10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

Or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 1-15759

CLECO CORPORATION

(Exact name of registrant as specified in its charter)

Louisiana (State or other jurisdiction of incorporation or organization)	72-1445282 (I.R.S. Employer Identification No.)
2030 Donahue Ferry Road, Pineville, Louisiana (Address of principal executive offices)	71360-5226 (Zip Code)
Registrant’s telephone number, including area code:  (318) 484-7400

Commission file number 1-05663

CLECO POWER LLC

(Exact name of registrant as specified in its charter)

Louisiana (State or other jurisdiction of incorporation or organization)	72-0244480 (I.R.S. Employer Identification No.)
2030 Donahue Ferry Road, Pineville, Louisiana (Address of principal executive offices)	71360-5226 (Zip Code)
Registrant’s telephone number, including area code:  (318) 484-7400
Indicate by check mark whether the Registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days.   Yes x No o
Indicate by check mark whether the Registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files).  Yes x No o
Indicate by check mark whether Cleco Corporation is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one):   Large accelerated filer x          Accelerated filer o                 Non-accelerated filer o  (Do not check if a smaller reporting company)      Smaller reporting company o
Indicate by check mark whether Cleco Power LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.  (Check one): Large accelerated filer o           Accelerated filer o                Non-accelerated filer x  (Do not check if a smaller reporting company)      Smaller reporting company o
Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act)  Yes o    No x

Number of shares outstanding of each of Cleco Corporation’s classes of Common Stock, as of the latest practicable date.

Registrant	Description of Class	Shares Outstanding at October 25, 2013
Cleco Corporation	Common Stock, $1.00 Par Value	60,452,158

Cleco Power LLC, a wholly owned subsidiary of Cleco Corporation, meets the conditions set forth in General Instructions H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced disclosure format.

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

This Combined Quarterly Report on Form 10-Q is separately filed by Cleco Corporation and Cleco Power.  Information in this filing relating to Cleco Power is filed by Cleco Corporation and separately by Cleco Power on its own behalf.  Cleco Power makes no representation as to information relating to Cleco Corporation (except as it may relate to Cleco Power) or any other affiliate or subsidiary of Cleco Corporation.

This report should be read in its entirety as it pertains to each respective Registrant.  The Notes to the Unaudited Condensed Consolidated Financial Statements are combined.

TABLE OF CONTENTS
		PAGE
GLOSSARY OF TERMS		3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		5
PART I	Financial Information
ITEM 1.	Cleco Corporation — Condensed Consolidated Financial Statements (Unaudited)	7
	Cleco Power — Condensed Consolidated Financial Statements (Unaudited)	16
	Notes to the Unaudited Condensed Consolidated Financial Statements	25
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	44
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	59
ITEM 4.	Controls and Procedures	60
PART II	Other Information
ITEM 1.	Legal Proceedings	61
ITEM 1A.	Risk Factors	61
ITEM 4.	Mine Safety Disclosures	61
ITEM 5.	Other Information	61
ITEM 6.	Exhibits	62
	Signatures	63

2

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

GLOSSARY OF TERMS

References in this filing to “Cleco”, including all items in Parts I and II, mean Cleco Corporation and its subsidiaries, including Cleco Power, and references to “Cleco Power” mean Cleco Power LLC and its subsidiaries, unless the context clearly indicates otherwise. Additional abbreviations or acronyms used in this filing, including all items in Parts I and II, are defined below.

ABBREVIATION OR ACRONYM	DEFINITION
401(k) Plan	Cleco Power 401(k) Savings and Investment Plan
ABR	Alternate Base Rate which is the greater of the prime rate, the federal funds effective rate plus 0.50%, or the LIBOR plus 1.0%
Acadia	Acadia Power Partners, LLC, a wholly owned subsidiary of Acadia Power Holdings LLC, a wholly owned subsidiary of Midstream
Acadia Unit 1	Cleco Power’s 580-MW unit, a combined-cycle, natural gas-fired power plant located at the Acadia Power Station in Eunice, Louisiana
Acadia Unit 2	Entergy Louisiana’s 580-MW unit, a combined-cycle, natural gas-fired power plant located at the Acadia Power Station in Eunice, Louisiana
AFUDC	Allowance for Funds Used During Construction
Amended Lignite Mining Agreement	Amended and restated lignite mining agreement effective December 29, 2009
AMI	Advanced Metering Infrastructure
Attala	Attala Transmission LLC, a wholly owned subsidiary of Cleco Corporation
CERCLA	The Comprehensive Environmental Response, Compensation, and Liability Act of 1980
Cleco Katrina/Rita	Cleco Katrina/Rita Hurricane Recovery Funding LLC, a wholly owned subsidiary of Cleco Power
Coughlin	Coughlin Power Station, a combined-cycle, natural gas-fired power plant located in St. Landry, Louisiana
DHLC	Dolet Hills Lignite Company, LLC, a wholly owned subsidiary of SWEPCO
Diversified Lands	Diversified Lands LLC, a wholly owned subsidiary of Cleco Corporation
Dodd-Frank Act	The Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law on July 21, 2010
DOE	United States Department of Energy
Dolet Hills	A 650-MW lignite/natural gas generating unit at Cleco Power’s plant site in Mansfield, Louisiana. Cleco Power has a 50% ownership interest in the capacity of Dolet Hills.
Entergy	Entergy Corporation
Entergy Gulf States	Entergy Gulf States Louisiana, L.L.C.
Entergy Louisiana	Entergy Louisiana, LLC
Entergy Mississippi	Entergy Mississippi, Inc.
EPA	United States Environmental Protection Agency
ERO	Electric Reliability Organization
ESPP	Cleco Corporation Employee Stock Purchase Plan
Evangeline	Cleco Evangeline LLC, a wholly owned subsidiary of Midstream
FAC	Fuel Adjustment Clause
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FRP	Formula Rate Plan
GAAP	Generally Accepted Accounting Principles in the United States
GO Zone	Gulf Opportunity Zone Act of 2005 (Public Law 109-135)
Interconnection Agreement	One of two Interconnection and Real Estate Agreements, one between Attala and Entergy Mississippi, and the other between Perryville and Entergy Louisiana
IRP	Integrated Resource Planning
IRS	Internal Revenue Service
kWh	Kilowatt-hour(s) as applicable
LIBOR	London Inter-Bank Offer Rate
Lignite Mining Agreement	Dolet Hills Mine Lignite Mining Agreement, dated as of May 31, 2001
LPSC	Louisiana Public Service Commission
LTICP	Cleco Corporation Long-Term Incentive Compensation Plan
Madison Unit 3	A 600-MW solid-fuel generating unit at Cleco Power’s plant site in Boyce, Louisiana
MATS	Mercury and Air Toxics Standards
Midstream	Cleco Midstream Resources LLC, a wholly owned subsidiary of Cleco Corporation
MISO	Midcontinent Independent System Operator, Inc.
Moody’s	Moody’s Investors Service
MW	Megawatt(s) as applicable
NERC	North American Electric Reliability Corporation
NMTC	New Markets Tax Credit
NMTC Fund	USB NMTC Fund 2008-1 LLC was formed to invest in projects qualifying for New Markets Tax Credits and Solar Projects
Not Meaningful	A percentage comparison of these items is not statistically meaningful because the percentage difference is greater than 1,000%
OATT	Open Access Transmission Tariff

3

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

ABBREVIATION OR ACRONYM	DEFINITION
OCI	Other Comprehensive Income
Oxbow	Oxbow Lignite Company, LLC, 50% owned by Cleco Power and 50% owned by SWEPCO
PCAOB	Public Company Accounting Oversight Board
PCB	Polychlorinated biphenyl
Perryville	Perryville Energy Partners, L.L.C., a wholly owned subsidiary of Cleco Corporation
Power Purchase Agreement	Power Purchase Agreement, dated as of January 28, 2004, between Perryville and Entergy Services, Inc., as agent for Entergy Louisiana and Entergy Gulf States
PRP	Potentially responsible party
Registrant(s)	Cleco Corporation and Cleco Power
RFP	Request for Proposal
Rodemacher Unit 2	A 523-MW coal/natural gas generating unit at Cleco Power’s plant site in Boyce, Louisiana. Cleco Power has a 30% ownership interest in the capacity of Rodemacher Unit 2.
RTO	Regional Transmission Organization
Sale Agreement	Purchase and Sale Agreement, dated as of January 28, 2004, between Perryville and Entergy Louisiana
S&P	Standard & Poor’s Ratings Services, a credit rating agency
SEC	Securities and Exchange Commission
SERP	Cleco Corporation Supplemental Executive Retirement Plan
SPP	Southwest Power Pool
Support Group	Cleco Support Group LLC, a wholly owned subsidiary of Cleco Corporation
SWEPCO	Southwestern Electric Power Company, a wholly owned subsidiary of American Electric Power Company, Inc.
VIE	Variable Interest Entity

4

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Combined Quarterly Report on Form 10-Q includes “forward-looking statements” about future events, circumstances, and results. All statements other than statements of historical fact included in this Combined Quarterly Report are forward-looking statements, including, without limitation, future capital expenditures; projections, including with respect to base revenue; business strategies; goals, beliefs, plans, and objectives; competitive strengths; market developments; development and operation of facilities; growth in sales volume; meeting capacity requirements, including through RFPs; expansion of service to existing customers and service to new customers; future environmental regulations and remediation liabilities; electric customer credits; and the anticipated outcome of various regulatory and legal proceedings. Although the Registrants believe that the expectations reflected in such forward-looking statements are reasonable, such forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks and uncertainties that could cause the actual results to differ materially from the Registrants’ expectations. In addition to any assumptions and other factors referred to specifically in connection with these forward-looking statements, the following list identifies some of the factors that could cause the Registrants’ actual results to differ materially from those contemplated in any of the Registrants’ forward-looking statements:

• factors affecting utility operations, such as unusual weather conditions or other natural phenomena; catastrophic weather-related damage (such as hurricanes and other storms or severe drought conditions); unscheduled generation outages; unanticipated maintenance or repairs; unanticipated changes to fuel costs, fuel supply costs or availability constraints due to higher demand, shortages, transportation problems, or other developments; fuel mix of Cleco’s generation facilities; decreased customer load; environmental incidents and compliance costs; and power transmission system constraints,

• Cleco Corporation’s holding company structure and its dependence on the earnings, dividends, or distributions from its subsidiaries to meet its debt obligations and pay dividends on its common stock,

• Cleco Power’s ability to maintain its right to sell wholesale generation at market-based rates within its control area,

• Cleco Power’s dependence on energy from sources other than its facilities and future sources of such additional energy,

• nonperformance by and creditworthiness of counterparties under power purchase agreements, or the restructuring of those agreements, including possible termination,

• nonperformance by and creditworthiness of the guarantor counterparty of the NMTC Fund,

• regulatory factors such as changes in rate-setting policies, recovery of investments made under traditional regulation, recovery of storm restoration costs, the frequency and timing of rate increases or decreases, the results of periodic NERC and LPSC audits, participation in an RTO and Cleco Power’s ability to recover related transmission upgrade costs, the

compliance with the ERO reliability standards for bulk power systems by Cleco Power and Evangeline, and the change in market conditions resulting from MISO that could affect Cleco’s ability to create, maintain, and renew energy sales contracts with new and existing customers,

• reliance on third parties for determination of Cleco Power’s commitments and obligations to markets for generation resources and reliance on third party transmission services,

• financial or regulatory accounting principles or policies imposed by FASB, the SEC, the PCAOB, FERC, the LPSC, or similar entities with regulatory or accounting oversight,

• economic conditions, including the ability of customers to continue paying utility bills, related growth and/or down-sizing of businesses in Cleco’s service area, monetary fluctuations, changes in commodity prices, and inflation rates,

• the current global and U.S. economic environment, including the potential impact from the automatic reductions in U.S. federal government spending that went into effect in the first quarter of 2013, known as sequestration, the partial U.S. federal government shutdown in October 2013, and the ongoing debates related to the U.S. federal government budget and debt ceiling,

• credit ratings of Cleco Corporation and Cleco Power,

• ability to remain in compliance with debt covenants,

• changing market conditions and a variety of other factors associated with physical energy, financial transactions, and energy service activities, including, but not limited to, price, basis, credit, liquidity, volatility, capacity, transmission, interest rates, and warranty risks,

• the availability and use of alternative sources of energy and technologies,

• the imposition of energy efficiency requirements or increased conservation efforts of customers,

• reliability of Cleco Power’s and Midstream’s generating facilities,

• acts of terrorism, cyber attacks, data security breaches or other attempts to disrupt Cleco’s business or the business of third parties, or other man-made disasters,

• availability or cost of capital resulting from changes in Cleco’s business or financial condition, interest rates, or market perceptions of the electric utility industry and energy-related industries,

• changes in tax laws or disallowances of uncertain tax positions that may result in a change to tax benefits or expenses,

• employee work force factors, including work stoppages and changes in key executives,

• legal, environmental, and regulatory delays and other obstacles associated with mergers, acquisitions, reorganizations, investments in joint ventures, or other capital projects, including the AMI project and the transfer of Coughlin to Cleco Power,

5

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

• costs and other effects of legal and administrative proceedings, settlements, investigations, claims, and other matters,

• changes in federal, state, or local laws and changes in tax laws or rates, or regulating policies,

• the impact of current or future environmental laws and regulations, including those related to greenhouse gases and energy efficiency that could limit or terminate the operation of certain generating units, increase costs, or reduce customer demand for electricity,

• the ability of Cleco Power to recover from its customers the costs of compliance with environmental laws and regulations, including capital expenditures associated with MATS, and

• the ability of Dolet Hills lignite reserve to provide sufficient fuel to the Dolet Hills Power Station until at least 2026.

For more discussion of these factors and other factors that could cause actual results to differ materially from those contemplated in the Registrants’ forward-looking statements, please read “Risk Factors” in this report and the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012. All subsequent written and oral forward-looking statements attributable to the Registrants or persons acting on their behalf are expressly qualified in their entirety by the factors identified above.

The Registrants undertake no obligation to update any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, or other factors affecting such statements.

6

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

PART I — FINANCIAL INFORMATION

ITEM 1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cleco Corporation

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with Cleco Corporation’s Consolidated Financial Statements and Notes included in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012. For more information on the basis of presentation, see “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Basis of Presentation.”

7

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO CORPORATION
Condensed Consolidated Statements of Income (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)	2013			2012
Operating revenue
Electric operations	$	314,766		$	282,894
Other operations	14,843			15,408
Gross operating revenue	329,609			298,302
Electric customer credits	(846		)	(930		)
Operating revenue, net	328,763			297,372
Operating expenses
Fuel used for electric generation	101,752			79,701
Power purchased for utility customers	5,999			19,364
Other operations	30,057			30,517
Maintenance	20,427			20,059
Depreciation	41,756			34,931
Taxes other than income taxes	12,007			9,455
Gain on sale of assets	(29		)	(2		)
Total operating expenses	211,969			194,025
Operating income	116,794			103,347
Interest income	332			132
Allowance for other funds used during construction	1,303			1,882
Other income	2,837			1,834
Other expense	(1,456		)	(1,232		)
Interest charges
Interest charges, including amortization of debt expense, premium, and discount, net	19,436			22,610
Allowance for borrowed funds used during construction	(422		)	(644		)
Total interest charges	19,014			21,966
Income before income taxes	100,796			83,997
Federal and state income tax expense	34,389			20,179
Net income applicable to common stock	$	66,407		$	63,818
Average number of basic common shares outstanding	60,450,384			60,346,476
Average number of diluted common shares outstanding	60,748,647			60,599,203
Basic earnings per share
Net income applicable to common stock	$	1.10		$	1.06
Diluted earnings per share
Net income applicable to common stock	$	1.09		$	1.05
Cash dividends paid per share of common stock	$	0.3625		$	0.3375
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

8

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO CORPORATION
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012
Net income	$	66,407	$	63,818
Other comprehensive income, net of tax:
Amortization of postretirement benefits (net of tax expense of $311 in 2013 and $239 in 2012)	497		332
Net gain on cash flow hedges (net of tax expense of $33 in 2013 and $302 in 2012)	53		483
Total other comprehensive income, net of tax	550		815
Comprehensive income, net of tax	$	66,957	$	64,633
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

9

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO CORPORATION
Condensed Consolidated Statements of Income (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)	2013			2012
Operating revenue
Electric operations	$	796,957		$	720,776
Other operations	37,917			38,464
Gross operating revenue	834,874			759,240
Electric customer credits	(1,270		)	1,025
Operating revenue, net	833,604			760,265
Operating expenses
Fuel used for electric generation	259,728			207,764
Power purchased for utility customers	24,795			44,069
Other operations	88,420			86,901
Maintenance	64,372			61,478
Depreciation	110,529			99,028
Taxes other than income taxes	34,926			29,198
Loss (gain) on sale of assets	817			(57		)
Total operating expenses	583,587			528,381
Operating income	250,017			231,884
Interest income	789			163
Allowance for other funds used during construction	2,880			4,298
Equity income from investees, before tax	—			1
Other income	12,282			24,223
Other expense	(2,146		)	(2,718		)
Interest charges
Interest charges, including amortization of debt expense, premium, and discount, net	62,284			64,671
Allowance for borrowed funds used during construction	(926		)	(1,466		)
Total interest charges	61,358			63,205
Income before income taxes	202,464			194,646
Federal and state income tax expense	66,892			54,110
Net income applicable to common stock	$	135,572		$	140,536
Average number of basic common shares outstanding	60,428,944			60,375,538
Average number of diluted common shares outstanding	60,694,632			60,626,471
Basic earnings per share
Net income applicable to common stock	$	2.25		$	2.33
Diluted earnings per share
Net income applicable to common stock	$	2.23		$	2.32
Cash dividends paid per share of common stock	$	1.0625		$	0.9625
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

10

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO CORPORATION
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012
Net income	$	135,572	$	140,536
Other comprehensive income, net of tax:
Amortization of postretirement benefits (net of tax expense of $1,013 in 2013 and $670 in 2012)	1,619		1,221
Net gain on cash flow hedges (net of tax expense of $892 in 2013 and $715 in 2012)	1,426		1,143
Total other comprehensive income, net of tax	3,045		2,364
Comprehensive income, net of tax	$	138,617	$	142,900
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

11

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT SEPT. 30, 2013			AT DEC. 31, 2012
Assets
Current assets
Cash and cash equivalents	$	46,800		$	31,020
Restricted cash and cash equivalents	3,359			8,781
Customer accounts receivable (less allowance for doubtful accounts of $823 in 2013 and $1,105 in 2012)	56,434			39,293
Other accounts receivable	42,671			37,741
Taxes receivable, net	—			34,612
Unbilled revenue	33,629			28,662
Fuel inventory, at average cost	48,909			46,867
Material and supplies inventory, at average cost	62,450			58,232
Accumulated deferred federal and state income taxes, net	1,132			79,353
Accumulated deferred fuel	6,851			7,833
Cash surrender value of company-/trust-owned life insurance policies	62,682			57,346
Prepayments	6,326			5,951
Regulatory assets - other	6,109			11,095
Other current assets	206			552
Total current assets	377,558			447,338
Property, plant, and equipment
Property, plant, and equipment	4,272,907			4,140,194
Accumulated depreciation	(1,371,857		)	(1,311,273		)
Net property, plant, and equipment	2,901,050			2,828,921
Construction work in progress	151,254			180,540
Total property, plant, and equipment, net	3,052,304			3,009,461
Equity investment in investees	14,541			14,540
Prepayments	4,119			4,261
Restricted cash and cash equivalents	5,112			5,440
Restricted investments	12,275			10,852
Regulatory assets - deferred taxes, net	217,550			210,445
Regulatory assets - other	298,520			289,570
Net investment in direct financing lease	13,528			13,542
Intangible asset	109,552			120,545
Other deferred charges	22,458			21,355
Total assets	$	4,127,517		$	4,147,349
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
(Continued on next page)

12

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO CORPORATION
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT SEPT. 30, 2013			AT DEC. 31, 2012
Liabilities and shareholders’ equity
Liabilities
Current liabilities
Long-term debt due within one year	$	17,147		$	91,140
Accounts payable	86,768			102,695
Customer deposits	48,287			45,553
Provision for rate refund	2,967			4,165
Taxes payable	35,671			—
Interest accrued	24,750			12,957
Interest rate risk management liability	—			2,627
Regulatory liabilities - other	—			8,255
Deferred compensation	10,424			9,626
Uncertain tax positions	4,610			686
Other current liabilities	14,171			16,926
Total current liabilities	244,795			294,630
Deferred credits
Accumulated deferred federal and state income taxes, net	755,868			762,992
Accumulated deferred investment tax credits	5,421			6,252
Postretirement benefit obligations	156,950			186,746
Restricted storm reserve	17,309			16,285
Uncertain tax positions	—			2,184
Tax credit fund investment, net	48,806			78,840
Contingent sale obligations	900			8,150
Other deferred credits	28,564			34,799
Total deferred credits	1,013,818			1,096,248
Long-term debt, net	1,290,990			1,257,258
Total liabilities	2,549,603			2,648,136
Commitments and Contingencies (Note 11)
Shareholders’ equity
Common shareholders’ equity
Common stock, $1 par value, authorized 100,000,000 shares, issued 61,047,006 and 60,961,570 shares and outstanding 60,452,158 and 60,355,545 shares at September 30, 2013 and December 31, 2012, respectively	61,047			60,962
Premium on common stock	420,913			416,619
Retained earnings	1,145,962			1,075,074
Treasury stock, at cost, 594,848 and 606,025 shares at September 30, 2013 and December 31, 2012, respectively	(20,683		)	(21,072		)
Accumulated other comprehensive loss	(29,325		)	(32,370		)
Total shareholders’ equity	1,577,914			1,499,213
Total liabilities and shareholders’ equity	$	4,127,517		$	4,147,349
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

13

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO CORPORATION
Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012
Operating activities
Net income	$	135,572		$	140,536
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	120,792			122,676
Unearned compensation expense	4,707			4,986
Allowance for other funds used during construction	(2,880		)	(4,298		)
Net deferred income taxes	60,172			8,040
Deferred fuel costs	2,906			(4,218		)
Cash surrender value of company-/trust-owned life insurance	(1,631		)	(2,841		)
Changes in assets and liabilities:
Accounts receivable	(30,167		)	(13,247		)
Unbilled revenue	(4,967		)	(1,376		)
Fuel, materials and supplies inventory	(5,595		)	(15,943		)
Accounts payable	(15,691		)	(25,422		)
Customer deposits	9,777			8,772
Postretirement benefit obligations	(26,968		)	5,459
Regulatory assets and liabilities, net	(28,727		)	(30,532		)
Other deferred accounts	(7,480		)	(17,388		)
Taxes accrued	70,188			36,021
Interest accrued	11,793			7,616
Other operating	(2,136		)	5,763
Net cash provided by operating activities	289,665			224,604
Investing activities
Additions to property, plant, and equipment	(131,521		)	(177,146		)
Allowance for other funds used during construction	2,880			4,298
Property, plant, and equipment grants	729			15,075
Insurance reimbursement for property loss	—			5,454
Premiums paid on company-/trust-owned life insurance	(3,705		)	(2,733		)
Return of equity investment in tax credit fund	473			37,132
Contributions to tax credit fund	(38,940		)	(46,859		)
Transfer of cash from restricted accounts	5,750			19,102
Purchase of restricted investments	(6,422		)	(4,340		)
Maturity of restricted investments	5,003			—
Other investing	942			799
Net cash used in investing activities	(164,811		)	(149,218		)
Financing activities
Draws on credit facility	198,000			—
Payments on credit facility	(223,000		)	(10,000		)
Issuance of long-term debt	160,000			50,000
Retirement of long-term debt	(113,969		)	(74,368		)
Repurchase of long-term debt	(60,000		)	—
Repurchase of common stock	—			(8,007		)
Settlement of interest rate swap	(3,269		)	—
Dividends paid on common stock	(64,448		)	(58,459		)
Other financing	(2,388		)	236
Net cash used in financing activities	(109,074		)	(100,598		)
Net increase (decrease) in cash and cash equivalents	15,780			(25,212		)
Cash and cash equivalents at beginning of period	31,020			93,576
Cash and cash equivalents at end of period	$	46,800		$	68,364
Supplementary cash flow information
Interest paid (net of amount capitalized)	$	45,464		$	48,212
Income taxes refunded, net	$	(47,318	)	$	(131	)
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	$	12,869		$	16,657
Non-cash additions to property, plant, and equipment, net	$	1,280		$	18,395
Issuance of common stock – ESPP	$	240		$	257
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

14

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO CORPORATION
Condensed Consolidated Statements of Changes in Common Shareholders’ Equity (Unaudited)
	COMMON STOCK			TREASURY STOCK					PREMIUM ON COMMON STOCK		RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE LOSS			TOTAL SHAREHOLDERS’ EQUITY
(THOUSANDS, EXCEPT SHARE AMOUNTS)	SHARES	AMOUNT		SHARES		COST
Balances, Dec. 31, 2011	60,702,342	$	60,702	(410,403	)	$	(13,215	)	$	409,904	$	990,605		$	(28,139	)	$	1,419,857
Common stock issued for compensatory plans	254,540	255		4,002		136			5,385		—			—			5,776
Repurchase of common stock	—	—		(200,000	)	(8,006		)	—		—			—			(8,006		)
Dividends on common stock, $0.9625 per share	—	—		—		—			—		(58,673		)	—			(58,673		)
Net income	—	—		—		—			—		140,536			—			140,536
Other comprehensive income, net of tax	—	—		—		—			—		—			2,364			2,364
Balances, Sept. 30, 2012	60,956,882	$	60,957	(606,401	)	$	(21,085	)	$	415,289	$	1,072,468		$	(25,775	)	$	1,501,854
Balances, Dec. 31, 2012	60,961,570	$	60,962	(606,025	)	$	(21,072	)	$	416,619	$	1,075,074		$	(32,370	)	$	1,499,213
Common stock issued for compensatory plans	85,436	85		11,177		389			4,294		—			—			4,768
Dividends on common stock, $1.0625 per share	—	—		—		—			—		(64,684		)	—			(64,684		)
Net income	—	—		—		—			—		135,572			—			135,572
Other comprehensive income, net of tax	—	—		—		—			—		—			3,045			3,045
Balances, Sept. 30, 2013	61,047,006	$	61,047	(594,848	)	$	(20,683	)	$	420,913	$	1,145,962		$	(29,325	)	$	1,577,914
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

15

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

PART I — FINANCIAL INFORMATION

ITEM 1.CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Cleco Power

These unaudited Condensed Consolidated Financial Statements should be read in conjunction with Cleco Power’s Consolidated Financial Statements and Notes included in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012. For more information on the basis of presentation, see “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Basis of Presentation.”

16

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Income (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012
Operating revenue
Electric operations	$	314,766		$	282,894
Other operations	14,301			14,905
Affiliate revenue	335			343
Gross operating revenue	329,402			298,142
Electric customer credits	(846		)	(930		)
Operating revenue, net	328,556			297,212
Operating expenses
Fuel used for electric generation	101,752			79,701
Power purchased for utility customers	18,339			33,254
Other operations	28,471			29,063
Maintenance	17,478			16,095
Depreciation	39,962			33,199
Taxes other than income taxes	10,891			8,390
Total operating expenses	216,893			199,702
Operating income	111,663			97,510
Interest income	331			129
Allowance for other funds used during construction	1,303			1,882
Other income	2,838			1,188
Other expense	(2,239		)	(1,224		)
Interest charges
Interest charges, including amortization of debt expense, premium, and discount, net	19,078			22,606
Allowance for borrowed funds used during construction	(422		)	(644		)
Total interest charges	18,656			21,962
Income before income taxes	95,240			77,523
Federal and state income tax expense	33,355			19,740
Net income	$	61,885		$	57,783
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

17

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012
Net income	$	61,885	$	57,783
Other comprehensive income, net of tax:
Amortization of postretirement benefits (net of tax expense of $130 in 2013 and $103 in 2012)	207		124
Net gain on cash flow hedges (net of tax expense of $33 in 2013 and $302 in 2012)	53		483
Total other comprehensive income, net of tax	260		607
Comprehensive income, net of tax	$	62,145	$	58,390
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

18

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Income (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012
Operating revenue
Electric operations	$	796,957		$	720,776
Other operations	36,366			36,967
Affiliate revenue	1,005			1,030
Gross operating revenue	834,328			758,773
Electric customer credits	(1,270		)	1,025
Operating revenue, net	833,058			759,798
Operating expenses
Fuel used for electric generation	259,728			207,459
Power purchased for utility customers	51,278			65,493
Other operations	83,385			82,647
Maintenance	55,857			51,739
Depreciation	105,251			93,847
Taxes other than income taxes	31,554			26,004
Gain on sale of assets	—			(1		)
Total operating expenses	587,053			527,188
Operating income	246,005			232,610
Interest income	784			153
Allowance for other funds used during construction	2,880			4,298
Other income	4,606			3,511
Other expense	(3,693		)	(2,698		)
Interest charges
Interest charges, including amortization of debt expense, premium, and discount, net	61,808			62,719
Allowance for borrowed funds used during construction	(926		)	(1,466		)
Total interest charges	60,882			61,253
Income before income taxes	189,700			176,621
Federal and state income tax expense	65,558			54,748
Net income	$	124,142		$	121,873
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

19

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012
Net income	$	124,142	$	121,873
Other comprehensive income, net of tax:
Amortization of postretirement benefits (net of tax expense of $455 in 2013 and $267 in 2012)	727		555
Net gain on cash flow hedges (net of tax expense of $892 in 2013 and $715 in 2012)	1,426		1,143
Total other comprehensive income, net of tax	2,153		1,698
Comprehensive income, net of tax	$	126,295	$	123,571
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

20

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT SEPT. 30, 2013			AT DEC. 31, 2012
Assets
Utility plant and equipment
Property, plant, and equipment	$	4,001,194		$	3,871,940
Accumulated depreciation	(1,283,205		)	(1,227,078		)
Net property, plant, and equipment	2,717,989			2,644,862
Construction work in progress	147,369			176,584
Total utility plant, net	2,865,358			2,821,446
Current assets
Cash and cash equivalents	42,560			23,368
Restricted cash and cash equivalents	3,359			8,781
Customer accounts receivable (less allowance for doubtful accounts of $823 in 2013 and $1,105 in 2012)	56,434			39,293
Accounts receivable - affiliate	1,260			2,991
Other accounts receivable	42,453			37,562
Unbilled revenue	33,629			28,662
Fuel inventory, at average cost	48,909			46,867
Material and supplies inventory, at average cost	59,597			55,472
Accumulated deferred federal and state income taxes, net	8,306			87,286
Accumulated deferred fuel	6,851			7,833
Cash surrender value of company-owned life insurance policies	19,234			20,842
Prepayments	4,528			4,415
Regulatory assets - other	6,109			11,095
Other current assets	—			371
Total current assets	333,229			374,838
Equity investment in investee	14,532			14,532
Prepayments	4,119			4,261
Restricted cash and cash equivalents	5,015			5,343
Restricted investments	12,275			10,852
Regulatory assets - deferred taxes, net	217,550			210,445
Regulatory assets - other	298,520			289,570
Intangible asset	109,552			120,545
Other deferred charges	21,241			19,897
Total assets	$	3,881,391		$	3,871,729
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
(Continued on next page)

21

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Liabilities and member’s equity
Member’s equity	$	1,371,214	$	1,319,919
Long-term debt, net	1,290,990		1,232,258
Total capitalization	2,662,204		2,552,177
Current liabilities
Long-term debt due within one year	17,147		91,140
Accounts payable	77,529		89,782
Accounts payable - affiliate	10,240		10,097
Customer deposits	48,287		45,553
Provision for rate refund	2,967		4,165
Taxes payable	21,371		1,328
Interest accrued	26,074		13,893
Interest rate risk management liability	—		2,627
Regulatory liabilities - other	—		8,255
Other current liabilities	10,744		11,746
Total current liabilities	214,359		278,586
Commitments and Contingencies (Note 11)
Deferred credits
Accumulated deferred federal and state income taxes, net	848,020		845,769
Accumulated deferred investment tax credits	5,421		6,252
Postretirement benefit obligations	106,636		137,637
Restricted storm reserve	17,309		16,285
Uncertain tax positions	—		222
Other deferred credits	27,442		34,801
Total deferred credits	1,004,828		1,040,966
Total liabilities and member’s equity	$	3,881,391	$	3,871,729
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

22

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012
Operating activities
Net income	$	124,142		$	121,873
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	114,078			102,724
Allowance for other funds used during construction	(2,880		)	(4,298		)
Net deferred income taxes	70,864			43,259
Deferred fuel costs	2,906			(4,218		)
Changes in assets and liabilities:
Accounts receivable	(30,125		)	(13,807		)
Unbilled revenue	(4,967		)	(1,376		)
Fuel, materials and supplies inventory	(5,500		)	(15,778		)
Accounts payable	(12,296		)	(20,474		)
Customer deposits	9,777			8,772
Postretirement benefit obligations	(29,784		)	4,323
Regulatory assets and liabilities, net	(28,727		)	(30,532		)
Other deferred accounts	(10,143		)	(20,057		)
Taxes accrued	20,043			23,194
Interest accrued	12,182			9,482
Other operating	2,427			2,440
Net cash provided by operating activities	231,997			205,527
Investing activities
Additions to property, plant, and equipment	(126,977		)	(173,268		)
Allowance for other funds used during construction	2,880			4,298
Property, plant, and equipment grants	729			15,075
Transfer of cash from restricted accounts	5,750			19,102
Purchase of restricted investments	(6,422		)	(4,340		)
Maturity of restricted investments	5,003			—
Other investing	857			804
Net cash used in investing activities	(118,180		)	(138,329		)
Financing activities
Draws on credit facility	160,000			—
Payments on credit facility	(160,000		)	—
Issuance of long-term debt	160,000			50,000
Retirement of long-term debt	(113,969		)	(74,368		)
Repurchase of long-term debt	(60,000		)	—
Settlement of interest rate swap	(3,269		)	—
Distribution to parent	(75,000		)	(58,000		)
Other financing	(2,387		)	(1,710		)
Net cash used in financing activities	(94,625		)	(84,078		)
Net increase (decrease) in cash and cash equivalents	19,192			(16,880		)
Cash and cash equivalents at beginning of period	23,368			67,458
Cash and cash equivalents at end of period	$	42,560		$	50,578
Supplementary cash flow information
Interest paid (net of amount capitalized)	$	45,248		$	48,140
Income taxes refunded, net	$	(456	)	$	(246	)
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	$	12,591		$	16,141
Non-cash additions to property, plant, and equipment, net	$	1,280		$	18,395
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

23

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

CLECO POWER
Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited)
(THOUSANDS)	RETAINED EARNINGS			ACCUMULATED OTHER COMPREHENSIVE LOSS			TOTAL MEMBER’S EQUITY
Balances, Dec. 31, 2011	$	1,251,492		$	(20,630	)	$	1,230,862
Other comprehensive income, net of tax	—			1,698			1,698
Distribution to parent	(58,000		)	—			(58,000		)
Net income	121,873			—			121,873
Balances, Sept. 30, 2012	$	1,315,365		$	(18,932	)	$	1,296,433
Balances, Dec. 31, 2012	$	1,340,340		$	(20,421	)	$	1,319,919
Other comprehensive income, net of tax	—			2,153			2,153
Distribution to parent	(75,000		)	—			(75,000		)
Net income	124,142			—			124,142
Balances, Sept. 30, 2013	$	1,389,482		$	(18,268	)	$	1,371,214
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

24

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Index to Applicable Notes to the Unaudited Condensed Consolidated Financial Statements of Registrants
Note 1	Summary of Significant Accounting Policies	Cleco Corporation and Cleco Power
Note 2	Recent Authoritative Guidance	Cleco Corporation and Cleco Power
Note 3	Regulatory Assets and Liabilities	Cleco Corporation and Cleco Power
Note 4	Fair Value Accounting	Cleco Corporation and Cleco Power
Note 5	Debt	Cleco Corporation and Cleco Power
Note 6	Pension Plan and Employee Benefits	Cleco Corporation and Cleco Power
Note 7	Income Taxes	Cleco Corporation and Cleco Power
Note 8	Disclosures about Segments	Cleco Corporation
Note 9	Electric Customer Credits	Cleco Corporation and Cleco Power
Note 10	Variable Interest Entities	Cleco Corporation and Cleco Power
Note 11	Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees	Cleco Corporation and Cleco Power
Note 12	Affiliate Transactions	Cleco Corporation and Cleco Power
Note 13	Storm Restoration	Cleco Corporation and Cleco Power
Note 14	Accumulated Other Comprehensive Loss	Cleco Corporation and Cleco Power

Notes to the Unaudited Condensed Consolidated Financial Statements

Note 1 — Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements of Cleco include the accounts of Cleco and its majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Basis of Presentation

The Condensed Consolidated Financial Statements of Cleco Corporation and Cleco Power have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all of the information and notes required by GAAP for annual financial statements. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements. Because the interim Condensed Consolidated Financial Statements and the accompanying notes do not include all of the information and notes required by GAAP for annual financial statements, the Condensed Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the consolidated financial statements and accompanying notes in the Registrants’ Combined Annual Report on Form 10-K for the year ended December 31, 2012.

These Condensed Consolidated Financial Statements, in the opinion of management, reflect all normal recurring adjustments that are necessary to fairly present the financial position and results of operations of Cleco. Amounts reported in Cleco’s interim financial statements are not necessarily indicative of amounts expected for the annual periods due to the effects of seasonal temperature variations on energy consumption, regulatory rulings, the timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices, and other factors.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the

reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. For more information on recent authoritative guidance and its effect on financial results, see Note 2 — “Recent Authoritative Guidance.”

Property, Plant, and Equipment

Property, plant, and equipment consists primarily of regulated utility generation and energy transmission assets. Regulated assets, utilized primarily for retail operations and electric transmission and distribution, are stated at the cost of construction, which includes certain materials, labor, payroll taxes and benefits, administrative and general costs, and the estimated cost of funds used during construction. Jointly owned assets are reflected in property, plant, and equipment at Cleco Power’s share of the cost to construct or purchase the assets. Cleco’s property, plant, and equipment consisted of:

(THOUSANDS)	AT SEPT. 30, 2013			AT DEC. 31, 2012
Regulated utility plants	$	4,001,194		$	3,871,940
Other	271,713			268,254
Total property, plant, and equipment	4,272,907			4,140,194
Accumulated depreciation	(1,371,857		)	(1,311,273		)
Net property, plant, and equipment	$	2,901,050		$	2,828,921

Restricted Cash and Cash Equivalents

Various agreements to which Cleco is subject contain covenants that restrict its use of cash. As certain provisions under these agreements are met, cash is transferred out of related escrow accounts and becomes available for its intended purposes and/or general corporate purposes. Cleco’s restricted cash and cash equivalents consisted of:  

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Diversified Lands’ mitigation escrow	$	97	$	97
Cleco Katrina/Rita’s storm recovery bonds	3,359		8,781
Cleco Power’s future storm restoration costs	4,944		5,343
Cleco Power’s building renovation escrow	71		—
Total restricted cash and cash equivalents	$	8,471	$	14,221

25

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Cleco Katrina/Rita has the right to bill and collect storm restoration costs from Cleco Power’s customers. As cash is collected, it is restricted for payment of administration fees, interest, and principal on storm recovery bonds. During the nine months ended September 30, 2013, Cleco Katrina/Rita collected $14.9 million net of administration fees. In March and September 2013, Cleco Katrina/Rita used $7.1 million and $6.8 million, respectively, for scheduled storm recovery bond principal payments and $3.3 million and $3.1 million, respectively, for related interest.

In connection with Cleco Power’s building modernization project, Cleco Power was required to establish an escrow account with a qualified financial institution and deposit all retainage monies as they accrue under the construction contract. Upon completion of the construction work, the funds including any interest held in the escrow account will be released from escrow and paid to the construction contractor.

Fair Value Measurements and Disclosures

Various accounting pronouncements require certain assets and liabilities to be measured at their fair values. Some assets and liabilities are required to be measured at their fair value each reporting period, while others are required to be measured only one time, generally the date of acquisition or debt issuance. Cleco and Cleco Power are required to disclose the fair value of certain assets and liabilities by one of three levels when required for recognition purposes under GAAP. For more information about fair value levels, see Note 4 — “Fair Value Accounting.”

Risk Management

Market risk inherent in Cleco’s market risk-sensitive instruments and positions includes potential changes arising from changes in interest rates and the commodity market prices of power and natural gas on different energy exchanges. Cleco’s Energy Market Risk Management Policy authorizes the use of various derivative instruments, including exchange traded futures and option contracts, forward purchase and sales contracts, and swap transactions to reduce exposure to fluctuations in the price of power and natural gas. Cleco applies the authoritative guidance as it relates to derivatives and hedging to determine whether the market risk-sensitive instruments and positions are required to be marked-to-market. Generally, Cleco Power’s market risk-sensitive instruments and positions qualify for the normal-purchase, normal-sale exception to mark-to-market accounting because Cleco Power takes physical delivery and the instruments and positions are used to satisfy customer requirements.

Cleco Power may enter into positions to mitigate the volatility in customer fuel costs. These positions are marked-to-market with the resulting gain or loss recorded on the balance sheet as a component of energy risk management assets or liabilities. Such gain or loss is deferred as a component of deferred fuel assets or liabilities in accordance with regulatory policy. When these positions close, actual gains or losses will be included in the FAC and reflected on

customers’ bills as a component of the fuel cost adjustment. There were no open positions at September 30, 2013 or December 31, 2012.

Cleco and Cleco Power maintain a master netting agreement policy and monitor credit risk exposure through review of counterparty credit quality, counterparty credit exposure, and counterparty concentration levels. Cleco manages these risks by establishing appropriate credit and concentration limits on transactions with counterparties and by requiring contractual guarantees, cash deposits, or letters of credit from counterparties or their affiliates, as deemed necessary. Cleco Power has agreements in place with various counterparties that authorize the netting of financial buys and sells and contract payments to mitigate credit risk for transactions entered into for risk management purposes.

Cleco has entered into various contracts to mitigate the volatility in interest rate risk. These contracts include, but are not limited to, interest rate swaps and treasury rate locks. For these contracts in which Cleco is hedging the variability of cash flows related to forecasted transactions that qualify as cash flow hedges, the changes in the fair value of such derivative instruments are reported in other comprehensive income. To qualify for hedge accounting, the relationship between the hedging instrument and the hedged item must be documented to include the risk management objective and strategy, and, at inception and on an ongoing basis, the effectiveness of the hedge in offsetting the changes in the cash flows of the item being hedged. Gains or losses accumulated in other comprehensive income are reclassified as earnings in the periods in which earnings are affected by the variability of the cash flows of the hedged item. The ineffective portions of hedges will be recognized in current period earnings unless management determines that it is probable that the costs will be recovered through the ratemaking process. If management determines that it is probable that the costs will be recovered from customers, then they will be recognized as a regulatory asset or liability and amortized to earnings over the life of the related debt. For those contracts in which Cleco is hedging the variability of cash flows related to forecasted transactions that do not qualify as cash flow hedges, the changes in the fair value of such derivative instruments will be recognized in current period earnings unless management determines that it is probable that the costs will be recovered from customers through the ratemaking process. If management determines that it is probable that the costs will be recovered from customers, then they will be recognized as a regulatory asset or liability and amortized to earnings over the life of the related debt. For more information on the interest rate risk contracts, see Note 4 — “Fair Value Accounting — Interest Rate Derivatives.”

Earnings per Average Common Share

The following tables show the calculation of basic and diluted earnings per share:

26

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

						FOR THE THREE MONTHS ENDED SEPT. 30,
				2013					2012
(THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)	INCOME		SHARES	PER SHARE AMOUNT		INCOME		SHARES	PER SHARE AMOUNT
Basic net income applicable to common stock	$	66,407	60,450,384	$	1.10	$	63,818	60,346,476	$	1.06
Effect of dilutive securities
Add:  stock option grants			—					1,536
Add:  restricted stock (LTICP)			298,263					251,191
Diluted net income applicable to common stock	$	66,407	60,748,647	$	1.09	$	63,818	60,599,203	$	1.05

						FOR THE NINE MONTHS ENDED SEPT. 30,
				2013					2012
(THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)	INCOME		SHARES	PER SHARE AMOUNT		INCOME		SHARES	PER SHARE AMOUNT
Basic net income applicable to common stock	$	135,572	60,428,944	$	2.25	$	140,536	60,375,538	$	2.33
Effect of dilutive securities
Add:  stock option grants			—					4,518
Add:  restricted stock (LTICP)			265,688					246,415
Diluted net income applicable to common stock	$	135,572	60,694,632	$	2.23	$	140,536	60,626,471	$	2.32

Stock option grants are excluded from the computation of diluted earnings per share if the exercise price is higher than the average market price. There were no stock option grants excluded from the computation of diluted earnings per share for the three and nine months ended September 30, 2012. All stock options were exercised during 2012 and no additional options were granted during the nine months ended September 30, 2013.

Stock-Based Compensation

At September 30, 2013, Cleco had two stock-based compensation plans, the ESPP and the LTICP. Substantially all employees, excluding officers and general managers, may choose to participate in the ESPP and purchase a limited

amount of common stock at a discount through a stock option agreement. Options or restricted shares of stock, known as non-vested stock as defined by the authoritative guidance on stock-based compensation, common stock equivalents, and stock appreciation rights may be granted to certain officers, key employees, or directors of Cleco Corporation and its subsidiaries pursuant to the LTICP.

During the nine months ended September 30, 2013, Cleco granted 139,048 shares of non-vested stock to certain officers, key employees, and directors of Cleco Corporation and its subsidiaries pursuant to the LTICP.

Cleco and Cleco Power reported pre-tax compensation expense for their share-based compensation plans as shown in the following table:

	CLECO CORPORATION				CLECO POWER				CLECO CORPORATION				CLECO POWER
	FOR THE THREE MONTHS ENDED SEPT. 30,								FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012		2013		2012		2013		2012
Equity classification
Non-vested stock	$	1,585	$	1,139	$	492	$	301	$	4,487	$	3,271	$	1,204	$	792
Stock options	—		2		—		—		—		11		—		—
Total equity classification	$	1,585	$	1,141	$	492	$	301	$	4,487	$	3,282	$	1,204	$	792
Liability classification
Common stock equivalent units	$	—	$	847	$	—	$	338	$	1	$	1,552	$	1	$	631
Total pre-tax compensation expense	$	1,585	$	1,988	$	492	$	639	$	4,488	$	4,834	$	1,205	$	1,423
Tax benefit	$	610	$	765	$	189	$	246	$	1,727	$	1,860	$	463	$	548

Note 2 — Recent Authoritative Guidance

The Registrants adopted, or will adopt, the recent authoritative guidance listed below on their respective effective dates.

In July 2012, FASB issued guidance on testing indefinite-lived intangible assets for impairment. This guidance is intended to reduce costs and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. Entities are allowed to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The adoption of this guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have an impact on the financial condition, results of operations, or cash flows of the Registrants.

In January 2013, FASB clarified the scope of revised disclosure requirements related to balance sheet offsetting that was issued in December 2011. The amendment clarifies that the scope applies to derivatives accounted for in accordance with the authoritative guidance for derivatives and hedging. The adoption of this revision is required for interim and annual periods beginning on or after January 1, 2013. The adoption of this revision did not have an impact on the financial condition, results of operations, or cash flows of the Registrants because it relates to disclosures, and no additional disclosures were required.

In February 2013, FASB revised the disclosure requirements related to items reclassified out of accumulated other comprehensive income. This guidance is intended to improve the transparency of changes in OCI. This revision is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. Cleco adopted the

27

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

revisions to this amendment during the first quarter of 2013. The adoption of this revision did not have an impact on the financial condition, results of operations, or cash flows of the Registrants because it relates to disclosures. For more information on items reclassified out of accumulated other comprehensive income, see Note 14 — “Accumulated Other Comprehensive Loss.”

In February 2013, FASB issued guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The adoption of this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on the financial condition, results of operations, or cash flows of the Registrants.

In April 2013, FASB issued guidance on applying the liquidation basis of accounting and the related disclosure requirements. Under this accounting standards update, an entity must use the liquidation basis of accounting to present its financial statements when it determines that liquidation is imminent, unless the liquidation is the same as that under the plan specified in an entity's governing documents created at its inception. The adoption of this standard is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The adoption of this guidance is not expected to have an effect on the financial condition, results of operations, or cash flows of the Registrants.

In July 2013, FASB amended the guidance for derivatives and hedging to provide for the inclusion of the Fed Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes. The adoption of this guidance is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of this guidance did not have an effect on the financial condition, results of operations, or cash flows of the Registrants.

In July 2013, FASB amended the income tax guidance to provide for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The adoption of this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have an effect on the financial condition, results of operations, or cash flows of the Registrants.

Note 3 — Regulatory Assets and Liabilities

Cleco Power follows the authoritative guidance on regulated operations, which allows utilities to capitalize or defer certain costs based on regulatory approval and management’s ongoing assessment that it is probable these items will be recovered through the ratemaking process. The following table summarizes Cleco Power’s regulatory assets and liabilities at September 30, 2013 and December 31, 2012:

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Regulatory assets – deferred taxes, net	$	217,550	$	210,445
Mining costs	$	14,657	$	16,569
Interest costs	6,033		6,304
Asset removal costs	919		867
Postretirement plan costs	146,597		156,458
Tree trimming costs	4,945		5,656
Training costs	7,214		7,330
Surcredits, net	16,738		6,211
Construction carrying costs	—		4,697
Lignite mining agreement contingency	3,781		3,781
Power purchase agreement capacity costs	13,316		6,217
AMI deferred revenue requirement	3,960		1,483
AFUDC equity gross-up	73,518		74,158
Rate case costs	179		581
Acadia Unit 1 acquisition costs	2,786		2,865
IRP/RFP costs	—		39
AMI pilot costs	—		22
Financing costs	9,864		7,282
Biomass costs	122		145
Total regulatory assets – other	$	304,629	$	300,665
Construction carrying costs	—		(8,255		)
Fuel and purchased power	6,851		7,833
Total regulatory assets, net	$	529,030	$	510,688

Surcredits, Net

Cleco Power has recorded surcredits as the result of a settlement with the LPSC that addressed, among other things, the recovery of the storm damages related to hurricanes and uncertain tax positions. In the settlement, Cleco Power was required to implement surcredits to provide ratepayers with the economic benefit of the carrying charges of certain accumulated deferred income tax liabilities at a rate of return which was set by the LPSC. The settlement, through a true-up mechanism, allows the surcredits to be adjusted to reflect the actual tax deductions allowed by the IRS.

Cleco Power also was allowed to record a corresponding regulatory asset in an amount representing the flow back of the carrying charges to ratepayers. This amount is being amortized over various terms of the established surcredits.

As a result of a settlement with the LPSC, Cleco Power is required to implement a surcredit when funds are withdrawn from the restricted storm reserve. In September 2012, Cleco Power withdrew $10.0 million from the restricted storm reserve to pay for storm damages, resulting in the establishment of a new surcredit. This surcredit will be utilized to partially replenish the storm reserve.

In the third quarter of 2013, Cleco Power recorded a true-up to the surcredits to reflect the actual tax deductions allowed by the IRS for storm damages and uncertain tax positions. As a result of the true-up, Cleco Power has recorded a regulatory asset that represents the amounts that will be collected from ratepayers in future periods.

Construction Carrying Costs

In February 2006, the LPSC approved Cleco Power’s plans to build Madison Unit 3. Terms of the approval included authorization for Cleco Power to collect from customers a portion of the carrying costs of capital during the construction phase of the unit. Cleco Power’s retail rate plan established that Cleco Power return carrying costs to customers and record a regulatory asset for all carrying costs incurred by Cleco Power above the actual amount collected from

28

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

customers. These costs were amortized over a four-year period. As of June 30, 2013, Cleco Power had returned $166.0 million to customers, which represents all amounts due to be refunded to customers.

Power Purchase Agreement Capacity Costs

In March 2012, Cleco Power received approval from the LPSC for a three-year power purchase agreement with Evangeline providing 730 MW of capacity and energy beginning May 1, 2012 and ending April 30, 2015. The LPSC order allows Cleco Power to defer and recover a portion of capacity costs associated with the power purchase agreement. The deferred costs are being collected over the term of the contract.

AMI Deferred Revenue Requirement

In February 2011, the LPSC approved Cleco Power’s stipulated settlement in Docket No. U-31393 allowing Cleco Power to defer, as a regulatory asset, the estimated revenue requirements for the AMI project. The amount of the regulatory asset, including carrying charges, is capped by the LPSC at $20.0 million. The regulatory asset will amortize over the economic life of the project, currently estimated at 15 years.

Financing Costs

In 2011, Cleco Power entered into and settled two treasury rate locks. Also in 2011, Cleco Power entered into a forward starting swap contract. These derivatives were entered into in order to mitigate the interest rate exposure on coupon payments related to forecasted debt issuances. In May 2013, the forward starting interest rate swap was settled at a loss of $3.3 million. Cleco Power deferred $2.9 million of the losses as a regulatory asset. As a result of management’s

assessment that it is probable that these costs will be recovered through the ratemaking process, Cleco Power is amortizing the regulatory asset over the terms of the related debt issuances.

Fuel and Purchased Power Costs

The cost of fuel used for electric generation and the cost of power purchased for utility customers are recovered through the LPSC-established FAC, which enables Cleco Power to pass on to its customers substantially all such charges. For the three months ended September 30, 2013, approximately 88% of Cleco Power’s total fuel cost was regulated by the LPSC, while the remainder was regulated by FERC.

The $1.0 million decrease in the under-recovered costs was primarily due to higher fuel cost recovery revenue partially offset by an increase in per-unit costs of fuel and purchased power and higher volumes of fuel used for electric generation.

Note 4 — Fair Value Accounting

The amounts reflected in Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012, for cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, other accounts receivable, accounts payable, and short-term debt approximate fair value because of their short-term nature.  Estimates of the fair value of Cleco and Cleco Power’s long-term debt are based upon the quoted market price for the same or similar issues or by a discounted present value analysis of future cash flows using current rates obtained by Cleco and Cleco Power for debt with similar maturities.

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, 2013				AT DEC. 31, 2012
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market:
Cash and cash equivalents	$	46,800	$	46,800	$	31,020	$	31,020
Restricted cash and cash equivalents	$	8,471	$	8,471	$	14,221	$	14,221
Long-term debt, excluding debt issuance costs	$	1,306,230	$	1,419,560	$	1,345,198	$	1,579,674

Cleco Power
	AT SEPT. 30, 2013				AT DEC. 31, 2012
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market:
Cash and cash equivalents	$	42,560	$	42,560	$	23,368	$	23,368
Restricted cash and cash equivalents	$	8,374	$	8,374	$	14,124	$	14,124
Long-term debt, excluding debt issuance costs	$	1,306,230	$	1,419,560	$	1,320,198	$	1,554,674

At September 30, 2013, Cleco and Cleco Power were exposed to concentrations of credit risk through their short-term investments classified as cash equivalents and restricted cash equivalents. Cleco had $45.6 million ($37.3 million of cash equivalents and $8.3 million of restricted cash equivalents) in short-term investments in institutional money market funds. Cleco Power had $41.8 million ($33.5 million of cash equivalents and $8.3 million of restricted cash equivalents) in short-term investments in institutional money market funds. If the money market funds fail to perform under the terms of the investments, Cleco and Cleco Power will be exposed to a loss of the invested amounts. Collateral on these

types of investments is not required by either Cleco or Cleco Power.

Fair Value Measurements and Disclosures

The authoritative guidance on fair value measurements requires entities to classify assets and liabilities that are either measured or disclosed at their fair value according to three different levels depending on the inputs used in determining fair value.

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

29

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

authoritative guidance for fair value measurements and disclosures.

Cleco
	CLECO CONSOLIDATED FAIR VALUE MEASUREMENTS AT REPORTING DATE USING:
(THOUSANDS)	AT SEPT. 30, 2013		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2012		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	$	47,901	$	—	$	47,901	$	—	$	39,489	$	—	$	39,489	$	—
Municipal bonds	9,631		—		9,631		—		10,203		—		10,203		—
Corporate bonds	513		—		513		—		—		—		—		—
Total assets	$	58,045	$	—	$	58,045	$	—	$	49,692	$	—	$	49,692	$	—
Liability Description
Interest rate derivatives	$	—	$	—	$	—	$	—	$	2,627	$	—	$	2,627	$	—
Long-term debt	1,419,560		—		1,419,560		—		1,579,674		—		1,579,674		—
Total liabilities	$	1,419,560	$	—	$	1,419,560	$	—	$	1,582,301	$	—	$	1,582,301	$	—

Cleco Power
	CLECO POWER FAIR VALUE MEASUREMENTS AT REPORTING DATE USING:
(THOUSANDS)	AT SEPT. 30, 2013		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2012		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	$	44,005	$	—	$	44,005	$	—	$	33,292	$	—	$	33,292	$	—
Municipal bonds	9,631		—		9,631		—		10,203		—		10,203		—
Corporate bonds	513		—		513		—		—		—		—		—
Total assets	$	54,149	$	—	$	54,149	$	—	$	43,495	$	—	$	43,495	$	—
Liability Description
Interest rate derivatives	$	—	$	—	$	—	$	—	$	2,627	$	—	$	2,627	$	—
Long-term debt	1,419,560		—		1,419,560		—		1,554,674		—		1,554,674		—
Total liabilities	$	1,419,560	$	—	$	1,419,560	$	—	$	1,557,301	$	—	$	1,557,301	$	—

Cleco utilizes different valuation techniques for fair value calculations. In order to measure the fair value for Level 1 assets and liabilities, Cleco obtains the closing price from published indices in active markets for the various instruments and multiplies this price by the appropriate number of instruments held. Cleco had no Level 1 assets or liabilities at September 30, 2013 or December 31, 2012. Level 2 fair values for assets and liabilities are determined by obtaining the closing price from published indices in active markets for instruments that are similar to Cleco’s assets and liabilities. The fair value obtained is then discounted to the current period using a U.S. Treasury published interest rate as a proxy for a risk-free rate of return. For some options, Cleco uses the Black-Scholes model using observable and available inputs to calculate the fair value, consistent with the income approach. These techniques have been applied consistently for each fiscal period. Level 3 fair values allow for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Cleco had no Level 3 assets or liabilities at September 30, 2013 or December 31, 2012.

The assets and liabilities reported at fair value are grouped into classes based on the underlying nature and risks associated with the individual asset or liability.

The institutional money market funds were reported on the Cleco Condensed Consolidated Balance Sheet in cash and cash equivalents, current restricted cash and cash equivalents, non-current restricted cash and cash equivalents, and restricted investments of $37.3 million, $3.4 million,

$5.1 million, and $2.1 million, respectively, at September 30, 2013. At Cleco Power, the institutional money market funds were reported on the Condensed Consolidated Balance Sheet in cash and cash equivalents, current restricted cash and cash equivalents, non-current restricted cash and cash equivalents, and restricted investments and were $33.5 million, $3.4 million, $5.0 million, and $2.1 million, respectively, at September 30, 2013. The Level 2 institutional money market funds asset consists of a single class. In order to capture interest income and minimize risk, cash is invested in money market funds that invest primarily in short-term securities issued by the U.S. Treasury in order to maintain liquidity and achieve the goal of a net asset value of a dollar. The risks associated with this class are counterparty risk of the fund manager and risk of price volatility associated with the underlying securities of the fund.

The municipal and corporate bonds were reported on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets in restricted investments in the amount of $9.6 million and $0.5 million at September 30, 2013, respectively. The Level 2 municipal bonds and the Level 2 corporate bonds consisted of a single class. In order to maximize income, meet the requirements established by the LPSC, and maintain safety and liquidity for the restricted reserve fund, restricted cash and cash equivalents were invested in short-term, fixed-income debt instruments. The risks associated with this class are counterparty risk of the fund manager and risk of price volatility associated with the municipal bonds and corporate bonds. Quarterly, Cleco receives reports from the custody agent for

30

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

the investment manager which provides the fair value measurement. Cleco performs an evaluation of those reports to verify the fair value of the securities.

The Level 2 interest rate derivative was one forward starting interest rate swap liability that consisted of a single class that contained only one instrument. The risks were changes in the three-month LIBOR rate and counterparty risk. This instrument was with a direct counterparty and not traded through an exchange.

The Level 2 long-term debt liability consists of a single class. In order to fund capital requirements, Cleco issues long-term, fixed and variable rate debt with various tenors. The fair value of this class fluctuates as the market interest rates for fixed and variable rate debt with similar tenors and credit ratings change. The fair value of the debt could also change from period to period due to changes in the credit rating of the Cleco entity that issued the debt.

During the nine months ended September 30, 2013, and the year ended December 31, 2012, Cleco did not experience any transfers between levels.

Restricted Investments

In September 2007, the LPSC authorized the funding and securitization of a $50.0 million reserve for Cleco Power’s future storm costs. On July 1, 2012, Cleco Power transferred $13.0 million of the related restricted cash and cash equivalents to an outside investment manager. Investments made by the investment manager are restricted to the criteria established by management in Cleco Power’s guidelines for short-term investments. At September 30, 2013, the investments included cash and cash equivalents and debt securities.

The cash and cash equivalents are reflected in Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2013, as restricted cash and cash equivalents and approximate fair value because of their short-term nature. 

The debt securities are recorded at fair value on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2013, as restricted investments. The investments in debt securities include municipal bonds, corporate bonds, and commercial paper with original maturity

dates of more than three months and are classified as available-for-sale securities and reported at fair value. Because Cleco Power’s investment strategy for these investments is within the requirements established by the LPSC for the restricted reserve fund, realized and unrealized gains and losses, interest income, investment management fees, and custody fees are recorded directly to Cleco Power’s restricted storm reserve rather than in earnings or other comprehensive income. As a result, no amounts will be recorded to other comprehensive income for these investments.

Quarterly, Cleco Power’s available-for-sale debt securities are evaluated on an individual basis to determine if a decline in fair value below the carrying value is other-than-temporary.

Management determines whether it intends to sell or if it is more likely than not that it will be required to sell impaired securities. This determination considers current and forecasted liquidity and regulatory requirements. For Cleco Power’s impaired debt securities for which there was no intent or expected requirement to sell, the evaluation assesses whether it is likely the amortized cost will be recovered considering the nature of the securities, credit rating, financial condition of the issuer, or the extent and duration of the unrealized loss and market conditions. If Cleco Power determines that an other-than-temporary decline in value exists on its debt securities, the investments would be written down to fair value with a new basis established. Declines in fair value below cost basis that are determined to be other-than-temporary would be recorded to Cleco Power’s restricted storm reserve. The unrealized losses on Cleco Power’s debt securities as of September 30, 2013, were caused by interest rate movements. Cleco Power does not intend to sell the debt securities and has determined it is more likely than not that it will not be required to sell the investments before recovery of the amortized cost value. Cleco Power determined there were no other-than-temporary impairments on its debt securities at September 30, 2013.

The following table provides a reconciliation of Cleco Power’s available-for-sale debt securities from amortized cost to fair value at September 30, 2013 and December 31, 2012:

	AT SEPT. 30, 2013									AT DEC. 31, 2012
(THOUSANDS)	AMORTIZED COST		TOTAL UNREALIZED GAINS (1)			TOTAL UNREALIZED LOSSES (1)		FAIR VALUE		AMORTIZED COST		TOTAL UNREALIZED GAINS (1)		TOTAL UNREALIZED LOSSES (1)		FAIR VALUE
Municipal bonds	$	9,641	$	5		$	15	$	9,631	$	10,228	$	3	$	28	$	10,203
Corporate bonds	515		—			2		513		—		—		—		—
Commercial paper	2,131		—		—	—		2,131		649		—		—		649
Total available-for-sale debt securities	$	12,287	$	5		$	17	$	12,275	$	10,877	$	3	$	28	$	10,852
(1)  Unrealized gains and losses are recorded to the restricted storm reserve.

Cleco Power recognized less than $0.1 million unrealized mark-to-market gains in the restricted storm reserve for both the three and nine months ended September 30, 2013. Cleco Power recognized less than $0.1 million unrealized mark-to-market losses in the restricted storm reserve for both the three and nine months ended September 30, 2012.

The following table summarizes the debt securities that were in an unrealized loss position at September 30, 2013, 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	$	7	$	2,698	$	8	$	2,518
Corporate bonds	2		513		—		—
Total	$	9	$	3,211	$	8	$	2,518

31

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

At September 30, 2013, the fair value of Cleco Power’s available-for-sale debt securities by contractual maturity was:

(THOUSANDS)	AT SEPT. 30, 2013
One year or less	$	5,740
Over one year through five years	6,535
Total fair value	$	12,275

There were no realized gains or losses on Cleco Power’s available-for-sale debt securities during the three and nine months ended September 30, 2013 and 2012. Realized gains and losses will be determined on a specific identification basis.

Derivatives and Hedging

The authoritative guidance on derivatives and hedging requires entities to provide transparent disclosures about a company’s derivative activities and how the related hedged items affect a company’s financial position, financial performance, and cash flows. Cleco is required to provide qualitative and quantitative disclosures about derivative fair value, gains and losses, and credit-risk-related contingent features in derivative agreements.

For the three and nine months ended September 30, 2013, there was no effect on Cleco and Cleco Power’s Condensed Consolidated Statements of Income for derivatives not designated as hedging instruments. For the three and nine months ended September 30, 2012, Cleco and Cleco Power recognized losses in Fuel used for electric generation on the Condensed Consolidated Statements of Income of $0.6 million and $8.2 million, respectively, for derivatives not designated as hedging instruments. In accordance with the authoritative guidance for regulated operations, there were no unrealized gains or losses and no deferred losses associated with fuel cost hedges reported in Accumulated deferred fuel on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012. As gains and losses are realized in future periods, they will be reported as Fuel used for electric generation on Cleco and Cleco Power’s Condensed Consolidated Statements of Income.

At December 31, 2012, Cleco and Cleco Power’s Condensed Consolidated Balance Sheets had no derivative instruments not designated as hedging instruments.

At September 30, 2013 and December 31, 2012, Cleco Power had no open positions hedged for natural gas.

In November 2011, Cleco Power entered into a pay fixed/receive variable forward starting interest rate swap contract in order to mitigate the interest rate exposure on coupon payments related to the remaining $50.0 million fixed-rate forecasted debt issuance. The forward starting interest rate swap had a spot 30-year all-in swap rate of 3.05%, notional amount of $50.0 million, with the pricing date of May 14, 2013, or the issuance of the notes, whichever was earlier. The forward starting interest rate swap met the criteria of a cash flow hedge under the authoritative guidance as it related to derivatives and hedging and was carried on the balance sheet at its fair value. Because of the inputs and common techniques used to calculate fair value, the swap valuation was considered Level 2.

During the first quarter of 2013, Cleco determined that the forward starting interest rate swap ceased to be highly effective in offsetting changes in the cash flows of the forecasted coupon payments and discontinued hedge accounting prospectively. In May 2013, upon pricing of the

2008 Series B GO Zone bonds, Cleco Power settled the forward starting interest rate swap at a loss of $3.3 million. Of this amount, Cleco Power deferred $2.9 million as a regulatory asset and recognized $0.4 million in other comprehensive income. In May 2013, Cleco Power began amortizing these losses over the 25-year term of the related debt. For more information about the 2008 Series B GO Zone bonds, see Note 5 — “Debt.”

The following table presents 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, 2013 and 2012.

	FOR THE THREE MONTHS ENDED SEPT. 30,
	2013					2012
(THOUSANDS)	AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate   derivatives (1)	$	—	$	(86	)*	$	802	$	17	*

* The (loss) gain reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.

⁽¹⁾ During the three months ended September 30, 2013 and 2012, Cleco had no ineffectiveness and losses related to the interest rate derivatives recorded as a regulatory asset.

	FOR THE NINE MONTHS ENDED SEPT. 30,
	2013					2012
(THOUSANDS)	AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate   derivatives (1)	$	1,762	$	(165	)*	$	(733	)	$	(39	)*

* The loss reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.

⁽¹⁾ During the nine months ended September 30, 2013 and 2012, Cleco recorded ineffectiveness and losses related to the interest rate derivatives as a regulatory asset of $3.3 million and $2.6 million, respectively.

At September 30, 2013, Cleco Power expected $0.3 million of the effective portion of deferred net losses related to interest rate derivatives to be reclassed from accumulated OCI to interest charges over the next 12 months.

Note 5 — Debt

Short-term Debt

At September 30, 2013 and December 31, 2012, Cleco and Cleco Power had no short-term debt outstanding.

Long-term Debt

At September 30, 2013, Cleco’s long-term debt outstanding was $1.31 billion, of which $17.1 million was due within one year. The long-term debt due within one year at September 30, 2013, represents $14.9 million principal payments for the Cleco Katrina/Rita storm recovery bonds and $2.2 million of capital lease payments.

For Cleco, long-term debt decreased$40.3 million from December 31, 2012, primarily due to a $75.0 million repayment of senior notes, $60.0 million of solid waste disposal bonds reacquired in March 2013, a $25.0 million reduction in credit facility draws, $14.0 million scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2013, and a $1.6 million decrease in capital lease

32

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

obligations. These decreases were partially offset by $35.0 million outstanding on a bank term loan entered into in March 2013, the issuance of $50.0 million 2008 Series A GO Zone bonds and $50.0 million 2008 Series B GO Zone bonds in May 2013, and debt discount amortizations of $0.3 million.

At September 30, 2013, Cleco Power’s long-term debt outstanding was $1.31 billion of which $17.1 million was due within one year. The long-term debt due within one year at September 30, 2013, represents $14.9 million principal payments for the Cleco Katrina/Rita storm recovery bonds and $2.2 million of capital lease payments.

For Cleco Power, long-term debt decreased$15.3 million from December 31, 2012, primarily due to a $75.0 million repayment of senior notes, $60.0 million of solid waste disposal bonds reacquired in March 2013, $14.0 million scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2013, and a $1.6 million decrease in capital lease obligations. These decreases were partially offset by $35.0 million outstanding on a bank term loan entered into in March 2013, the issuance of $50.0 million 2008 Series A GO Zone bonds and $50.0 million 2008 Series B GO Zone bonds in May 2013, and debt discount amortizations of $0.3 million.

Cleco Power’s $60.0 million solid waste disposal facility bonds due 2037, which were issued by the Rapides Finance Authority for the benefit of Cleco Power in November 2007, were required to be mandatorily tendered by the bondholders for purchase on March 1, 2013, pursuant to the terms of the indenture. The bonds were issued in connection with a loan agreement between the Rapides Finance Authority and Cleco Power. On March 1, 2013, Cleco Power purchased all $60.0 million outstanding bonds at face value plus $1.6 million of accrued interest, using draws under Cleco Power’s revolving credit facility. In connection with the purchase, the interest rate of the bonds will reset each week based on the Securities Industry and Financial Markets Association index. The initial interest rate of the bonds at March 1, 2013, was 0.11% per annum. Interest expense will continue to be recorded with a corresponding amount recorded as interest income, excluding amortization of debt issuance costs. Although the bonds remain outstanding, Cleco Power has the right to redeem and cancel the debt at any time without approval of the Rapides Finance Authority. In accordance with the authoritative guidance, the bonds are considered extinguished and Cleco Power is holding the debt as treasury bonds, resulting in a net presentation on Cleco and Cleco Power's Condensed Consolidated Balance Sheets. Cleco Power has the option to remarket the bonds for new terms and new interest rates, both to be determined by market conditions.

On March 20, 2013, Cleco Power entered into a bank term loan agreement in the amount of $60.0 million. Proceeds of the loan agreement were used to repay draws under Cleco Power’s revolving credit facility. Cleco Power made a $25.0 million payment on the loan on May 8, 2013, reducing the balance outstanding to $35.0 million. The interest rate under the agreement at September 30, 2013, was 0.93%. The rate resets monthly at one month LIBOR, plus 0.75%. The loan matures on May 29, 2015.

On May 3, 2013, Cleco Power remarketed $50.0 million of its 2008 Series A GO Zone bonds which had previously been purchased by Cleco Power and were being held as treasury bonds. The interest rate at September 30, 2013, was 0.94% which is based on 65% of one month LIBOR, plus 0.82%. The rate resets monthly. The 2008 Series A GO Zone bonds will be

subject to remarketing on May 3, 2015. Of the $50.0 million bonds, $25.0 million of the proceeds were used to fund the partial repayment of the $60.0 million solid waste disposal bonds described above and $25.0 million of the proceeds were used to partially fund the maturity of Cleco Power’s $75.0 million 5.375% senior notes on May 1, 2013.

On May 8, 2013, Cleco Power remarketed $50.0 million of its 2008 Series B GO Zone bonds which had previously been purchased by Cleco Power and were being held as treasury bonds, at a fixed interest rate of 4.25%. The 2008 Series B GO Zone bonds mature on December 1, 2038. The proceeds were used to partially fund the maturity of Cleco Power's $75.0 million 5.375% senior notes on May 1, 2013.

Credit Facilities

At September 30, 2013, Cleco Corporation and Cleco Power had no borrowings outstanding under their respective existing $250.0 million and $300.0 million credit facilities.

On October 16, 2013, Cleco Corporation and Cleco Power entered into new, amended and restated credit facilities with a maturity date of October 16, 2018. The new facilities replace the previous facilities, which were to mature on October 7, 2016. The new facilities are comprised of the same ten banks, plus one additional bank. The new facilities are priced the same as the old facilities and are for the same amounts.

Note 6 — Pension Plan and Employee Benefits

Pension Plan and Other Benefits Plan

Most employees hired before August 1, 2007, are covered by a non-contributory, defined benefit pension plan. Benefits under the plan reflect an employee’s years of service, age at retirement, and highest total average compensation for any consecutive five calendar years during the last ten years of employment with Cleco. Cleco’s policy is to base its contributions to the employee pension plan upon actuarial computations utilizing the projected unit credit method, subject to the IRS’s full funding limitation. In January 2013, Cleco Power made $34.0 million in discretionary contributions to the pension plan designated for the 2012 plan year. Cleco does not expect to make any additional discretionary contributions to the pension plan for the remainder of the year. During 2012, Cleco made no discretionary or required contributions to the pension plan. The required contributions are driven by liability funding target percentages set by law which could cause the required contributions to be uneven among the years. The ultimate amount and timing of the contributions may be affected by changes in the discount rate, changes in the funding regulations, and actual returns on fund assets. Cleco Power is considered the plan sponsor and Support Group is considered the plan administrator.

Cleco’s retirees and their dependents are eligible to receive medical, dental, vision, and life insurance benefits (other benefits). Cleco recognizes the expected cost of these other benefits during the periods in which the benefits are earned.

The components of net periodic pension and other benefit cost for the three and nine months ended September 30, 2013 and 2012, are as follows:

33

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

	PENSION BENEFITS						OTHER BENEFITS
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012			2013		2012
Components of periodic benefit cost:
Service cost	$	2,472		$	2,078		$	614	$	303
Interest cost	4,485			4,563			214		334
Expected return on plan assets	(5,861		)	(5,201		)	—		—
Amortizations:
Transition obligation	—			—			6		5
Prior period service credit	(18		)	(18		)	—		—
Net loss	3,304			2,087			213		112
Net periodic benefit cost	$	4,382		$	3,509		$	1,047	$	754

	PENSION BENEFITS						OTHER BENEFITS
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012			2013		2012
Components of periodic benefit cost:
Service cost	$	7,417		$	6,234		$	1,242	$	1,096
Interest cost	13,455			13,690			1,176		1,287
Expected return on plan assets	(17,584		)	(15,604		)	—		—
Amortizations:
Transition obligation	—			—			15		15
Prior period service credit	(53		)	(53		)	—		—
Net loss	9,913			6,259			849		512
Net periodic benefit cost	$	13,148		$	10,526		$	3,282	$	2,910

Because Cleco Power is the pension plan sponsor and the related trust holds the assets, the net unfunded status of the pension plan is reflected at Cleco Power. The liability of Cleco’s other subsidiaries is transferred with a like amount of assets to Cleco Power monthly. The expense of the pension plan related to Cleco’s other subsidiaries for the three and nine months ended September 30, 2013, was $0.6 million and $1.9 million, respectively. The amounts for the same periods in 2012 were $0.5 million and $1.6 million, respectively.

Cleco Corporation is the plan sponsor for the other benefit plans. There are no assets set aside in a trust and the liabilities are reported on the individual subsidiaries’ financial statements. The current portion of the other benefits liability for Cleco was $3.1 million at September 30, 2013. The amount at December 31, 2012, was also $3.1 million. The current portion of the other benefits liability for Cleco Power was $2.9 million at September 30, 2013. The amount at December 31, 2012, was also $2.9 million. The expense related to other benefits reflected in Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2013, was $0.9 million and $2.8 million, respectively. The amounts for the same periods in 2012 were $0.7 million and $2.5 million, respectively.

SERP

Certain Cleco officers are covered by the SERP. The SERP is a non-qualified, non-contributory, defined-benefit pension plan. Benefits under the plan reflect an employee’s years of service, age at retirement, and the sum of the highest base salary paid out of the last five calendar years plus the average of the three highest bonuses paid during the 60 months prior to retirement, reduced by benefits received from any other defined benefit pension plan, SERP Plan, or Cleco contributions under the enhanced 401(k) Plan to the extent such contributions exceed the limits of the 401(k) Plan. Cleco does not fund the SERP liability but instead pays for current benefits out of the general funds available. Cleco Power has formed a Rabbi Trust

designated as the beneficiary for life insurance policies issued on the SERP participants. Proceeds from the life insurance policies are expected to be used to pay the SERP participants’ life insurance benefits, as well as future SERP payments. However, because SERP is a non-qualified plan, the assets of the trust could be used to satisfy general creditors of Cleco Power in the event of insolvency. All SERP benefits are paid out of the general cash available of the respective companies from which the officer retired. No contributions to the SERP were made during the nine months ended September 30, 2013 or 2012. Cleco Power is considered the plan sponsor and Support Group is considered the plan administrator. The components of net periodic SERP benefit cost for the three and nine months ended September 30, 2013 and 2012, are as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
Components of periodic benefit cost:
Service cost	$	514	$	372	$	1,541	$	1,115
Interest cost	645		632		1,934		1,895
Amortizations:
Prior period service cost	13		13		40		40
Net loss	576		441		1,728		1,324
Net periodic benefit cost	$	1,748	$	1,458	$	5,243	$	4,374

The SERP liabilities are reported on the individual subsidiaries’ financial statements. At September 30, 2013 and December 31, 2012, the current portion of the SERP liability for Cleco was $2.7 million and $2.5 million, respectively. The current portion of the SERP liability for Cleco Power was $0.8 million at September 30, 2013. The amount at December 31, 2012, was also $0.8 million. The expense related to the SERP reflected on Cleco Power’s Condensed Consolidated Statements of Income was $0.4 million and $1.2 million for the three and nine months ended September 30, 2013, compared to $0.4 million and $1.1 million for the same period in 2012.

401(k) Plan

Most employees are eligible to participate in the 401(k) Plan. Under the 401(k) Plan, Cleco makes matching contributions and funds dividend reinvestments with cash. Cleco’s 401(k) Plan expense for the three and nine monthsended September 30, 2013 and 2012 is as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
401(k) Plan expense	$	936	$	963	$	3,361	$	3,303

Cleco Power is the plan sponsor for the 401(k) Plan. The expense of the 401(k) Plan related to Cleco’s other subsidiaries for the three and nine months ended September 30, 2013, was $0.2 million and $0.8 million, respectively. The amounts for the same periods in 2012 were also $0.2 million and $0.8 million, respectively.

Note 7 — Income Taxes

The following table summarizes the effective income tax rates for Cleco and Cleco Power for the three and nine month periods ended September 30, 2013 and 2012.

34

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
	2013		2012		2013		2012
Cleco	34.1	%	24.0	%	33.0	%	27.8	%
Cleco Power	35.0	%	25.5	%	34.6	%	31.0	%

Effective Tax Rates

For the three and nine months ended September 30, 2013 and 2012, the effective income tax rate for Cleco was different than the federal statutory rate due to permanent tax deductions, flowthrough benefits associated with AFUDC equity, tax benefits delivered from Cleco’s investment in the NMTC Fund, an increase in the liability for uncertain tax positions, a favorable settlement with taxing authorities, adjustments for tax returns as filed, and state tax expense.

For the three and nine months ended September 30, 2013, compared to the three and nine months ended September 30, 2012, the effective income tax rate for Cleco increased due to a decrease in permanent tax deductions, a decrease in flowthrough benefits associated with AFUDC equity, a decrease in tax benefits delivered from Cleco's investment in the NMTC Fund, an increase in the liability for uncertain tax positions, and the absence of a favorable settlement with taxing authorities. 

For the three and nine months ended September 30, 2013 and 2012, the effective income tax rate for Cleco Power was different than the federal statutory rate due to permanent tax deductions, flowthrough benefits associated with AFUDC equity, a decrease in the liability for uncertain tax positions, a favorable settlement with taxing authorities, adjustments for tax returns as filed, and state tax expense.

For the three and nine months ended September 30, 2013, compared to the three and nine months ended September 30, 2012, the effective income tax rate for Cleco Power increased due to a decrease in permanent tax deductions, a decrease in flowthrough benefits associated with AFUDC equity, and the absence of a favorable settlement with taxing authorities. 

Valuation Allowance

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. As of September 30, 2013 and December 31, 2012, Cleco had a deferred tax asset resulting from NMTC carryforwards of $91.2 million and $78.8 million, respectively. If the NMTC carryforwards are not utilized, they will begin to expire in 2029. Management considers it more likely than not that all deferred tax assets related to NMTC carryforwards will be realized; therefore, no valuation allowance has been recorded.

Net Operating Losses

As of September 30, 2013, Cleco had a net operating loss carryforward primarily related to a tax accounting method change for bonus depreciation associated with Madison Unit 3. Cleco considers it more likely than not that these income tax losses generated will be utilized to reduce future income taxes. Cleco expects to utilize the entire net operating loss carryforward within the statutory deadlines.

Uncertain Tax Positions

Cleco classifies all interest related to uncertain tax positions as a component of interest payable and interest expense. The total amounts of uncertain tax positions and related interest

payable and interest expense, as reflected on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets and Statements of Income, are shown in the following tables.

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Interest payable
Cleco	$	2,069	$	1,420
Cleco Power	$	3,712	$	3,358

The interest payable reflects the amount of interest anticipated to be paid to taxing authorities. These amounts do not include 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 September 30, 2013 and December 31, 2012, are $8.4 million and $6.2 million, respectively.

	FOR THE THREE MONTHS ENDED SEPT. 30,					FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012			2013			2012
Interest charges
Cleco	$	174	$	(121	)	$	(116	)	$	(8,477	)
Cleco Power	$	113	$	133		$	354		$	(9,504	)

The interest charges reflect the amount of interest anticipated to be paid to or received from taxing authorities. These amounts do not include any offset for the amounts that may be recovered from or owed to customers under the existing rate orders.

The federal income tax years that remain subject to examination by the IRS are 2007 through 2012. The Louisiana state income tax years that remain subject to examination by the Louisiana Department of Revenue are 2002 through 2011. At December 31, 2012, Cleco had $60.4 million deposited with the IRS, of which $43.5 million remained to either offset tax and interest liabilities for tax years subsequent to 2003 or to be refunded. Cleco received a refund of tax and interest in January 2013 from the IRS of $42.3 million relating to tax years 2001 through 2008.

Cleco is currently under audit by the IRS for the years 2010 through 2012. During the third quarter of 2013, Cleco increased its liability for uncertain tax positions. In addition, Cleco reclassified all uncertain tax positions to current from noncurrent as it expects to settle all outstanding audits within the next 12 months. Cleco estimates that it is reasonably possible that the balance of unrecognized tax benefits as of September 30, 2013, could decrease by a maximum of $4.6 million for Cleco and the balance for Cleco Power would be unchanged in the next 12 months as a result of reaching settlements with the IRS and state tax authorities. The settlements could involve the payment of additional taxes, the adjustment of deferred taxes, and/or the recognition of tax benefits, which may have an effect on Cleco’s effective tax rate.

Cleco classifies income tax penalties as a component of other expense. During 2013 and 2012, the amount of penalties recognized was immaterial.

Note 8 — Disclosures about Segments

Cleco’s reportable segments are based on its method of internal reporting, which disaggregates business units by its first-tier subsidiary. Cleco’s reportable segments are Cleco Power and Midstream. The holding company, a shared services subsidiary, two transmission interconnection facility

35

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

subsidiaries, and an investment subsidiary are shown as Other in the following tables.

Each reportable segment engages in business activities from which it earns revenue and incurs expenses. Segment managers report periodically to Cleco’s Chief Executive Officer (the chief operating decision-maker) with discrete financial information and, at least quarterly, present discrete financial information to Cleco Corporation’s Board of Directors. Each reportable segment prepared budgets for 2013 that were presented to and approved by Cleco Corporation’s Board of Directors.

The financial results of Cleco’s segments are presented on an accrual basis. Management evaluates the performance of its segments and allocates resources to them based on segment profit and the requirements to implement new strategic initiatives and projects to meet current business objectives. Material intercompany transactions occur on a regular basis. These intercompany transactions relate primarily to the power purchase agreement between Cleco Power and Evangeline that began in 2012 and joint and common administrative support services provided by Support Group.

SEGMENT INFORMATION FOR THE THREE MONTHS ENDED SEPT. 30,
2013 (THOUSANDS)	CLECO POWER			MIDSTREAM		OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	314,766		$	—	$	—		$	—		$	314,766
Tolling operations	—			12,339		—			(12,339		)	—
Other operations	14,301			1		541			—			14,843
Electric customer credits	(846		)	—		—			—			(846		)
Affiliate revenue	335			—		13,313			(13,648		)	—
Operating revenue, net	$	328,556		$	12,340	$	13,854		$	(25,987	)	$	328,763
Depreciation	$	39,962		$	1,522	$	272		$	—		$	41,756
Interest charges	$	18,656		$	312	$	(110	)	$	156		$	19,014
Interest income	$	331		$	—	$	(156	)	$	157		$	332
Federal and state income tax expense (benefit)	$	33,355		$	4,083	$	(3,048	)	$	(1	)	$	34,389
Net income	$	61,885		$	1,164	$	3,358		$	—		$	66,407
Additions to long-lived assets	$	38,585		$	337	$	358		$	—		$	39,280
Equity investment in investees	$	14,532		$	—	$	8		$	1		$	14,541
Total segment assets	$	3,881,391		$	219,028	$	106,158		$	(79,060	)	$	4,127,517

2012 (THOUSANDS)	CLECO POWER			MIDSTREAM			OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	282,894		$	—		$	—		$	—		$	282,894
Tolling operations	—			13,890			—			(13,890		)	—
Other operations	14,905			1			502			—			15,408
Electric customer credits	(930		)	—			—			—			(930		)
Affiliate revenue	343			—			12,343			(12,686		)	$	—
Operating revenue, net	$	297,212		$	13,891		$	12,845		$	(26,576	)	$	297,372
Depreciation	$	33,199		$	1,499		$	233		$	—		$	34,931
Interest charges	$	21,962		$	(69	)	$	(124	)	$	197		$	21,966
Interest income	$	129		$	—		$	(194	)	$	197		$	132
Federal and state income tax expense (benefit)	$	19,740		$	2,489		$	(2,050	)	$	—		$	20,179
Net income	$	57,783		$	3,429		$	2,606		$	—		$	63,818
Additions to long-lived assets	$	65,073		$	799		$	503		$	—		$	66,375
Equity investment in investees (1)	$	14,532		$	—		$	8		$	—		$	14,540
Total segment assets  (1)	$	3,871,729		$	215,342		$	201,678		$	(141,400	)	$	4,147,349
(1) Balances as of December 31, 2012

36

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

SEGMENT INFORMATION FOR THE NINE MONTHS ENDED SEPT. 30,
2013 (THOUSANDS)	CLECO POWER			MIDSTREAM			OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	796,957		$	—		$	—		$	—		$	796,957
Tolling operations	—			26,483			—			(26,483		)	—
Other operations	36,366			2			1,550			(1		)	37,917
Electric customer credits	(1,270		)	—			—			—			(1,270		)
Affiliate revenue	1,005			—			40,406			(41,411		)	—
Operating revenue	$	833,058		$	26,485		$	41,956		$	(67,895	)	$	833,604
Depreciation	$	105,251		$	4,523		$	755		$	—		$	110,529
Interest charges	$	60,882		$	(338	)	$	334		$	480		$	61,358
Interest income	$	784		$	—		$	(474	)	$	479		$	789
Federal and state income tax expense (benefit)	$	65,558		$	7,221		$	(5,887	)	$	—		$	66,892
Net income	$	124,142		$	6,180		$	5,251		$	(1	)	$	135,572
Additions to long-lived assets	$	124,731		$	2,664		$	1,629		$	—		$	129,024
Equity investment in investees	$	14,532		$	—		$	8		$	1		$	14,541
Total segment assets	$	3,881,391		$	219,028		$	106,158		$	(79,060	)	$	4,127,517

2012 (THOUSANDS)	CLECO POWER		MIDSTREAM		OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	720,776	$	—	$	—		$	—		$	720,776
Tolling operations	—		21,434		—			(21,434		)	—
Other operations	36,967		2		1,496			(1		)	38,464
Electric customer credits	1,025		—		—			—			1,025
Affiliate revenue	1,030		—		37,540			(38,570		)	—
Operating revenue	$	759,798	$	21,436	$	39,036		$	(60,005	)	$	760,265
Depreciation	$	93,847	$	4,491	$	689		$	1		$	99,028
Interest charges	$	61,253	$	244	$	1,320		$	388		$	63,205
Interest income	$	153	$	—	$	(379	)	$	389		$	163
Equity income from investees, before tax	$	—	$	—	$	1		$	—		$	1
Federal and state income tax expense (benefit)	$	54,748	$	7,278	$	(7,916	)	$	—		$	54,110
Net income	$	121,873	$	11,053	$	7,610		$	—		$	140,536
Additions to long-lived assets	$	159,836	$	6,811	$	1,371		$	—		$	168,018
Equity investment in investees (1)	$	14,532	$	—	$	8		$	—		$	14,540
Total segment assets (1)	$	3,871,729	$	215,342	$	201,678		$	(141,400	)	$	4,147,349
(1) Balances as of December 31, 2012

Note 9 — Electric Customer Credits

The current amount of Cleco Power’s annual retail earnings is subject to the terms of an FRP established by the LPSC effective February 12, 2010. The FRP allows Cleco Power the opportunity to earn a target return on equity of 10.7%, including returning to retail customers 60% of retail earnings between 11.3% and 12.3% and all retail earnings over 12.3%. The amount of credits due customers, if any, is determined by Cleco Power and the LPSC annually. Cleco Power must file annual monitoring reports no later than October 31 for the 12-month period ending June 30. In April 2013, Cleco Power filed an application with the LPSC to extend its current FRP and seek rate recovery of Coughlin. Cleco Power requested in its application that the FRP extension be effective through June 2020. The docket is currently in the discovery phase. The procedural schedule currently anticipates LPSC testimony by mid-November 2013. Cleco Power expects LPSC action on this request by the second quarter of 2014.

On October 31, 2012, Cleco Power filed its report for the 12 months endedJune 30, 2012, which indicated that $1.7 million was due to be returned to customers. On June 26, 2013, the LPSC approved the monitoring report for the 12 months endedJune 30, 2012, with a recommended adjusted refund of $2.4 million. The increase in refund was the result of

changes to revenue requirements for certain FRP Rider items. Cleco Power issued refunds on customers’ bills in the third quarter of 2013. Cleco Power expects to file its monitoring report for the 12 months ended June 30, 2013 on or before October 31, 2013, which will indicate that$2.2 millionis due to be returned to customers. Cleco Power has accrued for this anticipated refund at September 30, 2013. The accrual for estimated electric customer credits reflected on Cleco Corporation and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012, was $3.0 million and $4.2 million, respectively.

Note 10 — Variable Interest Entities

Cleco reports its investments in VIEs in accordance with the authoritative guidance. Cleco and Cleco Power report the investment in Oxbow on the equity method of accounting. Under the equity method, the assets and liabilities of this entity are reported as equity investment in investees on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets. The revenue and expenses (excluding income taxes) of this entity are netted and reported as equity income or loss from investees on Cleco and Cleco Power’s Condensed Consolidated Statements of Income.

37

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Equity Method VIEs

Equity investment in investees at September 30, 2013, primarily represented Cleco Power’s $14.5 million investment in Oxbow. Equity investments that are less than 100% owned by Diversified Lands represented less than $0.1 million of the total balance.

Oxbow

Oxbow is owned 50% by Cleco Power and 50% by SWEPCO and is accounted for as an equity method investment. Cleco Power is not the primary beneficiary because it shares the power to control Oxbow’s significant activities with SWEPCO. Cleco’s current assessment of its maximum exposure to loss related to Oxbow at September 30, 2013, consisted of its equity investment of $14.5 million. The following table presents the components of Cleco Power’s equity investment in Oxbow.

INCEPTION TO DATE (THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Purchase price	$	12,873	$	12,873
Cash contributions	1,659		1,659
Total equity investment in investee	$	14,532	$	14,532

The following table compares the carrying amount of Oxbow’s assets and liabilities with Cleco’s maximum exposure to loss related to its investment in Oxbow.

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Oxbow’s net assets/liabilities	$	29,065	$	29,065
Cleco Power’s 50% equity	$	14,532	$	14,532
Cleco’s maximum exposure to loss	$	14,532	$	14,532

The following tables contain summarized financial information for Oxbow.

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Current assets	$	2,182	$	1,814
Property, plant, and equipment, net	22,698		23,029
Other assets	4,254		4,248
Total assets	$	29,134	$	29,091
Current liabilities	$	69	$	26
Partners’ capital	29,065		29,065
Total liabilities and partners’ capital	$	29,134	$	29,091

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
Operating revenue	$	856	$	450	$	1,795	$	1,125
Operating expenses	856		450		1,795		1,125
Income before taxes	$	—	$	—	$	—	$	—

Oxbow’s property, plant, and equipment, net consists of land and lignite reserves. The lignite reserves are intended to be used to provide fuel to the Dolet Hills Power Station. DHLC mines the lignite reserves at Oxbow through the Amended Lignite Mining Agreement.

Oxbow has no third-party agreements, guarantees, or other third-party commitments that contain obligations affecting Cleco Power’s investment in Oxbow.

Note 11 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees

Litigation

Devil’s Swamp

In October 2007, Cleco received a Special Notice for Remedial Investigation and Feasibility Study (RI/FS) from the EPA pursuant to CERCLA (also known as the Superfund statute). CERCLA establishes several classes of PRPs for a contaminated site, and imposes strict, joint, and several liability on those PRPs for the cost of response to the contamination. The special notice requested that Cleco Corporation and Cleco Power, along with many other listed PRPs, enter into negotiations with the EPA for the performance of an RI/FS at an area known as the Devil’s Swamp Lake site just northwest of Baton Rouge, Louisiana. The EPA identified Cleco as one of many companies that was sending PCB wastes for disposal to the site. The Devil’s Swamp Lake site has been proposed to be added to the National Priorities List based on the release of PCBs to fisheries and wetlands located on the site, but no final determination has been made. The PRPs began discussing a potential proposal to the EPA in February 2008. The EPA issued a Unilateral Administrative Order to PRP’s Clean Harbors, Inc. and Baton Rouge Disposal to Conduct an RI/FS on December 3, 2009. The Tier 1 part of the study was complete as of June 25, 2012. Currently, the study/remedy selection task continues. Therefore, management is unable to determine how significant Cleco’s share of the costs associated with the RI/FS and possible response action at the facility site, if any, may be and whether or not this will have a material adverse effect on the Registrants’ financial condition, results of operations, or cash flows. 

Discrimination Complaints

In December 2009, a complaint was filed in the U.S. District Court for the Western District of Louisiana (the Court) on behalf of eight current employees and four former employees alleging that Cleco discriminated against each of them on the basis of race. Each is seeking various remedies provided under applicable statutes prohibiting racial discrimination in the workplace, and together, the plaintiffs seek monetary compensation exceeding $35.0 million. In July 2010, the plaintiffs moved to add an additional current employee alleging that Cleco had discriminated on the basis of race. The additional plaintiff seeks compensation of no less than $2.5 million and became the thirteenth plaintiff. In April 2011, Cleco entered into a settlement with one of the current employees which resulted in a dismissal of one of the thirteen cases with prejudice. In September 2011, the Court ruled on Cleco’s summary judgment motions, with the end result that eleven of the twelve remaining plaintiffs had at least one claim remaining. In February 2013, the Court ruled on the second motion for summary judgment, filed by Cleco in March 2012, in each of the eleven cases and each such case was dismissed with prejudice. Appeals were filed in ten of the eleven dismissed cases to the United States Court of Appeals for the Fifth Circuit (the Fifth Circuit). In June 2013, the Fifth Circuit clerk dismissed the appeals of two of the current employees due to their failure to file a brief in support of their respective appeals. On various dates during August, September, and October 2013, the Fifth Circuit affirmed the trial court

38

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

judgments in favor of Cleco in six of the eight remaining cases. There has been no disposition of the two remaining appeals.

City of Opelousas

In March 2010, a complaint was filed in the 27th Judicial District Court of St. Landry Parish, State of Louisiana, on behalf of three Cleco Power customers in Opelousas, Louisiana.  The complaint alleges that Cleco Power overcharged the plaintiffs by applying to customers in Opelousas the same retail rates as Cleco Power applies to all of its retail customers.  The plaintiffs claim that Cleco Power owes customers in Opelousas more than $30.0 million as a result of the alleged overcharges. The plaintiffs allege that Cleco Power should have established, solely for customers in Opelousas, retail rates that are separate and distinct from the retail rates that apply to other customers of Cleco Power and that Cleco Power should not collect from customers in Opelousas the storm surcharge approved by the LPSC following hurricanes Katrina and Rita. In April 2010, Cleco Power filed a petition with the LPSC appealing to its expertise in declaring that the ratepayers of Opelousas have been properly charged the rates that are applicable to Cleco Power’s retail customers and that no overcharges have been collected.

In May 2010, a second class action lawsuit was filed in the 27th Judicial District Court for St. Landry Parish, State of Louisiana, repeating the allegations of the first complaint, which was submitted on behalf of 249 Opelousas residents. In January 2011, the presiding judge in the state court proceeding ruled that the jurisdiction to hear the two class actions resides in the state court and not with the LPSC as argued by both Cleco and the LPSC Staff. Both Cleco and the LPSC Staff appealed this ruling to the Third Circuit Court of Appeals for the State of Louisiana (Third Circuit). In September 2011, the Third Circuit denied both appeals. In October 2011, both Cleco and the LPSC appealed the Third Circuit’s ruling to the Louisiana Supreme Court. In February 2011, the administrative law judge (ALJ) in the LPSC proceeding ruled that the LPSC has jurisdiction to decide the claims raised by the class action plaintiffs. At its December 2011 Business and Executive Session, the LPSC adopted the ALJ’s recommendation that Cleco be granted summary judgment in its declaratory action finding that Cleco’s ratepayers in the City of Opelousas have been served under applicable rates and policies approved by the LPSC and Cleco’s Opelousas ratepayers have not been overcharged in connection with LPSC rates or ratemaking. In January 2012, the class action plaintiffs filed their appeal of such LPSC decision to the 19th Judicial District Court for East Baton Rouge Parish, State of Louisiana. In December 2012, the Louisiana Supreme Court issued its opinion accepting Cleco’s jurisdictional arguments and dismissed the state court claims. The only matter remaining is before the 19th Judicial District Court to review the LPSC ruling in Cleco’s favor that it had properly charged the ratepayers of Opelousas. In view of the uncertainty of the claims, management is not able to predict or give a reasonable estimate of the possible range of liability, if any, of these claims. However, if it is found that Cleco Power overcharged customers resulting in a refund, any such refund could have a material adverse effect on the Registrants’ results of operations, financial condition, and cash flows.

Other

Cleco is involved in various litigation matters, including regulatory, environmental, and administrative proceedings

before various courts, regulatory commissions, arbitrators, and governmental agencies regarding matters arising in the ordinary course of business. The liability Cleco may ultimately incur with respect to any one of these matters in the event of a negative outcome may be in excess of amounts currently accrued. Management regularly analyzes current information and, as of September 30, 2013, believes the probable and reasonably estimable liabilities based on the eventual disposition of these matters is approximately $8.9 million and has accrued this amount.

Off-Balance Sheet Commitments

Cleco Corporation and Cleco Power have entered into various off-balance sheet commitments, in the form of guarantees and standby letters of credit, in order to facilitate their activities and the activities of Cleco Corporation’s subsidiaries and equity investees (affiliates). Cleco Corporation and Cleco Power have also agreed to contractual terms that require them to pay third parties if certain triggering events occur. These contractual terms generally are defined as guarantees in the authoritative guidance.

Cleco Corporation entered into these off-balance sheet commitments in order to entice desired counterparties to contract with its affiliates by providing some measure of credit assurance to the counterparty in the event Cleco’s affiliates do not fulfill certain contractual obligations. If Cleco Corporation had not provided the off-balance sheet commitments, the desired counterparties may not have contracted with Cleco’s affiliates, or may have contracted with them at terms less favorable to its affiliates.

The off-balance sheet commitments are not recognized on Cleco’s Condensed Consolidated Balance Sheets because management has determined that Cleco’s affiliates are able to perform these obligations under their contracts and that it is not probable that payments by Cleco will be required. Cleco’s off-balance sheet commitments as of September 30, 2013, are summarized in the following table and a discussion of the off-balance sheet commitments follows the table. The discussion should be read in conjunction with the table to understand the impact of the off-balance sheet commitments on Cleco’s financial condition.

	AT SEPT. 30, 2013
(THOUSANDS)	FACE AMOUNT		REDUCTIONS		NET AMOUNT
Cleco Corporation
Guarantee issued to Entergy Mississippi on behalf of Attala	$	500	$	—	$	500
Cleco Power
Obligations under standby letter of credit issued to the Louisiana Department of Labor	3,725		—		3,725
Total	$	4,225	$	—	$	4,225

In January 2006, Cleco Corporation provided a $0.5 million guarantee to Entergy Mississippi for Attala’s obligations under the Interconnection Agreement. This guarantee will be effective through the life of the agreement.

The State of Louisiana allows employers of certain financial net worth to self-insure their workers’ compensation benefits. Cleco Power has a certificate of self-insurance from the Louisiana Office of Workers’ Compensation and is required to post a $3.7 million letter of credit, an amount equal to 110% of the average losses over the previous three years, as surety.

39

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Disclosures about Guarantees

Cleco Corporation provided a limited guarantee and an indemnification to Entergy Louisiana and Entergy Gulf States for Perryville’s performance, indemnity, representation, and warranty obligations under the Sale Agreement, the Power Purchase Agreement, and other ancillary agreements related to the sale of the Perryville facility in 2004. This is a continuing guarantee and all obligations of Cleco Corporation shall continue until the guaranteed obligations have been fully performed or otherwise extinguished. The discounted probability-weighted liability under the guarantees and indemnifications recognized on Cleco’s Condensed Consolidated Balance Sheet as of September 30, 2013, was $0.2 million. The maximum amount of the potential payment to Entergy Louisiana and Entergy Gulf States is $42.4 million. Currently, management does not expect to be required to pay Entergy Louisiana and Entergy Gulf States under the guarantee.

In February 2010, Cleco Power acquired Acadia Unit 1 and limited guarantees and indemnifications were provided to Cleco Power. The maximum amount of the potential payment to Cleco Power for indemnifications was $30.0 million, except for indemnifications relating to the fundamental organizational structure of which there was no maximum amount. Cleco Corporation was obligated to pay a maximum of $10.0 million if the claims were not paid to Cleco Power pursuant to the guarantee. An indemnification liability of $13.5 million which represents the fair value of these indemnifications was recorded on Cleco’s Condensed Consolidated Balance Sheet.

The indemnification liabilities were reduced through expiration of the contractual life or through a reduction in the probability of a claim arising. The indemnification obligation had a term of approximately three years. As these underlying indemnifications expired, income was recognized on Cleco’s Condensed Consolidated Statements of Income. At September 30, 2013, the contractual life of the indemnification had expired and there was no remaining liability. For the three months ended September 30, 2013, less than $0.1 million of income was recognized and for the nine months ended September 30, 2013, $0.4 million was recognized. For the three months ended September 30, 2012, no income was recognized and for the nine months ended September 30, 2012, $7.2 million was recognized.

In April 2011, Acadia completed its disposition of Acadia Unit 2 to Entergy Louisiana. Limited guarantees and indemnifications were provided to Entergy Louisiana and an indemnification liability of $21.8 million, which represents the fair value of these indemnifications was recorded on Cleco’s Condensed Consolidated Balance Sheet.

The indemnification liabilities are reduced through expiration of the contractual life or through a reduction in the probability of a claim arising. The indemnification obligation is expected to have a term of three years. After the three-year period, a residual value of approximately $0.2 million will remain. At September 30, 2013, an indemnification liability of $0.9 million remained, which represents the risk of payment, as a contingent sale obligation recorded on Cleco’s Condensed Consolidated Balance Sheet. As these underlying indemnifications expire, income is recognized on Cleco’s

Condensed Consolidated Statements of Income. For the three months ended September 30, 2013, no income was recognized and for the nine months ended September 30, 2013, $6.9 million was recognized. For the three months ended September 30, 2012, no income was recognized and for the nine months ended September 30, 2012, $11.8 million was recognized. The maximum amount of the potential payment to Entergy Louisiana for the indemnifications is the purchase price of $298.8 million, except for the liabilities retained for which there is no maximum amount. Cleco Corporation is obligated to pay the same maximum amounts as Acadia if Acadia is unable to pay claims to Entergy Louisiana pursuant to the guarantee.

As part of the Amended Lignite Mining Agreement, Cleco Power and SWEPCO, joint owners of Dolet Hills, have agreed to pay the loan and lease principal obligations of the lignite miner, DHLC, when due if they do not have sufficient funds or credit to pay. Any amounts paid on behalf of the miner would be credited by the lignite miner against future invoices for lignite delivered. At September 30, 2013, Cleco Power had a liability of $3.8 million related to the amended agreement. The maximum projected payment by Cleco Power under this guarantee is estimated to be $72.5 million; however, the Amended Lignite Mining Agreement does not contain a cap. The projection is based on the forecasted loan and lease obligations to be incurred by DHLC, primarily for purchases of equipment. Cleco Power has the right to dispute the incurrence of loan and lease obligations through the review of the mining plan before the incurrence of such loan and lease obligations. The Amended Lignite Mining Agreement does not terminate pursuant to its terms until 2026 and does not affect the amount the Registrants can borrow under their credit facilities. Currently, management does not expect to be required to pay DHLC under the guarantee.

In its bylaws, Cleco Corporation has agreed to indemnify directors, officers, agents, and employees who are made a party to a pending or completed suit, arbitration, investigation, or other proceeding whether civil, criminal, investigative, or administrative, if the basis of inclusion arises as the result of acts conducted in the discharge of their official capacity. Cleco Corporation has purchased various insurance policies to reduce the risks associated with the indemnification. In its operating agreement, Cleco Power provides for the same indemnification as described above with respect to its managers, officers, agents, and employees.

Generally, neither Cleco Corporation nor Cleco Power has recourse that would enable them to recover amounts paid under their guarantee or indemnification obligations. The one exception is the insurance contracts associated with the indemnification of directors, managers, officers, agents, and employees. There are no assets held as collateral for third parties that either Cleco Corporation or Cleco Power could obtain and liquidate to recover amounts paid pursuant to the guarantees or indemnification obligations.

The following table summarizes the expected amount of commitment termination per period of off-balance sheet commitments and on-balance sheet guarantees discussed above.

40

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

							AT SEPT. 30, 2013
			AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
(THOUSANDS)	NET AMOUNT COMMITTED		LESS THAN ONE YEAR		1-3 YEARS		3-5 YEARS		MORE THAN 5 YEARS
Off-balance sheet commitments	$	4,225	$	3,725	$	—	$	—	$	500
On-balance sheet guarantees	4,906		900		—		—		4,006
Total	$	9,131	$	4,625	$	—	$	—	$	4,506

Other Commitments

NMTC Fund

In 2008, Cleco Corporation and US Bancorp Community Development Corporation (USBCDC) formed the NMTC Fund. Cleco has a 99.9% membership interest in the NMTC Fund and USBCDC has a 0.1% interest. The purpose of the NMTC Fund is to invest in projects located in qualified active low-income communities that are underserved by typical debt capital markets. These investments are designed to generate NMTCs and Historical Rehabilitation tax credits. The NMTC Fund was later amended to include renewable energy investments. The majority of the energy investments qualify for grants under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009. The tax benefits received from the NMTC Fund reduce the federal income tax obligations of Cleco Corporation. In total, Cleco Corporation will contribute $283.6 million of equity contributions to the NMTC Fund and will receive at least $301.9 million in the form of tax credits, tax losses, capital gains/losses, earnings, and cash over the life of the investment, which ends in 2017. The $18.3 million difference between equity contributions and total benefits received will be recognized over the life of the NMTC Fund as net tax benefits are delivered. The following table reflects remaining future equity contributions.

(THOUSANDS)	CONTRIBUTION
Three months ending Dec. 31, 2013	$	12,071
Years ending Dec. 31,
2014	47,434
2015	11,195
2016	3,698
2017	2,914
Total	$	77,312

Of the $77.3 million, $48.3 million is due to be paid within the next 12 months. Due to the right of offset, the investment and associated debt are presented on Cleco’s Condensed Consolidated Balance Sheet in the line item titled Tax credit fund investment, net. The amount of tax benefits delivered in excess of capital contributions as of September 30, 2013, was $83.4 million. The amount of tax benefits delivered but not utilized as of September 30, 2013, was $112.3 million and is reflected as a deferred tax asset.

The equity contribution does not contain a stated rate of interest. Cleco Corporation has recorded the liability and investment at its calculated fair value within the framework of the authoritative guidance. In order to calculate the fair value, management used an imputed rate of interest assuming that Cleco Corporation obtained financing of a similar nature from a third party. The imputed interest rate was used in a net present value model in order to calculate the fair value of the remaining portion of the delayed equity contributions. The following table contains the disclosures required by the

authoritative guidelines for equity investments with an imputed interest rate.

(THOUSANDS)
Equity contributions, imputed interest rate 6%
Principal payment schedule above:	$	77,312
Less:  unamortized discount	5,015
Total	$	72,297

The gross investment amortization expense will be recognized over a ten-year period, with four years remaining under the new amendment, using the cost method in accordance with the authoritative guidance for investments. The grants received under Section 1603, which allow certain projects to receive a federal grant in lieu of tax credits, and other cash reduce the basis of the investment. Periodic amortization of the investment and the deferred taxes generated by the basis reduction temporary difference are included as components of income tax expense.

Other

Cleco has accrued for liabilities related to third parties and employee medical benefits.

Risks and Uncertainties

Cleco Corporation

Cleco Corporation could be subject to possible adverse consequences if Cleco’s counterparties fail to perform their obligations or if Cleco Corporation or its affiliates are not in compliance with loan agreements or bond indentures.

Other

Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows. After assessing the current operating performance, liquidity, and credit ratings of Cleco Corporation, management believes that Cleco will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. If Cleco Corporation’s credit ratings were to be downgraded by Moody’s or S&P, Cleco Corporation would be required to pay additional fees and higher interest rates under its bank credit and other debt agreements.

Future actions or inactions of the U.S. federal government, including a failure to increase the government debt limit or another shutdown of the federal government, could increase the actual or perceived risk that the U.S. may not ultimately pay its obligations when due and may disrupt financial markets, including capital markets.

Changes in the regulatory environment or market forces could cause Cleco to determine its assets have suffered an other-than-temporary decline in value, whereby an impairment would be required to be taken and Cleco’s financial condition could be materially adversely affected.

41

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Cleco Power

Cleco Power supplies the majority of its customers’ electric power requirements from its own generation facilities. In addition to power obtained from power purchase agreements, Cleco Power purchases power from other utilities and marketers to supplement its generation at times of relatively high demand or when the purchase price of power is less than its own cost of generation. Due to its location on the transmission grid, Cleco Power relies on two main suppliers of electric transmission when accessing external power markets. At times, constraints limit the amount of purchased power these transmission providers can deliver into Cleco Power’s service territory.

Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows. After assessing the current operating performance, liquidity, and credit ratings of Cleco Power, management believes that Cleco Power will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. Cleco Power pays fees and interest under its bank credit agreements based on the highest rating held. If Cleco Power’s credit ratings were to be downgraded by Moody’s or S&P, Cleco Power would be required to pay additional fees and higher interest rates under its bank credit agreements. Cleco Power’s collateral for derivatives is based on the lowest rating held. If Cleco Power’s credit ratings were to be downgraded by Moody’s or S&P, Cleco Power would be required to pay additional collateral for derivatives.

Future actions or inactions of the U.S. federal government, including a failure to increase the government debt limit or another shutdown of the federal government, could increase the actual or perceived risk that the U.S. may not ultimately pay its obligations when due and may disrupt financial markets, including capital markets.

Note 12 — Affiliate Transactions

Cleco Power has affiliate balances that are payable to or due from its affiliates. The following table is a summary of those balances.

	AT SEPT. 30, 2013				AT DEC. 31, 2012
(THOUSANDS)	ACCOUNTS RECEIVABLE		ACCOUNTS PAYABLE		ACCOUNTS RECEIVABLE		ACCOUNTS PAYABLE
Cleco Corporation	$	5	$	368	$	139	$	1,140
Support Group	1,160		6,415		2,777		7,528
Midstream	63		2		27		5
Evangeline	21		3,371		6		1,401
Diversified Lands	10		84		42		23
Other (1)	1		—		—		—
Total	$	1,260	$	10,240	$	2,991	$	10,097
(1) Represents Perryville and Attala

Note 13 — Storm Restoration

On August 28, 2012, Hurricane Isaac made landfall in south Louisiana as a Category 1 hurricane, causing power outages to approximately 95,000, or 34%, of Cleco Power’s electric customers and affecting Cleco Power’s entire service territory. By September 2, 2012, power was restored to 100% of customers who could receive power.

The cost of restoration for Hurricane Isaac was $24.3 million. The damage to equipment from the storm required replacement, as well as repair of existing assets. Therefore, the balance sheets of Cleco and Cleco Power reflect the capitalization of approximately 56.0% of the restoration costs recorded at September 30, 2013, or approximately $13.6 million. The remaining cost was offset against Cleco Power’s existing storm damage reserve.

Note 14 — Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are summarized in the following tables for Cleco and Cleco Power. All amounts are reported net of income taxes and amounts in parentheses indicate debits.

Cleco
				FOR THE THREE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, June 30, 2013	$	(23,619	)	$	(6,256	)	$	(29,875	)
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	497			—			497
Reclassification of net loss to interest charges	—			53			53
Net current-period other comprehensive income	497			53			550
Balances, Sept. 30, 2013	$	(23,122	)	$	(6,203	)	$	(29,325	)

42

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

				FOR THE NINE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, Dec. 31, 2012	$	(24,741	)	$	(7,629	)	$	(32,370	)
Other comprehensive income before reclassifications:
Net derivative gain	—			1,355			1,355
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	1,619			—			1,619
Reclassification of net loss to interest charges	—			102			102
Reclassification of ineffectiveness to regulatory asset	—			(31		)	(31		)
Net current-period other comprehensive income	1,619			1,426			3,045
Balances, Sept. 30, 2013	$	(23,122	)	$	(6,203	)	$	(29,325	)

Cleco Power
				FOR THE THREE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, June 30, 2013	$	(12,272	)	$	(6,256	)	$	(18,528	)
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	207			—			207
Reclassification of net loss to interest charges	—			53			53
Net current-period other comprehensive income	207			53			260
Balances, Sept. 30, 2013	$	(12,065	)	$	(6,203	)	$	(18,268	)

				FOR THE NINE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, Dec. 31, 2012	$	(12,792	)	$	(7,629	)	$	(20,421	)
Other comprehensive income before reclassifications:
Net derivative gain	—			1,355			1,355
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	727			—			727
Reclassification of net loss to interest charges	—			102			102
Reclassification of ineffectiveness to regulatory asset	—			(31		)	(31		)
Net current-period other comprehensive income	727			1,426			2,153
Balances, Sept. 30, 2013	$	(12,065	)	$	(6,203	)	$	(18,268	)

43

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Cleco uses its website, http:\\www.cleco.com, as a routine channel for distribution of important information, including news releases, analyst presentations, and financial information. Cleco’s website is the primary source of publicly disclosed news about Cleco. Cleco is providing the address to its website solely for the information of investors and does not intend the address to be an active link. The contents of the website are not incorporated into this Combined Quarterly Report on Form 10-Q.

The following discussion and analysis should be read in combination with the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012, and Cleco and Cleco Power’s Condensed Consolidated Financial Statements contained in this Combined Quarterly Report on Form 10-Q. The information included therein is essential to understanding the following discussion and analysis. Below is information concerning the consolidated results of operations of Cleco for the three and nine months ended September 30, 2013 and September 30, 2012.

RESULTS OF OPERATIONS

Overview

Cleco is a regional energy company that conducts substantially all of its business operations through its two primary subsidiaries:

• Cleco Power, a regulated electric utility company, which owns 9 generating units with a total nameplate capacity of 2,565 MW and serves approximately 283,000 customers in Louisiana through its retail business and 10 communities across Louisiana and Mississippi through wholesale power contracts and

• Midstream, a wholesale energy business, which owns Evangeline (which operates Coughlin). Evangeline owns two generating units with a total nameplate capacity of 775 MW.

Cleco Power

Many factors affect Cleco Power’s primary business of selling electricity. These factors include the presence of a stable regulatory environment, which impacts cost recovery and return on equity, as well as the recovery of costs related to growing energy demand and rising fuel prices; the ability to increase energy sales while containing costs; and the ability to meet increasingly stringent regulatory and environmental standards. Key initiatives that Cleco Power is currently working on include the completion of the AMI project, implementation of various environmental controls to comply with the MATS ruling, completion of the transfer of ownership and control of Coughlin from Evangeline, extension of its current FRP, and integration into MISO. These initiatives are discussed below.

AMI Project

In May 2010, Cleco Power accepted the terms of a $20.0 million grant from the DOE under the DOE’s small-grant process to implement advanced metering technology for all of Cleco Power’s retail customers. Cleco Power estimates the project will cost $72.4 million, with the DOE grant providing $20.0 million toward the project and Cleco Power providing the

remaining $52.4 million. The grant program is a part of the American Recovery and Reinvestment Act of 2009, an economic stimulus package passed by Congress in February 2009. Advanced metering technology allows Cleco Power to better manage its electric system and provides improved service to customers through the meter’s communicating capabilities. At September 30, 2013, Cleco Power had incurred $69.7 million in project costs, of which $20.0 million has been reimbursed by the DOE. The installation of the advanced meters was substantially completed in May 2013, with the project to be fully functional by the fourth quarter of 2013. For more information on the AMI Project, see “— Financial Condition — Regulatory and Other Matters — AMI Project.”

MATS

The MATS rule was finalized in February 2012 and requires affected electric generating units to meet specific numeric emission standards and work practice standards to address hazardous air pollutants. MATS imposes strict emission limits on new and existing coal- and liquid oil-fired electric generating units for mercury, acid gases, and non-mercury metallic pollutants. Cleco Power units impacted by the rule include Rodemacher Unit 2, Madison Unit 3, and Dolet Hills. MATS allows existing sources approximately three years to comply with the rule. The actual compliance deadline is April 16, 2015. Cleco Power completed its evaluation of control technology options and has identified capital expenditures that will be required to engineer, procure, and install pollution controls and emissions monitoring equipment to ensure Cleco Power will be in a position to comply with MATS in a timely manner. New equipment to be installed and operational by the compliance date at Rodemacher Unit 2 and Dolet Hills includes dry sorbent injection for acid gas control and fabric filters (baghouses) for metal particulate control. In addition, activated carbon injection for mercury control is to be installed and operational by the compliance date at Rodemacher Unit 2, Madison Unit 3, and Dolet Hills. Cleco Power has completed the design work for this equipment and work has been initiated at both Dolet Hills and Rodemacher Unit 2, with work at Madison Unit 3 expected to begin in the second quarter of 2014. Cleco Power filed an application with the LPSC on August 16, 2012, requesting authorization to recover the revenue requirements associated with the MATS equipment. The LPSC proceeding is currently in the discovery phase. The MATS project is expected to cost $265.0 million, of which Cleco Power’s portion is $111.3 million. As of September 30, 2013, $83.3 million was spent on the project, of which Cleco Power’s portion was $35.0 million.

Power Supply Options/Coughlin Transfer from Midstream

Cleco Power issued an RFP seeking up to approximately 750 MW of capacity and energy, for a three- or five-year period starting May 1, 2012. Cleco Power selected Evangeline’s proposal for a 730-MW product beginning May 1, 2012, and ending April 30, 2015. The definitive agreement between Evangeline and Cleco Power was executed in January 2012 and approved by the LPSC in March 2012 and FERC in April 2012. In May 2012, Cleco Power issued a draft RFP seeking long-term resources beyond April 2015. The final RFP was issued in July 2012 and proposals were received from

44

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

potential suppliers in August 2012. On October 30, 2012, Cleco Power announced Evangeline as the winning bidder in Cleco Power’s 2012 Long-Term RFP. In December 2012, Cleco Power and Evangeline executed definitive agreements to transfer ownership and control of Coughlin from Evangeline to Cleco Power. Cleco Power's application seeking regulatory approval was listed in the LPSC's Official Bulletin, dated April 12, 2013.  In May 2013, Cleco Power filed its application with FERC seeking authorization to acquire Coughlin, and subsequently received authorization from FERC on August 26, 2013.  The transaction is expected to close on or before April 30, 2014, following regulatory approval by the LPSC.

Extension of FRP

On April 26, 2013, Cleco Power filed an application with the LPSC to extend its current FRP and to seek rate recovery of Coughlin. Cleco Power requested in its application that the FRP extension be effective through June 2020. The docket is currently in the discovery phase. The procedural schedule currently anticipates LPSC testimony by mid-November 2013. Cleco expects LPSC action on this request by the second quarter of 2014.

MISO

Cleco Power’s transmission system is heavily interconnected with Entergy’s system; therefore, Cleco Power plans to follow Entergy and join MISO in December 2013. On December 6, 2012, Cleco Power filed an application with the LPSC indicating Cleco’s intent to join MISO, asking the commission to find that transferring control of certain transmission assets to MISO is in the public interest, to create an accounting order deferring costs related to Cleco Power’s transition into the MISO market, and to expedite treatment. On June 26, 2013, the LPSC unanimously approved Cleco Power’s change of control request. On June 18, 2013, Cleco Power filed a related application with the LPSC requesting approval of Cleco Power’s proposed MISO integration, implementation, and ratemaking plans. Discovery related to this integration, implementation, and ratemaking phase is still ongoing with a vote anticipated from the LPSC in mid-November 2013.

Cleco Midstream

Evangeline

In December 2011, Evangeline was notified that Cleco Power selected its proposal to fulfill Cleco Power’s capacity and energy needs as defined in the Cleco Power RFP for contractual resources beginning in 2012. The proposal was for a 730-MW product beginning May 1, 2012, and ending April 30, 2015. The definitive agreement between Evangeline and Cleco Power was executed in January 2012 and was approved by the LPSC in March 2012 and FERC in April 2012. Midstream was marketing Coughlin’s capacity for periods beginning after April 30, 2015, and had been evaluating various options to optimize Coughlin’s value. On October 30, 2012, Cleco Power announced that Evangeline was the winning bidder in Cleco Power’s 2012 Long-Term RFP. In December 2012, Cleco Power and Evangeline executed definitive agreements to transfer ownership and control of Coughlin from Evangeline to Cleco Power. For more information, see “— Financial Condition — Regulatory and Other Matters — Generation RFP.”

Comparison of the Three Months Ended September 30, 2013 and 2012

Cleco Consolidated
	FOR THE THREE MONTHS ENDED SEPT. 30,
					FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2013		2012			VARIANCE			CHANGE
Operating revenue, net	$	328,763	$	297,372		$	31,391		10.6	%
Operating expenses	211,969		194,025			(17,944		)	(9.2	)%
Operating income	$	116,794	$	103,347		$	13,447		13.0	%
Allowance for other funds used during construction	$	1,303	$	1,882		$	(579	)	(30.8	)%
Other income	$	2,837	$	1,834		$	1,003		54.7	%
Interest charges	$	19,014	$	21,966		$	2,952		13.4	%
Federal and state income taxes	$	34,389	$	20,179		$	(14,210	)	(70.4	)%
Net income applicable to common stock	$	66,407	$	63,818		$	2,589		4.1	%

Consolidated net income applicable to common stock increased $2.6 million, or 4.1%, in the third quarter of 2013 compared to the third quarter of 2012 primarily due to higher Cleco Power and corporate earnings, partially offset by lower Midstream earnings.

Operating revenue, net increased $31.4 million, or 10.6%, in the third quarter of 2013 compared to the third quarter of 2012 largely as a result of higher base revenue and fuel cost recovery revenue at Cleco Power.

Operating expenses increased $17.9 million, or 9.2%, in the third quarter of 2013 compared to the third quarter of 2012 primarily due to higher per unit costs and volumes of fuel used for electric generation, higher depreciation expense, and higher taxes other than income taxes at Cleco Power. These increases were partially offset by lower recoverable and nonrecoverable purchased power at Cleco Power.

Allowance for other funds used during construction decreased $0.6 million, or 30.8%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to lower AFUDC accruals related to miscellaneous transmission projects at Cleco Power.

Other income increased $1.0 million, or 54.7%, during the third quarter of 2013 compared to the third quarter of 2012 largely due to a death benefit recognized on life insurance policies, partially offset by a decrease in the cash surrender value of life insurance polices and lower mutual assistance income.

Interest charges decreased $3.0 million, or 13.4%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to an adjustment to customer surcredits due to a tax settlement and the retirement of senior notes at Cleco Power.

Federal and state income taxes increased $14.2 million, or 70.4%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to $6.7 million for the change in pre-tax income excluding AFUDC equity, $3.9 million for a decrease in tax credits, $2.9 million for the absence of a favorable 2012 settlement with taxing authorities, $1.7 million for the increase in the liability for uncertain tax positions, and $0.2 million for a decrease in permanent tax deductions. These decreases were partially offset by $0.8 million for adjustments for tax returns filed and $0.4 million for miscellaneous tax items.

Results of operations for Cleco Power and Midstream are more fully described below.

45

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Cleco Power
	FOR THE THREE MONTHS ENDED SEPT. 30,
							FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2013			2012				VARIANCE			CHANGE
Operating revenue
Base	$	197,905		$	180,276			$	17,629		9.8	%
Fuel cost recovery	116,861			102,618				14,243			13.9	%
Electric customer credits	(846		)	(930		)		84			9.0	%
Other operations	14,301			14,905				(604		)	(4.1	)%
Affiliate revenue	335			343				(8		)	(2.3	)%
Operating revenue, net	328,556			297,212				31,344			10.5	%
Operating expenses
Recoverable fuel used for electric generation	101,004			78,902				(22,102		)	(28.0	)%
Recoverable power purchased for utility customers	15,848			23,706				7,858			33.1	%
FAC non-recoverable fuel and power purchased	3,239			10,347				7,108			68.7	%
Other operations	28,471			29,063				592			2.0	%
Maintenance	17,478			16,095				(1,383		)	(8.6	)%
Depreciation	39,962			33,199				(6,763		)	(20.4	)%
Taxes other than income taxes	10,891			8,390				(2,501		)	(29.8	)%
Total operating expenses	216,893			199,702				(17,191		)	(8.6	)%
Operating income	$	111,663		$	97,510			$	14,153		14.5	%
Allowance for other funds used during construction	$	1,303		$	1,882			$	(579	)	(30.8	)%
Other income	$	2,838		$	1,188			$	1,650		138.9	%
Other expense	$	2,239		$	1,224			$	(1,015	)	(82.9	)%
Interest charges	$	18,656		$	21,962			$	3,306		15.1	%
Federal and state income taxes	$	33,355		$	19,740			$	(13,615	)	(69.0	)%
Net income	$	61,885		$	57,783			$	4,102		7.1	%

Cleco Power’s net income in the third quarter of 2013 increased $4.1 million, or 7.1%, compared to the third quarter of 2012. Contributing factors include:

• higher base revenue,

• lower FAC non-recoverable fuel and power purchased,

• lower interest charges, and

• higher other income.

These factors were partially offset by:

• higher income taxes,

• higher depreciation expense,

• higher taxes other than income taxes,

• higher maintenance expenses,

• higher other expense,

• lower other operations revenue, and

• lower allowance for other funds used during construction.

	FOR THE THREE MONTHS ENDED SEPT. 30,
(MILLION kWh)	2013		2012		FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	1,198		1,202		(0.3	)%
Commercial	793		784		1.1	%
Industrial	592		582		1.7	%
Other retail	35		36		(2.8	)%
Total retail	2,618		2,604		0.5	%
Sales for resale	643		616		4.4	%
Unbilled	(45	)	(69	)	34.8	%
Total retail and wholesale customer sales	3,216		3,151		2.1	%

	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012			FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	$	100,636		$	96,954		3.8	%
Commercial	52,678			50,145			5.1	%
Industrial	23,875			21,993			8.6	%
Other retail	2,799			2,669			4.9	%
Surcharge	8,205			1,950			320.8	%
Other	(1,563		)	(1,566		)	0.2	%
Total retail	186,630			172,145			8.4	%
Sales for resale	13,657			12,459			9.6	%
Unbilled	(2,382		)	(4,328		)	45.0	%
Total retail and wholesale customer sales	$	197,905		$	180,276		9.8	%

Cleco Power’s residential customers’ demand for electricity is affected largely by weather. Weather generally is measured in cooling-degree days and heating-degree days. A cooling-degree day is an indication of the likelihood that a consumer will use air conditioning, while a heating-degree day is an indication of the likelihood that a consumer will use heating. An increase in heating-degree days does not produce the same increase in revenue as an increase in cooling-degree days, because alternative heating sources are more available and because winter energy is priced below the rate charged for energy used in the summer. Normal heating-degree days and cooling-degree days are calculated for a month by separately calculating the average actual heating- and cooling-degree days for that month over a period of 30 years.

The following table shows how cooling-degree days varied from normal conditions and from the prior period. Cleco Power uses weather data provided by the National Oceanic and Atmospheric Administration to determine degree days.

	FOR THE THREE MONTHS ENDED SEPT. 30,
				2013 CHANGE
	2013	2012	NORMAL	PRIOR YEAR		NORMAL
Cooling-degree days	1,633	1,560	1,511	4.7	%	8.1	%

Base

Base revenue increased $17.6 million, or 9.8%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to an annual rate adjustment associated with Cleco’s FRP, which resulted in an approximate $6.6 million increase to base revenue, and an adjustment to customer surcredits and increased sales from warmer weather, which resulted in an approximate $11.0 million increase to base revenue.

Cleco Power expects to begin providing service to expansions of current customers’ operations, as well as

46

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

service to new retail customers. These expansions of service to current customers and service to new customers are expected to contribute additional base revenue of $0.6 million for the remainder of 2013, an additional $2.5    million in 2014, and an additional $3.0 million in 2015. Cleco Power also anticipates additional base revenue for the remainder of 2013 of approximately $1.8 million associated with the implementation of a FERC formula rate methodology for transmission services and $0.5 million associated with the recovery of expenditures for compliance with anticipated environmental laws.

During the third quarter of 2013, Cleco Power executed a 10-year agreement and a 20-year agreement with two existing wholesale customers. The anticipated increase in base revenue related to these customers is approximately $5.2 million in 2014 and an additional $0.5 million in 2015.

For information on the effects of future energy sales on Cleco Power’s financial condition, results of operations, and cash flows, see “Risk Factors — Future Electricity Sales” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Fuel Cost Recovery

Fuel cost recovery revenue billed to customers increased $14.2 million, or 13.9%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to increases in the per-unit cost of fuel used for electric generation and power purchased for utility customers. Also contributing to the increase were higher volumes of fuel used for electric generation. Partially offsetting the increase were lower volumes of power purchased for utility customers. Changes in fuel costs historically have not significantly affected Cleco Power’s net income. Generally, fuel and purchased power expenses are recovered through the LPSC-established FAC, which enables Cleco Power to pass on to its customers substantially all such charges. Approximately 88% of Cleco Power’s total fuel cost during the third quarter of 2013 was regulated by the LPSC, while the remainder was regulated by FERC. Recovery of FAC costs is subject to refund until approval is received from the LPSC.

Other Operations

Other operations revenue decreased $0.6 million, or 4.1%, in the third quarter of 2013 compared to the third quarter of 2012 primarily due to $4.3 million of lower wholesale sales. This decrease was partially offset by $3.6 million of additional transmission revenue as a result of the implementation of new transmission rates and $0.1 million of higher other miscellaneous revenue.

Operating Expenses

Operating expenses increased $17.2 million, or 8.6%, in the third quarter of 2013 compared to the third quarter of 2012. Recoverable fuel used for electric generation increased $22.1 million, or 28.0%, primarily due to higher per unit costs and volumes of fuel used for electric generation as compared to the third quarter of 2012. Recoverable power purchased for utility customers decreased $7.9 million, or 33.1%, largely due to lower volumes of purchased power. Partially offsetting this decrease were higher per unit costs of purchased power. Fuel used for electric generation and power purchased for utility customers generally are influenced by natural gas prices as well as availability of transmission. However, other factors such as scheduled and/or unscheduled outages, unusual

maintenance or repairs, or other developments may affect fuel used for electric generation and power purchased for utility customers. FAC non-recoverable fuel and power purchased decreased $7.1 million, or 68.7%, primarily due to lower non-recoverable wholesale power purchases. Other operations expense decreased $0.6 million, or 2.0%, primarily due to lower customer service expenses and lower generation expenses, partially offset by higher consulting expenses. Maintenance expense increased $1.4 million, or 8.6%, primarily due to higher generating station outage expenses. Depreciation expense increased $6.8 million, or 20.4%, primarily due to amortization of the Evangeline capacity costs and normal recurring additions to fixed assets. Taxes other than income taxes increased $2.5 million, or 29.8%, primarily due to higher property taxes.

Allowance for Other Funds Used During Construction

Allowance for other funds used during construction decreased $0.6 million, or 30.8%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to lower AFUDC accruals resulting from the completion of miscellaneous transmission projects.

Other Income

Other income increased $1.7 million, or 138.9%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to $2.3 million of a death benefit recognized on life insurance policies and $0.1 of higher miscellaneous income, partially offset by $0.7 million of lower mutual assistance income.

Other Expense

Other expense increased $1.0 million, or 82.9%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to a decrease in the cash surrender value of life insurance policies of $1.9 million related to the death benefit recognized, partially offset by $0.8 million of lower mutual assistance expenses and $0.1 million of lower miscellaneous expenses.

Interest Charges

Interest charges decreased $3.3 million, or 15.1%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to $2.1 million related to an adjustment to customer surcredits due to a tax settlement, $1.0 million due to the retirement of senior notes, $0.8 million related to reacquired debt, and $0.1 million of miscellaneous interest charges. These amounts were partially offset by an increase of $0.7 million related to GO Zone bonds.

Income Taxes

Federal and state income taxes increased $13.6 million, or 69.0%, during the third quarter of 2013 compared to the third quarter of 2012. The increase is primarily due to $7.0 million for the change in pre-tax income excluding AFUDC equity, $2.9 million for the absence of a favorable 2012 settlement with taxing authorities, $1.7 million for the absence of a favorable adjustment for tax credits, $1.6 million to record tax expense at the projected annual effective rate, $0.5 million for adjustments for tax returns filed, and $0.1 million for a decrease in permanent tax deductions. These increases were partially offset by $0.2 million for a decrease in the liability for uncertain tax positions.

47

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Midstream
	FOR THE THREE MONTHS ENDED SEPT. 30,
							FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2013			2012			VARIANCE			CHANGE
Operating revenue
Tolling operations	$	12,339		$	13,890		$	(1,551	)	(11.2	)%
Other operations	1			1			—			—	%
Operating revenue	12,340			13,891			(1,551		)	(11.2	)%
Operating expenses
Other operations	1,869			2,027			158			7.8	%
Maintenance	2,844			3,903			1,059			27.1	%
Depreciation	1,522			1,499			(23		)	(1.5	)%
Taxes other than income taxes	621			612			(9		)	(1.5	)%
Gain on sale of assets	(29		)	(2		)	27			*
Total operating expenses	6,827			8,039			1,212			15.1	%
Operating income	$	5,513		$	5,852		$	(339	)	(5.8	)%
Federal and state income tax expense	$	4,083		$	2,489		$	(1,594	)	(64.0	)%
Net income	$	1,164		$	3,429		$	(2,265	)	(66.1	)%
* Not meaningful

Factors affecting Midstream during the third quarter of 2013 are described below.

Operating Revenue

Operating revenue decreased $1.6 million, or 11.2%, in the third quarter of 2013 compared to the third quarter of 2012 primarily due to lower tolling revenue at Evangeline resulting from lower variable operations and maintenance and start-up revenue. 

Operating Expenses

Operating expenses decreased $1.2 million, or 15.1%, in the third quarter of 2013 compared to the third quarter of 2012 primarily due to lower routine maintenance expenses and lower turbine maintenance expenses at Evangeline.

Income Taxes

Federal and state income taxes increased $1.6 million, or 64.0%, during the third quarter of 2013 compared to the third quarter of 2012 primarily due to $1.9 million for an increase in the liability for uncertain tax positions, partially offset by $0.3 million for the change in pre-tax income.

Comparison of the Nine Months Ended September 30, 2013 and 2012

Cleco Consolidated
			FOR THE NINE MONTHS ENDED SEPT. 30,
						FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2013			2012		VARIANCE			CHANGE
Operating revenue, net	$	833,604		$	760,265	$	73,339		9.6	%
Operating expenses	583,587			528,381		(55,206		)	(10.4	)%
Operating income	$	250,017		$	231,884	$	18,133		7.8	%
Interest income	$	789		$	163	$	626		384.0	%
Allowance for other funds used during construction	$	2,880		$	4,298	$	(1,418	)	(33.0	)%
Other income	$	12,282		$	24,223	$	(11,941	)	(49.3	)%
Other expense	$	2,146		$	2,718	$	572		21.0	%
Interest charges	$	61,358		$	63,205	$	1,847		2.9	%
Federal and state income taxes	$	66,892		$	54,110	$	(12,782	)	(23.6	)%
Net income applicable to common stock	$	135,572		$	140,536	$	(4,964	)	(3.5	)%

Consolidated net income applicable to common stock decreased $5.0 million, or 3.5%, in the first nine months of 2013 compared to the first nine months of 2012 primarily due to lower Midstream and corporate earnings, partially offset by higher earnings at Cleco Power.

Operating revenue, net increased $73.3 million, or 9.6%, in the first nine months of 2013 compared to the first nine months of 2012 largely as a result of higher base revenue and higher fuel cost recovery revenue at Cleco Power.

Operating expenses increased $55.2 million, or 10.4%, in the first nine months of 2013 compared to the first nine months of 2012 primarily due to higher per unit costs and volumes of fuel used for electric generation, higher depreciation expense, higher taxes other than income taxes, and higher operations and maintenance expenses at Cleco Power. These increases were partially offset by lower purchased power costs at Cleco Power.

Interest income increased $0.6 million, or 384.0%, in the first nine months of 2013 compared to the first nine months of 2012 primarily due to interest associated with the deferral of regulatory costs to be collected from customers in future periods.

Allowance for other funds used during construction decreased $1.4 million, or 33.0%, in the first nine months of 2013 compared to the first nine months of 2012 primarily due to lower AFUDC accruals related to miscellaneous transmission projects at Cleco Power.

Other income decreased $11.9 million, or 49.3%, in the first nine months of 2013 compared to the first nine months of 2012 largely due to lower income related to the contractual expiration of underlying indemnifications resulting from the disposition of Acadia Units 1 and 2 . Also contributing to this decrease was a reduction of the cash surrender value of life insurance policies related to the death benefit recognized and lower mutual assistance income, partially offset by a death benefit recognized on life insurance policies.

Other expense decreased $0.6 million, or 21.0%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to lower mutual assistance expenses.

Interest charges decreased $1.8 million, or 2.9%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to an adjustment to customer surcredits

48

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

due to a tax settlement and lower interest on bonds, partially offset by a change in uncertain tax positions.

Federal and state income taxes increased $12.8 million, or 23.6%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to $5.2 million for a decrease in tax credits, $3.5 million for the change in pre-tax income excluding AFUDC equity, $1.7 million for the increase in the liability for uncertain tax positions, $1.6 million for the absence of a favorable 2012 settlement with taxing authorities, $1.1 million for a decrease in permanent tax deductions, and $0.9 million for a decrease in flowthrough of tax benefits. These increases were partially offset by $0.6 million for adjustments for tax returns filed, $0.3 million to record tax expense at the consolidated projected annual effective tax rate, and $0.3 million for miscellaneous tax items.

Results of operations for Cleco Power and Midstream are more fully described below.

Cleco Power
				FOR THE NINE MONTHS ENDED SEPT. 30,
								FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2013				2012			VARIANCE			CHANGE
Operating revenue
Base	$	496,138			$	465,800		$	30,338		6.5	%
Fuel cost recovery	300,819				254,976			45,843			18.0	%
Electric customer credits	(1,270		)		1,025			(2,295		)	(223.9	)%
Other operations	36,366				36,967			(601		)	(1.6	)%
Affiliate revenue	1,005				1,030			(25		)	(2.4	)%
Operating revenue, net	833,058				759,798			73,260			9.6	%
Operating expenses
Recoverable fuel used for electric generation	257,446				205,785			(51,661		)	(25.1	)%
Recoverable power purchased for utility customers	43,365				49,186			5,821			11.8	%
FAC non-recoverable fuel and power purchased	10,195				17,981			7,786			43.3	%
Other operations	83,385				82,647			(738		)	(0.9	)%
Maintenance	55,857				51,739			(4,118		)	(8.0	)%
Depreciation	105,251				93,847			(11,404		)	(12.2	)%
Taxes other than income taxes	31,554				26,004			(5,550		)	(21.3	)%
Gain on sale of assets	—				(1		)	(1		)	(100.0	)%
Total operating expenses	587,053				527,188			(59,865		)	(11.4	)%
Operating income	$	246,005			$	232,610		$	13,395		5.8	%
Interest income	$	784			$	153		$	631		412.4	%
Allowance for other funds used during construction	$	2,880			$	4,298		$	(1,418	)	(33.0	)%
Other income	$	4,606			$	3,511		$	1,095		31.2	%
Other expense	$	3,693			$	2,698		$	(995	)	(36.9	)%
Interest charges	$	60,882			$	61,253		$	371		0.6	%
Federal and state income taxes	$	65,558			$	54,748		$	(10,810	)	(19.7	)%
Net income	$	124,142			$	121,873		$	2,269		1.9	%

Cleco Power’s net income in the first nine months of 2013 increased $2.3 million, or 1.9%, compared to the first nine months of 2012. Contributing factors include:

• higher base revenue,

• lower FAC non-recoverable fuel and power purchased,

• higher other income,

• higher interest income, and

• lower interest charges.

These were partially offset by:

• higher depreciation expense,

• higher income taxes,

• higher taxes other than income taxes,

• higher other operations and maintenance expenses,

• higher electric customer credits,

• lower allowance for other funds used during construction,

• higher other expense, and

• lower other operations revenue.

	FOR THE NINE MONTHS ENDED SEPT. 30,
(Million kWh)	2013	2012	FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	2,839	2,834	0.2	%
Commercial	2,007	2,021	(0.7	)%
Industrial	1,723	1,710	0.8	%
Other retail	100	101	(1.0	)%
Total retail	6,669	6,666	—	%
Sales for resale	1,583	1,472	7.5	%
Unbilled	107	11	872.7	%
Total retail and wholesale customer sales	8,359	8,149	2.6	%

	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012			FAVORABLE/ (UNFAVORABLE)
Electric sales
Residential	$	227,151		$	219,494		3.5	%
Commercial	141,406			136,208			3.8	%
Industrial	67,061			63,217			6.1	%
Other retail	7,860			7,436			5.7	%
Surcharge	12,496			6,801			83.7	%
Other	(4,694		)	(4,686		)	(0.2	)%
Total retail	451,280			428,470			5.3	%
Sales for resale	39,234			35,954			9.1	%
Unbilled	5,624			1,376			308.7	%
Total retail and wholesale customer sales	$	496,138		$	465,800		6.5	%

The following chart shows how cooling- and heating-degree days varied from normal conditions and from the prior period. Cleco Power uses weather data provided by the National Oceanic and Atmospheric Administration to determine degree days.

			FOR THE NINE MONTHS ENDED SEPT. 30,
				2013 CHANGE
	2013	2012	NORMAL	PRIOR YEAR		NORMAL
Heating-degree days	874	500	949	74.8	%	(7.9	)%
Cooling-degree days	2,649	2,954	2,532	(10.3	)%	4.6	%

Base

Base revenue increased $30.3 million, or 6.5%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to an annual rate adjustment associated with Cleco’s FRP, which resulted in an approximate $14.5 million increase to base revenue. Also contributing to this increase was an adjustment to customer surcredits, colder winter weather in the first quarter of 2013, and higher industrial sales, which resulted in an approximate $15.8 million increase to base revenue. For information on the anticipated effects of changes in base revenue in future periods, see “—

49

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Comparison of the Three Months Ended September 30, 2013 and 2012 — Cleco Power — Base.” For information on the effects of future energy sales on Cleco Power’s financial condition, results of operations, and cash flows, see “Risk Factors — Future Electricity Sales” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Fuel Cost Recovery

Fuel cost recovery revenue billed to customers increased $45.8 million, or 18.0%, during the first nine months of 2013 compared to the first nine months in 2012 primarily due to increases in the per-unit cost of fuel used for electric generation and power purchased for utility customers. Also contributing to the increase were higher volumes of fuel used for electric generation. Partially offsetting the increase were lower volumes of power purchased for utility customers. For information on Cleco Power’s ability to recover fuel and purchase power costs, see “— Comparison of the Three Months Ended September 30, 2013 and 2012 — Cleco Power — Fuel Cost Recovery.”

Electric Customer Credits

Electric customer credits increased $2.3 million, or 223.9%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to the absence of the reversals of the 2012 cycle accrual and fuel audit reserves. For additional information on the accrual of electric customer credits, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 9 — Electric Customer Credits.”

Other Operations

Other operations revenue decreased $0.6 million, or 1.6%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to $5.6 million of lower wholesale sales, $1.1 million from the absence of bonus lease payments, and $0.4 million of lower other miscellaneous revenue. These decreases were partially offset by $6.5 million of additional transmission revenue as a result of the implementation of transmission rates approved on February 6, 2013.

Operating Expenses

Operating expenses increased $59.9 million, or 11.4%, in the first nine months of 2013 compared to the first nine months of 2012. Recoverable fuel used for electric generation increased $51.7 million, or 25.1%, primarily due to higher per unit costs and volumes of fuel used as compared to the first nine months of 2012. Recoverable power purchased for utility customers decreased $5.8 million, or 11.8%, largely due to lower volumes of purchased power. Partially offsetting this decrease were higher per-unit costs of purchased power. Fuel used for electric generation and power purchased for utility customers generally are influenced by natural gas prices, as well as availability of transmission. However, other factors such as scheduled and/or unscheduled outages, unusual maintenance or repairs, or other developments may affect fuel used for electric generation and power purchased for utility customers. FAC non-recoverable fuel and purchased power decreased $7.8 million, or 43.3%, primarily due to lower non-recoverable wholesale power purchases. Other operations expense increased $0.7 million, or 0.9%, primarily due to higher consulting expenses, partially offset by lower customer service expenses. Maintenance expense increased $4.1 million, or 8.0%, primarily due to higher generating station outage

expenses in the first nine months of 2013. Depreciation expense increased $11.4 million, or 12.2%, primarily due to amortization of the Evangeline capacity costs and normal recurring additions to fixed assets. Taxes other than income taxes increased $5.6 million, or 21.3%, primarily due to higher property taxes.

Interest Income

Interest income increased $0.6 million, or 412.4%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to interest associated with the deferral of regulatory costs.

Allowance for Other Funds Used During Construction

Allowance for other funds used during construction decreased $1.4 million, or 33.0%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to lower AFUDC accruals resulting from the completion of miscellaneous transmission projects.

Other Income

Other income increased $1.1 million, or 31.2%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to $2.3 million of a death benefit recognized on life insurance policies. This increase was partially offset by $0.6 million of lower mutual assistance income, $0.3 million of lower royalties received, and $0.3 of miscellaneous other income.

Other Expense

Other expense increased $1.0 million, or 36.9%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to a decrease in the cash surrender value of life insurance policies of $1.9 million related to the death benefit recognized. This increase was partially offset by $0.5 million of lower mutual assistance expenses and $0.4 million of lower miscellaneous expenses.

Interest Charges

Interest charges decreased $0.4 million, or 0.6%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to $2.4 million related to an adjustment to customer surcredits due to a tax settlement, $1.8 million related to reacquired debt, $1.1 million due to pollution control bonds, and $0.9 million due to the retirement of senior notes. These amounts were partially offset by $4.4 million related to the absence of a favorable adjustment related to a tax settlement in 2012, $1.0 million related to GO Zone bonds, and $0.4 million of higher other miscellaneous interest charges.

Income Taxes

Federal and state income taxes increased $10.8 million, or 19.7%, during the first nine months of 2013 compared to the first nine months of 2012. The increase is primarily due to $5.6 million for the change in pre-tax income excluding AFUDC equity, $1.8 million for a decrease in tax credits, $1.6 million for the absence of a favorable 2012 settlement with taxing authorities, $1.1 million for a decrease in permanent tax deductions, $0.9 million for a decrease in flowthrough of tax benefits, and $0.5 million for adjustments for tax returns filed. These increases were partially offset by $0.5 million to record tax expense at the projected annual effective tax rate and $0.2 million for a decrease in the liability for uncertain tax positions.

50

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

Midstream
	FOR THE NINE MONTHS ENDED SEPT. 30,
							FAVORABLE/(UNFAVORABLE)
(THOUSANDS)	2013			2012			VARIANCE			CHANGE
Operating revenue
Tolling operations	$	26,483		$	21,434		$	5,049		23.6	%
Other operations	2			2			—			—	%
Operating revenue	26,485			21,436			5,049			23.6	%
Operating expenses
Fuel used for electric generation	—			304			304			100.0	%
Power purchased for utility customers	—			9			9			100.0	%
Other operations	5,439			5,684			245			4.3	%
Maintenance	8,010			9,528			1,518			15.9	%
Depreciation	4,523			4,491			(32		)	(0.7	)%
Taxes other than income taxes	1,872			1,896			24			1.3	%
Loss (gain) on sale of assets	817			(45		)	(862		)	*
Total operating expenses	20,661			21,867			1,206			5.5	%
Operating income (loss)	$	5,824		$	(431	)	$	6,255		*
Other income	$	7,250		$	19,016		$	(11,766	)	(61.9	)%
Interest charges	$	(338	)	$	244		$	582		238.5	%
Federal and state income tax expense	$	7,221		$	7,278		$	57		0.8	%
Net income	$	6,180		$	11,053		$	(4,873	)	(44.1	)%
* Not meaningful

Factors affecting Midstream during the first nine months of 2013 are described below.

Operating Revenue

Operating revenue increased $5.0 million, or 23.6%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to higher tolling revenue at Evangeline resulting from a new power purchase agreement with Cleco Power for Coughlin Units 6 and 7 that began in May 2012 as compared to the power purchase agreement with Cleco Power for Coughlin Unit 6 in effect from January through April 2012. Also contributing to this increase was the absence of availability penalties from Coughlin Unit 7 in June 2012.

Operating Expenses

Operating expenses decreased $1.2 million, or 5.5%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to lower maintenance expenses at Evangeline due to lower turbine and routine maintenance expense. Partially offsetting this decrease was a loss in 2013 on the disposal of assets at Evangeline from higher removal and parts retirement expense.

Other Income

Other income decreased $11.8 million, or 61.9%, during the first nine months of 2013 compared to the first nine months of 2012 largely due to lower contractual expirations of underlying indemnifications resulting from the disposition of Acadia Units 1 and 2.

Interest Charges

Interest charges decreased $0.6 million, or 238.5%, during the first nine months of 2013 compared to the first nine months of 2012 primarily related to $0.5 million for a change in uncertain tax positions and $0.1 million of lower miscellaneous interest charges.

Income Taxes

Federal and state income taxes decreased $0.1 million, or 0.8%, during the first nine months of 2013 compared to the first nine months of 2012 primarily due to $1.9 million for the change in pre-tax income and $0.1 million for adjustments for tax returns filed, partially offset by $1.9 for the increase in the liability for uncertain tax positions.

FINANCIAL CONDITION

Liquidity and Capital Resources

General Considerations and Credit-Related Risks

Credit Ratings and Counterparties

Financing for operational needs and capital expenditure requirements not satisfied by operating cash flows depends upon the cost and availability of external funds through both short- and long-term financing. The inability to raise capital on favorable terms could negatively affect Cleco’s or Cleco Power’s ability to maintain or expand its businesses. Access to funds is dependent upon factors such as general economic and capital market conditions, regulatory authorizations and policies, Cleco Corporation’s and Cleco Power’s credit ratings, the cash flows from routine operations, and the credit ratings of project counterparties. After assessing the current operating performance, liquidity, and credit ratings of Cleco Corporation and Cleco Power, management believes that Cleco Corporation and Cleco Power will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. The following table presents the credit ratings of Cleco Corporation and Cleco Power at September 30, 2013.

	SENIOR UNSECURED DEBT		CORPORATE CREDIT
	MOODY’S	S&P	S&P
Cleco Corporation	Baa3	N/A	BBB+
Cleco Power	Baa2	BBB+	N/A

Cleco notes that credit ratings are not recommendations to buy, sell, or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.

On July 26, 2013, S&P upgraded Cleco Corporation’s corporate credit rating and Cleco Power’s unsecured credit rating to BBB+ from BBB. At that time, S&P revised the outlook from positive to stable. Cleco Corporation and Cleco Power pay fees and interest under their bank credit agreements based on the highest rating held. All-in interest rates under the facilities are 0.25% lower due to the ratings upgrade and savings are dependent upon the level of borrowings. On August 16, 2013, Moody’s changed its outlook to positive from stable for both Cleco Corporation and Cleco Power. If Cleco Corporation or Cleco Power’s credit rating were to be downgraded by Moody’s or S&P, Cleco Corporation and/or Cleco Power would be required to pay additional fees and

51

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

incur higher interest rates for borrowings under their bank credit agreements. Cleco Power’s collateral for derivatives is based on the lowest rating held. If Cleco Power’s credit ratings were to be downgraded by Moody’s or S&P, Cleco Power would be required to post additional collateral for derivatives.

With respect to any open power or natural gas trading positions that Cleco may initiate in the future, Cleco may be required to provide credit support or pay liquidated damages. The amount of credit support that Cleco may be required to provide at any point in the future is dependent on the amount of the initial transaction, changes in the market price of power and natural gas, the changes in open power and gas positions, and changes in the amount counterparties owe Cleco. Changes in any of these factors could cause the amount of requested credit support to increase or decrease.

In June 2013, the LPSC approved Cleco Power’s application to join MISO and to find that transferring control of certain transmission assets to MISO was in the public interest, to create an accounting order deferring costs related to Cleco Power’s transition into the MISO market, and to expedite treatment. MISO operates a fully functioning RTO market. The vast majority of the transactions are settled through the day-ahead market; however, MISO also operates a real-time energy market to address the deviations between day-ahead and real-time schedules. Due to the timing of the settlement of such schedules, Cleco Power will be required to provide credit support for MISO and this may cause the amount of requested credit support to increase or decrease. At this time there are no initial credit requirements.

Global and U.S. Economic Environment

The current economic environment and uncertainty may have an impact on Cleco’s business and financial condition. Future actions or inactions of the U.S. federal government, including a failure to increase the government debt limit or another shutdown of the federal government, could increase the actual or perceived risk that the U.S. may not ultimately pay its obligations when due and may disrupt financial markets, including capital markets. Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows. Market conditions in the past years have limited the availability and have increased the costs of capital for many companies. Although the Registrants have not experienced restrictions in the financial markets, their ability to access the capital markets may be restricted at a time when the Registrants would like, or need, to do so. Any restrictions could have a material impact on the Registrants’ ability to fund capital expenditures or debt service, or on their flexibility to react to changing economic and business conditions. Credit constraints could have a material negative impact on the Registrants’ lenders or customers, causing them to fail to meet their obligations to the Registrants or to delay payment of such obligations. The lower interest rates that the Registrants have been exposed to have been beneficial to recent debt issuances; however, these rates have negatively affected interest income for the Registrants’ short-term investments.

Fair Value Measurements

Various accounting pronouncements require certain assets and liabilities to be measured at their fair values. Some assets and liabilities are required to be measured at their fair value each reporting period, while others are required to be measured only one time, generally the date of acquisition or

debt issuance. Cleco and Cleco Power are required to disclose the fair value of certain assets and liabilities by one of three levels when required for recognition purposes under GAAP.  Other financial assets and liabilities, such as long-term debt, are reported at their carrying values at their date of issuance on the consolidated balance sheets with their fair values as of the balance sheet date disclosed within the three levels. For more information about fair value levels, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 4 — Fair Value Accounting.”

Cash Generation and Cash Requirements

Restricted Cash and Cash Equivalents

Various agreements to which Cleco is subject contain covenants that restrict its use of cash. As certain provisions under these agreements are met, cash is transferred out of related escrow accounts and becomes available for its intended purposes and/or general corporate purposes. Cleco’s restricted cash and cash equivalents consisted of:  

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Diversified Lands’ mitigation escrow	$	97	$	97
Cleco Katrina/Rita’s storm recovery bonds	3,359		8,781
Cleco Power’s future storm restoration costs	4,944		5,343
Cleco Power’s building renovation escrow	71		—
Total restricted cash and cash equivalents	$	8,471	$	14,221

Cleco Katrina/Rita has the right to bill and collect storm restoration costs from Cleco Power’s customers. As cash is collected, it is restricted for payment of administration fees, interest, and principal on storm recovery bonds. During the nine months ended September 30, 2013, Cleco Katrina/Rita collected $14.9 million net of administration fees. In March and September 2013, Cleco Katrina/Rita used $7.1 million and $6.8 million, respectively for scheduled storm recovery bond principal payments and $3.3 million and $3.1 million, respectively for related interest. 

In connection with Cleco Power’s building modernization project, Cleco Power was required to establish an escrow account with a qualified financial institution and deposit all retainage monies as they accrue under the construction contract. Upon completion of the construction work, the funds including any interest held in the escrow account will be released from escrow and paid to the construction contractor.

Debt

Cleco Consolidated

At September 30, 2013 and December 31, 2012, Cleco had no short-term debt outstanding.

At September 30, 2013, Cleco’s long-term debt outstanding was $1.31 billion, of which $17.1 million was due within one year. The long-term debt due within one year at September 30, 2013, represents $14.9 million principal payments for the Cleco Katrina/Rita storm recovery bonds and $2.2 million of capital lease payments.

For Cleco, long-term debt decreased $40.3 million from December 31, 2012, primarily due to a $75.0 million repayment of senior notes, $60.0 million of solid waste disposal bonds reacquired in March 2013, a $25.0 million reduction in credit facility draws, $14.0 million scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and

52

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

September 2013, and a $1.6 million decrease in capital lease obligations. These decreases were partially offset by $35.0 million outstanding on a bank term loan entered into in March 2013, the issuance of $50.0 million 2008 Series A GO Zone bonds and $50.0 million 2008 Series B GO Zone bonds in May 2013, and debt discount amortizations of $0.3 million.

Cash and cash equivalents available at September 30, 2013, were $46.8 million combined with $550.0 million credit facility capacity ($250.0 million from Cleco Corporation and $300.0 million from Cleco Power) for total liquidity of $596.8 million. Cash and cash equivalents available at September 30, 2013, increased$15.8 million when compared to cash and cash equivalents available at December 31, 2012. This increase was primarily due to an increase in customer receipts and the receipt of tax refunds. Partially offsetting this increase was higher vendor payments, the payment of common stock dividends, interest payments, contributions to the pension plan, credit facility draw repayments, routine working capital fluctuations, and payment of property taxes.

At September 30, 2013, Cleco and Cleco Power were exposed to concentrations of credit risk through their short-term investments classified as cash equivalents. In order to mitigate potential credit risk, Cleco and Cleco Power have established guidelines for short-term investments. For more information on the concentration of credit risk through short-term investments classified as cash equivalents, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 4 — Fair Value Accounting.”

At September 30, 2013 and December 31, 2012, Cleco had a working capital surplus of $132.8 million and $152.7 million, respectively. The $19.9 milliondecrease in working capital is primarily due to:

• a $152.4 million net increase in current tax liabilities and uncertain tax positions and related interest charges expected to be settled in the next 12 months and

• an $11.9 million increase in accrued interest.

These decreases in working capital were partially offset by:

• a $74.0 million decrease in long-term debt due within one year which reflects the refinancing of long-term debt,

• a $17.1 million increase in customer accounts receivable,

• a $15.9 million decrease in accounts payable primarily due to payments of ad valorem tax, employee incentives and fuel that were accrued at year end,

• a $15.8 million increase in unrestricted cash and cash equivalents as discussed above, and

• an $8.3 million decrease in regulatory liabilities due to the return of customer owed carrying costs related to the construction of Madison Unit 3.

Cleco Corporation (Holding Company Level)

Cleco Corporation had no short-term debt outstanding at September 30, 2013 or December 31, 2012.

At September 30, 2013, Cleco Corporation had no draws outstanding under its $250.0 million credit facility compared to $25.0 million outstanding at December 31, 2012. This facility provides for working capital and other needs.

Cleco Corporation and Cleco Power have uncommitted lines of credit with a bank that allow up to $10.0 million each in short term borrowings, but no more than $10.0 million in aggregate, to support their working capital needs.

Cash and cash equivalents available at September 30, 2013, were $4.0 million, combined with $250.0 million credit facility capacity for total liquidity of $254.0 million. Cash and cash equivalents available at September 30, 2013, decreased$3.4 million when compared to cash and cash equivalents available at December 31, 2012, primarily due to higher vendor payments, the payment of common stock dividends, credit facility draw repayments, routine working capital fluctuations, and payment of property taxes. Partially offsetting this decrease was a tax refund.

Cleco Power

At September 30, 2013 and December 31, 2012, Cleco Power had no short-term debt outstanding.

At September 30, 2013, Cleco Power’s long-term debt outstanding was $1.31 billion, of which $17.1 million was due within one year. The long-term debt due within one year at September 30, 2013, represents $14.9 million principal payments for the Cleco Katrina/Rita storm recovery bonds and $2.2 million of capital lease payments.

For Cleco Power, long-term debt decreased$15.3 million from December 31, 2012, primarily due to a $75.0 million repayment of senior notes, $60.0 million solid waste disposal bonds reacquired in March 2013, $14.0 million scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2013, and a $1.6 million decrease in capital lease obligations. These decreases were partially offset by $35.0 million outstanding on a bank term loan entered into in March 2013, the issuance of $50.0 million 2008 Series A GO Zone bonds and $50.0 million 2008 Series B GO Zone bonds in May 2013, and debt discount amortizations of $0.3 million.

At September 30, 2013 and December 31, 2012, there were no borrowings outstanding under Cleco Power’s $300.0 million credit facility. This facility provides for working capital and other needs.

Cleco Corporation and Cleco Power have uncommitted lines of credit with a bank that allow up to $10.0 million each in short term borrowings, but no more than $10.0 million in aggregate, to support their working capital needs.

Cash and cash equivalents available at September 30, 2013, were $42.6 million, combined with $300.0 million facility capacity for total liquidity of $342.6 million. Cash and cash equivalents increased$19.2 million, when compared to cash and cash equivalents at December 31, 2012. This increase is primarily due to an increase in customer receipts.  Partially offsetting this increase was higher vendor payments, interest payments, contributions to the pension plan, payment of property taxes, and routine working capital fluctuations.

At September 30, 2013 and December 31, 2012, Cleco Power had a working capital surplus of $118.9 million and$96.3 million, respectively.  The $22.6 millionincrease in working capital is primarily due to:

• a $74.0 million decrease in long-term debt due within one year which reflects the refinancing of long-term debt,

• a $19.2 million increase in unrestricted cash and cash equivalents, as discussed above,

53

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

• a $17.1 million increase in customer accounts receivable,

• an $8.3 million decrease in regulatory liabilities due to the return of customer owed carrying costs related to the construction of Madison Unit 3, and

• a $12.3 million decrease in accounts payable primarily due to payments of ad valorem tax, employee incentive and fuel that were accrued at year end.

These increases in working capital were partially offset by:

• a $99.4 million net increase in current tax liabilities and uncertain tax positions and related interest charges expected to be settled in the next 12 months and

• an $11.8 million increase in accrued interest.

Cleco Power’s $60.0 million solid waste disposal facility bonds due 2037, which were issued by the Rapides Finance Authority for the benefit of Cleco Power in November 2007, were required to be mandatorily tendered by the bondholders for purchase on March 1, 2013, pursuant to the terms of the indenture. The bonds were issued in connection with a loan agreement between the Rapides Finance Authority and Cleco Power. On March 1, 2013, Cleco Power purchased all $60.0 million outstanding bonds at face value plus $1.6 million of accrued interest, using draws under Cleco Power’s revolving credit facility. In connection with the purchase, the interest rate of the bonds will reset each week based on the Securities Industry and Financial Markets Association index. The initial interest rate of the bonds at March 1, 2013, was 0.11% per annum. Interest expense will continue to be recorded with a corresponding amount recorded as interest income, excluding amortization of debt issuance costs. Although the bonds remain outstanding, Cleco Power has the right to redeem and cancel the debt at any time without approval of the Rapides Finance Authority. In accordance with the authoritative guidance, the bonds are considered extinguished and Cleco Power is holding the debt as treasury bonds, resulting in a net presentation on Cleco and Cleco Power's Condensed Consolidated Balance Sheets. Cleco Power has the option to remarket the bonds for new terms and new interest rates, both to be determined by market conditions.

On March 20, 2013, Cleco Power entered into a bank term loan agreement in the amount of $60.0 million. Proceeds of the loan agreement were used to repay draws under Cleco Power’s revolving credit facility. Cleco Power made a $25.0 million payment on the loan on May 8, 2013, reducing the balance outstanding to $35.0 million. The interest rate under the agreement at September 30, 2013, was 0.93%. The rate resets monthly at one month LIBOR, plus 0.75%. The loan matures on May 29, 2015.

On May 3, 2013, Cleco Power remarketed $50.0 million of its 2008 Series A GO Zone bonds which had previously been purchased by Cleco Power and were being held as treasury bonds. The interest rate at September 30, 2013, was 0.94% which is based on 65% of one month LIBOR, plus 0.82%. The rate resets monthly. The 2008 Series A GO Zone bonds will be subject to remarketing on May 3, 2015. Of the $50.0 million bonds, $25.0 million of the proceeds were used to fund the partial repayment of the $60.0 million solid waste disposal bonds described above and $25.0 million of the proceeds were used to partially fund the maturity of Cleco Power’s $75.0 million 5.375% senior notes on May 1, 2013.

On May 8, 2013, Cleco Power remarketed $50.0 million of its 2008 Series B GO Zone bonds which had previously been purchased by Cleco Power and were being held as treasury bonds, at a fixed interest rate of 4.25%. The 2008 Series B GO Zone bonds mature on December 1, 2038. The proceeds were used to partially fund the maturity of Cleco Power's $75.0 million 5.375% senior notes on May 1, 2013.

Credit Facilities

At September 30, 2013, Cleco Corporation had no borrowings outstanding under its existing credit facility. Cleco Corporation’s credit facility agreement has a maximum capacity of $250.0 million. The borrowing costs under the facility are equal to one-month LIBOR plus 1.275%orABR, plus facility fees of 0.225%. If Cleco Corporation’s credit ratings were to be downgraded one level, Cleco Corporation would be required to pay fees and interest at a rate of 0.25% higher under the pricing levels of its credit facility.

At September 30, 2013, Cleco Power had no borrowings outstanding under its existing credit facility. Cleco Power’s credit facility agreement has a maximum capacity of $300.0 million. The borrowing costs are LIBOR plus 1.075% or ABR, plus facility fees of 0.175%. If Cleco Power’s credit ratings were to be downgraded one level, Cleco Power would be required to pay fees and interest at a rate of 0.25% higher under the pricing levels of its credit facility.

At September 30, 2013, Cleco Corporation and Cleco Power were in compliance with the covenants in their credit facilities. If Cleco Corporation were to default under the covenants in its credit facility or other debt agreements, it would be unable to borrow additional funds under the facility and the lenders could accelerate all principal and interest outstanding. Further, if Cleco Power were to default under its credit facility or other debt agreements, Cleco Corporation would be considered in default under its credit facility.

On October 16, 2013, Cleco Corporation and Cleco Power entered into new, amended and restated credit facilities with maturity dates of October 16, 2018. The new facilities replace the previous facilities, which were to mature on October 7, 2016. The new facilities are comprised of the same ten banks, plus one additional bank. The new facilities are priced the same as the old facilities and are for the same amounts.

Midstream

Midstream had no debt outstanding at September 30, 2013 or December 31, 2012.

Cleco Consolidated Cash Flows

Net Operating Cash Flow

Net cash provided by operating activities was $289.7 million during the first nine months of 2013, compared to $224.6 million during the first nine months of 2012. Cash provided by operating activities during the first nine months of 2013 increased$65.1 million from the first nine months of 2012 primarily due to the following items:

• higher income tax refunds of $47.2 million,

• lower refund of Madison Unit 3 carrying costs of $23.8 million due to extinguishment of the liability,

• lower expenditures for fuel inventories and related transportation of $10.9 million, primarily petroleum coke and lignite,

54

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

• lower storm expenditures of $7.1 million,

• lower payroll of $5.1 million, and

• lower vendor payments of $4.8 million.

These increases were partially offset by higher pension plan contributions of $34.0 million.

Net Investing Cash Flow

Net cash used in investing activities was $164.8 million during the first nine months of 2013, compared to $149.2 million during the first nine months of 2012. Net cash used in investing activities during the first nine months of 2013 was higher than the first nine months of 2012 primarily due to the following items:

• lower return of investment in the NMTC Fund of $36.7 million,

• lower property, plant, and equipment grants received of $14.3 million, and

• lower transfers of cash from restricted accounts of $13.3 million.

These increases were partially offset by lower additions to property, plant, and equipment, net of AFUDC, of $44.2 million.

Net Financing Cash Flow

Net cash used in financing activities was $109.1 million during the first nine months of 2013 compared to $100.6 million during the first nine months of 2012. Net cash used in financing activities during the first nine months of 2013 was higher than the first nine months of 2012 primarily due to the following items:

• higher repayments on the revolving credit facility of $213.0 million,

• the repurchase of long-term debt of $60.0 million, and

• higher retirement of long-term debt of $39.6 million.

These increases were partially offset by:

• draws on the revolving credit facility of $198.0 million and

• higher issuances of long-term debt of $110.0 million.

Cleco Power Cash Flows

Net Operating Cash Flow

Net cash provided by operating activities was $232.0 million during the first nine months of 2013, compared to $205.5 million during the first nine months of 2012. Cash provided by operating activities during the first nine months of 2013 increased$26.5 million from the first nine months of 2012 primarily due to the following items:

• lower refund of Madison Unit 3 carrying costs of $23.8 million due to extinguishment of the liability,

• lower expenditures for fuel inventories and related transportation of $10.9 million, primarily petroleum coke and lignite,

• lower storm expenditures of $7.1 million,

• lower vendor payments of $4.6 million, and

• lower payroll of $3.8 million.

These increases were partially offset by higher pension plan contributions of $34.0 million.

Net Investing Cash Flow

Net cash used in investing activities was $118.2 million during the first nine months of 2013, compared to $138.3 million during the first nine months of 2012. Net cash used in investing activities during the first nine months of 2013 was lower than the first nine months of 2012 primarily due to lower additions to property, plant, and equipment, net of AFUDC, of $44.9 million.

This decrease was partially offset by:

• lower property, plant, and equipment grants received of $14.3 million and

• lower transfers of cash from restricted accounts of $13.4 million.

Net Financing Cash Flow

Net cash used in financing activities was $94.6 million during the first nine months of 2013 compared to $84.1 million during the first nine months of 2012. Net cash used in financing activities during the first nine months of 2013 was higher than the first nine months of 2012 primarily due to the following items:

• repayments on the revolving credit facility of $160.0 million,

• the repurchase of long-term debt of $60.0 million,

• higher retirement of long-term debt of $39.6 million, and

• higher distributions to Cleco Corporation of $17.0 million.

These increases were partially offset by:

• draws on the revolving credit facility of $160.0 million and

• higher issuances of long-term debt of $110.0 million.

Contractual Obligations and Other Commitments

Cleco, in the normal course of business activities, enters into a variety of contractual obligations. Some of these result in direct obligations that are reflected in the Condensed Consolidated Balance Sheets while other commitments, some firm and some based on uncertainties, are not reflected in the Condensed Consolidated Financial Statements.

For more information regarding Cleco’s Contractual Obligations and Other Commitments, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Contractual Obligations and Other Commitments” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Off-Balance Sheet Commitments and Disclosures about Guarantees

Cleco Corporation and Cleco Power have entered into various off-balance sheet commitments, in the form of guarantees and standby letters of credit, in order to facilitate their activities and the activities of Cleco Corporation’s subsidiaries and equity investees (affiliates). Cleco Corporation and Cleco Power have also agreed to contractual terms that require them to pay third parties if certain triggering events occur. These contractual terms generally are defined as guarantees in the

55

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

authoritative guidance. For more information on off-balance sheet commitments, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 11 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Off-Balance Sheet Commitments” and “— Disclosures about Guarantees.”

Regulatory and Other Matters

Generation RFP

Renewable Energy Pilot Program

In November 2010, the LPSC established a two-part renewable energy pilot program implementation plan consisting of a research component and an RFP component. Cleco Power is meeting the requirements of the research component by developing eight self-build renewable energy projects, each with a maximum nameplate rating of 300 kilowatts. The RFP component of the program requires each LPSC jurisdictional utility to conduct an RFP for new long-term renewable resources, while prohibiting the utilities from bidding self-build projects into the long-term RFP. Cleco Power’s requirement is 43 MW of renewable energy with a minimum term of 10 years and a maximum term of 20 years, and can reasonably be expected to be deliverable within the 2011-2014 time period. Because Madison Unit 3 is designed to burn biomass fuel, with minor modifications, in addition to its primary fuel, Cleco Power has been given an exception allowing it to conduct an RFP for biomass fuel along with identifying the costs to co-fire biomass fuel in Madison Unit 3. In November 2011, Cleco Power received LPSC approval for recovery of the test burn costs, and performed a biomass test burn at Madison Unit 3. Cleco Power issued its final RFP for biomass fuel in February 2012, and received all proposals in April 2012. In August 2012, Cleco Power filed a written report to the LPSC regarding co-firing biomass fuel in Madison Unit 3. At its August 21, 2013 meeting, the LPSC decided Cleco met their requirements relating to the renewable energy pilot program. For more information on Cleco’s renewable energy pilot program, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Generation RFP” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

RFP for Contractual Resources Beginning in May 2012

In September 2011, Cleco Power issued a draft RFP for resources and conducted a technical and bidders conference on October 13, 2011. The final RFP seeking up to approximately 750 MW of capacity and energy for a three- or five-year term was published on October 21, 2011. In March 2012, Cleco Power received approval from the LPSC for a three-year power purchase agreement with Evangeline providing 730 MW of capacity and energy for a delivery term beginning May 1, 2012, and ending April 30, 2015. Because Cleco Power and Evangeline are affiliates, Cleco Power also received approval from FERC to make power sales between affiliates pursuant to Section 205 of the Federal Power Act.

2012 Long-Term RFP for Capacity and Energy Resources

In May 2012, Cleco Power issued a draft RFP seeking up to approximately 800 MW beginning May 2015 to meet long-term capacity and energy needs due to load growth, environmental regulations, and the expiration of the Evangeline power

purchase agreement discussed above. Cleco Power conducted a technical and bidders conference in May 2012, issued its final RFP in July 2012, and received proposals from potential suppliers in August 2012. In October 2012, Cleco Power announced Evangeline as the winning bidder in Cleco Power’s 2012 Long-Term RFP, subject to further due diligence, the completion of definitive agreements, and regulatory approvals from the LPSC and FERC. In December 2012, Cleco Power and Evangeline executed definitive agreements to transfer ownership and control of Coughlin from Evangeline to Cleco Power. Cleco Power's application seeking regulatory approval is listed in the LPSC's Official Bulletin, dated April 12, 2013.  In May 2013, Cleco Power filed its application with FERC seeking authorization to acquire Coughlin, and subsequently received authorization from FERC on August 26, 2013.  The transaction is expected to close on or before April 30, 2014, following regulatory approval by the LPSC.

Environmental Matters

Cleco is subject to extensive environmental regulation by federal, state, and local authorities and is required to comply with numerous environmental laws and regulations, and to obtain and comply with numerous governmental permits, in operating its facilities. In addition, existing environmental laws, regulations, and permits could be revised or reinterpreted; new laws and regulations could be adopted or become applicable to Cleco or its facilities; and future changes in environmental laws and regulations could occur, including potential regulatory and enforcement developments related to air emissions. Cleco may incur significant additional costs to comply with these revisions, reinterpretations, and requirements. Cleco Power would then seek recovery of additional environmental compliance costs as riders through the LPSC’s environmental adjustment clause or its FRP, or as a base rate adjustment as appropriate. If Cleco fails to comply with these revisions, reinterpretations, and requirements, it could be subject to civil or criminal liabilities and fines.

For more information on MATS, see “— Results of Operations — Cleco Power — MATS.” For a discussion of other Cleco environmental matters, please read “Business — Environmental Matters” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Retail Rates of Cleco Power

For information concerning Cleco Power’s current FRP, the pending request for extension of the FRP, amounts accrued and refunded by Cleco Power as a result of the FRP, and information on the LPSC Staff’s FRP reviews, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 9 — Electric Customer Credits.”

In August 2009, the LPSC opened a docket to study the promotion of energy efficiency by jurisdictional electric and natural gas utilities. On September 20, 2013, the commission issued their General Order adopting amended energy efficiency rules, which were previously rescinded by the LPSC’s order on March 28, 2013. On September 30, 2013, Cleco Power filed its formal intent to participate in the Phase I - Quick Start Process as defined in the LPSC’s Order. Phase I is intended to expedite the implementation of energy efficiency programs by developing detailed policies designed to implement cost-effective options. The new rules are not expected to have a material impact on the results of operations, financial condition, or cash flows of Cleco Power.

56

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

For information on certain other regulatory aspects of retail rates concerning Cleco Power, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Retail Rates of Cleco Power” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Transmission Rates of Cleco Power

Transmission Service

On March 29, 2012, Cleco Power filed a request with FERC for revisions to its OATT. The revisions were proposed to allow adoption of a formula rate methodology for transmission delivery and ancillary services provided by Cleco Power under the OATT and the existing bilateral Electric System Interconnection Agreements that preceded the OATT. The new formula rates permit recovery of Cleco Power’s FERC-jurisdictional investments in transmission and other assets placed in service since the existing rates were established. In May 2012, FERC issued an order accepting the rates for scheduling, system control and dispatch service, and the loss factors effective June 1, 2012. The remaining proposed rates were suspended for the maximum five-month statutory period and were effective November 1, 2012, subject to refund. On February 6, 2013, Cleco Power received notification that FERC had approved its settlement agreement filed on December 21, 2012. This settlement agreement allows for a return on equity of 10.5%, with an equity ratio of 53%. In accordance with the settlement, Cleco Power shall discount the charges produced by the formula rate by 10% until the earlier of December 31, 2014, or the date upon which Cleco commences operations under the MISO tariff, currently anticipated to be December 2013.

For more information on the transmission rates of Cleco Power, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Wholesale Rates of Cleco” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012 and “— Financial Condition — Regulatory and Other Matters — Market Restructuring — Wholesale Electric Markets.”

Integrated Resource Plan (IRP)

In accordance with the General Order in LPSC Docket No. R-30021, Cleco Power filed a request with the commission to initiate an IRP process on October 21, 2013. The IRP process includes conducting stakeholder meetings and receiving feedback from stakeholders. The schedule outlined in the General Order calls for Cleco Power to file a draft IRP in October 2014, and a final report in May 2015.

Market Restructuring

Wholesale Electric Markets

Regional Transmission Organization

On December 6, 2012, Cleco Power filed an application with the LPSC indicating Cleco’s intent to join MISO, asking the commission to find that transferring control of certain transmission assets to MISO is in the public interest, to create an accounting order deferring costs related to Cleco Power’s transition into the MISO market, and to expedite treatment. On June 26, 2013, the LPSC unanimously approved Cleco Power’s

change of control request. On June 18, 2013, Cleco Power filed a related application with the LPSC requesting approval of Cleco Power’s proposed MISO integration, implementation, and ratemaking plans. Discovery related to this integration, implementation, and ratemaking phase is still ongoing with a vote anticipated from the LPSC in mid-November 2013. Cleco Power anticipates joining the MISO RTO in December 2013.

For more information on regulatory aspects of wholesale electric markets affecting Cleco, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Market Restructuring — Wholesale Electric Markets” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Retail Electric Markets

For a discussion of the regulatory aspects of retail electric markets affecting Cleco Power, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Market Restructuring — Retail Electric Markets” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Lignite Deferral

At September 30, 2013 and December 31, 2012, Cleco Power had $14.7 million and $16.6 million, respectively, in deferred lignite mining costs remaining uncollected.

For more information on Cleco Power’s deferred lignite mining expenditures, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Lignite Deferral” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

AMI Project

In May 2010, Cleco Power accepted the terms of a $20.0 million grant from the DOE under the DOE’s small-grant process to implement advanced metering technology for all of Cleco Power’s retail customers. Cleco Power estimates the project will cost $72.4 million, with the DOE grant providing $20.0 million toward the project and Cleco Power providing the remaining $52.4 million. The grant program is a part of the American Recovery and Reinvestment Act of 2009. Advanced metering technology allows Cleco Power to better manage its electric system and provides improved service to customers through the meter’s communicating capabilities. At September 30, 2013, Cleco Power had incurred $69.7 million in project costs, of which $20.0 million has been reimbursed by the DOE. The installation of the advanced meters was substantially completed in May 2013, with the project to be fully functional by the fourth quarter of 2013. For more information, please read “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — AMI Project” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Financial Reform Legislation

In July 2010, the President signed the Dodd-Frank Act into law. Title VII of the Dodd-Frank Act established a comprehensive new regulatory framework for swaps and security-based swaps, including mandatory clearing, exchange trading, collateral requirements, margin requirements, and other

57

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

transparency requirements. In July 2012, the Commodity Futures Trading Commission published final rules for the definition of a swap and for the end-user exemption. Cleco Power has registered on the International Swaps and Derivatives Association (ISDA) website and submitted the required adherence letters and questionnaires pertinent to the ISDA August 2012 Dodd-Frank Act Protocol and the ISDA March 2013 Dodd-Frank Act Protocol. Management continues to review the final rules that have been issued or will be issued under the Dodd-Frank Act and will continue to monitor this law and its possible impact on the Registrants.

Franchises

On July10, 2013, the Town of Cottonportunanimouslyvoted to approve a new franchise agreement with Cleco Power with an effective date of July 16, 2013. The franchise agreement is for 30 years until July 2043.Approximately 1,085 Cleco Power customers are located in Cottonport.

On July 15, 2013, the Village of Moreauville unanimously voted to approve a new franchise agreement with Cleco Power with an effective date of July 19, 2013. The franchise agreement is for 30 years until July 2043. Approximately 573 Cleco Power customers are located in Moreauville.

On August 8, 2013, the City of Mandeville unanimously voted to approve a new franchise agreement with Cleco Power with an effective date of August 9, 2013.  The franchise agreement is for 30 years until August 2043.  Approximately 7,001 Cleco Power customers are located in Mandeville.

On August 12, 2013, the Town of Oberlin unanimously voted to approve a new franchise agreement with Cleco Power with an effective date of August 26, 2013.  The franchise agreement is for 30 years until August 2043.  Approximately 693 Cleco Power customers are located in Oberlin.

For more information on other electric service franchises, please read “Business — Regulatory Matters, Industry Developments, and Franchises — Franchises” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

Other Franchise Matters

For information regarding other franchise matters, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 11 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — City of Opelousas.”

Recent Authoritative Guidance

For a discussion of recent authoritative guidance, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 2 — Recent Authoritative Guidance” of this Combined Quarterly Report on Form 10-Q, which discussion is incorporated herein by reference.

CRITICAL ACCOUNTING POLICIES

Cleco’s critical accounting policies include those accounting policies that are both important to Cleco’s financial condition and results of operations and those that require management to make difficult, subjective, or complex judgments about future events, which could result in a material impact to the financial statements of Cleco Corporation’s segments or to Cleco as a consolidated entity. The financial statements contained in this report are prepared in accordance with GAAP, which require Cleco to make estimates and

assumptions. Estimates and assumptions about future events and their effects cannot be made with certainty. Management bases its current estimates and assumptions on historical experience and on various other factors that are believed to be reasonable under the circumstances.  On an ongoing basis, these estimates and assumptions are evaluated and, if necessary, adjustments are made when warranted by new or updated information or by a change in circumstances or environment. Actual results may differ significantly from these estimates under different assumptions or conditions. 

For more information on Cleco’s critical accounting policies, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Policies” in the Registrant’s Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

CLECO POWER — NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS

Set forth below is information concerning the results of operations of Cleco Power for the three and nine months ended September 30, 2013 and September 30, 2012. The following should be read in combination with Cleco Power’s Unaudited Condensed Consolidated Financial Statements and the Notes contained in this Combined Quarterly Report on Form 10-Q.

Cleco Power meets the conditions specified in General Instructions H(1)(a) and (b) to Form 10-Q and is therefore permitted to use the reduced disclosure format for wholly owned subsidiaries of reporting companies. Accordingly, Cleco Power has omitted from this report the information called for by Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and Item 3 (Quantitative and Qualitative Disclosures about Market Risk) of Part I of Form 10-Q and the following Part II items of Form 10-Q: Item 2 (Unregistered Sales of Equity Securities and Use of Proceeds) and Item 3 (Defaults upon Senior Securities). Pursuant to the General Instructions, Cleco Power has included an explanation of the reasons for material changes in the amount of revenue and expense items of Cleco Power between the first nine months of 2013 and the first nine months of 2012. Reference is made to Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012.

For an explanation of material changes in the amount of revenue and expense items of Cleco Power between the third quarter of 2013 and the third quarter of 2012, see “— Results of Operations — Comparison of the Three Months Ended September 30, 2013 and 2012 — Cleco Power” of this Combined Quarterly Report on Form 10-Q, which discussion is incorporated herein by reference.

For an explanation of material changes in the amount of revenue and expense items of Cleco Power between the first nine months of 2013 and the first nine months of 2012, see “— Results of Operations — Comparison of the Nine Months Ended September 30, 2013 and 2012 — Cleco Power” of this Combined Quarterly Report on Form 10-Q, which discussion is incorporated herein by reference.

58

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Risk Overview

Market risk inherent in Cleco’s market risk-sensitive instruments and positions includes potential changes arising from changes in interest rates and the commodity market prices of power and natural gas in the industry on different energy exchanges.

Cleco applies the authoritative guidance as it relates to derivatives and hedging to determine whether the market risk-sensitive instruments and positions are required to be marked-to-market. Generally, Cleco Power’s market risk-sensitive instruments and positions qualify for the normal-purchase, normal-sale exception to mark-to-market accounting since Cleco Power takes physical delivery and the instruments and positions are used to satisfy customer requirements. When positions close, actual gains or losses are included in the FAC and reflected on customers’ bills as a component of the FAC.

Cleco’s exposure to market risk, as discussed below, represents an estimate of possible changes in the fair value or future earnings that would occur, assuming possible future movements in the interest rates and commodity prices of power and natural gas. Management’s views on market risk are not necessarily indicative of actual results, nor do they represent the maximum possible gains or losses. The views do represent, within the parameters disclosed, what management estimates may happen.

Cleco monitors credit risk exposure through reviews of counterparty credit quality, aggregate counterparty credit exposure, and aggregate counterparty concentration levels. Cleco manages these risks by establishing appropriate credit and concentration limits on transactions with counterparties and requiring contractual guarantees, cash deposits, or letters of credit from counterparties or their affiliates, as deemed necessary. Cleco Power has agreements in place with various counterparties that authorize the netting of financial transactions and contract payments to mitigate credit risk for transactions entered into for risk management purposes.

Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows. Market conditions during past years have limited the availability and have increased the costs of capital for many companies. Future actions or inactions of the U.S. federal government, including a failure to increase the government debt limit or another shutdown of the federal government, could increase the actual or perceived risk that the U.S. may not ultimately pay its obligations when due and may disrupt financial markets, including capital markets. The inability to raise capital on favorable terms could negatively affect Cleco’s ability to maintain and expand its businesses. After assessing the current operating performance, liquidity, and credit ratings of Cleco, management believes that it will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. Cleco Corporation and Cleco Power pay fees and interest under their respective credit facilities based on the highest rating held. If Cleco Corporation or Cleco Power’s credit ratings were to be downgraded by Moody’s or S&P, Cleco Corporation or Cleco Power, as the case may be, would be required to pay additional fees and higher interest rates under their respective credit facilities. Cleco Power’s collateral for derivatives is based on the lowest rating held. If Cleco Power’s credit ratings

were to be downgraded by S&P or Moody’s, Cleco Power would be required to pay additional collateral for derivatives.

Interest Rate Risks

Cleco monitors its mix of fixed- and variable-rate debt obligations in light of changing market conditions and from time to time may alter that mix, for example, refinancing balances outstanding under its variable-rate credit facility with fixed-rate debt. For details, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 5 — Debt.” Calculations of the changes in fair market value and interest expense of the debt securities are made over a one-year period.

Sensitivity to changes in interest rates for variable-rate obligations is computed by assuming a 1% change in the current interest rate applicable to such debt.

At September 30, 2013, Cleco had no short-term variable rate debt and $85.0 million in long-term variable-rate debt.

At September 30, 2013, Cleco Corporation had no borrowings outstanding under its $250.0 million credit facility.

In November 2011, Cleco Power entered into a forward starting interest rate swap contract in order to mitigate the interest rate exposure on coupon payments related to a $50.0 million fixed-rate forecasted debt issuance. The forward starting interest rate swap had a spot 30-year all-in swap rate of 3.05%, notional amount of $50.0 million, with the pricing date of May 14, 2013, or the issuance of the notes, whichever was earlier. The forward starting interest rate swap met the criteria of a cash flow hedge under the authoritative guidance as it relates to derivatives and hedging and was carried on the balance sheet at its fair value.

During the first quarter of 2013, Cleco determined that the forward starting interest rate swap ceased to be highly effective in offsetting changes in the cash flows of the forecasted coupon payments and discontinued hedge accounting prospectively. In May 2013, upon pricing of the 2008 Series B GO Zone bonds, Cleco Power settled the forward starting interest rate swap at a loss of $3.3 million. Of this amount, Cleco Power deferred $2.9 million as a regulatory asset and recognized $0.4 million in other comprehensive income. In May 2013, Cleco Power began amortizing these losses over the 25-year term of the related debt.

Commodity Price Risks

Management believes Cleco has controls in place to minimize the risks involved in its financial and energy commodity activities. Independent controls over energy commodity functions consist of a middle office (risk management), a back office (accounting), and regulatory compliance staff, as well as monitoring by a risk management committee comprised of officers, who are approved by Cleco Corporation’s Board of Directors. Risk limits are recommended by the Risk Management Committee and monitored through a daily risk report that identifies the current Value-at-Risk, current market conditions, and concentration of energy market positions.

Cleco Power procures fuel for generation and purchases power to meet the power demands of customers. Cleco Power may enter into positions to mitigate the volatility in customerfuel costs, as encouraged by various LPSC orders. These positions are marked-to-market with the resulting gain or loss recorded on the balance sheet as a component of the accumulated deferred fuel asset or liability and a component

59

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

of the energy risk management assets or liabilities. When these positions close, actual gains or losses will be included in the FAC and reflected in customers’ bills as a component of the fuel cost adjustment. There were no open positions at September 30, 2013 or December 31, 2012.

Cleco Power

Please refer to “— Risk Overview” for a discussion of market risk inherent in Cleco Power’s market risk-sensitive instruments.

Cleco Power has entered into various fixed- and variable-rate debt obligations. Please refer to “— Interest Rate Risks” for a discussion of how Cleco Power monitors its mix of fixed- and variable-rate debt obligations and the manner of calculating changes in fair market value and interest expense of its debt obligations.

Cleco Power had no short-term variable-rate debt and $85.0 million in long-term variable-rate debt as of September 30, 2013.

On March 20, 2013, Cleco Power entered into a bank term loan agreement in the amount of $60.0 million. At September 30, 2013, Cleco Power had $35.0 million outstanding under the bank term loan. The interest rate under

the agreement at September 30, 2013, was 0.93%. The rate resets monthly at one month LIBOR, plus 0.75%. Each 1% increase in the interest rate applicable to such debt would have resulted in a decrease in Cleco Power’s pre-tax earnings of $0.4 million.

On May 3, 2013, Cleco Power remarketed $50.0 million of its 2008 Series A GO Zone bonds which had previously been purchased by Cleco Power and were being held as treasury bonds. The interest rate at September 30, 2013, was 0.94% which is based on 65% of one month LIBOR, plus 0.82%. The rate resets monthly. The 2008 Series A GO Zone bonds will be subject to remarketing on May 3, 2015. Each 1% increase in the interest rate applicable to such debt would have resulted in a decrease in Cleco Power’s pre-tax earnings of $0.5 million.

At September 30, 2013, Cleco Power had no borrowings outstanding under its $300.0 million credit facility.

Please refer to “— Commodity Price Risks” for a discussion of controls, transactions, Value-at-Risk, and market value maturities associated with Cleco Power’s energy commodity activities.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

As of September 30, 2013, evaluations were performed under the supervision and with the participation of Cleco Corporation and Cleco Power (individually, “Registrant” and collectively, the “Registrants”) management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO). The evaluations assessed the effectiveness of the Registrants’ disclosure controls and procedures. Based on the evaluations, the CEO and CFO have concluded that the Registrants’ disclosure controls and procedures are effective

to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities

Exchange Act of 1934 is recorded, processed, summarized,

and reported within the time periods specified in SEC rules

and forms; and that the Registrants’ disclosure controls and procedures are also effective in ensuring that such information is accumulated and communicated to the Registrants’ management, including the CEO and CFO, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There has been no change in the Registrants’ internal control over financial reporting that occurred during the quarter ended September 30, 2013, that has materially affected, or is reasonably likely to materially affect, the Registrants’ internal control over financial reporting.

60

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

PART II — OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

CLECO

For information on legal proceedings affecting Cleco, see Part

I, Item 1, “Notes to the Unaudited Condensed Consolidated

Financial Statements — Note 11 — Litigation, Other

Commitments and Contingencies, and Disclosures about

Guarantees — Litigation.”

CLECO POWER

For information on legal proceedings affecting Cleco Power,

see Part I, Item 1, “Notes to the Unaudited Condensed

Consolidated Financial Statements — Note 11 — Litigation,

Other Commitments and Contingencies, and Disclosures

about Guarantees — Litigation.”

ITEM 1A. RISK FACTORS

Other than the update to the risk factors below, there have been no material changes from the risk factors disclosed under the heading “Risk Factors” in Item 1A of the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2012 (the “2012 Annual Report on Form 10-K”). For risks that could affect actual results and cause results to differ materially from those expressed in any forward-looking statements made by, or on behalf of, the Registrants, see the risk factors disclosed under “Risk Factors” in Item 1A of the 2012 Annual Report on Form 10-K.

Reliability and Infrastructure Protection Standards Compliance

Cleco is subject to mandatory reliability and critical infrastructure protection standards. Fines and civil penalties are imposed on those who fail to comply with these standards.

NERC serves as the ERO with authority to establish and enforce mandatory reliability and infrastructure protection standards, subject to FERC approval, for users of the nation’s transmission system. FERC enforces compliance with these standards. New standards are being developed and existing standards are continuously being modified.

As these standards continue to be adopted and modified, they may impose additional compliance requirements on Cleco Power and Midstream operations, which may result in an increase in capital expenditures and operating expenses. Failure to comply with these standards can result in the imposition of material fines and civil penalties.

In December 2012, the Southwest Power Pool Regional Entity notified Cleco that an audit would be conducted to determine Cleco’s compliance with the NERC Critical Infrastructure Protection cybersecurity standard requirements. The audit was conducted in March 2013. Cleco submitted mitigation plans and evidence of remedial efforts in connection with the SPP’s initial findings from the audit. Cleco and the SPP agreed to a financial settlement totaling less than $0.1 million. The next NERC Reliability audit is scheduled to begin in November 2013. Management is unable to predict the outcome of the future audit or whether it will have a material adverse effect on the Registrants’ results of operations, financial condition, and cash flows.

ITEM 4.MINE SAFETY DISCLOSURES

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Act and Item 104 of Regulation S-K is included in Exhibit 95 to this Combined Quarterly Report on Form 10-Q.

ITEM 5.OTHER INFORMATION

On October 25, 2013, the Board of Directors of Cleco Corporation amended Cleco Corporation’s Bylaws to eliminate the staggered board structure. Prior to the amendment, the Bylaws required the classification of the Board of Directors into three classes of, as near as possible, equal size. The amendment requires the Board of Directors to be elected by the shareholders annually. Section 1(d)(3) of Article III of the Bylaws also was deleted. Pursuant to the Bylaws, the Board of

Directors’ terms cannot be shortened. Therefore, the declassified board structure will be phased in, and all Directors will be elected on an annual basis beginning in 2017. Both amendments are effective October 25, 2014, pursuant to Section 1 of Article XIV of the Bylaws, which provides for a delayed effective date for amendments to certain Bylaws provisions. The revised Bylaws are filed as Exhibit 3.1 to this Combined Quarterly Report on Form 10-Q.

61

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

ITEM 6.   EXHIBITS
CLECO CORPORATION
3.1	Bylaws of Cleco Corporation, revised effective October 25, 2014
10.1	Amended and Restated Credit Agreement dated as of October 16, 2013 among Cleco Corporation, various financial institutions, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 of Cleco Corporation Form 8-K (file no. 001-15759), filed with the SEC on October 17, 2013)
12(a)	Computation of Ratios of Earnings to Fixed Charges for the three-, nine-, and twelve-month periods ended September 30, 2013, for Cleco Corporation
31.1	CEO Certification in accordance with section 302 of the Sarbanes-Oxley Act of 2002
31.2	CFO Certification in accordance with section 302 of the Sarbanes-Oxley Act of 2002
32.1	CEO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.2	CFO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
95	Mine Safety Disclosures
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase
CLECO POWER
10.2	Amended and Restated Credit Agreement dated as of October 16, 2013 among Cleco Power LLC, various financial institutions, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.2 of Cleco Corporation Form 8-K (file no. 001-05663), filed with the SEC on October 17, 2013)
12(b)	Computation of Ratios of Earnings to Fixed Charges for the three-, nine-, and twelve-month periods ended September 30, 2013, for Cleco Power
31.3	CEO Certification in accordance with section 302 of the Sarbanes-Oxley Act of 2002
31.4	CFO Certification in accordance with section 302 of the Sarbanes-Oxley Act of 2002
32.3	CEO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
32.4	CFO Certification pursuant to section 906 of the Sarbanes-Oxley Act of 2002
95	Mine Safety Disclosures
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	XBRL Taxonomy Extension Definition Linkbase
101.LAB	XBRL Taxonomy Extension Label Linkbase
101.PRE	XBRL Taxonomy Extension Presentation Linkbase

62

CLECO CORPORATION
CLECO POWER	2013 3RD QUARTER FORM 10-Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CLECO CORPORATION
(Registrant)
By:	/s/ Terry L. Taylor
	Terry L. Taylor
	Controller & Chief Accounting Officer

Date: October 30, 2013

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CLECO POWER LLC
(Registrant)
By:	/s/ Terry L. Taylor
	Terry L. Taylor
	Controller & Chief Accounting Officer

Date: October 30, 2013

63

EX-3.1

EXHIBIT 3.1

BYLAWS

OF

CLECO CORPORATION

(Revised effective October 25, 2014)

ARTICLE I	Registered Office; Registered Agents; Corporate Seal	1
Section 1.	Registered Office and Registered Agent(s)	1
Section 2.	Corporate Seal	1
ARTICLE II	Shareholders	1
Section 1.	Place of Holding Meetings	1
Section 2.	Quorum; Adjournment of Meetings	1
(a)	General Rule	1
(b)	Special Rule	1
(c)	Adjournments	2
Section 3.	Annual Meeting	2
Section 4.	Special Meeting	2
Section 5.	Conduct of Meetings	3
Section 6.	Voting	4
Section 7.	Notice	5
Section 8.	Amendment of Articles of Incorporation	8
(a)	Shareholders Proposals	8
(b)	Effectiveness	8
Section 9.	Effectiveness of Other Amendments to Articles of Incorporation	9
Section 10.	General	10
ARTICLE III	Directors	10
Section 1.	Certain General Provisions	10
(a)	Number	10
(b)	Tenure	10
(c)	Nominations	10
(d)	Qualifications; Declaration of Vacancy	12
(e)	Removal	13
(f)	Powers	14
(g)	Change in Number of Directors	14
(h)	Rights of Preferred Shareholders, etc.	15
Section 2.	Filling of Vacancies	15
Section 3.	Annual and Regular Meetings	15
Section 4.	Special Meetings	15
Section 5.	Place of Meetings; Telephone Meetings	15
Section 6.	Quorum	16
Section 7.	Compensation	16
Section 8.	Committees	16
ARTICLE IV	Indemnification	16
Section 1.	Right to Indemnification - General	16

Section 2.	Certain Provisions Respecting Indemnification for and Advancement of Expenses	17
Section 3.	Procedure for Determination of Entitlement to Indemnification	17
Section 4.	Presumptions and Effect of Certain Proceedings	18
Section 5.	Right of Claimant to Bring Suit	19
Section 6.	Non-Exclusivity and Survival of Rights	19
Section 7.	Definitions	20
ARTICLE V	Executive Committee	21
Section 1.	Election and Tenure	21
Section 2.	Executive Committee	21
Section 3.	Meetings	21
Section 4.	Compensation	22
ARTICLE VI	Audit Committee	22
Section 1.	Election and Tenure	22
Section 2.	Audit Committee	22
Section 3.	Meetings	22
Section 4.	Compensation	22
ARTICLE VII	Compensation Committee	22
Section 1.	Election and Tenure	22
Section 2.	Compensation Committee	22
Section 3.	Meetings	23
Section 4.	Compensation	23
ARTICLE VII.A.	Nominating/Governance Committee	23
Section 1.	Election and Tenure	23
Section 2.	Nominating/Governance Committee	23
Section 3.	Meetings	23
Section 4.	Compensation	23
ARTICLE VIII	Officers	24
Section 1.	Election, Tenure, and Compensation	24
Section 2.	Powers and Duties of Chairman of Board of Directors	24
Section 3.	Powers and Duties of President	24
Section 4.	Powers and Duties of Vice President	24
Section 5.	Powers and Duties of Secretary	24
Section 6.	Powers and Duties of Treasurer	25
Section 7.	Delegation of Duties	25

ii

ARTICLE IX	Capital Stock	25
Section 1.	Stock Certificates	25
Section 2.	Lost or Destroyed Certificates	26
Section 3.	Transfer of Shares	26
Section 4.	Dividends	26
Section 5.	Closing Transfer Books; Fixing Record Date	26
ARTICLE X	Fair-Price Provisions	26
Section 1.	Definitions	26
Section 2.	Vote Required in Business Combinations	30
Section 3.	When Voting Requirements Not Applicable	30
(a)	Definitions	30
(b)	Conditions	30
(c)	Other Provisions	33
ARTICLE XI	Notices	33
Section 1.	Manner of Giving Notice	33
Section 2.	Waiver of Notice	34
ARTICLE XII	Miscellaneous	34
Section 1.	Fiscal Year	34
Section 2.	Checks and Drafts	34
Section 3.	Books and Records	34
Section 4.	Separability	34
ARTICLE XIII	Amendment of Bylaws	34
Section 1.	Voting	34
Section 2.	Shareholder Proposals	34
Section 3.	Effective Date	35
ARTICLE XIV	Other Amendments to Bylaws	35
Section 1.	Effective Date	35
ARTICLE XV	Control Share Acquisition Statute	36
Section 1.		36

iii

BYLAWS

OF

CLECO CORPORATION

ARTICLE I

Registered Office; Registered Agents; Corporate Seal

Section 1.Registered Office and Registered Agent(s). The registered office of the Corporation is 2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226, and its registered agents are the president and chief executive officer of the Corporation, the general counsel, and the manager of insurance and claims of the Corporation, post office address 2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226. The Corporation may also have offices at such other places as the board of directors, the chief executive officer or the president may from time to time designate.

Section 2.Corporate Seal. The corporate seal of the Corporation shall be circular in form and have inscribed on its periphery the words “Cleco Corporation 1999” and in its center the words “Corporate”, “Seal” and “Louisiana.”

ARTICLE II

Shareholders

Section 1.Place of Holding Meetings. All meetings of the shareholders shall be held at the principal office of the Corporation in the City of Pineville, State of Louisiana, except in cases in which the notices thereof designate some other place, which may be within or without the State of Louisiana.

Section 2.Quorum; Adjournment of Meetings.

(a)General Rule. Except as otherwise provided in these bylaws, the presence in person or by proxy at a meeting of shareholders of the holders of record of a number of the shares of the capital stock of the Corporation issued and outstanding and entitled to vote thereat that represents a majority of the votes entitled to be cast thereat shall constitute a quorum at such meeting.

(b)Special Rule. At a meeting of shareholders at least one purpose of which is to amend or repeal a provision of or to supplement these bylaws or the articles of incorporation of the Corporation or to act on a merger, consolidation, reclassification, repurchase, or exchange of securities, transfer of all or substantially all of the assets of the Corporation, dissolution, “business combination” as defined in article X of these bylaws, or similar transaction, a quorum shall for all purposes consist of the presence in person or by proxy at such meeting of the holders of the number of the shares of the capital stock of the Corporation issued and outstanding and entitled to

1

vote thereat that represents 80% of the votes entitled to be cast thereat. At a meeting described in the preceding sentence, the quorum for any class of shares entitled to vote as a class shall be the holders of the number of shares of such class that represents 80% of the votes entitled to be cast by all holders of all shares of such class. Notwithstanding the foregoing, if the change in the articles of incorporation or bylaws, merger, consolidation, reclassification, repurchase, or exchange of securities, transfer of all or substantially all of the assets of the Corporation, dissolution, “business combination” as defined in article X of these bylaws, or similar transaction in question shall have been approved, before submission of a proposal relating thereto to a vote of shareholders, by at least 80% of the “continuing directors” (hereinafter defined) of the Corporation, then, instead of subsection (b), subsection (a) of this section 2 shall determine the quorum at the meeting of shareholders at which such proposal is considered by shareholders. For purposes of the preceding, a “continuing director” shall mean a director elected pursuant to a solicitation of proxies by the board of directors of the Corporation at an annual meeting of shareholders held at least 90 days before the date of determination and who has served continuously since such election, or a director elected by continuing directors to fill a vacancy.

(c)Adjournments. A meeting may, whether or not a quorum shall be in attendance at the time for which such meeting shall have been called and without any notice other than by announcement at such meeting, be adjourned from time to time by the chairman of the board of directors or the vote of the shareholders present in person or by proxy representing a majority of the votes so present, for a period not exceeding one month at any one time; provided, however, that a meeting at which a director or directors are to be elected shall be adjourned only from day to day until such director or directors have been elected. At an adjourned meeting at which a quorum shall attend, any business may be transacted which might have been transacted if such meeting had been held as originally called.

Section 3.Annual Meeting. Except as otherwise provided by resolution of the board of directors, the annual meeting of shareholders for the election of directors shall be held on the third Friday after the first Monday in April of each year. At each annual meeting, the shareholders shall elect directors to succeed those whose terms have expired as of the date of such annual meeting. Such other matters as may properly come before a meeting may be acted upon at an annual meeting.

Section 4.Special Meeting.

(a)Special meetings of the shareholders for any purpose or purposes may be called by the chief executive officer or president, by a majority of the board of directors, or by a majority of the executive committee, if any, of the board of directors; provided, however, that if and whenever dividends payable on any series of the Corporation’s preferred stock shall be in default in an amount equal to the aggregate dividends payable in any period of 12 consecutive calendar months, a special meeting shall be called on the demand in writing of the holders of record of a majority of the outstanding shares of preferred stock; and, provided further, that a special meeting of shareholders may be called by a shareholder or shareholders as provided in the Corporation’s articles of incorporation, these bylaws, or otherwise by law.

(b)Any shareholder requesting that a special meeting of shareholders be called (the

2

“Requesting Person”) shall, at the time of making the request, be a shareholder and submit written evidence, reasonably satisfactory to the secretary of the Corporation, that the Requesting Person is a shareholder of the Corporation and shall identify in writing (i) all information required to be included in a shareholder’s notice to bring business before a meeting of shareholders, as set forth in section 7(b)(3) of article II of these bylaws, and (ii) the reason or reasons for which the special meeting is to be called. Within 15 days after the Requesting Person has submitted the aforesaid items to the secretary of the Corporation, the secretary of the Corporation shall determine whether the evidence of the Requesting Person’s status as a shareholder submitted by the Requesting Person is reasonably satisfactory and shall notify the Requesting Person in writing of his determination. If the Requesting Person fails to submit the requisite information in the form or at the time indicated, or if the secretary of the Corporation fails to find such evidence of shareholder status reasonably satisfactory, then the request to call a special meeting of shareholders shall be deemed invalid (by reason of failure to comply with these bylaws) and no special meeting of shareholders shall be held pursuant to such request. Nothing in this subsection (b) shall affect the rights of the Corporation’s shareholders as provided in section 3(b) of article 6 of the Corporation’s articles of incorporation or as provided in subsection (a) immediately preceding with respect to the rights of the Corporation’s preferred shareholders.

Section 5. Conduct of Meetings. Meetings of shareholders shall be presided over by the chief executive officer or president of the Corporation or, if the chief executive officer or president is not present at a meeting, by such other person as the board of directors shall designate or, if no such person is designated by the board of directors, the most senior officer of the Corporation present at the meeting. The secretary of the Corporation, if present, shall act as secretary of each meeting of shareholders; if he is not present at a meeting, then such person as may be designated by the presiding officer shall act as secretary of the meeting. Meetings of shareholders shall follow reasonable and fair procedure. Subject to the foregoing, the conduct of any meeting of shareholders and the determination of procedure and rules shall be within the absolute discretion of the presiding officer (the “Chairman of the Meeting”), and there shall be no appeal from any ruling of the Chairman of the Meeting with respect to procedure or rules. Accordingly, in any meeting of shareholders or part thereof, the Chairman of the Meeting shall have the sole power to determine appropriate rules or to dispense with theretofore prevailing rules. Without limiting the foregoing, the following rules shall apply:

(a)The Chairman of the Meeting may ask or require that anyone not a bona fide shareholder or proxy leave the meeting.

(b)A resolution or motion shall be considered for vote only if proposed by a shareholder or duly authorized proxy, and seconded by an individual, who is a shareholder or a duly authorized proxy, other than the individual who proposed the resolution or motion, subject to compliance with any other requirements concerning such a proposed resolution or motion contained in these bylaws. The Chairman of the Meeting may propose any motion for vote. The order of business at all meetings of shareholders shall be determined by the Chairman of the Meeting.

(c)The Chairman of the Meeting may impose any reasonable limits with respect to participation in the meeting by shareholders, including, but not limited to, limits on the amount of

3

time at the meeting taken up by the remarks or questions of any shareholder, limits on the numbers of questions per shareholder, and limits as to the subject matter and timing of questions and remarks by shareholders.

(d)Before any meetings of shareholders, the board of directors may appoint any persons other than nominees for office to act as inspectors of election at the meeting or its adjournment. If no inspectors of election are so appointed, the Chairman of the Meeting may, and on the request of any shareholder or a shareholder’s proxy shall, appoint inspectors of election at the meeting of shareholders. The number of inspectors shall be three. If any person appointed as inspector fails to appear or fails or refuses to act, the Chairman of the Meeting may, and upon the request of any shareholder or a shareholder’s proxy shall, appoint a person to fill such vacancy.

The duties of these inspectors shall be as follows:

(1)Determine the number of shares outstanding and the voting power of each, the shares represented at the meeting, the existence of a quorum, and the authenticity, validity and effect of proxies;

(2)Receive votes or ballots;

(3)Hear and determine all challenges and questions in any way arising in connection with the right to vote;

(4)Count and tabulate all votes;

(5)Report to the board of directors the results based on the information assembled by the inspectors; and

(6)    Do any other acts that may be proper to conduct the election or vote with fairness to all shareholders.

Notwithstanding the foregoing, the final certification of the results of any election or other matter acted upon at a meeting of shareholders shall be made by the board of directors.

Section 6. Voting. Except as otherwise provided by the articles of incorporation, each holder of shares of capital stock of the Corporation shall be entitled, at each meeting of shareholders, to one vote for each share of such stock standing in his name on the books of the corporation on the date of such meeting or, if the board of directors, pursuant to section 5 of article IX of these bylaws, shall have fixed a record date for the purpose of such meeting or shall have fixed a date as of which the books of the Corporation shall be temporarily closed against transfers of shares, then as of such date; except that in the election of directors of the Corporation, each holder of shares of common stock of the Corporation shall have the right to multiply the number of votes to which he may be entitled by the number of directors to be elected, and he may cast all such votes for one candidate or he may distribute them among any two or more candidates. A shareholder may vote either in person or by proxy appointed by an instrument in writing, subscribed by such shareholder or by his duly authorized attorney. Except as otherwise provided by law, the articles of incorporation, or these bylaws, all elections shall be had and all questions

4

shall be decided by a majority of the votes cast at a duly constituted meeting at which a quorum is present.

Section 7. Notice.

(a)Unless otherwise provided by the articles of incorporation, written or printed notice, stating the place, day, and hour of each meeting of shareholders, and, in the case of a special meeting, the business proposed to be transacted thereat, shall be given in the manner provided in article XI of these bylaws to each shareholder entitled to vote at such meeting, at least 15 days before an annual meeting and at least five days before a special meeting.

(b)

(1)Except as provided in subsection (c) of this section, to be properly brought before any meeting of the shareholders, business must be either (i) specified in the notice of meeting (or any supplement thereto) given by or at the direction of the board of directors pursuant to subsection (a) of this section 7, (ii) otherwise properly brought before the meeting by or at the direction of the board of directors, or (iii) otherwise properly brought before the meeting by a shareholder who (A) is a shareholder at the time of the giving of such shareholder’s notice provided for in this section 7, (B) shall be a holder of record entitled to vote at the meeting and (C) complies with the requirements of this section 7. Clause (iii) of the immediately preceding sentence shall be the exclusive means for a shareholder to submit business or proposals (other than matters properly brought under Rule 14a-8 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and included in the notice relating to the meeting (or any supplement thereto) given in accordance with subsection (a) of this section 7) before any meeting of shareholders.

(2)In addition to any other applicable requirements, for business to be properly brought before any meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the secretary of the Corporation. To be timely, a shareholder’s notice must be delivered to or mailed and received at the principal executive offices of the Corporation at least 120 days prior to the meeting; provided, however, that in the event that less than 135 days’ notice or prior public disclosure of the date of any meeting of shareholders is given or made to shareholders by the Corporation, notice by the shareholder to be timely must be so received not later than the close of business of the 15th day following the day on which such notice of the date of the meeting was mailed or such public disclosure was made, whichever first occurs. In no event shall any adjournment, postponement or deferral of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a shareholder’s notice as described above.

(3)Any such shareholder’s notice to the secretary of the Corporation shall set forth in writing as to each matter the shareholder proposes to bring before any meeting of the shareholders (i) a brief description of the business desired to be brought before the meeting and the reasons for conducting such business at the meeting, (ii) as to the shareholder proposing such business and the beneficial owner, if any, on whose behalf the proposal is made, (A) the name and record address of the shareholder proposing such business, as they appear on the Corporation’s books, and of the beneficial owner, if any,

5

(B) the name and address of all other persons known by such shareholder and beneficial owner, if any, to be supporting such business (“Supporting Person”), (C) the class or series and number of shares of the Corporation which are, directly or indirectly, owned beneficially and of record by each of the shareholder, beneficial owner and Supporting Person, (D) any option, warrant, convertible security, stock appreciation right or similar right with an exercise or conversion privilege or a settlement payment or mechanism at a price related to any class or series of shares of capital stock of the Corporation or with a value derived in whole or in part from the price, value or volatility of any class or series of shares of capital stock of the Corporation or any derivative or synthetic arrangement having characteristics of a long position in any class or series of shares of capital stock of the Corporation, whether or not such instrument or right shall be subject to settlement in the underlying class or series of capital stock of the Corporation or otherwise (a “Derivative Instrument”) directly or indirectly owned beneficially by such shareholder and by such beneficial owner and any other direct or indirect opportunity to profit or share in any profit derived from any increase or decrease in the value of shares of capital stock of the Corporation, (E) any proxy, contract, arrangement, understanding or relationship the effect or intent of which is to increase or decrease the voting power of such shareholder or beneficial owner with respect to any shares or any security of the Corporation, (F) any pledge by such shareholder or beneficial owner of any security of the Corporation or any short interest of such shareholder or beneficial owner in any security of the Corporation (a person shall be deemed to have a short interest in a security if such person directly or indirectly, through any contract, arrangement, understanding, relationship or otherwise, has the opportunity to profit or share in any profit derived from any decrease in the value of the subject security), (G) any rights to dividends on the shares of capital stock of the Corporation owned beneficially by such shareholder and by such beneficial owner that are separated or separable from the underlying shares of capital stock of the Corporation, (H) any proportionate interest in shares of capital stock of the Corporation or Derivative Instruments held, directly or indirectly, by a general or limited partnership in which such shareholder or beneficial owner is a general partner or, directly or indirectly, beneficially owns an interest in a general partner, (I) any performance-related fees (other than an asset-based fee) that such shareholder or beneficial owner is entitled to based on any increase or decrease in the value of shares of capital stock of the Corporation or Derivative Instruments, if any, as of the date of such notice, including, without limitation, any such interests held by members of such shareholder’s or beneficial owner’s immediate family sharing the same household, (J) a representation regarding whether such shareholder or beneficial owner intends to solicit proxies with respect to the business desired to be brought before the meeting and (K) a representation regarding whether such shareholder or beneficial owner intends to appear in person or by proxy at the meeting, (iii) any other information relating to such shareholder and beneficial owner, if any, that would be required to be disclosed in solicitations of proxies for the proposal, or would otherwise be required, in each case pursuant to section 14 of the Exchange Act and the rules and regulations promulgated thereunder; (iv) any material interest of such shareholder, any such beneficial owner and any Supporting Person in such business or proposal and (v) a description of all agreements, arrangements and understandings between such shareholder and beneficial owner, if any, and any other person or persons (including their names) in connection with such business or proposal by such shareholder. Beneficial ownership shall

6

be determined in accordance with section 1 of article X of these bylaws.

(4)A shareholder providing notice of business proposed to be brought before a meeting of shareholders shall further update and supplement such notice, if necessary, so that the information provided or required to be provided in such notice pursuant to subsection (b) of this section 7 shall be true and correct as of the record date for the meeting and as of the date that is ten business days prior to the meeting, including any adjournment or postponement thereof, and such update and supplement shall be delivered to, or mailed and received by, the secretary of the Corporation not later than five business days after the record date for the meeting (in the case of the update and supplement required to be made as of the record date), and not later than eight business days prior to the date for the meeting, if practicable (or, if not practicable, on the first practicable date prior to), including any adjournment or postponement thereof (in the case of the update and supplement required to be made as of ten business days prior to the meeting or any adjournment or postponement thereof). In addition, a shareholder providing notice of business proposed to be brought before an annual meeting shall update and supplementsuch notice, and deliver such update and supplement to the principal executive offices of the Corporation, promptly following the occurrence of any event that materially changes the information provided or required to be provided in such notice pursuant to subsection (b) of this section 7.

(5)Except as provided in subsection (c) of this section 7, notwithstanding anything in these bylaws to the contrary, no business shall be conducted at any meeting of the shareholders except in accordance with the procedures set forth in this section 7 of article II, provided, however, that nothing in this section 7 of article II shall be deemed to preclude discussion by any shareholder as to any business properly brought before any meeting of the shareholders. In addition to the foregoing provisions of this section 7, a shareholder of the Corporation shall also comply with all applicable requirements of the Exchange Act and the rules and regulations thereunder with respect to the matters set forth in this section 7. Nothing in this section 7 shall be deemed to affect any rights of shareholders to request inclusion of proposals in the Corporation’s proxy statement pursuant to Rule 14a-8 under the Exchange Act.

(6)The Chairman of the Meeting shall, if the facts warrant, determine and declare at any meeting of the shareholders that business was not properly brought before the meeting of shareholders in accordance with the provisions of this section 7 of article II, and if he should so determine, he shall so declare to the meeting and any such business not properly brought before the meeting shall not be transacted. A determination whether a matter is or is not properly before the meeting shall not depend on whether such proposal has been or will be included in any proxy statement delivered or to be delivered to the Corporation’s shareholders.

(7)Nothing in this subsection (b) shall affect the rights of holders of the Corporation’s preferred stock as provided in section 3(b) of article 6 of the Corporation’s articles of incorporation or as provided in subsection (a) of section 4 of article II of these bylaws with respect to the rights of the Corporation’s preferred shareholders.

7

(c)Nothing in subsection (b)(2) or (b)(6) of this section 7 shall apply to the following provisions of these bylaws or any proposal by a shareholder or shareholders with respect to any matter governed by and inconsistent with any of the following provisions:

Article II, section 8(a);

Article III, section 1(c);

Article III, section 1(e); and

Article XIII, section 2.

Section 8.Amendment of Articles of Incorporation.

(a)Shareholder Proposals. No proposal by a shareholder to amend or supplement the articles of incorporation of the Corporation shall be voted upon at a meeting of shareholders unless, at least 180 days before such meeting of shareholders, such shareholder shall have delivered in writing to the secretary of the Corporation (i) notice of such proposal, including all information required by section 7(b)(3) of article II of these bylaws, (ii) the text of such amendment or supplement and (iii) an opinion of counsel, which counsel and the form and substance of which opinion shall be reasonably satisfactory to the board of directors of the Corporation, to the effect that the articles of incorporation of the Corporation, as proposed to be so amended or supplemented, would not be in conflict with the laws of the State of Louisiana. In no event shall any adjournment, postponement or deferral of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a shareholder’s notice as described above. Within 30 days after such shareholder shall have delivered the aforesaid items to the secretary of the Corporation, the secretary and the board of directors of the Corporation shall respectively determine whether the items to be ruled upon by them are reasonably satisfactory and shall notify such shareholder in writing of their respective determinations. If such shareholder fails to submit a required item in the form or within the time indicated, or if the secretary or the board of directors of the Corporation determines that the items to be ruled upon by them are not reasonably satisfactory, then such proposal by such shareholder may not be voted upon by the shareholders of the Corporation at such meeting of shareholders.

(b)Effectiveness. No provision amending or supplementing, or purporting to amend or supplement, the articles of incorporation of the Corporation that would have an effect, direct or indirect, on any of the following items may be included in articles of amendment signed by any officer, agent or representative of the Corporation on behalf of the Corporation or delivered to the Secretary of State of Louisiana for filing of record until the later of (i) one year following the adoption by the shareholders of such amendment or supplement or (ii) 10 days after the adjournment sine die of the annual meeting of shareholders next succeeding the adoption by the shareholders of the Corporation of such amendment or supplement:

(1)quorum at a regular or special meeting of shareholders;

(2)procedures for amendment of the articles of incorporation or bylaws of the Corporation upon a proposal by a shareholder of the Corporation;

8

(3)the effective date of an amendment to the articles of incorporation or bylaws of the Corporation, or the time at which steps may be taken to effect an amendment to the articles of incorporation or bylaws of the Corporation; or

(4)votes of shareholders of the Corporation required to approve (i) an amendment or supplement to or repeal of the bylaws of the Corporation, (ii) an amendment or supplement to the articles of incorporation of the Corporation, or (iii) a merger, consolidation, share exchange, reclassification of securities, repurchase of shares, transfer of all or substantially all of the assets of the Corporation, dissolution, “business combination” as defined in article X of these bylaws, or similar transaction.

Section 9. Effectiveness of Other Amendments to Articles of Incorporation. No provision amending or supplementing, or purporting to amend or supplement, the articles of incorporation of the Corporation that would have an effect, direct or indirect, on any of the following items may be included in articles of amendment signed by any officer, agent or representative of the Corporation on behalf of the Corporation or delivered to the Secretary of State of Louisiana for filing of record until the later of (i) one year following the adoption by the shareholders of such amendment or supplement or (ii) 10 days after the adjournment sine die of the annual meeting of the shareholders next succeeding the adoption by the shareholders of the Corporation of such amendment or supplement:

(1)the number of directors of the Corporation;

(2)the procedures for nomination by a shareholder of persons to be elected as directors of the Corporation;

(3)qualifications of directors of the Corporation or the declaration by the board of directors of a vacancy in the office of director;

(4)removal of directors or officer of the Corporation;

(5)power of directors of the Corporation;

(6)the filling of vacancies on the board of directors of the Corporation and the election of directors to fill newly created directorships;

(7)powers of committees of the board of directors of the Corporation;

(8)the calling of special meetings of shareholders;

(9) determinations of the presiding person at a meeting of shareholders;

or

(10)votes of shareholders of the Corporation required to approve the removal of a director.

9

Section 10.General. As used in these bylaws, the term “shareholder” shall have the meaning given such term in Section 1 of the Louisiana Business Corporation Law. As used in these bylaws, the terms “shares entitled to vote” and “votes entitled to be cast” shall mean (i) if a record date has been fixed for such meeting of shareholders, shares (or the votes related to such shares) of capital stock of the Corporation, which class or series of capital stock have the right to vote on such matter pursuant to the provisions of the articles of incorporation of the Corporation, outstanding as of the record date, or (ii) if a record date has not been fixed for such meeting of shareholders, shares (or the votes related to such shares) of capital stock of the Corporation, which class or series of capital stock have the right to vote on such matter pursuant to the provisions of the articles of incorporation of the Corporation, outstanding on the date of such meeting.

ARTICLE III

Directors

Section 1. Certain General Provisions.

(a)Number. The corporate powers of the Corporation shall be vested in and exercised, and the business and affairs of the Corporation shall be managed, by a board of directors which shall consist of nine (9) directors.

(b)Tenure. The directors shall be elected by the shareholders annually and shall hold office until the next annual meeting of shareholders and until their successors are elected and have qualified.

(c)Nominations. Nominations for election of members of the board of directors may be made by the board of directors or by a shareholder. The name of a person to be nominated by a shareholder (a “Nominator”) as a member of the board of directors of the Corporation must be submitted in writing to the secretary of the Corporation not fewer than 180 days before the date of the meeting of shareholders at which such person is proposed to be nominated. The Nominator shall also submit written evidence, reasonably satisfactory to the secretary of the Corporation, that the Nominator is a shareholder and shall identify in writing the information required by section 7(b)(3) of article II of these bylaws, except that all information required to be provided with respect to any shareholder or beneficial owner shall also be provided with respect to each proposed nominee. At such time, the Nominator shall also submit in writing (1) to the extent not provided in the information submitted pursuant to this subsection (c), (x) description of all direct and indirect compensation and other material monetary agreements, arrangements and understandings during the past three years, and any other material relationships, between or among the shareholder giving the notice and the beneficial owner, if any, on whose behalf the nomination is made, and their respective affiliates and associates, or others Acting in Concert (as defined below) therewith, on the one hand, and each proposed nominee, and his or her respective affiliates and associates, or others Acting in Concert therewith, on the other hand, including, without limitation, all information that would be required to be disclosed pursuant to Rule 404 promulgated under Regulation S-K if such shareholder and such beneficial owner, or any affiliate or associate thereof or person Acting in Concert therewith, were the “registrant” for purposes of such rule and the nominee were a director or executive officer of such registrant, (y) the name, age, business address

10

and residence address, business experience or other qualifications of each such proposed nominee, (z) the principal occupation or employment of each such proposed nominee and (2) a notarized affidavit executed by each such proposed nominee to the effect (x) that, if elected as a member of the board of directors, he will serve, (y) that he has reviewed the provisions of section 1 of this article III of these bylaws, and (z) that he is eligible for election as a member of the board of directors. In no event shall any adjournment, postponement or deferral of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a shareholder’s notice as described above. Within 30 days after the Nominator has submitted the aforesaid items to the secretary of the Corporation, the secretary of the Corporation shall determine whether the evidence of the Nominator’s status as a shareholder submitted by the Nominator is reasonably satisfactory and shall notify the Nominator in writing of his determination with respect thereto. The failure of the secretary of the Corporation to find such evidence reasonably satisfactory, or the failure of the Nominator to submit the requisite information in the form or within the time indicated, shall make the person to be nominated ineligible for nomination at the meeting of shareholders at which such person is proposed to be nominated. Beneficial ownership shall be determined in accordance with section 1 of article X of these bylaws.

To be eligible to be a nominee for election or reelection as a director of the Corporation, a person must deliver (in accordance with the time periods prescribed for delivery of notice set forth above) to the secretary of the Corporation at the principal executive offices of the Corporation a written questionnaire with respect to the background and qualification of such person and the background of any other person or entity on whose behalf the nomination is being made (which questionnaire shall be in the form provided by the secretary upon written request) and a written representation and agreement (in the form provided by the secretary upon written request) that such person (A) is not and will not become a party to (1) any agreement, arrangement or understanding with, and has not given any commitment or assurance to, any person or entity as to how such person, if elected as a director of the Corporation, will act or vote on any issue or question (a “Voting Commitment”) that has not been disclosed to the Corporation or (2) any Voting Commitment that could limit or interfere with such person’s ability to comply, if elected as a director of the Corporation, with such person’s fiduciary duties under applicable law, (B) is not and will not become a party to any agreement, arrangement or understanding with any person or entity other than the Corporation with respect to any direct or indirect compensation, reimbursement or indemnification in connection with service or action as a director that has not been disclosed therein, and (C) in such person’s individual capacity and on behalf of any person or entity on whose behalf the nomination is being made, would be in compliance, if elected as a director of the Corporation, and will comply with all applicable publicly disclosed corporate governance, conflict of interest, confidentiality and stock ownership and trading policies and guidelines of the Corporation.

A person shall be deemed to be “Acting in Concert” with another person for purposes of these bylaws if such person knowingly acts (whether or not pursuant to an express agreement, arrangement or understanding) in concert with, or towards a common goal relating to the management, governance or control of the Corporation in parallel with, such other person where (A) each person is conscious of the other person’s conduct or intent and this awareness is an element in their decision-making processes and (B) at least one additional factor suggests that such persons intend to act in concert or in parallel, which such additional factors may include, without limitation,

11

exchanging information (whether publicly or privately), attending meetings, conducting discussions, or making or soliciting invitations to act in concert or in parallel; provided, that a person shall not be deemed to be Acting in Concert with any other person solely as a result of the solicitation or receipt of revocable proxies or consents from such other person in response to a solicitation made pursuant to, and in accordance with, Section 14(a) of the Exchange Act by way of a proxy or consent solicitation statement filed on Schedule 14A. A person Acting in Concert with another person shall be deemed to be Acting in Concert with any third party who is also Acting in Concert with such other person.

(d)Qualifications; Declaration of Vacancy.

(1)No person shall be eligible for election or reelection as a director after attaining age 72, and no person who is or shall have been a full-time officer or employee of the Corporation or any subsidiary thereof shall be eligible for election or reelection as a director after attaining age 65 or (even if under 65) after such director’s employment by the Corporation has terminated.

(2)Upon attaining the age of 72 or 65, as specified in paragraph (1) immediately preceding, a director may continue to serve as a director of the Corporation until no later than the next succeeding annual meeting of shareholders, at which time, unless he has previously ceased to be a member of the board of directors of the Corporation, his position as a director shall cease. Notwithstanding the foregoing, with regard to a director of the Corporation who is also an officer or employee of the Corporation or any subsidiary thereof, such director’s position as a director shall cease immediately upon termination of such director's employment by the Corporation.

(3)Upon the occurrence of any of the events described in paragraph (2) of this subsection (d), the affected director shall cease to be a director of the Corporation at the time specified in such paragraph. Determination of the eligibility of a person for election, reelection, or continued service on the board of directors under other provisions of this subsection (d) or otherwise as provided by applicable law including, but not limited to, occurrence of an event specified in Section 81.C(2) of the Louisiana Business Corporation Law, shall, subject to the provisions of paragraph (6) below, be made by vote of a majority of the members of the board of directors. If the board of directors, pursuant to such a determination, determines that a person is ineligible for election, reelection, or continued service on the board of directors, such ineligibility shall be effective immediately upon such determination, and, if the affected person is a director of the Corporation at the time of such determination, his position as a director shall cease at such time.

Within 30 days after a Nominator has submitted the name of a person to be nominated as a member of the board of directors, the board of directors shall determine whether the proposed nominee is eligible for election under this subsection (d) and shall notify the Nominator in writing of its determination. If the board of directors shall determine that such proposed nominee is not eligible for election, such person shall be ineligible to be nominated at the meeting of shareholders for which his nomination was proposed.

12

(4)If a director of the Corporation ceases to be a director (x) at the annual meeting of shareholders next succeeding the day upon which he attained the age of 72 or 65, as specified in paragraphs (1), (2), and (4) of this subsection (d), and if there is time remaining in the regularly scheduled term of office of such director, (y) because of termination of employment, as provided in paragraphs (1), (2), and (4) of this subsection (d), or (z) upon the determination of the board of directors of the Corporation pursuant to paragraph (4) of this subsection (d) that a director of the Corporation is no longer qualified to continue serving as a director of the Corporation, the board of directors shall declare the office held by such director vacant and may fill such vacancy as provided in section 2 of this article III of these bylaws.

(5)Without limiting the ability of the board of directors as provided by applicable law to declare vacant the position of a director on the board of directors, if a member of the board of directors has been adjudged by a court of competent jurisdiction to be guilty of fraud, criminal conduct (other than minor traffic violations), gross abuse of office amounting to a breach of trust, or similar misconduct, and no appeal (or further appeal) therefrom is permitted under applicable law, the other directors then in office, by unanimous vote, may declare the position occupied by such director vacant, and such other directors may fill such vacancy as provided in section 2 of this article III of these bylaws.

(e)Removal. In this subsection (e), the terms “remove” and “removal” and their related grammatical forms shall refer only to the process of dismissal provided for in this subsection, and shall not be deemed to refer to disqualification of a director, cessation of a director to be such, or declaration of a vacancy in the office of director as provided for in subsection (d) of this section 1 or otherwise as permitted by law.

A member of the board of directors may be removed by the shareholders of the Corporation only for cause. Any such removal for cause shall be at a special meeting of shareholders called for such purpose. The vote of the holders of shares conferring 80% of the total votes of all shares of capital stock of the Corporation voting as a single class shall be necessary to remove a director; provided, however, that if a director has been elected by the exercise of the privilege of cumulative voting, such director may not be removed if the votes cast against his removal would be sufficient to elect him if then cumulatively voted at an election of the class of directors of which he is a part. For purposes of this subsection (e), cause for removal shall exist only if a director shall have been adjudged by a court of competent jurisdiction to be guilty of fraud, criminal conduct (other than minor traffic violations), gross abuse of office amounting to a breach of trust, or similar misconduct, and no appeal (or further appeal) therefrom shall be permitted under applicable law.

No proposal by a shareholder to remove a director of the Corporation shall be voted upon at a meeting of shareholders unless, at least 180 days before such meeting, such shareholder shall have delivered in writing to the secretary of the Corporation (1) notice of such proposal, including all information required by section 7(b)(3) of article II of these bylaws, (2) a statement of the grounds on which such director is proposed to be removed and (3) an opinion of counsel, which counsel and the form and substance of which opinion shall be reasonably satisfactory to the board

13

of directors of the Corporation (excluding the director proposed to be removed), to the effect that, if adopted at a duly called special meeting of the shareholders of the Corporation by the vote of the holders of shares conferring 80% of the total votes of all shares of the capital stock of the Corporation voting as single class, such removal would not be in conflict with the laws of the State of Louisiana, the articles of incorporation of the Corporation, or these bylaws. In no event shall any adjournment, postponement or deferral of a special meeting of shareholders or the announcement thereof commence a new time period for the giving of a shareholder’s notice as described above. Within 30 days after such shareholder shall have delivered the aforesaid items to the secretary of the Corporation, the secretary and the board of directors of the Corporation shall respectively determine whether the items to be ruled upon by them are reasonably satisfactory and shall notify such shareholder in writing of their respective determinations. If such shareholder fails to submit a required item in the form or within the time indicated, or if the secretary or the board of directors of the Corporation determines that the items to be ruled upon by them, respectively, as provided above are not reasonably satisfactory, then such proposal by such shareholder may not be voted upon by the shareholders of the Corporation at such meeting of shareholders.

(f)Powers. Subject to the provisions of the laws of the State of Louisiana, the articles of incorporation of the Corporation, and these bylaws, the board of directors shall have and exercise, in addition to such powers as are set forth in the articles of incorporation, all of the powers which may be exercised by the Corporation, including, but without thereby limiting the generality of the above, the power to create and to delegate, with power to subdelegate, any of its powers to any committee, officer, or agent; provided, however, that the board of directors shall not have the power to delegate its authority to:

(1)amend, repeal, or supplement the bylaws of the Corporation;

(2)take definitive action on a merger, consolidation, reclassification or exchange of securities, repurchase by the Corporation of any of its equity securities, transfer of all or substantially all of the assets of the Corporation, dissolution, "business combination" as defined in article X of these bylaws, or similar action;

(3)elect or remove a director or officer of the Corporation;

(4)submit a proposal to shareholders for action by shareholders;

(5)appoint a director to or remove a director from a committee of the board of directors; or

(6)declare a dividend on the capital stock of the Corporation.

(g)Change in Number of Directors. No amendment or supplement to or repeal of subsection (a) of section 1 of article III of these bylaws that would have the effect of increasing the number of authorized directors of the Corporation by more than two during any 12-month period shall be permitted unless at least 80% of the “continuing directors” then in office (as defined in subsection (b) of section 2 of article II of these bylaws) shall authorize such action.

14

(h)Rights of Preferred Shareholders, etc. Nothing in this section 1 of this article III of these bylaws shall affect the rights of the Corporation's shareholders as provided in section 3(b) of article 6 of the Corporation's articles of incorporation.

Section 2. Filling of Vacancies. Except to the extent required by law or section 3(b) of article 6 of the articles of incorporation of the Corporation, newly created directorships resulting from any increase in the authorized number of directors and any vacancies in the board of directors resulting from the attainment by a director of the age of 72 or 65, as specified in paragraphs (1), (2), (4), and (5) of subsection (d) of section 1 of this article III, or from death, resignation, disqualification or removal of a director, or from failure of the shareholders to elect the full number of authorized directors, or from any other cause shall be filled by the affirmative vote of at least a majority of the remaining directors (or director) then in office, even though less than a quorum of the whole board. Any director elected in accordance with the preceding sentence shall hold office until the next annual meeting of shareholders. Except to the extent required by law or section 3(b) of article 6 of the articles of incorporation of the Corporation, the shareholders shall have no right to fill any vacancies in the board of directors.

Section 3. Annual and Regular Meetings. Within 45 days after each annual meeting of shareholders, and if possible on the date of each annual meeting of shareholders immediately following each such meeting, the board of directors shall hold an annual meeting for the purpose of electing officers and transacting other corporate business. Such meeting shall be called in the manner for calling regular or special meetings of the board of directors.

Except as otherwise provided by resolution of the board of directors, other regular meetings of the board of directors shall be held on the last Friday in January, July and October at such places as the chief executive officer or president may direct in the notices of such meetings. At least five days’ notice by mail or written telecommunication shall be given to each director of the time and place of holding each regular meeting of the board of directors.

Section 4. Special Meetings. A special meeting of the board of directors may be called by the chief executive officer or president, to be held at such place as he may direct in the notice of such meeting, on four days’ notice by mail or three days’ notice by written telecommunication, to each director. A special meeting shall be called by the chief executive officer or president in like manner on the written request of at least 50% of the members of the board.

Section 5. Place of Meetings; Telephone Meetings. A meeting of the board of directors may be held either within or without the State of Louisiana. The time and place of holding a regular or special meeting of the board of directors may be changed and another place and time fixed for such regular or special meeting by a majority of the members of the board.

The members of the board of directors, and a committee thereof, may participate in and hold a meeting of the board or of such committee by means of conference telephone or similar communications equipment provided that all persons participating in such meeting can hear and communicate with one another. Participation in a meeting pursuant to this provision shall constitute presence in person at such meeting, except where a person participates in such meeting

15

for the express purpose of objecting to the transaction of any business on the grounds that such meeting was not lawfully called or convened.

Section 6. Quorum. A majority of the directors shall constitute a quorum, but a smaller number may adjourn a meeting from time to time without further notice until a quorum is secured. If a quorum is present, the directors present can continue to do business until adjournment notwithstanding the subsequent withdrawal of enough directors to leave less than a quorum or the refusal of any director present to vote.

Section 7. Compensation. Each director shall be entitled to receive from the Corporation reimbursement of his expenses incurred in attending any regular or special meeting of the board and, by resolution of the board, such other compensation as it may approve. Such reimbursement and compensation shall be payable whether or not an adjournment be had because of the absence of a quorum. Nothing herein contained shall be construed to preclude any director from serving the Corporation in another capacity and receiving compensation therefor.

Section 8. Committees. From time to time, the board of directors may appoint, from its own number, in addition to the committees provided for in these bylaws, such other committee or committees for such purpose or purposes as it shall determine. Subject to the limitations imposed by these bylaws, the articles of incorporation, and the laws of the State of Louisiana, each committee of the board of directors shall have such powers as shall be specified in the resolution of appointment.

ARTICLE IV

Indemnification

Section 1. Right to Indemnification - General. The Corporation shall indemnify any person who was or is, or is threatened to be made, a party to or otherwise involved in any pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or other proceeding, whether civil, criminal, administrative or investigative (any such threatened, pending or completed proceeding being hereinafter called a “Proceeding”) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of another business, foreign or nonprofit corporation, partnership, joint venture, trust, employee benefit plan or other enterprise (whether the basis of his involvement in such Proceeding is alleged action in an official capacity or in any other capacity while serving as such), to the fullest extent permitted by applicable law in effect from time to time, and to such greater extent as applicable law may from time to time permit, from and against expenses, including attorney’s fees, judgments, fines, amounts paid or to be paid in settlement, liability and loss, ERISA excise taxes, actually and reasonably incurred by him or on his behalf or suffered in connection with such Proceeding or any claim, issue or matter therein; provided, however, that, except as provided in section 5 of this article, the Corporation shall indemnify any such person claiming indemnity in connection with a Proceeding initiated by such person only if such Proceeding was authorized by the board of directors.

16

Section 2. Certain Provisions Respecting Indemnification for and Advancement of Expenses.

(a)To the extent that a person referred to in section 1 of this article is required to serve as a witness in any Proceeding referred to therein, he shall be indemnified against all Expenses (as hereinafter defined) actually and reasonably incurred by him or on his behalf in connection with serving as a witness.

(b)The Corporation shall from time to time pay, in advance of final disposition, all Expenses incurred by or on behalf of any person referred to in section 1 of this article claiming indemnity thereunder in respect of any Proceeding referred to therein. Each such advance shall be made within ten days after the receipt by the Corporation of a statement from the claimant requesting the advance, which statement shall reasonably evidence the relevant Expenses and be accompanied or preceded by any such undertaking as may be required by applicable law respecting the contingent repayment of such Expenses. Whenever and to the extent applicable law requires the board of directors to act in the specific case with respect to the payment of Expenses in advance of the final disposition of any Proceeding, the board of directors shall act with respect thereto within the period specified in the preceding sentence and shall withhold the payment of Expenses in advance only if there is a reasonable and prompt determination by the board of directors by a majority vote of a quorum of Disinterested Directors (as hereinafter defined), or (if such quorum is not obtainable or, even if obtainable, a quorum of Disinterested Directors so directs) by Independent Counsel (as hereinafter defined) in a written opinion, that advancement of Expenses is inappropriate, even taking into account any undertaking given with respect to the repayment of such Expenses, because based on the facts then known there is no reasonable likelihood that the claimant would be able ultimately to demonstrate that he met the standard of conduct necessary for indemnification with respect to such Expenses.

Section 3. Procedure for Determination of Entitlement to Indemnification.

(a)To obtain indemnification under this article, a claimant shall submit to the Corporation a written application. The secretary of the Corporation shall, promptly upon receipt of such an application for indemnification, advise the board of directors in writing of the application. In connection with any such application, the claimant shall provide such documentation and information as is reasonably requested by the Corporation and reasonably available to him and relevant to a determination of entitlement to indemnification.

(b)A person’s entitlement to indemnification under this article, unless ordered by a court, shall be determined, as required or permitted by applicable law: (i) by the board of directors by a majority vote of a quorum consisting of Disinterested Directors, (ii) if a quorum of the board of directors consisting of Disinterested Directors is not obtainable or, even if obtainable, a quorum of Disinterested Directors so directs, by Independent Counsel in a written opinion, or (iii) by the shareholders of the Corporation; provided, however, that if a Change of Control (as hereinafter defined) shall have occurred, no determination of entitlement to indemnification adverse to the claimant shall be made other than one made or concurred in by Independent Counsel, selected as provided in paragraph (d) of this section, in a written opinion.

17

(c)If the determination of entitlement to indemnification is to be made by Independent Counsel in the absence of a Change of Control, the Corporation shall furnish notice to the claimant within ten days after receipt of the application for indemnification specifying the identity and address of Independent Counsel. The claimant may, within fourteen days after receipt of such written notice of selection, deliver to the Corporation a written objection to such selection, subject to paragraph (e) of this section. If such an objection is made, either the Corporation or the claimant may petition any court of competent jurisdiction for a determination that the objection has no reasonable basis or for the appointment as Independent Counsel of counsel selected by the court.

(d)If there has been a Change of Control, Independent Counsel to act as and to the extent required by paragraph (b) of this section or paragraph (b) of section 2 shall be selected by the claimant, who shall give the Corporation written notice advising of the identity and address of the Independent Counsel so selected. The Corporation may, within seven days after receipt of such written notice of selection, deliver to the claimant a written objection to such selection, subject to paragraph (e) of this section. The claimant may, within five days after the receipt of such objection, select other counsel to act as Independent Counsel, and the Corporation may, within seven days after receipt of such written notice of selection, deliver to the claimant a written objection, as aforesaid, to such second selection. In the case of any such objection the claimant may petition any court of competent jurisdiction for a determination that the objection has no reasonable basis or for the appointment as Independent Counsel of counsel selected by the court.

(e)    Any objection to the selection of Independent Counsel may be asserted only on the ground that the counsel so selected does not qualify as Independent Counsel under the definition contained in section 7 of this article, and the objection shall set forth with particularity the basis of such assertion. No counsel selected by the Corporation or by the claimant may serve as Independent Counsel if a timely objection has been made to his selection unless a court has determined that such objection has no reasonable basis.

(f)    The Corporation shall pay any and all reasonable fees and expenses of Independent Counsel acting pursuant to this article and in any proceeding in which such counsel is a party or a witness in respect of its investigation and report. The Corporation shall pay all reasonable fees and expenses incident to the procedures of this section regardless of the manner in which Independent Counsel is selected or appointed.

Section 4.Presumptions and Effect of Certain Proceedings.

(a) A person referred to in section 1 of this article claiming a right to indemnification under this article shall be presumed (except as may be otherwise expressly provided in this article or required by applicable law) to be entitled to such indemnification upon submission of an application for indemnification in accordance with section 3, and the Corporation shall have the burden of proof to overcome the presumption in any determination contrary to the presumption.

(b)Unless the determination is to be made by Independent Counsel, if the person or persons empowered under section 3 of this article to determine entitlement to indemnification shall not have made and furnished the determination in writing to the claimant within 60 days after

18

receipt by the Corporation of the application for indemnification, the determination of entitlement to indemnification shall be deemed to have been made in favor of the claimant unless the claimant knowingly misrepresented a material fact in connection with the application or such indemnification is prohibited by law. The termination of any Proceeding, or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contender or its equivalent, shall not of itself adversely affect the right of a claimant to indemnification or create a presumption that a claimant did not act in a manner which would deny him the right to indemnification.

Section 5. Right of Claimant to Bring Suit.

(a)If (i) a determination is made pursuant to the procedures contemplated by section 3 of this article that a claimant is not entitled to indemnification under this article, (ii) advancement of Expenses is not timely made pursuant to paragraph (b) of section 2 of this article, (iii) Independent Counsel has not made and delivered a written opinion as to entitlement to indemnification within 90 days after the selection or appointment of counsel has become final by virtue of the lapse of time for objection or the overruling of objections or appointment of counsel by a court, or (iv) payment of a claim for indemnification is not made within five days after a favorable determination of entitlement to indemnification has been made or deemed to have been made pursuant to section 3 or 4 of this article, the claimant shall be entitled to bring suit against the Corporation to establish his entitlement to such indemnification or advancement of Expenses and to recover the unpaid amount of his claim. It shall be a defense to any such action (other than an action brought to enforce a claim for Expenses incurred in defending any Proceeding in advance of its final disposition where the required undertaking, if any is required, has been tendered to the Corporation) that the claimant did not meet the applicable standard of conduct which makes it permissible for the Corporation to indemnify the claimant for the amount claimed, but the burden of proving such defense shall be upon the Corporation. Neither the failure of the Corporation (including its board of directors, Independent Counsel or its shareholders) to have made a determination before the commencement of such action that indemnification of the claimant is proper under the circumstances because he has met such applicable standard of conduct, nor an actual determination by the Corporation (including its board of directors, Independent Counsel or its shareholders) that the claimant has not met the applicable standard of conduct, shall be a defense to the action or create a presumption that the claimant has not met the applicable standard of conduct, and the claimant shall be entitled to a de novo trial on the merits as to any such matter as to which no determination or an adverse determination has been made.

(b)If a claimant is successful in whole or in part in prosecuting any claim referred to in paragraph (a) of this section, the claimant shall also be entitled to recover from the Corporation, and shall be indemnified by the Corporation against, any and all Expenses actually and reasonably incurred by him in prosecuting such claim.

Section 6. Non-Exclusivity and Survival of Rights. The rights of indemnification and to receive advancement of Expenses contemplated by this article shall not be deemed exclusive of any other rights to which any person may at any time be entitled under any bylaw, agreement, authorization of shareholders or directors (regardless of whether directors authorizing such indemnification are beneficiaries thereof), or otherwise, both as to action in his official capacity

19

and as to action in another capacity; provided that no other indemnification measure shall permit indemnification of any person for the results of such person's willful or intentional misconduct.

The Corporation may procure or maintain insurance or other similar arrangement, at its expense, to protect itself and any director, officer, employee or agent of the Corporation or other corporation, partnership, joint venture, trust or other enterprise against any expense, liability or loss asserted against or incurred by such person, whether or not the Corporation would have the power to indemnify such person against such expense or liability.

In considering the cost and availability of such insurance, the Corporation, in the exercise of its business judgment, may purchase insurance which provides for any and all of (i) deductibles, (ii) limits on payments required to be made by the insurer, or (iii) coverage which may not be as comprehensive as that previously included in insurance purchased by the Corporation. The purchase of insurance with deductibles, limits on payments and coverage exclusions will be deemed to be in the best interest of the Corporation but may not be in the best interest of certain of the persons covered thereby. As to the Corporation, purchasing insurance with deductibles, limits on payments, and coverage exclusions is similar to the Corporation’s practice of self-insurance in other areas. In order to protect the officers and directors of the Corporation, the Corporation shall indemnify and hold each of them harmless as provided in section 1 of this article IV, without regard to whether the Corporation would otherwise be entitled to indemnify such officer or director under the other provisions of this article IV, to the extent (i) of such deductibles, (ii) of amounts exceeding payments required to be made by an insurer or (iii) that prior policies of officers and directors liability insurance held by the Corporation would have provided for payment to such officer or director. Notwithstanding the foregoing provisions of this section 6, no person shall be entitled to indemnification for the results of such person's willful or intentional misconduct.

The right to indemnification conferred in this article shall be a contract right, and no amendment, alteration or repeal of this article or any provision thereof shall restrict the indemnification rights granted by this article as to any person claiming indemnification with respect to acts, events and circumstances that occurred, in whole or in part, before such amendment, alteration or repeal. The provisions of this article shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of his heirs, executors and legal representatives.

Section 7.Definitions. For purposes of this article:

(a)“Change of Control” means the occurrence of any of the following events or circumstances: (1) there shall have occurred an event required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Exchange Act, whether or not the Corporation is then subject to such reporting requirement; (2) (i) any “person” (as such term is used in Section 13(d) and 14(d) of the Exchange Act) shall have become the “beneficial owner”, (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Corporation representing 30% or more of the combined voting power of the Corporation’s then outstanding voting securities without the prior approval of at least two-thirds of the members of the board of directors in office

20

immediately before such person’s attaining such percentage interest; (3) the Corporation is a party to a merger, consolidation, sale of assets or other reorganization, or the subject of a proxy contest, as a consequence of which members of the board of directors in office immediately before such transaction or event constitute less than a majority of the board of directors thereafter; (4) during any period of two consecutive years, individuals who at the beginning of such period constituted the board of directors (including for this purpose any new director whose election or nomination for election by the Corporation’s shareholders was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of such period) cease for any reason to constitute at least a majority of the board of directors.

(b)“Disinterested Director” means a director of the Corporation who is not and was not a party to the Proceeding in respect of which indemnification is sought as provided in this article.

(c)“Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding.

(d)“Independent Counsel” means a law firm, or a member of a law firm, with substantial experience in matters of corporation law that neither presently is, nor in the five years before his selection or appointment has been, retained to represent: (i) the Corporation or person claiming indemnification in any matter material to either, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder, and is not otherwise precluded under applicable professional standards from acting in the capacity herein contemplated.

ARTICLE V

Executive Committee

Section 1.Election and Tenure. The board of directors may appoint an executive committee consisting of such number of directors as it may appoint, to serve at the pleasure of the board of directors, but in any event not beyond the next annual meeting of the board of directors. The board may at any time, without notice, remove and replace any member of the executive committee.

Section 2.Executive Committee. Subject to the provisions of subsection (f) of section 1 of article III of these bylaws, the executive committee shall have a charter that will be approved, and revised as appropriate, from time to time by the committee and the board. In general terms, the functions of the committee shall be those as set forth in the charter.

Section 3.Meetings. The executive committee shall meet at stated times or on notice to all by one of its number, in which notice the time and place of the meeting shall be set forth. The executive committee shall fix its own rules of procedure, and a majority shall constitute a quorum; but the affirmative vote of a majority of the whole committee shall be necessary in every case. The executive committee shall keep regular minutes of its proceedings and report the same

21

to the board of directors.

Section 4.Compensation. Members of the executive committee, other than officers of the Corporation, shall receive such compensation for their services as shall be prescribed by the board of directors. Each member of the executive committee shall be entitled to receive from the Corporation reimbursement of his expenses incurred in attending a meeting of such committee.

ARTICLE VI

Audit Committee

Section 1.Election and Tenure. The board of directors may appoint an audit committee, consisting of such number of directors as it may appoint, to serve at the pleasure of the board of directors, but in any event not beyond the next annual meeting of the board of directors. The board may at any time, without notice, remove and replace any member of the audit committee.

Section 2.Audit Committee. Subject to the provisions of subsection (f) of section 1 of article III of these bylaws, the audit committee shall have a charter that will be approved, and revised as appropriate, from time to time by the committee and the board. In general terms, the functions of the committee shall be those as set forth in the charter.

Section 3.Meetings. The audit committee shall meet at stated times or on notice to all by one of its number, in which notice the time and place of the meeting shall be set forth. The audit committee shall fix its own rules of procedure, and a majority shall constitute a quorum; but the affirmative vote of a majority of the whole committee shall be necessary in every case. The audit committee shall keep regular minutes of its proceedings and report the same to the board of directors.

Section 4.Compensation. Members of the audit committee, other than officers of the Corporation, shall receive such compensation for their services as shall be prescribed by the board of directors. Each member of the audit committee shall be entitled to receive from the Corporation reimbursement of his expenses incurred in attending a meeting of the audit committee.

ARTICLE VII

Compensation Committee

Section 1.Election and Tenure. The board of directors may appoint a compensation committee, consisting of such number of directors as it may appoint, to serve at the pleasure of the board of directors, but in any event not beyond the next annual meeting of the board of directors. The board may at any time, without notice, remove and replace any member of the compensation committee.

Section 2.Compensation Committee. Subject to the provisions of subsection (f) of section 1 of article III of these bylaws, the compensation committee shall have a charter that will

22

be approved, and revised as appropriate, from time to time by the committee and the board. In general terms, the functions of the committee shall be those as set forth in the charter.

Section 3.Meetings. The compensation committee shall meet at stated times or on notice to all by one of its number, in which notice the time and place of the meeting shall be set forth. The compensation committee shall fix its own rules of procedure, and a majority shall constitute a quorum; but the affirmative vote of the majority of the whole committee shall be necessary in every case. The compensation committee shall keep regular minutes of its proceedings and report the same to the board of directors.

Section 4.Compensation. Members of the compensation committee, other than officers of the Corporation, shall receive such compensation for their services as shall be prescribed by the board of directors. Each member of the compensation committee shall be entitled to receive from the Corporation reimbursement of his expenses incurred in attending a meeting of the compensation committee.

Article VII.A.

Nominating/Governance Committee

Section 1.Election and Tenure. The board of directors may appoint a nominating/governance committee consisting of such number of directors as it may appoint, to serve at the pleasure of the board of directors, but in any event not beyond the next annual meeting of the board of directors. The board may at anytime, without notice remove and replace any member of the nominating/governance committee.

Section 2.Nominating/Governance Committee. Subject to the provisions of subsection (f) of section 1 of article III of these bylaws, the nominating/governance committee shall have a charter that will be approved, and revised as appropriate, from time to time by the committee and the board. In general terms, the functions of the committee shall be those as set forth in the charter.

Section 3.Meetings. The nominating/governance committee shall meet at stated times or on notice to all by one of its number, in which notice the time and place of the meeting shall be set forth. The nominating/governance committee shall fix its own rules of procedure, and a majority shall constitute a quorum; but the affirmative vote of a majority of the whole committee shall be necessary in every case. The nominating/governance committee shall keep regular minutes of its proceedings and report the same to the board of directors.

Section 4.Compensation. Members of the nominating/governance committee, other than officers of the Corporation, shall receive such compensation for their services as shall be prescribed by the board of directors. Each member of the nominating/governance committee shall be entitled to receive from the Corporation reimbursement of his expenses incurred in attending a meeting of such committee.

23

ARTICLE VIII

Officers

Section l. Election, Tenure, and Compensation. The officers of the Corporation shall consist of a president, one or more vice presidents, a secretary, a treasurer, and such other officers, including a chairman of the board of directors, as may from time to time be elected or appointed by the board of directors. Officers of the Corporation shall be elected annually by the board of directors as provided in section 3 of article III of these bylaws. If such annual election is not held, the officers then in office shall remain as such until their respective successors shall be elected and qualify. No officer, except the chairman of the board of directors, need be a director, and any two or more offices, except the offices of president and vice president, may be held by one person. The powers of all officers of the Corporation shall be subject to the provisions of subsection (f) of section 1 of article III of these bylaws.

Section 2.Powers and Duties of Chairman of Board of Directors. The board of directors may elect a non-employee chairman to give leadership to the board and to serve as liaison between management and the board of directors. In collaboration with the chief executive officer, the chairman will establish an agenda for each board meeting which covers all matters which should come before the board in the proper exercise of its duties. The chairman will be accountable and will provide leadership for all issues of corporate governance which should come to the attention of the board and its committees. The chairman will provide leadership to the board in the establishment of positions which the board should take on issues to come before the annual meeting of shareholders. The chairman shall perform such other duties as from time to time may be delegated to him/her by the board of directors.

Section 3. Powers and Duties of President. The president shall be the chief executive officer and/or the chief operating officer of the Corporation and, subject to the direction of the board of directors, shall (a) have general and active management of the administration and operation of the business of the Corporation, (b) have the general supervision and direction of the other officers of the Corporation and shall see that their duties are properly performed, (c) see that all orders and resolutions of the board of directors are carried into effect, (d) have the power to execute contracts and conveyances on behalf of the Corporation (including without limitation conveyances of real and personal property to and by the Corporation), and (e) perform such other functions normally performed by a chief executive officer.

Section 4. Powers and Duties of Vice President. The board of directors may appoint one ormore vice presidents. Each vice president shall have the power to execute contracts and conveyances on behalf of the Corporation, and shall have such other powers and shall perform such other duties as may be assigned to him by the board of directors or by the president.

Section 5. Powers and Duties of Secretary. The secretary shall attend and record, in a book kept for such purpose, the proceedings of all meetings of the shareholders of the Corporation and of the board of directors. He shall keep an account of stock registered and transferred in such manner as the board of directors may prescribe. He shall keep the seal of the Corporation and, when authorized by the board of directors or the executive committee, he shall affix the seal of the

24

Corporation to any instrument requiring the same, and attest the same by his signature, or cause the same to be attested by the signature of an assistant secretary. He shall give proper notice of meetings of shareholders and directors and shall perform such other duties as shall be assigned to him. Assistant secretaries shall have such duties as the board of directors may from time to time prescribe.

Section 6. Powers and Duties of Treasurer. The treasurer shall have custody of the funds and securities of the Corporation, shall keep full and accurate accounts of receipts and disbursements in books belonging to the Corporation, and shall deposit or cause to be deposited all moneys and other valuable effects in the name and to the credit of the Corporation in such depositories as may be designated by the board of directors. He shall disburse or cause to be disbursed the funds of the Corporation as may be ordered by the board of directors, executive committee, chief executive officer or president, taking proper vouchers for such disbursements, and shall render to the chief executive officer, the president, and the directors at the regular meetings of the board of directors, or whenever they require it, an account of all his transactions as treasurer and of the financial condition of the Corporation, and at the regular meeting of the board of directors next preceding the annual shareholders’ meeting, a like report for the preceding fiscal year. He shall give the Corporation a bond, if required by the board of directors, in such sum and in form and with security satisfactory to the board of directors, for the faithful performance of the duties of his office and the restoration to the Corporation, in case of his death, resignation, or removal from office, of all books, papers, vouchers, moneys, and other property of whatever kind in his possession belonging to the Corporation. He shall perform such other duties as the board of directors or executive committee may from time to time prescribe. Assistant treasurers shall have such duties as the board of directors may from time to time prescribe.

Section 7. Delegation of Duties. In case of the absence or disability of any officer of the Corporation, or for any other reason deemed sufficient by the board of directors, the board of directors may delegate such officer’s powers or duties for the time being to any other officer, to any employee with management responsibility, or to any director.

ARTICLE IX

Capital Stock

Section l. Stock Certificates. The shares of capital stock of the Corporation may be represented by certificates in such form as may be approved by the board of directors, which certificates shall be signed by the chief executive officer, the president or one of the vice presidents of the Corporation and also by the secretary or an assistant secretary, or the treasurer or an assistant treasurer. Such certificates shall have affixed an impression of the seal of the Corporation. Where such certificates are countersigned by a transfer agent and by a registrar, both of which may be the same institution, the signatures of such officers and the seal of the Corporation thereon may be facsimiles, engraved or printed. If an officer of the Corporation who shall have signed a certificate of capital stock, or whose facsimile signature has been affixed for such purpose, shall cease to be such officer of the Corporation before the stock certificate so signed shall have been issued by the Corporation, such stock certificate may nevertheless be issued and delivered with the same force and effect as though the person who signed such certificate or

25

whose facsimile signature has been affixed for such purpose had not ceased to be such officer of the Corporation. Notwithstanding the foregoing regarding share certificates, officers of the Corporation may provide that some or all of any or all classes or series of the Corporation’s capital stock may be uncertificated shares.

Section 2. Lost or Destroyed Certificates. The board of directors may determine the conditions upon which a new certificate for capital stock of the Corporation may be issued in place of a certificate which is alleged to have been lost, stolen, or destroyed and may, in its discretion, require the owner of such certificate or his legal representative to give bond with sufficient surety to the Corporation to indemnify it against any loss or claim which may arise by reason of the issue of a new certificate in the place of the one so alleged to have been lost, stolen, or destroyed.

Section 3. Transfer of Shares. The shares of capital stock of the Corporation shall be transferable only upon its books by the holders thereof in person or by their duly authorized attorneys or legal representatives, and upon such transfer the old certificates, if such shares are represented by certificates, shall be surrendered to the Corporation by the delivery thereof to the person in charge of the stock or transfer books and ledgers, or to such other person as the board of directors may designate, by whom they shall be canceled. New stock certificates or uncertificated shares may thereupon be issued, representing the shares so transferred. A record shall be made of each transfer.

Section 4. Dividends. Dividends upon the capital stock may be declared by the board of directors at a regular or special meeting out of the net profits or surplus of the Corporation. Before paying a dividend or making a distribution of profits, there may be set aside out of the accumulated profits of the Corporation such sum or sums as the directors from time to time, in their absolute discretion, think proper as a reserve fund for meeting contingencies or for equalizing dividends or for repairing or maintaining property of the Corporation or for such other purpose as the directors shall think conducive to the interests of the Corporation.

Section 5. Closing Transfer Books; Fixing Record Date. The board of directors may fix the time, not exceeding 60 days preceding the date of a meeting of shareholders, a dividend payment date, or a date for the allotment of rights, during which the books of the Corporation shall be temporarily closed against transfers of stock; or, in lieu thereof, the board of directors may fix a date, not exceeding 60 days preceding the date of a meeting of shareholders, a dividend payment date, or a date for the allotment of rights, as a date for the taking of a record of the shareholders entitled to notice of and to vote at such meeting, or entitled to receive such dividends or such rights, as the case may be; and only shareholders of record on such date shall be entitled to notice of and to vote at such meeting, or to receive such dividends or rights, as the case may be.

ARTICLE X

Fair-Price Provisions

Section 1. Definitions. As used in article X of these bylaws, the following terms shall have the indicated meanings:

26

(a)“Affiliate,” including the term “affiliated person,” means a person that directly or indirectly through one or more intermediaries controls, is controlled by, or is under common control with, a specified person.

(b)“Associate,” when used to indicate a relationship with any person, means any of the following:

(1)A corporation or organization, other than the Corporation or a subsidiary of the Corporation, of which such person is an officer, director, or partner or is, directly or indirectly, the beneficial owner of 10% or more of any class or series of equity securities.

(2)A trust or other estate on which such person has a substantial beneficial interest or as to which such person serves as trustee or in a similar fiduciary capacity.

(3)A relative or spouse of such person, or any relative of such spouse, who has the same home as such person or who is a director or officer of the Corporation or any of its affiliates.

(c)“Beneficial owner,” when used with respect to voting stock, means any of the following:

(1)A person who individually or with any of his affiliates or associates beneficially owns voting stock, directly or indirectly.

(2)A person who individually or with any of his affiliates or associates has either of the following rights:

(A)To acquire voting stock, whether such right is exercisable immediately or only after the passage of time, pursuant to any agreement, arrangement, or understanding or upon the exercise of conversion rights, exchange rights, warrants, or options, or otherwise.

(B)To vote voting stock pursuant to any agreement, arrangement, or understanding.

(3)A person who has any agreement, arrangement, or understanding for the purpose of acquiring, holding, voting, or disposing voting stock with any other person who beneficially owns or whose affiliates beneficially own, directly or indirectly, such shares of voting stock.

(d) “Business combination” means any of the following:

(1)Except for a merger, consolidation, or share exchange that does not alter the contract rights of the stock as expressly set forth in the articles of incorporation of the Corporation or change or convert in whole or in part the outstanding shares of the Corporation, any merger, consolidation, or share exchange of the Corporation or any subsidiary with:

27

(A)An interested shareholder; or

(B)Another corporation, whether or not itself an interested shareholder, which is, or after the merger, consolidation, or share exchange would be, an affiliate of an interested shareholder that was an interested shareholder before the transaction.

(2)A sale, lease, transfer, or other disposition, other than in the ordinary course of business, in one transaction or a series of transactions in any twelve-month period, to an interested shareholder or any affiliate of an interested shareholder, other than the Corporation or any of its subsidiaries, of any assets of the Corporation or any subsidiary having, measured at the time the transaction or transactions are approved by the board of directors of the Corporation, an aggregate book value as of the end of the Corporation’s most recently ended fiscal quarter of 10% or more of the total market value of the outstanding stock of the Corporation or of its net worth as of the end of its most recently ended fiscal quarter.

(3)The issuance or transfer by the Corporation or any subsidiary, in one transaction or a series of transactions, of any equity securities of the Corporation or any subsidiary which has an aggregate market value of five percent or more of the total market value of the outstanding stock of the Corporation, to any interested shareholder or any affiliate of any interested shareholder, other than the Corporation or any of its subsidiaries, except pursuant to the exercise of warrants or rights to purchase securities offered pro rata to all holders of the Corporation’s voting stock or any other method affording substantially proportionate treatment of the holders of voting stock.

(4)The adoption of a plan or proposal for the liquidation or dissolution of the Corporation in which anything other than cash will be received by an interested shareholder or an affiliate of an interested shareholder.

(5)A reclassification of securities, including a reverse stock split or recapitalization of the Corporation, or any merger, consolidation, or share exchange of the Corporation with any of its subsidiaries which has the effect, directly or indirectly, in one transaction or a series of transactions, of increasing by five percent or more of the total number of outstanding shares the proportionate amount of the outstanding shares of any class or series of equity securities of the Corporation or any subsidiary which is directly or indirectly owned by an interested shareholder or an affiliate of an interested shareholder.

(e)“Common stock” means stock other than preferred or preference stock.

(f)“Control,” including the terms “controlling,” ”controlled by,” and “under common control with,” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise. The beneficial ownership of 10% or more of the votes entitled to be cast of a corporation’s voting stock creates a presumption of control.

28

(g)“Equity security” means any of the following:

(1)Stock or a similar security, certificate of interest, or participation on any profit sharing agreement, voting trust certificate, or certificate of deposit for an equity security.

(2) A security convertible, with or without consideration, into an equity security, or any warrant or other security carrying any right to subscribe to or purchase an equity security.

(3)Any put, call, straddle, or other option or privilege of buying an equity security from or selling an equity security to another without being bound to do so.

(h)(l )“Interested shareholder” means any person other than the Corporation or any subsidiary that is either of the following:

(A)The beneficial owner, directly or indirectly, of 10% or more of the voting power of the outstanding voting stock of the Corporation.

(B)An affiliate of the Corporation who at any time within the two-year period immediately before the date in question was the beneficial owner, directly or indirectly, of l0% or more of the voting power of the then outstanding voting stock of the Corporation.

(2)For the purpose of determining whether a person is an interested shareholder, the number of shares of voting stock deemed to be outstanding shall include shares deemed owned by the person through application of subsection (c) of this section, but may not include any other shares of voting stock which may be issuable pursuant to any agreement, arrangement, or understanding, or upon exercise of conversion rights, warrants, or options, or otherwise.

(i) “Market value” means the following:

(A)In the case of stock, the highest closing sale price during the 30-day period immediately preceding the date in question of a share of such stock on the principal United States securities exchange registered under the Exchange Act on which such stock is listed, or if such stock is not listed on any such exchange, the highest closing bid quotation with respect to a share of such stock during the 30-day period preceding the date in question on the National Association of Securities Dealers, Inc., Automated Quotations System or any system then in use, or if no such quotations are available, the fair market value on the date in question of a share of such stock as determined by the board of directors of the Corporation in good faith.

(B)In the case of property other than cash or stock, the fair market value of such property on the date in question as determined by the board of directors of the Corporation

29

in good faith.

(j)“Subsidiary” means any corporation of which voting stock having a majority of the votes entitled to be cast is owned, directly or indirectly, by the Corporation.

(k)“Voting stock” means shares of capital stock of a corporation entitled to vote generally in the election of directors.

Section 2. Vote Required in Business Combinations. In addition to any vote otherwise required by law or the articles of incorporation of the Corporation, a business combination shall be recommended by the board of directors and approved by the affirmative vote of at least each of the following:

(a)80% of the votes entitled to be cast by outstanding shares of voting stock of the Corporation voting together as a single voting group.

(b)Two-thirds of the votes entitled to be cast by holders of voting stock other than voting stock held by the interested shareholder who is or whose affiliate is a party to the business combination or an affiliate or associate of the interested shareholder, voting together as a single voting group.

Section 3. When Voting Requirements Not Applicable.

(a)Definitions. For purposes of subsection (b) of this section, the following terms shall have the indicated meanings:

(1)“Announcement date” means the first general public announcement of a proposal or intention to make a proposal of a business combination or its first communication generally to shareholders of the Corporation, whichever is earlier.

(2)“Determination date” means the date on which an interested shareholder first became an interested shareholder.

(3)“Valuation date” means the following:

(A)For a business combination voted upon by shareholders, the later of (i) the day before the day of the shareholders” vote or (ii) the day 20 days before the consummation of the business combination.

(B)For a business combination not voted upon by shareholders, the date of the consummation of the business combination.

(b)Conditions. The vote required by section 2 of this article X shall not apply to a business combination, as defined in section 1 of this article X, if each of the following conditions is met:

30

(1 )The aggregate amount of the cash and the market value as of the valuation date of consideration other than cash to be received per share by holders of common stock in such business combination is at least equal to the highest of the following:

(A)The highest per share price, including any brokerage commissions, transfer taxes, and soliciting dealers’ fees, paid by the interested shareholder for any shares of common stock of the same class or series that he acquired:

(i)within the two-year period immediately before the announcement date of the proposal of the business combination; or

(ii)in the transaction in which he became an interested shareholder, whichever is higher; or

(B)The market value per share of common stock of the same class or series on the announcement date or on the determination date, whichever is higher; or

(C)The price per share equal to the market value per share of common stock of the same class or series determined pursuant to subparagraph (B) immediately preceding, multiplied by the fraction of:

(i)The highest per share price, including any brokerage commissions, transfer taxes, and soliciting dealers’ fees, paid by the interested shareholder for shares of common stock of the same class or series that he acquired within the two-year period immediately before the announcement date, over

(ii) The market value per share of common stock of the same class or series on the first day in such two-year period on which the interested shareholder acquired shares of common stock.

(2)The aggregate amount of the cash and the market value as of the valuation date of consideration other than cash to be received per share by holders of shares of any class or series of outstanding stock other than common stock is at least equal to the highest of the following, whether or not the interested shareholder has previously acquired shares of a particular class or series of stock:

(A)The highest per share price, including any brokerage commissions, transfer taxes, and soliciting dealers’ fees, paid by the interested shareholder for any shares of such class or series of stock that he acquired:

(i) within the two-year period immediately before the announcement date of the proposal of the business combination; or

(ii) in the transaction in which he became an interested shareholder,

31

whichever is higher; or

(B)The highest preferential amount per share to which the holders of shares of such class or series of stock are entitled in the event of voluntary or involuntary liquidation, dissolution, or winding up of the Corporation; or

(C)The market value per share of such class or series of stock on the announcement date or on the determination date, whichever is higher; or

(D)The price per share equal to the market value per share of such class or series of stock determined pursuant to subparagraph (C) immediately preceding, multiplied by the fraction of:

(i)The highest per share price, including any brokerage commissions, transfer taxes, and soliciting dealers’ fees, paid by the interested shareholder for such shares of voting stock acquired by him within the two-year period immediately before the announcement date, over

(ii)The market value per share of the same class or series of voting stock on the first day on such two-year period on which the interested shareholder acquired shares of the same class or series of voting stock.

(3)The consideration to be received by holders of any class or series of outstanding stock is to be in cash or in the same form as the interested shareholder previously paid for shares of the same class or series of stock. If the interested shareholder has paid for shares of any class or series of stock with varying forms of consideration, the form of consideration for such class or series of stock shall be either cash or the form used to acquire the largest number of shares of such class or series of stock that he previously acquired.

(4)(A)After the interested shareholder has become an interested shareholder and before the consummation of such business combination:

(i)There shall have been no failure to declare and pay at the regular date therefor any full periodic dividends, cumulative or not, on any outstanding preferred stock of the Corporation;

(ii) There shall have been:

(aa)No reduction in the annual rate of dividends paid on any class or series of stock of the Corporation that is not preferred stock except as necessary to reflect any subdivision of such stock; and

(bb)An increase in such annual rate of dividends as shall have been necessary to reflect reclassification, including reverse

32

stock split, recapitalization, reorganization, or similar transaction, which shall have the effect of reducing the number of outstanding shares of such stock; and

(iii)The interested shareholder did not become the beneficial owner of additional shares of stock of the Corporation except as part of the transaction which resulted in such interested shareholder’s becoming an interested shareholder or by virtue of proportionate stock splits or stock dividends.

(B) The provisions of (i) and (ii) of subparagraph (A) shall not apply if neither an interested shareholder nor an affiliate or associate of an interested shareholder voted as a director of the Corporation in a manner inconsistent with (i) and (ii), and the interested shareholder, within 10 days after an act or failure to act inconsistent with such subparagraphs, shall have notified the board of directors of the Corporation in writing that the interested shareholder disapproves thereof and requests in good faith that the board of directors rectify such act or failure to act.

(5)After the interested shareholder has become an interested shareholder, the interested shareholder may not have received the benefit, directly or indirectly, except proportionately as a shareholder, of loans, advances, guarantees, pledges, or other financial assistance, or tax credits or other tax advantages, provided by the Corporation or any of its subsidiaries, whether in anticipation of or in connection with such business combination or otherwise.

(c)Other Provisions.

(1)Section 2 of this article X shall not apply to a business combination with a particular interested shareholder or his existing or future affiliates that has been approved or exempted therefrom by resolution of the board of directors of the Corporation; provided, however, that any such resolution shall have been adopted before the time that such interested shareholder first became an interested shareholder.

(2) Unless by its terms a resolution adopted under this subsection is made irrevocable, it may be altered or repealed by the board of directors, but this shall not affect a business combination that has been consummated or is the subject of an existing agreement entered into before the alteration or repeal.

ARTICLE XI

Notices

Section 1. Manner of Giving Notice. Notice required to be given under the provisions of these bylaws to a director, officer, or shareholder shall not be construed to mean personal notice, but may be given by depositing written or printed notice in a post office or letter box in a postpaid wrapper addressed to such director, officer, or shareholder at such address as appears on

33

the books of the Corporation, such notice to be deemed to have been given at the time when the same shall have been thus mailed; or, if such person has provided a telecommunications address to the Corporation, such notice may be given by prepaid written telecommunication sent to such address and in such event shall be deemed to have been given at the time when the same shall have been transmitted.

Section 2. Waiver of Notice. Any shareholder, officer, or director may waive, in writing or by written telecommunication, whether before or after the time stated, any notice required to be given under these bylaws.

ARTICLE XII

Miscellaneous

Section 1. Fiscal Year. The fiscal year of the Corporation shall begin on the first day of January and end on the last day of December in each year.

Section 2. Checks and Drafts. All checks, drafts, and orders for the payment of money shall be signed by the treasurer, in person or by facsimile or other authorized means, or by such other officer or officers or agents as the board of directors may from time to time designate. No check shall be signed in blank.

Section 3. Books and Records. The books, accounts, and records of the Corporation shall, subject to the limitations fixed by law, be open to inspection by the shareholders at such times and subject to such regulations as the board of directors may prescribe.

Section 4. Separability. If one or more of the provisions of these bylaws shall be held to be invalid, illegal, or unenforceable, such invalidity, illegality, or unenforceability shall not affect any other provision hereof and these bylaws shall be construed as if such invalid, illegal, or unenforceable provision or provisions had never been contained herein.

ARTICLE XIII

Amendment of Bylaws

Section 1. Voting. These bylaws may be amended, repealed, or supplemented at any regular meeting of the board of directors, or at any special meeting called for such purpose, by the affirmative vote of a majority of the board of directors, or by unanimous written consent; provided, however, that in each instance an amendment, repeal, or supplement shall not be inconsistent with the law or the articles of incorporation of the Corporation and shall be subject to the power of the shareholders to amend, repeal, or supplement the bylaws so made but only upon the affirmative vote of at least 80% of all shares of capital stock entitled to vote thereon.

Section 2. Shareholder Proposals. No proposal by a shareholder to amend, repeal, or supplement the bylaws of the Corporation may be voted upon at a meeting of shareholders unless,

34

at least 180 days before such meeting of shareholders, such shareholder shall have delivered in writing to the secretary of the Corporation (a) notice of such proposal, including all information required by section 7(b)(3) of article II of these bylaws, (b) the text of the proposed amendment, repeal, or supplement and (c) an opinion of counsel, which counsel and the form and substance of which opinion shall be reasonably satisfactory to the board of directors of the Corporation, to the effect that the bylaws (if any) resulting from the adoption of such proposal would not be in conflict with the articles of incorporation of the Corporation or the laws of the State of Louisiana. In no event shall any adjournment, postponement or deferral of a meeting of shareholders or the announcement thereof commence a new time period for the giving of a shareholder’s notice as described above. Within 30 days after such shareholder shall have submitted the aforesaid items, the secretary and the board of directors of the Corporation shall respectively determine whether the items to be ruled upon by them are reasonably satisfactory and shall notify such shareholder in writing of their respective determinations. If such shareholder fails to submit a required item in the form or within the time indicated, or if the secretary or the board of directors of the Corporation determine that the items to be ruled upon by them are not reasonably satisfactory, then such proposal by such shareholder may not be voted upon by the shareholders of the Corporation at such meeting of shareholders.

Section 3. Effective Date. No amendment or supplement to or repeal of any of the following provisions of these bylaws, whether resulting from action of the directors or the shareholders, shall take effect until the later of (i) one year following the adoption of such amendment, supplement, or repeal, or (ii) 10 days after the adjournment sine die of the annual meeting of shareholders next succeeding the adoption of such amendment, supplement, or repeal:

Article II, section 2;

Article II, section 8;

Article X; and

Article XIII.

ARTICLE XIV

Other Amendments to Bylaws

Section 1. Effective Date. No amendment or supplement to or repeal of any of the following provisions of these bylaws, whether resulting from action of the directors or the shareholders, shall take effect until the later of (i) one year following the adoption of such amendment, supplement, or repeal, or (ii) 10 days after the adjournment sine die of the annual meeting of shareholders next succeeding the adoption of such amendment, supplement, or repeal:

Article II, section 4;

Article II, section 5;

Article II, section 7;

Article II, section 9;

Article III, section 1;

Article III, section 2; and

Article XIV;

35

provided, however, that the board of directors shall have the power at any time, free from the foregoing restrictions, but subject to the provisions of subsection (g) of section 1 of article III of these bylaws, to amend or otherwise change subsections (a) and (d)(1) of section 1 of article III of these bylaws, and, with respect to any amendments to or changes in such subsection (d)(1), to make appropriate conforming changes in such section 1.

ARTICLE XV

Control Share Acquisition Statute

Section 1. Pursuant to Section 136 of the Louisiana Business Corporation Law, the provisions of Sections 135 through 140.2 of the Louisiana Business Corporation Law, enacted as part of Title 12 of the Louisiana Revised Statutes, shall not apply to “control share acquisitions” (as defined therein) of this Corporation.

36

EX-12.A

CLECO CORPORATION EXHIBIT 12(a)

Computation of Ratios of Earnings to Fixed Charges
	FOR THE THREE MONTHS ENDED			FOR THE NINE MONTHS ENDED			FOR THE TWELVE MONTHS ENDED
(THOUSANDS, EXCEPT RATIOS)	SEPT. 30, 2013
Earnings from continuing operations	$	66,407		$	135,572		$	158,684
Undistributed equity loss from investees	—			—			1
Income taxes	34,389			66,892			78,109
Earnings from continuing operations before income taxes	$	100,796		$	202,464		$	236,794
Fixed charges:
Interest	$	18,553		$	59,727		$	80,708
Amortization of debt expense, premium, net	883			2,557			3,353
Portion of rentals representative of an interest factor	129			381			504
Interest of capitalized lease	152			479			1,108
Total fixed charges	$	19,717		$	63,144		$	85,673
Earnings from continuing operations before income taxes	$	100,796		$	202,464		$	236,794
Plus:  total fixed charges from above	19,717			63,144			85,673
Plus:  amortization of capitalized interest	128			384			511
Earnings from continuing operations before income taxes and fixed charges	$	120,641		$	265,992		$	322,978
Ratio of earnings to fixed charges	6.12		X	4.21		X	3.77		X

EX-12.B

CLECO POWER EXHIBIT 12(b)

Computation of Ratios of Earnings to Fixed Charges
	FOR THE THREE MONTHS ENDED			FOR THE NINE MONTHS ENDED			FOR THE TWELVE MONTHS ENDED
(THOUSANDS, EXCEPT RATIOS)	SEPT. 30, 2013
Earnings from continuing operations	$	61,885		$	124,142		$	149,117
Income taxes	33,355			65,558			78,942
Earnings from continuing operations before income taxes	$	95,240		$	189,700		$	228,059
Fixed charges:
Interest	$	18,279		$	59,504		$	78,867
Amortization of debt expense, premium, net	799			2,304			3,016
Portion of rentals representative of an interest factor	129			381			504
Interest of capitalized lease	152			479			1,108
Total fixed charges	$	19,359		$	62,668		$	83,495
Earnings from continuing operations before income taxes	$	95,240		$	189,700		$	228,059
Plus:  total fixed charges from above	19,359			62,668			83,495
Plus:  amortization of capitalized interest	51			153			204
Earnings from continuing operations before income taxes and fixed charges	$	114,650		$	252,521		$	311,758
Ratio of earnings to fixed charges	5.92		X	4.03		X	3.73		X

EX-31.1

CLECO CORPORATION	EXHIBIT 31.1
Certification

I, Bruce A. Williamson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cleco Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  October 30, 2013

/s/ Bruce A. Williamson

Bruce A. Williamson

President and Chief Executive Officer

EX-31.2

CLECO CORPORATION	EXHIBIT 31.2
Certification

I, Thomas R. Miller, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cleco Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  October 30, 2013

/s/  Thomas R. Miller

Thomas R. Miller

Senior Vice President and Chief Financial Officer

EX-31.3

CLECO POWER LLC	EXHIBIT 31.3
Certification

I, Bruce A. Williamson, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cleco Power LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: October 30, 2013

/s/ Bruce A. Williamson

Bruce A. Williamson

Chief Executive Officer

EX-31.4

CLECO POWER LLC	EXHIBIT 31.4
Certification

I, Thomas R. Miller, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Cleco Power LLC;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  October 30, 2013

/s/  Thomas R. Miller

Thomas R. Miller

Senior Vice President and Chief Financial Officer

EX-32.1

CLECO CORPORATION EXHIBIT 32.1

Cleco Corporation

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cleco Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bruce A. Williamson, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  October 30, 2013

/s/  Bruce A. Williamson

Bruce A. Williamson

President and Chief Executive Officer

EX-32.2

CLECO CORPORATION EXHIBIT 32.2

Cleco Corporation

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cleco Corporation (the “Company”) on Form 10-Q for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas R. Miller, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  October 30, 2013

/s/  Thomas R. Miller

Thomas R. Miller

Senior Vice President and Chief Financial Officer 

EX-32.3

CLECO POWER LLC	EXHIBIT 32.3
Cleco Power LLC
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cleco Power LLC (the “Company”) on Form 10-Q for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bruce A. Williamson, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:  October 30, 2013

/s/  Bruce A. Williamson

Bruce A. Williamson

Chief Executive Officer

EX-32.4

CLECO POWER LLC	EXHIBIT 32.4
Cleco Power LLC
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cleco Power LLC (the “Company”) on Form 10-Q for the quarter ended September 30, 2013, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas R. Miller, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 30, 2013

/s/ Thomas R. Miller

Thomas R. Miller

Senior Vice President and Chief Financial Officer

EX-95

CLECO CORPORATION
CLECO POWER	EXHIBIT 95

MINE SAFETY DISCLOSURES

Cleco Power does not have control over the day-to-day operations, including safety, of either the Dolet Hills mine or the Oxbow mine.  Pursuant to a mining joint operating agreement governing the mines, Cleco Power and SWEPCO each have two representatives on a four member executive committee.  The main purpose of the executive committee is to enhance communication among the mine operator, Cleco Power, and SWEPCO.  The executive committee's duties include:  reviewing the status of the mine; providing policy recommendations concerning basic planning, land acquisition, geological and engineering activities; recommending economic limits and personnel requirements; reviewing mining and lignite delivery issues; and reviewing the financial information and operational records of DHLC.  

Under Section 1503 of the Dodd-Frank Act, public reporting companies that meet the definition of an “operator” of a mine under the Federal Mine Safety and Health Act of 1977 (Mine Act) as administered by the Mine Safety and Health Administration (MSHA) are required to report notices of violations and proposed assessments of violations of MSHA regulations promulgated in support of the Mine Act.  The MSHA defines an operator as any owner, lessee, or other person who operates, controls, or supervises a coal or other mine or any independent contractor performing services or construction at such mine.  Cleco Power might meet the definition of an “operator” under the MSHA through its two representatives on the executive committee.  Therefore, Cleco Power has chosen to include the disclosures required by Section 1503 of the Dodd-Frank Act.  During the third quarter of 2013, DHLC was issued six safety citations by MSHA. While three of the violations were Non-Significant and Substantial and are not subject to MSHA's reporting requirements, the other three were classified as Significant and Substantial. DHLC did receive assessments for four of the six citations. These four citations were assessed by MSHA and the amount paid was immaterial. The MSHA definition of control is not the same as the definition of control pursuant to accounting pronouncements relating to consolidation and equity method investments.  Management has determined that its relationship with DHLC does not meet the definition of control under accounting pronouncements; therefore, Cleco Power has not included any financial information about DHLC in its periodic reports.

XML

Income Taxes

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Income Taxes

Note 7 — Income Taxes

The following table summarizes the effective income tax rates for Cleco and Cleco Power for the three and nine month periods ended September 30, 2013 and 2012.

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
	2013		2012		2013		2012
Cleco	34.1	%	24.0	%	33.0	%	27.8	%
Cleco Power	35.0	%	25.5	%	34.6	%	31.0	%

Effective Tax Rates

For the three and nine months ended September 30, 2013 and 2012, the effective income tax rate for Cleco was different than the federal statutory rate due to permanent tax deductions, flowthrough benefits associated with AFUDC equity, tax benefits delivered from Cleco’s investment in the NMTC Fund, an increase in the liability for uncertain tax positions, a favorable settlement with taxing authorities, adjustments for tax returns as filed, and state tax expense.

For the three and nine months ended September 30, 2013, compared to the three and nine months ended September 30, 2012, the effective income tax rate for Cleco increased due to a decrease in permanent tax deductions, a decrease in flowthrough benefits associated with AFUDC equity, a decrease in tax benefits delivered from Cleco's investment in the NMTC Fund, an increase in the liability for uncertain tax positions, and the absence of a favorable settlement with taxing authorities. 

For the three and nine months ended September 30, 2013 and 2012, the effective income tax rate for Cleco Power was different than the federal statutory rate due to permanent tax deductions, flowthrough benefits associated with AFUDC equity, a decrease in the liability for uncertain tax positions, a favorable settlement with taxing authorities, adjustments for tax returns as filed, and state tax expense.

For the three and nine months ended September 30, 2013, compared to the three and nine months ended September 30, 2012, the effective income tax rate for Cleco Power increased due to a decrease in permanent tax deductions, a decrease in flowthrough benefits associated with AFUDC equity, and the absence of a favorable settlement with taxing authorities. 

Valuation Allowance

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized. As of September 30, 2013 and December 31, 2012, Cleco had a deferred tax asset resulting from NMTC carryforwards of $91.2 million and $78.8 million, respectively. If the NMTC carryforwards are not utilized, they will begin to expire in 2029. Management considers it more likely than not that all deferred tax assets related to NMTC carryforwards will be realized; therefore, no valuation allowance has been recorded.

Net Operating Losses

As of September 30, 2013, Cleco had a net operating loss carryforward primarily related to a tax accounting method change for bonus depreciation associated with Madison Unit 3. Cleco considers it more likely than not that these income tax losses generated will be utilized to reduce future income taxes. Cleco expects to utilize the entire net operating loss carryforward within the statutory deadlines.

Uncertain Tax Positions

Cleco classifies all interest related to uncertain tax positions as a component of interest payable and interest expense. The total amounts of uncertain tax positions and related interest payable and interest expense, as reflected on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets and Statements of Income, are shown in the following tables.

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Interest payable
Cleco	$	2,069	$	1,420
Cleco Power	$	3,712	$	3,358

The interest payable reflects the amount of interest anticipated to be paid to taxing authorities. These amounts do not include 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 September 30, 2013 and December 31, 2012, are $8.4 million and $6.2 million, respectively.

	FOR THE THREE MONTHS ENDED SEPT. 30,					FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012			2013			2012
Interest charges
Cleco	$	174	$	(121	)	$	(116	)	$	(8,477	)
Cleco Power	$	113	$	133		$	354		$	(9,504	)

The interest charges reflect the amount of interest anticipated to be paid to or received from taxing authorities. These amounts do not include any offset for the amounts that may be recovered from or owed to customers under the existing rate orders.

The federal income tax years that remain subject to examination by the IRS are 2007 through 2012. The Louisiana state income tax years that remain subject to examination by the Louisiana Department of Revenue are 2002 through 2011. At December 31, 2012, Cleco had $60.4 million deposited with the IRS, of which $43.5 million remained to either offset tax and interest liabilities for tax years subsequent to 2003 or to be refunded. Cleco received a refund of tax and interest in January 2013 from the IRS of $42.3 million relating to tax years 2001 through 2008.

Cleco is currently under audit by the IRS for the years 2010 through 2012. During the third quarter of 2013, Cleco increased its liability for uncertain tax positions. In addition, Cleco reclassified all uncertain tax positions to current from noncurrent as it expects to settle all outstanding audits within the next 12 months. Cleco estimates that it is reasonably possible that the balance of unrecognized tax benefits as of September 30, 2013, could decrease by a maximum of $4.6 million for Cleco and the balance for Cleco Power would be unchanged in the next 12 months as a result of reaching settlements with the IRS and state tax authorities. The settlements could involve the payment of additional taxes, the adjustment of deferred taxes, and/or the recognition of tax benefits, which may have an effect on Cleco’s effective tax rate.

Cleco classifies income tax penalties as a component of other expense. During 2013 and 2012, the amount of penalties recognized was immaterial.

XML

Pension Plan and Employee Benefits, 401 (K) Plans (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
401(k) Plan [Abstract]
401 (k) Plan expense	$ 936	$ 963	$ 3,361	$ 3,303
Other Subsidiaries [Member]
401(k) Plan [Abstract]
401 (k) Plan expense	$ 200	$ 200	$ 800	$ 800

XML

Consolidated Statements of Comprehensive Income (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net tax expense of amortization of postretirement benefits	$ 311	$ 239	$ 1,013	$ 670
Net tax expense on cash flow hedges	33	302	892	715
Cleco Power [Member]
Net tax expense of amortization of postretirement benefits	130	103	455	267
Net tax expense on cash flow hedges	$ 33	$ 302	$ 892	$ 715

XML

Consolidated Statement of Changes in Member's Equity (USD $) In Thousands, unless otherwise specified	Total	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Cleco Power [Member]	Cleco Power [Member] Retained Earnings [Member]	Cleco Power [Member] Accumulated Other Comprehensive Income (Loss) [Member]
Stockholders' equity, Beginning Balance at Dec. 31, 2011	$ 1,419,857	$ 990,605	$ (28,139)	$ 1,230,862	$ 1,251,492	$ (20,630)
Increase (Decrease) in Member's Equity [Roll Forward]
Other comprehensive income, net of tax	2,364		2,364	1,698		1,698
Distributions to parent				(58,000)	(58,000)
Net income	140,536	140,536		121,873	121,873
Stockholders' equity, Ending Balance at Sep. 30, 2012	1,501,854	1,072,468	(25,775)	1,296,433	1,315,365	(18,932)
Stockholders' equity, Beginning Balance at Jun. 30, 2012
Increase (Decrease) in Member's Equity [Roll Forward]
Other comprehensive income, net of tax	815			607
Net income	63,818			57,783
Stockholders' equity, Ending Balance at Sep. 30, 2012	1,501,854			1,296,433
Stockholders' equity, Beginning Balance at Dec. 31, 2012	1,499,213	1,075,074	(32,370)	1,319,919	1,340,340	(20,421)
Increase (Decrease) in Member's Equity [Roll Forward]
Other comprehensive income, net of tax	3,045		3,045	2,153		2,153
Distributions to parent				(75,000)	(75,000)
Net income	135,572	135,572		124,142	124,142
Stockholders' equity, Ending Balance at Sep. 30, 2013	1,577,914	1,145,962	(29,325)	1,371,214	1,389,482	(18,268)
Stockholders' equity, Beginning Balance at Jun. 30, 2013
Increase (Decrease) in Member's Equity [Roll Forward]
Other comprehensive income, net of tax	550			260
Net income	66,407			61,885
Stockholders' equity, Ending Balance at Sep. 30, 2013	$ 1,577,914			$ 1,371,214

XML

Accumulated Other Comprehensive Loss

9 Months Ended

Sep. 30, 2013

Equity [Abstract]

Comprehensive Income (Loss) Note

Note 14 — Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss are summarized in the following tables for Cleco and Cleco Power. All amounts are reported net of income taxes and amounts in parentheses indicate debits.

Cleco
				FOR THE THREE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, June 30, 2013	$	(23,619	)	$	(6,256	)	$	(29,875	)
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	497			—			497
Reclassification of net loss to interest charges	—			53			53
Net current-period other comprehensive income	497			53			550
Balances, Sept. 30, 2013	$	(23,122	)	$	(6,203	)	$	(29,325	)

				FOR THE NINE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, Dec. 31, 2012	$	(24,741	)	$	(7,629	)	$	(32,370	)
Other comprehensive income before reclassifications:
Net derivative gain	—			1,355			1,355
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	1,619			—			1,619
Reclassification of net loss to interest charges	—			102			102
Reclassification of ineffectiveness to regulatory asset	—			(31		)	(31		)
Net current-period other comprehensive income	1,619			1,426			3,045
Balances, Sept. 30, 2013	$	(23,122	)	$	(6,203	)	$	(29,325	)

Cleco Power
				FOR THE THREE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, June 30, 2013	$	(12,272	)	$	(6,256	)	$	(18,528	)
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	207			—			207
Reclassification of net loss to interest charges	—			53			53
Net current-period other comprehensive income	207			53			260
Balances, Sept. 30, 2013	$	(12,065	)	$	(6,203	)	$	(18,268	)

				FOR THE NINE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, Dec. 31, 2012	$	(12,792	)	$	(7,629	)	$	(20,421	)
Other comprehensive income before reclassifications:
Net derivative gain	—			1,355			1,355
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	727			—			727
Reclassification of net loss to interest charges	—			102			102
Reclassification of ineffectiveness to regulatory asset	—			(31		)	(31		)
Net current-period other comprehensive income	727			1,426			2,153
Balances, Sept. 30, 2013	$	(12,065	)	$	(6,203	)	$	(18,268	)

XML

Accumulated Other Comprehensive Loss (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	$ (29,875)		$ (32,370)
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	497		1,619
Net current-period other comprehensive income	550	815	3,045	2,364
Accumulated other comprehensive loss, Ending Balance	(29,325)		(29,325)
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(23,619)		(24,741)
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	497		1,619
Net current-period other comprehensive income	497		1,619
Accumulated other comprehensive loss, Ending Balance	(23,122)		(23,122)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(6,256)		(7,629)
Net current-period other comprehensive income
Net current-period other comprehensive income	53		1,426
Accumulated other comprehensive loss, Ending Balance	(6,203)		(6,203)
Interest Expense [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	53		102
Interest Expense [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	53		102
Regulatory Asset [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax			(31)
Regulatory Asset [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax			(31)
Cleco Power [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(18,528)		(20,421)
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	207		727
Net current-period other comprehensive income	260	607	2,153	1,698
Accumulated other comprehensive loss, Ending Balance	(18,268)		(18,268)
Cleco Power [Member] | Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(12,272)		(12,792)
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	207		727
Net current-period other comprehensive income	207		727
Accumulated other comprehensive loss, Ending Balance	(12,065)		(12,065)
Cleco Power [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(6,256)		(7,629)
Net current-period other comprehensive income
Net current-period other comprehensive income	53		1,426
Accumulated other comprehensive loss, Ending Balance	(6,203)		(6,203)
Cleco Power [Member] | Interest Expense [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	53		102
Cleco Power [Member] | Interest Expense [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	53		102
Cleco Power [Member] | Regulatory Asset [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax			(31)
Cleco Power [Member] | Regulatory Asset [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax			$ (31)

XML

Income Taxes, Income Tax Uncertainties (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Uncertain Tax Positions [Abstract]
Interest payable associated with uncertain tax positions	$ 2,069,000		$ 2,069,000		$ 1,420,000
Interest charges related to uncertain tax positions	174,000	(121,000)	(116,000)	(8,477,000)
Cleco Power [Member]
Uncertain Tax Positions [Abstract]
Interest payable associated with uncertain tax positions	3,712,000		3,712,000		3,358,000
Amounts expected to be recovered from customers under existing rate orders	8,400,000		8,400,000		6,200,000
Interest charges related to uncertain tax positions	$ 113,000	$ 133,000	$ 354,000	$ (9,504,000)

XML

Disclosures about Segments

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Disclosures about Segments

Note 8 — Disclosures about Segments

Cleco’s reportable segments are based on its method of internal reporting, which disaggregates business units by its first-tier subsidiary. Cleco’s reportable segments are Cleco Power and Midstream. The holding company, a shared services subsidiary, two transmission interconnection facility subsidiaries, and an investment subsidiary are shown as Other in the following tables.

Each reportable segment engages in business activities from which it earns revenue and incurs expenses. Segment managers report periodically to Cleco’s Chief Executive Officer (the chief operating decision-maker) with discrete financial information and, at least quarterly, present discrete financial information to Cleco Corporation’s Board of Directors. Each reportable segment prepared budgets for 2013 that were presented to and approved by Cleco Corporation’s Board of Directors.

The financial results of Cleco’s segments are presented on an accrual basis. Management evaluates the performance of its segments and allocates resources to them based on segment profit and the requirements to implement new strategic initiatives and projects to meet current business objectives. Material intercompany transactions occur on a regular basis. These intercompany transactions relate primarily to the power purchase agreement between Cleco Power and Evangeline that began in 2012 and joint and common administrative support services provided by Support Group.

SEGMENT INFORMATION FOR THE THREE MONTHS ENDED SEPT. 30,
2013 (THOUSANDS)	CLECO POWER			MIDSTREAM		OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	314,766		$	—	$	—		$	—		$	314,766
Tolling operations	—			12,339		—			(12,339		)	—
Other operations	14,301			1		541			—			14,843
Electric customer credits	(846		)	—		—			—			(846		)
Affiliate revenue	335			—		13,313			(13,648		)	—
Operating revenue, net	$	328,556		$	12,340	$	13,854		$	(25,987	)	$	328,763
Depreciation	$	39,962		$	1,522	$	272		$	—		$	41,756
Interest charges	$	18,656		$	312	$	(110	)	$	156		$	19,014
Interest income	$	331		$	—	$	(156	)	$	157		$	332
Federal and state income tax expense (benefit)	$	33,355		$	4,083	$	(3,048	)	$	(1	)	$	34,389
Net income	$	61,885		$	1,164	$	3,358		$	—		$	66,407
Additions to long-lived assets	$	38,585		$	337	$	358		$	—		$	39,280
Equity investment in investees	$	14,532		$	—	$	8		$	1		$	14,541
Total segment assets	$	3,881,391		$	219,028	$	106,158		$	(79,060	)	$	4,127,517

2012 (THOUSANDS)	CLECO POWER			MIDSTREAM			OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	282,894		$	—		$	—		$	—		$	282,894
Tolling operations	—			13,890			—			(13,890		)	—
Other operations	14,905			1			502			—			15,408
Electric customer credits	(930		)	—			—			—			(930		)
Affiliate revenue	343			—			12,343			(12,686		)	$	—
Operating revenue, net	$	297,212		$	13,891		$	12,845		$	(26,576	)	$	297,372
Depreciation	$	33,199		$	1,499		$	233		$	—		$	34,931
Interest charges	$	21,962		$	(69	)	$	(124	)	$	197		$	21,966
Interest income	$	129		$	—		$	(194	)	$	197		$	132
Federal and state income tax expense (benefit)	$	19,740		$	2,489		$	(2,050	)	$	—		$	20,179
Net income	$	57,783		$	3,429		$	2,606		$	—		$	63,818
Additions to long-lived assets	$	65,073		$	799		$	503		$	—		$	66,375
Equity investment in investees (1)	$	14,532		$	—		$	8		$	—		$	14,540
Total segment assets  (1)	$	3,871,729		$	215,342		$	201,678		$	(141,400	)	$	4,147,349
(1) Balances as of December 31, 2012

SEGMENT INFORMATION FOR THE NINE MONTHS ENDED SEPT. 30,
2013 (THOUSANDS)	CLECO POWER			MIDSTREAM			OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	796,957		$	—		$	—		$	—		$	796,957
Tolling operations	—			26,483			—			(26,483		)	—
Other operations	36,366			2			1,550			(1		)	37,917
Electric customer credits	(1,270		)	—			—			—			(1,270		)
Affiliate revenue	1,005			—			40,406			(41,411		)	—
Operating revenue	$	833,058		$	26,485		$	41,956		$	(67,895	)	$	833,604
Depreciation	$	105,251		$	4,523		$	755		$	—		$	110,529
Interest charges	$	60,882		$	(338	)	$	334		$	480		$	61,358
Interest income	$	784		$	—		$	(474	)	$	479		$	789
Federal and state income tax expense (benefit)	$	65,558		$	7,221		$	(5,887	)	$	—		$	66,892
Net income	$	124,142		$	6,180		$	5,251		$	(1	)	$	135,572
Additions to long-lived assets	$	124,731		$	2,664		$	1,629		$	—		$	129,024
Equity investment in investees	$	14,532		$	—		$	8		$	1		$	14,541
Total segment assets	$	3,881,391		$	219,028		$	106,158		$	(79,060	)	$	4,127,517

2012 (THOUSANDS)	CLECO POWER		MIDSTREAM		OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	720,776	$	—	$	—		$	—		$	720,776
Tolling operations	—		21,434		—			(21,434		)	—
Other operations	36,967		2		1,496			(1		)	38,464
Electric customer credits	1,025		—		—			—			1,025
Affiliate revenue	1,030		—		37,540			(38,570		)	—
Operating revenue	$	759,798	$	21,436	$	39,036		$	(60,005	)	$	760,265
Depreciation	$	93,847	$	4,491	$	689		$	1		$	99,028
Interest charges	$	61,253	$	244	$	1,320		$	388		$	63,205
Interest income	$	153	$	—	$	(379	)	$	389		$	163
Equity income from investees, before tax	$	—	$	—	$	1		$	—		$	1
Federal and state income tax expense (benefit)	$	54,748	$	7,278	$	(7,916	)	$	—		$	54,110
Net income	$	121,873	$	11,053	$	7,610		$	—		$	140,536
Additions to long-lived assets	$	159,836	$	6,811	$	1,371		$	—		$	168,018
Equity investment in investees (1)	$	14,532	$	—	$	8		$	—		$	14,540
Total segment assets (1)	$	3,871,729	$	215,342	$	201,678		$	(141,400	)	$	4,147,349
(1) Balances as of December 31, 2012

XML

Debt, Short-term Debt (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Short-term Debt [Line Items]
Short-term debt	$ 0	$ 0
Cleco Power [Member]
Short-term Debt [Line Items]
Short-term debt	$ 0	$ 0

XML

Income Taxes, Income Tax Examination (Details) (USD $) In Millions, unless otherwise specified				9 Months Ended
	Sep. 30, 2013 Internal Revenue Service (IRS) [Member]	Jan. 31, 2013 Internal Revenue Service (IRS) [Member]	Dec. 31, 2012 Internal Revenue Service (IRS) [Member]	Sep. 30, 2013 Internal Revenue Service (IRS) [Member] Minimum [Member]	Sep. 30, 2013 Internal Revenue Service (IRS) [Member] Maximum [Member]	Sep. 30, 2013 State and Local Jurisdiction [Member] Minimum [Member]	Sep. 30, 2013 State and Local Jurisdiction [Member] Maximum [Member]
Income Tax Examination [Line Items]
Tax years that remain subject to examination				2007	2012	2002	2011
Summary of income tax examinations [Abstract]
Deposits with the IRS			$ 60.4
Deposits with the IRS remaining to offset tax and interest liabilities			43.5
Refund adjustment from settlement with taxing authority		42.3
Income tax years currently under examination				2010	2012
Significant Change in Unrecognized Tax Benefits is Reasonably Possible, Estimated Range of Change, Upper Bound	$ (4.6)

XML

Summary of Significant Accounting Policies Summary of Significant Accounting Policies, Risk Management (Details) (Energy Related Derivative [Member], Cleco Power [Member])	Sep. 30, 2013 MMBTU	Dec. 31, 2012 MMBTU
Energy Related Derivative [Member] | Cleco Power [Member]
Derivative Instruments and Hedging Activities Disclosures [Line Items]
Number of open derivative positions	0	0

XML

Regulatory Assets and Liabilities (Tables) (Cleco Power [Member])

9 Months Ended

Sep. 30, 2013

Cleco Power [Member]

Schedule of Regulatory Assets and Liabilities, Net [Line Items]

Regulatory Assets and Liabilities

The following table summarizes Cleco Power’s regulatory assets and liabilities at September 30, 2013 and December 31, 2012:

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Regulatory assets – deferred taxes, net	$	217,550	$	210,445
Mining costs	$	14,657	$	16,569
Interest costs	6,033		6,304
Asset removal costs	919		867
Postretirement plan costs	146,597		156,458
Tree trimming costs	4,945		5,656
Training costs	7,214		7,330
Surcredits, net	16,738		6,211
Construction carrying costs	—		4,697
Lignite mining agreement contingency	3,781		3,781
Power purchase agreement capacity costs	13,316		6,217
AMI deferred revenue requirement	3,960		1,483
AFUDC equity gross-up	73,518		74,158
Rate case costs	179		581
Acadia Unit 1 acquisition costs	2,786		2,865
IRP/RFP costs	—		39
AMI pilot costs	—		22
Financing costs	9,864		7,282
Biomass costs	122		145
Total regulatory assets – other	$	304,629	$	300,665
Construction carrying costs	—		(8,255		)
Fuel and purchased power	6,851		7,833
Total regulatory assets, net	$	529,030	$	510,688

XML

Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Property, Plant, and Equipment

Cleco’s property, plant, and equipment consisted of:

(THOUSANDS)	AT SEPT. 30, 2013			AT DEC. 31, 2012
Regulated utility plants	$	4,001,194		$	3,871,940
Other	271,713			268,254
Total property, plant, and equipment	4,272,907			4,140,194
Accumulated depreciation	(1,371,857		)	(1,311,273		)
Net property, plant, and equipment	$	2,901,050		$	2,828,921

Restricted Cash and Cash Equivalents

Cleco’s restricted cash and cash equivalents consisted of:  

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Diversified Lands’ mitigation escrow	$	97	$	97
Cleco Katrina/Rita’s storm recovery bonds	3,359		8,781
Cleco Power’s future storm restoration costs	4,944		5,343
Cleco Power’s building renovation escrow	71		—
Total restricted cash and cash equivalents	$	8,471	$	14,221

Earnings per Average Common Share

The following tables show the calculation of basic and diluted earnings per share:

						FOR THE THREE MONTHS ENDED SEPT. 30,
				2013					2012
(THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)	INCOME		SHARES	PER SHARE AMOUNT		INCOME		SHARES	PER SHARE AMOUNT
Basic net income applicable to common stock	$	66,407	60,450,384	$	1.10	$	63,818	60,346,476	$	1.06
Effect of dilutive securities
Add:  stock option grants			—					1,536
Add:  restricted stock (LTICP)			298,263					251,191
Diluted net income applicable to common stock	$	66,407	60,748,647	$	1.09	$	63,818	60,599,203	$	1.05

						FOR THE NINE MONTHS ENDED SEPT. 30,
				2013					2012
(THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)	INCOME		SHARES	PER SHARE AMOUNT		INCOME		SHARES	PER SHARE AMOUNT
Basic net income applicable to common stock	$	135,572	60,428,944	$	2.25	$	140,536	60,375,538	$	2.33
Effect of dilutive securities
Add:  stock option grants			—					4,518
Add:  restricted stock (LTICP)			265,688					246,415
Diluted net income applicable to common stock	$	135,572	60,694,632	$	2.23	$	140,536	60,626,471	$	2.32

Stock-Based Compensation

Cleco and Cleco Power reported pre-tax compensation expense for their share-based compensation plans as shown in the following table:

	CLECO CORPORATION				CLECO POWER				CLECO CORPORATION				CLECO POWER
	FOR THE THREE MONTHS ENDED SEPT. 30,								FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012		2013		2012		2013		2012
Equity classification
Non-vested stock	$	1,585	$	1,139	$	492	$	301	$	4,487	$	3,271	$	1,204	$	792
Stock options	—		2		—		—		—		11		—		—
Total equity classification	$	1,585	$	1,141	$	492	$	301	$	4,487	$	3,282	$	1,204	$	792
Liability classification
Common stock equivalent units	$	—	$	847	$	—	$	338	$	1	$	1,552	$	1	$	631
Total pre-tax compensation expense	$	1,585	$	1,988	$	492	$	639	$	4,488	$	4,834	$	1,205	$	1,423
Tax benefit	$	610	$	765	$	189	$	246	$	1,727	$	1,860	$	463	$	548

XML

Fair Value Accounting, Restricted Investments (Details) (Cleco Power [Member], USD $)			3 Months Ended		9 Months Ended		12 Months Ended	3 Months Ended		9 Months Ended			12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended
	Jul. 02, 2012	Sep. 30, 2007	Sep. 30, 2013 Debt Securities [Member]	Sep. 30, 2012 Debt Securities [Member]	Sep. 30, 2013 Debt Securities [Member]	Sep. 30, 2012 Debt Securities [Member]	Dec. 31, 2012 Debt Securities [Member]	Sep. 30, 2013 Debt Securities [Member] Restricted Storm Reserve [Member] Maximum [Member]	Sep. 30, 2012 Debt Securities [Member] Restricted Storm Reserve [Member] Maximum [Member]	Sep. 30, 2013 Debt Securities [Member] Restricted Storm Reserve [Member] Maximum [Member]	Sep. 30, 2012 Debt Securities [Member] Restricted Storm Reserve [Member] Maximum [Member]	Sep. 30, 2013 Municipal Bonds [Member]	Dec. 31, 2012 Municipal Bonds [Member]	Sep. 30, 2013 Corporate Bond Securities [Member]	Dec. 31, 2012 Corporate Bond Securities [Member]	Sep. 30, 2013 Commercial Paper [Member]	Dec. 31, 2012 Commercial Paper [Member]
Schedule of Available-for-sale Securities [Line Items]
LPSC authorized storm reserve funding		$ 50,000,000
Amount of restricted cash and cash equivalents transfered to an investment manager	13,000,000
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities					0
Reconciliation of available-for-sale debt securities from amortized cost to fair value[Abstract]
Amortized Cost			12,287,000		12,287,000		10,877,000					9,641,000	10,228,000	515,000	0	2,131,000	649,000
Total Unrealized Gains					5,000		3,000					5,000	3,000	0	0	0	0
Total Unrealized Losses					17,000		28,000					15,000	28,000	2,000	0	0	0
Fair Value			12,275,000		12,275,000		10,852,000					9,631,000	10,203,000	513,000	0	2,131,000	649,000
Unrealized mark-to-market gain (loss) available-for-sale securities								100,000	(100,000)	100,000	(100,000)
Summary of the debt securities that were in an unrealized loss position [Abstract]
Less Than 12 Months Aggregate Unrealized Loss					9,000							7,000		2,000
Less Than 12 Months Aggregate Related Fair Value			3,211,000		3,211,000							2,698,000		513,000
12 Months or Longer Aggregate Unrealized Loss					8,000							8,000		0
12 Months or Longer Aggregate Related Fair Value			2,518,000		2,518,000							2,518,000		0
Available-for-sale securities, debt securities by contractual Maturity[Abstract]
One year or less			5,740,000		5,740,000
Over one year through five years			6,535,000		6,535,000
Total fair value			12,275,000		12,275,000		10,852,000					9,631,000	10,203,000	513,000	0	2,131,000	649,000
Available-for-sale Securities, Realized Gain (Loss)			$ 0	$ 0	$ 0	$ 0

XML

Affiliate Transactions Affiliate Transactions (Tables) (Cleco Power [Member])

9 Months Ended

Sep. 30, 2013

Cleco Power [Member]

Related Party Transaction [Line Items]

Schedule of Related Party Transactions [Table Text Block]

Cleco Power has affiliate balances that are payable to or due from its affiliates. The following table is a summary of those balances.

	AT SEPT. 30, 2013				AT DEC. 31, 2012
(THOUSANDS)	ACCOUNTS RECEIVABLE		ACCOUNTS PAYABLE		ACCOUNTS RECEIVABLE		ACCOUNTS PAYABLE
Cleco Corporation	$	5	$	368	$	139	$	1,140
Support Group	1,160		6,415		2,777		7,528
Midstream	63		2		27		5
Evangeline	21		3,371		6		1,401
Diversified Lands	10		84		42		23
Other (1)	1		—		—		—
Total	$	1,260	$	10,240	$	2,991	$	10,097
(1) Represents Perryville and Attala

XML

Summary of Significant Accounting Policies, Stock-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Stock-Based Compensation [Line Items]
Share-based compensation expense	$ 1,585	$ 1,988	$ 4,488	$ 4,834
Tax benefit	610	765	1,727	1,860
Equity Classification [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	1,585	1,141	4,487	3,282
Non-vested Stock [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	1,585	1,139	4,487	3,271
Stock Options [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	0	2	0	11
Common Stock Equivalent Units [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	0	847	1	1,552
Cleco Power [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	492	639	1,205	1,423
Tax benefit	189	246	463	548
Cleco Power [Member] | Equity Classification [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	492	301	1,204	792
Cleco Power [Member] | Non-vested Stock [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	492	301	1,204	792
Cleco Power [Member] | Stock Options [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	0	0	0	0
Cleco Power [Member] | Common Stock Equivalent Units [Member]
Stock-Based Compensation [Line Items]
Share-based compensation expense	$ 0	$ 338	$ 1	$ 631
LTIP [Member] | Non-vested Stock [Member]
Stock-Based Compensation [Line Items]
Non-vested stock granted during the period (in shares)			139,048

XML

Debt, Long-term Debt (Details) (USD $)	9 Months Ended		9 Months Ended											9 Months Ended		9 Months Ended						0 Months Ended	9 Months Ended		9 Months Ended		0 Months Ended	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Line of Credit [Member]	Sep. 30, 2013 Capital Lease Obligations [Member]	Sep. 30, 2013 Senior Notes [Member]	Sep. 30, 2013 Debt Discount Amortization [Member]	Sep. 30, 2013 Cleco Katrina Rita Storm Recovery Bonds [Member] Bonds [Member]	Sep. 30, 2013 Series A GO Zone bonds [Member] Bonds [Member]	Sep. 30, 2013 Series B GO Zone bonds [Member] Bonds [Member]	Sep. 30, 2013 Cleco Power's solid waste disposal facility bonds, 5.25%, due 2037, mandatory tender on March 1, 2013 [Member] Bonds [Member]	Sep. 30, 2013 Bank Term Loan [Member] Notes Payable to Banks [Member]	Sep. 30, 2013 Cleco Power [Member]	Dec. 31, 2012 Cleco Power [Member]	Sep. 30, 2013 Cleco Power [Member] Capital Lease Obligations [Member]	Sep. 30, 2013 Cleco Power [Member] Notes Payable to Banks [Member]	Sep. 30, 2013 Cleco Power [Member] Senior Notes [Member]	Sep. 30, 2013 Cleco Power [Member] Debt Discount Amortization [Member]	Sep. 30, 2013 Cleco Power [Member] London Interbank Offered Rate (LIBOR) [Member] Notes Payable to Banks [Member]	Sep. 30, 2013 Cleco Power [Member] Cleco Katrina Rita Storm Recovery Bonds [Member] Bonds [Member]	Sep. 30, 2013 Cleco Power [Member] Series A GO Zone bonds [Member] Bonds [Member]	May 03, 2013 Cleco Power [Member] Series A GO Zone bonds [Member] Bonds [Member]	May 03, 2013 Cleco Power [Member] Series A GO Zone bonds [Member] London Interbank Offered Rate (LIBOR) [Member] Bonds [Member]	Sep. 30, 2013 Cleco Power [Member] Series B GO Zone bonds [Member] Bonds [Member]	May 07, 2013 Cleco Power [Member] Series B GO Zone bonds [Member] Bonds [Member]	Sep. 30, 2013 Cleco Power [Member] Cleco Power's solid waste disposal facility bonds, 5.25%, due 2037, mandatory tender on March 1, 2013 [Member] Bonds [Member]	Mar. 01, 2013 Cleco Power [Member] Cleco Power's solid waste disposal facility bonds, 5.25%, due 2037, mandatory tender on March 1, 2013 [Member] Bonds [Member]	May 09, 2013 Cleco Power [Member] Bank Term Loan [Member] Notes Payable to Banks [Member]	Sep. 30, 2013 Cleco Power [Member] Bank Term Loan [Member] Notes Payable to Banks [Member]	Mar. 20, 2013 Cleco Power [Member] Bank Term Loan [Member] Notes Payable to Banks [Member]
Debt Instrument [Line Items]
Long-term debt outstanding, total	$ 1,310,000,000											$ 1,310,000,000
Long-term debt due within one year	17,147,000	91,140,000										17,147,000	91,140,000
Principal payments for Cleco Katrina/Rita storm recovery bonds due within one year							14,900,000												14,900,000
Capital lease payments due within one year	2,200,000											2,200,000
Increase (Decrease) in debt instrument, net	(40,300,000)		(25,000,000)	(1,600,000)	(75,000,000)	300,000	(14,000,000)	50,000,000	50,000,000	(60,000,000)	35,000,000	(15,300,000)		(1,600,000)		(75,000,000)	300,000		(14,000,000)	50,000,000			50,000,000		(60,000,000)			35,000,000
Face value of outstanding bonds purchased																										60,000,000
Accrued interest paid on purchase of bonds																										1,600,000
Face amount of debt instrument																					50,000,000			50,000,000					60,000,000
Repayments of bank term loan																											25,000,000
Balance of bank term loan																												$ 35,000,000
Interest rate (in ten-thousandths)															0.93%						0.94%			4.25%		0.11%
Component of basis spread, percentage of variable interest rate (in ten-thousandths)																						65.00%
Basis spread on variable interest rate (in ten-thousandths)																		0.75%				0.82%

XML

Disclosures about Segments (Tables)

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information

SEGMENT INFORMATION FOR THE THREE MONTHS ENDED SEPT. 30,
2013 (THOUSANDS)	CLECO POWER			MIDSTREAM		OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	314,766		$	—	$	—		$	—		$	314,766
Tolling operations	—			12,339		—			(12,339		)	—
Other operations	14,301			1		541			—			14,843
Electric customer credits	(846		)	—		—			—			(846		)
Affiliate revenue	335			—		13,313			(13,648		)	—
Operating revenue, net	$	328,556		$	12,340	$	13,854		$	(25,987	)	$	328,763
Depreciation	$	39,962		$	1,522	$	272		$	—		$	41,756
Interest charges	$	18,656		$	312	$	(110	)	$	156		$	19,014
Interest income	$	331		$	—	$	(156	)	$	157		$	332
Federal and state income tax expense (benefit)	$	33,355		$	4,083	$	(3,048	)	$	(1	)	$	34,389
Net income	$	61,885		$	1,164	$	3,358		$	—		$	66,407
Additions to long-lived assets	$	38,585		$	337	$	358		$	—		$	39,280
Equity investment in investees	$	14,532		$	—	$	8		$	1		$	14,541
Total segment assets	$	3,881,391		$	219,028	$	106,158		$	(79,060	)	$	4,127,517

2012 (THOUSANDS)	CLECO POWER			MIDSTREAM			OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	282,894		$	—		$	—		$	—		$	282,894
Tolling operations	—			13,890			—			(13,890		)	—
Other operations	14,905			1			502			—			15,408
Electric customer credits	(930		)	—			—			—			(930		)
Affiliate revenue	343			—			12,343			(12,686		)	$	—
Operating revenue, net	$	297,212		$	13,891		$	12,845		$	(26,576	)	$	297,372
Depreciation	$	33,199		$	1,499		$	233		$	—		$	34,931
Interest charges	$	21,962		$	(69	)	$	(124	)	$	197		$	21,966
Interest income	$	129		$	—		$	(194	)	$	197		$	132
Federal and state income tax expense (benefit)	$	19,740		$	2,489		$	(2,050	)	$	—		$	20,179
Net income	$	57,783		$	3,429		$	2,606		$	—		$	63,818
Additions to long-lived assets	$	65,073		$	799		$	503		$	—		$	66,375
Equity investment in investees (1)	$	14,532		$	—		$	8		$	—		$	14,540
Total segment assets  (1)	$	3,871,729		$	215,342		$	201,678		$	(141,400	)	$	4,147,349
(1) Balances as of December 31, 2012

SEGMENT INFORMATION FOR THE NINE MONTHS ENDED SEPT. 30,
2013 (THOUSANDS)	CLECO POWER			MIDSTREAM			OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	796,957		$	—		$	—		$	—		$	796,957
Tolling operations	—			26,483			—			(26,483		)	—
Other operations	36,366			2			1,550			(1		)	37,917
Electric customer credits	(1,270		)	—			—			—			(1,270		)
Affiliate revenue	1,005			—			40,406			(41,411		)	—
Operating revenue	$	833,058		$	26,485		$	41,956		$	(67,895	)	$	833,604
Depreciation	$	105,251		$	4,523		$	755		$	—		$	110,529
Interest charges	$	60,882		$	(338	)	$	334		$	480		$	61,358
Interest income	$	784		$	—		$	(474	)	$	479		$	789
Federal and state income tax expense (benefit)	$	65,558		$	7,221		$	(5,887	)	$	—		$	66,892
Net income	$	124,142		$	6,180		$	5,251		$	(1	)	$	135,572
Additions to long-lived assets	$	124,731		$	2,664		$	1,629		$	—		$	129,024
Equity investment in investees	$	14,532		$	—		$	8		$	1		$	14,541
Total segment assets	$	3,881,391		$	219,028		$	106,158		$	(79,060	)	$	4,127,517

2012 (THOUSANDS)	CLECO POWER		MIDSTREAM		OTHER			ELIMINATIONS			CONSOLIDATED
Revenue
Electric operations	$	720,776	$	—	$	—		$	—		$	720,776
Tolling operations	—		21,434		—			(21,434		)	—
Other operations	36,967		2		1,496			(1		)	38,464
Electric customer credits	1,025		—		—			—			1,025
Affiliate revenue	1,030		—		37,540			(38,570		)	—
Operating revenue	$	759,798	$	21,436	$	39,036		$	(60,005	)	$	760,265
Depreciation	$	93,847	$	4,491	$	689		$	1		$	99,028
Interest charges	$	61,253	$	244	$	1,320		$	388		$	63,205
Interest income	$	153	$	—	$	(379	)	$	389		$	163
Equity income from investees, before tax	$	—	$	—	$	1		$	—		$	1
Federal and state income tax expense (benefit)	$	54,748	$	7,278	$	(7,916	)	$	—		$	54,110
Net income	$	121,873	$	11,053	$	7,610		$	—		$	140,536
Additions to long-lived assets	$	159,836	$	6,811	$	1,371		$	—		$	168,018
Equity investment in investees (1)	$	14,532	$	—	$	8		$	—		$	14,540
Total segment assets (1)	$	3,871,729	$	215,342	$	201,678		$	(141,400	)	$	4,147,349
(1) Balances as of December 31, 2012

XML

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees, Other Commitments (Details) (USD $)	9 Months Ended
	Sep. 30, 2013	Aug. 31, 2008
Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees [Abstract]
Membership interest in U.S Bank New Markets Tax Credit Fund (in thousandths)		99.90%
Equity contributions to be made to the Fund	$ 283,600,000
Net tax benefits to be received from the Fund	301,900,000
Difference between equity contributions and total benefits received will be recognized over the life of the Fund as net tax benefits	18,300,000
Future equity contributions to the NMTC Fund [Abstract]
Three months ending Dec. 31, 2013	12,071,000
Year ending Dec. 31, 2014	47,434,000
Year ending Dec. 31, 2015	11,195,000
Year ending Dec. 31, 2016	3,698,000
Year ending Dec. 31, 2017	2,914,000
Total	77,312,000
Total future equity contributions	77,312,000
Future equity contributions due within the next 12 months	48,300,000
Tax benefits in excess of capital contributions	83,400,000
Tax benefits not utilized	112,300,000
Equity contributions with an imputed interest rate [Abstract]
Equity contributions - imputed interst rate (in hundredths)	6.00%
Principal payment schedule above:	77,312,000
Less: unamortized discount	5,015,000
Total	$ 72,297,000
Period of recognition of gross investment amortization expense (in years)	10 years
Remaining period of recognition of gross investment amortization expense (in years)	4 years

XML

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees, Disclosures about Guarantees (Details) (USD $)					1 Months Ended	3 Months Ended	9 Months Ended			3 Months Ended	1 Months Ended	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 Financial Guarantee [Member]	Jan. 31, 2006 Financial Guarantee [Member]	Sep. 30, 2013 2004 sale of Perryville facility [Member] Performance Guarantee [Member]	Feb. 28, 2010 Acadia Unit 1 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2012 Acadia Unit 1 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2013 Acadia Unit 1 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2012 Acadia Unit 1 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Feb. 23, 2010 Acadia Unit 1 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2013 Acadia Unit 1 Transaction [Member] Maximum [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Apr. 30, 2011 Acadia Unit 2 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2013 Acadia Unit 2 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2012 Acadia Unit 2 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2013 Acadia Unit 2 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2012 Acadia Unit 2 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Apr. 29, 2011 Acadia Unit 2 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Feb. 28, 2010 Cleco Power [Member] Acadia Unit 1 Transaction [Member] Guarantee Issued to Cleco Power on behalf of Acadia [Member]	Sep. 30, 2013 Cleco Power [Member] Lignite Mining Agreement Guarantee [Member] Financial Guarantee [Member]
Disclosures about Guarantees [Abstract]
Liability recognized on the balance sheets	$ 4,906,000			$ 200,000								$ 900,000		$ 900,000				$ 3,800,000
Guarantor Obligations, Maximum Exposure, Undiscounted	4,225,000	500,000		42,400,000	10,000,000							298,800,000		298,800,000			30,000,000	72,500,000
Guarantees, Fair Value Disclosure							0		13,500,000							21,800,000
Guarantor Obligations, Term					P3Y						P3Y
Maximum residual value of indemnification obligation												200,000		200,000
Income from contractual expiration of indemnification						0	400,000	7,200,000		100,000		0	0	6,900,000	11,800,000
Off-balance sheet commitments, expected termination dates [Abstract]
Net amount	4,225,000	500,000	500,000
Less than 1 year	3,725,000
1-3 years	0
3-5 years	0
More than 5 years	500,000
On-balance sheet guarantees, expected termination dates [Abstract]
Net amount committed	4,906,000			200,000								900,000		900,000				3,800,000
Less than 1 year	900,000
1-3 years	0
3-5 years	0
More than 5 years	4,006,000
Total off-balance sheet commitments and on-balance sheet guarantees, expected termination dates [Abstract]
Total net amount committed	9,131,000
Total less than 1 year	4,625,000
Total 1-3 years	0
Total 3-5 years	0
Total more than 5 years	$ 4,506,000

XML

Fair Value Accounting, Carrying Value and Estimated Fair Value (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Carrying Value [Member]
Financial instruments not marked-to-market [Abstract]
Cash and cash equivalents	$ 46,800	$ 31,020
Restricted cash and cash equivalents	8,471	14,221
Long-term debt, excluding debt issuance costs	1,306,230	1,345,198
Estimated Fair Value [Member]
Financial instruments not marked-to-market [Abstract]
Cash and cash equivalents	46,800	31,020
Restricted cash and cash equivalents	8,471	14,221
Long-term debt, excluding debt issuance costs	1,419,560	1,579,674
Cleco Power [Member] | Carrying Value [Member]
Financial instruments not marked-to-market [Abstract]
Cash and cash equivalents	42,560	23,368
Restricted cash and cash equivalents	8,374	14,124
Long-term debt, excluding debt issuance costs	1,306,230	1,320,198
Cleco Power [Member] | Estimated Fair Value [Member]
Financial instruments not marked-to-market [Abstract]
Cash and cash equivalents	42,560	23,368
Restricted cash and cash equivalents	8,374	14,124
Long-term debt, excluding debt issuance costs	$ 1,419,560	$ 1,554,674

XML

Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Principles of Consolidation, Policy

The accompanying Condensed Consolidated Financial Statements of Cleco include the accounts of Cleco and its majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Basis of Presentation, Policy

The Condensed Consolidated Financial Statements of Cleco Corporation and Cleco Power have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all of the information and notes required by GAAP for annual financial statements. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements. Because the interim Condensed Consolidated Financial Statements and the accompanying notes do not include all of the information and notes required by GAAP for annual financial statements, the Condensed Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the consolidated financial statements and accompanying notes in the Registrants’ Combined Annual Report on Form 10-K for the year ended December 31, 2012.

These Condensed Consolidated Financial Statements, in the opinion of management, reflect all normal recurring adjustments that are necessary to fairly present the financial position and results of operations of Cleco. Amounts reported in Cleco’s interim financial statements are not necessarily indicative of amounts expected for the annual periods due to the effects of seasonal temperature variations on energy consumption, regulatory rulings, the timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices, and other factors.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.

Property, Plant, and Equipment, Policy

Property, plant, and equipment consists primarily of regulated utility generation and energy transmission assets. Regulated assets, utilized primarily for retail operations and electric transmission and distribution, are stated at the cost of construction, which includes certain materials, labor, payroll taxes and benefits, administrative and general costs, and the estimated cost of funds used during construction. Jointly owned assets are reflected in property, plant, and equipment at Cleco Power’s share of the cost to construct or purchase the assets.

Restricted Cash and Cash Equivalents, Policy

Various agreements to which Cleco is subject contain covenants that restrict its use of cash. As certain provisions under these agreements are met, cash is transferred out of related escrow accounts and becomes available for its intended purposes and/or general corporate purposes.

Cleco Katrina/Rita has the right to bill and collect storm restoration costs from Cleco Power’s customers. As cash is collected, it is restricted for payment of administration fees, interest, and principal on storm recovery bonds.

Fair Value Measurements and Disclosures, Policy

Various accounting pronouncements require certain assets and liabilities to be measured at their fair values. Some assets and liabilities are required to be measured at their fair value each reporting period, while others are required to be measured only one time, generally the date of acquisition or debt issuance. Cleco and Cleco Power are required to disclose the fair value of certain assets and liabilities by one of three levels when required for recognition purposes under GAAP.

Risk Management, Policy

Market risk inherent in Cleco’s market risk-sensitive instruments and positions includes potential changes arising from changes in interest rates and the commodity market prices of power and natural gas on different energy exchanges. Cleco’s Energy Market Risk Management Policy authorizes the use of various derivative instruments, including exchange traded futures and option contracts, forward purchase and sales contracts, and swap transactions to reduce exposure to fluctuations in the price of power and natural gas. Cleco applies the authoritative guidance as it relates to derivatives and hedging to determine whether the market risk-sensitive instruments and positions are required to be marked-to-market. Generally, Cleco Power’s market risk-sensitive instruments and positions qualify for the normal-purchase, normal-sale exception to mark-to-market accounting because Cleco Power takes physical delivery and the instruments and positions are used to satisfy customer requirements.

Cleco Power may enter into positions to mitigate the volatility in customer fuel costs. These positions are marked-to-market with the resulting gain or loss recorded on the balance sheet as a component of energy risk management assets or liabilities. Such gain or loss is deferred as a component of deferred fuel assets or liabilities in accordance with regulatory policy. When these positions close, actual gains or losses will be included in the FAC and reflected on customers’ bills as a component of the fuel cost adjustment. There were no open positions at September 30, 2013 or December 31, 2012.

Cleco and Cleco Power maintain a master netting agreement policy and monitor credit risk exposure through review of counterparty credit quality, counterparty credit exposure, and counterparty concentration levels. Cleco manages these risks by establishing appropriate credit and concentration limits on transactions with counterparties and by requiring contractual guarantees, cash deposits, or letters of credit from counterparties or their affiliates, as deemed necessary. Cleco Power has agreements in place with various counterparties that authorize the netting of financial buys and sells and contract payments to mitigate credit risk for transactions entered into for risk management purposes.

Cleco has entered into various contracts to mitigate the volatility in interest rate risk. These contracts include, but are not limited to, interest rate swaps and treasury rate locks. For these contracts in which Cleco is hedging the variability of cash flows related to forecasted transactions that qualify as cash flow hedges, the changes in the fair value of such derivative instruments are reported in other comprehensive income. To qualify for hedge accounting, the relationship between the hedging instrument and the hedged item must be documented to include the risk management objective and strategy, and, at inception and on an ongoing basis, the effectiveness of the hedge in offsetting the changes in the cash flows of the item being hedged. Gains or losses accumulated in other comprehensive income are reclassified as earnings in the periods in which earnings are affected by the variability of the cash flows of the hedged item. The ineffective portions of hedges will be recognized in current period earnings unless management determines that it is probable that the costs will be recovered through the ratemaking process. If management determines that it is probable that the costs will be recovered from customers, then they will be recognized as a regulatory asset or liability and amortized to earnings over the life of the related debt. For those contracts in which Cleco is hedging the variability of cash flows related to forecasted transactions that do not qualify as cash flow hedges, the changes in the fair value of such derivative instruments will be recognized in current period earnings unless management determines that it is probable that the costs will be recovered from customers through the ratemaking process. If management determines that it is probable that the costs will be recovered from customers, then they will be recognized as a regulatory asset or liability and amortized to earnings over the life of the related debt.

Earnings Per Average Common Share, Policy

Stock option grants are excluded from the computation of diluted earnings per share if the exercise price is higher than the average market price.

Stock-Based Compensation, Policy

At September 30, 2013, Cleco had two stock-based compensation plans, the ESPP and the LTICP. Substantially all employees, excluding officers and general managers, may choose to participate in the ESPP and purchase a limited amount of common stock at a discount through a stock option agreement. Options or restricted shares of stock, known as non-vested stock as defined by the authoritative guidance on stock-based compensation, common stock equivalents, and stock appreciation rights may be granted to certain officers, key employees, or directors of Cleco Corporation and its subsidiaries pursuant to the LTICP.

New Accounting Pronouncements, Policy

The Registrants adopted, or will adopt, the recent authoritative guidance listed below on their respective effective dates.

In July 2012, FASB issued guidance on testing indefinite-lived intangible assets for impairment. This guidance is intended to reduce costs and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. Entities are allowed to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The adoption of this guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have an impact on the financial condition, results of operations, or cash flows of the Registrants.

In January 2013, FASB clarified the scope of revised disclosure requirements related to balance sheet offsetting that was issued in December 2011. The amendment clarifies that the scope applies to derivatives accounted for in accordance with the authoritative guidance for derivatives and hedging. The adoption of this revision is required for interim and annual periods beginning on or after January 1, 2013. The adoption of this revision did not have an impact on the financial condition, results of operations, or cash flows of the Registrants because it relates to disclosures, and no additional disclosures were required.

In February 2013, FASB revised the disclosure requirements related to items reclassified out of accumulated other comprehensive income. This guidance is intended to improve the transparency of changes in OCI. This revision is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. Cleco adopted the revisions to this amendment during the first quarter of 2013. The adoption of this revision did not have an impact on the financial condition, results of operations, or cash flows of the Registrants because it relates to disclosures. For more information on items reclassified out of accumulated other comprehensive income, see Note 14 — “Accumulated Other Comprehensive Loss.”

In February 2013, FASB issued guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The adoption of this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on the financial condition, results of operations, or cash flows of the Registrants.

In April 2013, FASB issued guidance on applying the liquidation basis of accounting and the related disclosure requirements. Under this accounting standards update, an entity must use the liquidation basis of accounting to present its financial statements when it determines that liquidation is imminent, unless the liquidation is the same as that under the plan specified in an entity's governing documents created at its inception. The adoption of this standard is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The adoption of this guidance is not expected to have an effect on the financial condition, results of operations, or cash flows of the Registrants.

In July 2013, FASB amended the guidance for derivatives and hedging to provide for the inclusion of the Fed Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes. The adoption of this guidance is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of this guidance did not have an effect on the financial condition, results of operations, or cash flows of the Registrants.

In July 2013, FASB amended the income tax guidance to provide for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The adoption of this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have an effect on the financial condition, results of operations, or cash flows of the Registrants.

Public Utilities, Policy

Cleco Power follows the authoritative guidance on regulated operations, which allows utilities to capitalize or defer certain costs based on regulatory approval and management’s ongoing assessment that it is probable these items will be recovered through the ratemaking process.

Marketable Securities, Available-for-sale Securities, Policy

Because Cleco Power’s investment strategy for these investments is within the requirements established by the LPSC for the restricted reserve fund, realized and unrealized gains and losses, interest income, investment management fees, and custody fees are recorded directly to Cleco Power’s restricted storm reserve rather than in earnings or other comprehensive income. As a result, no amounts will be recorded to other comprehensive income for these investments.

Quarterly, Cleco Power’s available-for-sale debt securities are evaluated on an individual basis to determine if a decline in fair value below the carrying value is other-than-temporary.

Management determines whether it intends to sell or if it is more likely than not that it will be required to sell impaired securities. This determination considers current and forecasted liquidity and regulatory requirements. For Cleco Power’s impaired debt securities for which there was no intent or expected requirement to sell, the evaluation assesses whether it is likely the amortized cost will be recovered considering the nature of the securities, credit rating, financial condition of the issuer, or the extent and duration of the unrealized loss and market conditions. If Cleco Power determines that an other-than-temporary decline in value exists on its debt securities, the investments would be written down to fair value with a new basis established. Declines in fair value below cost basis that are determined to be other-than-temporary would be recorded to Cleco Power’s restricted storm reserve.

Pension and Other Postretirement Plans, Policy

Most employees hired before August 1, 2007, are covered by a non-contributory, defined benefit pension plan. Benefits under the plan reflect an employee’s years of service, age at retirement, and highest total average compensation for any consecutive five calendar years during the last ten years of employment with Cleco. Cleco’s policy is to base its contributions to the employee pension plan upon actuarial computations utilizing the projected unit credit method, subject to the IRS’s full funding limitation.

Cleco’s retirees and their dependents are eligible to receive medical, dental, vision, and life insurance benefits (other benefits). Cleco recognizes the expected cost of these other benefits during the periods in which the benefits are earned.

Most employees are eligible to participate in the 401(k) Plan. Under the 401(k) Plan, Cleco makes matching contributions and funds dividend reinvestments with cash.

Certain Cleco officers are covered by the SERP. The SERP is a non-qualified, non-contributory, defined-benefit pension plan. Benefits under the plan reflect an employee’s years of service, age at retirement, and the sum of the highest base salary paid out of the last five calendar years plus the average of the three highest bonuses paid during the 60 months prior to retirement, reduced by benefits received from any other defined benefit pension plan, SERP Plan, or Cleco contributions under the enhanced 401(k) Plan to the extent such contributions exceed the limits of the 401(k) Plan.

Income Tax, Policy

Valuation allowances are recorded to reduce deferred tax assets when it is more likely than not that a tax benefit will not be realized.

Cleco classifies all interest related to uncertain tax positions as a component of interest payable and interest expense.

Cleco classifies income tax penalties as a component of other expense.

Segment Reporting, Policy

The financial results of Cleco’s segments are presented on an accrual basis. Management evaluates the performance of its segments and allocates resources to them based on segment profit and the requirements to implement new strategic initiatives and projects to meet current business objectives.

Equity Method Investments, Policy

Cleco reports its investments in VIEs in accordance with the authoritative guidance. Cleco and Cleco Power report the investment in Oxbow on the equity method of accounting. Under the equity method, the assets and liabilities of this entity are reported as equity investment in investees on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets. The revenue and expenses (excluding income taxes) of this entity are netted and reported as equity income or loss from investees on Cleco and Cleco Power’s Condensed Consolidated Statements of Income.

Consolidation, Variable Interest Entity, Policy

Oxbow is owned 50% by Cleco Power and 50% by SWEPCO and is accounted for as an equity method investment. Cleco Power is not the primary beneficiary because it shares the power to control Oxbow’s significant activities with SWEPCO.

XML

Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets
Customer accounts receivable, allowance for doubtful accounts	$ 823	$ 1,105
Shareholders' equity
Common stock, par value (in dollars per share)	$ 1	$ 1
Common stock, authorized (in shares)	100,000,000	100,000,000
Common stock, issued (in shares)	61,047,006	60,961,570
Common stock, outstanding (in shares)	60,452,158	60,355,545
Treasury stock, at cost (in shares)	594,848	606,025
Cleco Power [Member]
Current assets
Customer accounts receivable, allowance for doubtful accounts	$ 823	$ 1,105

XML

Consolidated Statement of Changes in Common Shareholders' Equity (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock [Member]	Treasury Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income (Loss) [Member]
Stockholders' equity, Beginning Balance at Dec. 31, 2011	$ 1,419,857	$ 60,702	$ (13,215)	$ 409,904	$ 990,605	$ (28,139)
Treasury stock, Beginning Balance (in shares) at Dec. 31, 2011			(410,403)
Common stock issued, Beginning Balance (in shares) at Dec. 31, 2011		60,702,342
Stock Issued or Granted During Period, Share-based Compensation [Abstract]
Common stock issued for compensatory plans, Value	5,776	255	136	5,385
Common stock issued for compensatory plans (in shares)		254,540	4,002
Treasury Stock Acquired [Abstract]
Repurchase of common stock, Value	(8,006)		(8,006)
Repurchase of common stock (in shares)			(200,000)
Dividends on common stock	(58,673)				(58,673)
Net income	140,536				140,536
Other comprehensive income, net of tax	2,364					2,364
Stockholders' equity, Ending Balance at Sep. 30, 2012	1,501,854	60,957	(21,085)	415,289	1,072,468	(25,775)
Treasury stock, Ending Balance (in shares) at Sep. 30, 2012			(606,401)
Common stock issued, Ending Balance (in shares) at Sep. 30, 2012		60,956,882
Stockholders' equity, Beginning Balance at Dec. 31, 2012	1,499,213	60,962	(21,072)	416,619	1,075,074	(32,370)
Treasury stock, Beginning Balance (in shares) at Dec. 31, 2012	(606,025)		(606,025)
Common stock issued, Beginning Balance (in shares) at Dec. 31, 2012	60,961,570	60,961,570
Stock Issued or Granted During Period, Share-based Compensation [Abstract]
Common stock issued for compensatory plans, Value	4,768	85	389	4,294
Common stock issued for compensatory plans (in shares)		85,436	11,177
Treasury Stock Acquired [Abstract]
Dividends on common stock	(64,684)				(64,684)
Net income	135,572				135,572
Other comprehensive income, net of tax	3,045					3,045
Stockholders' equity, Ending Balance at Sep. 30, 2013	$ 1,577,914	$ 61,047	$ (20,683)	$ 420,913	$ 1,145,962	$ (29,325)
Treasury stock, Ending Balance (in shares) at Sep. 30, 2013	(594,848)		(594,848)
Common stock issued, Ending Balance (in shares) at Sep. 30, 2013	61,047,006	61,047,006

XML

Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2013

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 1 — Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements of Cleco include the accounts of Cleco and its majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Basis of Presentation

The Condensed Consolidated Financial Statements of Cleco Corporation and Cleco Power have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all of the information and notes required by GAAP for annual financial statements. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements. Because the interim Condensed Consolidated Financial Statements and the accompanying notes do not include all of the information and notes required by GAAP for annual financial statements, the Condensed Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the consolidated financial statements and accompanying notes in the Registrants’ Combined Annual Report on Form 10-K for the year ended December 31, 2012.

These Condensed Consolidated Financial Statements, in the opinion of management, reflect all normal recurring adjustments that are necessary to fairly present the financial position and results of operations of Cleco. Amounts reported in Cleco’s interim financial statements are not necessarily indicative of amounts expected for the annual periods due to the effects of seasonal temperature variations on energy consumption, regulatory rulings, the timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices, and other factors.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. For more information on recent authoritative guidance and its effect on financial results, see Note 2 — “Recent Authoritative Guidance.”

Property, Plant, and Equipment

Property, plant, and equipment consists primarily of regulated utility generation and energy transmission assets. Regulated assets, utilized primarily for retail operations and electric transmission and distribution, are stated at the cost of construction, which includes certain materials, labor, payroll taxes and benefits, administrative and general costs, and the estimated cost of funds used during construction. Jointly owned assets are reflected in property, plant, and equipment at Cleco Power’s share of the cost to construct or purchase the assets. Cleco’s property, plant, and equipment consisted of:

(THOUSANDS)	AT SEPT. 30, 2013			AT DEC. 31, 2012
Regulated utility plants	$	4,001,194		$	3,871,940
Other	271,713			268,254
Total property, plant, and equipment	4,272,907			4,140,194
Accumulated depreciation	(1,371,857		)	(1,311,273		)
Net property, plant, and equipment	$	2,901,050		$	2,828,921

Restricted Cash and Cash Equivalents

Various agreements to which Cleco is subject contain covenants that restrict its use of cash. As certain provisions under these agreements are met, cash is transferred out of related escrow accounts and becomes available for its intended purposes and/or general corporate purposes. Cleco’s restricted cash and cash equivalents consisted of:  

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Diversified Lands’ mitigation escrow	$	97	$	97
Cleco Katrina/Rita’s storm recovery bonds	3,359		8,781
Cleco Power’s future storm restoration costs	4,944		5,343
Cleco Power’s building renovation escrow	71		—
Total restricted cash and cash equivalents	$	8,471	$	14,221

Cleco Katrina/Rita has the right to bill and collect storm restoration costs from Cleco Power’s customers. As cash is collected, it is restricted for payment of administration fees, interest, and principal on storm recovery bonds. During the nine months ended September 30, 2013, Cleco Katrina/Rita collected $14.9 million net of administration fees. In March and September 2013, Cleco Katrina/Rita used $7.1 million and $6.8 million, respectively, for scheduled storm recovery bond principal payments and $3.3 million and $3.1 million, respectively, for related interest.

In connection with Cleco Power’s building modernization project, Cleco Power was required to establish an escrow account with a qualified financial institution and deposit all retainage monies as they accrue under the construction contract. Upon completion of the construction work, the funds including any interest held in the escrow account will be released from escrow and paid to the construction contractor.

Fair Value Measurements and Disclosures

Various accounting pronouncements require certain assets and liabilities to be measured at their fair values. Some assets and liabilities are required to be measured at their fair value each reporting period, while others are required to be measured only one time, generally the date of acquisition or debt issuance. Cleco and Cleco Power are required to disclose the fair value of certain assets and liabilities by one of three levels when required for recognition purposes under GAAP. For more information about fair value levels, see Note 4 — “Fair Value Accounting.”

Risk Management

Market risk inherent in Cleco’s market risk-sensitive instruments and positions includes potential changes arising from changes in interest rates and the commodity market prices of power and natural gas on different energy exchanges. Cleco’s Energy Market Risk Management Policy authorizes the use of various derivative instruments, including exchange traded futures and option contracts, forward purchase and sales contracts, and swap transactions to reduce exposure to fluctuations in the price of power and natural gas. Cleco applies the authoritative guidance as it relates to derivatives and hedging to determine whether the market risk-sensitive instruments and positions are required to be marked-to-market. Generally, Cleco Power’s market risk-sensitive instruments and positions qualify for the normal-purchase, normal-sale exception to mark-to-market accounting because Cleco Power takes physical delivery and the instruments and positions are used to satisfy customer requirements.

Cleco Power may enter into positions to mitigate the volatility in customer fuel costs. These positions are marked-to-market with the resulting gain or loss recorded on the balance sheet as a component of energy risk management assets or liabilities. Such gain or loss is deferred as a component of deferred fuel assets or liabilities in accordance with regulatory policy. When these positions close, actual gains or losses will be included in the FAC and reflected on customers’ bills as a component of the fuel cost adjustment. There were no open positions at September 30, 2013 or December 31, 2012.

Cleco and Cleco Power maintain a master netting agreement policy and monitor credit risk exposure through review of counterparty credit quality, counterparty credit exposure, and counterparty concentration levels. Cleco manages these risks by establishing appropriate credit and concentration limits on transactions with counterparties and by requiring contractual guarantees, cash deposits, or letters of credit from counterparties or their affiliates, as deemed necessary. Cleco Power has agreements in place with various counterparties that authorize the netting of financial buys and sells and contract payments to mitigate credit risk for transactions entered into for risk management purposes.

Cleco has entered into various contracts to mitigate the volatility in interest rate risk. These contracts include, but are not limited to, interest rate swaps and treasury rate locks. For these contracts in which Cleco is hedging the variability of cash flows related to forecasted transactions that qualify as cash flow hedges, the changes in the fair value of such derivative instruments are reported in other comprehensive income. To qualify for hedge accounting, the relationship between the hedging instrument and the hedged item must be documented to include the risk management objective and strategy, and, at inception and on an ongoing basis, the effectiveness of the hedge in offsetting the changes in the cash flows of the item being hedged. Gains or losses accumulated in other comprehensive income are reclassified as earnings in the periods in which earnings are affected by the variability of the cash flows of the hedged item. The ineffective portions of hedges will be recognized in current period earnings unless management determines that it is probable that the costs will be recovered through the ratemaking process. If management determines that it is probable that the costs will be recovered from customers, then they will be recognized as a regulatory asset or liability and amortized to earnings over the life of the related debt. For those contracts in which Cleco is hedging the variability of cash flows related to forecasted transactions that do not qualify as cash flow hedges, the changes in the fair value of such derivative instruments will be recognized in current period earnings unless management determines that it is probable that the costs will be recovered from customers through the ratemaking process. If management determines that it is probable that the costs will be recovered from customers, then they will be recognized as a regulatory asset or liability and amortized to earnings over the life of the related debt. For more information on the interest rate risk contracts, see Note 4 — “Fair Value Accounting — Interest Rate Derivatives.”

Earnings per Average Common Share

The following tables show the calculation of basic and diluted earnings per share:

						FOR THE THREE MONTHS ENDED SEPT. 30,
				2013					2012
(THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)	INCOME		SHARES	PER SHARE AMOUNT		INCOME		SHARES	PER SHARE AMOUNT
Basic net income applicable to common stock	$	66,407	60,450,384	$	1.10	$	63,818	60,346,476	$	1.06
Effect of dilutive securities
Add:  stock option grants			—					1,536
Add:  restricted stock (LTICP)			298,263					251,191
Diluted net income applicable to common stock	$	66,407	60,748,647	$	1.09	$	63,818	60,599,203	$	1.05

						FOR THE NINE MONTHS ENDED SEPT. 30,
				2013					2012
(THOUSANDS, EXCEPT SHARES AND PER SHARE AMOUNTS)	INCOME		SHARES	PER SHARE AMOUNT		INCOME		SHARES	PER SHARE AMOUNT
Basic net income applicable to common stock	$	135,572	60,428,944	$	2.25	$	140,536	60,375,538	$	2.33
Effect of dilutive securities
Add:  stock option grants			—					4,518
Add:  restricted stock (LTICP)			265,688					246,415
Diluted net income applicable to common stock	$	135,572	60,694,632	$	2.23	$	140,536	60,626,471	$	2.32

Stock option grants are excluded from the computation of diluted earnings per share if the exercise price is higher than the average market price. There were no stock option grants excluded from the computation of diluted earnings per share for the three and nine months ended September 30, 2012. All stock options were exercised during 2012 and no additional options were granted during the nine months ended September 30, 2013.

Stock-Based Compensation

At September 30, 2013, Cleco had two stock-based compensation plans, the ESPP and the LTICP. Substantially all employees, excluding officers and general managers, may choose to participate in the ESPP and purchase a limited amount of common stock at a discount through a stock option agreement. Options or restricted shares of stock, known as non-vested stock as defined by the authoritative guidance on stock-based compensation, common stock equivalents, and stock appreciation rights may be granted to certain officers, key employees, or directors of Cleco Corporation and its subsidiaries pursuant to the LTICP.

During the nine months ended September 30, 2013, Cleco granted 139,048 shares of non-vested stock to certain officers, key employees, and directors of Cleco Corporation and its subsidiaries pursuant to the LTICP.

Cleco and Cleco Power reported pre-tax compensation expense for their share-based compensation plans as shown in the following table:

	CLECO CORPORATION				CLECO POWER				CLECO CORPORATION				CLECO POWER
	FOR THE THREE MONTHS ENDED SEPT. 30,								FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012		2013		2012		2013		2012
Equity classification
Non-vested stock	$	1,585	$	1,139	$	492	$	301	$	4,487	$	3,271	$	1,204	$	792
Stock options	—		2		—		—		—		11		—		—
Total equity classification	$	1,585	$	1,141	$	492	$	301	$	4,487	$	3,282	$	1,204	$	792
Liability classification
Common stock equivalent units	$	—	$	847	$	—	$	338	$	1	$	1,552	$	1	$	631
Total pre-tax compensation expense	$	1,585	$	1,988	$	492	$	639	$	4,488	$	4,834	$	1,205	$	1,423
Tax benefit	$	610	$	765	$	189	$	246	$	1,727	$	1,860	$	463	$	548

XML

Consolidated Statement of Changes in Common Shareholders' Equity (Parenthetical) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Statement of Stockholders' Equity [Abstract]
Dividends on common stock (in dollars per share)	$ 0.3625	$ 0.3375	$ 1.0625	$ 0.9625

XML

Regulatory Assets and Liabilities, Summary of Regulatory Assets and Liabilities (Details) (Cleco Power [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Total regulatory assets, net	$ 529,030	$ 510,688
Construction carrying costs - liability [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory liabilities	0	(8,255)
Deferred Income Tax Charges [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	217,550	210,445
Total regulatory assets - other [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	304,629	300,665
Mining costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	14,657	16,569
Interest costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	6,033	6,304
Asset removal costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	919	867
Postretirement plan costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	146,597	156,458
Tree trimming costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	4,945	5,656
Training costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	7,214	7,330
Storm surcredits, net [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	16,738	6,211
Construction carrying costs - asset [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	0	4,697
Lignite mining agreement contingency [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	3,781	3,781
Power purchase agreement capacity costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	13,316	6,217
AMI Deferred Revenue Requirement [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	3,960	1,483
AFUDC equity gross-up [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	73,518	74,158
Rate case costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	179	581
Acadia Unit 1 acquisition costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	2,786	2,865
IRP/RFP costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	0	39
AMI pilot costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	0	22
Financing costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	9,864	7,282
Biomass costs [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	122	145
Fuel and purchased power [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Regulatory assets	$ 6,851	$ 7,833

XML

Fair Value Accounting (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value [Line Items]

Fair Value By Balance Sheet Grouping

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, 2013				AT DEC. 31, 2012
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market:
Cash and cash equivalents	$	46,800	$	46,800	$	31,020	$	31,020
Restricted cash and cash equivalents	$	8,471	$	8,471	$	14,221	$	14,221
Long-term debt, excluding debt issuance costs	$	1,306,230	$	1,419,560	$	1,345,198	$	1,579,674

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, 2013		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2012		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	$	47,901	$	—	$	47,901	$	—	$	39,489	$	—	$	39,489	$	—
Municipal bonds	9,631		—		9,631		—		10,203		—		10,203		—
Corporate bonds	513		—		513		—		—		—		—		—
Total assets	$	58,045	$	—	$	58,045	$	—	$	49,692	$	—	$	49,692	$	—
Liability Description
Interest rate derivatives	$	—	$	—	$	—	$	—	$	2,627	$	—	$	2,627	$	—
Long-term debt	1,419,560		—		1,419,560		—		1,579,674		—		1,579,674		—
Total liabilities	$	1,419,560	$	—	$	1,419,560	$	—	$	1,582,301	$	—	$	1,582,301	$	—

Effect of Derivatives On Consolidated Statements of Income

The following table presents 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, 2013 and 2012.

	FOR THE THREE MONTHS ENDED SEPT. 30,
	2013					2012
(THOUSANDS)	AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate   derivatives (1)	$	—	$	(86	)*	$	802	$	17	*

* The (loss) gain reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.

⁽¹⁾ During the three months ended September 30, 2013 and 2012, Cleco had no ineffectiveness and losses related to the interest rate derivatives recorded as a regulatory asset.

	FOR THE NINE MONTHS ENDED SEPT. 30,
	2013					2012
(THOUSANDS)	AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate   derivatives (1)	$	1,762	$	(165	)*	$	(733	)	$	(39	)*

* The loss reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.

⁽¹⁾ During the nine months ended September 30, 2013 and 2012, Cleco recorded ineffectiveness and losses related to the interest rate derivatives as a regulatory asset of $3.3 million and $2.6 million, respectively.

Cleco Power [Member]

Fair Value [Line Items]

Fair Value By Balance Sheet Grouping

Cleco Power
	AT SEPT. 30, 2013				AT DEC. 31, 2012
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market:
Cash and cash equivalents	$	42,560	$	42,560	$	23,368	$	23,368
Restricted cash and cash equivalents	$	8,374	$	8,374	$	14,124	$	14,124
Long-term debt, excluding debt issuance costs	$	1,306,230	$	1,419,560	$	1,320,198	$	1,554,674

Schedule of Available-for-sale Securities Reconciliation

The following table provides a reconciliation of Cleco Power’s available-for-sale debt securities from amortized cost to fair value at September 30, 2013 and December 31, 2012:

	AT SEPT. 30, 2013									AT DEC. 31, 2012
(THOUSANDS)	AMORTIZED COST		TOTAL UNREALIZED GAINS (1)			TOTAL UNREALIZED LOSSES (1)		FAIR VALUE		AMORTIZED COST		TOTAL UNREALIZED GAINS (1)		TOTAL UNREALIZED LOSSES (1)		FAIR VALUE
Municipal bonds	$	9,641	$	5		$	15	$	9,631	$	10,228	$	3	$	28	$	10,203
Corporate bonds	515		—			2		513		—		—		—		—
Commercial paper	2,131		—		—	—		2,131		649		—		—		649
Total available-for-sale debt securities	$	12,287	$	5		$	17	$	12,275	$	10,877	$	3	$	28	$	10,852
(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 debt securities that were in an unrealized loss position at September 30, 2013, 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	$	7	$	2,698	$	8	$	2,518
Corporate bonds	2		513		—		—
Total	$	9	$	3,211	$	8	$	2,518

Investments Classified by Contractual Maturity Date [Table Text Block]

At September 30, 2013, the fair value of Cleco Power’s available-for-sale debt securities by contractual maturity was:

(THOUSANDS)	AT SEPT. 30, 2013
One year or less	$	5,740
Over one year through five years	6,535
Total fair value	$	12,275

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, 2013		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2012		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	$	44,005	$	—	$	44,005	$	—	$	33,292	$	—	$	33,292	$	—
Municipal bonds	9,631		—		9,631		—		10,203		—		10,203		—
Corporate bonds	513		—		513		—		—		—		—		—
Total assets	$	54,149	$	—	$	54,149	$	—	$	43,495	$	—	$	43,495	$	—
Liability Description
Interest rate derivatives	$	—	$	—	$	—	$	—	$	2,627	$	—	$	2,627	$	—
Long-term debt	1,419,560		—		1,419,560		—		1,554,674		—		1,554,674		—
Total liabilities	$	1,419,560	$	—	$	1,419,560	$	—	$	1,557,301	$	—	$	1,557,301	$	—

XML

Variable Interest Entities (Tables)

9 Months Ended

Sep. 30, 2013

Variable Interest Entities [Abstract]

Components of Equity Investments

The following table presents the components of Cleco Power’s equity investment in Oxbow.

INCEPTION TO DATE (THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Purchase price	$	12,873	$	12,873
Cash contributions	1,659		1,659
Total equity investment in investee	$	14,532	$	14,532

Comparison of Investee's Assets and Liabilities with Maximum Exposure to Loss

The following table compares the carrying amount of Oxbow’s assets and liabilities with Cleco’s maximum exposure to loss related to its investment in Oxbow.

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Oxbow’s net assets/liabilities	$	29,065	$	29,065
Cleco Power’s 50% equity	$	14,532	$	14,532
Cleco’s maximum exposure to loss	$	14,532	$	14,532

Equity Method Investments - Summarized Financial Information

The following tables contain summarized financial information for Oxbow.

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Current assets	$	2,182	$	1,814
Property, plant, and equipment, net	22,698		23,029
Other assets	4,254		4,248
Total assets	$	29,134	$	29,091
Current liabilities	$	69	$	26
Partners’ capital	29,065		29,065
Total liabilities and partners’ capital	$	29,134	$	29,091

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
Operating revenue	$	856	$	450	$	1,795	$	1,125
Operating expenses	856		450		1,795		1,125
Income before taxes	$	—	$	—	$	—	$	—

XML

Summary of Significant Accounting Policies, Restricted Cash and Cash Equivalents (Details) (USD $)	1 Months Ended		9 Months Ended
	Sep. 30, 2013	Mar. 31, 2013	Sep. 30, 2013	Dec. 31, 2012
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents	$ 8,471,000		$ 8,471,000	$ 14,221,000
Diversified Lands Mitigation Escrow Agreement [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents	97,000		97,000	97,000
Katrina/Rita Bond Payments [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents	3,359,000		3,359,000	8,781,000
Restricted Cash and Cash Equivalents, Cleco Katrina/Rita Storm Recover Bond Variance [Abstract]
Restricted cash collected by Cleco Katrina/Rita, net of administration fees			14,900,000
Restricted cash used by Cleco Katrina/Rita for bond principal payments	(6,800,000)	(7,100,000)
Restricted cash used by Cleco Katrina/Rita for bond interest payments	(3,100,000)	(3,300,000)
Future Storm Restoration Costs [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents	4,944,000		4,944,000	5,343,000
Building Renovations Escrow [Member]
Restricted Cash and Cash Equivalents Items [Line Items]
Restricted cash and cash equivalents	$ 71,000		$ 71,000	$ 0

XML

Income Taxes, Valuation Allowance (Details) (New Markets Tax Credit Carryforward [Member], USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Dec. 31, 2012
New Markets Tax Credit Carryforward [Member]
Tax Credit Carryforward [Line Items]
Tax Credit Carryforward, Valuation Allowance	$ 0
Tax credit carryforwards	$ 91.2	$ 78.8
Expiration date	Jan. 01, 2029

XML

Debt, Credit Facilities (Details) (Line of Credit [Member], USD $) In Millions, unless otherwise specified	Sep. 30, 2013
Line of Credit Facility [Line Items]
Line of credit facility, amount outstanding	$ 0
Line of Credit Facility, Current Borrowing Capacity	250.0
Cleco Power [Member]
Line of Credit Facility [Line Items]
Line of credit facility, amount outstanding	0
Line of Credit Facility, Current Borrowing Capacity	$ 300.0

XML

Fair Value Accounting, Fair Value Measurements and Disclosures(Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Cash and Cash Equivalents [Member]
Asset Description
Institutional money market funds	$ 37,300
Restricted Cash and Cash Equivalents, Current [Member]
Asset Description
Institutional money market funds	3,400
Restricted Cash and Cash Equivalents, Noncurrent [Member]
Asset Description
Institutional money market funds	5,100
Restricted Investment, Noncurrent [Member]
Asset Description
Institutional money market funds	2,100
Municipal Bonds [Member] | Restricted Investment, Noncurrent [Member]
Asset Description
Available-for-sale Securities, Debt Securities	9,600
Corporate Bond Securities [Member] | Restricted Investment, Noncurrent [Member]
Asset Description
Available-for-sale Securities, Debt Securities	500
Measured On A Recurring Basis [Member] | Estimated Fair Value [Member]
Asset Description
Institutional money market funds	47,901	39,489
Total Assets	58,045	49,692
Liability Description
Interest rate derivatives	0	2,627
Long-term debt	1,419,560	1,579,674
Total Liabilities	1,419,560	1,582,301
Measured On A Recurring Basis [Member] | Estimated Fair Value [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	9,631	10,203
Measured On A Recurring Basis [Member] | Estimated Fair Value [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	513	0
Measured On A Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Asset Description
Institutional money market funds	0	0
Total Assets	0	0
Liability Description
Interest rate derivatives	0	0
Long-term debt	0	0
Total Liabilities	0	0
Measured On A Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	0	0
Measured On A Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	0	0
Measured On A Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member]
Asset Description
Institutional money market funds	47,901	39,489
Total Assets	58,045	49,692
Liability Description
Interest rate derivatives	0	2,627
Long-term debt	1,419,560	1,579,674
Total Liabilities	1,419,560	1,582,301
Measured On A Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	9,631	10,203
Measured On A Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	513	0
Measured On A Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member]
Asset Description
Institutional money market funds	0	0
Total Assets	0	0
Liability Description
Interest rate derivatives	0	0
Long-term debt	0	0
Total Liabilities	0	0
Measured On A Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	0	0
Measured On A Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	0	0
Cleco Power [Member] | Cash and Cash Equivalents [Member]
Asset Description
Institutional money market funds	33,500
Cleco Power [Member] | Restricted Cash and Cash Equivalents, Current [Member]
Asset Description
Institutional money market funds	3,400
Cleco Power [Member] | Restricted Cash and Cash Equivalents, Noncurrent [Member]
Asset Description
Institutional money market funds	5,000
Cleco Power [Member] | Restricted Investment, Noncurrent [Member]
Asset Description
Institutional money market funds	2,100
Cleco Power [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	9,631	10,203
Cleco Power [Member] | Municipal Bonds [Member] | Restricted Investment, Noncurrent [Member]
Asset Description
Available-for-sale Securities, Debt Securities	9,600
Cleco Power [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	513	0
Cleco Power [Member] | Corporate Bond Securities [Member] | Restricted Investment, Noncurrent [Member]
Asset Description
Available-for-sale Securities, Debt Securities	500
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Estimated Fair Value [Member]
Asset Description
Institutional money market funds	44,005	33,292
Total Assets	54,149	43,495
Liability Description
Interest rate derivatives	0	2,627
Long-term debt	1,419,560	1,554,674
Total Liabilities	1,419,560	1,557,301
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Estimated Fair Value [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	9,631	10,203
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Estimated Fair Value [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	513	0
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member]
Asset Description
Institutional money market funds	0	0
Total Assets	0	0
Liability Description
Interest rate derivatives	0	0
Long-term debt	0	0
Total Liabilities	0	0
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	0	0
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Quoted Prices in Active Markets for Identical Assets (Level 1) [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	0	0
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member]
Asset Description
Institutional money market funds	44,005	33,292
Total Assets	54,149	43,495
Liability Description
Interest rate derivatives	0	2,627
Long-term debt	1,419,560	1,554,674
Total Liabilities	1,419,560	1,557,301
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	9,631	10,203
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Significant Other Observable Inputs (Level 2) [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	513	0
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member]
Asset Description
Institutional money market funds	0	0
Total Assets	0	0
Liability Description
Interest rate derivatives	0	0
Long-term debt	0	0
Total Liabilities	0	0
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Municipal Bonds [Member]
Asset Description
Available-for-sale Securities, Debt Securities	0	0
Cleco Power [Member] | Measured On A Recurring Basis [Member] | Significant Unobservable Inputs (Level 3) [Member] | Corporate Bond Securities [Member]
Asset Description
Available-for-sale Securities, Debt Securities	$ 0	$ 0

XML

Consolidated Statements of Comprehensive Income (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Net income	$ 66,407	$ 63,818	$ 135,572	$ 140,536
Other comprehensive income, net of tax:
Amortization of postretirement benefits (net of tax)	497	332	1,619	1,221
Net gain on cash flow hedges (net of tax)	53	483	1,426	1,143
Total other comprehensive income, net of tax	550	815	3,045	2,364
Comprehensive income, net of tax	66,957	64,633	138,617	142,900
Cleco Power [Member]
Net income	61,885	57,783	124,142	121,873
Other comprehensive income, net of tax:
Amortization of postretirement benefits (net of tax)	207	124	727	555
Net gain on cash flow hedges (net of tax)	53	483	1,426	1,143
Total other comprehensive income, net of tax	260	607	2,153	1,698
Comprehensive income, net of tax	$ 62,145	$ 58,390	$ 126,295	$ 123,571

XML

Fair Value Accounting

9 Months Ended

Sep. 30, 2013

Fair Value Disclosures [Abstract]

Fair Value Accounting

Note 4 — Fair Value Accounting

The amounts reflected in Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012, for cash and cash equivalents, restricted cash and cash equivalents, accounts receivable, other accounts receivable, accounts payable, and short-term debt approximate fair value because of their short-term nature.  Estimates of the fair value of Cleco and Cleco Power’s long-term debt are based upon the quoted market price for the same or similar issues or by a discounted present value analysis of future cash flows using current rates obtained by Cleco and Cleco Power for debt with similar maturities.

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, 2013				AT DEC. 31, 2012
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market:
Cash and cash equivalents	$	46,800	$	46,800	$	31,020	$	31,020
Restricted cash and cash equivalents	$	8,471	$	8,471	$	14,221	$	14,221
Long-term debt, excluding debt issuance costs	$	1,306,230	$	1,419,560	$	1,345,198	$	1,579,674

Cleco Power
	AT SEPT. 30, 2013				AT DEC. 31, 2012
(THOUSANDS)	CARRYING VALUE		ESTIMATED FAIR VALUE		CARRYING VALUE		ESTIMATED FAIR VALUE
Financial instruments not marked-to-market:
Cash and cash equivalents	$	42,560	$	42,560	$	23,368	$	23,368
Restricted cash and cash equivalents	$	8,374	$	8,374	$	14,124	$	14,124
Long-term debt, excluding debt issuance costs	$	1,306,230	$	1,419,560	$	1,320,198	$	1,554,674

At September 30, 2013, Cleco and Cleco Power were exposed to concentrations of credit risk through their short-term investments classified as cash equivalents and restricted cash equivalents. Cleco had $45.6 million ($37.3 million of cash equivalents and $8.3 million of restricted cash equivalents) in short-term investments in institutional money market funds. Cleco Power had $41.8 million ($33.5 million of cash equivalents and $8.3 million of restricted cash equivalents) in short-term investments in institutional money market funds. If the money market funds fail to perform under the terms of the investments, Cleco and Cleco Power will be exposed to a loss of the invested amounts. Collateral on these types of investments is not required by either Cleco or Cleco Power.

Fair Value Measurements and Disclosures

The authoritative guidance on fair value measurements requires entities to classify assets and liabilities that are either measured or disclosed at their fair value according to three different levels depending on the inputs used in determining fair value.

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, 2013		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2012		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	$	47,901	$	—	$	47,901	$	—	$	39,489	$	—	$	39,489	$	—
Municipal bonds	9,631		—		9,631		—		10,203		—		10,203		—
Corporate bonds	513		—		513		—		—		—		—		—
Total assets	$	58,045	$	—	$	58,045	$	—	$	49,692	$	—	$	49,692	$	—
Liability Description
Interest rate derivatives	$	—	$	—	$	—	$	—	$	2,627	$	—	$	2,627	$	—
Long-term debt	1,419,560		—		1,419,560		—		1,579,674		—		1,579,674		—
Total liabilities	$	1,419,560	$	—	$	1,419,560	$	—	$	1,582,301	$	—	$	1,582,301	$	—

Cleco Power
	CLECO POWER FAIR VALUE MEASUREMENTS AT REPORTING DATE USING:
(THOUSANDS)	AT SEPT. 30, 2013		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2012		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	$	44,005	$	—	$	44,005	$	—	$	33,292	$	—	$	33,292	$	—
Municipal bonds	9,631		—		9,631		—		10,203		—		10,203		—
Corporate bonds	513		—		513		—		—		—		—		—
Total assets	$	54,149	$	—	$	54,149	$	—	$	43,495	$	—	$	43,495	$	—
Liability Description
Interest rate derivatives	$	—	$	—	$	—	$	—	$	2,627	$	—	$	2,627	$	—
Long-term debt	1,419,560		—		1,419,560		—		1,554,674		—		1,554,674		—
Total liabilities	$	1,419,560	$	—	$	1,419,560	$	—	$	1,557,301	$	—	$	1,557,301	$	—

Cleco utilizes different valuation techniques for fair value calculations. In order to measure the fair value for Level 1 assets and liabilities, Cleco obtains the closing price from published indices in active markets for the various instruments and multiplies this price by the appropriate number of instruments held. Cleco had no Level 1 assets or liabilities at September 30, 2013 or December 31, 2012. Level 2 fair values for assets and liabilities are determined by obtaining the closing price from published indices in active markets for instruments that are similar to Cleco’s assets and liabilities. The fair value obtained is then discounted to the current period using a U.S. Treasury published interest rate as a proxy for a risk-free rate of return. For some options, Cleco uses the Black-Scholes model using observable and available inputs to calculate the fair value, consistent with the income approach. These techniques have been applied consistently for each fiscal period. Level 3 fair values allow for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Cleco had no Level 3 assets or liabilities at September 30, 2013 or December 31, 2012.

The assets and liabilities reported at fair value are grouped into classes based on the underlying nature and risks associated with the individual asset or liability.

The institutional money market funds were reported on the Cleco Condensed Consolidated Balance Sheet in cash and cash equivalents, current restricted cash and cash equivalents, non-current restricted cash and cash equivalents, and restricted investments of $37.3 million, $3.4 million, $5.1 million, and $2.1 million, respectively, at September 30, 2013. At Cleco Power, the institutional money market funds were reported on the Condensed Consolidated Balance Sheet in cash and cash equivalents, current restricted cash and cash equivalents, non-current restricted cash and cash equivalents, and restricted investments and were $33.5 million, $3.4 million, $5.0 million, and $2.1 million, respectively, at September 30, 2013. The Level 2 institutional money market funds asset consists of a single class. In order to capture interest income and minimize risk, cash is invested in money market funds that invest primarily in short-term securities issued by the U.S. Treasury in order to maintain liquidity and achieve the goal of a net asset value of a dollar. The risks associated with this class are counterparty risk of the fund manager and risk of price volatility associated with the underlying securities of the fund.

The municipal and corporate bonds were reported on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets in restricted investments in the amount of $9.6 million and $0.5 million at September 30, 2013, respectively. The Level 2 municipal bonds and the Level 2 corporate bonds consisted of a single class. In order to maximize income, meet the requirements established by the LPSC, and maintain safety and liquidity for the restricted reserve fund, restricted cash and cash equivalents were invested in short-term, fixed-income debt instruments. The risks associated with this class are counterparty risk of the fund manager and risk of price volatility associated with the municipal bonds and corporate bonds. Quarterly, Cleco receives reports from the custody agent for the investment manager which provides the fair value measurement. Cleco performs an evaluation of those reports to verify the fair value of the securities.

The Level 2 interest rate derivative was one forward starting interest rate swap liability that consisted of a single class that contained only one instrument. The risks were changes in the three-month LIBOR rate and counterparty risk. This instrument was with a direct counterparty and not traded through an exchange.

The Level 2 long-term debt liability consists of a single class. In order to fund capital requirements, Cleco issues long-term, fixed and variable rate debt with various tenors. The fair value of this class fluctuates as the market interest rates for fixed and variable rate debt with similar tenors and credit ratings change. The fair value of the debt could also change from period to period due to changes in the credit rating of the Cleco entity that issued the debt.

During the nine months ended September 30, 2013, and the year ended December 31, 2012, Cleco did not experience any transfers between levels.

Restricted Investments

In September 2007, the LPSC authorized the funding and securitization of a $50.0 million reserve for Cleco Power’s future storm costs. On July 1, 2012, Cleco Power transferred $13.0 million of the related restricted cash and cash equivalents to an outside investment manager. Investments made by the investment manager are restricted to the criteria established by management in Cleco Power’s guidelines for short-term investments. At September 30, 2013, the investments included cash and cash equivalents and debt securities.

The cash and cash equivalents are reflected in Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2013, as restricted cash and cash equivalents and approximate fair value because of their short-term nature. 

The debt securities are recorded at fair value on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2013, as restricted investments. The investments in debt securities include municipal bonds, corporate bonds, and commercial paper with original maturity dates of more than three months and are classified as available-for-sale securities and reported at fair value. Because Cleco Power’s investment strategy for these investments is within the requirements established by the LPSC for the restricted reserve fund, realized and unrealized gains and losses, interest income, investment management fees, and custody fees are recorded directly to Cleco Power’s restricted storm reserve rather than in earnings or other comprehensive income. As a result, no amounts will be recorded to other comprehensive income for these investments.

Quarterly, Cleco Power’s available-for-sale debt securities are evaluated on an individual basis to determine if a decline in fair value below the carrying value is other-than-temporary.

Management determines whether it intends to sell or if it is more likely than not that it will be required to sell impaired securities. This determination considers current and forecasted liquidity and regulatory requirements. For Cleco Power’s impaired debt securities for which there was no intent or expected requirement to sell, the evaluation assesses whether it is likely the amortized cost will be recovered considering the nature of the securities, credit rating, financial condition of the issuer, or the extent and duration of the unrealized loss and market conditions. If Cleco Power determines that an other-than-temporary decline in value exists on its debt securities, the investments would be written down to fair value with a new basis established. Declines in fair value below cost basis that are determined to be other-than-temporary would be recorded to Cleco Power’s restricted storm reserve. The unrealized losses on Cleco Power’s debt securities as of September 30, 2013, were caused by interest rate movements. Cleco Power does not intend to sell the debt securities and has determined it is more likely than not that it will not be required to sell the investments before recovery of the amortized cost value. Cleco Power determined there were no other-than-temporary impairments on its debt securities at September 30, 2013.

The following table provides a reconciliation of Cleco Power’s available-for-sale debt securities from amortized cost to fair value at September 30, 2013 and December 31, 2012:

	AT SEPT. 30, 2013									AT DEC. 31, 2012
(THOUSANDS)	AMORTIZED COST		TOTAL UNREALIZED GAINS (1)			TOTAL UNREALIZED LOSSES (1)		FAIR VALUE		AMORTIZED COST		TOTAL UNREALIZED GAINS (1)		TOTAL UNREALIZED LOSSES (1)		FAIR VALUE
Municipal bonds	$	9,641	$	5		$	15	$	9,631	$	10,228	$	3	$	28	$	10,203
Corporate bonds	515		—			2		513		—		—		—		—
Commercial paper	2,131		—		—	—		2,131		649		—		—		649
Total available-for-sale debt securities	$	12,287	$	5		$	17	$	12,275	$	10,877	$	3	$	28	$	10,852
(1)  Unrealized gains and losses are recorded to the restricted storm reserve.

Cleco Power recognized less than $0.1 million unrealized mark-to-market gains in the restricted storm reserve for both the three and nine months ended September 30, 2013. Cleco Power recognized less than $0.1 million unrealized mark-to-market losses in the restricted storm reserve for both the three and nine months ended September 30, 2012.

The following table summarizes the debt securities that were in an unrealized loss position at September 30, 2013, 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	$	7	$	2,698	$	8	$	2,518
Corporate bonds	2		513		—		—
Total	$	9	$	3,211	$	8	$	2,518

At September 30, 2013, the fair value of Cleco Power’s available-for-sale debt securities by contractual maturity was:

(THOUSANDS)	AT SEPT. 30, 2013
One year or less	$	5,740
Over one year through five years	6,535
Total fair value	$	12,275

There were no realized gains or losses on Cleco Power’s available-for-sale debt securities during the three and nine months ended September 30, 2013 and 2012. Realized gains and losses will be determined on a specific identification basis.

Derivatives and Hedging

The authoritative guidance on derivatives and hedging requires entities to provide transparent disclosures about a company’s derivative activities and how the related hedged items affect a company’s financial position, financial performance, and cash flows. Cleco is required to provide qualitative and quantitative disclosures about derivative fair value, gains and losses, and credit-risk-related contingent features in derivative agreements.

For the three and nine months ended September 30, 2013, there was no effect on Cleco and Cleco Power’s Condensed Consolidated Statements of Income for derivatives not designated as hedging instruments. For the three and nine months ended September 30, 2012, Cleco and Cleco Power recognized losses in Fuel used for electric generation on the Condensed Consolidated Statements of Income of $0.6 million and $8.2 million, respectively, for derivatives not designated as hedging instruments. In accordance with the authoritative guidance for regulated operations, there were no unrealized gains or losses and no deferred losses associated with fuel cost hedges reported in Accumulated deferred fuel on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets as of September 30, 2013 and December 31, 2012. As gains and losses are realized in future periods, they will be reported as Fuel used for electric generation on Cleco and Cleco Power’s Condensed Consolidated Statements of Income.

At December 31, 2012, Cleco and Cleco Power’s Condensed Consolidated Balance Sheets had no derivative instruments not designated as hedging instruments.

At September 30, 2013 and December 31, 2012, Cleco Power had no open positions hedged for natural gas.

In November 2011, Cleco Power entered into a pay fixed/receive variable forward starting interest rate swap contract in order to mitigate the interest rate exposure on coupon payments related to the remaining $50.0 million fixed-rate forecasted debt issuance. The forward starting interest rate swap had a spot 30-year all-in swap rate of 3.05%, notional amount of $50.0 million, with the pricing date of May 14, 2013, or the issuance of the notes, whichever was earlier. The forward starting interest rate swap met the criteria of a cash flow hedge under the authoritative guidance as it related to derivatives and hedging and was carried on the balance sheet at its fair value. Because of the inputs and common techniques used to calculate fair value, the swap valuation was considered Level 2.

During the first quarter of 2013, Cleco determined that the forward starting interest rate swap ceased to be highly effective in offsetting changes in the cash flows of the forecasted coupon payments and discontinued hedge accounting prospectively. In May 2013, upon pricing of the 2008 Series B GO Zone bonds, Cleco Power settled the forward starting interest rate swap at a loss of $3.3 million. Of this amount, Cleco Power deferred $2.9 million as a regulatory asset and recognized $0.4 million in other comprehensive income. In May 2013, Cleco Power began amortizing these losses over the 25-year term of the related debt. For more information about the 2008 Series B GO Zone bonds, see Note 5 — “Debt.”

The following table presents 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, 2013 and 2012.

	FOR THE THREE MONTHS ENDED SEPT. 30,
	2013					2012
(THOUSANDS)	AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF GAIN RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate   derivatives (1)	$	—	$	(86	)*	$	802	$	17	*

* The (loss) gain reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.

⁽¹⁾ During the three months ended September 30, 2013 and 2012, Cleco had no ineffectiveness and losses related to the interest rate derivatives recorded as a regulatory asset.

	FOR THE NINE MONTHS ENDED SEPT. 30,
	2013					2012
(THOUSANDS)	AMOUNT OF GAIN RECOGNIZED IN OCI		AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)			AMOUNT OF LOSS RECOGNIZED IN OCI			AMOUNT OF LOSS RECLASSIFIED FROM ACCUMULATED OCI INTO INCOME (EFFECTIVE PORTION)
Interest rate   derivatives (1)	$	1,762	$	(165	)*	$	(733	)	$	(39	)*

* The loss reclassified from accumulated OCI into income (effective portion) is reflected in interest charges.

⁽¹⁾ During the nine months ended September 30, 2013 and 2012, Cleco recorded ineffectiveness and losses related to the interest rate derivatives as a regulatory asset of $3.3 million and $2.6 million, respectively.

At September 30, 2013, Cleco Power expected $0.3 million of the effective portion of deferred net losses related to interest rate derivatives to be reclassed from accumulated OCI to interest charges over the next 12 months.

XML

Consolidated Balance Sheets (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets
Cash and cash equivalents	$ 46,800	$ 31,020
Restricted cash and cash equivalents	3,359	8,781
Customer accounts receivable (less allowance for doubtful accounts)	56,434	39,293
Other accounts receivable	42,671	37,741
Taxes receivable, net	0	34,612
Unbilled revenue	33,629	28,662
Fuel inventory, at average cost	48,909	46,867
Material and supplies inventory, at average cost	62,450	58,232
Accumulated deferred federal and state income taxes, net	1,132	79,353
Accumulated deferred fuel	6,851	7,833
Cash surrender value of company-/trust-owned life insurance policies	62,682	57,346
Prepayments	6,326	5,951
Regulatory assets- other	6,109	11,095
Other current assets	206	552
Total current assets	377,558	447,338
Property, plant, and equipment
Property, plant, and equipment	4,272,907	4,140,194
Accumulated depreciation	(1,371,857)	(1,311,273)
Net property, plant, and equipment	2,901,050	2,828,921
Construction work in progress	151,254	180,540
Total property, plant, and equipment, net	3,052,304	3,009,461
Equity investment in investees	14,541	14,540
Prepayments	4,119	4,261
Restricted cash and cash equivalents	5,112	5,440
Restricted investments	12,275	10,852
Regulatory assets - deferred taxes, net	217,550	210,445
Regulatory assets - other	298,520	289,570
Net investment in direct financing lease	13,528	13,542
Intangible asset	109,552	120,545
Other deferred charges	22,458	21,355
Total assets	4,127,517	4,147,349
Current liabilities
Long-term debt due within one year	17,147	91,140
Accounts payable	86,768	102,695
Customer deposits	48,287	45,553
Provision for rate refund	2,967	4,165
Taxes payable	35,671	0
Interest accrued	24,750	12,957
Interest rate risk management liability	0	2,627
Regulatory liabilities - other	0	8,255
Deferred compensation	10,424	9,626
Uncertain tax positions	4,610	686
Other current liabilities	14,171	16,926
Total current liabilities	244,795	294,630
Deferred credits
Accumulated deferred federal and state income taxes, net	755,868	762,992
Accumulated deferred investment tax credits	5,421	6,252
Postretirement benefit obligations	156,950	186,746
Restricted storm reserve	17,309	16,285
Uncertain tax positions	0	2,184
Tax credit fund investment, net	48,806	78,840
Contingent sale obligations	900	8,150
Other deferred credits	28,564	34,799
Total deferred credits	1,013,818	1,096,248
Capitalization
Long-term debt, net	1,290,990	1,257,258
Total liabilities	2,549,603	2,648,136
Commitments and Contingencies
Shareholders' equity
Common stock	61,047	60,962
Premium on common stock	420,913	416,619
Retained earnings	1,145,962	1,075,074
Treasury stock, at cost	(20,683)	(21,072)
Accumulated other comprehensive loss	(29,325)	(32,370)
Total shareholders' equity	1,577,914	1,499,213
Total liabilities and shareholders' equity	4,127,517	4,147,349
Cleco Power [Member]
Current assets
Cash and cash equivalents	42,560	23,368
Restricted cash and cash equivalents	3,359	8,781
Customer accounts receivable (less allowance for doubtful accounts)	56,434	39,293
Accounts receivable - affiliate	1,260	2,991
Other accounts receivable	42,453	37,562
Unbilled revenue	33,629	28,662
Fuel inventory, at average cost	48,909	46,867
Material and supplies inventory, at average cost	59,597	55,472
Accumulated deferred federal and state income taxes, net	8,306	87,286
Accumulated deferred fuel	6,851	7,833
Cash surrender value of company-/trust-owned life insurance policies	19,234	20,842
Prepayments	4,528	4,415
Regulatory assets- other	6,109	11,095
Other current assets	0	371
Total current assets	333,229	374,838
Property, plant, and equipment
Property, plant, and equipment	4,001,194	3,871,940
Accumulated depreciation	(1,283,205)	(1,227,078)
Net property, plant, and equipment	2,717,989	2,644,862
Construction work in progress	147,369	176,584
Total property, plant, and equipment, net	2,865,358	2,821,446
Equity investment in investees	14,532	14,532
Prepayments	4,119	4,261
Restricted cash and cash equivalents	5,015	5,343
Restricted investments	12,275	10,852
Regulatory assets - deferred taxes, net	217,550	210,445
Regulatory assets - other	298,520	289,570
Intangible asset	109,552	120,545
Other deferred charges	21,241	19,897
Total assets	3,881,391	3,871,729
Current liabilities
Long-term debt due within one year	17,147	91,140
Accounts payable	77,529	89,782
Accounts payable - affiliate	10,240	10,097
Customer deposits	48,287	45,553
Provision for rate refund	2,967	4,165
Taxes payable	21,371	1,328
Interest accrued	26,074	13,893
Interest rate risk management liability	0	2,627
Regulatory liabilities - other	0	8,255
Other current liabilities	10,744	11,746
Total current liabilities	214,359	278,586
Deferred credits
Accumulated deferred federal and state income taxes, net	848,020	845,769
Accumulated deferred investment tax credits	5,421	6,252
Postretirement benefit obligations	106,636	137,637
Restricted storm reserve	17,309	16,285
Uncertain tax positions	0	222
Other deferred credits	27,442	34,801
Total deferred credits	1,004,828	1,040,966
Capitalization
Long-term debt, net	1,290,990	1,232,258
Member's equity	1,371,214	1,319,919
Total capitalization	2,662,204	2,552,177
Commitments and Contingencies
Shareholders' equity
Accumulated other comprehensive loss	(18,268)	(20,421)
Total shareholders' equity	1,371,214	1,319,919
Total liabilities and shareholders' equity	$ 3,881,391	$ 3,871,729

XML

Disclosures about Segments (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013 entity	Sep. 30, 2012	Sep. 30, 2013 entity	Sep. 30, 2012	Dec. 31, 2012
Segment Reporting Information [Line Items]
Number of transmission interconnection facility subsidiaries	2		2
Revenue
Electric operations	$ 314,766	$ 282,894	$ 796,957	$ 720,776
Tolling operations	0	0	0	0
Other operations	14,843	15,408	37,917	38,464
Electric customer credits	(846)	(930)	(1,270)	1,025
Affiliate revenue	0	0	0	0
Operating revenue, net	328,763	297,372	833,604	760,265
Depreciation	41,756	34,931	110,529	99,028
Interest Expense	19,014	21,966	61,358	63,205
Interest income	332	132	789	163
Equity income (loss) from investees, before tax			0	1
Federal and state income tax expense (benefit)	34,389	20,179	66,892	54,110
Net income	66,407	63,818	135,572	140,536
Additions to long-lived assets	39,280	66,375	129,024	168,018
Equity investment in investees	14,541		14,541		14,540
Total segment assets	4,127,517		4,127,517		4,147,349
Operating Segments [Member] | Midstream [Member]
Revenue
Electric operations	0	0	0	0
Tolling operations	12,339	13,890	26,483	21,434
Other operations	1	1	2	2
Electric customer credits	0	0	0	0
Affiliate revenue	0	0	0	0
Operating revenue, net	12,340	13,891	26,485	21,436
Depreciation	1,522	1,499	4,523	4,491
Interest Expense	312	(69)	(338)	244
Interest income	0	0	0	0
Equity income (loss) from investees, before tax				0
Federal and state income tax expense (benefit)	4,083	2,489	7,221	7,278
Net income	1,164	3,429	6,180	11,053
Additions to long-lived assets	337	799	2,664	6,811
Equity investment in investees	0		0		0
Total segment assets	219,028		219,028		215,342
Operating Segments [Member] | Corporate and Other [Member]
Revenue
Electric operations	0	0	0	0
Tolling operations	0	0	0	0
Other operations	541	502	1,550	1,496
Electric customer credits	0	0	0	0
Affiliate revenue	13,313	12,343	40,406	37,540
Operating revenue, net	13,854	12,845	41,956	39,036
Depreciation	272	233	755	689
Interest Expense	(110)	(124)	334	1,320
Interest income	(156)	(194)	(474)	(379)
Equity income (loss) from investees, before tax				1
Federal and state income tax expense (benefit)	(3,048)	(2,050)	(5,887)	(7,916)
Net income	3,358	2,606	5,251	7,610
Additions to long-lived assets	358	503	1,629	1,371
Equity investment in investees	8		8		8
Total segment assets	106,158		106,158		201,678
Operating Segments [Member] | Cleco Power, LLC and Subsidiary, Segment [Member]
Revenue
Electric operations	314,766	282,894	796,957	720,776
Tolling operations	0	0	0	0
Other operations	14,301	14,905	36,366	36,967
Electric customer credits	(846)	(930)	(1,270)	1,025
Affiliate revenue	335	343	1,005	1,030
Operating revenue, net	328,556	297,212	833,058	759,798
Depreciation	39,962	33,199	105,251	93,847
Interest Expense	18,656	21,962	60,882	61,253
Interest income	331	129	784	153
Equity income (loss) from investees, before tax				0
Federal and state income tax expense (benefit)	33,355	19,740	65,558	54,748
Net income	61,885	57,783	124,142	121,873
Additions to long-lived assets	38,585	65,073	124,731	159,836
Equity investment in investees	14,532		14,532		14,532
Total segment assets	3,881,391		3,881,391		3,871,729
Intersegment Elimination [Member]
Revenue
Electric operations	0	0	0	0
Tolling operations	(12,339)	(13,890)	(26,483)	(21,434)
Other operations	0	0	(1)	(1)
Electric customer credits	0	0	0	0
Affiliate revenue	(13,648)	(12,686)	(41,411)	(38,570)
Operating revenue, net	(25,987)	(26,576)	(67,895)	(60,005)
Depreciation	0	0	0	1
Interest Expense	156	197	480	388
Interest income	157	197	479	389
Equity income (loss) from investees, before tax				0
Federal and state income tax expense (benefit)	(1)	0	0	0
Net income	0	0	(1)	0
Additions to long-lived assets	0	0	0	0
Equity investment in investees	1		1		0
Total segment assets	$ (79,060)		$ (79,060)		$ (141,400)

XML

Consolidated Statements of Income (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Operating revenue
Electric operations	$ 314,766	$ 282,894	$ 796,957	$ 720,776
Other operations	14,843	15,408	37,917	38,464
Affiliate revenue	0	0	0	0
Gross operating revenue	329,609	298,302	834,874	759,240
Electric customer credits	(846)	(930)	(1,270)	1,025
Operating revenue, net	328,763	297,372	833,604	760,265
Operating expenses
Fuel used for electric generation	101,752	79,701	259,728	207,764
Power purchased for utility customers	5,999	19,364	24,795	44,069
Other operations	30,057	30,517	88,420	86,901
Maintenance	20,427	20,059	64,372	61,478
Depreciation	41,756	34,931	110,529	99,028
Taxes other than income taxes	12,007	9,455	34,926	29,198
Loss (gain) on sale of assets	(29)	(2)	817	(57)
Total operating expenses	211,969	194,025	583,587	528,381
Operating income	116,794	103,347	250,017	231,884
Interest income	332	132	789	163
Allowance for other funds used during construction	1,303	1,882	2,880	4,298
Equity income (loss) from investees, before tax			0	1
Other income	2,837	1,834	12,282	24,223
Other expense	(1,456)	(1,232)	(2,146)	(2,718)
Interest charges
Interest charges, including amortization of debt expense, premium, and discount, net	19,436	22,610	62,284	64,671
Allowance for borrowed funds used during construction	(422)	(644)	(926)	(1,466)
Total interest charges	19,014	21,966	61,358	63,205
Income before income taxes	100,796	83,997	202,464	194,646
Federal and state income tax expense	34,389	20,179	66,892	54,110
Net income applicable to common stock	66,407	63,818	135,572	140,536
Net income	66,407	63,818	135,572	140,536
Average shares of common stock outstanding
Average number of basic common shares outstanding (in shares)	60,450,384	60,346,476	60,428,944	60,375,538
Average number of diluted common shares outstanding (in shares)	60,748,647	60,599,203	60,694,632	60,626,471
Basic earnings per share
Net income applicable to common stock (in dollars per share)	$ 1.10	$ 1.06	$ 2.25	$ 2.33
Diluted earnings per share
Net income applicable to common stock (in dollars per share)	$ 1.09	$ 1.05	$ 2.23	$ 2.32
Cash dividends paid per share of common stock (in dollars per share)	$ 0.3625	$ 0.3375	$ 1.0625	$ 0.9625
Cleco Power [Member]
Operating revenue
Electric operations	314,766	282,894	796,957	720,776
Other operations	14,301	14,905	36,366	36,967
Affiliate revenue	335	343	1,005	1,030
Gross operating revenue	329,402	298,142	834,328	758,773
Electric customer credits	(846)	(930)	(1,270)	1,025
Operating revenue, net	328,556	297,212	833,058	759,798
Operating expenses
Fuel used for electric generation	101,752	79,701	259,728	207,459
Power purchased for utility customers	18,339	33,254	51,278	65,493
Other operations	28,471	29,063	83,385	82,647
Maintenance	17,478	16,095	55,857	51,739
Depreciation	39,962	33,199	105,251	93,847
Taxes other than income taxes	10,891	8,390	31,554	26,004
Loss (gain) on sale of assets			0	(1)
Total operating expenses	216,893	199,702	587,053	527,188
Operating income	111,663	97,510	246,005	232,610
Interest income	331	129	784	153
Allowance for other funds used during construction	1,303	1,882	2,880	4,298
Other income	2,838	1,188	4,606	3,511
Other expense	(2,239)	(1,224)	(3,693)	(2,698)
Interest charges
Interest charges, including amortization of debt expense, premium, and discount, net	19,078	22,606	61,808	62,719
Allowance for borrowed funds used during construction	(422)	(644)	(926)	(1,466)
Total interest charges	18,656	21,962	60,882	61,253
Income before income taxes	95,240	77,523	189,700	176,621
Federal and state income tax expense	33,355	19,740	65,558	54,748
Net income	$ 61,885	$ 57,783	$ 124,142	$ 121,873

XML

Pension Plan and Employee Benefits, Pension Plan and Other Benefits Plan (Details) (USD $)	3 Months Ended		9 Months Ended		12 Months Ended	3 Months Ended		9 Months Ended			1 Months Ended	3 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended
	Sep. 30, 2013 Pension Benefits [Member]	Sep. 30, 2012 Pension Benefits [Member]	Sep. 30, 2013 Pension Benefits [Member]	Sep. 30, 2012 Pension Benefits [Member]	Dec. 31, 2012 Pension Benefits [Member]	Sep. 30, 2013 Other Benefits [Member]	Sep. 30, 2012 Other Benefits [Member]	Sep. 30, 2013 Other Benefits [Member]	Sep. 30, 2012 Other Benefits [Member]	Dec. 31, 2012 Other Benefits [Member]	Jan. 31, 2013 Cleco Power [Member] Pension Benefits [Member]	Sep. 30, 2013 Cleco Power [Member] Other Benefits [Member]	Sep. 30, 2012 Cleco Power [Member] Other Benefits [Member]	Sep. 30, 2013 Cleco Power [Member] Other Benefits [Member]	Sep. 30, 2012 Cleco Power [Member] Other Benefits [Member]	Dec. 31, 2012 Cleco Power [Member] Other Benefits [Member]	Sep. 30, 2013 Other Subsidiaries [Member] Pension Benefits [Member]	Sep. 30, 2012 Other Subsidiaries [Member] Pension Benefits [Member]	Sep. 30, 2013 Other Subsidiaries [Member] Pension Benefits [Member]	Sep. 30, 2012 Other Subsidiaries [Member] Pension Benefits [Member]
Defined Benefit Plan Disclosure [Line Items]
Pension contributions designated for prior plan year											$ 34,000,000
Discretionary contributions to the pension plan					0
Current portion of other benefits liability						3,100,000		3,100,000		3,100,000		2,900,000		2,900,000		2,900,000
Components of periodic benefit costs
Service cost	2,472,000	2,078,000	7,417,000	6,234,000		614,000	303,000	1,242,000	1,096,000
Interest cost	4,485,000	4,563,000	13,455,000	13,690,000		214,000	334,000	1,176,000	1,287,000
Expected return on plan assets	(5,861,000)	(5,201,000)	(17,584,000)	(15,604,000)		0	0	0	0
Transition obligation	0	0	0	0		6,000	5,000	15,000	15,000
Prior period service cost (credit)	(18,000)	(18,000)	(53,000)	(53,000)		0	0	0	0
Net loss	3,304,000	2,087,000	9,913,000	6,259,000		213,000	112,000	849,000	512,000
Net periodic benefit cost	$ 4,382,000	$ 3,509,000	$ 13,148,000	$ 10,526,000		$ 1,047,000	$ 754,000	$ 3,282,000	$ 2,910,000			$ 900,000	$ 700,000	$ 2,800,000	$ 2,500,000		$ 600,000	$ 500,000	$ 1,900,000	$ 1,600,000

XML

Pension Plan and Employee Benefits (Tables)

9 Months Ended

Sep. 30, 2013

401(k) Plan [Abstract]

401(k) Plan expense

Cleco’s 401(k) Plan expense for the three and nine monthsended September 30, 2013 and 2012 is as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
401(k) Plan expense	$	936	$	963	$	3,361	$	3,303

Pension Benefits [Member]

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Net periodic benefit costs

The components of net periodic pension and other benefit cost for the three and nine months ended September 30, 2013 and 2012, are as follows:

	PENSION BENEFITS						OTHER BENEFITS
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012			2013		2012
Components of periodic benefit cost:
Service cost	$	2,472		$	2,078		$	614	$	303
Interest cost	4,485			4,563			214		334
Expected return on plan assets	(5,861		)	(5,201		)	—		—
Amortizations:
Transition obligation	—			—			6		5
Prior period service credit	(18		)	(18		)	—		—
Net loss	3,304			2,087			213		112
Net periodic benefit cost	$	4,382		$	3,509		$	1,047	$	754

	PENSION BENEFITS						OTHER BENEFITS
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012			2013		2012
Components of periodic benefit cost:
Service cost	$	7,417		$	6,234		$	1,242	$	1,096
Interest cost	13,455			13,690			1,176		1,287
Expected return on plan assets	(17,584		)	(15,604		)	—		—
Amortizations:
Transition obligation	—			—			15		15
Prior period service credit	(53		)	(53		)	—		—
Net loss	9,913			6,259			849		512
Net periodic benefit cost	$	13,148		$	10,526		$	3,282	$	2,910

SERP Benefits [Member]

Defined Benefit Plans and Other Postretirement Benefit Plans Table Text Block [Line Items]

Net periodic benefit costs

The components of net periodic SERP benefit cost for the three and nine months ended September 30, 2013 and 2012, are as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
Components of periodic benefit cost:
Service cost	$	514	$	372	$	1,541	$	1,115
Interest cost	645		632		1,934		1,895
Amortizations:
Prior period service cost	13		13		40		40
Net loss	576		441		1,728		1,324
Net periodic benefit cost	$	1,748	$	1,458	$	5,243	$	4,374

XML

Storm Restoration

9 Months Ended

Sep. 30, 2013

Storm Restoration [Abstract]

Storm Restoration

Note 13 — Storm Restoration

On August 28, 2012, Hurricane Isaac made landfall in south Louisiana as a Category 1 hurricane, causing power outages to approximately 95,000, or 34%, of Cleco Power’s electric customers and affecting Cleco Power’s entire service territory. By September 2, 2012, power was restored to 100% of customers who could receive power.

The cost of restoration for Hurricane Isaac was $24.3 million. The damage to equipment from the storm required replacement, as well as repair of existing assets. Therefore, the balance sheets of Cleco and Cleco Power reflect the capitalization of approximately 56.0% of the restoration costs recorded at September 30, 2013, or approximately $13.6 million. The remaining cost was offset against Cleco Power’s existing storm damage reserve.

XML

Fair Value Accounting, Concentration of Risk (Details) (Maximum Amount of Loss [Member], USD $) In Millions, unless otherwise specified	Sep. 30, 2013
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk through short-term investments	$ 45.6
Concentrations of credit risk through short-term investments in cash equivalents	37.3
Concentrations of credit risk through short-term investments in restricted cash equivalents	8.3
Cleco Power [Member]
Fair Value, Concentration of Risk, Financial Statement Captions [Line Items]
Concentrations of credit risk through short-term investments	41.8
Concentrations of credit risk through short-term investments in cash equivalents	33.5
Concentrations of credit risk through short-term investments in restricted cash equivalents	$ 8.3

XML

Income Taxes, Effective Tax Rate Reconciliation (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Effective Income Tax Rate [Line Items]
Effective income tax rates	34.10%	24.00%	33.00%	27.80%
Cleco Power [Member]
Effective Income Tax Rate [Line Items]
Effective income tax rates	35.00%	25.50%	34.60%	31.00%

XML

Affiliate Transactions (Details) (Cleco Power [Member], USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Related Party Transaction [Line Items]
Accounts payable - affiliate	$ 10,240	$ 10,097
Accounts receivable - affiliate	1,260	2,991
Cleco Corporation [Member]
Related Party Transaction [Line Items]
Accounts payable - affiliate	368	1,140
Accounts receivable - affiliate	5	139
Support Group [Member]
Related Party Transaction [Line Items]
Accounts payable - affiliate	6,415	7,528
Accounts receivable - affiliate	1,160	2,777
Midstream [Member]
Related Party Transaction [Line Items]
Accounts payable - affiliate	2	5
Accounts receivable - affiliate	63	27
Evangeline [Member]
Related Party Transaction [Line Items]
Accounts payable - affiliate	3,371	1,401
Accounts receivable - affiliate	21	6
Diversified Lands [Member]
Related Party Transaction [Line Items]
Accounts payable - affiliate	84	23
Accounts receivable - affiliate	10	42
Others [Member]
Related Party Transaction [Line Items]
Accounts payable - affiliate	0	0
Accounts receivable - affiliate	$ 1	$ 0

XML

Summary of Significant Accounting Policies, Earnings Per Average Common Share (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income
Basic net income applicable to common stock	$ 66,407	$ 63,818	$ 135,572	$ 140,536
Diluted net income applicable to common stock	$ 66,407	$ 63,818	$ 135,572	$ 140,536
Shares
Average number of basic common shares outstanding (in shares)	60,450,384	60,346,476	60,428,944	60,375,538
Effect of dilutive securities
Add: stock option grants (in shares)	0	1,536	0	4,518
Add: restricted stock (LTICP) (in shares)	298,263	251,191	265,688	246,415
Average number of diluted common shares outstanding (in shares)	60,748,647	60,599,203	60,694,632	60,626,471
Per Share Amount
Net income applicable to common stock (in dollars per share)	$ 1.10	$ 1.06	$ 2.25	$ 2.33
Diluted net income per average common share (in dollars per share)	$ 1.09	$ 1.05	$ 2.23	$ 2.32
Stock Options [Member]
Per Share Amount
Amount of stock options excluded from computation of diluted earnings per share (in shares)				0

XML

Accumulated Other Comprehensive Loss (Tables)

9 Months Ended

Sep. 30, 2013

Accumulated Other Comprehensive Loss [Line Items]

Schedule of Accumulated Other Comprehensive Income (Loss)

The

Cleco Power [Member]

Accumulated Other Comprehensive Loss [Line Items]

Schedule of Accumulated Other Comprehensive Income (Loss)

Cleco Power
				FOR THE THREE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, June 30, 2013	$	(12,272	)	$	(6,256	)	$	(18,528	)
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	207			—			207
Reclassification of net loss to interest charges	—			53			53
Net current-period other comprehensive income	207			53			260
Balances, Sept. 30, 2013	$	(12,065	)	$	(6,203	)	$	(18,268	)

				FOR THE NINE MONTHS ENDED SEPT. 30, 2013
(THOUSANDS)	POSTRETIREMENT BENEFIT NET (LOSS) GAIN			NET (LOSS) GAIN ON CASH FLOW HEDGES			TOTAL ACCUMULATED OTHER COMPREHENSIVE (LOSS) GAIN
Balances, Dec. 31, 2012	$	(12,792	)	$	(7,629	)	$	(20,421	)
Other comprehensive income before reclassifications:
Net derivative gain	—			1,355			1,355
Amounts reclassified from accumulated other comprehensive income:
Amortization of postretirement benefit net loss	727			—			727
Reclassification of net loss to interest charges	—			102			102
Reclassification of ineffectiveness to regulatory asset	—			(31		)	(31		)
Net current-period other comprehensive income	727			1,426			2,153
Balances, Sept. 30, 2013	$	(12,065	)	$	(6,203	)	$	(18,268	)

XML

Summary of Significant Accounting Policies, Property, Plant, and Equipment (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Public Utility, Property, Plant, and Equipment [Line Items]
Total property, plant, and equipment	$ 4,272,907	$ 4,140,194
Accumulated depreciation	(1,371,857)	(1,311,273)
Net property, plant, and equipment	2,901,050	2,828,921
Unregulated Operation [Member]
Public Utility, Property, Plant, and Equipment [Line Items]
Other	271,713	268,254
Regulated Operation [Member]
Public Utility, Property, Plant, and Equipment [Line Items]
Regulated utility plants	$ 4,001,194	$ 3,871,940

XML

Regulatory Assets and Liabilities

9 Months Ended

Sep. 30, 2013

Regulatory Assets and Liabilities Disclosure [Abstract]

Regulatory Assets and Liabilities

Note 3 — Regulatory Assets and Liabilities

Cleco Power follows the authoritative guidance on regulated operations, which allows utilities to capitalize or defer certain costs based on regulatory approval and management’s ongoing assessment that it is probable these items will be recovered through the ratemaking process. The following table summarizes Cleco Power’s regulatory assets and liabilities at September 30, 2013 and December 31, 2012:

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Regulatory assets – deferred taxes, net	$	217,550	$	210,445
Mining costs	$	14,657	$	16,569
Interest costs	6,033		6,304
Asset removal costs	919		867
Postretirement plan costs	146,597		156,458
Tree trimming costs	4,945		5,656
Training costs	7,214		7,330
Surcredits, net	16,738		6,211
Construction carrying costs	—		4,697
Lignite mining agreement contingency	3,781		3,781
Power purchase agreement capacity costs	13,316		6,217
AMI deferred revenue requirement	3,960		1,483
AFUDC equity gross-up	73,518		74,158
Rate case costs	179		581
Acadia Unit 1 acquisition costs	2,786		2,865
IRP/RFP costs	—		39
AMI pilot costs	—		22
Financing costs	9,864		7,282
Biomass costs	122		145
Total regulatory assets – other	$	304,629	$	300,665
Construction carrying costs	—		(8,255		)
Fuel and purchased power	6,851		7,833
Total regulatory assets, net	$	529,030	$	510,688

Surcredits, Net

Cleco Power has recorded surcredits as the result of a settlement with the LPSC that addressed, among other things, the recovery of the storm damages related to hurricanes and uncertain tax positions. In the settlement, Cleco Power was required to implement surcredits to provide ratepayers with the economic benefit of the carrying charges of certain accumulated deferred income tax liabilities at a rate of return which was set by the LPSC. The settlement, through a true-up mechanism, allows the surcredits to be adjusted to reflect the actual tax deductions allowed by the IRS.

Cleco Power also was allowed to record a corresponding regulatory asset in an amount representing the flow back of the carrying charges to ratepayers. This amount is being amortized over various terms of the established surcredits.

As a result of a settlement with the LPSC, Cleco Power is required to implement a surcredit when funds are withdrawn from the restricted storm reserve. In September 2012, Cleco Power withdrew $10.0 million from the restricted storm reserve to pay for storm damages, resulting in the establishment of a new surcredit. This surcredit will be utilized to partially replenish the storm reserve.

In the third quarter of 2013, Cleco Power recorded a true-up to the surcredits to reflect the actual tax deductions allowed by the IRS for storm damages and uncertain tax positions. As a result of the true-up, Cleco Power has recorded a regulatory asset that represents the amounts that will be collected from ratepayers in future periods.

Construction Carrying Costs

In February 2006, the LPSC approved Cleco Power’s plans to build Madison Unit 3. Terms of the approval included authorization for Cleco Power to collect from customers a portion of the carrying costs of capital during the construction phase of the unit. Cleco Power’s retail rate plan established that Cleco Power return carrying costs to customers and record a regulatory asset for all carrying costs incurred by Cleco Power above the actual amount collected from customers. These costs were amortized over a four-year period. As of June 30, 2013, Cleco Power had returned $166.0 million to customers, which represents all amounts due to be refunded to customers.

Power Purchase Agreement Capacity Costs

In March 2012, Cleco Power received approval from the LPSC for a three-year power purchase agreement with Evangeline providing 730 MW of capacity and energy beginning May 1, 2012 and ending April 30, 2015. The LPSC order allows Cleco Power to defer and recover a portion of capacity costs associated with the power purchase agreement. The deferred costs are being collected over the term of the contract.

AMI Deferred Revenue Requirement

In February 2011, the LPSC approved Cleco Power’s stipulated settlement in Docket No. U-31393 allowing Cleco Power to defer, as a regulatory asset, the estimated revenue requirements for the AMI project. The amount of the regulatory asset, including carrying charges, is capped by the LPSC at $20.0 million. The regulatory asset will amortize over the economic life of the project, currently estimated at 15 years.

Financing Costs

In 2011, Cleco Power entered into and settled two treasury rate locks. Also in 2011, Cleco Power entered into a forward starting swap contract. These derivatives were entered into in order to mitigate the interest rate exposure on coupon payments related to forecasted debt issuances. In May 2013, the forward starting interest rate swap was settled at a loss of $3.3 million. Cleco Power deferred $2.9 million of the losses as a regulatory asset. As a result of management’s assessment that it is probable that these costs will be recovered through the ratemaking process, Cleco Power is amortizing the regulatory asset over the terms of the related debt issuances.

Fuel and Purchased Power Costs

The cost of fuel used for electric generation and the cost of power purchased for utility customers are recovered through the LPSC-established FAC, which enables Cleco Power to pass on to its customers substantially all such charges. For the three months ended September 30, 2013, approximately 88% of Cleco Power’s total fuel cost was regulated by the LPSC, while the remainder was regulated by FERC.

The $1.0 million decrease in the under-recovered costs was primarily due to higher fuel cost recovery revenue partially offset by an increase in per-unit costs of fuel and purchased power and higher volumes of fuel used for electric generation.

XML

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees, Off-Balance Sheet Commitments (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Jan. 31, 2006
Guarantor Obligations [Line Items]
Face amount	$ 4,225
Reductions	0
Net amount	4,225
Guarantee Issued to Entergy Mississippi on behalf of Attala [Member]
Guarantor Obligations [Line Items]
Face amount	500
Reductions	0
Net amount	500	500
Cleco Power [Member] | Obligations Under Standby Letter of Credit Issued to the Louisiana Department of Labor [Member]
Guarantor Obligations [Line Items]
Face amount	3,725
Reductions	0
Net amount	$ 3,725
Percentage of average losses on which letter of credit is based (in hundredths)	110.00%

XML

Income Taxes (Tables)

9 Months Ended

Sep. 30, 2013

Income Tax Disclosure [Abstract]

Effective income tax rates

The following table summarizes the effective income tax rates for Cleco and Cleco Power for the three and nine month periods ended September 30, 2013 and 2012.

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
	2013		2012		2013		2012
Cleco	34.1	%	24.0	%	33.0	%	27.8	%
Cleco Power	35.0	%	25.5	%	34.6	%	31.0	%

Liability and expense related to unrecognized tax benefits

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

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Interest payable
Cleco	$	2,069	$	1,420
Cleco Power	$	3,712	$	3,358

	FOR THE THREE MONTHS ENDED SEPT. 30,					FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012			2013			2012
Interest charges
Cleco	$	174	$	(121	)	$	(116	)	$	(8,477	)
Cleco Power	$	113	$	133		$	354		$	(9,504	)

XML

Regulatory Assets and Liabilities, Additional Disclosures (Details) (Cleco Power [Member], USD $)	36 Months Ended				1 Months Ended					9 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended
	Apr. 30, 2015 Evangeline [Member] Evangeline Power Purchase Agreement [Member] MW	Mar. 31, 2012 Evangeline [Member] Evangeline Power Purchase Agreement [Member]	May 07, 2013 Swap [Member]	Sep. 30, 2013 Construction carrying costs - liability [Member]	Sep. 30, 2012 Deferred storm surcredits, net [Member]	Sep. 30, 2013 Deferred storm surcredits, net [Member]	Dec. 31, 2012 Deferred storm surcredits, net [Member]	Sep. 30, 2013 AMI Deferred Revenue Requirement [Member]	Dec. 31, 2012 AMI Deferred Revenue Requirement [Member]	Sep. 30, 2013 AMI Deferred Revenue Requirement [Member] Maximum [Member]	Feb. 28, 2011 AMI Deferred Revenue Requirement [Member] Maximum [Member]	Sep. 30, 2013 Construction carrying costs - asset [Member]	Dec. 31, 2012 Construction carrying costs - asset [Member]	Sep. 30, 2013 Fuel and purchased power [Member]	Sep. 30, 2013 Fuel and purchased power [Member]	Dec. 31, 2012 Fuel and purchased power [Member]	Sep. 30, 2013 Biomass costs [Member]	Dec. 31, 2012 Biomass costs [Member]	Sep. 30, 2013 Financing costs [Member]	Dec. 31, 2012 Financing costs [Member]	Sep. 30, 2013 Financing costs [Member] Swap [Member]
Schedule of Regulatory Assets and Liabilities, Net [Line Items]
Withdrawal from Restricted Storm Reserve					$ 10,000,000
Amortization period (in years)										P15Y		P4Y
Amount of construction carrying costs returned to customers				166,000,000
Long-term power purchase agreement, term (in years)		3 years
Capacity and energy provided by a power purchase agreement (in MW)	730
Regulatory assets						16,738,000	6,211,000	3,960,000	1,483,000		20,000,000	0	4,697,000	6,851,000	6,851,000	7,833,000	122,000	145,000	9,864,000	7,282,000
Gain (Loss) on the settlement of forward starting interest rate derivative			(3,300,000)
Gain (Loss) deferred as a regulatory asset on settlement of forward starting interest rate derivative			(2,900,000)																		(2,900,000)
Percentage of total fuel cost regulated by LPSC (in hundredths)														88.00%
Increase (decrease) in other regulatory assets															$ (1,000,000)

XML

Pension Plan and Employee Benefits

9 Months Ended

Sep. 30, 2013

Compensation and Retirement Disclosure [Abstract]

Pension Plan and Employee Benefits

Note 6 — Pension Plan and Employee Benefits

Pension Plan and Other Benefits Plan

Most employees hired before August 1, 2007, are covered by a non-contributory, defined benefit pension plan. Benefits under the plan reflect an employee’s years of service, age at retirement, and highest total average compensation for any consecutive five calendar years during the last ten years of employment with Cleco. Cleco’s policy is to base its contributions to the employee pension plan upon actuarial computations utilizing the projected unit credit method, subject to the IRS’s full funding limitation. In January 2013, Cleco Power made $34.0 million in discretionary contributions to the pension plan designated for the 2012 plan year. Cleco does not expect to make any additional discretionary contributions to the pension plan for the remainder of the year. During 2012, Cleco made no discretionary or required contributions to the pension plan. The required contributions are driven by liability funding target percentages set by law which could cause the required contributions to be uneven among the years. The ultimate amount and timing of the contributions may be affected by changes in the discount rate, changes in the funding regulations, and actual returns on fund assets. Cleco Power is considered the plan sponsor and Support Group is considered the plan administrator.

Cleco’s retirees and their dependents are eligible to receive medical, dental, vision, and life insurance benefits (other benefits). Cleco recognizes the expected cost of these other benefits during the periods in which the benefits are earned.

The components of net periodic pension and other benefit cost for the three and nine months ended September 30, 2013 and 2012, are as follows:

	PENSION BENEFITS						OTHER BENEFITS
	FOR THE THREE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012			2013		2012
Components of periodic benefit cost:
Service cost	$	2,472		$	2,078		$	614	$	303
Interest cost	4,485			4,563			214		334
Expected return on plan assets	(5,861		)	(5,201		)	—		—
Amortizations:
Transition obligation	—			—			6		5
Prior period service credit	(18		)	(18		)	—		—
Net loss	3,304			2,087			213		112
Net periodic benefit cost	$	4,382		$	3,509		$	1,047	$	754

	PENSION BENEFITS						OTHER BENEFITS
	FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013			2012			2013		2012
Components of periodic benefit cost:
Service cost	$	7,417		$	6,234		$	1,242	$	1,096
Interest cost	13,455			13,690			1,176		1,287
Expected return on plan assets	(17,584		)	(15,604		)	—		—
Amortizations:
Transition obligation	—			—			15		15
Prior period service credit	(53		)	(53		)	—		—
Net loss	9,913			6,259			849		512
Net periodic benefit cost	$	13,148		$	10,526		$	3,282	$	2,910

Because Cleco Power is the pension plan sponsor and the related trust holds the assets, the net unfunded status of the pension plan is reflected at Cleco Power. The liability of Cleco’s other subsidiaries is transferred with a like amount of assets to Cleco Power monthly. The expense of the pension plan related to Cleco’s other subsidiaries for the three and nine months ended September 30, 2013, was $0.6 million and $1.9 million, respectively. The amounts for the same periods in 2012 were $0.5 million and $1.6 million, respectively.

Cleco Corporation is the plan sponsor for the other benefit plans. There are no assets set aside in a trust and the liabilities are reported on the individual subsidiaries’ financial statements. The current portion of the other benefits liability for Cleco was $3.1 million at September 30, 2013. The amount at December 31, 2012, was also $3.1 million. The current portion of the other benefits liability for Cleco Power was $2.9 million at September 30, 2013. The amount at December 31, 2012, was also $2.9 million. The expense related to other benefits reflected in Cleco Power’s Condensed Consolidated Statements of Income for the three and nine months ended September 30, 2013, was $0.9 million and $2.8 million, respectively. The amounts for the same periods in 2012 were $0.7 million and $2.5 million, respectively.

SERP

Certain Cleco officers are covered by the SERP. The SERP is a non-qualified, non-contributory, defined-benefit pension plan. Benefits under the plan reflect an employee’s years of service, age at retirement, and the sum of the highest base salary paid out of the last five calendar years plus the average of the three highest bonuses paid during the 60 months prior to retirement, reduced by benefits received from any other defined benefit pension plan, SERP Plan, or Cleco contributions under the enhanced 401(k) Plan to the extent such contributions exceed the limits of the 401(k) Plan. Cleco does not fund the SERP liability but instead pays for current benefits out of the general funds available. Cleco Power has formed a Rabbi Trust designated as the beneficiary for life insurance policies issued on the SERP participants. Proceeds from the life insurance policies are expected to be used to pay the SERP participants’ life insurance benefits, as well as future SERP payments. However, because SERP is a non-qualified plan, the assets of the trust could be used to satisfy general creditors of Cleco Power in the event of insolvency. All SERP benefits are paid out of the general cash available of the respective companies from which the officer retired. No contributions to the SERP were made during the nine months ended September 30, 2013 or 2012. Cleco Power is considered the plan sponsor and Support Group is considered the plan administrator. The components of net periodic SERP benefit cost for the three and nine months ended September 30, 2013 and 2012, are as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
Components of periodic benefit cost:
Service cost	$	514	$	372	$	1,541	$	1,115
Interest cost	645		632		1,934		1,895
Amortizations:
Prior period service cost	13		13		40		40
Net loss	576		441		1,728		1,324
Net periodic benefit cost	$	1,748	$	1,458	$	5,243	$	4,374

The SERP liabilities are reported on the individual subsidiaries’ financial statements. At September 30, 2013 and December 31, 2012, the current portion of the SERP liability for Cleco was $2.7 million and $2.5 million, respectively. The current portion of the SERP liability for Cleco Power was $0.8 million at September 30, 2013. The amount at December 31, 2012, was also $0.8 million. The expense related to the SERP reflected on Cleco Power’s Condensed Consolidated Statements of Income was $0.4 million and $1.2 million for the three and nine months ended September 30, 2013, compared to $0.4 million and $1.1 million for the same period in 2012.

401(k) Plan

Most employees are eligible to participate in the 401(k) Plan. Under the 401(k) Plan, Cleco makes matching contributions and funds dividend reinvestments with cash. Cleco’s 401(k) Plan expense for the three and nine monthsended September 30, 2013 and 2012 is as follows:

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
401(k) Plan expense	$	936	$	963	$	3,361	$	3,303

Cleco Power is the plan sponsor for the 401(k) Plan. The expense of the 401(k) Plan related to Cleco’s other subsidiaries for the three and nine months ended September 30, 2013, was $0.2 million and $0.8 million, respectively. The amounts for the same periods in 2012 were also $0.2 million and $0.8 million, respectively.

XML

Recent Authoritative Guidance

9 Months Ended

Sep. 30, 2013

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Authoritative Guidance

Note 2 — Recent Authoritative Guidance

The Registrants adopted, or will adopt, the recent authoritative guidance listed below on their respective effective dates.

In July 2012, FASB issued guidance on testing indefinite-lived intangible assets for impairment. This guidance is intended to reduce costs and complexity of testing indefinite-lived intangible assets other than goodwill for impairment. Entities are allowed to perform a “qualitative” assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The adoption of this guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. The adoption of this guidance did not have an impact on the financial condition, results of operations, or cash flows of the Registrants.

In January 2013, FASB clarified the scope of revised disclosure requirements related to balance sheet offsetting that was issued in December 2011. The amendment clarifies that the scope applies to derivatives accounted for in accordance with the authoritative guidance for derivatives and hedging. The adoption of this revision is required for interim and annual periods beginning on or after January 1, 2013. The adoption of this revision did not have an impact on the financial condition, results of operations, or cash flows of the Registrants because it relates to disclosures, and no additional disclosures were required.

In February 2013, FASB revised the disclosure requirements related to items reclassified out of accumulated other comprehensive income. This guidance is intended to improve the transparency of changes in OCI. This revision is effective for fiscal years, and interim periods within those years, beginning after December 15, 2012. Cleco adopted the revisions to this amendment during the first quarter of 2013. The adoption of this revision did not have an impact on the financial condition, results of operations, or cash flows of the Registrants because it relates to disclosures. For more information on items reclassified out of accumulated other comprehensive income, see Note 14 — “Accumulated Other Comprehensive Loss.”

In February 2013, FASB issued guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed at the reporting date. The adoption of this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have a material impact on the financial condition, results of operations, or cash flows of the Registrants.

In April 2013, FASB issued guidance on applying the liquidation basis of accounting and the related disclosure requirements. Under this accounting standards update, an entity must use the liquidation basis of accounting to present its financial statements when it determines that liquidation is imminent, unless the liquidation is the same as that under the plan specified in an entity's governing documents created at its inception. The adoption of this standard is effective for entities that determine liquidation is imminent during annual reporting periods beginning after December 15, 2013, and interim reporting periods therein. The adoption of this guidance is not expected to have an effect on the financial condition, results of operations, or cash flows of the Registrants.

In July 2013, FASB amended the guidance for derivatives and hedging to provide for the inclusion of the Fed Funds Effective Swap Rate as a U.S. benchmark interest rate for hedge accounting purposes. The adoption of this guidance is effective for qualifying new or redesignated hedging relationships entered into on or after July 17, 2013. The adoption of this guidance did not have an effect on the financial condition, results of operations, or cash flows of the Registrants.

In July 2013, FASB amended the income tax guidance to provide for the presentation of an unrecognized tax benefit when a net operating loss carryforward, a similar tax loss, or a tax credit carryforward exists. The adoption of this guidance is effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. The adoption of this guidance is not expected to have an effect on the financial condition, results of operations, or cash flows of the Registrants.

XML

Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Operating activities
Net income	$ 135,572	$ 140,536
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	120,792	122,676
Unearned compensation expense	4,707	4,986
Allowance for other funds used during construction	(2,880)	(4,298)
Net deferred income taxes	60,172	8,040
Deferred fuel costs	2,906	(4,218)
Cash surrender value of company-/trust-owned life insurance	(1,631)	(2,841)
Changes in assets and liabilities:
Accounts receivable	(30,167)	(13,247)
Unbilled revenue	(4,967)	(1,376)
Fuel, materials and supplies inventory	(5,595)	(15,943)
Accounts payable	(15,691)	(25,422)
Customer deposits	9,777	8,772
Postretirement benefit obligations	(26,968)	5,459
Regulatory assets and liabilities, net	(28,727)	(30,532)
Other deferred accounts	(7,480)	(17,388)
Taxes accrued	70,188	36,021
Interest accrued	11,793	7,616
Other operating	(2,136)	5,763
Net cash provided by operating activities	289,665	224,604
Investing activities
Additions to property, plant, and equipment	(131,521)	(177,146)
Allowance for other funds used during construction	2,880	4,298
Property plant and equipment grants	729	15,075
Insurance reimbursement for property loss	0	5,454
Premiums paid on company-/trust-owned life insurance	(3,705)	(2,733)
Return of equity investment in tax credit fund	473	37,132
Contributions to tax credit fund	(38,940)	(46,859)
Transfer of cash from restricted accounts	5,750	19,102
Purchase of restricted investments	(6,422)	(4,340)
Maturity of restricted investments	5,003	0
Other investing	942	799
Net cash used in investing activities	(164,811)	(149,218)
Financing activities
Draws on credit facility	198,000	0
Payments on credit facility	(223,000)	(10,000)
Issuance of long-term debt	160,000	50,000
Retirement of long-term debt	(113,969)	(74,368)
Repurchase of long-term debt	(60,000)	0
Repurchase of common stock	0	8,007
Settlement of interest rate swap	(3,269)	0
Dividends paid on common stock	(64,448)	(58,459)
Other financing	(2,388)	236
Net cash used in financing activities	(109,074)	(100,598)
Net increase (decrease) in cash and cash equivalents	15,780	(25,212)
Cash and cash equivalents at beginning of period	31,020	93,576
Cash and cash equivalents at end of period	46,800	68,364
Supplementary cash flow information
Interest paid (net of amount capitalized)	45,464	48,212
Income taxes refunded, net	(47,318)	(131)
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	12,869	16,657
Non-cash additions to property, plant, and equipment	1,280	18,395
Employee Stock [Member] | Common Stock [Member]
Supplementary non-cash investing and financing activities
Issuance of common stock - ESPP	240	257
Cleco Power [Member]
Operating activities
Net income	124,142	121,873
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	114,078	102,724
Allowance for other funds used during construction	(2,880)	(4,298)
Net deferred income taxes	70,864	43,259
Deferred fuel costs	2,906	(4,218)
Changes in assets and liabilities:
Accounts receivable	(30,125)	(13,807)
Unbilled revenue	(4,967)	(1,376)
Fuel, materials and supplies inventory	(5,500)	(15,778)
Accounts payable	(12,296)	(20,474)
Customer deposits	9,777	8,772
Postretirement benefit obligations	(29,784)	4,323
Regulatory assets and liabilities, net	(28,727)	(30,532)
Other deferred accounts	(10,143)	(20,057)
Taxes accrued	20,043	23,194
Interest accrued	12,182	9,482
Other operating	2,427	2,440
Net cash provided by operating activities	231,997	205,527
Investing activities
Additions to property, plant, and equipment	(126,977)	(173,268)
Allowance for other funds used during construction	2,880	4,298
Property plant and equipment grants	729	15,075
Transfer of cash from restricted accounts	5,750	19,102
Purchase of restricted investments	(6,422)	(4,340)
Maturity of restricted investments	5,003	0
Other investing	857	804
Net cash used in investing activities	(118,180)	(138,329)
Financing activities
Draws on credit facility	160,000	0
Payments on credit facility	(160,000)	0
Issuance of long-term debt	160,000	50,000
Retirement of long-term debt	(113,969)	(74,368)
Repurchase of long-term debt	(60,000)	0
Settlement of interest rate swap	(3,269)	0
Distribution to parent	(75,000)	(58,000)
Other financing	(2,387)	(1,710)
Net cash used in financing activities	(94,625)	(84,078)
Net increase (decrease) in cash and cash equivalents	19,192	(16,880)
Cash and cash equivalents at beginning of period	23,368	67,458
Cash and cash equivalents at end of period	42,560	50,578
Supplementary cash flow information
Interest paid (net of amount capitalized)	45,248	48,140
Income taxes refunded, net	(456)	(246)
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	12,591	16,141
Non-cash additions to property, plant, and equipment	$ 1,280	$ 18,395

XML

Pension Plan and Employee Benefits, SERP (Details) (SERP Benefits [Member], USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Defined Benefit Plan Disclosure [Line Items]
Defined Benefit Plan, Contributions by Employer			$ 0	$ 0
Components of periodic benefit costs
Service cost (credit)	514,000	372,000	1,541,000	1,115,000
Interest cost	645,000	632,000	1,934,000	1,895,000
Prior period service cost (credit)	13,000	13,000	40,000	40,000
Net loss	576,000	441,000	1,728,000	1,324,000
Net periodic benefit cost	1,748,000	1,458,000	5,243,000	4,374,000
Curent portion of SERP liability	2,700,000		2,700,000		2,500,000
Cleco Power [Member]
Components of periodic benefit costs
Net periodic benefit cost	400,000	400,000	1,200,000	1,100,000
Curent portion of SERP liability	$ 800,000		$ 800,000		$ 800,000

XML

Fair Value Accounting, Derivatives and Hedging (Details) (USD $)	3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended			9 Months Ended	12 Months Ended	0 Months Ended	1 Months Ended		3 Months Ended	9 Months Ended					9 Months Ended	12 Months Ended	3 Months Ended	9 Months Ended
	Sep. 30, 2013 Derivatives Not Designated As Hedging Instruments [Member]	Sep. 30, 2013 Derivatives Not Designated As Hedging Instruments [Member]	Sep. 30, 2013 Interest Rate Contract [Member] Derivatives Designated as Hedging Instruments [Member]	Sep. 30, 2012 Interest Rate Contract [Member] Derivatives Designated as Hedging Instruments [Member]	Sep. 30, 2013 Interest Rate Contract [Member] Derivatives Designated as Hedging Instruments [Member]	Sep. 30, 2012 Interest Rate Contract [Member] Derivatives Designated as Hedging Instruments [Member]	Dec. 31, 2012 Energy Related Derivative [Member] Derivatives Not Designated As Hedging Instruments [Member]	Sep. 30, 2013 Energy Related Derivative [Member] Derivatives Not Designated As Hedging Instruments [Member] AccumulatedDeferredFuel [Member]	Dec. 31, 2012 Energy Related Derivative [Member] Derivatives Not Designated As Hedging Instruments [Member] AccumulatedDeferredFuel [Member]	Nov. 14, 2011 Cleco Power [Member] Swap [Member]	May 30, 2013 Cleco Power [Member] Swap [Member]	May 07, 2013 Cleco Power [Member] Swap [Member]	Sep. 30, 2013 Cleco Power [Member] Derivatives Not Designated As Hedging Instruments [Member]	Sep. 30, 2013 Cleco Power [Member] Derivatives Not Designated As Hedging Instruments [Member]	Sep. 30, 2013 Cleco Power [Member] Interest Rate Contract [Member] Derivatives Designated as Hedging Instruments [Member]	Sep. 30, 2013 Cleco Power [Member] Energy Related Derivative [Member] MMBTU	Dec. 31, 2012 Cleco Power [Member] Energy Related Derivative [Member] MMBTU	Dec. 31, 2012 Cleco Power [Member] Energy Related Derivative [Member] Derivatives Not Designated As Hedging Instruments [Member]	Sep. 30, 2013 Cleco Power [Member] Energy Related Derivative [Member] Derivatives Not Designated As Hedging Instruments [Member] AccumulatedDeferredFuel [Member]	Dec. 31, 2012 Cleco Power [Member] Energy Related Derivative [Member] Derivatives Not Designated As Hedging Instruments [Member] AccumulatedDeferredFuel [Member]	Sep. 30, 2012 Cleco Power [Member] Energy Related Derivative [Member] Derivatives Not Designated As Hedging Instruments [Member] Fuel Used For Electric Generation [Member]	Sep. 30, 2012 Cleco Power [Member] Energy Related Derivative [Member] Derivatives Not Designated As Hedging Instruments [Member] Fuel Used For Electric Generation [Member]
Derivatives, Fair Value [Line Items]
Net gain (loss) on derivative recognized in income	$ 0	$ 0											$ 0	$ 0
Loss recognized in income																					600,000	8,200,000
Net unrealized gain (loss) on derivative								0											0
Net gain (loss) on derivatives not designated as hedging instruments									0											0
Balance of derivatives not designated as hedging instruments recorded on the balance sheet							0											0
Number of open derivative positions																0	0
Notional amount of derivative										50,000,000
Remaining maturity of derivative										30 years
Interest rate on derivative										3.05%
Gain (Loss) on the settlement of forward starting interest rate derivative												(3,300,000)
Gain (Loss) deferred as a regulatory asset on settlement of forward starting interest rate derivative												(2,900,000)
Gain (loss) on forward starting interest rate swap remaining in accumulated other comprehensive income (loss)												(400,000)
Amortization period of gain (loss) on settlement of the forward starting interest rate derivative											25 years
Schedule of Derivative Instruments [Abstract]
Gain (Loss) recognized in other comprehensive income (loss), effective portion			0	802,000	1,762,000	(733,000)
Gain (Loss) reclassified from accumulated OCI into income, effective portion			(86,000)	17,000	(165,000)	(39,000)
Net hedge ineffectiveness gain (loss)			0	0	3,300,000	2,600,000
Interest rate cash flow hedge gain (loss) to be reclassified during the next 12 months															$ (300,000)

XML

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees (Tables)

9 Months Ended

Sep. 30, 2013

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees [Abstract]

Off-Balance Sheet Commitments

The following table summarizes the expected amount of commitment termination per period of off-balance sheet commitments and on-balance sheet guarantees discussed above.

							AT SEPT. 30, 2013
			AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
(THOUSANDS)	NET AMOUNT COMMITTED		LESS THAN ONE YEAR		1-3 YEARS		3-5 YEARS		MORE THAN 5 YEARS
Off-balance sheet commitments	$	4,225	$	3,725	$	—	$	—	$	500
On-balance sheet guarantees	4,906		900		—		—		4,006
Total	$	9,131	$	4,625	$	—	$	—	$	4,506

Cleco’s off-balance sheet commitments as of September 30, 2013, are summarized in the following table and a discussion of the off-balance sheet commitments follows the table. The discussion should be read in conjunction with the table to understand the impact of the off-balance sheet commitments on Cleco’s financial condition.

	AT SEPT. 30, 2013
(THOUSANDS)	FACE AMOUNT		REDUCTIONS		NET AMOUNT
Cleco Corporation
Guarantee issued to Entergy Mississippi on behalf of Attala	$	500	$	—	$	500
Cleco Power
Obligations under standby letter of credit issued to the Louisiana Department of Labor	3,725		—		3,725
Total	$	4,225	$	—	$	4,225

Other Commitments

The following table reflects remaining future equity contributions.

(THOUSANDS)	CONTRIBUTION
Three months ending Dec. 31, 2013	$	12,071
Years ending Dec. 31,
2014	47,434
2015	11,195
2016	3,698
2017	2,914
Total	$	77,312

Equity Investments with an Imputed Interest Rate

The following table contains the disclosures required by the authoritative guidelines for equity investments with an imputed interest rate.

(THOUSANDS)
Equity contributions, imputed interest rate 6%
Principal payment schedule above:	$	77,312
Less:  unamortized discount	5,015
Total	$	72,297

XML

Storm Restoration (Details) (Cleco Power [Member], Hurricane Isaac [Member], USD $) In Millions, unless otherwise specified	Sep. 30, 2013	Sep. 02, 2012	Aug. 28, 2012 customer
Cleco Power [Member] | Hurricane Isaac [Member]
Storm Resotration [Line Items]
Approximate number of customers affected (in ones)			95,000
Percent of customers affected (in hundredths)			34.00%
Percent of customers restored (in hundredths)		100.00%
Cost of storm restoration	$ 24.3
Percent of storm restoration costs capitalized (in hundredths)	56.00%
Capitalized storm restoration costs	$ 13.6

XML

Electric Customer Credits (Details) (USD $)					125 Months Ended
	Sep. 30, 2013	Dec. 31, 2012	Sep. 30, 2013 Cleco Power [Member]	Dec. 31, 2012 Cleco Power [Member]	Jun. 30, 2020 Cleco Power [Member] Louisiana Public Service Commission [Member] 2010 FRP [Member]	Jun. 26, 2013 Cleco Power [Member] Louisiana Public Service Commission [Member] 2012 FRP Monitoring Report [Member]	Jun. 30, 2012 Cleco Power [Member] Louisiana Public Service Commission [Member] 2012 FRP Monitoring Report [Member]	Jun. 30, 2013 Cleco Power [Member] Louisiana Public Service Commission [Member] 2013 FRP Monitoring Report [Member]
Public Utilities, General Disclosures [Line Items]
Target return on equity allowed by FRP (in thousandths)					10.70%
Percentage of retail earnings within range to be returned to customers (in hundredths)					60.00%
Return on equity for customer credit, low range (in thousandths)					11.30%
Return on equity for customer credit, high range (in thousandths)					12.30%
Total customer credits						$ 2,400,000	$ 1,700,000	$ 2,200,000
Provision for rate refund	$ 2,967,000	$ 4,165,000	$ 2,967,000	$ 4,165,000

XML

Electric Customer Credits

9 Months Ended

Sep. 30, 2013

Regulated Operations [Abstract]

Electric Customer Credits

Note 9 — Electric Customer Credits

The current amount of Cleco Power’s annual retail earnings is subject to the terms of an FRP established by the LPSC effective February 12, 2010. The FRP allows Cleco Power the opportunity to earn a target return on equity of 10.7%, including returning to retail customers 60% of retail earnings between 11.3% and 12.3% and all retail earnings over 12.3%. The amount of credits due customers, if any, is determined by Cleco Power and the LPSC annually. Cleco Power must file annual monitoring reports no later than October 31 for the 12-month period ending June 30. In April 2013, Cleco Power filed an application with the LPSC to extend its current FRP and seek rate recovery of Coughlin. Cleco Power requested in its application that the FRP extension be effective through June 2020. The docket is currently in the discovery phase. The procedural schedule currently anticipates LPSC testimony by mid-November 2013. Cleco Power expects LPSC action on this request by the second quarter of 2014.

On October 31, 2012, Cleco Power filed its report for the 12 months endedJune 30, 2012, which indicated that $1.7 million was due to be returned to customers. On June 26, 2013, the LPSC approved the monitoring report for the 12 months endedJune 30, 2012, with a recommended adjusted refund of $2.4 million. The increase in refund was the result of changes to revenue requirements for certain FRP Rider items. Cleco Power issued refunds on customers’ bills in the third quarter of 2013. Cleco Power expects to file its monitoring report for the 12 months ended June 30, 2013 on or before October 31, 2013, which will indicate that$2.2 millionis due to be returned to customers. Cleco Power has accrued for this anticipated refund at September 30, 2013. The accrual for estimated electric customer credits reflected on Cleco Corporation and Cleco Power’s Condensed Consolidated Balance Sheets at September 30, 2013 and December 31, 2012, was $3.0 million and $4.2 million, respectively.

XML

Debt

9 Months Ended

Sep. 30, 2013

Debt Disclosure [Abstract]

Debt

Note 5 — Debt

Short-term Debt

At September 30, 2013 and December 31, 2012, Cleco and Cleco Power had no short-term debt outstanding.

Long-term Debt

At September 30, 2013, Cleco’s long-term debt outstanding was $1.31 billion, of which $17.1 million was due within one year. The long-term debt due within one year at September 30, 2013, represents $14.9 million principal payments for the Cleco Katrina/Rita storm recovery bonds and $2.2 million of capital lease payments.

For Cleco, long-term debt decreased$40.3 million from December 31, 2012, primarily due to a $75.0 million repayment of senior notes, $60.0 million of solid waste disposal bonds reacquired in March 2013, a $25.0 million reduction in credit facility draws, $14.0 million scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2013, and a $1.6 million decrease in capital lease obligations. These decreases were partially offset by $35.0 million outstanding on a bank term loan entered into in March 2013, the issuance of $50.0 million 2008 Series A GO Zone bonds and $50.0 million 2008 Series B GO Zone bonds in May 2013, and debt discount amortizations of $0.3 million.

At September 30, 2013, Cleco Power’s long-term debt outstanding was $1.31 billion of which $17.1 million was due within one year. The long-term debt due within one year at September 30, 2013, represents $14.9 million principal payments for the Cleco Katrina/Rita storm recovery bonds and $2.2 million of capital lease payments.

For Cleco Power, long-term debt decreased$15.3 million from December 31, 2012, primarily due to a $75.0 million repayment of senior notes, $60.0 million of solid waste disposal bonds reacquired in March 2013, $14.0 million scheduled Cleco Katrina/Rita storm recovery bond principal payments made in March and September 2013, and a $1.6 million decrease in capital lease obligations. These decreases were partially offset by $35.0 million outstanding on a bank term loan entered into in March 2013, the issuance of $50.0 million 2008 Series A GO Zone bonds and $50.0 million 2008 Series B GO Zone bonds in May 2013, and debt discount amortizations of $0.3 million.

Cleco Power’s $60.0 million solid waste disposal facility bonds due 2037, which were issued by the Rapides Finance Authority for the benefit of Cleco Power in November 2007, were required to be mandatorily tendered by the bondholders for purchase on March 1, 2013, pursuant to the terms of the indenture. The bonds were issued in connection with a loan agreement between the Rapides Finance Authority and Cleco Power. On March 1, 2013, Cleco Power purchased all $60.0 million outstanding bonds at face value plus $1.6 million of accrued interest, using draws under Cleco Power’s revolving credit facility. In connection with the purchase, the interest rate of the bonds will reset each week based on the Securities Industry and Financial Markets Association index. The initial interest rate of the bonds at March 1, 2013, was 0.11% per annum. Interest expense will continue to be recorded with a corresponding amount recorded as interest income, excluding amortization of debt issuance costs. Although the bonds remain outstanding, Cleco Power has the right to redeem and cancel the debt at any time without approval of the Rapides Finance Authority. In accordance with the authoritative guidance, the bonds are considered extinguished and Cleco Power is holding the debt as treasury bonds, resulting in a net presentation on Cleco and Cleco Power's Condensed Consolidated Balance Sheets. Cleco Power has the option to remarket the bonds for new terms and new interest rates, both to be determined by market conditions.

On March 20, 2013, Cleco Power entered into a bank term loan agreement in the amount of $60.0 million. Proceeds of the loan agreement were used to repay draws under Cleco Power’s revolving credit facility. Cleco Power made a $25.0 million payment on the loan on May 8, 2013, reducing the balance outstanding to $35.0 million. The interest rate under the agreement at September 30, 2013, was 0.93%. The rate resets monthly at one month LIBOR, plus 0.75%. The loan matures on May 29, 2015.

On May 3, 2013, Cleco Power remarketed $50.0 million of its 2008 Series A GO Zone bonds which had previously been purchased by Cleco Power and were being held as treasury bonds. The interest rate at September 30, 2013, was 0.94% which is based on 65% of one month LIBOR, plus 0.82%. The rate resets monthly. The 2008 Series A GO Zone bonds will be subject to remarketing on May 3, 2015. Of the $50.0 million bonds, $25.0 million of the proceeds were used to fund the partial repayment of the $60.0 million solid waste disposal bonds described above and $25.0 million of the proceeds were used to partially fund the maturity of Cleco Power’s $75.0 million 5.375% senior notes on May 1, 2013.

On May 8, 2013, Cleco Power remarketed $50.0 million of its 2008 Series B GO Zone bonds which had previously been purchased by Cleco Power and were being held as treasury bonds, at a fixed interest rate of 4.25%. The 2008 Series B GO Zone bonds mature on December 1, 2038. The proceeds were used to partially fund the maturity of Cleco Power's $75.0 million 5.375% senior notes on May 1, 2013.

Credit Facilities

At September 30, 2013, Cleco Corporation and Cleco Power had no borrowings outstanding under their respective existing $250.0 million and $300.0 million credit facilities.

On October 16, 2013, Cleco Corporation and Cleco Power entered into new, amended and restated credit facilities with a maturity date of October 16, 2018. The new facilities replace the previous facilities, which were to mature on October 7, 2016. The new facilities are comprised of the same ten banks, plus one additional bank. The new facilities are priced the same as the old facilities and are for the same amounts.

XML

Accumulated Other Comprehensive Loss YTD (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	$ (29,875)		$ (32,370)
Net current-period other comprehensive income
Other comprehensive income before reclassifications			1,355
Amounts reclassified from accumulated other comprehensive income, net of tax	497		1,619
Net current-period other comprehensive income	550	815	3,045	2,364
Accumulated other comprehensive loss, Ending Balance	(29,325)		(29,325)
Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(23,619)		(24,741)
Net current-period other comprehensive income
Other comprehensive income before reclassifications			0
Amounts reclassified from accumulated other comprehensive income, net of tax	497		1,619
Net current-period other comprehensive income	497		1,619
Accumulated other comprehensive loss, Ending Balance	(23,122)		(23,122)
Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(6,256)		(7,629)
Net current-period other comprehensive income
Other comprehensive income before reclassifications			1,355
Net current-period other comprehensive income	53		1,426
Accumulated other comprehensive loss, Ending Balance	(6,203)		(6,203)
Interest Expense [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	53		102
Interest Expense [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	53		102
Regulatory Asset [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax			(31)
Regulatory Asset [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax			(31)
Cleco Power [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(18,528)		(20,421)
Net current-period other comprehensive income
Other comprehensive income before reclassifications			1,355
Amounts reclassified from accumulated other comprehensive income, net of tax	207		727
Net current-period other comprehensive income	260	607	2,153	1,698
Accumulated other comprehensive loss, Ending Balance	(18,268)		(18,268)
Cleco Power [Member] | Accumulated Defined Benefit Plans Adjustment [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(12,272)		(12,792)
Net current-period other comprehensive income
Other comprehensive income before reclassifications			0
Amounts reclassified from accumulated other comprehensive income, net of tax	207		727
Net current-period other comprehensive income	207		727
Accumulated other comprehensive loss, Ending Balance	(12,065)		(12,065)
Cleco Power [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Accumulated Other Comprehensive Loss [Line Items]
Accumulated other comprehensive loss, Beginning Balance	(6,256)		(7,629)
Net current-period other comprehensive income
Other comprehensive income before reclassifications			1,355
Net current-period other comprehensive income	53		1,426
Accumulated other comprehensive loss, Ending Balance	(6,203)		(6,203)
Cleco Power [Member] | Interest Expense [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	53		102
Cleco Power [Member] | Interest Expense [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax	53		102
Cleco Power [Member] | Regulatory Asset [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax			(31)
Cleco Power [Member] | Regulatory Asset [Member] | Accumulated Net Gain (Loss) from Designated or Qualifying Cash Flow Hedges [Member]
Net current-period other comprehensive income
Amounts reclassified from accumulated other comprehensive income, net of tax			$ (31)

XML

Affiliate Transactions

9 Months Ended

Sep. 30, 2013

Related Party Transactions [Abstract]

Affiliate Transactions

Note 12 — Affiliate Transactions

Cleco Power has affiliate balances that are payable to or due from its affiliates. The following table is a summary of those balances.

	AT SEPT. 30, 2013				AT DEC. 31, 2012
(THOUSANDS)	ACCOUNTS RECEIVABLE		ACCOUNTS PAYABLE		ACCOUNTS RECEIVABLE		ACCOUNTS PAYABLE
Cleco Corporation	$	5	$	368	$	139	$	1,140
Support Group	1,160		6,415		2,777		7,528
Midstream	63		2		27		5
Evangeline	21		3,371		6		1,401
Diversified Lands	10		84		42		23
Other (1)	1		—		—		—
Total	$	1,260	$	10,240	$	2,991	$	10,097
(1) Represents Perryville and Attala

XML

Variable Interest Entities

9 Months Ended

Sep. 30, 2013

Variable Interest Entities [Abstract]

Variable Interest Entities

Note 10 — Variable Interest Entities

Cleco reports its investments in VIEs in accordance with the authoritative guidance. Cleco and Cleco Power report the investment in Oxbow on the equity method of accounting. Under the equity method, the assets and liabilities of this entity are reported as equity investment in investees on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets. The revenue and expenses (excluding income taxes) of this entity are netted and reported as equity income or loss from investees on Cleco and Cleco Power’s Condensed Consolidated Statements of Income.

Equity Method VIEs

Equity investment in investees at September 30, 2013, primarily represented Cleco Power’s $14.5 million investment in Oxbow. Equity investments that are less than 100% owned by Diversified Lands represented less than $0.1 million of the total balance.

Oxbow

Oxbow is owned 50% by Cleco Power and 50% by SWEPCO and is accounted for as an equity method investment. Cleco Power is not the primary beneficiary because it shares the power to control Oxbow’s significant activities with SWEPCO. Cleco’s current assessment of its maximum exposure to loss related to Oxbow at September 30, 2013, consisted of its equity investment of $14.5 million. The following table presents the components of Cleco Power’s equity investment in Oxbow.

INCEPTION TO DATE (THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Purchase price	$	12,873	$	12,873
Cash contributions	1,659		1,659
Total equity investment in investee	$	14,532	$	14,532

The following table compares the carrying amount of Oxbow’s assets and liabilities with Cleco’s maximum exposure to loss related to its investment in Oxbow.

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Oxbow’s net assets/liabilities	$	29,065	$	29,065
Cleco Power’s 50% equity	$	14,532	$	14,532
Cleco’s maximum exposure to loss	$	14,532	$	14,532

The following tables contain summarized financial information for Oxbow.

(THOUSANDS)	AT SEPT. 30, 2013		AT DEC. 31, 2012
Current assets	$	2,182	$	1,814
Property, plant, and equipment, net	22,698		23,029
Other assets	4,254		4,248
Total assets	$	29,134	$	29,091
Current liabilities	$	69	$	26
Partners’ capital	29,065		29,065
Total liabilities and partners’ capital	$	29,134	$	29,091

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2013		2012		2013		2012
Operating revenue	$	856	$	450	$	1,795	$	1,125
Operating expenses	856		450		1,795		1,125
Income before taxes	$	—	$	—	$	—	$	—

Oxbow’s property, plant, and equipment, net consists of land and lignite reserves. The lignite reserves are intended to be used to provide fuel to the Dolet Hills Power Station. DHLC mines the lignite reserves at Oxbow through the Amended Lignite Mining Agreement.

Oxbow has no third-party agreements, guarantees, or other third-party commitments that contain obligations affecting Cleco Power’s investment in Oxbow.

XML

Document And Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 25, 2013
Entity Information [Line Items]
Entity Registrant Name	CLECO CORP
Entity Central Index Key	0001089819
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		60,452,158
Cleco Power [Member]
Entity Information [Line Items]
Entity Registrant Name	CLECO POWER LLC
Entity Central Index Key	0000018672
Entity Filer Category	Non-accelerated Filer

XML

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees

9 Months Ended

Sep. 30, 2013

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees [Abstract]

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees

Note 11 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees

Litigation

Devil’s Swamp

In October 2007, Cleco received a Special Notice for Remedial Investigation and Feasibility Study (RI/FS) from the EPA pursuant to CERCLA (also known as the Superfund statute). CERCLA establishes several classes of PRPs for a contaminated site, and imposes strict, joint, and several liability on those PRPs for the cost of response to the contamination. The special notice requested that Cleco Corporation and Cleco Power, along with many other listed PRPs, enter into negotiations with the EPA for the performance of an RI/FS at an area known as the Devil’s Swamp Lake site just northwest of Baton Rouge, Louisiana. The EPA identified Cleco as one of many companies that was sending PCB wastes for disposal to the site. The Devil’s Swamp Lake site has been proposed to be added to the National Priorities List based on the release of PCBs to fisheries and wetlands located on the site, but no final determination has been made. The PRPs began discussing a potential proposal to the EPA in February 2008. The EPA issued a Unilateral Administrative Order to PRP’s Clean Harbors, Inc. and Baton Rouge Disposal to Conduct an RI/FS on December 3, 2009. The Tier 1 part of the study was complete as of June 25, 2012. Currently, the study/remedy selection task continues. Therefore, management is unable to determine how significant Cleco’s share of the costs associated with the RI/FS and possible response action at the facility site, if any, may be and whether or not this will have a material adverse effect on the Registrants’ financial condition, results of operations, or cash flows. 

Discrimination Complaints

In December 2009, a complaint was filed in the U.S. District Court for the Western District of Louisiana (the Court) on behalf of eight current employees and four former employees alleging that Cleco discriminated against each of them on the basis of race. Each is seeking various remedies provided under applicable statutes prohibiting racial discrimination in the workplace, and together, the plaintiffs seek monetary compensation exceeding $35.0 million. In July 2010, the plaintiffs moved to add an additional current employee alleging that Cleco had discriminated on the basis of race. The additional plaintiff seeks compensation of no less than $2.5 million and became the thirteenth plaintiff. In April 2011, Cleco entered into a settlement with one of the current employees which resulted in a dismissal of one of the thirteen cases with prejudice. In September 2011, the Court ruled on Cleco’s summary judgment motions, with the end result that eleven of the twelve remaining plaintiffs had at least one claim remaining. In February 2013, the Court ruled on the second motion for summary judgment, filed by Cleco in March 2012, in each of the eleven cases and each such case was dismissed with prejudice. Appeals were filed in ten of the eleven dismissed cases to the United States Court of Appeals for the Fifth Circuit (the Fifth Circuit). In June 2013, the Fifth Circuit clerk dismissed the appeals of two of the current employees due to their failure to file a brief in support of their respective appeals. On various dates during August, September, and October 2013, the Fifth Circuit affirmed the trial court judgments in favor of Cleco in six of the eight remaining cases. There has been no disposition of the two remaining appeals.

City of Opelousas

In March 2010, a complaint was filed in the 27th Judicial District Court of St. Landry Parish, State of Louisiana, on behalf of three Cleco Power customers in Opelousas, Louisiana.  The complaint alleges that Cleco Power overcharged the plaintiffs by applying to customers in Opelousas the same retail rates as Cleco Power applies to all of its retail customers.  The plaintiffs claim that Cleco Power owes customers in Opelousas more than $30.0 million as a result of the alleged overcharges. The plaintiffs allege that Cleco Power should have established, solely for customers in Opelousas, retail rates that are separate and distinct from the retail rates that apply to other customers of Cleco Power and that Cleco Power should not collect from customers in Opelousas the storm surcharge approved by the LPSC following hurricanes Katrina and Rita. In April 2010, Cleco Power filed a petition with the LPSC appealing to its expertise in declaring that the ratepayers of Opelousas have been properly charged the rates that are applicable to Cleco Power’s retail customers and that no overcharges have been collected.

In May 2010, a second class action lawsuit was filed in the 27th Judicial District Court for St. Landry Parish, State of Louisiana, repeating the allegations of the first complaint, which was submitted on behalf of 249 Opelousas residents. In January 2011, the presiding judge in the state court proceeding ruled that the jurisdiction to hear the two class actions resides in the state court and not with the LPSC as argued by both Cleco and the LPSC Staff. Both Cleco and the LPSC Staff appealed this ruling to the Third Circuit Court of Appeals for the State of Louisiana (Third Circuit). In September 2011, the Third Circuit denied both appeals. In October 2011, both Cleco and the LPSC appealed the Third Circuit’s ruling to the Louisiana Supreme Court. In February 2011, the administrative law judge (ALJ) in the LPSC proceeding ruled that the LPSC has jurisdiction to decide the claims raised by the class action plaintiffs. At its December 2011 Business and Executive Session, the LPSC adopted the ALJ’s recommendation that Cleco be granted summary judgment in its declaratory action finding that Cleco’s ratepayers in the City of Opelousas have been served under applicable rates and policies approved by the LPSC and Cleco’s Opelousas ratepayers have not been overcharged in connection with LPSC rates or ratemaking. In January 2012, the class action plaintiffs filed their appeal of such LPSC decision to the 19th Judicial District Court for East Baton Rouge Parish, State of Louisiana. In December 2012, the Louisiana Supreme Court issued its opinion accepting Cleco’s jurisdictional arguments and dismissed the state court claims. The only matter remaining is before the 19th Judicial District Court to review the LPSC ruling in Cleco’s favor that it had properly charged the ratepayers of Opelousas. In view of the uncertainty of the claims, management is not able to predict or give a reasonable estimate of the possible range of liability, if any, of these claims. However, if it is found that Cleco Power overcharged customers resulting in a refund, any such refund could have a material adverse effect on the Registrants’ results of operations, financial condition, and cash flows.

Other

Cleco is involved in various litigation matters, including regulatory, environmental, and administrative proceedings before various courts, regulatory commissions, arbitrators, and governmental agencies regarding matters arising in the ordinary course of business. The liability Cleco may ultimately incur with respect to any one of these matters in the event of a negative outcome may be in excess of amounts currently accrued. Management regularly analyzes current information and, as of September 30, 2013, believes the probable and reasonably estimable liabilities based on the eventual disposition of these matters is approximately $8.9 million and has accrued this amount.

Off-Balance Sheet Commitments

Cleco Corporation and Cleco Power have entered into various off-balance sheet commitments, in the form of guarantees and standby letters of credit, in order to facilitate their activities and the activities of Cleco Corporation’s subsidiaries and equity investees (affiliates). Cleco Corporation and Cleco Power have also agreed to contractual terms that require them to pay third parties if certain triggering events occur. These contractual terms generally are defined as guarantees in the authoritative guidance.

Cleco Corporation entered into these off-balance sheet commitments in order to entice desired counterparties to contract with its affiliates by providing some measure of credit assurance to the counterparty in the event Cleco’s affiliates do not fulfill certain contractual obligations. If Cleco Corporation had not provided the off-balance sheet commitments, the desired counterparties may not have contracted with Cleco’s affiliates, or may have contracted with them at terms less favorable to its affiliates.

The off-balance sheet commitments are not recognized on Cleco’s Condensed Consolidated Balance Sheets because management has determined that Cleco’s affiliates are able to perform these obligations under their contracts and that it is not probable that payments by Cleco will be required. Cleco’s off-balance sheet commitments as of September 30, 2013, are summarized in the following table and a discussion of the off-balance sheet commitments follows the table. The discussion should be read in conjunction with the table to understand the impact of the off-balance sheet commitments on Cleco’s financial condition.

	AT SEPT. 30, 2013
(THOUSANDS)	FACE AMOUNT		REDUCTIONS		NET AMOUNT
Cleco Corporation
Guarantee issued to Entergy Mississippi on behalf of Attala	$	500	$	—	$	500
Cleco Power
Obligations under standby letter of credit issued to the Louisiana Department of Labor	3,725		—		3,725
Total	$	4,225	$	—	$	4,225

In January 2006, Cleco Corporation provided a $0.5 million guarantee to Entergy Mississippi for Attala’s obligations under the Interconnection Agreement. This guarantee will be effective through the life of the agreement.

The State of Louisiana allows employers of certain financial net worth to self-insure their workers’ compensation benefits. Cleco Power has a certificate of self-insurance from the Louisiana Office of Workers’ Compensation and is required to post a $3.7 million letter of credit, an amount equal to 110% of the average losses over the previous three years, as surety.

Disclosures about Guarantees

Cleco Corporation provided a limited guarantee and an indemnification to Entergy Louisiana and Entergy Gulf States for Perryville’s performance, indemnity, representation, and warranty obligations under the Sale Agreement, the Power Purchase Agreement, and other ancillary agreements related to the sale of the Perryville facility in 2004. This is a continuing guarantee and all obligations of Cleco Corporation shall continue until the guaranteed obligations have been fully performed or otherwise extinguished. The discounted probability-weighted liability under the guarantees and indemnifications recognized on Cleco’s Condensed Consolidated Balance Sheet as of September 30, 2013, was $0.2 million. The maximum amount of the potential payment to Entergy Louisiana and Entergy Gulf States is $42.4 million. Currently, management does not expect to be required to pay Entergy Louisiana and Entergy Gulf States under the guarantee.

In February 2010, Cleco Power acquired Acadia Unit 1 and limited guarantees and indemnifications were provided to Cleco Power. The maximum amount of the potential payment to Cleco Power for indemnifications was $30.0 million, except for indemnifications relating to the fundamental organizational structure of which there was no maximum amount. Cleco Corporation was obligated to pay a maximum of $10.0 million if the claims were not paid to Cleco Power pursuant to the guarantee. An indemnification liability of $13.5 million which represents the fair value of these indemnifications was recorded on Cleco’s Condensed Consolidated Balance Sheet.

The indemnification liabilities were reduced through expiration of the contractual life or through a reduction in the probability of a claim arising. The indemnification obligation had a term of approximately three years. As these underlying indemnifications expired, income was recognized on Cleco’s Condensed Consolidated Statements of Income. At September 30, 2013, the contractual life of the indemnification had expired and there was no remaining liability. For the three months ended September 30, 2013, less than $0.1 million of income was recognized and for the nine months ended September 30, 2013, $0.4 million was recognized. For the three months ended September 30, 2012, no income was recognized and for the nine months ended September 30, 2012, $7.2 million was recognized.

In April 2011, Acadia completed its disposition of Acadia Unit 2 to Entergy Louisiana. Limited guarantees and indemnifications were provided to Entergy Louisiana and an indemnification liability of $21.8 million, which represents the fair value of these indemnifications was recorded on Cleco’s Condensed Consolidated Balance Sheet.

The indemnification liabilities are reduced through expiration of the contractual life or through a reduction in the probability of a claim arising. The indemnification obligation is expected to have a term of three years. After the three-year period, a residual value of approximately $0.2 million will remain. At September 30, 2013, an indemnification liability of $0.9 million remained, which represents the risk of payment, as a contingent sale obligation recorded on Cleco’s Condensed Consolidated Balance Sheet. As these underlying indemnifications expire, income is recognized on Cleco’s Condensed Consolidated Statements of Income. For the three months ended September 30, 2013, no income was recognized and for the nine months ended September 30, 2013, $6.9 million was recognized. For the three months ended September 30, 2012, no income was recognized and for the nine months ended September 30, 2012, $11.8 million was recognized. The maximum amount of the potential payment to Entergy Louisiana for the indemnifications is the purchase price of $298.8 million, except for the liabilities retained for which there is no maximum amount. Cleco Corporation is obligated to pay the same maximum amounts as Acadia if Acadia is unable to pay claims to Entergy Louisiana pursuant to the guarantee.

As part of the Amended Lignite Mining Agreement, Cleco Power and SWEPCO, joint owners of Dolet Hills, have agreed to pay the loan and lease principal obligations of the lignite miner, DHLC, when due if they do not have sufficient funds or credit to pay. Any amounts paid on behalf of the miner would be credited by the lignite miner against future invoices for lignite delivered. At September 30, 2013, Cleco Power had a liability of $3.8 million related to the amended agreement. The maximum projected payment by Cleco Power under this guarantee is estimated to be $72.5 million; however, the Amended Lignite Mining Agreement does not contain a cap. The projection is based on the forecasted loan and lease obligations to be incurred by DHLC, primarily for purchases of equipment. Cleco Power has the right to dispute the incurrence of loan and lease obligations through the review of the mining plan before the incurrence of such loan and lease obligations. The Amended Lignite Mining Agreement does not terminate pursuant to its terms until 2026 and does not affect the amount the Registrants can borrow under their credit facilities. Currently, management does not expect to be required to pay DHLC under the guarantee.

In its bylaws, Cleco Corporation has agreed to indemnify directors, officers, agents, and employees who are made a party to a pending or completed suit, arbitration, investigation, or other proceeding whether civil, criminal, investigative, or administrative, if the basis of inclusion arises as the result of acts conducted in the discharge of their official capacity. Cleco Corporation has purchased various insurance policies to reduce the risks associated with the indemnification. In its operating agreement, Cleco Power provides for the same indemnification as described above with respect to its managers, officers, agents, and employees.

Generally, neither Cleco Corporation nor Cleco Power has recourse that would enable them to recover amounts paid under their guarantee or indemnification obligations. The one exception is the insurance contracts associated with the indemnification of directors, managers, officers, agents, and employees. There are no assets held as collateral for third parties that either Cleco Corporation or Cleco Power could obtain and liquidate to recover amounts paid pursuant to the guarantees or indemnification obligations.

The following table summarizes the expected amount of commitment termination per period of off-balance sheet commitments and on-balance sheet guarantees discussed above.

							AT SEPT. 30, 2013
			AMOUNT OF COMMITMENT EXPIRATION PER PERIOD
(THOUSANDS)	NET AMOUNT COMMITTED		LESS THAN ONE YEAR		1-3 YEARS		3-5 YEARS		MORE THAN 5 YEARS
Off-balance sheet commitments	$	4,225	$	3,725	$	—	$	—	$	500
On-balance sheet guarantees	4,906		900		—		—		4,006
Total	$	9,131	$	4,625	$	—	$	—	$	4,506

Other Commitments

NMTC Fund

In 2008, Cleco Corporation and US Bancorp Community Development Corporation (USBCDC) formed the NMTC Fund. Cleco has a 99.9% membership interest in the NMTC Fund and USBCDC has a 0.1% interest. The purpose of the NMTC Fund is to invest in projects located in qualified active low-income communities that are underserved by typical debt capital markets. These investments are designed to generate NMTCs and Historical Rehabilitation tax credits. The NMTC Fund was later amended to include renewable energy investments. The majority of the energy investments qualify for grants under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009. The tax benefits received from the NMTC Fund reduce the federal income tax obligations of Cleco Corporation. In total, Cleco Corporation will contribute $283.6 million of equity contributions to the NMTC Fund and will receive at least $301.9 million in the form of tax credits, tax losses, capital gains/losses, earnings, and cash over the life of the investment, which ends in 2017. The $18.3 million difference between equity contributions and total benefits received will be recognized over the life of the NMTC Fund as net tax benefits are delivered. The following table reflects remaining future equity contributions.

(THOUSANDS)	CONTRIBUTION
Three months ending Dec. 31, 2013	$	12,071
Years ending Dec. 31,
2014	47,434
2015	11,195
2016	3,698
2017	2,914
Total	$	77,312

Of the $77.3 million, $48.3 million is due to be paid within the next 12 months. Due to the right of offset, the investment and associated debt are presented on Cleco’s Condensed Consolidated Balance Sheet in the line item titled Tax credit fund investment, net. The amount of tax benefits delivered in excess of capital contributions as of September 30, 2013, was $83.4 million. The amount of tax benefits delivered but not utilized as of September 30, 2013, was $112.3 million and is reflected as a deferred tax asset.

The equity contribution does not contain a stated rate of interest. Cleco Corporation has recorded the liability and investment at its calculated fair value within the framework of the authoritative guidance. In order to calculate the fair value, management used an imputed rate of interest assuming that Cleco Corporation obtained financing of a similar nature from a third party. The imputed interest rate was used in a net present value model in order to calculate the fair value of the remaining portion of the delayed equity contributions. The following table contains the disclosures required by the authoritative guidelines for equity investments with an imputed interest rate.

(THOUSANDS)
Equity contributions, imputed interest rate 6%
Principal payment schedule above:	$	77,312
Less:  unamortized discount	5,015
Total	$	72,297

The gross investment amortization expense will be recognized over a ten-year period, with four years remaining under the new amendment, using the cost method in accordance with the authoritative guidance for investments. The grants received under Section 1603, which allow certain projects to receive a federal grant in lieu of tax credits, and other cash reduce the basis of the investment. Periodic amortization of the investment and the deferred taxes generated by the basis reduction temporary difference are included as components of income tax expense.

Other

Cleco has accrued for liabilities related to third parties and employee medical benefits.

Risks and Uncertainties

Cleco Corporation

Cleco Corporation could be subject to possible adverse consequences if Cleco’s counterparties fail to perform their obligations or if Cleco Corporation or its affiliates are not in compliance with loan agreements or bond indentures.

Other

Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows. After assessing the current operating performance, liquidity, and credit ratings of Cleco Corporation, management believes that Cleco will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. If Cleco Corporation’s credit ratings were to be downgraded by Moody’s or S&P, Cleco Corporation would be required to pay additional fees and higher interest rates under its bank credit and other debt agreements.

Future actions or inactions of the U.S. federal government, including a failure to increase the government debt limit or another shutdown of the federal government, could increase the actual or perceived risk that the U.S. may not ultimately pay its obligations when due and may disrupt financial markets, including capital markets.

Changes in the regulatory environment or market forces could cause Cleco to determine its assets have suffered an other-than-temporary decline in value, whereby an impairment would be required to be taken and Cleco’s financial condition could be materially adversely affected.

Cleco Power

Cleco Power supplies the majority of its customers’ electric power requirements from its own generation facilities. In addition to power obtained from power purchase agreements, Cleco Power purchases power from other utilities and marketers to supplement its generation at times of relatively high demand or when the purchase price of power is less than its own cost of generation. Due to its location on the transmission grid, Cleco Power relies on two main suppliers of electric transmission when accessing external power markets. At times, constraints limit the amount of purchased power these transmission providers can deliver into Cleco Power’s service territory.

Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows. After assessing the current operating performance, liquidity, and credit ratings of Cleco Power, management believes that Cleco Power will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. Cleco Power pays fees and interest under its bank credit agreements based on the highest rating held. If Cleco Power’s credit ratings were to be downgraded by Moody’s or S&P, Cleco Power would be required to pay additional fees and higher interest rates under its bank credit agreements. Cleco Power’s collateral for derivatives is based on the lowest rating held. If Cleco Power’s credit ratings were to be downgraded by Moody’s or S&P, Cleco Power would be required to pay additional collateral for derivatives.

Future actions or inactions of the U.S. federal government, including a failure to increase the government debt limit or another shutdown of the federal government, could increase the actual or perceived risk that the U.S. may not ultimately pay its obligations when due and may disrupt financial markets, including capital markets.

XML

Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees, Litigation (Details) (USD $) In Millions, unless otherwise specified	3 Months Ended		12 Months Ended			1 Months Ended
	Sep. 30, 2013 Discrimination Complaint [Member] employee	Sep. 30, 2013 Other Litigation Matters [Member]	Dec. 31, 2010 Minimum [Member] Discrimination Complaint [Member]	Dec. 31, 2009 Minimum [Member] Discrimination Complaint [Member]	Mar. 09, 2010 Cleco Power [Member] City of Opelousas Litigation [Member] claim resident	Mar. 31, 2010 Cleco Power [Member] Minimum [Member] City of Opelousas Litigation [Member]	Mar. 31, 2010 Cleco Power [Member] Customer [Member] City of Opelousas Litigation [Member] customer
Litigation [Abstract]
Loss contingency, damages sought, minimum amount			$ 2.5	$ 35.0		$ 30.0
Loss contingency, number of plaintiffs (in ones)	2						3
Number of residents in second class action lawsuit (in ones)					249
Number of class action law suits (in ones)					2
Amount of estimated loss		$ 8.9

XML

Variable Interest Entities (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012	Dec. 31, 2012
Components of equity method investments [Abstract]
Total equity investment in investee	$ 14,541		$ 14,541		$ 14,540
Oxbow Variable Interest Entity, Not Primary Beneficiary [Member]
Variable Interest Entity [Line Items]
Variable interest entity, ownership percentage (in hundredths)			50.00%
Ownership percentage by other parties (in hundredths)			50.00%
Components of equity method investments [Abstract]
Purchase price	12,873		12,873		12,873
Cash contributions	1,659		1,659		1,659
Total equity investment in investee	14,532		14,532		14,532
Comparison of carrying amount of assets and liabilities to maximum loss exposure [Abstract]
Oxbow's net assets/liabilities	29,065		29,065		29,065
Cleco Power's 50% equity	14,532		14,532		14,532
Cleco's maximum exposure to loss	14,532		14,532		14,532
Summarized financial information [Abstract]
Current assets	2,182		2,182		1,814
Property, plant and equipment, net	22,698		22,698		23,029
Other assets	4,254		4,254		4,248
Total assets	29,134		29,134		29,091
Current liabilities	69		69		26
Partner's capital	29,065		29,065		29,065
Total liabilities and partners' capital	29,134		29,134		29,091
Operating revenue	856	450	1,795	1,125
Operating expenses	856	450	1,795	1,125
Income (loss) before taxes	0	0	0	0
Maximum [Member] | Subsidiaries Less Than 100% Owned by Diversified Lands LLC, Not Primary Beneficiary [Member]
Components of equity method investments [Abstract]
Total equity investment in investee	$ 100		$ 100