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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2013

Effective Income Tax Rate Reconciliation

For the years ended December 31, 2013, 2012, and 2011, income tax expense was lower than the amount computed by applying the statutory federal rate to income before tax. The differences are as follows.



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS, EXCEPT FOR %)	2013			2012			2011
Income before tax	$	240,260		$	228,975		$	298,745
Statutory rate	35.0		%	35.0		%	35.0		%
Tax at federal statutory rate	$	84,091		$	80,141		$	104,561
Increase (decrease):
Plant differences, including AFUDC flowthrough	427			(1,222		)	(1,758		)
Amortization of investment tax credits	(1,108		)	(1,180		)	(1,238		)
State income taxes	1,094			(218		)	2,155
Tax settlement	—			—			10,782
New markets tax credits	(4,806		)	(9,261		)	(4,697		)
Other	(123		)	(2,933		)	(6,908		)
Total taxes	$	79,575		$	65,327		$	102,897
Effective Rate	33.1		%	28.5		%	34.4		%

Current and Deferred Income Tax Expense

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



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2013			2012			2011
Current federal income tax expense	$	15,672		$	47,768		$	77,659
Deferred federal income tax expense	65,237			21,724			26,577
Amortization of accumulated deferred investment tax credits	(1,108		)	(1,180		)	(1,238		)
Total federal income tax expense	$	79,801		$	68,312		$	102,998
Current state income tax (benefit) expense	(978		)	(1,192		)	2,857
Deferred state income tax expense (benefit)	752			(1,793		)	(2,958		)
Total state income tax benefit	$	(226	)	$	(2,985	)	$	(101	)
Total federal and state income tax expense	$	79,575		$	65,327		$	102,897
Items charged or credited directly to shareholders’ equity
Federal deferred	3,497			(2,386		)	(8,908		)
State deferred	565			(385		)	(1,439		)
Total tax expense (benefit) from items charged directly to shareholders’ equity	$	4,062		$	(2,771	)	$	(10,347	)
Total federal and state income tax expense	$	83,637		$	62,556		$	92,550

Deferred Tax Assets and Liabilities

The balance of accumulated deferred federal and state income tax assets and liabilities at December 31, 2013 and 2012 was comprised of the following.



	AT DEC. 31,
(THOUSANDS)	2013			2012
Depreciation and property basis differences	$	(878,298	)	$	(822,831	)
Net operating loss carryforward	95,360			139,036
New markets tax credits	99,782			82,584
Fuel costs	(7,229		)	(9,400		)
Deferred carrying charges	—			1,369
SERP – other comprehensive income	15,330			19,392
Regulated operations regulatory liability, net	(84,702		)	(75,046		)
Postretirement benefits other than pension	(5,075		)	(2,275		)
Other	(10,139		)	(16,468		)
Accumulated deferred federal and state income taxes	$	(774,971	)	$	(683,639	)

Liability for Unrecognized Tax Benefits

The total liability for unrecognized tax benefits for Cleco and Cleco Power at December 31, 2013, 2012, and 2011 is shown in the following table:



Cleco
(THOUSANDS)	LIABILITY FOR UNRECOGNIZED TAX BENEFITS
Balance at January 1, 2011	$	102,785
Reduction for tax positions of current period	(4,129		)
Additions for tax positions of prior years	11,031
Reduction for tax positions of prior years	(8,670		)
Reduction for settlement with tax authority	(44,782		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2011	$	56,235
Reduction for tax positions of current period	—
Additions for tax positions of prior years	—
Reduction for tax positions of prior years	—
Reduction for settlement with tax authority	(53,109		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2012	$	3,126
Reduction for tax positions of current period	—
Additions for tax positions of prior years	2,193
Reduction for tax positions of prior years	(248		)
Reduction for settlement with tax authority	—
Reduction for lapse of statute of limitations	—
Balance at December 31, 2013	$	5,071

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



	AT DEC. 31,
(THOUSANDS)	2013		2012
Interest payable
Cleco	$	88	$	1,420
Cleco Power	$	11	$	3,358

The interest payable reflects the amount of interest anticipated to be paid to taxing authorities. These amounts do not included any offset for amounts that may be recovered from customers under existing rate orders. The amounts expected to be recoverable from Cleco Power’s customers under existing rate orders at December 31, 2013 and December 31, 2012, are $8.4 million and $6.2 million, respectively.



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2013		2012			2011
Interest charges
Cleco	$	154	$	(9,223	)	$	(27,175	)
Cleco Power	$	11	$	(11,648	)	$	2,116

Cleco Power [Member]

Effective Income Tax Rate Reconciliation

Cleco Power

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



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS, EXCEPT FOR %)	2013			2012			2011
Income before tax	$	229,791		$	214,981		$	212,244
Statutory rate	35.0		%	35.0		%	35.0		%
Tax at federal statutory rate	$	80,427		$	75,243		$	74,285
Increase (decrease):
Plant differences, including AFUDC flowthrough	427			(1,222		)	(1,758		)
Amortization of investment tax credits	(1,108		)	(1,180		)	(1,238		)
State income taxes	730			(705		)	(853		)
Other	(1,095		)	(4,003		)	(1,027		)
Total taxes	$	79,381		$	68,133		$	69,409
Effective Rate	34.5		%	31.7		%	32.7		%

Current and Deferred Income Tax Expense

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



	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2013			2012			2011
Current federal income tax (benefit) expense	$	(33	)	$	13,008		$	23,347
Deferred federal income tax expense	81,188			59,008			47,763
Amortization of accumulated deferred investment tax credits	(1,108		)	(1,180		)	(1,238		)
Total federal income tax expense	$	80,047		$	70,836		$	69,872
Current state income tax (benefit) expense	(1,012		)	(1,060		)	1,691
Deferred state income tax expense (benefit)	346			(1,643		)	(2,154		)
Total state income tax benefit	$	(666	)	$	(2,703	)	$	(463	)
Total federal and state income taxes	$	79,381		$	68,133		$	69,409
Items charged or credited directly to members’ equity
Federal deferred	2,824			20			(8,580		)
State deferred	456			3			(1,386		)
Total tax expense (benefit) from items charged directly to member’s equity	$	3,280		$	23		$	(9,966	)
Total federal and state income tax expense	$	82,661		$	68,156		$	59,443

Deferred Tax Assets and Liabilities

The balance of accumulated deferred federal and state income tax assets and liabilities at December 31, 2013 and 2012, was comprised of the following.



	AT DEC. 31,
(THOUSANDS)	2013			2012
Depreciation and property basis differences	$	(836,771	)	$	(804,133	)
Net operating loss carryforward	81,102			127,742
Fuel costs	(7,229		)	(9,389		)
Deferred carrying charges	—			1,369
SERP - other comprehensive income	8,681			11,961
Regulated operations regulatory liability, net	(84,702		)	(75,046		)
Postretirement benefits other than pension	(19,056		)	(13,442		)
Other	(6,603		)	2,455
Accumulated deferred federal and state income taxes	$	(864,578	)	$	(758,483	)

Liability for Unrecognized Tax Benefits



Cleco Power
(THOUSANDS)	LIABILITY FOR UNRECOGNIZED TAX BENEFITS
Balance at January 1, 2011	$	60,975
Reduction for tax positions of current period	(4,018		)
Additions for tax positions of prior years	4,271
Reduction for tax positions of prior years	(8,670		)
Reduction for settlement with tax authority	—
Reduction for lapse of statute of limitations	—
Balance at December 31, 2011	$	52,558
Reduction for tax positions of current period	—
Additions for tax positions of prior years	—
Reduction for tax positions of prior years	—
Reduction for settlement with tax authority	(52,310		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2012	$	248
Reduction for tax positions of current period	—
Additions for tax positions of prior years	—
Reduction for tax positions of prior years	(248		)
Reduction for settlement with tax authority	—
Reduction for lapse of statute of limitations	—
Balance at December 31, 2013	$	—

- Definition

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

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