Income Taxes (Tables)

12 Months Ended

Dec. 31, 2014

Effective Income Tax Rate Reconciliation

For the years ended December 31, 2014, 2013, and 2012, 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 %)	2014			2013			2012
Income before tax	$	221,855		$	240,260		$	228,975
Statutory rate	35.0		%	35.0		%	35.0		%
Tax at federal statutory rate	$	77,649		$	84,091		$	80,141
Increase (decrease):
Plant differences, including AFUDC flowthrough	462			427			(1,222		)
Amortization of investment tax credits	(983		)	(1,108		)	(1,180		)
State income taxes	23			1,094			(218		)
Settlement with taxing authorities	(9,106		)	—			—
New markets tax credits	(754		)	(4,806		)	(9,261		)
Other	(175		)	(123		)	(2,933		)
Total taxes	$	67,116		$	79,575		$	65,327
Effective Rate	30.3		%	33.1		%	28.5		%

Current and Deferred Income Tax Expense

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

	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2014			2013			2012
Current federal income tax expense	$	11,082		$	15,672		$	47,768
Deferred federal income tax expense	71,061			65,237			21,724
Amortization of accumulated deferred investment tax credits	(983		)	(1,108		)	(1,180		)
Total federal income tax expense	$	81,160		$	79,801		$	68,312
Current state income tax benefit	(6,580		)	(978		)	(1,192		)
Deferred state income tax (benefit) expense	(7,464		)	752			(1,793		)
Total state income tax benefit	$	(14,044	)	$	(226	)	$	(2,985	)
Total federal and state income tax expense	$	67,116		$	79,575		$	65,327
Items charged or credited directly to shareholders’ equity
Federal deferred	(3,656		)	3,497			(2,386		)
State deferred	(590		)	565			(385		)
Total tax (benefit) expense from items charged directly to shareholders’ equity	$	(4,246	)	$	4,062		$	(2,771	)
Total federal and state income tax expense	$	62,870		$	83,637		$	62,556

Deferred Tax Assets and Liabilities

The balance of accumulated deferred federal and state income tax assets and liabilities at December 31, 2014 and 2013 was comprised of the following:

	AT DEC. 31,
(THOUSANDS)	2014			2013
Depreciation and property basis differences	$	(892,725	)	$	(878,298	)
Net operating loss carryforward	56,315			95,360
New markets tax credits	84,504			99,782
Fuel costs	(11,686		)	(7,229		)
Other comprehensive income	19,576			15,330
Regulated operations regulatory liability, net	(90,135		)	(84,702		)
Postretirement benefits other than pension	812			(5,075		)
Other	(8,734		)	(10,139		)
Accumulated deferred federal and state income taxes	$	(842,073	)	$	(774,971	)

Liability for 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 Consolidated Balance Sheets and Statements of Income, are shown in the following tables:

	AT DEC. 31,
(THOUSANDS)	2014		2013
Interest payable
Cleco	$	—	$	88
Cleco Power	$	—	$	11

The interest payable reflects the amount of interest anticipated to be paid to or received from taxing authorities. These amounts do not include any offset for amounts that may be recovered from customers under the existing rate orders. The amounts expected to be recoverable from Cleco Power’s customers under existing rate orders for settled positions at December 31, 2014 and December 31, 2013, are $5.2 million and $8.4 million, respectively.

	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2014		2013		2012
Interest charges
Cleco	$	—	$	154	$	(9,223	)
Cleco Power	$	—	$	11	$	(11,648	)

The total liability for unrecognized tax benefits for Cleco and Cleco Power at December 31, 2014, 2013, and 2012 is shown in the following table:

Cleco
(THOUSANDS)	LIABILITY FOR UNRECOGNIZED TAX BENEFITS
Balance at January 1, 2012	$	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
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	(5,071		)
Reduction for lapse of statute of limitations	—
Balance at December 31, 2014	$	—

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 %)	2014			2013			2012
Income before tax	$	231,290		$	229,791		$	214,981
Statutory rate	35.0		%	35.0		%	35.0		%
Tax at federal statutory rate	$	80,952		$	80,427		$	75,243
Increase (decrease):
Plant differences, including AFUDC flowthrough	462			427			(1,222		)
Amortization of investment tax credits	(983		)	(1,108		)	(1,180		)
State income taxes	351			730			(705		)
Settlement with taxing authorities	(2,320		)	—			—
Other	(1,488		)	(1,095		)	(4,003		)
Total taxes	$	76,974		$	79,381		$	68,133
Effective Rate	33.3		%	34.5		%	31.7		%

Current and Deferred Income Tax Expense

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

	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2014			2013			2012
Current federal income tax (benefit) expense	$	(197	)	$	(33	)	$	13,008
Deferred federal income tax expense	83,676			81,188			59,008
Amortization of accumulated deferred investment tax credits	(983		)	(1,108		)	(1,180		)
Total federal income tax expense	$	82,496		$	80,047		$	70,836
Current state income tax benefit	(4,161		)	(1,012		)	(1,060		)
Deferred state income tax (benefit) expense	(1,361		)	346			(1,643		)
Total state income tax benefit	$	(5,522	)	$	(666	)	$	(2,703	)
Total federal and state income taxes	$	76,974		$	79,381		$	68,133
Items charged or credited directly to members’ equity
Federal deferred	(1,137		)	2,824			20
State deferred	(184		)	456			3
Total tax (benefit) expense from items charged directly to member’s equity	$	(1,321	)	$	3,280		$	23
Total federal and state income tax expense	$	75,653		$	82,661		$	68,156

Deferred Tax Assets and Liabilities

The balance of accumulated deferred federal and state income tax assets and liabilities at December 31, 2014 and 2013, was comprised of the following:

	AT DEC. 31,
(THOUSANDS)	2014			2013
Depreciation and property basis differences	$	(890,030	)	$	(836,771	)
Net operating loss carryforward	12,323			81,102
Fuel costs	(11,686		)	(7,229		)
Other comprehensive income	10,002			8,681
Regulated operations regulatory liability, net	(90,135		)	(84,702		)
Postretirement benefits other than pension	(14,346		)	(19,056		)
Other	(10,735		)	(6,603		)
Accumulated deferred federal and state income taxes	$	(994,607	)	$	(864,578	)

Liability for Unrecognized Tax Benefits

Cleco Power
(THOUSANDS)	LIABILITY FOR UNRECOGNIZED TAX BENEFITS
Balance at January 1, 2012	$	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	$	—
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	—
Reduction for lapse of statute of limitations	—
Balance at December 31, 2014	$	—