Note 3 — Recent Authoritative Guidance

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

In February 2016, FASB amended the guidance to account for leases. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes practical expedients that may be elected by entities. Management expects to elect the practical expedients which permit the Registrants to retain their current lease assessment and classifications for existing leases at the effective date and to not apply the new guidance to land easements that exist or expire before the effective date. Management is currently working through an adoption plan which includes the evaluation of lease contracts, new business processes, including changes to current recordkeeping systems, and the need for additional internal controls. Other than an expected increase in assets and liabilities, the full impact of the amended guidance has not been determined. Management will continue to evaluate the impact of this guidance, including any additional clarifying amendments issued during implementation. The amended guidance could have a material impact on the results of operations, financial condition, or cash flows of the Registrants.

In November 2016, FASB amended guidance for certain cash flow issues. The amended guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. Therefore, amounts generally described as restricted cash and cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within those years. This amendment was applied using a retrospective transition method to each period presented. This guidance impacted the presentation of the cash flows statement, but did not have an impact on the results of operations or financial condition of the Registrants.

The following tables summarize the changes in the presentation of the Condensed Consolidated Statements of Cash Flows for Cleco and Cleco Power:



Cleco
	FOR THE THREE MONTHS ENDED MAR. 31, 2017
(THOUSANDS)	AS REPORTED			AS ADJUSTED
Transfer of cash from restricted accounts, net	$	8,790		$	—
Net cash used in investing activities	$	(38,112	)	$	(46,902	)
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents	$	(1,558	)	$	(10,348	)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	$	23,077		$	69,571
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	21,519		$	59,223



Cleco Power
	FOR THE THREE MONTHS ENDED MAR. 31, 2017
(THOUSANDS)	AS REPORTED			AS ADJUSTED
Transfer of cash from restricted accounts, net	$	8,790		$	—
Net cash used in investing activities	$	(36,762	)	$	(45,552	)
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents	$	(318	)	$	(9,108	)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	$	21,482		$	67,955
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	21,164		$	58,847

In March 2017, FASB amended guidance related to defined benefit pension and other postretirement benefit plans. The new amendment requires an entity to present service cost in the same line item as other current employee compensation costs and to present the remaining components of net benefit cost in a separate line item outside of operating items. The amendment also allows only the service cost component of net benefit cost to be eligible for capitalization within property, plant, and equipment. The non-service costs will continue to be capitalized and recovered from ratepayers as approved by FERC. Beginning January 1, 2018, the non-service costs capitalized for ratemaking purposes were reflected as a regulatory asset or liability for GAAP. The adoption of this guidance was effective for annual periods beginning after December 15, 2017, including interim periods within those years. This amendment was applied retrospectively for the presentation of the service cost in the income statement while the capitalization of the service cost was applied prospectively. This guidance did not have a significant impact on the results of operations, financial condition, or cash flows of the Registrants.

The following tables summarize the impact of this guidance on the Condensed Consolidated Statements of Income for Cleco and Cleco Power:



Cleco
	FOR THE THREE MONTHS ENDED MAR. 31, 2017
(THOUSANDS)	AS REPORTED			AS ADJUSTED
Other operations expenses	$	31,892		$	29,327		*
Total operating expenses	$	211,703		$	209,039
Operating income	$	38,798		$	41,462
Other expense	$	(274	)	$	(2,938	)
*Also reflects $0.1 million of Merger transaction and commitment costs that were reported in a separate line item in prior year.



Cleco Power
	FOR THE THREE MONTHS ENDED MAR. 31, 2017
(THOUSANDS)	AS REPORTED			AS ADJUSTED
Other operations expenses	$	31,988		$	30,264
Total operating expenses	$	209,002		$	207,278
Operating income	$	44,700		$	46,424
Other expense	$	(274	)	$	(1,998	)

In February 2018, FASB amended guidance that permits, but does not require, companies to reclassify stranded tax effects from the TCJA from AOCI to retained earnings. The adoption of this guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. Management is currently evaluating this guidance and the impact it may have on the results of operations, financial condition, or cash flows of the Registrants.