

Note 12 — Disclosures about Segments

Cleco

Cleco’s reportable segment is based on its method of internal reporting, which disaggregates business units by its first-tier subsidiary.

Cleco Power, the reportable segment, engages in business activities from which it earns revenue and incurs expenses. Segment managers report periodically to Cleco’s CEO with discrete financial information and, at least quarterly, present discrete financial information to Cleco and Cleco Power’s Boards of Managers. The reportable segment prepares budgets that are presented to and approved by Cleco and Cleco Power’s Boards of Managers. The column shown as Other in the chart below includes the holding company, a shared services subsidiary, two transmission interconnection facility subsidiaries, an investment subsidiary, and a subsidiary formed to facilitate the Cleco Cajun Transaction. On December 29, 2017, Cleco sold the transmission assets owned by Attala and Perryville, the two subsidiaries that owned and operated the transmission interconnection facilities. After December 29, 2017, the remaining operations of Attala and Perryville were minimal. On February 4, 2019, the Cleco Cajun Transaction was closed. For the Registrants’ Combined Quarterly Report on Form 10-Q for the quarter ended March 31, 2019, Cleco Cajun is expected to become a new reportable segment. For more information on the transaction, see Note 21 — “Cleco Cajun Transaction”.

The financial results of Cleco’s segment are presented on an accrual basis. Management evaluates the performance of its segment and allocates resources to it 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 joint and common administrative support services.



SEGMENT INFORMATION
	SUCCESSOR FOR THE YEAR ENDED DEC. 31, 2018
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS			TOTAL
Revenue
Electric operations	$	1,191,587		$	(9,680	)	$	—		$	1,181,907
Other operations	82,330			2			—			82,332
Affiliate revenue	874			74,591			(75,465		)	—
Electric customer credits	(33,195		)	—			—			(33,195		)
Operating revenue, net	$	1,241,596		$	64,913		$	(75,465	)	$	1,231,044
Depreciation and amortization	$	162,069		$	8,344		$	1		$	170,414
Merger transaction and commitment costs	$	—		$	19,514		$	—		$	19,514
Interest income	$	5,052		$	1,338		$	(317	)	$	6,073
Interest charges	$	71,303		$	55,659		$	(320	)	$	126,642
Federal and state income tax expense (benefit)	$	55,924		$	(26,541	)	$	(1	)	$	29,382
Net income (loss)	$	162,257		$	(67,819	)	$	(1	)	$	94,437
Additions to property, plant, and equipment	$	289,153		$	1,908		$	—		$	291,061
Equity investment in investee	$	18,172		$	—		$	—		$	18,172
Goodwill	$	1,490,797		$	—		$	—		$	1,490,797
Total segment assets	$	5,839,853		$	633,756		$	(36,795	)	$	6,436,814



	SUCCESSOR FOR THE YEAR ENDED DEC. 31, 2017
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS			TOTAL
Revenue
Electric operations	$	1,108,389		$	(10,757	)	$	—		$	1,097,632
Other operations	77,522			2,058			—			79,580
Affiliate revenue	851			57,168			(58,019		)	—
Electric customer credits	(1,566		)	—			—			(1,566		)
Operating revenue, net	$	1,185,196		$	48,469		$	(58,019	)	$	1,175,646
Depreciation and amortization	$	158,415		$	8,439		$	—		$	166,854
Merger transaction and commitment costs	$	—		$	5,445		$	(293	)	$	5,152
Interest income	$	1,283		$	316		$	(175	)	$	1,424
Interest charges	$	69,362		$	53,725		$	(174	)	$	122,913
Federal and state income tax expense (benefit)	$	67,331		$	(60,252	)	$	—		$	7,079
Net income (loss)	$	150,738		$	(12,659	)	$	1		$	138,080
Additions to property, plant, and equipment	$	235,252		$	1,680		$	—		$	236,932
Equity investment in investee	$	18,172		$	—		$	—		$	18,172
Goodwill	$	1,490,797		$	—		$	—		$	1,490,797
Total segment assets	$	5,679,538		$	619,943		$	(21,099	)	$	6,278,382



	SUCCESSOR APR. 13, 2016 - DEC. 31, 2016												PREDECESSOR JAN. 1, 2016 - APR. 12, 2016
(THOUSANDS)	CLECO POWER			OTHER			ELIMINATIONS			TOTAL			CLECO POWER			OTHER			ELIMINATIONS			TOTAL
Revenue
Electric operations	$	810,075		$	(7,482	)	$	(1	)	$	802,592		$	281,154		$	—		$	—		$	281,154
Other operations	50,080			1,482			—			51,562			18,493			587			—			19,080
Affiliate revenue	621			35,602			(36,223		)	—			263			15,024			(15,287		)	—
Electric customer credits	(1,149		)	—			—			(1,149		)	(364		)	—			—			(364		)
Operating revenue, net	$	859,627		$	29,602		$	(36,224	)	$	853,005		$	299,546		$	15,611		$	(15,287	)	$	299,870
Depreciation and amortization	$	109,695		$	7,296		$	(1	)	$	116,990		$	43,698		$	377		$	1		$	44,076
Merger transaction and commitment costs	$	151,501		$	23,285		$	—		$	174,786		$	—		$	34,928		$	(16	)	$	34,912
Interest income	$	652		$	275		$	(87	)	$	840		$	208		$	69		$	(12	)	$	265
Interest charges	$	54,606		$	35,246		$	(86	)	$	89,766		$	21,840		$	295		$	(12	)	$	22,123
Federal and state income tax expense (benefit)	$	5,376		$	(28,198	)	$	—		$	(22,822	)	$	12,993		$	(9,525	)	$	—		$	3,468
Net income (loss)	$	17,580		$	(41,692	)	$	(1	)	$	(24,113	)	$	21,548		$	(25,508	)	$	—		$	(3,960	)
Additions to property, plant, and equipment	$	143,790		$	654		$	—		$	144,444		$	42,353		$	39		$	—		$	42,392
Equity investment in investee	$	18,672		$	—		$	—		$	18,672
Goodwill	$	1,490,797		$	—		$	—		$	1,490,797
Total segment assets	$	5,758,245		$	614,959		$	(30,060	)	$	6,343,144

Cleco Power

Cleco Power is a vertically integrated, regulated electric utility operating within Louisiana and Mississippi and is viewed as one unit by management. Discrete financial reports are prepared only at the company level.