Intangible Assets and Liabilities

3 Months Ended

Mar. 31, 2022

Intangible Assets And Liabilities Disclosure [Abstract]

Intangible Assets and Liabilities

Note 14 — Intangible Assets and Liabilities

As a result of the 2016 Merger, fair value adjustments were recorded on Cleco’s Condensed Consolidated Balance Sheet for the valuation of finite intangible assets relating to long-term wholesale power supply agreements. At the end of their lives, these power supply agreement intangible assets will have no residual value. The intangible assets related to the power supply agreements are amortized over the estimated life of each applicable contract ranging between 7 and 19 years, and the amortization is included in Electric operations on Cleco’s Condensed Consolidated Statements of Income.

As a result of the Cleco Cajun Transaction, fair value adjustments were recorded on Cleco’s Condensed Consolidated Balance Sheet for the difference between the contract and market price of acquired long-term wholesale power agreements. At the end of their lives, these intangible assets and liabilities will have no residual value. These intangibles are amortized over the estimated life of each applicable contract ranging between 6 and 8 years. The amortization is included in Electric operations on Cleco’s Condensed Consolidated Statements of Income.

As part of the Cleco Cajun Transaction, Cleco assumed an LTSA for maintenance services related to the Cottonwood Plant. This intangible liability is being amortized using the straight-line method over the estimated life of the LTSA of seven years. The amortization is included as a reduction to the LTSA prepayments on Cleco’s Condensed Consolidated Balance Sheet.

The following table presents Cleco’s amortization of intangible assets and liabilities for the three months ended March 31, 2022, and 2021:

Cleco
	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2022		2021
Intangible assets
Trade name	$	—	$	64
Power supply agreements	$	6,400	$	6,400
Intangible liabilities
LTSA	$	871	$	871
Power supply agreements	$	389	$	882

The following table summarizes the balances for intangible assets and liabilities subject to amortization for Cleco at March 31, 2022, and December 31, 2021:

Cleco
(THOUSANDS)	AT MAR. 30, 2022		AT DEC. 31, 2021
Intangible assets
Power supply agreements	$	184,004	$	184,004
Total intangible assets carrying amount	184,004		184,004
Intangible liabilities
LTSA	24,100		24,100
Power supply agreements	14,200		14,200
Total intangible liability carrying amount	38,300		38,300
Net intangible assets carrying amount	145,704		145,704
Accumulated amortization	(87,606)		(82,466)
Net intangible assets subject to amortization	$	58,098	$	63,238