Disclosures about Segments

9 Months Ended

Sep. 30, 2022

Segment Reporting [Abstract]

Disclosures about Segments

Note 10 — Disclosures about Segments

Cleco’s reportable segments are based on its method of internal reporting, which disaggregates business units by its first-tier subsidiary. Cleco’s reportable segments are Cleco Power and Cleco Cajun.

Each reportable segment engages in business activities from which it earns revenue and incurs expenses. Segment managers report periodically to Cleco’s CEO, who is Cleco’s chief operating decision maker, with discrete financial information and, at least quarterly, present discrete financial information to Cleco Holdings’ and, in the case of Cleco Power, Cleco Power’s Boards of Managers. The reportable segment prepares budgets that are presented to and approved by

Cleco Holdings’ and, in the case of Cleco Power, Cleco Power’s Boards of Managers. The column shown as Other in the following tables includes the holding company, a shared services subsidiary, and an investment subsidiary. There were no changes to Cleco’s existing reportable segments.

The financial results in the following tables are presented on an accrual basis. EBITDA is a key non-GAAP financial measure used by the CEO to assess the operating performance of Cleco’s segments. Management evaluates the performance of Cleco’s segments and allocates resources to them based on segment profit and the requirements to implement strategic initiatives and projects to meet current business objectives. EBITDA is defined as net income

adjusted for interest, income taxes, depreciation, and amortization. Depreciation and amortization in the following tables includes amortization of intangible assets and liabilities recorded for the fair value adjustment of wholesale power supply agreements as a result of the 2016 Merger and the Cleco Cajun Transaction, as well as amortization of deferred lease revenue resulting from the Cleco Cajun Transaction. Material intercompany transactions occur on a regular basis. These intercompany transactions relate primarily to joint and common administrative support services as well as transmission services provided by Cleco Power to Cleco Cajun.

Segment Information for the Three Months Ended Sept. 30,
2022 (THOUSANDS)	CLECO POWER		CLECO CAJUN			TOTAL SEGMENTS
Revenue
Electric operations	$	481,153	$	140,767		$	621,920
Other operations	24,757		39,573			64,330
Affiliate revenue	1,657		—			1,657
Electric customer credits	(6,728)		—			(6,728)
Operating revenue, net	$	500,839	$	180,340		$	681,179
Net income	$	40,733	$	39,741		$	80,474
Add: Depreciation and amortization	44,368		13,336		(1)	57,704
Less: Interest income	1,726		472			2,198
Add: Interest charges	23,840		219			24,059
Add: Federal and state income tax expense	1,862		14,461			16,323
EBITDA	$	109,077	$	67,285		$	176,362
(1) Includes $3.6 million of amortization of intangible assets and liabilities related to wholesale power supply agreements and $(2.3) million of deferred lease revenue amortization as a result of the Cleco Cajun Transaction.

2022 (THOUSANDS)	TOTAL SEGMENTS		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	621,920	$	(2,420)		$	—	$	619,500
Other operations	64,330		1			(2,560)		61,771
Affiliate revenue	1,657		29,583			(31,240)		—
Electric customer credits	(6,728)		—			—		(6,728)
Operating revenue, net	$	681,179	$	27,164		$	(33,800)	$	674,543
Depreciation and amortization	$	57,704	$	4,375	(1)	$	—	$	62,079
Interest income	$	2,198	$	58		$	(18)	$	2,238
Interest charges	$	24,059	$	15,850		$	(19)	$	39,890
Federal and state income tax expense (benefit)	$	16,323	$	(10,712)		$	—	$	5,611
Net income (loss)	$	80,474	$	(12,103)		$	1	$	68,372
(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

2021 (THOUSANDS)	CLECO POWER		CLECO CAJUN			TOTAL SEGMENTS
Revenue
Electric operations	$	357,084	$	107,500		$	464,584
Other operations	22,779		35,158			57,937
Affiliate revenue	1,380		—			1,380
Electric customer credits	(691)		—			(691)
Operating revenue, net	$	380,552	$	142,658		$	523,210
Net income	$	56,561	$	86,744		$	143,305
Add: Depreciation and amortization	43,526		12,623		(1)	56,149
Less: Interest income	936		4			940
Add: Interest charges	18,509		1,117			19,626
Add: Federal and state income tax expense	548		29,888			30,436
EBITDA	$	118,208	$	130,368		$	248,576
(1) Includes $3.6 million of amortization of intangible assets and liabilities related to wholesale power supply agreements and $(2.3) million of deferred lease revenue amortization as a result of the Cleco Cajun Transaction.

2021 (THOUSANDS)	TOTAL SEGMENTS		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	464,584	$	(2,420)		$	—	$	462,164
Other operations	57,937		1			(2,217)		55,721
Affiliate revenue	1,380		32,116			(33,496)		—
Electric customer credits	(691)		—			—		(691)
Operating revenue, net	$	523,210	$	29,697		$	(35,713)	$	517,194
Depreciation and amortization	$	56,149	$	8,189	(1)	$	—	$	64,338
Interest income	$	940	$	43		$	(42)	$	941
Interest charges	$	19,626	$	15,044		$	(41)	$	34,629
Federal and state income tax expense (benefit)	$	30,436	$	133		$	—	$	30,569
Net income (loss)	$	143,305	$	(23,396)		$	1	$	119,910
(1) Includes $2.4 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

Segment Information for the Nine Months Ended Sept. 30,
2022 (THOUSANDS)	CLECO POWER		CLECO CAJUN			TOTAL SEGMENTS
Revenue
Electric operations	$	1,145,864	$	370,489		$	1,516,353
Other operations	62,528		111,897			174,425
Affiliate revenue	4,744		—			4,744
Electric customer credits	(6,992)		—			(6,992)
Operating revenue, net	$	1,206,144	$	482,386		$	1,688,530
Net income	$	134,462	$	132,190		$	266,652
Add: Depreciation and amortization	133,907		59,734		(2)	193,641
Less: Interest income	3,501		661			4,162
Add: Interest charges	63,947		253			64,200
Add: Federal and state income tax expense	5,800		47,136			52,936
EBITDA	$	334,615	$	238,652		$	573,267
Additions to property, plant, and equipment	$	139,726	$	4,844		$	144,570
Equity investment in investees (1)	$	2,072	$	—		$	2,072
Goodwill (1)	$	1,490,797	$	—		$	1,490,797
Total segment assets (1)	$	6,950,548	$	1,110,338		$	8,060,886
(1) Balances as of September 30, 2022. (2) Includes $10.8 million of amortization of intangible assets and liabilities related to wholesale power supply agreements and $(6.9) million of deferred lease revenue amortization as a result of the Cleco Cajun Transaction.

2022 (THOUSANDS)	TOTAL SEGMENTS		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	1,516,353	$	(7,260)		$	—	$	1,509,093
Other operations	174,425		5			(7,388)		167,042
Affiliate revenue	4,744		82,728			(87,472)		—
Electric customer credits	(6,992)		—			—		(6,992)
Operating revenue, net	$	1,688,530	$	75,473		$	(94,860)	$	1,669,143
Depreciation and amortization	$	193,641	$	13,127	(2)	$	(1)	$	206,767
Interest income	$	4,162	$	141		$	(67)	$	4,236
Interest charges	$	64,200	$	45,684		$	(66)	$	109,818
Federal and state income tax expense (benefit)	$	52,936	$	(23,384)		$	(1)	$	29,551
Net income (loss)	$	266,652	$	(41,173)		$	—	$	225,479
Additions to property, plant, and equipment	$	144,570	$	944		$	—	$	145,514
Equity investment in investees (1)	$	2,072	$	(305,348)		$	305,348	$	2,072
Goodwill (1)	$	1,490,797	$	—		$	—	$	1,490,797
Total segment assets (1)	$	8,060,886	$	248,847		$	174,788	$	8,484,521
(1) Balances as of September 30, 2022. (2) Includes $7.3 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

2021 (THOUSANDS)	CLECO POWER		CLECO CAJUN			TOTAL SEGMENTS
Revenue
Electric operations	$	887,191	$	300,415		$	1,187,606
Other operations	57,674		98,851			156,525
Affiliate revenue	4,259		—			4,259
Electric customer credits	(40,429)		244			(40,185)
Operating revenue, net	$	908,695	$	399,510		$	1,308,205
Net income	$	102,407	$	153,719		$	256,126
Add: Depreciation and amortization	126,534		36,614		(2)	163,148
Less: Interest income	2,404		10			2,414
Add: Interest charges	55,392		786			56,178
Add: Federal and state income tax (benefit) expense	(219)		52,561			52,342
EBITDA	$	281,710	$	243,670		$	525,380
Additions to property, plant, and equipment	$	200,237	$	5,904		$	206,141
Equity investment in investees (1)	$	2,072	$	—		$	2,072
Goodwill (1)	$	1,490,797	$	—		$	1,490,797
Total segment assets (1)	$	6,620,298	$	1,104,090		$	7,724,388
(1) Balances as of December 31, 2021. (2) Includes $10.0 million of amortization of intangible assets and liabilities related to wholesale power supply agreements and $(6.9) million deferred lease revenue amortization as a result of the Cleco Cajun Transaction.

2021 (THOUSANDS)	TOTAL SEGMENTS		OTHER			ELIMINATIONS		TOTAL
Revenue
Electric operations	$	1,187,606	$	(7,260)		$	(1)	$	1,180,345
Other operations	156,525		4			(5,752)		150,777
Affiliate revenue	4,259		85,392			(89,651)		—
Electric customer credits	(40,185)		—			—		(40,185)
Operating revenue, net	$	1,308,205	$	78,136		$	(95,404)	$	1,290,937
Depreciation and amortization	$	163,148	$	17,052	(2)	$	(1)	$	180,199
Interest income	$	2,414	$	100		$	(98)	$	2,416
Interest charges	$	56,178	$	45,732		$	(98)	$	101,812
Federal and state income tax expense (benefit)	$	52,342	$	(21,357)		$	—	$	30,985
Net income (loss)	$	256,126	$	(37,068)		$	1	$	219,059
Additions to property, plant, and equipment	$	206,141	$	1,116		$	—	$	207,257
Equity investment in investees (1)	$	2,072	$	(46,901)		$	46,901	$	2,072
Goodwill (1)	$	1,490,797	$	—		$	—	$	1,490,797
Total segment assets (1)	$	7,724,388	$	619,101		$	(218,471)	$	8,125,018
(1) Balances as of December 31, 2021. (2) Includes $7.3 million of amortization of intangible assets related to Cleco Power’s wholesale power supply agreements as a result of the 2016 Merger.

	FOR THE THREE MONTHS ENDED SEPT. 30,				FOR THE NINE MONTHS ENDED SEPT. 30,
(THOUSANDS)	2022		2021		2022		2021
Net income	$	68,372	$	119,910	$	225,479	$	219,059
Add: Depreciation and amortization	62,079		64,338		206,767		180,199
Less: Interest income	2,238		941		4,236		2,416
Add: Interest charges	39,890		34,629		109,818		101,812
Add: Federal and state income tax expense	5,611		30,569		29,551		30,985
Add: Other corporate costs and noncash items (1)	2,648		71		5,888		(4,259)
Total segment EBITDA	$	176,362	$	248,576	$	573,267	$	525,380
(1) Adjustments made for Other and Elimination totals not allocated to total segment EBITDA.