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Discontinued Operations
 12 Months Ended
Dec. 31, 2023
Discontinued Operations and Disposal Groups [Abstract]  
Discontinued Operations
Note 3 — Discontinued Operations
In 2022, Cleco Holdings began a strategic review process related to its investment in Cleco Cajun. In March 2023, Cleco Holdings’ management, with the support of its Board of Managers, committed to a plan of action for the disposition of the Cleco Cajun Sale Group. On November 22, 2023, the Cleco Cajun Divestiture Purchase and Sale Agreement was entered into between the Cleco Cajun Sellers and the Cleco Cajun Purchasers whereby the Cleco Cajun Sellers have agreed to sell the Cleco Cajun Sale Group to the Cleco Cajun Purchasers for the purchase price of $600.0 million, with $500.0 million due at closing and $100.0 million payable 24 months after closing. The purchase price is subject to the closing purchase price adjustment as set forth in the Cleco Cajun Divestiture Purchase and Sale Agreement, including adjustments based on net working capital.
The Cleco Cajun Sellers and the Cleco Cajun Purchasers have each made customary representations, warranties, and covenants in the Cleco Cajun Divestiture Purchase and Sale Agreement. The closing of the transaction is subject to customary closing conditions, including (i) the expiration or termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, (ii) approval of FERC, (iii) approval of the Federal Communication Commission, and (iv) customary conditions regarding the accuracy of the representations and warranties and compliance by the parties with their respective obligations under the Cleco Cajun Divestiture Purchase and Sale Agreement. The Cleco Cajun Divestiture Purchase and Sale Agreement includes customary termination provisions, including if the closing of the transaction does not occur within nine months of November 22, 2023. The parties expect the transaction to close in the second quarter of 2024.
Cleco Holdings’ management determined that the criteria under GAAP for the Cleco Cajun Sale Group to be classified as held for sale were met and the sale will represent a strategic shift that will have a major effect on Cleco’s future operations and financial results. Therefore, the results of operations and financial position of the Cleco Cajun Sale Group are presented as discontinued operations, and the financial information for historical periods provided in this Annual Report on Form 10-K has been recast to reflect this presentation. Certain expenses incurred by the Cleco Cajun Sale Group as a result of common services provided by Support Group are reflected in Cleco’s results of continuing operations due to the expected ongoing nature of those expenses. In addition, revenue recognized by Cleco Power from transmission services provided to the Cleco Cajun Sale Group is no longer eliminated upon consolidation of Cleco's financial statements and is reflected in Cleco’s results of continuing operations due to the expected ongoing nature of these services.
In February 2019 in connection with the approval of the Cleco Cajun Acquisition, Cleco made commitments to the LPSC that included the repayment of $400.0 million of Cleco Holdings’ debt by December 31, 2024. Proceeds from the divestiture of the Cleco Cajun Sale Group must be used to satisfy the LPSC commitment. At December 31, 2023, $66.7 million of that debt remains outstanding. Interest expense on that debt is included in discontinued operations.
Cleco determined that the estimated fair value less the estimated cost to sell the Cleco Cajun Sale Group was less than the carrying value of the Cleco Cajun Sale Group at March 31, 2023, June 30, 2023, September 30, 2023, and December 31, 2023. These determinations resulted in a total impairment charge of $173.0 million for the year ended December 31, 2023, of which $19.0 million was recognized in the three months ended December 31, 2023. The additional impairment charge recognized in the three months ended December 31, 2023, was primarily due to changes in assumptions related to the expected sale proceeds and the expected closing date. The impairment charge recognized for the year ended December 31, 2023, reduced the carrying value of the Cleco Cajun Sale Group to its estimated fair value less estimated cost to sell and is recorded in Loss from discontinued operations, net of income taxes on Cleco's Consolidated Statement of Income. The estimated fair value was determined using the income approach. The fair value estimates involved a number of judgments and assumptions including the future performance of the Cleco Cajun Sale Group through the expected divestiture date, the expected net
working capital adjustment to the sale proceeds from the Cleco Cajun Divestiture Purchase and Sale Agreement, and the weighted average cost of capital or discount rate. The fair value measurement of the Cleco Cajun Sale Group is classified as Level 3 in the fair value hierarchy.
At December 31, 2023, Cleco also recognized a write-down of $25.0 million related to Cleco Cajun’s coal fuel inventory. This write-down was primarily due to indications that the probable net realizable value of the coal fuel inventory, which was driven by forecasted market prices of power in the MISO South region, was less than its net book value. The write-down reduced the carrying value of the Cleco Cajun Sale Group and is reflected as a reduction to Fuel Inventory, at average cost and an increase to Fuel used for electric generation in the following tables.
The following table presents the amounts that have been reclassified from continuing operations and included in discontinued operations within Cleco’s Consolidated Statements of Income for the years ended December 31, 2023, 2022, and 2021:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)202320222021
Operating revenue, net
Electric operations$543,519 $496,042 $398,226 
Other operations125,816 148,823 128,750 
Gross operating revenue
669,335 644,865 526,976 
Electric customer credits
— — 244 
Operating revenue, net669,335 644,865 527,220 
Operating expenses
Fuel used for electric generation126,130 169,195 87,091 
Purchased power230,284 380,233 257,703 
Other operations and maintenance87,599 70,611 65,786 
Depreciation and amortization15,891 69,999 52,102 
Taxes other than income taxes
13,160 12,330 11,666 
Total operating expenses473,064 702,368 474,348 
Operating income (loss)
196,271 (57,503)52,872 
Other income (expense), net
47 127 (618)
Interest, net(6,919)(6,079)(5,523)
Loss on classification as held for sale(173,000)— — 
Income (loss) from discontinued operations before income taxes16,399 (63,455)46,731 
Federal and state income tax expense (benefit)1,757 (19,118)11,778 
Income (loss) from discontinued operations, net of income taxes$14,642 $(44,337)$34,953 
The following table presents the assets and liabilities of the Cleco Cajun Sale Group that have been reclassified as held for sale within Cleco’s Consolidated Balance Sheets as of December 31, 2023, and 2022:

(THOUSANDS)AT DEC. 31, 2023AT DEC. 31, 2022
Cash, cash equivalents, and restricted cash equivalents$4,100 $4,067 
Accounts receivable70,001 57,822 
Fuel inventory, at average cost47,243 33,153 
Materials and supplies, at average cost36,283 34,195 
Energy risk management assets1,066 518 
Property, plant, and equipment, net648,676 649,067 
Prepayments18,587 23,601 
Intangible assets - other32,569 36,548 
Other assets20,207 23,619 
Loss recognized on classification as held for sale(173,000)— 
Total assets held for sale - discontinued operations$705,732 $862,590 
Accounts payable$30,442 $56,609 
Deferred lease revenue19,945 22,246 
Intangible liabilities12,695 13,956 
Asset retirement obligations46,165 63,725 
Other liabilities5,705 6,508 
Total liabilities held for sale - discontinued operations$114,952 $163,044 

Cleco has elected to present cash flows of discontinued operations combined with cash flows of continuing operations. The following table presents the cash flows from discontinued operations related to the Cleco Cajun Sale Group for the years ended December 31, 2023, 2022, and 2021:

FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)202320222021
Net cash provided by operating activities - discontinued operations
$8,778 $6,878 $9,082 
Net cash used in investing activities - discontinued operations$(8,745)$(6,867)$(9,081)