Leases

12 Months Ended

Dec. 31, 2023

Leases [Abstract]

Leases

Note 4 — Leases

Cleco maintains operating and finance leases in its ordinary course of business activities.

Operating Leases

Cleco Power leases utility systems from two municipalities and one non-municipal public body. One municipal lease has a term of 10 years and expires on August 11, 2031. The second municipal lease has a term of 10 years and expires on May 13, 2028. The non-municipal lease has a term of 27 years and expires on July 31, 2039. Each utility system lease contains fixed and variable components, as well as provisions for extensions.

Cleco Power has a lease for 113 railcars to transport its coal. This lease expires on March 31, 2024. Cleco Power reassesses its need for the railcars upon the expiration of each term. Cleco Power pays a monthly rental fee per car. The railcar lease does not contain contingent rent payments.

Cleco Power has leases for three towboats in order to transport petroleum coke to Madison Unit 3. Each of the towboat leases has a term of 10 years and expires on March

31, 2028. Under these agreements, the rates are adjusted annually per the Producer Price Index. Each lease contains provisions for a five-year extension.

Cleco’s and Cleco Power’s remaining operating leases provide for office and operating facilities, office equipment, and tower rentals.

The following is a schedule by year of future minimum lease payments due under Cleco’s and Cleco Power’s long-term operating leases together with the present value of the net minimum lease payments as of December 31, 2023:

(THOUSANDS)
Years ending Dec. 31,
2024	$	3,453
2025	3,309
2026	3,275
2027	3,255
2028	2,455
Thereafter	7,575
Total minimum lease payments	23,322
Less: amount representing interest	3,073
Present value of net minimum operating lease payments	$	20,249
Current liabilities	$	2,973
Non-current liabilities	$	17,276

Finance Lease

In April 2018, Cleco Power entered into an agreement with Savage Inland Marine for continued use of 42 barges used to transport petroleum coke to Madison Unit 3 through March 2033. The agreement meets the accounting definition of a finance lease.

The barge lease rate contains both a fixed and variable component, of which the latter is adjusted every third anniversary of the agreement for estimated executory costs. If the barges are idle, the lessor is required to attempt to sublease the barges to third parties with the revenue reducing Cleco Power’s lease payment. This agreement contains a provision for early termination upon the occurrence of any one of four cancellation events.

For each of the years ended December 31, 2023, 2022, and 2021, Cleco Power paid $2.2 million in lease payments. For the years ended December 31, 2023, 2022, and 2021, Cleco Power received $2.6 million, $0.6 million, and $0.2 million, respectively, of revenue from subleases.

The following is an analysis of the leased property under the finance lease:

(THOUSANDS)	AT DEC. 31, 2023		AT DEC. 31, 2022
Barges	$	16,800	$	16,800
Accumulated amortization	(6,440)		(5,320)
Net finance lease asset	$	10,360	$	11,480

The following is a schedule by year of future minimum lease payments due under the finance lease together with the present value of the net minimum lease payments as of December 31, 2023:

(THOUSANDS)
Years ending Dec. 31,
2024	$	2,203
2025	2,203
2026	2,203
2027	2,203
2028	2,203
Thereafter	8,863
Total minimum lease payments	19,878
Less: amount representing interest	6,907
Present value of net minimum finance lease payments	$	12,971
Current liabilities	$	925
Non-current liabilities	$	12,046

Additional Lessee Disclosures

Cleco’s and Cleco Power’s total lease cost includes amounts on the income statement, as well as amounts capitalized as part of property, plant, or equipment or inventory. The following tables reflect total lease costs for Cleco and Cleco Power for the years ended December 31, 2023, and 2022:

Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Finance lease cost
Amortization of ROU assets	$	1,120	$	1,120
Interest on lease liabilities	1,367		1,448
Operating lease cost	3,589		3,685
Variable lease cost	790		508
Total lease cost	$	6,866	$	6,761

Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Finance lease cost
Amortization of ROU assets	$	1,120	$	1,120
Interest on lease liabilities	1,367		1,448
Operating lease cost	3,581		3,675
Variable lease cost	790		508
Total lease cost	$	6,858	$	6,751

The following tables present additional information related to Cleco’s and Cleco Power’s operating and finance leases as of and for the years ended December 31, 2023, and 2022:

Cleco
		AT DEC. 31,
(THOUSANDS)	BALANCE SHEET LINE ITEM	2023		2022
Supplemental balance sheet information
ROU assets
Operating	Operating lease right of use assets	$	20,070	$	22,636
Finance	Property, plant, and equipment	10,360		11,480
Total ROU assets		$	30,430	$	34,116
Current lease liabilities
Operating	Other current liabilities	$	2,973	$	2,912
Finance	Long-term debt and finance leases due within one year	925		836
Non-current lease liabilities
Operating	Operating lease liabilities	17,276		19,790
Finance	Long-term debt and finance leases, net	12,046		12,971
Total lease liabilities		$	33,220	$	36,509

Cleco Power
		AT DEC. 31,
(THOUSANDS)	BALANCE SHEET LINE ITEM	2023		2022
Supplemental balance sheet information
ROU assets
Operating	Operating lease right of use assets	$	20,070	$	22,628
Finance	Property, plant, and equipment	10,360		11,480
Total ROU assets		$	30,430	$	34,108
Current lease liabilities
Operating	Other current liabilities	$	2,973	$	2,903
Finance	Long-term debt and finance leases due within one year	925		836
Non-current lease liabilities
Operating	Operating lease liabilities	17,276		19,790
Finance	Long-term debt and finance leases, net	12,046		12,971
Total lease liabilities		$	33,220	$	36,500

Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,571	$	3,696
Operating cash flows from finance leases	$	1,367	$	1,448
Financing cash flows from finance leases	$	836	$	755

Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,562	$	3,685
Operating cash flows from finance leases	$	1,367	$	1,448
Financing cash flows from finance leases	$	836	$	755

Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022
Other supplemental information
Operating leases
Weighted-average remaining lease term	12.2 years		12.5 years
Weighted-average discount rate	4.30	%	4.36	%
Finance leases
Weighted-average remaining lease term	9.3 years		10.3 years
Weighted-average discount rate	10.18	%	10.18	%

Cleco Power
	AT DEC. 31, 2023
(THOUSANDS)	2023		2022
Other supplemental information
Operating leases
Weighted-average remaining lease term	12.2 years		11.4 years
Weighted-average discount rate	4.30	%	4.35	%
Finance leases
Weighted-average remaining lease term	9.3 years		10.3 years
Weighted-average discount rate	10.18	%	10.18	%

Leases

Note 4 — Leases

Cleco maintains operating and finance leases in its ordinary course of business activities.

Operating Leases

Cleco Power leases utility systems from two municipalities and one non-municipal public body. One municipal lease has a term of 10 years and expires on August 11, 2031. The second municipal lease has a term of 10 years and expires on May 13, 2028. The non-municipal lease has a term of 27 years and expires on July 31, 2039. Each utility system lease contains fixed and variable components, as well as provisions for extensions.

Cleco Power has a lease for 113 railcars to transport its coal. This lease expires on March 31, 2024. Cleco Power reassesses its need for the railcars upon the expiration of each term. Cleco Power pays a monthly rental fee per car. The railcar lease does not contain contingent rent payments.

Cleco Power has leases for three towboats in order to transport petroleum coke to Madison Unit 3. Each of the towboat leases has a term of 10 years and expires on March

31, 2028. Under these agreements, the rates are adjusted annually per the Producer Price Index. Each lease contains provisions for a five-year extension.

Cleco’s and Cleco Power’s remaining operating leases provide for office and operating facilities, office equipment, and tower rentals.

The following is a schedule by year of future minimum lease payments due under Cleco’s and Cleco Power’s long-term operating leases together with the present value of the net minimum lease payments as of December 31, 2023:

(THOUSANDS)
Years ending Dec. 31,
2024	$	3,453
2025	3,309
2026	3,275
2027	3,255
2028	2,455
Thereafter	7,575
Total minimum lease payments	23,322
Less: amount representing interest	3,073
Present value of net minimum operating lease payments	$	20,249
Current liabilities	$	2,973
Non-current liabilities	$	17,276

Finance Lease

In April 2018, Cleco Power entered into an agreement with Savage Inland Marine for continued use of 42 barges used to transport petroleum coke to Madison Unit 3 through March 2033. The agreement meets the accounting definition of a finance lease.

The barge lease rate contains both a fixed and variable component, of which the latter is adjusted every third anniversary of the agreement for estimated executory costs. If the barges are idle, the lessor is required to attempt to sublease the barges to third parties with the revenue reducing Cleco Power’s lease payment. This agreement contains a provision for early termination upon the occurrence of any one of four cancellation events.

For each of the years ended December 31, 2023, 2022, and 2021, Cleco Power paid $2.2 million in lease payments. For the years ended December 31, 2023, 2022, and 2021, Cleco Power received $2.6 million, $0.6 million, and $0.2 million, respectively, of revenue from subleases.

The following is an analysis of the leased property under the finance lease:

(THOUSANDS)	AT DEC. 31, 2023		AT DEC. 31, 2022
Barges	$	16,800	$	16,800
Accumulated amortization	(6,440)		(5,320)
Net finance lease asset	$	10,360	$	11,480

The following is a schedule by year of future minimum lease payments due under the finance lease together with the present value of the net minimum lease payments as of December 31, 2023:

(THOUSANDS)
Years ending Dec. 31,
2024	$	2,203
2025	2,203
2026	2,203
2027	2,203
2028	2,203
Thereafter	8,863
Total minimum lease payments	19,878
Less: amount representing interest	6,907
Present value of net minimum finance lease payments	$	12,971
Current liabilities	$	925
Non-current liabilities	$	12,046

Additional Lessee Disclosures

Cleco’s and Cleco Power’s total lease cost includes amounts on the income statement, as well as amounts capitalized as part of property, plant, or equipment or inventory. The following tables reflect total lease costs for Cleco and Cleco Power for the years ended December 31, 2023, and 2022:

Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Finance lease cost
Amortization of ROU assets	$	1,120	$	1,120
Interest on lease liabilities	1,367		1,448
Operating lease cost	3,589		3,685
Variable lease cost	790		508
Total lease cost	$	6,866	$	6,761

Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Finance lease cost
Amortization of ROU assets	$	1,120	$	1,120
Interest on lease liabilities	1,367		1,448
Operating lease cost	3,581		3,675
Variable lease cost	790		508
Total lease cost	$	6,858	$	6,751

The following tables present additional information related to Cleco’s and Cleco Power’s operating and finance leases as of and for the years ended December 31, 2023, and 2022:

Cleco
		AT DEC. 31,
(THOUSANDS)	BALANCE SHEET LINE ITEM	2023		2022
Supplemental balance sheet information
ROU assets
Operating	Operating lease right of use assets	$	20,070	$	22,636
Finance	Property, plant, and equipment	10,360		11,480
Total ROU assets		$	30,430	$	34,116
Current lease liabilities
Operating	Other current liabilities	$	2,973	$	2,912
Finance	Long-term debt and finance leases due within one year	925		836
Non-current lease liabilities
Operating	Operating lease liabilities	17,276		19,790
Finance	Long-term debt and finance leases, net	12,046		12,971
Total lease liabilities		$	33,220	$	36,509

Cleco Power
		AT DEC. 31,
(THOUSANDS)	BALANCE SHEET LINE ITEM	2023		2022
Supplemental balance sheet information
ROU assets
Operating	Operating lease right of use assets	$	20,070	$	22,628
Finance	Property, plant, and equipment	10,360		11,480
Total ROU assets		$	30,430	$	34,108
Current lease liabilities
Operating	Other current liabilities	$	2,973	$	2,903
Finance	Long-term debt and finance leases due within one year	925		836
Non-current lease liabilities
Operating	Operating lease liabilities	17,276		19,790
Finance	Long-term debt and finance leases, net	12,046		12,971
Total lease liabilities		$	33,220	$	36,500

Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,571	$	3,696
Operating cash flows from finance leases	$	1,367	$	1,448
Financing cash flows from finance leases	$	836	$	755

Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2023		2022
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,562	$	3,685
Operating cash flows from finance leases	$	1,367	$	1,448
Financing cash flows from finance leases	$	836	$	755

Cleco
	AT DEC. 31,
(THOUSANDS)	2023		2022
Other supplemental information
Operating leases
Weighted-average remaining lease term	12.2 years		12.5 years
Weighted-average discount rate	4.30	%	4.36	%
Finance leases
Weighted-average remaining lease term	9.3 years		10.3 years
Weighted-average discount rate	10.18	%	10.18	%

Cleco Power
	AT DEC. 31, 2023
(THOUSANDS)	2023		2022
Other supplemental information
Operating leases
Weighted-average remaining lease term	12.2 years		11.4 years
Weighted-average discount rate	4.30	%	4.35	%
Finance leases
Weighted-average remaining lease term	9.3 years		10.3 years
Weighted-average discount rate	10.18	%	10.18	%