Document



Louisiana (State or other jurisdiction of incorporation or organization)	72-0244480 (I.R.S. Employer Identification No.)

2030 Donahue Ferry Road, Pineville, Louisiana (Address of principal executive offices)	71360-5226 (Zip Code)

Registrant’s telephone number, including area code: (318) 484-7400

Indicate by check mark whether the Registrants: (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to file such reports) and (2) have been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the Registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrants were required to submit and post such files). Yes x No ¨

Indicate by check mark whether Cleco Corporate Holdings LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x (Do not check if a smaller reporting company) Smaller reporting company ¨ Emerging growth company ¨ If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether Cleco Power LLC is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,”and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one): Large accelerated filer ¨ Accelerated filer ¨ Non-accelerated filer x (Do not check if a smaller reporting company) Smaller reporting company ¨ Emerging growth company ¨ If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the Registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act) Yes ¨ No x



ABBREVIATION OR ACRONYM	DEFINITION
401(k) Plan	Cleco Power 401(k) Savings and Investment Plan
ABR	Alternate Base Rate which is the greater of the prime rate, the federal funds effective rate plus 0.50%, or LIBOR plus 1.0%
Acadia	Acadia Power Partners, LLC, previously a wholly owned subsidiary of Midstream. Acadia Power Partners, LLC was dissolved effective August 29, 2014.
Acadia Unit 1	Cleco Power’s 580-MW, combined cycle power plant located at the Acadia Power Station in Eunice, Louisiana
Acadia Unit 2	Entergy Louisiana’s 580-MW, combined cycle power plant located at the Acadia Power Station in Eunice, Louisiana, which is operated by Cleco Power
AFUDC	Allowance for Funds Used During Construction
ALJ	Administrative Law Judge
Amended Lignite Mining Agreement	Amended and restated lignite mining agreement effective December 29, 2009
AMI	Advanced Metering Infrastructure
AOCI	Accumulated Other Comprehensive Income (Loss)
ARO	Asset Retirement Obligation
ARRA	American Recovery and Reinvestment Act of 2009
Attala	Attala Transmission LLC, a wholly owned subsidiary of Cleco Holdings
bcIMC	British Columbia Investment Management Corporation
CCR	Coal combustion by-products or residual
CEO	Chief Executive Officer
CFO	Chief Financial Officer
Cleco	Cleco Holdings and its subsidiaries
Cleco Cajun	Cleco Cajun LLC, formerly Cleco Energy LLC, a wholly owned subsidiary of Cleco Holdings
Cleco Corporation	Pre-merger entity that was converted to a limited liability company and changed its name to Cleco Corporate Holdings LLC on April 13, 2016
Cleco Group	Cleco Group LLC, a wholly owned subsidiary of Cleco Partners
Cleco Holdings	Cleco Corporate Holdings LLC, a wholly owned subsidiary of Cleco Group
Cleco Katrina/Rita	Cleco Katrina/Rita Hurricane Recovery Funding LLC, a wholly owned subsidiary of Cleco Power
Cleco Partners	Cleco Partners L.P., a Delaware limited partnership that is owned by a consortium of investors, including funds or investment vehicles managed by MIRA, bcIMC, John Hancock Financial, and other infrastructure investors
Cleco Power	Cleco Power LLC and its subsidiaries, a wholly owned subsidiary of Cleco Holdings
Cottonwood Energy	Cottonwood Energy Company LP, an indirect subsidiary of NRG South Central. Upon closing of the Purchase and Sale Agreement, Cottonwood Energy will become an indirect subsidiary of Cleco Holdings.
Coughlin	Cleco Power’s 775-MW, combined-cycle power plant located in St. Landry, Louisiana
DHLC	Dolet Hills Lignite Company, LLC, a wholly owned subsidiary of SWEPCO
Diversified Lands	Diversified Lands LLC, a wholly owned subsidiary of Cleco Holdings
Dolet Hills	A facility consisting of Dolet Hills Power Station, the Dolet Hills mine, and the Oxbow mine
Dolet Hills Power Station	A 650-MW generating unit at Cleco Power’s plant site in Mansfield, Louisiana. Cleco Power has a 50% ownership interest in the capacity of Dolet Hills.
EAC	Environmental Adjustment Clause
EBITDA	Earnings before interest, taxes, depreciation, and amortization
Entergy Gulf States	Entergy Gulf States Louisiana, LLC
Entergy Louisiana	Entergy Louisiana, LLC
EPA	U.S. Environmental Protection Agency
ERO	Electric Reliability Organization
Evangeline	Cleco Evangeline LLC, a wholly owned subsidiary of Midstream
FAC	Fuel Adjustment Clause
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FTR	Financial Transmission Right
FRP	Formula Rate Plan
GAAP	Generally Accepted Accounting Principles in the U.S.
IRS	Internal Revenue Service
kWh	Kilowatt-hour(s)
LIBOR	London Interbank Offered Rate
LMP	Locational Marginal Price
LPSC	Louisiana Public Service Commission
Madison Unit 3	A 641-MW generating unit at Cleco Power’s plant site in Boyce, Louisiana
MATS	Mercury and Air Toxics Standards



ABBREVIATION OR ACRONYM	DEFINITION
Merger	Merger of Merger Sub with and into Cleco Corporation pursuant to the terms of the Merger Agreement which was completed on April 13, 2016
Merger Agreement	Agreement and Plan of Merger, dated as of October 17, 2014, by and among Cleco Partners, Merger Sub, and Cleco Corporation
Merger Commitments	Cleco Partners’, Cleco Group’s, Cleco Holdings’, and Cleco Power’s 77 commitments to the LPSC as defined in Docket No. U-33434 of which a performance report must be filed annually by October 31 for the 12 months ending June 30
Merger Sub	Cleco MergerSub Inc., previously an indirect wholly owned subsidiary of Cleco Partners that was merged with and into Cleco Corporation, with Cleco Corporation surviving the Merger, and Cleco Corporation converting to a limited liability company and changing its name to Cleco Holdings
Midstream	Cleco Midstream Resources LLC, a wholly owned subsidiary of Cleco Holdings
MIRA	Macquarie Infrastructure and Real Assets Inc.
MISO	Midcontinent Independent System Operator, Inc.
Moody’s	Moody’s Investors Service, a credit rating agency
MW	Megawatt(s)
MWh	Megawatt-hour(s)
NERC	North American Electric Reliability Corporation
NMTC	New Markets Tax Credit
NMTC Fund	USB NMTC Fund 2008-1 LLC was formed to invest in projects qualifying for New Markets Tax Credits and Solar Projects
Not Meaningful	A percentage comparison of these items is not statistically meaningful because the percentage difference is greater than 1,000%
NRG Energy	NRG Energy, Inc.
NRG South Central	NRG South Central Generating LLC
Other Benefits	Includes medical, dental, vision, and life insurance for Cleco’s retirees
Oxbow	Oxbow Lignite Company, LLC, 50% owned by Cleco Power and 50% owned by SWEPCO
PCB	Polychlorinated biphenyl
Perryville	Perryville Energy Partners, L.L.C., a wholly owned subsidiary of Cleco Holdings
Purchase and Sale Agreement	Purchase and Sale Agreement, dated as of February 6, 2018, by and among NRG Energy, NRG South Central, and Cleco Energy LLC (now Cleco Cajun)
RE	Regional Entity
Registrant(s)	Cleco Holdings and/or Cleco Power
ROE	Return on Equity
RTO	Regional Transmission Organization
S&P	Standard & Poor’s Ratings Services, a credit rating agency
SEC	U.S. Securities and Exchange Commission
SERP	Supplemental Executive Retirement Plan
SPP	Southwest Power Pool
SPP RE	Southwest Power Pool Regional Entity
SSR	System Support Resource
START	Strategic Alignment and Real-Time Transformation
Support Group	Cleco Support Group LLC, a wholly owned subsidiary of Cleco Holdings
SWEPCO	Southwestern Electric Power Company, an electric utility subsidiary of American Electric Power Company, Inc.
TCJA	Tax Cuts and Jobs Act of 2017
Teche Unit 3	A 359-MW generating unit at Cleco Power’s plant site in Baldwin, Louisiana
VaR	Value-at-Risk

This Combined Quarterly Report on Form 10-Q includes “forward-looking statements” about future events, circumstances, and results. All statements other than statements of historical fact included in this Combined Quarterly Report are forward-looking statements, including, without limitation, future capital expenditures; business strategies; goals, beliefs, plans and objectives; competitive strengths; market developments; development and operation of facilities; growth in sales volume; meeting capacity requirements; expansion of service to existing customers and service to new customers; future environmental regulations and remediation liabilities; electric customer credits; and the anticipated outcome of various regulatory and legal proceedings. Although the Registrants believe that the expectations reflected in such forward-looking statements are reasonable, such forward-looking statements are based on numerous assumptions (some of which may prove to be incorrect) and are subject to risks and uncertainties that could cause the actual results to differ materially from the Registrants’ expectations. In addition to any assumptions and other factors referred to specifically in connection with these forward-looking statements, the following list identifies some of the factors that could cause the Registrants’ actual results to differ materially from those contemplated in any of the Registrants’ forward-looking statements:


•	the effects of the Merger on Cleco Holdings’ and Cleco Power’s business relationships, operating results, and business generally,

•

regulatory factors such as changes in rate-setting practices or policies; the unpredictability in political actions of governmental regulatory bodies; adverse regulatory ratemaking actions; recovery of investments made under traditional regulation; recovery of storm restoration costs; the frequency, timing, and amount of rate increases or decreases; the impact that rate cases or requests for FRP extensions may have on operating decisions of Cleco Power; the results of periodic NERC, LPSC, and FERC audits; participation in MISO and the related operating challenges and uncertainties, including increased wholesale competition relative to additional suppliers; and compliance with the ERO reliability standards for bulk power systems by Cleco Power,


•	the ability to recover fuel costs through the FAC,


•	the ability to close the proposed transaction with NRG Energy and NRG South Central, including the related financings,


•	the ability to successfully integrate the assets to be acquired in the proposed transaction with NRG Energy and NRG South Central, if completed, into Cleco’s operations,

•

factors affecting utility operations, such as unusual weather conditions or other natural phenomena; catastrophic weather-related damage caused by hurricanes and other storms or severe drought conditions; unscheduled generation outages; unanticipated maintenance or repairs; unanticipated changes to fuel costs or fuel supply costs, shortages, transportation problems, or other developments; fuel mix of Cleco’s generating facilities; decreased customer

load; environmental incidents and compliance costs; and power transmission system constraints,


•	reliance on third parties for determination of Cleco Power’s commitments and obligations to markets for generation resources and reliance on third-party transmission services,


•	global and domestic economic conditions, including the ability of customers to continue paying their utility bills, related growth and/or down-sizing of businesses in Cleco’s service area, monetary fluctuations, changes in commodity prices, and inflation rates,


•	political uncertainty in the U.S., including the ongoing debates related to the U.S. federal government budget and debt ceiling, and volatility and disruption in global capital and credit markets,


•	the ability of the lignite reserves at Dolet Hills to provide sufficient fuel to the Dolet Hills Power Station until at least 2036,


•	Cleco Power’s ability to maintain its right to sell wholesale power at market-based rates within its control area,


•	Cleco Power’s dependence on energy from sources other than its facilities and future sources of such additional energy,


•	reliability of Cleco Power’s generating facilities,


•	the imposition of energy efficiency requirements or increased conservation efforts of customers,


•	the impact of current or future environmental laws and regulations, including those related to CCRs, greenhouse gases, and energy efficiency that could limit or terminate the operation of certain generating units, increase costs, or reduce customer demand for electricity,


•	the ability to recover costs of compliance with environmental laws and regulations, including those through the EAC,


•	financial or regulatory accounting principles or policies imposed by FASB, the SEC, FERC, the LPSC, or similar entities with regulatory or accounting oversight,


•	changing market conditions and a variety of other factors associated with physical energy, financial transactions, and energy service activities, including, but not limited to, price, basis, credit, liquidity, volatility, capacity, transmission, interest rates, and warranty risks,


•	legal, environmental, and regulatory delays and other obstacles associated with acquisitions (including the NRG South Central acquisition), reorganizations, investments in joint ventures, or other capital projects,


•	costs and other effects of legal and administrative proceedings, settlements, investigations, claims, and other matters,


•	the availability and use of alternative sources of energy and technologies, such as wind, solar, battery storage, and distributed generation,


•	changes in federal, state, or local laws (including the TCJA and other tax laws), changes in tax rates, disallowances of

tax positions, or changes in other regulating policies that may result in a change to tax benefits or expenses,


•	the restriction on the ability of Cleco Power to make distributions to Cleco Holdings in certain instances, as a result of the Merger Commitments,


•	Cleco Holdings’ dependence on the earnings, dividends, or distributions from its subsidiaries to meet its debt obligations,


•	acts of terrorism, cyber attacks, data security breaches or other attempts to disrupt Cleco’s business or the business of third parties, or other man-made disasters,


•	nonperformance by and creditworthiness of the guarantor counterparty of the NMTC Fund,


•	credit ratings of Cleco Holdings and Cleco Power,


•	the ability to remain in compliance with debt covenants,


•	the availability or cost of capital resulting from changes in global markets, Cleco’s business or financial condition, interest rates, or market perceptions of the electric utility industry and energy-related industries, and


•	employee workforce factors, including aging workforce, changes in management, and inadequate resources.

For more discussion of these factors and other factors that could cause actual results to differ materially from those contemplated in the Registrants’ forward-looking statements, see Part I, Item 1A, “Risk Factors” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2017.

All subsequent written and oral forward-looking statements attributable to the Registrants, or persons acting on their behalf, are expressly qualified in their entirety by the factors identified above.

Any forward-looking statement is considered only as of the date of this Combined Quarterly Report on Form 10-Q and, except as required by law, the Registrants undertake no obligation to update any forward-looking statements, whether as a result of changes in actual results, changes in assumptions, or other factors affecting such statements.



CLECO

Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT MAR. 31, 2018			AT DEC. 31, 2017
Assets
Current assets
Cash and cash equivalents	$	176,508		$	119,040
Restricted cash and cash equivalents	6,727			13,081
Customer accounts receivable (less allowance for doubtful accounts of $1,424 in 2018 and $1,457 in 2017)	52,277			60,117
Other accounts receivable	22,680			30,806
Unbilled revenue	30,011			36,398
Fuel inventory, at average cost	73,215			87,520
Materials and supplies, at average cost	88,420			85,404
Energy risk management assets	4,828			7,396
Accumulated deferred fuel	23,053			13,980
Cash surrender value of company-/trust-owned life insurance policies	82,771			83,117
Prepayments	6,690			9,050
Regulatory assets	22,207			24,670
Other current assets	681			1,146
Total current assets	590,068			571,725
Property, plant, and equipment
Property, plant, and equipment	3,629,249			3,594,525
Accumulated depreciation	(221,941		)	(192,348		)
Net property, plant, and equipment	3,407,308			3,402,177
Construction work in progress	212,847			186,629
Total property, plant, and equipment, net	3,620,155			3,588,806
Equity investment in investee	18,172			18,172
Goodwill	1,490,797			1,490,797
Restricted cash and cash equivalents	19,327			20,081
Regulatory assets	425,041			432,358
Intangible assets	107,881			114,850
Other deferred charges	38,540			41,593
Total assets	$	6,309,981		$	6,278,382
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

(Continued on next page)



CLECO

Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT MAR. 31, 2018			AT DEC. 31, 2017
Liabilities and member’s equity
Liabilities
Current liabilities
Long-term debt due within one year	$	19,875		$	19,193
Accounts payable	95,542			147,562
Customer deposits	59,765			58,582
Provision for rate refund	11,805			4,206
Taxes payable, net	34,264			22,698
Interest accrued	40,924			14,703
Deferred compensation	11,322			12,132
Other current liabilities	21,633			21,278
Total current liabilities	295,130			300,354
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net	618,657			614,812
Postretirement benefit obligations	243,084			242,135
Regulatory liabilities - deferred taxes, net	138,329			140,426
Restricted storm reserve	14,705			14,469
Other deferred credits	38,251			33,724
Total long-term liabilities and deferred credits	1,053,026			1,045,566
Long-term debt, net	2,874,064			2,836,105
Total liabilities	4,222,220			4,182,025
Commitments and contingencies (Note 12)
Member’s equity
Membership interest	2,069,376			2,069,376
Retained earnings	21,263			29,902
Accumulated other comprehensive loss	(2,878		)	(2,921		)
Total member’s equity	2,087,761			2,096,357
Total liabilities and member’s equity	$	6,309,981		$	6,278,382
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.



CLECO

Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2018				2017
Operating activities
Net income	$	10,861			$	6,292
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	46,754				46,727
Unearned compensation expense	1,116				955
Allowance for equity funds used during construction	(2,363		)		(911		)
Deferred income taxes	1,733				3,041
Deferred fuel costs	(11,353		)		(2,982		)
Cash surrender value of company-/trust-owned life insurance	346				(1,702		)
Changes in assets and liabilities
Accounts receivable	10,563				8,346
Unbilled revenue	6,387				4,765
Fuel inventory and materials and supplies	11,573				(7,733		)
Prepayments	2,199				1,318
Accounts payable	(40,239		)		(27,148		)
Customer deposits	3,500				2,622
Provision for merger commitments	(1,187		)		(3,866		)
Postretirement benefit obligations	1,007				1,213
Regulatory assets and liabilities, net	3,960				2,599
Other deferred accounts	5,871				1,920
Taxes accrued	11,108				12,568
Interest accrued	26,220				25,620
Other operating	(93		)		1,138
Net cash provided by operating activities	87,963				74,782
Investing activities
Additions to property, plant, and equipment	(64,133		)		(47,890		)
Allowance for equity funds used during construction	2,363				911
Reimbursement for property loss	1,172				39
Return of equity investment in tax credit fund	2,775				426
Other investing	75				(388		)
Net cash used in investing activities	(57,748		)		(46,902		)
Financing activities
Issuances of long-term debt	50,000				—
Repayment of long-term debt	(9,700		)		(9,060		)
Distributions to member	(19,500		)		(28,955		)
Other financing	(655		)		(213		)
Net cash provided by (used in) financing activities	20,145				(38,228		)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	50,360				(10,348		)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	152,202			⁽¹⁾	69,571
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	202,562		⁽²⁾	$	59,223

Supplementary cash flow information
Interest paid, net of amount capitalized	$	4,236			$	4,011
Income taxes refunded, net	$	270			$	1
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	$	35,067			$	27,617
⁽¹⁾ Includes cash and cash equivalents of $119,040, current restricted cash and cash equivalents of $13,081, and non-current restricted cash and cash equivalents of $20,081. ⁽²⁾ Includes cash and cash equivalents of $176,508, current restricted cash and cash equivalents of $6,727, and non-current restricted cash and cash equivalents of $19,327. The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.



CLECO POWER

Condensed Consolidated Balance Sheets (Unaudited)
(THOUSANDS)	AT MAR. 31, 2018			AT DEC. 31, 2017
Assets
Utility plant and equipment
Property, plant, and equipment	$	4,924,970		$	4,893,484
Accumulated depreciation	(1,737,911		)	(1,712,590		)
Net property, plant, and equipment	3,187,059			3,180,894
Construction work in progress	212,727			185,507
Total utility plant and equipment, net	3,399,786			3,366,401
Current assets
Cash and cash equivalents	128,182			69,816
Restricted cash and cash equivalents	6,727			13,081
Customer accounts receivable (less allowance for doubtful accounts of $1,424 in 2018 and $1,457 in 2017)	52,277			60,117
Accounts receivable - affiliate	1,311			1,355
Other accounts receivable	22,278			30,680
Unbilled revenue	30,011			36,398
Fuel inventory, at average cost	73,215			87,520
Materials and supplies, at average cost	88,420			85,404
Energy risk management assets	4,828			7,396
Accumulated deferred fuel	23,053			13,980
Cash surrender value of company-owned life insurance policies	20,341			20,278
Prepayments	5,000			7,236
Regulatory assets	13,350			15,812
Other current assets	—			475
Total current assets	468,993			449,548
Equity investment in investee	18,172			18,172
Restricted cash and cash equivalents	19,306			20,060
Regulatory assets	252,889			257,408
Intangible asset	37,216			41,701
Other deferred charges	35,125			35,451
Total assets	$	4,231,487		$	4,188,741

Liabilities and member’s equity
Member’s equity	$	1,548,980		$	1,550,679
Long-term debt, net	1,381,409			1,341,475
Total capitalization	2,930,389			2,892,154
Current liabilities
Long-term debt due within one year	19,875			19,193
Accounts payable	87,607			134,374
Accounts payable - affiliate	9,969			8,697
Customer deposits	59,765			58,582
Provision for rate refund	11,805			4,206
Taxes payable, net	45,197			31,611
Interest accrued	22,638			7,083
Other current liabilities	16,960			16,172
Total current liabilities	273,816			279,918
Commitments and contingencies (Note 12)
Long-term liabilities and deferred credits
Accumulated deferred federal and state income taxes, net	663,255			656,362
Postretirement benefit obligations	174,971			173,747
Regulatory liabilities - deferred taxes, net	138,329			140,426
Restricted storm reserve	14,705			14,469
Other deferred credits	36,022			31,665
Total long-term liabilities and deferred credits	1,027,282			1,016,669
Total liabilities and member’s equity	$	4,231,487		$	4,188,741
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.



CLECO POWER

Condensed Consolidated Statements of Cash Flows (Unaudited)
	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2018				2017
Operating activities
Net income	$	26,004			$	17,854
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization	42,022				40,871
Allowance for equity funds used during construction	(2,363		)		(911		)
Deferred income taxes	4,692				10,135
Deferred fuel costs	(11,353		)		(2,982		)
Changes in assets and liabilities
Accounts receivable	10,710				8,064
Unbilled revenue	6,387				4,765
Fuel inventory and materials and supplies	11,573				(7,733		)
Prepayments	2,075				925
Accounts payable	(35,030		)		(23,836		)
Accounts payable, affiliate	672				2,083
Customer deposits	3,500				2,622
Provision for merger commitments	(1,187		)		(3,866		)
Postretirement benefit obligations	1,061				1,026
Regulatory assets and liabilities, net	3,463				2,103
Other deferred accounts	6,116				1,494
Taxes accrued	13,127				11,769
Interest accrued	15,555				14,230
Other operating	2,322				2,566
Net cash provided by operating activities	99,346				81,179
Investing activities
Additions to property, plant, and equipment	(63,343		)		(46,744		)
Allowance for equity funds used during construction	2,363				911
Reimbursement of property loss	1,172				39
Other investing	75				242
Net cash used in investing activities	(59,733		)		(45,552		)
Financing activities
Issuances of long-term debt	50,000				—
Repayment of long-term debt	(9,700		)		(9,060		)
Distributions to parent	(28,000		)		(35,000		)
Other financing	(655		)		(675		)
Net cash provided by (used in) financing activities	11,645				(44,735		)
Net increase (decrease) in cash, cash equivalents, restricted cash, and restricted cash equivalents	51,258				(9,108		)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	102,957			⁽¹⁾	67,955
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	154,215		⁽²⁾	$	58,847

Supplementary cash flow information
Interest paid, net of amount capitalized	$	1,789			$	2,212
Supplementary non-cash investing and financing activities
Accrued additions to property, plant, and equipment	$	35,038			$	27,493
⁽¹⁾ Includes cash and cash equivalents of $69,816, current restricted cash and cash equivalents of $13,081, and non-current restricted cash and cash equivalents of $20,060. ⁽²⁾ Includes cash and cash equivalents of $128,182, current restricted cash and cash equivalents of $6,727, and non-current restricted cash and cash equivalents of $19,306. The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.

Note 1 — Summary of Significant Accounting Policies

Principles of Consolidation

The accompanying Condensed Consolidated Financial Statements of Cleco include the accounts of Cleco Holdings and its majority-owned subsidiaries after elimination of intercompany accounts and transactions.

Basis of Presentation

The Condensed Consolidated Financial Statements of Cleco and Cleco Power have been prepared in accordance with GAAP for interim financial information and with the instructions to the Form 10-Q and Regulation S-X. Accordingly, these Condensed Consolidated Financial Statements do not include all of the information and notes required by GAAP for annual financial statements. The year-end Condensed Consolidated Balance Sheet data was derived from audited financial statements. Because the interim Condensed Consolidated Financial Statements and the accompanying notes do not include all of the information and notes required by GAAP for annual financial statements, the Condensed Consolidated Financial Statements and other information included in this quarterly report should be read in conjunction with the Consolidated Financial Statements and accompanying notes in the Registrants’ Combined Annual Report on Form 10-K for the year ended December 31, 2017.

These Condensed Consolidated Financial Statements, in the opinion of management, reflect all normal recurring adjustments that are necessary to fairly state the financial position and results of operations of Cleco and Cleco Power. Amounts reported in Cleco and Cleco Power’s interim financial statements are not necessarily indicative of amounts expected for the annual periods due to the effects of seasonal temperature variations on energy consumption, regulatory rulings, the timing of maintenance on electric generating units, changes in mark-to-market valuations, changing commodity prices, discrete income tax items, and other factors.

In preparing financial statements that conform to GAAP, management must make estimates and assumptions that affect the reported amounts of assets and liabilities, the reported amounts of revenues and expenses, and the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates. For information on recent authoritative guidance and its effect on financial results, see Note 3 — “Recent Authoritative Guidance.”

Restricted Cash and Cash Equivalents

Various agreements to which Cleco is subject contain covenants that restrict its use of cash. As certain provisions under these agreements are met, cash is transferred out of related escrow accounts and becomes available for its intended purposes and/or general corporate purposes.

Cleco and Cleco Power’s restricted cash and cash equivalents consisted of:



Cleco
(THOUSANDS)	AT MAR. 31, 2018		AT DEC. 31, 2017
Current
Cleco Katrina/Rita’s storm recovery bonds	$	2,601	$	8,597
Cleco Power’s charitable contributions	1,200		1,200
Cleco Power’s rate credit escrow	2,926		3,284
Total current	6,727		13,081
Non-current
Diversified Lands’ mitigation escrow	21		21
Cleco Power’s future storm restoration costs	14,705		14,456
Cleco Power’s charitable contributions	3,044		3,575
Cleco Power’s rate credit escrow	1,557		2,029
Total non-current	19,327		20,081
Total restricted cash and cash equivalents	$	26,054	$	33,162



Cleco Power
(THOUSANDS)	AT MAR. 31, 2018		AT DEC. 31, 2017
Current
Cleco Katrina/Rita’s storm recovery bonds	$	2,601	$	8,597
Charitable contributions	1,200		1,200
Rate credit escrow	2,926		3,284
Total current	6,727		13,081
Non-current
Future storm restoration costs	14,705		14,456
Charitable contributions	3,044		3,575
Rate credit escrow	1,557		2,029
Total non-current	19,306		20,060
Total restricted cash and cash equivalents	$	26,033	$	33,141

Cleco Katrina/Rita has the right to bill and collect storm restoration costs from Cleco Power’s customers. As cash is collected, it is restricted for payment of administration fees, interest, and principal on storm recovery bonds. The change from December 31, 2017, to March 31, 2018, was due to Cleco Katrina/Rita using $9.7 million for a scheduled storm recovery bond principal payment and $1.4 million for the related interest payment, partially offset by collections of $5.1 million net of administration fees.

Fair Value Measurements and Disclosures

Various accounting pronouncements require certain assets and liabilities to be measured at their fair values. Some assets and liabilities are required to be measured at their fair value each reporting period, while others are required to be measured only one time, generally the date of acquisition or debt issuance. Cleco and Cleco Power disclose the fair value of certain assets and liabilities by one of three levels when required for recognition purposes. For more information about fair value levels, see Note 5 — “Fair Value Accounting.”

Risk Management

Market risk inherent in Cleco’s market risk-sensitive instruments and positions includes potential changes in value arising from changes in interest rates and the commodity market prices of power, FTRs, and natural gas in the industry on different energy exchanges. Cleco’s Energy Market Risk Management Policy authorizes the use of various derivative instruments, including exchange traded futures and option contracts, forward purchase and sales contracts, and swap transactions to reduce exposure to fluctuations in the price of power, FTRs, and natural gas. Cleco evaluates derivatives and hedging activities to determine whether the market risk-sensitive instruments and positions are required to be marked-to-market.

Cleco Power may also enter into risk mitigating positions that would not meet the requirements of a normal-purchase, normal-sale transaction in order to attempt to mitigate the volatility in customer fuel costs. These positions would be marked-to-market with the resulting gain or loss recorded on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets as a component of energy risk management assets or liabilities. Such gain or loss would be deferred as a component of deferred fuel assets or liabilities in accordance with regulatory policy. When these positions close, actual gains or losses would be included in the FAC and reflected on customers’ bills as a component of the fuel charge. There were no open natural gas positions at March 31, 2018, or December 31, 2017. In 2015, the LPSC approved a long-term

natural gas hedging pilot program that requires Cleco Power to establish a proposal for a program that will be designed to provide gas price stability for a minimum of five years. Cleco Power’s proposal was submitted to the LPSC in July 2017. An ALJ has been assigned to the docket and a status conference was held in October 2017. On February 28, 2018, Cleco Power responded to LPSC data requests for the gas hedging docket. Cleco Power is currently awaiting a new procedural schedule to be established.

Cleco Power purchases FTRs in auctions facilitated by MISO. The majority of its FTRs are purchased in annual auctions during the second quarter, but Cleco Power may purchase additional FTRs in monthly auctions. FTRs are derivative instruments which represent economic hedges of future congestion charges that will be incurred in serving Cleco Power’s customer load. FTRs are not designated as hedging instruments for accounting purposes. Cleco Power records FTRs at their estimated fair value when purchased. Each accounting period, Cleco Power adjusts the carrying value of FTRs to their estimated fair value based on the most recent MISO FTR auction prices. Unrealized gains or losses on FTRs held by Cleco Power are included in Accumulated deferred fuel on Cleco Power’s Condensed Consolidated Balance Sheets. Realized gains or losses on settled FTRs are recorded in Fuel used for electric generation on Cleco Power’s Condensed Consolidated Statements of Income. For more information on FTRs, see Note 5 — “Fair Value Accounting — Commodity Contracts.”

Cleco and Cleco Power maintain a master netting agreement policy and monitor credit risk exposure through review of counterparty credit quality, aggregate counterparty credit exposure, and aggregate counterparty concentration levels. Cleco manages these risks by establishing appropriate credit and concentration limits on transactions with counterparties and requiring contractual guarantees, cash deposits, or letters of credit from counterparties or their affiliates, as deemed necessary. Cleco Power has agreements in place with various counterparties that authorize the netting of financial buys and sells and contract payments to mitigate credit risk for transactions entered into for risk management purposes.

Cleco and Cleco Power may enter into contracts to mitigate the volatility in interest rate risk. These contracts include, but are not limited to, interest rate swaps and treasury rate locks. For the three months ended March 31, 2018, and March 31, 2017, Cleco did not enter into any contracts to mitigate the volatility in interest rate risk.



Note 2 — Revenue Recognition

Cleco adopted the accounting guidance for revenue recognition and all related amendments on January 1, 2018, using the modified retrospective method. The guidance affects entities that enter into contracts for the transfer of nonfinancial assets unless those contracts are within the scope of other standards. The core principle of this guidance is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. Application of the new revenue standard did not result in a cumulative effect adjustment to the opening balance of retained earnings. The comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The impact of the adoption of the new standard

is not material to the results of operations, financial condition, or cash flows of the Registrants.

Revenue from Contracts with Customers

Retail Utility Revenue

Cleco’s revenue from contracts with customers is generated primarily from Cleco Power’s regulated revenue to retail residential, commercial, and industrial customers. Cleco recognizes retail revenue from these contracts as a series, and progress towards satisfaction of the performance obligation is measured using an output method based on kWh delivered. Accordingly, revenue from electricity sales is recognized as energy is delivered to the customer. Cleco bills retail customers, based on rates regulated by the LPSC, on a monthly basis with payments generally due within 20 days of the invoice date. Cleco records retail revenue under the invoice practical expedient, which states that if an entity has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date, the entity may recognize revenue in the amount that the entity has a right to invoice.

Included in Cleco’s retail revenue is unbilled electric revenue which represents the amount customers will be billed for services rendered from the last meter reading to the end of the respective accounting period. Cleco uses actual customer energy consumption data available from AMI to calculate unbilled revenue.

Wholesale Revenue

Wholesale revenue is generated primarily through the sale of energy and capacity to municipalities and the MISO transmission provider. Cleco also enters into transactions through MISO for spot energy sales which are transacted in the Day-Ahead Energy and Operating Reserves Market and the Real-Time Energy and Operating Reserves Market. The electricity revenue performance obligations, representing both energy and capacity, are satisfied as a series of performance obligations, and progress towards satisfaction of the performance obligations are measured using an output

method. The energy performance obligation measure of progress is based on kWh delivered. The capacity performance obligation measure of progress is based on time elapsed and will be recognized each month as Cleco’s generating units stand ready to deliver electricity to the customer. Cleco charges its wholesale customers market based rates that are subject to FERC’s triennial market power analysis. Cleco recognizes wholesale revenue, inclusive of both performance obligations, under the invoice practical expedient for the amount Cleco has the right to invoice.

Transmission Revenue

Transmission revenue is earned under a tariff with MISO. The performance obligation of transmission service is satisfied as service is provided. Revenue is recognized upon delivery of the transmission service. Cleco’s revenue from the transmission of electricity is recorded based on a FERC-approved annual formula rate mechanism. This mechanism provides for an annual filing of an estimated revenue requirement with rates effective January 1 of each year and a mechanism to true-up that estimate based on actual revenue requirements.

Other Revenue

Other revenue from contracts with customers, which is not a significant source of Cleco’s revenue, includes Teche Unit 3 SSR revenue, connection or other fees, and electric customer credits. The performance obligation under these contracts is satisfied and revenue is recognized as control of the products is delivered or services are rendered.

Revenue Unrelated to Contracts with Customers

Certain energy-related transactions, where Cleco records the change in value of those contracts, qualify as derivative contracts and are recorded pursuant to derivatives and hedging accounting guidance.

Disaggregated Revenue

Operating revenue, net for the three months ended March 31, 2018, was as follows:

Transaction Price Allocated to Remaining Performance Obligations

For wholesale contracts that are greater than one year, the following table discloses (1) the aggregate amount of the transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as of March 31, 2018, and (2) when Cleco expects to recognize this revenue:



REMAINING PERFORMANCE OBLIGATIONS (THOUSANDS)
Nine months ending Dec. 31, 2018	$	7,721
Years ending Dec. 31,
2019	6,779
2020	7,068
2021	7,068
2022	6,468
Thereafter	10,210
Total wholesale contracts	$	45,314

Unsatisfied performance obligations primarily relate to stand-ready obligations as part of fixed capacity minimums.

Note 3 — Recent Authoritative Guidance

The Registrants adopted, or will adopt, the recent authoritative guidance listed below on their respective effective dates.

In February 2016, FASB amended the guidance to account for leases. This guidance is intended to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The adoption of this guidance is effective for fiscal years beginning after December 15, 2018, including interim periods within those years. In transition, lessees and lessors are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. The modified retrospective approach includes practical expedients that may be elected by entities. Management expects to elect the practical expedients which permit the Registrants to retain their current lease assessment and classifications for existing leases at the effective date and to not apply the new guidance to land easements that exist or expire before the effective date. Management is currently working through an adoption plan which includes the evaluation of lease contracts, new business processes, including changes to current recordkeeping systems, and the need for additional internal controls. Other than an expected increase in assets and liabilities, the full impact of the amended guidance has not been determined. Management will continue to evaluate the impact of this guidance, including any additional clarifying amendments issued during implementation. The amended guidance could have a material impact on the results of operations, financial condition, or cash flows of the Registrants.

In November 2016, FASB amended guidance for certain cash flow issues. The amended guidance requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash. Therefore, amounts generally described as restricted cash and cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The adoption of this guidance was effective for fiscal years beginning after December 15, 2017, including interim periods within those years. This amendment was applied using a retrospective transition method to each period presented. This guidance impacted the presentation of

the cash flows statement, but did not have an impact on the results of operations or financial condition of the Registrants.

The following tables summarize the changes in the presentation of the Condensed Consolidated Statements of Cash Flows for Cleco and Cleco Power:



Cleco
	FOR THE THREE MONTHS ENDED MAR. 31, 2017
(THOUSANDS)	AS REPORTED			AS ADJUSTED
Transfer of cash from restricted accounts, net	$	8,790		$	—
Net cash used in investing activities	$	(38,112	)	$	(46,902	)
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents	$	(1,558	)	$	(10,348	)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	$	23,077		$	69,571
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	21,519		$	59,223



Cleco Power
	FOR THE THREE MONTHS ENDED MAR. 31, 2017
(THOUSANDS)	AS REPORTED			AS ADJUSTED
Transfer of cash from restricted accounts, net	$	8,790		$	—
Net cash used in investing activities	$	(36,762	)	$	(45,552	)
Net decrease in cash, cash equivalents, restricted cash, and restricted cash equivalents	$	(318	)	$	(9,108	)
Cash, cash equivalents, restricted cash, and restricted cash equivalents at beginning of period	$	21,482		$	67,955
Cash, cash equivalents, restricted cash, and restricted cash equivalents at end of period	$	21,164		$	58,847

In March 2017, FASB amended guidance related to defined benefit pension and other postretirement benefit plans. The new amendment requires an entity to present service cost in the same line item as other current employee compensation costs and to present the remaining components of net benefit cost in a separate line item outside of operating items. The amendment also allows only the service cost component of net benefit cost to be eligible for capitalization within property, plant, and equipment. The non-service costs will continue to be capitalized and recovered from ratepayers as approved by FERC. Beginning January 1, 2018, the non-service costs capitalized for ratemaking purposes were reflected as a regulatory asset or liability for GAAP. The adoption of this guidance was effective for annual periods beginning after December 15, 2017, including interim periods within those years. This amendment was applied retrospectively for the presentation of the service cost in the income statement while the capitalization of the service cost was applied prospectively. This guidance did not have a significant impact on the results of operations, financial condition, or cash flows of the Registrants.

The following tables summarize the impact of this guidance on the Condensed Consolidated Statements of Income for Cleco and Cleco Power:



Cleco
	FOR THE THREE MONTHS ENDED MAR. 31, 2017
(THOUSANDS)	AS REPORTED			AS ADJUSTED
Other operations expenses	$	31,892		$	29,327		*
Total operating expenses	$	211,703		$	209,039
Operating income	$	38,798		$	41,462
Other expense	$	(274	)	$	(2,938	)
*Also reflects $0.1 million of Merger transaction and commitment costs that were reported in a separate line item in prior year.



Cleco Power
	FOR THE THREE MONTHS ENDED MAR. 31, 2017
(THOUSANDS)	AS REPORTED			AS ADJUSTED
Other operations expenses	$	31,988		$	30,264
Total operating expenses	$	209,002		$	207,278
Operating income	$	44,700		$	46,424
Other expense	$	(274	)	$	(1,998	)

In February 2018, FASB amended guidance that permits, but does not require, companies to reclassify stranded tax effects from the TCJA from AOCI to retained earnings. The adoption of this guidance is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those years. Early adoption is permitted. Management is currently evaluating this guidance and the impact it may have on the results of operations, financial condition, or cash flows of the Registrants.

Note 4 — Regulatory Assets and Liabilities

Cleco capitalizes or defers certain costs for recovery from customers and recognizes a liability for amounts expected to be returned to customers based on regulatory approval and management’s ongoing assessment that it is probable these items will be recovered or refunded through the ratemaking process.

Under the current regulatory environment, Cleco believes these regulatory assets will be fully recoverable; however, if in the future, as a result of regulatory changes or competition, Cleco’s ability to recover these regulatory assets would no longer be probable, then to the extent that such regulatory assets were determined not to be recoverable, Cleco would be required to write-down such assets. In addition, potential deregulation of the industry or possible future changes in the method of rate regulation of Cleco could require discontinuance of the application of the authoritative guidance on regulated operations.

The following table summarizes Cleco Power’s regulatory assets and liabilities:



(THOUSANDS)	AT MAR. 31, 2018			AT DEC. 31, 2017
Regulatory liabilities - deferred taxes, net	$	(138,329	)	$	(140,426	)
Mining costs	3,186			3,823
Interest costs	4,410			4,499
AROs	2,689			2,762
Postretirement costs	139,822			142,764
Tree trimming costs	7,579			7,193
Training costs	6,513			6,552
Surcredits, net	1,195			2,173
AMI deferred revenue requirement	4,090			4,227
Emergency declarations	4,004			4,131
Production operations and maintenance expenses	7,226			8,625
AFUDC equity gross-up	71,245			71,205
Acadia Unit 1 acquisition costs	2,310			2,336
Financing costs	8,201			8,293
MISO integration costs	234			468
Coughlin transaction costs	961			968
Corporate franchise tax, net	—			153
MATS costs	1,282			2,564
Non-service cost of postretirement benefits	1,037			—
Other	255			484
Total regulatory assets	266,239			273,220
Corporate franchise tax, net	(169		)	—
Accumulated deferred fuel	23,053			13,980
Total regulatory assets, net	$	150,794		$	146,774

The following table summarizes Cleco’s net regulatory assets and liabilities:



(THOUSANDS)	AT MAR. 31, 2018		AT DEC. 31, 2017
Total Cleco Power regulatory assets, net	$	150,794	$	146,774
Cleco Merger adjustments ⁽¹⁾
Fair value of long-term debt	145,033		147,145
Postretirement costs	20,878		21,375
Financing costs	8,536		8,623
Debt issuance costs	6,562		6,665
Total Cleco regulatory assets, net	$	331,803	$	330,582

⁽¹⁾Cleco regulatory assets include acquisition accounting adjustments as a result of the Merger.

Non-service Cost of Postretirement Benefits

On January 1, 2018, FASB’s amended guidance related to defined benefit pension and other postretirement plans became effective. The amendment allows only the service cost component of net benefit cost to be eligible for capitalization within property, plant, and equipment. The non-service costs will continue to be capitalized and recovered from ratepayers as approved by FERC. Beginning January 1, 2018, the non-service cost previously eligible for capitalization into property, plant, and equipment will be deferred to a regulatory asset and amortized over the estimated lives of the respective assets. For more information on FASB’s guidance related to defined benefit pension and other postretirement plans, see Note 3 — “Recent Authoritative Guidance.”

Note 5 — Fair Value Accounting

The amounts reflected on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets at March 31, 2018, and December 31, 2017, for cash equivalents, restricted cash equivalents, accounts receivable, other accounts receivable, short-term debt, and accounts payable approximate fair value

because of their short-term nature. Cleco applies the provisions of the fair value measurement standard to its non-recurring, non-financial measurements including business combinations as well as impairment related to goodwill and other long-lived assets.

The following tables summarize the carrying value and estimated market value of Cleco and Cleco Power’s financial instruments not measured at fair value on Cleco and Cleco Power’s Condensed Consolidated Balance Sheets:



Cleco
	AT MAR. 31, 2018				AT DEC. 31, 2017
(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	$	2,905,222	$	2,924,772	$	2,866,955	$	2,921,325

* The carrying value of long-term debt does not include deferred issuance costs of $11.3 million and $11.6 million at March 31, 2018, and December 31, 2017, respectively.



Cleco Power
	AT MAR. 31, 2018				AT DEC. 31, 2017
(THOUSANDS)	CARRYING VALUE*		FAIR VALUE		CARRYING VALUE*		FAIR VALUE
Long-term debt	$	1,410,188	$	1,555,341	$	1,369,810	$	1,535,234

* The carrying value of long-term debt does not include deferred issuance costs of $8.9 million and $9.1 million at March 31, 2018, and December 31, 2017, respectively.

Fair Value Measurements and Disclosures

Cleco classifies assets and liabilities that are measured at their fair value according to three different levels depending on the inputs used in determining fair value.

The following tables disclose for Cleco and Cleco Power the fair value of financial assets and liabilities measured on a recurring basis:



TABLE OF CONTENTS
		PAGE
GLOSSARY OF TERMS		3
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS		5

PART I	Financial Information
ITEM 1.	Cleco — Condensed Consolidated Financial Statements (Unaudited)	7
	Cleco Power — Condensed Consolidated Financial Statements (Unaudited)	14
	Notes to the Unaudited Condensed Consolidated Financial Statements	20
ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	38
ITEM 3.	Quantitative and Qualitative Disclosures about Market Risk	48
ITEM 4.	Controls and Procedures	49

PART II	Other Information
ITEM 1.	Legal Proceedings	50
ITEM 1A.	Risk Factors	50
ITEM 4.	Mine Safety Disclosures	50
ITEM 6.	Exhibits	50
	Signatures	51



CLECO

Condensed Consolidated Statements of Income (Unaudited)
	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2018			2017
Operating revenue
Electric operations	$	262,211		$	234,056
Other operations	22,196			16,880
Gross operating revenue	284,407			250,936
Electric customer credits	(7,647		)	(435		)
Operating revenue, net	276,760			250,501
Operating expenses
Fuel used for electric generation	67,016			69,873
Power purchased for utility customers	53,159			31,963
Other operations	27,967			29,327
Maintenance	29,119			24,523
Depreciation and amortization	42,507			40,851
Taxes other than income taxes	12,258			12,502
Total operating expenses	232,026			209,039
Operating income	44,734			41,462
Interest income	783			312
Allowance for equity funds used during construction	2,363			911
Other income	554			1,370
Other expense	(3,554		)	(2,938		)
Interest charges
Interest charges, including amortization of debt issuance costs, premiums, and discounts, net	32,030			31,945
Allowance for borrowed funds used during construction	(873		)	(227		)
Total interest charges	31,157			31,718
Income before income taxes	13,723			9,399
Federal and state income tax expense	2,862			3,107
Net income	$	10,861		$	6,292
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.



CLECO POWER

Condensed Consolidated Statements of Income (Unaudited)
	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2018			2017
Operating revenue
Electric operations	$	264,631		$	237,553
Other operations	22,195			16,365
Affiliate revenue	208			219
Gross operating revenue	287,034			254,137
Electric customer credits	(7,647		)	(435		)
Operating revenue, net	279,387			253,702
Operating expenses
Fuel used for electric generation	67,016			69,873
Power purchased for utility customers	53,159			31,963
Other operations	27,307			30,264
Maintenance	29,078			24,420
Depreciation and amortization	40,388			38,758
Taxes other than income taxes	11,918			12,000
Total operating expenses	228,866			207,278
Operating income	50,521			46,424
Interest income	641			266
Allowance for equity funds used during construction	2,363			911
Other income	740			210
Other expense	(2,608		)	(1,998		)
Interest charges
Interest charges, including amortization of debt issuance costs, premiums, and discounts, net	18,529			18,331
Allowance for borrowed funds used during construction	(873		)	(227		)
Total interest charges	17,656			18,104
Income before income taxes	34,001			27,709
Federal and state income tax expense	7,997			9,855
Net income	$	26,004		$	17,854
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.



CLECO POWER

Condensed Consolidated Statements of Comprehensive Income (Unaudited)
	FOR THE THREE MONTHS ENDED MAR. 31,
(THOUSANDS)	2018		2017
Net income	$	26,004	$	17,854
Other comprehensive income (loss), net of tax
Postretirement benefits gain (loss) (net of tax expense of $83 in 2018 and tax benefit of $262 in 2017)	233		(420		)
Amortization of interest rate derivatives to earnings (net of tax expense of $22 in 2018 and $33 in 2017)	64		53
Total other comprehensive income (loss), net of tax	297		(367		)
Comprehensive income, net of tax	$	26,301	$	17,487
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.



	FOR THE THREE MONTHS ENDED MAR. 31, 2018
(THOUSANDS)	CLECO POWER		OTHER				ELIMINATIONS			TOTAL
Revenue from contracts with customers
Retail revenue
Residential ⁽¹⁾	$	91,390	$	—			$	—		$	91,390
Commercial ⁽¹⁾	66,695		—				—			66,695
Industrial ⁽¹⁾	37,386		—				—			37,386
Other retail ⁽¹⁾	3,801		—				—			3,801
Surcharge	5,238		—				—			5,238
Total retail revenue	$	204,510	$	—			$	—		$	204,510
Wholesale, net ⁽¹⁾	43,830		(2,420		)	⁽²⁾	—			41,410
Transmission	17,644		—				—			17,644
Other ⁽³⁾	43		1				—			44
Total revenue from contracts with customers	$	266,027	$	(2,419	)		$	—		$	263,608

Revenue unrelated to contracts with customers
Affiliate	$	208	$	15,669			$	(15,877	)	$	—
Other	13,152		—				—			13,152
Total revenue unrelated to contracts with customers	13,360		15,669				(15,877		)	13,152
Operating revenue, net	$	279,387	$	13,250			$	(15,877	)	$	276,760



Louisiana (State or other jurisdiction of incorporation or organization)	72-1445282 (I.R.S. Employer Identification No.)

2030 Donahue Ferry Road, Pineville, Louisiana (Address of principal executive offices)	71360-5226 (Zip Code)

Registrant’s telephone number, including area code: (318) 484-7400



CLECO

Condensed Consolidated Statements of Changes in Member’s Equity (Unaudited)
(THOUSANDS)	MEMBERSHIP INTEREST		RETAINED EARNINGS			AOCI			TOTAL MEMBER’S EQUITY
Balances, Dec. 31, 2017	$	2,069,376	$	29,902		$	(2,921	)	$	2,096,357
Distributions to member	—		(19,500		)	—			(19,500		)
Net income	—		10,861			—			10,861
Other comprehensive income, net of tax	—		—			43			43
Balances, Mar. 31, 2018	$	2,069,376	$	21,263		$	(2,878	)	$	2,087,761
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.



Index to Applicable Notes to the Unaudited Condensed Consolidated Financial Statements of Registrants

Note 1	Summary of Significant Accounting Policies	Cleco and Cleco Power
Note 2	Revenue Recognition	Cleco and Cleco Power
Note 3	Recent Authoritative Guidance	Cleco and Cleco Power
Note 4	Regulatory Assets and Liabilities	Cleco and Cleco Power
Note 5	Fair Value Accounting	Cleco and Cleco Power
Note 6	Debt	Cleco and Cleco Power
Note 7	Pension Plan and Employee Benefits	Cleco and Cleco Power
Note 8	Income Taxes	Cleco and Cleco Power
Note 9	Disclosures about Segments	Cleco
Note 10	Regulation and Rates	Cleco and Cleco Power
Note 11	Variable Interest Entities	Cleco and Cleco Power
Note 12	Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees	Cleco and Cleco Power
Note 13	Affiliate Transactions	Cleco and Cleco Power
Note 14	Intangible Assets	Cleco and Cleco Power
Note 15	Accumulated Other Comprehensive Loss	Cleco and Cleco Power
Note 16	Plan of Acquisition	Cleco and Cleco Power



Cleco
	CLECO CONSOLIDATED FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS)	AT MAR. 31, 2018		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2017		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset description
Institutional money market funds	$	198,446	$	—	$	198,446	$	—	$	144,302	$	—	$	144,302	$	—
FTRs	4,828		—		—		4,828		7,396		—		—		7,396
Total assets	$	203,274	$	—	$	198,446	$	4,828	$	151,698	$	—	$	144,302	$	7,396
Liability description
FTRs	$	545	$	—	$	—	$	545	$	352	$	—	$	—	$	352
Total liabilities	$	545	$	—	$	—	$	545	$	352	$	—	$	—	$	352



Cleco Power
	CLECO POWER FAIR VALUE MEASUREMENTS AT REPORTING DATE
(THOUSANDS)	AT MAR. 31, 2018		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)		AT DEC. 31, 2017		QUOTED PRICES IN ACTIVE MARKETS FOR IDENTICAL ASSETS (LEVEL 1)		SIGNIFICANT OTHER OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS (LEVEL 3)
Asset description
Institutional money market funds	$	151,225	$	—	$	151,225	$	—	$	95,681	$	—	$	95,681	$	—
FTRs	4,828		—		—		4,828		7,396		—		—		7,396
Total assets	$	156,053