Leases

12 Months Ended

Dec. 31, 2024

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.

During 2024, Cleco Power renewed its lease for 111 railcars for coal transportation which expires on March 31, 2027. 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 had leases for three towboats in order to transport petroleum coke to Madison Unit 3. During 2024, Cleco Power modified its agreement to reduce the number of

towboats to two with an expiration date of April 2025 due to a change in fuel strategy.

As a result of a cancellation notice and two amendments, Cleco Power reclassified its barge finance lease to an operating lease for 20 barges through April 15, 2025. For more information on the barge lease see “— Finance Lease.”

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, 2024:

(THOUSANDS)
Years ending Dec. 31,
2025	$	3,167
2026	2,596
2027	2,347
2028	2,208
2029	2,205
Thereafter	5,370
Total minimum lease payments	17,893
Less: amount representing interest	2,351
Present value of net minimum operating lease payments	$	15,542
Current liabilities	$	2,754
Non-current liabilities	$	12,788

Finance Lease

In April 2018, Cleco Power entered into an agreement with Savage Inland Marine for continued use of barges used to transport solid fuel to Madison Unit 3 through March 2033. Upon commencement, Cleco Power loaned Savage Inland Marine $16.8 million to purchase the barges and a receivable was established. At December 31, 2023, $12.9 million of this receivable remained. At December 31, 2024, this receivable was satisfied as part of the termination of the finance lease discussed below. The agreement met the accounting definition of a finance lease at inception.

The barge lease rate contained both a fixed and variable component, of which the latter was adjusted periodically for associated executory costs. If the barges were idle, the lessor was required to attempt to sublease the barges to third parties with the revenue reducing Cleco Power’s lease payment. At December 31, 2023, the amount of leased property under the finance lease consisted of $16.8 million for barges and $6.4 million of accumulated amortization, for a net finance lease asset of $10.4 million.

In October 2024, pursuant to a provision for early termination in accordance with the terms of the agreement, Cleco Power notified Savage Inland Marine that Cleco Power would be terminating the lease agreement effective April 15, 2025. This resulted in the lease being classified as an operating lease. Consequently, the net finance lease asset and finance lease obligation were derecognized and a $2.2 million gain was recorded in Accumulated deferred fuel on Cleco’s and Cleco Power’s Consolidated Balance Sheets. In addition, an operating lease obligation of $0.4 million was recognized.

For the year ended December 31, 2024, Cleco Power paid $2.0 million in lease payments. For each of the years ended December 31, 2023 and 2022, Cleco Power paid $2.2 million in lease payments. For the years ended December 31, 2024, 2023, and 2022, Cleco Power received $0.7 million, $2.6

million, and $0.6 million, respectively, of revenue from subleases.

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, 2024, and 2023:

Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2024		2023
Finance lease cost
Amortization of ROU assets	$	1,027	$	1,120
Interest on lease liabilities	1,175		1,367
Operating lease cost	3,772		3,589
Variable lease cost	737		790
Total lease cost	$	6,711	$	6,866

Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2024		2023
Finance lease cost
Amortization of ROU assets	$	1,027	$	1,120
Interest on lease liabilities	1,175		1,367
Operating lease cost	3,772		3,581
Variable lease cost	737		790
Total lease cost	$	6,711	$	6,858

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, 2024, and 2023:

		AT DEC. 31,
(THOUSANDS)	BALANCE SHEET LINE ITEM	2024		2023
Supplemental balance sheet information
ROU assets
Operating	Operating lease right of use assets	$	14,905	$	20,070
Finance	Property, plant, and equipment	—		10,360
Total ROU assets		$	14,905	$	30,430
Current lease liabilities
Operating	Other current liabilities	$	2,754	$	2,973
Finance	Long-term debt and finance leases due within one year	—		925
Non-current lease liabilities
Operating	Operating lease liabilities	12,788		17,276
Finance	Long-term debt and finance leases, net	—		12,046
Total lease liabilities		$	15,542	$	33,220

	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2024		2023
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,663	$	3,571
Operating cash flows from finance leases	$	1,175	$	1,367
Financing cash flows from finance leases	$	844	$	836

	AT DEC. 31,
(THOUSANDS)	2024		2023
Other supplemental information
Operating leases
Weighted-average remaining lease term	11.7 years		12.2 years
Weighted-average discount rate	4.16	%	4.30	%
Finance leases
Weighted-average remaining lease term	N/A		9.3 years
Weighted-average discount rate	N/A		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.

During 2024, Cleco Power renewed its lease for 111 railcars for coal transportation which expires on March 31, 2027. 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 had leases for three towboats in order to transport petroleum coke to Madison Unit 3. During 2024, Cleco Power modified its agreement to reduce the number of

towboats to two with an expiration date of April 2025 due to a change in fuel strategy.

As a result of a cancellation notice and two amendments, Cleco Power reclassified its barge finance lease to an operating lease for 20 barges through April 15, 2025. For more information on the barge lease see “— Finance Lease.”

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, 2024:

(THOUSANDS)
Years ending Dec. 31,
2025	$	3,167
2026	2,596
2027	2,347
2028	2,208
2029	2,205
Thereafter	5,370
Total minimum lease payments	17,893
Less: amount representing interest	2,351
Present value of net minimum operating lease payments	$	15,542
Current liabilities	$	2,754
Non-current liabilities	$	12,788

Finance Lease

In April 2018, Cleco Power entered into an agreement with Savage Inland Marine for continued use of barges used to transport solid fuel to Madison Unit 3 through March 2033. Upon commencement, Cleco Power loaned Savage Inland Marine $16.8 million to purchase the barges and a receivable was established. At December 31, 2023, $12.9 million of this receivable remained. At December 31, 2024, this receivable was satisfied as part of the termination of the finance lease discussed below. The agreement met the accounting definition of a finance lease at inception.

The barge lease rate contained both a fixed and variable component, of which the latter was adjusted periodically for associated executory costs. If the barges were idle, the lessor was required to attempt to sublease the barges to third parties with the revenue reducing Cleco Power’s lease payment. At December 31, 2023, the amount of leased property under the finance lease consisted of $16.8 million for barges and $6.4 million of accumulated amortization, for a net finance lease asset of $10.4 million.

In October 2024, pursuant to a provision for early termination in accordance with the terms of the agreement, Cleco Power notified Savage Inland Marine that Cleco Power would be terminating the lease agreement effective April 15, 2025. This resulted in the lease being classified as an operating lease. Consequently, the net finance lease asset and finance lease obligation were derecognized and a $2.2 million gain was recorded in Accumulated deferred fuel on Cleco’s and Cleco Power’s Consolidated Balance Sheets. In addition, an operating lease obligation of $0.4 million was recognized.

For the year ended December 31, 2024, Cleco Power paid $2.0 million in lease payments. For each of the years ended December 31, 2023 and 2022, Cleco Power paid $2.2 million in lease payments. For the years ended December 31, 2024, 2023, and 2022, Cleco Power received $0.7 million, $2.6

million, and $0.6 million, respectively, of revenue from subleases.

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, 2024, and 2023:

Cleco
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2024		2023
Finance lease cost
Amortization of ROU assets	$	1,027	$	1,120
Interest on lease liabilities	1,175		1,367
Operating lease cost	3,772		3,589
Variable lease cost	737		790
Total lease cost	$	6,711	$	6,866

Cleco Power
	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2024		2023
Finance lease cost
Amortization of ROU assets	$	1,027	$	1,120
Interest on lease liabilities	1,175		1,367
Operating lease cost	3,772		3,581
Variable lease cost	737		790
Total lease cost	$	6,711	$	6,858

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, 2024, and 2023:

		AT DEC. 31,
(THOUSANDS)	BALANCE SHEET LINE ITEM	2024		2023
Supplemental balance sheet information
ROU assets
Operating	Operating lease right of use assets	$	14,905	$	20,070
Finance	Property, plant, and equipment	—		10,360
Total ROU assets		$	14,905	$	30,430
Current lease liabilities
Operating	Other current liabilities	$	2,754	$	2,973
Finance	Long-term debt and finance leases due within one year	—		925
Non-current lease liabilities
Operating	Operating lease liabilities	12,788		17,276
Finance	Long-term debt and finance leases, net	—		12,046
Total lease liabilities		$	15,542	$	33,220

	FOR THE YEAR ENDED DEC. 31,
(THOUSANDS)	2024		2023
Supplemental cash flow information
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases	$	3,663	$	3,571
Operating cash flows from finance leases	$	1,175	$	1,367
Financing cash flows from finance leases	$	844	$	836

	AT DEC. 31,
(THOUSANDS)	2024		2023
Other supplemental information
Operating leases
Weighted-average remaining lease term	11.7 years		12.2 years
Weighted-average discount rate	4.16	%	4.30	%
Finance leases
Weighted-average remaining lease term	N/A		9.3 years
Weighted-average discount rate	N/A		10.18	%