Discontinued Operations

3 Months Ended

Mar. 31, 2025

Discontinued Operations and Disposal Groups [Abstract]

Discontinued Operations

Note 3 — Discontinued Operations

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. As a result, 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 represents 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 have been presented as discontinued operations since March 31, 2023.

On June 1, 2024, the Cleco Cajun Sellers completed the sale of the Cleco Cajun Sale Group. After all working capital adjustments were finalized, Cleco incurred a cumulative loss related to the Cleco Cajun Divestiture of $216.7 million. Upon closing, the Cleco Cajun Sellers received $474.5 million, net of adjustments as set forth in the Cleco Cajun Divestiture Purchase and Sale Agreement and adjustments based on net working capital. Also, in conjunction with the closing of the Cleco Cajun Divestiture, the Cleco Cajun Sellers paid $10.8 million to professional service firms that were engaged to facilitate the transaction. Cleco expects to receive an additional $113.0 million by June 2026, which is not contingent upon the post-divestiture performance of the divested business. This receivable is discounted to its net present value and recorded in Receivable - Cleco Cajun Divestiture on Cleco’s Condensed Consolidated Balance Sheet. In connection with the sale, Cleco entered into an other services agreement and a transition services agreement to provide certain services to the Cleco Cajun Purchasers for up to twelve months. During the fourth quarter of 2024, the transition services agreement was terminated.

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. On April 26, 2024, the remaining $66.7 million of that debt was paid and this LPSC commitment was satisfied. Interest expense on that debt was included in discontinued operations.

The following table presents the amounts that were reclassified from continuing operations and included in discontinued operations within Cleco’s Condensed

Consolidated Statements of Income for the three months ended March 31, 2024:

(THOUSANDS)	FOR THE THREE MONTHS ENDED MAR. 31, 2024
Operating revenue, net
Electric operations	$	128,828
Other operations	31,534
Operating revenue, net	160,362
Operating expenses
Fuel used for electric generation	15,196
Purchased power	61,940
Other operations and maintenance	23,291
Depreciation and amortization	356
Total operating expenses	100,783
Operating income	59,579
Other income, net	126
Interest, net	(80)
Loss on classification as held for sale	(17,000)
Income from discontinued operations before income taxes	42,625
Federal and state income tax expense	10,663
Income from discontinued operations, net of income taxes	$	31,962

Cleco 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 three months ended March 31, 2024:

(THOUSANDS)	FOR THE THREE MONTHS ENDED MAR. 31, 2024
Net cash used in operating activities - discontinued operations	$	(4,780)
Net cash provided by investing activities - discontinued operations	$	4,953