Discontinued Operations

6 Months Ended

Jun. 30, 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. The term of the other services agreement was extended to August 31, 2025.

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 and six months ended June 30, 2024:

(THOUSANDS)	FOR THE THREE MONTHS ENDED JUNE 30, 2024		FOR THE SIX MONTHS ENDED JUNE 30, 2024
Operating revenue, net
Electric operations	$	78,727	$	207,555
Other operations	19,458		50,992
Operating revenue, net	98,185		258,547
Operating expenses
Fuel used for electric generation	5,860		21,056
Purchased power	31,095		93,035
Other operations and maintenance	14,300		37,591
Depreciation and amortization	3,915		4,271
Total operating expenses	55,170		155,953
Operating income	43,015		102,594
Other income, net	113		239
Interest, net	662		582
Loss - Cleco Cajun Divestiture(1)	(27,951)		(44,951)
Income from discontinued operations before income taxes	15,839		58,464
Federal and state income tax expense	3,129		13,792
Income from discontinued operations, net of income taxes	$	12,710	$	44,672

(1) This line item represents the loss on the classification as held for sale until the closing of the Cleco Cajun Divestiture. After the closing of the Cleco Cajun Divestiture, this line item represents the loss on the sale of the Cleco Cajun Sale Group.

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 six months ended June 30, 2024:

(THOUSANDS)	FOR THE SIX MONTHS ENDED JUNE 30, 2024
Net cash used in operating activities - discontinued operations	$	(982)
Net cash used in investing activities - discontinued operations	$	(3,118)