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Summary of Significant Accounting Policies
 9 Months Ended
Sep. 30, 2025
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies
Note 1 — Summary of Significant Accounting Policies
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 Divestiture closed. For more information, see Note 3 — “Discontinued Operations.”
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.
On March 12, 2025, following the formation of Cleco Securitization II and the completion of the securitization financing of stranded and decommissioning costs associated with the retirement of the Dolet Hills Power Station as well as deferred fuel and other costs associated with the closure of the Oxbow mine, Cleco Power became the primary beneficiary of Cleco Securitization II, and as a result, the financial statements of Cleco Securitization II are consolidated with the financial statements of Cleco Power. For more information on Cleco Securitization II, see Note 13 — “Variable Interest Entities — Securitization Entities — Cleco Securitization II.”
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
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 and adjusted for discontinued operations. 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 on Form 10-Q 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 fiscal year ended December 31, 2024.
These condensed consolidated financial statements, in the opinion of management, reflect all normal recurring adjustments that are necessary for a fair statement of the financial position and results of operations of Cleco and Cleco Power. Amounts reported in Cleco’s 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 2 — “Recent Authoritative Guidance.” For information on discontinued operations, see Note 3 — “Discontinued Operations.”

Revision of Previously Issued Financial Information
In the second quarter of 2025, Cleco identified errors in its previously filed consolidated annual and interim financial statements. Specifically, management identified errors (collectively, the “Q2 2025 CF Errors”) in the Consolidated Statements of Cash Flows included in the previously filed consolidated financial statements of Cleco and Cleco Power for the years ended December 31, 2024, 2023, and 2022 and interim periods in 2025 and 2024.
Management assessed the materiality of the Q2 2025 CF Errors on the previously filed consolidated financial statements in accordance with the SEC’s Staff Accounting Bulletin (“SAB”) No. 99 and SAB No. 108 and determined that the Q2 2025 CF Errors were not material to the prior period financial statements, individually or in the aggregate; however, for comparability purposes, the comparative amounts presented in the third quarter 2025 Form 10-Q have been revised.
The Q2 2025 CF Errors primarily relate to an error in the classification of accrued capital expenditures in the Consolidated Statements of Cash Flows, which resulted in errors to the Net cash provided by operating activities and Net cash provided by (used in) investing activities lines. The revisions had no impact on the consolidated balance sheets, consolidated statements of income, consolidated statements of comprehensive income, consolidated statements of changes in member’s equity, or notes to the financial statements included in the previously filed financial statements.
A summary of the revisions to the comparative periods presented in this Quarterly Report on Form 10-Q is shown below.
CLECOCLECO POWER
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024
(THOUSANDS)AS REPORTED
REVISION
AS REVISED
AS REPORTED
REVISION
AS REVISED
Unearned compensation expense$5,875 $23,588 $29,463 $1,236 $13,101 $14,337 
Accounts receivable$1,612 $4,896 $6,508 $(17,405)$4,896 $(12,509)
Customer deposits$5,768 $(4,896)$872 $5,768 $(4,896)$872 
Other deferred accounts(1)
$(10,824)$(9,623)$(20,447)$(5,128)$(9,082)$(14,210)
Accounts payable(2)
$(30,560)$(18,514)$(49,074)$(20,575)$(10,540)$(31,115)
Taxes accrued$60,424 $526 $60,950 $23,473 $81 $23,554 
Other operating(3)
$(12,684)$(3,398)$(16,082)$(2,030)$(981)$(3,011)
Net cash provided by operating activities$265,136 $(7,421)$257,715 $248,855 $(7,421)$241,434 
Additions to property, plant, and equipment$(172,513)$(18,163)$(190,676)$(168,528)$(18,163)$(186,691)
Customer advances for construction$— $17,834 $17,834 $— $17,834 $17,834 
Net cash provided by (used in) investing activities
$293,291 $(329)$292,962 $(166,493)$(329)$(166,822)
Credit deposits$— $7,750 $7,750 $— $7,750 $7,750 
Net cash used in financing activities$(439,911)$7,750 $(432,161)$(85,706)$7,750 $(77,956)
Accrued additions to property, plant, and equipment$4,488 $3,044 $7,532 $4,486 $3,044 $7,530 
Amounts presented as revised differ from those in Part I, Item 1, “Condensed Consolidated Financial Statements (Unaudited) — Cleco — Condensed Consolidated Statements of Cash Flows (Unaudited)” and “— Cleco Power — Condensed Consolidated Statements of Cash Flows (Unaudited)” due to the following:
(1) For Cleco and Cleco Power, includes $15.4 million previously reported in Other deferred accounts that was reclassified to Storm reserves.
(2) For Cleco, includes $26.2 million that was reclassified to Incentive compensation payable. For Cleco Power, includes $7.9 million that was reclassified to Incentive compensation payable.
(3) For Cleco, includes $8.2 million that was reclassified to Incentive compensation payable. For Cleco Power, includes $1.5 million that was reclassified to Incentive compensation payable and $0.2 million that was reclassified to Prepayments.
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’s and Cleco Power’s restricted cash and cash equivalents consisted of the following:
Cleco
(THOUSANDS)AT SEPT. 30, 2025AT DEC. 31, 2024
Current
Cleco Securitization I and Cleco Securitization II operating expenses and debt service
$19,748 $15,918 
Cleco Securitization II energy transition costs
10,620 — 
Total current30,368 15,918 
Non-current
Cleco Securitization II energy transition costs
31,919 1 
Diversified Lands’ mitigation escrow25 24 
Cleco Power’s future storm restoration costs107,904 116,468 
Total non-current139,848 116,493 
Total restricted cash and cash equivalents$170,216 $132,411 

Cleco Power
(THOUSANDS)AT SEPT. 30, 2025AT DEC. 31, 2024
Current
Cleco Securitization I and Cleco Securitization II operating expenses and debt service
$19,748 $15,918 
Cleco Securitization II energy transition costs
10,620 — 
Total current30,368 15,918 
Non-current
Cleco Securitization II energy transition costs
31,919 1 
Future storm restoration costs107,904 116,468 
Total non-current139,823 116,469 
Total restricted cash and cash equivalents$170,191 $132,387 

In June 2025, Cleco Power received LPSC approval to withdraw $12.3 million from the storm reserve to cover costs associated with multiple storm events that occurred from December 2022 until April 2024. In December 2025, management anticipates filing an additional application seeking approval for withdrawal of the accumulated restoration costs for Hurricane Francine, as well as expenses from other storms and wildfires that occurred in 2024, from the storm reserve. At September 30, 2025, Cleco Power had $37.8 million of unrecovered accumulated storm restoration
costs that are probable of recovery from the storm reserve, pending submittal of applications and approvals by the LPSC. For more information about these accumulated storm restoration costs, see Note 5 — “Regulatory Assets and Liabilities — Storm Reserve.”
On March 12, 2025, in conjunction with the securitization financing and pursuant to the financing order issued by the LPSC on November 20, 2024, a newly funded energy transition reserve for reimbursement of Dolet Hills Power Station energy transition costs and for future energy transition costs was established. For more information about the energy transition reserve, see Note 5 — “Regulatory Assets and Liabilities — Energy Transition Reserve.”
Related Party Transactions
Investment funds managed by MAM hold an ownership interest in Cleco Holdings, which wholly owns Cleco Power. In accordance with applicable state and federal regulations and GAAP, Cleco Power evaluates relationships and transactions to determine whether they involve related parties. A related party relationship exists when one party significantly influences the management or operating policies of the other, or when the parties are subject to common control or ownership, among other things as described in Cleco’s policies and procedures.
In July 2022, Cleco Power entered into a long-term agreement with DESRI, a third party, to purchase the output and associated attributes of a 240-MW solar electric generation facility to be constructed in DeSoto Parish, Louisiana. Cleco Power expects to begin receiving output from this facility by 2027. In January 2025, MAM, through the investment funds it manages, completed a significant minority investment in DESRI, establishing DESRI as a related party to Cleco Power.
As of September 30, 2025, the project remains in development, and no payments or capital expenditures have been made to DESRI to date. Cleco Power will disclose and quantify any future financial activity under the agreement as it occurs.
Reserves for Credit Losses
Customer accounts receivable are recorded at the invoiced amount and do not bear interest. Customer accounts receivable are generally considered past due 21 days after the billing date. Cleco recognizes write-offs within the allowance for credit losses once all recovery methods have been exhausted. It is the policy of management to review accounts receivable and unbilled revenue monthly using a reserve matrix based on historical bad debt write-off as well as current and forecasted economic conditions, to establish a credit loss estimate.
Cleco’s credit losses at September 30, 2025, are within normal levels and historical trends.
The tables below present the changes in the allowance for credit losses by receivable for Cleco and Cleco Power:
Cleco
FOR THE THREE MONTHS ENDED SEPT. 30, 2025FOR THE NINE MONTHS ENDED SEPT. 30, 2025
(THOUSANDS)ACCOUNTS
RECEIVABLE
OTHER
TOTALACCOUNTS
RECEIVABLE
OTHER
TOTAL
Balances, beginning of period
$845 $1,638 $2,483 $1,337 $1,638 $2,975 
Current period provision1,026 — 1,026 1,407 — 1,407 
Charge-offs(752)— (752)(2,102)— (2,102)
Recovery236 — 236 713 — 713 
Balances, Sept. 30, 2025$1,355 $1,638 $2,993 $1,355 $1,638 $2,993 
FOR THE THREE MONTHS ENDED SEPT. 30, 2024FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)ACCOUNTS
RECEIVABLE
OTHER
TOTALACCOUNTS
RECEIVABLE
OTHER
TOTAL
Balances, beginning of period
$1,368 $1,638 $3,006 $3,012 $1,638 $4,650 
Current period provision401 — 401 911 — 911 
Charge-offs(854)— (854)(3,614)— (3,614)
Recovery217 — 217 823 — 823 
Balances, Sept. 30, 2024$1,132 $1,638 $2,770 $1,132 $1,638 $2,770 
Cleco Power
FOR THE THREE MONTHS ENDED SEPT. 30, 2025
FOR THE NINE MONTHS ENDED SEPT. 30, 2025
(THOUSANDS)ACCOUNTS RECEIVABLE
Balances, beginning of period
$845 $1,337 
Current period provision1,026 1,407 
Charge-offs(752)(2,102)
Recovery236 713 
Balances, Sept. 30, 2025$1,355 $1,355 

FOR THE THREE MONTHS ENDED SEPT. 30, 2024
FOR THE NINE MONTHS ENDED SEPT. 30, 2024
(THOUSANDS)ACCOUNTS RECEIVABLE
Balances, beginning of period
$1,368 $3,012 
Current period provision401 911 
Charge-offs(854)(3,614)
Recovery217 823 
Balances, Sept. 30, 2024$1,132 $1,132