{"url_path":"/sec/cik-0001089819/10-q/2026/item-2","section_key":"item-2","section_title":"Item 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-12","source_url":"https://www.sec.gov/Archives/edgar/data/1089819/0001089819-26-000010-index.html","accession_number":"0001089819-26-000010","cik":"0001089819","ticker":null,"issuer_name":"Cleco Corporate Holdings LLC","edgar_url":"https://www.sec.gov/Archives/edgar/data/1089819/0001089819-26-000010-index.html","primary_entity_key":"0001089819","primary_entity_name":"Cleco Corporate Holdings LLC"},"word_count":8034,"has_tables":true,"body_markdown":"ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS\n\nCleco uses its website, https://www.cleco.com, as a routine channel for distribution of important information, including news releases and financial information. Cleco’s website is the primary source of publicly disclosed news about Cleco. Cleco is providing the address to its website solely for informational purposes and does not intend for the address to be an active link. The contents of the website are not incorporated into this Quarterly Report on Form 10-Q.\n\nThe following discussion and analysis should be read in combination with the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and Cleco’s and Cleco Power’s Condensed Consolidated Financial Statements contained in this Quarterly Report on Form 10-Q. The information included therein is essential to understanding the following discussion and analysis. Below is information concerning the consolidated results of operations of Cleco for the three months ended March 31, 2026, and 2025.\n\nOVERVIEW\n\nCleco is a regional energy company that conducts substantially all of its business operations through its principal operating business segment, Cleco Power. Cleco Power is a regulated electric utility company that owns eight generating units with a total rated capacity of 2,676 MW and serves\n\napproximately 298,000 customers in Louisiana through its retail business and supplies wholesale power in Louisiana.\n\nMany factors affect Cleco’s primary business of generating, delivering, and selling electricity. These factors include the ability to increase energy sales while containing costs and the ability to successfully perform in MISO while subject to the related operating challenges and uncertainties. In addition, factors affecting Cleco Power include weather and the presence of a stable regulatory environment, which impacts the ROE and future rate cases, as well as the recovery of costs related to storms, growing energy demand, and volatile fuel prices; the ability to reliably deliver power to its jurisdictional customers; and the ability to comply with increasingly stringent regulatory and environmental standards. Significant events and major initiatives impacting Cleco and Cleco Power are discussed below.\n\nRecent Events\n\nOn April 24, 2026, Cleco Partners entered into an equity purchase agreement, pursuant to which Stonepeak and Bernhard Capital Partners have agreed, subject to customary closing conditions, to acquire all of the outstanding equity interests of Cleco Group.\n\nThe Proposed Cleco Group Sale Transaction is subject to customary closing conditions, including receipt of required\n\n38\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\nregulatory approvals, including approvals from the LPSC and FERC, and the expiration or termination of applicable waiting periods under the HSR Act. In addition, pending consummation of the Proposed Cleco Group Sale Transaction, the equity purchase agreement generally requires Cleco Partners to cause Cleco to operate in the ordinary course of business consistent with past practice and restricts Cleco from taking certain actions with respect to its business without the consent of the purchasers. Cleco plans to file an application with the LPSC seeking approval of the sale in June 2026.\n\nRegulatory Structure and Rate Case Outlook\n\nCleco Power’s retail rates are governed by an FRP approved by the LPSC, which allows for annual adjustments based on an ROE. The FRP provides a structured regulatory environment that supports Cleco Power’s ability to recover costs and earn a reasonable return while maintaining rate stability for customers.\n\nAs of July 1, 2024, Cleco Power’s FRP permits a target ROE of 9.7%, with refund obligations for earnings above 10.3%. The FRP also includes a residential revenue decoupling mechanism to stabilize recovery of base revenues.\n\nCleco Power is required to file its next base rate case with the LPSC by June 30, 2026, with rates effective on July 1, 2027. This filing will provide an opportunity to reassess the cost structure, capital investments, and evolving customer needs, including those related to grid modernization, renewable integration, and electrification initiatives. Management is preparing for this filing as part of Cleco Power’s regulatory and financial planning process.\n\nCorporate Sustainability\n\nCleco is evaluating renewable and electrification initiatives as part of its long‑term resource and infrastructure planning. Currently, management is unable to predict what impact the implementation of these sustainability initiatives will have on the Registrants. For more information on these sustainability goals, see Part I, Item 1, “Business — Human Capital,” “— Communities,” and “— Oversight and Governance” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025. For more information about Cleco’s environmental initiatives, see “— Decarbonization Initiatives” and “— Renewable and Electrification Initiatives.”\n\nPeople\n\nCleco is committed to providing affordable, reliable, and sustainable electricity. It supports community investment across its service territory and fosters a workplace culture that values a sense of belonging, safety, and innovation.\n\nPlanet\n\nCleco is expanding renewable and electrification initiatives and transitioning away from coal-fired generation. It aims to reduce GHG emissions from its generating fleet by approximately 50% by 2035, with a long-term ambition of net-zero emissions by 2050. These targets depend on factors such as policy developments, load growth, technology, and implementation feasibility.\n\nPrinciples\n\nCleco maintains a governance framework supported by policies and practices that promote accountability. A Corporate Sustainability Steering Committee and a Chief\n\nAdministrative and Sustainability Officer oversee the implementation of sustainability initiatives.\n\nGrid Reliability\n\nCleco Power is actively advancing grid reliability and operational resilience to support safe and consistent service amid evolving grid demands and environmental conditions. Cleco Power closely monitors system performance and manages grid conditions through targeted infrastructure investments and coordination with MISO. These efforts are intended to support overall grid stability during periods of elevated demand, extreme weather, or transmission constraints. Cleco Power employs operational load management tools when necessary to preserve grid integrity, including in circumstances where MISO may issue system reliability directives. Cleco Power continues to enhance system readiness through grid modernization investments, evaluation of generation availability, and ongoing assessment of changing load patterns, including increased electrification and peak usage growth. Through these initiatives, Cleco Power remains focused on reducing the likelihood, duration, and impact of service interruptions while supporting a resilient and reliable electric system for customers.\n\nGeneration Planning\n\nCleco Power’s participation in MISO’s ERAS could significantly impact its long-term generation planning and its ability to meet future reliability and capacity needs. ERAS is a newly launched MISO initiative designed to accelerate the interconnection timeline for new generation resources, with the potential to enable interconnection agreements within approximately 90 days, which is substantially faster than traditional MISO study cycles. While ERAS offers an expedited path for select projects, the majority of new generation resources will continue to follow MISO’s Definitive Planning Phase (DPP), which is the standard interconnection process consisting of multiple phases of system impact and facilities studies that typically span more than a year. This process includes detailed evaluations of network upgrades and reliability impacts and requires milestone commitments and financial deposits at various stages. In certain circumstances, projects advancing through MISO’s standard interconnection process may be modified, delayed, or withdrawn due to evolving system conditions, study results, or cost outcomes, and because DPP remains the primary pathway for most projects, Cleco’s long-term planning must account for both ERAS opportunities and DPP requirements, as delays or cost implications in either process could materially affect resource adequacy and investment decisions.\n\nCleco Power is actively participating in ERAS, which is subject to limitations on the total number and timing of submissions and requires a financial commitment to MISO for each submission. Cleco’s ability to meet future reliability and capacity requirements may be materially affected by anticipated load growth from large-scale commercial and industrial customers, and the financial commitment required for ERAS participation.\n\nCleco continues to monitor developments in the MISO planning processes, including ERAS and DPP, and is actively evaluating its options in response to these changes. While participation is underway, there can be no assurance that ERAS will result in favorable outcomes. However, the emergence of ERAS represents a material consideration in\n\n39\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\nCleco’s long-term generation planning and capital investment strategy.\n\nDecarbonization Initiatives\n\nManagement is considering the most economically viable decarbonization strategies and remains committed to addressing Cleco Power’s carbon output of its solid fuel generating units. For more information on environmental matters that could affect Cleco Power’s decarbonization initiatives, see “— Results of Operations — Regulatory and Other Matters — Environmental Matters.”\n\nRenewable and Electrification Initiatives\n\nIn July 2022, Cleco Power entered into a long-term agreement to purchase, among other things, the output, capacity, and current and future environmental resource credits of a 240-MW solar electric generation facility to be constructed in DeSoto Parish, Louisiana and owned by DESRI. In September 2024, the LPSC approved the agreement, including the recovery of $2.1 million of incurred development costs. The LPSC also approved Cleco Power’s recovery of future costs to construct, own, operate, and maintain the transmission line necessary to deliver the energy from the solar generation facility to Cleco Power’s transmission grid. Cleco Power is progressing the solar and related interconnection project and currently expects the commercial operation date to begin in the third quarter of 2026, subject to satisfaction of applicable conditions and project milestones.\n\nCleco Power is evaluating potential future resources to diversify its generation portfolio as part of its IRP process and is engaging with customers to assess demand for potential renewable energy offerings. These evaluations reflect evolving customer interest, including potential large‑load customers. Cleco Power continues to consider market conditions and applicable regulatory requirements as it further refines its resource planning strategy. As of March 31, 2026, the IRP process had not resulted in the identification of an optimal resource portfolio or the advancement of any additional generation resources.\n\nCleco Power is also pursuing electrification initiatives for its customers such as gas compression, e-trucking, green tariffs, infrastructure for light duty electric vehicles and forklifts, and electric vehicle charging sites, among others. These initiatives are in various stages of evaluation and development and may be subject to future regulatory approval.\n\nDSMART Project\n\nThe DSMART project includes modernization of Cleco Power’s distribution system by replacing or upgrading distribution line equipment to utilize new and emerging technologies to facilitate automatic fault isolation, service restoration, and fault location. The project provides savings through a reduction in outage restoration time and improved operational efficiencies. The project also improves safety and reliability of Cleco Power’s distribution assets by minimizing outage patrols and improving situational awareness in the distribution operations center. The total estimated project cost is $111.4 million. The project implementation will be completed in phases, and management expects the total project will be completed by the end of 2028. Cleco Power is currently in the second phase of the project. As of March 31, 2026, Cleco Power had spent $89.9 million on the project.\n\nGrid Resiliency and Hardening\n\nCleco Power is actively participating in programs to enhance its grid resilience against growing threats of extreme weather and climate change. This may include potential hardening projects aimed at reinforcing or replacing critical infrastructure on Cleco Power’s transmission and distribution systems with materials that can better withstand extreme weather events, avoid or mitigate customer outages from such events, and facilitate faster restoration after such events. Cleco Power’s grid resiliency plan is a 10-year plan that identifies an estimated 1,400 projects with a total investment of approximately $510.0 million. In December 2024, Cleco Power filed an application with the LPSC for approval of Phase 1 of the plan which includes $257.6 million of project investments to be completed over 5 years. On November 3, 2025, Cleco Power filed an uncontested stipulated settlement with the LPSC, reducing the proposed investment to approximately $200.0 million. The settlement was approved by the LPSC in November 2025. Effective January 1, 2026, Cleco Power began collecting revenues under the LPSC‑approved Grid Resiliency Rate Rider. The rider provides for contemporaneous recovery of prudently incurred costs associated with Phase I of Cleco Power’s grid resiliency plan, subject to a semi‑annual true up and prudency review by the LPSC. Management expects that costs incurred under Phase I, as well as costs incurred under future phases of the grid resiliency plan, will continue to be recovered through this mechanism.\n\nLarge Load Growth Initiatives\n\nCleco Power is evaluating opportunities to support long‑term load growth associated with increasing demand from large‑load customers, including data centers, driven predominately by the expansion of artificial intelligence and related digital infrastructure. In support of this demand, Cleco Power is pursuing potential long‑term arrangements to supply power to large‑load facilities within its service territory. In connection with certain large‑load growth and interconnection projects, Cleco Power has received customer advances and cost reimbursements and executed arrangements for project progression, subject to applicable regulatory requirements. As part of these efforts, Cleco Power may incur planning, engineering, procurement, and other initial capital costs to prepare to serve large‑load customers in advance of receiving final approval from the LPSC. Cleco Power has structured these arrangements to limit financial and operational exposure prior to approval by the LPSC and has implemented significant contractual and credit protections intended to mitigate risk, including customer funding mechanisms that provide for the upfront payment of required construction‑related contributions prior to facilities being placed in service. Because large-load projects are typically associated with a single customer or a limited number of customers, Cleco Power could experience increased customer concentration over time as these facilities become operational.\n\nOn April 20, 2026, Cleco Power executed an electric service agreement with a data center developer in connection with a project under development that is intended to serve a future large‑load customer and entered into related power supply and commercial agreements to support the anticipated load, which includes a capacity purchase power agreement with a third party, subject to applicable regulatory and other approvals. These arrangements include additional credit support, including a parent guarantee from a creditworthy affiliate of the ultimate customer upon regulatory approval and\n\n40\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\na substantial letter of credit designed to ensure recovery of applicable costs and to limit exposure to Cleco Power’s other customers. Cleco Power continues to evaluate other potential large‑load growth opportunities within its service territory.\n\nOther\n\nCleco Power is working to secure load growth opportunities that include renewing existing franchises, pursuing new\n\nfranchises, and adding new retail load opportunities with large industrial, commercial, and residential customers. The retail opportunities include sectors such as agriculture, oil and gas, chemicals, metals, national accounts, government, military, wood, paper, health care, information technology, transportation, clean and green fuels, and other manufacturing.\n\nRESULTS OF OPERATIONS\n\nComparison of the Three Months Ended March 31, 2026, and 2025\n\n FOR THE THREE MONTHS ENDED MAR. 31,\n\nCLECO POWER\n\nOTHER\n\nSEGMENTS\n\nCLECO\n\n(THOUSANDS)20262025\nVARIANCE*\n\nVARIANCE*\n\nVARIANCE*\n\nOperating revenue   \n\nBase$185,337 $182,585 $2,752 $— $2,752 \n\nFuel cost and purchased power recovery\n117,703 87,543 30,160 — 30,160 \n\nOther operations31,078 23,456 7,622 (1,844)5,778 \n\nAffiliate revenue246 245 1 (1)— \n\nOperating revenue, net334,364 293,829 40,535 (1,845)38,690 \n\nOperating expenses\n\nRecoverable fuel and purchased power\n117,878 87,561 (30,317)— (30,317)\n\nNon-recoverable fuel and purchased power\n6,463 3,148 (3,315)— (3,315)\n\nOther operations and maintenance\n70,818 57,908 (12,910)2,120 (10,790)\n\nDepreciation and amortization\n49,859 47,783 (2,076)(37)(2,113)\n\nTaxes other than income taxes\n16,140 15,618 (522)(155)(677)\n\nTotal operating expenses\n261,158 212,018 (49,140)1,928 (47,212)\n\nOperating income73,206 81,811 (8,605)83 (8,522)\n\nInterest income\n2,732 4,592 (1,860)299 (1,561)\n\nAllowance for equity funds used during construction\n1,619 531 1,088 — 1,088 \n\nOther income (expense), net1,485 (350)1,835 (62)1,773 \n\nInterest charges29,675 25,684 (3,991)(56)(4,047)\n\nFederal and state income tax expense10,554 11,883 1,329 (270)1,059 \n\nNet income$38,813 $49,017 $(10,204)$(6)$(10,210)\n\n* Favorable/(Unfavorable)\n\nSummary of Consolidated Results\n\nThe changes in Cleco’s and Cleco Power’s results of operations are primarily attributable to the following:\n\nBase\n\nBase revenue increased $2.8 million primarily due to $10.8 million of higher retail rates largely resulting from an increase in the IICR, which is adjusted annually. This increase is partially offset by $4.9 million from lower usage due to milder winter weather and $2.6 million for the absence of the allowed carrying charge on the related Dolet Hills regulatory asset.\n\nFor information on the effects of future energy sales on the results of operations, financial condition, or cash flows of Cleco Power, see Part I, Item 1A, “Risk Factors — Operational Risks — Future Electricity Sales” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nThe following tables show the components of Cleco Power’s base revenue:\n\nFOR THE THREE MONTHS ENDED MAR. 31,\n\n(THOUSANDS)20262025FAVORABLE/\n(UNFAVORABLE)\n\nElectric sales\n\nResidential$82,319 $85,391 (3.6)%\n\nCommercial63,687 61,905 2.9 %\n\nIndustrial34,604 30,069 15.1 %\n\nOther retail3,574 3,517 1.6 %\n\nTotal retail184,184 180,882 1.8 %\n\nSales for resale1,153 1,703 (32.3)%\n\nTotal base revenue\n$185,337 $182,585 1.5 %\n\n41\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\n FOR THE THREE MONTHS ENDED MAR. 31,\n\n(MILLION kWh)20262025FAVORABLE/\n(UNFAVORABLE)\n\nElectric sales   \n\nResidential804 879 (8.5)%\n\nCommercial606 607 (0.2)%\n\nIndustrial613 538 13.9 %\n\nOther retail28 30 (6.7)%\n\nTotal retail2,051 2,054 (0.1)%\n\nSales for resale5 71 (93.0)%\n\nTotal retail and wholesale customer sales\n2,056 2,125 (3.2)%\n\nCleco Power’s residential customers’ demand for electricity is affected largely by weather. Weather is generally measured in cooling degree-days and heating degree-days. A high number of cooling degree-days may indicate consumers will use more air conditioning, while a high number of heating degree-days may indicate consumers will use more heating. An increase in heating degree-days does not produce the same increase in revenue as an increase in cooling degree-days because alternative heating sources are more readily available, and winter energy is typically priced below the rate charged for energy used in the summer. Normal heating degree-days and cooling degree-days are calculated for a month by separately calculating the average actual heating and cooling degree-days for that month over a period of 30 years.\n\nThe following chart shows how cooling and heating degree-days varied from normal conditions and from the prior period. Cleco Power uses weather data provided by the National Oceanic and Atmospheric Administration to determine degree-days.\n\n FOR THE THREE MONTHS ENDED MAR. 31,\n\n    \n% CHANGE\n\n 20262025NORMALPRIOR YEARNORMAL\n\nHeating degree-days681 865 843 (21.3)%(19.2)%\n\nCooling degree-days212 158 100 34.2 %112.0 %\n\nFuel Cost and Purchased Power Recovery/Recoverable Fuel and Purchased Power\n\nChanges in fuel costs historically have not significantly affected Cleco Power’s net income. Generally, fuel and purchased power expenses are recovered through the LPSC-established FAC, which enables Cleco Power to pass on to its customers substantially all such expenses. Approximately 99.8% of Cleco Power’s total fuel cost during the first quarter of 2026 was regulated by the LPSC. Recovery of FAC costs is subject to periodic fuel audits by the LPSC which may result in a refund to customers. Generally, fuel and purchased power expenses are impacted by customer usage, the per unit cost of fuel used for electric generation, and the dispatch of Cleco Power’s generating facilities by MISO. Cleco Power’s incremental recoverable fuel and purchased power expenses for the three months ended March 31, 2026, were impacted primarily by higher natural gas costs as compared to the three months ended March 31, 2025.\n\nOther Operations Revenue\n\nOther operations revenue increased $5.8 million primarily due to $7.6 million of higher securitization revenue resulting from the completion of the securitization financing of the Energy Transition Property in March 2025 and higher transmission\n\nrevenue at Cleco Power. This increase was partially offset by $1.8 million for the absence of the other service agreement revenue from the Cleco Cajun Divestiture.\n\nOther Operations and Maintenance\n\nOther operations and maintenance expense increased $10.8 million primarily due to higher maintenance expenses largely from scheduled plant outages and distribution right-of-way maintenance.\n\nInterest Charges\n\nInterest charges increased $4.0 million primarily due to higher debt balances associated with the energy transition bonds issued by Cleco Securitization II in March 2025.\n\nIncome Taxes\n\nFor more information on Cleco Power’s effective income tax rates, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 9 — Income Taxes — Effective Tax Rates.”\n\nNon-GAAP Measure\n\nThe financial results in the following table are presented on an accrual basis. EBITDA is a key non-GAAP financial measure used by the CEO to assess the operating performance of Cleco’s segment; however, it is not indicative of future performance. Management evaluates the performance of Cleco’s segment and allocates resources to it based on segment profit and the requirements to implement strategic initiatives and projects to meet current business objectives. EBITDA is defined as net income adjusted for interest, income taxes, depreciation, and amortization.\n\nCleco’s segment structure and its allocation of corporate expenses were updated to reflect how management makes financial decisions and allocates resources.\n\nThe following table sets forth a reconciliation of net income, the nearest comparable GAAP financial performance measure, to EBITDA for the Cleco Power reportable segment for the three months ended March 31, 2026, and 2025:\n\nFOR THE THREE MONTHS\nENDED MAR. 31,\n\n(THOUSANDS)20262025\n\nNet income\n$38,813 $49,017 \n\nAdd: Depreciation and amortization49,859 47,783 \n\nLess: Interest income2,732 4,592 \n\nAdd: Interest charges29,675 25,684 \n\nAdd: Federal and state income tax expense10,554 11,883 \n\nEBITDA$126,169 $129,775 \n\nFINANCIAL CONDITION\n\nLiquidity and Capital Resources\n\nGeneral Considerations and Credit-Related Risks\n\nCredit Ratings and Counterparties\n\nFinancing for operational needs and capital expenditure requirements not satisfied by operating cash flows depends upon the cost and availability of external funds through both short- and long-term financing. The inability to raise capital on favorable terms could negatively affect Cleco’s ability to maintain or expand its businesses. Access to funds is\n\n42\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\ndependent upon factors such as general economic and capital market conditions, regulatory authorizations and policies, Cleco Holdings’ and Cleco Power’s credit ratings, cash flows from routine operations, and credit ratings of project counterparties. After assessing the current operating performance, liquidity, and credit ratings of Cleco Holdings and Cleco Power, management believes that Cleco will have access to the capital markets at prevailing market rates for companies with comparable credit ratings. The following table presents the credit ratings of Cleco Holdings and Cleco Power at March 31, 2026:\n\nSENIOR UNSECURED DEBTCORPORATE/LONG-TERM ISSUER\n\nS&PMOODY’SFITCHS&PMOODY’SFITCH\n\nCleco HoldingsBBB-Baa3BBB-\nBBB\nBaa3BBB-\n\nCleco Power\nA-\nA3BBB+A-A3BBB\n\nCredit ratings are not recommendations to buy, sell, or hold securities, and may be subject to revision or withdrawal at any time by the assigning rating agency. Each rating should be evaluated independently of any other rating.\n\nCleco Holdings and Cleco Power pay fees and interest under their bank credit agreements based on the highest rating held. If Cleco Holdings’ or Cleco Power’s credit ratings were to be downgraded, Cleco Holdings or Cleco Power, respectively, could be required to pay additional fees and incur higher interest rates for borrowings under their respective revolving credit facilities.\n\nCleco Holdings and Cleco Power may be required to provide credit support with respect to bilateral transactions and contracts that they have entered into or may enter into in the future. The amount of credit support required may change based on margining formulas, changes in credit agency ratings, or liquidity ratios.\n\nCleco Power participates in the MISO market. MISO requires participants to provide credit support which may increase or decrease due to the timing of the settlement schedules and MISO margining formulas. For more information about MISO, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Transmission Rates” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025. For more information about credit support see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 13 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees.”\n\nGlobal and U.S. Economic Environment\n\nGlobal and domestic economic conditions may have an impact on Cleco’s business and financial condition. Access to capital markets is a significant source of funding for both short- and long-term capital requirements not satisfied by operating cash flows. During periods of capital market volatility, the availability of capital could be limited, and the costs of capital may\n\nincrease for many companies. Although the Registrants have not experienced restrictions in the financial markets, their ability to access the capital markets may be restricted at a time when the Registrants would like, or need, to do so. Any restrictions could have a material impact on the Registrants’ ability to fund capital expenditures or debt service, or on their flexibility to react to changing economic and business conditions. Credit constraints could have a material, negative impact on the Registrants’ lenders or customers, causing them to fail to meet their obligations to the Registrants or to delay payment of such obligations.\n\nIn recent years, inflationary pressures have increased substantially. Under established regulatory practice, historical costs have traditionally formed the basis for recovery from customers. As a result, Cleco Power’s future cash flows designed to provide recovery of historical plant costs may not be adequate to replace property, plant, and equipment in future years. For information on the impacts of inflation and market price volatility of natural gas on credit loss reserves related to customer accounts receivable, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Reserves for Credit Losses.”\n\nFair Value Measurements\n\nVarious accounting pronouncements require certain assets and liabilities to be measured at their fair values. For more information, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 5 — Fair Value Accounting Instruments.”\n\nCash Generation and Cash Requirements\n\nRestricted Cash and Cash Equivalents\n\nFor information on Cleco’s and Cleco Power’s restricted cash and cash equivalents, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 1 — Summary of Significant Accounting Policies — Restricted Cash and Cash Equivalents.”\n\nWorking Capital and Debt\n\nAt March 31, 2026, and December 31, 2025, Cleco Power had a working capital surplus of $160.7 million and $164.4 million, respectively, resulting in a decrease of $3.7 million in working capital.\n\nAt March 31, 2026, and December 31, 2025, Cleco had a working capital surplus of $182.1 million and a working capital deficit of $74.2 million, respectively, resulting in an increase of $256.3 million in working capital.\n\nThe following table contains the working capital variances for the period ended March 31, 2026, and December 31, 2025, and 2024.\n\n43\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\nCLECO POWEROTHER\nSEGMENTSCLECO\n\n(THOUSANDS)\nAT MAR. 31, 2026\n\nAT DEC. 31, 2025\n\nVARIANCE(1)\n\nVARIANCE(1)\n\nVARIANCE(1)\n\nCurrent assets\n\nCash and cash equivalents$208,196 $162,660 $45,536 $1,125 $46,661 \n\nRestricted cash and cash equivalents25,567 33,865 (8,298)— (8,298)\n\nCustomer accounts receivable\n49,058 53,053 (3,995)— (3,995)\n\nAccounts receivable - affiliate2 9 (7)(57)(64)\n\nReceivable - Cleco Cajun Divestiture— — — 2,738 2,738 \n\nOther accounts receivable47,290 67,449 (20,159)17 (20,142)\n\nUnbilled revenue42,882 47,453 (4,571)— (4,571)\n\nFuel inventory, at average cost86,572 84,951 1,621 — 1,621 \n\nMaterials and supplies, at average cost194,904 183,085 11,819 — 11,819 \n\nEnergy risk management assets(2)\n4,247 2,452 1,795 — 1,795 \n\nAccumulated deferred fuel(2)\n30,381 25,711 4,670 — 4,670 \n\nCash surrender value of company/trust-owned life insurance policies6,862 7,813 (951)(1,308)(2,259)\n\nPrepayments56,563 60,702 (4,139)(1,009)(5,148)\n\nRegulatory assets30,805 37,923 (7,118)— (7,118)\n\nOther current assets723 353 370 (827)(457)\n\nTotal current assets784,052 767,479 16,573 679 17,252 \n\nCurrent liabilities\n\nShort-term debt— — — (10,000)(10,000)\n\nLong-term debt due within one year\n255,326 254,943 (383)249,922 249,539 \n\nAccounts payable(2)\n129,747 133,283 3,536 3,957 7,493 \n\nAccounts payable - affiliate9,967 13,038 3,071 (10,245)(7,174)\n\nCustomer deposits59,138 58,787 (351)— (351)\n\nProvision for customer refund\n20,797 20,900 103 — 103 \n\nTaxes payable50,927 28,454 (22,473)6,910 (15,563)\n\nInterest accrued33,236 13,891 (19,345)(5,208)(24,553)\n\nEnergy risk management liabilities(2)\n8,829 10,890 2,061 — 2,061 \n\nRegulatory liabilities10,445 10,199 (246)— (246)\n\nDeferred compensation— — — 17,580 17,580 \n\nPostretirement benefit obligations20,096 22,530 2,434 — 2,434 \n\nEnergy transition reserves6,080 10,730 4,650 — 4,650 \n\nOther current liabilities18,757 25,414 6,657 6,401 13,058 \n\nTotal current liabilities623,345 603,059 (20,286)259,317 239,031 \n\nWorking capital surplus (deficit)$160,707 $164,420 $(3,713)$259,996 $256,283 \n\n(1) Favorable/(Unfavorable)\n\n(2) Energy risk management assets, Accumulated deferred fuel, Accounts payable, and Energy risk management liabilities do not include FTRs. FTR activity is not included in working capital.\n\nSummary of Consolidated Results\n\nThe $256.3 million increase in Cleco’s working capital is primarily due to:\n\n•a $249.5 million decrease in long-term debt due within one year primarily due to its reclassification to long-term debt as a result of the Cleco Holdings’ term loan entered into on April 24, 2026. For more information on Cleco’s debt, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 7 — Debt,”\n\n•a $46.7 million increase in cash and cash equivalents,\n\n•a $17.6 million decrease in deferred compensation primarily due to the reclassification of long-term deferred compensation,\n\n•a $13.1 million decrease in other current liabilities primarily due to the timing of payments of long-term incentive plan compensation in March 2026 and an adjustment to the Dolet Hills ARO liability,\n\n•an $11.8 million increase in material and supplies inventory primarily due to higher purchases of transmission and distribution inventory in order to support future needs at Cleco Power,\n\n•a $7.5 million decrease in accounts payable primarily due to the timing of payments for short-term incentive plan compensation and lower accruals for MISO settlements and plant outages, partially offset by higher accruals for inventory and maintenance and data center development,\n\n•a $4.7 million increase in accumulated deferred fuel primarily due to additional deferrals through a fuel surcharge for incremental costs related to a severe winter storm that occurred in January 2026, the settlement of option premiums, and higher fuel costs, partially offset by the timing of collections at Cleco Power, and\n\n•a $4.7 million decrease in energy transition reserves primarily due to the reclassification of the long-term energy transition reserves.\n\nThese increases in working capital were partially offset by:\n\n•a $24.6 million increase in interest accrued primarily due to the timing of interest payments on long-term debt,\n\n•a $20.1 million decrease in other account receivable primarily due to lower accruals for customer reimbursements, pole attachments, and customer advances\n\n44\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\nfor construction and the timing of collections from joint owners at Cleco Power, partially offset by higher MISO accruals,\n\n•a $15.6 million increase in taxes payable primarily due to higher provision for federal and state income taxes and accruals for property taxes,\n\n•a $10.0 million increase in short-term debt primarily due to draws on Cleco Holdings’ revolving credit facility,\n\n•an $8.3 million decrease in restricted cash and cash equivalents,\n\n•a $7.2 million increase in accounts payable - affiliate primarily due to a federal tax refund received at Cleco Holdings,\n\n•a $7.1 million decrease in regulatory assets primarily due to the amortization of the Dolet Hills carrying charge, the reclassification of the ARO regulatory asset for the Dolet Hills decommissioning to long-term, and the amortization of Northlake transmission costs,\n\n•a $5.1 million decrease in prepayments primarily due to the timing of insurance premiums paid, and\n\n•a $4.6 million decrease in unbilled revenue primarily due to lower usage as a result of milder weather.\n\nDebt\n\nFor more information on Cleco Power’s long-term debt due within one year, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 7 — Debt.”\n\nLiquidity\n\nThe following tables present the total liquidity for Cleco and Cleco Power for March 31, 2026, and December 31, 2025:\n\nCleco\n\n(THOUSANDS)\nAT MAR 31, 2026\n\nAT DEC. 31, 2025\n\nCash and cash equivalents$217,717 $171,056 \n\nCleco Power revolving credit facility\n300,000 300,000 \n\nLess: Outstanding revolving draws\n— — \n\nCleco Holdings revolving credit facility\n175,000 175,000 \n\nLess: Outstanding revolving draws\n(10,000)— \n\nTotal liquidity$682,717 $646,056 \n\nCleco Power\n\n(THOUSANDS)\nAT MAR 31, 2026\n\nAT DEC. 31, 2025\n\nCash and cash equivalents$208,196 $162,660 \n\nRevolving credit facility\n300,000 300,000 \n\nLess: Outstanding revolving draws\n— — \n\nTotal liquidity$508,196 $462,660 \n\nCredit Facilities\n\nAt March 31, 2026, Cleco had two separate revolving credit facilities, one for Cleco Holdings in the amount of $175.0 million with $10.0 million of outstanding borrowings and one for Cleco Power in the amount of $300.0 million with no outstanding borrowings. The total of all revolving credit facilities maintains a maximum aggregate capacity of $475.0 million.\n\nCleco Holdings’ revolving credit facility provides funding for working capital and other financing needs. The revolving credit facility includes restrictive financial covenants and matures in May 2029. Under covenants contained in Cleco Holdings’ revolving credit facility, Cleco is required to maintain\n\ntotal indebtedness, not including securitization indebtedness, less than or equal to 65% of total capitalization. At March 31, 2026, Cleco Holdings was in compliance with the covenants of its revolving credit facility. At March 31, 2026, the borrowing costs under Cleco Holdings’ revolving credit agreement were equal to SOFR plus 1.725% or ABR plus 0.625%, plus commitment fees of 0.275% on the unused portion of the facility. If Cleco Holdings’ credit ratings were to be downgraded one level by the credit rating agencies, Cleco Holdings may be required to pay incremental interest and commitment fees of 0.125% and 0.05%, respectively, under the pricing levels of its revolving credit facility.\n\nCleco Power’s revolving credit facility provides funding for working capital and other financing needs. The revolving credit facility includes restrictive financial covenants and matures in May 2029. Under covenants contained in Cleco Power’s revolving credit facility, Cleco Power is required to maintain total indebtedness, not including securitization indebtedness, less than or equal to 65% of total capitalization. At March 31, 2026, Cleco Power was in compliance with the covenants of its revolving credit facility. At March 31, 2026, the borrowing costs under Cleco Power’s revolving credit agreement were equal to SOFR plus 1.35% or ABR plus 0.25%, plus commitment fees of 0.15% on the unused portion of the facility. If Cleco Power’s credit ratings were to be downgraded one level by the credit rating agencies, Cleco Power may be required to pay incremental interest and commitment fees of 0.125% and 0.025%, respectively, under the pricing levels of its revolving credit facility.\n\nIf Cleco Holdings or Cleco Power were to not comply with certain covenants in their respective revolving credit facilities or other debt agreements, they would be unable to borrow additional funds under the facilities, and the lenders under the respective credit facility or debt agreement could accelerate all principal and interest outstanding. Further, if Cleco Power were to default under its revolving credit facility or other debt agreements, Cleco Holdings would be considered in default under its revolving credit facility.\n\nConcentrations of Credit Risk\n\nAt March 31, 2026, and 2025, Cleco and Cleco Power were exposed to concentrations of credit risk through their short-term investments classified as cash equivalents. In order to mitigate potential credit risk, Cleco and Cleco Power have established guidelines for short-term investments. For more information on the concentration of credit risk through short-term investments classified as cash equivalents, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 5 — Fair Value Accounting Instruments — Concentrations of Credit Risk.”\n\nDebt and Distribution Limitations\n\nThe 2016 Merger Commitments include provisions for limiting the amount of distributions that can be made from Cleco Holdings to Cleco Group, depending on Cleco Holdings’ debt to EBITDA ratio and its corporate credit ratings. Cleco Holdings may not make any distribution unless, after giving effect to such distribution, Cleco Holdings’ debt to EBITDA ratio is equal to or less than 6.50 to 1.00 and Cleco Holdings’ corporate credit rating is investment grade with one or more of the three credit rating agencies. At March 31, 2026, Cleco Holdings was in compliance with the provisions of the 2016 Merger Commitments that would restrict the amount of distributions available. Additionally, in accordance with the\n\n45\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\n2016 Merger Commitments, Cleco Power is subject to certain provisions limiting the amount of distributions that may be paid to Cleco Holdings, depending on Cleco Power’s common equity ratio and its corporate credit ratings. Cleco Power may not make any distribution unless, after giving effect to such distribution, Cleco Power’s common equity ratio would not be less than 48% and Cleco Power’s corporate credit rating is investment grade with two of the three credit rating agencies. At March 31, 2026, Cleco Power was in compliance with the provisions of the 2016 Merger Commitments that would restrict\n\nthe amount of distributions available. The 2016 Merger Commitments also prohibit Cleco from incurring additional long-term debt, excluding non-recourse debt, unless certain financial ratios are achieved. For more information on the 2016 Merger Commitments, see Part I, Item 1A, “Risk Factors — Structural Risks — Holding Company” and “— Regulatory Risks — Regulatory Compliance” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nCleco - Cash Flows\n\nCash Flows Comparison for the Three Months Ended March 31, 2026, and 2025\n\nFOR THE THREE MONTHS ENDED MAR. 31,\n\nCLECO POWER\n\nCLECO\n\n(THOUSANDS)\n2026\n\n2025\n\nVARIANCE\n\n2026\n\n2025\n\nVARIANCE\n\nOperating activities\n \n\nNet income, adjusted for non-cash items(1)\n$92,395 $113,149 $(20,754)$92,031 $111,850 $(19,819)\n\nChanges in assets and liabilities\n\nFuel inventory and materials and supplies(13,440)(3,124)(10,316)(13,440)(3,124)(10,316)\n\nAccounts payable\n558 11,524 (10,966)280 10,502 (10,222)\n\nPostretirement benefit obligations\n(4,721)(17,448)12,727 (5,968)(18,126)12,158 \n\nOther deferred accounts\n(15,203)(3,997)(11,206)(15,555)(6,544)(9,011)\n\nOther operating items with variances outside the threshold(2)\n9,779 (22,952)32,731 3,620 (39,304)42,924 \n\nNet cash provided by operating activities$69,368 $77,152 $(7,784)$60,968 $55,254 $5,714 \n\nInvesting activities\n\nCustomer advances for construction, net of refunds\n$53,622 $(2,171)$55,793 $53,622 $(2,171)$55,793 \n\nOther investing items with variances outside the threshold(2)\n(71,086)(68,350)(2,736)(71,493)(68,807)(2,686)\n\nNet cash used in investing activities\n$(17,464)$(70,521)$53,057 $(17,871)$(70,978)$53,107 \n\nFinancing activities\n\nDraws on revolving credit facilities$— $20,000 $(20,000)$10,000 $40,000 $(30,000)\n\nPayments on revolving credit facilities— (130,000)130,000 — (130,000)130,000 \n\nIssuances of long-term debt— 305,000 (305,000)— 305,000 (305,000)\n\nRepayment of long-term debt(8,438)(133,135)124,697 (8,438)(133,135)124,697 \n\nOther financing items with variances outside the threshold(2)\n(122)(4,952)4,830 (190)(4,952)4,762 \n\nNet cash (used in) provided by financing activities\n$(8,560)$56,913 $(65,473)$1,372 $76,913 $(75,541)\n\n(1) Non-cash items primarily include depreciation and amortization, AFUDC, and deferred income taxes.\n\n(2) For purposes of this analysis, management considered variances to be immaterial if they remained within plus or minus $10.0 million.\n\nSummary of Consolidated Results\n\nNet Operating Cash Flows\n\nNet cash provided by operating activities increased primarily due to cash flows from net income, adjusted for non-cash items. This increase was primarily attributable to changes in net income and deferred income taxes. For more information on net income, see “— Results of Operations — Comparison of the Three Months Ended March 31, 2026, and 2025 — Summary of Consolidated Results.” For more information on deferred income taxes, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 9 — Income Taxes.”\n\nYear-over-year changes in working capital accounts also materially impact the net cash provided by operating activities. For more information on these changes in working capital, see “— Working Capital.”\n\nNet Investing Cash Flows\n\nNet cash used in investing activities decreased primarily due to higher contributions in aid of construction, driven by both\n\nthe timing of receipts and increased customer‑funded construction activity during the period.\n\nNet Financing Cash Flows\n\nFor more information on financing activities, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 7 — Debt.”\n\nContractual Obligations\n\nCleco, in the normal course of business activities, enters into a variety of contractual obligations. Some of these result in direct obligations that are reflected in Cleco’s Condensed Consolidated Balance Sheets while others are commitments, some firm and some based on uncertainties, that are not reflected in the Condensed Consolidated Financial Statements. For more information regarding Cleco’s Contractual Obligations, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Contractual Obligations” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\n46\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\nOff-Balance Sheet Commitments and Guarantees\n\nFor information about off-balance sheet commitments and guarantees, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 13 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees.”\n\nRegulatory and Other Matters\n\nEnvironmental Matters\n\nCleco is subject to extensive environmental regulation by federal, state, and local authorities and is required to comply with numerous environmental laws and regulations, and to obtain and comply with numerous governmental permits in operating its facilities. In addition, existing environmental laws, regulations, and permits could be revised or reinterpreted; new laws and regulations could be adopted or become applicable to Cleco or its facilities; and future changes in environmental laws and regulations could occur, including potential regulatory and enforcement developments related to air emissions, water and/or waste management. Cleco may incur significant additional costs to comply with these revisions, reinterpretations, and requirements. Cleco Power could then seek recovery of additional environmental compliance costs as riders through the LPSC’s EAC or FRP. If Cleco fails to comply with these revisions, reinterpretations, and requirements, it could be subject to civil or criminal liabilities and fines.\n\nCleco is currently evaluating possible impacts various environmental rules may have on its generating units. For a discussion of other Cleco environmental matters, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 13 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Environmental Audit” in this Quarterly Report on Form 10-Q and Part I, Item 1, “Business — Environmental Matters” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nRetail and Wholesale Rates\n\nFor information on Cleco Power’s base rates, fuel rates, and environmental rates, see Part I, Item 1, “Business — Regulatory Matters, Industry Developments, and Franchises — Rates” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nFor information on Cleco Power’s FRP, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 11 — Regulation and Rates — FRP.”\n\nFor information on Cleco Power’s FAC and the most recent fuel audit, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 13 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Fuel Audits.”\n\nFor information on Cleco Power’s EAC, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 13 — Litigation, Other Commitments and Contingencies, and Disclosures about Guarantees — Litigation — LPSC Audits and Reviews — Environmental Audit.”\n\nFor information on Cleco Power’s wholesale rates, see Part II, Item 8, “Financial Statements and Supplementary Data — Notes to the Financial Statements — Note 14 — Regulation and Rates — Wholesale Rates” in the Registrants’ Combined\n\nAnnual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nTransmission Rates\n\nFor information about the risks associated with Cleco’s participation in MISO, see Part I, Item 1A, “Risk Factors — Regulatory Risks — MISO” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nCleco Power is actively participating in programs to enhance its grid resilience against growing threats of extreme weather and climate change. For more information on Cleco Power’s grid resiliency plan, see Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Overview — Grid Resiliency and Hardening.”\n\nFor information on transmission rates of Cleco, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Transmission Rates” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nMarket Structure\n\nWholesale Electric Markets\n\nRTO\n\nFor information on Cleco’s operations within MISO and for information on regulatory aspects of wholesale electric markets affecting Cleco, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition — Regulatory and Other Matters — Market Structure — Wholesale Electric Markets” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nElectric Reliability Organization (ERO)\n\nNERC, subject to oversight by FERC, is the ERO responsible for developing and enforcing mandatory reliability standards for users, owners, and operators of the bulk power system. NERC, as the ERO, delegates authority to SERC.\n\nA NERC Operations and Planning Reliability Standards audit is conducted at least every three years for Cleco Power. The next audit is scheduled to begin in 2028.\n\nA NERC Critical Infrastructure Protection (CIP) audit is also conducted at least every three years for Cleco Power. The most recent audit began in October 2025 and concluded in February 2026, resulting in no penalties. The next audit is scheduled to begin in 2028.\n\nManagement is unable to predict the final outcome of any future audits or whether any findings will have a material adverse effect on the results of operations, financial condition, or cash flows of the Registrants. For a discussion of risks associated with FERC’s regulation of Cleco Power’s transmission system, see Part I, Item 1A, “Risk Factors — Regulatory Risks — Reliability and CIP Standards Compliance” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nRetail Electric Markets\n\nCurrently, the LPSC does not provide exclusive service territories for electric utilities under its jurisdiction. Instead, retail service is obtained through a long-term nonexclusive franchise. The LPSC uses a “300-foot rule” for determining the\n\n47\n\nCLECO\n\nCLECO POWER\n2026 1ST QUARTER FORM 10-Q\n\nsupplier for new customers. The “300-foot rule” requires a customer to take service from the electric utility that is within 300 feet of the respective customer. If the customer is beyond 300 feet from any existing utility service, they may choose their electric supplier. The application of the rule has led to competition with neighboring utilities for retail customers at the borders of Cleco Power’s service areas.\n\nIRP\n\nThe IRP report outlines how Cleco Power plans to meet its forecasted load requirements on a reliable, economic and sustainable basis.\n\nOn September 5, 2025, Cleco Power filed an interim IRP with the LPSC. On October 22, 2025, Cleco Power submitted a request to the LPSC to initiate its next four-year IRP cycle. Cleco Power received approval from the LPSC to combine the interim IRP and the next four-year IRP into a single filing, with the IRP report scheduled to be filed in October 2026.\n\nService Quality Plan (SQP)\n\nIn October 2015, the LPSC proposed an SQP containing 21 requirements for Cleco Power. The SQP has provisions relating to employee headcount, employee benefits, customer service, reliability, vegetation management, and reporting. In April 2016, the SQP was approved by the LPSC. The SQP expired in December 2020; however, Cleco continued to maintain its compliance with the SQP. On October 15, 2024, Cleco Power submitted a proposed amended and extended SQP to the LPSC. On March 30, 2026, Cleco filed the SQP under the 2024 expired plan, as the new plan has not been finalized or approved by the LPSC.\n\nFranchises\n\nFor information on franchises, see Part I, Item 1, “Business — Regulatory Matters, Industry Developments, and Franchises — Franchises” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nRecent Authoritative Guidance\n\nFor a discussion of recent authoritative guidance, see Item 1, “Notes to the Unaudited Condensed Consolidated Financial Statements — Note 2 — Recent Authoritative Guidance.”\n\nCRITICAL ACCOUNTING ESTIMATES\n\nThe preparation of Cleco’s and Cleco Power’s Consolidated Financial Statements in conformity with GAAP requires management to apply appropriate accounting policies and to make estimates and judgments that could have a material impact on the results of operations, financial condition, or cash flows of the Registrants.\n\nFor more information on Cleco’s critical accounting estimates, see Part II, Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in the Registrants’ Combined Annual Report on Form 10-K for the fiscal year ended December 31, 2025.\n\nCLECO POWER — NARRATIVE ANALYSIS OF RESULTS OF OPERATIONS\n\nCleco Power meets the conditions specified in General Instructions H(1)(a) and (b) to Form 10-Q and is, therefore, permitted to use the reduced disclosure format for wholly owned subsidiaries of reporting companies. Accordingly, Cleco Power has omitted from this Quarterly Report on Form 10-Q the information called for by Item 2 (Management’s Discussion and Analysis of Financial Condition and Results of Operations) and Item 3 (Quantitative and Qualitative Disclosures about Market Risk) of Part I of Form 10-Q and the following Part II items of Form 10-Q: Item 2 (Unregistered Sales of Equity Securities and Use of Proceeds) and Item 3 (Defaults upon Senior Securities)."}