2012 SEC Form 11-K











UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 11-K

(Mark One)
x    ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012

OR

¨    TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ____________________

Commission file number 1-15759

A.  Full title of the plan and the address of the plan, if different from that of the issuer named below:

Cleco Power LLC 401(k) Savings and Investment Plan


B.  Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

CLECO CORPORATION

2030 Donahue Ferry Road, Pineville, Louisiana 71360-5226




















Cleco Power LLC 401(k) Savings and Investment Plan
Financial Statements and Supplemental Schedule
December 31, 2012 and 2011




Cleco Power LLC 401(k) Savings and Investment Plan
Index
December 31, 2012 and 2011



 
Page(s)
Report of Independent Registered Public Accounting Firm
Financial Statements
 
Statements of Net Assets Available for Benefits
Statement of Changes in Net Assets Available for Benefits
Notes to the Financial Statements
Supplemental Schedule
 
Schedule H, line 4i - Schedule of Assets (Held at End of Year)

Note: Schedules other than the one listed above as required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure have been omitted because they are either not required or not applicable.









Report of Independent Registered Public Accounting Firm




To the Participants and Administrator of the
Cleco Power LLC 401(k) Savings and Investment Plan


We have audited the accompanying statements of net assets available for benefits of the Cleco Power LLC 401(k) Savings and Investment Plan (the “Plan”) as of December 31, 2012 and 2011 and the related statement of changes in net assets available for benefits for the year ended December 31, 2012. These financial statements are the responsibility of the Plan’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2012 and 2011, and the changes in net assets available for benefits for the year ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America.

Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of assets (held at end of year) as of December 31, 2012, is presented for the purpose of additional analysis and is not a required part of the basic financial statements, but is supplementary information required by the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan’s management. The supplemental schedule has been subjected to the auditing procedures applied in the audits of the basic financial statements, and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.




/s/ McElroy, Quirk, & Burch (APC)
Lake Charles, Louisiana
June 20, 2013





1

Cleco Power LLC 401(k) Savings and Investment Plan
Statements of Net Assets Available for Benefits
December 31, 2012 and 2011


 
Participant Directed
 
2012

 
2011

Investments, at fair value (see Note 2)
$
268,095,281

 
$
245,542,742

Notes receivable from participants (see Note 1)
4,401,507

 
4,554,116

Contributions receivable from employer
365,173

 
313,984

Net assets available for benefits
$
272,861,961

 
$
250,410,842




The accompanying notes are an integral part of the financial statements.

2

Cleco Power LLC 401(k) Savings and Investment Plan
Statement of Changes in Net Assets Available for Benefits
December 31, 2012


 
Participant
 
Directed
 
 
Additions to net assets attributed to:
 
Investment income:
 
Net appreciation in fair value of investments (see Note 2)
$
19,778,195

Interest and dividends
7,662,618

Net investment income
27,440,813

 
 
Interest income on notes receivable from participants
237,817

 
 
Contributions:
 
Employer’s
4,268,152

Participants’
8,844,536

Rollovers
244,205

Total contributions
13,356,893

 
 
Total additions
41,035,523

 
 
Deductions from net assets attributed to:
 
Benefits paid to participants
18,566,139

Administrative expenses
18,265

Total deductions
18,584,404

 
 
Net increase
22,451,119

Net assets available for plan benefits:
 
Beginning of year
250,410,842

End of year
$
272,861,961




The accompanying notes are an integral part of the financial statements.

3

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


1.    Summary of Significant Accounting Policies and Description of Plan
Plan Description
The Cleco Power LLC 401(k) Savings and Investment Plan (the “Plan”), which was adopted January 1, 1985, and amended and restated effective November 1, 2010, is intended to provide active, eligible employees of Cleco Corporation and its subsidiaries (“Cleco”) with voluntary, long-term savings and investment opportunities. The Plan is a defined contribution plan designed to comply with Section 4975(e)(7) of the Internal Revenue Code of 1986, as amended (the “Code”), and is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974. In accordance with the Plan, employer contributions can be in the form of Cleco Corporation stock or cash. Cash contributions are invested in proportion to the participant’s voluntary contribution investment choices. Cleco Corporation has the right to change the form of contribution at any time. Plan participants are allowed to choose whether to have dividends on Cleco Corporation common stock distributed in cash or reinvested in additional shares of Cleco Corporation common stock. Participation in the Plan is voluntary and active Cleco employees are eligible to participate. Although the Plan is voluntary, new employees are automatically enrolled in the Plan at a pre-tax contribution rate of 4%. The automatic pre-tax contribution percentage can be increased or decreased, or participants may choose to opt out of the Plan. For a complete description of the Plan, refer to the Cleco Power LLC 401(k) Savings and Investment Plan (the “Plan Document”).
Plan Amendments
In January 2012, the Plan was amended. This amendment allows for automatic deferrals and automatic increases for participants who have not affirmatively chosen to defer a portion of their compensation. Employees are able to opt-out of automatic deferrals and increases and may change their contribution elections at any time.
Plan Administration and Administration Expenses
The administration of the Plan is the responsibility of a retirement committee (the “Committee”) comprised of employees of Cleco. The Committee is appointed by the Board of Directors of Cleco Corporation, the sole member of Cleco Power LLC (“Cleco Power”). Cleco Power is a wholly owned subsidiary of Cleco Corporation. Most of the administrative expenses incurred by the Plan are borne by Cleco; however, personalized on-line investment advisory fees and distribution expenses are paid by the participants of the Plan. Cleco Power is the Plan sponsor. The responsibilities for the investment, reinvestment, control and disbursement of the funds of the Plan rests with JPMorgan Chase Bank (“Trustee”) and with J.P. Morgan Retirement Plan Services (“Agent”) acting as the agent of the Trustee and recordkeeper to the Plan.
Contributions
Participant contributions are recorded in the period that Cleco makes payroll deductions from participants. Unless otherwise restricted by law, participants may contribute on a pretax basis up to 50% of annual compensation, not to exceed $17,000 in 2012 and $16,500 in 2011. Participants who are at least 50 years old by the end of the tax year may make an additional “catch-up” contribution (above the 401(k) annual deferral limit) up to $5,500 in each of 2012 and 2011. The Trustee, in accordance with the participants’ directives, invests the employee and employer contributions in one or more of 21 publicly traded mutual funds, in one self-directed account with access to over 1,000 mutual funds, in one common collective trust, and in Cleco Corporation common stock. Certain qualified 401(k) rollovers are permitted under the Plan.
Cleco Corporation’s matching contribution depends upon the hire date of the participant. Participants hired prior to August 1, 2007, are eligible to receive a basic match not to exceed 66-2/3% of the employees’ total pretax basic contribution, up to the first 6% of the participant’s annual compensation. Participants hired or rehired on or after August 1, 2007, are eligible to receive a basic match not to exceed 100% of the employees’ total pretax basic contribution, up to the first 6% of the participant’s annual compensation. Additionally, all employees hired or rehired on or after August 1, 2007, whether they chose to make a voluntary contribution or not, are eligible to receive a non-elective company contribution subject to certain vesting requirements. In December 2012 and 2011, management approved a 2% non-elective contribution for eligible employees. For 2012 and 2011, the non-elective contributions were paid to the Plan in March 2013 and April 2012, respectively.




4

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


Participants’ Accounts
The Agent maintains accounts on behalf of each Plan participant. Each account is credited with (a) the participant’s pretax, after tax or rollover contribution, (b) the matching contribution and (c) the participant’s share of Plan earnings. Allocations are based on participant compensation or account balances, as defined in the Plan Document.
Vesting
Participants are fully vested in their voluntary contributions, eligible rollovers, earnings, and basic match at all times. Effective August 1, 2007, the non-elective Cleco funded contributions are subject to vesting based upon years of vesting service as shown below:
Years of Vesting Service
 
Vested Percentage
1 year or less
 
%
 
2 years
 
20
%
 
3 years
 
40
%
 
4 years
 
60
%
 
5 years
 
80
%
 
6 years or more
 
100
%
 
Forfeitures
At December 31, 2012 and 2011, forfeited nonvested accounts totaled $29,046 and $12,210, respectively, and will be used to reduce future employer contributions. For 2012, employer contributions were reduced by $29,046 from forfeited nonvested accounts.
Withdrawals and Notes Receivable from Participants
Funds in participants’ accounts may be distributed upon death or separation from service in either a lump-sum amount equal to the value of their account or as a distribution in kind of shares held for their account. A participant is entitled to receive a whole number of shares of Cleco Corporation common stock. The amounts of any fractional shares are distributed in cash. Under Internal Revenue Service regulations, active employees may withdraw funds from their accounts after age 59-1/2 or in the case of certain defined financial hardships.
Loans are available to participants up to specified limits. The term of loans shall not exceed five years and the interest rate is calculated based on the prime rate published in The Wall Street Journal on the first day of the month before the loan is requested plus 2%. Interest rates on these loans ranged from 5.25% to 10.25% in 2011 and 2012. Notes receivable from participants are measured at amortized cost (unpaid principal balance plus any accrued but unpaid interest). Delinquent notes receivable from participants are recorded as a distribution based upon the terms of the plan document. Benefits payable for terminations and withdrawals are included in net assets available for benefits and are charged to net assets available for benefits when paid.
Diversification
Participants are allowed to diversify shares of Cleco Corporation common stock regardless of age and years of service. Participants who elect to diversify can invest the proceeds from the sale of shares of Cleco Corporation common stock in the investment options offered by the Plan.
Investment Valuation
Investments in securities and mutual funds traded on national securities exchanges are valued based on the last reported sales price as of the end of each fiscal year.





5

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


Common Collective Trusts
Common collective trusts are valued at the asset value per unit as determined by the collective trust as of the valuation date, which approximates fair value. For more information on common collective trusts, see Note 5 - "Fair Value Measurements."

Income Recognition
Purchases and sales of securities are recorded on a trade-date basis. The Plan presents in the Statement of Changes in Net Assets Available for Benefits the net appreciation/depreciation in the fair value of its investments which consists of the realized gains or losses and the unrealized appreciation/depreciation on those investments. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.
Priority Upon Termination of Plan
The Plan may be terminated at any time by the Cleco Board of Directors, the sole member of Cleco Power LLC, a wholly owned subsidiary of Cleco Corporation. Upon termination, all assets are to be distributed to Plan participants or their beneficiaries. Participants would receive their proportionate share of the assets as determined by individual account balances on the date of termination.
Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of increases (decreases) in net assets available for benefits during the reporting period. Actual results could differ from those estimates.
Recent Authoritative Guidance
The Plan adopted the recent authoritative guidance listed below on their respective effective dates.
In May 2011, the Financial Accounting Standards Board (“FASB”) issued guidance on fair value measurements. This guidance results in a consistent definition of fair value and common requirements for measurement of and disclosure about fair value between GAAP and IFRS (International Financial Reporting Standards). The adoption of this guidance is effective prospectively for interim and annual periods beginning after December 15, 2011. The adoption of this guidance did not have a material impact on the financial condition or results of operations of the Plan.
In December 2011, FASB revised the disclosure requirements related to balance sheet offsetting. After the effective date, entities must disclose both the gross and net information about instruments and transactions eligible for offsetting on the balance sheet, including transactions under master netting agreements. The adoption of this revision is required for interim and annual periods beginning on or after January 1, 2013. The adoption of this revision will not have any effect on the financial condition or results of operations of the Plan since it relates to disclosures.



6

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


2.
Investments
Information relative to investments as of December 31, 2012 and 2011, respectively, is as follows:
Description
 
2012
 
2011
Investments, at fair value:
 
 
 
 
Mutual Funds:
 
 
 
 
Royce Pennsylvania Small Cap Equity Fund
 
$
148,892

 
$

*JP Morgan Prime Money Market Fund
 
19,498,543

 
18,117,970

*Dodge & Cox Balanced Fund
 
23,632,486

 
21,372,574

*FMI Large Cap
 
25,955,094

 
23,865,651

*American Century Growth Fund
 
14,736,523

 
13,192,805

T. Rowe Price Income Fund
 
768,707

 
578,467

T. Rowe Price Mid Cap Growth Fund
 
9,139,471

 
8,194,846

T. Rowe Price Retirement 2005 Index Fund
 
82,477

 
86,357

T. Rowe Price Retirement 2010 Index Fund
 
819,438

 
871,839

T. Rowe Price Retirement 2015 Index Fund
 
2,291,985

 
2,256,743

T. Rowe Price Retirement 2020 Index Fund
 
4,100,363

 
3,477,659

T. Rowe Price Retirement 2025 Index Fund
 
2,436,136

 
2,017,091

T. Rowe Price Retirement 2030 Index Fund
 
2,210,551

 
1,875,002

T. Rowe Price Retirement 2035 Index Fund
 
1,895,064

 
1,356,138

T. Rowe Price Retirement 2040 Index Fund
 
2,096,144

 
1,611,974

T. Rowe Price Retirement 2045 Index Fund
 
2,064,115

 
1,467,017

T. Rowe Price Retirement 2050 Index Fund
 
996,395

 
662,862

T. Rowe Price Retirement 2055 Index Fund
 
578,497

 
414,090

Diamond Hill Capital Fund
 
209,406

 
240,895

Scout Core Plus Bond Fund
 
13,467,992

 
10,548,706

CRM Mid Cap Value Fund
 
5,559,652

 
5,028,711

Morgan Stanley International Equity Fund
 
9,357,370

 
7,957,588

Total mutual funds
 
142,045,301

 
125,194,985

State Street Global Advisors S&P 500 Fund - common collective trust
 
12,320,195

 
10,194,058

Schwab Personal Choice Retirement Account - participant directed
brokerage
 
4,609,237

 
4,679,712

*Cleco Corporation Common Stock
 
109,120,548

 
105,473,987

Total investments, at fair value
 
$
268,095,281

 
$
245,542,742

___________________________
 
 
 
 
    *Denotes investment exceeds 5% of the net assets available for benefits.
 
 
 
 

The Plan’s investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $19,778,195 for the year ended December 31, 2012, as follows:
Mutual funds
$
12,787,484

Cleco Corporation common stock
5,365,113

Common collective trust
1,625,598

     Net appreciation in fair value of investments
$
19,778,195





7

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


3.
Concentration of Market Risk
The Plan holds investments in the plan sponsor’s common stock, as well as various mutual funds; accordingly, plan participants’ accounts that hold shares of the plan sponsor’s common stock are exposed to market risk in the event of a significant decline in the value of such stock.
For all mutual funds, refer to the specific fund’s prospectus and annual report for a full description of each fund’s investment holdings and significant concentrations of credit risk. The mutual fund prospectus and annual reports can be obtained by contacting J.P. Morgan Retirement Plan Services.
4.
Concentration of Investments
Included in investments at December 31, 2012 and 2011 are shares of the sponsor’s common stock amounting to $109,120,548 and $105,473,987, respectively. This investment represents 41 percent and 43 percent of total investments at December 31, 2012 and 2011, respectively. A significant decline in the market value of the sponsor’s stock would significantly affect the net assets available for benefits.
5.
Fair Value Measurements
FASB Accounting Standards Codification 820, Fair Value Measurements and Disclosures, provides the framework for measuring fair value.
The framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access
Level 2 - Inputs to the valuation methodology include
quoted prices for similar assets or liabilities in active markets
quoted prices for identical or similar assets or liabilities in inactive markets
inputs other than quoted prices that are observable for the asset or liability
inputs that are derived principally from or corroborated by observable market data by correlation or other means
If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement.
The asset or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.
The following is a description of the valuation methodologies used for each class of assets of the Plan measured at fair value.
Mutual funds: Valued at the daily closing price as reported by the fund. Mutual funds held by the Plan are open-end mutual funds that are registered with the Securities and Exchange Commission. These funds are required to publish their daily net asset value (NAV) and to transact at that price. The mutual funds held by the Plan are deemed to be actively traded.

Common collective trust: Valued at the NAV of units of a bank collective trust. The NAV, as provided by the trustee, is used as a practical expedient to estimate fair value. The NAV is based on the fair value of the underlying investments held by the fund less its liabilities. This practical expedient is not used when it is determined to be probable that the fund will sell the investment for an amount different than the reported NAV. Participant transactions may occur daily. Were




8

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


the Plan to initiate a full redemption of the collective trust, the investment adviser reserves the right to temporarily delay withdrawal from the trust in order to ensure that securities liquidations will be carried out in an orderly business manner.
Participant directed brokerage: Valued at the fair market value based upon indicative pricing from broker quotes.
Cleco Corporation common stock: Valued at the closing price reported on the New York Stock Exchange.
The preceding methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, although the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value as of December 31, 2012 and 2011.




























9

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


 
Assets at Fair Value as of December 31, 2012
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds:
 
 
 
 
 
 
 
Money market fund
$
19,498,543

 
$

 
$

 
$
19,498,543

Target date funds
19,571,165

 

 

 
19,571,165

Balanced funds
23,632,486

 

 

 
23,632,486

Growth funds
50,040,494

 

 

 
50,040,494

Value funds
5,559,652

 

 

 
5,559,652

Fixed income funds
14,236,699

 

 

 
14,236,699

Small cap equity
148,892

 

 

 
148,892

International equity funds
9,357,370

 

 

 
9,357,370

Total mutual funds
$
142,045,301

 
$

 
$

 
$
142,045,301

Common collective trust

 
12,320,195

 

 
12,320,195

Participant directed brokerage:
 
 
 
 
 
 


Cash and cash equivalents
$
1,396,340

 
$

 
$

 
1,396,340

Other mutual funds
1,869,561

 

 

 
1,869,561

Common stock
1,343,336

 

 

 
1,343,336

Total participant directed brokerage
$
4,609,237

 
$

 
$

 
$
4,609,237

Cleco Corporation common stock
109,120,548

 

 

 
109,120,548

Total assets at fair value
$
255,775,086

 
$
12,320,195

 
$

 
$
268,095,281

 
 
 
Assets at Fair Value as of December 31, 2011
 
Level 1
 
Level 2
 
Level 3
 
Total
Mutual funds:
 
 
 
 
 
 
 
Money market fund
$
18,117,970

 
$

 
$

 
$
18,117,970

Target date funds
16,096,772

 

 

 
16,096,772

Balanced funds
21,372,574

 

 

 
21,372,574

Growth funds
45,494,197

 

 

 
45,494,197

Value funds
5,028,711

 

 

 
5,028,711

Fixed income funds
11,127,173

 

 

 
11,127,173

International equity funds
7,957,588

 

 

 
7,957,588

Total mutual funds
$
125,194,985

 
$

 
$

 
$
125,194,985

Common collective trust

 
10,194,058

 

 
10,194,058

Participant directed brokerage:
 
 
 
 
 
 


Cash and cash equivalents
$
1,535,745

 
$

 
$

 
$
1,535,745

Other mutual funds
1,868,627

 

 

 
1,868,627

Common stock
1,275,340

 

 

 
1,275,340

Total participant directed brokerage
$
4,679,712

 
$

 
$

 
$
4,679,712

Cleco Corporation common stock
105,473,987

 

 

 
105,473,987

Total assets at fair value
$
235,348,684

 
$
10,194,058

 
$

 
$
245,542,742


The Plan had no Level 3 assets at December 31, 2012 or 2011. The Plan, as allowed by the authoritative accounting guidance, has a policy that transfers between levels are recognized at the end of a reporting period. During the years ended December 31, 2012 and 2011, the Plan did not experience any transfers between levels.





10

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


Fair Value of Investments in Entities that Use NAV

The following table summarizes investments measured at fair value based on NAV per share as of December 31, 2012 and 2011, respectively.
December 31, 2012
Fair Value
Unfunded Commitments
Redemption Frequency (if currently eligible)
Redemption Notice Period
Common collective trust
$
12,320,195

n/a
Daily
1 day
 
 
 
 
 
December 31, 2011
Fair Value
Unfunded Commitments
Redemption
Frequency (if
currently eligible)
Redemption Notice Period
Common collective trust
$
10,194,058

n/a
Daily
1 day
6.    Related Party Transactions
Certain Plan investments are managed by affiliates of the Agent and Trustee. The Agent is the recordkeeper as defined by the Plan. Participants may elect to invest in shares of Cleco Corporation common stock. In 2012 and 2011, the Plan acquired 253,031 and 209,730 shares, respectively, of Cleco Corporation common stock with an approximate market value of $10,138,510 and $7,182,477, respectively. In 2012 and 2011, the Plan sold 224,218 and 252,028 shares, respectively, of Cleco Corporation common stock with an approximate market value of $9,047,456 and $8,705,786, respectively. In addition, during 2012 and 2011, 67,981 and 57,153 shares, respectively, of Cleco Corporation common stock representing in-kind distributions were made to participants with an approximate market value of $2,739,310 and $1,981,272, respectively.
Other related parties include Cleco employees who participate in the Plan and the Committee which is comprised of employees of Cleco and is responsible for the administration of the Plan. During 2012 and 2011, no Cleco employee received compensation from the Plan.
7.
Tax Status
The Plan is qualified under Sections 401(a) and 401(k) of the Internal Revenue Code and, accordingly, the associated trust is generally exempt from federal income taxes under provision Section 501(a). The Plan obtained its latest determination letter on March 22, 2006, in which the Internal Revenue Service stated that the Plan, as then written, was in compliance with the applicable requirements of the Internal Revenue Code. Effective November 1, 2010, the Plan was amended and restated. The Plan requested but has not received a determination letter for the amended and restated Plan. The Plan administrator and the Plan’s tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the Internal Revenue Code.
Accounting principles generally accepted in the United States of America require Plan management to evaluate tax positions taken by the Plan and recognize a tax liability (or asset) if the organization has taken an uncertain tax position that more likely than not would not be sustained upon examination by the Internal Revenue Service. The Plan administrator has analyzed the tax positions and has concluded that as of December 31, 2012 and 2011 there were no uncertain tax positions taken or expected to be taken that would require recognition of a liability (or asset) or disclosure in the financial statements. The Plan is generally subject to examination for a period of three years after the filing of its employee benefit plan annual return. There are currently no audits for any plan years in progress.
Participants’ pretax contributions, Cleco Corporation’s contributions, rollover contributions as well as interest, dividends and profits earned by the Plan are not subject to federal income taxes until these amounts are distributed.



11

Cleco Power LLC 401(k) Savings and Investment Plan
Notes to the Financial Statements
December 31, 2012 and 2011


8.
Risks and Uncertainties
The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statement of net assets available for benefits.





12

Cleco Power LLC 401(k) Savings and Investment Plan
Schedule H, line 4i - Schedule of Assets (Held at End of Year)
December 31, 2012
EIN: 72-0244480 Plan Number: 003


(a)
(b)
 
(c)
 
(d)
 
(e)
 
 
 
Description of investment, including
 
 
 
 
 
Identity of issuer, borrower,
 
maturity date, rate of interest,
 
 
 
Current
 
lessor or similar party
 
collateral, par, or maturity value
 
Cost
 
Value
*
JP Morgan Prime Money Market Fund
 
Mutual fund
 
 
 
19,498,543

 
Scout Core Plus Bond Fund
 
Mutual fund
 
 
 
13,467,992

 
Diamond Hill Capital Fund
 
Mutual fund
 
 
 
209,406

 
Dodge & Cox Balanced Fund
 
Mutual fund
 
 
 
23,632,486

 
T. Rowe Price Mid Cap Growth Fund
 
Mutual fund
 
 
 
9,139,471

 
T. Rowe Price Income Fund
 
Mutual fund
 
 
 
768,707

 
T. Rowe Retirement 2005 Index Fund
 
Mutual fund
 
 
 
82,477

 
T. Rowe Retirement 2010 Index Fund
 
Mutual fund
 
 
 
819,438

 
T. Rowe Retirement 2015 Index Fund
 
Mutual fund
 
 
 
2,291,985

 
T. Rowe Retirement 2020 Index Fund
 
Mutual fund
 
 
 
4,100,363

 
T. Rowe Retirement 2025 Index Fund
 
Mutual fund
 
 
 
2,436,136

 
T. Rowe Retirement 2030 Index Fund
 
Mutual fund
 
 
 
2,210,551

 
T. Rowe Retirement 2035 Index Fund
 
Mutual fund
 
 
 
1,895,064

 
T. Rowe Retirement 2040 Index Fund
 
Mutual fund
 
 
 
2,096,144

 
T. Rowe Retirement 2045 Index Fund
 
Mutual fund
 
 
 
2,064,115

 
T. Rowe Retirement 2050 Index Fund
 
Mutual fund
 
 
 
996,395

 
T. Rowe Retirement 2055 Index Fund
 
Mutual fund
 
 
 
578,497

 
Royce Pennsylvania Small Cap Equity Fund
 
Mutual fund
 
 
 
148,892

 
FMI Large Cap
 
Mutual fund
 
 
 
25,955,094

 
American Century Growth Fund
 
Mutual fund
 
 
 
14,736,523

 
CRM Mid Cap Value Fund
 
Mutual fund
 
 
 
5,559,652

 
Morgan Stanley International Equity Fund
 
Mutual fund
 
 
 
9,357,370

 
Total mutual funds
 
 
 
 
 
$
142,045,301

 
State Street Global Advisors S&P 500 Fund
 
Common collective trust
 
 
 
$
12,320,195

 
Schwab Personal Choice Retirement Account
 
Participant directed brokerage
 
 
 
$
4,609,237

*
Cleco Corporation
 
Common stock
 
 
 
$
109,120,548

*
Notes receivable from participants
 
Notes receivable from participants with interest rates ranging from 5.25% to 10.25% and maturity dates ranging from 2013 to 2017
 
$

 
$
4,401,507

 
Total Assets Held
 
 
 
 
 
$
272,496,788

_______________________
 
 
 
 
 
 
*Denotes party-in-interest.
 
 
 
 
 
 



The accompanying notes are an integral part of the financial statements.

13




SIGNATURE


          The Plan.  Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.





 
CLECO POWER LLC
401(k) SAVINGS AND INVESTMENT PLAN
 
 
 
 
Date: June 20, 2013
By:   /s/ Darren J. Olagues
 
(Darren J. Olagues, Chairman of the Retirement Committee of Cleco Corporation, Plan Administrator)









EXHIBIT

INDEX




Exhibit Number
Description
 
 
23
Consent of McElroy, Quirk & Burch (APC)