Entergy 2002 Annual Report Download - page 34

Entergy used $150 million to invest in temporary invest-
ments with a maturity of greater than 90 days in 2001, and
those investments matured in 2002. This results in a net
decrease of $300 million in cash used in 2002.
Partially offsetting the decrease in net cash used in investing
activities were the following:
Entergy received less cash from sales of businesses in 2002
than it received in 2001. The sale of the Saltend plant in
August 2001 provided approximately $810 million in cash,
while the sale of various projects in 2002 provided approxi-
mately $215 million in cash.
Entergy spent approximately $150 million more on con-
struction in 2002 than in 2001, primarily for construction
of the Harrison County project.
2001 Compared to 2000
Net cash used in investing activities increased by $410 million
in 2001 primarily due to the following:
Entergy used $550 million more cash in its 2001 nuclear
power plant purchase than it used in its 2000 nuclear
power plant purchase. In September 2001, Entergy’s
Non-Utility Nuclear business purchased the 970 MW
Indian Point 2 nuclear power plant for $600 million in
cash. In 2000, Entergy paid $50 million cash and issued
notes payable of approximately $750 million to NYPA
to purchase the 980 MW Indian Point 3 and 825 MW
FitzPatrick nuclear power plants.
Entergy made cash contributions of approximately
$414 million in connection with the formation of
Entergy-Koch in 2001.
Entergy made a $272 million cash investment in 2001to
provide collateral for a line of credit that secures the
installment obligations it owes to NYPA for the acquisition
of the FitzPatrick and Indian Point 3 nuclear power plants.
Entergy used $150 million to invest in temporary invest-
ments with a maturity of greater than 90 days in 2001.
Partially offsetting the increase in net cash used in investing
activities were the following:
Entergy received approximately $810 million in cash from
the sale of the Saltend plant in August 2001.
Entergy spent less on construction due to completion of
the Saltend and Damhead Creek plants.
The recovery of deferred fuel costs incurred at certain of
the domestic utility companies increased in 2001. Entergy
Arkansas, the Texas portion of Entergy Gulf States, and
Entergy Mississippi (for 2000 only) have treated these costs
as regulatory investments because these companies are
allowed by their regulatory jurisdictions to recover the
accumulated fuel cost regulatory asset over longer than a
twelve-month period. Entergy Mississippi’s fuel recovery
mechanism changed effective January 2001, and Entergy
Mississippi’s fuel cost under-recoveries incurred after that
date are being recovered over less than a twelve-month
period. The companies will recover carrying charges on
the under-recovered balances.
Financing Activities
2002 Compared to 2001
Financing activities used $409 million less cash in 2002 than in
2001 primarily due to the following:
Entergy increased the net borrowings under Entergy
Corporation’s credit facilities by $295 million in 2002.
Entergy Corporation issued $267 million of long-term
notes in 2002.
The non-nuclear wholesale assets business used $196 million
less cash in 2002 to retire debt than it did in 2001. This
primarily resulted from two transactions. The non-nuclear
wholesale assets business retired $268 million of long-term
debt in April 2002 related to the acquisition of the rights
to purchase turbines from a special-purpose financing
entity. In 2001 the non-nuclear wholesale assets business
retired the $555 million outstanding on the Saltend
credit facility when the plant was sold.
Issuances of long-term debt net of retirements by the
U.S. Utility segment provided $113 million less cash in
2002 than in 2001. Net issuances were $76 million in
2002 compared to $189 million in 2001.
Entergy repurchased $81.6 million more of its common
stock in 2002 than in 2001.
In a non-cash transaction in 2002, long-term debt was reduced
by $488 million in the sale of the Damhead Creek plant when
the purchaser assumed the Damhead Creek debt along with
the acquisition of the plant.
2001 Compared to 2000
Financing activities used cash in 2001 compared to providing
a small amount of cash in 2000 primarily due to:
the $555 million retirement of the Saltend credit facility in
August 2001 when the plant was sold;
a higher amount of net issuances of debt by the U.S.
Utility in 2000 than in 2001;
no additional borrowings in 2001 under the Saltend and
Damhead Creek credit facilities due to the completion of
the construction of the plants in 2000 (in 2000, borrowings
under the Damhead Creek credit facility increased by
approximately $164 million to finance construction of
the plant); and
a reduction in the amount of debt outstanding on the
Entergy Corporation credit facility.
Partially offsetting the increase in cash used in 2001 were the
following:
decreased repurchases of Entergy’s common stock
in 2001; and
the redemption of Entergy Gulf States’ preference stock
in 2000.
MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS continued
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