Entergy 2004 Annual Report Download - page 35

Entergy Corporation and Subsidiaries 2004
Investing Activities
2004 Compared to 2003
Net cash used in investing activities decreased in 2004 primarily due
to the following:
•Construction expenditures were $158 million lower in 2004
than in 2003, including decreases of $81 million in the U.S.
Utility business, $39 million in the Non-Utility Nuclear
business, and $42 million in the non-nuclear wholesale
assets business.
•Entergy received net returns of invested capital from Entergy-
Koch of $284 million in 2004 after the sale by Entergy-Koch
of its trading and pipeline businesses. This activity is reported
in the “Decrease in other investments” line in the cash
flow statement.
•Approximately $60 million of the cash collateral for a letter of
credit that secures the installment obligations owed to New
York Power Authority (NYPA) for the acquisition of the
FitzPatrick and Indian Point 3 nuclear power plants was
released to Entergy in 2004. Approximately $172 million of this
cash collateral was released to Entergy in 2003, and the letter of
credit is no longer secured by cash collateral. This activity is
reported in the “Decrease in other investments” line in the cash
flow statement.
•The non-nuclear wholesale assets business realized $75 million
in net proceeds fromsales of portions of three of its power
plants in 2004.
•Entergy made temporary investments of $50 million in 2003,
and these investments matured in the first quarter of 2004.
•Entergy Arkansas used $7 million, Entergy Gulf States used
$77 million, and Entergy Mississippi used $73 million for other
regulatoryinvestments in 2003 as a result of fuel cost under-
recovery. In 2004, Entergy Arkansas used $4 million and
Entergy Gulf States used $50 million for other regulatory
investments related to fuel cost under-recovery. See Note 1 to
the consolidated financial statements for discussion of the
accounting treatment of these fuel cost under-recoveries.
2003 Compared to 2002
Net cash used in investing activities increased in 2003 primarily due
to the following:
•The non-nuclear wholesale assets business realized $215 million
in net proceeds from sales of businesses in 2002.
•Temporary investments of $150 million matured in 2002, which
provided cash flow in 2002.
•Temporary investments of $50 million were made in 2003,
which used cash flow in 2003.
•Entergy Gulf States had $77 million and Entergy Mississippi
had $73 million of other regulatory investments in 2003 as a
result of fuel cost under-recoveries. See Note 1 to the
consolidated financial statements for discussionof the
accounting treatment of these fuel cost under-recoveries. See
Note 2 to the consolidated financial statements for discussion of
the change in Entergy Mississippi’s energy cost recovery rider.
Partiallyoffsetting these uses of cash, approximately $172 million
of the cash collateral for a letter of credit that secures the installment
obligations owed to NYPA for the acquisition of the FitzPatrick
and Indian Point 3 nuclear power plants was released to Entergy
during 2003.
Financing Activities
2004 Compared to 2003
Net cash used in financing activities increased in 2004 primarily due
to the following:
•Entergy Corporation issued $538 million of long-term notes
in 2003.
•Entergy Corporation repurchased $1.018 billion of its common
stock in 2004, as discussed above in the “Uses of Capital” section.
•Entergy Corporation paid $65 million more in common stock
dividends in 2004 than in 2003.
Offsetting the factors that caused an increase in cash used in
financing activities in 2004 were the following:
•Retirements of long-term debt net of issuances by the U.S.
Utility segment used $345 million in 2004 and used
$359 million in 2003. See Note 5 to the consolidated financial
statements for the details of the long-term debt activity in 2004.
•In 2003, EntergyCorporationdecreased the net borrowings on
its credit facility by $500 million, while in 2004, net borrowings
onits credit facilities increased by $50 million.
•The non-nuclear wholesale assets business retired the
$79 million Top of Iowa wind project debt at its maturity in
January 2003.
2003 Compared to 2002
Net cash used in financing activities increased in 2003 primarily due
to the following:
•Net long-term debt retirements by the U.S. Utility segment
wereapproximately $470 million in 2003 compared to net
issuances of approximately $76 million in 2002. See Note 5 to
the consolidated financial statements for the details of Entergy’s
long-termdebt outstanding.
•The net borrowings under Entergy Corporation’s credit facilities
decreased $500 million in 2003 compared to an increase of
$244 million in 2002.
The items causing cash used to increase in 2003 werepartially
offset by the following:
•Entergy Corporation issued $538 million of long-term notes in
2003 compared to $267 million in 2002.
•The non-nuclear wholesale assets business retired $268 million
of long-term debt in 2002 related to the repurchase of the rights
to acquire turbines discussed in “Results of Operations” above.
Partially offsetting this was the retirement of the $79 million
Top of Iowa wind project debt at its maturity in January 2003.
•Entergy repurchased $8 million of its common stock in 2003
compared to $118 million in 2002.
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 acquisitionof the plant.
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MANAGEMENT’S FINANCIAL DISCUSSION and ANALYSIS continued