Entergy 2004 Annual Report Download - page 48

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Entergy Corporation and Subsidiaries 2004
Management of Entergy Corporation and its subsidiaries has prepared
and is responsible for the financial statements and related financial
information included in this document. To meet this responsibility,
management establishes and maintains a system of internal control
designed to provide reasonable assurance regarding the preparation and
fair presentation of financial statements in accordance with generally
accepted accounting principles. This system includes communication
through written policies and procedures, an employee Code of
Entegrity, and an organizational structure that provides for appropriate
division of responsibility and the training of personnel. This system is
also tested by a comprehensive internal audit program.
Entergy management assesses the effectiveness of its internal
control over financial reporting on an annual basis. In making this
assessment, management uses the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in
Internal Control – Integrated Framework. Management acknowledges,
however, that all internal control systems, no matter how well designed,
haveinherent limitations and can provide only reasonable assurance
with respect to financial statement preparation and presentation.
As a supplement to management’s assessment, Entergy’s
independent auditors conduct an objective assessment of the degree
to whichmanagement meets its responsibilityfor fairness of financial
reporting and issue an attestation report on the adequacy of
management’s assessment.They evaluate Entergy’s internal control over
financial reporting and perform such tests and other procedures
as they deem necessary to reach and express an opinion on the fairness
of the financial statements.
In addition, the Audit Committee of the Board of Directors,
composed solely of independent Directors, meets with the independent
auditors, internal auditors, management, and internal accountants
periodically to discuss internal controls, and auditing and financial
reporting matters. The Audit Committee appoints the independent
auditors annually, and reviews with the independent auditors the scope
and results of the audit effort. The Committee also meets periodically
with the independent auditors and the chief internal auditor without
management, providing free access to the Committee.
Based on management’s assessment of internal controls using the
COSO criteria, management believes that Entergy maintained effective
internal control over financial reporting as of December 31, 2004.
Management further believes that this assessment, combined with the
policies and procedures noted above provide reasonable assurance that
Entergy’s financial statements are fairly and accurately presented in
accordance with generally accepted accounting principles.
J. WAYNE LEONARD LEO P. DENAULT
Chief Executive Officer Executive Vice President
and Chief Financial Officer
To the Board of Directors and Shareholders of Entergy Corporation:
We have audited the accompanying consolidated balance sheets of
Entergy Corporation and Subsidiaries (the Corporation) as of
December 31, 2004 and 2003, and the related consolidated statements
of income; of retained earnings, comprehensive income, and paid-in
capital; and of cash flows for each of the three years in the period ended
December 31, 2004. These financial statements are the responsibility of
the Corporation’s management. Our responsibility is to express an
opinion on these financial statements based on our audits. We did not
audit the financial statements of Entergy-Koch, LP, the Corporation’s
investment in which is accounted for by the use of the equity method.
The Corporation’s equity in earnings of unconsolidated equity affiliates
for the year ended December 31, 2003 includes $180,110,000 for
Entergy-Koch, LP, which earnings were audited by other auditors
whose report (which as to 2003 included an explanatory paragraph con-
cerning a change in accounting for inventory held for trading purposes
and energy trading contracts not qualifying as derivatives) has been
furnished to us, and our opinion for the year ended December 31, 2003,
insofar as it relates to the amount audited by other auditors included for
such company, is based solely on the report of such other auditors.
Weconducted our audits in accordance with the 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 and the reportof other auditors provide a reasonable basis
for our opinion.
In our opinion, based on our audits and the report of other auditors,
such consolidated financial statements present fairly, in all material
respects, the financial positionof EntergyCorporation and Subsidiaries
as of December 31, 2004 and 2003, and the results of their operations
and their cash flows for each of the three years in the period ended
December 31, 2004 in conformity with accounting principles generally
accepted in the United States of America.
As discussed in Notes 1, 5, and 8 to the consolidated financial statements,
Entergy Corporation adopted the provisions of Statement of Financial
Accounting Standards (SFAS) No. 143, Accounting for Asset Retirement
Obligations, and Statement of Financial Accounting Standards Board
Interpretation No. 46, Consolidation of Variable Interest Entities, in 2003,
and SFAS No. 142, Goodwill and Other Intangible Assets, in 2002.
We have also audited, in accordance with the standards of the Public
Company Accounting Oversight Board (United States), the effectiveness of
the Corporation’sinternal control over financial reporting as of December
31, 2004, based onthe criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission and our report dated March 8, 2005 expressed an
unqualified opinion on management’s assessment of the effectiveness of the
Corporation’s internal control over financial reporting and an unqualified
opinionon the effectiveness of the Corporation’s internal control over
financial reporting.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
March 8, 2005
REPORT OF MANAGEMENT REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM