Entergy 2005 Annual Report Download - page 46

ENTERGY CORPORATION AND SUBSIDIARIES 2005
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Investing Activities
2005 Compared to 2004
Net cash used in investing activities increased in 2005 primarily due
to the following activity:
■Construction expenditures were $47 million higher in 2005 than
in 2004, including an increase of $147 million in the U.S.
Utility business and a decrease of $82 million in the Non-Utility
Nuclear business. U.S. Utility construction expenditures in 2005
include $302 million caused by Hurricanes Katrina and Rita.
■The non-nuclear wholesale assets business realized $75 million
in net proceeds from sales of portions of three of its power
plants in 2004.
■Entergy Louisiana purchased the 718 MW Perryville power
plant in June 2005 for $162 million.
■Entergy received net returns of invested capital from Entergy-
Koch of $49 million in 2005 compared to $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 secured the installment obligations owed to the
New York Power Authority (NYPA) for the acquisition of
the FitzPatrick and Indian Point 3 nuclear power plants was
released to Entergy in 2004.
■The U.S. Utility used $390 million in 2005 and $54 million in
2004 for other regulatory investments as a result of fuel cost
under-recovery. See Note 1 to the consolidated financial state-
ments for discussion of the accounting treatment of these fuel
cost under-recoveries.
Offsetting these factors was the following:
■The non-nuclear wholesale assets business received a return of
invested capital of $34 million in 2005 from the Top Deer wind
power joint venture after Top Deer obtained debt financing.
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 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 from sales 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.
■The U.S. Utility used $156 million for other regulatory
investments in 2003 as a result of fuel cost under-recovery.
In 2004, the U.S. Utility used $54 million for other regulatory
investments related to fuel cost under-recovery.
Financing Activities
2005 Compared to 2004
Financing activities provided $496 million of cash in 2005 compared
to using $1,672 million of cash in 2004 primarily due to the follow-
ing activity:
■Net issuances of long-term debt by the U.S. Utility segment
provided $462 million of cash in 2005 compared to retirements
of long-term debt net of issuances using $345 million in 2004.
See Note 5 to the consolidated financial statements for the
details of long-term debt outstanding at December 31, 2005
and 2004.
■Entergy Corporation increased the net borrowings on its credit
facility by $735 million in 2005 compared to $50 million during
2004. See Note 4 to the consolidated financial statements for a
description of the Entergy Corporation credit facility.
■Entergy Corporation repurchased $878 million of its common
stock in 2005 compared to $1,018 million in 2004, as discussed
above in the “Capital Expenditure Plans and Other Uses of
Capital” section.
■Entergy Corporation issued $500 million of long-term notes in
connection with its equity units offering in December 2005.
■Entergy Louisiana, LLC issued $100 million of preferred
membership interests in December 2005.
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 “Capital Expenditure
Plans and Other 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, Entergy Corporation decreased the net borrowings on
its credit facility by $500 million, while in 2004, net borrowings
on its 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.
MANAGEMENT’S FINANCIAL DISCUSSION and ANALYSIS continued