Entergy 2006 Annual Report Download

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ENTERGY 2006 ANNUAL REPORT

Table of contents

  • Page 1
    E N T E R G Y 2 0 0 6 A N N U A L R E P O R T

  • Page 2
    ... and operates power plants with approximately 30,000 megawatts of electric generating capacity and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.6 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues...

  • Page 3
    ... then we aspire and seek to achieve. In setting our aspirations, we adhere to the principles of sustainable growth. It is our firm belief that only by consistently delivering superior financial, operational and societal results can we build a company that is worthy of your investment and trust. 1

  • Page 4
    ... year's annual report is "having it all." Obviously, that phrase means different things to different people. To many of our customers it's the dream of home ownership, stable employment, adequate healthcare and seeing their children head off to college for the first time in their family's history...

  • Page 5
    ... all" means in business. â- As the rebuilding process began, we worked to educate and influence communities to adopt environmentally smart building standards in order to lower future utility bills for our customers and reduce environmental emissions. We redoubled our efforts in support of wetland...

  • Page 6
    ...work - in good times and bad. Mississippi Last June, the Mississippi Public Service Commission approved recovery of $89 million in storm restoration costs for Hurricane Katrina with no finding of imprudence. Ninety cents on the dollar was funded by the $81 million Community Development Block Grant...

  • Page 7
    ... this company has ever faced. The cost and financial recovery process consumed considerable time and resources as well. Nonetheless, we refused to let the storms slow down momentum in other initiatives in our utility and nuclear businesses. Utilities: Executing the Resource Supply Plan Testimony...

  • Page 8
    A Lasting Contribution Robert v.d. Luft n 2006, Robert v.d. Luft retired as the chairman of our Board of Directors after eight years of service in that position. Under his leadership, Entergy's market capitalization grew from less than $7 billion at the time Bob became chairman to more than $19 ...

  • Page 9
    ... Opportunity acquisitions, management service contracts and other types of agreements. We have also continued to preserve our option to pursue new nuclear development through the construction and operating license initiatives at Grand Gulf Nuclear Station and River Bend Station. The Time to Aspire...

  • Page 10
    ... - generation, transmission and distribution. Our service area has unique operational and economic challenges. We strive to address these challenges while continually improving customer satisfaction, increasing productivity and decreasing costs. We aspire to operate safe, secure and vital nuclear...

  • Page 11
    .... Our point-of-view driven business model continues to serve us well, J. Wayne Leonard Chairman and Chief Executive Officer In 2006, Robert v.d. Luft retired as the chairman of our Board of Directors after eight years of service in that position. Under Bob's guidance, Entergy became a Wayne Leonard...

  • Page 12

  • Page 13
    ... or above our risk-adjusted cost of capital, all the while maintaining solid investment grade credit with flexibility to manage risk and act on opportunities. We also aspire to return cash to our owners through common stock repurchases of up to $500 million each year and/or dividends targeting a 60...

  • Page 14
    ... of public funds, better manage energy usage and address the underlying causes of poverty. Of special note in 2006 were our coordinated jurisdiction efforts to secure increased funding for the federal Low Income Home Energy Assistance Program. We worked to maximize funding for Entergy states through...

  • Page 15
    ... will at times seem out of reach. However, we believe our management team and employees have the expertise and the will to achieve superior financial, operational and societal results consistent with our aspirations. LIHEAP Funding in Arkansas, Louisiana, Mississippi and Texas $ millions 167...

  • Page 16

  • Page 17
    ... and modernize our generation fleet and create opportunities to lower our customers' rates. It's a comprehensive plan that calls for the contract purchase of power, the acquisition of highly efficient assets, as well as the evaluation of new fuel and new capacity alternatives, conditioned on the...

  • Page 18
    ...of new nuclear capacity at our Grand Gulf Nuclear Station and River Bend Station. Nuclear generation is emission-free, less exposed to fuel price volatility and subject to federal incentives. With necessary legislative support, including loan guarantee and production tax credit incentives, and state...

  • Page 19
    ...made its required Transition to Competition filing at the end of 2006. In its plan, Entergy Gulf States-Texas proposed to join the Electric Reliability Council of Texas. We expect that the billion dollar investment to electrically connect our Texas business with ERCOT will provide customer benefits...

  • Page 20

  • Page 21
    .... With our positive point of view on nuclear generation, we continue to aggressively pursue opportunities to expand our nuclear business. Safety and Security First measures, security force and operator training, controlled access and behavioral observation programs. We work closely with outside...

  • Page 22
    ... 2006 We strive to increase our nuclear generation through high capacity factors to meet the growing demand for power. and the James A. FitzPatrick Nuclear Power Plant in New York. The operating licenses for Vermont Yankee, Pilgrim and FitzPatrick are currently scheduled to expire in 2012, 2012 and...

  • Page 23
    ... 2007, qualifying the Grand Gulf Nuclear Station near Port Gibson, Mississippi, as an acceptable site for a new nuclear reactor. We are also pursuing a combined construction and operating license for the new unit at Grand Gulf, as well as our River Bend Station near St. Francisville, Louisiana. Our...

  • Page 24
    ... commitment. We aspire to meet the particular needs of our low-income customers. We aspire to a workforce that performs every job safely and that reflects the diversity of our communities. As diligently as we will work in the years ahead toward our aspirations, we will continue to imagine...

  • Page 25
    C L I MATE C H A N G E : The Defining Issue of Our Time

  • Page 26
    Climate Change: The Defining Issue of Our Time J. Wayne Leonard THE SCIENCE IS REAL. THE PROOF IS EVERYWHERE. cp 1 Unequivocal Evidence of a Human Role in Climate Change Richard H. Moss, Ph.D. Ecosystem Response to Climate Change Camille Parmesan, Ph.D. Clean Energy or No More Crawfish, Cher Mike ...

  • Page 27
    ... of state regulations is well-intended, but not the ultimate answer. Mandatory greenhouse gas regulations at the federal level will trigger technology innovation throughout our economy and change the way we manage our resources. â- J. Wayne Leonard Chairman and CEO Entergy Corporation cp1

  • Page 28

  • Page 29
    â- â- â- â-

  • Page 30

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  • Page 33

  • Page 34
    ... and actions. All investments, including socially-oriented ones, are expected to meet our financial aspirations for longterm value creation. The Science Regardless of whether the forecasts for temperature or sea-level rise or climate change are conservative, no business schooled in risk management...

  • Page 35
    ... capacity factors, uprates and the construction of new nuclear facilities Using newer, more efficient generation technologies such as combined-cycle gas turbine plants Investing in equipment upgrades, carbon sequestration projects and carbon credits to lower CO2 emissions Considering the future cost...

  • Page 36
    ... program in New Orleans in partnership with Nike, Shell, Environmental Resources Trust and Global Green Using the Environmental Initiatives fund to help create new and innovative greenhouse gas offset market mechanisms that cost effectively achieve climate benefits while also leveraging benefits...

  • Page 37

  • Page 38

  • Page 39

  • Page 40
    ...and of transmission that includes Entergy's utility service nuclear materials and fuel, including possible shutdown of territory, and the application of market power criteria by nuclear generating facilities, particularly those in the the FERC northeastern United States â- the economic climate, and...

  • Page 41
    ... 9,828 111,459 (a) Before cumulative effect of accounting changes. (b) Includes long-term debt (excluding currently maturing debt), preferred stock with sinking fund, and non-current capital lease obligations. (c) Includes sales to Entergy New Orleans, which was deconsolidated in 2006 and 2005. See...

  • Page 42
    ... and sells electric power in a four-state service territory that includes portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and operates a small natural gas distribution business. â- NON-UTILITY NUCLEAR owns and operates five nuclear power plants located in...

  • Page 43
    ... million for Entergy Gulf States-Louisiana. In October 2006, the LRA Board endorsed a resolution proposing to allocate $200 million in CDBG funds to Entergy New Orleans to defray gas and electric utility system repair costs in an effort to provide rate relief for Entergy New Orleans customers. The...

  • Page 44
    ...formula rate plan filing and the annual revenue requirement related to the purchase of power from the Perryville generating station, and increases in the Texas jurisdiction of Entergy Gulf States related to an incremental purchased capacity recovery rider that began in December 2005 and a transition...

  • Page 45
    ... in payroll and benefits costs; â- an increase of $20 million in nuclear costs as a result of higher NRC fees, security costs, labor-related costs, and a non-refueling plant outage at Entergy Gulf States in February 2006; â- an increase of $16 million in customer service support costs due to an...

  • Page 46
    ... in the fuel cost component included in the price applied to unbilled sales. The increase in the fuel cost component is attributable to an increase in the market prices of natural gas and purchased power. See "Critical Accounting Estimates - Unbilled Revenue" and Note 1 to the financial statements...

  • Page 47
    ... Hurricanes Katrina and Rita); â- an increase of $5 million in estimated loss provisions recorded for the bankruptcy of CashPoint, which managed a network of payment agents for the Utility operating companies; â- an increase of $5 million in payroll and benefits costs which includes higher pension...

  • Page 48
    ... Maturities and Estimated Interest Payments 20102011 After 2011 Notes payable includes borrowings outstanding on credit facilities with original maturities of less than one year. Entergy Arkansas, Entergy Gulf States, and Entergy Mississippi each have 364-day credit facilities available as follows...

  • Page 49
    ... fuel at the decommissioned Big Rock nuclear plant, which is located near Charlevoix, Michigan. Management expects to close the transaction in the second quarter 2007, pending the approvals of the NRC, the FERC, the Michigan Public Service Commission, and other regulatory agencies. Estimated capital...

  • Page 50
    ... of Entergy New Orleans subject to valid, perfected, and non-avoidable Circumstances such as weather patterns, fuel and purchased power price fluctuations, and unanticipated expenses, including unscheduled plant outages and storms, could affect the timing and level of internally generated funds in...

  • Page 51
    ...Retail Services business operating in the ERCOT region of Texas and the sale of the non-nuclear wholesale asset business' remaining interest in a power development project. â- Entergy Mississippi purchased the 480 MW Attala power plant in January 2006 for $88 million and Entergy Louisiana purchased...

  • Page 52
    ...affecting Entergy's business, including rate regulation and fuel-cost recovery, federal regulation, and market and credit risk sensitive instruments. STATE AND LOCAL R ATE R EGULATION AND F UEL -COST R ECOVERY The rates that the Utility operating companies and System Energy charge for their services...

  • Page 53
    ... Louisiana Recovery Authority (LRA) Board endorsed a resolution proposing to allocate $200 million in CDBG funds to Entergy New Orleans to defray gas and electric utility system repair costs in an effort to provide rate relief for Entergy New Orleans customers. The action plan was approved by state...

  • Page 54
    ...include the mix of solid fuel and gas-fired generation available to each company and the costs of natural gas and purchased power. Entergy Louisiana, Entergy Gulf States, and Entergy Mississippi are more dependent upon gas-fired generation sources than Entergy Arkansas or Entergy 38 New Orleans. Of...

  • Page 55
    ... generating plants located outside of Arkansas, costs of the Entergy New Orleans bankruptcy, and costs associated with restoration of facilities damaged by Hurricanes Katrina and Rita. Mr. McDonald was also directed to describe actions taken since December 19, 2005 to encourage or persuade the FERC...

  • Page 56
    ... orders, or require "hold harmless protection be put in place to prevent any harm to [Entergy Louisiana] and [Entergy Gulf States-Louisiana] as a result of the impact of [Entergy Arkansas'] termination." The LPSC complaint further urges the FERC to find that "Entergy controls the actions of [Entergy...

  • Page 57
    ... transmission service either was granted when there was insufficient transmission capacity or was not granted when there was sufficient transmission capacity; and (2) Entergy had failed to timely post to Entergy's OASIS site certain 41 The Utility operating companies (except Entergy New Orleans...

  • Page 58
    ...to be primarily provided in the form of credits against transmission charges over time as the GenCos take transmission service from Entergy. The Utility operating companies (except Entergy New Orleans) continue to be subject to several pending, but not acted upon, complaints where GenCos are seeking...

  • Page 59
    ...grade, Entergy will be required to replace Entergy Corporation guarantees with cash or letters of credit under some of the agreements. In addition to selling the power produced by its plants, the NonUtility Nuclear business sells installed capacity to load-serving distribution companies in order for...

  • Page 60
    ...require Entergy to decommission its nuclear power plants after each facility is taken out of service, and money is collected and deposited in trust funds during the facilities' operating lives in order to provide for this obligation. Entergy conducts periodic decommissioning cost studies to estimate...

  • Page 61
    ...current technologies and regulations. In the third quarter of 2004, Entergy Gulf States recorded a revision to its estimated decommissioning cost liability in accordance with a new decommissioning cost study for River Bend that reflected an expected life extension for the plant. The revised estimate...

  • Page 62
    ...: â- Discount rates used in determining the future benefit obligations; â- Projected health care cost trend rates; â- Expected long-term rate of return on plan assets; and â- Rate of increase in future compensation levels. Entergy reviews these assumptions on an annual basis and adjusts them as...

  • Page 63
    ... health care and life insurance benefit costs is due to the increase in the discount rate (from 5.9% to 6.00%) and plan amendments in the Non-Utility Nuclear plans. OTHER CONTINGENCIES As a company with multi-state domestic utility operations and a history of international investments, Entergy...

  • Page 64
    ... Accounting Standards No. 158, Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans - an amendment of FASB Statements No. 87, 88, 106, and 132(R). We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States...

  • Page 65
    ...regarding their change in the method of accounting for defined benefit pension and other postretirement plans. DELOITTE & TOUCHE LLP New Orleans, Louisiana February 26, 2007 I N T E R N A L C O N T R O L over F I N A N C I A L R E P O R T I N G The management of Entergy Corporation is responsible...

  • Page 66
    ...,577 208,499 1,544,445 9,685,521 Operating and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale Purchased power Nuclear refueling outage expenses Provision for asset impairments and restructuring charges Other operation and maintenance Decommissioning Taxes other than income...

  • Page 67
    ... 31, RETAI N ED EARN I NGS 2006 2005 2004 Retained Earnings - Beginning of period Add: Consolidated net income Adjustment for change in accounting method Total Deduct: Dividends declared on common stock Capital stock and other expenses Total Retained Earnings - End of period ACCUMU LATED OTH ER...

  • Page 68
    ... funds Non-utility property - at cost (less accumulated depreciation) Other Total PROPERTY, PLANT AN D EQU I PMENT: 229,089 2,858,523 212,726 47,115 3,347,453 296,784 2,606,765 228,833 81,535 3,213,917 Electric Property under capital lease Natural gas Construction work in progress Nuclear fuel...

  • Page 69
    ... tax credits Obligations under capital leases Other regulatory liabilities Decommissioning and retirement cost liabilities Transition to competition Regulatory reserves Accumulated provisions Pension and other postretirement liabilities Long-term debt Preferred stock with sinking fund Other...

  • Page 70
    ... equity affiliates - net of dividends Provision for asset impairments and restructuring charges Changes in working capital: Receivables Fuel inventory Accounts payable Taxes accrued Interest accrued Deferred fuel Other working capital accounts Provision for estimated losses and reserves Changes in...

  • Page 71
    ... stock Common stock and treasury stock Retirement of long-term debt Repurchase of common stock Redemption of preferred stock Changes in credit line borrowings - net Dividends paid: Common stock Preferred stock Net cash flow provided by (used in) financing activities Effect of exchange rates on...

  • Page 72
    ...in Arkansas, Louisiana, and Mississippi, respectively. Entergy Gulf States generates, transmits, and distributes electric power primarily to retail customers in Texas and Louisiana. Entergy Gulf States also distributes gas to retail customers in and around Baton Rouge, Louisiana. Entergy New Orleans...

  • Page 73
    ... Fuel-Type Ownership Investment Utility: Entergy Arkansas: Independence White Bluff Entergy Gulf States: Roy S. Nelson Unit 6 Big Cajun 2 Unit 3 Entergy Mississippi: Independence Units 1 and 2 and Common Facilities System Energy: Grand Gulf Unit 1 Non-Nuclear Wholesale Assets: Harrison County...

  • Page 74
    ...," for its River Bend nuclear refueling outage costs and now accounts for these costs in the same manner as Entergy's other subsidiaries. Adoption of FSP No. AUG AIR-1 resulted in an immaterial retrospective adjustment to Entergy's and Entergy Gulf States' retained earnings balance. A LLOWANCE FOR...

  • Page 75
    ... may also be applied to separable portions of a utility's business, such as the generation or transmission functions, or to specific classes of customers. If an enterprise meets these criteria, it capitalizes costs that would otherwise be charged to expense if the rate actions of its regulator...

  • Page 76
    ... is classified as "transition to competition" deferred credits on the balance sheet. Entergy Gulf States has also recorded a corresponding regulatory asset. R EACQUIRED D EBT The premiums and costs associated with reacquired debt of Entergy's Utility operating companies and System Energy (except...

  • Page 77
    .... Deferred Fuel Costs Entergy Arkansas, Entergy Gulf States, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans are allowed to recover certain fuel and purchased power costs through fuel mechanisms included in electric and gas rates that are recorded as fuel cost recovery revenues...

  • Page 78
    ...the energy cost recovery rider in the pending Entergy Arkansas rate case. Entergy Arkansas has requested rehearing of the order. Entergy Gulf States (Texas) In the Texas jurisdiction, Entergy Gulf States' rate schedules include a fixed fuel factor to recover fuel and purchased power costs, including...

  • Page 79
    ...and Entergy Louisiana In Louisiana, Entergy Gulf States and Entergy Louisiana recover electric fuel and purchased power costs for the upcoming month based upon the level of such costs from the prior month. In Louisiana, Entergy Gulf States' purchased gas adjustments include estimates for the billing...

  • Page 80
    ... signed by the Governor of Louisiana in May 2006. Hearings are scheduled for April 2007. Entergy Mississippi In May 2006, Entergy Gulf States completed the $6 million interim recovery of storm costs through the fuel adjustment clause pursuant to an LPSC order. Beginning in September 2006, Entergy...

  • Page 81
    ...Louisiana Recovery Authority (LRA) Board endorsed a resolution proposing to allocate $200 million in CDBG funds to Entergy New Orleans to defray gas and electric utility system repair costs in an effort to provide rate relief for Entergy New Orleans customers. The proposal was developed as an action...

  • Page 82
    ... to forgo recovery of $3.5 million of deferred 2003 capacity costs associated with certain power purchase agreements. The credits were issued to customers in connection with April 2005 billings. The settlement includes the establishment of a three-year formula rate plan for Entergy Gulf States that...

  • Page 83
    ... funds will be held in a restricted escrow account. Fuel Adjustment Clause Litigation In April 1999, a group of ratepayers filed a complaint against Entergy New Orleans, Entergy Corporation, Entergy Services, and Entergy Power in state court in Orleans Parish purportedly on behalf of all Entergy New...

  • Page 84
    ... retail customer choice is implemented; Entergy Gulf States may not file a general base rate case in Texas before June 30, 2007, with rates effective no earlier than June 30, 2008, but may seek before then the recovery of certain incremental purchased power capacity costs, adjusted for load growth...

  • Page 85
    ... will transition to competition, the PUCT, on February 1, 2007, dismissed Entergy Gulf States' unbundled cost of service proceeding. CO -OWNER-I NITIATED P ROCEEDING AT THE FERC In September 2004, East Texas Electric Cooperative (ETEC) filed a complaint at the FERC against Entergy Arkansas relating...

  • Page 86
    ... for tax purposes. Entergy Arkansas, Entergy Louisiana Holdings, Entergy Mississippi, and Entergy New Orleans partially conceded accelerated tax depreciation associated with these assets. Entergy Gulf States was not part of the settlement and did not change its accounting method for these certain...

  • Page 87
    ... operating companies (except Entergy New Orleans) and System Energy default on other indebtedness or are in bankruptcy or insolvency proceedings, an acceleration of the facilities' maturity dates may occur. Entergy Arkansas, Entergy Gulf States, and Entergy Mississippi each has credit facilities...

  • Page 88
    ... Corporation as the lender, the terms of the December 9, 2005 bankruptcy court order provide that all borrowings by Entergy New Orleans under the DIP Credit Agreement are: (i) entitled to superpriority administrative claim status pursuant to section 364(c)(1) of the Bankruptcy Code; (ii) secured...

  • Page 89
    ...Entergy Mississippi Entergy Mississippi Entergy Arkansas Entergy Gulf States Entergy Mississippi Entergy Louisiana Entergy Arkansas Entergy Gulf States Entergy Louisiana October 2007 April 2008 June 2008 December 2008 December 2009 June 2010 June 2010 August 2010 November 2010 May 2011 November 2011...

  • Page 90
    ... Nuclear Waste Policy Act of 1982, Entergy's nuclear owner/licensee subsidiaries have contracts with the DOE for spent nuclear fuel disposal service. The contracts include a one-time fee for generation prior to April 7, 1983. Entergy Arkansas is the only Entergy company that generated electric power...

  • Page 91
    ... Mississippi limits securities issuances unless certain capitalization and investment grade ratings conditions are met. Entergy Gulf States and Entergy Louisiana have received FERC long-term financing orders that do not have such conditions. The long-term securities issuances of Entergy Arkansas...

  • Page 92
    ... Corporation Utility: Preferred Stock without sinking fund: Entergy Arkansas, 4.32% - 7.88% Series Entergy Gulf States, 4.20% - 7.56% Series Entergy Louisiana Holdings, 4.16% - 8.00% Series Entergy Louisiana LLC, 6.95% Series Entergy Mississippi, 4.36% - 6.25% Series Total Energy Commodity Services...

  • Page 93
    ... Awards Plan of Entergy Corporation and Subsidiaries, and certain other stock benefit plans. The Directors' Plan awards to non-employee directors a portion of their compensation in the form of a fixed number of shares of Entergy Corporation common stock. On January 29, 2007, the Board approved a new...

  • Page 94
    ... in insurance coverage to compensate the public in the event of a nuclear power reactor accident. Entergy Arkansas has two licensed reactors and Entergy Gulf States, Entergy Louisiana, and System Energy each have one licensed reactor (10% of Grand Gulf is owned by a non-affiliated company (SMEPA...

  • Page 95
    ...Entergy Arkansas Entergy Gulf States Entergy Louisiana Entergy Mississippi Entergy New Orleans System Energy Non-Utility Nuclear $16.6 $13.3 $15.5 $0.10 $0.10 $11.6 $65.6 Entergy maintains property insurance for its nuclear units in excess of the NRC's minimum requirement of $1.06 billion per site...

  • Page 96
    ... in federal and state courts in Texas, Louisiana, and Mississippi primarily by contractor employees in the 1950-1980 timeframe against Entergy Gulf States, Entergy Louisiana, and Entergy New Orleans, and Entergy Mississippi as premises owners of power plants, for damages caused by alleged exposure...

  • Page 97
    ..., changes in technology, and increased costs of labor, materials, and equipment. During 2004, 2005, and 2006 Entergy updated decommissioning cost studies for ANO 1 and 2, River Bend, Grand Gulf, Waterford 3, and certain Non-Utility Nuclear plants. In the third quarter of 2004, Entergy Gulf States...

  • Page 98
    ..., buildings, vehicles, and fuel storage facilities (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) with minimum lease payments as follows (in thousands): Year Operating Leases Capital Leases Entergy Arkansas Entergy Gulf States Entergy Louisiana...

  • Page 99
    ... and preferred stocks, fixed-income securities, interest in a money market fund, and insurance contracts. The Registrant Subsidiaries' pension costs are recovered from customers as 83 Service cost - benefits earned during the period Interest cost on projected benefit obligation Expected return...

  • Page 100
    ... Subsidiaries recover SFAS 106 costs from customers and are required to contribute postretirement benefits collected in rates to an external trust. Entergy Arkansas, the portion of Entergy Gulf States regulated by the PUCT, Entergy Mississippi, and Entergy New Orleans have received regulatory...

  • Page 101
    ... Securities Other (Cash and GACs) 45% 20% 31% 4% 37% 14% 49% 0% Amounts not yet recognized in the balance sheet (before application of SFAS 158) Unrecognized transition obligation 13,007 Unrecognized prior service cost (62,062) Unrecognized net loss 353,733 Accrued other post retirement benefit...

  • Page 102
    ... assets was as follows for Entergy Corporation and its subsidiaries for 2006 and 2005. 2006 2005 Weighted-average discount rate: Pension Other postretirement Weighted-average rate of increase in future compensation levels Expected long-term rate of return on plan assets: Taxable assets Non-taxable...

  • Page 103
    ... certain management level employees include a restriction that requires 75% of the gains upon exercise of the option to be held in Entergy Corporation common stock until the earlier of five years or termination of employment. The reduction in fair value of the stock options is based upon an estimate...

  • Page 104
    ... calculated by the difference in Entergy's Corporation common stock price on the date of exercise and the exercise price of the stock options granted. With the adoption of the fair value method of SFAS 123 and the application of SFAS 123R, Entergy recognizes compensation cost over the vesting period...

  • Page 105
    ... Texas, and provides natural gas utility service in portions of Louisiana. Non-Utility Nuclear owns and operates five nuclear power plants and is primarily focused on selling electric power produced by those plants to wholesale customers. "All Other" includes the parent company, Entergy Corporation...

  • Page 106
    ...Income taxes (benefits) Loss from discontinued operations Net income Total assets Investments in affiliates - at equity Cash paid for long-lived asset additions $ Businesses marked with * are referred to as the "competitive businesses," with the exception of the parent company, Entergy Corporation...

  • Page 107
    ...method of accounting: Company Ownership Description Entergy New Orleans, Inc. 100% ownership of common stock A regulated public utility company that generates, transmits, distributes, and sells electric power to retail and wholesale customers. As a result of Entergy New Orleans' bankruptcy filing...

  • Page 108
    ... gas and risk management services for electricity and natural gas. The total cost of such services in 2004 was approximately $9.5 million. There were no related party transactions between EntergyKoch and Entergy in 2006 or 2005. Entergy Louisiana and Entergy New Orleans entered into purchase power...

  • Page 109
    ... TRUST FUNDS Entergy holds debt and equity securities, classified as availablefor-sale, in nuclear decommissioning trust accounts. The NRC requires Entergy to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, Pilgrim, Indian Point 1 and...

  • Page 110
    ..., but would pay the affiliate prepetition accounts payable in cash. Because of the effects of Hurricane Katrina, on September 23, 2005, Entergy New Orleans filed a voluntary petition in the United States Bankruptcy Court for the Eastern District of Louisiana seeking reorganization relief under the...

  • Page 111
    ... power outages, restoration costs, and changes in customer load. Entergy determined that no impairment has occurred because management believes that cost recovery is probable. Entergy will continue to assess the carrying value of its investment in Entergy New Orleans as developments occur in Entergy...

  • Page 112
    ... purchase shares of the company's common stock. The plan also accommodates payments of up to $3,000 per month for the purchase of Entergy common shares. First-time investors may make an initial minimum purchase of $1,000. Contact Mellon by telephone or internet for information and an enrollment form...

  • Page 113
    ...of nuclear operations at South Carolina Electric & Gas Company. Age, 53 Joseph T. Henderson Senior Vice President and General Tax Counsel. Joined Entergy in 1999. Former Associate General Tax Counsel for Shell Oil. Age, 49 Nathan E. Langston Senior Vice President and Chief Accounting Officer. Joined...

  • Page 114
    ... million BTU 135,343 pounds 253,918 pounds Cert no. SGS-COC-3048 Environmental impact estimates were made using the Environmental Defense Paper Calculator. For more information visit http://www.papercalculator.org. Entergy Corporation Post Office Box 61000 New Orleans, LA 70161 www.entergy.com