Entergy 2006 Annual Report Download - page 105

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ENTERGY CORPORATION AND SUBSIDIARIES 2
2000066
LONG-TERM INCENTIVE AWARDS
Entergy grants long-term incentive awards earned under its stock ben-
efit plans in the form of performance units, which are equal to the
cash value of shares of Entergy Corporation common stock at the end
of the performance period, which is the last trading day of the year.
Performance units will pay out to the extent that the performance
conditions are satisfied. In addition to the potential for equivalent
share appreciation or depreciation, performance units will earn the
cash equivalent of the dividends paid during the three-year perform-
ance period applicable to each plan. The costs of incentive awards are
charged to income over the three-year period.
The following table includes financial information for the long-
term incentive awards for each of the years presented (in millions):
2006 2005 2004
Fair value of long-term incentive
awards at December 31, $37 $34 $49
Compensation expense included in
Entergy’s Net Income for the year $22 $16 $31
Tax benefit recognized in
Entergy’s Net Income for the year $ 8 $ 6 $12
Compensation cost capitalized as part
of fixed assets and inventory as of
December 31, $ 3 $ 2 $ 6
Entergy paid $17.1 million in 2006 for awards earned under the
Long-Term Incentive Plan. The distribution is applicable to the
2003 - 2005 performance period.
RESTRICTED AWARDS
Entergy grants restricted awards earned under its stock benefit plans
in the form of stock units that are subject to time-based restrictions.
The restricted units are equal to the cash value of shares of Entergy
Corporation common stock at the time of vesting. The costs of
restricted awards are charged to income over the restricted period,
which varies from grant to grant. The average vesting period for
restricted awards granted is 54 months. As of December 31, 2006,
there were 163,912 unvested restricted units that are expected to vest
over an average period of 33 months.
The following table includes financial information for restricted
awards for each of the years presented (in millions):
2006 2005 2004
Fair value of restricted awards at December 31, $3.6 $ – $ –
Compensation expense included in
Entergy’s Net Income for the year $3.1 $3.5 $5.3
Tax benefit recognized in
Entergy’s Net Income for the year $1.2 $1.4 $2.1
Compensation cost capitalized as
part of fixed assets and inventory as of
December 31, $0.5 $ – $ –
Entergy paid $0.2 million in 2006 for awards earned under the
Restricted Awards Plan.
NOTE 13. BUSINESS SEGMENT INFORMATION
Entergy’s reportable segments as of December 31, 2006 are Utility
and Non-Utility Nuclear. Utility generates, transmits, distributes, and
sells electric power in portions of Arkansas, Louisiana, Mississippi,
and 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, and other business activity, including
the Energy Commodity Services segment, the Competitive Retail
Services business, and earnings on the proceeds of sales of previously-
owned businesses. The Energy Commodity Services segment was
presented as a reportable segment prior to 2005, but it did not meet
the quantitative thresholds for a reportable segment in 2005 and
2004, and with the sale of Entergy-Koch’s businesses in 2004, man-
agement does not expect the Energy Commodity Services segment to
meet the quantitative thresholds in the foreseeable future. The 2004
information in the tables below has been restated to include the
Energy Commodity Services segment in the All Other column. As a
result of the Entergy New Orleans bankruptcy filing, Entergy has dis-
continued the consolidation of Entergy New Orleans retroactive to
January 1, 2005, and is reporting Entergy New Orleans results under
the equity method of accounting in the Utility segment.
NOTESto CONSOLIDATED FINANCIAL STATEMENTS continued
89