Entergy 2007 Annual Report Download

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2007 ANNUAL REPORT
Featuring 14,300 EMPLOYEES Directed by BOARD OF DIRECTORS
Produced by SHAREHOLDER STUDIOS Story by ENTERGY’S LEADERSHIP TEAM
Cracking even the toughest of cases!

Table of contents

  • Page 1
    2 0 0 7 A n n u A l R e p o R t Cracking even the toughest of cases! Featuring 14,300 EMPLOYEES Directed by BOARD OF DIRECTORS Produced by SHAREHOLDER STUDIOS Story by ENTERGY'S LEADERSHIP TEAM

  • Page 2
    ... and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the secondlargest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues...

  • Page 3
    ...except percentages and per share amounts) Operating revenues Consolidated net income Earnings per share Basic Diluted Average shares outstanding (in millions) Basic Diluted Return on average common equity Net cash flow provided by operating activities UTILITY ELECTRIC OPERATING DATA $11,484 $ 1,135...

  • Page 4
    ... at least $24.5 million in additional public and private funds to help low-income families and individuals throughout Arkansas, Louisiana, Massachusetts, Mississippi, New York, Texas and Vermont. In 2007, Entergy received the U.S. Chamber of Commerce Award for Community Service and in early 2008, we...

  • Page 5
    ... stock in SpinCo, comprised of the non-utility nuclear plants, a power marketing operation, and the remaining 50 percent stake in the nuclear services joint venture. SpinCo will be uniquely positioned as the only pure-play, emissionfree nuclear generating company in the United States, at a time when...

  • Page 6
    ... customers. Facility in southwestern Louisiana and receiving regulatory approval to proceed with the Little Gypsy Unit 3 repowering project. We continue to pursue buy, build and contract power purchase options through our portfolio transformation initiative in order to procure the right generating...

  • Page 7
    ...Community Development Block Grant from the Louisiana Recovery Authority and after reaching a regulatory recovery agreement with the New Orleans City Council. In August, we received the final regulatory approval for Entergy Louisiana and Entergy Gulf States Louisiana from the Louisiana Public Service...

  • Page 8
    ... a cap-and-trade program to power generators. We believe any free allowances should go only to the end-use customers. We also believe the bulk of research and development money should go to research for the retrofit of existing coal plants even though almost all of our generating plants are nuclear...

  • Page 9
    ...to stabilize Entergy's CO2 emissions at 20 percent below year 2000 levels from 2006 to 2010. We more than met our stabilization goal in 2006 and 2007. We aspire to provide clean, reliable and affordable power in our utility business. We aspire to operate safe, secure and vital nuclear resources in...

  • Page 10
    WINNER OF THE TOP TSR A W A R D Ninth Anniversary Edition T H E O R I G I N A L C U T O F T H E VA L U E D E T E C T I V E ' S G R E AT E S T A D V E N T U R E 1998 TO 2007

  • Page 11
    ... evaluated, including human rights, corporate governance, environment, climate change, philanthropy, financial and employee relations. Institutional Shareholder Services rated Entergy as the top utility for corporate governance and indicated that we outperformed 99.8 percent of companies in the...

  • Page 12
    ... work location including generating facilities, offices, transmission and distribution networks, Entergy companies' employees and contractors are focused on building the behaviors, systems and culture that we need to achieve zero accidents. In 2007, our Lost Work Day Incident Rate, which measures...

  • Page 13
    .... Total Shareholder Return 2007, % A So ciet y That Is Healthy, Productive an d Educated Approximately 25 percent of our 2.7 million utility customers fall below the poverty level. We created our low-income customer assistance initiative in 1999 to address this stark reality. Entergy's commitment...

  • Page 14
    Smart and Savvy, together they're going to change how you think about Entergy's Utilities. Featuring PORTFOLIO TRANSFORMATION STRATEGY Starring EXCELLENT CUSTOMER SERVICE Directed by UTILITY LEADERSHIP TEAM Original Musical Score by REGULATORY STAKEHOLDERS

  • Page 15
    ... balance of unrecovered storm restoration costs and Entergy Gulf States Louisiana will recover $187 million. The approved plan also includes recovery of storm reserves totaling $239 million to offset the impact of future restoration efforts from storm events. Finally, securitization of storm-related...

  • Page 16
    ... parameters for rough production cost equalization. The $252 million payment required for Entergy Arkansas created regulatory challenges in Arkansas. In its ruling on the Entergy Arkansas rate case, among other actions, the Arkansas Public Service Commission ordered a 9.9 percent return on equity...

  • Page 17
    ... agreement, Entergy Arkansas will sell one-third of the plant output to Entergy Gulf States Louisiana. Finally, to preserve the nuclear option for its customers, the utilities continued to pursue the potential of new nuclear development at the Grand Gulf Nuclear Station and River Bend Station...

  • Page 18
    Safe. Secure. Emission-free. Stunning value builds in the nuclear business. Featuring PREMIER NUCLEAR FLEET Starring EXCEPTIONAL NUCLEAR SERVICES TEAM Directed by NUCLEAR LEADERSHIP TEAM

  • Page 19
    ... unit, the Louisiana Public Service Commission approved new nuclear financing rules in 2007 that provide the structure and certainty at the state level that we would need to decide to proceed with new nuclear development at River Bend Station. The rules include a detailed review of plant costs...

  • Page 20
    ... Power Research Institute so that we can make any necessary adjustments to enable performance consistent with our high standards going forward. Throughout 2007, we also made progress in the implementation of a new siren system at Indian Point Energy Center. Indian Point is the first nuclear facility...

  • Page 21
    ...2007 Northeast Nuclear Fleet Production Costs $ per MWh 29 21 Before ETR ownership 2007 Using our operational and risk management expertise, we have transformed underperforming non-utility nuclear assets into a valuable portfolio of emission-free power-generating assets that are safe and secure...

  • Page 22
    Watch this staggering drama unfold as emitters of greenhouse gases become innovative problem-solvers. Featuring A SMART CARBON POLICY With Special Appearances by U.S. AND INTERNATIONAL POLICYMAKERS

  • Page 23
    ... rely on the most efficient method for resource allocation and that is the market. There are two main forms of market-based greenhouse gas regulation - a cap-and-trade system or a carbon tax. Cap-and-trade limits greenhouse gas emissions at a defined level and tradable allowances to emit are either...

  • Page 24
    ...the changes now will be cheaper in the long run and certainly better than waiting until it's too late. Bottom line, we need a robust, 10-year price signal. 4. S U P P O R T R E S E A R C H AND DISTRIBUTION The transaction plan - now in the can - awaits final approvals. Distribution is scheduled for...

  • Page 25
    ... dollars As a utility company serving coastal Louisiana and Texas, including New Orleans, Entergy received a personal wake-up call from hurricanes Katrina and Rita. These storms dramatically demonstrated the unique risks that climate change poses to our company and the communities we serve. Coastal...

  • Page 26
    This never-ending story of growing value continues. Watch it unfold in 2008 when THE VALUE TRILOGY opens on an exchange near you!

  • Page 27
    ... approvals, in order to complete the transaction around the end of the third quarter of 2008. W Financial Review 27 Five-Year Summary of Selected Financial and Operating Data Management's Financial Discussion and Analysis Report of Management Reports of Independent Registered Public Accounting...

  • Page 28
    ...ies 20 07 Financial Review Forward-Looking Information In this combined report and from time to time, Entergy Corporation and the Registrant Subsidiaries (Entergy Arkansas, Inc., Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., and...

  • Page 29
    ... 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 Note 18 to the financial statements...

  • Page 30
    ...Management's Financial Discussion and Analysis Entergy operates primarily through two business segments: Utility and Non-Utility Nuclear. n฀ UTILITY generates, transmits, distributes, and sells electric power in a four-state service territory that includes portions of Arkansas, Mississippi, Texas...

  • Page 31
    ... costs of Hurricane Katrina damage, as well as a lost customer base component intended to help offset the need for storm-related rate increases. In October 2006, the Louisiana Recovery Authority Board endorsed a resolution proposing to allocate $200 million in CDBG funds to Entergy New Orleans...

  • Page 32
    ... generally proceed as if Entergy New Orleans had not filed for bankruptcy protection, with exceptions for certain claims. Entergy Gulf States Louisiana, Entergy Louisiana, and Entergy Texas have filed with their respective retail regulators for recovery of storm restoration costs, including through...

  • Page 33
    ... Public Service Commission (LPSC)-approved incremental deferred and ongoing purchased power capacity costs. The formula rate plan filing is discussed in Note 2 to the financial statements. The fuel recovery variance is primarily due to the inclusion of Grand Gulf costs in Entergy New Orleans' fuel...

  • Page 34
    ... related to the allowance for equity funds used during construction; and n฀ the amortization of investment tax credits. These factors were partially offset by book and tax differences for utility plant items and state income taxes at the Utility operating companies. The effective income tax rate...

  • Page 35
    ... October 2005 for Entergy Gulf States Louisiana for the 2004 formula rate plan filing and the annual revenue requirement related to the purchase of power from the Perryville generating station, and increases for Entergy Texas related to an incremental purchased capacity recovery rider that began...

  • Page 36
    ... or capitalization of storm costs in 2005. Interest charges increased for the Utility and Parent & Other primarily due to additional borrowing to fund the significant storm restoration costs associated with Hurricanes Katrina and Rita. D i s c on t i n ue d O p e r a t i on s Other operation and...

  • Page 37
    ...credit agreement requires Entergy Louisiana to maintain a consolidated debt ratio of 65% or less of its total capitalization. (e) Borrowings under the Entergy Mississippi credit facilities may be secured by a security interest in its accounts receivable. (f ) The credit facility allows Entergy Texas...

  • Page 38
    ... or purchase of additional generation supply sources within the Utility's service territory through the Utility's supply plan initiative, including Entergy Louisiana's Little Gypsy Unit 3 repowering project, Entergy Arkansas' pending acquisition of the 789 MW gas-fired Ouachita power plant, each...

  • Page 39
    ...in April 2008 to address Entergy Arkansas' request for acquisition of the plant and concurrent cost recovery. In January 2008 the FERC issued an order authorizing the acquisition. In November 2007, Entergy Gulf States Louisiana filed a request with the LPSC for authorization to purchase one-third of...

  • Page 40
    .... The FERC has issued orders (FERC Short-Term Orders) approving the short-term borrowing limits of the Utility operating companies and System Energy through March 31, 2008 (except Entergy New Orleans, which is effective through May 4, 2009, and Entergy Gulf States Louisiana and Entergy Texas, which...

  • Page 41
    ..., partially offset by the receipt of $181 million of Community Development Block Grant funds by Entergy New Orleans in 2007, significant storm restoration spending in 2006, and a decrease of $118 million in the amount of pension funding payments in 2007. n฀ ฀ Non-Utility Nuclear provided $880...

  • Page 42
    ... MPSC, the Public Utility Commission of Texas (PUCT), and the FERC, are primarily responsible for approval of the rates charged to customers. Following is a summary of base rate and related proceedings, and proceedings involving Hurricane Katrina and Hurricane Rita cost recovery. These proceedings...

  • Page 43
    ... to the state. In October 2006, Entergy Mississippi received $81 million in CDBG funding, pursuant to MPSC orders approving recovery of $89 million storm restoration costs. n฀฀ In June 2006, Entergy New Orleans made its annual formula rate plan filings with the City Council. At the same time as...

  • Page 44
    ... service in June 2007, are necessary to achieve rough production cost equalization as defined by the FERC's orders (in millions): Entergy Arkansas Entergy Gulf States Louisiana (includes $(30) million related to Entergy Texas) Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas...

  • Page 45
    ...70) Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas The actual payments/receipts for 2008, based on calendar year 2007 production costs, will not be calculated until the Utility operating companies' FERC Form 1s have been filed...

  • Page 46
    ... payments by Entergy Arkansas, require Entergy Arkansas to provide "generating capacity or wholesale power contracts to Entergy Louisiana and Entergy Gulf StatesLouisiana sufficient to satisfy the rough production cost equalization requirements established in the System Agreement orders," or require...

  • Page 47
    ...Gulf States and Calcasieu Power, LLC seeking FERC approval of Entergy Gulf States Louisiana's acquisition of the Calcasieu Generating Facility, the Utility operating companies filed a Petition for Declaratory Order requesting that the FERC find either (1) that in those circumstances where a resource...

  • Page 48
    ... at Entergy Louisiana, $39.9 million at Entergy Mississippi and $18.6 million at Entergy Texas. To the extent the Utility operating companies have been ordered to provide refunds, or may in the future be ordered to provide additional refunds, the majority of these costs will qualify for inclusion...

  • Page 49
    ..., customers, or financial counterparties to a contract or agreement. Credit risk also includes potential demand on liquidity due to collateral requirements within supply or sales agreements. Non-Utility Nuclear's purchase of the FitzPatrick and Indian Point 3 plants from NYPA included value sharing...

  • Page 50
    ... Non-Utility Nuclear business units. Regulations 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...

  • Page 51
    ...when it is opened, or other factors. Entergy is pursuing damages claims against the DOE for its failure to pick up spent fuel timely. TECHNOLOGY AND REGULATION - To date, there is limited practical experience in the United States with actual decommissioning of large nuclear facilities. As experience...

  • Page 52
    ...: n฀ Discount rates used in determining the future benefit obligations; n฀ Projected health care cost trend rates; n฀ Expected long-term rate of return on plan assets; and n฀ Rate of increase in future compensation levels. Entergy reviews these assumptions on an annual basis and adjusts them...

  • Page 53
    ... not been enacted, which increased the allowed discount rate used to calculate the pension funding liability. Total postretirement health care and life insurance benefit costs for Entergy in 2007 were $89.6 million, including $26 million in savings due to the estimated effect of future Medicare Part...

  • Page 54
    ... of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform...

  • Page 55
    ... is to express an opinion on the Corporation's internal control over financial reporting based on our audit. We conducted our audit 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...

  • Page 56
    ...Operating and maintenance: Fuel, fuel-related expenses, and gas purchased for resale Purchased power Nuclear refueling outage expenses Other operation and maintenance Decommissioning Taxes other than income taxes Depreciation and amortization Other regulatory charges (credits) - net Total OPERATING...

  • Page 57
    ... - Balance at end of period: Accumulated derivative instrument fair value changes (12,540) Pension and other postretirement liabilities (107,145) Net unrealized investment gains 121,611 Foreign currency translation 6,394 Minimum pension liability - Total $ 8,320 Comprehensive Income PAID-IN CAPITAL...

  • Page 58
    ... - Entergy New Orleans DIP loan Notes receivable Accounts receivable: Customer Allowance for doubtful accounts Other Accrued unbilled revenues Total accounts receivable Accumulated deferred income taxes Fuel inventory - at average cost Materials and supplies - at average cost Deferred nuclear...

  • Page 59
    ... Currently maturing long-term debt Notes payable Accounts payable Customer deposits Taxes accrued Interest accrued Deferred fuel costs Obligations under capital leases Pension and other postretirement liabilities System agreement cost equalization Other Total NON-CURRENT LIABILITIES $ 996,757 25...

  • Page 60
    ... 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 other regulatory assets Other Net cash flow provided by operating activities...

  • Page 61
    ... equity 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 cash...

  • Page 62
    ... and Entergy Texas generate, transmit, and distribute electric power primarily to retail customers in Arkansas, Louisiana, Louisiana, Mississippi, and Texas, respectively. Entergy Gulf States Louisiana also distributes gas to retail customers in and around Baton Rouge, Louisiana. Entergy New Orleans...

  • Page 63
    ...millions): Generating Stations Utility: Entergy Arkansas Independence White Bluff Entergy Gulf States Louisiana Roy S. Nelson Big Cajun 2 Entergy Mississippi Independence Entergy Texas Roy S. Nelson Big Cajun 2 System Energy Grand Gulf Non-Nuclear Wholesale Assets: Harrison County Warren Gas Gas 550...

  • Page 64
    ... off line. Prior to 2006, River Bend's costs were accrued in advance of the outage and included in the cost of service used to establish retail rates. Entergy Gulf States Louisiana relieved the accrued liability when it incurred costs during the next River Bend outage. In 2006, Entergy Gulf States...

  • Page 65
    ... by Entergy's Utility operating companies. C ASH AND portion of River Bend, Entergy Gulf States Louisiana has recorded an offsetting amount of unrealized gains/(losses) in other deferred credits. Decommissioning trust funds for Pilgrim, Indian Point 2, Vermont Yankee, and Palisades do not receive...

  • Page 66
    ... and costs associated with reacquired debt of Entergy's Utility operating companies and System Energy (except that portion allocable to the deregulated operations of Entergy Gulf States Louisiana) are included in regulatory assets and are being amortized over the life of the related new issuances...

  • Page 67
    ... Development Block Grants (CDBG), pursuing recovery through existing or new rate mechanisms regulated by the FERC and local regulatory bodies, and securitization. Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas have received approval...

  • Page 68
    ... March 2007 order. Entergy Texas Entergy Texas' rate schedules include a fixed fuel factor to recover fuel and purchased power costs, including carrying charges, not recovered in base rates. The fixed fuel factor formula was revised and approved by a PUCT order in August 2006. The new formula was...

  • Page 69
    ... the October 2006 formula rate plan filing settlement. Entergy New Orleans' gas rate schedules include an adjustment to reflect estimated gas costs for the billing month, adjusted by a surcharge or credit similar to that included in the electric fuel adjustment clause, including carrying charges. In...

  • Page 70
    ... costs of Hurricane Katrina damage, as well as a lost customer base component intended to help offset the need for storm-related rate increases. In October 2006, the Louisiana Recovery Authority Board endorsed a resolution proposing to allocate $200 million in CDBG funds to Entergy New Orleans...

  • Page 71
    ... in storm-related costs through December 2006 that are eligible for CDBG funding under the state action plan, and certified Entergy New Orleans' estimated costs of $465 million for its gas system rebuild. In April 2007, Entergy New Orleans executed an agreement with the Louisiana Office of Community...

  • Page 72
    ...In December 2007, Entergy Louisiana filed testimony in the Phase II proceeding seeking financing cost recovery and proposing a procedure for synchronizing future base rate recovery by a formula rate plan or base rate filing of the project's non-fuel costs. Phase II hearings are scheduled to begin in...

  • Page 73
    ... increases related to the formula rate plan 2004 test year revenue requirement and the capacity costs associated with the purchase of power from the Perryville power plant. Retail Rates - Gas In January 2008, Entergy Gulf States Louisiana filed with the LPSC its gas rate stabilization plan for...

  • Page 74
    ... approved a settlement agreement that resolves Entergy New Orleans' rate and storm-related rider filings by providing for phased-in rate increases, while taking into account with respect to storm restoration costs the anticipated receipt of CDBG funding as recommended by the Louisiana Recovery...

  • Page 75
    ...abated the proceeding to allow the Southwest Power Pool (SPP) to develop additional information about the costs and benefits of Entergy Texas joining the SPP similar to information presented regarding Entergy Texas joining ERCOT. The SPP filed a work plan that estimates that it will take nine months...

  • Page 76
    ...) 898,384 (18,654) $ 559,284 FERC In October 2004, Arkansas Electric Cooperative (AECC) filed a complaint at the FERC against Entergy Arkansas relating to a contract dispute over the pricing of substitute energy at the co-owned Independence and White Bluff coal plants. The main issue in the case...

  • Page 77
    ... service costs" provided for under IRS regulations, which affects the amount of cost of goods sold related to the production of electricity. Entergy's agreement with the IRS on electric power contracts involved an adjustment to reduce Entergy Louisiana Holdings' deduction related to its accounting...

  • Page 78
    ... (R&E) expenditures; 5) income tax credits claimed for R&E; and 6) a 2003 deduction associated with the revisions to the emergency plans at the Indian Point Energy Center. Regarding all of these issues, Entergy disagrees with the IRS Examination Division position and filed a formal protest on July...

  • Page 79
    ... interest rate as of December 31, 2007 that would be applied to the outstanding borrowings under the facility. (b) The credit facility requires Entergy Arkansas to maintain a total shareholders' equity of at least 25% of its total assets. (c) The credit facility allows Entergy Gulf States Louisiana...

  • Page 80
    ... - Entergy Gulf States Louisiana(g) 5.25% Series due August 2015 - Entergy Gulf States Louisiana(g) 5.56% Series due September 2015 - Entergy Louisiana 5.92% Series due February 2016 - Entergy Mississippi 6.75% Series due October 2017 - Entergy New Orleans 5.4% Series due May 2018 - Entergy Arkansas...

  • Page 81
    ... 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 with nuclear fuel prior to that date and includes the one-time fee, plus accrued interest, in long...

  • Page 82
    ... of the notes' maturity dates may occur. Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy Texas, and System Energy have received FERC long-term financing orders authorizing long-term securities issuances. Entergy Arkansas has received an APSC long-term financing...

  • Page 83
    ... Louisiana Holding, an Entergy subsidiary, purchased 160,000 of these shares from the holders. (e) Pending developments in the Entergy New Orleans bankruptcy proceeding, Entergy deconsolidated Entergy New Orleans and reported its financial position and results under the equity method of accounting...

  • Page 84
    ... share repurchase program to enable Entergy to consider opportunistic purchases in response to equity market conditions. The amount of repurchases may vary as a result of material changes in business results or capital spending or new investment opportunities. The Board had previously approved...

  • Page 85
    ... production projections would require estimated payments of approximately $144.5 million in 2008, and a total of $3.0 billion for the years 2009 through 2031. Entergy Louisiana currently recovers the costs of the purchased energy through its fuel adjustment clause. In an LPSC-approved settlement...

  • Page 86
    ... as follows (in millions): Utility: Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans System Energy Non-Utility Nuclear $20.7 $15.5 $17.1 $0.06 $0.06 $13.6 $86.8 Entergy's conventional property insurance program provides coverage up to $400...

  • Page 87
    ... approving the settlement of Entergy New Orleans' rate and storm-cost recovery filings requires Entergy New Orleans to record those proceeds in a designated sub-account of other deferred credits. This other deferred credit is shown as "Gas system rebuild insurance proceeds" on Entergy New Orleans...

  • Page 88
    ... of nuclear fuel through loans made under revolving credit agreements, the issuance of commercial paper, and the issuance of intermediate-term notes. The credit agreements for Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, and System Energy each have a termination date of...

  • Page 89
    ... charged to operations, in 2007, 2006, and 2005 for the four Registrant Subsidiaries that own nuclear power plants (in millions): 2007 2006 lease lease payments Interest payments Interest Entergy Arkansas $ 61.7 $ 5.8 $ 55.0 $ 5.0 Entergy Gulf States Louisiana 31.5 2.8 28.1 3.6 Entergy Louisiana...

  • Page 90
    ... stocks, fixed-income securities, interest in a money market fund, and insurance contracts. The Registrant Subsidiaries' pension costs are recovered from customers as a component of cost of service in each of their jurisdictions. Entergy uses a December 31 measurement date for its pension plans...

  • Page 91
    ... Benefits paid Fair value of assets at end of year Funded status 2006 $ 2,894,008 92,706 167,257 - - - 4,372 1,003 (123,272) $3,036,074 Entergy Arkansas, Entergy Mississippi, Entergy New Orleans, and Entergy Texas have received regulatory approval to recover SFAS 106 costs through rates. Entergy...

  • Page 92
    ... whereby long-term earnings on the assets (plus cash contributions) provide adequate funding for retiree benefit payments. The mix of assets is based on an optimization study that The accumulated benefit obligation for Entergy's qualified pension plans was $2.8 billion and $2.7 billion at December...

  • Page 93
    ... 2007 Weighted-average discount rate: Pension Other postretirement Weighted-average rate of increase in future compensation levels 6.50% 6.50% 4.23% 2006 6.00% 6.00% 3.25% Entergy also sponsors non-qualified, non-contributory defined benefit pension plans that provide benefits to certain executives...

  • Page 94
    ...an estimate of the call option value of the reinvested gain discounted to present value over the five year reinvestment period. Stock options are granted at exercise prices that equal the closing market price of Entergy Corporation common stock on the date of grant. Generally, stock options granted...

  • Page 95
    ... 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...

  • Page 96
    ... SEGMENT INFORMATION continued Entergy's reportable segments as of December 31, 2007 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...

  • Page 97
    ... Entergy New Orleans. Entergy Louisiana and Entergy New Orleans entered into purchase power agreements with RS Cogen that expired in April 2006, and purchased a total of $15.8 million and $61.2 million of capacity and energy from RS Cogen in 2006 and 2005, respectively. Entergy Gulf States Louisiana...

  • Page 98
    ... price and interest rate risk - investments Utility, Non-Utility Nuclear In January 2006, Entergy Mississippi purchased the Attala power plant, a 480 MW natural gas-fired, combined-cycle generating facility in central Mississippi, for $88 million from Central Mississippi Generating Company. Entergy...

  • Page 99
    ... t i ve s Entergy holds debt and equity securities, classified as available-forsale, 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 2, Vermont...

  • Page 100
    ... portion of River Bend, Entergy Gulf States Louisiana has recorded an offsetting amount of unrealized gains or losses in other deferred credits due to existing contractual commitments with the former owner. NOTE 18. ENTERGY NEW ORLEANS BANKRUPTCY PROCEEDING n฀ n฀ an agreement with its...

  • Page 101
    ... and Entergy's Code of Conduct. You can also request and receive information via email. Printed copies of the above are also available without charge by calling 1-888-ENTERGY or writing to: Entergy Corporation Investor Relations P.O. Box 61000 New Orleans, LA 70161 INSTITUTIONAL INVESTOR INQUIRIES...

  • Page 102
    ... accounting, rate making, finance, tax, and systems development before being promoted to Senior Vice President and Chief Accounting Officer in 2007. Age, 49 Terry R. Seamons Senior Vice President, Human Resources and Administration. Joined Entergy in 2007. Former Vice President and Managing Director...

  • Page 103
    Enterg y Cor porat ion a nd Subsid ia r ies 20 07 Directors Maureen S. W. Frank Simon D. Gary W. BATEMAN BLOUNT deBREE EDWARDS Alexis M. Donald C. J. Wayne Stuart L. HERMAN HINTZ LEONARD LEVENICK James R. William A. W. J. "Billy" Steven V. NICHOLS PERCY, II TAUZIN WILKINSON...

  • Page 104
    Environmental BENEFITS STATEMENT Entergy Corporation Post Office Box 61000 New Orleans, LA 70161 entergy.com This Entergy Corporation 2007 Annual Report is printed on Neenah Environment Papers - PC 100, made of 100 percent post-consumer waste material. It is Forest Stewardship Council™ certified,...