Entergy 2007 Annual Report Download - page 35

33
Entergy Corporation and Subsidiaries 2007
2006 CO M P A R E D T O 2005
Following are income statement variances for Utility, Non-Utility
Nuclear, Parent & Other business segments, and Entergy comparing
2006 to 2005 showing how much the line item increased or (decreased)
in comparison to the prior period (in thousands):
Non-Utility Parent &
Utility Nuclear Other Entergy
2005 Consolidated
Net Income (Loss) $659,760 $282,623 $ (44,052) $ 898,331
Net revenue (operating revenue
less fuel expense,
purchased power, and
other regulatory charges
(credits) – net) 195,681 114,028 3,952 313,661
Other operation and
maintenance expenses 177,725 49,264 (13,831) 213,158
Taxes other than
income taxes 38,662 8,489 (1,111) 46,040
Depreciation 19,780 13,215 (1,580) 31,415
Other income 44,465 27,622 65,049 137,136
Interest charges 41,990 (3,450) 38,234 76,774
Other (including discontinued
operations) (3,146) (6,465) 44,232 34,621
Income taxes (72,557) 40,794 (84,477) (116,240)
2006 Consolidated
Net Income $691,160 $309,496 $131,946 $1,132,602
Net Revenue
Utility
Following is an analysis of the change in net revenue comparing 2006
to 2005 (in millions):
2005 Net Revenue $4,075.4
Base revenues/Attala costs 143.2
Fuel recovery 39.6
Pass-through rider revenue 35.5
Transmission revenue 20.8
Storm cost recovery 12.3
Volume/weather 10.6
Price applied to unbilled electric sales (43.7)
Purchased power capacity (34.5)
Other 11.9
2006 Net Revenue $4,271.1
e base revenues variance resulted primarily from increases
eective October 2005 for Entergy Gulf States Louisiana for the 2004
formula rate plan ling 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 in December 2005 and a transition
to competition rider that began in March 2006. e Attala costs
variance is due to the recovery of Attala power plant costs at Entergy
Mississippi through the power management rider. e net income
eect of the Attala cost recovery is partially oset by Attala costs in
other operation and maintenance expenses, depreciation expense, and
taxes other than income taxes.
e fuel recovery variance resulted primarily from adjustments of
fuel clause recoveries for Entergy Gulf States Louisiana and increased
recovery in 2006 of fuel costs from retail and special rate customers.
e pass-through rider revenue variance is due to a change in 2006 in
the accounting for city franchise tax revenues in Arkansas as directed by
the Arkansas Public Service Commission (APSC). e change results in
an increase in rider revenue with a corresponding increase in taxes other
than income taxes, resulting in no eect on net income.
e transmission revenue variance is primarily due to new
transmission customers in 2006. Also contributing to the increase was
an increase in rates eective June 2006.
e storm cost recovery variance is due to the return earned on
the interim recovery of storm-related costs at Entergy Louisiana and
Entergy Gulf States Louisiana in 2006 as allowed by the LPSC. e
storm cost recovery lings are discussed in Note 2 to the nancial
statements.
e volume/weather variance resulted from an increase of 1.7% in
electricity usage primarily in the industrial sector. e increase was
partially oset by the eect of less favorable weather on billed sales
in the residential sector, compared to the same period in 2005, and a
decrease in usage during the unbilled period.
e price applied to unbilled sales variance is due to the exclusion in
2006 of the fuel cost component in the calculation of the price applied
to unbilled sales. Eective January 1, 2006, the fuel cost component
is no longer included in the unbilled revenue calculation at Entergy
Louisiana and Entergy Gulf States Louisiana, which is in accordance
with regulatory treatment. See “Management’s Financial Discussion
And Analysis - Critical Accounting Estimates” herein.
e purchased power capacity variance is primarily due to higher
capacity charges and new purchased power contracts in 2006. A portion
of the variance is due to the amortization of deferred capacity costs and
is oset in base revenues due to base rate increases implemented to
recover incremental deferred and ongoing purchased power capacity
charges, as discussed above.
Non-Utility Nuclear
Net revenue increased for Non-Utility Nuclear primarily due to higher
pricing in its contracts to sell power. Also contributing to the increase
in revenues was increased generation in 2006 due to power uprates
completed in 2005 and 2006 at certain plants and fewer refueling
outages in 2006. Following are key performance measures for Non-
Utility Nuclear for 2006 and 2005:
2006 2005
Net MW in operation at December 31 4,200 4,105
Average realized price per MWh $44.33 $42.26
GWh billed 34,847 33,641
Capacity factor for the period 95% 93%
Other Operation and Maintenance Expenses
Other operation and maintenance expenses increased for the Utility
from $1,471 million in 2005 to $1,649 million in 2006 primarily due
to the following:
n฀ an increase of $52 million in payroll, payroll-related, and
benets costs;
n฀ 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, Inc. in February 2006;
n฀ an increase of $16 million in customer service support costs
due to an increase in contract costs and an increase in customer
write-os;
n฀ the receipt in 2005 of proceeds of $16 million from a settlement,
which is discussed further in “Signicant Factors And Known
Trends - Central States Compact Claim;”
Management’s Financial Discussion and Analysis conti nued