Entergy 2008 Annual Report Download

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MEETING THE CHALLENGE
ENTERGY 2008 ANNUAL REPORT
The ultimate measure of a man is not where he
stands in moments of comfort, but where he stands
at times of challenge and controversy.” – Martin Luther King, Jr.
“

Table of contents

  • Page 1
    ENTERGY 2008 ANNUAL REPORT " The ultimate measure of a man is not where he stands in moments of comfort, but where he stands at times of challenge and controversy." - Martin Luther King, Jr. MEETING THE CHALLENGE

  • Page 2
    ... of a nuclear services joint venture, continuing the transformation of our utilities' generation portfolio and pursuing constructive regulatory outcomes at the local, state and federal levels. Then extraordinary challenges emerged including a crisis in global financial markets, unusually high...

  • Page 3
    ...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 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues...

  • Page 4
    .... I know that Entergy employees markets will return to normal, or if normal is forever changed. will face whatever challenges lie ahead with resilience, courage I don't know what natural gas and power prices will be at the and optimism. I know this because they have proven it time and end of the...

  • Page 5
    ...; Entergy's utility operating companies held residential customer base rates ï¬,at in nominal terms in 2008. We took the necessary steps to execute the spin-off of our non-utility nuclear assets to Enexus Energy Corporation and to establish our nuclear services joint venture, EquaGen LLC. We...

  • Page 6
    ... of time. Entergy also requested temporary suspension of federal regulatory reviews of two new nuclear license applications for Grand Gulf Nuclear Station and River Bend Station. This action does not reï¬,ect a change in our position on nuclear power as it relates to the goals of energy independence...

  • Page 7
    ... and managers remain 100 percent focused on operational excellence at our nuclear plants. In 2008, our non-utility nuclear ï¬,eet achieved the highest level of generating output since Entergy took ownership of these assets. The capability factor for these assets reached 92 percent for outage cycles...

  • Page 8
    ...one fortunate turn of events (i.e., nuclear acquisitions made valuable by rising fossil fuel prices). We are a point-of-view-driven company and we entered into these transactions fully expecting that outcome (in addition to creating increased reliability and safety). Over the last 10 years based on...

  • Page 9
    ..., positive total shareholder returns over the long term. In 2008, we set records for the fastest, safest storm restoration in our company's history. We continued our efforts to transform our generation portfolio to ensure our customers have access to clean, affordable power until market uncertainty...

  • Page 10
    "It is not the strongest of the species that survives,

  • Page 11
    ... and safest storm restoration in the company's history following two back-to-back, devastating hurricanes. We received both the Edison Electric Institute Emergency Assistance Award and the Emergency Recovery Award for our response to n n n 2008 storms. In fact, we are the only utility to have...

  • Page 12
    ..., philanthropy, employee relations, financial and governance. In 2008, we received the Edison Electric Institute Advocacy Award for our initiatives to help the 20 to 30 percent of Entergy customers living in poverty in our service territories within Arkansas, Louisiana, Mississippi and Texas. We...

  • Page 13
    ...the states the Entergy utility companies serve. In 2008, LIHEAP funding to Arkansas, Louisiana, Mississippi and Texas increased by $3.1 million, up 3 percent over 2007. In addition, Entergy along with its employees and customers raised more than $2.3 million in local bill payment assistance funds in...

  • Page 14
    "You have to accept whatever comes

  • Page 15
    ... of requesting interim recovery, last fall Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana, LLC and Entergy New Orleans, Inc. collectively accessed $229 million from funded storm reserves. The Arkansas Public Service Commission also approved a process for Entergy Arkansas, Inc. to recover...

  • Page 16
    ... acquire generation resources and invest in infrastructure to address a long-term short position in our utility service territories of up to three gigawatts. Last year Entergy Arkansas completed its acquisition of the Ouachita Power Facility and Entergy Gulf States Louisiana completed...

  • Page 17
    ... Restoration in Company History number of days* 16 13 8 124 n Mississippi enacted new baseload legislation that will facilitate development of new nuclear resources at Grand Gulf. Entergy Mississippi continues to work with the relatively new commissioners on the Mississippi Public Service...

  • Page 18

  • Page 19
    ... with exacting attention to safety and security. U nder the pending spin-off transaction, our nonutility nuclear ï¬,eet will be owned by Enexus Energy Corporation, a premier generation company, and operated by EquaGen LLC, a joint venture owned equally by Entergy Corporation and Enexus. We pursued...

  • Page 20
    ... to give the company access to the vendor's engineering programs. These awards are given to nuclear energy operators for innovations that improve safety, economics or plant performance. In addition, in August 2008, Indian Point Energy Center successfully placed into service a new state-of-the-art...

  • Page 21
    ... power prices and/or incremental investment. A combination of heat rate expansion, carbon legislation, capacity markets and/or changes in gas prices are expected to affect power prices. Non-Utility Nuclear Fleet Production Costs $ per MWh 30 73 Before ETR ownership 2008 Even as we pursued plans...

  • Page 22
    "I have been impressed with the urgency of doing.

  • Page 23
    ... Entergy, we live with the climate change issue on an almost daily basis. Our industry is responsible for about a third of total U.S. greenhouse gas emissions. Our service territories, including our corporate headquarters and the homes of many of our employees, lie along the U.S. Gulf Coast, an area...

  • Page 24
    ... standard also does nothing to help develop a technological solution for conventional coal plants. In fact, a renewable portfolio standard would only divert attention from this vital mission. A strong cap-and-trade program that puts a price on CO2 emissions is the best way to make renewable energy...

  • Page 25
    ... cap. Low-income customers will face a greater burden as they typically spend a higher percentage of their income on energy. Recognizing the regressive nature of carbon policy, Entergy believes assistance must be directed to low-income households to help offset the cost of any climate change policy...

  • Page 26
    "We shall neither fail nor falter; we shall not weaken or tire... Give us the tools and we will finish the job." - Sir Winston Churchill

  • Page 27
    ...future holds. Our long-term aspirations, point-of-view-driven business model and experienced employees drive our success. As a result, we are ready to: n Strive to continually deliver top-quartile total shareholder returns. n Re-engage with power markets in the future in order to purchase power, and...

  • Page 28
    ... capacity factors at its nuclear generating facilities Entergy's ability to develop and execute on a point of view regarding future prices of electricity, natural gas, and other energy-related commodities prices for power generated by Entergy's non-utility generating facilities, the ability to hedge...

  • Page 29
    ... Operating revenues (in millions) Billed electric energy sales (GWh) (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...

  • Page 30
    ...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. n N ON-UTILITY NUCLEAR owns and operates six nuclear power plants located in...

  • Page 31
    ... on Entergy Nuclear FitzPatrick's, Entergy Nuclear Indian Point 2's, Entergy Nuclear Indian Point 3's, and Entergy Nuclear Operations, Inc.'s status as lightly regulated entities in New York, given that they will continue to be competitive wholesale generators. The New York State Attorney General...

  • Page 32
    ... initiatives, the amount of restoration costs that it may ultimately recover, or the timing of such recovery. ENTERGY ARKANSAS JANUARY 2009 ICE STORM In September 2008, Hurricane Gustav and Hurricane Ike caused catastrophic damage to portions of Entergy's service territories in Louisiana and Texas...

  • Page 33
    ... price variance was partially offset by: n t he absence of interim storm recoveries through the formula rate plans at Entergy Louisiana and Entergy Gulf States Louisiana which ceased upon the Act 55 financing of storm costs in the third quarter 2008; and n a credit passed on to customers...

  • Page 34
    ...31 Average realized price per MWh GWh billed Capacity factor Refueling outage days: FitzPatrick Indian Point 2 Indian Point 3 Palisades Pilgrim Vermont Yankee Realized Price per M W h When Non-Utility Nuclear acquired its six nuclear power plants it also entered into purchased power agreements with...

  • Page 35
    ... Other operation and maintenance expenses increased for the parent company, Entergy Corporation, primarily due to outside services costs of $69 million related to the planned spin-off of the Non-Utility Nuclear business. Interest charges decreased primarily due to lower interest rates on borrowings...

  • Page 36
    ... market of Entergy New Orleans' share of the output of Grand Gulf, pursuant to City Council approval of measures proposed by Entergy New Orleans to address the reduction in Entergy New Orleans' retail customer usage caused by Hurricane Katrina and to provide revenue support for the costs of Entergy...

  • Page 37
    ... 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 38
    ... Hurricane Gustav, Hurricane Ike, and the Arkansas ice storms. Nevertheless, each Utility operating company is responsible for its storm restoration cost obligations and for recovering its storm-related costs. In October 2008, Entergy Gulf States Louisiana, Entergy Louisiana, and Entergy New Orleans...

  • Page 39
    ...Capital lease payments(2) Operating leases(2) Purchase obligations(3) ˜ 2009 $1,114 $ 162 $ 90 $1,548 Total $16,516 $ 505 $ 448 $ 9,250 Entergy Arkansas Entergy Gulf States Louisiana August 2012 Entergy Louisiana August 2012 Entergy Mississippi May 2009 Entergy Mississippi May 2009 Entergy Texas...

  • Page 40
    ... portfolio with new or repowered generation resources. Opportunities resulting from the supply plan initiative, including new 38 In April 2007, Entergy Louisiana announced that it intended to pursue the solid fuel repowering of a 538 MW unit at its Little Gypsy plant, and Entergy Gulf States...

  • Page 41
    ... Little Gypsy proceedings because Entergy Louisiana needed to update its estimated project cost and schedule in order to support the request to recover cash earnings on its construction work in progress (CWIP) costs. On October 16, 2008, Entergy Louisiana, together with Entergy Gulf States Louisiana...

  • Page 42
    ... plant outages and storms, could affect the timing and level of internally generated funds in the future. Provisions within the Articles of Incorporation or pertinent indentures and various other agreements relating to the long-term debt and preferred stock of certain of Entergy Corporation...

  • Page 43
    ...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 to defray gas and electric utility system repair costs...

  • Page 44
    ... revenues due to customer outages, the receipt of $181 million of Community Development Block Grant funds by Entergy New Orleans in 2007, and a $100 million increase in pension contributions in 2008. N on-Utility Nuclear provided $1,255 million in cash from operating activities in 2008 compared to...

  • Page 45
    ...Non-Utility Nuclear purchased the 798 MW Palisades nuclear power plant located near South Haven, Michigan for a net cash payment of $336 million. n I n March 2008, Entergy Gulf States Louisiana purchased the Calcasieu Generating Facility, a 322 MW simple-cycle, gas-fired power plant located near...

  • Page 46
    ... 2008. Recovery of all Grand Gulf costs through the fuel adjustment clause was continued. Gas base rates increased by $4.75 million in November 2006 and increased by additional $1.5 million in March 2007 and an additional $4.75 million in November 2007. The settlement called for Entergy New Orleans...

  • Page 47
    ... fuel and gas-fired generation available to each company and 45 the costs of natural gas and purchased power. Entergy Louisiana, Entergy Gulf States Louisiana, Entergy Texas, and Entergy Mississippi are more dependent upon gas-fired generation sources than Entergy Arkansas or Entergy New Orleans...

  • Page 48
    ... the FERC's remedy based on calendar year 2006 production costs. Entergy Arkansas recorded a corresponding regulatory asset for its right to collect the payments from its customers, and Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy Texas recorded corresponding...

  • Page 49
    ...-to-date information. The preliminary estimate was recorded based on the following estimate of the payments/receipts among the Utility operating companies for 2009 (in millions): Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas...

  • Page 50
    ...Time Information Systems (OASIS) node for purposes of processing and evaluating transmission service requests and ensuring compliance with the Utility operating companies' obligation to post transmission-related information. d eveloping a base plan for the Utility operating companies' transmission...

  • Page 51
    ... due to credit support requirements within supply or sales agreements. C OMMODIT Y P RICE R ISK Power Generation The Utility operating companies (except Entergy New Orleans) have been parties to several proceedings before the FERC in which independent generation entities (GenCos) seek refunds of...

  • Page 52
    ... value sharing agreements, Entergy's Non-Utility Nuclear business agreed to make annual payments to NYPA based on the generation output of the Indian Point 3 and FitzPatrick plants from January 2007 through December 2014. Entergy's Non-Utility Nuclear business will pay NYPA $6.59 per MWh for power...

  • Page 53
    ... Utility business, portions of River Bend and Grand Gulf are not included in rate base, which could reduce the revenue that would otherwise be recovered for the applicable portions of those units' generation. In the non-nuclear wholesale assets business, Entergy's investments in merchant generation...

  • Page 54
    ... year of service by the employees eligible for pension benefits. The recent decline in stock market prices will affect Entergy's planned levels of contributions in the future. Minimum required funding calculations as determined under Pension Protection Act guidance are performed annually as of...

  • Page 55
    ... after December 15, 2008. An entity may not apply SFAS 160 before that date. Pursuant to SFAS 160, beginning in 2009, Entergy will prospectively reclassify as equity its subsidiary preferred stock without sinking fund. In March 2008 the FASB issued Statement of Financial Accounting Standards No. 161...

  • Page 56
    ...by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 27, 2009 expressed an unqualified opinion on the Corporation's internal control over financial reporting. DELOITTE & TOUCHE LLP New Orleans, Louisiana February 27, 2009 J. WAYNE LEONARD Chairman...

  • Page 57
    ... 31, 2008 of the Corporation and our report dated February 27, 2009 expressed an unqualified opinion on those consolidated financial statements. DELOITTE & TOUCHE LLP New Orleans, Louisiana February 27, 2009 Internal Control Over Financial Reporting The management of Entergy Corporation is...

  • Page 58
    ... 84,230 1,784,793 10,932,158 Electric Natural gas Competitive businesses Total OPERATING EXPENSES 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...

  • Page 59
    ...common stock Capital stock and other expenses Total Retained Earnings - End of period ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) $1,132,602 Balance at beginning of period: Accumulated derivative instrument fair value changes Pension and other postretirement liabilities Net unrealized investment...

  • Page 60
    ... Balance Sheets In thousands, as of December 31, ASSETS CURRENT ASSETS 2008 2007 Cash and cash equivalents: Cash Temporary cash investments - at cost, which approximates market Total cash and cash equivalents Securitization recovery trust account Accounts receivable: Customer Allowance...

  • Page 61
    ...' EQUITY CURRENT LIABILITIES 2008 2007 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...

  • Page 62
    ...charges (credits) - net Depreciation, amortization, and decommissioning Deferred income taxes, investment tax credits, and non-current taxes accrued Equity in earnings (loss) of unconsolidated equity affiliates net of dividends Changes in working capital: Receivables Fuel inventory Accounts payable...

  • Page 63
    ...Dividends paid: Common stock Preferred equity Net cash ï¬,ow used in financing activities Effect of exchange rates on cash and cash equivalents Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Effect of the reconsolidation of Entergy New Orleans on cash and...

  • Page 64
    ... Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans operating expenses and capital costs attributable to Grand Gulf. The capital costs are computed by allowing a return on System Energy's common equity funds allocable to its net investment in Grand Gulf, plus System Energy...

  • Page 65
    .... Investment tax credits are deferred and amortized based upon the average useful life of the related property, in accordance with ratemaking treatment. Utility Business: Entergy Arkansas Independence Unit 1 Coal Common Facilities Coal White Bluff Units 1 and 2 Coal Entergy Gulf States Louisiana...

  • Page 66
    ... 31, 2008 that obligated the holders to purchase a certain number of shares of Entergy common stock for a stated price no later than February 17, 2009. Under the terms of the purchase contracts, Entergy attempted to remarket the notes payable associated with the equity units in February 2009 but was...

  • Page 67
    ...) on investment securities in other regulatory liabilities/assets. For the nonregulated 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...

  • Page 68
    ... its accounting policies and based on the historic treatment of such costs in its service territories (except for Entergy Arkansas because it discontinued regulatory storm reserve accounting in July 2007 as a result of an APSC order), because management believes that recovery through some form of...

  • Page 69
    ... Fuel and Purchased Power Cost Recovery continued Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas are allowed to recover certain fuel and purchased power costs through fuel mechanisms included in electric and gas rates...

  • Page 70
    ... fuel and purchased power costs for the upcoming month based upon the level of such costs from the prior month. Entergy Gulf States Louisiana's purchased gas adjustments include estimates for the billing month adjusted by a surcharge or credit that arises from an annual reconciliation of fuel costs...

  • Page 71
    ... October 2006 formula rate plan filing settlement. Entergy New Orleans' gas rate schedules include an adjustment to reï¬,ect 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 72
    ... approved Entergy Arkansas' request to defer 2008 extraordinary storm restoration costs for recovery via a storm damage rider in 2009. The APSC reduced Entergy Arkansas' request by $4 million to allow for standard variation in storm costs from the normalized level in base rates. Entergy Arkansas is...

  • Page 73
    ...'s accounting policy for collection of sales taxes, Entergy Mississippi does not report the collections as revenue because it is merely acting as the billing and collection agent for the state. Entergy New Orleans In December 2005, the U.S. Congress passed the Katrina Relief Bill, a hurricane aid...

  • Page 74
    ... supported Entergy Arkansas' acquisition of the plant, but opposed the sale of one-third of the capacity and energy to Entergy Gulf 72 States Louisiana. The industrial group AEEC opposed Entergy Arkansas' purchase of the plant. The Arkansas attorney general opposed recovery of the non-fuel costs...

  • Page 75
    ... storm damage accrual. Entergy Louisiana then implemented a $16.9 million formula rate plan increase, subject to refund, effective the first billing cycle in September 2008, comprised of $12.6 million of recovery of incremental and deferred capacity costs and $4.3 million based on a cost of service...

  • Page 76
    ... includes removal of interim storm cost recovery and a reduction in the storm damage accrual. Entergy Gulf States Louisiana then implemented a $16.0 million formula rate plan increase, subject to refund, effective the first billing cycle in October 2008 to collect previously deferred and ongoing...

  • Page 77
    ... to allow recovery of all Grand Gulf costs through the fuel adjustment clause stays in place during the rate-effective period (a significant portion of Grand Gulf costs was previously recovered through base rates). At the same time as it made its formula rate plan filings, Entergy New Orleans also...

  • Page 78
    ... Orleans, Entergy Corporation, and Entergy Services are a single business enterprise, and, as such, are liable in solido with Entergy New Orleans for any claims asserted in the Entergy New Orleans fuel adjustment clause lawsuit and the Entergy New Orleans rate of return lawsuit, and, alternatively...

  • Page 79
    ... certain incremental purchased power capacity costs, adjusted for load growth, not in excess of five percent of its annual base rate revenues (as discussed above in "Deferred Fuel Costs," in December 2005 Entergy Texas implemented a PUCT-approved annual incremental purchased capacity recovery rider...

  • Page 80
    ... (E NTE RGY A RK ANSAS) In October 2004, Arkansas Electric Cooperative Corporation (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 81
    ...(1,026,203) Plant-related basis differences (4,898,373) Power purchase agreements (762,576) Nuclear decommissioning trusts (1,297,585) Other (311,558) Total (8,296,295) Deferred tax assets: Accumulated deferred investment tax credit 123,810 Capital losses 131,690 Net operating loss carryforwards 387...

  • Page 82
    ... Utility operating companies (except Entergy New Orleans) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the facility maturity date may occur. Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy Texas...

  • Page 83
    ... due June 2008 - Entergy Gulf States Louisiana(f) 3.875% Series due August 2008 - Entergy New Orleans Libor + 0.75% Series due December 2008 - Entergy Gulf States Louisiana(f) Libor + 0.40% Series due December 2009 - Entergy Gulf States Louisiana(f) 4.5% Series due June 2010 - Entergy Arkansas 4.67...

  • Page 84
    ... at an annual rate of 5.75%, and (2) a purchase contract that obligated the holder of the equity unit to purchase for $50 between 0.5705 and 0.7074 shares of Entergy Corporation common stock on or before Februar y 17, 2009. Entergy paid the holders quarterly contract adjustment payments of 1.875...

  • Page 85
    ... secured transition bonds In November 2000, Entergy's Non-Utility Nuclear business purchased the FitzPatrick and Indian Point 3 power plants in a seller-financed transaction. Entergy issued notes to NYPA with seven annual installments of approximately $108 million commencing one year from the date...

  • Page 86
    ... related company (dollars in thousands): Shares/Units Authorized 2008 Entergy Corporation Utility: Preferred Stock or Membership Interests without sinking fund: Entergy Arkansas, 4.32% - 6.45% Series Entergy Gulf States Louisiana, Series A 8.25% Entergy Louisiana, 6.95% Series(a) Entergy Mississippi...

  • Page 87
    ... 2009. 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 a program under which Entergy was authorized to repurchase up to $1.5 billion of its common stock through 2006. Entergy...

  • Page 88
    ... Grand Gulf is owned by a nonaffiliated company (SMEPA) that would share on a pro-rata basis in any retrospective premium assessment to System Energy under the Price-Anderson Act). Entergy's Non-Utility Nuclear business owns and operates six nuclear power reactors and owns the shutdown Indian Point...

  • Page 89
    ... Utility: Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Non-Utility Nuclear $21.0 $17.0 $18.5 $0.07 $0.07 N/A $14.7 $87.8 Entergy maintains property insurance for its nuclear units in excess of the NRC's minimum...

  • Page 90
    ... through a charge to expense, to reï¬,ect the time value of money for this present value obligation. The accretion will Utility: Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Non-Utility Nuclear(b) Other $472...

  • Page 91
    ... separate interest component charged to operations, in 2008, 2007, and 2006 for the four Registrant Subsidiaries that own nuclear power plants (in millions): 2008 Lease Payments Interest Entergy Arkansas $ 63.5 Entergy Gulf States Louisiana 29.3 Entergy Louisiana 44.6 System Energy 33.0 Total $170...

  • Page 92
    ... 1986, as amended. The assets of the plans include common 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 a component of cost of service in each of their jurisdictions...

  • Page 93
    ... into Entergy Gulf States Louisiana and Entergy Texas.) Such obligations are being amortized over a 20-year period that began in 1993. For the most part, the Registrant Subsidiaries recover SFAS 106 costs from customers and are required to contribute postretirement benefits collected in rates to...

  • Page 94
    ...directives, Entergy Arkansas, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy contribute the postretirement benefit costs collected in rates to trusts. System Energy is funding, on behalf of Entergy Operations, postretirement benefits associated with Grand Gulf. C OMPONE...

  • Page 95
    ...Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy contribute postretirement benefit costs collected in rates into trusts. System Energy is funding, on behalf of Entergy Operations, postretirement benefits associated with Grand Gulf. The mix of assets in the trusts is based...

  • Page 96
    ... the net periodic pension and other postretirement benefit costs for 2008, 2007, and 2006 were as follows: 2008 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...

  • Page 97
    ...December 31, 2008, there were 3,609,585 authorized shares remaining for stock-based awards, including 2,000,000 for non-option grants. S TOCK O P TIONS Stock options are granted at exercise prices that equal the closing market price of Entergy Corporation common stock on the date of grant. Generally...

  • Page 98
    ... 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...

  • Page 99
    ...BUSINESS SEGMENT INFORMATION continued Entergy's reportable segments as of December 31, 2008 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...

  • Page 100
    ... 2008, Entergy Gulf States Louisiana purchased the Calcasieu Generating Facility, a 322 MW simple-cycle gas-fired power plant located near the city of Sulphur in southwestern Louisiana, for approximately $56 million from a subsidiary of Dynegy, Inc. Entergy Gulf States Louisiana received the plant...

  • Page 101
    ... Gulf States Louisiana is scheduled to report the results of that study by March 30, 2009. PALISADE S In April 2007, Entergy's Non-Utility Nuclear business purchased the 798 MW Palisades nuclear energy plant located near South Haven, Michigan from Consumers Energy Company for a net cash payment...

  • Page 102
    ... of these swaps are based on a portion of projected annual purchases of gas for electric generation and projected winter purchases for gas distribution at Entergy Gulf States Louisiana and Entergy New Orleans. Entergy's exposure to market risk is determined by a number of factors, including the size...

  • Page 103
    ...are available, and model-generated prices using quoted forward gas market curves and estimates regarding heat rates to convert gas to power and the costs associated with the transportation of the power from the plants' busbar to the contract's point of delivery, generally a power market hub, for the...

  • Page 104
    ... TRUST FUNDS continued 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...

  • Page 105
    ... of issuance of the notes. Entergy New Orleans will pay interest on the notes from their date of issuance at the Louisiana judicial rate of interest plus 1%. The Louisiana judicial rate of interest is 9.5% for 2007, 8.5% for 2008, and 5.5% for 2009. n Entergy New Orleans repaid in full, in cash...

  • Page 106
    ... Committees 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...

  • Page 107
    ...utility accounting, rate making, finance, tax, and systems development before being promoted to Senior Vice President and Chief Accounting Officer in 2007. Age, 50 Terry R. Seamons Senior Vice President, Human Resources and Administration. Joined Entergy in 2007. Former Vice President and Managing...

  • Page 108
    ... 1,803 Million BTU 121,331 Pounds 227,630 Pounds Environmental impact estimates were made using the Environmental Defense Paper Calculator. For more information visit http://www.papercalculator.org Cert no. SGS-COC-3048 Entergy Corporation Post Office Box 61000 New Orleans, LA 70161 entergy.com