Entergy 2008 Annual Report Download - page 100

9898
ENTERGY CORPORATION AND SUBSIDIARIES 2008
Notes to Consolidated Financial Statements continued
98
Earnings were negatively affected in the fourth quarter 2007 by
expenses of $22.2 million ($13.6 million net-of-tax) for Utility and
$29.9 million ($18.4 million net-of-tax) for Non-Utility Nuclear
recorded in connection with a nuclear operations fleet alignment.
This process was undertaken with the goals of eliminating
redundancies, capturing economies of scale, and clearly establishing
organizational governance. Most of the expenses related to the
voluntary severance program offered to employees. Approximately
200 employees from the Non-Utility Nuclear business and 150
employees in the Utility business accepted the voluntary severance
program offers.
Revenues and pre-tax income (loss) related to the Competitive
Retail Services business’ discontinued operations were as follows:
(in thousands):
2008 2007 2006
Operating revenues $– $– $134,444
Pre-tax income (loss) $– $– $ (429)
There were no assets or liabilities related to the Competitive
Retail Services business’ discontinued operations as of December
31, 2008 and 2007.
GE O G R A P H I C AR E A S
For the years ended December 31, 2008 and 2007, Entergy derived
none of its revenue from outside of the United States. For the year
ended December 31, 2006, Entergy derived less than 1% of its
revenue from outside of the United States.
As of December 31, 2008 and 2007, Entergy had no long-lived
assets located outside of the United States.
NOTE 14. EQUITY METHOD INVESTMENTS
As of December 31, 2008, Entergy owns investments in the
following companies that it accounts for under the equity method
of accounting:
Company Ownership Description
Entergy-Koch, LP 50% partnership interest Entergy-Koch was in
the energy commodity
marketing and trading
business and gas
transportation and storage
business until the fourth
quarter of 2004 when these
businesses were sold.
RS Cogen LLC 50% member interest Co-generation project
that produces power and
steam on an industrial and
merchant basis in the Lake
Charles, Louisiana area.
Top Deer 50% member interest Wind-powered electric
generation joint venture.
Following is a reconciliation of Entergy’s investments in equity
affiliates (in thousands):
2008 2007 2006
Beginning of year $ 78,992 $229,089 $ 296,784
Entergy New Orleans(a) – (153,988) –
Income (loss) from the investments (11,684) 3,176 93,744
Distributions received – – (163,697)
Dispositions and other adjustments (1,061) 715 2,258
End of year $ 66,247 $ 78,992 $ 229,089
(a) As a result of Entergy New Orleans’ bankruptcy filing in September 2005,
Entergy deconsolidated Entergy New Orleans and reflected Entergy
New Orleans’ financial results under the equity method of accounting
retroactive to January 1, 2005. In May 2007, with confirmation of the
plan of reorganization, Entergy reconsolidated Entergy New Orleans
retroactive to January 1, 2007 and no longer accounts for Entergy
New Orleans under the equity method of accounting. See Note 18 to the
financial statements for further discussion of the bankruptcy proceeding.
The following is a summary of combined financial information
reported by Entergy’s equity method investees (in thousands):
2008 2007 2006(1)
Income Statement Items
Operating revenues $ 60,350 $ 65,600 $632,820
Operating income (loss) $ (5,320) $ 22,606 $ 27,452
Net income (loss) $(23,361) $ 6,257 $212,210(2)
Balance Sheet Items
Current assets $ 91,559 $ 96,624
Noncurrent assets $353,562 $372,421
Current liabilities $106,697 $ 92,423
Noncurrent liabilities $217,792 $229,037
(1) Includes financial information for Entergy New Orleans which
was accounted for under the equity method of accounting in 2006.
(2) Includes gains recorded by Entergy-Koch on the sales of its energy trading
and pipeline businesses.
RE L A T E D -PA R T Y TR A N S A C T I O N S A N D GU A R A N T E E S
See Note 18 to the financial statements for a discussion of the
Entergy New Orleans bankruptcy proceedings and activity between
Entergy and 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 of capacity and energy
from RS Cogen in 2006. Entergy Gulf States Louisiana purchased
approximately $82.5 million, $68.4 million, and $64.3 million of
electricity generated from Entergy’s share of RS Cogen in 2008,
2007, and 2006, respectively. Entergy’s operating transactions with
its other equity method investees were not significant in 2008,
2007, or 2006.
NOTE 15. ACQUISITIONS AND DISPOSITIONS
CA L C A S I E U
In March 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,
materials and supplies, SO2 emission allowances, and related real
estate in the transaction. The FERC and the LPSC approved the
acquisition.