Entergy 2008 Annual Report Download - page 105

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ENTERGY CORPORATION AND SUBSIDIARIES 2008
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Notes to Consolidated Financial Statements concluded
n
Entergy New Orleans issued notes due in three years in
satisfaction of its affiliate prepetition accounts payable
(approximately $74 million, including interest), including
its indebtedness to the Entergy System money pool. Entergy
New Orleans included in the principal amount of the notes
accrued interest from September 23, 2005 at the Louisiana
judicial rate of interest for 2005 (6%) and 2006 (8%), and
at the Louisiana judicial rate of interest plus 1% for 2007
through the date 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, the outstanding
borrowings under the debtor-in-possession credit agreement
between Entergy New Orleans and Entergy Corporation
(approximately $67 million).
nEntergy New Orleans’ first mortgage bonds remain outstanding
with their stated maturity dates and interest terms. Pursuant to
an agreement with its first mortgage bondholders, Entergy New
Orleans paid the first mortgage bondholders an amount equal
to the one year of interest from the bankruptcy petition date
that the bondholders had waived previously in the bankruptcy
proceeding (approximately $12 million).
nEntergy New Orleans’ preferred stock will remain outstanding
on its stated dividend terms, and Entergy New Orleans paid its
unpaid preferred dividends in arrears (approximately
$1 million).
nLitigation claims were generally unaltered, and will generally
proceed as if Entergy New Orleans had not filed for bankruptcy
protection, with exceptions for certain claims.
With confirmation of the plan of reorganization, Entergy
reconsolidated Entergy New Orleans in the second quarter 2007,
retroactive to January 1, 2007. Because Entergy owns all of the
common stock of Entergy New Orleans, reconsolidation does
not affect the amount of net income that Entergy records from
Entergy New Orleans’ operations for any current or prior periods,
but does result in Entergy New Orleans’ results being included
in each individual income statement line item in 2007, rather
than just its net income being presented as “Equity in earnings of
unconsolidated equity affiliates,” as remains the case for 2006.
Entergy’s income statement for 2006 includes $220 million in
operating revenues and $46 million in purchased power expenses
from transactions between Entergy New Orleans and Entergy’s
subsidiaries. Because Entergy owns all of the common stock of
Entergy New Orleans, however, the deconsolidation of Entergy
New Orleans in 2005 and 2006 did not affect the amount of net
income Entergy recorded resulting from Entergy New Orleans’
operations.
NOTE 19. QUARTERLY FINANCIAL DATA (UNAUDITED)
Operating results for the four quarters of 2008 and 2007 for Entergy
Corporation and subsidiaries were (in thousands):
Operating Operating Net
Revenues Income Income
2008:
First Quarter $2,864,734 $606,233 $308,749
Second Quarter $3,264,271 $568,109 $270,954
Third Quarter $3,963,884 $752,092 $470,289
Fourth Quarter $3,000,867 $356,733 $170,574
2007:
First Quarter $2,694,060 $438,594 $212,195
Second Quarter $2,769,352 $478,040 $267,602
Third Quarter $3,289,087 $810,332 $461,159
Fourth Quarter $2,731,899 $329,402 $193,893
EA R N I N G S P E R AV E R A G E CO M M O N SH A R E
2008 2007
Basic Diluted Basic Diluted
First Quarter $1.60 $1.56 $1.06 $1.03
Second Quarter $1.42 $1.37 $1.36 $1.32
Third Quarter $2.47 $2.41 $2.37 $2.30
Fourth Quarter $0.90 $0.89 $1.00 $0.96
The business of the Utility operating companies is subject to
seasonal fluctuations with the peak periods occurring during the
third quarter.