Entergy 2008 Annual Report Download - page 45

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ENTERGY CORPORATION AND SUBSIDIARIES 2008
43
Management’s Financial Discussion and Analysis continued
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Investing Activities
2008 Compared to 2007
Net cash used in investing activities increased by $472 million
in 2008 compared to 2007. The following activity is notable in
comparing 2008 to 2007:
nConstruction expenditures were $634 million higher in 2008
than in 2007, primarily due to storm restoration spending
caused by Hurricane Gustav and Hurricane Ike and increased
spending on various projects by the Utility that are discussed
further in “Capital Expenditure Plans and Other Uses of
Capital” above.
nIn April 2007, 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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.
nIn September 2008, Entergy Arkansas purchased the Ouachita
Plant, a 789 MW gas-fired plant located 20 miles south of
the Arkansas state line near Sterlington, Louisiana, for
approximately $210 million.
nNon-Utility Nuclear made a $72 million payment to NYPA
in 2008 under the value sharing agreements associated with
the acquisition of the FitzPatrick and Indian Point 3 power
plants. See Note 15 to the financial statements for additional
discussion of the value sharing agreements.
nThe investment of a net total of $45 million in escrow accounts
for construction projects in 2008.
nEntergy Mississippi realized proceeds in 2007 from $100 million
of investments held in trust that were received from a bond
issuance in 2006 and used to redeem bonds in 2007.
2007 Compared to 2006
Net cash used in investing activities increased by $190 million
in 2007 compared to 2006. The following activity is notable in
comparing 2007 to 2006:
nConstruction expenditures were $55 million lower in 2007 than
in 2006, primarily due to a decrease of $44 million in Non-
Utility Nuclear spending.
nIn 2006, Entergy received proceeds from the sale of the retail
electric portion of the Competitive Retail Services business
operating in the Electric Reliability Council of Texas (ERCOT)
region of Texas and the sale of the non-nuclear wholesale asset
business’ remaining interest in a power development project.
nNon-Utility Nuclear purchased the Palisades power plant in
April 2007.
nEntergy Mississippi purchased the Attala power plant in
January 2006.
nInsurance proceeds received increased by $64 million in 2007
because of payments received on Hurricane Katrina and
Hurricane Rita claims.
Financing Activities
2008 Compared to 2007
Net cash used in financing activities decreased $151 million in 2008
compared to 2007. The following activity is notable in comparing
2008 to 2007:
nEntergy Corporation increased the net borrowings under
its revolving credit facility by $986 million in 2008 and by
$1,431 million in 2007. See Note 4 to the financial statements
for a description of the Entergy Corporation credit facility.
nEntergy Arkansas issued $300 million of 5.40% Series First
Mortgage Bonds in July 2008.
nEntergy Louisiana issued $300 million of 6.50% Series First
Mortgage Bonds in August 2008.
nEntergy Louisiana repurchased, prior to maturity, $60 million
of Auction Rate governmental bonds in April 2008.
nEntergy New Orleans paid, at maturity, its $30 million 3.875%
Series First Mortgage Bonds in August 2008.
nUnder the terms of the debt assumption agreement between
Entergy Texas and Entergy Gulf States Louisiana that is
discussed in Note 5 to the financial statements, Entergy Texas
paid at maturity $309.1 million of Entergy Gulf States Louisiana
First Mortgage Bonds in 2008.
nThe Utility operating companies increased the borrowings
outstanding on their long-term credit facilities by $100 million
in 2008.
nA subsidiary of Entergy Texas issued $329.5 million of
securitization bonds in June 2007. See Note 5 to the financial
statements for additional information regarding the
securitization bonds.
nEntergy Corporation paid $237 million of notes payable at their
maturities in 2008.
nEntergy Mississippi redeemed $100 million of First Mortgage
Bonds in 2007.
nEntergy Corporation repurchased $512 million of its common
stock in 2008 and $1,216 million of its common stock in 2007.
nEntergy Corporation increased the dividend on its common
stock in the third quarter 2007. The quarterly dividend was
$0.54 per share for the first two quarters of 2007 and $0.75 per
share for each quarter since then.
2007 Compared to 2006
Net cash used in financing activities decreased by $862 million
in 2007 compared to 2006. The following activity is notable in
comparing 2007 to 2006:
nEntergy Corporation increased the net borrowings under its
credit facility by $1,431 million in 2007, compared to increasing
the net borrowings under its credit facilities by $35 million in
2006. See Note 4 to the financial statements for a description of
the Entergy Corporation credit facility.
nA subsidiary of Entergy Texas issued $329.5 million of
securitization bonds in June 2007. See Note 5 to the financial
statements for additional information regarding the
securitization bonds.
nEntergy Mississippi redeemed $100 million of First Mortgage
Bonds in 2007 and issued $100 million of First Mortgage Bonds
in 2006.
nEntergy Corporation repurchased $1,216 million of its
common stock in 2007, and repurchased $584 million of its
common stock in 2006.
nEntergy Louisiana Holdings, Inc. redeemed all $100.5 million
of its outstanding preferred stock in June 2006.
RATE, COST-RECOVERY, AND OTHER REGULATION
ST A T E A N D LO C A L RA T E RE G U L A T I O N A N D FU E L -CO S T RE C O V E R Y
The rates that the Utility operating companies and System Energy
charge for their services significantly influence Entergy’s financial
position, results of operations, and liquidity. These companies are
regulated and the rates charged to their customers are determined
in regulatory proceedings. Governmental agencies, including the
APSC, the City Council, the LPSC, the MPSC, the 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 are discussed in
more detail in Note 2 to the financial statements.