Entergy 2009 Annual Report Download - page 149

Entergy Corporation and Subsidiaries
Notes to Financial Statements
145
The fair value of debt securities, summarized by contractual maturities, as of December 31, 2009 and 2008
are as follows:
2009 2008
(In Millions)
less than 1 year $31 $21
1 year - 5 years 676 526
5 years - 10 years 388 490
10 years - 15 years 131 146
15 years - 20 years 34 52
20 years+ 163 161
Total $1,423 $1,396
During the years ended December 31, 2009, 2008, and 2007, proceeds from the dispositions of securities
amounted to $2,571 million, $1,652 million, and $1,583 million, respectively. During the years ended December 31,
2009, 2008, and 2007, gross gains of $80 million, $26 million, and $5 million, respectively, and gross losses of $30
million, $20 million, and $4 million, respectively, were reclassified out of other comprehensive income into earnings.
Other-than-temporary impairments and unrealized gains and losses
Entergy evaluates unrealized losses at the end of each period to determine whether an other-than-temporary
impairment has occurred. Effective January 1, 2009, Entergy adopted an accounting pronouncement providing
guidance regarding recognition and presentation of other-than-temporary impairments related to investments in debt
securities. The assessment of whether an investment in a debt security has suffered an other-than-temporary
impairment is based on whether Entergy has the intent to sell or more likely than not will be required to sell the debt
security before recovery of its amortized costs. Further, if Entergy does not expect to recover the entire amortized
cost basis of the debt security, an other-than-temporary impairment is considered to have occurred and it is measured
by the present value of cash flows expected to be collected less the amortized cost basis (credit loss). For debt
securities held as of January 1, 2009 for which an other-than-temporary impairment had previously been recognized
but for which assessment under the new guidance indicates this impairment is temporary, Entergy recorded an
adjustment to its opening balance of retained earnings of $11.3 million ($6.4 million net-of-tax). Entergy did not
have any material other-than-temporary impairments relating to credit losses on debt securities in 2009. The
assessment of whether an investment in an equity security has suffered an other-than-temporary impairment continues
to be based on a number of factors including, first, whether Entergy has the ability and intent to hold the investment
to recover its value, the duration and severity of any losses, and, then, whether it is expected that the investment will
recover its value within a reasonable period of time. Entergy's trusts are managed by third parties who operate in
accordance with agreements that define investment guidelines and place restrictions on the purchases and sales of
investments. Non-Utility Nuclear recorded charges to other income of $86 million in 2009, $50 million in 2008, and
$5 million in 2007, resulting from the recognition of the other-than-temporary impairment of certain equity securities
held in its decommissioning trust funds.
NOTE 18. ENTERGY NEW ORLEANS BANKRUPTCY PROCEEDING
As a result of the effects of Hurricane Katrina and the effect of extensive flooding that resulted from levee
breaks in and around the New Orleans area, on September 23, 2005, Entergy New Orleans filed a voluntary petition
in bankruptcy court seeking reorganization relief under Chapter 11 of the U.S. Bankruptcy Code. On May 7, 2007,
the bankruptcy judge entered an order confirming Entergy New Orleans' plan of reorganization. With the receipt of
CDBG funds, and the agreement on insurance recovery with one of its excess insurers, Entergy New Orleans waived
the conditions precedent in its plan of reorganization and the plan became effective on May 8, 2007. Following are
significant terms in Entergy New Orleans' plan of reorganization:
147