Entergy 2009 Annual Report Download - page 23

Entergy Corporation and Subsidiaries
Management's Financial Discussion and Analysis
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a revision in the fourth quarter 2008 of estimated depreciable lives involving certain intangible assets in
accordance with formula rate plan treatment; and
an increase in plant in service.
Other income decreased primarily due to the cessation of carrying charges on storm restoration costs as a
result of the Louisiana Act 55 storm cost financing approved in 2007 and lower interest earned on the
decommissioning trust funds. This decrease was substantially offset by dividends earned of $29.5 million by Entergy
Louisiana and $10.3 million by Entergy Gulf States Louisiana on investments in preferred membership interests of
Entergy Holdings Company. The dividends on preferred stock are eliminated in consolidation and have no effect on
net income since the investment is in another Entergy subsidiary.
Non-Utility Nuclear
Other operation and maintenance expenses increased from $760 million in 2007 to $773 million in 2008.
This increase was primarily due to deferring costs for amortization from three refueling outages in 2008 compared to
four refueling outages in 2007 and to a $34 million increase associated with owning the Palisades plant, which was
acquired in April 2007, for the entire period. The increase was partially offset by a decrease of $29 million related to
expenses recorded in 2007 in connection with the nuclear operations fleet alignment, as discussed above.
Depreciation and amortization expenses increased from $99 million in 2007 to $126 million in 2008 as a
result of the acquisition of Palisades in April 2007, which contributed $12 million to the increase, as well as other
increases in plant in service.
Other income decreased primarily due to $50 million in charges to interest income in 2008 resulting from the
recognition of impairments of certain equity securities held in Non-Utility Nuclear's decommissioning trust funds that
are not considered temporary.
Other expenses increased due to increases of $23 million in nuclear refueling outage expenses and $15
million in decommissioning expenses that primarily resulted from the acquisition of Palisades in April 2007.
Parent & Other
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.
Other income decreased primarily due to the elimination for consolidation purposes of dividends earned of
$29.5 million by Entergy Louisiana and $10.3 million by Entergy Gulf States Louisiana on investments in preferred
membership interests of Entergy Holdings Company, as discussed above.
Interest charges decreased primarily due to lower interest rates on borrowings under Entergy Corporation's
revolving credit facility.
Income Taxes
The effective income tax rate for 2008 was 32.7%. The reduction in the effective income tax rate versus the
federal statutory rate of 35% in 2008 is primarily due to:
a capital loss recognized for income tax purposes on the liquidation of Entergy Power Generation, LLC in
the third quarter 2008, which resulted in an income tax benefit of approximately $79.5 million. Entergy
Power Generation, LLC was a holding company in Entergy's non-nuclear wholesale assets business;
recognition of tax benefits of $44.3 million associated with the loss on sale of stock of Entergy Asset
Management, Inc., a non-nuclear wholesale subsidiary, as a result of a settlement with the IRS; and
an adjustment to state income taxes for Non-Utility Nuclear to reflect the effect of a change in the
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