Entergy 2009 Annual Report Download - page 69

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ENTERGY CORPORATION AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements include the accounts of Entergy Corporation and its
subsidiaries. As required by generally accepted accounting principles, all significant intercompany transactions have
been eliminated in the consolidated financial statements. The Utility operating companies and many other Entergy
subsidiaries maintain accounts in accordance with FERC and other regulatory guidelines. Certain previously
reported amounts have been reclassified to conform to current classifications, with no effect on net income or
shareholders' (or members') equity.
Use of Estimates in the Preparation of Financial Statements
In conformity with generally accepted accounting principles, the preparation of Entergy Corporation's
consolidated financial statements requires management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, revenues, and expenses and the disclosure of contingent assets and liabilities.
Adjustments to the reported amounts of assets and liabilities may be necessary in the future to the extent that future
estimates or actual results are different from the estimates used.
Revenues and Fuel Costs
Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy
Texas generate, transmit, and distribute electric power primarily to retail customers in Arkansas, Louisiana,
Louisiana, Mississippi, and Texas, respectively. Entergy Gulf States Louisiana also distributes natural gas to retail
customers in and around Baton Rouge, Louisiana. Entergy New Orleans sells both electric power and natural gas to
retail customers in the City of New Orleans, except for Algiers, where Entergy Louisiana is the electric power
supplier. Entergy's Non-Utility Nuclear segment derives almost all of its revenue from sales of electric power
generated by plants owned by the Non-Utility Nuclear segment.
Entergy recognizes revenue from electric power and natural gas sales when power or gas is delivered to
customers. To the extent that deliveries have occurred but a bill has not been issued, Entergy's Utility operating
companies accrue an estimate of the revenues for energy delivered since the latest billings. The Utility operating
companies calculate the estimate based upon several factors including billings through the last billing cycle in a
month, actual generation in the month, historical line loss factors, and prices in effect in Entergy's Utility operating
companies' various jurisdictions. Changes are made to the inputs in the estimate as needed to reflect changes in
billing practices. Each month the estimated unbilled revenue amounts are recorded as revenue and unbilled accounts
receivable, and the prior month's estimate is reversed. Therefore, changes in price and volume differences resulting
from factors such as weather affect the calculation of unbilled revenues from one period to the next, and may result in
variability in reported revenues from one period to the next as prior estimates are reversed and new estimates
recorded.
Entergy's Utility operating companies' rate schedules include either fuel adjustment clauses or fixed fuel
factors, which allow either current recovery in billings to customers or deferral of fuel costs until the costs are billed
to customers. Where the fuel component of revenues is billed based on a pre-determined fuel cost (fixed fuel factor),
the fuel factor remains in effect until changed as part of a general rate case, fuel reconciliation, or fixed fuel factor
filing.
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