Entergy 2010 Annual Report Download

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ENTERGY 2010 ANNUAL REPORT
DO N O T L E T A N Y T H I N G T U R N Y O U F R O M Y O U R P U R P O S E .

Table of contents

  • Page 1
    E N T E R G Y 2 0 1 0 A N N U A L R E P O R T DO NOT LE T AN Y T HING T URN YOU FROM YOUR PURPOSE.

  • Page 2
    THE TRUE V ALUE BUT IN ITS OF MONEY I S NOT IN ITS POSSESSION USE . Miser sold all that he had, and bought a lump...hole, and fancy that the gold is still lying there. It will do you quite the same service; for when the gold was there, you had it not, as you did not make the slightest use of it."...

  • Page 3
    ...per share amounts) 2010 Change 2009 Change 2008 Operating revenues Net income attributable to Entergy Corporation Earnings per share Basic Diluted Average shares outstanding Basic Diluted Return on average common equity Net cash ï¬,ow provided by operating activities UTILITY ELECTRIC OPERATING...

  • Page 4
    To Our Stakeholders

  • Page 5
    ... in storm costs using a now-standard framework. n We realized sustained improvement in Utility customer service performance over the past 12 years and again in 2010, as measured by outage duration, outage frequency and regulatory outage complaints. n We set numerous records in nuclear operations...

  • Page 6
    ... Engineer er magazine Top 50 did we achieve another record businesses in Arkansas, Louisiana, Employers for 2010 year of operational earnings Mississippi and Texas. We never per share for our company (the lose sight of this fact. In 2010, tenth new record since 1999), we the Utility continued...

  • Page 7
    ... Resources, the Utility is negotiating the purchase of additional power capacity and evaluating the self-build of a 550-megawatt combined-cycle, gas-turbine generation facility at our Ninemile Point Power Plant in Westwego, La. Also planned is the 178-megawatt uprate at Grand Gulf Nuclear Station...

  • Page 8
    ... at Pilgrim, Vermont Yankee and Indian Point. Not only is each plant safe (the main criterion) but also each is vital to the regional power generation infrastructure. Published reports from the New York Independent System Operator and the ISO New England have stated that the unexpected retirement of...

  • Page 9
    .... In 2010, Entergy and the Entergy Charitable Foundation gave $16.3 million in grants, many of which fund programs to help break the cycle of poverty. We aspire to provide clean, reliable and affordable power in our utility business. We aspire to operate safe, secure and vital nuclear resources in...

  • Page 10
    ... rich natural resources that support $634 billion in annual GDP and the security of residential, commercial and industrial assets valued at more than $2 trillion are increasingly vulnerable to storm surge, ï¬,ooding and wind damage. Recent storms like hurricanes Katrina, Rita, Gustav and Ike provide...

  • Page 11
    ... of falling commodity prices, uncertainty around license renewal at our non-utility nuclear plants and our failure to achieve the spin-off of our non-utility nuclear business have left scars that will not heal until we have reversed the damages from these events and achieved success in these and...

  • Page 12
    ... possibly get at it. He tried everything he could think of to reach the water, but all his efforts were in vain. At last he collected as many stones as he could carry, and dropped them one by one with his beak into the pitcher, until he brought the water within...

  • Page 13
    ... Hurricane Katrina provided it. After Katrina devastated New Orleans in 2005, we had a decision to make. Stay in New Orleans knowing it would take incredible commitment from our employees to help rebuild the city or depart for another location. As our board of directors and leadership team struggled...

  • Page 14
    ...Grasshopper; "we have got plenty of food at present." But the Ant went on its way and continued its toil. When the winter came the Grasshopper had no food, and found itself...and grain from the stores they had collected in the summer. Then the Grasshopper knew: It is best to prepare for the days...

  • Page 15
    ... utility companies. Entergy performed highest or was ranked among the best in climate strategy, environmental policy and management system, corporate citizenship and philanthropy, corporate governance, scorecards and management systems, occupational health and safety, and price and risk management...

  • Page 16
    ... 6 to 8 percent for 2010 through 2014 (off 2009 base levels) driven by improving returns and investing capital wisely to meet customers' needs. At Entergy Wholesale Commodities, we've executed significant hedging for 2011 and 2012, providing certainty in a bearish commodity-price environment, while...

  • Page 17
    ... a $200,000 grant to the United Way of Greater New Orleans will help fund a program that matches the savings of working poor families. Our efforts to fight poverty and improve education in our utility service territory continue to earn recognition. We received the Edison Electric Institute Advocacy...

  • Page 18
    ... into the pool for the third time, and brought up the axe that had been lost. On the Workman claiming it, and expressing his joy at its recovery, Mercury, pleased with his honesty, gave him the golden and the silver axes in addition to his own. The Workman, on his return to his house, related to...

  • Page 19
    ... from Power Engineering magazine in an annual global competition. The Waterford 3 Steam Electric Station achieved its best ever annual net generation and broke its own record for continuous days of operation while Grand Gulf Nuclear Station completed a record run in early 2010 and River Bend Station...

  • Page 20
    ...'s utility operating companies operate under FRPs - Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi and Entergy New Orleans. In early 2010, Entergy Mississippi obtained a revised FRP that simplifies setting base rates, stabilizes customer bills and provides a return on capital...

  • Page 21
    ... nuclear generating unit in the nation. Finally, in 2010, Entergy Louisiana, Entergy Gulf States Louisiana and Entergy Mississippi submitted filings seeking approval to preserve new nuclear development options. The Utility also sees substantial opportunities in the power transmission business...

  • Page 22
    ... any marks of his footsteps, or if he knew where his lair was. "I will," he said, "at once show you the Lion himself." The Hunter, turning very pale, and chattering with his teeth from fear, replied, "No, thank you. I did not ask that; it is his track only I am in search...

  • Page 23
    ... non-utility nuclear units at five sites in Massachusetts, Michigan, New York and Vermont, one nuclear plant in Nebraska managed under a service contract and approximately 1,000 megawatts of non-nuclear generation, including 80 megawatts of wind power. At the end of 2010, EWC successfully completed...

  • Page 24
    ... of hedging, product choice and surpassing of minimum limits based on its point of view. While unit contingent contracts remain the standard when they are economically available, uncertainty related to license renewals at Pilgrim, Indian Point and Vermont Yankee drove hedging actions in 2010 that...

  • Page 25
    ...the best-positioned non-utility generators in the country relative to near-term commodity prices. 2010 Nuclear Plant Operational Successes â- Palisades recorded its best refueling outage generation performance and second longest run in its 38-year history. Indian Point Unit 2 recorded the highest...

  • Page 26
    ... threatening from either huntsman or hound. He replied, "I do it advisedly; for it would never do to have to sharpen my weapons just at the time I ought to be using them." A The Wild Boar and the Fox Wild Boar stood under a tree, and rubbed his tusks against

  • Page 27
    ... cost lives. Regardless of climate change, we in the U.S. Gulf Coast region face increased risks from natural hazards now. It's time to begin adapting. For more than 10 years, Entergy has taken proactive steps to conserve environmental resources and stabilize our greenhouse gas emissions. In 2010...

  • Page 28
    ...the Gulf Coast in 2011 and 2012 and will continue discussions with state and local leaders on adaptation. Entergy is also developing a plan based on the study that will: n Determine what actions we can and should take to build greater resilience for our assets, n Identify ways we can share ideas and...

  • Page 29
    ... reduction offset purchases. In 2010, we also initiated a study to evaluate retrofitting Roy S. Nelson Unit 6, a 585-megawatt coal-fired plant, with carbon capture sequestration technology. Our partner in the project, Tenaska New Technologies LLC, received a $795,000 grant from the Global Carbon...

  • Page 30
    ... outlook updated in October 2010 identifies opportunities to: n Deliver 6 to 8 percent compound average annual net income growth from 2010 to 2014 (2009 base year) at the utility business, Position Entergy Wholesale Commodities to provide near-term certainty in a bearish market environment, while...

  • Page 31
    ... and Operating Data Comparison of Five-Year Cumulative Return Management's Financial Discussion and Analysis Report of Management Reports of Independent Registered Public Accounting Firm Internal Control Over Financial Reporting Consolidated Income Statements Consolidated Statements of Changes in...

  • Page 32
    ...the Entergy Wholesale Commodities nuclear plants the prices and availability of fuel and power Entergy must purchase for its Utility customers, and Entergy's ability to meet credit support requirements for fuel and power supply contracts volatility and changes in markets for electricity, natural gas...

  • Page 33
    ...$120.86 (a) Assumes $100 invested at the closing price on December 31, 2005 in Entergy Corporation common stock, the S&P 500 Index, and the Philadelphia Utility Index, and reinvestment of all dividends. 2006 2007 2008 2009 2010 Entergy Corporation S&P 500 Index Philadelphia Utility Index 31

  • Page 34
    ...: Utility and Entergy Wholesale Commodities: n The UTILITY business segment includes the generation, transmission, distribution, and sale of electric power in service territories in four states that include portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans...

  • Page 35
    ... have resulted in lower natural gas prices and therefore lower market prices for electricity in the New York and New England power regions. Entergy Wholesale Commodities' nuclear business experienced a decrease in realized price per MWh to $59.16 in 2010 from $61.07 in 2009, and is almost certain...

  • Page 36
    ...expenses primarily due to higher nuclear labor and contract costs; n an increase of $12.5 million due to the capitalization in 2009 of Ouachita Plant service charges previously expensed; and n an increase of $11 million due to the amortization of Entergy Texas rate case expenses. See Note 2 to...

  • Page 37
    ... the line item increased or (decreased) in comparison to the prior period (in thousands): Entergy Wholesale Parent Utility Commodities and Other 2008 Consolidated Net Income (Loss) $605,144 Net revenue (operating revenue less fuel expense, purchased power, and other regulatory charges/credits) 105...

  • Page 38
    ... at Entergy Gulf States Louisiana and Entergy Louisiana; n a decrease of $16 million in payroll-related and benefits costs; n prior year storm damage charges as a result of several storms hitting Entergy Arkansas's service territory in 2008, including Hurricane Gustav and Hurricane Ike in...

  • Page 39
    ...in 2009. Entergy Wholesale Commodities Other operation and maintenance expenses increased from $836 million in 2008 to $922 million in 2009 primarily due to $46 million in outside service costs and incremental labor costs related to the then planned spin-off of Entergy's non-utility nuclear business...

  • Page 40
    ...2012 2013 $6 $7 20142015 $9 After 2015 $44 Capital lease payments Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy Texas each had credit facilities available as of December 31, 2010 as follows (amounts in millions): Amount Drawn Expiration Amount...

  • Page 41
    ...-build option at Entergy Louisiana's Ninemile site. n Entergy Louisiana's Waterford 3 steam generators replacement project, which is discussed in further detail below. n System Energy's planned approximate 178 MW uprate of the Grand Gulf nuclear plant. The project is currently expected to cost...

  • Page 42
    ...In October 2009, Entergy Louisiana announced that it has signed an agreement to acquire Unit 2 of the Acadia Energy Center, a 580 MW generating unit located near Eunice, La., from Acadia Power Partners, LLC, an independent power producer. The Acadia Energy Center, which entered commercial service in...

  • Page 43
    ... in Arkansas and Mississippi. The storms resulted in widespread power outages, significant damage to distribution, transmission, and generation infrastructure, and the loss of sales during the power outages. In October 2008, Entergy Gulf States Louisiana, Entergy Louisiana, and Entergy New Orleans...

  • Page 44
    ...of the securitization bonds. In the third quarter 2009, Entergy settled with its insurer on its Hurricane Ike claim and Entergy Texas received $75.5 million in proceeds (Entergy received a total of $76.5 million). ENTERGY ARKANSAS JANUARY 2009 ICE STORM directly to Entergy Louisiana. In August 2008...

  • Page 45
    ...were $281 million lower in 2009 than in 2008 primarily due to Hurricane Gustav and Hurricane Ike restoration spending in 2008. 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...

  • Page 46
    ... Agreement) and interstate transmission of electricity, as well as rates for System Energy's sales of capacity and energy from Grand Gulf to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans pursuant to the Unit Power Sales Agreement. The Utility operating companies...

  • Page 47
    ... Federal Energy Regulatory Commission ("FERC") - directed cost/benefit study of all Entergy Operating Companies (''Entergy OpCos") becoming full members in the Southwest Power Pool Regional Transmission Organization ("SPP RTO"); the CRA APSC-directed addendum study considering Entergy Arkansas, Inc...

  • Page 48
    ...North American Electric Reliability Corporation (NERC) reliability planning standards, the availability of transmission service across the system, and whether the Utility operating companies could have purchased lower cost power from merchant generators located on the transmission system rather than...

  • Page 49
    ...Regional State Committee (E-RSC), which is comprised of representatives from all of the Utility operating companies' retail regulators, has been formed to consider several of these issues related to Entergy's transmission system. Among other things, the E-RSC in concert with the FERC plan to conduct...

  • Page 50
    ..., planned generation volume, and hedged position, a $10 per MWh change in the annual average energy price would have had a corresponding effect on pre-tax net income of $53 million in 2010. Entergy's purchase of the FitzPatrick and Indian Point 3 plants from NYPA included value sharing agreements...

  • Page 51
    ... its Utility and Entergy Wholesale Commodities business units. Regulations require Entergy subsidiaries to decommission the nuclear power plants after each facility is taken out of service, and money is collected and deposited in trust funds during the facilities' operating lives in order to provide...

  • Page 52
    ... units, that the plant's license will be renewed. A change in that assumption could have a significant effect on the expected future cash ï¬,ows and result in a significant effect on operations. Four nuclear power plants in the Entergy Wholesale Commodities business segment have applications...

  • Page 53
    ... in determining future benefit obligations; n Projected health care cost trend rates; n Expected long-term rate of return on plan assets; and n Rate of increase in future compensation levels. Entergy reviews these assumptions on an annual basis and adjusts them as necessary. The falling...

  • Page 54
    ...is based upon a weighted average 24-month corporate bond rate published by the U.S. Treasury; therefore, periodic changes in asset returns and interest rates can affect funding shortfalls and future cash contributions. Total postretirement health care and life insurance benefit costs for Entergy in...

  • Page 55
    ...S 2 0 1 0 Management's Financial Discussion and Analysis concluded Other Contingencies As a company with multi-state domestic utility operations and a history of international investments, Entergy is subject to a number of federal, state, and international laws and regulations and other factors and...

  • Page 56
    ...of the Corporation's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform...

  • Page 57
    ... LLP New Orleans, Louisiana February 25, 2011 Internal Control Over Financial Reporting The management of Entergy Corporation is responsible for establishing and maintaining adequate internal control over financial reporting for Entergy. Entergy's internal control system is designed to provide...

  • Page 58
    ...,487,577 2009 $ 7,880,016 172,213 2,693,421 10,745,650 2008 $10,073,160 241,856 2,778,740 13,093,756 Electric Natural gas Competitive businesses Total OPERATING EXPENSES Operating and maintenance: Fuel, fuel-related expenses, and gas purchased for resale Purchased power Nuclear refueling outage...

  • Page 59
    ... stock repurchases Common stock issuances in settlement of equity unit purchase contracts Common stock issuances related to stock plans Common stock dividends declared Preferred dividend requirements of subsidiaries(a) Capital stock and other expenses Adjustment for implementation of new accounting...

  • Page 60
    ... trust funds Non-utility property - at cost (less accumulated depreciation) Other Total PROPERTY, PLANT AND EQUIPMENT 40,697 3,595,716 257,847 405,946 4,300,206 39,580 3,211,183 247,664 120,273 3,618,700 Electric Property under capital lease Natural gas Construction work in progress Nuclear fuel...

  • Page 61
    ...2010 2009 Currently maturing long-term debt Notes payable and commercial paper Accounts payable Customer deposits Accumulated deferred income taxes Interest accrued Deferred fuel costs Obligations under capital leases Pension and other postretirement liabilities System agreement cost equalization...

  • Page 62
    ... funds used during construction Nuclear fuel purchases Proceeds from sale/leaseback of nuclear fuel Proceeds from sale of assets and businesses Payment for purchase of plant Insurance proceeds received for property damages Changes in transition charge account NYPA value sharing payment Payments...

  • Page 63
    ... 31, FINANCING ACTIVITIES 2010 2009 2008 Proceeds from the issuance of: Long-term debt Common stock and treasury stock Retirement of long-term debt Repurchase of common stock Redemption of preferred stock Changes in credit borrowings - net Dividends paid: Common stock Preferred equity Net cash...

  • Page 64
    ... 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...

  • Page 65
    ... load carrying capability as demonstrated under actual operating conditions based on the primary fuel (assuming no curtailments) that each station was designed to utilize. (2) Ouachita Units 1 and 2 are owned 100% by Entergy Arkansas and Ouachita Unit 3 is owned 100% by Entergy Gulf States Louisiana...

  • Page 66
    ... 15%) of River Bend plant costs, generation, revenues, and expenses established under a 1992 LPSC order. The plan allows Entergy Gulf States Louisiana to sell the electricity from the deregulated assets to Louisiana retail customers at 4.6 cents per kWh or off-system at higher prices, with certain...

  • Page 67
    ...ows expected to be collected less the amortized cost basis (credit loss). 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...

  • Page 68
    ... time as the dividends in arrears are paid. Therefore, Entergy Arkansas, Entergy Mississippi, and Entergy New Orleans present their preferred securities outstanding between liabilities and shareholders' equity on the balance sheet. Entergy Gulf States Louisiana and Entergy Louisiana, both organized...

  • Page 69
    ...838.2 2009 $ 403.9 Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas are allowed to recover fuel and purchased power costs through fuel mechanisms included in electric and gas rates that are recorded as fuel cost recovery...

  • Page 70
    ...APSC initiated an investigation into Entergy Arkansas's interim energy cost recovery rate. The investigation focused on Entergy Arkansas's 1) gas contracting, portfolio, and hedging practices; 2) wholesale purchases during the period; 3) management of the coal inventory at its coal generation plants...

  • Page 71
    .... Entergy New Orleans's gas rate schedules include a purchased gas adjustment to reï¬,ect estimated gas costs for the billing month, adjusted by a surcharge or credit similar to that included in the electric fuel adjustment clause, including carrying charges. Entergy Texas Entergy Texas's rate...

  • Page 72
    ... Ike storm cost recovery case with the LPSC in May 2009. In September 2009, Entergy Gulf States Louisiana and Entergy Louisiana and the Louisiana Utilities Restoration Corporation (LURC), an instrumentality of the State of Louisiana, filed with the LPSC an application requesting that the LPSC grant...

  • Page 73
    ...Louisiana, Mississippi, and Texas, including the effect of extensive ï¬,ooding that resulted from levee breaks in and around the greater New Orleans area. The storms and ï¬,ooding resulted in widespread power outages, significant damage to electric distribution, transmission, and generation and gas...

  • Page 74
    ... storm-related costs through December 2006 that are eligible for CDBG funding under the state action plan. Entergy New Orleans received $180.8 million of CDBG funds in 2007 and $19.2 million in 2010. ENTERGY TEXAS Hurricane Ike and Hurricane Gustav Entergy Texas filed an application in April 2009...

  • Page 75
    ... - 11.4% Electric; 10.0% - 11.0% Gas Entergy Louisiana 9.45% - 11.05% Entergy Mississippi 10.79% - 13.05% Entergy New Orleans 10.7% - 11.5% Electric; 10.25% - 11.25% Gas Entergy Texas 10.125% Pending Proceedings/Events retail base rates implemented in the July 2010 billing cycle pursuant to...

  • Page 76
    ... million refund. In addition, Entergy Louisiana moved the recovery of approximately $12.5 million of capacity costs from fuel adjustment clause recovery to base rate recovery. At its April 21, 2010 meeting, the LPSC accepted the joint report. In May 2010, Entergy Louisiana made its formula rate plan...

  • Page 77
    ... a recovery mechanism for City Councilapproved capacity additions, plus provisions for extraordinary cost changes and force majeure events. In May 2010, Entergy New Orleans filed its electric and gas formula rate plan evaluation reports. The filings requested a $12.8 million electric base revenue...

  • Page 78
    ...solid fuel and gas-fired generation available to each company and the costs of natural gas and purchased power. Entergy Louisiana, Entergy Gulf States Louisiana, Entergy Texas, and Entergy Mississippi are more dependent upon gas-fired generation sources than Entergy Arkansas or Entergy New Orleans...

  • Page 79
    ... quarter 2007 Entergy Arkansas recorded accounts payable and Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, and Entergy Texas recorded accounts receivable to reï¬,ect the rough production cost equalization payments and receipts required to implement the FERC's remedy based on...

  • Page 80
    ...operating companies, including whether the Utility operating companies had properly reï¬,ected generating units' minimum operating levels for purposes of making unit commitment and dispatch decisions, whether Entergy Arkansas's sales to third parties from its retained share of the Grand Gulf nuclear...

  • Page 81
    ... appropriate to order refunds resulting from changes in the treatment of interruptible load in the allocation of capacity costs by the Utility operating companies. In August 2010 the FERC issued an order stating that it has the authority and refunds are appropriate. The APSC, MPSC, and Entergy have...

  • Page 82
    ... from: State income taxes net of federal income tax effect 40,530 Regulatory differences utility plant items 14,931 Amortization of investment tax credits (15,980) Writeoff of reorganization costs (19,974) Tax law change-Medicare Part D 13,616 Decommissioning trust fund basis - Capital gains...

  • Page 83
    ... left open for administrative purposes pending the appeal by the IRS of the U.K. Windfall Tax foreign tax credit and street lighting issues to the United States Court of Appeals for the Fifth Circuit. Additionally, with respect to Entergy's acquisition of all of its nonutility nuclear power plants...

  • Page 84
    ...audit is progressing according to plan. The audit report is expected to be issued in the second quarter 2011. The IRS has also examined the Entergy Wholesale Commodities subsidiaries' and Utility operating companies' mark-to-market deductions claimed on wholesale power contracts. With respect to the...

  • Page 85
    ... 0.67% 2.01% 2.01% 2.01% 0.74 both money pool and external short-term borrowings) for the Registrant Subsidiaries (in millions): Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Authorized $250 $200 $250 $175 $100...

  • Page 86
    ...time fee for generation prior to April 7, 1983. Entergy Arkansas is the only Entergy company that generated electric power with nuclear fuel prior to that date and includes the one-time fee, plus accrued interest, in long-term debt. (d) See Note 10 for further discussion of the Waterford 3 and Grand...

  • Page 87
    ...assets or revenues of Entergy Arkansas. Entergy Arkansas has no payment obligations to Entergy Arkansas Restoration Funding except to remit storm recovery charge collections. Entergy Texas Securitization Bonds - Hurricane Rita In April 2007 the PUCT issued a financing order authorizing the issuance...

  • Page 88
    ... at the option of the related company (dollars in thousands): Shares/Units Authorized 2010 Entergy Corporation Utility: Preferred Stock or Preferred Membership Interests without sinking fund: Entergy Arkansas, 4.32% - 6.45% Series 3,413,500 Entergy Gulf States Louisiana, Series A 8.25% 100,000...

  • Page 89
    ... at an annual rate of 5.75%, and (2) a purchase contract that obligated the holder of the equity unit to purchase for $50 between 0.5705 and 0.7074 shares of Entergy Corporation common stock on or before February 17, 2009. Entergy paid the holders quarterly contract adjustment payments of 1.875...

  • Page 90
    ...10% of Grand Gulf is owned by a non-affiliated company (SMEPA) that would share on a prorata basis in any retrospective premium assessment to System Energy under the Price-Anderson Act). The Entergy Wholesale Commodities segment includes the ownership and operation of six nuclear power reactors and...

  • Page 91
    ...Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Entergy Wholesale Commodities $21.3 $16.3 $19.3 $0.07 $0.07 N/A $15.3 $ - Potential assessments for the Entergy Wholesale Commodities plants are covered by insurance...

  • Page 92
    ...): Change Liabilities in Cash Liabilities as of Dec. Flow as of Dec. 31, 2009 Accretion Estimate Spending 31, 2010 Utility: Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Entergy Wholesale Commodities $ 566...

  • Page 93
    ...): Change Liabilities in Cash Liabilities as of Dec. Flow as of Dec. 31, 2008 Accretion Estimate Spending 31, 2009 Utility: Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Entergy Wholesale Commodities $ 540...

  • Page 94
    ... are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $8.4 million in 2010, $7.2 million in 2009, and $10.2 million in 2008 for Entergy Arkansas and $2.3 million in 2010, $3.1 million in 2009, and $3.4 million in 2008 for Entergy Gulf States...

  • Page 95
    ... Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended. The assets of the plans include common and preferred stocks, fixed-income securities, interest in a money market fund, and insurance contracts. The Registrant Subsidiaries' pension costs...

  • Page 96
    ..., Entergy Arkansas, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy contribute the other postretirement benefit costs collected in rates into trusts. System Energy is funding, on behalf of Entergy Operations, other postretirement benefits associated with Grand Gulf...

  • Page 97
    ...accounting standards) as comprehensive income and/ or as a regulatory asset reï¬,ective of the recovery mechanism for pension and other postretirement benefit costs in the Utility's jurisdictions. For the portion of Entergy Gulf States Louisiana that is not regulated, the unrecognized prior service...

  • Page 98
    ...% The expected long term rate of return of 8.5% for 2010 (8.5% for 2009) for the qualified pension plans' assets is based on the geometric average of the historical annual performance of a representative portfolio weighted by the target asset allocation defined in the table above. The time period...

  • Page 99
    ... pension and other postretirement plans measured at fair value on a recurring basis at December 31, 2010 and December 31, 2009 (in thousands): 2010 Qualified Pension Trust Level 1 Level 2 Level 3 Total Equity securities: Corporate stocks: Preferred $ - $ 8,354 Common 1,375,531 - Common collective...

  • Page 100
    ...fit costs for 2010, 2009, and 2008 were as follows: 2010 Weighted-average discount rate: Qualified pension 6.10% - 6.30% Other postretirement 6.10% Non-qualified pension 5.40% Weighted-average rate of increase in future compensation levels 4.23% Expected long-term rate of return on plan assets...

  • Page 101
    ...are as follows: 2010 25.73% 5.46 2.57% 3.74% $3.24 2009 24.39% 5.33 2.22% 3.50% $3.00 2008 18.9% 4.64 2.77% 2.96% $3.00 Stock price volatility Expected term in years Risk-free interest rate Dividend yield Dividend payment per share Note 12. Stock-Based Compensation Entergy grants stock options and...

  • Page 102
    ... grants restricted awards earned under its stock benefit plans in the form of stock units that are subject to time-based restrictions. The restricted units are equal to the cash value of shares of Entergy Corporation common stock at the time of vesting. The costs of restricted awards are charged...

  • Page 103
    ...electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, and natural gas utility service in portions of Louisiana. Entergy Wholesale Commodities includes the ownership and operation of six nuclear power plants located in the northern United States and the sale of the electric power...

  • Page 104
    ...merchant basis in the Lake Charles, Louisiana area. 50% member interest Wind-powered electric generation joint venture. Ouachita In September 2008, Entergy Arkansas purchased the Ouachita Plant, a 789 MW three-train gas-fired combined cycle generating turbine (CCGT) electric power plant located 20...

  • Page 105
    .... Entergy manages fuel price volatility for its Louisiana jurisdictions (Entergy Gulf States Louisiana, Entergy Louisiana, and Entergy New Orleans) and Entergy Mississippi primarily through the purchase of short-term natural gas swaps. These swaps are marked-to-market with offsetting regulatory...

  • Page 106
    ...-current portion) Derivatives not designated as hedging instruments Assets: Natural gas swaps Prepayments and other $8 $(-) Utility $95 $(4) Entergy Wholesale Commodities $117 $(8) Entergy Wholesale Commodities Balance sheet location Fair value(a) Offset(a) Business (a) The balances of derivative...

  • Page 107
    ... to manage fuel price volatility for the Utility's Louisiana and Mississippi customers. All benefits or costs of the program are recorded in fuel costs. The total volume of natural gas swaps outstanding as of December 31, 2010 is 37,120,000 MMBtu for Entergy. Credit support for these natural gas...

  • Page 108
    ... (in millions): 2010 Level 1 Assets: Temporary cash investments $1,218 Decommissioning trust funds:(a) Equity securities 387 Debt securities 497 Power contracts - Securitization recovery trust account 43 Storm reserve escrow account 329 $2,474 Liabilities: Power contracts Gas hedge contracts Level...

  • Page 109
    ... Trust Funds Entergy holds debt and equity securities, classified as availablefor-sale, in nuclear decommissioning trust accounts. The NRC requires Entergy subsidiaries to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, Pilgrim, Indian Point...

  • Page 110
    ...to provide financial support apart from their scheduled lease payments. See Note 4 to the financial statements for details of the nuclear fuel companies' credit facility and commercial paper borrowings and long-term debt that are reported by Entergy, Entergy Arkansas, Entergy Gulf States Louisiana...

  • Page 111
    ... Arkansas has no payment obligations to Entergy Arkansas Restoration Funding except to remit storm recovery charge collections. See Note 5 to the financial statements for additional details regarding the storm cost recovery bonds. Entergy Louisiana and System Energy are also considered to each hold...

  • Page 112
    ...ficer of Entergy New Orleans, Inc. Age, 42 E. Renae Conley Executive Vice President, Human Resources and Administration. Joined Entergy in 1999. Former President of Cincinnati Gas and Electric Company. Age, 53 John T. Herron President and Chief Executive Officer Nuclear Operations/Chief Nuclear Of...

  • Page 113
    E N T E R G Y C O R P O R AT I O N A N D S U B S I D I A R I E S 2 0 1 0 B OARD OF D IRECTORS Pictured from left to right, front row: Alexis M. Herman, W. Frank Blount, James R. Nichols, Gary W. Edwards, W. J. "Billy" Tauzin, J. Wayne Leonard and Maureen Scannell Bateman. Pictured from left to ...

  • Page 114
    ... of January 31, 2011, there were 179,037,924 shares of Entergy common stock outstanding. Shareholders of record totaled 36,598, and approximately 82,000 investors held Entergy stock in "street name" through a broker. The high and low trading prices for each quarterly period in 2010 and 2009 were as...

  • Page 115
    ... Council™ certified, processed chlorine free, alkaline pH, and meets the American National Standards Institute standards for longevity. By using Neenah Environment PC 100, Entergy Corporation saved the following resources: Trees Water Energy Solid Waste CO2 Equiv. Emissions 2,632 Trees 1,202,911...

  • Page 116