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ENTERGY 2012 ANNUAL REPORT
trans tions
LIGHTING THE WAY TO SUSTAINABLE VALUE

Table of contents

  • Page 1
    ENTERGY 2012 ANNUAL REPORT L I G H T I N G T H E W AY T O S U S TA I N A B L E VA L U E trans tions

  • Page 2
    ... one of the nation's leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $10 billion and approximately 15,000 employees. The way we HIGHLIGHTS FINANCIAL RESULTS (in millions...

  • Page 3
    ...not changed. Entergy exists to serve its stakeholders. That way of thinking consistently guides our pursuit of sustainable value. Contents Letter to Our Stakeholders Entergy Sustainability Highlights Utility Entergy Wholesale Commodities Looking Ahead Financial Review Investor Information Directors...

  • Page 4
    ...as the uncertainty surrounding future power prices for the Entergy Wholesale Commodities business, offer significant challenges. A smooth, seamless transition in 2012 was the naming of a new executive leadership team. The succession process and plan the board of directors undertook was years in the...

  • Page 5
    ... short in critical areas. In our utility business, we made significant investments in 2012 to better serve customers - closing the acquisitions of two natural gas-fired plants and completing major construction projects at two nuclear plants. Through the contributions of our employees, contractors...

  • Page 6
    ... utilities' transmission operations to MISO in December 2013. We also are working with the Public Utility Commission of Texas staff to resolve issues in joining MISO that are related to certain power purchase agreements put in place at the time of the jurisdictional separation of Entergy Gulf States...

  • Page 7
    ..., affordable power. He spoke up for low-income customers and demanded that Entergy utilities do a better job in serving the poor. His support of the Low Income Home Energy Assistance Program helped double federal funding over a 10-year period. Wayne spoke up for action to address climate change, and...

  • Page 8
    ... both the Entergy utility operating companies and ITC. In 2012, Entergy and ITC began the regulatory approval process for the transaction. ITC has scheduled a special meeting of shareholders on April 16 to vote on the transaction. We continue to plan for closing in 2013, pending regulatory approval...

  • Page 9
    ... Rick Smith, who retired in January 2013 after 13 years of service at Entergy. We thank Rick for his outstanding contributions to both our utility and EWC businesses. John Herron announced his retirement in December 2012 as our chief nuclear officer. Over his 12 years at Entergy, John always...

  • Page 10
    L I G H T I N G T H E W A Y T O S U S T A I N A B L E V A L U E WE SUCCEED BY CREATING SUSTAINABLE VALUE FOR OUR OWNERS, CUSTOMERS, EMPLOYEES & COMMUNITIES

  • Page 11
    ... in cash dividend payments to owners of our common stock, while maintaining solid credit and liquidity. While our point of view on future power prices grew more positive in 2012, we realize we must deal with the reality of today's markets. We continue to project growth at the utility business, while...

  • Page 12
    ... six utility operating companies: Entergy Arkansas, Inc., Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc. and Entergy Texas, Inc. We also provide gas service to 194,000 customers living in the New Orleans and Baton Rouge, La. areas...

  • Page 13
    ... partnerships, participation in community organizations and events, social media, direct mail and other vehicles. Innovative educational technology and community initiatives in Claiborne County, home to our Grand Gulf Nuclear Station, are examples of Entergy's engagement efforts. The Mississippi...

  • Page 14
    L I G H T I N G T H E W A Y T O S U S T A I N A B L E V A L U E WE TAC K L E T H E TOUGH C H A L L E N G E S WITH PASSION & INTEGRITY

  • Page 15
    ... information and estimated restoration times. On Entergy's myAdvisor and myHome websites, customers can use tools and resources to better understand their bills, select payment options and find ways to save energy and money. Entergy utilities continued to gain in the J.D. Power and Associates 2012...

  • Page 16
    ...December ice storm in Arkansas. Storm restoration costs have secured the availability of clean and efficient nuclear related to Hurricane Isaac alone are estimated at $370 million. energy for the benefit of our customers. In February 2013, Entergy Louisiana and Entergy Gulf States Clean generation...

  • Page 17
    ...-regional, high-performance grid. The proposed spin-off and merger of Entergy utilities' electric transmission businesses with a subsidiary of ITC Holdings Corp. is a significant step forward in addressing these issues. ITC's proven independent business model for owning and operating transmission...

  • Page 18
    L I G H T I N G T H E W A Y T O S U S T A I N A B L E V A L U E WE ACTIVELY MANAGE OUR PORTFOLIO TO INCREASE CASH FLOW AND REDUCE RISK

  • Page 19
    ... Subsidiaries 2012 ENTERGY WHOLESALE COMMODITIES Preserving Future Value ADAPTING TO DYNAMIC POWER MARKETS EWC owns and operates nuclear and non-nuclear power plants that are vital to our ability to provide safe, reliable products and services at reasonable costs. Nuclear power is a safe, secure...

  • Page 20
    ...scenarios for Indian Point result in electric rate increases for residential, commercial and industrial customers. At the same time we continue to assist Con Edison and the New York Power Authority with their efforts to develop a contingency plan assuming Indian Point is taken out of service in 2015...

  • Page 21
    ... devastated communities in New York, New Jersey and other states along the Atlantic coast. High winds, heavy rain and massive flooding caused damages estimated in the billions of dollars. EWC's Indian Point, FitzPatrick, Pilgrim and Vermont Yankee plants all safely weathered the storm. Indian Point...

  • Page 22
    ... analyze opportunities with the potential to create sustainable value under current or expected market conditions. Our ongoing pursuit of the proposals for the utility operating companies to join MISO and to spin off and merge the transmission business with ITC are examples of these efforts. We know...

  • Page 23
    ... of charge from Entergy upon written request to Entergy Corporation, Investor Relations, P.O. Box 61000, New Orleans, LA 70161 or by calling Entergy's Investor Relations information line at 1-888- ENTERGY (368-3749), or from ITC upon written request to ITC Holdings Corp., Investor Relations, 27175...

  • Page 24
    ... pending and future rate cases and negotiations, including various performance-based rate discussions, Entergy's utility supply plan, and recovery of fuel and purchased power costs; the termination of Entergy Arkansas's and Entergy Mississippi's participation in the System Agreement in December 2013...

  • Page 25
    ....61 $100.92 $ 65.78 $108.60 $100.35 (a) Assumes $100 invested at the closing price on December 31, 2007 in Entergy Corporation common stock, the S&P 500 Index, and the Philadelphia Utility Index, and reinvestment of all dividends. Entergy Corporation S&P 500 Index Philadelphia Utility Index 23

  • Page 26
    ... entered into an agreement to spin off its transmission business and merge it with a newly-formed subsidiary of ITC Holdings Corp. n The ENTERGY WHOLESALE COMMODITIES business segment includes the ownership and operation of six nuclear power plants located in the northern United States and the...

  • Page 27
    ...Commodities for 2012 and 2011: 2012 2011 Owned capacity GWh billed Average realized price per MWh Entergy Wholesale Commodities Nuclear Fleet Capacity factor GWh billed Average realized revenue per MWh Refueling outage days: FitzPatrick Indian Point 2 Indian Point 3 Palisades Pilgrim Vermont Yankee...

  • Page 28
    ...or capitalization of storm restoration costs for Hurricane Isaac, which hit the Utility's service area in August 2012; n the effect of the deferral, as approved by the FERC, and the LPSC for the Louisiana jurisdictions, of costs related to the transition and implementation of joining the MISO RTO...

  • Page 29
    ... rate plan increase at Entergy Louisiana effective May 2011; and n a base rate increase at Entergy Arkansas effective July 2010. These were partially offset by formula rate plan decreases at Entergy New Orleans effective October 2010 and October 2011. See Note 2 to the financial statements...

  • Page 30
    ...for asset retirement obligations. Owned capacity GWh billed Average realized price per MWh Entergy Wholesale Commodities Nuclear Fleet Capacity factor GWh billed Average realized revenue per MWh Refueling outage days: FitzPatrick Indian Point 2 Indian Point 3 Palisades Pilgrim Vermont Yankee 6,599...

  • Page 31
    ... for the planned spin-off of its non-utility nuclear business; and n the recognition of a $14 million Louisiana state income tax benefit related to storm cost financing. Partially offsetting the decreased effective income tax rate was a charge of $16 million resulting from a change in tax...

  • Page 32
    ...in progress or general or intangible plant, for the Utility operating companies was $1.03 billion for Entergy Arkansas, $.57 billion for Entergy Gulf States Louisiana, $.73 billion for Entergy Louisiana, $.58 billion for Entergy Mississippi, $.03 billion for Entergy New Orleans, and $.64 billion for...

  • Page 33
    ... Utility operating companies becoming market participants in MISO. On September 26, 2012, Entergy Services submitted an application under Federal Power Act section 205 requesting FERC authorization to cancel System Agreement Service Schedule MSS-2 (Transmission Equalization) effective upon closing...

  • Page 34
    ...the consistency of Indian Point's operations with New York State's coastal management policies must be resolved to the extent required by the Coastal Zone Management Act (CZMA). On July 24, 2012, Entergy filed a supplement to the Indian Point license renewal application currently pending before the...

  • Page 35
    ...and Estimated Interest Payments 2013 2014 2015 20162017 After 2017 Capital lease payments $6 $5 $5 $9 $34 The capital leases are discussed in Note 10 to the financial statements. Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and...

  • Page 36
    ... Planned Construction and Capital Investments 2013 2014 2015 Operating lease payments $94 $97 $80 $94 $140 The operating leases are discussed in Note 10 to the financial statements. Maintenance Capital: Utility: Generation Transmission Distribution Other Total Entergy Wholesale Commodities...

  • Page 37
    ... Louisiana's and Entergy Gulf States Louisiana's formula rate plans, if one is in effect when the project is placed in service; alternatively, Entergy Gulf States Louisiana and Entergy Louisiana must file rate cases approximately 12 months prior to the expected in-service date. Entergy New Orleans...

  • Page 38
    ... plant outages and storms, could affect the timing and level of internally generated funds in the future. Provisions within the Articles of Incorporation or pertinent indentures and various other agreements relating to the long-term debt and preferred stock of certain of Entergy Corporation...

  • Page 39
    ... issuance of the investment recovery bonds. This increase was partially offset by: a decrease of $190 million in payments for the purchase of plants resulting from the purchase of the Hot Spring Energy Facility by Entergy Arkansas for approximately $253 million in November 2012, the purchase of the...

  • Page 40
    ... Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas 10.2% 9.9% - 11.4% Electric; 10.0% - 11.0% Gas 9.45% - 11.05% 9.88% - 12.01% 10.7% - 11.5% Electric; 10.25% - 11.25% Gas 9.8% The Utility operating companies' base rate, fuel and purchased power cost...

  • Page 41
    ... 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 historically have engaged in the coordinated planning, construction, and operation of generating and bulk...

  • Page 42
    ... market. The LPSC voted to grant Entergy Gulf States Louisiana's and Entergy Louisiana's application for transfer of control to MISO, subject to conditions, in May 2012 and issued its order in June 2012. On October 26, 2012, the APSC authorized Entergy Arkansas to sign the MISO Transmission Owners...

  • Page 43
    ... investigation concerning certain generation procurement, dispatch, and transmission system practices and policies of the Utility operating companies would remain open. The release noted, however, the intention of each of the Utility operating companies to join MISO and Entergy's agreement with ITC...

  • Page 44
    ... of Entergy Wholesale Commodities' current forward capacity and generation contracts as well as total revenue projections based on market prices as of December 31, 2012. Entergy Wholesale Commodities Nuclear Portfolio 2013 2014 2015 2016 2017 Energy Percent of planned generation under contract...

  • Page 45
    ... 2012 MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS continued Entergy estimates that a positive $10 per MWh change in the annual average energy price in the markets in which the Entergy Wholesale Commodities nuclear business sells power, based on the respective year-end market conditions, planned...

  • Page 46
    ... the 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 47
    ...plans which cover substantially all employees. Additionally, Entergy currently provides postretirement health care and life insurance benefits for substantially all employees who reach retirement age and meet certain eligibility requirements while still working for Entergy. Entergy's reported costs...

  • Page 48
    Entergy Corporation and Subsidiaries 2012 MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS continued payments. Based on recent market trends, the discount rates used to calculate its 2012 qualified pension benefit obligation and 2013 qualified pension cost ranged from 4.31% to 4.50% for its speci...

  • Page 49
    ...'s current estimate of contributions to its other postretirement plans is approximately $82.5 million in 2013. Other Contingencies As a company with multi-state utility operations, Entergy is subject to a number of federal and state laws and regulations and other factors and conditions in the areas...

  • Page 50
    ...Board of Directors and Shareholders of Entergy Corporation and Subsidiaries New Orleans, Louisiana We have audited the accompanying consolidated balance sheets of Entergy Corporation and Subsidiaries (the "Corporation") as of December 31, 2012 and 2011, and the related consolidated income statements...

  • Page 51
    ... LLP New Orleans, Louisiana February 27, 2013 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 52
    ..., fuel-related expenses, and gas purchased for resale Purchased power Nuclear refueling outage expenses Asset impairment Other operation and maintenance Decommissioning Taxes other than income taxes Depreciation and amortization Other regulatory charges - net Total Gain on sale of business OPERATING...

  • Page 53
    ... 31, 2012, 2011, and 2010 Subsidiaries' Preferred Stock Common Stock Treasury Stock Paid-in Capital Retained Earnings Total BALANCE AT DECEMBER 31, 2009 Consolidated net income(a) Other comprehensive income Common stock repurchases Common stock issuances related to stock plans Common stock...

  • Page 54
    ... revenues Total accounts receivable Deferred fuel costs Accumulated deferred income taxes Fuel inventory - at average cost Materials and supplies - at average cost Deferred nuclear refueling outage costs System agreement cost equalization Prepayments and other Total OTHER PROPERTY AND INVESTMENTS...

  • Page 55
    ... payable and commercial paper Accounts payable Customer deposits Taxes accrued Accumulated deferred income taxes Interest accrued Deferred fuel costs Obligations under capital leases Pension and other postretirement liabilities System agreement cost equalization Other Total NON-CURRENT LIABILITIES...

  • Page 56
    .../capital expenditures Allowance for equity funds used during construction Nuclear fuel purchases Payment for purchase of plant Proceeds from sale of assets and businesses Insurance proceeds received for property damages Changes in securitization account NYPA value sharing payment Payments to storm...

  • Page 57
    ... stock Retirement of long-term debt Repurchase of common stock Redemption of subsidiary common and preferred stock Changes in credit borrowings and commercial paper - net Dividends paid: Common stock Preferred stock Net cash ï¬,ow provided by (used in) financing activities Effect of exchange rates...

  • Page 58
    ... general rate case, fuel reconciliation, or fixed fuel factor filing. System Energy's operating revenues are intended to recover from Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans operating expenses and capital costs attributable to Grand Gulf. The capital costs...

  • Page 59
    ... 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. The investment and accumulated depreciation numbers...

  • Page 60
    ... of River Bend that is not rate-regulated, Entergy Gulf States Louisiana has recorded an offsetting amount of unrealized gains/(losses) in other deferred credits. Decommissioning trust funds for Pilgrim, Indian Point 2, Vermont Yankee, and Palisades do not meet the criteria for regulatory accounting...

  • Page 61
    ...operating costs associated with the assets, the efficiency and availability of the assets and generating units, and the future market and price for energy over the remaining life of the assets. Two nuclear power plants in the Entergy Wholesale Commodities business segment (Indian Point 2 and Indian...

  • Page 62
    ..., 2012. In order to determine this price, Entergy used significant observable inputs, including quoted forward power and gas prices, where available. Significant unobservable inputs, such as projected long-term pre-tax operating margins (cash basis), and estimated weighted average costs of capital...

  • Page 63
    ... the LPSC) Grand Gulf fuel - non-current and power management rider - recovered through rate riders when rates are redetermined periodically (Note 2 - Fuel and purchased power cost recovery) New nuclear generation development costs (Note 2) Gas hedging costs - recovered through fuel rates Pension...

  • Page 64
    ... R ECOVERY 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 revenues...

  • Page 65
    ... fuel and purchased power costs for the billing month based upon the level of such costs incurred two months prior to the billing month. Entergy Gulf States Louisiana's purchased gas adjustments include estimates for the billing month adjusted by a surcharge or credit that arises from an annual...

  • Page 66
    ... PUCT issued an order providing for a $77 million refund, including interest, for fuel cost recovery over-collections through June 2010. The refund was made for most customers over a three-month period beginning with the September 2010 billing cycle. In December 2010, Entergy Texas filed with the...

  • Page 67
    ... level of rates for Entergy Gulf States Louisiana. Under its primary request, Entergy Gulf States Louisiana assumes that it has completed integration into MISO and that the spin-off and merger of its transmission business with a subsidiary of ITC Holdings has occurred (the MISO/ITC Scenario...

  • Page 68
    ... appropriate level of rates for Entergy Louisiana. Under its primary request, Entergy Louisiana assumes that it has completed integration into MISO and that the spin-off and merger of its transmission business with a subsidiary of ITC Holdings has occurred (the MISO/ITC Scenario). Under the MISO/ITC...

  • Page 69
    ... Entergy Mississippi and the Mississippi Public Utilities Staff that provides for no change in rates. Retail Rates - Gas (Entergy Gulf States Louisiana) In January 2013, Entergy Gulf States Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2012...

  • Page 70
    ... and the annual storm reserve accrual. The order also reduced Entergy Texas's proposed purchased power capacity costs, stating that they are not known and measureable; reduced Entergy Texas's regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based...

  • Page 71
    ...) Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas 17) $ 17 The actual payments/receipts for 2013, based on calendar year 2012 production costs, will not be calculated until the Utility operating companies' 2012 FERC Form 1s...

  • Page 72
    ...Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas record accounts receivable to reï¬,ect the rough production cost equalization payments and receipts required to implement the FERC's remedy. Entergy Arkansas, and, for December 2012, Entergy...

  • Page 73
    ...Utility 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...

  • Page 74
    ...effects of the FERC's order on System Agreement Service Schedules MSS-1, MSS-2, and MSS-3, and the potential offsetting cost would be significantly less than that for each of the other Utility operating companies. Entergy provided to the LPSC an illustrative intra-system bill recalculation as speci...

  • Page 75
    ...the LPSC claims that the damages that should be paid by Entergy Arkansas to the Utility operating company's customers for 2003, 2004, and 2006 are $42 million to Entergy Gulf States, Inc., $7 million to Entergy Louisiana, $23 million to Entergy Mississippi, and $4 million to Entergy New Orleans; and...

  • Page 76
    ... Holdings Company LLC, a company wholly-owned and consolidated by Entergy, E NTERGY N EW O RLEANS In December 2005, the U.S. Congress passed the Katrina Relief Bill, a hurricane aid package that included Community Development Block Grant (CDBG) funding (for the states affected by Hurricanes Katrina...

  • Page 77
    ... LPSC's order with the Louisiana Nineteenth Judicial District Court. A schedule for the appeal has not been established. In their rate cases filed in February 2013, Entergy Gulf States Louisiana and Entergy Louisiana request recovery of their new nuclear generation development costs over a tenyear...

  • Page 78
    ... and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2012 and 2011 are as follows (in thousands): 2012 2011 Current: Federal $ (47,851) Foreign 143 State (41,516) Total (89,224) Deferred and non-current - net 131,130 Investment tax credit adjustments - net (11,051) Income...

  • Page 79
    ... Circuit decision. On October 29, 2012, the U.S. Supreme Court granted PPL Corp.'s petition for certiorari. The Solicitor General's petition for writ of certiorari in Entergy's case is currently on hold pending the disposition of the PPL case. Entergy's case will be determined consistent with the...

  • Page 80
    ... Entergy Gulf States Louisiana received $679 million and $274.7 million, respectively, from the Louisiana Utilities Restoration Corporation ("LURC"). These receipts from LURC were from the proceeds of a Louisiana Act 55 financing of the costs incurred to restore service following Hurricane Katrina...

  • Page 81
    ... 31, 2012, Entergy Corporation had $665 million of commercial paper outstanding. The weighted-average interest rate for the year ended December 31, 2012 was 0.88%. Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each had...

  • Page 82
    ... Nuclear Waste Policy Act of 1982, Entergy's nuclear owner/licensee subsidiaries have contracts with the DOE for spent nuclear fuel disposal service. The contracts include a one-time fee for generation prior to April 7, 1983. Entergy Arkansas is the only Entergy company that generated electric power...

  • Page 83
    ...payment obligations to Entergy Arkansas Restoration Funding except to remit storm recovery charge collections. Entergy Louisiana Securitization Bonds - Little Gypsy In August 2011, the LPSC issued a financing order authorizing the issuance of bonds to recover Entergy Louisiana's investment recovery...

  • Page 84
    ... 2012 2011 Entergy Corporation Utility: Preferred Stock or Preferred Membership Interests without sinking fund: Entergy Arkansas, 4.32% - 6.45% Series Entergy Gulf States Louisiana, Series A 8.25% Entergy Louisiana, 6.95% Series(a) Entergy Mississippi, 4.36% - 6.25% Series Entergy New Orleans...

  • Page 85
    ... and certain other stock benefit plans. The Directors' Plan awards to nonemployee directors a portion of their compensation in the form of a fixed number of shares of Entergy Corporation common stock. In October 2009 the Board granted authority for a $750 million share repurchase program which was...

  • Page 86
    ... to Entergy Louisiana, current production projections would require estimated payments of approximately $174.9 million in 2013, and a total of $2.37 billion for the years 2014 through 2031. Entergy Louisiana currently recovers the costs of the purchased energy through its fuel adjustment clause...

  • Page 87
    ...millions): Utility: Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Entergy Wholesale Commodities $21.9 $18.9 $22.0 $0.07 $0.07 n/a $18.4 $ - Grand Gulf $400,000 weekly indemnity (total for four policies) n $56...

  • Page 88
    ...): Change in Cash Flow Estimate Liabilities as of Dec. 31, 2011 Accretion Liabilities as of Dec. Spending 31, 2012 Utility: Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Entergy Wholesale Commodities $ 640...

  • Page 89
    ... as of Dec. 31, 2010 Change in Cash Flow Estimate Liabilities as of Dec. Spending 31, 2011 Accretion Utility: Entergy Arkansas Entergy Gulf States Louisiana Entergy Louisiana Entergy Mississippi Entergy New Orleans Entergy Texas System Energy Entergy Wholesale Commodities $ 602.2 $ 339.9 $ 321...

  • Page 90
    ...Retirement Plan for Non-Bargaining Employees" and "Entergy Corporation Retirement Plan for Bargaining Employees." Except for the Entergy Corporation Retirement Plan III, the pension plans are noncontributory and provide pension benefits that are based on employees' credited service and compensation...

  • Page 91
    ...benefit payments made during the quarter. Entergy Corporation and its subsidiaries fund pension costs in accordance with contribution guidelines established by the Employee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended. The assets of the plans...

  • Page 92
    ... FINANCIAL STATEMENTS continued Pursuant to regulatory directives, Entergy Arkansas, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy contribute the other postretirement benefit costs collected in rates into external trusts. System Energy is funding, on behalf of Entergy...

  • Page 93
    ..., and capital market assumptions of its investment consultant and investment managers. The expected long-term rate of return for the qualified pension plans' assets is based primarily on the geometric average of the historical annual performance of a representative portfolio weighted by the...

  • Page 94
    ... broker quotes. (b) Common stocks, treasury notes and bonds, and certain preferred stocks and fixed income debt securities are stated at fair value determined by quoted market prices. (c) The common collective trusts hold investments in accordance with stated objectives. The investment strategy of...

  • Page 95
    Entergy Corporation and Subsidiaries 2012 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued (e) The registered investment company holds investments in domestic and international bond markets and estimates fair value using net asset value per share. (f) The other remaining assets are U.S. ...

  • Page 96
    ... daily public stock price volatility of Entergy Corporation common stock over a period equal to the expected term of the award. The expected term of the options is based upon historical option exercises and the weighted average life of options when exercised and the estimated weighted average life...

  • Page 97
    ... year-end stock price is less than the weighted average exercise price, the aggregate intrinsic value of outstanding stock options as of December 31, 2012 was zero. The intrinsic value of "in the money" stock options is $7.8 million as of December 31, 2012. Entergy recognizes compensation cost over...

  • Page 98
    ... net income Compensation cost capitalized as part of fixed assets and inventory $11.4 $ 4.4 $ 2.0 $3.9 $1.5 $0.7 $- $- $- Long-Term Performance Unit Program Entergy grants long-term incentive awards earned under its stock benefit plans in the form of performance units, which are equal to the...

  • Page 99
    ... INFORMATION Entergy's reportable segments as of December 31, 2012 are Utility and Entergy Wholesale Commodities. Utility includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, and natural gas utility service...

  • Page 100
    ... United States. NOTE 14. EQUITY METHOD INVESTMENTS H INDS E NERGY F ACILITY In November 2012, Entergy Mississippi purchased the Hinds Energy Facility, a 450 MW combined-cycle natural gas turbine unit located in Jackson, Mississippi, from KGen Hinds LLC for approximately $206 million. The FERC and...

  • Page 101
    ... of projected annual exposure to gas for electric generation and projected winter purchases for gas distribution at Entergy Gulf States Louisiana. Entergy's exposure to market risk is determined by a number of factors, including the size, term, composition, and diversification of positions held...

  • Page 102
    ... Entergy Wholesale Commodities Balance Sheet Location Fair Value(a) Offset(a) Business (a) The balances of derivative assets and liabilities in these tables are presented gross. Certain investments, including those not designated as hedging instruments, are subject to master netting agreements...

  • Page 103
    ...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, 2012 is 39,380,000 MMBtu for Entergy, 12,670,000 MMBtu for Entergy Gulf States...

  • Page 104
    ... reporting market data, providing market and credit risk analyses and valuations in support of Entergy Wholesale Commodities' commercial transactions, developing and administering protocols for the management of market and credit risks, implementing and maintaining controls around changes to market...

  • Page 105
    ...TO CONSOLIDATED FINANCIAL STATEMENTS continued corporate guarantees, which would require additional cash or letters of credit in the event of a decrease in Entergy Corporation's credit rating to below investment grade. On a daily basis, Entergy Wholesale Commodities calculates the mark-to-market for...

  • Page 106
    ...on investment securities in other regulatory liabilities/assets. For the nonregulated portion of River Bend, Entergy Gulf States Louisiana has recorded an offsetting amount of unrealized gains/ (losses) in other deferred credits. Decommissioning trust funds for Pilgrim, Indian Point 1 and 2, Vermont...

  • Page 107
    ...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 108
    ... cancelled Little Gypsy repowering project. With the proceeds, Entergy Louisiana Investment Recovery Funding purchased from Entergy Louisiana the investment recovery property, which is the right to recover from customers through an investment recovery charge amounts sufficient to service the bonds...

  • Page 109
    ...'s Code of Conduct. You can also request and receive information via email. Printed copies of the above are also available without charge by calling 1-888-ENTERGY or writing to: Entergy Corporation Investor Relations P.O. Box 61000 New Orleans, LA 70161 INSTITUTIONAL INVESTOR INQUIRIES In May 2012...

  • Page 110
    ... on Jan. 2, 2013, after serving as Senior Vice President of Nuclear Operations. Age, 56 E. Renae Conley Executive Vice President, Human Resources and Administration. Joined Entergy in 1999. Former President and Chief Executive Officer of Entergy Gulf States Louisiana and Entergy Louisiana. Age, 55...

  • Page 111
    Board of D rectors Maureen S. Bateman Leo P. Denault Gary W. Edwards Alexis M. Herman Donald C. Hintz Stuart L. Levenick Blanche L. Lincoln Stewart C. Myers William A. Percy, II W. J. "Billy" Tauzin Steven V. Wilkinson

  • Page 112
    ... impact estimates were made using the Environmental Defense Fund Paper Calculator. For more information visit http://www.papercalculator.org. FSC ® is not responsible for the saving calculations by using this paper. Entergy Corporation Post Office Box 61000 New Orleans, LA 70161 entergy...