Entergy 2014 Annual Report Download - page 56
Download and view the complete annual report
Please find page 56 of the 2014 Entergy annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.(QWHUJ\&RUSRUDWLRQDQG6XEVLGLDULHV
0DQDJHPHQWV)LQDQFLDO'LVFXVVLRQDQG$QDO\VLV
7LPLQJ,QSURMHFWLQJGHFRPPLVVLRQLQJFRVWVWZRDVVXPSWLRQVPXVWEHPDGHWRHVWLPDWHWKHWLPLQJRISODQW
GHFRPPLVVLRQLQJ)LUVWWKHGDWHRIWKHSODQW¶VUHWLUHPHQWPXVWEHHVWLPDWHG$KLJKSUREDELOLW\WKDWWKHSODQW¶V
OLFHQVHZLOOEHUHQHZHGDQGWKHSODQWZLOORSHUDWHIRUVRPHWLPHEH\RQGWKHRULJLQDOOLFHQVHWHUPKDVEHHQ
DVVXPHGIRUSXUSRVHVRIFDOFXODWLQJWKHGHFRPPLVVLRQLQJOLDELOLW\IRUDQXPEHURI(QWHUJ\¶VQXFOHDUXQLWV
6HFRQGDQDVVXPSWLRQPXVWEHPDGHZKHWKHUDOOGHFRPPLVVLRQLQJDFWLYLW\ZLOOSURFHHGLPPHGLDWHO\XSRQ
SODQWUHWLUHPHQWRUZKHWKHUWKHSODQWZLOOEHSODFHGLQ6$)6725VWDWXV6$)6725LVGHFRPPLVVLRQLQJD
IDFLOLW\E\SODFLQJLWLQDVDIHVWDEOHFRQGLWLRQWKDWLVPDLQWDLQHGXQWLOLWLVVXEVHTXHQWO\GHFRQWDPLQDWHGDQG
GLVPDQWOHGWROHYHOVWKDWSHUPLWOLFHQVHWHUPLQDWLRQQRUPDOO\ZLWKLQ\HDUVIURPSHUPDQHQWFHVVDWLRQRI
RSHUDWLRQV$FKDQJHRIDVVXPSWLRQUHJDUGLQJHLWKHUWKHSUREDELOLW\RIOLFHQVHUHQHZDOWKHSHULRGRIFRQWLQXHG
RSHUDWLRQRUWKHXVHRID6$)6725SHULRGFDQFKDQJHWKHSUHVHQWYDOXHRIWKHDVVHWUHWLUHPHQWREOLJDWLRQV
&RVW (VFDODWLRQ )DFWRUV (QWHUJ\¶V FXUUHQW GHFRPPLVVLRQLQJ FRVW VWXGLHV LQFOXGH DQ DVVXPSWLRQ WKDW
GHFRPPLVVLRQLQJFRVWVZLOOHVFDODWHRYHUSUHVHQWFRVWOHYHOVE\IDFWRUVUDQJLQJIURPDSSUR[LPDWHO\WR
$ EDVLV SRLQW FKDQJH LQ WKLV DVVXPSWLRQ FRXOG FKDQJH WKH HVWLPDWHG SUHVHQW YDOXH RI WKH
GHFRPPLVVLRQLQJOLDELOLWLHVE\DSSUR[LPDWHO\WR7KHWLPLQJDVVXPSWLRQLQIOXHQFHVWKHVLJQLILFDQFH
RIWKHHIIHFWRIDFKDQJHLQWKHHVWLPDWHGLQIODWLRQRUFRVWHVFDODWLRQUDWHEHFDXVHWKHHIIHFWLQFUHDVHVZLWKWKH
OHQJWKRIWLPHDVVXPHGEHIRUHGHFRPPLVVLRQLQJDFWLYLW\HQGV
6SHQW)XHO'LVSRVDO)HGHUDOODZUHTXLUHVWKH'2(WRSURYLGHIRUWKHSHUPDQHQWVWRUDJHRIVSHQWQXFOHDUIXHO
DQGOHJLVODWLRQKDVEHHQSDVVHGE\&RQJUHVVWRGHYHORSDUHSRVLWRU\DW<XFFD0RXQWDLQ1HYDGD7KHFXUUHQW
3UHVLGHQWLDODGPLQLVWUDWLRQKRZHYHUKDVGHIXQGHGWKH<XFFD0RXQWDLQSURMHFW7KH'2(KDVQRW\HWEHJXQ
DFFHSWLQJVSHQWQXFOHDUIXHODQGLVLQQRQFRPSOLDQFHZLWKIHGHUDOODZ7KH'2(FRQWLQXHVWRGHOD\PHHWLQJ
LWVREOLJDWLRQDQG(QWHUJ\¶VQXFOHDUSODQWRZQHUVDUHFRQWLQXLQJWRSXUVXHGDPDJHFODLPVDJDLQVWWKH'2(IRU
LWVIDLOXUHWRSURYLGHWLPHO\VSHQWIXHOVWRUDJH8QWLODIHGHUDOVLWHLVDYDLODEOHKRZHYHUQXFOHDUSODQWRSHUDWRUV
PXVWSURYLGHIRULQWHULPVSHQWIXHOVWRUDJHRQWKHQXFOHDUSODQWVLWHZKLFKFDQUHTXLUHWKHFRQVWUXFWLRQDQG
PDLQWHQDQFHRIGU\FDVNVWRUDJHVLWHVRURWKHUIDFLOLWLHV7KHFRVWVRIGHYHORSLQJDQGPDLQWDLQLQJWKHVHIDFLOLWLHV
GXULQJWKHGHFRPPLVVLRQLQJSHULRGFDQKDYHDVLJQLILFDQWHIIHFWDVPXFKDVDQDYHUDJHRIWRRI
WRWDOHVWLPDWHGGHFRPPLVVLRQLQJFRVWV(QWHUJ\¶VGHFRPPLVVLRQLQJVWXGLHVLQFOXGHFRVWHVWLPDWHVIRUVSHQW
IXHOVWRUDJHZKHQDSSOLFDEOH7KHVHHVWLPDWHVFRXOGFKDQJHLQWKHIXWXUHKRZHYHUEDVHGRQWKHWLPLQJRI
ZKHQWKH'2(EHJLQVWRIXOILOOLWVREOLJDWLRQWRUHFHLYHDQGVWRUHVSHQWQXFOHDUIXHO
7HFKQRORJ\ DQG 5HJXODWLRQ 2YHU WKH SDVW VHYHUDO \HDUV PRUH SUDFWLFDO H[SHULHQFH ZLWK WKH DFWXDO
GHFRPPLVVLRQLQJRIQXFOHDUIDFLOLWLHVKDVEHHQJDLQHGDQGWKDWH[SHULHQFHKDVEHHQLQFRUSRUDWHGLQWR(QWHUJ\¶V
FXUUHQWGHFRPPLVVLRQLQJFRVWHVWLPDWHV*LYHQWKHORQJGXUDWLRQRIGHFRPPLVVLRQLQJSURMHFWVDGGLWLRQDO
H[SHULHQFH LQFOXGLQJ WHFKQRORJLFDO DGYDQFHPHQWV LQ GHFRPPLVVLRQLQJ FRXOG RFFXU KRZHYHU DQG DIIHFW
FXUUHQWFRVWHVWLPDWHV,QDGGLWLRQLIUHJXODWLRQVUHJDUGLQJQXFOHDUGHFRPPLVVLRQLQJZHUHWRFKDQJHWKLV
FRXOGVLJQLILFDQWO\DIIHFWFRVWHVWLPDWHV
,QWHUHVW5DWHV7KHHVWLPDWHGGHFRPPLVVLRQLQJFRVWVWKDWDUHWKHEDVLVIRUWKHUHFRUGHGGHFRPPLVVLRQLQJ
OLDELOLW\DUHGLVFRXQWHGWRSUHVHQW YDOXHXVLQJD FUHGLWDGMXVWHGULVNIUHHUDWH:KHQWKH GHFRPPLVVLRQLQJ
OLDELOLW\ LV UHYLVHG LQFUHDVHV LQ FDVK IORZV DUH GLVFRXQWHG XVLQJ WKH FXUUHQW FUHGLWDGMXVWHG ULVNIUHH UDWH
'HFUHDVHVLQHVWLPDWHGFDVKIORZVDUHGLVFRXQWHGXVLQJWKHFUHGLWDGMXVWHGULVNIUHHUDWHXVHGSUHYLRXVO\LQ
HVWLPDWLQJWKHGHFRPPLVVLRQLQJOLDELOLW\WKDWLVEHLQJUHYLVHG7KHUHIRUHWRWKHH[WHQWWKDWDUHYLVHGFRVWVWXG\
UHVXOWVLQDQLQFUHDVHLQHVWLPDWHGFDVKIORZVDFKDQJHLQLQWHUHVWUDWHVIURPWKHWLPHRIWKHSUHYLRXVFRVW
HVWLPDWHZLOODIIHFWWKHFDOFXODWLRQRIWKHSUHVHQWYDOXHRIWKHUHYLVHGGHFRPPLVVLRQLQJOLDELOLW\
)XWXUHUHYLVLRQVRIHVWLPDWHGGHFRPPLVVLRQLQJFRVWVWKDWGHFUHDVHWKHOLDELOLW\DOVRUHVXOWLQDGHFUHDVHLQWKH
DVVHWUHWLUHPHQWFRVWDVVHW)RUWKHQRQUDWHUHJXODWHGSRUWLRQVRI(QWHUJ\¶VEXVLQHVVWKHVHUHGXFWLRQVZLOOLPPHGLDWHO\
UHGXFHRSHUDWLQJH[SHQVHVLIWKHUHGXFWLRQRIWKHOLDELOLW\H[FHHGVWKHDPRXQWRIWKHXQGHSUHFLDWHGDVVHWUHWLUHPHQW
FRVWDVVHWDWWKHGDWHRIWKHUHYLVLRQ)XWXUHUHYLVLRQVRIHVWLPDWHGGHFRPPLVVLRQLQJFRVWVWKDWLQFUHDVHWKHOLDELOLW\
UHVXOWLQDQLQFUHDVHLQWKHDVVHWUHWLUHPHQWFRVWDVVHWZKLFKLVWKHQGHSUHFLDWHGRYHUWKHDVVHW¶VUHPDLQLQJHFRQRPLF
OLIH)RUDSODQWIRUZKLFKWKHYDOXHLVLPSDLUHGLQFOXGLQJDSODQWWKDWLVVKXWGRZQRULVQHDULQJLWVVKXWGRZQGDWH
KRZHYHUIRUWKHQRQUDWHUHJXODWHGSRUWLRQVRI(QWHUJ\¶VEXVLQHVVWKHLQFUHDVHLQWKHOLDELOLW\ZLOOLPPHGLDWHO\LQFUHDVH
RSHUDWLQJH[SHQVHDQGQRWWKHDVVHWUHWLUHPHQWFRVWDVVHW