ENTERGY ARKANSAS, LLC - Quarter Report: 2011 June (Form 10-Q)

(Mark One)
X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Quarterly Period Ended June 30, 2011
	OR
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ____________ to ____________

Commission File Number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number, and IRS Employer Identification No.		Commission File Number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number, and IRS Employer Identification No.
1-11299	ENTERGY CORPORATION (a Delaware corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 576-4000 72-1229752		1-31508	ENTERGY MISSISSIPPI, INC. (a Mississippi corporation) 308 East Pearl Street Jackson, Mississippi 39201 Telephone (601) 368-5000 64-0205830
1-10764	ENTERGY ARKANSAS, INC. (an Arkansas corporation) 425 West Capitol Avenue Little Rock, Arkansas 72201 Telephone (501) 377-4000 71-0005900		0-05807	ENTERGY NEW ORLEANS, INC. (a Louisiana corporation) 1600 Perdido Street New Orleans, Louisiana 70112 Telephone (504) 670-3700 72-0273040
0-20371	ENTERGY GULF STATES LOUISIANA, L.L.C. (a Louisiana limited liability company) 446 North Boulevard Baton Rouge, Louisiana 70802 Telephone (800) 368-3749 74-0662730		1-34360	ENTERGY TEXAS, INC. (a Texas corporation) 350 Pine Street Beaumont, Texas 77701 Telephone (409) 981-2000 61-1435798
1-32718	ENTERGY LOUISIANA, LLC (a Texas limited liability company) 446 North Boulevard Baton Rouge, Louisiana 70802 Telephone (800) 368-3749 75-3206126		1-09067	SYSTEM ENERGY RESOURCES, INC. (an Arkansas corporation) Echelon One 1340 Echelon Parkway Jackson, Mississippi 39213 Telephone (601) 368-5000 72-0752777

	Large accelerated filer		Accelerated filer		Non- accelerated filer		Smaller reporting company
Entergy Corporation	Ö
Entergy Arkansas, Inc.					Ö
Entergy Gulf States Louisiana, L.L.C.					Ö
Entergy Louisiana, LLC					Ö
Entergy Mississippi, Inc.					Ö
Entergy New Orleans, Inc.					Ö
Entergy Texas, Inc.					Ö
System Energy Resources, Inc.					Ö

Common Stock Outstanding		Outstanding at July 29, 2011
Entergy Corporation	($0.01 par value)	176,781,300

	Page Number
Forward-looking information	iv
Definitions	vi
Entergy Corporation and Subsidiaries
Management’s Financial Discussion and Analysis
Results of Operations	1
Liquidity and Capital Resources	9
Rate, Cost-recovery, and Other Regulation	13
Market and Credit Risk Sensitive Instruments	14
Nuclear Matters	16
Critical Accounting Estimates	16
New Accounting Pronouncements	16
Consolidated Statements of Income	17
Consolidated Statements of Cash Flows	18
Consolidated Balance Sheets	20
Consolidated Statements of Changes in Equity and Comprehensive Income	22
Selected Operating Results	23
Notes to Financial Statements	24
Part 1. Item 4.  Controls and Procedures	67
Entergy Arkansas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis
Results of Operations	68
Liquidity and Capital Resources	71
State and Local Rate Regulation	73
Federal Regulation	73
Nuclear Matters	73
Environmental Risks	73
Critical Accounting Estimates	73
Consolidated Income Statements	74
Consolidated Statements of Cash Flows	75
Consolidated Balance Sheets	76
Consolidated Statements of Changes in Common Equity	78
Selected Operating Results	79
Entergy Gulf States Louisiana, L.L.C.
Management’s Financial Discussion and Analysis
Results of Operations	80
Liquidity and Capital Resources	82
State and Local Rate Regulation	84
Federal Regulation	85
Nuclear Matters	85
Environmental Risks	85
Critical Accounting Estimates	85
Income Statements	86
Statements of Cash Flows	87
Balance Sheets	88
Statements of Changes in Equity and Comprehensive Income	90
Selected Operating Results	91

	Page Number
Entergy Louisiana, LLC
Management’s Financial Discussion and Analysis
Results of Operations	92
Liquidity and Capital Resources	95
State and Local Rate Regulation	98
Federal Regulation	98
Nuclear Matters	98
Environmental Risks	98
Critical Accounting Estimates	99
Income Statements	100
Statements of Cash Flows	101
Balance Sheets	102
Statements of Changes in Equity and Comprehensive Income	104
Selected Operating Results	105
Entergy Mississippi, Inc.
Management’s Financial Discussion and Analysis
Results of Operations	106
Liquidity and Capital Resources	108
State and Local Rate Regulation	110
Federal Regulation	110
Critical Accounting Estimates	110
Income Statements	111
Statements of Cash Flows	113
Balance Sheets	114
Statements of Changes in Common Equity	116
Selected Operating Results	117
Entergy New Orleans, Inc.
Management’s Financial Discussion and Analysis
Results of Operations	118
Liquidity and Capital Resources	120
State and Local Rate Regulation	122
Federal Regulation	122
Environmental Risks	122
Critical Accounting Estimates	122
Income Statements	123
Statements of Cash Flows	125
Balance Sheets	126
Statements of Changes in Common Equity	128
Selected Operating Results	129

	Page Number
Entergy Texas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis
Results of Operations	130
Liquidity and Capital Resources	133
State and Local Rate Regulation	135
Federal Regulation	135
Environmental Risks	135
Critical Accounting Estimates	135
Consolidated Income Statements	136
Consolidated Statements of Cash Flows	137
Consolidated Balance Sheets	138
Consolidated Statements of Changes in Common Equity	140
Selected Operating Results	141
System Energy Resources, Inc.
Management’s Financial Discussion and Analysis
Results of Operations	142
Liquidity and Capital Resources	142
Nuclear Matters	144
Environmental Risks	144
Critical Accounting Estimates	144
Income Statements	145
Statements of Cash Flows	147
Balance Sheets	148
Statements of Changes in Common Equity	150
Part II.  Other Information
Item 1.    Legal Proceedings	151
Item 1A.  Risk Factors	151
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds	151
Item 5.    Other Information	152
Item 6.    Exhibits	155
Signature	158

·

resolution of pending and future rate cases and negotiations, including various performance-based rate discussions, and other regulatory proceedings, including those related to Entergy’s System Agreement or any successor agreement or arrangement, Entergy’s utility supply plan, recovery of storm costs, and recovery of fuel and purchased power costs

·

changes in utility regulation, including the beginning or end of retail and wholesale competition, the ability to recover net utility assets and other potential stranded costs, the operations of the independent coordinator of transmission for Entergy’s utility service territory and transition to a successor or alternative arrangement, including possible participation in a regional transmission organization, and the application of more stringent transmission reliability requirements or market power criteria by the FERC

·

changes in regulation of nuclear generating facilities and nuclear materials and fuel, including possible shutdown of nuclear generating facilities, particularly those owned or operated by the Entergy Wholesale Commodities business, and the effects of new or existing safety concerns regarding nuclear power plants and nuclear fuel

·	resolution of pending or future applications for license renewals or modifications of nuclear generating facilities

·	the performance of and deliverability of power from Entergy’s generation resources, including the capacity factors at its nuclear generating facilities

·	Entergy’s ability to develop and execute on a point of view regarding future prices of electricity, natural gas, and other energy-related commodities

·	prices for power generated by Entergy’s merchant generating facilities and the ability to hedge, sell power forward or otherwise reduce the market price risk associated with those facilities, including 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, uranium, and other energy-related commodities

·	changes in law resulting from federal or state energy legislation or legislation subjecting energy derivatives used in hedging and risk management transactions to governmental regulation

·	changes in environmental, tax, and other laws, including requirements for reduced emissions of sulfur, nitrogen, carbon, mercury, and other substances, and changes in costs of compliance with environmental and other laws and regulations

·	uncertainty regarding the establishment of interim or permanent sites for spent nuclear fuel and nuclear waste storage and disposal

·

variations in weather and the occurrence of hurricanes and other storms and disasters, including uncertainties associated with efforts to remediate the effects of hurricanes and ice storms and the recovery of costs associated with restoration, including accessing funded storm reserves, federal and local cost recovery mechanisms, securitization, and insurance

·	effects of climate change

·	Entergy’s ability to manage its capital projects and operation and maintenance costs

·	Entergy’s ability to purchase and sell assets at attractive prices and on other attractive terms

·	the economic climate, and particularly economic conditions in Entergy’s Utility service territory and the Northeast United States and events that could influence economic conditions in those areas

·	the effects of Entergy’s strategies to reduce tax payments

·	changes in the financial markets, particularly those affecting the availability of capital and Entergy’s ability to refinance existing debt, execute share repurchase programs, and fund investments and acquisitions

·	actions of rating agencies, including changes in the ratings of debt and preferred stock, changes in general corporate ratings, and changes in the rating agencies’ ratings criteria

·	changes in inflation and interest rates

·	the effect of litigation and government investigations or proceedings

·	advances in technology

·	the potential effects of threatened or actual terrorism, cyber attacks or data security breaches, and war or a catastrophic event such as a nuclear accident or a natural gas pipeline explosion

·	Entergy’s ability to attract and retain talented management and directors

·	changes in accounting standards and corporate governance

·	declines in the market prices of marketable securities and resulting funding requirements for Entergy’s defined benefit pension and other postretirement benefit plans

·	changes in decommissioning trust fund values or earnings or in the timing of or cost to decommission nuclear plant sites

·	factors that could lead to impairment of long-lived assets

·	the ability to successfully complete merger, acquisition, or divestiture plans, regulatory or other limitations imposed as a result of merger, acquisition, or divestiture, and the success of the business following a merger, acquisition, or divestiture

Abbreviation or Acronym	Term
AFUDC	Allowance for Funds Used During Construction
ALJ	Administrative Law Judge
ANO 1 and 2	Units 1 and 2 of Arkansas Nuclear One (nuclear), owned by Entergy Arkansas
APSC	Arkansas Public Service Commission
ASU	Accounting Standards Update issued by the FASB
Board	Board of Directors of Entergy Corporation
capacity factor	Actual plant output divided by maximum potential plant output for the period
City Council or Council	Council of the City of New Orleans, Louisiana
Entergy	Entergy Corporation and its direct and indirect subsidiaries
Entergy Corporation	Entergy Corporation, a Delaware corporation
Entergy Gulf States, Inc.	Predecessor company for financial reporting purposes to Entergy Gulf States Louisiana that included the assets and business operations of both Entergy Gulf States Louisiana and Entergy Texas
Entergy Gulf States Louisiana	Entergy Gulf States Louisiana, L.L.C., a company created in connection with the jurisdictional separation of Entergy Gulf States, Inc. and the successor company to Entergy Gulf States, Inc. for financial reporting purposes.  The term is also used to refer to the Louisiana jurisdictional business of Entergy Gulf States, Inc., as the context requires.
Entergy Texas	Entergy Texas, Inc., a company created in connection with the jurisdictional separation of Entergy Gulf States, Inc.  The term is also used to refer to the Texas jurisdictional business of Entergy Gulf States, Inc., as the context requires.
Entergy Wholesale Commodities (EWC)	Entergy’s non-utility business segment primarily comprised of the ownership and operation of six nuclear power plants, the ownership of interests in non-nuclear power plants, and the sale of the electric power produced by those plants to wholesale customers
EPA	United States Environmental Protection Agency
ERCOT	Electric Reliability Council of Texas
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
firm LD	Transaction that requires receipt or delivery of energy at a specified delivery point (usually at a market hub not associated with a specific asset) or settles financially on notional quantities; if a party fails to deliver or receive energy, the defaulting party must compensate the other party as specified in the contract
FitzPatrick	James A. FitzPatrick Nuclear Power Plant (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Form 10-K	Annual Report on Form 10-K for the calendar year ended December 31, 2010 filed with the SEC by Entergy Corporation and its Registrant Subsidiaries
Grand Gulf	Unit No. 1 of Grand Gulf Nuclear Station (nuclear), 90% owned or leased by System Energy
GWh	Gigawatt-hour(s), which equals one million kilowatt-hours
Independence	Independence Steam Electric Station (coal), owned 16% by Entergy Arkansas, 25% by Entergy Mississippi, and 7% by Entergy Power
Indian Point 2	Unit 2 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Indian Point 3	Unit 3 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
IRS	Internal Revenue Service

Abbreviation or Acronym	Term
ISO	Independent System Operator
kW	Kilowatt, which equals one thousand watts
kWh	Kilowatt-hour(s)
LPSC	Louisiana Public Service Commission
MISO	Midwest Independent Transmission System Operator, Inc., a regional transmission organization
MMBtu	One million British Thermal Units
MPSC	Mississippi Public Service Commission
MW	Megawatt(s), which equals one thousand kilowatts
MWh	Megawatt-hour(s)
Net MW in operation	Installed capacity owned and operated
NRC	Nuclear Regulatory Commission
NYPA	New York Power Authority
Offsetting positions	Transactions for the purchase of energy, generally to offset a firm LD transaction
Palisades	Palisades Power Plant (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Pilgrim	Pilgrim Nuclear Power Station (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
PPA	Purchased power agreement or power purchase agreement
PUCT	Public Utility Commission of Texas
Registrant Subsidiaries	Entergy Arkansas, Inc., Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana, LLC, Entergy Mississippi, Inc., Entergy New Orleans, Inc., Entergy Texas, Inc., and System Energy Resources, Inc.
River Bend	River Bend Station (nuclear), owned by Entergy Gulf States Louisiana
RTO	Regional transmission organization
SEC	Securities and Exchange Commission
SPP	Southwest Power Pool
System Agreement	Agreement, effective January 1, 1983, as modified, among the Utility operating companies relating to the sharing of generating capacity and other power resources
System Energy	System Energy Resources, Inc.
TWh	Terawatt-hour(s), which equals one billion kilowatt-hours
unit-contingent	Transaction under which power is supplied from a specific generation asset; if the asset is not operating, the seller is generally not liable to the buyer for any damages
Unit Power Sales Agreement	Agreement, dated as of June 10, 1982, as amended and approved by FERC, among Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy, relating to the sale of capacity and energy from System Energy’s share of Grand Gulf
Utility	Entergy’s business segment that generates, transmits, distributes, and sells electric power, with a small amount of natural gas distribution
Utility operating companies	Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas
Vermont Yankee	Vermont Yankee Nuclear Power Station (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Waterford 3	Unit No. 3 (nuclear) of the Waterford Steam Electric Station, 100% owned or leased by Entergy Louisiana
weather-adjusted usage	Electric usage excluding the effects of deviations from normal weather

·	Utility generates, transmits, distributes, and sells electric power in service territories in four states that include portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and operates a small natural gas distribution business.

·

The Entergy Wholesale Commodities business segment includes the ownership and operation of six nuclear power plants located in the northern United States and the sale of the electric power produced by those plants to wholesale customers.  This business also provides services to other nuclear power plant owners.  Entergy Wholesale Commodities also owns interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers.

		Utility		Entergy Wholesale Commodities		Parent & Other (1)		Entergy
		(In Thousands)
2nd Qtr 2010 Consolidated Net Income		$230,173		$104,557		($14,447)		$320,283
Net revenue (operating revenue less fuel   expense, purchased power, and other   regulatory charges/credits)		11,992		(55,659)		1,117		(42,550)
Other operation and maintenance expenses		13,669		(19,296)		17,919		12,292
Taxes other than income taxes		4,493		(2,454)		208		2,247
Depreciation and amortization		2,547		5,983		109		8,639
Other income		11,004		(4,272)		(2,825)		3,907
Interest expense		(17,590)		(4,594)		11,227		(10,957)
Other expenses		(680)		2,455		-		1,775
Income taxes		(2,011)		(3,024)		(47,919)		(52,954)
2nd Qtr 2011 Consolidated Net Income		$252,741		$65,556		$2,301		$320,598

(1)	Parent & Other includes eliminations, which are primarily intersegment activity.

 

 

 

 

		Amount
		(In Millions)
2010 net revenue		$1,293
Retail electric price		21
Volume/weather		14
Purchased power capacity		(4)
Net wholesale revenue		(11)
Other		(8)
2011 net revenue		$1,305

·	a base rate increase at Entergy Arkansas effective July 2010;

·	rate actions at Entergy Texas, including a base rate increase effective August 2010 and an additional increase beginning May 2011; and

·	formula rate plan increases at Entergy Louisiana effective September 2010 and May 2011.

		Amount
		(In Millions)
2010 net revenue		$530
Realized price changes		(52)
Volume		5
Other		(9)
2011 net revenue		$474

		2011		2010
Net MW in operation at June 30		4,998		4,998
Average realized revenue per MWh		$52.38		$57.69
GWh billed		9,993		9,868
Capacity factor		91%		90%
Refueling Outage Days:
Indian Point 2		-		11
Indian Point 3		7		-
Pilgrim		25		-
Vermont Yankee		-		29

·	an increase of $13 million in nuclear expenses primarily due to higher labor costs;

·	an increase of $5 million in legal expenses primarily resulting from an increase in legal and regulatory activity increasing the use of outside legal services;

·	an increase of $4 million in legal expenses due to the deferral in 2010 of certain litigation expenses in accordance with regulatory treatment; and

·	an increase of $3 million due to the deferral in 2010 of 2009 Entergy Arkansas rate case expenses.

·

an increase in distributions of $6 million earned by Entergy Louisiana and $3 million earned by Entergy Gulf States Louisiana on investments in preferred membership interests of Entergy Holdings Company. The distributions on preferred membership interests are eliminated in consolidation and have no effect on Entergy’s net income because the investment is in another Entergy subsidiary.  See Note 2 to the financial statements in the Form 10-K for discussion of these investments in preferred membership interests; and

·	an increase of $5 million in realized earnings on decommissioning trust fund investments.

·	a decrease in costs related to spin-off dis-synergies;

·	a decrease of $7 million due to the absence of expenses from the Harrison County plant, which was sold in December 2010; and

·	a decrease in spending on tritium remediation work.

		Utility		Entergy Wholesale Commodities		Parent & Other (1)		Entergy
		(In Thousands)
2010 Consolidated Net Income		$373,144		$195,099		($29,146)		$539,097
Net revenue (operating revenue less fuel   expense, purchased power, and other   regulatory charges/credits)		30,233		(95,800)		1,342		(64,225)
Other operation and maintenance expenses		26,702		(69,851)		8,702		(34,447)
Taxes other than income taxes		(1,746)		(5,908)		(277)		(7,931)
Depreciation and amortization		(4,394)		8,701		12		4,319
Other income		10,257		(27,760)		(4,935)		(22,438)
Interest expense		(26,482)		(51,792)		23,719		(54,555)
Other expenses		(64)		7,223		1		7,160
Income taxes		(1,776)		(5,623)		(28,990)		(36,389)
2011 Consolidated Net Income		$421,394		$188,789		($35,906)		$574,277

(1)	Parent & Other includes eliminations, which are primarily intersegment activity.

		Amount
		(In Millions)
2010 net revenue		$2,423
Retail electric price		39
Volume/weather		23
Net gas revenue		(7)
Purchased power capacity		(9)
Net wholesale revenue		(14)
Other		(2)
2011 net revenue		$2,453

·	a base rate increase at Entergy Arkansas effective July 2010;

·	rate actions at Entergy Texas, including a base rate increase effective August 2010 and an additional increase beginning May 2011; and

·	formula rate plan increases at Entergy Louisiana effective September 2010 and May 2011.

		Amount
		(In Millions)
2010 net revenue		$1,095
Realized price changes		(67)
Volume		(14)
Other		(15)
2011 net revenue		$999

		2011		2010
Net MW in operation at June 30		4,998		4,998
Average realized revenue per MWh		$54.91		$58.22
GWh billed		19,906		20,123
Capacity factor		91%		92%
Refueling Outage Days:
Indian Point 2		-		33
Indian Point 3		30		-
Pilgrim		25		-
Vermont Yankee		-		29

·	an increase of $17 million in nuclear expenses primarily due to higher labor and benefits costs;

·	an increase of $8 million in legal expenses primarily resulting from an increase in legal and regulatory activity increasing the use of outside legal services;

·	an increase of $6 million in transmission and distribution expenses primarily due to vegetation and maintenance expenses; and

·	several individually insignificant items.

 

·	the write-off of $32 million of capital costs in first quarter 2010, primarily for software that will not be utilized, in connection with Entergy’s decision to unwind the infrastructure created for the planned spin-off of its non-utility nuclear business;

·	a decrease of $13 million due to the absence of expenses from the Harrison County plant which was sold in December 2010;

·	a decrease in spending on tritium remediation work; and

·	several other individually insignificant factors.

 

·	a Michigan tax law change that repealed the business tax and enacted a corporate income tax, which eliminates a deduction that was available under the business tax;

·	state income taxes; and

·	certain book and tax differences for Utility plant items.

 

·

a charge of $16 million recorded in first quarter 2010 resulting from a change in tax law associated with the federal healthcare legislation enacted in March 2010.  See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K for a discussion of the federal healthcare legislation; and

·	state income taxes; and

·	certain book and tax differences for Utility plant items.

·	a $19 million tax benefit recorded first quarter 2010 in connection with Entergy’s decision to unwind the infrastructure created for the planned spin-off of its non-utility nuclear business; and

·	book and tax differences related to the allowance for equity funds used during construction.

		June 30, 2011		December 31, 2010
Debt to capital		58.1%		57.3%
Effect of excluding the Arkansas and Texas securitization bonds		(1.8)%		(2.0)%
Debt to capital, excluding securitization bonds (1)		56.3%		55.3%
Effect of subtracting cash		(1.2)%		(3.2)%
Net debt to net capital, excluding securitization bonds (1)		55.1%		52.1%

(1)	Calculation excludes the Arkansas and Texas securitization bonds, which are non-recourse to Entergy Arkansas and Entergy Texas, respectively.

 

Capacity		Borrowings		Letters of Credit		Capacity Available
(In Millions)
$3,465		$1,895		$25		$1,545

 

 

 

 

 

		2011		2010
		(In Millions)
Cash and cash equivalents at beginning of period		$1,294		$1,710
Cash flow provided by (used in):
Operating activities		977		1,468
Investing activities		(1,827)		(1,173)
Financing activities		86		(670)
Effect of exchange rates on cash and cash equivalents		-		1
Net decrease in cash and cash equivalents		(764)		(374)
Cash and cash equivalents at end of period		$530		$1,336

·	the purchase of the Acadia Power Plant by Entergy Louisiana for approximately $300 million in April 2011;

·	an increase in nuclear fuel purchases, as more plants were preparing for refueling outages in the spring 2011 than in the spring 2010;

·

a change in collateral deposit activity, reflected in the “Decrease (increase) in other investments” line, as Entergy received net deposits from Entergy Wholesale Commodities’ counterparties during 2010 and made net collateral deposits in 2011.  Entergy Wholesale Commodities’ forward sales contracts are discussed in the Market and Credit Risk Sensitive Instruments section below; and

 

 

·

an increase in construction expenditures, primarily in the Utility business.  Entergy’s construction spending plans for 2011 through 2013 are discussed in the Form 10-K.  April 2011 storms that caused damage to transmission and distribution lines, equipment, poles, and other facilities, primarily in Arkansas, also contributed to the increase.  The estimated capital cost of repairing that damage is approximately $55 million.

 

		2011		2012		2013		2014		2015
Percent of planned generation sold forward:
Unit-contingent		76%		59%		36%		14%		12%
Unit-contingent with guarantee of availability (1)		20%		14%		16%		13%		13%
Firm LD		3%		24%		24%		8%		-%
Offsetting positions		(3)%		(10)%		-%		-%		-%
Total energy sold forward		96%		87%		76%		35%		25%
Planned generation (TWh) (2)		21		41		40		41		41
Average revenue under contract per MWh (3) (4)		$54		$49		$45-51		$49-55		$49-57

(1)

A sale of power on a unit-contingent basis coupled with a guarantee of availability provides for the payment to the power purchaser of contract damages, if incurred, in the event the seller fails to deliver power as a result of the failure of the specified generation unit to generate power at or above a specified availability threshold.  All of Entergy’s outstanding guarantees of availability provide for dollar limits on Entergy’s maximum liability under such guarantees.

 

 

 

 

 

 

 

 

 

 

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ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Six Months Ended June 30, 2011 and 2010
(Unaudited)
		Three Months Ended								Six Months Ended
		2011				2010				2011				2010
		(In Thousands, Except Share Data)
OPERATING REVENUES
Electric		$	2,212,038			$	2,214,108			$	4,077,936			$	4,221,038
Natural gas			28,891				31,136				100,014				127,163
Competitive businesses			562,350				617,706				1,166,538				1,274,095
TOTAL			2,803,279				2,862,950				5,344,488				5,622,296
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale			563,333				631,546				1,071,026				1,190,214
Purchased power			451,227				416,458				813,845				891,361
Nuclear refueling outage expenses			62,966				64,221				126,951				126,510
Other operation and maintenance			712,496				700,204				1,368,245				1,402,692
Decommissioning			55,497				52,467				110,762				104,043
Taxes other than income taxes			129,215				126,968				254,449				262,380
Depreciation and amortization			264,206				255,567				529,090				524,771
Other regulatory charges (credits) - net			5,601				(10,722	)			491				17,370
TOTAL			2,244,541				2,236,709				4,274,859				4,519,341
OPERATING INCOME			558,738				626,241				1,069,629				1,102,955
OTHER INCOME
Allowance for equity funds used during construction			20,753				17,630				38,042				30,926
Interest and investment income			35,921				34,955				62,668				83,164
Miscellaneous - net			(16,962	)			(16,780	)			(26,360	)			(17,302	)
TOTAL			39,712				35,805				74,350				96,788
INTEREST EXPENSE
Interest expense			136,049				148,179				272,183				327,379
Allowance for borrowed funds used during construction			(9,150	)			(10,323	)			(17,684	)			(18,325	)
TOTAL			126,899				137,856				254,499				309,054
INCOME BEFORE INCOME TAXES			471,551				524,190				889,480				890,689
Income taxes			150,953				203,907				315,203				351,592
CONSOLIDATED NET INCOME			320,598				320,283				574,277				539,097
Preferred dividend requirements of subsidiaries			5,015				5,017				10,031				10,033
NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION		$	315,583			$	315,266			$	564,246			$	529,064
Earnings per average common share:
Basic		$	1.77			$	1.67			$	3.16			$	2.80
Diluted		$	1.76			$	1.65			$	3.14			$	2.77
Dividends declared per common share		$	0.83			$	0.83			$	1.66			$	1.58
Basic average number of common shares outstanding			177,808,890				188,776,240				178,318,784				188,988,284
Diluted average number of common shares outstanding			178,925,180				190,717,958				179,502,551				190,999,699
See Notes to Financial Statements.