ENTERGY NEW ORLEANS, LLC - Quarter Report: 2012 September (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 September 30, 2012
	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 October 31, 2012
Entergy Corporation	($0.01 par value)	177,732,990

	Page Number
Forward-looking information	iii
Definitions	v
Entergy Corporation and Subsidiaries
Management’s Financial Discussion and Analysis	1
Consolidated Statements of Income	24
Consolidated Statements of Comprehensive Income	25
Consolidated Statements of Cash Flows	26
Consolidated Balance Sheets	28
Consolidated Statements of Changes in Equity	30
Selected Operating Results	31
Notes to Financial Statements	32
Part 1. Item 4.  Controls and Procedures	83
Entergy Arkansas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis	84
Consolidated Income Statements	90
Consolidated Statements of Cash Flows	91
Consolidated Balance Sheets	92
Consolidated Statements of Changes in Common Equity	94
Selected Operating Results	95
Entergy Gulf States Louisiana, L.L.C.
Management’s Financial Discussion and Analysis	96
Income Statements	105
Statements of Comprehensive Income	106
Statements of Cash Flows	107
Balance Sheets	108
Statements of Changes in Equity	110
Selected Operating Results	111
Entergy Louisiana, LLC and Subsidiaries
Management’s Financial Discussion and Analysis	112
Consolidated Income Statements	121
Consolidated Statements of Comprehensive Income	122
Consolidated Statements of Cash Flows	123
Consolidated Balance Sheets	124
Consolidated Statements of Changes in Equity	126
Selected Operating Results	127
Entergy Mississippi, Inc.
Management’s Financial Discussion and Analysis	128
Income Statements	135
Statements of Cash Flows	137
Balance Sheets	138
Statements of Changes in Common Equity	140
Selected Operating Results	141

	Page Number
Entergy New Orleans, Inc.
Management’s Financial Discussion and Analysis	142
Income Statements	148
Statements of Cash Flows	149
Balance Sheets	150
Statements of Changes in Common Equity	152
Selected Operating Results	153
Entergy Texas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis	154
Consolidated Income Statements	161
Consolidated Statements of Cash Flows	163
Consolidated Balance Sheets	164
Consolidated Statements of Changes in Common Equity	166
Selected Operating Results	167
System Energy Resources, Inc.
Management’s Financial Discussion and Analysis	168
Income Statements	171
Statements of Cash Flows	173
Balance Sheets	174
Statements of Changes in Common Equity	176
Part II.  Other Information
Item 1.    Legal Proceedings	177
Item 1A.  Risk Factors	177
Item 2.    Unregistered Sales of Equity Securities and Use of Proceeds	177
Item 5.    Other Information	178
Item 6.    Exhibits	183
Signature	186

·	resolution of 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 and November 2015, respectively;

·	regulatory and operating challenges and uncertainties associated with the Utility operating companies’ proposal to move to the MISO RTO and the operations of the independent coordinator of transmission for Entergy's Utility service area;

·

risks associated with the proposed spin-off and subsequent merger of Entergy’s electric transmission business into a subsidiary of ITC Holdings Corp., including the risk that Entergy and the Utility operating companies may not be able to timely satisfy the conditions or obtain the approvals required to complete such transaction or such approvals may contain material restrictions or conditions, and the risk that if completed, the transaction may not achieve its anticipated results;

·	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, 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 or environmental concerns regarding nuclear power plants and nuclear fuel;

·	resolution of pending or future applications, and related regulatory proceedings and litigation, 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, meet credit support requirements for hedges, 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, ice storms, or other weather events 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 area 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; and

·	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
ASLB	Atomic Safety and Licensing Board, the board within the NRC that conducts hearings and performs other regulatory functions that the NRC authorizes
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
D.C. Circuit	U.S. Court of Appeals for the District of Columbia Circuit
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
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, 2011 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
ISO	Independent System Operator

Abbreviation or Acronym	Term
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
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 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

·

The Utility business segment includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and operates a small natural gas distribution business.  As discussed in more detail in “Plan to Spin Off the Utility’s Transmission Business,” in the Form 10-K, in December 2011, Entergy entered into an agreement to spin off its transmission business and merge it with a newly-formed subsidiary of ITC Holdings Corp.

·

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.

Company		Hurricane Isaac Restoration Costs
		(In Millions)
Entergy Arkansas		$10
Entergy Gulf States Louisiana		70-90
Entergy Louisiana		240-300
Entergy Mississippi		30-40
Entergy New Orleans		50-60
Total		$400-500

		Utility		Entergy Wholesale Commodities		Parent & Other (1)		Entergy
		(In Thousands)
3rd Qtr 2011 Consolidated Net Income		$528,459		$130,862		($26,252)		$633,069
Net revenue (operating revenue less fuel   expense, purchased power, and other   regulatory charges/credits)		189,220		(46,721)		(2,626)		139,873
Other operation and maintenance expenses		40,964		16,059		(602)		56,421
Taxes other than income taxes		(2,248)		(617)		(130)		(2,995)
Depreciation and amortization		13,902		(15,664)		(79)		(1,841)
Other income		(5,287)		(2,847)		(365)		(8,499)
Interest expense		9,485		(2,227)		12,951		20,209
Other expenses		3,442		(5,097)		-		(1,655)
Income taxes		346,341		(29,926)		35,219		351,634
3rd Qtr 2012 Consolidated Net Income		$300,506		$118,766		($76,602)		$342,670

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

		Amount
		(In Millions)
2011 net revenue		$1,319
Mark-to-market tax settlement sharing		200
Grand Gulf recovery		31
Retail electric price		26
Purchased power capacity		(12)
Net wholesale revenue		(15)
Volume/weather		(35)
Other		(6)
2012 net revenue		$1,508

		Amount
		(In Millions)
2011 net revenue		$542
Nuclear realized price changes		(48)
Nuclear volume		(22)
Other		23
2012 net revenue		$495

		2012		2011
Owned capacity		6,612		6,016
GWh billed		12,002		11,255
Average realized revenue per MWh		$51.88		$56.02
Entergy Wholesale Commodities Nuclear Fleet
Capacity factor		90%		98%
GWh billed		10,480		10,645
Average realized revenue per MWh		$52.27		$56.07
Refueling Outage Days:
FitzPatrick		15		-

·

the deferral in 2011 of $13 million of 2010 Michoud plant maintenance costs pursuant to the settlement of Entergy New Orleans’ 2010 test year formula rate plan filing approved by the City Council in September 2011.  See Note 2 to the financial statements in the Form 10-K for further discussion of the Entergy New Orleans 2010 test year formula rate plan filing and settlement;

·	$11 million of costs incurred in 2012 related to the planned spin-off and merger of the Utility’s transmission business;

·	an increase of $10 million resulting from a temporary increase in the Entergy Mississippi storm damage reserve authorized by the MPSC effective August 2012;

·	an increase of $7 million in energy efficiency costs at Entergy Arkansas.  These costs are recovered through the energy efficiency rider and have no effect on net income;

·

an increase of $7 million in compensation and benefits costs primarily due to decreasing discount rates and changes in certain actuarial assumptions resulting from a recent experience study.  See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for further discussion of benefits costs; and

·	the amortization of $4 million of Hurricane Rita storm costs in accordance with a rate order from the PUCT effective September 2012.  See Note 2 to the financial statements for discussion of the PUCT order.

·

an increase of $5 million in compensation and benefits costs primarily due to decreasing discount rates and changes in certain actuarial assumptions resulting from a recent experience study.  See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for further discussion of benefits costs;

·	an increase of $4 million due to the operations of the Rhode Island State Energy Center, which was acquired in December 2011; and

·	other items, including additional material and supply costs.

		Utility		Entergy Wholesale Commodities		Parent & Other (1)		Entergy
		(In Thousands)
2011 Consolidated Net Income		$949,854		$319,651		($62,159)		$1,207,346
Net revenue (operating revenue less fuel   expense, purchased power, and other   regulatory charges/credits)		(6,473)		(149,942)		(4,871)		(161,286)
Other operation and maintenance expenses		120,313		56,486		5,893		182,692
Asset impairment		-		355,524		-		355,524
Taxes other than income taxes		3,684		14,297		(145)		17,836
Depreciation and amortization		28,061		(3,931)		(91)		24,039
Other income		1,102		8,098		(207)		8,993
Interest expense		17,546		1,346		23,306		42,198
Other expenses		6,288		(54,105)		-		(47,817)
Income taxes		92,347		(223,380)		45,101		(85,932)
2012 Consolidated Net Income		$676,244		$31,570		($141,301)		$566,513

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

		Amount
		(In Millions)
2011 net revenue		$3,772
Louisiana Act 55 financing tax settlement sharing		(163)
Volume/weather		(84)
Purchased power capacity		(25)
Net wholesale revenue		(24)
Grand Gulf recovery		31
Retail electric price		43
Mark-to-market tax settlement sharing		201
Other		14
2012 net revenue		$3,765

 

The Grand Gulf recovery variance is primarily due to increased recovery of higher expenses resulting from the Grand Gulf uprate.

·	an increase in the energy efficiency rider at Entergy Arkansas, as approved by the APSC, effective July 2012.  This increase is offset by costs included in other operation and maintenance expenses and has no effect on net income;

·	an increase in the storm cost recovery rider at Entergy Mississippi, as approved by the MPSC for a five-month period effective August 2012.  This increase is offset by costs included in other operation and maintenance expenses and has no effect on net income;

·	a special formula rate plan rate increase at Entergy Louisiana effective May 2011 in accordance with a previous LPSC order relating to the acquisition of Unit 2 of the Acadia Energy Center; and

·	a base rate increase at Entergy Texas beginning May 2011 as a result of the settlement of the December 2009 rate case.

		Amount
		(In Millions)
2011 net revenue		$1,541
Nuclear realized price changes		(162)
Nuclear volume		(30)
Other		42
2012 net revenue		$1,391

		2012		2011
Owned capacity		6,612		6,016
GWh billed		34,957		32,376
Average realized revenue per MWh		$49.84		$55.20
Entergy Wholesale Commodities Nuclear Fleet
Capacity factor		88%		93%
GWh billed		30,744		30,551
Average realized revenue per MWh		$50.42		$55.31
Refueling Outage Days:
FitzPatrick		15		-
Indian Point 2		28		-
Indian Point 3		-		30
Palisades		34		-
Pilgrim		-		25

·

an increase of $42 million in compensation and benefits costs primarily due to decreasing discount rates and changes in certain actuarial assumptions resulting from a recent experience study.  See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for further discussion of benefits costs;

·	$27 million of costs incurred in 2012 related to the planned spin-off and merger of the Utility’s transmission business;

·	an increase of $17 million in fossil-fueled generation expenses resulting from higher outage costs primarily because of the timing of the outages and increased scope of outages compared to the same period in the prior year;

·

the deferral in 2011 of $13 million of 2010 Michoud plant maintenance costs pursuant to the settlement of Entergy New Orleans’ 2010 test year formula rate plan filing approved by the City Council in September 2011.  See Note 2 to the financial statements in the Form 10-K for further discussion of the Entergy New Orleans 2010 test year formula rate plan filing and settlement;

·	an increase of $10 million resulting from a temporary increase in the Entergy Mississippi storm damage reserve authorized by the MPSC effective August 2012;

·	an increase of $9 million in energy efficiency costs at Entergy Arkansas.  These costs are recovered through the energy efficiency rider and have no effect on net income;

·	nuclear insurance refunds of $5 million received in 2011; and

·	the amortization of $4 million of Hurricane Rita storm costs in accordance with a rate order from the PUCT effective September 2012.  See Note 2 to the financial statements for discussion of the PUCT order.

·	a decrease of approximately $7 million as a result of the deferral or capitalization of storm restoration costs for Hurricane Isaac, which hit the Utility's service area in August 2012; and

·	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, which reduced expenses by $10 million.

·

an increase of $23 million in compensation and benefits costs primarily due to decreasing discount rates and changes in certain actuarial assumptions resulting from a recent experience study.  See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for further discussion of benefits costs;

·	an increase of $15 million due to the operations of the Rhode Island State Energy Center, which was acquired in December 2011; and

·	other items, including additional material and supply costs.

 

 

 

 

 

Capital Structure

		September 30, 2012		December 31, 2011
Debt to capital		57.7 %		57.3 %
Effect of excluding the securitization bonds		(2.0)%		(2.3)%
Debt to capital, excluding securitization bonds (1)		55.7 %		55.0 %
Effect of subtracting cash		(1.6)%		(1.5)%
Net debt to net capital, excluding securitization bonds (1)		54.1 %		53.5 %

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

Capacity		Borrowings		Letters of Credit		Capacity Available
(In Millions)
$3,500		$1,315		$8		$2,177

 

 

Capital Investment Plan Preliminary Estimate for 2013-2015

 

		2012		2011
		(In Millions)
Cash and cash equivalents at beginning of period		$694		$1,294
Cash flow provided by (used in):
Operating activities		2,220		2,130
Investing activities		(2,323)		(2,395)
Financing activities		159		(42)
Net increase (decrease) in cash and cash equivalents		56		(307)
Cash and cash equivalents at end of period		$750		$987

·	a decrease of $167 million in pension contributions.  See "MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Critical Accounting Estimates" in the Form 10-K and Note 6 to the financial statements herein for a discussion of qualified pension and other postretirement benefits funding; and

·	an increase in deferred fuel cost collections.

 

·	the purchase of the Acadia Unit 2 by Entergy Louisiana for approximately $300 million in April 2011;

·	a decrease in nuclear fuel purchases because of variations from year to year in the timing and pricing of fuel reload requirements, material and services deliveries, and the timing of cash payments during the nuclear fuel cycle; and

·	proceeds received from the U.S. Department of Energy resulting from litigation regarding the storage of spent nuclear fuel.  The litigation is discussed in more detail in Part II, Item 5, “Spent Nuclear Fuel.”

 

 

 

		2012		2013		2014		2015		2016		2017
Energy
Percent of planned generation under contract (a):
Unit-contingent (b)		65%		41%		22%		12%		12%		13%
Unit-contingent with availability guarantees (c)		13%		19%		15%		13%		13%		13%
Firm LD (d)		24%		24%		55%		-%		-%		-%
Offsetting positions (e)		(13)%		-%		(19)%		-%		-%		-%
Total		89%		84%		73%		25%		25%		26%
Planned generation (TWh) (f) (g)		11		40		41		41		40		41
Average revenue per MWh on contracted volumes:
Minimum		$47		$45		$44		$48		$50		$51
Expected based on market prices as of September 30, 2012		$47		$45		$45		$49		$51		$52
Sensitivity: -/+ $10 per MWh market price change		$47		$45-$47		$44-$48		$48-$52		$50-$54		$51-$55
Capacity (n)
Percent of capacity sold forward (h):
Bundled capacity and energy contracts (i)		16%		16%		16%		16%		16%		16%
Capacity contracts (j)		59%		28%		13%		12%		5%		-%
Total		75%		44%		29%		28%		21%		16%
Planned net MW in operation (g) (k)		5,011		5,011		5,011		5,011		5,011		5,011
Average revenue under contract per kW per month (applies to Capacity contracts only)		$2.2		$2.3		$2.9		$3.3		$3.4		$-
Total Nuclear Energy and Capacity Revenues
Expected sold and market total revenue per MWh		$48		$47		$45		$45		$47		$48
Sensitivity: -/+ $10 per MWh market price change		$47-$49		$46-$51		$42-$51		$38-$53		$40-$55		$41-$56

 

		2012		2013		2014		2015		2016		2017
Energy
Percent of planned generation under contract (a):
Cost-based contracts (l)		42%		39%		32%		35%		32%		32%
Firm LD (d)		5%		5%		5%		7%		6%		6%
Total		47%		44%		37%		42%		38%		38%
Planned generation (TWh) (f) (m)		1		6		6		6		6		6
Capacity
Percent of capacity sold forward (h):
Cost-based contracts (l)		35%		29%		24%		24%		24%		24%
Bundled capacity and energy contracts (i)		8%		8%		8%		8%		8%		8%
Capacity contracts (j)		53%		47%		47%		48%		20%		-%
Total		96%		84%		79%		80%		52%		32%
Planned net MW in operation (k) (m)		1,052		1,052		1,052		1,052		1,052		1,052

(a)	Percent of planned generation output sold or purchased forward under contracts, forward physical contracts, forward financial contracts, or options that mitigate price uncertainty that may require regulatory approval or approval of transmission rights
(b)	Transaction under which power is supplied from a specific generation asset; if the asset is not operating, seller is generally not liable to buyer for any damages
(c)	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.
(d)	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, defaulting party must compensate the other party as specified in the contract, a portion of which may be capped through the use of risk management products
(e)	Transactions for the purchase of energy, generally to offset a Firm LD transaction
(f)	Amount of output expected to be generated by Entergy Wholesale Commodities resources considering plant operating characteristics, outage schedules, and expected market conditions that effect dispatch
(g)	Assumes NRC license renewal for plants whose current licenses expire within five years and uninterrupted normal operation at all plants.  NRC license renewal applications are in process for two units, as follows (with current license expirations in parentheses): Indian Point 2 (September 2013) and Indian Point 3 (December 2015).  For a discussion regarding the continued operation of the Vermont Yankee plant, see “Impairment of Long-Lived Assets” in Note 1 to the financial statements in the Form 10-K and “Vermont Yankee” in Note 11 to the financial statements herein.  For a discussion regarding the license renewals for Indian Point 2 and Indian Point 3, see “Entergy Wholesale Commodities Authorizations to Operate Its Nuclear Power Plants” above.
(h)	Percent of planned qualified capacity sold to mitigate price uncertainty under physical or financial transactions
(i)	A contract for the sale of installed capacity and related energy, priced per megawatt-hour sold
(j)	A contract for the sale of an installed capacity product in a regional market
(k)	Amount of capacity to be available to generate power and/or sell capacity considering uprates planned to be completed during the year.  The increased capacity figure for the nuclear portfolio from the 10-K reflects the final testing and confirmation of a small incremental increase in output associated with equipment replacements at Palisades.

(l)	Contracts priced in accordance with cost-based rates, a ratemaking concept used for the design and development of rate schedules to ensure that the filed rate schedules recover only the cost of providing the service; these contracts are on owned non-utility resources located within Entergy’s Utility service area, which do not operate under market-based rate authority.  The percentage sold assumes approval of long-term transmission rights.  Includes sales to the Utility through 2013 of 121 MW of capacity and energy from Entergy Power sourced from Independence Steam Electric Station Unit 2.
(m)	Non-nuclear planned generation and net MW in operation include purchases from affiliated and non-affiliated counterparties under long-term contracts and exclude energy and capacity from Entergy Wholesale Commodities’ wind investment accounted for under the equity method of accounting and from the 544 MW Ritchie plant that is not planned to operate.
(n)	Reflects effect of ISO New England’s acceptance in the second quarter 2012 of Vermont Yankee’s bid to delist for the June 2015 through May 2016 forward capacity auction #6 and retroactively for the June 2013 through May 2014 forward capacity auction #4.  ISO New England has until May 2013 to consider Vermont Yankee’s delist bid for forward capacity auction #5.

 

 

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 2012 and 2011
(Unaudited)
		Three Months Ended								Nine Months Ended
		2012				2011				2012				2011
		(In Thousands, Except Share Data)
OPERATING REVENUES
Electric		$	2,320,360			$	2,733,601			$	6,039,752			$	6,811,538
Natural gas			23,557				26,439				93,444				126,453
Competitive businesses			619,643				635,513				1,732,624				1,802,050
TOTAL			2,963,560				3,395,553				7,865,820				8,740,041
OPERATING EXPENSES
Operating and Maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale			596,270				849,982				1,572,265				1,921,007
Purchased power			336,552				475,335				966,816				1,289,180
Nuclear refueling outage expenses			62,582				64,566				184,288				191,517
Asset impairment			-				-				355,524				-
Other operation and maintenance			765,242				708,821				2,259,758				2,077,066
Decommissioning			56,796				56,467				126,641				167,229
Taxes other than income taxes			149,049				152,044				424,329				406,493
Depreciation and amortization			281,740				283,581				836,711				812,672
Other regulatory charges			24,477				203,848				162,509				204,338
TOTAL			2,272,708				2,794,644				6,888,841				7,069,502
OPERATING INCOME			690,852				600,909				976,979				1,670,539
OTHER INCOME
Allowance for equity funds used during construction			18,396				21,516				70,986				59,558
Interest and investment income			24,490				33,238				94,767				95,906
Miscellaneous - net			(10,768	)			(14,137	)			(41,794	)			(40,498	)
TOTAL			32,118				40,617				123,959				114,966
INTEREST EXPENSE
Interest expense			155,800				137,301				452,162				409,484
Allowance for borrowed funds used during construction			(8,003	)			(9,713	)			(27,877	)			(27,397	)
TOTAL			147,797				127,588				424,285				382,087
INCOME BEFORE INCOME TAXES			575,173				513,938				676,653				1,403,418
Income taxes			232,503				(119,131	)			110,140				196,072
CONSOLIDATED NET INCOME			342,670				633,069				566,513				1,207,346
Preferred dividend requirements of subsidiaries			5,582				5,015				16,108				15,046
NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION		$	337,088			$	628,054			$	550,405			$	1,192,300
Earnings per average common share:
Basic		$	1.90			$	3.55			$	3.11			$	6.70
Diluted		$	1.89			$	3.53			$	3.10			$	6.67
Dividends declared per common share		$	0.83			$	0.83			$	2.49			$	2.49
Basic average number of common shares outstanding			177,517,846				176,950,469				177,184,464				177,857,667
Diluted average number of common shares outstanding			177,975,075				177,723,020				177,636,549				178,805,215
See Notes to Financial Statements.