10-KPeriod: FY2006

ENTERGY CORP /DE/ Annual Report, Year Ended Dec 31, 2006

Filed March 1, 2007For Securities:ETR

Summary

This 10-K filing for Entergy Corporation and Subsidiaries as of March 1, 2007, details the company's financial performance and operations. The report highlights the significant impact of Hurricanes Katrina and Rita in 2005, which led to substantial restoration costs and damage to infrastructure, particularly affecting the Utility segment. Entergy New Orleans filed for Chapter 11 bankruptcy protection in September 2005 due to these events. The company is actively pursuing cost recovery through insurance, federal legislation, and regulatory mechanisms. Financially, the company reported consolidated net income of $1,132,602,000 for 2006, an increase from $898,331,000 in 2005, driven by improved net revenue in both Utility and Non-Utility Nuclear segments, although interest charges increased due to additional borrowing for storm restoration. The filing also addresses the company's business segments, the Utility and Non-Utility Nuclear operations, and discusses capital expenditures, liquidity, risk management, and regulatory matters across its various state jurisdictions. Key financial data points include total assets of $31,082,731,000 and long-term obligations of $8,996,620,000 as of December 31, 2006. Management expresses confidence in maintaining effective internal controls over financial reporting.

Key Highlights

  • 1Hurricane Katrina and Rita caused significant damage, leading to $1.48 billion in restoration costs for the Utility segment by December 31, 2006, with $654 million recorded as regulatory assets.
  • 2Entergy New Orleans filed for Chapter 11 bankruptcy in September 2005 due to the financial impact of Hurricane Katrina.
  • 3Consolidated net income for 2006 was $1,132,602,000, up from $898,331,000 in 2005.
  • 4Net revenue for the Utility segment increased by $195.7 million in 2006 compared to 2005, driven by base revenues, storm cost recovery, and volume/weather factors.
  • 5Non-Utility Nuclear segment net revenue increased due to higher pricing in power sales contracts and increased generation.
  • 6Entergy Corporation's net debt to net capital ratio was 49.4% at year-end 2006.
  • 7Planned capital expenditures for 2007 are estimated at $1.738 billion, excluding Entergy New Orleans.
  • 8Entergy Corporation repurchased $584 million of its common stock in 2006 and authorized a new $1.5 billion repurchase program.

Frequently Asked Questions

Hurricanes Katrina and Rita caused significant damage, resulting in restoration costs of $1.48 billion for the Utility segment by the end of 2006. These costs include $828 million in construction expenditures and $654 million recorded as regulatory assets, reflecting management's belief in probable recovery through regulatory mechanisms. Additionally, Entergy New Orleans estimated lost net revenue of approximately $194 million through 2007 and incurred $22 million in uncollectible accounts receivable due to Hurricane Katrina.

Entergy New Orleans filed for Chapter 11 bankruptcy on September 23, 2005, due to the financial impact of Hurricane Katrina. As of the filing date of this report (March 1, 2007), Entergy New Orleans had filed an amended plan of reorganization and a disclosure statement, with a confirmation hearing scheduled for May 2007. Key conditions for the plan's effectiveness include receiving at least $50 million in insurance proceeds and $200 million in CDBG funding.

Entergy Corporation reported consolidated net income of $1,132,602,000 for the year ended December 31, 2006, an increase from $898,331,000 for the year ended December 31, 2005. This improvement was driven by increases in net revenue for both the Utility and Non-Utility Nuclear segments.

Entergy operates primarily through two reportable segments: Utility and Non-Utility Nuclear. The Utility segment generates, transmits, distributes, and sells electric power in Arkansas, Mississippi, Texas, and Louisiana, and also operates a small natural gas distribution business. The Non-Utility Nuclear segment owns and operates five nuclear power plants in the northeastern United States, selling power primarily to wholesale customers and providing services to other nuclear power plant owners.