10-KPeriod: FY2007

ENTERGY CORP /DE/ Annual Report, Year Ended Dec 31, 2007

Filed February 29, 2008For Securities:ETR

Summary

Entergy Corporation's (ETR) 2007 10-K filing highlights a year of operational recovery and strategic restructuring. The company reported consolidated net income of $1.135 billion, a slight increase from the previous year, driven by strong performance in its Non-Utility Nuclear segment which benefited from higher pricing and the acquisition of the Palisades plant. The Utility segment also showed resilience, with net revenue increasing despite increased operation and maintenance expenses. A significant strategic development is Entergy's plan, approved in November 2007, to spin off its Non-Utility Nuclear business into a separate, publicly traded company. This separation, along with a proposed joint venture for nuclear services, aims to allow Entergy to focus on its core Utility business. The company expects the spin-off to qualify for tax-free treatment for shareholders. Entergy also made significant progress in its liquidity and capital resources, refinancing its credit facilities and managing its debt levels, which remained within its financial aspirations. The company remains focused on environmental compliance and managing risks associated with its operations and market conditions, including the ongoing impact of Hurricanes Katrina and Rita, for which insurance claims and CDBG funding are being actively managed.

Financial Highlights

26 data points
Beta

Net Income

$1.13B

EPS (Diluted)

$2.80

Cash & Equivalents

$1.25B

Free Cash Flow

$2.56B

Financial Statements
Beta
Operating Expenses$9.43B
Operating Income$2.06B
Interest Expense$637.05M
Net Income$1.13B
EPS (Basic)$2.88
EPS (Diluted)$2.80
Shares Outstanding (Basic)393.15M
Shares Outstanding (Diluted)405.56M

Key Highlights

  • 1Consolidated net income of $1.135 billion for 2007.
  • 2Plan to spin off Non-Utility Nuclear business into a separate company, aiming for completion in Q3 2008.
  • 3Acquisition of the Palisades nuclear energy plant in April 2007, adding 798 MW to the Non-Utility Nuclear segment.
  • 4Utility segment net revenue increased, supported by higher customer usage and rate increases.
  • 5Non-Utility Nuclear segment net revenue increased due to higher power prices and additional production.
  • 6Entergy New Orleans emerged from Chapter 11 bankruptcy in May 2007, with its reorganization plan confirmed.
  • 7Entergy Corporation refinanced its credit facilities, securing a $3.5 billion, five-year credit facility in August 2007.

Frequently Asked Questions

Entergy's primary strategic initiative is the separation of its Non-Utility Nuclear business into a new, separate, publicly-traded company through a tax-free spin-off. This is expected to be completed in the third quarter of 2008, allowing Entergy to focus on its core Utility business.

The Non-Utility Nuclear segment experienced strong performance in 2007, with net revenue increasing due to higher pricing in power contracts and additional production from the acquisition of the Palisades plant. Key performance metrics like average realized price per MWh increased to $52.69 from $44.33 in 2006.

Hurricanes Katrina and Rita caused significant damage to Entergy's Utility segment, leading to increased storm restoration and business continuity costs. The company is actively pursuing reimbursement through insurance claims, federal legislation (CDBG funds), and regulatory mechanisms. As of December 31, 2007, Entergy had received $134.5 million in insurance claims, with an estimated $270 million in remaining net recoveries.

Entergy is managing its liquidity and capital resources through internally generated funds, cash on hand ($1.27 billion as of December 31, 2007), securities issuances, bank financing under new and existing facilities, and sales of assets. The company refinanced its credit facilities in August 2007, securing a $3.5 billion, five-year credit facility and maintains its debt-to-capital ratio within its financial aspirations.