10-QPeriod: Q1 FY2003

ENTERGY CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2003

Filed May 9, 2003For Securities:ETR

Summary

Entergy Corporation's May 9, 2003, 10-Q filing highlights ongoing regulatory and legal matters, alongside strategic generation and transmission initiatives. The company is cooperating with investigations by the FERC, CFTC, and SEC concerning trading practices of Entergy-Koch Trading, although management does not anticipate material financial impact. Significant efforts are underway to secure regulatory approvals for various generation purchase power agreements across its utility subsidiaries, with key decisions expected in May and June 2003. The company also notes progress and ongoing studies related to FERC's Standard Market Design and transmission regionalization efforts. Financially, the reported earnings ratios for the twelve months ended March 31, 2003, indicate generally stable coverage for most subsidiaries, with Entergy New Orleans experiencing shortfalls in earnings to cover fixed charges and preferred dividends. The company has also resolved certain environmental liabilities, with Entergy Arkansas being removed from a PRP list and Entergy Gulf States completing an engineered cap at a service center site.

Key Highlights

  • 1Entergy is cooperating with FERC, CFTC, and SEC investigations into trading activities of its Entergy-Koch Trading subsidiary, with management currently not expecting material financial impact.
  • 2Multiple regulatory bodies are reviewing Entergy's proposed generation purchase power agreements across its subsidiaries (Entergy Louisiana, Entergy New Orleans, Entergy Arkansas), with key decisions anticipated in May and June 2003.
  • 3The company is actively involved in evolving industry standards with ongoing studies related to FERC's Standard Market Design (SMD) and the development of the SeTrans RTO, though operational start dates are projected for mid-2005.
  • 4Environmental matters show positive resolution for Entergy Arkansas, which has been removed from a PRP list by the EPA for a specific site. Entergy Gulf States has completed remediation efforts at its Lake Charles Service Center site.
  • 5The filing includes updated earnings to fixed charges and earnings to combined fixed charges and preferred dividends ratios for its domestic utility companies, showing generally adequate coverage except for Entergy New Orleans.
  • 6The CEO and CFO of Entergy and its subsidiaries have concluded that disclosure controls and procedures are effective, with no significant changes to internal controls noted subsequent to the evaluation period.
  • 7Entergy Services has signed a letter of intent to purchase a 725MW plant near Monroe, Louisiana, subject to regulatory approvals, expected by year-end 2003.

Frequently Asked Questions

Entergy is cooperating with inquiries from the FERC, CFTC, and SEC regarding specific trading activities. While the reviews are ongoing, Entergy management currently does not expect any material financial impact from these investigations.

Entergy is seeking regulatory approval for several generation purchase power agreements across its utility companies. Additionally, the company is engaged in the development of the SeTrans RTO and is studying FERC's proposed Standard Market Design, with the RTO expected to be operational by mid-2005.

The earnings ratios for the twelve months ended March 31, 2003, are presented for most domestic utility companies. Entergy New Orleans, however, experienced shortfalls where earnings were not adequate to cover fixed charges and preferred dividends during the period, as well as for the trailing twelve months.

Based on evaluations conducted within 90 days prior to the filing, the CEOs and CFOs of Entergy and its subsidiaries concluded that their disclosure controls and procedures are effective. There were no significant changes in internal controls or other factors that could significantly affect disclosure controls noted during this period.