8-KEarnings & ResultsFinancial EventsRegulation FD+1

ENTERGY CORP /DE/ 8-K Report, Financial Results (Jan 19, 2005)

Filed January 19, 2005For Securities:ETR

Summary

Entergy Corporation (ETR) filed an 8-K on January 19, 2005, reporting a material impairment charge related to its Warren Power plant. This charge, estimated at approximately $55 million ($36 million net-of-tax), was recognized in the fourth quarter of 2004. The impairment was determined through valuation studies conducted in connection with the partial monetization of the company's non-nuclear wholesale assets business during the same quarter. Importantly, Entergy stated that this impairment charge is not expected to lead to any future cash expenditures for the company. This filing also included a public announcement regarding these matters and a statement on the uses and usefulness of non-GAAP information, which are furnished, not filed, under SEC regulations.

Key Highlights

  • 1Entergy Corporation recognized a material impairment charge of approximately $55 million ($36 million net-of-tax) for its Warren Power plant.
  • 2The impairment charge was recorded in the fourth quarter of 2004.
  • 3The impairment was identified based on valuation studies related to the monetization of a portion of Entergy's non-nuclear wholesale assets business.
  • 4The company does not anticipate any future cash expenditures resulting from this impairment charge.
  • 5The filing also includes a public announcement and a statement on non-GAAP financial information.
  • 6The reported information is furnished, not filed, under Items 2.02 and 7.01 of Form 8-K.

Frequently Asked Questions

This Form 8-K is primarily filed to disclose a material impairment charge of approximately $55 million ($36 million net-of-tax) related to Entergy Corporation's Warren Power plant. This charge was recognized in the fourth quarter of 2004.

The impairment resulted in a non-cash charge of approximately $55 million, or $36 million after tax, recognized in the fourth quarter of 2004. Entergy has stated that this charge will not lead to any future cash expenditures.

The impairment charge was determined to be necessary after valuation studies, conducted in connection with the partial monetization of the company's non-nuclear wholesale assets business in Q4 2004, indicated that the carrying value of the Warren Power plant exceeded its recoverable amount.

No, Entergy Corporation has explicitly stated that they do not expect the impairment charge to result in any future cash expenditures. This indicates it is primarily an accounting adjustment reflecting a decrease in asset value, not a cash outflow.