SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 [FEE REQUIRED]
For the Period from September 6, 2001 (date of inception) through
December 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
Commission File Number 2-62223
SAVINGS PLAN OF ENTERGY CORPORATION AND SUBSIDIARIES II
(Full title of the plan)
ENTERGY CORPORATION
639 Loyola Avenue
New Orleans, Louisiana 70113
(Issuer and address of principal executive office)
SAVINGS PLAN OF ENTERGY CORPORATION AND SUBSIDIARIES II
Table of Contents
Page
Number
(a)Financial Statements:
Independent Auditors' Report 2
Statement of Net Assets Available for Benefits
as of December 31, 2001 3
Statement of Changes in Net Assets Available for Benefits
for the period from September 6, 2001 (date of inception)
through December 31, 2001 4
Notes to Financial Statements 5
(b)Signature 12
(c)Exhibit:
Independent Auditors' Consent 13
INDEPENDENT AUDITORS' REPORT
To the Trustee and Participants of the
Savings Plan of Entergy Corporation and Subsidiaries II
We have audited the accompanying statement of net assets available
for benefits of the Savings Plan of Entergy Corporation and
Subsidiaries II as of December 31, 2001, and the related statement
of changes in net assets available for benefits for the period from
September 6, 2001 ("date of inception") through December 31, 2001.
These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, such financial statements present fairly, in all
material respects, the net assets available for benefits of the Plan
as of December 31, 2001, and the changes in net assets available for
benefits for the period from September 6, 2001 ("date of inception")
through December 31, 2001, in conformity with accounting principles
generally accepted in the United States of America.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
June 21, 2002
SAVINGS PLAN OF ENTERGY CORPORATION AND SUBSIDIARIES II
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
As of December 31, 2001
INVESTMENTS:
Plan interest in Master Trust $ 17,867,283
RECEIVABLES:
Participants' contributions 74,953
Employer contributions 10,068
Interest receivable 2,161
------------
87,182
------------
Net Assets Available for Benefits $ 17,954,465
============
See Notes to Financial Statements.
SAVINGS PLAN OF ENTERGY CORPORATION AND SUBSIDIARIES II
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the Period from September 6, 2001 (date of inception) through
December 31, 2001
Participant Non-Participant
Directed Directed Total
Additions to Net Assets attributed to:
Investment income:
Plan interest in Master Trust investment income $1,382,193 $ 284 $1,382,477
Contributions:
Participant 858,013 - 858,013
Employer - net of forfeitures 76,110 6,873 82,983
----------- ------------ -----------
Total contributions 934,123 6,873 940,996
----------- ------------ -----------
Total additions 2,316,316 7,157 2,323,473
----------- ------------ -----------
Transfers:
Plans transferred-in 14,958,119 - 14,958,119
Loans transferred-in 672,873 - 672,873
Interfund transfers (2,741) 2,741 -
----------- ------------ -----------
Total transfers 15,628,251 2,741 15,630,992
----------- ------------ -----------
Net increase 17,944,567 9,898 17,954,465
----------- ------------ -----------
Net Assets Available for Benefits
Beginning of Period - - -
----------- ------------ -----------
End of Period $17,944,567 $ 9,898 $17,954,465
=========== ============ ===========
See Notes to Financial Statements.
SAVINGS PLAN OF ENTERGY CORPORATION AND SUBSIDIARIES II
Notes to Financial Statements
Note 1. General Description of the Plan
The following description of the Savings Plan of Entergy
Corporation and Subsidiaries II (Entergy Savings Plan II) is
provided for general information only. Entergy Savings Plan II
participants should refer to the Entergy Savings Plan II summary
plan description for a more complete description of the Entergy
Savings Plan II's provisions.
General: The Entergy Savings Plan II is a defined contribution
plan of Entergy Corporation and Subsidiaries, collectively the
Entergy System Companies, subject to the provisions of the Employee
Retirement Income Security Act of 1974, as amended (ERISA). The
ERISA provisions set forth the requirements for participation,
vesting of benefits, fiduciary conduct for administering and
handling of assets, and disclosure of Entergy Savings Plan II
information.
Trustee: The Entergy Savings Plan II utilizes T. Rowe Price Trust
Company as its trustee and T. Rowe Price Retirement Plan Services,
Inc. as its recordkeeper and provider of other administrative
services. The Entergy Savings Plan II's investment options, which
are managed by its trustee or affiliates of its trustee, are:
o Entergy Common Stock Fund
o Stable Income Fund
o Equity Index Trust
o Balanced Fund
o Blue Chip Growth Fund
o New Horizons Fund
o New Income Fund
o International Stock Fund
o Equity Income Fund
o Participants' Loans
Eligibility: The Entergy Savings Plan II is available to
bargaining employees transferred from Consolidated Edison Company
of New York, Inc. (Con Edison) to Entergy Nuclear Operations, Inc.
(ENUC), or bargaining employees hired by ENUC after September 6,
2001 whose work location is either Indian Point Generating Station
Unit 1 or 2, Indian Point Gas Turbine Unit 1, 2, or 3, or the
Toddville Training Center upon completion of three months of
employment. Service credit for participation eligibility purposes
under the Con Edison Plan counts for this purpose.
Contributions: Entergy Savings Plan II contributions made by or on
behalf of participants are deposited with the trustee.
Participants may elect to contribute, through payroll deductions,
up to a total of $6.75 for each of the participant's basic straight-
time hours of service, not in excess of 80 hours, for any payroll
period. Participant contributions up to $1.02 per hour for any
payroll period are considered participating contributions while any
contributions in excess of this amount are considered
nonparticipating contributions.
Participant contributions may be made on a before-tax basis (401(k)
contributions), an after-tax basis, or a combination of both.
Contributions are limited by federal tax legislation. The 401(k)
contribution dollar limit for the calendar year 2001 was $10,500
per participant.
The employing Entergy System Company's matching contribution to the
Entergy Savings Plan II on behalf of the participant is equal to
50% of the participant's participating contribution.
The Entergy Savings Plan II provides that certain taxable amounts
received by an employee that originated from an employee benefit
plan qualified under Section 401(a) of the Internal Revenue Code of
1986, as amended (the Code), may be accepted under the Entergy
Savings Plan II as rollover contributions (rollover contributions).
Investments: Participant contributions and company matching
contributions are invested as directed by participants in
accordance with the Entergy Savings Plan II's investment options.
Earnings on contributions are allocated based on participants'
account balances.
The value of investments may fluctuate with changes in market
conditions. The amount of risk varies based on the fund's
investment goals and composition. Participants should realize the
risk associated with each investment when determining how to invest
their contributions.
Participant accounts: Each participant's account is credited with
the participant's contribution and allocation of the Entergy System
Companies' matching contribution and net earnings of the Entergy
Savings Plan II's interest in the Master Trust (see Note 4).
Allocations are based on participant earnings or account balances,
as defined.
Vesting: Participants are fully vested at all times in participant
contributions and amounts transferred from the Con Edison Plan.
Participants are vested in company matching contributions on the
earlier of the last day of the third calendar year following the
close of the contribution year and the first day of the calendar
month in which the participant completes five years of service.
In-Service withdrawals: While employed, participants may, with
certain restrictions, withdraw all or a portion of the value of
their participant contributions and rollover contributions. Such
withdrawals may include all or a portion of the value of their
before-tax accounts if the participant has attained age 59-1/2.
Withdrawals of before-tax contributions may be subject to a 10%
premature distribution tax unless the participant is age 59-1/2 or
older. A participant may also apply for a hardship withdrawal from
his 401(k) contributions if the participant satisfies certain
financial hardship withdrawal criteria.
Loans to participants: The Entergy Savings Plan II has a loan
provision whereby participants who are actively employed may borrow
an amount from their eligible account up to a maximum of 50% of the
vested balance of their account or $50,000, whichever is less. The
amount borrowed is deducted from the participant's eligible account
and repaid with interest based on a reasonable rate determined by
the plan administrator in accordance with an established schedule.
The loan must be repaid within 5 years, or 10 years if for the
acquisition of the participant's primary residence. If a
participant with an outstanding loan separates from service, the
remaining principal balance of the loan is treated as a taxable
distribution to the participant unless the amount is repaid in full
within a specified period from the date of separation.
Payment of Benefits: Participants become eligible to receive a
single-sum distribution of the entire vested value of the
participant's Entergy Savings Plan II accounts upon termination of
employment, retirement, disability, or death. There are certain
provisions regarding deferral of distributions; installment
distributions for terminated participants, retirees, and disabled
participants; minimum account balances; and mandatory
distributions.
Generally, there are tax consequences associated with receiving a
distribution from the Entergy Savings Plan II, unless the taxable
portion is rolled over to an individual retirement account or
another retirement plan account which qualifies under Sections
408(a) or 401(a) of the Code. Additionally, a 10% penalty tax for
early withdrawal applies, unless the distribution is received after
age 59-1/2 or the participant satisfies one of the legal exemptions
to such tax.
Inactive accounts: Participants are allowed, under the provisions
of the Entergy Savings Plan II, to defer receipt of their vested
account balance upon separation from the Entergy Savings Plan II
until age 70-1/2. The amount allocated to such participants was
$874,922 at December 31, 2001.
Forfeitures: Upon termination of employment for reasons other than
retirement, disability, or death, the portion of the employee's
account in which he/she is not vested at the time of termination
shall be forfeited and credited to a forfeiture account.
Forfeitures are used first to pay administrative expenses and the
residual, if any, to reduce employer contributions. There were no
forfeitures during the period from September 6, 2001 through
December 31, 2001.
Note 2. Summary of Significant Accounting Policies
Basis of presentation: The accompanying financial statements have
been prepared on the accrual basis of accounting.
Use of estimates in the preparation of financial statements: The
preparation of the Entergy Savings Plan II financial statements, in
conformity with accounting principles generally accepted in the
United States of America, requires management to make estimates and
assumptions that affect reported amounts in the Statement of Net
Assets Available for Benefits and the Statement of Changes in Net
Assets Available for Benefits, such as those regarding fair value.
Adjustments to the reported amounts may be necessary in the future
to the extent that future estimates or actual results are different
from the estimates used in the financial statements.
Investment valuation: Cash and temporary cash investments and
loans to participants are valued at cost, which approximates fair
value. Investments in equity and fixed income securities are
stated at their fair value as determined by quoted market prices on
the valuation date, in compliance with the Department of Labor
Rules and Regulations for Reporting and Disclosure under ERISA.
The values of guaranteed investment contracts (GICs) are recorded
at contract value, which approximates fair market value. Contract
value represents amounts invested under the GICs, plus interest
earned and reinvested through the valuation date at the contracted
rate. The values of synthetic investment contracts (SICs) are
recorded at contract value, which approximates fair market value,
because participants are guaranteed a return of principal and
accrued interest. SICs are similar to GICs except that the assets
of a SIC are placed in a trust with ownership by the Master Trust
and a financially responsible third party issues a wrapper
contract. A wrapper contract is an insurance policy that
guarantees a stated rate of return on specific Master Trust assets
placed in the trust.
Payment of benefits: Benefits payable for terminations and
withdrawals are recorded when paid. This accounting method differs
from that required in the Internal Revenue Service and Department
of Labor Form 5500, which requires benefits payable to be accrued
and charged to net assets in the period the liability arises.
Income recognition: The difference in fair value of the assets in
the Master Trust from one period to the next is recognized and
included in investment income (loss) in the accompanying Statement
of Changes in Net Assets Available for Benefits. The investment
income (loss) also includes realized gains and losses.
Purchases and sales of securities are accounted for on a trade-date
basis. Interest income is recorded on the accrual basis.
Dividends are recorded on the ex-dividend date.
Administrative expenses: All costs and expenses of administering
the Entergy Savings Plan II, except expenses incurred in the direct
acquisition or disposition of stock and investment manager fees,
are paid first by forfeitures and then by Entergy Corporation.
Concentration of credit risk: The Stable Income Fund of the Master
Trust invests in GICs and SICs which are subject to credit risk
with respect to the insurance companies that back them. The
potential credit risk of the GICs as of December 31, 2001 is
$50,102,449. The potential credit risk for the SICs represents the
amount by which the contract value exceeds the fair value of the
SIC assets in the trust. As of December 31, 2001, the contract
value of the SIC assets was $174,088,033. The fair value of the
SIC assets exceeded the contract value by $4,118,534. There are no
reserves against the contract values of the GICs or SICs for credit
risk of the contract issuers or otherwise. The Entergy Savings
Plan II provisions set investment guidelines addressing investment
diversification, quality, maturity, and performance standards
prescribed to mitigate the potential credit risk.
Note 3. Investment Contracts With Insurance Companies
The Master Trust invests in a diversified portfolio of GICs and
SICs issued by insurance companies and other financial
institutions. The average yield for the GICs and SICs was
approximately 5.7% for 2001. The crediting interest rates varied
from 4.42%-6.60% for 2001.
Note 4. Interest in Master Trust
The Entergy Savings Plan II investments are held in a bank-
administered trust (Master Trust) established by Entergy
Corporation and maintained by T. Rowe Price Trust Company (the
Trustee). The Entergy Savings Plan II maintains an undivided
beneficial interest in each of the investment accounts of the
Master Trust. Use of the Master Trust permits the commingling of
the trust assets of the savings plans of Entergy Corporation and
its subsidiaries for investment and administrative purposes.
Although assets are commingled in the Master Trust, the Trustee
maintains supporting records for the purpose of allocating the
equity in net earnings (losses) and the administrative expenses of
the investment accounts to the participating plans. Equity in an
investment account's net earnings is comprised of interest and
dividends and realized and unrealized investment gains and losses.
As of December 31, 2001, the Entergy Savings Plan II's interest in
the net assets of the Master Trust was approximately 1%.
The fair values of investments in the Master Trust as of December
31, 2001 are as follows:
Cash and cash equivalents $ 40,551,547
Common stock* 575,905,167
Mutual funds 535,718,048
Common trust funds 142,788,948
Guaranteed investment contracts 50,102,449
Synthetic investment contracts 174,088,033
Brokerage accounts 7,388,946
Loans to participants 41,519,682
--------------
$1,568,062,820
==============
* As of December 31, 2001, $482,449,100 of the Entergy Corporation
common stock was non-participant directed.
Dividend and interest income and net realized and unrealized
appreciation (depreciation) of investments in the Master Trust for
the year ended December 31, 2001 are summarized as follows:
Dividend and interest income:
Common stock $16,847,998
Mutual funds 14,126,878
Common trust funds 630,515
Loans to participants 3,443,375
-----------
$35,048,766
===========
Net realized and unrealized appreciation (depreciation) of
investments:
Common stock $(43,861,111)
Mutual funds (54,615,024)
Common trust funds (10,995,998)
Synthetic investment contracts 13,801,227
Brokerage accounts (2,328,833)
------------
$(97,999,739)
============
Note 5. Tax Status
On February 27, 2002, Entergy Savings Plan II submitted a request
for a determination letter from the Internal Revenue Service
stating that the Entergy Savings Plan II is in compliance with the
applicable requirements of the Code. A response has not yet been
received. However, the plan administrator and the plan's tax
counsel believe that the Entergy Savings Plan II is currently
designed and being operated in compliance with the applicable
requirements of the Code. Accordingly, no provision for income
taxes has been included in the Entergy Savings Plan II's financial
statements.
Note 6. Entergy Savings Plan II Termination
Although it has not expressed any intent to do so, the Entergy
System Companies have the right under the Entergy Savings Plan II
to discontinue their contributions at any time and Entergy
Corporation has the right to terminate the Entergy Savings Plan II
subject to the provisions of ERISA. In the event that the Entergy
Savings Plan II is terminated, subject to conditions set forth in
ERISA, the Entergy Savings Plan II provides that all participants
will be fully vested and the net assets of the Entergy Savings Plan
II be distributed to participants in proportion to their respective
vested interests in such net assets at that date.
Note 7. Related Party Transactions
Certain of the Master Trust investments are shares in funds managed
by T. Rowe Price Trust Company who is the trustee, as defined by
the Entergy Savings Plan II and, therefore, these investments and
investment transactions qualify as party-in-interest transactions.
As the Master Trust holds common stock of Entergy Corporation as an
investment, these investments and investment transactions also
qualify as party-in-interest transactions. The year-end market
price of Entergy Corporation common stock was $39.11 per share at
December 31, 2001.
SIGNATURE
The Entergy Savings Plan II. Pursuant to the requirements of the
Securities and Exchange Act of 1934, the Employee Benefits Committee
has duly caused this annual report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAVINGS PLAN OF ENTERGY
CORPORATION AND SUBSIDIARIES
By: /s/ Darrell A. Guidroz
Darrell A. Guidroz
Director, Human Resources
Compensation and Benefits
Dated: June 28, 2002
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Post-Effective
Amendments No. 3 and 5A on Form S-8, and their related prospectus, to
Registration Statement No. 33-54298 of Entergy Corporation on Form S-4
of our report dated June 21, 2002, appearing in this Annual Report on
Form 11-K of the Savings Plan of Entergy Corporation and Subsidiaries
II for the period from September 6, 2001 through December 31, 2001.
DELOITTE & TOUCHE LLP
New Orleans, Louisiana
June 28, 2002