Decommissioning Trust Funds

12 Months Ended

Dec. 31, 2017

Decommissioning Trust Funds

DECOMMISSIONING TRUST FUNDS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)

Entergy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The NRC requires Entergy subsidiaries to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, Vermont Yankee, and Palisades.  The funds are invested primarily in equity securities, fixed-rate debt securities, and cash and cash equivalents.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities. NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  As a result of the agreement with NYPA, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and recorded asset retirement obligations for the decommissioning liabilities. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values were based on the trust statements received from NYPA and were valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds were not assigned a level in the fair value hierarchy. For Indian Point 3, the receivable for the beneficial interest in the decommissioning trust fund was recorded in other deferred debits on the consolidated balance sheet as of December 31, 2016. For FitzPatrick, the receivable for the beneficial interest in the decommissioning trust fund was classified as held for sale within other deferred debits on the consolidated balance sheet as of December 31, 2016. In January 2017, NYPA transferred to Entergy the Indian Point 3 decommissioning trust funds with a fair value of $726 million and the FitzPatrick decommissioning trust fund with a fair value of $793 million. In March 2017, Entergy closed on the sale of the FitzPatrick plant to Exelon. As part of the transaction, Entergy transferred the FitzPatrick decommissioning trust fund to Exelon. The FitzPatrick decommissioning trust fund had a disposition-date fair value of $805 million. See Note 9 to the financial statements for further discussion of the decommissioning agreements with NYPA and see Note 14 to the financial statements for further discussion of the sale of FitzPatrick.

Entergy records decommissioning trust funds on the balance sheet at their fair value.  Because of the ability of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, the Registrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities in other regulatory liabilities/assets.  For the 30% interest in River Bend formerly owned by Cajun, Entergy Louisiana records an offsetting amount in other deferred credits for the excess trust earnings not currently expected to be needed to decommission the plant.  Decommissioning trust funds for Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, Vermont Yankee, and Palisades do not meet the criteria for regulatory accounting treatment.  Accordingly, unrealized gains recorded on the assets in these trust funds are recognized in the accumulated other comprehensive income component of shareholders’ equity because these assets are classified as available for sale.  Unrealized losses (where cost exceeds fair market value) on the assets in these trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other than temporary and therefore recorded in earnings.  Generally, Entergy records realized gains and losses on its debt and equity securities using the specific identification method to determine the cost basis of its securities.

The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$4,662		$2,131		$1		$3,511		$1,673		$1
Debt Securities	2,550		44		16		2,213		34		27
Total		$7,212		$2,175		$17		$5,724		$1,707		$28

The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2017 are $491 million for Indian Point 1, $621 million for Indian Point 2, $798 million for Indian Point 3, $458 million for Palisades, $1,068 million for Pilgrim, and $613 million for Vermont Yankee. The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2016 are $443 million for Indian Point 1, $564 million for Indian Point 2, $412 million for Palisades, $960 million for Pilgrim, and $584 million for Vermont Yankee. The fair values of the decommissioning trust funds for the Registrant Subsidiaries’ nuclear plants are detailed below.

Deferred taxes on unrealized gains/(losses) are recorded in other comprehensive income (loss) for the decommissioning trusts which do not meet the criteria for regulatory accounting treatment as described above. Unrealized gains/(losses) above are reported before deferred taxes of $479 million and $399 million as of December 31, 2017 and 2016, respectively.  The amortized cost of debt securities was $2,539 million as of December 31, 2017 and $2,212 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 3.24%, an average duration of approximately 6.33 years, and an average maturity of approximately 9.99 years.  The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$8		$1		$1,099		$7		$23		$1		$1,169		$26
More than 12 months	—		—		265		9		1		—		20		1
Total		$8		$1		$1,364		$16		$24		$1		$1,189		$27

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$74		$125
1 year - 5 years	902		763
5 years - 10 years	812		719
10 years - 15 years	147		109
15 years - 20 years	100		73
20 years+	515		424
Total		$2,550		$2,213

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $3,163 million, $2,409 million, and $2,492 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $149 million, $32 million, and $72 million, respectively, and gross losses of $13 million, $13 million, and $13 million, respectively, were reclassified out of other comprehensive income into earnings.

Entergy Arkansas

Entergy Arkansas holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$596.7		$354.9		$—		$525.4		$281.5		$—
Debt Securities	348.2		2.1		3.0		309.3		3.4		4.2
Total		$944.9		$357.0		$3.0		$834.7		$284.9		$4.2

The amortized cost of debt securities was $349.1 million as of December 31, 2017 and $310.1 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 2.64%, an average duration of approximately 5.61 years, and an average maturity of approximately 7.00 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$168.0		$1.2		$—		$—		$146.7		$4.2
More than 12 months	—		—		41.4		1.8		—		—		—		—
Total		$—		$—		$209.4		$3.0		$—		$—		$146.7		$4.2

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$13.0		$16.7
1 year - 5 years	123.4		106.2
5 years - 10 years	180.6		161.2
10 years - 15 years	4.8		7.7
15 years - 20 years	3.4		1.0
20 years+	23.0		16.5
Total		$348.2		$309.3

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $339.4 million, $197.4 million, and $213 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $17.7 million, $1.8 million, and $5.9 million, respectively, and gross losses of $0.6 million, $0.8 million, and $0.3 million, respectively, were recorded in earnings.

Entergy Louisiana

Entergy Louisiana holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$818.3		$461.2		$—		$715.9		$346.6		$—
Debt Securities	493.8		10.9		3.6		424.8		8.0		5.0
Total		$1,312.1		$472.1		$3.6		$1,140.7		$354.6		$5.0

The amortized cost of debt securities was $490 million as of December 31, 2017 and $421.9 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 3.88%, an average duration of approximately 6.17 years, and an average maturity of approximately 12.06 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$135.3		$1.1		$—		$—		$198.8		$4.8
More than 12 months	—		—		84.4		2.5		—		—		4.8		0.2
Total		$—		$—		$219.7		$3.6		$—		$—		$203.6		$5.0

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$23.2		$31.4
1 year - 5 years	122.8		99.1
5 years - 10 years	109.3		122.8
10 years - 15 years	52.7		41.4
15 years - 20 years	50.7		30.9
20 years+	135.1		99.2
Total		$493.8		$424.8

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $231.3 million, $219.2 million, and $123.5 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $12 million, $3.9 million, and $1.9 million, respectively, and gross losses of $0.4 million, $0.4 million, and $0.3 million, respectively, were recorded in earnings.

System Energy    

System Energy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$575.2		$308.6		$—		$473.9		$221.9		$0.1
Debt Securities	330.5		4.2		1.2		306.6		2.0		4.5
Total		$905.7		$312.8		$1.2		$780.5		$223.9		$4.6

The amortized cost of debt securities was $327.5 million as of December 31, 2017 and $309.1 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 2.67%, an average duration of approximately 6.48 years, and an average maturity of approximately 9.22 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$196.9		$1.0		$—		$—		$220.9		$4.4
More than 12 months	—		—		10.4		0.2		—		0.1		0.8		0.1
Total		$—		$—		$207.3		$1.2		$—		$0.1		$221.7		$4.5

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$4.1		$6.6
1 year - 5 years	173.0		188.2
5 years - 10 years	78.5		78.5
10 years - 15 years	1.0		1.3
15 years - 20 years	6.9		7.8
20 years+	67.0		24.2
Total		$330.5		$306.6

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $565.4 million, $499.3 million, and $390.4 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $1.4 million, $3.5 million, and $3.3 million, respectively, and gross losses of $3.3 million, $1.7 million, and $0.5 million, respectively, were recorded in earnings.

Other-than-temporary impairments and unrealized gains and losses

Entergy evaluates investment securities in the Entergy Wholesale Commodities’ nuclear decommissioning trust funds with unrealized losses at the end of each period to determine whether an other-than-temporary impairment has occurred.  The assessment of whether an investment in a debt security has suffered an other-than-temporary impairment is based on whether Entergy has the intent to sell or more likely than not will be required to sell the debt security before recovery of its amortized costs.  Further, if Entergy does not expect to recover the entire amortized cost basis of the debt security, an other-than-temporary impairment is considered to have occurred and it is measured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss).  Entergy did not have any material other-than-temporary impairments relating to credit losses on debt securities for the years ended December 31, 2017, 2016, and 2015.  The assessment of whether an investment in an equity security has suffered an other-than-temporary impairment is based on a number of factors including, first, whether Entergy has the ability and intent to hold the investment to recover its value, the duration and severity of any losses, and, then, whether it is expected that the investment will recover its value within a reasonable period of time.  Entergy’s trusts are managed by third parties who operate in accordance with agreements that define investment guidelines and place restrictions on the purchases and sales of investments.  Entergy did not record material charges to other income in 2017, 2016, or 2015 resulting from the recognition of the other-than-temporary impairment of equity securities held in its decommissioning trust funds.

Entergy Arkansas [Member]

Decommissioning Trust Funds

DECOMMISSIONING TRUST FUNDS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)

Entergy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The NRC requires Entergy subsidiaries to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, Vermont Yankee, and Palisades.  The funds are invested primarily in equity securities, fixed-rate debt securities, and cash and cash equivalents.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities. NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  As a result of the agreement with NYPA, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and recorded asset retirement obligations for the decommissioning liabilities. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values were based on the trust statements received from NYPA and were valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds were not assigned a level in the fair value hierarchy. For Indian Point 3, the receivable for the beneficial interest in the decommissioning trust fund was recorded in other deferred debits on the consolidated balance sheet as of December 31, 2016. For FitzPatrick, the receivable for the beneficial interest in the decommissioning trust fund was classified as held for sale within other deferred debits on the consolidated balance sheet as of December 31, 2016. In January 2017, NYPA transferred to Entergy the Indian Point 3 decommissioning trust funds with a fair value of $726 million and the FitzPatrick decommissioning trust fund with a fair value of $793 million. In March 2017, Entergy closed on the sale of the FitzPatrick plant to Exelon. As part of the transaction, Entergy transferred the FitzPatrick decommissioning trust fund to Exelon. The FitzPatrick decommissioning trust fund had a disposition-date fair value of $805 million. See Note 9 to the financial statements for further discussion of the decommissioning agreements with NYPA and see Note 14 to the financial statements for further discussion of the sale of FitzPatrick.

Entergy records decommissioning trust funds on the balance sheet at their fair value.  Because of the ability of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, the Registrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities in other regulatory liabilities/assets.  For the 30% interest in River Bend formerly owned by Cajun, Entergy Louisiana records an offsetting amount in other deferred credits for the excess trust earnings not currently expected to be needed to decommission the plant.  Decommissioning trust funds for Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, Vermont Yankee, and Palisades do not meet the criteria for regulatory accounting treatment.  Accordingly, unrealized gains recorded on the assets in these trust funds are recognized in the accumulated other comprehensive income component of shareholders’ equity because these assets are classified as available for sale.  Unrealized losses (where cost exceeds fair market value) on the assets in these trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other than temporary and therefore recorded in earnings.  Generally, Entergy records realized gains and losses on its debt and equity securities using the specific identification method to determine the cost basis of its securities.

The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$4,662		$2,131		$1		$3,511		$1,673		$1
Debt Securities	2,550		44		16		2,213		34		27
Total		$7,212		$2,175		$17		$5,724		$1,707		$28

The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2017 are $491 million for Indian Point 1, $621 million for Indian Point 2, $798 million for Indian Point 3, $458 million for Palisades, $1,068 million for Pilgrim, and $613 million for Vermont Yankee. The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2016 are $443 million for Indian Point 1, $564 million for Indian Point 2, $412 million for Palisades, $960 million for Pilgrim, and $584 million for Vermont Yankee. The fair values of the decommissioning trust funds for the Registrant Subsidiaries’ nuclear plants are detailed below.

Deferred taxes on unrealized gains/(losses) are recorded in other comprehensive income (loss) for the decommissioning trusts which do not meet the criteria for regulatory accounting treatment as described above. Unrealized gains/(losses) above are reported before deferred taxes of $479 million and $399 million as of December 31, 2017 and 2016, respectively.  The amortized cost of debt securities was $2,539 million as of December 31, 2017 and $2,212 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 3.24%, an average duration of approximately 6.33 years, and an average maturity of approximately 9.99 years.  The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$8		$1		$1,099		$7		$23		$1		$1,169		$26
More than 12 months	—		—		265		9		1		—		20		1
Total		$8		$1		$1,364		$16		$24		$1		$1,189		$27

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$74		$125
1 year - 5 years	902		763
5 years - 10 years	812		719
10 years - 15 years	147		109
15 years - 20 years	100		73
20 years+	515		424
Total		$2,550		$2,213

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $3,163 million, $2,409 million, and $2,492 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $149 million, $32 million, and $72 million, respectively, and gross losses of $13 million, $13 million, and $13 million, respectively, were reclassified out of other comprehensive income into earnings.

Entergy Arkansas

Entergy Arkansas holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$596.7		$354.9		$—		$525.4		$281.5		$—
Debt Securities	348.2		2.1		3.0		309.3		3.4		4.2
Total		$944.9		$357.0		$3.0		$834.7		$284.9		$4.2

The amortized cost of debt securities was $349.1 million as of December 31, 2017 and $310.1 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 2.64%, an average duration of approximately 5.61 years, and an average maturity of approximately 7.00 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$168.0		$1.2		$—		$—		$146.7		$4.2
More than 12 months	—		—		41.4		1.8		—		—		—		—
Total		$—		$—		$209.4		$3.0		$—		$—		$146.7		$4.2

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$13.0		$16.7
1 year - 5 years	123.4		106.2
5 years - 10 years	180.6		161.2
10 years - 15 years	4.8		7.7
15 years - 20 years	3.4		1.0
20 years+	23.0		16.5
Total		$348.2		$309.3

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $339.4 million, $197.4 million, and $213 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $17.7 million, $1.8 million, and $5.9 million, respectively, and gross losses of $0.6 million, $0.8 million, and $0.3 million, respectively, were recorded in earnings.

Entergy Louisiana

Entergy Louisiana holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$818.3		$461.2		$—		$715.9		$346.6		$—
Debt Securities	493.8		10.9		3.6		424.8		8.0		5.0
Total		$1,312.1		$472.1		$3.6		$1,140.7		$354.6		$5.0

The amortized cost of debt securities was $490 million as of December 31, 2017 and $421.9 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 3.88%, an average duration of approximately 6.17 years, and an average maturity of approximately 12.06 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$135.3		$1.1		$—		$—		$198.8		$4.8
More than 12 months	—		—		84.4		2.5		—		—		4.8		0.2
Total		$—		$—		$219.7		$3.6		$—		$—		$203.6		$5.0

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$23.2		$31.4
1 year - 5 years	122.8		99.1
5 years - 10 years	109.3		122.8
10 years - 15 years	52.7		41.4
15 years - 20 years	50.7		30.9
20 years+	135.1		99.2
Total		$493.8		$424.8

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $231.3 million, $219.2 million, and $123.5 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $12 million, $3.9 million, and $1.9 million, respectively, and gross losses of $0.4 million, $0.4 million, and $0.3 million, respectively, were recorded in earnings.

System Energy    

System Energy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$575.2		$308.6		$—		$473.9		$221.9		$0.1
Debt Securities	330.5		4.2		1.2		306.6		2.0		4.5
Total		$905.7		$312.8		$1.2		$780.5		$223.9		$4.6

The amortized cost of debt securities was $327.5 million as of December 31, 2017 and $309.1 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 2.67%, an average duration of approximately 6.48 years, and an average maturity of approximately 9.22 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$196.9		$1.0		$—		$—		$220.9		$4.4
More than 12 months	—		—		10.4		0.2		—		0.1		0.8		0.1
Total		$—		$—		$207.3		$1.2		$—		$0.1		$221.7		$4.5

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$4.1		$6.6
1 year - 5 years	173.0		188.2
5 years - 10 years	78.5		78.5
10 years - 15 years	1.0		1.3
15 years - 20 years	6.9		7.8
20 years+	67.0		24.2
Total		$330.5		$306.6

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $565.4 million, $499.3 million, and $390.4 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $1.4 million, $3.5 million, and $3.3 million, respectively, and gross losses of $3.3 million, $1.7 million, and $0.5 million, respectively, were recorded in earnings.

Other-than-temporary impairments and unrealized gains and losses

Entergy evaluates investment securities in the Entergy Wholesale Commodities’ nuclear decommissioning trust funds with unrealized losses at the end of each period to determine whether an other-than-temporary impairment has occurred.  The assessment of whether an investment in a debt security has suffered an other-than-temporary impairment is based on whether Entergy has the intent to sell or more likely than not will be required to sell the debt security before recovery of its amortized costs.  Further, if Entergy does not expect to recover the entire amortized cost basis of the debt security, an other-than-temporary impairment is considered to have occurred and it is measured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss).  Entergy did not have any material other-than-temporary impairments relating to credit losses on debt securities for the years ended December 31, 2017, 2016, and 2015.  The assessment of whether an investment in an equity security has suffered an other-than-temporary impairment is based on a number of factors including, first, whether Entergy has the ability and intent to hold the investment to recover its value, the duration and severity of any losses, and, then, whether it is expected that the investment will recover its value within a reasonable period of time.  Entergy’s trusts are managed by third parties who operate in accordance with agreements that define investment guidelines and place restrictions on the purchases and sales of investments.  Entergy did not record material charges to other income in 2017, 2016, or 2015 resulting from the recognition of the other-than-temporary impairment of equity securities held in its decommissioning trust funds.

Entergy Louisiana [Member]

Decommissioning Trust Funds

DECOMMISSIONING TRUST FUNDS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)

Entergy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The NRC requires Entergy subsidiaries to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, Vermont Yankee, and Palisades.  The funds are invested primarily in equity securities, fixed-rate debt securities, and cash and cash equivalents.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities. NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  As a result of the agreement with NYPA, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and recorded asset retirement obligations for the decommissioning liabilities. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values were based on the trust statements received from NYPA and were valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds were not assigned a level in the fair value hierarchy. For Indian Point 3, the receivable for the beneficial interest in the decommissioning trust fund was recorded in other deferred debits on the consolidated balance sheet as of December 31, 2016. For FitzPatrick, the receivable for the beneficial interest in the decommissioning trust fund was classified as held for sale within other deferred debits on the consolidated balance sheet as of December 31, 2016. In January 2017, NYPA transferred to Entergy the Indian Point 3 decommissioning trust funds with a fair value of $726 million and the FitzPatrick decommissioning trust fund with a fair value of $793 million. In March 2017, Entergy closed on the sale of the FitzPatrick plant to Exelon. As part of the transaction, Entergy transferred the FitzPatrick decommissioning trust fund to Exelon. The FitzPatrick decommissioning trust fund had a disposition-date fair value of $805 million. See Note 9 to the financial statements for further discussion of the decommissioning agreements with NYPA and see Note 14 to the financial statements for further discussion of the sale of FitzPatrick.

Entergy records decommissioning trust funds on the balance sheet at their fair value.  Because of the ability of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, the Registrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities in other regulatory liabilities/assets.  For the 30% interest in River Bend formerly owned by Cajun, Entergy Louisiana records an offsetting amount in other deferred credits for the excess trust earnings not currently expected to be needed to decommission the plant.  Decommissioning trust funds for Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, Vermont Yankee, and Palisades do not meet the criteria for regulatory accounting treatment.  Accordingly, unrealized gains recorded on the assets in these trust funds are recognized in the accumulated other comprehensive income component of shareholders’ equity because these assets are classified as available for sale.  Unrealized losses (where cost exceeds fair market value) on the assets in these trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other than temporary and therefore recorded in earnings.  Generally, Entergy records realized gains and losses on its debt and equity securities using the specific identification method to determine the cost basis of its securities.

The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$4,662		$2,131		$1		$3,511		$1,673		$1
Debt Securities	2,550		44		16		2,213		34		27
Total		$7,212		$2,175		$17		$5,724		$1,707		$28

The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2017 are $491 million for Indian Point 1, $621 million for Indian Point 2, $798 million for Indian Point 3, $458 million for Palisades, $1,068 million for Pilgrim, and $613 million for Vermont Yankee. The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2016 are $443 million for Indian Point 1, $564 million for Indian Point 2, $412 million for Palisades, $960 million for Pilgrim, and $584 million for Vermont Yankee. The fair values of the decommissioning trust funds for the Registrant Subsidiaries’ nuclear plants are detailed below.

Deferred taxes on unrealized gains/(losses) are recorded in other comprehensive income (loss) for the decommissioning trusts which do not meet the criteria for regulatory accounting treatment as described above. Unrealized gains/(losses) above are reported before deferred taxes of $479 million and $399 million as of December 31, 2017 and 2016, respectively.  The amortized cost of debt securities was $2,539 million as of December 31, 2017 and $2,212 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 3.24%, an average duration of approximately 6.33 years, and an average maturity of approximately 9.99 years.  The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$8		$1		$1,099		$7		$23		$1		$1,169		$26
More than 12 months	—		—		265		9		1		—		20		1
Total		$8		$1		$1,364		$16		$24		$1		$1,189		$27

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$74		$125
1 year - 5 years	902		763
5 years - 10 years	812		719
10 years - 15 years	147		109
15 years - 20 years	100		73
20 years+	515		424
Total		$2,550		$2,213

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $3,163 million, $2,409 million, and $2,492 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $149 million, $32 million, and $72 million, respectively, and gross losses of $13 million, $13 million, and $13 million, respectively, were reclassified out of other comprehensive income into earnings.

Entergy Arkansas

Entergy Arkansas holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$596.7		$354.9		$—		$525.4		$281.5		$—
Debt Securities	348.2		2.1		3.0		309.3		3.4		4.2
Total		$944.9		$357.0		$3.0		$834.7		$284.9		$4.2

The amortized cost of debt securities was $349.1 million as of December 31, 2017 and $310.1 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 2.64%, an average duration of approximately 5.61 years, and an average maturity of approximately 7.00 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$168.0		$1.2		$—		$—		$146.7		$4.2
More than 12 months	—		—		41.4		1.8		—		—		—		—
Total		$—		$—		$209.4		$3.0		$—		$—		$146.7		$4.2

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$13.0		$16.7
1 year - 5 years	123.4		106.2
5 years - 10 years	180.6		161.2
10 years - 15 years	4.8		7.7
15 years - 20 years	3.4		1.0
20 years+	23.0		16.5
Total		$348.2		$309.3

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $339.4 million, $197.4 million, and $213 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $17.7 million, $1.8 million, and $5.9 million, respectively, and gross losses of $0.6 million, $0.8 million, and $0.3 million, respectively, were recorded in earnings.

Entergy Louisiana

Entergy Louisiana holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$818.3		$461.2		$—		$715.9		$346.6		$—
Debt Securities	493.8		10.9		3.6		424.8		8.0		5.0
Total		$1,312.1		$472.1		$3.6		$1,140.7		$354.6		$5.0

The amortized cost of debt securities was $490 million as of December 31, 2017 and $421.9 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 3.88%, an average duration of approximately 6.17 years, and an average maturity of approximately 12.06 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$135.3		$1.1		$—		$—		$198.8		$4.8
More than 12 months	—		—		84.4		2.5		—		—		4.8		0.2
Total		$—		$—		$219.7		$3.6		$—		$—		$203.6		$5.0

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$23.2		$31.4
1 year - 5 years	122.8		99.1
5 years - 10 years	109.3		122.8
10 years - 15 years	52.7		41.4
15 years - 20 years	50.7		30.9
20 years+	135.1		99.2
Total		$493.8		$424.8

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $231.3 million, $219.2 million, and $123.5 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $12 million, $3.9 million, and $1.9 million, respectively, and gross losses of $0.4 million, $0.4 million, and $0.3 million, respectively, were recorded in earnings.

System Energy    

System Energy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$575.2		$308.6		$—		$473.9		$221.9		$0.1
Debt Securities	330.5		4.2		1.2		306.6		2.0		4.5
Total		$905.7		$312.8		$1.2		$780.5		$223.9		$4.6

The amortized cost of debt securities was $327.5 million as of December 31, 2017 and $309.1 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 2.67%, an average duration of approximately 6.48 years, and an average maturity of approximately 9.22 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$196.9		$1.0		$—		$—		$220.9		$4.4
More than 12 months	—		—		10.4		0.2		—		0.1		0.8		0.1
Total		$—		$—		$207.3		$1.2		$—		$0.1		$221.7		$4.5

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$4.1		$6.6
1 year - 5 years	173.0		188.2
5 years - 10 years	78.5		78.5
10 years - 15 years	1.0		1.3
15 years - 20 years	6.9		7.8
20 years+	67.0		24.2
Total		$330.5		$306.6

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $565.4 million, $499.3 million, and $390.4 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $1.4 million, $3.5 million, and $3.3 million, respectively, and gross losses of $3.3 million, $1.7 million, and $0.5 million, respectively, were recorded in earnings.

Other-than-temporary impairments and unrealized gains and losses

Entergy evaluates investment securities in the Entergy Wholesale Commodities’ nuclear decommissioning trust funds with unrealized losses at the end of each period to determine whether an other-than-temporary impairment has occurred.  The assessment of whether an investment in a debt security has suffered an other-than-temporary impairment is based on whether Entergy has the intent to sell or more likely than not will be required to sell the debt security before recovery of its amortized costs.  Further, if Entergy does not expect to recover the entire amortized cost basis of the debt security, an other-than-temporary impairment is considered to have occurred and it is measured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss).  Entergy did not have any material other-than-temporary impairments relating to credit losses on debt securities for the years ended December 31, 2017, 2016, and 2015.  The assessment of whether an investment in an equity security has suffered an other-than-temporary impairment is based on a number of factors including, first, whether Entergy has the ability and intent to hold the investment to recover its value, the duration and severity of any losses, and, then, whether it is expected that the investment will recover its value within a reasonable period of time.  Entergy’s trusts are managed by third parties who operate in accordance with agreements that define investment guidelines and place restrictions on the purchases and sales of investments.  Entergy did not record material charges to other income in 2017, 2016, or 2015 resulting from the recognition of the other-than-temporary impairment of equity securities held in its decommissioning trust funds.

System Energy [Member]

Decommissioning Trust Funds

DECOMMISSIONING TRUST FUNDS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)

Entergy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The NRC requires Entergy subsidiaries to maintain trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, Vermont Yankee, and Palisades.  The funds are invested primarily in equity securities, fixed-rate debt securities, and cash and cash equivalents.

For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities. NYPA and Entergy subsidiaries executed decommissioning agreements, which specified their decommissioning obligations. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate of the present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costs estimated in independent decommissioning cost studies.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. The transaction was contingent upon receiving approval from the NRC, which was received in January 2017.  As a result of the agreement with NYPA, in the third quarter 2016, Entergy removed the contract asset from its balance sheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and recorded asset retirement obligations for the decommissioning liabilities. At December 31, 2016, the fair values of the decommissioning trust funds held by NYPA were $719 million for the Indian Point 3 plant and $785 million for the FitzPatrick plant. The fair values were based on the trust statements received from NYPA and were valued by the fund administrator using net asset value as a practical expedient. Accordingly, these funds were not assigned a level in the fair value hierarchy. For Indian Point 3, the receivable for the beneficial interest in the decommissioning trust fund was recorded in other deferred debits on the consolidated balance sheet as of December 31, 2016. For FitzPatrick, the receivable for the beneficial interest in the decommissioning trust fund was classified as held for sale within other deferred debits on the consolidated balance sheet as of December 31, 2016. In January 2017, NYPA transferred to Entergy the Indian Point 3 decommissioning trust funds with a fair value of $726 million and the FitzPatrick decommissioning trust fund with a fair value of $793 million. In March 2017, Entergy closed on the sale of the FitzPatrick plant to Exelon. As part of the transaction, Entergy transferred the FitzPatrick decommissioning trust fund to Exelon. The FitzPatrick decommissioning trust fund had a disposition-date fair value of $805 million. See Note 9 to the financial statements for further discussion of the decommissioning agreements with NYPA and see Note 14 to the financial statements for further discussion of the sale of FitzPatrick.

Entergy records decommissioning trust funds on the balance sheet at their fair value.  Because of the ability of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, the Registrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities in other regulatory liabilities/assets.  For the 30% interest in River Bend formerly owned by Cajun, Entergy Louisiana records an offsetting amount in other deferred credits for the excess trust earnings not currently expected to be needed to decommission the plant.  Decommissioning trust funds for Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, Vermont Yankee, and Palisades do not meet the criteria for regulatory accounting treatment.  Accordingly, unrealized gains recorded on the assets in these trust funds are recognized in the accumulated other comprehensive income component of shareholders’ equity because these assets are classified as available for sale.  Unrealized losses (where cost exceeds fair market value) on the assets in these trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other than temporary and therefore recorded in earnings.  Generally, Entergy records realized gains and losses on its debt and equity securities using the specific identification method to determine the cost basis of its securities.

The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$4,662		$2,131		$1		$3,511		$1,673		$1
Debt Securities	2,550		44		16		2,213		34		27
Total		$7,212		$2,175		$17		$5,724		$1,707		$28

The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2017 are $491 million for Indian Point 1, $621 million for Indian Point 2, $798 million for Indian Point 3, $458 million for Palisades, $1,068 million for Pilgrim, and $613 million for Vermont Yankee. The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2016 are $443 million for Indian Point 1, $564 million for Indian Point 2, $412 million for Palisades, $960 million for Pilgrim, and $584 million for Vermont Yankee. The fair values of the decommissioning trust funds for the Registrant Subsidiaries’ nuclear plants are detailed below.

Deferred taxes on unrealized gains/(losses) are recorded in other comprehensive income (loss) for the decommissioning trusts which do not meet the criteria for regulatory accounting treatment as described above. Unrealized gains/(losses) above are reported before deferred taxes of $479 million and $399 million as of December 31, 2017 and 2016, respectively.  The amortized cost of debt securities was $2,539 million as of December 31, 2017 and $2,212 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 3.24%, an average duration of approximately 6.33 years, and an average maturity of approximately 9.99 years.  The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$8		$1		$1,099		$7		$23		$1		$1,169		$26
More than 12 months	—		—		265		9		1		—		20		1
Total		$8		$1		$1,364		$16		$24		$1		$1,189		$27

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$74		$125
1 year - 5 years	902		763
5 years - 10 years	812		719
10 years - 15 years	147		109
15 years - 20 years	100		73
20 years+	515		424
Total		$2,550		$2,213

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $3,163 million, $2,409 million, and $2,492 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $149 million, $32 million, and $72 million, respectively, and gross losses of $13 million, $13 million, and $13 million, respectively, were reclassified out of other comprehensive income into earnings.

Entergy Arkansas

Entergy Arkansas holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$596.7		$354.9		$—		$525.4		$281.5		$—
Debt Securities	348.2		2.1		3.0		309.3		3.4		4.2
Total		$944.9		$357.0		$3.0		$834.7		$284.9		$4.2

The amortized cost of debt securities was $349.1 million as of December 31, 2017 and $310.1 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 2.64%, an average duration of approximately 5.61 years, and an average maturity of approximately 7.00 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$168.0		$1.2		$—		$—		$146.7		$4.2
More than 12 months	—		—		41.4		1.8		—		—		—		—
Total		$—		$—		$209.4		$3.0		$—		$—		$146.7		$4.2

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$13.0		$16.7
1 year - 5 years	123.4		106.2
5 years - 10 years	180.6		161.2
10 years - 15 years	4.8		7.7
15 years - 20 years	3.4		1.0
20 years+	23.0		16.5
Total		$348.2		$309.3

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $339.4 million, $197.4 million, and $213 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $17.7 million, $1.8 million, and $5.9 million, respectively, and gross losses of $0.6 million, $0.8 million, and $0.3 million, respectively, were recorded in earnings.

Entergy Louisiana

Entergy Louisiana holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$818.3		$461.2		$—		$715.9		$346.6		$—
Debt Securities	493.8		10.9		3.6		424.8		8.0		5.0
Total		$1,312.1		$472.1		$3.6		$1,140.7		$354.6		$5.0

The amortized cost of debt securities was $490 million as of December 31, 2017 and $421.9 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 3.88%, an average duration of approximately 6.17 years, and an average maturity of approximately 12.06 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$135.3		$1.1		$—		$—		$198.8		$4.8
More than 12 months	—		—		84.4		2.5		—		—		4.8		0.2
Total		$—		$—		$219.7		$3.6		$—		$—		$203.6		$5.0

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$23.2		$31.4
1 year - 5 years	122.8		99.1
5 years - 10 years	109.3		122.8
10 years - 15 years	52.7		41.4
15 years - 20 years	50.7		30.9
20 years+	135.1		99.2
Total		$493.8		$424.8

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $231.3 million, $219.2 million, and $123.5 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $12 million, $3.9 million, and $1.9 million, respectively, and gross losses of $0.4 million, $0.4 million, and $0.3 million, respectively, were recorded in earnings.

System Energy    

System Energy holds debt and equity securities, classified as available-for-sale, in nuclear decommissioning trust accounts.  The securities held as of December 31, 2017 and 2016 are summarized as follows:

	2017						2016
	Fair Value		Total Unrealized Gains		Total Unrealized Losses		Fair Value		Total Unrealized Gains		Total Unrealized Losses
	(In Millions)
Equity Securities		$575.2		$308.6		$—		$473.9		$221.9		$0.1
Debt Securities	330.5		4.2		1.2		306.6		2.0		4.5
Total		$905.7		$312.8		$1.2		$780.5		$223.9		$4.6

The amortized cost of debt securities was $327.5 million as of December 31, 2017 and $309.1 million as of December 31, 2016.  As of December 31, 2017, the debt securities have an average coupon rate of approximately 2.67%, an average duration of approximately 6.48 years, and an average maturity of approximately 9.22 years.  The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale equity and debt securities, summarized by investment type and length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2017 and 2016:

	2017								2016
	Equity Securities				Debt Securities				Equity Securities				Debt Securities
	Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses
	(In Millions)
Less than 12 months		$—		$—		$196.9		$1.0		$—		$—		$220.9		$4.4
More than 12 months	—		—		10.4		0.2		—		0.1		0.8		0.1
Total		$—		$—		$207.3		$1.2		$—		$0.1		$221.7		$4.5

The fair value of debt securities, summarized by contractual maturities, as of December 31, 2017 and 2016 are as follows:

	2017		2016
	(In Millions)
less than 1 year		$4.1		$6.6
1 year - 5 years	173.0		188.2
5 years - 10 years	78.5		78.5
10 years - 15 years	1.0		1.3
15 years - 20 years	6.9		7.8
20 years+	67.0		24.2
Total		$330.5		$306.6

During the years ended December 31, 2017, 2016, and 2015, proceeds from the dispositions of securities amounted to $565.4 million, $499.3 million, and $390.4 million, respectively.  During the years ended December 31, 2017, 2016, and 2015, gross gains of $1.4 million, $3.5 million, and $3.3 million, respectively, and gross losses of $3.3 million, $1.7 million, and $0.5 million, respectively, were recorded in earnings.

Other-than-temporary impairments and unrealized gains and losses

Entergy evaluates investment securities in the Entergy Wholesale Commodities’ nuclear decommissioning trust funds with unrealized losses at the end of each period to determine whether an other-than-temporary impairment has occurred.  The assessment of whether an investment in a debt security has suffered an other-than-temporary impairment is based on whether Entergy has the intent to sell or more likely than not will be required to sell the debt security before recovery of its amortized costs.  Further, if Entergy does not expect to recover the entire amortized cost basis of the debt security, an other-than-temporary impairment is considered to have occurred and it is measured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss).  Entergy did not have any material other-than-temporary impairments relating to credit losses on debt securities for the years ended December 31, 2017, 2016, and 2015.  The assessment of whether an investment in an equity security has suffered an other-than-temporary impairment is based on a number of factors including, first, whether Entergy has the ability and intent to hold the investment to recover its value, the duration and severity of any losses, and, then, whether it is expected that the investment will recover its value within a reasonable period of time.  Entergy’s trusts are managed by third parties who operate in accordance with agreements that define investment guidelines and place restrictions on the purchases and sales of investments.  Entergy did not record material charges to other income in 2017, 2016, or 2015 resulting from the recognition of the other-than-temporary impairment of equity securities held in its decommissioning trust funds.