Entergy Corporation and Subsidiaries Management's Financial Discussion and Analysis 10 Other income (deductions) changed from $47.6 million in 2002 to ($36.0 million) in 2003 primarily due to a decrease in "miscellaneous - net" as a result of a $107.7 million accrual in the second quarter of 2003 for the loss that would be associated with a final, non-appealable decision disallowing abeyed River Bend plant costs.
See Note 2 to the consolidated financial statements for more details regarding the River Bend abeyed plant costs.
The decrease was partially offset by an increase in interest and dividend income as a result of the implementation of SFAS 143.
Interest on long-term debt decreased from $462.0 million in 2002 to $433.5 million in 2003 primarily due to the redemption and refinancing of long-term debt.
NON-UTILITY NUCLEAR Following are key performance measures for Non-Utility Nuclear:
## Table 0 ##
2004 Compared to 2003 The decrease in earnings for Non-Utility Nuclear from $300.8 million to $245.0 million was primarily due to the $154.5 million net-of-tax cumulative effect of a change in accounting principle that increased earnings in the first quarter of 2003 upon implementation of SFAS 143.
See "Critical Accounting Estimates - SFAS 143" below for discussion of the implementation of SFAS 143.
Earnings before the cumulative effect of accounting change increased by $98.7 million primarily due to the following: ?
lower operation and maintenance expenses, which decreased from $681.8 million in 2003 to $595.7 million in 2004, primarily resulting from charges recorded in 2003 in connection with the voluntary severance program; ?
higher revenues, which increased from $1.275 billion in 2003 to $1.342 billion in 2004, primarily resulting from higher contract pricing.
The addition of a support services contract for the Cooper Nuclear Station and increased generation in 2004 due to power uprates completed in 2003 and fewer planned and unplanned outages in 2004 also contributed to the higher revenues; and ?
miscellaneous income resulting from a reduction in the decommissioning liability for a plant, as discussed in Note 8 to the consolidated financial statements.
Partially offsetting this increase were the following: ?
higher income taxes, which increased from $88.6 million in 2003 to $142.6 million in 2004; and ?
higher depreciation expense, which increased from $34.3 million in 2003 to $48.9 million in 2004, due to additions to plant in service.2003 Compared to 2002 The increase in earnings for Non-Utility Nuclear from $200.5 million to $300.8 million was primarily due to the $154.5 million net-of-tax cumulative effect of a change in accounting principle recognized in the first quarter of 2003 upon implementation of SFAS 143.
See "Critical Accounting Estimates - SFAS 143" below for discussion of the implementation of SFAS 143.
Income before the cumulative effect of accounting change decreased by $54.2 million.
The decrease was primarily due to $83.0 million ($50.6 million net-of-tax) of charges recorded in connection with the voluntary severance program.
Except for the effect of the voluntary severance program, operation and maintenance expenses in 2003 per MWh of generation were in line with 2002 operation and maintenance expenses.
Gains and Other Income The following table shows our gains and other income for the fiscal years ended December 31, 2004, January 2, 2004, and January 3, 2003.
## Table 1 ##
Interest Expense 2004 COMPARED TO 2003 Interest expense decreased $11 million to $99 million, reflecting the repayment of $234 million of senior debt in the fourth quarter of 2003 and other subsequent debt reductions, partially offset by lower capitalized interest resulting from fewer projects under construction, primarily related to our Timeshare segment.2003 COMPARED TO 2002 Interest expense increased $24 million to $110 million, reflecting interest on the mortgage debt assumed in the fourth quarter of 2002 associated with the acquisition of 14 senior living communities, and lower capitalized interest resulting from fewer projects under construction, primarily related to our Timeshare segment.
In the fourth quarter of 2003, $234 million of senior debt was repaid.
The weighted average interest rate on the repaid debt was 7 percent.
Interest Income, Provision for Loan Losses, and Income Tax 2004 COMPARED TO 2003 Interest income, before the provision for loan losses, increased $17 million (13 percent) to $146 million, reflecting higher loan balances, including the $200 million note collected in the third quarter of 2004 related to the acquisition by Cendant Corporation of our interest in the Two Flags joint venture and higher interest rates.
We recognized $9 million of interest income associated with the $200 million note, which was issued early in the 2004 second quarter.
Our provision for loan losses for 2004 was a benefit of $8 million and includes $3 million of reserves for loans deemed uncollectible at three hotels, offset by the reversal of $11 million of reserves no longer deemed necessary.
Income from continuing operations before income taxes generated a tax provision of $100 million in 2004, compared to a tax benefit of $43 million in 2003.
The difference is primarily attributable to the impact of the synthetic fuel joint ventures, which generated a tax benefit and tax credits of $165 million in 2004, compared to $245 million in 2003 and to higher pre-tax income.
In the third quarter of 2003, we sold a 50 percent interest in our synthetic fuel joint ventures, and we currently consolidate the joint ventures.2003 COMPARED TO 2002 Interest income increased $7 million (6 percent) to $129 million.
Our provision for loan losses for 2003 was $7 million and includes $15 million of reserves for loans deemed uncollectible at six hotels, offset by the reversal of $8 million of reserves no longer deemed necessary.
Income from continuing operations before income taxes and minority interest generated a tax benefit of $43 million in 2003, compared to a tax provision of $32 million in 2002.
The difference is primarily attributable to the impact of our synthetic fuel operation, which generated a tax benefit and tax credits of $245 million in 2003, compared to $208 million in 2002.
Excluding the impact of the synthetic fuel operation, our pre-tax income was lower in 2003, which also contributed to the favorable tax impact.
Our effective tax rate for discontinued operations increased from 15.7 percent to 39 percent due to the impact of the taxes in 2002 associated with the sale of stock in connection with the disposal of our Senior Living Services business.
Minority Interest Minority interest increased from an expense of $55 million in 2003 to a benefit of $40 million in 2004, primarily as a result of the change in the ownership structure of the synthetic fuel joint ventures following our sale of 50 percent of our interest in the joint ventures.
Due to the purchaser’s put option, which expired on November 6, 2003, minority interest for 2003 reflected our partner’s share of the synthetic fuel operating losses and its share of the associated tax benefit, along with its share of the tax credits from the June 21, 2003, sale date through the put option’s expiration date, when we began accounting for the ventures under the equity method of accounting.
For 2004, minority interest reflects our partner’s share of the synthetic fuel losses from March 26, 2004 (when we began consolidating the ventures due to the adoption of FIN 46(R)), through year-end.
For additional information, see the discussion relating to our “Synthetic Fuel” segment on page 19.
Income from Continuing Operations 2004 COMPARED TO 2003 Income from continuing operations increased 25 percent to $594 million, and diluted earnings per share from continuing operations increased 27 percent to $2.47.
The favorable results were primarily driven by strong hotel demand, new unit growth, strong timeshare results, higher interest income reflecting higher balances and rates, lower interest expense due to debt reductions, lower loan loss provisions, stronger synthetic fuel results and increased gains of $58 million, partially offset by higher income taxes excluding the synthetic fuel impact, and higher general and administrative expenses.2003 COMPARED TO 2002 Income from continuing operations increased 8 percent to $476 million, and diluted earnings per share from continuing operations advanced 11 percent to $1.94.
Synthetic fuel operations contributed $96 million in 2003 compared to $74 million in 2002.
Our lodging financial results declined $5 million to $702 million in 2003.
The comparisons
Product Specific Risks and Risk Mitigants For certain living benefits guarantees, claims will primarily represent the funding of contractholder lifetime withdrawals after the cumulative withdrawals have first exhausted the contractholder account value.
Due to the age of the in force block, limited claim payments have occurred to date, and they are not expected to increase significantly within the next five years, based upon current assumptions.
The timing and amount of future claims will depend on actual returns on contractholder account value and actual contractholder behavior relative to our assumptions.
The majority of our current living benefits guarantees provide for guaranteed lifetime contractholder withdrawal payments inclusive of a “highest daily” contract value guarantee.
Our PDI variable annuity complements our variable annuity products with the highest daily benefit and provides for guaranteed lifetime contractholder withdrawal payments, but restricts contractholder asset allocation to a single bond fund sub-account within the separate accounts.
The majority of our variable annuity contracts with living benefits guarantees, and all new contracts sold with our highest daily living benefits feature, include risk mitigants in the form of an automatic rebalancing feature and/or inclusion in our ALM strategy.
We may also utilize external reinsurance as a form of additional risk mitigation.
The risks associated with the guaranteed benefits of certain legacy products that were sold prior to our development of the automatic rebalancing feature are also managed through our ALM strategy.
Certain legacy GMAB products include the automatic rebalancing feature, but are not included in the ALM strategy.
The PDI product and contracts with the GMIB feature have neither risk mitigant.
Certain risks associated with PDI are managed through the limitation of contractholder asset allocations to a single bond fund sub-account.
For our GMDBs, we provide a benefit payable in the event of death.
Our base GMDB is generally equal to a return of cumulative deposits adjusted for any partial withdrawals.
Certain products include an optional enhanced GMDB based on the greater of a minimum return on the contract value or an enhanced value.
We have retained the risk that the total amount of death benefit payable may be greater than the contractholder account value.
However, a substantial portion of the account values associated with GMDBs are subject to an automatic rebalancing feature because the contractholder also selected a living benefit guarantee which includes an automatic rebalancing feature.
All of the variable annuity account values with living benefit guarantees also contain GMDBs.
The living and death benefit features for these contracts cover the same insured life and, consequently, we have insured both the longevity and mortality risk on these contracts.
The following table sets forth the risk management profile of our living benefit guarantees and GMDB features as of the periods indicated.
## Table 2 ##
(1) All contracts with living benefit guarantees also contain GMDB features, covering the same insured contract.
(2) Contracts with living benefits that are included in our ALM strategy, and have an automatic rebalancing feature.
(3) Represents contracts subject to reinsurance transaction with external counterparty covering new business for the period April 1, 2015 through December 31, 2016.
These contracts with living benefits also have an automatic rebalancing feature.
(4) Includes contracts that have a GMDB feature and do not have an automatic rebalancing feature.
The risk profile of our variable annuity account values as of the periods above reflect our product risk diversification strategy and the runoff of legacy products over time.

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2004	2003	2002
Net MW in operation at December 31	4,058	4,001	3,955
Average realized price per MWh	$41.26	$39.38	$40.07
Generation in GWh for the year	32,524	32,379	29,953
Capacity factor for the year	92%	92%	93%

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($ in millions)	2004	2003	2002
Timeshare note sale gains	$64	$64	$60
Synthetic fuel earn-out payments received, net	28	—	—
Gains on sales of real estate	44	21	28
Gains on sales of joint venture investments	19	21	44
Other	9	—	—
$164	$106	$132

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December 31,
2016	2015	2014
Account Value	% of Total	Account Value	% of Total	Account Value	% of Total
(in millions)
Living benefit/GMDB features-1:
Both ALM strategy and automatic rebalancing-2	$106,585	69%	$106,018	71%	$110,953	72%
ALM strategy only	9,409	6%	9,994	7%	11,395	7%
Automatic rebalancing only	1,168	1%	1,393	1%	1,771	1%
External reinsurance-3	2,932	2%	1,513	1%	0	0%
PDI	7,926	5%	4,664	3%	2,777	2%
Other Products	2,730	2%	2,870	2%	3,324	2%
Total living benefit/GMDB features	$130,750	$126,452	$130,220
GMDB features and other-4	22,545	15%	22,989	15%	24,863	16%
Total variable annuity account value	$153,295	$149,441	$155,083

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Question: what is the growth rate in earnings for non-utility nuclear in 2004 compare to 2003?
Answer: -0.18551