Entergy Corporation · NYSE:ETR
Entergy — 44th Edison Electric Institute Financial Conference 2009
33 slides from Entergy's conference presentation, Nov 2, 2009
Slide 1: Edison Electric Institute Financial Conference
44'h Edison Electric Institute Financial Conference November 1-3, 2009 & pi
Slide 2: Caution Regarding Forward-Looking Statements and Reg G Compliance
Caution Regarding Forward-Looking Statements and Reg G Compliance In this presentation, and from time to time, Entergy Corporation makes certain “forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Except to the extent required by the federal secur
Slide 3: Entergy's Asset Portfolio and POV-Focused Business Model
Entergy’s Asset Portfolio and POV-Focused Business Model Enterqy’s Businesses + 30/00 MW electric generating capacity 2M largast U.S.nuslear generator 27 millon customers $13billon revenue 14700 employees + Bvertcally integrated dectric Ullities (Sretal regulators] + contiguous sistas — Arkareas, Lo
Slide 4: Motivation and Value Opportunities for Spin-off
Motivation and Value Opportunities for Spin-off Potential to Capture Other Motivation for Separation Shareholder Value Risk Isolate commodity risks Option Value Provide shareholders 2 ees inherent in the Non- the optionality of Utility Nuclear business making independent buy/sell decisions for Optim
Slide 5: A Utility of Diversified Load and Generation
A Utility of Diversified Load and Generation 2008 Stati © Customers: © Electric 2.7M, Gas 0.19M © Revenues: $10.1B (incl. $5.3B Fuel) * Billed Sales: 106 TWh © Res 31%, Camm'l/ Gav't 28% * Ind 36%, Wholesale 5% © Sources of Energy: 112 TWh © Nuclear 34%, Coal 14% * Purchased Power 30% © Gas/ Oil | H
Slide 6: Five Regulatory Jurisdictions
Five Regulatory Jurisdictions 3 Commissioners Appointed by Governor, including Chair 6-year terms, staggered 3 Commissioners Elected, Chair rotates every 1 ~2 years 4-year terms, concurrent Entergy Arkansas 5 Commissioners Elected, Chair selected by peers for 1-year term 6-year terms, staggered Loui
Slide 7: Emerging Signs of Regional Economic Recovery
Emerging Signs of Regional Economic Recovery Entergy's service territery didn't fall Industrial sector has bean mest os hard as the rest of the nation offactad by the downturn Entergy Regional GDP vs. U.S. Entergy Utility Weather-adjusted Sales Growth 1Q 2008 - 4020118; % annualized 14.2008 - 30.200
Slide 8: Earnings Growth through ROE Improvement
Earnings Growth through ROE Improvement Return on Equity [BookROE © Authorized ROE 2008; % g Authorized FRP ROE Range Achi ing Theeretical Earnings* Could Generate Up te ~$150M 2008 Test Yeor New FRP Adeptad 18 Cost of Service Adj Wy geereon8, od in Nev 2009 15 EGSL +$36.9@ Rate Case in ELL 6616.30
Slide 9: Turn in Commodity Markets
Turn in Commodity Markets Natural Gas ‘Stock Indices 10 Yr Credit Rates, S/MMbtu Indiesed (101708 = 100) #0 —sap soo | cach Ga 100 uy a =H oe ie 2010 Nymex Strip gg np : ° sea TR « 60 aaa } aman 28 sae: hones ge5e 528s 32333283 $2333233 $2333 238 Aluminum Copper Steel Market Volatility St sar Sra sn
Slide 10: Productive Rate Base Growth
Productive Rate Base Growth Generation Gas-Fired Capacity Recent Acquisitions; SikW Perryilte ie J S235 (6/2005) Calcasieu s205/Kw (3/2008) yates Ouachita Keel $231,100 ‘J ss25rKw = J ¢1-2008) (3/2008) Acquire er contract seme ef the merchant capacity built ever the past decade Self Build Options Co
Slide 11: Line of Sight on Total Shareholder Return Aspiration
Line of Sight on Total Shareholder Return Aspiration Entergy’s Goal itustrative ‘Att Portaio £ mgt Repurctesse Earnings Per Share Growth =i 2009E - 2014E rowth te Challenge: 15% CAGR Iaprovenents ETR Utility ETR Aspiration Pre-Spin Pre-Spin Past-Spin Utility Capital Plan 7 Investment ‘eae - 2012; $B
Slide 12: A Nuclear Portfolio of Low-Cost Assets in Attractive Markets
A Nuclear Portfolio of Low-Cost Assets in Attractive Markets Enexus Nuclear Fleet Palisades — 798 AW Acquired April 2007 Contracted! September 2003 FitzPatrick — 838 mW ‘Acquired November 2000 ‘Vermont Yankee — 605 RW Acquired July 2002 Pilgrim — 688 NW Acquired July 1999 tetrad Indian Point, Unit 2
Slide 13: The Enexus Value Proposition
The Enexus Value Proposition Three key elements define the Enexus value position Supports Transactional, \ capabilities 2
Slide 14: Parameters for Value Growth
Parameters for Value Growth ene Us. Maximize value Risk-adjusted returns Risk management priority Our point-of-view. Patience and discipline Organic and transactional Nuclear and other Buyer and seller Position for dislocated market opportunities Return capital ta shareholders Strong capital structu
Slide 15: Multiple Upsides
Multiple Upsides Enexus Energy is unique pare Sharaheldars Multiple upside elements provide _ unmatched Ki value-enhaneing justed EBITDA! opportunities Non-Nuclear Opportunities Nuclear Opportunities G Somme Une £0, Natural Gas__ Sas Heat Rates / Capacity Markets Free Cash Flow Strong Capital Struct
Slide 16: Strong Base / Transactional Capabilities
Strong Base / Transactional Capabilities The U.S. generation industry will evolve (© Business Cycles © Rating Agencies ¢ Financing Constraints Regulation ) Enexus will be part Of that evolution { » Strong copie { © Generation Companies itructure a is ee © Private Equity © Significant Liquidity * Hed
Slide 17: A Rapidly Evolving Nuclear Industry
A Rapidly Evolving Nuclear Industry ase) % semen one iQ Pocometeston ~~ (OE ecu ene><uis Ser = cat Management ‘ 2 2 P ccUNGEN ae \ vow Nucla Ronayne? GosP ts A Forgets ModularReactors —_pacow (SAFSTOR oat fr mae aoa ¢ 4 License Renewal! Acquisitions Decommissioning Operational DA tale Services Devel
Slide 18: Financial Strength and Flexibility
Financial Strength and Flexibility ene><us Estimated Financial Capabili $M at spin date (assumed Jan. 1, 2010) Equity and Unsecured Bond Financing 00" 360 760 i Gash Minimum Bank Additional Sub- Other Liquidity Facilities Secured Total Potential Commitment Financing Financing Authority Sources ‘Cons
Slide 19: Near-term Value-Enhancing Opportunities
Near-term Value-Enhancing Opportunities Hedge Strategy Gd Energy Current Sold Forward Position a capacity % as of Sep. 30, 2008 86 88 7 Bal. 09E 10E NE 12E BE 14E : aqos Operational Excellence con Capacity Factor Facter = 2004-YTD 2009; % 100% 92 93 95 89 95 ot 04 05 06 07 08 09YTD wi
Slide 20: License Renewal Update
License Renewal Update License Renewal Status Comments on the Process Expected ‘License renewals are granted based on safety and environmental reviews ried NRC Strong safely scores Decision 90 INPO {Insitute of Nuciear Power Operations) Indextor the fleet Date Experts tapped in environmental raters
Slide 21: Enexus Markets and Contracts
Enexus Markets and Contracts Markets and Nearest Hub 2010; % of Total MW MSO Bundled contract A 16 NVISO - ROS' Capacity Price §3.17/KW-mo, (summer J 2009) and $1.71/KW-mo. y (winter 2009 / 2010) NVISO Zone G NEPOOL MASS Hob 2009-2010 Capacity Price (FCM) $4.10/KW-ma 26 * H/ISO Zanes ARG ae pres or
Slide 22: New York Zone A Market Prices and Heat Rates
New York Zone A Market Prices and Heat Rates NYISO Zone A ATC Forward Prices ($!MWh) 85 5 —z009 —2010 —2011 —2012 65 55 45 35 25 Pesce egeeseseessseggeess Source: MEX Carport NYISO Zone A Implied Delivered Heat Rate (BtulkWh) 7,600 2008 2010 —=2011 —=2012 7,000 6,500 6,000 5,500 5,000 ssssssees = a
Slide 23: New York Zone G Market Prices and Heat Rates
New York Zone G Market Prices and Heat Rates NYISO Zone G ‘ATC Forward Prices (SIMWh) —2009 —2010 —2011 —2012 ssssssessees8 S358 38 8 5 8 = Source: NM coat == NYISO Zone G Implied Delivered Heat Rate (BtulkWh) 10,200 2012 410/09 9,800 9,400 9,000 8,600 |4 8,200 7,800 ssssssesees = So FH SR BT 11108
Slide 24: New England Market Prices and Heat Rates
New England Market Prices and Heat Rates NEPOOL MASS Hub ATC Forward Prices ($!MWh) 118 —2009 —2010 —2011 —2012 98 eEereeeESSeSse ee sb 828 8 8 Suu oc ci Ea £ NEPOOL MASS Hub Implied Delivered Heat Rate (BtulkWh) 9,300 8,900 8,500 8,100 7,700 11/08 eeeeeee Sheek ERE E 10/08 a a eae 2
Slide 25: Bridge from Old to New Views
Bridge from Old to New Views Business as Usual »» Separate Recap Post-Spin 2009 EPS ee Entergy _— Entergy . oaks, mY ia el ae Mie ae 2010 reduction; 2010 ili c Share Parent! Parent? Range: repurchase || Range: Other Other! EPS exchange EPS Non-Nuclear Non-Nuclear Wholesale Wholesale Assets; Assets;
Slide 26: 2010 Earnings Guidance
2010 Earnings Guidance on Business as Usual Basis As-Reported and Operational EPS — Business as Usual 2010E Guidance (after-tax) 6.80 Midpoint 6.40 -7.20 Range 0.08 on _— (0-15) (020) (0.05) Utility ? Parent / Other Entergy Nuclear (includes Non-Nuclear Wholesale Assets) Midpoint Aetions pense “asse
Slide 27: 2010 Post-Spin Outlook for Each Company
2010 Post-Spin Outlook for Each Company Post-Spin Financial Outlook a 2010E, assuming Jan. 1, 2010 spin date "== Combined Entergy ene<Us Midpoint Sishare (after-taq) BAU Operational Guidance 3.36 -3.75 3.05 - 3.45 6.80 Separation stage (0.10) (0.30) (0.40) Recapttalization stage 0.60 (1.20) (0.60) O
Slide 28: Accretive Projection by 2013
Accretive Projection by 2013 2014 EPS — ttlustrative Post-Spin Opportunities — iifustrative Continues to Widen Over Hedging Strategy [a] Time Changes @Enexus Additional Financial Capacity @Enexus Structuring @Enexus |_| Additional Financial Business Post-Spin Capacity @Entergy a as Usual Opportunity
Slide 29: Investment Above Depreciation to Meet Existing Needs at the Utility
Investment Above Depreciation to Meet Existing Needs at the Utility Projected Capital Expenditures 2010E -2012E; $B Investing Capital — Preliminary 2010E - 2012E; % of Total Maintenance Investing Gapital Gapital 36 utility Potential Portfolio Transformation Parent’ so - Generation (Existing Fleet on
Slide 30: Overarching Aspiration: Top Quartile Total Shareholder Return
Overarching Aspiration: Top Quartile Total Shareholder Return 2014 Financial Aspirations Off 2009 base year Top Quertile Superior TSR TSR Double Adjusted Digit EPS Growth EBITDA’ (Compound Annual $2 billion Growth Rate) Balanced Investment? Return Program? Balanced Investment? Return Program BBIBa C
Slide 31: Entergy 2014 Financial Driver Sensitivities
Entergy 2014 Financial Driver Sensitivities 2014 Earnings Sensitivities Mlustrative Sishare 0.13 1% Retail Sales Growth | $100M/ year 0.03 Investment in —_. Service 0.45 1% Increase in Allowed ROE} 1% Increase in —= NFOM (0.07) $100M Increase in __ Debt (0.02) $500M 0.20 - 0.25 Share Repurchases (po
Slide 32: Enexus 2014 Financial Driver Sensitivities
Enexus 2014 Financial Driver Sensitivities Enexus 2014 Aspiration Assumptions Aspiration Estimated Assumptions nual Impact +0— 1,500 BtulkWh heat rate expansion Up to. 350 $2 billion + $0—30!ton CO, Up to 500 Adjusted EBITDA’ + $0 - 4lkW-month capacity price Up to 200 -1+ $0 -2/MMBtu change in gas p
Slide 33: Appendix: Reg G Reconciliation
Appendix: Reg G Reconciliation 2009E and 2010E Gi (Per share in US. $} 2003E" 2010E Guidance Guidance Midpoint___ Midpoint As-Reported o) 6.30 6.55 Less Special Items 2009 Non-utility nuclear spin-off expenses at Utility, Parent & Other (0.06) E 2009 Non-utility nuclear spin-off dis-synergies at Ene
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