Entergy Corporation · NYSE:ETR
Entergy — Merrill Lynch Global Power & Gas Leaders Conference 2004
31 slides from Entergy's conference presentation, Sep 28, 2004
Slide 1: “Guns or Knives?”
“Guns or Knives?” Harvey Logan to Butch Cassidy Merrill Lynch Global Power & Gas Leaders Conference J. Wayne Leonard Chief Executive Officer — September 28, 2004 = Entergy
Slide 2: Safe Harbor and Reg G Compliance
Safe Harbor and Reg G Compliance In this presentation and from time to time, Entergy makes statements conceming its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are "forward-looking staternents" within the meaning of the Private Secur
Slide 3: Entergy’s Business Model
sy Supe Entergy’s Business Model Entergy's Business Model Suppiy/Demand —_CifmatedWsather Data Environmental Compotlilve Bahavior Fual Prices Logisiative/Roguiatory CredliMarkeis _Caplial Markeis Positions,
Slide 4: Value: Dynamic POV Investment Model
Value Buy, Sell, Hold....Fuhgetuhbo Dynamic POV Investment Model Intern: Expansion! Monitor Invest Outside Utility} Energy Sector Supply peste Plan | Nuclear st Monitor Business Fit (Knowledge, Skills) i
Slide 5: Any Questions?
Any Questions?
Slide 6: How Do You Continue to Grow Earnings?
How Do You Continue to Grow Earnings? Record Opportunity Operational Earnings Operational Earnings 99-03; $/share New-Term Guidance & Aspiration; S/snare cot 381 3703.80 312 323 2.17 ane nite weathe: s9 00s. 225 297 323 2.64 03 4.01 O4E OSE OBE 383-393 4.60-4.85 Doable? inirinsi@growth and accretion
Slide 7: Growing the Top Line and Squeezing the Middle
Growing the Top Line and Squeezing the Middle Source Revenues ——e— to Create Value for Shareholders Regulated Resolve Entergy Louisiana rate case Resolve Entergy Gulf States- Texas rate case Continue utility supply plan Grow sales Competitive Re-contract nuclear energy and capacity at higher prices
Slide 8: What is the Status of the Louisiana and Texas Rate Cases?
What is the Status of the Berens | Louisiana and Texas Rate Cases? Record Opportunity Entergy Mississippi (2002) 2004 2005 JFMAMJJASOND Formula Rate Plan 2003 Return on Equity Bandwidth < Entergy Louisiana (EL!) Staff filed $20M rate increase and 9.75% ROE (8/04) vs. $167M rate increase and 11.4% RO
Slide 9: Texas and Louisiana Rate Case Details
Texas and Louisiana Rate Case Details ELI Rate Case Filing vs. LPSC Staff Position Base Rate Increase; Revenue; $M Stel Agustnents 167 (70) (14) re!) Ea 11) {20} — se 20 = Filing Supply Decommission Equity Return DebtCGost Timing’ Staff Plan (11.4% vs. 9.75%) Rate Other Position EGSI-TX Rate Case Co
Slide 10: Supply Plan Reduces Customers’ Price and Improves Shareholder Risk/Reward
pply Plan Reduces Customers’ Price and Improves Shareholder Risk/Reward Profile Enterat{Rew Orieardysevings Achieved Ii ar of Strategic Enteref{CoulsiangpRate Case Requested Supply Plan Components Supply Resource Plan $M SM PPA 36 PPA & Additional 72 Rate Base Less: Fuel Savings 104 Less: Fuel Savin
Slide 11: What are the Potential Regulatory Outcomes?
What are the Potential Regulatory wy Supreme Court of the United States ERS Case Reversed the LPSC's decision requiring an additional rate reduction and refund (9-0) Grand Gulf ‘aomw Grand Gulf Decided case in favor of "no trapped costs” "states may not alter FERC- ordered allocations of wholesale p
Slide 12: Does a System That Is Short Have Market Power?
Does a System That Is Short Have Market Power? Pe) Carn rival generation serve wholesale load? Daily Peak Load* vs. Average Daily Peak Load for Peak Month a owe Annual wholesale needle peak 22.6 GW 25 Average daily peak ” | (native load) 207 6w) Daily Peak Wholesale market 19 GW 6 load Average Less|
Slide 13: Does a System That Is Short Have Market Power? Market Share Test
Does a System That Is Short Have Market Power? 2 Market Share Test Does utility have dominant position (20% of uncommitted capacity)? Daily Peak Load* vs. Minimum Peak Load Day for Each Season 03; cw Total Uncommitted 30-32 GW 25 Entergy 20 Uncommitted 9-11 GW 4 % of Total 30-38% . 8 Load Day Thresh
Slide 14: Does a System That Is Short Have Market Power?
Does a System That Is Short Have Market Power? RPh Moael Can rival generators compete for wholesale load? Supply Curve - Load vs. Marginal Cost 03; MW (x-axis) vs. $MWh (y-axis) pene dee Peak Wholesale ¢ Rival 100 Entergy Regulated | gad = capacity C) ves eo Capacity Availabe for 60 *~ “Wholesale Sa
Slide 15: What If: Possible Remedies
at If Possible Reme Loss of market-based rate authority Potential impediments to capacity purchases or mergers and acquisitions Divest “native load” capacity to pass tests Potential establishment o{ICD/ RTO /ISO DC Circuit Court 4
Slide 16: Can You Acquire Additional Plants?
Can You Acquire Additional Plants? in Sti Total Merchant Capacity for Potential Acquisition Market Area ~18 GW Entergy ShortPosition 35GW Entergy Units >35 Years Old ~6Gw Opportunity m2: ‘A Mothballed oe Active Construction @ operational Suspended Construction Excludes 1725 MWs: 1) Perqville 2) E7R
Slide 17: What is the Opportunity to Sell at Higher Prices for 2006 and Beyond?
What is the Opportunity to Sell at Higher Prices for 2006 and Beyond? Record Entergy Nuclear Earnings Contribution ‘99-05E; S/share “Ea | 135-144 99 OO 01 G2 03° O4E O5E [ll As-reported [| | Operational Opportunity Energy Contracts vs. Market Price O4E-0BE, Average $1MWh as of 6/04 Potential 06 reve
Slide 18: How Are Your Productivity Improvement Initiatives Progressing?
How Are Your Productivity Improvement Initiatives Progressing? Record Opportunity Entergy Regulated Fleet Production Cost Entergy Nuclear Northeast Fleet 97-03; 3-Year Average $/MWh Production Cost Comparison 3-year Average Before ETR vs. 03 and Goal; $/¥Wh 31% foros ETR Early 90's = $2300Wh 00-02 k
Slide 19: Is Nuclear Growth Tapped Out?
Is Nuclear Growth Tapped Out? Opportunity US Nuclear Market Record Entergy Nuclear AcquisitionsiContracts 9101 9103 Indian Pocaper Paint2 (cen) saB4iKw - 7199 Pilgrim S2iKW 11100 Indian ta Points | | Vaneee FitzPatrick A : ‘$208IKW $360IKW © Small Seale Plants (OETR Owned Plants ETR Gontracts x 00-0
Slide 20: What Is the Schedule for Trading and Pipeline Sales?
What Is the Schedule for Trading and Pipeline Sales? Strategic review concluded ~$1B expected net cash impact Sale to third party is most of all transactions value-enbancing alternative #
Slide 21: How Do You Get POV in the Future?
How Do Get POV in the Future? Today After Sale of Tradi
Slide 22: How Much Financial Headroom Remains after the $1.5 Billion Buyback?
How Much Financial Headroom Remains after the $1.5 Billion Buyback? Record Debt Ratios Last 12 Months 298-2004; % 7 Debt to capital 7 50 Target 40 Net debt to net capital E 4) 2088 2Q98 2000 2001 2Q02 2Q03 2Q04 —gE Capital structure provides financial headroom for capital redeployment Opportunity Pr
Slide 23: How Are You Thinking about the Dividend?
How Are You Thinking about the Dividend? Record Opportunity Cash Provided to Shareholders Cash Provided to Shareholders Cumulative 99-03; $B Cumulative O4E-06E; % of Operational Earnings a4 13 99 oo a1 02 03 Dividend Increase~* 5% 5% 6% 29% Projected ~$3B in cash to reholders in next 3 years ff oper
Slide 24: What Keeps You Up at Night?
What Keeps You Up at Night? 1998-Today af Improve service at utility Achieve favorable regulatory outcomes at FERC Achieve safety and operational improvements at newly acquired nuclear plants Obtain emergency plan certification at Indian Paint Complete merchant plant build-out Mitigate risk at Salte
Slide 25: How Do You Continue to Grow Earnings?
How Do You Continue to Grow Earnings? Record Opportunity Operational Earnings 99-03; $/share Operational Earnings Near-Term Guidance & Aspiration; $/share ce part owt 604.35 425 eaoe! 381 3.703.890 312 323 20 ane mnie | weathe| EL} oo o1 oz 03 O4E OSE O6E As. 225° 297 3.23 264 4.01 3.83 - 3.93 4.60
Slide 26: What Didn’t I Ask?
What Didn'tlAsk?
Slide 27: What Didn’t I Ask... About Environmental Policy?
What Didn’t | Ask... About Environmental Policy? Entergy Aspiration 05] To be recognized as an environmental leader, not only in electricity generation, but among all US industrial companies. Commitment Progress Goal Stabilize COZ emissions at 00 level 18% decrease 0% increase through 05 Top 10 Gene
Slide 28: What Didn’t I Ask... About Low Income Initiatives?
What Didn’t | Ask... About Low Income Initiatives? 1/3 of Entergy’s Retail Good Corporate Citizenship Customers Live in Poverty Promotes Social Change + Legislation passed providing permanent sources of 9 Public funding for L! assistance in AR, LA, NO, TX Promoted charitable customer assistance fund
Slide 29: Appendix: Reg G Reconciliations
Appendix: Reg G Reconciliations ‘ein uty peel tam a
Slide 30: Appendix: Reg G Reconciliations
Appendix: Reg G Reconciliations Tor 325 33 296 M392 ‘age ‘390 ‘ast waa sant wea 1365 15528 a2 SB? 5531 15546 528 530 15566 er)
Slide 31: Appendix: Reg G Reconciliations
Appendix: Reg G Reconciliations Net cath flow provided by operating activites my $63 Lees Net nuclear fuelpurchases oa Deoommiéssionina tust contibutons oa Operating cash lw 6a Planned maintenance capital expenditures 268) Preferred and common dividends 43 Free cath low (= (114m) 22 Netstock repurch
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