Slide 1: The Simple Life
The Simple Life 2005 Annual Meeting of Stockholders J. Wayne Leonard aan Chief Executive Officer = May 13, 2005 —=Enten gy
Slide 2: Safe Harbor and Reg G Compliance
Safe Harbor and Reg G Compliance In this presentation and fram time to time, Entergy makes statements concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are "Yorward-looking statements’ within the meaning of the Private Secur
Slide 3: Entergy's Business Model
Entergy’s Business Model ‘Supply/Demand Climate/Weather Data Environment Competitive Beha Fuel Prices Legislation/Regulation Credit Markets Create Options | Markets Skills Scale Scope Positions
Slide 4: Strategic Principles Are the Cornerstones of Our Business Model
Strategic Principles Are the Cornerstones of Our Business Model Business Strategy Financial Strategy Capital Corporate Wealth Creation > a Corporate Wealth Distribution
Slide 5: Business Strategy Is Grounded in Four Key Concepts
Business Strategy Is Grounded in Four Key Concepts BUSINESS STRATEGY Capital POV - Driven Develop robust POV; use it to drive all decisions Narrow Strategic Only enter (or stay invested in) businesses where we Disciplined Capital _ Invest at positive spreads to cost of capital; divest at Conservatio
Slide 6: Principles Guided Our Past Actions
le But Timele Principles Guided Our Past Actions
Slide 7: Dynamic POV Drove Decisive Action
Dynamic POV Drove Decisive Action Divestitures 98-04 FPL Merger 00 ieee Latin asl Security) | Hyperion America ( Fossil Citi- EIS! Pow Edesur Fra ate Turbines wcrc Wholesale Results GB 9 Ga
Slide 8: Including Divesting to Extract Maximum Value
Including Divesting to Extract Maximum Value 50% Owner C4) Entergy-Koch Trading |sota to Merrill Lynch Closed@41/1/04 > Undisclosed price @ Gulf South Pipeline we GULF SOUTH® |sota to 4 TEXAS GAS FANSMISSION, LLG - a subsidiary of Loews Corp Closed 2/29/0. $1.136B price = Sales monetized value creat
Slide 9: Strategic POV - Exit
Strategic POV - Exit Example #1 TRADING JBUSINESS STRATEGY POV: Natural owners: Big bé idelit Pipeline supported Global market Increasing sales pri Complex fuel price for pipelines interrelationships More risk, less margin Conservation o Risk / return tt Example #2 PIPELINE J}BUSINESS STRATEGY POV:
Slide 10: Strategic POV - Grow
Strategic POV - Grow Example #3 NUCLEAR BUSINESS STRATEGY POV: Capital Stewar Scale advantage i Poor operators inii Talent pool shrinking NRC pressures Environmental ben “zero emissions” Conservation of Hedged at purchase with unit-contin: Example #4 SUPPLY PLAN BUSINESS STRATEGY POV: — High gas pri
Slide 11: Protecting Wealth
Protecting Wealth FINANCIAL STRATEGY Balance Sheet Financial Optimization Flexibility > <a Balance Sheet Align leverage (including debt, guarantees and Optimization contractual obligations) with business risk profile 40
Slide 12: Balance Sheet Optimization
Balance Sheet Optimization Capital Structure : 04 and 05 S&P ' Raised ratings* of ETR operating 1098 vs. 1Q05; ¥ Q88'vs: 10) ue subsidiaries; Raised EGSI al secured and unsecured ratings 3/31/05 we 4B. oa Del EOSi EAl BBB+m> A- 6 50 ratings EGs| BBB- =) BBB=} BBB+ j ’ upgraded) 1) BBB+mmp A. EM BBB+
Slide 13: Cash Enabled Entergy to Act
Cash Enabled Entergy to Act Cash Generation and Investment 99-04; $B Cash Flow from Operating Activities MM enscomrnenneen i 1 99-04 = $0.9B / year /Debt reduction z=: | Net share i repurchases Beg. Cash $1 2B 0.8 — | Operating Maintenance Free Cash Proceeds Investments Ending Cash Capex* and Flow f
Slide 14: Business + Financial Strategy = Wealth Creation
Business + Financial Strategy = Wealth Creation CORPORATE WEALTH CREATION 413
Slide 15: Wealth Creation: Growing Earnings in a Mature Industry
Wealth Creation: Growing Earnings in a “Mature” Industry Operational Earnings - = 99-04 and 05 Guidance; $/share LN a3-14% i] 4.60-4.85 4.25 sold 3.81 = 3.80 Weather Impact 3.12 3.23 $0.32 ., 2.17 99 00 01 02 03 04 05 Guidance As- Reported 2.25 2.97 3.23 2.64 4.01 3.93 4.60-4.85 14
Slide 16: Wealth Creation: Share Price Grows with Earnings / Cash Flows
Wealth Creation: Share Price Grows with Earnings / Cash Flows Entergy Share Price 1/1/98-5/11/05; $/share $73.30/share CAGR! Apr 05 s ' 60 40 20 \$16.69/share 0 Mar 00 1/98 = 1/99 1/00 1/01 1102) 1/03, 1/04. 1/05 Source: Bloomberg 45
Slide 17: Wealth Creation: Market Cap Grows with Share Price
Wealth Creation: Market Cap Grows with Share Price Market Capitalization Entergy Shares Outstanding 1/1/98-3/31/05; $B 1/1/98-3/31/05; M 20) @O 13% | 20 $15.0B 240 jar 05, 230 16 220 12 240 8 200 190 4 $4.2B 1/98 1/99 1/00 1/01 1/02 1/03 1/04 2/05 Mar 00 0 @ 730/99 - ETR announced $0.75B share repur
Slide 18: Wealth Creation + Owner Focus = Wealth Distribution
Wealth Creation + Owner Focus = Wealth Distribution CORPORATE WEALTH DISTRIBUTION 47
Slide 19: Distributing Wealth to Owners
Distributing Wealth to Owners Dividends Paid and Net Common Share Repurchases 99-04: $B 0.8 0.5 Net Share —> 0.3 Repurchases Dividends — | 0.3 99 00 01 A Announ 0.75B Share repurcl program * Includes purchases to offset dilution from stock options 02 03 04 A A € 29% > Dividend Announced increase €$1
Slide 20: Total Shareholder Return
Total Shareholder Return Total Shareholder Return Five years ending 9/30/03 and 9/30/04; % El Index Awai El Index Awa for Top TSR Back to Back for Top TSR 9/30/98 through 9/30/03 150 , 150 100 100 Entergy, 50 50 S&P S&P 500 Electrics 9 S&P 0 ‘y Electrics S&P 500 -50 -50 9/98 =699/99 9/00 9/01 9/02 9
Slide 21: The Same Timeless Principles Will Determine Our Future
The Same ‘Timeless’ Principles Will Determine Our Future
Slide 22: Initiatives Have Been Identified for 2005
Initiatives Have Been Identified for 2005 Operational and Key Drivers Assumed to be in Lower End of Range As-Reported Guidance Variables 05; $/share : a 7 = Entergy Nuclear) + Positive Negative ; ae 5% open position _| Final actuarial $4.60 - $4.85 Contract pricing Rrcine assumptions for Uprates Cos
Slide 23: Strategic Opportunities Have Been Identified for the Future
Strategic Opportunities Have Been Identified for the Future Future Strategic Opportunities EPS PNear-term: 8-10% Utility | Recover ongoing investments in rate base to Growth 7 ” 5-69) improve reliabi and service Long-term: 5-6% Eam incentives under performance-based Financial Aspirations Returns 9%
Slide 24: Grow Rate Base to Improve Reliability and Service
Grow Rate Base to Improve Reliability and Service Utility Rate Base Examples of Growth Capital Expenditures 99 vs. 04; $B or) Sates Perryville plant acquisition Ace (acquisition approved by LPSC in 5-0 vote in Apr 05) “3% | Attala plant acquisition announced 3/17/05 (application to be filed with MPS
Slide 25: Regulatory Mechanisms
Regulatory Mechanisms 04; % of rate base 3/23/05 - Approved Basic Regulatory Objective An environment that allows routine, timely and full recovery of capital gh Incentives Electric Formula Rate Plans Jurisdiction ROE Incentives Entergy Gulf 10.65% ROE —_+/- 60/40 customer/ States—LA and75bp company
Slide 26: Acquire Generating Resources through Supply Plan
Acquire Generating Resources through Supply Plan New Generation by Region that reduce prices to customers Generation Statistics ethane Boas {Speratona Suspended con tuston Merchant te TT Capacity ees hon 3/17/05 Acquisitio. nae hA NNOUNCE Entergy Short ~3-5GW Position Entergy Units > 2 35yrs old ScW
Slide 27: Aggressively Pursue Solutions for Entergy Gulf States - Texas
Aggressively Pursue Solutions for Entergy Gulf States — Texas Texas Bill Provisions Remain regulated until PUCT Can recover through separate May proceed with and certifies power region riders: complete jurisdictional (1) Reasonable and necessary separation Clarifies rate freeze: can file transition
Slide 28: And Contingency Plan if Legislative and Regulatory Solutions Stall
And Contingency Plan if Legislative and Regulatory Solutions Stall Alternatives to Legislative or Regulatory Solutions Filed appeal of rate case dismissal in Travis County, - No prescribed timeline - Past experience indicates at least six months Begin proceeding in Louisiana to separate Entergy - Pr
Slide 29: Resolve Market Power Proceeding
Resolve Market Power Proceeding Uncommitted pivotal Pass in all supplier screen markets Can rival generation serve wholesale load? Uncommitted market Fail in the share analysis Entergy Does utility have control area dominant position (20% market of uncommitted capacity)? Delivered Price Test Pas: Ca
Slide 30: Achieve Approval of Transmission Proposal
Achieve Approval of Transmission Proposal Generation Merchants ransmission Distribution Customers Independent Key Functions: QFs Administer OASIS Calculate available flowgate capacity Grant or deny service Also: Load serving entities Oversee Entergy’s transmission planning process Facilitate regiona
Slide 31: Effectively Manage Nuclear Portfolio
Effectively Manage Nuclear Portfolio Unsold Energy at 3/05 Remainder of 05E-09E; % 2/23/05 — NYPA selects Entergy in long-term RFP that requested contracts 86 starting as early as 08 56 28 5 10 Rem. O6E O7E O8E 09E 05E Energy Prices at 3/05 Remainder of 05E-09E; Average $/MWh Market 70 ATC Firm LD 5
Slide 32: Expand Capacity, Reduce Costs at Entergy Nuclear
Expand Capacity, Reduce Costs at Entergy Nuclear Planned Uprates Entergy Nuclear Non-Fuel O&M 04-06E; MW 02-05E; $M 4,200 800 a s 700 Adjusted* 4,058 3724/05 >> Nuclear 600 As-Reported Regulatory Commission g approves uprate ~ 500 04 OSE 06E 02 03 04 05E “02 adjusted for full year of Vermont Yankee
Slide 33: Grow Nuclear Business Through Acquisitions and Contracts
@ Small Scale Plants ETR Owned Plants ETR Contracts 01-03 Rolling Average Capacity Factors < 90% ~)\ Grow Nuclear Business rough Acquisitions and Contracts Potential Market Single owner / small scale (32) Production cost above $20/MWh Low capacity factor / event issues (22) Declining / low performan
Slide 34: Cooper Success - More Reliable / Less Risk
Cooper Success — More Reliable / Less Risk Cooper 764 MW IWANO Index Factors Operational performance Safety systems Radiological Chemistry Fuel WANO Index 03-04; Index 68 Bcd ss 04 Year in Review 31% 89 93% capability factor Record run of 321 days 03 04 “We inspected you often and thoroughly and you
Slide 35: Pursue Additional Opportunities?
Pursue Additional Opportunities? Includes: Transform nuclear asset portfolio into a business (i.e., add other generation types or short position) Evaluate M&A opportunities 34
Slide 36: Aspiring to Maintain Flexibility
Aspiring to Maintain Flexibility FINANCIAL STRATEGY Aspiration Status < 50% net debt to net capital Currently at 48% net debt to net capital Debt to capital at 50% Also monitoring total debt/total capital to remain within rating agency ranges Aspiration Status Continuous improvement in ratings and b
Slide 37: Aspiring to Distribute Wealth to Owners
Aspiring to Distribute Wealth to Owners CORPORATE WEALTH DISTRIBUTION Dividends Share Repurchases Aspiration Status Targeting top quartile annual dividend growth (-5%) 20% increase announced 10/04 Second stepwise increase in two years (29% increase announced 7/03) Aspiration | Invest at positive spr
Slide 38: The Simple Life
The Simple Life 2005 Annual Meeting of Stockholders J. Wayne Leonard aan Chief Executive Officer = May 13, 2005 —=Enten gy
Slide 39: Appendix
Appendix D> i Entergy
Slide 40: Appendix: Reg G Reconciliation
Appendix: Reg G Reconciliation Table 1: Cash Generation and Investment - Reconciliation of GAAP to Non-GAAP Measures 1999-2004 (8 in billions) 1999-2004 Beginning cash, January 1, 1999 @ 12 Cash flow provided by operating activities ) 127 Less: Net nuclear fuel purchases (0.3) Decommissioning trust
Slide 41: Appendix: Reg G Reconciliations
Appendix: Reg G Reconciliations Table 2: Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures 4999-2005E (S per share) 1999 2000 2001 2002 2003 20042005 As-Reported Earnings @ 2.28 2.97 9.28 264 4.4 3.83 460-485 Less Special tems Utility, Pareat & Other Regulatory and reserve adjustme
Slide 42: Appendix: Reg G Reconciliations
Appendix: Reg G Reconciliations Table & Entergy Nuclear Non-Fuel O&M - Reconciliation of GAAP to Non-GAAP Measures 2002.2005E (Sin miltions) 2002 2003, 2001 20056 Entergy Nuclear AsReported Non-Fuel O&M @ 13 780 695 675 Adjustments Full year Vermont Yankee and refueling amortization 112 : - . ‘Volun