Entergy Corporation · NYSE:ETR
Entergy — Morgan Stanley Investor Meeting (April 2005)
36 slides from Entergy's conference presentation, Apr 26, 2005
Slide 1: Entergy Nuclear - Morgan Stanley Investor Meeting
Entergy Nuclear Morgan Stanley Investor Meeting Indian Point Energy Center April 26, 2005 a = 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 concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are "forward-looking statements” within the meaning of the Private Secur
Slide 3: Discussion Outline
Discussion Outline © Entergy Nuclear Business Strategy - A combination of operational excellence, price risk management and portfolio management &) Current Initiatives and Development Opportunities - Focusing on improving revenues, cost efficiency and expansion opportunities ) Indian Point Energy Ce
Slide 4: Nuclear's Strategy Combines Operational Excellence and Price Risk and Portfolio Management
Nuclear’s Strategy Combines Operational Excellence and Price Risk and Portfolio Management How Do We Compete? Where Do We Compete? Customers Utilities Nuclear plant owners Retail Electric Providers Products/ Generation Services Management services Decommission/license renewal services Competitors 3-
Slide 5: Entergy Operates Nuclear Units in the U.S.
Entergy Operates 11 Nuclear Units in the U.S. Pilgrim James A. Indian Point Vermont |Yankee FitzPatrick 2and3 Entergy’s Nuclear Fleet Cooper Arkansas Nuclear One — Grand Gulf River Bend Waterford 3 1 and 2
Slide 6: Entergy Nuclear Also Provides Services to Other Nuclear Plant Owners
Entergy Nuclear Also Provides Services to Other Nuclear Plant Owners Management License Renewal License Renewal Decommissioning Cooper DC Cook Davis-Besse Maine Yankee License Renewal DecomCost Estimating Decommissioning Susquehanna TLG Services Millstone 1 Ongoing service contracts in green Previou
Slide 7: Entergy's Nuclear Business Accounts For Nearly 30% of Earnings
Entergy’s Nuclear Business Accounts For Nearly 30% of Entergy’s Earnings Earnings Breakdown Cash Flow from Operating Activities 05 Guidance: % 04; % Utility,
Slide 8: Entergy Nuclear Has Achieved Substantial Growth in Earnings Since Inception
Entergy Nuclear Has Achieved Substantial Growth in Earnings Since Its Inception in 99 1 CAGR ~68% 1.32-1.41 Entergy Nuclear Operational Earnings 99-04 and 05 Guidance; $/share 99 00 01 02 03 04 05 Guidance As- Reported 0.06 0.22 0.57 0.88 1.30 1.06 1.32-1.41
Slide 9: Discussion Outline
Discussion Outline @ Entergy Nuclear Business Strategy - A combination of operational excellence, price risk management and portfolio management Current Initiatives and Development Opportunities - Focusing on , cost efficiency and expansion opportunities ) Indian Point Energy Center - A safe, secure
Slide 10: Three Markets Provide Indication for Northeast Pricing
Three Markets Provide Indication for Northeast Pricing Entergy Nuclear Northeast Fleet Market and Nearest Hub At 3/05; MW and (acqui ion date) 04; % of Total MW NYISO Zone wt NYISO Zone G* 05 ATC Price / \ QS'ATC Price $55/MWh $67/MWh “~~ 688 MW (7/99) NEPOOL Mass Hub : 05 ATC Price IP2: 1,028 MW (9
Slide 11: Entergy Nuclear Has Closed New Nuclear Contracts that Benefit from Higher Market Prices
Entergy Nuclear Has Closed New Nuclear Contracts that Benefit from Higher Market Prices Energy Sold Energy Contract Price O5E-08E; % 05E-08E; Average $/MWh Portfolio 50 : ~ Portfolio 95 70% at 3/05 90 __--- Sold nn 1/04-3/05 Sold 72 48 “ 1/04-3/05 “ Portfolio 4 at 3/05 44 40 . Portfolio s a at 12/03
Slide 12: A Comprehensive Hedging Strategy Guides Nuclear Contracting Decisions
A Comprehensive Hedging Strategy Guides Nuclear Contracting Decisions Unsold Energy at 3/05 Sensitivity to $9/MWh Remainder of 05E-09E: % or $1/MMBtu Price Change* $/share % Unsold - 1 i | Energy Prices at 3/05 Remainder of 05E-09E; Average $/MWh Rem. 05E Market 70 ATC Firm LD 20 | 60 ee 50 ee ao ET
Slide 13: Capacity Market Provides Steady Contribution to Revenues
Capacity Market Provides Steady Contribution to Revenues Capacity Sold at 3/05 Contract Prices at 3/05 Remainder of 05E-09E; % Remainder of 05E-09E; Average $/MWh 80 45 Total Energy 1 and Capacity Ener: 49 my 34 40 ie 23 35 Rem. O06E O7E O8E 09E Rem. 06E O7E 08E 09E 05E 05E 12
Slide 14: Discussion Outline
Discussion Outline @ Entergy Nuclear Business Strategy - A combination of operational excellence, price risk management and portfolio management Current Initiatives and Development Opportunities - Focusing on improving revenues, and expansion opportunities ) Indian Point Energy Center - A safe, secu
Slide 15: Production Cost Improvements Are Moving the NE Fleet Closer to the Industry Median
Production Cost Improvements Are Moving the NE Fleet Closer to the Industry Median Production Costs 3 Northeast Fleet 97-04; $/MWh NE Fleet | Southern Fleet TenaaS | 35 —33 Acquisitions ae 30 06 Goal: 25 $18/MWh 20 20 ; LLL: id EL ELEEE 97 98 99 00 01 02 03 04 U.S. Nuclear Industry Production Costs
Slide 16: Cost Management Strategies Are Used to Address Production and A&G Costs
Cost Management Strategies Are Used to Address Production and Administrative & General Costs Entergy Nuclear Non-Fuel O&M Cost Management Strategies 02-05E: $M Entergy Continuous 800 /mprovement Model 700 Adjusted* \ . 600 As-Reported IthStrides ee . Moving in a new direction 500 ferey Supply Chain
Slide 17: Discussion Outline
Discussion Outline @ Entergy Nuclear Business Strategy - A combination of operational excellence, price risk management and portfolio management Current Initiatives and Development Opportunities - Focusing on improving revenues, cost efficiency and ) Indian Point Energy Center - A safe, secure and v
Slide 18: Ability to Apply Differentiated Skills to Underperforming Assets Offers Expansion Opportunities
Ability to Apply Differentiated Skills to Underperforming Assets Offers Entergy Expansion Opportunities Entergy-Owned Plants vs. U.S. Fleet Entergy-Owned Plants vs. U.S. Fleet WANO Index Capability Factor _ 97-04; Index poe 97-04: % cond $ 19% ih 12% 100 i 100 i ‘ creray ‘ Entergy 1 vg. SARS 04 Avg.
Slide 19: Plant Uprates Provide Incremental Capacity at Attractive Return Levels
Plant Uprates Provide Incremental Capacity at Attractive Return Levels Illustrative Planned Uprates 04-06E: MW Installed in refueling outage completed Completed on'ai10o in 03 and 04 04 05E O6E “Uses approximately 250 milion shares cutstancing Uprate Financial Profile EPS* 0.15 0.10 0.05 0.00 For Ex
Slide 20: Cooper Success Illustrates the Benefits to Joining Entergy's Fleet
Cooper Success Illustrates the Benefits to Joining Entergy’s Fleet WANO Index 03-04; Index = 764 MW |WANO Index Factors Operational performance Safety systems Radiological Chemistry Fuel “We inspected you often and thoroughly and you passed the test ...” - Bruce Mallett, NRC regional administrator u
Slide 21: Nuclear Business Is Focused On Growing Through Acquisitions and Contracts
Nuclear Business Is Focused On Growing Through Acquisitions and Contracts Potential Market Attributes Target vs. ETR Opportunit: Single owner / 1-2 units Duane Arnold 1 small scale (32) vs.11 to come on market since 03 Production cost $22 vs. $15-20 Every $1/MWh above $20/MWh - MWh savings = $8M Low
Slide 22: New Nuclear Is A Potential Longer-term Opportunity
New Nuclear Is A Potential Longer-term Opportunity What are the considerations to building new nuclear plants? National Energy Policy Risk Mitigation & Financing Administration and Congress Regulatory Certainty Energy Companies Safe / Economical Designs Adequate Plant Sov Industry Financials Consort
Slide 23: NuStart Is One of Two U.S. Initiatives Leading the Charge to Build New Nuclear Plants
NuStart Is One of Two U.S. Initiatives Leading the Charge to Build New Nuclear Plants NuStart Potential Timeline 04 05 07 038 10 14 i T T T T l 1 1 Formed to ; develop IssueRFP || Final design ; ; combined Select sites for selection: Potential Potential operating construction submit COL construction
Slide 24: Discussion Outline
Discussion Outline @ Entergy Nuclear Business Strategy - A combination of operational excellence, price risk management and portfolio management &) Current Initiatives and Development Opportunities - Focusing on improving revenues, cost efficiency and expansion opportunities & Indian Point Energy Ce
Slide 25: aa Aa
aa Aa wwe es NNN Secondary Moisture Separator Containment Spray -- an Steam Generator 4 4) Pressurizer Reactor Coolant Pump : Condensate par Pump —f Reactor Biver Water System 24
Slide 26: Key Plant Information
Key Plant Information Indian Point 2 Indian Point 3 Operational 1974 Operational 1976 Licensed to 2013 Licensed to 2015 Output: 1,028 Net Output: 994 Net Westinghouse Pressurized Water Reactor Fuel: Enriched Uranium Containment: Reinforced Concrete 3 12 - 4 12 thick, steel lined 25
Slide 27: Key Safety Features
Key Safety Features Containment Building, 3.5-foot thick dome, 4.5-foot thick side walls, 8 rows of 2.5-inch steel bars Reactor Vessel, 6-inch steel, surrounded by several feet of steel reinforced concrete, positioned low in the Containment Building 4-foot thick missile shield over the reactor vesse
Slide 28: Containment Building and Vessel Head
Containment Building and Vessel Head ‘Containment Wall Indian Point “A Xs Va Containment Building oN dennuen, ash i Hudson River 27
Slide 29: Spent Fuel Storage
Spent Fuel Storage Grade - Spent Fuel ground level Pool Reinforced Concrete Walls 23 Feet of water shielding above fuel Spent fuel bundles on bottom of pool below grade 28
Slide 30: Inspections at Both Units Have Not Found Reactor Vessel Head Degradation
Inspections at Both Units Have Not Found Reactor Vessel Head Degradation Reactor Vessel Head Background Davis-Besse-type plants (different manufacturer) have experienced through wall leaks No Westinghouse plants similar to IP2/IP3 have had through wall leaks IP2/3 has accumulated only approximately
Slide 31: Security Measures Before and After Sept. 11
Before Sept. 11, facility was capable of defending against a substantial threat: Well armed and trained security force Vehicle barriers, fencing with surveillance and detection capabilities Metal detectors, explosive detectors, x-ray equipment Employee background checks and palm readers After Sept.
Slide 32: Approved Emergency Plan in Place
Approved Emergency Plan in Place Indian Point Emergency Plan Indian Point has a federally-approved emergency response plan Improvements to Emergency Plan infrastructure include: Communications equipment Radiation monitors Meteorology computers Radio systems Sirens Entergy has increased support for N
Slide 33: Vital
Vital Vital Statistics Initiated aggressive advertising and lobbying campaigns to deliver the “safe, secure, and vital” message and facts Provides 2,000 MW (20-30% of ConEd load) electricity to power roughly 2 million homes Saves customers about $1.5 billion annually Decreases the electrical blackou
Slide 34: Summary
Summary Entergy Nuclear has made major safety and operating improvements at all sites, including Indian Point — a safe, secure and vital provider of electricity to the New York area. Robust energy market provides benefits to selling output while managing associated risks. Cost management strategies
Slide 35: Appendix
Appendix a = Entergy,
Slide 36: Appendix: Reg G Reconciliations
Appendix: Reg G Reconciliations Table 1: Entergy Nuclear Operational Earnings - Reconciliation of GAAP to Non-GAAP Measures 1999-2005E ( per share) 1999 200020012002 20032004 2005E As-Reported Earnings (a) 0.06 0.22 0.57 088 (1.30 1.06 1.92-1.41 Less Special Items SFAS 143 implementation - - - - 067
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