Entergy Corporation · NYSE:ETR
Entergy — Investor Presentation (November 2005)
70 slides from Entergy's investor presentation, Nov 7, 2005
Slide 1: ne Stor: il oy we Centy,
ne Stor: il oy we Centy, th
Slide 2: Forward-looking statements
inthis 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 “Toruard-looking statements" within the meaning of the Private Securities Litigation Reform Act of 199
Slide 3: It's always best to start at the beginning
It’s always best to start at the beginning
Slide 4: Entergy's Utility Business Model
Entergy’s Utility Business Model Corporate Citizenship (Alignment wicommunity values and satisfaction wiservice) "Value Drivers, oe
Slide 5: Katrina Forecast Track
Forecast Track on uae 2g 26,at 3:00 a.m. Panhandle hit was r, expected... ‘ Forecest Teck =? csc SON CET (ies 4a = wl ee Forecast Track .. but track abruptly moved much farther west. ie as ete 1 “t conn we gu
Slide 6: Wind Field Image Map
Wind Field Image Map on August 29 at 4:00 a.m.
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Slide 8: Katrina Storm Surge Approaches Post-Katrina Flooding in New Orleans
ina Storm Surge Approaches Post-Katrina Flooding im)New Orleans ntergy’s Michoud plant id Surrounding Areas Photo by Entergy's Michoud plant manager Don MeCroshelf
Slide 9: Peak Outage Map for Louisiana and Mississippi
) Peak Outage Map for Louisiana and Mississippi Due to Hurricane Katrina
Slide 10: Summary: Katrina Approaches — Customers Flee — Entergy Responds
Summary: Katrina Approaches — Customers Flee — Entergy Responds (1) Katrina hits FL at Category 1 (2) Evacuations as Katrina heads towards LA Restoration begins after Hurricane Katrina fe \. Friday ‘Afternoon cer N \
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Slide 12: Rita Forecast Track
Forecast Track on Septemben23 at Initial landfall hit Texas/Louisiana border as predicted... Forecast Track on September 24 at 9:00 p.m, ImpactWeather. JENGA ees ...but tracked northeast after landfall, i damage to all jurisdictions. "1
Slide 13: Peak Outage Map for Hurricane Rita
‘Peak Outage Map for Hurricane Rita 42
Slide 14: Total Outage Map for Both Storms
Total Outage Map for Both Storms s J Due to Katrina and Rita , Service Territory Outages Square Miles 73,000 90.000 Katrina Rita Both Coes bat 807 x Out of Service (2° <f Not Affected (Green) 43
Slide 15: Damage from Both Storms Exceeded Anything Entergy Had Ever Experienced
Damage from Both Storms Exceeded eoening Entergy Had Ever Experienced oe if on er Rita Total R £ Poles Destroyed Di 28,900 . Katrina Rita Total Customer Outages (millions) 1.9 4 400 11,500 rl i | ASD @ a : J aks = Katrina Rita Tee a Katrina le Katrina Rita ota J 4 ¢ A fe
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Slide 18: Each Storm Had Unique Challenges to Address
Each Storm Had Unique Challenges to Address serene caine vee Damage Restoration Logistics Employees Flooded natural gas facilities Severe substation flooding Communications knocked out Gasolineldiesel shortages Inaccessibility due@{to flooding Resources pre-dedicated to Florida Security threats in N
Slide 19: A hazardous and technically unexplainable journey
A hazardous and technically unexplainable journey into the outer stratosphere — Reet Et eee alae 49
Slide 20: Challenges Met and Expectations Exceeded
Challenges Met and [7,500 workers were coordinated, clothed, housed and fed 800 military, state and local law enforcement and armed security officers For 23 days, 119 MW load served from ERGOT grid for first time | | were answered within 30 seconds} ES & Critical Functions | All 34 critical IT syste
Slide 21: Summary: More Customers Flee — Entergy Responds — Power Restored
Summary: More Customers Flee — Entergy Responds — Power Restored (4) Evacuations as Rita heads towards LATX (©) Restoration begins after Hurricane Rita (©) Restoration complete day 47 after Katrina (5) ®. Thursday Track_ . @ . Wednesday Track
Slide 22: October 15: Restoration Completed for Customers Who Can Take Service
October 15: Restoration Completed for Customers Who Can Take Service p Hurricanes Katrina and Rita Restorations _ Outage Profile by Restoration Days; thousands. * ‘6 4,200 4 tum to Service Customers oy {\atrina Laney (Extended Outage Customers 1,000 800 - qs é 600 \Day 38 Day 47 ‘ 200 - t ! ~+-/ # L
Slide 23: You killed her
You killed her
Slide 24: And Then The Verdict Came In
And Then The Verdict Came In || (Despite the obstacles, Entergy, the USA's ctric utility, has, by most accounts, \d expectations by restoring power in just about a week to most of the 1.1 million homes and businesses that “Entergy has really been out hee working hard and they're helping.” ~Former Pr
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Slide 26: Financial Aftermath Requires Comprehensive Financing Strategy
Financial Aftermath Requires Comprehensive Financing Strategy ,, g Entergy Financing Requirements ‘Restoration costs, fuel payments and “normal” operations. inproductive cash usagelleadsto Tower returns 5 Corporate \ Financing . Strategy Credit OC _—_— needed to sustain event- #® - Determinant of ca
Slide 27: Majority of Restoration Costs Will Be Paid in 2005
Majority of Restoration Costs Will Be Paid in 2005 > Restoration Costs ae $M. Estimated Timing of Costs % ay 2008 4 20% |F * 4100-4,400 % je» y 2007 5-10% 16-28 Other 26
Slide 28: Network!
Network! 000, P chalet 30,000) Superdome & Entergy Headquarters Building | | eva ousul sida tae 2) 6,000 oT Breeches
Slide 29: Revenue Impact at ENOI and ELI Extends Beyond 2005
Revenue Impact at ENOI and ELI Extends Beyond 2005 Customers ans — P = Number of Estimated 06 Estimated 06 »_ Customers Non-Fuel Non-Fuel ¢ / Electric and icy ou, e Sas Revenues Revers Ne i 28
Slide 30: Rising Commodity Prices Have Implications for Both Utility and Nuclear
Rising Commodity Prices Have Implications for Both colby and Nuclear age 2.26 price movement in one year , ae ce at for Commodity Contracts _ 104-3Q05; $M $M 1,681 FS - z 4 923 =.‘ r % e a6 21 4224 we 4q04 1005} 2005. 1Renects th oF ENO! 104 1905 2@05 | 305 ee 29
Slide 31: Rating Agencies Responded to Financial Uncertainties Spurred by Storms
Rating Agencies Responded to Financial Incertainties Spurred by Storms After St. Opco Outlook Rating” Outlook ETR BBB Stable BBB t EAl A. Stable A- EGS| BBB+ Stable BBB+ ELI A. Stable A- EMI A. Stable A- ENO| A- Stable Moody's ETR Baad Stable Baad EAl Baal Stable EGS| Baa} Stable ELI Baal Stable EMI
Slide 32: Financial Strategy Principles
Financial Strategy Principles Principle Balance Sheet Optimization Financial Flexibi Description Align leverage (including debt, guarantees and contractual obligations) with business risk profile Ensure cash is available to maintain liquidity/pursue growth 31
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Slide 34: You're confusing courage with wisdom
You’re confusing courage with wisdom 33
Slide 35: Financing Plan Provides Cash for Restoration Costs and a Liquidity Cushion
Financing Plan Provides Cash for Restoration Costs and a Liquidity Cushion TS eer ea — inancing Plan Drivers : Gon I ash 2 the - ~ ¢ ; - ; f F is for: ; Psy ie te mental losses i : deferred fuel es. : lef ” # . . Corporate 4 \ Financing Strategy Credit - Rating Considerations» Liquidity needs fore -
Slide 36: Financing Plan Consists of Debt and Equity-Linked Securities
* Financing Plan Consists of Debt and Equity-Linked Securities pe 0 Financing Plan Sources. “$B 7° Entergy _ Equi Corporation Securities Ope a Funding to! : Credit Companies Ess! | Revolver « Lf, LA eee i Tes 35
Slide 37: Recovery Initiatives Support Unwinding of Financing Plan
Recovery Initiatives Support Unwinding of Financing Plan i= PPG eae 7 Storm Restoration Cost covery Initiatives ~ ve rc ; 2 = n Securitization ' 36
Slide 38: Non-nuclear Property Insurance Estimated Restoration Costs
Non-nuclear Property Insurance Estimated Restoration'Costs % by type Item Description <e Coverage Up to $400M per occurrence . $20M deductible per occurrence | Fees Party Utility property insured on : eereuton 20% system-wide basis Covered Generating station $ Menelation Property substations, gas di
Slide 39: Legislative Relief is Critical to Protect Customers from Severe Cost Burden
Legislative Relief is Critical to Protect Customers from Severe Cost Burden Ee es Fen | seen esr Community Development Block Grants Tax Incentives Stafford Act utility Stabilization Act Securitization Provides relief to investor-owned utilities for restoration costs and incremental losses Allows com
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Slide 42: Local Regulators Have Expressed Support for Recovery of Prudently Incurred Costs
Local Regulators Have Expressed Support for Recovery of Prudently Incurred Costs "Public Utility Commission of Texas 4 At its October 28 Open Meeting, the Commission moved to initiate a proceeding that will allow red EGS! Texas to prove up its storm costs and freasonabls restoration costs Malia indi
Slide 43: Aggressive Action Plan Established to Pursue Recovery Over Next 15 Months
Aggressive Action Plan Established to Pursue Recovery Over Next 15 Months Projected Timeline of Action on Recovery Initiatives Complete loss Funding may begin shortly thereafter valuation Legislation Federal Securi Mississippi Request regulatory collecting recovery SRE sisis may offer alate ier lecu
Slide 44: ENOI - That's a horse of a different color
ENO! - That’s a horse of a different color
Slide 45: Too much money, not enough people
Too much money, not enough people tages jidistrative 44
Slide 46: Key Factors in ENOI Bankruptcy Process
te Key Factorsjin ENO! Bankruptcy Process e sa Outcome of Today's Uncertainties + Regional economic recovery + Repopulation of city + Utility service level desired and ability to pay for it + Insurance proceeds + Federal assistance + Regulatory recovery mechanisms Determines Rate Levels Factors: + N
Slide 47: Is this justice? The best we can do?
Is this justice? The best we can do?
Slide 48: What is Entergy's optimal capital structure?
What is Entergy’s optimal capital structure? Does Entergy have excess capital to deploy? What are the investment hurdles? What is the impact of a specific investment on Entergy’s overall risk profile? Is Entergy stock a good investment? What are investor preferences relative to the dividend? Capital
Slide 49: Entergy's Nuclear Business Model
Entergy’s Nuclear Business Model ak Value Drivers. ee
Slide 50: Nuclear Business Strategy Is Simple: Make Money on the Spread
Nuclear Business Strategy Is Simple: Make Money on the Spread
Slide 51: Hedging Strategy Components
Hedging Strategy Components Pepesoeme and process risks - including Limits Sets sold fonward and product mix targets; tracks market, ©) credit and related operational Wea Value-at-Risk (VaR) metrics Sets policy standards based Upon company, industry and capital market dynamics 4 Objectives & Targets
Slide 52: Although Re-Contracting Has Tracked Higher Prices, Market Continues to Run
Although Re-Contracting Has Tracked Higher Prices, Market Continues to Run ~ 2007 Northeast Power Prices p 2007 Projected Energy Revenues ~ 3003-305; $mwn £ Prices at 3Q03'vs. 3005; $B “ x oq baie Ma Ke (Significant we . 50 te 4 47 30 ' $\3003 1004 3004 Ao Open ~ 2007 Northeast Sold Forward 3Q03-3Q0
Slide 53: Nuclear Cost Strategy Aims to Align Costs With Industry Median
Nuclear Cost Strategy Aims to Align Costs With Industry Median lortheast Fleet Southern Fleet 06 Go: $19/MWh S. Nuclear Industry Pro » 3yvear rolling 97-03; il Median ™@ Top Quartile ) 30 95.97 9698 * S799 9851 -01 00.02 = 01.03 ‘Entergy Nuciear’s northeast feet rodletion cost prior fo the aBgule du
Slide 54: Nuclear Operations Update: ANO, Grand Gulf, Vermont Yankee
ANO Unit 1 Construction Project Refueling outage began October 4 Ended «record - setting run of 472 days — bettering its previous record set in 2001-2002 Wessel head and steam generators se placement underyy Grand Gulf & VY Refueling Outages Grand Gulf's refuelinty outage ended on October 18 30 days
Slide 55: Significant Milestone Reached in Advancement of New Nuclear
88 9122 9122 icant’ ilestone Reached In Advancement of New Nuclear Energy Policy Act of 2005 provides incentives for construction and > opération ofnew nuclear —_| ee construction and operation” NuStart— a consortium of 11 industry ‘ Jeaders - was formed to obtain the first NuStart announced) epee c
Slide 56: The Future
Slide 57: Long-Term Aspirations
Long-Term Aspirations 56% annual growth over the long term 9% ROIC <50% net debt to net capital Key Events That Will Shape Entergy’s Future Direction Federal legislative assistance for storm costs Regulatory storm recovery strategy and proceedings in L. MS and TX Property damage insurance settlement
Slide 58: Some people without brains do an awful lot of talking
1 don’tknow. Some people without brains do an awful lot of talking. Don’t they? 57
Slide 59: Poor little kid. I hope she makes it home all right.
Slide 60: I am a very good man. I'm just a very bad wizard.
Oh no dear. | am a very good man. ’m just a very bad wizard. 59
Slide 61: Oh joy, rapture, I've got a brain
Oh joy, rapture, I’ve got a brain 60
Slide 62: Shucks folks, I'm speechless
Shucks folks, I’m speechless 61
Slide 63: Hearts will never be practical until they can be
Hearts will never be practical until they can be 62
Slide 64: There's no place like home
There’s no place like home
Slide 65: Everything I wanted was in my own back yard
Everything | wanted was in my own back yard...if | wanted it hard enough B4
Slide 66: You Can Count on Entergy
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Slide 67: Go Away
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Slide 69: Appendix
Appendix
Slide 70: Appendix: More Quotes
Appendix: More Quotes rm to electrical disasters. But, Katrina, they say, s a different monster. . Entergy Cerne needs help restoring power to over a million customers. It's going to else.” =KENS-TV, San Antonio eo: erence ali ey tty in this crisis while the ‘atallievels - Ww. penne Arkansas Democ!