Entergy Corporation · NYSE:ETR
Entergy — Edison Electric Institute Financial Conference 2010
63 slides from Entergy's conference presentation, Oct 29, 2010
Slide 1: Edison Electric Institute Financial Conference
45" Edison Electric Institute Financial Conference October 31, 2010 — November 3, 2010 == Entergy
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: Discussion Outline
Discussion Outline Entergy Overview Entergy Wholesale Commodities Valuable Option ee —————$—_—_—____ Utility Growth Proposition Ee ————_—_— Financial Strategy rr ————_—_—_—_—___ Financial Outlook ee
Slide 4: Entergy's Integrated Business
Entergy’s Integrated Business Entergy’s Legacy Positions Enteray’s Businesses Enteray Wholesale © 30/000 MW electric generating Commodities Capcity Ednlenr rits ovmed 2A fargest U.S.ruclear generator She Stee (ages my 27 millon customers {dvuclear plant # Over $10 bilian revenue managed 800 MW) 1500
Slide 5: Taken Many Paths, But One Guiding Strategy
Taken Many Paths, But One Guiding Strategy 98 00 02 04 06 08 10 GUstomer Gare, Reliability, Storm Response / Recovery Regulated Businesses wuss bls bet Transco / RTO IGT (Transmission) Post ict? Supply Plan/ Portfolio Transformation Strategy [Gas Strategy Entergy-Koch Entergy Power Mitg. = {wholesal
Slide 6: What's Worked and What Hasn't
What’s Worked and What Hasn’t 90's Strategy uy / |1993 - Gulf States Merge [Utilities jurisdictions in 2007) 1996-Startedtrading [2001 — JV with Koch Industries Build / Buy |igas, power) 2004 -Sold for $55M gain Buy [1996 - CitiPower 1998 —Sold for $19M gain Buy [1997 London Electricity |1998 -Sold
Slide 7: Entergy Operational EPS
Entergy Operational EPS 4999 — 2009 (after-tax) Results: Tripled Earnings and Delivered Industry-Leading Shareholder Return Capital Return 1073011998 - 1012212010; % Assumes $100 invested at closing price on 10/30/1998" Entergy As-Reported 7 500 Bier % Entergy Koch JV Nuclear \ Non- Nuclear | 300 Wh
Slide 8: Discussion Outline
Discussion Outline Entergy Overview ee a LLL Utility Growth Proposition Ee ————_—_— Financial Strategy rr ————_—_—_—_—___ Financial Outlook ee
Slide 9: EWC - Managing a Valuable Option
EWC - Managing a Valuable Option (\, Ewe Highlights Operates with high capacity factors in attractive regions with clearly defined energy and capacity markets © Strong operational track record Entergy Wholesale Commodities (EWC) Well-defined, demonstrated, and executed hedging limits and track recor
Slide 10: EWC's Nuclear Portfolio — Low Cost Assets in Attractive Markets
EWC’s Nuclear Portfolio — Low Cost Assets in Attractive Markets EWC Nuclear Fleet Nomuility nuclear onnedoapacty: 4862 MW Norvnuclear wholesale acsats owned capacity: 1,250 MW# Total owned capacity: 6,251 MW JE Norvutility nuclear management services contract: 200 MW Polimades — 798 unw FitzPatrick
Slide 11: EWC's Non-Nuclear Wholesale Assets
EWC’S Non-Nuclear Wholesale Assets Ewe Non-Nuclear Wholesale Assets ‘Lop of joer #0 Uae (Lata| BO Be Ousnership Interest: 50% Fuel Type Technology: Wind NERC Region: MAP ‘White Deer — 40 NRW (Total BO WW) (Qusnership Interest: 50% Fuel Type Technology Wind NERC Region: SPP Independence Unit 2— 121 R
Slide 12: Nuclear Operating Performance Records
Fas of 1727/2010 Second longest run (832 days, 2008 - 2010) Highest generation ina year (100.3% capacity factor, 2003) ¥ 45 years with only 4 trip V |P2: Record for highest generation for a cycle (99.1% online, 2008 - 2010) Y 1P3: New run record for Westinghouse 4 loop plants (678 days, 2007 - 2003)
Slide 13: Top Priority: License Renewal of EWC Nuclear Fleet
Top Priority: License Renewal of EWC Nuclear Fleet ense Renewal — NRC New York and Vermont Status Uni Filed Expiration NRC Status Vermont 5 Issued Under Vermont law, Vermont Public Service Palisades ed) 312412031 472007 Board will need to issue anew certificate _ of Publis good for post-20%2 operati
Slide 14: Pilgrim and Vermont Yankee in Final Stages of NRC License Renewal Process
Pilgrim and Vermont Yankee in Final Stages of NRC License Renewal Process License Renewal Status — Nuclear Regulatory Commission NRC ruling denying intervenor's request to disqualify one of the Atomic Safety and Licensing Board panel judges cleared the way for establishing a — procedural schedule to
Slide 15: Wedgewire Screens Are Available at Indian Point
Wedgewire Screens Are Available at Indian Point Wedgewire Screens vs. Cooling Towers We creen © Air quatity — probably “not permittabie” © Aesthetic — size / visible plume ~10% of time © Bottom fine — in operation no tater than Apr. 2015 » Zoning — Village of Buchanan not supportive * © Would signif
Slide 16: Indian Point Water-Related Proceedings
Indian Point Water-Related Proceedings Expected to Continue through 2011 Indian Point Water Intake / Discharge Proceedings Projected Timeline of Milestones 7120-2110, 9124M0 & Mid-11 or AGIOS yop, 420 © AON «BHO = 10290 TBD Early-11 later. «© TBD —_+— —__|— ¥ indian Point Yindian Point | “Comment! r
Slide 17: Ongoing Negotiations in Vermont
Ongoing Negotiations in Vermont toward Key Dates in First Half of 2011 Vermont Yankee Timeline of Key Events {3am | 4am | tai | 20% | 3am | 4am | 1012 | ey Q % Primaries Elections * ® * Working to satisfactorily Key date for RRO! License substantial expires resolve major issues (e.9., PPA, decommiss
Slide 18: Indian Point Critical to New York State Reliability
Indian Point Critical to New York State Reliability New York Plants Indian Point Retirement (NYISO 2010 Study) NYDEC's proposed BTA (Best Technology Available) policy is likely to create the greatest risk for... unacceptable reliability Reliability violations in 2016 if both units retired when their
Slide 19: ISO-New England — Vermont Yankee Required for Grid Stability
ISO-New England — Vermont Yankee Required for Grid Stab Denial of Vermont Yankee’s Request to Withdraw from Auction ISO-NE Forward Capacity Auction #4 (Jun. 2013 — May 2014): ISO-NE Press Release Aug. 30, 2010 ~ "The studies completed so far have shown that with or without Vermont Yankee, the system
Slide 20: EWC Nuclear Markets
EWC Nuclear Markets EWc Nuclear Markets and Nearest Hub 2011; % of Total MW NYISO Zone A? Miso $35/ MWh S47 1 AA <1) NYVISO - ROS? ISO-NE MASS Hab Bg $0.91 / KW-month 7 Cra (2011 Calendar Avg) fAwg. 2671 FCA) NVISO Zone @ HAI Ms * Palisades Cantat Prive 2 1WISO donee ARG ar proves for FePatel and In
Slide 21: New York Zone A Market Prices and Heat Rates
New York Zone A Market Prices and Heat Rates NYISO Zone A ATC Forward Prices ($!MWh) 210 2011 2012 2013 01/08 04/08 , 07108 10/08 01/09 04/09 07/09 10109 01/10 o4/10 07/10 10/10 Souise: NYMEX Clea NYISO Zone A Implied Delivered Heat Rate (BtulkWh)} 9,000 8,000 7,000 6,000 5,000 4,000 01/08 04/08 07/
Slide 22: New York Zone G Market Prices and Heat Rates
New York Zone G Market Prices and Heat Rates NYISO Zone G ATC Forward Prices ($!MWh) 120 — 100 80 — 60 40 20 01/08 04/08 07/08 10/08 01/09 04/09 07/09 10/09 01/10 04/10 O7/10 10/10 Source: NYMEX Cleazod NYISO Zone G Implied Delivered Heat Rate (BtulkWh)} 210 2011 2012 2013 ‘M000 210 201 2012 2013 20
Slide 23: New England Market Prices and Heat Rates
New England Market Prices and Heat Rates ISO-NE MASS Hub ATC Forward Prices ($!MWh) 120 100 80 60 40 20 01/08 04/08 07/08 10/08 01/09 04/09 07/09 10/09 01/10 04/10 O7/10 10/10 Source: NYMEX Cleazod ISO-NE MASS Hub Implied Delivered Heat Rate (BtulkWh) 210 2011 2012 2013 ‘10,000 2010 —201t 2012 2013
Slide 24: Accelerated Hedging Activity in Last Months
Accelerated Hedging Activity in Last 12 Months Northeast Nuclear Fleet Forward Prices (Weighted by Capacity} itustrative Oct. 2009 - Oct. 2010; ATC SIMWh 70 65 60 55 50 45 40 2011 —2012 —2013 —2014 10109 11/09 12109 10 240 30 4/10 510 640 7/10 8/10 910 10/10 Sourva: NYMEX Clearzot EWC Nuclear Sold F
Slide 25: Reducing Earnings at Risk for 2011 and 2012
Reducing Earnings at Risk for 2011 and 2012 Consolidated EPS EWC Nuclear Hedging Hlustrative 2011 Guidance Midpoint; % of Total 2914 - 2015E; % (as of 1072112010) 100% 100% 80% 80% EWC 60% bbc 40% mI 20% 60% 0% ME 126 «13E «= 14E15E 40% EWC Nuclear Price Sensitivity 2011E - 2015E; @ $SIMWh price mov
Slide 26: Valuable Option in Period of Uncertainty
Valuable Option in Period of Uncertainty Heat Rate Upside Opportunities itustrative NY State's 45x15 Clean Energy Goal Reduce 2015 $10 30% of energy from demand by 15% $20IMWh renewable resources (-3,000 MW?) Potential by 2015 = —M (2,200 aw) Lower — = National CO, energy lee legislation efficiency
Slide 27: Evaluating Growth Opportunities on an Ongoing Basis
Evaluating Growth Opportunities on an Ongoing Basis MidwestIS® Eneriing the Mearand 26
Slide 28: Long-Term Financial Outlook — EWC
Long-Term Financial Outlook — EWC 2014 EWC Nuclear ifustrative | EWC Long-Term Outlook itustrative Adjusted EBITDA’ Sensi ies? Prepared Oct. 2010 $M (pre-tax) — Prepared Oct. 2010 forward powar ld in the long-term financial outlesk , 250 compared te 2010, EWC effars a valuable eption HeatRate Expans
Slide 29: Discussion Outline
Discussion Outline ———————$—$—_—__———___ Entergy Overview ee ———_———_—_—_——$—_—<—_—— Entergy Wholesale Commodities Valuable Option ee ————_—_— Financial Strategy rr ————_—_—_—_—___ Financial Outlook ee
Slide 30: Utility - Pursuing Opportunities
Utility - Pursuing Opportunities Utility Highlights Operating diversity and various cost recovery mechanisms with presence in four states Successful recovery of costs associated with storms ! hurricanes primarily through securitization Improving regulatory environment Formula rate plans in Louisiana
Slide 31: Operating Diversity and Regulatory Oversight
Operating Diversity and Regulatory Oversight Electric Gustomer Breakdown 2009; % of MWh sales Generation Portfolio 2009; % of MW owned and leased Coal Nuclear Overview of Utility Operating Companies Entergy Arkansas Enietay Gulf Sates Entergy Louisiana © Electric tity Electric ane wer tity | |e Bete
Slide 32: Five Regulatory Jurisdictions
Five Regulatory Jurisdictions Arkansas — APSC 3 Commissioners Appointed by Governor, including Chair 6-year terms, staggered Mississippi - MPSC 3 Commissioners Elected, Chair rotates every 1—2 years 4-year terms, concurrent Entergy Arkansas Lo ina — LPSC 5 Commissioners Elected, Chair selected by pe
Slide 33: Formula Rate Plans — Efficient and Effective Regulatory Constructs
Formula Rate Plans — Efficient and Effective Regulatory Constructs Utilities’ Regulatory Mechanisms As of Sep. 2010; % of total rate base Periodic Rate Gases Formula Rate Case Comments v Entergy Arkansas: last rate case approved Jun. 2010 v Entergy Texas: current rate case to be reviewed by PUGT on
Slide 34: Meaningful Progress in Arkansas and Texas
Meaningful Progress in Arkansas and Texas ction Current / Stipulated Agreement | Previous Arkansas 10.2% authorized ROE $63.7M rate increase Ne write-offs Effective July 2010 Legislation authorizing storm reserve accounting and storm securitization 9.9% authorized ROE $5.1M rate decrease $70+M in ra
Slide 35: Regional Economic Recovery Continues
Regional Economic Recovery Continues Entergy's service territery didn't fall Utility sales trends point to os hard as the rest of the nation ragional economic recovery Entergy Regional GDP vs. U.S. Entergy Utility Weather-adjusted Sales Growth 1Q 2008 — 4Q 2011E; % annualized 1Q 201 3Q2010; % THE= 2
Slide 36: Improving Service and Managing Risks
Improving Service and Managing Risks for Constructive Outcomes to All Stakeholders 108 vs. 1998 Storms Average Residential Base Rate Last 12 Months; $/kWh Metrics; peal ¥ $640M cash storm reserves all Center Kia approved (incl. $570M from Response Time securitization} Outage Frequency EBL | | “$228.
Slide 37: Generation
Generation »Gas-Fired Capacity Acquire or contract merchant capacity built over the past decade «Potential Self-Build Options 100% i 90% Construct and | or repower generating facilities on existing Entergy utility sites | 80% Potential Nuclear Capacity 70% Preserve option to build new units 60% at G
Slide 38: For Example, Acquisitions That Make Sense
For Example, Acqu ions That Make Sense Long-Term Resource Requirements 2009 Strategic Resource Plan Refresh (Sep. 2010); GW | Summer 2009 Long-Term RFP 8 canaiaeea wbreas et Selected 5 resources — 4 acquisitions totaling ~2,800 MW, including the Ninemile self build option Subsequent to RFP selection
Slide 39: Transmission Evolution
Transmission Evolution YereRc order 2000 1996 — 2001 - 2004 - 2001 sy 2003 uns 2009 ones Entergy Proposed Regional SET! aa elimination State suspende: of “note b" Committee Lack of (E-RSC) retail regulator ad support investment (2004 - 2008) 55
Slide 40: Evaluating Transmission Options as ICT Expiration Approaches
Evaluating Transmission Options as ICT Expiration Approaches Entergy Regional State Committee (E-RSC) Similar to SPP’s RSC Five members — one fram each jurisdiction; each member has one equal vote Bylaws require unanimous vote on policy issues Possible Transmission Options SPP RTO Analysis funded by
Slide 41: ICT / RTO and System Agreement Milestones
IcTi RTO System Agreement Parallel Review of System Agreement and ICT / RTO Alternatives through 2011 Projected Significant Milestones Sep.! Oct. — FERC filings Nov. 2012 oninterim ICT Expiration of extension extension of ICT arrangeme! Nav. 17 Expiration of initial nt term of ICT arrangement 2012 |
Slide 42: Long-Term Financial Outlook — Utility
Long-Term Financial Outlook — Utility 2014 Utility Earnings Sensitivities 2014 ity Net Income Outlook $ishare (after-tax) - Prepared Oct. 2010 One Path for Growth (2009 base); % 0.14 Retail Sales Growth 1% GWh growth Investment 0.03 $100M/year in Service ———=— Allowed ROE 0.43 6. 1% Increase Non-Fue
Slide 43: Discussion Outline
Discussion Outline ———————$—$—_—__———___ Entergy Overview ee ———_———_—_—_——$—_—<—_—— Entergy Wholesale Commodities Valuable Option ee —————$—_—_—____ Utility Growth Proposition Ee sae Financial Strategy Financial Outlook ee
Slide 44: Evaluating Options for Parent Debt Due over Next Few Years
Evaluating Options for Parent Debt Due over Next Few Years Parent Debt 2007 - 2009; $B 45 4.0 3.5 3.0 25 2.0 15 1.0 0.5 0.0 07 08 @Permanent Debt Equity Units Parent Financing Options Note Issuance »Revolver —Renew at maturity —Renew prior to maturity 09 @Revolver 2011, Entergy Corp. Notes Issuance
Slide 45: Refinancing Opportunities for the Utility's Flexible Debt Portfolio
Refinancing Opportunities for the Utility’s Flexible Debt Portfolio Treasury Yield Curve Utility Operating Companies’ Debt % As of 6730/2010; $B Callable @ Par, Years —@ 10/26/2009 —@ 1/4/2010 Retired / 10 Ge Retired Since 9/1/2010 -@ 10/25/2010 a4
Slide 46: Completed $930 Million Economic Refinancings
Completed $930 Million Economic Refinancings Since September 1* Utility Operating Company Refinancing Activity Since 91172010; $M 1,000 955.7 900 Entergy Ark a ntergy Arkansas 700 600 |) Coupon 500 | rates. 400 C os Entergy Cult States Louisiana 300 200 400 ||, aay =nteray Louisiana 9/24 10/1 10/5 1
Slide 47: Debt to Capital, excluding Securitization Debt | Operating Cash Flow
Debt to Capital, excluding Securitization Debt | Operating Cash Flow 2005 —3Q 2010; % Last Twelve Months 2005 - 3Q 2010; $B 80 5 Debt to capital osnoan 08 06 07 08 09 1Q102Q103Q10 05’ 06° 07 08 09 1Q102Q103Q10 Gross Liquidity Cash Flow Interest Coverage (Cash and Cash Equivalents + Revolver Capacity
Slide 48: Strong Liquidity Position
Strong Liqui Current Liquidity Position ity Position As of Sep. 30, 2010 (unless otherwise nated); SM Company Type Entergy Corporation (HoldCo) Revolver | Aug. 2012 51,672 Entergy Arkansas, Inc. Revolver | Apr. 2011 5 Entergy Gulf States Louisiana, L.L.C. Revolver | Aug. 2012 100 Entergy Loui Revolv
Slide 49: Current Credit Ratings
Current Credit Ratings Entergy’s Organizational Structure and Corporate Credit Ratings’ (all ratings are stable); As of Oct 2010 2011 G = $6.60 | Entergy Wholesale Commodities 2011 EPS G Entergy Enteray Entergy Fc Arkansa Louisiana, ||| New Orleans, ||| _ Eneray — Non-utilty Moeae Inc. (ER LLC {ELL}
Slide 50: Discussion Outline
Discussion Outline a "aascn' SS Financial Outlook
Slide 51: 2011 Earnings Guidance
2011 Earnings Guidance As-Reported and Operational EPS 2011E Guidance; $!sh {after-tax} - Prepared Oct. 2010 660 Micpoirt oz0 oxo i ow oom —— Bea™ om 35) 2.05) (a3) (040) 40) foa0) OIE) Entergy Wholesale Parent & Other Commodities mans i oe Okey imme ad mtn mm AR gy thant Oat ta? opt Ea 20 te Be ES
Slide 52: Investment Above Depreciation to Meet Existing Needs at the Utility
Investment Above Depreciation to Meet Existing Needs at the Utility Projected Capital Expenditures Investing Capital — Preli 2011E -2013E; $B 2011E -2013E; % of Total Preliminary Preliminary Maintenance Investing Capital Capital 36 Potential Portfolio Transformation Generation (Existing Fleet) Envir
Slide 53: Investing and Returning Capital
Investing and Returning Capital - Outlook Includes No Traditional Equity Issuances 2014 Corporate Earnings Sensitivities Current Five-year Financial Outlook $ishare (after-tax) - Prepared Oct. 2010 Cash Sources and Uses Interest Rate 1% increase on $1B debt Effective Tax Rates 1% change in overall r
Slide 54: Strategic Considerations
Strategic Considerations (—— Entergy’s Business Model ———_| Operational Partfalia Excellence Management Enhance Invest in Efficient the Value of the Risk What You Have Business Management Implement constructive regulatory strategies; Resolve System Agreement and transmission structure Acquire genera
Slide 55: Overarching Financial Outlook — Top-Quartile Total Shareholder Return
Overarching Financial Outlook — Top-Quartile Total Shareholder Return Current Long-term Financial Outlook Prepared Oct. 2010 Overarching: Top-Quartile Total Shareholder Return ings Outlook ¥ Utility. 6 — 8% compound annual net income growth fram 2010 through 2014 (2009 hase) Y Entergy Wholesale Comm
Slide 56: Can We Repeat This in the Next Years?
Can We Repeat This in the Next 10 Years? 1998 — 2009 Returned Contributors to $4.3 billion Share repurchases (net) Financial > Business strategy ili ivi i -Sale of London eAdbiilion Diieias Gals Electricity and CitiPower Market Cap Nuclear plant acquisitions $15.5 billion Stock value, Dec. 31, 2009
Slide 57: Summary
Summary Strong operating performance at both Utility and Entergy Wholesale Commodities (EWC) Utility Stable operating cash flow from highly regulated utilities in four states with various operating characteristics and cost recovery mechanisms Continued focus on improving regulatory environment Long-
Slide 58: Appendix
Appendix
Slide 59: Appendix: Reg G Reconciliations
Appendix Reg G Reconciliations ‘able EPS Contrbuion by Business Reconeilaion of GAP fo Non-GAAP lhesures 1999-208 PersiorenUS5 9992000 2002002 20m 200420052006 007 aoe 2009 TEREFORTED UsitFerentOther 459 251 20 2 4m 296297 397267222 Carpet Busnesses rtery Muska Cy a ee a Energy Commodity Services on
Slide 60: Appendix: Reg G Reconciliations
Slide 61: Appendix: Reg G Reconciliations
Appendix Reg G Reconciliations Table: Consalideted EPS Reconciliation of GAAP to Non-GAAP Measures ‘2010E Guidance Range — Prepared October 2009" and Updated Apeil 2010" 2011E Guidtance Range — Prepared October 2010 (Persharein US. 5) ‘210. 210 OnE ng Gz éée ‘Starting Point Range Reng ‘Be Repated (4
Slide 62: Appendix: Reg G Reconciliations
Appendix Reg G Reconciliations a Lem easaned cack expiants ee et eb, echt cmiiraion dele fF) a7 “Total capitation var ome spr mz me nm mn nZ0 Lem seomiierfon debt E -_ pow m= m mo “Total capstan, cxcheing se ceiraom ded 15} Taroom wes me mi me mK mo (Lem cada case esis me tz ame teat et capital exct
Slide 63: Appendix: Reg G Reconciliations
Appendix Reg G Reconciliations Tae Ty aT Ream TTT Raa CRT ET Aaeenlinton et GAAP Hen-GAAP om m m1 ere m1 m ‘rage Camman Exuty am fOE-As-teport one ROE- paren heen oer emt at ROE-operatna can pte year arama eet am Wit nT yr preEMMEE. 62
Entergy — Edison Electric Institute Financial Conference 2010 on 6ix