Entergy gives updated outlook
by Wally Northway
Published: November 2,2009
NEW ORLEANS — Entergy Corporation has issued 2010 earnings guidance assuming a business as usual operation for the full year as well as post-spin financial outlooks for Entergy and Enexus Energy Corporation. In addition, Entergy outlined its preliminary three-year capital expenditure plan for the period 2010 through 2012.
J. Wayne Leonard, Entergy’s chairman and CEO, said, “With line of sight on ultimate resolution in 2010, the Entergy board of directors has granted authority for an additional $750-million share repurchase program, following completion of an initial $500-million authorization in third quarter 2009. While it is expected the additional share repurchases under the new authorization will occur following spin-off completion in the near-term, consistent with the $500-million authorization, the incremental $750 million of share repurchase capacity is supported by the underlying business operations whether or not the spin-off transaction is completed.”
As the proposed spin-off date of Entergy’s non-utility nuclear business is not yet known with certainty at this time, Entergy is initiating 2010 earnings guidance in the range of $6.40 to $7.20 per share on an operational basis, assuming a business as usual operation for the full year. As-reported earnings per share guidance ranges from $6.15 to $6.95 and reflects $(0.25) per share of projected dis-synergies associated with the spin-off and plans to enter into a nuclear services joint venture. Guidance for 2010 does not incorporate a special item for expenses, which were incurred beginning in 2008 and are expected to continue in 2010, anticipated in connection with outside services provided to pursue the spin-off. The level of these charges in 2010 will vary depending upon resolution of the spin-off.
Financial aspirations for the period 2009 through 2014 include:
• Entergy — Double digit compound annual earnings per share growth over the 2009 through 2014 horizon
• Enexus — Realizing $2 billion of adjusted EBITDA in 2014 and/or through share repurchases. The Adjusted EBITDA aspiration is expected to be achieved from power price increases on open positions and/or deployment of capital resulting in additional EBITDA potential. In addition, Enexus anticipates periodic return of capital in the form of share repurchases, with current estimated Adjusted EBITDA levels supporting such distributions
• Through a balanced capital investment/return program for both Entergy and Enexus
Credit quality and flexibility to manage risk and act on opportunities:
• Entergy — investment grade credit
• Enexus — “BB”/”Ba” range credit
The preliminary capital plan from 2010 through 2012 anticipates $7.1 billion for investment, including $2.7 billion of maintenance capital. The remaining $4.4 billion is for specific investments, as well as other initiatives
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