8-KRegulation FDOther EventsExhibits & Filings

ENTERGY CORP /DE/ 8-K Report, Regulation FD Disclosure (Sep 2, 2004)

Filed September 2, 2004For Securities:ETR

Summary

This Form 8-K filing by Entergy Corporation on September 2, 2004, details significant divestiture plans aimed at restructuring its energy trading and pipeline operations. The company announced a definitive agreement to sell its US and foreign energy trading businesses of Entergy-Koch, LP to Merrill Lynch & Co., with an expected closing in the fourth quarter of 2004, subject to regulatory approvals. Additionally, Entergy plans to initiate a competitive process to sell the Gulf South Pipeline, with an expected closing in the first half of 2005. These transactions are anticipated to yield substantial cash proceeds for Entergy, with its share expected to be distributed from Entergy-Koch over a period ending in 2006. Entergy projects a net cash impact of approximately $1 billion from these sales and the eventual liquidation of the joint venture. The accounting treatment will involve reducing Entergy's equity investment in the unconsolidated affiliate, with potential recognition of a book gain or loss depending on the final sale prices and the net cash impact realized. Investors should note that these are forward-looking statements with inherent risks and uncertainties.

Key Highlights

  • 1Entergy Corporation to sell US and foreign energy trading businesses of Entergy-Koch, LP to Merrill Lynch & Co.
  • 2Sale of trading businesses expected to close in Q4 2004, subject to regulatory approvals (FERC, Hart-Scott-Rodino, European, UK, Canadian authorities).
  • 3Entergy to conduct a competitive process to sell the Gulf South Pipeline, with expected closing in H1 2005.
  • 4Anticipated net cash impact from these divestitures and joint venture liquidation is approximately $1 billion.
  • 5Cash proceeds expected to be distributed to Entergy from Entergy-Koch as cash distributions between closing dates and year-end 2006, predominantly in 2005.
  • 6Proceeds will be accounted for as reductions to Entergy's approximately $1.1 billion equity investment in the unconsolidated affiliate.
  • 7Potential for a book gain or loss upon finalization, depending on the sale price of the Gulf South Pipeline.

Frequently Asked Questions

Entergy is announcing two key transactions: the sale of its US and foreign energy trading businesses within Entergy-Koch, LP to Merrill Lynch & Co., and its intention to sell the Gulf South Pipeline, also part of Entergy-Koch, LP.

The sale of the energy trading businesses is expected to close in the fourth quarter of 2004. The sale of the Gulf South Pipeline is expected to close in the first half of 2005.

Entergy expects these transactions, including the eventual liquidation of the joint venture, to result in a net cash impact of approximately $1 billion. These proceeds will be recognized as cash distributions reducing Entergy's equity investment in Entergy-Koch.

Key risks include the completion of the sale of the trading businesses, the ability to sell the Gulf South Pipeline at attractive prices, the actual amount of cash Entergy-Koch can distribute, the resolution of investigations into Entergy-Koch's past trading practices, the effects of litigation, and tax payments on sales proceeds and distributions. The final net cash impact is also subject to revision based on the competitive process for the pipeline sale.