8-KRegulation FD

ENTERGY CORP /DE/ 8-K Report, Regulation FD Disclosure (Sep 6, 2005)

Filed September 6, 2005For Securities:ETR

Summary

Entergy Corporation (ETR) filed an 8-K report on September 6, 2005, to disclose the significant impact of Hurricane Katrina, which struck the Gulf South region on August 29, 2005. The hurricane caused widespread power outages and catastrophic damage to Entergy's service territories in Louisiana and Mississippi, affecting its operating companies including Entergy New Orleans, Entergy Louisiana, Entergy Mississippi, and Entergy Gulf States. Significant damage to distribution and transmission facilities, as well as flooding of several fossil fuel units, resulted in approximately 1.1 million customers losing power. The company anticipates substantial financial repercussions, including lower revenues due to extended outages and customer losses, and higher capital expenditures for restoration and repair efforts. While Entergy possesses sufficient liquidity through cash on hand and a $2 billion revolving credit facility, the full financial impact is currently unascertainable. Consequently, Entergy is unable to affirm its previously issued 2005 earnings per share guidance ($4.60-$4.85) and its 2006 earnings growth aspiration (8-10%). The company plans to hold an investor teleconference on September 6, 2005, to discuss these developments.

Key Highlights

  • 1Hurricane Katrina caused widespread damage to Entergy's infrastructure in Louisiana and Mississippi, affecting 1.1 million customers.
  • 2Significant impact on revenues is expected due to extended outages, customer losses, and billing/collection difficulties.
  • 3Capital expenditures are anticipated to increase substantially for repair and restoration of damaged facilities.
  • 4Entergy has sufficient liquidity with cash on hand and a $2 billion revolving credit facility to manage obligations and restoration costs.
  • 5Company is unable to affirm its previously issued 2005 earnings per share guidance ($4.60-$4.85).
  • 62006 earnings growth aspirations (8-10%) and cash flow estimates will be revised.
  • 7A $1.5 billion share repurchase program remains in place, though timing may be delayed.

Frequently Asked Questions

This 8-K filing is primarily to disclose the significant impact of Hurricane Katrina on Entergy Corporation's operations and financial outlook. The storm caused extensive damage to the company's service territory in the Gulf South region.

Hurricane Katrina caused catastrophic damage to Entergy's distribution and transmission facilities, leading to approximately 1.1 million customers being without power immediately following the storm. This has resulted in widespread service disruptions.

Entergy anticipates a negative financial impact. Revenues are expected to decrease due to extended outages and customer losses. Conversely, capital and other expenditures are projected to rise significantly to cover the costs of repairing and replacing damaged assets. The company is currently unable to provide updated earnings guidance for 2005 and 2006 due to these uncertainties.

Entergy believes it has sufficient liquidity to meet its obligations and fund restoration efforts. This liquidity comes from its cash reserves and a $2 billion revolving credit facility. The company also plans to utilize inter-company borrowing and seek regulatory authorizations for necessary funding at its subsidiaries.