Entergy 2008 Annual Report Download - page 19

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nder the pending spin-off transaction, our non-
utility nuclear fleet will be owned by Enexus Energy
Corporation, a premier generation company, and
operated by EquaGen LLC, a joint venture owned equally by
Entergy Corporation and Enexus.
We pursued the spin-off of our non-utility nuclear assets in
order to unlock the value of this business, value that has not
been fully realized or recognized with the business embedded
in a company that includes a regulated utility business. We
believe the spin transaction can generate value in multiple
ways including:
n As an independent company, Enexus will have the
opportunity to maintain an efficient risk profile for its
business. That means optimizing its capital structure with
increased borrowing capacity and pursuing a more flexible
generation hedging strategy aligned with the risk profile
of a merchant business rather than a utility. In addition, as
a stand-alone entity, Enexus will have greater flexibility to
acquire other assets and businesses.
n Separating Entergy’s utility business from the non-utility nuclear
business will ring-fence both businesses from risks that exist
in the other. This will provide greater transparency to investors,
rating agencies and other stakeholders for both businesses.
n The spin transaction provides Entergy shareholders with the
valuable option to trade the utility and non-utility nuclear
businesses independently. We believe that good corporate
governance dictates that the decision to buy, hold or sell
the non-utility nuclear segment of our business be made
available to individual shareholders to execute consistent
with their individual points of view.
The value inherent in the spin transaction and the underlying
non-utility nuclear plants exists today and will continue to exist
in the future. We are in the enviable position of being able to
wait to execute this transaction when conditions align with our
long-term points of view.
Ready to Act When the Time Is Right
Throughout 2008, we worked diligently to be in a position to
execute the spin transaction. We named management teams for
Enexus and EquaGen. We secured regulatory approvals from
the Nuclear Regulatory Commission and the Federal Energy
Regulatory Commission, obtained a private letter ruling from
the Internal Revenue Service and continue to seek approvals
from the Securities and Exchange Commission and the states of
New York and Vermont. We also executed a $1.2 billion credit
agreement on behalf of Enexus in spite of one of the most
turbulent financial markets in recent history.
However, even as we prepared to execute the spin from an
operational perspective, financial market conditions continued
ENTERGY NON-UTILITY NUCLEAR
ENTERGY CORPORATION AND SUBSIDIARIES 2008
Excellence,
then, is not an act, but a habit.”
– Aristotle
“We are what we repeatedly do.
We are firm believers in the unmatched potential of clean nuclear power, generated
by assets that are operated with exacting attention to safety and security.
U
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