-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JChdcHSSs+zgyv5bDCz7N8aXw2FFpMRrSsrHE2va2fEJs2NLU0tAn4YJmyMPZmeI 9Uk6qJoXV00aiZlFsIwxag== 0000065984-01-500049.txt : 20010816 0000065984-01-500049.hdr.sgml : 20010816 ACCESSION NUMBER: 0000065984-01-500049 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20010815 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits ITEM INFORMATION: FILED AS OF DATE: 20010815 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ENTERGY CORP /DE/ CENTRAL INDEX KEY: 0000065984 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 135550175 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11299 FILM NUMBER: 1715774 BUSINESS ADDRESS: STREET 1: 639 LOYOLA AVE CITY: NEW ORLEANS STATE: LA ZIP: 70113 BUSINESS PHONE: 5045764000 MAIL ADDRESS: STREET 1: PO BOX 61000 CITY: NEW ORLEANS STATE: LA ZIP: 70161 FORMER COMPANY: FORMER CONFORMED NAME: ENTERGY CORP /FL/ DATE OF NAME CHANGE: 19940329 FORMER COMPANY: FORMER CONFORMED NAME: ENTERGY GSU HOLDINGS INC /DE/ DATE OF NAME CHANGE: 19940329 FORMER COMPANY: FORMER CONFORMED NAME: MIDDLE SOUTH UTILITIES INC DATE OF NAME CHANGE: 19890521 8-K 1 a11201.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date earliest event reported) August 15, 2001 Commission Registrant, State of Incorporation, I.R.S. File Number Address and Telephone Number Employer Identification No. 1-11299 ENTERGY CORPORATION 13-5550175 (a Delaware corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 576-4000 Form 8-K Item 5.Other Events On August 15, 2001, Entergy's domestic non-utility nuclear business agreed to purchase the 510 MW Vermont Yankee Nuclear Power Plant in Vernon, Vermont from Vermont Yankee Nuclear Power Corporation (VYNPC) for $180 million, to be paid in cash upon closing. Entergy will receive the plant, nuclear fuel, inventories and related real estate. The liability to decommission the plant, as well as related decommissioning trust funds of approximately $280 million, will also be transferred to Entergy. Under a 10-year power purchase agreement (PPA) executed in conjunction with the transaction, Entergy will sell 100% of the plant's output up to 510 MW to VYNPC's owner-utilities. The PPA includes an adjustment clause whereby the prices specified in the PPA will be adjusted downward annually, beginning in 2006, if power market prices drop below the PPA prices. Management expects to close the transaction by the spring of 2002, pending the approvals of the NRC, the Public Service Board of Vermont, and other regulatory agencies. Item 7. Financial Statements, Pro Forma Financial Statements and Exhibits (c) Exhibits. Exhibit Description No. 99.1 Release, dated August 15, 2001, issued by Entergy. 99.2 Release, dated August 15, 2001, issued by Entergy. Item 9. Regulation FD Disclosure Entergy Corporation On August 15, 2001, Entergy Corporation ("Entergy") issued two public announcements, which are attached as exhibits hereto and incorporated herein by reference. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Entergy Corporation By: /s/ Nathan E. Langston Nathan E. Langston Vice President and Chief Accounting Officer Dated: August 15, 2001 EX-99 3 a11201991.txt [Logo of Entergy] For Further Information Nancy Morovich, Vice President, Investor Relations Phone 504/576-5506, Fax - 2897 INVESTOR NEWS nmorovi@entergy.com August 15, 2001 Entergy Will Buy Vermont Yankee, Expanding Northeast Nuclear Portfolio to 4,000 MW Entergy Corporation today announced that it has reached an agreement to acquire the Vermont Yankee nuclear plant near Brattleboro, Vermont. The acquisition of Vermont Yankee brings Entergy's Northeast generation portfolio to nearly 4,000 megawatts, and makes Entergy the largest nuclear operator in the region. The Vermont Yankee plant will be acquired for approximately $284/kW and is expected to contribute $0.03 to Entergy's EPS in 2002 for a partial year of operation. This amount is reflected in Entergy's previously-issued 2002 earnings guidance of $3.30 to $3.50 per share. Entergy will pay $145 million to the owners of Vermont Yankee for the 510 MW plant. In addition, the owners agreed to sell fuel at Vermont Yankee to Entergy for its book value at the time of closing, which is estimated to be $35 million. As part of the Vermont Yankee purchase, Entergy and twelve owners of the plant executed a 10-year Purchase Power Agreement for 100% of the plant's output up to 510 MW. The PPA price, which varies by year, averages $42 per megawatt hour. From 2002 through 2005, the PPA contract price is fixed. Thereafter, the PPA includes a "low market adjuster" that protects VY owner-utilities and their power consumers in case market power prices decline significantly. If a prior year's average market price of power is more than five percent below the annual PPA price for the current year, the PPA price would drop to 105% of the previous year's average market price. Vermont Yankee will become the third General Electric boiling water reactor in Entergy's Northeast fleet. Because of this, Entergy expects to achieve operating efficiencies in the areas of purchasing, inventory management and resource sharing. In addition, Entergy expects to uprate the capacity of Vermont Yankee by 10%, or 50 MW, over the next three years. The PPA does not cover output associated with uprates. The transaction is targeted to close in Spring 2002, pending approval by the U.S. Nuclear Regulatory Commission and other regulatory and state agencies. Description Plant Vermont Yankee Location near Brattleboro, Vermont Reactor type General Electric boiling water reactor Capacity 510 MW (uprates expected to add 50 MW) Next refueling Fall 2002 (18-month cycle) outage 1991-2000 89% average capacity factor License 2012 expiration Terms of Sale ETR cash requirements $180 million ($35 for fuel, $145 for plant and other assets) Decommissioning Owners will transfer $280 million trust fund at closing Purchase power Owners will purchase 100% of VY's 510 MW agreement (PPA) output for 10 years on a unit contingent basis at PPA prices that average $42/MWH o From 2002 through 2005, PPA price is fixed. o From 2006 through 2012, PPA price may be adjusted. The "low market adjuster" applies if a prior year's average market price of power is more than 5% below the annual PPA price for the current year. In this scenario, the PPA price drops to 105% of the previous year's average market price. Economic Value of the Transaction What Entergy is buying: $Millions Fuel 35 Plant & Other assets 145 Total 180 A purchase price of $145 million for 510 MW of nuclear generation equates to $284/kW Expected EPS Contribution1 Range 2002-05 Annual EPS contribution $0.07 to 0.10 from VY $(0.04) to (0.03) Lost interest income at $0.03 to 0.07 Parent Total EPS impact Average Project Metrics 2002-05 Operating Margin 30% Net Margin 12% Coverage 11X ROE 15% ROIC 12% Entergy Nuclear's Northeast Presence Inserted here is a map showing location and reactor type of Entergy's Northeastern U.S. non-regulated nuclear plants. The nuclear businesses of Entergy Corporation are headquartered in Jackson, Mississippi. Entergy's nuclear businesses encompass five power reactors at four locations in Arkansas, Mississippi and Louisiana under regulatory jurisdictions, and the Corporation is expanding into the competitive power market nationally by purchasing additional nuclear plants. The Vermont Yankee purchase will be Entergy's fourth purchase in the Northeast. The company purchased Pilgrim Nuclear Station in 1999-the first nuclear plant sale in a competitive bidding process, and the Indian Point 3 and Fitzpatrick Nuclear Stations in 2000. The company is expected to close the purchase of Indian Point 2 Nuclear Station in September 2001. Entergy is a major global energy company with power production, distribution operations, and related diversified services. Entergy owns, manages, or invests in power plants generating more than 30,000 megawatts of electricity domestically and internationally, and delivers electricity to about 2.6 million customers in portions of Arkansas, Louisiana, Mississippi, and Texas. Through Entergy-Koch, L.P., it is also a leading provider of wholesale energy marketing and trading services. -30- Entergy's on-line address is: www.entergy.com. The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: Investors are cautioned that forward-looking statements contained herein with respect to the revenues, earnings, performance, strategies, prospects and other aspects of the business of Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New Orleans, Inc., and System Energy Resources, Inc. and their affiliated companies may involve risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties relating to: the effects of weather, the performance of generating units and transmission systems, the possession of nuclear materials, fuel and purchased power prices and availability, the effects of regulatory decisions and changes in law, litigation, capital spending requirements, the onset of competition, including the ability to recover net regulatory assets and other potential stranded costs, the effects of recent developments in the California electricity market on the utility industry nationally, advances in technology, changes in accounting standards, corporate restructuring and changes in capital structure, the success of new business ventures, changes in the markets for electricity and other energy-related commodities, changes in interest rates and in financial and foreign currency markets generally, the economic climate and growth in Entergy's service territories, changes in corporate strategies, and other factors. _______________________________ 1 Assuming 40% debt financing. EX-99 4 a11201992.txt [Logo of Entergy] [Logo of Vermont Yankee] Date: August 15, 2001 For Immediate Release: Contacts: Entergy Nuclear Vermont Yankee Carl Crawford Rob Williams (News Media) (802) 258-4181 (601) 368-5658 office rob.williams@vynpc.com (888) 432-5493 pager ccrawfo@entergy.com Nancy Morovich JPMorgan (Investor Relations) Paul Dabbar (504) 576-5506 (212) 622-2287 nmorovi@entergy.com Entergy Will Buy Vermont Yankee for $180 Million NEW ORLEANS - Entergy Corporation (NYSE: ETR) and the Vermont Yankee Nuclear Power Corporation have reached an agreement to sell the Vermont Yankee nuclear power plant in Vernon, VT, to Entergy for $180 million. Vermont Yankee will become Entergy's 10th nuclear unit and its fifth in the Northeast. Entergy Nuclear has operated five nuclear units in Arkansas, Mississippi and Louisiana for more than 20 years and began buying its properties in the Northeast in 1999. The $180 million in cash represents $145 million for the plant and related assets, and $35 million for nuclear fuel. "We expect to realize significant operating efficiencies since Vermont Yankee is a sister plant to our Pilgrim plant in Plymouth, Mass., and our FitzPatrick plant in Oswego County, N.Y.," said Wayne Leonard, Chief Executive Officer of Entergy. All three are boiling water reactors designed by General Electric and, as a result, many resources such as inventories and spare parts, best safety practices, group purchasing, specialized technical skills, manpower, key management and financing can be shared. Ross Barkhurst, President and Chief Executive Officer of Vermont Yankee, said, "We are pleased to be selling this outstanding nuclear plant to a national leader in nuclear plant operations with a strong track record of safe operations. We are very pleased that the auction process run by JPMorgan has been so successful. We were able to execute the auction on a timely basis with a process which garnered significant interest and clearly maximized the value of the plant." In addition to $180 million, Entergy will retain the plant's 450 employees at their same salary and comparable benefits. Entergy will also receive nuclear fuel and all materials and spare parts inventory as well as the plant, switchyard and related real estate in nearby Brattleboro. Entergy will also assume decommissioning liability for the plant and the plant's decommissioning trust fund, which is required by the U.S. Nuclear Regulatory Commission. No decommissioning top-off or any other financing by Vermont Yankee Nuclear Power Corporation is anticipated with the transaction. For the benefit of power consumers of the Vermont Yankee owner-utilities, the deal includes a power purchase agreement requiring Entergy to sell all the plant's power to present Vermont Yankee sponsors through 2012, the remaining years of the plant's operating license, at average annual prices ranging from $39 to $45 a megawatt-hour. The agreement includes a "low market adjuster" that protects Vermont Yankee owner-utilities and their power consumers in case power market prices drop significantly. If a prior year's average market price of power is more than five percent below the annual agreement price for the current year, the agreement price would drop to 105 percent of the previous year's average market price. The Vermont Yankee Nuclear Power Corporation is owned by 12 New England utilities. The largest shareholder is Central Vermont Public Service Corp. in Rutland, VT, 31.3 percent, and the others are New England Power Co., 22.5 percent; Green Mountain Power Corp., 17.9 percent; Connecticut Light and Power Co., 9.5 percent; Central Maine Power Co. and Public Service Company of New Hampshire, 4 percent each; Burlington Electric Department, 3.6 percent; Cambridge Electric Light and Western Massachusetts Electric Co., 2.5 percent each; Vermont Electric Cooperative, Inc., 1 percent, and Washington Electric Cooperative Inc. and Village of Lyndonville Electric Department, 0.6 percent each. Entergy Nuclear Chief Executive Officer Jerry Yelverton said the power purchase agreement benefits Entergy as well as New England. "New England power consumers will have a reliable source of electricity with built-in price stability. That reduces our risk and allows us to focus our time and attention on increasing the plant's capacity factor, achieving cost synergies with other plants, and maintaining the highest level of safe operations." The sale is subject to the approval of the Public Service Board of Vermont, the U.S. Nuclear Regulatory Commission, the Federal Energy Regulatory Commission and other regulatory authorities. After their approvals, a closing is targeted for the spring of 2002. Vermont Yankee is the largest power generator in Vermont, producing about 30 percent of the power used by Vermont consumers. With a 510-megawatt capacity, the unit can produce enough power to supply about 500,000 homes. The plant has been an excellent performer with an average capacity factor of 89 percent over the past 10 years, the second highest of all boiling water power reactors in the nation. "The men and women of Vermont Yankee have worked hard fulfilling our commitment to a high standard of operations," said Barkhurst, Vermont Yankee's president. "Entergy's purchase is a clear indication that our hard work is valued by a nuclear industry leader. Our employees' culture of excellence will be welcomed by Entergy's successful national operation." Yelverton, Entergy Nuclear's CEO, said Entergy will be committed to high environmental standards and close, supportive relations with local communities, as the current Vermont Yankee owners have been. Vermont Yankee Chairman Robert Young said, "This agreement preserves the economic benefits that Vermont Yankee provides the state and the region and the price stability inherent in the purchase power agreement helps protect New England's electric consumers from the volatility of the electricity market. We look forward to bringing this agreement before our regulators for a thorough review in the coming months." The plant and related assets will be transferred to Entergy Nuclear Vermont Yankee LLC, an Entergy subsidiary, and will become part of the Entergy Nuclear Northeast fleet. In addition to the three boiling water reactors mentioned, Entergy also owns and operates the Indian Point 3 unit, purchased from the New York Power Authority last November, and is preparing to close the purchase of the Indian Point 2 plant from Con Edison this fall. Both are Westinghouse pressurized water reactors and located on the same site in north Westchester County, N.Y. The nuclear businesses of Entergy Corporation are headquartered in Jackson, Miss. As a global energy company, Entergy, based in New Orleans, is the third largest power generator in the nation with more than 30,000 megawatts of generating capacity, about $9 billion in annual revenue and over 2.6 million customers in Arkansas, Mississippi, Louisiana and Texas. Entergy Nuclear South operates five nuclear units from its regional office in Jackson, Miss. Its newly acquired units are managed from its Entergy Nuclear Northeast regional office in White Plains, N.Y. Entergy Nuclear also manages decommissioning activities and furnishes license renewal engineering services to the U.S. nuclear power industry. JPMorgan acted as exclusive financial advisor to Vermont Yankee on the sale, and has been advisor on the sale of 11 of the last 13 nuclear units sold in the U.S., including Millstone, Nine Mile Point, Indian Point 3 and James A. Fitzpatrick. -30- Entergy's on-line address is www.entergy-nuclear.com Vermont Yankee's on-line address is www.vermontyankee.com The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: Investors are cautioned that forward-looking statements contained herein with respect to the revenues, earnings, performance, strategies, prospects and other aspects of the business of Entergy Corporation, Entergy Arkansas, Inc., Entergy Gulf States, Inc., Entergy Louisiana, Inc., Entergy Mississippi, Inc., Entergy New Orleans, Inc., and System Energy Resources, Inc. and their affiliated companies may involve risks and uncertainties. A number of factors could cause actual results or outcomes to differ materially from those indicated by such forward-looking statements. These factors include, but are not limited to, risks and uncertainties relating to: the effects of weather, the performance of generating units and transmission systems, the possession of nuclear materials, fuel and purchased power prices and availability, the effects of regulatory decisions and changes in law, litigation, capital spending requirements, the onset of competition, including the ability to recover net regulatory assets and other potential stranded costs, the effects of recent developments in the California electricity market on the utility industry nationally, advances in technology, changes in accounting standards, corporate restructuring and changes in capital structure, the success of new business ventures, changes in the markets for electricity and other energy-related commodities, changes in interest rates and in financial and foreign currency markets generally, the economic climate and growth in Entergy's service territories, changes in corporate strategies, and other factors. -----END PRIVACY-ENHANCED MESSAGE-----