Entergy Management Discusses Q3 2012 Results - Earnings Call Transcript

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Entergy (ETR)

Q3 2012 Earnings Call

November 05, 2012 1:00 pm ET

Executives

Paula Waters - Vice President of Investor Relations

J. Wayne Leonard - Chairman, Chief Executive Officer and Chairman of Executive Committee

Leo P. Denault - Chief Financial Officer and Executive Vice President

Theodore H. Bunting - Group President of Utility Operations

Richard J. Smith - President of Entergy Wholesale Commodities

Analysts

Dan Eggers - Crédit Suisse AG, Research Division

Julien Dumoulin-Smith - UBS Investment Bank, Research Division

Jonathan P. Arnold - Deutsche Bank AG, Research Division

Steven I. Fleishman - BofA Merrill Lynch, Research Division

Greg Gordon - ISI Group Inc., Research Division

Presentation

Operator

Good day, everyone, and welcome to the Entergy Corporation Third Quarter 2012 Earnings Release Conference Call. As a reminder, today's call is being recorded. At this time, for opening remarks and introductions, I would like to turn the conference over to Vice President of Investor Relations, Paula Waters. Please go ahead.

Paula Waters

Good afternoon, and thank you for joining us. We'll begin today with comments from Entergy's Chairman and CEO, Wayne Leonard; and then Leo Denault, our CFO, will review results. [Operator Instructions]

As part of today's conference call, Entergy Corporation makes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks and uncertainties, and there are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Additional information concerning these factors is included in the company's SEC filings.

On September 25, 2012, ITC Holdings Corp. filed a registration statement on Form S-4 with the SEC, registering shares of ITC common stock to be issued to Entergy shareholders in connection with the proposed spin-merge of our transmission business with ITC. But this registration statement has not become effective. In addition, our subsidiary, Mid South TransCo, will file a registration statement with the SEC, registering TransCo common units to be issued to Entergy shareholders in connection with the proposed transactions. Entergy shareholders are urged to read the proxy statement prospectus included in the ITC registration statement and the prospectus to be included in the TransCo registration statement and other relevant documents, when available, because they contain important information about ITC, TransCo and the proposed transactions. These documents, when they are available, can be obtained, free of charge, from the SEC's website at www.sec.gov, and can also be obtained, free of charge, upon written request to Entergy or ITC.

Now, I'll turn the call over to Wayne.

J. Wayne Leonard

Thanks, Paula. Good afternoon, everyone. We are relieved for all of you that we can be here today to talk to you now that Hurricane Sandy is gone and the restoration is well underway. Entergy sent teams of more than 852 workers and support staff to assist in the restoration effort from Arkansas, Louisiana, Mississippi and Texas. The first wave, last Saturday, October 27. The second was requested and immediately assembled last Monday.

As you know, we are well acquainted with major storms. We also know that every storm has its own unique challenges. That was the case for us, this last -- past quarter, when Hurricane Isaac made its way through our service territory in late August, and last week for many of you. For us, it was a low-level hurricane 1 that just wouldn't leave. It was unique in its lifespan, limiting restoration and dumping 20 inches of water on many parts of our territory. For many of you, it was another unique low-level hurricane at the end of the storm season colliding with the onset of the winter storm season. And more importantly, it was unique in its massive size.

Both hurricanes remind us, it's not the peak intensity of the hurricane that matters most, but the amount of integrated kinetic energy, or what they call IKE. Because of its size, Sandy now ranks #2 of all time on the IKE measure in its cumulative destructive power that the Northeast endured. Actually, it lands right ahead of Katrina and right behind Isabel in 2003.

Among other things, storm surge correlates most highly with IKE, not the Saffir-Simpson hurricane intensity scale. Most all deaths from hurricanes result from storm surge. Many in the country may not appreciate how a low-level hurricane can be so destructive. But in Louisiana, we certainly understand what you all experienced.

Today, you're in the midst of what for some may be a long recovery effort, particularly with the threat of another storm within the week. Our thoughts and well wishes continue to be with each and every one of you in the storm's path as you begin that recovery.

With that in mind, and the fact that the fall EEI conference is next week, and you have a lot of companies to prepare for, Leo and I will try to cover the waterfront today so your time can be used most efficiently this week and next. That means more time for talk and probably less for questions today, but we expect it will help to make our meetings next week be as focused as possible on what really matters to you relative to Entergy.

And the fact is we simply have a lot of aspirations for our stakeholders and goals and objectives necessary to achieve them, and the activities around them never seem to slow down. And that's not necessarily a bad thing.

In that regard, we are very pleased to report to you substantial progress on one of those key initiatives that is projected to provide significant benefits to our customers and all stakeholders. Of course, I'm talking about the recent unanimous approvals in 2 retail jurisdictions on the proposed move to join the Midwest Independent Transmission System Operator, the Regional Transmission Organization, by December 2013.

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