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Vermont Yankee owner Entergy pulls plug on spinoff Enexus

first_img5 6% compound annual earnings growth from 2010 through 2014 (2009 base) Entergy Nuclear Vermont Yankee’s parent company, Entergy Corporation of New Orleans (NYSE: ETR), announced this morning that it will no longer pursue a plan to spin off the Vernon nuclear power plant and five others in its fleet into a new company called Enexus. The plan took a serious blow on March 25 when New York state effectively denied Entergy’s application to do so. Entergy said it will take a $0.40 to $0.45 writeoff to cover costs to date. The decision by the New York Public Service Commission was based on a high debt load for the new company of about $3 billion. New York officials were also concerned by the tritium leak at the Vermont plant and by the management action in Vermont associated with its relicensing. The Indian Point plants in Westchester County, NY, produce over 2 gigawatts of power, while the Vermont Yankee plant produces about 620 megawatts. Local response was understated.Steve Costello of Central Vermont Public Service said, “This may simplify things given the negative impression of Enexus in Montpelier.” He emphasized the “may.”Dorothy Schnure of Green Mountain Power said, “We are pleased at the news that Energy has decided not to proceed with the spin off as this appeared to be a major issue for many Vermonters.”Shawn Shouldice, of Capital Connections, LLC in Montpelier, said “There is actually a strong case that could have been made that Vermont would have been better served by Enexus rather than Entergy because of sizable additional financial assurances that the Vermont Department of Public Service was able to negotiate.”She added, “To the extent that this issue was largely a distraction in Vermont Yankee s license renewal process, however, taking the issue off the table, makes it more likely that Vermont Yankee will be able to continue to provide the state with clean, competitively-priced, and abundant power until 2032. So you could say, we welcome the company s announcement this week.”Shouldice is a registered lobbyist whose clients include the Vermont Energy Partnership and the National Federation of Independent Business.Vermont Yankee and the other plants targeted for the spin off are all so-called merchant plants, meaning that they are not owned directly by a utility but sell power directly to the wholesale power market. CVPS and GMP are former owners of the plant. They relinquished their stakes in the plant as the then Vermont Yankee Nuclear Power Corporation was sold to Entergy in 2002.Entergy said in a statement that the action is effective immediately as it plans to unwind the business infrastructure associated with the proposed separate non-utility nuclear generation and nuclear services companies while it evaluates and works to preserve its legal rights. This action includes the proposed new company, Enexus, and the associated management company, EquaGen. Meanwhile, Entergy said it is thus able to boost its dividend to shareholders to 83 cents per share from 75 cents, its first increase since 2007.Given the potential for the legal process to continue for an extended period, Entergy made the decision to unwind the internal organizations created for Enexus Energy Corporation and EquaGen LLC to eliminate dis-synergies related to the spin-off and redirect its efforts into other strategies as soon as possible in 2010. As a result of this decision, Entergy outlined capital return plans as well as updated long-term financial outlooks consistent with the current business structure. We are pleased the Board took action to return cash to our owners who have been patient during this protracted period of uncertainty, said J. Wayne Leonard, Entergy s chairman and chief executive officer . While we do not have an order from the New York State Public Service Commission, we believe there are serious questions with regard to the basis for the Commission s March 25 th decision to reject the spin-off transaction given the dialogue at the Commission s meetings over the last few months and will preserve all of our legal rights. That being said, we will leave that to the attorneys to figure out. We are moving forward on the business side to create and capture value unrealized today. Our tested business model focuses on portfolio management and operational excellence. Entergy has produced significant value by executing consistent with a market-based point-of-view through multiple changes in strategic direction over the last 11 years; in fact the highest total shareholder return in the industry over that period. Going forward, we will continue to apply this business model supported by strong cash flows and disciplined risk management to advance our financial and business aspirations.Capital Return PlansIn fourth quarter 2009, Entergy Corporation s Board of Directors authorized a new $750 million share repurchase program supported by the underlying business operations whether or not the spin-off transaction was completed. The company expects to execute on this $750 million share repurchase authority. The amount of repurchases may vary as a result of material changes in business results or capital spending or new investment opportunities. Further, this past weekend, the Board declared a quarterly dividend of $0.83 per common share payable June 1 to stockholders of record on May 12, reflecting the first increase in its quarterly common stock dividend since July 2007.Financial ImplicationsIn connection with the business unwind, Entergy estimated a total potential charge could range from $0.40 to $0.45 per share to reflect the write-off of capitalized costs incurred to date and certain other costs to be recorded in accordance with generally accepted accounting principles. The charge would be reported as a special item. This charge also includes the previously identified special items for spin-off dis-synergies and expenses for outside services provided to pursue the spin-off in 2010. Entergy will immediately take steps to eliminate spin-off dis-synergies as soon as possible during 2010.Overarching Financial AspirationEntergy continues to aspire to deliver superior value to owners as measured by total shareholder return. The company believes top-quartile total shareholder returns are achieved by:·Operating the business with the highest expectations and standards,·Executing on earnings growth opportunities while managing commodity and other business risks,·Delivering returns at or above the risk-adjusted cost of capital for each initiative, project, business, etc.,·Maintaining credit quality and flexibility,·Deploying capital in a disciplined manner, whether for new investments, share repurchases, dividends or debt retirements and·Being disciplined as either a buyer or a seller consistent with the market or Entergy s proprietary point-of-view.Long-term Financial OutlookOver the next five years, Entergy believes it offers a competitive utility investment opportunity combined with a valuable option represented by a unique, clean, non-utility nuclear generation business located in attractive power markets. The expected current long-term financial outlook includes the following:Earnings:·Utility: 5 to 6 percent compound annual earnings growth over the 2010 2014 horizon (2009 base year).·Entergy Nuclear: Relatively constant Adjusted EBITDA 1 under current forward prices, plus option value related to the potential positive effects of an economic rebound on market heat rates, capacity markets and natural gas prices. Potential environmental legislation and regulation could also recognize the value of clean energy to society.·Corporate: Results will vary depending upon factors including future effective income tax and interest rates, the amount of share repurchases and the ability to achieve the targeted financial results for the non-nuclear wholesale assets business.Capital deployment:·A balanced capital investment / return program. Entergy continues to see productive investment opportunities at the Utility in the coming years, as well as an investment outlook at Entergy Nuclear that supports continued safe, secure and reliable operations and opportunistic investments. Entergy aspires to fund this capital program without issuing traditional common equity, while maintaining a competitive capital return program. Given the company s financial profile with a mix of utility and non-utility businesses, return of capital is expected to be provided similar to the past through a combination of common stock dividends and share repurchases. Absent other attractive investment opportunities, capital deployment through dividends and share repurchases could total as much as $5 billion over the next five years under the current long-term business outlook. The amount of share repurchases may vary as a result of material changes in business results or capital spending or new investment opportunities.Credit quality:·Strong liquidity.·Solid credit metrics that support ready access to capital on reasonable terms.1 Adjusted EBITDA, a non-GAAP financial measure, is defined as earnings before interest, income taxes, depreciation and amortization and interest and dividend income, excluding decommissioningexpense and other than temporary impairment losses on decommissioning trust fund assets.The long-term financial outlook should be considered in association with 2014 financial sensitivities as shown in Table 1 . These sensitivities illustrate the estimated change in earnings or Adjusted EBITDA resulting from changes in business drivers. Estimated impacts shown in Table 1 are intended to be illustrative. Assumption Corporate Entergy Corporation s common stock is listed on the New York and Chicago exchanges under the symbol ETR . EstimatedAnnual ImpactUtility Adjusted EBITDARelatively constant Adjusted EBITDA plus option value+0 1,500 Btu/kWh heat rate expansion+$0 30/ton CO 2+$0 4/kW-mo. capacity price- / + $0 2/MMBtu change in gas priceUp to 300Up to 500Up to 200Down / Up to 600 TeleconferenceEntergy will host a teleconference to discuss this release at 10:00 a.m. CT on Monday, April 5, 2010, with access by telephone, (719) 325-2247, confirmation code 8490199.  The call can also be accessed via Entergy s Web site atwww.entergy.com(link is external) .  A replay of the teleconference will be available through April 12, 2010 thereafter by dialing (719) 457-0820 , confirmation code 8490199.  The replay will also be available on Entergy s Web site atwww.entergy.com(link is external) . (Adjusted EBITDA                 in U.S. $; millions) Balanced capital investment  / return / credit quality 1% retail sales growth$100 million/year investment in service1% change in allowed ROE1% change in non-fuel operation and maintenance expense$100 million change in debt- / + 0.13- / + 0.03- / + 0.44+ / – 0.07+ / – 0.02 (Per share in U.S. $) (a ) *******************************************************************************************************************************In this news release, and from time to time, Entergy Corporation makes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Table 1 :  2014 Financial Sensitivities  Illustrative Earnings growth Forward-looking statements involve a number of risks and uncertainties.  There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including (a) those factors discussed in Entergy s Form 10-K for the year ended December 31, 2009, and Entergy s other reports and filings made under the Securities Exchange Act of 1934, (b) uncertainties associated with efforts to remediate the effects of Hurricanes Gustav and Ike and the January 2009 Arkansas ice storm and recovery of costs associated with restoration, and (c) legislative and regulatory actions, and conditions of the capital markets during the periods covered by the forward-looking statements, in addition to other factors described elsewhere in this release and in subsequent securities filings. Source: Vermont Business Magazine. Entergy, 4.5.2010. Vermont Biz Drivers Additional investor information can be accessed on-line atwww.entergy.com/investor_relations(link is external) (Per share in U.S. $) (a ) 1% change in interest rate on $1 billion debt1% change in overall effective tax rate$500 million share repurchase+ / – 0.03+ / – 0.10+ 0.20 0.25(a) Based on estimated 2010 average fully diluted shares outstanding of approximately 187 million. Long-term Outlooklast_img read more

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‘Liberia’s Democracy Still Under Threat’ – Kofi Woods

first_imgAtty. Sam Kofi Woods described forests as of vital importance for the livelihood of millions of West Africans and that they provide key ecosystem services of local and global importance.“Educated people and intellectuals did not fail Liberia; greedy and selfish individuals did.”Renowned Liberian Human Rights Activist and former Minister of Labor, Atty. Samuel Kofi Woods, has said that Liberia’s democracy is still vulnerable and constantly threatened by leadership deficits which have  plagued the nation. In spite of criticisms of this view, Woods said, “I held that to be true (in the past) and do so now.”The Judiciary As a Beacon of HopeWith the growing tension and discontent provoked by the electoral impasse emanating from the recent October 10 presidential and legislative elections currently before the Supreme Court, Atty. Woods declared that the only hope for the country now lies with the highest court.“Our hope ultimately lies in our judiciary, which must now redeem our country. God give us men and women whose integrity will be unblemished, whose love for the nation will be tested and whose faith in you will lead them to give purpose and meaning of their existence,” he implored.He urged Liberians to respect the rule of law. The pursuit of no man’s ambition is worth a drop of human blood,” he cautioned.Speaking at the induction ceremony for officers of the Liberia Federation of Labor Unions yesterday in Monrovia, Atty. Woods said, “After years of elusive peace, tenuous transitional justice (the Truth and Reconciliation process) and cosmetic national reconciliation, our attempt to consolidate our democratic credentials is under threat because we failed to properly reform our institutions.”Officials-elect of the Liberia Federation of Labor Unions being being inducted into office“Educated people and intellectuals did not fail Liberia. It is greedy and selfish individuals who did. Educated or not, if you have no values, no integrity and no love for country, it will make no difference, Woods declared. “The value we place on materialism and wealth corrupts us and denies our nation of what it deserves,” he pointed out apparently making the case against ascribing blame along tribal and other divisions in the Liberian society.Woods warned that Liberia cannot continue to be a problem child in the ECOWAS region and on the African continent. “We must grow up and become responsible adults taking care of each other and building our nation,” he counseled.“No leader however patriotic will save our country individually. It will be our collective will to reform, love for one another and love for country,” Woods admonished.He observed that “We undermine our institutions and compromise them. We use them for personal rather than collective ends,” urging, “We must serve our government because in service to government we perform the highest moral responsibility. However, this must be done with the highest degree of commitment and integrity. Government is often seen as the center for exploitation and ill-gotten wealth.”“People’s desperation is not to serve but to acquire wealth at the sufferings and agony of our people. This is also true for our various organizations. Our reference to leadership deficit is not limited to the Presidency but at all levels of society: our family, religious institutions, professional bodies, etc.,” Woods stated.“My fellow compatriots, the complexities our nation face will not require cosmetic solutions,” he said, noting that it requires radical and deliberate attempts to fulfill the ideals of nationhood. “It will lie in a responsible leadership not led by those in the shadows.He said Liberians have failed to build strong and viable institutions because “we continue to glorify personalities. Our political, social and economic institutions have become small cartels of motley individuals whose sole purpose is to exploit our people and abuse their innocence.”Woods boasted that he left government unblemished. “I served in two capacities in government and I challenge all and sundry about my stewardship. I am on record as the only living Minister whose term at the Ministry of Public Works was audited twice and yet stand tall without any scar of abuse of the public trust.”He said, “I have the patience and time not to be confronted by gossips and rumors but facts and evidence that can be contested in the proper forum deemed by law.”Liberia’s problem, he said, is being compounded by new elements of tribal and group affiliations rather than the quality and value of the character. “Honest men and women have become enemies of the state. Here lies the Liberian Problem and here lies the problem of organized labor in Liberia.On The Economic FrontOn the economic front, Woods said people depend on work to fulfill their need for income to better their lives and the lives of their families, to escape poverty, ignorance, and disease, enjoy recreation and achieve status. Work also involves the production or creation of things that make life better and more fulfilling.“This is why we insisted on the need to review our labor laws and provide decency in the workplace. This is why social dialogue among workers, government, and employers remain a viable vehicle for progress.“It is my thesis that workers in Liberia continue to suffer the wrath of poverty and treated with a large measure of disdain because we have failed to organize because we have refused to come together into strong labor movements rather than small, briefcase labor organizations. We cannot have the force and effect necessary to transform the sector and make workers proud if we do not unite and organize.”Directing attention to the new officials of the Liberia Federation of Labor Union, Woods told them that no government however responsive, no minister however patriotic can offer them the dignity they deserve. “It is by organizing and building institutions larger than yourself and your ego that will provide you the freedom and dignity you deserve.”He gave a brief history of the formation of Labor Unions in the United States, Nigeria, and others and encouraged the new leaders to avoid petty jealousies, infighting, and internal conflict, to realize their potential as an economic force to make a difference in political issues in the future.Woods said “When we organize, we build power and we put ourselves in a better position to get what we want. A renowned union organizer once defined a union as a group of workers coming together to use their power in numbers to make their employers do what the employer would otherwise not do. If we agree that organizing gives us power then it is a no-brainer that WE MUST ORGANIZE, for our economic survival, the preservation of our dignity as human beings, our health, and safety on the job. Our future depends on organizing.”Inducting the officers, Mr. Emmett Crayton, assistant minister for the Trade Union & Social Dialogue at the Ministry of Labor, called for working relations with the government to ensure substantive success for the Union. He encouraged them to work together to realize their objectives.President Alfred B. Z. Summerville pledged his administration’s preparedness to work harder to ensure that the objectives of the Union are realized. He called on members to live up to their commitments to the Union and warned that there will be no handbag unions as members. He spoke briefly about his interactions across West Africa with Labor Unions in Ghana, Nigeria, Senegal and warned that his administration will do things differently to bring progress.Share this:Click to share on Twitter (Opens in new window)Click to share on Facebook (Opens in new window)last_img read more

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