Entergy 2008 Annual Report Download - page 5

Regardless of the market turmoil in 2008 – as frustrating and
disappointing a year as I can recall – I can look back with pride
on what our people did accomplish. Here are a few of their
achievements during these turbulent times.
After being hit within a two-week period by two of the most
destructive storms we’ve ever experienced, Entergy’s utility
employees set records for the fastest and, most importantly,
the safest storm restorations in company history. It was an
exceptional, heroic effort by our employees and the result of
extensive preparation, hard work and commitment. Entergy’s
performance was once again recognized by the Edison Electric
Institute with Entergy receiving both the Emergency Recovery
and Emergency Assistance awards. Entergy is the only company
recognized for these achievements every year since the
inception of these awards in 1999.
We pursued an active regulatory agenda in each of our
service territories to ensure we are well positioned to create
long-term value for our utility customers and Entergy
shareholders. In keeping with our long-term aspiration to lower
“real” base rates – with a base rate path less than projected
inflation – even as we transform our generation fleet, provide
better, more reliable service and reduce environmental
emissions; Entergy’s utility operating companies held
residential customer base rates flat in nominal terms in 2008.
We took the necessary steps to execute the spin-off of our
non-utility nuclear assets to Enexus Energy Corporation and to
establish our nuclear services joint venture, EquaGen LLC.
We named leadership teams for both companies, worked
to secure the required regulatory approvals, executed a
$1.2 billion credit agreement on behalf of Enexus, in spite of
being faced with some of the most turbulent financial markets
in recent history, and took the necessary actions to ensure
operational readiness for two new companies. As a result,
we are now in a position of “rolling readiness,” prepared to
act when acceptable regulatory approvals are received and
financial market conditions are conducive to move forward.
The non-utility nuclear fleet closed out the year with an
outstanding performance record, achieving the highest level
of generating output under Entergy ownership.
As a result of routinely testing the adequacy of liquidity
under various stress scenarios, Entergy executed operations
throughout the year with sound financial measures. We ended
the year with $2.6 billion of ready liquidity, including $1.9
billion of cash and cash equivalents on hand, without any forced
need to access capital markets during those turbulent times.
In 2008, with investors’ confidence again badly shaken by
headline failures in corporate governance and oversight, we
were again recognized for our own corporate governance
practices. Entergy received a perfect 10 rating from
GovernanceMetrics International. Of 4,200 companies
reviewed, just 1 percent received a perfect score. Institutional
Shareholder Services Corporate Services awarded Entergy a
100 percent rating for corporate governance in its utility
ranking. It awarded Entergy Corporation a 98.5 percent rating,
placing us near the very top of performers in the S&P 500.
For the seventh year in a row, Entergy was named to the
exclusive Dow Jones Sustainability World Index that recognizes
the top 10 percent of the biggest 2,500 companies worldwide
based on long-term economic, environmental and social
criteria. This year marks the third consecutive year we were
the only U.S. utility listed on the World Index. Entergy was also
named to the Dow Jones Sustainability North America Index
for the fourth consecutive year, every year since its inception.
In recognition of Entergy’s leading environmental and social
performance, Storebrand Investments SRI recently recognized
Entergy with “Best in Class” status. Entergy was one of only two
U.S. companies to achieve this status.
In December 2008, Entergy was honored to receive a special
Platts Global Energy Award of Excellence in recognition of
standout performance year after year over the past decade.
Entergy was cited for being a finalist 39 times in the Platts Global
Energy Awards competition, far more than any other energy
company. We are gratified to be one of only four companies in
the world to be recognized with this special award.
Like Sean Penn who transformed from the slacker character
Jeff Spicoli to a truly respected actor with an extraordinarily
diverse body of work and two Academy Awards, we have come a
long way from our reputation as an “underachiever” 10 years ago.
Financially, we maintained a 48 percent dividend payout
ratio and returned approximately $1 billion to shareholders
through dividends and share repurchases while reporting record
earnings. Our as-reported earnings were $6.20 per share in
2008 and operational earnings were $6.51 per share. In spite
of these achievements, disappointing doesn’t begin to describe
our 2008 financial performance. Our total shareholder return
was a dismal -28.3 percent.
Our mission is pretty simple, you entrust your money to us,
we put it to good use, manage the risk and return it to you with
a fair profit. In 2008 that didn’t happen. Despite the fact we
had record accounting earnings, economically, your investment
lost money (i.e., the stock price at which you can sell declined
ENTERGY CORPORATION AND SUBSIDIARIES 2008
Entergy was honored to receive a special
Platts Global Energy Award of Excellence in
recognition of standout performance year
after year over the past decade.
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