Entergy 2013 Annual Report Download

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CLARITY
One message for
all stakeholders
2013 INTEGRATED REPORT

Table of contents

  • Page 1
    2013 INTEGRATED REPORT CLARITY One message for all stakeholders

  • Page 2
    ... Utility: Powering a Renaissance Operational Performance Management Customer Engagement and Experience Entergy Wholesale Commodities: Preserving Optionality and Managing Risk Operational Performance Management Workforce Safety and Security Emergency Preparedness and Response Supply Chain Management...

  • Page 3
    ... shutdown of nuclear generating facilities owned or operated by the Entergy Wholesale Commodities business, and the effects of new or existing safety or environmental concerns regarding nuclear power plants and nuclear fuel; • resolution of pending or future applications, and related regulatory...

  • Page 4
    ... availability of capital and Entergy's ability to refinance existing debt, execute share repurchase programs, and fund investments and acquisitions; • actions of rating agencies, including changes in the ratings of debt and preferred stock, changes in general corporate ratings, and changes in the...

  • Page 5
    INTRODUCTION Entergy Corporation 2013 INTEGRATED REPORT 4

  • Page 6
    ... the largest regional transmission organizations in North America, MISO provides our utility customers with access to a huge regional energy market. The move is projected to generate approximately $1.4 billion in customer savings in the first 10 years. Entergy Corporation 2013 INTEGRATED REPORT 5

  • Page 7
    ... natural gas services to 196,000 customers in or around New Orleans and Baton Rouge, La., through two of our utility companies. Entergy provides power to wholesale customers from six nuclear units located in the northern U.S. and from several fossil and wind power plants through our EWC business...

  • Page 8
    ... COMPETENCIES Physical Assets Corporate Governance, Operational Excellence, Financial Management, Emergency Preparedness/Response, Sustainability Strategies Provide a safe, inclusive work environment, fair compensation and development opportunities for our employees Support our communities through...

  • Page 9
    ... in utility service territories Cost management Capital investment Earned ROEs sufficient to attract capital for future investment Interest rates Capacity factors Commodity prices Wholesale market designs Resource availability Environmental impacts Emerging technologies Engage customers and...

  • Page 10
    ... Palisades and Pilgrim nuclear plants in the first half of 2013. We accelerated the human capital management initiative to obtain the results faster in this business. We made the decision to close or retire one nuclear and one fossil unit based on economics and sold a small business that was better...

  • Page 11
    ... to Our Stakeholders We contributed to our communities. In 2013, Entergy and the Entergy Charitable Foundation invested more than $15 million in our communities. Entergy employees and retirees logged a record 100,477 hours of volunteer service valued at $2.2 million. These efforts enhanced the...

  • Page 12
    ... - online and through social media, text messaging and proactive phone messaging - to improve their experience. Our residential customer satisfaction scores were the highest Entergy has ever earned, placing us in the top quartile. Preserve optionality and manage risk at EWC. Our merchant business is...

  • Page 13
    ... thank Renae Conley, who retired in 2013 after 14 years of service at Entergy, most recently as executive vice president of human resources and administration and formerly as president and chief executive officer of Entergy Gulf States Louisiana and Entergy Louisiana. Renae's many contributions to...

  • Page 14
    ...the Entergy Board in 2013. Age, 60 Robert C. Merton (1970) Professor of Financial Economics, MIT Sloan School of Management, Cambridge, Massachusetts An Entergy director since 2009. Age, 73 GARY W. EDWARDS W. J. "BILLY" TAUZIN Former Senior Executive Vice President of Conoco Inc., Houston, Texas...

  • Page 15
    ...Senior Vice President, Human Resources and Chief Diversity Officer Joined Entergy in 1985. Became senior vice president, human resources and chief diversity officer on Sept. 1, 2013, after serving as vice president, human capital management. Age, 56 Entergy Corporation 2013 INTEGRATED REPORT 14

  • Page 16
    ...or mail. Visit our investor relations website at entergy.com/investor for earnings reports, financial releases, SEC filings and other investor information, including Entergy's Corporate Governance Guidelines, Board Committee Charters for the Corporate Governance, Audit and Personnel Committees and...

  • Page 17
    AT A GLANCE Entergy Corporation 2013 INTEGRATED REPORT 16

  • Page 18
    ... in our local communities through the Entergy Charitable Foundation and other grant programs. • We continued to value workforce diversity and inclusion as a strategic advantage for our business. • We expanded our use of social media to engage our employees, customers and communities. • We...

  • Page 19
    ... the transmission grid. Entergy utilities generally have the benefits of a constructive regulatory environment, reasonable rates, manageable environmental exposure and service territories with solid economic growth prospects. We transferred functional control to MISO on Dec. 19, 2013, and...

  • Page 20
    ... Utility Index Assumes $100 invested at the closing price on Dec. 31, 2008, in Entergy Corporation common stock, the S&P 500 Index, and the Philadelphia Utility Index, and reinvestment of all dividends. AVERAGE RESIDENTIAL ELECTRIC RATES Cents per kWh 14 12 10 8 6 4 2 0 2009 2010 2011 2012 2013...

  • Page 21
    ...36% EMPLOYEE AND RETIREE VOLUNTEERISM Hours in thousands 100 76 53 49 85 ENTERGY MANAGEMENT WORKFORCE Gender ENTERGY WORKFORCE Gender 87% Male 2012 2013 13% Female 81% Male 19% Female 2009 2010 2011 Based on EEO-1 code U.S. Bureau of Labor Statistics 2013 average for U.S. utilities: Male...

  • Page 22
    FINANCIAL HIGHLIGHTS Entergy Corporation 2013 INTEGRATED REPORT 21

  • Page 23
    ... Selected Financial and Operating Data 2013 2012 2011 2010 2009 Selected Financial Data: (In Thousands, Except Percentages and Per Share Amounts) Operating revenues Income from continuing operations Earnings per share from continuing operations: Basic Diluted Dividends declared per share Return on...

  • Page 24
    ... Competitive businesses TOTAL $ 8,942,360 154,353 2,294,234 11,390,947 $ 7,870,649 130,836 2,300,594 10,302,079 $ 8,673,517 165,819 2,389,737 11,229,073 Operating Expenses Operating and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale Purchased power Nuclear refueling outage...

  • Page 25
    FINANCIAL HIGHLIGHTS Consolidated Statements of Comprehensive Income (Unaudited) 2013 For the Years Ended December 31, 2012 (In Thousands) 2011 Net Income Other comprehensive income (loss) Cash ï¬,ow hedges net unrealized gain (loss) (net of tax expense (benefit) of ($ 87,940), ($55,750), and $34...

  • Page 26
    ...amortization, and decommissioning, including nuclear fuel amortization Deferred income taxes, investment tax credits, and non-current taxes accrued Asset impairments and related charges Gain on sale of business Changes in working capital: Receivables Fuel inventory Accounts payable Prepaid taxes and...

  • Page 27
    ... of subsidiary common and preferred stock Changes in credit borrowings and commercial paper - net Dividends paid: Common stock Preferred stock Net cash ï¬,ow provided by (used in) financing activities Effect of exchange rates on cash and cash equivalents Net increase (decrease) in cash and...

  • Page 28
    ... December 31, 2012) Deferred fuel costs Goodwill Accumulated deferred income taxes Other TOTAL TOTAL ASSETS $ 849,718 3,893,363 172,202 377,172 62,011 887,160 6,241,626 43,406,446 $ 742,030 5,025,912 172,202 377,172 37,748 936,648 7,291,712 43,202,502 Entergy Corporation 2013 INTEGRATED REPORT 27

  • Page 29
    ...' Equity: Common stock, $.01 par value, authorized 500,000,000 shares; issued 254,752,788 shares in 2013 and in 2012 Paid-in capital Retained earnings Accumulated other comprehensive loss Less - treasury stock, at cost (76,381,936 shares in 2013 and 76,945,239 shares in 2012) Total common...

  • Page 30
    ... net income and preferred dividend requirements of subsidiaries for 2013, 2012 and 2011 include $12.0 million, $15.0 million and $13.3 million, respectively, of preferred dividends on subsidiaries' preferred stock without sinking fund that is not presented as equity. Entergy Corporation 2013...

  • Page 31
    ... power, an essential service, helps people live their lives, operate their businesses and serve their customers and constituencies. EMPLOYEES Delivering strong economic performance enables us to provide employees with fair compensation and benefits, and opportunities to grow and develop as Entergy...

  • Page 32
    ... in spot and near-term power prices during the year, and licensing and regulatory issues related to our nuclear plants raising concerns over how long our plants will operate. EWC provides power to customers in wholesale power markets, which are located predominantly in the northern U.S. While...

  • Page 33
    ... Our utility business delivered more solid progress in 2013. Operational earnings reï¬,ected nearly $2 billion of efficient natural gas and nuclear generation investments placed in service in 2012 benefiting customers. The utility executed on the transfer of functional control of its transmission...

  • Page 34
    ... our business. RISK RESPONSIBILITIES The board's audit committee has primary responsibility for risk management. Management provides the committee with regular reports on corporate compliance, significant legal matters, Entergy's insurance programs, environmental risks, and market and credit risks...

  • Page 35
    ..., environmental and social practices is maintained by various committees as part of their charters. The board's six standing committees (and their meeting frequency in 2013) are: audit (13), corporate governance (8), personnel (7), finance (5), nuclear (7) and executive (0). The personnel committee...

  • Page 36
    ... for our customers by providing safe, secure, reliable service at reasonable cost. Our customers depend on our power to live and enhance their lives, run their businesses and serve their customers and constituencies. Read more about our efforts to deliver value to customers in our utility and EWC...

  • Page 37
    ... that generate, transmit, distribute and sell electric power to retail and wholesale customers in Arkansas, Louisiana, Mississippi and Texas. Two of our subsidiaries also provide natural gas utility services to customers in and around New Orleans and Baton Rouge, La. Growing our utilities is...

  • Page 38
    ... taking advantage of new and emerging technology to reduce outages and their duration. Entergy is recognized as an industry leader in emergency preparedness and response, which we view as a key component of reliability. Entergy Arkansas quickly and effectively restored power to customers following...

  • Page 39
    ... Me Money and myAccount Web pages. Customers can also access Entergy's energy efficiency programs: Entergy Solutions in Entergy Texas and Entergy Arkansas and Energy Smart in Entergy New Orleans. Another electronic newsletter, Powerful Solutions, is available for small business and managed account...

  • Page 40
    ... Solutions District Energy assets, which provide chilled water and steam to customers in Houston and New Orleans, to Brookfield Infrastructure, a company that is better positioned to grow this business. We also made the decision to retire and dismantle the Robert Ritchie Unit 2 fossil plant located...

  • Page 41
    ...its annual operating and maintenance expenditures by approximately 10 percent without impacting security or safety. 2013 HIGHLIGHTS : EWC BUSINESS ACTIVITIES Generation Nuclear Our Entergy Nuclear team received the Materials and Services - Top Industry Practice award in 2013 from the Nuclear Energy...

  • Page 42
    ...Providing Service to Our Customers Workforce Safety and Security Strong operational safety and top-tier workforce safety practices are fundamental drivers of our business performance. An accident-free work environment is a longstanding goal at Entergy. Our employees had a great safety year in 2013...

  • Page 43
    ... policies, systems and programs to build safety awareness, monitor safety performance and identify and address the root causes of accidents. In 2013, to support organizational changes implemented to improve safety focus and efficiency, we split our Safety, Health and Environmental Management...

  • Page 44
    ... New Orleans, Baton Rouge and northern Louisiana to practice a number of hurricane scenarios and appropriate messaging for each stage of the response effort. The Entergy Storm Center Internet site was redesigned for optimal performance on mobile devices and with easy access to social media channels...

  • Page 45
    ... that work with Entergy. All suppliers are expected to conduct business in a manner consistent with our code of conduct. BUILDING A SUSTAINABLE SUPPLY CHAIN Supply chain sustainability initiatives are focused on improving the safety and environmental performance of our suppliers. We have incentive...

  • Page 46
    ... environment and save customers money. EMPLOYEES Employees who live and work in our communities help uphold Entergy's commitment to environmental leadership by taking action in their daily jobs and volunteering in community environmental programs and projects. COMMUNITIES Our utilities are located...

  • Page 47
    ... Our Environment 2020 strategy has six areas of focus: • Continuously reduce Entergy's environmental footprint. • Assess and implement adaptation measures to mitigate physical risks to our operating area posed by climate change. • Proactively manage emerging compliance areas. • Deploy energy...

  • Page 48
    ... potential environmental requirements to test business planning decisions and evaluate optimal, lower-carbon energy resource investments. We address physical risks with a storm hardening process to prioritize investments to reduce business interruptions, a proven emergency preparedness and response...

  • Page 49
    ... resources and have a corporate water management standard in place. Only one Entergy facility operates in a water-constrained environment, Lewis Creek Plant in Willis, Texas, where we work with the water conservation district to optimize water use. We work on water issues with the Electric Power...

  • Page 50
    ... compliance training to employees, including basic annual environmental awareness training in our transmission and distribution organizations. For additional information on our compliance performance, please visit us at entergy.com/ environment. Entergy Corporation 2013 INTEGRATED REPORT 49

  • Page 51
    ... Save Me Money online customer tools that include information on energy efficiency, weatherization and energy conservation. "In 2013, Entergy Texas was named Energy STAR Partner of the Year in energy efficiency program delivery for the second consecutive year by the U.S. Environmental Protection...

  • Page 52
    ..., Entergy employees companywide participated in environmental volunteer activities. In Arkansas, employee volunteers shared information about energy efficiency programs at the Arkansas Earth Day Foundation's 10-year celebration. Employee volunteers in Texas picked up trash for the Beaumont Trash...

  • Page 53
    ... of service to all customers. Satisfied customers help us build a stronger Entergy. EMPLOYEES Employees benefit from our initiatives to enhance the communities where they live and work, as well as from employee-specific programs, opportunities and compensation. COMMUNITIES Low rates, the jobs we...

  • Page 54
    ... help position Entergy for the future. STR ATEGIC WORKFORCE PL ANNING We implemented a shared services model to make transaction-based processes such as accounting, procurement and information technology support more efficient and cost effective. We reorganized our fossil-fueled utility generation...

  • Page 55
    ... We value diversity as a strategic advantage for our business. We support a diverse and inclusive culture through numerous programs and initiatives in our organization, as well as in our customers, suppliers and partners. Entergy employees complete diversity and inclusion training at a rate of more...

  • Page 56
    ...resource bank on legal, financial, day care, aging parents, family and other issues. Entergy Arkansas initiated the Pedestrian/ Bicyclists Safety Awareness campaign to improve pedestrian safety in downtown Little Rock, following the tragic death of an Entergy employee in a 2011 pedestrian accident...

  • Page 57
    ...in partnership with state and local officials has the potential to lead to $65 billion in capital investment by investors, business owners and corporations in approximately 85 projects in our utility service area that could result in more than 42,000 jobs. Entergy Corporation 2013 INTEGRATED REPORT...

  • Page 58
    ... Advocacy The Low Income Home Energy Assistance Program is the largest source of utility assistance for customers in need. Entergy and our community partners advocate each year for increased funding for LIHEAP grants awarded to Arkansas, Louisiana, Mississippi and Texas residents. These efforts in...

  • Page 59
    ... are helping communities become cleaner, greener and more resilient to climate change. Through our Community Connectors program, Entergy employees and retirees logged a record 100,477 hours of volunteer service valued at $2.2 million in 2013. For every 20 hours, employees can earn a $250 grant for...

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    E N T E R G Y C O R P O R AT I O N 639 Loyola Avenue New Orleans, LA 70113 504-576-4000 entergy.com facebook.com/entergy | facebook.com/thepowertocare Twitter: @Entergy Smartphone app: entergy.com/app