Entergy 2014 Annual Report Download - page 6

While we power life for Entergy employees in many ways, our
employees power life for our company and our stakeholders. Entergy
employees – the most dedicated, conscientious group of people I know –
work diligently every day to keep the power on. And they do such a good
job that most people rarely give it a thought. By ensuring the power is on
every day and natural gas is delivered continuously, our employees drive
our success as a company. In 2014, we continued to transform our
organization because we need engaged, empowered employees to
achieve our goals and compete in a very dynamic industry. We largely
completed a companywide restructuring to reduce costs and refocus
resources in areas that support utility growth and the long-term value of
our EWC fleet. We identified specific leadership and employee practices
in 2014 that are hallmarks of healthy, successful organizations and we
are instilling these practices throughout our company. Organization
transformation takes time and effort, but we are confident it will
strengthen our ability to provide sustainable value to our stakeholders
over the long term.
“We see
significant
capacity for
stakeholder
value creation
in powering
life through
our existing
businesses.”
We power life for our owners by delivering attractive returns on the
investments they make in our business. We believe we must deliver
industry-leading returns over the long term in order to attract the capital
we need to invest in and grow our business. Short-term fluctuations in
power prices affect our performance, but over the long term, consistent
execution of our business strategies drives our ability to generate
competitive returns to our owners. In 2014, Entergy delivered top-
quartile total shareholder return, based on stock price performance and
dividends, of 44.8 percent compared to a return of 28.9 percent for the
Philadelphia Utility Index. We benefitted from both favorable market
conditions and strong execution of our business strategies.
We see significant capacity for stakeholder value creation in
powering life through our existing businesses. Our utilities are located
in the Gulf South, a region experiencing strong industrial development,
and our EWC assets play a critical role in the regions they serve. We
believe we can generate top-quartile returns for our owners by pursuing
opportunities that advance our business strategies: grow the utility
business and preserve optionality and manage risk at EWC. We
continually look for ways to further our strategies, either through organic
growth or transactions that offer attractive opportunities within our
existing businesses. We set a standard that not only should transactions
complement our strategies; they must also be executable and not distract
us from the significant opportunities before us today. In addition to
reinvesting in our utility and EWC businesses, our priority is to provide a
dividend payout that is comparable to our industry peers. In 2014, our
board established a target dividend payout range of 65 percent to 75
percent of earnings per share from the utility, parent and other segments.
At the same time, we are committed to maintaining investment-grade
ratings at our utilities and at Entergy Corporation. A strong financial and
credit position gives us the financial flexibility to respond
opportunistically to changing market conditions in ways that create
sustainable value for our stakeholders.
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