Entergy 2015 Annual Report Download

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Deliver
Serve
Align
Clear vision, clear progress.
2015 Integrated Report
What progress looks like at Entergy

Table of contents

  • Page 1
    2015 Integrated Report Clear vision, clear progress. What progress looks like at Entergy Deliver Serve Align

  • Page 2
    Clear vision, clear progress. 2015 Integrated Report Deliver Power Reliably and Efficiently The electricity and natural gas we provide to our utility and Entergy Wholesale Commodities customers fuel daily life for families, businesses and communities. We are investing to modernize our utility ...

  • Page 3
    ... Our Leadership Our Company Utility Entergy Wholesale Commodities Workplace Governance 72 74 51 61 65 68 Financial Highlights Key Performance Indicators About Entergy Forward-Looking Information and Regulation G Compliance Investor Information Business Fact Sheets The following icons in this report...

  • Page 4
    ... for a new combined-cycle gas turbine unit in Louisiana. The Union Power Station acquisition successfully closed in early March 2016. We launched utility-scale solar projects to provide access to renewable energy sources to customers in Arkansas, Mississippi and New Orleans. In transmission and...

  • Page 5
    ...ability to access capital to make investments through progressive regulatory mechanisms, a stronger balance sheet and financial flexibility. Positive developments in 2015 include the passage of legislation in Arkansas, Texas and Mississippi that supports our ability to meet our customers' needs when...

  • Page 6
    ... assets. The three remaining nuclear units are financially viable at this time. Palisades Power Plant, a singleunit plant in Michigan, operates under a favorable power purchase agreement that expires in 2022. Indian Point Energy Center, a low-cost, two-unit plant in New York, is in an attractive...

  • Page 7
    Clear vision, clear progress. 2015 Integrated Report Letter to Stakeholders We strengthened our leadership, refreshing our board of directors in 2015 and adding new members to our executive team. We welcomed three new board members in anticipation of the retirement of two valued members in 2016. ...

  • Page 8
    ...clear progress. 2015 Integrated Report Letter to Stakeholders To Our Retiring Board Members: Thank You Lead director Gary Edwards will retire from the Entergy board of directors upon reaching mandatory retirement age. A member of our board since 2005 and lead director since 2006, Gary helped guide...

  • Page 9
    ...the Ninemile Point Unit 6 plant ahead of schedule and under budget, and the optimization of the utility fossil generation fleet. Hugh McDonald will retire as president and chief executive officer of Entergy Arkansas, Inc. in 2016, following a 34-year career with Entergy. Hugh's vision and leadership...

  • Page 10
    ... FitzPatrick Nuclear Power Plant • Sold Rhode Island State Energy Center • Improved 2015 safety performance over prior year • Implemented new workforce safety system, manual and team • Launched $5 million, five-year initiative to support workforce development in our communities • Improved...

  • Page 11
    ...Bay, Texas Joined the Entergy Board in 2015. Age 59 BLANCHE LAMBERT LINCOLN Founder and Principal, Lincoln Policy Group Arlington, Virginia An Entergy director since 2011. Age 55 KAREN A. PUCKETT President and Chief Executive Officer, Harte Hanks, Inc. Monroe, Louisiana Joined the Entergy Board in...

  • Page 12
    ... retirement age policy calls for the retirement of two valued board members in 2016: Gary Edwards, our lead director, and Steve Wilkinson, chair of our audit committee. In anticipation of these retirements, our corporate governance committee and board, assisted by a leading executive recruiting...

  • Page 13
    Clear vision, clear progress. 2015 Integrated Report Our Leadership Entergy's board met 14 times in 2015. All board members then in office attended approximately 95 percent of the total number of meetings of the board and the committees on which he or she served. Board responsibility for ...

  • Page 14
    ... counsel. Age 54 DONALD W. VINCI Senior Vice President, Human Resources and Chief Diversity Officer Joined Entergy in 1985. Became senior vice president, human resources and chief diversity officer in 2013, after serving as vice president, human capital management. Age 57 WILLIAM M. MOHL President...

  • Page 15
    ... prosperity. "We power life" is Entergy's promise to create a better future for us all. We exist to operate a world-class energy business that creates sustainable value for our four stakeholders - owners, customers, employees and the communities in which we operate. This is our mission. • For our...

  • Page 16
    Clear vision, clear progress. 2015 Integrated Report Our Company Our Business Model Our business model includes operational excellence and asset management. Our business strategy is driven by detailed analysis that informs our views of material economic, environmental and social issues, which we ...

  • Page 17
    ... clear progress. 2015 Integrated Report Our Company Our Value Creation Process INPUTS Human Resources Financial Capital Intellectual Capital Manufactured Resources Natural Resources Social/Relationships ENTERGY OUR VISION We Power Life OUR MISSION We exist to operate a world-class energy business...

  • Page 18
    ... customers in Arkansas, Louisiana, Mississippi and Texas. We also deliver natural gas to customers in New Orleans and parts of Baton Rouge, Louisiana. Our strategic imperative is to aggressively grow our utility business. We made clear progress in 2015, executing our plans to invest to deliver power...

  • Page 19
    ... units in New Orleans and Arkansas. Since 2002, we have replaced nearly 20 percent of our generation resources with cleaner, more efficient resources. The Benefits of MISO Membership The utility generation assets we own and acquire are now operated within MISO - an evolution of our operating model...

  • Page 20
    ... while providing our customers with access to a renewable energy source. Entergy Mississippi, Inc. launched three solar pilot installations in three different locations, each capable of generating 500 KW from fixed-tilt solar arrays. Entergy New Orleans selected a contractor to begin construction...

  • Page 21
    ... service in Entergy Texas, Inc. in early to mid-2016. The Ponderosa-Grimes 230 kV line, the Orange County Project and the China-Amelia 230 kV line together represent nearly $150 million of transmission investment and will provide reliability benefits throughout the Entergy Texas footprint. Two new...

  • Page 22
    .... In Baton Rouge, we began a gas pipeline replacement program in 2015 to replace 100 miles of pipe over the next 10 years to improve safety and reliability. Commercial Development and Innovation To bring a constant focus on evaluating and integrating new technologies into our operating model, we...

  • Page 23
    ...turn helps us attract and retain customers. We made significant progress across our utility operating companies. For example: • Legislation facilitating future investment was passed in Arkansas, Mississippi and Texas. • The Mississippi Public Service Commission approved a rate modernization plan...

  • Page 24
    ... structures, enhanced economic development efforts and reduced regulatory costs. Entergy Louisiana also transferred its Algiers, Louisiana, assets and some 22,500 electric customers in Orleans Parish to Entergy New Orleans. Electric service to all Orleans Parish customers is now consolidated in...

  • Page 25
    Clear vision, clear progress. 2015 Integrated Report Utility Serve Our Customers With Excellence Excellent service that meets our customers' expectations is the foundation for our business success. All of our utilities improved by several points in the J.D. Power 2015 Electric Utility Residential ...

  • Page 26
    ...upgrades to our site selection websites to help businesses considering an expansion or relocation to the region. We offer energy efficiency programs as well as tools to help our customers reduce their energy bills. The objectives of Entergy's demand-side management and energy efficiency programs for...

  • Page 27
    ... to bring a $1.45 billion investment to Hinds County. This is not only the largest economic development announcement for central Mississippi in decades, it is also one of the largest projects of its kind in North America. The plant will create 2,500 new jobs with an average annual salary of $40,000...

  • Page 28
    ... more of Louisiana's wetlands through aerial planting of mangroves. Wetlands play a crucial role in storm protection and economic prosperity for many Entergy communities. Entergy is also engaged with The Lowlander Center to revisit the 2010 Building a Resilient Energy Gulf Coast report and data, and...

  • Page 29
    ... of shutdowns on plant employees and the surrounding communities. We are committed to supporting both groups during the transition. Indian Point is a low-cost plant located in a favorable market. It supplies on average 25 percent of the power for New York City and the Westchester County area. 29

  • Page 30
    ... the nuclear plants generate power Station in Nebraska. Palisades operates under a favorable power purchase agreement that expires in 2022. Indian Point is a low-cost plant located in a favorable market. It supplies on average 25 percent of the power for New York City and the Westchester County area...

  • Page 31
    Clear vision, clear progress. 2015 Integrated Report Entergy Wholesale Commodities Engage With Our Stakeholders We regularly engage with community stakeholders affected by our operations. For example, Entergy and New York State officials engaged in extensive discussions in 2015 to reach a ...

  • Page 32
    ... a special safety team to work closely with safety advisory boards, provide field safety support, develop targeted training and coordinate third-party reviews. We launched a new accident and incident reporting system (AirsWeb) companywide to track and report safety-related incidents, audits and...

  • Page 33
    ... duty accidents and medical attentions fatalities. We held the 2015 contractor safety summit in June, bringing together more than 70 contract partners in Houston, Texas, to share best practices. Improving workforce wellness benefits our employees and helps Entergy better control health care costs...

  • Page 34
    ... organizational health and diversity team to identify additional actions needed to continue improving our organizational Employee Resource Groups in Action • Veterans comprise 14 percent of Entergy's workforce, bringing extensive training and unique experiences that embody the types of leadership...

  • Page 35
    Clear vision, clear progress. 2015 Integrated Report Workplace health. Our emphasis going forward is on improving the culture deeper in the organization by helping middle managers develop leadership practices. In 2015, we merged our organizational health efforts and diversity and inclusion programs...

  • Page 36
    ... progress. 2015 Integrated Report Workplace Recruit, Retain and Develop Our Workforce Our business is only as good as our people, and at Entergy, we A new transmission boot camp are fortunate to work with the best in the business. Our talent and that provides craft training performance management...

  • Page 37
    ... 2015 average for U.S. utilities: Female 22% / Male 78% plans allow employees to plan for their future. Health and welfare benefits include medical, dental and vision coverage options, as well as employee assistance, including work-life balance programs. Through our annual incentive pay plan, we...

  • Page 38
    ... organization, for our commitment to helping students and schools succeed. RECOGNITION Entergy earned an 85 percent rating on the 2016 Corporate Equality Index by the Human Rights Campaign Foundation, which ranked us in the top 20 of energy and utility companies surveyed. 2015 Philanthropy Invested...

  • Page 39
    Clear vision, clear progress. 2015 Integrated Report Workplace OUR VALUES Create and Sustain a Safe and Healthy Life Cultivate a Diverse and Inclusive Work Culture Possess a Winning Spirit Focus on Our Customers Grow the Business Be Active Team Players Treat People with Respect ...

  • Page 40
    ...issues, Entergy's strategic imperatives and the company's enterprise risk management processes....climate resiliency. Material economic issues are identified by monitoring developments in energy demand; energy supply, including generation technologies and fuels; as well as industry and general business...

  • Page 41
    ... technologies and the ability to invest for the future. Complying with local and state regulators' requirements for Entergy to offer energy efficiency programs helps customers manage their bills and supports environmental goals. Select amounts of cost-effective energy efficiency can free up capital...

  • Page 42
    ... local communities through employment, tax base and community outreach is reciprocated by community support for ongoing Entergy operations. Community engagement in areas such as emergency planning is especially important where we have nuclear generating facilities. Human resource management Local...

  • Page 43
    ...the Utility Business • Control customer bills • Make productive investments • Earn reasonable returns Manage EWC Transition • Improve merchant fleet operations • Manage risk • Transition to smaller footprint • Extend Indian Point Energy Center operation • Decommission nuclear plants...

  • Page 44
    ... Develop supply solutions to meet utility demand Invest and modernize our utility assets Integrate external outreach Manage the physical risks associated with climate change and environmental regulation Manage EWC fleet operations Ensure continued Indian Point operation Decommission nuclear...

  • Page 45
    ...aligned, adaptable, engaged and able to get the right things done. Ensure our approach for training, developing and promoting employees is aligned to meet current and future business needs; develop human resource programs to recruit and retain a workforce that has the knowledge, skills and abilities...

  • Page 46
    ... in the dividend payout going forward. Our finance organization, led by our chief financial officer and governed by the finance committee of the board of directors, oversees our financial performance using prudent policies, strategies, procedures and investment processes. We proactively manage our...

  • Page 47
    ... throughout our business. The audit committee of the board of directors has primary responsibility for risk management at Entergy at the board level. Our management team provides regular reports to the committee on compliance, significant legal matters, insurance programs, environmental risks, and...

  • Page 48
    ... corrective action. Our practices include addressing compliance issues as they arise. The Entergy Ethics line (toll-free telephone line or via internet) is available for all employees. It is managed by a third party and permits anonymous reporting of any ethics violations or concerns. ENVIRONMENTAL...

  • Page 49
    ...on several large transmission projects. Our diverse suppliers often agree to mentor and coach other diverse suppliers through subcontracting, which helps establish and solidify a pipeline of talented contractors to support our aggressive utility capital investment plan. RECOGNITION Entergy was named...

  • Page 50
    ... ranking number seven for total generation. SOCIAL The Earned Income Tax Credit is one of the most effective tools in the fight against poverty, lifting some 6 million Americans above the poverty level each year. Entergy partners annually with the IRS, United Way and community organizations to help...

  • Page 51
    ... secured first mortgage bonds and upgraded its ratings for Entergy New Orleans. At the same time, Moody's affirmed its rating for Entergy Corporation and raised the outlook to positive. We are committed to generating strong financial returns for our owners, as it affords us ongoing access to capital...

  • Page 52
    ... Utility Index and the S&P 500 Index, and reinvestment of all dividends. Source: Bloomberg Credit Ratings as of March 18, 2016 ENTITY STANDARD & POOR'S RATING Entergy Arkansas 1 Entergy Louisiana 1 Entergy Mississippi 1 Entergy New Orleans 1 Entergy Texas 1 System Energy Resources 1 Entergy...

  • Page 53
    ... 2,333 2,307 205 8,214 216 244 8,674 Residential Commercial Industrial Governmental Total retail Sales for resale Other Total Utility Billed Electric Energy Sales: In GWh Residential Commercial Industrial Governmental Total retail Sales for resale Total 36,068 29,348 44,382 2,514 112,312...

  • Page 54
    ... used during construction Total Income (Loss) Before Income Taxes Income taxes Consolidated Net Income (Loss) Preferred dividend requirements of subsidiaries Net Income (Loss) Attributable to Entergy Corporation Earnings (loss) per average common share: Basic Diluted Basic average number of common...

  • Page 55
    ...) Foreign currency translation (net of tax expense (benefit) of ($345), ($404), and ($131)) Other comprehensive income (loss) Comprehensive Income (Loss) Preferred dividend requirements of subsidiaries Comprehensive Income (Loss) Attributable to Entergy Corporation $ (156,734) $ 960,257 $ 730,572...

  • Page 56
    ...189,219 Investing Activities Construction/capital expenditures Allowance for equity funds used during construction Nuclear fuel purchases Payment for purchase of plant Proceeds from sale of assets and businesses Insurance proceeds received for property damages Changes in securitization account NYPA...

  • Page 57
    ... issuance of: Long-term debt Preferred stock of subsidiary Treasury stock Retirement of long-term debt Repurchase of common stock Repurchase/redemptions of preferred stock Changes in credit borrowings and commercial paper - net Other Dividends paid: Common stock Preferred stock Net cash flow used in...

  • Page 58
    Clear vision, clear progress. 2015 Integrated Report Financial Highlights Consolidated Balance Sheets - Assets In Thousands (unaudited) December 31, 2015 2014 Current Assets Cash and cash equivalents: Cash Temporary cash investments Total cash and cash equivalents Accounts receivable: Customer ...

  • Page 59
    ... vision, clear progress. 2015 Integrated Report Financial Highlights Consolidated Balance Sheets - Liabilities and Equity In Thousands (unaudited) December 31, 2015 2014 Current Liabilities Currently maturing long-term debt Notes payable and commercial paper Accounts payable Customer deposits...

  • Page 60
    ... In thousands Common Stock Treasury Stock Paid-in Capital Retained Earnings Total Balance at December 31, 2012 Consolidated net income (a) Other comprehensive income Common stock issuances related to stock plans Common stock dividends declared Preferred dividend requirements of subsidiaries...

  • Page 61
    ... Utility Index and the S&P 500 Index, and reinvestment of all dividends. Source: Bloomberg Credit Ratings as of March 18, 2016 ENTITY STANDARD & POOR'S RATING Entergy Arkansas 1 Entergy Louisiana 1 Entergy Mississippi 1 Entergy New Orleans 1 Entergy Texas 1 System Energy Resources 1 Entergy...

  • Page 62
    Clear vision, clear progress. 2015 Integrated Report Key Performance Indicators ECONOMIC/OPERATIONAL Bellomy Perception Survey Average Monthly Residential Bill 1,000 kWh Usage/Month In Dollars 96.46 101.02 104.26 102.15 91.58 77% 75% 74% '13 '11 '12 '13 '14 '15 '14 '15 Entergy utility system ...

  • Page 63
    ... supplying to the grid, limited only by factors within control of plant management Capacity factor: normalized percentage of the period that the nuclear plants generate power ENVIRONMENTAL Cumulative CO2 Emissions from Entergy-Owned Plants and Controllable Purchases Million Tons 1,647.6 Average...

  • Page 64
    ... 2% 2015 Entergy Management Workforce Gender 2015 Entergy Workforce Gender 13% FEMALE Based on EEQ-1 Code 87% MALE 20% FEMALE 80% MALE U.S. Bureau of Labor Statistics 2015 average for U.S. utilities: Female 22% / Male 78% 2015 Philanthropy Invested More than $15 Million Employee and Retiree...

  • Page 65
    ... Entergy New Orleans, Inc.; and Entergy Texas, Inc. We also deliver natural gas services to 199,000 customers in or around New Orleans and Baton Rouge, Louisiana, through two of our utility companies. Wholesale Generation Entergy provides power to wholesale customers from five nuclear units located...

  • Page 66
    ... Integrated Report About Entergy ENTERGY BY THE NUMBERS IN 2015 GAAP Revenues GAAP Net Income (Loss) GAAP Earnings (Loss) Per Share Total Assets Employees at Year-end Utility Retail Electric Customers Utility Billed Retail Electric Energy Sales Interconnected High-Voltage Transmission Lines EWC...

  • Page 67
    ... development by Site Selection magazine for our efforts to help attract nearly $14.4 billion in projects that could result in as many as 7,200 jobs across our four-state utility service territory. It was the eighth straight year Entergy was named to the magazine's list. Women's Business Enterprise...

  • Page 68
    ... report and in subsequent securities filings): • resolution of pending and future rate cases and negotiations, including various performance-based rate discussions, Entergy's utility supply plan and recovery of fuel and purchased power costs; • the termination of Entergy Arkansas' participation...

  • Page 69
    Clear vision, clear progress. 2015 Integrated Report About Entergy • the performance of and deliverability of power from Entergy's generation resources, including the capacity factors at its nuclear generating facilities; • Entergy's ability to develop and execute on a point of view regarding ...

  • Page 70
    Clear vision, clear progress. 2015 Integrated Report About Entergy • changes in inflation and interest rates; • the effect of litigation and government investigations or proceedings; • changes in technology, including with respect to new, developing or alternative sources of generation; • ...

  • Page 71
    ...61) 5.83 As-reported Less special items: HCM implementation expenses Decisions to close Vermont Yankee, FitzPatrick and Pilgrim Palisades asset impairment and related write-offs Top Deer investment impairment Gain on the sale of Rhode Island State Energy Center Total special items Operational GAAP...

  • Page 72
    ...reinvestment and stock purchase plan agent. Shareholders of record with questions about lost certificates, lost or missing dividend checks, or notifications of change of address should contact: Wells Fargo Shareowner Services P.O. Box 64874 St. Paul, MN 55164-0874 Phone: 1-855-854-1360 Internet: www...

  • Page 73
    ... common stock. The plan also accommodates payments of up to $10,000 per month for the purchase of Entergy common shares. Firsttime investors may make an initial minimum purchase of $250. Contact Wells Fargo Shareowner Services by telephone or internet for information and an enrollment form. Direct...

  • Page 74
    Clear vision, clear progress. 2015 Integrated Report Business Fact Sheets Business Fact Sheets Entergy in: Arkansas Louisiana Mississippi New Orleans Texas 74

  • Page 75
    ... Entergy Arkansas, Inc. to the Arkansas Economy" © 2014 IHS) $1.7 million IN CHARITABLE DONATIONS FUEL MIX Nuclear 54% Natural Gas 18% Coal 14% Purchased Power 14% Investing more than to more than 430 organizations in 2015 ARKANSAS EMPLOYEES 14,000 hours of volunteer service in 2015 logged...

  • Page 76
    ... Gas Customers in Baton Rouge and New Orleans RESIDENTIAL CUSTOMERS enjoy RATES 32% BELOW the U.S. average 4,700 EMPLOYEES statewide, with a payroll of over Half a Billion Dollars For every 5 direct jobs Entergy creates, another 16 ENTERGY PLANS TO INVEST $5.2 billion in Louisiana projects...

  • Page 77
    ... area's appeal for new economic development. Mississippi JOBS CREATED in the past 5 years Utility rates help Mississippi RANK NUMBER 7,250 ENTERGY partners with many Mississippi schools in support of workforce training; the state has the 2 in best overall cost of doing business in USA (source...

  • Page 78
    ...,000 homes and businesses. ELECTRIC POWER TRANSMISSION SYSTEM UPGRADE project includes ENTERGY NEW ORLEANS CUSTOMERS = $30 million investment in improved capacity and reliability 90 percent of pre-Katrina customers ...and that number is climbing Broke ground for a 1-megawatt solar pilot project...

  • Page 79
    ... TRANSMISSION AND DISTRIBUTION LINES Since 2013, over the past five years More than $3.7 million IN CHARITABLE GIVING over the past five years More than WE HAVE ASSISTED in the creation of over 7,300 jobs in southeast Texas 430,000 CUSTOMERS IN 27 COUNTIES In 2015 EMPLOYEES ACHIEVED ENTERGY...