ABOUT THIS PUBLICATION | |
This publication is unaudited and should be used in conjunction with Entergy’s | ● uncertainty regarding the establishment of interim or permanent |
2012 Annual Report to Shareholders and Form 10-K filed with the Securities | sites for spent nuclear fuel and nuclear waste storage and disposal |
and Exchange Commission. It has been prepared for information purposes and | ● risks associated with the proposed spin-off and subsequent merger of |
is not intended for use in connection with any sale or purchase of, or any offer | Entergy’s electric transmission business into a subsidiary of |
to buy, any securities of Entergy Corporation or its subsidiaries. | ITC Holdings Corp., including the risk that Entergy and the Utility operating |
| companies may not be able to timely satisfy the conditions or obtain the |
FORWARD-LOOKING INFORMATION | approvals required to complete such transaction or such approvals may |
In this report and from time to time, Entergy Corporation makes statements | contain material restrictions or conditions, and the risk that if completed, the |
concerning its expectations, beliefs, plans, objectives, goals, strategies, and | transaction may not achieve its anticipated results |
future events or performance. Such statements are “forward-looking statements” | ● variations in weather and the occurrence of hurricanes and other storms |
within the meaning of the Private Securities Litigation Reform Act of 1995. | and disasters, including uncertainties associated with efforts to remediate |
Words such as “may,” “will,” “could,” “project,” “believe,” “anticipate,” “intend,” | the effects of hurricanes, ice storms, or other weather events and the recovery |
“expect,” “estimate,” “continue,” “potential,” “plan,” “predict,” “forecast,” and other | of costs associated with restoration, including accessing funded storm reserves, |
similar words or expressions are intended to identify forward-looking statements | federal and local cost recovery mechanisms, securitization, and insurance |
but are not the only means to identify these statements. Although Entergy believes | ● effects of climate change |
that these forward-looking statements and the underlying assumptions are | ● changes in the quality and availability of water supplies and the related |
reasonable, it cannot provide assurance that they will prove correct. Any | regulation of water use and diversion |
forward-looking statement is based on information current as of the date of this | ● Entergy’s ability to manage its capital projects and operation |
report and speaks only as of the date on which such statement is made. | and maintenance costs |
Except to the extent required by the federal securities laws, Entergy undertakes | ● Entergy’s ability to purchase and sell assets at attractive prices |
no obligation to publicly update or revise any forward-looking statements, | and on other attractive terms |
whether as a result of new information, future events, or otherwise. | ● the economic climate, and particularly economic conditions in Entergy’s |
Forward-looking statements involve a number of risks and uncertainties. | Utility service territory and the Northeast United States and events |
There are factors that could cause actual results to differ materially from those | that could influence economic conditions in those areas |
expressed or implied in the forward-looking statements, including those | ● the effects of Entergy’s strategies to reduce tax payments |
factors discussed or incorporated by reference in (a) Item 1A. Risk Factors | ● changes in the financial markets, particularly those affecting |
in the 2012 Form 10-K, (b) Management’s Financial Discussion and Analysis | the availability of capital and Entergy’s ability to refinance existing debt, execute |
in the 2012 Form 10-K, and (c) the following factors (in addition to others | share repurchase programs, and fund investments and acquisitions |
described elsewhere in this report and in subsequent securities filings): | ● actions of rating agencies, including changes in the ratings of |
● resolution of pending and future rate cases and negotiations, | debt and preferred stock, changes in general corporate ratings, |
including various performance-based rate discussions, | and changes in the rating agencies’ ratings criteria |
Entergy’s utility supply plan, and recovery of fuel and purchased power costs | ● changes in inflation and interest rates |
● the termination of Entergy Arkansas’s and Entergy Mississippi’s participation in | ● the effect of litigation and government investigations or proceedings |
the System Agreement in December 2013 and November 2015, respectively, and the | ● advances in technology |
potential for other Entergy operating companies to terminate participation in the System | ● the potential effects of threatened or actual terrorism, cyber attacks or data |
Agreement by providing notice pursuant to the current 96-month notice period and/or | security breaches, including increased security costs, and war or a |
by seeking an amendment to the System Agreement that would allow for an Entergy | catastrophic event such as a nuclear accident or a natural gas pipeline explosion |
operating company to terminate its participation in less than 96 months | ● Entergy’s ability to attract and retain talented management and directors |
● regulatory and operating challenges and uncertainties associated with the Utility | ● changes in accounting standards and corporate governance |
operating companies’ proposal to move to the Midcontinent Independent | ● declines in the market prices of marketable securities and |
System Operator, Inc. regional transmission organization | resulting funding requirements for Entergy’s defined benefit |
● changes in utility regulation, including the beginning or end of retail and wholesale | pension and other postretirement benefit plans |
competition, the ability to recover net utility assets and other potential stranded | ● future wage and employee benefit costs, including changes |
costs, and the application of more stringent transmission reliability requirements | in discount rates and returns on benefit plan assets |
or market power criteria by the Federal Energy Regulatory Commission | ● changes in decommissioning trust fund values or earnings |
● changes in regulation of nuclear generating facilities and nuclear materials and fuel, | or in the timing of or cost to decommission nuclear plant sites |
including possible shutdown of nuclear generating facilities, particularly those owned or | ● the effectiveness of Entergy’s risk management policies and |
operated by the Entergy Wholesale Commodities business, and the effects of new or | procedures and the ability and willingness of its counterparties |
existing safety or environmental concerns regarding nuclear power plants and nuclear fuel | to satisfy their financial and performance commitments |
● resolution of pending or future applications, and related regulatory proceedings | ● factors that could lead to impairment of long-lived assets |
and litigation, for license renewals or modifications of nuclear generating facilities | ● the ability to successfully complete merger, acquisition, or |
● the performance of and deliverability of power from Entergy’s generation | divestiture plans, regulatory or other limitations imposed as a |
resources, including the capacity factors at its nuclear generating facilities | result of merger, acquisition, or divestiture, and the success of |
● Entergy’s ability to develop and execute on a point of view regarding future | the business following a merger, acquisition, or divestiture |
prices of electricity, natural gas, and other energy-related commodities | |
● prices for power generated by Entergy’s merchant generating | REGULATION G COMPLIANCE |
facilities and the ability to hedge, meet credit support requirements for hedges, | Financial performance measures shown in this report include those |
sell power forward or otherwise reduce the market price risk associated | calculated and presented in accordance with generally accepted |
with those facilities, including the Entergy Wholesale Commodities nuclear plants | accounting principles (GAAP), as well as those that are considered |
● the prices and availability of fuel and power Entergy must purchase | non-GAAP measures. This report includes non-GAAP measures |
for its Utility customers, and Entergy’s ability to meet credit support | of operational earnings; operational adjusted EBITDA; operational return |
requirements for fuel and power supply contracts | on average invested capital; operational return on average common or |
● volatility and changes in markets for electricity, natural gas, | members’ equity; operational price to earnings ratio; operational common |
uranium, and other energy-related commodities | dividend payout ratio; gross liquidity, debt to capital ratio, excluding securitization |
● changes in law resulting from federal or state energy legislation or | debt; net debt to net capital ratio, excluding securitization debt; net debt to |
legislation subjecting energy derivatives used in hedging and risk | net capital ratio including off-balance sheet liabilities, excluding securitization |
management transactions to governmental regulation | debt; total debt, excluding assumption debt; debt to capital ratio, excluding |
● changes in environmental, tax, and other laws, including requirements for reduced | assumption debt; and net debt to net capital ratio, excluding assumption debt |
emissions of sulfur, nitrogen, carbon, greenhouse gases, mercury, and other regulated | when describing Entergy’s results of operations and financial performance. |
air emissions, and changes in costs of compliance with environmental and other laws | We have prepared reconciliations of these measures to the most directly |
and regulations | comparable GAAP measures. Reconciliations can be found on pages 7, 9, |
| and 57 – 67. |
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