Good day, ladies and gentlemen, and welcome to the Entergy Corporation Fourth Quarter 2014 Earnings Release and Teleconference. [Operator Instructions] As a reminder, today's call is being recorded. I would now like to turn the conference over to Paula Waters. Ma'am, you may begin.

Thank you. Good morning and thank you, everyone, for joining us. We'll begin today with comments from our Chairman and CEO, Leo Denault; and then Drew Marsh, our CFO, will review results. [Operator Instructions] In today's call, management will make certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to a number of risks and uncertainty that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Additional information concerning these risks and uncertainties is included in the company's SEC filings. Now I'll turn the call over to Leo.

Thank you, Paula. And good morning, everyone. Last year, we told you that Entergy was in a unique position, and that's still true today. We said we had a significant opportunity to invest in and modernize our fleet, strengthen reliability and meet evolving regular expectations and requirements. We said by making these investments, we could both grow our rate base and our keep customer rates low, a strategy supported in part by the industrial renaissance here in the Gulf South. We said we would manage risk and preserve optionality at Entergy wholesale commodities by improving fleet operations and pursuing stability. We said we'd manage commodity risk and leverage in the inherent volatility of power prices to our benefit and that of our owners. I'm pleased to say we did all of these things in 2014. At the Utility, we announced the proposed purchase of the Union Power Station, which would serve 4 of our operating companies. In Louisiana, Ninemile 6 came online months early and about $70 million underbudget. We resolved 2 important rate cases in Mississippi and Texas. And in Arkansas, while we are not where we need to be, we were granted limited relief in our request for a rate case rehearing. We completed our first full year of operation in MISO. And it's becoming clear that our projections that customers would realize savings were correct, validating our regulator's decision to approve that move. Although the numbers are still estimates, it now appears that customers across the Utility will, in fact, realize more MISO-driven savings than we had originally expected. We did all these while keeping our rates low, about 20% below the national average across all of our customer classes. For the year, we beat our original 1.9% retail sales growth projections by 0.4% coming in at…

Thank you, Leo, and good morning, everyone. Today, I will review the financial results for the quarter as well as highlights from the full year. In addition, I will discuss the 2015 operational earnings guidance which we initiated today and review our 2017 financial outlook. Starting with Slide 2, our fourth quarter results for the current and prior years are shown on an as reported and operational basis. Note that operational results exclude special items from the decision to close Vermont Yankee, HCM implementation and the transmission spin-merge effort terminated in 2013. Operational earnings per share were $0.75 in the fourth quarter of 2014, lower than the dollar per share earned in 2013. Results by line of business are summarized on Slide 3. Starting with Utility, operational EPS was $0.61 per share in the current period compared to $0.86 in the prior period. The Utility continued to realize volume improvement with 2.4% weather-adjusted retail sales growth. Excluding the effects of weather, higher volume contributed about $0.03 per share to the quarter's net revenue increase. The industrial customer class had the strongest gains at 6.7%. About a third of the industrial growth came from the large chemical segment, which increased 11% quarter-over-quarter, mostly due to the expansion of the core alkali -- of the ag core alkali customer. We also had solid growth of 4.3% from our petroleum refining customers, while sales to small industrial customers increased 3.3% as regional producers continue to benefit from a stronger national economy. Higher price contributed approximately $0.14 per share, a portion of which was offset by the other line items. Despite the net revenue growth, Utility results declined due largely to 3 drivers. First, nonfuel O&M was higher as benefits from our cost management efforts were offset by higher nuclear spending to improve operations,…

[Operator Instructions] Our first question is from Michael Weinstein of UBS.

It's Julien here. So I wanted to just dig in to the guidance a bit further here. Can you expand -- and I know you alluded to it already, but what exactly is driving the tax changes? Can you elaborate here a little bit? And what do you think about a normalized tax rate would be in subsequent years or just, kind of, in a generic year?

Julien, this is Drew. That's a good question. The -- if you look back over the last 5 years, we have had an operational effective tax rate in the range of what we're talking about. I think, corporate-wise, it's been about 26%, and at Utility, it's been about 23%. So what we're talking about is not unusual in that regard. And as we look forward, this year -- we'll usually talk about these things. We talk about a portfolio of opportunities and it's still certainly no different now. And we have a portfolio of opportunities that we're looking at in 2015. And by laying it all out this year upfront, we're trying to give you better view of what we expect this year. Beyond 2015, certainly our expectations continue to be that we will look for opportunities because that is one of the largest items on our income statement. But just to make sure that we are all clear about what the underlying business expectations are, we haven't -- we put statutory tax rates in for '16 and -- or our '17 outlook that we rolled forward today. So as far as 2015 goes, like I said, it is a portfolio of opportunities. We have a number of cases that are rolling forward with various tax authorities and it's based on what our expectations are today. Certainly nothing is guaranteed in that because there are ongoing discussions, but that's the best estimate that we have today. It could be higher or lower than that by the end of the year.

And just relative to the initial guidance you kind of laid out there at the time of EEI, what exactly changed? If you could elaborate briefly.

I think it just has to do with some of our expectations about what's going to transpire, particularly towards the end of the year. And our desire to make sure that our investors were fully informed about what the possibilities could be rather than get surprised, even if it's an upside at the end of the year. We certainly didn't want to land that in your lap as a surprise.

Great, excellent. And then just cutting back to the other side of the house here, on the EWC front, what are you thinking about sort of -- or what gives you confidence, rather, in still having kind of a long-term bullish perspective? Obviously, you have a view of '17, what are you seeing out there? Is it capacity, is it energy? I mean, could you elaborate a little bit?

Sure, Julien. This is Bill. A couple of things. In the long run, as we look at gas supply, obviously we're seeing a huge cut back in drilling. So we think that, eventually, that will have an impact, a bullish impact on natural gas prices. As it relates to heat rates, we think that those are also undervalued in the market. As you think about the number of shutdowns, either economic shutdowns or shutdowns due to environmental reasons we remain bullish on heat rates. And we are seeing some positive changes in the capacity markets, such as what we -- what was evidenced recently this week up in New England.

Our next question is from Dan Eggers of Crédit Suisse. Daniel L. Eggers - Crédit Suisse AG, Research Division: If I just kind of have a look at what you guys did in 2014 and you look at the 2015 at the Utility level, right, if we back out the beneficial tax rate, '14 being pretty close to statutory, '15 being much lower, it looks like your earnings are a lot closer to flat year-on-year. And I know there's always going to be moving parts, but how should we think about earned ROEs this year for '15? And then '16, '17, how you get to your earned ROEs if that tax rate does normalize?

I'll take a first crack at this, and then Theo can jump in. And I'll let Theo talk about ROEs. I'll talk about the big drivers for the earnings blocks as -- particularly as we move forward. So I think you're right. In terms of '14 to '15, we're not seeing substantial growth because we don't have a lot of rate actions. But as you look forward, certainly this year, we have some significant investment opportunities. We're talking about like Union Power and those kinds of things that we expect to come on at the end of the year, as well as rate opportunities within Arkansas and Texas. And those are going to be the main drivers. They're going to push us forward to sort of 2016, 2017 time frame. And I'll let Theo talk about the ROEs in particular.

Hey, Dan, this is Theo. I mean, I think when you look at '15 ROE, I think you're going to see ROE that's slightly below 10%. Not much different from '14, I think, as you somewhat illuminated on. But I think as you go forward through '16 and you look at the things Drew just mentioned earlier, sales growth, the fact that the Union purchase goes into -- planted into rates in 2000 -- I mean, the spend it goes in the rates in 2016. And also you see some changes relative to some of our O&M level pension cost, I want to mention you'll see those ROEs start to move, as we have said many times at EEI and other venues, in that 10% to 11% range in 2016. As you look at the various operating companies, we see ourselves making constructive progress at Arkansas as it relates to moving towards the allowed ROE as a result of our 2015 plan rate case and other actions in Arkansas. The growth that we see in Louisiana will move our Louisiana utilities. I think when you look at it on a combined basis, you'll see that company at -- within its earnings band range based on 9.95% allowed ROE. And I think as you look to Mississippi, New Orleans, we see those companies also earning at their allowed ROEs when they get into the 2016 timeframe. Texas gets closer. We see growth in Texas as well. And also, we would -- because of the Union acquisition, we'll have a rate case in Texas to move forward with that. And so we'll see some -- likely see some rate change in Texas as well. So all of that, as you look across the jurisdictions, we move closer -- to those that aren't at that point today, they move closer to get to their allowed ROE. And overall, as we've said over the past few months, when you say Utility business, that's in the 10.11% ROE range. Daniel L. Eggers - Crédit Suisse AG, Research Division: So I guess -- but if you think about kind of next year and beyond, effectively the $0.95 of tax that you have presumably could go away next year. You're thinking of the Texas case, the Arkansas case and putting Union in the rate base should more than compensate for that headwind. Is that the way if we're going to simply balance things out?

Yes, I think you'll see the rate actions. And again, as well as, I think, we'll see some O&M impacts as well as we go into '16. Daniel L. Eggers - Crédit Suisse AG, Research Division: Okay. And I just have one dumb question. If the discount rate stays at the same level as it ended last year, what happens to pension expense beyond 2015? Is it a catch-up year? Or would it stay at these levels, that would be a flat year-on-year comp?

No, that's an excellent question. No, It's an actually -- it would go up. So we build our forecast with interest rate increases, as the market tells us, in mind. And we -- mark-to-market, if you will. It's not exactly like a mark-to-market, but it's similar. And so we're anticipating interest rate rises, which would mean lower pension liabilities, which will mean lower pension expense. And so right now we are anticipating, in 2017, a 5% discount rate on our pension liability. And as I mentioned, that 4.27% is where we ended the year. So that would be somewhere in the neighborhood of about $0.20 of earnings -- $0.20, $0.25 of earnings per share impact if we were sort of flat to where we are today versus our expectations for 2017.

[Operator Instructions] Our next question is from Paul Patterson of Glenrock Associates.

Just on the 2015 guidance, you guys mentioned that there's an increase in depreciation and decommissioning for 2015. And you talked about it, I just wondered if you could just review that a little bit in terms of what's driving the increase in depreciation expense and decommissioning at the wholesale business at the nonregulated business.

Okay, this is Drew. So I mean, I think it's due to just normal activities. The depreciation is the higher -- the capital investment that we've made at EWC in 2014. And then the decommissioning expense is, as we get closer to the end of these lives, particularly as you shorten up your expectations, the decommissioning expense is going to rise naturally as you go out that direction. So I think it's just the normal expectations based on capital investment and shortening life of the assets.

With the capital investment that you're making, the actual plant value of the nuclear plant is increasing as the lifespan of the plant is decreasing, is that correct?

Certainly, from a GAAP accounting perspective, that you're seeing a large -- you're growing the asset base right now. And it is -- as you are getting to a shorter life expectancy, you are having that greater depreciation, yes.

And we should expect that to continue going forward?

Yes. I mean, like -- last year, I think, or maybe 2 years ago, we did a depreciation study to try and balance it out a little bit so it's less dramatic than it would have been before. But certainly, we -- you will see some of that still going forward, yes.

Our next question is from Stephen Byrd of Morgan Stanley.

I wanted to discuss hedging strategy from here. And just given the environment that we're in and your point of view, would you want to be a bit more cautious in terms of hedging in the expectation of improving heat rates, et cetera? Or how do you think about sort of your hedge philosophy at this point?

Steven, this is Bill. Well, absolutely, we think about that. So given the point of view that we just discussed earlier, as we look into the outer years, we want to be very careful about the products that we use so that we -- not necessarily really interested in a lot of fixed-price products at this point in time. So we look to move more towards structured products that have that asymmetric upside. Obviously, that depends on a lot of things -- counterparties, cost of the products, et cetera. But we are carefully looking at that strategy as we speak, specifically as it relates to 2016 and '17.

Okay. And just shifting to Indian Point specifically. There is a recent -- I think, it's a state ruling regarding -- just the hearing process around a potential summer shutdowns to protect fish in the Hudson River. Could you give us a sense of just procedurally the process through which that hearing will take place, just so we can try to focus on next steps in understanding that process?

Sure. That ruling just did come out this week. So kind of from a high-level perspective by February 20, Riverkeeper and the staff needs to make some recommendations as it relates to specifically what thinks it would like to recommend in terms of the outages that will go through the normal discovery process. Probably more of us throughout the summer. And then in the fall, we will actually have a hearing on the issues of outages and then hope to get you some initial reply briefs by the end of the year.

Okay. And then in terms of after the reply briefs, what would be the step back after that?

Well, depending on what happens there, then you would work through an appeal process, et cetera. To kind of sum it up, Stephen, we think this process probably goes on for several years before you get any final determination.

Oh, I see. So there could be a decision late in the year or early next year, but then there would be -- there could be various appeals after that?

That's correct.

Our next question is from Jonathan Arnold of Deutsche Bank.

One quick question on -- when you gave the sensitivity on interest rates and the discount rate just now, on the pension, I think it was $0.20 impact on 2017 if the discount rate increase did not materialize. Is that a holistic estimate, including your exposure to short-term debt? Or is that just the pension?

That was just the pension. And I was trying to do math on the fly, trying to widen my range out a little bit. But I think $0.08 is our rule of thumb on 25 basis points. So $0.20 to $0.25 is probably a better estimate for that. But yes, it doesn't include interest rate offset.

Okay. And the second point was I just -- I was curious on your -- I mean, you have the slides with the '17 point of view, but you also have '18, '19 disclosures in Table 7 of the release. Can you share with us what capacity price was embedded in that for the auction that just happened? Is it...

Are you talking about -- for ISO New England?

Well, for ISO New England...

Yes. I guess, I think it wasn't updated overnight, but it must have -- might have been your point of view that was in there.

Yes, I think it is our point of view. So you know that the option results for those Pilgrim and RISE came back for the CMA zone at about $11.08 a kW-month for that option.

Right. So is that what was in your table here?

I think it's fairly close to what we had. I mean, I think we had talked about that. We anticipated it would be net cone [ph].

Our next question is from Michael Lapides of Goldman Sachs.

Can you talk to us a little bit about your plans in Arkansas? You've hinted at times about trying to seek legislative relief. Just trying to think about the timing of trying to do that? And what type of relief or what type of mechanisms you'd like to seek versus the timing and process for a potential full-blown rate case there?

Yes, Michael, this is Theo. And I guess I'll start with we believe in Arkansas, we started from a common goal with those that are in state, we believe, with commissioners as well as state and local officials, which is really about attracting jobs, supporting economic development growth and regional prosperity in the state. When you think about legislative actions that we've talked about, I think we said this before, the legislature is currently in session now in Arkansas, and any legislative actions would clearly go through the legislative process within the current session. In terms of the different -- what may be a part of that, I think as we said before, we would be looking at mechanisms that would align Arkansas with some mechanisms we see in other jurisdictions across our service area. Things like, for instance, FRP. FRPs may be similar to what we've seen in Mississippi that has various forward-looking elements that recently came out of the Mississippi case. And also, I think, one thing we would look to try and address in Arkansas is really given the commission some criteria other than kind of a simple DCF method to determine ROE. I mean, really, this is really about giving the commissioners some, I'd say, more tools in our toolbox and really giving them various options they can look at again in a different way in Arkansas that would help us, help achieve the common goal that I talked about earlier. So with the legislative session going on, from a timing perspective, I would expect that we'd follow some legislation around this and around these various components in the next few weeks in Arkansas.

Got it. So we should probably think that any rate filings wouldn't happen until after the legislation -- legislative session closes? So kind of thinking about a midyear case, that implies a midyear 2016 revenue change.

Well, I think if you look -- I mean, as Leo mentioned in his opening comments, that we did provide notice that he would file a case in Arkansas, I believe in 60 to 90 days. So -- and we did that at the end of January. If you count from that point in time, you're sometime in the March, April time frame in terms of filing a case. And given the statutory timelines in Arkansas, that would probably put you with, if I'm doing my math correctly in my head, a rate-effective timeline somewhere at the beginning, potentially, of 2016.

Our next question comes from Charles Fishman of MorningStar.

Leo, you made comments concerning the way the board would look at the dividend in 2016 at EEI. If I take Slide 10 on your 2017 outlook the way I understood those comments at EEI, I should look at the Utility, net income, your outlook, less Parent & Other. And it appears to me, you're probably, by '17, you're getting closer to the payout range you want to be in. Is that a fair assessment that the board -- in the way the board would look at it?

Yes. When we -- I think even when we were talking back at EEI, the view is that we'll start to have the conversation with the Board when we start to look at '16 and '17's results. If you look at -- and you're exactly right. What we are talking about is the payout ratio around Utility combined with Parent & Other, as the dividend paying entity that we would be looking to, excluding EWC, of course, given the volatility associated with that kind of business. But as we start to look at what '16 and '17 hold and what those combined earnings would be, we think that that's where the conversation begins with the board. As we've mentioned, a lot of factors will go into that, in addition to just what those earnings levels are. So for example, the investment profile, what's going to happen in terms of our investments in the Utility in 2016 and '17. And if it make sense to reinvest versus the dividend, raise dividend, because we have the growth path there. So you're right about the metrics. You're -- and like I said, the timing would show up right around as we look at the '16 and '17 earnings profile.

Our last question is from Andy Levi of Avon Capital.

Just a few questions. I'll keep it to 2, 2.5. Just back on the taxes, I guess the concern I have that it is about $0.90 of earnings power. So if you kind of back that out, '15 actually looks kind of weak. And so I just kind of want to understand your thinking on that and why that is the case? Because if you kind of just put a Utility multiple on it, it's quite a bit of value, 10 to 15x the value in the stock. And then I have a follow-up.

Okay, Andy, this is Drew. I think the way we're thinking about it is '15 is sort of a foundation year for the growth opportunity that we have over the next couple of years. And as we look at it, we were really focused on making sure that we put the building blocks in place for making that 2017 aspiration. Taxes are a big piece of what we do every day. And we manage them as well as we can, like every other line item on the income statement. And like I said earlier, it's not out of line with where we have been in terms of an effective tax rate over the last 5 years. So we think this is part of our normal operating procedure. And this year, it's -- there's a couple of lumpy items in there that are helping us get there. But this is part of our expectation and what we expect to do every day when we come to work.

I understand that. But again, I'm not going to debate with you, but if you go back to your Regulation G disclosures, your statutory tax rate's 36%. So I'm just trying to look at the true earnings power longer-term of the company. The follow-up I have, this is on Pilgrim. I guess, since big snowstorm, the plant's been out. If you can kind of give us an update there? And if I'm not mistaken, you were supposed to have an outage in 2015 on Pilgrim? And so, whether this unforced outage will help on the scheduled outage that you had or is it just an unfortunate outage? And then in the spring, you'll go into your regular outage? And also the cost of having the plant down during this time of the year?

Yes, Andy, this is Bill. So to answer question regarding Pilgrim, the plant shutdown due to a Storm Juno, it shut down orderly, safely, without incident on the 27th. We did lose off-site power to the facility. However, all safety systems and backup power systems worked as planned. So we've been working through that, dealing with a number of issues. We expect that plant to start up in the near-term and in the next couple of days, and be back to full load probably sometime this weekend. As it relates to the planned outage, we do have a refueling outage that's scheduled in the spring. That remains unchanged. So we still need to refuel the facility and perform normal maintenance on that facility as we originally planned. So nothing really changes there.

And I have one really very quick question. On just EWC, I didn't see any CapEx numbers for '15. Is that something that you guys disclose or you don't give?

No. It should be in there, Andy. It's on table -- it's in Appendix B.

Okay. And how much is that for '15?

$425 million.

$425 million. Okay. And so, your operating cash flow at EWC is how much?

I don't think we disclosed that specifically.

I will now like to turn the conference call back over to Paula Waters for closing remarks.

Thank you, Shannon. And thanks to all for participating this morning. Before we close, we remind you to refer to our release and website for Safe Harbor and Regulation G Compliance statements. As a reminder, we plan to file our annual report on Form 10-K with the SEC around the end of the month. The Form 10-K provides more details and disclosures around our financial statements. Please note that events that occur prior to the date of our 10-K filings that provides additional evidence about conditions that existed at the date of the balance sheet will be reflected in our financial statements in accordance with Generally Accepted Accounting Principles. Our call was recorded and can be accessed on our website or by dialing (855) 859-2056. Replay code 62430843. The telephone replay will be available until February 12. This concludes our call. Thank you.

Ladies and gentlemen, this concludes today's conference. Thank you for your participation and have a wonderful day.