Good day, ladies and gentlemen and welcome to the Entergy Corporation Fourth Quarter 2015 Earnings Teleconference. [Operator Instructions] I would now like to turn the conference over to Paula Waters, Vice President of Investor Relations. Please begin.

Good morning and thank you for joining us. We will begin today with comments from Entergy’s Chairman and CEO, Leo Denault and then Drew Marsh, our CFO will review results. In an effort to accommodate everyone who has questions, we request that each person ask no more than two questions. 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 uncertainties 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. And now, I will turn the call over to Leo.

Thank you, Paula and good morning everyone. Today, we are reporting fourth quarter operational earnings per share of $1.58, consistent with the guidance we gave you last quarter. It was a good quarter overall, although developments related to resolving lingering risks and uncertainties resulted in a few non-recurring expenses. Namely, we had two regulatory charges in utility related to longstanding matters and we reported two additional asset impairments, reflecting the changes in strategic direction for the EWC business. With those things now mostly behind us, we have initiated 2016 guidance with the midpoint in line with our expectations. We also affirmed our 2017 and 2018 utility, parent and other financial outlook. 2015 was a pivotal year for us. We accomplished much of what we set out to do, working in the interest of all four of our stakeholders. For our customers, we began making investments in our long-term capital plan to continue modernizing our infrastructure and maintain a reliable and efficient system. Meanwhile, we control the overall cost in our customer bills and obtain new legislation and regulatory actions. These accomplishments facilitate our ability to continue improving our service to customers. Our employees, we continue to purchase – to pursue our organizational health initiative soliciting feedback from our workforce and using it to strengthen our culture and enhance our organization. For our communities, we continued our focus on education putting particular emphasis on workforce development. We began a $5 million 5-year workforce development initiative in partnership with the communities we serve. The first round of grants will be announced soon. We also contributed approximately $3 million throughout 2015 in support of education to organizations such as Teach for America, STEM/NOVA, Jobs for Americans Graduates and City Gear, among others. Our employees echoed our commitment, giving more than 95,000 hours of…

Thank you, Leo and good morning everyone. Today, I will discuss fourth quarter and full year 2015 results, followed by our guidance for 2016 and our outlook to 2018. But before we get into details, the punch-line is that our results and expectations remain in line with all that we have discussed with you. Now, let’s jump into 2015. Results for the quarter are summarized on Slide 4 of our presentation. Operational earnings, excluding special items were $1.58 per share, up from $0.75 a year ago and in line with the expectations we shared last November. Most significant special items include EWC’s non-cash impairment of our Palisades unit and the sale of the Rhode Island State Energy Center. Operational earnings for the business increased due to tax items, partially offset by utility charges, warm weather and lower wholesale power prices. Looking at utility, parent and other results on Slide 5, operational earnings per share increased quarter-over-quarter. The main driver was income tax as a result of the business combination for the two Louisiana operating companies, which was completed in October. This item contributed $1.50 to fourth quarter earnings after reserves to share $107 million with customers. The customer sharing is reflected as a reduction in net revenue. Unfavorable weather partially offset the tax items. Slide 6 shows our adjusted view of utility, parent and other earnings, which excludes weather and normalizes for income tax items. The adjusted view was lower than the same period a year ago. However, as Leo mentioned, this quarter’s result included two charges totaling $0.35 per share. Considering those charges, the underlying business was in line with our November expectations. Volume increased for both residential, weather-adjusted sales and industrial sales. Our residential growth was 1.6% and sales to industrial customers increased 0.6%, as shown on Slide…

Thank you. [Operator Instructions] The first question is from Dan Eggers of Credit Suisse. Your line is open.

Hi, good morning guys.

Good morning.

If I could jump to the back of the slide you have updated CapEx numbers, the CapEx increased quite a bit from what you had at EEI, part of that’s probably union slippage, but can you just help us think about the rate base growth and the effect of bonus depreciation on the rate base growth net of the increasing CapEx?

Dan, this is drew. And so we previously discussed that for the first couple of years, we already had an expectation for bonus depreciation baked into our financials. And so getting out to 2018, there is really not much impact on our overall rate based expectation, in fact it still remains right in the middle of our previous ranges that we provided, so really quite minimal impact on us overall through the guidance range or through the outlook range.

And then what was the rest of the increase beyond union to fill on the ‘16 to ’18 CapEx?

I think it was mostly just minor project adjustments. I do think that there is any major elements in there that would be worth calling out at this point, I don’t think.

And I guess on load growth and kind of the expectations for that number to bounce back after maybe a little bit slower for ‘16 than expected, where do you rank your confidence in that reset in growth today versus say six months ago or at the last Analyst Day and what is the visibility to that underlying industrial gain?

Dan, this is the Leo. I think from our perspective, we would rank that confidence higher, a little higher than we had say few years ago at the analyst meeting, because primarily a lot of the projects have advanced relative to that point in time and also we have gotten a better line of sight on what’s really happening from an economic perspective as it relates to what you are seeing with commodity markets. As we talked about at EEI, as you look ‘15 through ‘18, basically 95% of that growth or what we call new and expansion projects were related to projects that were in advance stages. And we continued to see that to be the case. That’s not to say that we see some projects, smaller projects, maybe falloff as we have gone forward. And if you also recall at EEI, that 95%, about 70% was made up of basically a handful of large projects that were in advance stages and those projects were primarily in the steel and ethane cracker, we did have an LNG project. We also have projects in the ammonia area, as well as methanol. So it was spread across a lot of various segments. As we continue to get closer and as we move closer in time to the expected construction, data completion dates of these projects, clearly we get more visibility around where those projects are just by the sheer passage of time. I think the other thing that we have gotten more visibility around is what’s going on with our existing customers and got more granularity as to what’s happening in that particular area. We don’t really see much growth when we talk about the 4% to 5% coming from our existing customer base. But as we have talked about in the past, our existing customers are large industrial customers are on fixed rate – fixed demand charge type contracts and so while we may see any volumetric fluctuations, we really don’t see accompanying fluctuations in revenue when you talk about downside situations. So I think our confidence is higher. I mean clearly, as Drew said in his script, there are still existential factors that can affect what we are seeing. But we monitor this on a very regular basis and we need to try to get as much intelligence around this as we possibly can, both from a customer perspective as well as the macroeconomic perspective.

So you are not seeing erosion in these existing customers because of an economic slowdown kind of on a global basis, so you are not expecting them to do worse, you would expect them to stay where they are is that effectively embedded in guidance?

I mean I would expect that there is always the risk they could do worse. But we have adjusted our expectation around that group based on what we see and what we know today. And we did adjust it downwards as compared to where we were a number of months ago.

Dan this is Drew. And of course you have seen in the last couple of quarters, we have seen lower growth in the industrial sector, but the new and expanding customers have been growing in the industrial space about 3% and existing customers have been detracting from it about 2.5%. So we are expecting a little bit of that same thing in 2016.

Okay, got it. Thank you, guys.

Thank you.

Thank you. The next question is from Julien Dumoulin-Smith of UBS. Your line is now open.

Hi, good morning.

Good morning Julien.

So just a follow-up a little bit on Dan’s last question, if you will, can you comment on sort of the non-industrial trends I suppose, just if we try to look at the mix 60-40, I suppose it would imply something shifting there as well, but I will let you elaborate?

Julien, are you relating to just the ‘16 period or the same period Dan was referring to?

Actually, let’s stick with ‘16.

Okay. I think when we think about growth in kind of the non-industrial sector for ’16. First, I would start by saying if you look at the quarterly GSP across the Gulf South region, we see numbers probably anywhere from 2.5% to 4% in the ‘16, ‘17 timeframe. Also I think if you look at what we have experienced even in ‘15 for the companies within that region, we have residential sales growth ranging from 1.5% to about 3.5% on a weather adjusted basis. We had commercial sales growth basically in the 1% to 2% on a weather adjusted basis in that area. And so as we look forward, we see for example on the commercial side, major projects that happened in ‘15 that will have a full year effect in ‘16, that contribute to what we view as a fairly reasonable sales growth expectation on the commercial side. In the residential area, we do – are seeing pockets of what we call maybe the multiplier effect related to the industrial growth that we see again in that Gulf South, Gulf Coast regional area. And I would also say that one thing that we take advantage of in 2016 is another day of kilowatt hour sales that have some small impact on our expectation in 2016 as well. So, around 1%, which is where we are when you adjust, when you take out the total growth and the impact of industrial, again, macroeconomic effects, we see – or impacts we could see at the industrial level, we could see at the residential and commercial. But we have as I said in response to Dan’s question we have done a lot of work around updating our expectations relative to that. And at this point, we feel fairly comfortable with where we are.

Just to be clear that you are saying not much of a change on the non-industrial?

I would say you mean ‘15 over ‘16 in terms of not much of a change or that was just where we were thinking…

Yes, exactly.

If you look at ‘15 weather-adjusted, I think residential was about 0.6%, commercial was about 0.4%. I think what we are seeing in ‘16 and our assumption is something closer to 1%.

And that’s consistent with where we were at sort of EEI November timeframe. The residential commercial expectations haven’t changed much.

Got it. And just a quick clarification, if you can on the expectations for FitzPatrick and the retirement timeline, is there any scenario here that you could be looking at implementing a ZEC or whatever you want to call it, scheme, perhaps margin positive presumably?

Julien, this is Bill. At this point in time, there is no clarity or certainty around what that program is and what the actual value associated with it would be. So, we have no plans as it relates to changing our focus on shutting down that plant on January 27. We do support the concept of a clean energy standard and I think that, that makes sense, but we really need to understand the details of it and assure that it is actually implemented.

Excellent. Thank you.

Thank you, Julien.

Thank you. And the next question is from Paul Patterson of Glenrock Associates. Your line is open.

Good morning.

Good morning.

We are going to miss, Paula. But anyway, I just want to touch base on the Palisades impairment and how that impacts – well, the Palisades and I guess the other impairment in the wind and what have you and how that impacts 2016 guidance? If I heard you correctly, you said there was a $0.49 impact that I understand it’s sort of complicated, so I don’t want you to go through any laborious detail. But just in general, so if you could highlight what that is? Did I hear that correctly I guess, I mean…

Yes. So, Paul, it’s Drew. A couple of things there. So I think that it’s spread across a couple of different categories when you think about these impairments. There is an impairment piece that’s in net revenue for fuel. There is an impairment piece, which is in O&M for refueling outage expenses and then there is an impairment piece which is in depreciation for the asset itself. And so, we have actually broken down for you in the back, in the appendix, on Slides 46 and 47, we give a lot of detail about the plants that are sort of ongoing and the plants that are planned to be closed or are closed and talk about where you can see those impairment effects for those three buckets.

Those impacts – I mean, the impairment was done in the fourth quarter. Did those impacts – how do they go into 2017, I guess?

Into 2017?

Yes. I mean, are they continuing or how do you follow what I am saying it just seems like a large number?

Yes. Well, I mean, it is. I mean if you think about all those plants that were impaired, they are still going to be operating in ‘16, so you are still going to see the effects of that stuff. Once you get into ‘17, as Bill said and we announced on January 27 we will be shutting down FitzPatrick, so you won’t see those same kind of effects as that starts to fall away. But Pilgrim and Palisades will still be there. So, you will still see those effects for those plants continue to go on. Now, once we refuel Pilgrim, I guess it will be a little bit different if we make that decision. And that would be I think those costs would be expensed if we go down that path. And so it will change things a little bit at that point, but you will still continue to see those impairment effects for those two assets, because they are still operating potentially beyond ‘17.

I guess what I am wondering is with respect to Palisades, I mean, what caused this big write-off in the contracted plant? It wasn’t completely clear to me, is it just the lifespan has been changed or your market expectations after the contract has expired?

Yes. So, I think what changed there is the fact that we made decisions around the other single unit assets. So, Pilgrim, FitzPatrick and Vermont Yankee were all single unit assets. Palisades was the only remaining one out there, although it did have the contract. Because of our decisions for the other three, we had to again more closely assess the probabilities associated with the life expectancy of the Palisades unit. And when we did that, it failed the accounting test for the impairment. And we are continuing to operate the plant till 2022. The operational decision is different than the accounting decision. We will make a decision around Palisades when it’s appropriate to do that out in the future and that will depend on the circumstances that exist at that time, the market conditions at that time, etcetera. But from an accounting perspective, we are forced by our other actions to take a close look at the Palisades unit.

Okay. And then just finally on the midpoint outlook, it’s a $0.40 range, just in terms of the term midpoint, how should we think about that? Is there some range outside of that that we should be thinking about or just elaborate a little bit on that terminology?

This idea was something that we originated, the idea of a midpoint outlook back at Analyst Day in 2014. And our expectation at that point of time was that by the time we got out to that date, because it was pretty far out there that our midpoint expectation might shift around a little bit. And so what we tried to do is signal to everybody about where it would land. But when we get out to that point, we would give you the actual guidance and give you a midpoint for where that would be. So, I guess similar to ‘16, where we landed at $4.35, which was at the bottom of our range of potential midpoints. I guess there could be a little bit above or below the ranges that we are talking about. But so I guess the answer to your question directly, yes, there could be a little bit above or below in those out-years, but we are not at this point communicating anything differently than just the range that we have.

Paul, this is Leo. Just this may or may not be helpful, but what we expect is the midpoint of the guidance to fall within that range.

Excellent. Thanks a lot.

Apparently, that was more helpful than any.

And the next question is from Stephen Byrd of Morgan Stanley. Your line is open.

Hi, good morning. Thanks for taking my questions.

Good morning, Steve.

I wanted to just add on to Paul’s question on thinking about Slide 47 and then also Slide 40. There are number of line items. But I guess in total, when we look at some of these nuclear plants that maybe shutting down at some point in the future, because I understand I guess you are including the revenues from power generated, but some of the expenses are not included in sort of adjusted earnings. On a total basis from these nuclear units, what’s the amount of expense that is effectively going to be excluded from adjusted earnings for these plants in say ‘16 or beyond?

In ‘16, I think it’s about $50 million of capital that would fall into that category, and I think that’s on Slide 40. And then I think if there are any fuel expenses, if we would make that again, that decision to shutdown Pilgrim, there could be some additional expenses that ends up in that same category. But I think that’s what we will be talking about, Stephen, mainly.

Okay. So $50 million you said capital, would that be something that would be an expense but will be excluded from adjusted earnings or is that CapEx, I wasn’t clear on that?

Well it is – it would otherwise be considered capital, but because of the situation where those plants are expected to shutdown, the accounting will force us to put that as an expense. So you will see it in the as reported as an expense, that $50 million in capital. We will break it out for you as a special item, so you can understand what that is. But that’s the way it would be portrayed I believe in the financial statement.

Okay. And what amount of fuel expense is being excluded from adjusted earnings?

I don’t know that – have that number in front of me right now, so we will have to give that to you later Stephen.

Okay understood. And then on ANO in column four, I think you laid out pretty clearly the cost of I believe $50 million in 2016, could you give a little color in terms of your assumption in the plan in terms of when you are able to move that out of column four and sort of what are the key challenges or steps that need to be taken to make that happen?

I will answer that. So just from a financial perspective, we don’t have any costs beyond 2016. From an operational perspective in the NRC, I think there is a longer process there that goes on. And so while we may stop incurring costs, it may be a little bit longer into 2017. I think there is a possibility it could go even longer than that, but I don’t believe that would be necessarily our expectation that the NRC would make a rating change there.

Okay, understood. Thank you.

Thank you. The next question is from Praful Mehta of Citigroup. Your line is open.

Hi guys and Paula, you will be missed and welcome David. So a quick question on the capital plan and your point that it’s the aging infrastructure that drives the growth and the CapEx, not as much the load growth. But I am assuming at some point, you do need load growth to kind of maintain your competitive rates and keep that rate and attract more I guess CapEx and more load into the region. So what is the minimum load growth that you look at from an industrial perspective, given the decline in load growth at least for 2016, how would you see the load growth out in the future and is there a minimum level that you would track to say you need that kind of load at least in terms of load growth to support the CapEx plan while keeping the rates in check?

So Parful that’s a good question. One thing to keep in mind, as you look at that capital plan, as you said, the generation piece of this is driven primarily by every year that goes by new technologies, improve the heat rate, cost efficiency, the environmental output of the new plants plus the old plants get older and more costly. So as time progresses, certainly we have the ability to benefit our customers with a more reliable, more environmentally friendly and lower production cost unit. And so we are doing that over time just like anyone would. It just so happens that this kind of seems to happen in big chunks in terms of when the facilities are required. So we are in the process of doing that. Recall that we have never been long generation also, so we are short – we anticipate being short generation out into the middle of the next decade even with if we were to have significantly lower growth. So the need for the generation will continue to exist and what we have mentioned before is we have some flexibility around the timing as it relates to the CTs. We have the deactivations of the units and certainly PPAs that roll off, that are all part of the mix. So it’s a combination of the need, but it’s also us making sure we have a risk mitigation strategy for the company and for its customers associated with how we put that in place. So I know there is no – at this industrial load growth number that we would give you that we say we no longer need this investment. But the fact of the matter is we would continue to be short with the ability to be in MISO and utilize the market…

Got it. Thank you, Leo. That was extremely helpful color. And finally just a quick question on taxes, I know you had reduced your NOL balance I think on the last call, now with bonus helping you as well, do you see yourselves being cash tax payers through the ‘18, ‘19 timeframe or it is the minimum tax cash tax during that period?

Praful I think what we said is we expect our cash tax rate to be around 10% through that period that you are talking about. And as I mentioned earlier, bonus depreciation was baked in for a good bit of that, so we would expect it to be about the same over that timeframe.

Got it. Thank you, guys.

Thank you.

Thank you.

Thank you. And the last question will come from Charles Fishman of Morningstar. Your line is open.

Thank you and good morning. On Arkansas, Leo, I recall that when you took your current position, this was one of your top three goals was to get an improved regulatory framework in Arkansas and now that you have it, I guess looking back and again I thought you said that your strategy was to tell Mississippi – or excuse me, to tell Arkansas that look at the industrial development in Mississippi if you have a favorable regulatory framework that can certainly support that development, I guess my question is was that the argument that helped win the day, number one. And I guess a related question would be is there anymore tweaking you would like to see in Arkansas, maybe besides a little higher allowed ROE?

Well, I would say, first of all there is no argument that we have had with anybody on anything. And I know you just used that term, but I don’t want that to be a term that’s out there. The fact of the matter is that all of our jurisdictions, Arkansas, Louisiana, Mississippi, Texas, all of them, we are all interested in the exact same thing. We are all interested in growing the economies of the jurisdictions in the states in which we operate and same with the city of New Orleans. We have spent a lot of time with all those jurisdictions, including Arkansas sitting down with them. Our jurisdictional CEOs have done a wonderful job. Their regulatory folks have done a wonderful job. Theo has done a wonderful job of making sure that we sit down and find common ground with all of them around bettering the economy of the state. And Charles, I started out with the four stakeholders and our objectives for them around the first quartile TSR, first quartile customer satisfaction, etcetera, we bring jobs to the state, we do good for the company, we could do good for the community, we could do good for the employees, it’s great for the political environment as well. So all we have done is we have sat down and discussed that with our regulators as well as the politicians in our regions to describe to them our desire to participate in that with them and help them achieve their objectives. And so what we have crafted in Texas with riders, in Arkansas with the forward-looking FRP, with Mississippi with the forward features at FRP, the way assets are recovered in Louisiana and New Orleans, etcetera. What we have accomplished with them is that common ground about how giving us the financial flexibility to make you all comfortable with the investments that we have through the regulatory process helps us attract the Big River steels, the Sasols of the world, the Continental Tires of the world to come to our region, to buy power from us, to help us invest in the infrastructure and create tens of thousands jobs. We are working on this together to be able to do that. So, I wouldn’t say that anybody won the day in Arkansas other than the State of Arkansas and we participated in that in a small way and they worked together with us to create something that allowed us to do that. And I would say that it’s no different than the workforce development program that I mentioned in my script. We are spending $5 million over the next 5 years to help train people to work at those plants that we have helped attract. And that’s good for all four of our stakeholders as well as we do that. So, it really has been the last few years of extraordinary collaboration, foresight buyer regulators and us listening to them as much as them listening to us.

Is there anything in Arkansas with respect to regulatory framework that you would like to tweak?

Well, I am not sure that, that’s something that we would need to do a lot of at the moment. Certainly, there is always things that we want to accomplish, but really that’s going to depend on the environment as we go forward, we go forward with the grid modernization, we go forward with AMI, we go forward with different things than what we have today that might require some further collaboration with those folks. But right now, we have got to make a filing under the first forward-looking FRP and get that underway before we started worrying about changing things.

Okay. Well, I think you are being a little modest, because I know this was one of your goals in Arkansas and I think you did accomplish it, so congratulations. And that was my only question.

Alright, thank you.

Thank you. And at this time, I would like to turn the call back over for closing remarks.

Thank you, Latoya 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. We plan to file our annual report on Form 10-K with the SEC next week. The Form 10-K provides more details and disclosures about our financial statements. Please note that events that occur prior to the date of our 10-K filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with GAAP. The call was recorded and can be accessed on our website or by dialing 855-859-2056, confirmation ID 85410755. The telephone replay will be available until February 25. This concludes our call.