Fast and furious – that’s how the challenges came in 2008. We faced back-to-back hurricanes, a global financial crisis and unusually high volatility in commodity markets – any one of which would have made for a difficult year. Together, it made for a year of extraordinary challenge.

Thanks to our dedicated employees, our long-term aspirations and our point-of-view-driven business model, we effectively managed through the crises. Underlying our aspirations and business model is our commitment to the principles of sustainable development.

As we’ve said in the past, we believe conducting our business in a sustainable manner creates real advantages for Entergy. Our external focus, strong network of relationships with many stakeholders and our ability to make progress toward multiple – sometimes conflicting – goals simultaneously are capabilities that are strengthened by our focus on sustainability.

Raising the Bar on Our Sustainability Performance

Even as we addressed numerous challenges in our business during 2008, we continued to raise the bar on our corporate sustainability performance. We took steps to ensure that we explicitly considered multiple goals within specific safety, environmental, social and economic initiatives. Examples of how we integrated and addressed multiple priorities simultaneously include:

• Our employees executed a record-setting storm restoration following hurricanes Gustav and Ike. In just eight days following peak outages due to Gustav and just seven days for Ike, power was restored to 85 percent of the customers who could accept power. The restoration effort was not only the fastest – which is important to our customers and our shareholders – but also the safest in company history for our employees and contractors. Reportable incidents dropped by 56 percent compared to the storm restoration efforts following hurricanes Katrina and Rita and, most importantly, there were no fatalities.
• As we aggressively advocate for a smart carbon policy to address greenhouse gas emissions, we also ensure the needs of our low-income customers are acknowledged and represented in the discussions. Entergy’s vice president of public affairs and leader of our Low-Income Initiative is an important member of our internal Climate Change Working Group. Her participation helps ensure that the social implications of this important environmental issue are proactively addressed.
• The Entergy Charitable Foundation expanded the focus of its giving in 2008 to include major environmental initiatives in addition to low-income initiatives, educational and literacy programs. The move enables funding of initiatives that strategically address climate change and other region-wide environmental priorities.
• In April 2008, we invited investment analysts who follow Entergy’s performance to an Analyst Conference in New Orleans. The purpose of the conference was to inform the investment community of our key priorities and strategies. Also on the agenda was a volunteer event in which 20 industry analysts and Entergy employees helped rebuild two homes in St. Bernard Parish, providing our economic stakeholders with firsthand experience of our communities’ urgent needs.

These examples illustrate the multitude of ways – both big and small – that we integrate the basic principles of sustainable development into all areas of our business. It is simply how we operate at Entergy; and it gives me confidence that we can navigate through future challenges to the long-term advantage of our customers, employees, shareholders and communities.

Meeting the Biggest Challenge of Our Times

When it comes to climate change, the biggest challenge of our times, we have a choice. We can pursue a path of inaction and succumb to the irreversible impact of climate change on our planet with its dire consequences, or we can embark on a concerted effort to invest in a sustainable, clean energy future. I believe we are running an enormous risk – so great as to be unquantifiable in economic terms – if we continue to ignore the scientific community’s warnings regarding the impact of climate change. As a responsible, prudent nation we should be working to mitigate the chance of a truly catastrophic outcome by immediately reducing our carbon dioxide emissions.

It is clearly the responsibility of the United States to lead on the climate change issue. Americans use nearly six times the energy per capita as the Chinese and twice as much as other developed countries. The United States is in the best position to find and fund new technologies and set the standard for meaningful action on climate change. I believe that action should include an immediate, meaningful cap on future CO₂ emissions in the United States through either a cap-and-trade system or a carbon tax.

Conventional coal plants are the single largest source of greenhouse gases in the world, accounting for nearly one-third of global energy-related CO₂ emissions. Electricity consumption in China is projected to nearly triple by 2030 with more than 75 percent being supplied by coal. To meet that increase in demand, China and other developing economies are building new coal plants at a rapid pace. While millions of dollars are being spent to develop renewable sources of energy, the reality is that renewables are simply too expensive to replace the world’s growing installed base of coal plants. A post-combustion, carbon-capture solution for conventional coal plants is the single biggest opportunity we have to reduce greenhouse gas emissions. This should be the top priority for research and development spending and U.S. policies.

In the past year, Entergy leaders have spent significant time communicating our position on climate change to industry and government leaders, and aggressively advocating for a smart carbon policy. Even though there are many voices when it comes to climate change, I believe we speak from the most credible position because Entergy has already taken action on climate change. We made our second voluntary commitment to stabilize our own greenhouse gas emissions from 2006 to 2010 at 20 percent below year 2000 levels after successfully completing our first voluntary commitment, which was made in 2001. In 2006, 2007 and again in 2008, we more than met our cumulative goal for curtailing CO₂ emissions.

Making a Commitment to Sustainable Development

In 2008, we were gratified by the recognition earned by our sustainability efforts. Entergy has been named to the exclusive Dow Jones Sustainability Index for seven consecutive years, and we have been the only U.S. utility on the World Index for the last three years. In 2008, Entergy ranked best-in-class for environmental policy and management systems, and for talent attraction and retention. We also scored in the top percentile for corporate governance and climate strategy.

Entergy was once again named one of the 100 Best Corporate Citizens by Corporate Responsibility Officer magazine in 2008 and was the top-rated utility company. Entergy ranked 17th out of the top 100 companies in the U.S. based on a weighted average of rankings in eight key areas: environment, climate change, human rights, philanthropy, employee relations, financial, lobbying and governance.

In December 2008, Entergy was honored to receive a special Platts Global Energy Award of Excellence in recognition of a track record of standout performance over the past decade. Entergy is one of only four companies worldwide to receive this special award.

We report this recognition here not to blow our own horn but rather to motivate other companies and organizations to follow our path toward sustainable development. We believe our corporate performance demonstrates that sustainable development is an advantageous way to operate a business.

More importantly, we believe sustainable development is not an option; it’s our responsibility. We are encouraged to see more and more of our peer companies join us in our commitment to sustainable development.

J. Wayne Leonard

Chairman and Chief Executive Officer