EX-99 3 a20405992.htm

Entergy
500 Clinton Center Drive
Clinton, MS  39056

News
Release

Date:

November 1, 2005

For Release:

Immediately

Contact:

Morgan Stewart (News Media)
(601) 339-2430
mstewa3@entergy.com

Michele Lopiccolo (Investor Relations)
(601) 339-2816
mlopicc@entergy.com

Exhibit 99.2

Entergy Reports Third Quarter Earnings

Clinton, Miss. - Entergy Corporation (NYSE:ETR) today reported third quarter 2005 as-reported and operational earnings of $350.0 million, or $1.65 per share. This compares to as-reported earnings of $282.2 million, or $1.22 per share, and operational earnings of $321.7 million, or $1.39 per share, in third quarter 2004.

"The two most significant natural disasters ever experienced at Entergy in Hurricanes Katrina and Rita tested the skill, the will, and the courage of our employees and certainly the patience and understanding of our customers," said J. Wayne Leonard, Entergy's chief executive officer. "Entergy has responded to the challenges posed by these unprecedented times and we are committed to continuing to provide a high level of service to our customers, to maintain a financially sound company, and to deliver top quartile returns to our shareholders."

Entergy Corporation Consolidated Earnings - Reconciliation of GAAP* to non-GAAP Measures

Third Quarter and Year-to-Date 2005 vs. 2004

Third Quarter

Year-to-Date

(Per share in U.S. $)

2005

2004

$ Change

2005

2004

$ Change

As-Reported Earnings

  Utility, Parent & Other

1.35

1.11

0.24

2.81

2.48

0.33

  Entergy Nuclear

0.33

0.28

0.05

0.95

0.84

0.11

  Energy Commodity Services

(0.03)

(0.17)

0.14

(0.01)

(0.08)

0.07

1.65

1.22

0.43

3.75

3.24

0.51

Special Items

-

(0.17)

0.17

-

(0.05)

0.05

Operational Earnings

1.65

1.39

0.26

3.75

3.29

0.46

*GAAP refers to United States generally accepted accounting principles.

Operational Earnings Highlights for Third Quarter 2005

    • Utility, Parent & Other was negatively affected by two hurricanes but showed increased results due to higher weather-driven revenues, decreased operation and maintenance expense and accretion.
    • Entergy Nuclear results increased as the result of higher generation due to uprates, fewer planned and unplanned outages during the current quarter and lower operation and maintenance expense and accretion.
    • Entergy's non-nuclear wholesale assets business had lower results due to reduced revenues and higher operation and maintenance expense.

Entergy also announced today a new financing plan to source from $2.5 to $3.0 billion through a combination of debt and equity linked securities. The financing plan is designed to provide adequate liquidity to Entergy and its subsidiaries while storm restoration cost recovery is pursued from a combination of insurance providers, federal and state legislation, and jurisdictional regulatory proceedings.

Utility, Parent & Other

In third quarter 2005, Utility, Parent & Other earned $285.8 million, or $1.35 per share, on an as-reported basis, compared to $257.5 million, or $1.11 per share, in third quarter 2004. Operational results in each period equaled as-reported results.

Entergy New Orleans results for the quarter are included in Utility, Parent & Other earnings. However, Entergy New Orleans was de-consolidated for third quarter 2005 financial reporting purposes due to uncertainties surrounding the nature, timing, and specifics of the Entergy New Orleans bankruptcy proceedings. On September 23, 2005, Entergy New Orleans filed a voluntary petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code to protect its customers and ensure continued progress in restoring power and gas service to New Orleans after Hurricane Katrina.

Earnings in third quarter 2005 reflect the storms' impact which reduced overall customer usage and revenues. Third quarter results also reflect an increase in net revenue due primarily to warmer-than-normal weather resulting in higher usage in the residential, commercial, and governmental sectors and lower operation and maintenance expense due to resources normally dedicated to operation and maintenance tasks being shifted to storm restoration work. In addition, a portion of the proceeds received during third quarter 2005 from a settlement with the Central Interstate Low-Level Radioactive Waste Compact Commission were applied against operation and maintenance expense. Accretion from Entergy's share repurchase program also impacted third quarter results.

Entergy New Orleans results for third quarter 2005 contributed three cents per share, compared to six cents per share one year ago. The decrease, due to outages caused by Hurricane Katrina, reflects $15 million of lower net revenue, compared to one year ago while overall fixed costs of Entergy New Orleans remained essentially unchanged.

Excluding Entergy New Orleans, megawatt-hour sales in the residential sector in third quarter 2005, on a weather-adjusted basis, were down nearly two percent, compared to third quarter 2004. Commercial and governmental sales, after adjusting for weather, were down nearly one percent, compared to the prior quarter. Industrial sales, after adjusting for the planned loss of one customer to cogeneration, experienced a decrease of nearly three percent in third quarter 2005 compared to the same period a year ago. Weather-adjusted sales usage was lower in the current period due primarily to customer outages in all customer classes caused by two major hurricanes that made landfall in the Entergy service territory during third quarter 2005.

Entergy Nuclear

Entergy Nuclear earned $69.3 million, or 33 cents per share, on both as-reported and operational bases in third quarter 2005. This compares to as-reported and operational earnings of $63.7 million, or 28 cents per share, in third quarter 2004. In third quarter 2005 Entergy Nuclear had higher generation resulting from uprates, no planned outage time and fewer unplanned outages compared to third quarter 2004. In addition, operation and maintenance expense decreased quarter to quarter due to lower refueling outage amortization expense. Also, accretion impacted Entergy Nuclear's earnings during the current period.

Energy Commodity Services

Energy Commodity Services results in third quarter 2005 include only earnings from Entergy's non-nuclear wholesale assets business. Energy Commodity Services as-reported results in third quarter 2004 included earnings from both the non-nuclear wholesale assets business and Entergy-Koch, LP.

Energy Commodity Services reported a loss of $5.1 million, or three cents per share, in third quarter 2005, compared to a loss of 17 cents per share in third quarter 2004. As-reported results in the current period reflect the absence of any results from Entergy-Koch, LP, which incurred a loss of 19 cents per share in third quarter 2004. The trading and pipeline businesses of Entergy-Koch, LP were sold in late 2004. Operational results for Energy Commodity Services were also a loss of $5.1 million, or three cents per share, in third quarter 2005, compared to no earnings on an operational basis one year ago. The loss in the current period reflects reduced revenues and increased operational costs compared to third quarter 2004.

Outlook

As of the date of this release, Entergy continues to be unable to affirm 2005 earnings guidance. Entergy is currently focused on resolving challenges and uncertainties brought on by the hurricanes. While these activities may affect near-term financial performance, the company's long-term aspirations remain in tact. Specifically, Entergy aspires to deliver average annual earnings per share growth of 5-6 percent, to achieve a 9 percent return on invested capital, and to continue to improve the company's overall credit quality over the long term. The company's ability to achieve these aspirations over time will be based upon a combination factors which include, but are not limited to, intrinsic growth, the recovery of storm-related restoration costs, the return of customers and load to portions of the Entergy service territory, and the amount of cash that is available for capital deployment in investments, share repurchases, dividends, or debt retirement.

Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy has annual revenues of more than $10 billion and approximately 14,000 employees.

-30-

Entergy's online address is www.entergy.com

In this release and from time to time, Entergy makes statements concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although Entergy believes that these forward-looking statements and the underlying assumptions are reasonable, it cannot provide assurance that they will prove correct. Except to the extent required by federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements involve a number of risks and uncertainties, and there are factors that could cause actual results to differ materially from those expressed or implied in these statements. Some of those factors include, but are not limited to: resolution of pending and future rate cases and other proceedings at local and federal regulatory agencies, Entergy's ability to manage its operation and maintenance costs, the performance of Entergy's generating plants, and particularly the capacity factor at its nuclear generating facilities, prices for power generated by Entergy's unregulated generating facilities, and the prices and availability of power Entergy must purchase for its utility customers, uncertainty regarding establishment of sites for spent nuclear fuel storage and disposal, Entergy's ability to develop and execute on a point of view regarding prices of electricity, natural gas, and other energy-related commodities, changes in the financial markets, particularly those affecting the availability of capital and Entergy's ability to refinance existing debt, execute its share repurchase program, and fund investments and acquisitions, actions of rating agencies, including changes in the ratings of debt and preferred stock, Entergy's ability to purchase and sell assets at attractive prices and on other attractive terms, changes in utility regulation and in regulation of the nuclear industry, the success of Entergy's strategies to reduce tax payments, the effects of litigation and weather, and uncertainties associated with efforts to remediate the effects of Hurricanes Katrina and Rita and recovery of costs associated with restoration including Entergy's ability to obtain financial assistance from governmental authorities in connection with these storms, the outcome of the Chapter 11 bankruptcy proceeding of Entergy New Orleans, Inc. and the impact, if any, of this proceeding on other Entergy companies.

 

 

Appendix A provides a reconciliation of GAAP as-reported earnings to non-GAAP operational earnings.

Appendix A: Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures
Third Quarter and Year-to-Date 2005 vs. 2004

(Per share in U.S. $)
 

Third Quarter

Year-to-Date
 

2005

2004

Change

2005

2004

Change

As-Reported

Utility, Parent & Other

1.35

1.11

0.24

2.81

2.48

0.33

Entergy Nuclear

0.33

0.28

0.05

0.95

0.84

0.11

Energy Commodity Services

  Non-nuclear wholesale assets

(0.03)

0.02

(0.05)

(0.01)

(0.01)

-

  Entergy-Koch Trading

-

(0.21)

0.21

-

(0.14)

0.14

  Gulf South Pipeline

-

0.02

(0.02)

-

0.07

(0.07)

     Total Energy Commodity Services

(0.03)

(0.17)

0.14

(0.01)

(0.08)

0.07

Consolidated As-Reported Earnings

1.65

1.22

0.43

3.75

3.24

0.51

Less Special Items

Utility, Parent & Other

-

-

-

-

-

-

Entergy Nuclear

-

-

-

-

-

-

Energy Commodity Services

  Non-nuclear wholesale assets

-

0.02

(0.02)

-

0.02

(0.02)

  Entergy-Koch Trading

-

(0.21)

0.21

-

(0.14)

0.14

  Gulf South Pipeline

-

0.02

(0.02)

-

0.07

(0.07)

     Total Energy Commodity Services

-

(0.17)

0.17

-

(0.05)

0.05

Consolidated Special Items

-

(0.17)

0.17

-

(0.05)

0.05

Operational

Utility, Parent & Other

1.35

1.11

0.24

2.81

2.48

0.33

Entergy Nuclear

0.33

0.28

0.05

0.95

0.84

0.11

Energy Commodity Services

  Non-nuclear wholesale assets

(0.03)

-

(0.03)

(0.01)

(0.03)

0.02

  Entergy-Koch Trading

-

-

-

-

-

-

  Gulf South Pipeline

-

-

-

-

-

-

     Total Energy Commodity Services

(0.03)

-

(0.03)

(0.01)

(0.03)

0.02

Consolidated Operational Earnings

1.65

1.39

0.26

3.75

3.29

0.46

 

Entergy Corporation

Consolidated Income Statement

Three Months Ended September 30

(in thousands)

2005

2004

% Inc/(Dec)

(unaudited)

Operating Revenues:

  Domestic electric

$2,490,265 

$2,389,276 

4.2 

  Natural gas

12,343 

33,628 

(63.3)

  Competitive businesses

627,123 

540,677 

16.0 

     Total

3,129,731 

2,963,581 

5.6 

Operating Expenses:

  Operation and maintenance:

    Fuel, fuel-related expenses, and gas purchased for resale

607,307 

805,886 

(24.6)

    Purchased power

977,661 

598,997 

63.2 

    Nuclear refueling outage expenses

41,432 

43,378 

(4.5)

    Other operation and maintenance

500,244 

582,240 

(14.1)

  Decommissioning

35,056 

37,747 

(7.1)

  Taxes other than income taxes

101,155 

112,568 

(10.1)

  Depreciation and amortization

217,883 

236,325 

(7.8)

  Other regulatory (credits) - net

5,156 

(25,032)

(120.6)

     Total

2,485,894 

2,392,109 

3.9 

Operating Income

643,837 

571,472 

12.7 

Other Income:

  Allowance for equity funds used during construction

5,894 

13,093 

(55.0)

  Interest and dividend income

50,700 

20,993 

141.5 

  Equity in earnings (loss) of unconsolidated equity affiliates

8,419 

(72,015)

111.7 

  Miscellaneous - net

(10,702)

41,254 

(125.9)

     Total

54,311 

3,325 

1,533.4 

Interest and Other Charges:

  Interest on long-term debt

111,101 

113,489 

(2.1)

  Other interest - net

18,918 

6,879 

175.0 

  Allowance for borrowed funds used during construction

(6,516)

(8,394)

(22.4)

     Total

123,503 

111,974 

10.3 

Income Before Income Taxes

574,645 

462,823 

24.2 

Income Taxes

218,257 

174,776 

24.9 

Consolidated Net Income

356,388 

288,047 

23.7 

Preferred dividend requirements of subsidiaries and other

6,436 

5,803 

10.9 

Earnings Applicable to Common Stock

$349,952 

$282,244 

24.0 

Earnings Per Average Common Share:

  Basic

$1.68 

$1.24 

35.5 

  Diluted

$1.65 

$1.22 

35.2 

Average Number of Common Shares Outstanding:

  Basic

207,906,762 

226,882,474 

  Diluted

212,335,619 

231,127,583 

 

Entergy Corporation

Consolidated Income Statement

Nine Months Ended September 30

(in thousands)

2005

2004

% Inc/(Dec)

(unaudited)

Operating Revenues:

  Domestic electric

$6,236,949 

$6,042,652  

3.2 

  Natural gas

51,729  

155,591  

(66.8)

  Competitive businesses

1,660,929  

1,501,985  

10.6 

     Total

7,949,607  

7,700,228  

3.2 

Operating Expenses:

  Operation and maintenance:

    Fuel, fuel-related expenses, and gas purchased for resale

1,525,652  

1,844,381  

(17.3)

    Purchased power

2,260,102  

1,603,957  

40.9 

    Nuclear refueling outage expenses

120,393  

124,084  

(3.0)

    Other operation and maintenance

1,585,969  

1,651,239  

(4.0)

  Decommissioning

108,580  

113,192  

(4.1)

  Taxes other than income taxes

290,237  

313,153  

(7.3)

  Depreciation and amortization

638,817  

662,614  

(3.6)

  Other regulatory (credits) - net

(44,814)

(57,009)

(21.4)

     Total

6,484,936  

6,255,611  

3.7 

Operating Income

1,464,671  

1,444,617  

1.4 

Other Income:

  Allowance for equity funds used during construction

29,414  

28,572  

2.9 

  Interest and dividend income

116,005  

75,067  

54.5 

  Equity in earnings (loss) of unconsolidated equity affiliates

22,012  

(31,908)

169.0 

  Miscellaneous - net

4,144  

59,993  

(93.1)

     Total

171,575  

131,724  

30.3 

Interest and Other Charges:

  Interest on long-term debt

324,149  

349,160  

(7.2)

  Other interest - net

44,457  

26,657  

66.8 

  Allowance for borrowed funds used during construction

(19,790)

(18,519)

6.9 

     Total

348,816  

357,298  

(2.4)

Income Before Income Taxes

1,287,430 

1,219,043  

5.6 

Income Taxes

460,115  

446,968  

2.9 

Consolidated Net Income

827,315  

772,075  

7.2 

Preferred dividend requirements of subsidiaries and other

19,217  

17,488  

9.9 

Earnings Applicable to Common Stock

$808,098  

$754,587  

7.1 

Earnings Per Average Common Share:

  Basic

$3.83  

$3.30  

16.1 

  Diluted

$3.75  

$3.24  

15.7 

Average Number of Common Shares Outstanding:

  Basic

211,033,629  

228,614,245  

  Diluted

215,540,185  

232,863,075  

 

Entergy Corporation

Utility Electric Energy Sales & Customers
Excluding Entergy New Orleans

Three Months Ended September 30

2005

2004

%
Change

%
Weather-Adjusted

(Millions of kwh)

Electric Energy Sales:

Residential

10,630

9,977

6.5 

(1.7)

Commercial

7,301

7,072

3.2 

(1.0)

Governmental

424

418

1.4 

1.4 

Industrial

9,736

10,288

(5.4)

(5.4)

     Total to Ultimate Customers

28,091

27,755

1.2 

(2.8)

Wholesale

2,227

2,034

9.5 

     Total Sales

30,318

29,789

1.8 

Nine Months Ended September 30

2005

2004

%
Change

%
Weather-Adjusted

(Millions of kwh)

Electric Energy Sales:

Residential

24,358

23,747

2.6 

(0.8)

Commercial

18,507

18,110

2.2 

0.5 

Governmental

1,184

1,158

2.2 

2.3 

Industrial

28,836

29,449

(2.1)

(2.1)

     Total to Ultimate Customers

72,885

72,464

0.6 

(0.9)

Wholesale

5,886

6,804

(13.5)

     Total Sales

78,771

79,268

(0.6)

As of September 30

2005

2004

%
Change

Electric Customers (Year to date average):

Residential

2,124,132

2,112,819

0.5 

Commercial

301,988

298,463

1.2 

Governmental

13,198

12,907

2.3 

Industrial

42,205

43,006

(1.9)

     Total Ultimate Customers

2,481,523

2,467,195

0.6 
Wholesale

37

41

(9.8)

     Total Customers

2,481,560

2,467,236

0.6