EX-99 3 a01706992.htm

Entergy
500 Clinton Center Drive
Clinton, MS  39056

 

News
Release

Date:

January 31, 2006

For Release:

Immediately

Contact:

Yolanda Pollard (News Media)
(504) 576-4238
ypollar@entergy.com

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

 

Exhibit 99.2

Entergy Reports Fourth Quarter Earnings

Clinton, Miss. - Entergy Corporation (NYSE:ETR) today reported fourth quarter 2005 as-reported earnings of $90.2 million, or 43 cents per share, compared with $154.9 million, or 68 cents per share, for fourth quarter 2004. On an operational basis, Entergy's fourth quarter 2005 earnings were $123.7 million, or 59 cents per share, compared with $113.6 million, or 50 cents per share, in fourth quarter 2004.

For the year, Entergy's as-reported earnings were $898.3 million, or $4.19 per share, and operational earnings were $943.1 million, or $4.40 per share. These results compare with as-reported earnings in 2004 of $909.5 million, or $3.93 per share, and operational earnings of $879.5 million, or $3.80 per share.

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

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

Fourth Quarter

Year-to-Date

(Per share in U.S. $)

2005

2004

$ Change

2005

2004

$ Change

As-Reported Earnings

  Utility, Parent & Other

-

0.36

(0.36)

2.82

2.86

(0.04)

  Entergy Nuclear

0.37

0.22

0.15

1.32

1.06

0.26

  Energy Commodity Services

0.06

0.10

(0.04)

0.05

0.01

0.04

0.43

0.68

(0.25)

4.19

3.93

0.26

Special Items

0.16

(0.18)

0.34

0.21

(0.13)

0.34

Operational Earnings

0.59

0.50

0.09

4.40

3.80

0.60

*GAAP refers to United States generally accepted accounting principles.

Operational Earnings Highlights for Fourth Quarter 2005

  • Utility, Parent & Other continued to be negatively affected by two hurricanes resulting in lower sales primarily in the industrial sector, partially offset by lower operation and maintenance expense.
  • Entergy Nuclear results increased as a result of higher generation due to uprates and fewer planned outages during the current quarter, higher pricing, lower operation and maintenance expense, and accretion.
  • Entergy's non-nuclear wholesale assets business had improved results due to the sale of SO2 allowances.

"The post-hurricane rebuilding process continues with marked progress being advanced at various levels," said J. Wayne Leonard, Entergy's chief executive officer. "Entergy continues to conduct its business with the goal of providing a safe environment for its employees, a high level of service to our customers, and top-quartile returns to our shareholders."

Other Quarterly Highlights
  • Entergy completed key elements of its financing plan including the issuance of $0.5 billion of new debt financing, the syndication of a new $1.5 billion corporate revolver, and the successful marketing of $0.5 billion of equity units.
  • Filings for recovery of storm costs were made in Louisiana and Mississippi with updated information on storm costs supplied in Texas.
  • Entergy Nuclear successfully completed the refueling outage at Vermont Yankee in 19 days.
  • New contracts signed at Entergy Nuclear raised the average sold price for its energy by $3-$7 per megawatt hour for the years 2007-2009.

Utility, Parent & Other

In fourth quarter 2005, Utility, Parent & Other reported an as-reported loss of $0.2 million, or zero cents per share, compared to earnings of $82.3 million, or 36 cents per share, in fourth quarter 2004. On an operational basis, earnings were $33.4 million, or 16 cents per share, in fourth quarter 2005, compared to $65.6 million, or 29 cents per share, in fourth quarter 2004. As-reported 2005 earnings reflect a loss of 16 cents per share resulting from the planned sale of the competitive retail business, comprised of an impairment reserve of 12 cents per share and an operating loss of four cents per share in this non-core business, with these amounts being reflected as discontinued operations in the financial statements.

Entergy New Orleans' results for the quarter are included in Utility, Parent & Other earnings. However, Entergy New Orleans is de-consolidated for fourth 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 fourth quarter 2005, exclusive of Entergy New Orleans, reflect extended hurricane-related outages due to significant customer property damage which reduced overall customer usage and revenues. Fourth quarter results also reflect materially lower industrial usage, particularly in the chemical and refining sectors, due to industry concentration along the hurricane-stricken Gulf Coast, lower operation and maintenance expense due to timing differences in spending anticipated in late 2005, and to a lesser extent, resources normally dedicated to operation and maintenance tasks being shifted to storm restoration work.

Entergy New Orleans' results for fourth quarter 2005 reflect a loss of eight cents per share, compared to a loss of two cents per share one year ago. The decrease, due to outages caused by Hurricane Katrina, reflects $44 million of lower net revenue compared to one year ago, with reduced operation and maintenance expense and lower interest expense partially offsetting the impact of lower revenues.

Excluding Entergy New Orleans, megawatt-hour sales in the residential sector in fourth quarter 2005, on a weather-adjusted basis, were down two percent, compared to fourth quarter 2004. Commercial and governmental sales, after adjusting for weather, were down four percent, compared to the prior quarter. Industrial sales, after adjusting for the planned loss of one customer to cogeneration, experienced a decrease of more than 12 percent in fourth 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 during third quarter 2005. The significant decline in the industrial sector in fourth quarter reflects the storm-related impact that was concentrated in the chemical and refining sectors which made up more than 50 percent of Entergy's industrial sales in 2005. High gas prices have placed some strain on the chemical and paper sectors, but large scale disruptions have not been experienced to date.

For the year 2005, Utility, Parent and Other earned $604.2 million, or $2.82 per share, on an as-reported basis, compared with $661.0 million, or $2.86 per share, for 2004. Operational earnings in 2005 were $648.9 million, or $3.03 per share, compared to $644.3 million, or $2.79 per share, for 2004. The higher operational earnings in 2005 were due primarily to warmer-than-normal weather and the impact of accretion, both of which offset the negative effects of the storms on Utility, Parent and Other results.

Entergy Nuclear

Entergy Nuclear earned $77.1 million, or 37 cents per share, on both as-reported and operational bases in fourth quarter 2005. This compares to as-reported and operational earnings of $49.5 million, or 22 cents per share, in fourth quarter 2004. In fourth quarter 2005 Entergy Nuclear had higher generation resulting from uprates, one planned refueling outage compared to two in fourth quarter 2004, and higher contract pricing. In addition, operation and maintenance expense decreased quarter to quarter due to timing. Also, accretion impacted Entergy Nuclear's earnings during the current period.

For the year 2005, Entergy Nuclear earned $282.6 million, or $1.32 per share, on both as-reported and operational bases, compared with $245.0, or $1.06 per share, for 2004. The increase in 2005 earnings was due primarily to increased revenue from higher contract pricing and higher generation due to fewer planned and unplanned refueling outage days, and accretion.

Energy Commodity Services

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

As-reported results for Energy Commodity Services in fourth quarter 2005 were $13.3 million, or six cents per share, compared to $23.1 million, or 10 cents per share, in fourth quarter 2004. As-reported results in the current period reflect the absence of a 15-cent loss in fourth quarter 2004 incurred by Entergy Koch, LP. The trading and pipeline businesses of Entergy Koch, LP were sold in late 2004. Operational results for Energy Commodity Services were also $13.3 million, or six cents per share, in fourth quarter 2005, compared to a loss of $1.6 million, or one cent per share, on an operational basis one year ago. The earnings in the current period reflect the sale of SO2 allowances during fourth quarter.

For the year 2005, Energy Commodity Services earned $11.6 million, or five cents per share, on both as-reported and operational bases, compared with $3.5 million, or one cent per share, in as-reported earnings and an operational loss of $9.8 million, or five cents per share, in 2004. The higher operational results in 2005 were due primarily to the sales of SO2 allowances at various times during the year.

Outlook

Entergy is initiating as-reported earnings guidance for 2006 in the range of $4.78 to $5.08 per share; 2006 operational earnings guidance is $4.50 to $4.80 per share. Earnings guidance ranges exclude Entergy New Orleans given the uncertainty that remains for this business as it works toward emerging from bankruptcy.

Entergy continues to focus on resolving challenges and uncertainties brought on by the hurricanes that severely affected its business operations in August and September of 2005. While these issues 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 of 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
Fourth Quarter and Year-to-Date 2005 vs. 2004

(Per share in U.S. $)
     
 

Fourth Quarter

Year-to-Date
 

2005

2004

Change

2005

2004

Change

As-Reported

Utility, Parent & Other

-

0.36

(0.36)

2.82

2.86

(0.04)

Entergy Nuclear

0.37

0.22

0.15

1.32

1.06

0.26

Energy Commodity Services

  Non-nuclear wholesale assets

0.06

0.25

(0.19)

0.05

0.23

(0.18)

  Entergy-Koch Trading

-

(0.21)

0.21

-

(0.35)

0.35

  Gulf South Pipeline

-

0.06

(0.06)

-

0.13

(0.13)

     Total Energy Commodity Services

0.06

0.10

(0.04)

0.05

0.01

0.04

Consolidated As-Reported Earnings

0.43

0.68

(0.25)

4.19

3.93

0.26

Less Special Items

Utility, Parent & Other

(0.16)

0.07

(0.23)

(0.21)

0.07

(0.28)

Entergy Nuclear

-

-

-

-

-

-

Energy Commodity Services

  Non-nuclear wholesale assets

-

0.26

(0.26)

-

0.28

(0.28)

  Entergy-Koch Trading

-

(0.21)

0.21

-

(0.35)

0.35

  Gulf South Pipeline

-

0.06

(0.06)

-

0.13

(0.13)

     Total Energy Commodity Services

-

0.11

(0.11)

-

0.06

(0.06)

Consolidated Special Items

(0.16)

0.18

(0.34)

(0.21)

0.13

(0.34)

Operational

Utility, Parent & Other

0.16

0.29

(0.13)

3.03

2.79

0.24

Entergy Nuclear

0.37

0.22

0.15

1.32

1.06

0.26

Energy Commodity Services

  Non-nuclear wholesale assets

0.06

(0.01)

0.07

0.05

(0.05)

0.10

  Entergy-Koch Trading

-

-

-

-

-

-

  Gulf South Pipeline

-

-

-

-

-

-

     Total Energy Commodity Services

0.06

(0.01)

0.07

0.05

(0.05)

0.10

Consolidated Operational Earnings

0.59

0.50

0.09

4.40

3.80

0.60

 

Entergy Corporation

Consolidated Income Statement

Three Months Ended December 31

(in thousands)

2005

2004

% Inc/(Dec)

(unaudited)

Operating Revenues:

  Domestic electric

$2,209,881 

$1,889,926 

16.9 

  Natural gas

25,931 

52,908 

(51.0)

  Competitive businesses

416,605 

360,394 

15.6 

     Total

2,652,417 

2,303,228 

15.2 

Operating Expenses:

  Operation and maintenance:

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

650,363 

643,827 

1.0 

    Purchased power

732,510 

381,890 

91.8 

    Nuclear refueling outage expenses

42,261 

41,988 

0.7 

    Provision for turbine commitments, asset impairments, and
      restructuring charges

- 

55,000 

- 

    Other operation and maintenance

569,345 

640,952 

(11.2)

  Decommissioning

34,542 

36,337 

(4.9)

  Taxes other than income taxes

98,173 

95,078 

3.3 

  Depreciation and amortization

219,221 

232,188 

(5.6)

  Other regulatory (credits) - net

(5,067)

(33,601)

(84.9)

     Total

2,341,348 

2,093,659 

11.8 

Operating Income

311,069 

209,569 

48.4 

Other Income:

  Allowance for equity funds used during  construction

16,322 

11,010 

48.2 

  Interest and dividend income

34,857 

34,659 

0.6 

  Equity in earnings (loss) of unconsolidated equity affiliates

(21,028)

(46,820)

55.1 

  Miscellaneous - net

9,650 

(4,486)

315.1 

     Total

39,801 

(5,637)

806.1 

Interest and Other Charges:

  Interest on long-term debt

116,185 

114,224 

1.7 

  Other interest - net

21,208 

14,416 

47.1 

  Allowance for borrowed funds used during construction

(9,587)

(7,222)

32.7 

     Total

127,806 

121,418 

5.3 

Income From Continuing Operations Before Income Taxes

223,064 

82,514 

170.3 

Income Taxes

93,113 

(80,662)

215.4 

Income From Continuing Operations

129,951 

163,176 

(20.4)

Loss From Discontinued Operations (net of taxes of ($17,995) and ($399))

(33,508)

(2,202)

1,421.7 

Consolidated Net Income

96,443 

160,974 

(40.1)

Preferred dividend requirements of subsidiaries and other

6,210 

6,037 

2.9 

Earnings Applicable to Common Stock

$90,233 

$154,937 

(41.8)

Earnings Per Average Common Share (from continuing operations):

  Basic

$0.59 

$0.71 

(16.9)

  Diluted

$0.59 

$0.69 

(14.5)

Loss Per Average Common Share (from discontinued operations):

  Basic

($0.16)

($0.01)

1,500.0 

  Diluted

($0.16)

($0.01)

1,500.0 

Earnings Per Average Common Share:

  Basic

$0.43 

$0.70 

(38.6)

  Diluted

$0.43 

$0.68 

(36.8)

Average Number of Common Shares Outstanding - Basic

207,495,740 

221,650,353 

Average Number of Common Shares Outstanding - Diluted

211,267,191 

226,218,648 

 

Entergy Corporation

Consolidated Income Statement

Twelve Months Ended December 31

(in thousands)

2005

2004

% Inc/(Dec)

(unaudited)

Operating Revenues:

  Domestic electric

$8,446,830 

$7,932,577 

6.5 

  Natural gas

77,660 

208,499 

(62.8)

  Competitive businesses

1,581,757 

1,544,445 

2.4 

     Total

10,106,247 

9,685,521 

4.3 

Operating Expenses:

  Operation and maintenance:

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

2,176,015 

2,488,208 

(12.5)

    Purchased power

2,521,247 

1,701,610 

48.2 

    Nuclear refueling outage expenses

162,653 

166,072 

(2.1)

    Provision for turbine commitments, asset impairments, and
     restructuring charges

- 

55,000 

- 

    Other operation and maintenance

2,122,206 

2,268,332 

(6.4)

  Decommissioning

143,121 

149,529 

(4.3)

  Taxes other than income taxes

382,521 

403,635 

(5.2)

  Depreciation and amortization

856,377 

893,574 

(4.2)

  Other regulatory (credits) - net

(49,882)

(90,611)

(44.9)

     Total

8,314,258 

8,035,349 

3.5 

Operating Income

1,791,989 

1,650,172 

8.6 

Other Income:

  Allowance for equity funds used during construction

45,736 

39,582 

15.5 

  Interest and dividend income

150,479 

109,635 

37.3 

  Equity in earnings (loss) of unconsolidated equity affiliates

985 

(78,727)

101.3 

  Miscellaneous - net

14,251 

55,509 

(74.3)

     Total

211,451 

125,999 

67.8 

Interest and Other Charges:

  Interest on long-term debt

440,334 

463,384 

(5.0)

  Other interest - net

64,646 

40,133 

61.1 

  Allowance for borrowed funds used during construction

(29,376)

(25,741)

14.1 

      Total

475,604 

477,776 

(0.5)

Income From Continuing Operations Before Income Taxes

1,527,836 

1,298,395 

17.7 

Income Taxes

559,284 

365,305 

53.1 

Income From Continuing Operations

968,552 

933,090 

3.8 

Loss From Discontinued Operations (net of taxes of ($24,051) and $603)

(44,794)

(41)

- 

Consolidated Net Income

923,758 

933,049 

(1.0)

Preferred dividend requirements of subsidiaries and other

25,427 

23,525 

8.1 

Earnings Applicable to Common Stock

$898,331 

$909,524 

(1.2)

Earnings Per Average Common Share (from continuing operations):

  Basic

$4.49 

$4.01 

12.0 

  Diluted

$4.40 

$3.93 

12.0 

Loss Per Average Common Share (from discontinued operations):

  Basic

($0.21)

- 

- 

  Diluted

($0.21)

- 

- 

Earnings Per Average Common Share:

  Basic

$4.27 

$4.01 

6.5 

  Diluted

$4.19 

$3.93 

6.6 

Average Number of Common Shares Outstanding - Basic

210,141,887 

226,863,758 

Average Number of Common Shares Outstanding - Diluted

214,441,362 

231,193,686 

 

Entergy Corporation

Utility Electric Energy Sales & Customers
Excluding Entergy New Orleans

Three Months Ended December 31

2005

2004

%
Change

%
Weather-Adjusted

(Millions of kwh)

Electric Energy Sales:

Residential

7,212

7,010

2.9

(2.1)

Commercial

5,894

6,042

(2.4)

(4.2)

Governmental

383

386

(0.8)

(0.3)

Industrial

8,778

10,268

(14.5)

(14.5)

    Total to Ultimate Customers

22,267

23,706

(6.1)

(8.0)

Wholesale

1,549

1,795

(13.7)

    Total Sales

23,816

25,501

(6.6)

Twelve Months Ended December 31

2005

2004

%
Change

%
Weather-Adjusted

(Millions of kwh)

Electric Energy Sales:

Residential

31,569

30,757

2.6

(1.1)

Commercial

24,401

24,152

1.0

(0.7)

Governmental

1,568

1,543

1.6

1.6

Industrial

37,615

39,718

(5.3)

(5.3)

    Total to Ultimate Customers

95,153

96,170

(1.1)

(2.7)

Wholesale

7,435

8,599

(13.5)

    Total Sales

102,588

104,769

(2.1)

December 31

2005

2004

%
Change

Electric Customers (End of period):

Residential

2,111,421

2,117,444

(0.3)

Commercial

296,539

301,422

(1.6)

Governmental

12,467

13,265

(6.0)

Industrial

39,287

41,674

(5.7)

    Total Ultimate Customers

2,459,714

2,473,805

(0.6)
Wholesale

33

42

(21.4)

    Total Customers

2,459,747

2,473,847

(0.6)