EX-99.2 3 a04209992.htm MEDIA RELEASE a04209992.htm
Exhibit 99.2
 
 
 
 
Entergy
639 Loyola Avenue
New Orleans, LA  70113
 
News
Release

 
Date: Aug. 4, 2009  
     
For Release: Immediately  
     
Contact:
Chanel Lagarde (News Media)
(504) 576-4238
clagar1@entergy.com
Michele Lopiccolo (Investor Relations)
(504) 576-4879
mlopicc@entergy.com


Entergy Reports Second Quarter Earnings

New Orleans, La.  Entergy Corporation (NYSE:ETR) today reported second quarter 2009 as-reported earnings of $226.8 million, or $1.14 per share, compared with $271.0 million, or $1.37 per share, for second quarter 2008. On an operational basis, Entergy’s second quarter 2009 earnings were $244.0 million, or $1.23 per share, compared with $289.2 million, or $1.46 per share, in second quarter 2008.
 
 
 
Consolidated Earnings – Reconciliation of GAAP to Non-GAAP Measures
Second Quarter and Year-to-Date 2009 vs. 2008
(Per share in U.S. $)
 
Second Quarter
Year-to-Date
 
2009
2008
Change
2009
2008
Change
As-Reported Earnings
1.14
1.37
(0.23)
2.35
2.93
(0.58)
Less Special Items
(0.09)
(0.09)
-
(0.17)
(0.09)
(0.08)
Operational Earnings
1.23
1.46
(0.23)
2.52
3.02
(0.50)

*GAAP refers to United States generally accepted accounting principles.

Operational Earnings Highlights for Second Quarter 2009
 
·    
Utility, Parent & Other’s results were modestly lower due to lower net revenue and higher expenses that offset the benefit of lower income tax expense during the quarter.
·    
Entergy Nuclear’s earnings decreased as a result of lower production due to additional refueling and unplanned outage days and a significant impairment recorded on decommissioning trust fund investments.
·    
Entergy’s Non-Nuclear Wholesale Assets results improved primarily as a result of lower income tax expense during the quarter.
 
“While financial and commodity markets present near-term challenges, we remain committed to executing on the opportunities we have at hand and creating new ones consistent with the opportunities of a changed economic climate,” said J. Wayne Leonard, Entergy’s chairman and chief executive officer. “At the same time, we are very attentive to managing risks with uncertainties around the economy, markets, pending legislation and new technologies.”
 
Other Business Highlights
 
·    
Entergy Texas, Inc. reached an agreement in principle that should resolve all issues in its storm recovery case through an unopposed settlement agreement. Legislation was also enacted, providing long sought clarity, mandating that all activities relating to Transition to Competition be ceased.
·    
Entergy Nuclear received a pair of Top Industry Practice awards from the Nuclear Energy Institute, out of 14 industry-wide awards presented by the industry trade group each year.
·    
Entergy filed a motion in its New York proceeding on its non-utility nuclear spin-off reorganization proposal requesting procedures and a schedule that would support closing the transaction this year. The Administrative Law Judges ruled that a decision on the motion would come after reviewing the amended petition expected to be filed around Aug. 10, 2009.
 
Entergy will host a teleconference to discuss this release at 10:00 a.m. CDT on Tuesday, Aug. 4, 2009, with access by telephone, 719-457-2080, confirmation code 4219567. The call and presentation slides can also be accessed via Entergy’s Web site at www.entergy.com. A replay of the teleconference will be available for seven days thereafter by dialing 719-457-0820, confirmation code 4219567. The replay will also be available on Entergy’s Web site at www.entergy.com.
 
Utility, Parent & Other
 
In second quarter 2009, Utility, Parent & Other had as-reported earnings of $134.7 million, or 68 cents per share, compared to $123.4 million, or 62 cents per share, in second quarter 2008. On an operational basis, second quarter 2009 earnings were $136.8 million, or 69 cents per share, compared to $141.6 million, or 71 cents per share, in second quarter 2008. Operational results for Utility, Parent & Other in second quarter 2009 reflect lower net revenue driven primarily by a regulatory charge associated with a May 2009 Federal Energy Regulatory Commission (FERC) order. Higher expenses also contributed to lower results in the current quarter. Partially offsetting these items were benefits from lower income tax expense.
 
Residential sales in second quarter 2009, on a weather-adjusted basis, were nearly flat, with only a 0.2 percent decrease compared to second quarter 2008. Commercial and governmental sales, on a weather-adjusted basis, decreased 1.0 percent year over year. Industrial sales in the second quarter were down 9.7 percent compared to the same quarter of 2008.
 
The weak economy affected customer usage across all customer segments, most notably in the industrial sector. Industrial sales in the second quarter 2009 for large customers were led by weaknesses in chemicals, primary metals and refining. Small and mid-sized industrial customers also continue to be negatively affected by overseas competition. Excluding the regulatory charge noted above, net revenue increased modestly in part due to the fact that a significant portion of the industrial customer bill is based on a fixed charge basis that does not vary linearly with volume changes. Also, net revenue included contributions from the warmer-than-normal weather experienced at the end of the second quarter 2009 primarily reflected in unbilled sales.
 
Entergy Nuclear
 
Entergy Nuclear earned $80.2 million, or 40 cents per share, on an as-reported basis and $95.3 million, or 48 cents per share, on an operational basis in second quarter 2009, compared to $143.6 million, or 73 cents per share, on as-reported and operational bases in second quarter 2008. Entergy Nuclear’s earnings decreased as a result of a decline in revenue from lower generation due to additional refueling and unplanned outage days in the current quarter and the scheduled reduction in revenue amortization for the Palisades below-market Power Purchase Agreement. Lower operation and maintenance expense during the quarter partially offset lower revenue. In addition, Entergy Nuclear’s second quarter 2009 earnings reflect a significant impairment on decommissioning trust investments, exceeding the amount recorded in the same period last year. Finally, as-reported results were further reduced by the special item for spin-off dis-synergies.
 
Non-Nuclear Wholesale Assets
 
Entergy’s Non-Nuclear Wholesale Assets business earned $11.9 million, or six cents per share, on both as-reported and operational bases in second quarter 2009 compared to $4.0 million, or two cents per share, a year ago. Business results improved primarily due to lower income tax expense.
 
Outlook
 
As a result of financial market conditions resulting in recognition of additional decommissioning trust impairments, and further decline in power prices for Entergy Nuclear’s open position, Entergy revised its 2009 as-reported earnings guidance to a range of $6.00 to $6.60 per share. The revised as-reported estimate incorporates year-to-date spin-off expenses for outside services, in addition to projected dis-synergies associated with the spin-off of Entergy’s non-utility nuclear business and plans to enter into a nuclear services joint venture. 2009 operational earnings guidance was revised to a range of $6.20 to $6.80 per share. Entergy had previously indicated that should the current economic climate and power prices on Entergy Nuclear’s open position persist for the balance of 2009, earnings could approach the lower end of the then-guidance ranges of $6.56 to $7.16 per share on an as-reported basis and $6.70 to $7.30 per share on an operational basis.
 
Business Separation
 
On Nov. 3, 2007, Entergy’s Board of Directors approved a plan to pursue a separation of the non-utility nuclear business from Entergy’s regulated utility business through a tax-free spin-off of the non-utility nuclear business. Enexus Energy Corporation will be a new, independent publicly traded company. In addition, Entergy and Enexus intend to enter into a nuclear services joint venture, with equal ownership. EquaGen LLC has been selected as the name for the joint venture.
 
Progress achieved since the last quarter update and/or current status includes:
 
·    
Entergy has filed a motion in New York outlining enhancements to the spin-off reorganization proposal and requesting procedures and a schedule to enable the report of the presiding Administrative Law Judges (ALJs) to be issued in time for the New York Public Service Commission (NYPSC) to issue a final order no later than its regularly scheduled November meeting; ALJs have ruled that a decision on Entergy’s motion will be considered after reviewing the company’s amended petition expected to be filed in August
·    
Entergy has received a six month extension of the Nuclear Regulatory Commission’s approval for the spin-off to January 28, 2010
·    
Entergy and Enexus remain in a rolling readiness posture
 
Enexus intends to file a petition in August with the NYPSC addressing amendments to the reorganization proposal to further enhance Enexus’ already robust financial strength and flexibility, including:
 
·    
A $1.0 billion reduction in long-term bonds to $3.5 billion
·    
A commitment to reserve at least $350 million of liquidity
·    
An increase in the initial cash balance left at Enexus to $750 million from the original $250 million
·    
A revised reorganization plan to transfer approximately 20 percent of the Enexus shares to a trust, to be exchanged for Entergy shares on a tax-free basis within a fixed period of time following the spin-off; this exchange is commonly referred to in tax-free reorganizations as a split-off and facilitates the enhancements listed above
 
The state regulatory decisions and financing continue as the critical path items. The rolling readiness posture enables Entergy to execute the spin-off following receipt of regulatory approvals and once the timing is right to access the credit markets, both on acceptable terms.

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 $13 billion and approximately 14,700 employees.
 
Additional information regarding Entergy’s quarterly results of operations, regulatory proceedings, and other operations is available in Entergy’s investor news release dated Aug. 4, 2009, a copy of which has been filed today with the Securities and Exchange Commission on Form 8-K and is available on Entergy’s investor relations Web site at www.entergy.com/investor_relations.
 
-30-

In this news release, and from time to time, Entergy Corporation makes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Except to the extent required by the 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.  There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including (a) those factors discussed in (i) Entergy’s Form 10-K for the year ended December 31, 2008, (ii) Entergy’s Form 10-Q for the quarter ended March 31, 2009, and (iii) Entergy’s other reports and filings made under the Securities Exchange Act of 1934, (b) the uncertainties associated with efforts to remediate the effects of Hurricanes Gustav and Ike and the January 2009 Arkansas ice storm and recovery of costs associated with restoration, and (c) the following transactional factors (in addition to others described elsewhere in this news release and in subsequent securities filings): (i) risks inherent in the contemplated spin-off, joint venture and related transactions (including the level of debt to be incurred by Enexus Energy Corporation and the terms and costs related thereto), (ii) legislative and regulatory actions, and (iii) conditions of the capital markets during the periods covered by the forward-looking statements.  Entergy cannot provide any assurances that the spin-off or any of the proposed transactions related thereto will be completed, nor can it give assurances as to the terms on which such transactions will be consummated.  The transaction is subject to certain conditions precedent, including regulatory approvals and the final approval by the Board of Directors of Entergy.

-more-



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
Second Quarter and Year-to-Date 2009 vs. 2008
(Per share in U.S. $)
 
Second Quarter
Year-to-Date
 
2009
2008
Change
2009
2008
Change
As-Reported
           
Utility, Parent & Other
0.68
0.62
0.06
1.00
1.11
(0.11)
Entergy Nuclear
0.40
0.73
(0.33)
1.32
1.84
(0.52)
Non-Nuclear Wholesale Assets
0.06
0.02
0.04
0.03
(0.02)
0.05
  Consolidated As-Reported Earnings
1.14
1.37
(0.23)
2.35
2.93
(0.58)
             
Less Special Items
           
Utility, Parent & Other
(0.01)
(0.09)
0.08
(0.06)
(0.09)
0.03
Entergy Nuclear
(0.08)
-
(0.08)
(0.11)
-
(0.11)
Non-Nuclear Wholesale Assets
-
-
-
-
-
-
  Consolidated Special Items
(0.09)
(0.09)
-
(0.17)
(0.09)
(0.08)
             
Operational
           
Utility, Parent & Other
0.69
0.71
(0.02)
1.06
1.20
(0.14)
Entergy Nuclear
0.48
0.73
(0.25)
1.43
1.84
(0.41)
Non-Nuclear Wholesale Assets
0.06
0.02
0.04
0.03
(0.02)
0.05
  Consolidated Operational Earnings
1.23
1.46
(0.23)
2.52
3.02
(0.50)
             




Entergy Corporation
 
Consolidated Income Statement
 
Three Months Ended June 30
 
(in thousands)
 
                   
                   
   
2009
   
2008
   
% Inc/(Dec)
 
   
(unaudited)
       
Operating Revenues:
                 
     Electric
  $ 1,918,446     $ 2,524,222       (24.0 )
     Natural gas
    28,834       53,985       (46.6 )
     Competitive businesses
    573,509       686,064       (16.4 )
                      Total
    2,520,789       3,264,271       (22.8 )
Operating Expenses:
                       
    Operation and maintenance:
                       
         Fuel, fuel-related expenses, and gas purchased for resale
    521,071       726,836       (28.3 )
         Purchased power
    322,919       748,203       (56.8 )
         Nuclear refueling outage expenses
    60,234       55,840       7.9  
         Other operation and maintenance
    696,345       710,309       (2.0 )
     Decommissioning
    49,307       46,816       5.3  
     Taxes other than income taxes
    122,401       125,942       (2.8 )
     Depreciation and amortization
    260,689       247,977       5.1  
     Other regulatory charges – net
    13,327       34,239       (61.1 )
                      Total
    2,046,293       2,696,162       (24.1 )
Operating Income
    474,496       568,109       (16.5 )
Other Income (Deductions):
                       
     Allowance for equity funds used during construction
    15,782       9,085       73.7  
     Interest and dividend income
    58,892       47,803       23.2  
     Other than temporary impairment losses
    (69,203 )     (24,404 )     183.6  
     Equity in earnings (loss) of unconsolidated equity affiliates
    1,369       (2,572 )     (153.2 )
     Miscellaneous - net
    (14,723 )     3,916       (476.0 )
                      Total
    (7,883 )     33,828       (123.3 )
Interest and Other Charges:
                       
     Interest on long-term debt
    125,157       119,903       4.4  
     Other interest - net
    27,487       28,030       (1.9 )
     Allowance for borrowed funds used during construction
    (8,483 )     (4,937 )     71.8  
                      Total
    144,161       142,996       0.8  
Income Before Income Taxes
    322,452       458,941       (29.7 )
Income Taxes
    90,641       183,012       (50.5 )
Consolidated Net Income
    231,811       275,929       (16.0 )
Preferred Dividend Requirements of Subsidiaries 
    4,998       4,975       0.5  
Net Income Attributable to Entergy Corporation 
  $ 226,813     $ 270,954       (16.3 )
                         
                         
Earnings Per Average Common Share
                       
     Basic
  $ 1.16     $ 1.42       (18.3 )
     Diluted
  $ 1.14     $ 1.37       (16.8 )
                         
Average Number of Common Shares Outstanding - Basic
    196,105,002       191,326,928          
Average Number of Common Shares Outstanding - Diluted
    198,243,169       197,864,459          




Entergy Corporation
 
Consolidated Income Statement
 
Six Months Ended June 30
 
(in thousands)
 
                   
                   
   
2009
   
2008
   
% Inc/(Dec)
 
   
(unaudited)
       
Operating Revenues:
                 
     Electric
  $ 3,945,363     $ 4,570,449       (13.7 )
     Natural gas
    102,884       143,380       (28.2 )
     Competitive businesses
    1,261,654       1,415,176       (10.8 )
                      Total
    5,309,901       6,129,005       (13.4 )
Operating Expenses:
                       
    Operation and maintenance:
                       
         Fuel, fuel-related expenses, and gas purchased for resale
    1,367,060       1,267,337       7.9  
         Purchased power
    646,174       1,368,845       (52.8 )
         Nuclear refueling outage expenses
    117,013       107,098       9.3  
         Other operation and maintenance
    1,341,389       1,321,577       1.5  
     Decommissioning
    98,050       92,812       5.6  
     Taxes other than income taxes
    256,798       234,513       9.5  
     Depreciation and amortization
    518,541       492,962       5.2  
     Other regulatory charges (credits) – net
    (16,147 )     69,519       (123.2 )
                      Total
    4,328,878       4,954,663       (12.6 )
Operating Income
    981,023       1,174,342       (16.5 )
Other Income (Deductions):
                       
     Allowance for equity funds used during construction
    32,730       18,371       78.2  
     Interest and dividend income
    105,278       105,740       (0.4 )
     Other than temporary impairment losses
    (84,939 )     (28,060 )     202.7  
     Equity in loss of unconsolidated equity affiliates
    (1,758 )     (3,501 )     (49.8 )
     Miscellaneous - net
    (24,895 )     (7,640 )     225.9  
                      Total
    26,416       84,910       (68.9 )
Interest and Other Charges:
                       
     Interest on long-term debt
    253,123       243,047       4.1  
     Other interest - net
    46,780       60,567       (22.8 )
     Allowance for borrowed funds used during construction
    (18,294 )     (10,053 )     82.0  
                      Total
    281,609       293,561       (4.1 )
Income Before Income Taxes
    725,830       965,691       (24.8 )
Income Taxes
    253,686       376,015       (32.5 )
Consolidated Net Income
    472,144       589,676       (19.9 )
Preferred Dividend Requirements of Subsidiaries 
    9,996       9,973       0.2  
Net Income Attributable to Entergy Corporation 
  $ 462,148     $ 579,703       (20.3 )
                         
                         
Earnings Per Average Common Share
                       
     Basic
  $ 2.38     $ 3.02       (21.2 )
     Diluted
  $ 2.35     $ 2.93       (19.8 )
                         
Average Number of Common Shares Outstanding - Basic
    194,359,001       191,983,266          
Average Number of Common Shares Outstanding - Diluted
    198,150,768       198,101,863          




Entergy Corporation
Utility Electric Energy Sales & Customers
             
Three Months Ended June 30
                 
   
2009
 
2008
 
%
 Change
 
%
Weather-Adjusted
   
(Millions of kwh)
       
Electric Energy Sales:
               
Residential
 
7,100
 
7,372
 
(3.7)
 
(0.2)
Commercial
 
6,518
 
6,688
 
(2.5)
 
(1.0)
Governmental
 
577
 
587
 
(1.7)
 
(1.4)
Industrial
 
8,790
 
9,730
 
(9.7)
 
(9.7)
    Total to Ultimate Customers
 
22,985
 
24,377
 
(5.7)
 
(4.3)
Wholesale
 
1,313
 
1,440
 
(8.8)
   
    Total Sales
 
24,298
 
25,817
 
(5.9)
   
                 
                 
                 
                 
Six Months Ended June 30
   
2009
 
2008
 
%
 Change
 
%
Weather-Adjusted
   
(Millions of kwh)
       
Electric Energy Sales:
               
Residential
 
14,992
 
15,384
 
(2.5)
 
(1.1)
Commercial
 
12,711
 
12,926
 
(1.7)
 
(1.1)
Governmental
 
1,140
 
1,155
 
(1.3)
 
(1.5)
Industrial
 
16,929
 
19,107
 
(11.4)
 
(11.4)
    Total to Ultimate Customers
 
45,772
 
48,572
 
(5.8)
 
(5.2)
Wholesale
 
2,700
 
2,729
 
(1.1)
   
    Total Sales
 
48,472
 
51,301
 
(5.5)
   
                 
                 
                 
                 
June 30
                 
   
2009
 
2008
 
%
Change
   
Electric Customers  (End of period):
             
Residential
 
2,330,337
 
2,311,624
 
0.8
   
Commercial
 
330,891
 
328,127
 
0.8
   
Governmental
 
15,523
 
15,318
 
1.3
   
Industrial
 
43,864
 
45,427
 
(3.4)
   
    Total Ultimate Customers
 
2,720,615
 
2,700,496
 
0.7
   
Wholesale
 
33
 
32
 
 3.1
   
    Total Customers
 
2,720,648
 
2,700,528
 
0.7