EX-99.2 3 a06011992.htm a06011992.htm
Exhibit 99.2

 
 
Entergy
639 Loyola Avenue
New Orleans, LA  70113
   
   
News
Release
 

Date:
 Nov. 1, 2011  
     
For Release:
Immediately
  
     
Contact:
Michael Burns (News Media)
(504) 576-4238
mburns@entergy.com
Paula Waters (Investor Relations)
(504) 576-4380
pwater1@entergy.com

Entergy Reports Third Quarter Earnings

New Orleans, La.  Entergy Corporation (NYSE: ETR) today reported third quarter 2011 as-reported earnings of $628.1 million, or $3.53 per share, compared with $492.9 million, or $2.62 per share, for third quarter 2010. On an operational basis, Entergy’s third quarter 2011 earnings were $628.1 million, or $3.53 per share, compared with $518.1 million, or $2.76 per share, in third quarter 2010.
 
Consolidated Earnings – Reconciliation of GAAP* to Non-GAAP Measures
Third Quarter and Year-to-Date 2011 vs. 2010
(Per share in U.S. $)
            
 
Third Quarter
Year-to-Date
 
2011
2010
Change
2011
2010
Change
As-Reported Earnings
3.53
2.62
0.91
6.67
5.38
1.29
Less Special Items
-
(0.14)
0.14
-
(0.40)
0.40
Operational Earnings
3.53
2.76
0.77
6.67
5.78
0.89
      *GAAP refers to United States generally accepted accounting principles.

Operational Earnings Highlights for Third Quarter 2011
 
·  
Utility results were higher due primarily to a tax settlement that resulted in a significant decrease in income tax expense, which was partially offset by a regulatory charge to reflect the portion of the tax benefit that will be shared with Entergy Louisiana, LLC’s customers.
 
 
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Entergy Reports Third Quarter Earnings
Page 2
Nov. 1, 2011

 

 
·  
Entergy Wholesale Commodities earnings decreased as a result of lower net revenue, due primarily to lower pricing associated with the nuclear fleet, and a higher effective income tax rate.
·  
Parent & Other results declined due primarily to higher income tax expense on Parent & Other activities.
 
 
“Legal and regulatory proceedings dominated the quarter. In September, the trial on our federal lawsuit to prevent the state of Vermont from forcing Vermont Yankee to close in March of next year, despite the fact that the NRC has extended the license, was completed. A ruling from the District Court could be issued at any time. In New York, the hearing before Administrative Law Judges of the New York State Department of Environmental Conservation is under way and expected to continue into 2012,” said J. Wayne Leonard, Entergy’s chairman and chief executive officer. “While we don’t expect final resolution - that is, appeals are always likely - for either of these issues in the immediate future, we are now moving out of the political arena and into the judicial system. Facts matter and we believe in our cases.
 
“The Utility also continues to make progress on key initiatives. The Arkansas Public Service Commission issued an order late last week in its proceeding on post-System Agreement transition for Entergy Arkansas, Inc. The order provides needed clarity, affirms that an RTO is the right answer, and opens the pathway for the other operating companies to move forward. We will submit a change of control filing in Arkansas to join MISO within the next 30 days.”
 
Other Business Highlights
 
·  
Entergy Gulf States Louisiana, L.L.C., Entergy Louisiana and Entergy New Orleans, Inc. received orders resolving their 2010 test year formula rate plan filings.
 
 
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Entergy Reports Third Quarter Earnings
Page 3
Nov. 1, 2011

 

 
·  
Entergy Wholesale Commodities announced its agreement to acquire the Rhode Island State Energy Center, a 583-megawatt combined-cycle gas turbine facility, including a planned 33-megawatt uprate, for $346 million.
·  
Entergy was recognized for the 10th consecutive year as a leader in sustainability by the Dow Jones Sustainability Index. In addition, the Carbon Disclosure Project named Entergy to the Carbon Disclosure Leadership Index for the seventh time in eight years.
 
Entergy will host a teleconference to discuss this release at 10 a.m. CT on Tuesday, Nov. 1, 2011, with access by telephone, (719) 457-2080, confirmation code 4650540. The call and presentation slides can also be accessed via Entergy’s website at www.entergy.com. A replay of the teleconference will be available through Nov. 8, 2011, by dialing (719) 457-0820, confirmation code 4650540. The replay will also be available on Entergy’s website at www.entergy.com.
 
Utility
 
In third quarter 2011, Utility’s as-reported and operational earnings were $524.1 million, or $2.95 per share, compared to $333.6 million, or $1.78 per share, on the same bases in third quarter 2010. Earnings in the current quarter reflect a tax settlement with the Internal Revenue Service entered into in August 2011 that resulted in a significant decrease in income tax expense. The majority of the income tax expense effect from the IRS settlement was recorded at the Utility; there was also some effect at the other business segments. Utility income tax expense was also lower in the current quarter due to the absence of the net effect of consolidated income tax adjustments across the Entergy companies in the third quarter of last year, which net to zero on a consolidated basis.
 
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Entergy Reports Third Quarter Earnings
Page 4
Nov. 1, 2011

 

A portion of the Utility tax benefit from the IRS settlement will be shared with Entergy Louisiana customers, consistent with the settlement approved by the Louisiana Public Service Commission in October 2011. As a result, the decrease in Utility income tax expense was partially offset by a decrease in net revenue attributed to the regulatory charge recorded to reflect the customer sharing arrangement. Excluding the regulatory charge, net revenue was slightly lower than the prior year. Weather was significantly warmer than normal in the third quarter of both years. Also contributing to the higher earnings was lower non-fuel operation and maintenance expense due primarily to a reduction in compensation and benefit expenses. These benefits were partially offset by higher depreciation and amortization expense from higher depreciable plant balances.
 
Residential sales in third quarter 2011, on a weather-adjusted basis, increased 0.1 percent compared to third quarter 2010. Commercial and governmental sales, on a weather-adjusted basis, increased 0.3 percent quarter over quarter. Industrial sales in the third quarter increased 7.3 percent compared to the same quarter of 2010.
 
Overall retail sales growth, on a weather-adjusted basis, was 2.6 percent in the third quarter of this year driven by strong industrial sales. Entergy’s service territory continues to benefit from expansions. Entergy Louisiana, Entergy Texas, Inc. and Entergy Mississippi, Inc. had the strongest industrial sales growth at 15.1 percent, 9.5 percent, and 3.1 percent, respectively.
 
Entergy Wholesale Commodities
 
Entergy Wholesale Commodities earned $130.2 million, or 73 cents per share, on as-reported and operational bases in third quarter 2011 compared to as-reported earnings of $143.0 million, or 76 per cents per share, and operational earnings of $168.2 million, or 90 cents per share, in third quarter 2010. Entergy Wholesale Commodities operational earnings declined partially as a result of lower net revenue driven by lower energy and capacity pricing on its nuclear fleet. The effect of lower pricing was partially offset by higher volume as a result of fewer refueling and unplanned nuclear outage days. A higher effective income tax rate also contributed to the Entergy Wholesale Commodities earnings decline. The higher income tax expense was due primarily to the absence of the net effect of consolidated income tax adjustments across the Entergy companies in the third quarter of last year, which net to zero on a consolidated basis. These items were partially offset by lower non-fuel operation and maintenance expense attributable primarily to lower compensation and benefit expenses and the absence of a write-off of capitalized engineering costs associated with a potential uprate project in the previous period.
 
-more-
 
 
Entergy Reports Third Quarter Earnings
Page 5
Nov. 1, 2011

 

Parent & Other
 
Parent & Other reported a loss of $26.3 million, or 15 cents per share, on as-reported and operational bases in third quarter 2011, compared to earnings of $16.2 million, or 8 cents per share, on the same bases in the third quarter of last year. Higher income tax expense on Parent & Other activities was the primary factor driving results for the quarter. Income tax expense was higher due to the absence of a reversal of an income tax reserve recorded in the third quarter of last year. The absence of the net effect of consolidated income tax adjustments also contributed.
 
Earnings Guidance
 
As a result of the Internal Revenue Service and LPSC settlements discussed above, Entergy revised its 2011 as-reported and operational earnings guidance to a range of $7.15 to $7.65 per share. Entergy’s previous guidance range was $6.35 to $6.85 per share on both as-reported and operational bases. The midpoint of Entergy’s 2011 earnings guidance is adjusted only to reflect the year-to-date income tax expense adjustments above the level assumed in the original guidance, including the IRS settlement agreement, net of amount to be shared with Entergy Louisiana’s customers.
 
-more-
 
 
Entergy Reports Third Quarter Earnings
Page 6
Nov. 1, 2011

 

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 $11 billion and approximately 15,000 employees.
 
Additional information regarding Entergy’s quarterly results of operations, regulatory proceedings and other operations is available in Entergy’s investor news release dated Nov. 1, 2011, 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 website 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, 2010; (ii) Entergy’s Form 10-Q for the quarters ended March 31, 2011 and June 30, 2011; and (iii) Entergy’s other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with rate proceedings, formula rate plans and other cost recovery mechanisms; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory risks, including any changes resulting from the nuclear crisis in Japan following its catastrophic earthquake and tsunami; (e) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; and (f) conditions in commodity and capital markets during the periods covered by the forward-looking statements, in addition to other factors described elsewhere in this release and in subsequent securities filings.


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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 2011 vs. 2010
(Per share in U.S. $)
 
Third Quarter
Year-to-Date
 
2011
2010
Change
2011
2010
Change
As-Reported
            
Utility
2.95
1.78
1.17
5.24
3.68
1.56
Entergy Wholesale Commodities
0.73
0.76
(0.03)
1.78
1.77
0.01
Parent & Other
(0.15)
0.08
(0.23)
(0.35)
(0.07)
(0.28)
  Consolidated As-Reported Earnings
3.53
2.62
0.91
6.67
5.38
1.29
             
Less Special Items
           
Utility
-
-
-
-
-
-
Entergy Wholesale Commodities
-
(0.14)
0.14
-
(0.50)
0.50
Parent & Other
-
-
-
-
0.10
(0.10)
  Consolidated Special Items
-
(0.14)
0.14
-
(0.40)
0.40
             
Operational
            
Utility
2.95
1.78
1.17
5.24
3.68
1.56
Entergy Wholesale Commodities
0.73
0.90
(0.17)
1.78
2.27
(0.49)
Parent & Other
(0.15)
0.08
(0.23)
(0.35)
(0.17)
(0.18)
  Consolidated Operational Earnings
3.53
2.76
0.77
6.67
5.78
0.89
             





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Entergy Corporation
  
Consolidated Income Statement
  
Three Months Ended September 30
  
(in thousands)
  
             
             
   
2011
    
2010
  
   
(unaudited)
  
Operating Revenues:
            
     Electric
   $ 2,733,601     $ 2,638,752  
     Natural gas
     26,439       27,263  
     Competitive businesses
     635,513       666,161  
                      Total
     3,395,553       3,332,176  
Operating Expenses:
                
    Operation and maintenance:
               
         Fuel, fuel-related expenses, and gas purchased for resale
     849,982       748,863  
         Purchased power
     475,335       484,694  
         Nuclear refueling outage expenses
     64,566       64,885  
         Other operation and maintenance
    708,821       808,688  
     Decommissioning
     56,467       53,380  
     Taxes other than income taxes
     152,044       138,217  
     Depreciation and amortization
     283,581       264,621  
     Other regulatory charges (credits) – net
     203,848       (1,814 )
                      Total
     2,794,644       2,561,534  
Operating Income
    600,909       770,642  
Other Income (Deductions):
                
     Allowance for equity funds used during construction
    21,516       15,064  
     Interest and investment income
     33,238       38,705  
     Miscellaneous – net
     (14,137 )     (14,748 )
                      Total
     40,617       39,021  
Interest Expense:
                
     Interest expense
     137,301       136,075  
     Allowance for borrowed funds used during construction
     (9,713 )     (8,949 )
                      Total
     127,588       127,126  
Income Before Income Taxes
     513,938       682,537  
Income Taxes
     (119,131 )     184,636  
Consolidated Net Income
    633,069       497,901  
Preferred Dividend Requirements of Subsidiaries
    5,015       5,015  
Net Income Attributable to Entergy Corporation
  $ 628,054     $ 492,886  
                 
                 
Earnings Per Average Common Share
                
     Basic
   $ 3.55     $ 2.65  
     Diluted
   $ 3.53     $ 2.62  
                 
Average Number of Common Shares Outstanding – Basic
     176,950,469       185,962,431  
Average Number of Common Shares Outstanding – Diluted
     177,723,020       187,777,172  


 
 
 


Entergy Corporation
  
Consolidated Income Statement
  
Nine Months Ended September 30
  
(in thousands)
  
             
             
   
2011
    
2010
  
   
(unaudited)
  
Operating Revenues:
            
     Electric
   $ 6,811,538     $ 6,859,791  
     Natural gas
     126,453       154,426  
     Competitive businesses
     1,802,050       1,940,256  
                      Total
     8,740,041       8,954,473  
Operating Expenses:
                
    Operation and maintenance:
               
         Fuel, fuel-related expenses, and gas purchased for resale
     1,921,007       1,939,077  
         Purchased power
     1,289,180       1,376,055  
         Nuclear refueling outage expenses
     191,517       191,395  
         Other operation and maintenance
    2,077,066       2,211,382  
     Decommissioning
     167,229       157,423  
     Taxes other than income taxes
     406,493       400,597  
     Depreciation and amortization
     812,672       789,392  
     Other regulatory charges (credits) – net
     204,338       15,555  
                      Total
     7,069,502       7,080,876  
Operating Income
    1,670,539       1,873,597  
Other Income (Deductions):
                
     Allowance for equity funds used during construction
    59,558       45,990  
     Interest and investment income
     95,906       121,869  
     Miscellaneous – net
     (40,498 )     (32,050 )
                      Total
     114,966       135,809  
Interest Expense:
                
     Interest expense
     409,484       463,454  
     Allowance for borrowed funds used during construction
     (27,397 )     (27,274 )
                      Total
     382,087       436,180  
Income Before Income Taxes
     1,403,418       1,573,226  
Income Taxes
     196,072       536,227  
Consolidated Net Income
    1,207,346       1,036,999  
Preferred Dividend Requirements of Subsidiaries
    15,046       15,048  
Net Income Attributable to Entergy Corporation
  $ 1,192,300     $ 1,021,951  
                 
                 
Earnings Per Average Common Share
                
     Basic
   $ 6.70     $ 5.44  
     Diluted
   $ 6.67     $ 5.38  
                 
Average Number of Common Shares Outstanding – Basic
     177,857,667       187,968,582  
Average Number of Common Shares Outstanding – Diluted
     178,805,215       189,914,439  


 
 
 



Entergy Corporation
Utility Electric Energy Sales & Customers
             
Three Months Ended September 30
                 
   
2011
  
2010
  
%
 Change
  
%
Weather-Adjusted
   
(Millions of kWh)
        
Electric Energy Sales:
                
Residential
  
12,376
  
12,365
  
0.1
  
0.1
Commercial
  
8,655
  
8,660
  
(0.1)
  
0.1
Governmental
  
689
  
681
  
1.2
  
2.2
Industrial
  
11,024
  
10,276
  
7.3
  
7.3
    Total to Ultimate Customers
  
32,744
  
31,982
  
2.4
  
2.6
Wholesale
 
1,038
  
1,063
  
(2.4)
    
    Total Sales
  
33,782
  
33,045
  
2.2
    
                 
                 
Nine Months Ended September 30
                 
   
2011
  
2010
  
%
 Change
  
%
Weather-Adjusted
   
(Millions of kWh)
        
Electric Energy Sales:
                
Residential
  
29,411
  
29,715
  
(1.0)
  
0.4
Commercial
  
22,048
  
21,935
  
0.5
  
(0.1)
Governmental
  
1,875
  
1,854
  
1.2
  
0.8
Industrial
  
30,681
  
28,871
  
6.3
  
6.3
    Total to Ultimate Customers
  
84,015
  
82,375
  
2.0
  
2.4
Wholesale
 
3,021
  
3,351
  
(9.8)
    
    Total Sales
  
87,036
  
85,726
  
1.5
    
                 
                 
September 30
                 
   
2011
  
2010
  
%
Change
    
Electric Customers  (End of period):
              
Residential
  
2,369,437
  
2,356,216
  
0.6
    
Commercial
  
337,558
  
334,642
  
0.9
    
Governmental
  
16,345
  
16,166
  
1.1
    
Industrial
  
47,575
  
47,622
  
(0.1)
    
    Total Ultimate Customers
  
2,770,915
  
2,754,646
  
0.6
    
Wholesale    23   24    (4.2)    
    Total Customers
  
2,770,938
  
2,754,670
  
0.6