EX-99.2 3 a05314992.htm a05314992.htm
 
Exhibit 99.2

 
  Entergy
639 Loyola Avenue
New Orleans, LA  70113
   
 
 
 
News
Release
 
 
 

 
Date:
July 29, 2014  
     
For Release:
Immediately  
     
Contact:
Shona Sabnis (Media)
(504) 576-4238
ssabnis@entergy.com
Paula Waters (Investor Relations)
(504) 576-4380
pwater1@entergy.com


Entergy Reports Second Quarter Earnings
 
Improved EWC fleet performance and industrial sales growth at Utility highlight quarter
 
New Orleans, La. Entergy Corporation (NYSE: ETR) today reported second quarter 2014 as-reported earnings of $189.4 million, or $1.05 per share, compared with $163.7 million, or 92 cents per share, for second quarter 2013. Operational earnings per share were 10 percent higher than the same quarter a year ago. On an operational basis, Entergy’s second quarter 2014 earnings were $200.3 million, or $1.11 per share, compared with $179.7 million, or $1.01 per share, in second quarter 2013.
 
“Our focus on operational excellence allowed us to continue to deliver on our commitments in the second quarter. At the Utility, we saw strong quarter-over-quarter industrial sales growth of 5.3 percent, and at Entergy Wholesale Commodities, solid performance was driven largely by improved fleet operations and no refueling outages, which allowed us to provide extended periods of uninterrupted power to the market,” said Entergy Chairman and Chief Executive Officer Leo Denault. “These results are further evidence of the progress we’ve made on many fronts over the past 18 months. The state of Entergy’s business is strong.”

-more-
 
 

 
Entergy Reports Second Quarter Earnings
Page 2
July 29, 2014



Consolidated Earnings – Reconciliation of GAAP to Non-GAAP Measures
Second Quarter and Year-to-Date 2014 vs. 2013
(Per share in U.S. $)
           
 
Second Quarter
Year-to-Date
 
2014
2013
Change
2014
2013
Change
As-Reported Earnings
1.05
0.92
0.13
3.29
1.82
1.47
Less Special Items
(0.06)
(0.09)
0.03
(0.11)
(0.13)
0.02
Operational Earnings
1.11
1.01
0.10
3.40
1.95
1.45
       *GAAP refers to United States generally accepted accounting principles.

Operational Earnings Per Share Highlights for Second Quarter 2014
 
·  
Entergy Wholesale Commodities earnings increased, driven by higher net revenue, and partially offset by higher income tax and depreciation expenses.
·  
Utility results were essentially flat. Higher net revenue and lower non-fuel operation and maintenance expense were offset by higher depreciation expense and a higher effective income tax rate.
·  
Parent & Other results matched the prior period.
 
Other Business Highlights
 
·  
River Bend was rated in the “excellence” category as compared to peers.
·  
Since June, the Utility has signed economic development projects totaling approximately 100 megawatts.
·  
J.D. Power’s 2014 satisfaction study of electric utility residential customers results show that all Entergy utility operating companies improved their performance by several points over last year.
·  
Corporate Responsibility Magazine named Entergy one of America’s 100 Best Corporate Citizens.
 
 
-more-
 
 

 
Entergy Reports Second Quarter Earnings
Page 3
July 29, 2014


A teleconference will be held at 10 a.m. CDT on Tuesday, July 29, 2014, to discuss Entergy’s second quarter 2014 earnings announcement and the company’s financial performance. The teleconference may be accessed by visiting Entergy’s website at www.entergy.com or by dialing (719) 325-2115, confirmation code 6761108, no more than 15 minutes prior to the start of the call. The presentation slides are also on Entergy’s website concurrent with this release, which was issued before market open on the day of the call. A replay of the teleconference will be available on Entergy’s website at www.entergy.com and by telephone. The telephone replay will be available through noon CDT on Tuesday, Aug. 5, 2014, by dialing (719) 457-0820, confirmation code 6761108. This release and presentation slides are also available on the Entergy Investor Relations mobile web app at enter.gy/ir.
 
Utility
 
In second quarter 2014, Utility earnings were $207.8 million, or $1.15 per share, on an as-reported basis and $211.3 million, or $1.17 per share, on an operational basis, compared to $196.2 million, or $1.10 per share, on an as-reported basis and $211.1 million, or $1.18 per share, on an operational basis for second quarter 2013. Higher net revenue and lower non-fuel O&M expense were offset by higher depreciation expense and a higher effective income tax rate.
 
The increase in Utility net revenue was driven largely by pricing adjustments from recent rate actions. The contribution attributable to volume was slightly negative. Higher weather-adjusted billed sales volume, particularly sales to industrial customers, was offset by the effects of weather, including milder weather in late June 2014 reflected in the unbilled period.
 
Billed retail sales increased 2.6 percent on a weather-adjusted basis. The increase was attributable largely to 5.3 percent growth in the industrial customer class. The industrial increase was led by the refining, chemicals and small industrial segments and was aided by expansions. Growth in Entergy Texas, Inc. and Entergy Gulf States Louisiana, L.L.C. service areas accounted for approximately 85 percent of the total industrial quarter-over-quarter increase.
 
-more-
 
 

 
Entergy Reports Second Quarter Earnings
Page 4
July 29, 2014


Residential sales in second quarter 2014, on a weather-adjusted basis, increased 0.2 percent compared to second quarter 2013. Commercial and governmental sales, on a weather-adjusted basis, increased 1.5 percent and 0.4 percent, respectively, quarter over quarter. Industrial sales in the second quarter increased 5.3 percent compared to the same quarter of 2013.
 
Utility non-fuel O&M was lower than the same quarter a year ago. The decrease reflected lower compensation and benefits costs from fewer employees and lower post-retirement benefit costs.
 
Entergy Wholesale Commodities
 
EWC reported as-reported earnings of $25.9 million, or 14 cents per share, and operational earnings of $33.4 million, or 18 cents per share, for second quarter 2014, compared to second quarter 2013 earnings of $11.5 million, or 6 cents per share, on an as-reported basis and $12.7 million, or 7 cents per share, on an operational basis. The increase in operational earnings was driven by higher operational adjusted earnings before interest, income taxes, depreciation and amortization and interest and investment income excluding decommissioning expense and other than temporary impairment losses on decommissioning trust fund assets. The increase was partially offset by higher depreciation and income tax expenses.
 
EWC operational adjusted EBITDA was $145 million in second quarter 2014, compared to $61 million in the same period a year ago. The quarter-over-quarter increase was attributable to net revenue. EWC’s nuclear fleet capacity factor improved on no refueling outages in second quarter 2014 as well as 37 fewer unplanned outage days. Higher realized price, driven by improved Northeast capacity prices, also contributed to the net revenue increase. The realized price for EWC’s nuclear fleet was approximately $50 per MWh in the second quarter of this year, compared to $46.40 in the comparable quarter a year ago.
 
-more-
 
 

 
Entergy Reports Second Quarter Earnings
Page 5
July 29, 2014


Contribution to second quarter 2014 operational adjusted EBITDA from the Vermont Yankee Nuclear Power Station, scheduled to be closed later this year at the end of its current operating cycle, was approximately $12 million.
 
Parent & Other
 
Parent & Other reported a loss of $44.3 million, or 24 cents per share, on an as-reported and operational basis for second quarter 2014, compared to a loss of $44.0 million, or 24 cents per share, on an as-reported and operational basis for second quarter 2013. No line items were individually significant.
 
Earnings Guidance
 
Entergy affirmed its previously issued 2014 operational earnings guidance to be in the range of $5.55 to $6.75 per share.
 
Three-Year Financial Outlook
 
Entergy’s current three-year financial outlook for 2014 through 2016 is summarized below.
 
Utility operational net income outlook of $1 billion to $1.050 billion by 2016, or 5 to 7 percent compound annual growth rate off 2013 base, through a combination of rate base growth and return on equity improvement. Three major aspects of the Utility growth strategy which support the outlook, include:
 
·  
Productive investment to meet existing and potential demand growth as well as reliability improvements,
 
-more-
 
 

 
Entergy Reports Second Quarter Earnings
Page 6
July 29, 2014


 
·  
Unique economic development opportunity driving 3.5 to 3.75 percent retail sales growth (CAGR off 2013 weather-adjusted results) to support rate stability and help fund productive investment and
·  
Ongoing engagement and collaboration with regulators on initiatives to benefit customers.
 
EWC operational adjusted EBITDA estimates will experience volatility based on commodity market activities at specific points in time. The EWC strategy is to preserve optionality and manage risks in that business. Cornerstones of that strategy include:
 
·  
Operational excellence and disciplined cost management,
·  
Robust hedging strategy to position the business to take advantage of price volatility,
·  
Continued pursuit of fair and competitive wholesale markets that provide proper compensation for needed plants and
·  
Ongoing efforts to educate parties on Indian Point’s critical role in the community and to continue along multiple paths to advocate for continued operations at that plant.
 
Parent and Other operational earnings per share outlook of $(1.10) to $(1.20) in 2016. Key drivers include level of borrowings as well cost of debt, level of affiliate preferred investments and effective income tax rate.
 
Entergy continues to reasonably believe that the company can achieve consolidated operational earnings per share growth of 2 to 4 percent CAGR by 2016 (2013 base year), based on factors described above and assuming realization of Entergy’s point of view on market power prices.
 
-more-
 
 

 
Entergy Reports Second Quarter Earnings
Page 7
July 29, 2014


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, including more than 10,000 megawatts of nuclear power, making it one of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 billion and approximately 14,000 employees.
 
Additional information regarding Entergy’s quarterly and annual results of operations, regulatory proceedings and other matters is available in Entergy’s investor news release dated July 29, 2014, a copy of which has been filed today with the SEC on Form 8-K, and Entergy’s quarterly presentation slides. These are available on Entergy’s Investor Relations website at www.entergy.com/investor_relations and on Entergy’s Investor Relations mobile web app at enter.gy/ir.
 
-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 this news release and in Entergy’s most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and 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) economic conditions and 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 subsequent securities filings.






-more-
 
 

 



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

Table 1: Consolidated Earnings – Reconciliation of GAAP to Non-GAAP Measures
Second Quarter and Year-to-Date 2014 vs. 2013
(Per share in U.S. $)
 
Second Quarter
Year-to-Date
 
2014
2013
Change
2014
2013
Change
As-Reported
           
Utility
1.15
1.10
0.05
2.28
1.79
0.49
Entergy Wholesale Commodities
0.14
0.06
0.08
1.49
0.52
0.97
Parent & Other
(0.24)
(0.24)
-
(0.48)
(0.49)
0.01
  Consolidated As-Reported Earnings
1.05
0.92
0.13
3.29
1.82
1.47
             
Less Special Items
           
Utility
(0.02)
(0.08)
0.06
(0.03)
(0.12)
0.09
Entergy Wholesale Commodities
(0.04)
(0.01)
(0.03)
(0.08)
(0.01)
(0.07)
Parent & Other
-
-
-
-
-
-
  Consolidated Special Items
(0.06)
(0.09)
0.03
(0.11)
(0.13)
0.02
             
Operational
           
Utility
1.17
1.18
(0.01)
2.31
1.91
0.40
Entergy Wholesale Commodities
0.18
0.07
0.11
1.57
0.53
1.04
Parent & Other
(0.24)
(0.24)
-
(0.48)
(0.49)
0.01
  Consolidated Operational Earnings
1.11
1.01
0.10
3.40
1.95
1.45
             
             


Appendix B provides a reconciliation of Entergy Wholesale Commodities GAAP net income to non-GAAP operational adjusted EBITDA.

Appendix B:  Entergy Wholesale Commodities Operational Adjusted EBITDA – Reconciliation of GAAP to Non-GAAP Measures
Second Quarter and Year-to-Date 2014 vs. 2013
($ in millions)
 
Second Quarter
Year-to-Date
 
2014
2013
Change
2014
2013
Change
Net income
26
12
14
269
94
175
Add back: interest expense
3
4
(1)
8
7
1
Add back: income tax expense
20
(15)
35
138
42
96
Add back: depreciation and amortization
71
50
21
141
100
41
Subtract: interest and investment income
22
22
-
48
51
(3)
Add back: decommissioning expense
35
30
5
69
61
8
Adjusted EBITDA
133
59
74
577
253
324
Add back: special item for HCM implementation expenses (pre-tax)
1
2
(1)
2
2
-
Add back: special item resulting from the decision to close VY (pre-tax)
11
-
11
21
-
21
Operational adjusted EBITDA
145
61
84
600
255
345
             
Totals may not foot due to rounding



-more-
 
 

 


Entergy Corporation
 
Consolidated Income Statement
 
Three Months Ended June 30
 
(in thousands)
 
             
             
   
2014
   
2013
 
   
(unaudited)
 
Operating Revenues:
           
     Electric
  $ 2,373,842     $ 2,177,210  
     Natural gas
    35,469       33,881  
     Competitive businesses
    587,339       527,117  
                      Total
    2,996,650       2,738,208  
Operating Expenses:
               
    Operation and maintenance:
               
         Fuel, fuel-related expenses, and gas purchased for resale
    604,081       489,608  
         Purchased power
    517,898       485,744  
         Nuclear refueling outage expenses
    66,497       66,464  
         Other operation and maintenance
    816,609       844,195  
     Decommissioning
    67,250       59,389  
     Taxes other than income taxes
    152,736       144,888  
     Depreciation and amortization
    331,742       297,516  
     Other regulatory charges (credits) – net
    (14,640 )     3,892  
                      Total
    2,542,173       2,391,696  
Operating Income
    454,477       346,512  
Other Income (Deductions):
               
     Allowance for equity funds used during construction
    14,788       16,249  
     Interest and investment income
    24,245       40,541  
     Miscellaneous – net
    (14,675 )     (13,157 )
                      Total
    24,358       43,633  
Interest Expense:
               
     Interest expense
    164,327       155,768  
     Allowance for borrowed funds used during construction
    (8,516 )     (6,791 )
                      Total
    155,811       148,977  
Income Before Income Taxes
    323,024       241,168  
Income Taxes
    128,743       73,113  
Consolidated Net Income
    194,281       168,055  
Preferred Dividend Requirements of Subsidiaries
    4,898       4,332  
Net Income Attributable to Entergy Corporation
  $ 189,383     $ 163,723  
                 
                 
Earnings Per Average Common Share
               
     Basic
  $ 1.06     $ 0.92  
     Diluted
  $ 1.05     $ 0.92  
                 
Average Number of Common Shares Outstanding – Basic
    179,354,103       178,196,525  
Average Number of Common Shares Outstanding – Diluted
    180,045,432       178,614,383  


 
 

 


Entergy Corporation
 
Consolidated Income Statement
 
Six Months Ended June 30
 
(in thousands)
 
             
             
   
2014
   
2013
 
   
(unaudited)
 
Operating Revenues:
           
     Electric
  $ 4,600,306     $ 4,126,490  
     Natural gas
    113,689       87,202  
     Competitive businesses
    1,491,498       1,133,390  
                      Total
    6,205,493       5,347,082  
Operating Expenses:
               
    Operation and maintenance:
               
         Fuel, fuel-related expenses, and gas purchased for resale
    1,147,910       999,940  
         Purchased power
    1,092,525       858,873  
         Nuclear refueling outage expenses
    126,041       127,183  
         Other operation and maintenance
    1,554,590       1,598,453  
     Decommissioning
    133,049       118,494  
     Taxes other than income taxes
    307,204       295,983  
     Depreciation and amortization
    660,465       598,392  
     Other regulatory charges (credits) – net
    (10,645 )     9,207  
                      Total
    5,011,139       4,606,525  
Operating Income
    1,194,354       740,557  
Other Income (Deductions):
               
     Allowance for equity funds used during construction
    29,917       29,000  
     Interest and investment income
    59,493       78,847  
     Miscellaneous – net
    (26,379 )     (26,779 )
                      Total
    63,031       81,068  
Interest Expense:
               
     Interest expense
    326,877       308,918  
     Allowance for borrowed funds used during construction
    (15,535 )     (11,979 )
                      Total
    311,342       296,939  
Income Before Income Taxes
    946,043       524,686  
Income Taxes
    345,709       189,648  
Consolidated Net Income
    600,334       335,038  
Preferred Dividend Requirements of Subsidiaries
    9,777       9,915  
Net Income Attributable to Entergy Corporation
  $ 590,557     $ 325,123  
                 
                 
Earnings Per Average Common Share
               
     Basic
  $ 3.30     $ 1.83  
     Diluted
  $ 3.29     $ 1.82  
                 
Average Number of Common Shares Outstanding – Basic
    179,077,503       178,112,709  
Average Number of Common Shares Outstanding – Diluted
    179,547,020       178,534,201  
 
 
 
 

 


Entergy Corporation
Utility Electric Energy Sales & Customers
             
Three Months Ended June 30
                 
   
2014
 
2013
 
%
 Change
 
%
Weather-Adjusted
   
(Millions of kWh)
       
Electric Energy Sales:
               
Residential
 
7,266
 
7,377
 
(1.5)
 
0.2
Commercial
 
6,762
 
6,684
 
1.2
 
1.5
Governmental
 
587
 
583
 
0.6
 
0.4
Industrial
 
10,902
 
10,357
 
5.3
 
5.3
    Total to Ultimate Customers
 
25,517
 
25,001
 
2.1
 
2.6
Wholesale
 
2,048
 
590
 
247.1
   
    Total Sales
 
27,565
 
25,591
 
7.7
   
                 
                 
Six Months Ended June 30
                 
   
2014
 
2013
 
%
 Change
 
%
Weather-Adjusted
   
(Millions of kWh)
       
Electric Energy Sales:
               
Residential
 
17,293
 
15,721
 
10.0
 
1.1
Commercial
 
13,563
 
13,105
 
3.5
 
1.8
Governmental
 
1,170
 
1,167
 
0.3
 
0.2
Industrial
 
21,015
 
20,225
 
3.9
 
3.9
    Total to Ultimate Customers
 
53,041
 
50,218
 
5.6
 
2.4
Wholesale
 
4,282
 
1,219
 
251.3
   
    Total Sales
 
57,323
 
51,437
 
11.4
   
                 
                 
June 30
                 
   
2014
 
2013
 
%
Change
   
Electric Customers (End of period):
             
Residential
 
2,405,182
 
2,395,491
 
0.4
   
Commercial
 
344,894
 
342,014
 
0.8
   
Governmental
 
17,281
 
16,695
 
3.5
   
Industrial
 
45,071
 
44,041
 
2.3
   
    Total Ultimate Customers
 
2,812,428
 
2,798,241
 
0.5
   
Wholesale   11   29    (62.1)    
    Total Customers
 
2,812,439
 
2,798,270
 
0.5