For further information:
Nancy Morovich, VP, Investor Relations
Phone 504/576-5506, Fax 504/576-2897
INVESTOR NEWS nmorovi@entergy.com
April 28, 2003
ENTERGY REPORTS IMPROVED FIRST QUARTER 2003 EARNINGS
NEW ORLEANS - Entergy Corporation announced consolidated first quarter 2003 as reported earnings per share of $1.73 compared with a loss of $(0.36) in 2002. Entergy's operational earnings per share for first quarter were $1.12 versus $0.80 in first quarter 2002. The 40 percent increase in the quarter's operational earnings was driven by solid performance at both the Utility and Entergy-Koch, LP. First quarter 2003 reported results included special items related to the implementation of Statement of Financial Accounting Standards (SFAS) 143, a new accounting standard which requires revaluation of nuclear decommissioning assets and liabilities.
Cash flow from operations for first quarter 2003 was $51 million, significantly lower than first quarter 2002 due primarily to changes in deferred fuel costs reflecting high fuel prices in 2003 compared to relatively low prices in first quarter 2002.
"The strong financial results achieved in first quarter 2003 reflect continuous performance improvements across all our businesses," saidJ. Wayne Leonard, Entergy's chief executive officer. "We're committed to achieving and maintaining superior performance in safety, customer service and operations, strong metrics in credit, liquidity and risk, and industry leadership in shareholder returns. We've established bold goals in all areas, and aspirations that were once distant images are now clearly in sight."
Table 1 provides a comparative summary of earnings per share for first quarter 2003 compared to the same period of 2002.
Table 1: Entergy Corporation Consolidated Results | |||
First Quarter 2003 vs. 2002 | |||
(Per share in U.S. $) | |||
2003 | 2002 | Change | |
As Reported | |||
U.S. Utility | 0.47 | 0.45 | 0.02 |
Parent & Other | (0.01) | (0.03) | 0.02 |
Competitive Businesses | 1.27 | (0.78) | 2.05 |
Consolidated Earnings | 1.73 | (0.36) | 2.09 |
Less Special Items | |||
U.S. Utility | (0.09) | - | (0.09) |
Parent & Other | - | - | - |
Competitive Businesses | 0.70 | (1.16) | 1.86 |
Total | 0.61 | (1.16) | 1.77 |
Operational | |||
U.S. Utility | 0.56 | 0.45 | 0.11 |
Parent & Other | (0.01) | (0.03) | 0.02 |
Competitive Businesses | 0.57 | 0.38 | 0.19 |
Consolidated Earnings | 1.12 | 0.80 | 0.32 |
Weather Impact | 0.02 | 0.03 | (0.01) |
I.U.S. Utility
In first quarter 2003, as reported earnings per share were $0.47 compared to $0.45 for first quarter 2002. First quarter 2003 results included a special item of $(0.09) related to the implementation of SFAS 143 which required revaluation of nuclear decommissioning assets and liabilities which generated a special charge of $(0.09). First quarter 2003 operational earnings at the Utility were $0.56 per share, compared to $0.45 in first quarter 2002. The increase in first quarter 2003 earnings was due primarily to increased revenues driven by sales growth and increased rates, with the growth in sales occurring primarily in the residential sector. In addition, while operation and maintenance (O&M) expense per MWh increased due to lower generation, nominal O&M expenses decreased by about $5 million, which contributed to the improvement in earnings in first quarter 2003. Utility operating cash flow for first quarter 2003 was $99 million, a decreas e of $236 million compared to the same period last year, due primarily to high fuel prices which led to increased levels of deferred fuel costs. The deferred fuel costs are expected to be recovered in future periods through regulatory mechanisms currently in place.
Higher electricity usage in first quarter 2003 increased residential sales by 8 percent, compared to first quarter 2002. This increase is due primarily to the improvement in the regional economy compared to the depressed economic conditions in first quarter 2002. Commercial and governmental sales were up 4 percent, reflecting increased usage across all commercial customer classes. Industrial sales experienced a decrease of 3 percent quarter over quarter. Extended negotiations with two industrial customers recently concluded with their move to co-generation. After removing the impact of these customer losses, industrial sales increased 3 percent driven by higher usage in the chemicals sector. A summary of sales volumes by customer class is included in Appendix A to this release.
Table 2 provides a summary of the Utility's key operational measures with quarter-to-quarter comparisons.
Table 2: Utility Operational Performance Measures | ||||
First Quarter 2003 vs. 2002(see appendix D for definitions of measures) | ||||
First Quarter | ||||
2003 | 2002 | % Change | ||
Utility | ||||
Generation in GWh | 18,531 | 21,032 | -11.9% | |
GWh billed | ||||
Residential | 7,843 | 7,274 | 7.8% | |
Commercial and governmental | 6,455 | 6,215 | 3.9% | |
Industrial | 9,324 | 9,590 | -2.8% | |
Operation & maintenance expense | $18.75 | $16.79 | 11.7% | |
Reliability | ||||
SAIFI (number, annualized) | 1.94 | 1.99 | -2.5% | |
SAIDI (minutes, annualized) | 161 | 151 | 6.6% | |
Reliability complaints | 14 | 14 | - | |
Safety | 2 | 7 | -71.4% | |
Number of customers | ||||
Residential | 2,243,165 | 2,228,532 | 0.7% | |
Commercial & governmental | 319,186 | 314,477 | 1.5% | |
Industrial | 38,906 | 38,319 | 1.5% | |
The Utility continues to pursue the approval of rate plans and mechanisms that provide increased certainty as to allowable earnings levels as well as incentives to reward operating excellence. These efforts resulted in Entergy New Orleans, Inc. obtaining an agreement in principle during first quarter 2003 which, if approved by the New Orleans City Council, would result in a base rate increase of $30.2 million. Appendix C provides a summary of the Utility's pending regulatory events and regulatory recovery mechanisms by operating subsidiary.
II.Parent & Other
Parent & Other recorded a loss of $(0.01) per share in first quarter 2003 on both as reported and operational bases. This compares to a loss of $(0.03) in both as reported and operational earnings per share in first quarter 2002. The reduced loss quarter to quarter was achieved in spite of higher interest expense recorded at Parent during first quarter 2003.
III.Competitive Businesses
As reported earnings were $1.27 per share for the competitive businesses in first quarter 2003 compared to a loss of $(0.78) in the same period of 2002. First quarter 2003 results include a special item of $0.70 while 2002 results included special items totaling $(1.16) per share. The special item recorded in 2003 reflects the impact of the implementation of SFAS 143 which required revaluation of certain assets and liabilities associated with nuclear decommissioning. First quarter 2002 special items of $(1.16) reflected costs associated with Entergy's decision to exit the greenfield power development business. Excluding all special items, operational earnings in the competitive businesses increased 50 percent, from $0.38 per share in first quarter 2002 to $0.57 in first quarter 2003, as a result of strong performance at Entergy-Koch Trading.
Operating cash flow at the competitive businesses for first quarter 2003 compared to the same period last year decreased by $43 million to $(6) million. The decrease was due primarily to the payment of costs associated with a gas services and generation contract in the non-nuclear wholesale assets business.
Table 3 provides a 2003 vs. 2002 comparison of contributions by competitive business for first quarter, on both as reported and operational bases.
Table 3: Competitive Businesses Contributions to Earnings Per Share | |||
First Quarter 2003 vs. 2002 | |||
(Per share in U.S. $) | |||
2003 | 2002 | $ Change | |
As Reported | |||
Entergy Nuclear | 0.86 | 0.18 | 0.68 |
Energy Commodity Services | |||
Non-nuclear wholesale assets | - | (1.18) | 1.18 |
Entergy-Koch Trading | 0.37 | 0.14 | 0.23 |
Gulf South Pipeline | 0.04 | 0.08 | (0.04) |
Total Energy Commodity Services | 0.41 | (0.96) | 1.37 |
Total | 1.27 | (0.78) | 2.05 |
Less Special Items | |||
Entergy Nuclear | 0.70 | - | 0.70 |
Energy Commodity Services | |||
Non-nuclear wholesale assets | - | (1.16) | 1.16 |
Entergy-Koch Trading | - | - | - |
Gulf South Pipeline | - | - | - |
Total Energy Commodity Services | - | (1.16) | 1.16 |
Total | 0.70 | (1.16) | 1.86 |
Operational | |||
Entergy Nuclear | 0.16 | 0.18 | (0.02) |
Energy Commodity Services | |||
Non-nuclear wholesale assets | - | (0.02) | 0.02 |
Entergy-Koch Trading | 0.37 | 0.14 | 0.23 |
Gulf South Pipeline | 0.04 | 0.08 | (0.04) |
Total Energy Commodity Services | 0.41 | 0.20 | 0.21 |
Total | 0.57 | 0.38 | 0.19 |
Table 4 provides a summary of Entergy's non-utility generation in MWh sold forward for the years 2003, 2004, and 2005.
Table 4: Competitive Businesses Percent of Generation Sold Forward | |||
Years 2003 through 2005(see appendix D for definitions of measures) | |||
Remainder of | |||
2003 | 2004 | 2005 | |
Entergy Nuclear | |||
Planned TWh of generation | 25 | 33 | 34 |
Percent of total planned competitive generation | 91% | 91% | 92% |
Percent of EN's total planned generation sold forward | 100% | 93% | 29% |
Average realized and assumed contract price per MWh | $37 | $38 | $35 |
Energy Commodity Services | |||
Planned TWh of generation | 2 | 3 | 3 |
Percent of total planned competitive generation | 9% | 9% | 8% |
Percent of ECS' total planned generation sold forward | 31% | 16% | 17% |
Average realized contract spark spread per MWh | $7 | $6 | $6 |
Average assumed market spark spread per MWh | $0 | $0 | $0 |
Percent of Competitive Businesses' planned generation sold forward | 94% | 86% | 28% |
Entergy Nuclear
In first quarter 2003, Entergy Nuclear (EN) earned $0.86 per share compared to $0.18 in first quarter 2002. The increase was due to the impact of the implementation of SFAS 143 which required the revaluation of certain assets and liabilities associated with nuclear decommissioning. First quarter 2003 operational earnings at EN were $0.16 per share compared to $0.18 in first quarter 2002. The decrease in operational earnings was due primarily to the impact of refueling outage expense. Three refueling outages were completed in fourth quarter 2002, while there were no refueling outages during fourth quarter 2001. As a result, a significant increase in outage amortization expense was recorded in first quarter 2003, compared to the same period one year ago, and was reflected in higher production cost. Higher production cost also reflects the addition of Vermont Yankee, acquired in July 2002, which has higher O&M expense on a per unit basis when compared to the other plants in the flee t.
Average realized price per MWh increased this year as a result of the inclusion of Vermont Yankee, combined with maintenance outages at FitzPatrick, which has lower power contract pricing than the fleet's average. EN's average capacity factor was 93.7 percent for first quarter 2003 due to outages at FitzPatrick and Pilgrim as compared to 100.3 percent for the same period in 2002. During first quarter 2003, planned generation was reduced by 6 percent due to maintenance outages and less than 1 percent for refueling outages. Operating cash flow at Entergy Nuclear was essentially flat this quarter compared to the same period last year.
Table 5 provides a summary of Entergy Nuclear's key operational measures with quarter-to-quarter comparisons.
Table 5: Entergy Nuclear Operational Performance Measures | |||
First Quarter 2003 vs. 2002(see appendix D for definitions of measures) | |||
First Quarter | |||
2003 | 2002 | % Change | |
Entergy Nuclear | |||
Net MW in operation | 3,955 | 3,445 | 14.8% |
Average realized price per MWh | $38.28 | $37.14 | 3.1% |
Production cost per MWh | $23.54 | $19.62 | 20.0% |
Generation in GWh | 8,093 | 7,509 | 7.8% |
Capacity factor | 93.7% | 100.3% | -6.6% |
Refueling outage duration: | |||
Indian Point 3(a) | - | - | - |
(a) Indian Point 3 began a scheduled refueling outage on March 28, 2003 and completed it on April 23, 2003.
Energy Commodity Services
Energy Commodity Services (ECS) includes earnings contributions from Entergy-Koch, LP and Entergy's non-nuclear wholesale assets. ECS recorded earnings of $0.41 per share in first quarter 2003 compared to a loss of $(0.96) in the same period last year. The improvement in results reported by ECS in 2003 was due primarily to strong earnings in trading and the absence in 2003 of charges recorded in first quarter 2002 in connection with the decision to exit the greenfield power development business.
Operational earnings in first quarter 2003 were $0.41 compared to $0.20 in the same period of 2002, reflecting substantially higher earnings at Entergy-Koch Trading (EKT), a subsidiary of Entergy-Koch, LP. The strong trading results were due primarily to high volatility during first quarter 2003 and a well-executed strategy developed through EKT's point-of-view analyses of both power and gas. Entergy-Koch's improved earnings from EKT were partially offset by lower income realized at its gas transportation subsidiary, Gulf South Pipeline. The reduced pipeline earnings reflected reduced levels of gas throughput even though temporary periods of extremely high weather-related demand occurred. Another driver of the lower earnings was expenses incurred to ensure quality service to customers was maintained during periods of high demand. The income sharing mechanisms that are part of the Entergy-Koch partnership agreement allocated substantially all of the partnership's income to Entergy in t he first quarter of 2003.
EKT's business model calls for exercising discipline and rigorously managing risk while executing its trading strategy. Average Daily Earnings at Risk (DEAR) during first quarter 2003 increased to $19.5 million which was not unusual given the significant gas and power volatility during the quarter. In addition to DEAR, EKT employs other risk measures that test whether or not overall risk is within acceptable limits. All of these measures were managed in accordance with established trading policies and procedures during the quarter. The duration of the trading book continues to be relatively short, with all of the mark-to-market value converting to cash by the end of 2004. Further, over 71 percent of the total market value of EKT's mark-to-market portfolio is based on actively quoted prices, and approximately 94 percent of EKT's counterparty credit exposure is associated with companies that currently have investment grade credit ratings. Lastly, mark-to-market earnings comprised 33 percent of Entergy's consolidated operational earnings for first quarter 2003.
Table 6 provides a summary of Energy Commodity Services' key operational measures with quarter-to-quarter comparisons.
Table 6: Energy Commodity Services Operational Performance Measures | |||
First Quarter 2003 vs. 2002(see appendix D for definitions of measures) | |||
First Quarter | |||
2003 | 2002 | % Change | |
Entergy-Koch Trading | |||
Electricity volatility | 86% | 39% | 120% |
Gas volatility | 91% | 79% | 15% |
Electricity marketed (GWh) (b) | 123,480 | 86,092 | 43% |
Gas marketed (Bcf/d) (b) | 7.8 | 5.6 | 39% |
Gain/loss days | 1.3 | 2.1 | -38% |
Daily average earnings at risk | 19.5 | 8.1 | 141% |
Low daily earnings at risk | 15.4 | 6.6 | 133% |
High daily earnings at risk | 35.2 | 10.3 | 242% |
Gulf South Pipeline | |||
Throughput (Bcf/d) | 2.20 | 2.66 | -17% |
Production cost ($/mmbtu) | $0.113 | $0.077 | -47% |
Non-Nuclear Wholesale Assets | |||
Net MW in operation | 1,421 | 1,870 | -24% |
Generation in GWh | 626 | 155 | 304% |
Net MW under construction | 385 | 756 | -49% |
(b) Previously reported volumes, which included only U.S. trading, have been adjusted to reflect both U.S. and Europe volumes traded.
Table 7 provides additional details on Entergy-Koch's trading activities during first quarter 2003.
Table 7: Entergy-Koch Trading Details(see appendix D for definitions of measures) | ||||
2003 | ||||
Changes in Fair Value of Trading Contracts | ||||
Fair value of contracts outstanding at December 31, 2002 after implementation of EITF 02-03 | 90.9 | |||
(Gain)/Loss from contracts realized/settled during the period | (246.7) | |||
Initial recorded value of contracts entered into during the period | 0.6 | |||
Net option premiums received during the period | 37.4 | |||
Change in fair value of contracts attributable to market movements during the period | 247.6 | |||
Other changes in fair value | 0.0 | |||
Net change in contracts outstanding during the period | 38.9 | |||
Fair value of contracts outstanding at March 31, 2003 | 129.8 | |||
Counterparty Credit Exposure | 2003 | |||
AAA | 0.4% | |||
AA | 19.1% | |||
A | 32.2% | |||
BBB | 41.9% | |||
Non-investment grade/Not rated | 6.4% | |||
2003 | 2002 | Change | ||
Balance Sheet($ in millions) | ||||
Mark-to-market accounting detail: | ||||
Fair value of contracts at end of period | 130 | 164 | (34) | |
Partners' capital | 1,337 | 1,084 | 253 | |
Fair value of contracts as percent of partners' capital | 9.7% | 15.1% | -35.8% | |
2003 | 2004 | 2005+ | Total | |
Maturities and Sources for Fair Value of Trading Contracts at | ||||
Prices actively quoted | 88.7 | 29.7 | (25.5) | 92.9 |
Prices provided by other sources | 28.0 | 1.8 | 0.8 | 30.6 |
Prices based on models | 5.4 | 0.3 | 0.7 | 6.3 |
Total | 122.1 | 31.7 | -24.0 | 129.8 |
IV.Variance Analysis
Table 8 provides first quarter 2003 vs. 2002 earnings variance analyses for "U.S. Utility, Parent & Other," "Competitive Businesses," and "Consolidated."
Table 8: Entergy Corporation As Reported Earnings Per Share Variance Analysis | |||||||
First Quarter 2003 vs. 2002 | |||||||
(Per share in U.S. $, sorted in consolidated | |||||||
column, most to least favorable) | U.S. Utility, | Competitive | |||||
Parent & Other | Businesses | Consolidated | |||||
2002 earnings | 0.42 | (0.78) | (0.36) | ||||
Asset/contract impairments and restructuring charges | - | 1.16 | (c) | 1.16 | |||
Cumulative effect of accounting changes | (0.09) | (d) | 0.72 | (d) | 0.63 | ||
Other income (deductions) | 0.01 | 0.19 | (e) | 0.20 | |||
Net revenue (loss) | 0.13 | (f) | (0.01) | 0.12 | |||
Interest expense and other charges | (0.02) | 0.04 | (g) | 0.02 | |||
Interest and dividend income | 0.02 | - | 0.02 | ||||
Income taxes - other | - | 0.02 | 0.02 | ||||
Other operation & maintenance expense | 0.03 | (h) | (0.01) | 0.02 | |||
Taxes other than income taxes | 0.02 | (0.01) | 0.01 | ||||
Depreciation/amortization expense | (0.02) | 0.01 | (0.01) | ||||
Share repurchase/dilution effect | - | (0.01) | (0.01) | ||||
Nuclear refueling outage expense | - | (0.04) | (i) | (0.04) | |||
Decommissioning expense | (0.04) | (j) | (0.01) | (0.05) | |||
2003 earnings | 0.46 | 1.27 | 1.73 | ||||
- Asset/contract impairment and restructuring charges primarily reflect prior year's impact of recording expenses associated with exiting the greenfield power development business, as well as charges associated with impairment reserves related to certain non-nuclear wholesale assets.
- Cumulative effect of accounting change reflects implementation of SFAS 143, a new accounting standard which required the revaluation of certain assets and liabilities associated with nuclear decommissioning.
- Other income (deductions) increased due primarily to higher Entergy-Koch earnings.
| Utility Net Revenue Variance Analysis | |
First Quarter | ||
Weather | (0.01) | |
Sales growth/pricing | 0.08 | |
Regulatory credit | 0.03 | |
Other | 0.03 | |
Total | 0.13 |
- Interest expense & other charges decreased due primarily to the absence of debt associated with the Damhead Creek power plant in the UK.
- Other operation & maintenance expense for the quarter decreased due primarily to lower fossil plant expenses as well as lower Parent expenses.
- The increase in nuclear outage refueling expense is due to higher nuclear refueling amortization expense for Indian Point 2, Vermont Yankee and FitzPatrick, each of which completed refueling outages in fourth quarter 2002.
- Decommissioning expense increased due to higher accretion expense on decommissioning liabilities resulting from the implementation of SFAS 143, which is primarily offset by regulatory credits to reflect anticipated future recovery of these expenses.
Table 9 lists special items by business with quarter-to-quarter comparisons. Special items are those events that are not routine, are related to prior periods, or are related to discontinued businesses. Special items are included in as reported earnings per share results but excluded from operational earnings per share and the timing of recording such items is made in accordance with generally accepted accounting principles.
Table 9: Entergy Special Items [shown as positive / (negative) impact on earnings] | |||
First Quarter 2003 vs. 2002 | |||
(Per share in U.S. $) | |||
2003 | 2002 | Change | |
U.S. Utility Special Items | |||
SFAS 143 implementation | (0.09) | - | (0.09) |
Total | (0.09) | - | (0.09) |
Parent & Other Special Items | |||
Total | - | - | - |
Competitive Businesses Special Items | |||
Entergy Nuclear | |||
SFAS 143 implementation | 0.70 | - | 0.70 |
Energy Commodity Services | |||
Asset impairments | - | (0.45) | 0.45 |
Turbine commitment | - | (0.62) | 0.62 |
Development costs | - | (0.09) | 0.09 |
Total | 0.70 | (1.16) | 1.86 |
Total Special Items | 0.61 | (1.16) | 1.77 |
V.Other Financial Performance Highlights
Entergy generated $51 million in operating cash in first quarter 2003, a decrease of $303 million compared to first quarter 2002. The majority of the decrease is the result of an increase in fuel costs in the Utility driven by high natural gas prices. Fuel recovery mechanisms are in place in each jurisdiction to provide for the future recovery of these fuel costs.
At the end of first quarter 2003, Entergy had approximately $377 million of cash and cash equivalents and unused revolver capacity of $988 million at the Parent and Utility subsidiaries. The current level of cash along with substantial borrowing capacity continues to provide valuable financial flexibility to Entergy.
Entergy continues to pursue financial and operational objectives to achieve double-digit performance in operational net margin and operational return on equity. As reported net margin was 12.65 percent, an increase of more than 7 percentage points over first quarter 2002, while operational net margin improved nearly 3 percentage points over last year to 11.09 percent. Return on equity, on an as reported basis, increased by nearly 7 percentage points to 13.69 percent while operational return on equity climbed to 12 percent, a level not achieved in more than seven years.
Entergy's capital structure remains within the target range of 45 to 50 percent net debt to net capital. Entergy's off-balance sheet debt, exclusive of operating leases, equals $285 million and constitutes less than 2 percent of total capitalization.
Table 10 provides a summary of financial measures with quarter-to-quarter comparisons.
Table 10: Entergy Corporation Key Financial Performance and Flexibility Measures(k) | |||
First Quarter Ended March 31, 2003 vs. 2002(see appendix D for definitions of certain measures) | |||
For 3 months ending March 31 | 2003 | 2002 | Change |
Operating cash flow ($ in millions) | $51 | $354 | $(303) |
For 12 months ending March 31 | 2003 | 2002 | Change |
Return on average invested capital - as reported | 8.67% | 5.65% | 3.02% |
Return on average invested capital - operational | 7.88% | 7.13% | 0.75% |
Return on average common equity - as reported | 13.69% | 6.80% | 6.89% |
Return on average common equity - operational | 12.00% | 10.20% | 1.80% |
Net margin - as reported | 12.65% | 5.59% | 7.06% |
Net margin - operational | 11.09% | 8.39% | 2.70% |
Cash flow interest coverage | 5.59 | 5.59 | - |
Book value per share | $36.54 | $33.30 | $3.24 |
End of period shares outstanding (millions) | 225.6 | 223.2 | 2.4 |
As of March 31 ($ in millions) | 2003 | 2002 | Change |
Revolver capacity | $988 | $1,071 | $(83) |
Total gross liquidity | $1,365 | $1,834 | $(469) |
Total debt | $8,128 | $7,923 | $205 |
Off-balance sheet liabilities | |||
Project debt | - | $334 | $(334) |
Debt of joint ventures - Entergy's share | $285 | $349 | $(64) |
Leases - Entergy's share | $501 | $343 | $158 |
Total off-balance sheet liabilities | $786 | $1,026 | $(240) |
Rating or other contingent liabilities | - | $295 | $(295) |
Net debt to net capital | 47.0% | 48.7% | -1.7% |
Net debt including off-balance sheet liabilities | 49.4% | 51.9% | -2.5% |
(k) As reported metrics are computed in accordance with GAAP as they include all components of net income, including special items. Operational metrics are non-GAAP measures as they are calculated using operational net income, which excludes the impact of special items. Reconciliations of operational earnings per share to as reported earnings per share can be found in Appendix B.
Cash and Liquidity
At the end of first quarter 2003, Entergy's combined cash balance and unused capacity on bank revolvers was $1.37 billion. Entergy's $1.45 billion corporate revolver, $988 million of which was unused at March 31, 2003, has a stated termination date of May 14, 2003, but can be extended to a one year note at Entergy's discretion through a "term out" provision. The renewal of Entergy's corporate revolver is underway. Bank commitments to date exceed $1 billion, and Entergy anticipates that it will secure additional commitments to allow it to achieve its targeted revolver renewal objective. The renewed revolver combined with $425 million in Parent term debt issued since December 2002 will provide Entergy with substantial liquidity and financial flexibility.
As detailed in Table 11, Entergy expects to have significant cash available through 2005 for three potential uses: investments in new businesses or assets, repayment of debt, and dividend increases. In addition, Entergy has numerous liquidity levers that could potentially generate more than $1 billion of additional liquidity, should it be required. These levers include reducing capital and O&M spending, and increasing net debt at the Utility.
Table 11 provides a summary of projected sources and uses of cash for the years 2003 through 2005 in accordance with Entergy's 2003 financial plan as of January 1, 2003. Current projections for 2003-2005 continue to support these estimates. Sources shown on the table include $2.4 billion of new debt that Entergy believes it could issue in association with new investments while maintaining a net debt ratio of 50% or less. This amount could vary depending upon the type of new investment and the credit market environment.
Table 11: Entergy Corporation Projected Sources and Uses of Cash | ||
2003-2005 | ||
Beginning cash at 1/1/03 | 1.3 | |
Entergy Corp. credit revolver - unused portion | 0.9 | |
Planned refinancings | 3.1 | |
New debt capacity | 2.4 | |
Total financings | 6.4 | |
Operating cash flow | 5.2 | |
Total sources | 12.9 | |
Debt maturities | 4.4 | |
Capital expenditures | 3.4 | |
Dividends | 1.0 | |
Targeted liquidity | 0.8 | |
Total uses | 9.6 | |
Net Liquidity Available for New Investment, Debt Repayment, Dividend Increase | 3.3 | |
Capital Expenditures
Entergy's capital plan from 2003 through 2005 calls for $3.4 billion of investment; $2.9 billion of this amount is associated with capital projects that maintain Entergy's existing assets. The remaining $0.5 billion is associated with previously identified investments such as the steam generator replacement at Arkansas Nuclear One Unit 1, nuclear plant power uprates at Entergy Nuclear, the completion of a gas-fired power plant currently under construction in Entergy's non-nuclear wholesale assets business, and a previously deferred equity investment for Entergy's interest in Entergy-Koch.
Table 12 provides a summary of planned capital expenditures for the period 2003 through 2005.
Table 12: Entergy Corporation Planned Capital Expenditures 2003-2005 | ||||
($ in billions) | ||||
2003 | 2004 | 2005 | Total | |
Maintenance capital | ||||
U. S. Utility | 0.8 | 0.8 | 0.9 | 2.5 |
Entergy Nuclear | 0.1 | 0.2 | 0.1 | 0.4 |
Energy Commodity Services | - | - | - | - |
Subtotal | 0.9 | 1.0 | 1.0 | 2.9 |
Other capital commitments | ||||
U. S. Utility | 0.1 | 0.1 | 0.1 | 0.3 |
Entergy Nuclear | 0.1 | - | - | 0.1 |
Energy Commodity Services | 0.0 | 0.1 | - | 0.1 |
Subtotal | 0.2 | 0.2 | 0.1 | 0.5 |
Total Planned Capital Expenditures | 1.1 | 1.2 | 1.1 | 3.4 |
Debt Refinancing
Entergy has $503 million of debt that matures in the remainder of 2003, $416 million or 83 percent of which is associated with the Utility. Entergy expects to fund approximately $150 million of remaining Utility 2003 maturities and all Entergy Nuclear 2003 maturities with cash. The balance of Utility 2003 maturities is expected to be refinanced for periods up to 30 years, consistent with the long-term nature of utility assets. Refinancing activity may be modified periodically in response to changing market conditions and capital needs.
Table 13 provides details on Entergy's 2003 debt maturities and refinancing activity.
Table 13: Entergy Corporation and Subsidiaries Debt Maturity and Refinancing Schedule(l) | |||||||||||
($ in millions) | |||||||||||
Scheduled maturities at December 31, 2002 | 2003 | 2004 | 2005-2009 | 2010+ | |||||||
U. S. Utility | 1,111 | 855 | 1,373 | 3,314 | |||||||
Parent | - | 595 | 267 | - | |||||||
Entergy Nuclear | 87 | 91 | 344 | 161 | |||||||
Energy Commodity Services | 79 | - | - | - | |||||||
Total | 1,277 | 1,541 | 1,984 | 3,475 | |||||||
Financings, refinancings and cash repayments completed through March 31, 2003 | |||||||||||
U. S. Utility | (695) | (25) | 100 | 100 | |||||||
Parent | - | (20) | 72 | 86 | |||||||
Entergy Nuclear | - | - | - | - | |||||||
Energy Commodity Services(m) | (79) | - | - | - | |||||||
Total | (774) | (45) | 172 | 186 | |||||||
Remaining maturities as of March 31, 2003 | |||||||||||
U. S. Utility | 416 | 830 | 1,473 | 3,414 | |||||||
Parent | - | 575 | 339 | 86 | |||||||
Entergy Nuclear | 87 | 91 | 344 | 161 | |||||||
Energy Commodity Services | - | - | - | - | |||||||
Total | 503 | 1,496 | 2,156 | 3,661 | |||||||
- Long-term debt, including current portion.
- Debt associated with Top of Iowa project retired with funds drawn under the corporate revolver.
VI.Earnings Guidance
"We are off to a very solid start in 2003," saidC. John Wilder, Entergy's chief financial officer. "The challenges ahead are significant, but we are confident that the financial stability we've worked so diligently to establish will provide the foundation we need to continue to deliver results. The strong earnings results we've achieved this quarter position us well relative to our full-year earnings guidance, but prudence dictates that it is simply too early to revise our view on projected full-year results."
Entergy's full-year 2003 earnings guidance is detailed in Table 14. Earnings guidance for 2003 includes the impact, which is not expected to be material, of Entergy's decision to expense stock options effective first quarter 2003. Additional detail on other key assumptions reflected in the earnings ranges are as follows:
- Approximately 70 percent of 2003 earnings are expected from the Utility. Earnings guidance is based on existing rate plans, including the Entergy Mississippi rate increase that became effective on January 1, 2003. In addition, earnings guidance reflects an anticipated rate increase at Entergy New Orleans. Current fuel recovery mechanisms are assumed for all companies as is the full-year impact of 2002 rate actions at Entergy Arkansas, Entergy Gulf States, and Entergy Mississippi. Incremental earnings expected in 2003 are also the result of an increase in overall sales growth. Partially offsetting these revenue enhancements are expected increases in O&M expense and depreciation.
- More than 20 percent of 2003 earnings are expected from Entergy Nuclear, where prices set by power purchase agreements will average $37/MWh. A year-over-year increase will result from the full-year impact of Vermont Yankee, outage differences, power uprates, and reduced overall operating costs. Currently, EN has sold 100 percent of the output of its generating assets, excluding a portion of uprated capacity, through the end of 2003 at prices that range from $29 to $42 per megawatt-hour. The capacity factor assumption for the fleet ranges from 93 to 95 percent, with Spring 2003 refueling outages at the Pilgrim and Indian Point 3 units.
- Energy Commodity Services' guidance is based on contributions from Entergy-Koch at a 50 percent sharing of income, consistent with Entergy's ownership share. Modest year-over-year growth is anticipated in trading and at the pipeline.
- Parent & Other's guidance is based on modest improvement in corporate expenses along with increased interest expense.
Table 14 provides Entergy's projection of 2003 operational earnings per share, with 2002 as reported and operational earnings as its data starting points. As reported earnings per share guidance is different from operational earnings per share guidance due to special items recorded to date. At this time, no material special items are expected to be recorded during the remainder of 2003.
(Per share in U.S. $) | ||||||||
2002 |
|
| ||||||
Range of Impact | ||||||||
Utility | ||||||||
As Reported | 2.57 | |||||||
Less special items | 0.00 | Operational items: | ||||||
Operational | 2.57 | Increased revenues due to rate actions and sales growth | 0.24 | 0.27 | ||||
Increased O&M, depreciation, other | (0.11) | (0.09) | ||||||
Total Operational | 0.13 | 0.18 | 2.70 | 2.75 | ||||
Special items: | ||||||||
(0.09) | (0.09) | |||||||
Total As Reported | 2.61 | 2.66 | ||||||
Entergy Nuclear | ||||||||
As Reported | 0.88 | |||||||
Less special items | 0.00 | Operational items: | ||||||
Operational | 0.88 | Increased revenue due to increased MWhs produced | 0.05 | 0.07 | ||||
Decreased revenue due to lower PPA pricing | (0.02) | (0.02) | ||||||
Increased outage amortization expense | (0.08) | (0.08) | ||||||
Decreased O&M expense, other | 0.07 | 0.10 | ||||||
Total Operational | 0.02 | 0.07 | 0.90 | 0.95 | ||||
Special items: | ||||||||
SFAS 143 implementation | 0.70 | 0.70 | ||||||
Total As Reported | 1.60 | 1.65 | ||||||
Energy Commodity Services | ||||||||
As Reported | (0.64) | |||||||
Less special items | (1.17) | Operational items: | ||||||
Operational | 0.53 | Decreased contribution from Entergy-Koch(n) | (0.21) | (0.21) | ||||
Increased income from commodity trading | 0.02 | 0.06 | ||||||
Increased income from pipeline operations | 0.01 | 0.02 | ||||||
Total Operational | (0.18) | (0.13) | 0.35 | 0.40 | ||||
Special items: | ||||||||
None | - | - | ||||||
Total As Reported | 0.35 | 0.40 | ||||||
Parent & Other | ||||||||
As Reported | (0.17) | |||||||
Less special items | 0.00 | Operational items: | ||||||
Operational | (0.17) | Increased net interest expense | (0.05) | (0.03) | ||||
Decreased corporate expense | 0.02 | 0.05 | ||||||
Total Operational | (0.03) | 0.02 | (0.20) | (0.15) | ||||
Special items: | ||||||||
None | - | - | ||||||
Total As Reported | (0.20) | (0.15) | ||||||
Total | ||||||||
As Reported | 2.64 | |||||||
Less special items | (1.17) | |||||||
Operational | 3.81 | Total Operational Guidance for 2003 | 3.75 | 3.95 | ||||
Total As Reported Guidance for 2003(o) | 4.35 | 4.55 |
- n. Reflects 2002 earnings associated with disproportionate income sharing.
o. As reported guidance range is rounded to the nearest increment of $0.05 per share.
Entergy's 2003 earnings guidance is detailed in Table 15 below, with March 2003 year-to-date actual results as its starting point. This table reflects the projected changes in the earnings profile for each of Entergy's businesses for the remainder of 2003.
Table 15: 2003 Earnings Per Share Guidance Based on March 2003 Year-To-Date Earnings | ||||||||
(Per share in U.S. $) | ||||||||
|
|
| ||||||
Range of Impact | ||||||||
Utility | ||||||||
As Reported | 0.47 | |||||||
Less special items | (0.09) | Operational items: | ||||||
Operational | 0.56 | Utility operations (normal weather) | 2.10 | 2.15 | ||||
ENOI rate case potential revenue increase | 0.04 | 0.04 | ||||||
Total Operational | 2.14 | 2.19 | 2.70 | 2.75 | ||||
Special items: | ||||||||
SFAS 143 Implementation | (0.09) | (0.09) | ||||||
Total As Reported | 2.61 | 2.66 | ||||||
Entergy Nuclear | ||||||||
As Reported | 0.86 | |||||||
Less special items | 0.70 | Operational items: | ||||||
Operational | 0.16 | Plant operations at 98% non-outage capacity factor | 0.78 | 0.85 | ||||
Outages at Indian Point 3 and Pilgrim | (0.04) | (0.06) | ||||||
Total Operational | 0.74 | 0.79 | 0.90 | 0.95 | ||||
Special items: | ||||||||
SFAS 143 implementation | 0.70 | 0.70 | ||||||
Total As Reported | 1.60 | 1.65 | ||||||
Energy Commodity Services | ||||||||
As Reported | 0.41 | |||||||
Less special items | 0.00 | Operational items: | ||||||
Operational | 0.41 | Conservative commodity trading earnings(p) | 0.06 | 0.09 | ||||
Normal pipeline operations(p) | 0.08 | 0.10 | ||||||
Non-nuclear wholesale assets operations | (0.05) | (0.05) | ||||||
Total Operational | 0.09 | 0.14 | 0.50 | 0.55 | ||||
Special items: | ||||||||
None | - | - | ||||||
Total As Reported |
|
| 0.50 | 0.55 | ||||
Parent & Other | ||||||||
As Reported | (0.01) | |||||||
Less special items | 0.00 | Operational items: | ||||||
Operational | (0.01) | Net interest income/(expense) | (0.12) | (0.09) | ||||
Other corporate expenses | (0.07) | (0.05) | ||||||
Total Operational | (0.19) | (0.14) | (0.20) | (0.15) | ||||
Special items: | ||||||||
None | - | - | ||||||
Total As Reported | (0.20) | (0.15) | ||||||
Subtotal | ||||||||
As Reported | 1.73 | |||||||
Less special items | 0.61 | |||||||
Operational | 1.12 | Total Operational for 2003 before adjustment |
|
| 3.90 | 4.10 | ||
Adjustment to return to original guidance | (0.15) | (0.15) | ||||||
Total | ||||||||
As Reported | 1.73 | |||||||
Less special items | 0.61 | |||||||
Operational | 1.12 | Total Operational for 2003 | 3.75 | 3.95 | ||||
Total As Reported for 2003(q) | 4.35 | 4.55 |
q. As reported guidance range is rounded to the nearest increment of $0.05 per share.
Entergy's goal is to grow earnings at an average annual rate of 8 to 10 percent in 2003 and beyond. Entergy expects to achieve its targeted earnings by growing its existing businesses at a rate of approximately 6 percent, with the remaining 2 to 4 percent from new capital investments. Entergy has acknowledged that such growth is achievable only if new investments can be achieved or uncontracted nuclear output can be sold at attractive pricing. Entergy remains confident that investment opportunities will be available and thus believes the targeted level of earnings growth is achievable beyond 2003. At the same time Entergy has consistently maintained a disciplined policy that new investments must exceed (on an ex ante basis) the incremental average project cost of capital while maintaining corporate credit metrics.
Appendix A provides details of kwh sales and customer statistics for the Utility.
Appendix A: Utility Electric Energy Sales & Customers | ||||||||||
Three Months Ended March | ||||||||||
% | % Weather | |||||||||
2003 | 2002 | Change | Adjusted | |||||||
(Millions of kwh) | ||||||||||
ELECTRIC ENERGY SALES: | ||||||||||
Residential | 7,843 | 7,274 | 7.8 | 8.2 | ||||||
Commercial | 5,822 | 5,598 | 4.0 | 3.8 | ||||||
Governmental | 633 | 617 | 2.6 | 2.6 | ||||||
Industrial | 9,324 | 9,590 | (2.8) | (2.8) | ||||||
Total to Ultimate Customers | 23,622 | 23,079 | 2.4 | 2.4 | ||||||
Wholesale | 2,513 | 2,181 | 15.2 | |||||||
Total Sales | 26,135 | 25,260 | 3.5 | |||||||
Twelve Months Ended March | ||||||||||
% | ||||||||||
2003 | 2002 | Change | ||||||||
(Millions of kwh) | ||||||||||
ELECTRIC ENERGY SALES: | ||||||||||
Residential | 33,151 | 30,817 | 7.6 | |||||||
Commercial | 25,577 | 24,730 | 3.4 | |||||||
Governmental | 2,694 | 2,596 | 3.8 | |||||||
Industrial | 40,752 | 40,885 | (0.3) | |||||||
Total to Ultimate Customers | 102,174 | 99,028 | 3.2 | |||||||
Wholesale | 10,160 | 8,628 | 17.8 | |||||||
Total Sales | 112,334 | 107,656 | 4.3 | |||||||
March | ||||||||||
% | ||||||||||
2003 | 2002 | Change | ||||||||
ELECTRIC CUSTOMERS(YEAR-TO-DATE AVERAGE): | ||||||||||
Residential | 2,243,165 | 2,228,532 | 0.7 | |||||||
Commercial | 303,920 | 299,585 | 1.4 | |||||||
Governmental | 15,266 | 14,892 | 2.5 | |||||||
Industrial | 38,906 | 38,319 | 1.5 | |||||||
Total Ultimate Customers | 2,601,257 | 2,581,328 | 0.8 | |||||||
Wholesale | 42 | 36 | 16.7 | |||||||
Total Customers | 2,601,299 | 2,581,364 | 0.8 | |||||||
Appendix B provides a side-by-side comparison of historical performance metrics.
Appendix B: Historical Performance Metrics(see appendix D for definitions of measures)(r) (s) | |||||||||||||
2Q01 | 3Q01 | 4Q01 | 1Q02 | 2Q02 | 3Q02 | 4Q02 | 1Q03 | 02 YTD | 03 YTD | ||||
Financial | |||||||||||||
EPS - as reported ($) | 1.06 | 1.39 | 0.09 | -0.36 | 1.06 | 1.59 | 0.33 | 1.73 | -0.36 | 1.73 | |||
Less EPS - special items ($) | 0.00 | 0.15 | -0.09 | -1.16 | -0.11 | 0.09 | -0.01 | 0.61 | -1.16 | 0.61 | |||
EPS - operational ($) | 1.06 | 1.24 | 0.18 | 0.80 | 1.17 | 1.50 | 0.34 | 1.12 | 0.80 | 1.12 | |||
Trailing Twelve Months |
| ||||||||||||
ROIC - as reported (%) | 7.05 | 7.33 | 7.17 | 5.65 | 5.46 | 5.46 | 5.81 | 8.67 | |||||
ROIC - operational (%) | 7.34 | 7.38 | 7.16 | 7.13 | 7.07 | 7.12 | 7.39 | 7.88 |
| ||||
ROE - as reported (%) | 10.36 | 10.27 | 10.04 | 6.80 | 6.64 | 7.10 | 7.84 | 13.69 |
| ||||
ROE - operational (%) | 11.03 | 10.38 | 10.04 | 10.20 | 10.28 | 10.82 | 11.32 | 12.00 |
| ||||
Cash Flow Interest Coverage | 5.25 | 5.14 | 5.25 | 5.59 | 5.94 | 6.66 | 6.12 | 5.59 | |||||
Net debt/net capital (%) | 51.1 | 50.6 | 49.7 | 48.7 | 49.1 | 47.6 | 46.3 | 47.0 | |||||
Utility | |||||||||||||
Generation in GWh | 23,814 | 28,081 | 21,245 | 21,032 | 22,698 | 26,635 | 19,687 | 18,531 | 21,032 | 18,531 | |||
GWh billed |
| ||||||||||||
Residential | 6,733 | 10,502 | 6,309 | 7,274 | 7,202 | 10,827 | 7,279 | 7,843 | 7,274 | 7,843 | |||
Commercial & Gov't | 6,538 | 8,073 | 6,499 | 6,215 | 6,766 | 8,240 | 6,811 | 6,455 | 6,215 | 6,455 | |||
Industrial | 10,710 | 10,457 | 10,098 | 9,590 | 10,341 | 10,839 | 10,248 | 9,324 | 9,590 | 9,324 | |||
O&M expense/MWh | $14.33 | $14.17 | $19.44 | $16.79 | $23.87 | $14.01 | $23.84 | $18.75 | $16.79 | $18.75 | |||
Reliability |
| ||||||||||||
SAIFI | 2.2 | 2.1 | 2.1 | 2.0 | 2.0 | 2.1 | 2.0 | 1.9 |
| ||||
SAIDI | 169.5 | 164.1 | 162.0 | 151.0 | 150.7 | 161.2 | 164.0 | 161.0 |
| ||||
Nuclear | |||||||||||||
Net MW in operation | 2,475 | 3,445 | 3,445 | 3,445 | 3,445 | 3,955 | 3,955 | 3,955 | 3,445 | 3,955 | |||
Average realized price per MWh | $35.66 | $34.62 | $35.27 | $37.14 | $39.88 | $42.59 | $40.87 | $38.28 | $37.14 | $38.28 | |||
Production cost/MWh | $18.41 | $17.06 | $19.55 | $19.62 | $19.40 | $18.49 | $22.18 | $23.54 | $19.62 | $23.54 | |||
Generation in GWh | 4,208 | 5,887 | 7,260 | 7,509 | 7,449 | 8,152 | 6,843 | 8,093 | 7,509 | 8,093 | |||
Capacity factor | 77.8% | 97.5% | 95.0% | 100.3% | 98.5% | 96.8% | 78.0% | 93.7% | 100.3% | 93.7% | |||
Energy Commodity Services | |||||||||||||
Entergy-Koch Trading | |||||||||||||
Electricity volatility (%) | 91 | 75 | 37 | 39 | 51 | 57 | 41 | 86 | 39 | 86 | |||
Gas volatility (%) | 52 | 69 | 80 | 79 | 53 | 58 | 50 | 91 | 79 | 91 | |||
Gain/loss days | 4.3 | 3.3 | 2.2 | 2.1 | 1.7 | 2.0 | 1.3 | 1.3 | 2.1 | 1.3 | |||
Gulf South Pipeline |
| ||||||||||||
Throughput (Bcf/d) | 2.26 | 2.56 | 2.51 | 2.66 | 2.31 | 2.27 | 2.22 | 2.20 | 2.66 | 2.20 | |||
Production cost ($) | 0.095 | 0.088 | 0.098 | 0.077 | 0.096 | 0.096 | 0.113 | 0.113 | 0.077 | 0.113 | |||
Non-Nuclear Wholesale Assets |
| ||||||||||||
Net MW in operation | 3,368 | 2,330 | 2,410 | 1,870 | 1,209 | 1,209 | 1,421 | 1,421 | 1,870 | 1,421 |
(r) As reported metrics are computed in accordance with GAAP as they include all components of net income, including special items. Operational metrics are non-GAAP measures as they are calculated using operational net income, which excludes the impact of special items. A reconciliation of operational earnings per share to as reported earnings per share is provided here.
(s) Certain prior period metrics have been revised to reflect the impact of applying SFAS 143.
Appendix C provides a summary of the Utility's pending regulatory events and regulatory recovery mechanisms by operating subsidiary.
Appendix C: Utility Regulatory Summary Table | |||
First Quarter 2003 | |||
Company | Authorized ROE | Pending Cases/Events | Fuel Recovery Mechanism |
Entergy Arkansas | 11.0% | No cases pending. TCA mechanism expired on 12/31/01. | Annual reset based on prior year's cost. |
Entergy Gulf States - TX | 10.95% | Base rates frozen since Settlement order issued in June 1999. Freeze will likely extend to the start of retail open access, which is currently not expected to occur until at least 1st quarter 2004. | Fuel Factor with semi-annual reset based on gas prices. Surcharge and refund material under- and over-recoveries semi-annually based on actual cost. |
Entergy Gulf States - LA | 11.1% | The 9th revenue review (2002) and prospective revenue study are currently pending before the LPSC with hearings set for October 2003. EGSI's filing included a $11.5 million rate refund, implemented in June 2002, and requested a prospective rate increase of approximately $21.7 million. The LPSC staff filed testimony in April 2003 recommending a $30 million refund and a prospective rate reduction of at least $75 million. The company intends to vigorously oppose staff's recommendations, but cannot predict the outcome at this time. | Monthly reset with 60-day lag based on prior two months actual fuel and purchased power costs plus 1/12 of unrecovered fuel balance. |
Entergy Louisiana | 9.7%-11.3%(t) | ELI's current rates will remain in effect until changed pursuant to a new formula rate plan or pursuant to a cost of service and revenue requirements filing to be made by June 30, 2003. In conjunction with the Commission staff, ELI is pursuing the development of a new formula rate plan proposal. | Monthly reset with 60-day lag based on prior two months actual fuel and purchased power costs plus 1/12 of unrecovered fuel balance. |
Entergy Mississippi | 10.64%-12.86%(u) | Annual formula rate plan is in place. In December 2002, the MPSC approved a joint stipulation that resulted in a $48.2 million rate increase and an ROE midpoint of 11.75%. EMI will make its next formula rate plan filing in March 2004. | Quarterly reset based on forecasted costs plus any deferred fuel balance (over- or under-recovery) from the second prior quarter. |
Entergy New Orleans | 11.4% | Rate case filed with the City Council in May 2002 requesting a rate increase of $44 million. An agreement in principle reached in March 2003 with the Advisors to the City Council would result in a $30 million base rate increase, if approved by the City Council. A decision is expected mid May 2003 and new rates will be effective June 2003. | Monthly reset with 60-day lag based on prior two months actual fuel and purchased power costs plus 1/12 unrecovered fuel balance. |
System Energy Resources, Inc. | 10.94% | ROE approved by July 2001 FERC order. No cases pending. | Actual costs billed as incurred. |
(t) Entergy Louisiana's formula rate plan expired with the 2001 test year. Under the expired formula, if Entergy Louisiana earned outside of the bandwidth range, rates would be adjusted on a prospective basis. If earnings were above the bandwidth range, rates would be reduced by 60% of the overage, and if below, increased by 60% of the shortfall.
(u) If Entergy Mississippi earns outside of the bandwidth range, rates will be adjusted on a prospective basis. If earnings are above the bandwidth range, rates are reduced by 50% of the overage, and if below, increased by 50% of the shortfall. The range presented above is not adjusted for performance measures, under which the ROE midpoint can increase or decrease by as much as 1%.
Appendix D provides definitions of certain operational and financial performance measures referenced in this release.
Appendix D: Definitions of Operational and Financial Performance Measures | |
Operational Measures | |
Utility | |
Generation in GWh | Total number of GWh produced by all Utility generation facilities |
GWh billed | Total number of GWh billed to all customer classes |
Operation & maintenance expense | Operation and maintenance and nuclear refueling expenses per MWh generated, excluding fuel |
SAIFI | System average interruption frequency index; average number per customer per year |
SAIDI | System average interruption duration index; average minutes per customer per year |
Reliability complaints | Number of complaints to regulators concerning reliability issues |
Number of customers | Year-to-date average number of customers |
Safety | Number of accidents resulting in lost time work |
Competitive Businesses | |
Planned TWh of generation | Amount of output expected to be generated by Entergy Nuclear for nuclear units, or by non-nuclear wholesale assets for fossil and wind units, considering plant operating characteristics, outage schedules, and expected market conditions which impact dispatch |
Percent of planned generation sold forward | Percent of planned generation output, excluding output associated with plant uprates, sold forward under capacity contract, forward physical contract or forward financial contract, consistent with assumptions used in earnings guidance |
Average realized and assumed contract price/spark spread per MWh | Price/spark spread at which generation output is expected to be sold to third parties, given existing and anticipated contracts/market prices based on expected dispatch |
Entergy Nuclear | |
Net MW in operation | Installed capacity owned or operated by Entergy Nuclear |
Average realized price per MWh | As reported revenue per MWh generated for all non-utility nuclear operations |
Production cost per MWh | Operation and maintenance expenses per MWh |
Generation in GWh | Total number of GWh produced by all non-utility nuclear facilities |
Capacity factor | The percentage of the period that the plant generates power calculated by dividing the output by the capacity and normalizing the time period |
Refueling outage duration | Number of generation days lost for a scheduled refueling outage that was completed during the quarter |
Energy Commodity Services | |
Entergy-Koch Trading | |
Electricity volatility | Average volatility of into-Cinergy power prices for the period. The changes in volatility numbers for the comparative prior-year periods are the result of a refinement of the definition of the initial month used in the time period selected over which the calculation of power and gas volatilities is measured. |
Gas volatility | Average volatility of Henry Hub spot prices for the period. (See note to Electricity Volatility immediately above.) |
Electricity marketed (GWh) | Total physical GWh volumes marketed in the U.S. and Europe during the period |
Gas marketed (Bcf/d) | Physical Bcf/d volumes marketed in the U.S. and Europe during the period |
Gain/loss days | Ratio of days where trading gains exceeded trading losses in the aggregate across all commodities |
Daily average earnings at risk | Daily value at risk in millions of dollars for the period using a 97.5% confidence level. This measure indicates that, if prices moved against the positions, the loss in neutralizing the portfolio would not be expected to exceed the calculated value at risk |
Gulf South Pipeline | |
Throughput | Gas in Bcf/d transported by the pipeline during the period |
Production cost | Cost in $/mmbtu associated with delivering gas, excluding gas expense |
Non-nuclear Wholesale Assets | |
Net MW in operation | Total MW owned and operated |
Generation in GWh | Total number of GWh produced by all non-nuclear wholesale generating assets |
Average realized price per MWh | As reported revenue per MWh generated for all non-nuclear wholesale generating assets |
Net MW under construction | Total MW owned and under construction |
Appendix D: Definitions of Operational and Financial Performance Measures (continued) | |
Financial Measures | |
Operational net income | As reported net income adjusted to exclude the impact of special items |
Return on average invested capital - as reported | 12-months rolling net income adjusted to include preferred dividends and tax-effected interest expense divided by average invested capital |
Return on average invested capital - operational | 12-months rolling operational net income adjusted to include preferred dividends and tax-effected interest expense divided by average invested capital |
Return on average common equity - as reported | 12-months rolling net income divided by average common equity |
Return on average common equity - operational | 12-months rolling operational net income divided by average common equity |
Net margin - as reported | 12-months rolling net income divided by 12 months rolling revenue |
Net margin - operational | 12-months rolling operational net income divided by 12 months rolling revenue |
Cash flow interest coverage | 12-months operating cash flow plus 12-months rolling interest paid, divided by net interest expense (interest expense minus interest income) |
Book value per share | Common equity divided by end of period shares outstanding |
Revolver capacity | Amount of undrawn capacity remaining on corporate and subsidiary revolvers |
Total gross liquidity | Sum of cash and revolver capacity |
Total debt | Sum of short-term and long-term debt and capital leases on the balance sheet less non-recourse debt, if any |
Project debt | Financing at subsidiaries to support specific projects |
Debt of joint ventures (Entergy share) | Debt issued for Entergy-Koch, LP and RS Cogen joint ventures |
Leases (Entergy share) | Operating leases held by subsidiaries capitalized at implicit interest rate |
Rating or other contingent liabilities | Parent guarantees for which cash collateral may be required in event of downgrade below investment grade |
Net debt to net capital | Gross debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents |
Net debt including off-balance sheet liabilities | Sum of gross debt and off-balance sheet debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents |
Entergy's common stock is listed on the New York, Chicago, and Pacific exchanges under the symbol "ETR".
Additional investor information can be accessed on-line at
www.entergy.com/earnings
Teleconference and Webcast Details
Entergy's senior management team will host an earnings conference call at 10:00 a.m. CDT, Monday, April 28, 2003. The call can be accessed by dialing 719-457-2621; the confirmation code is 422244. Please call no more than 15 minutes prior to the scheduled start time. The call can also be accessed and the presentation slides viewed via Entergy's web site atwww.entergy.com/webcasts. A replay of the teleconference will be available for seven days following the teleconference by dialing 719-457-0820, confirmation code 422244. The replay will also be available on Entergy's web site atwww.entergy.com/webcasts.
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The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: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. 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 the statements. Some of those factors include, but are not limited to: resolution of pending and future rate cases and negotiations, including the Entergy New Orleans rate ca se and various performance-based rate discussions, and other regulatory decisions, including those related to Entergy's utility supply plan, Entergy's ability to reduce its operation and maintenance costs, particularly at its Non-Utility Nuclear generating facilities including the uncertainty of negotiations with unions to agree to such reductions, 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 - particularly the ability to extend or replace the existing power purchase agreements for the Non-Utility Nuclear plants - and the prices and availability of power Entergy must purchase for its utility customers, Entergy's ability to develop and execute on a point of view regarding prices of electricity, natural gas, and other energy-related commodities, Entergy-Koch's profitability in trading electricity, natural gas, and other energy-related commodities, changes in th e number of participants in the energy trading market, and in their creditworthiness and risk profile, changes in the financial markets, particularly those affecting the availability of capital and Entergy's ability to refinance existing debt and to fund investments and acquisitions, actions of rating agencies, including changes in the ratings of debt and preferred stock, changes in inflation and interest rates, Entergy's ability to purchase and sell assets at attractive prices and on other attractive terms, volatility and changes in markets for electricity, natural gas, and other energy-related commodities, changes in utility regulation, including the beginning or end of retail and wholesale competition, the ability to recover net utility assets and other potential stranded costs, and the establishment of SeTrans or another regional transmission organization, changes in regulation of nuclear generating facilities and nuclear materials and fuel, including possible shutdown of Indian Point or other nuclear ge nerating facilities, changes in environmental, tax, and other laws, including requirements for reduced emissions of sulfur, nitrogen, carbon, and other substances, the economic climate, and particularly growth in Entergy's service territory, variations in weather, hurricanes, and other disasters, advances in technology, the potential impacts of threatened or actual terrorism and war, the success of Entergy's strategies to reduce taxes, the effects of litigation, changes in accounting standards, changes in corporate governance and securities law requirements and Entergy's ability to attract and retain talented management and directors.
Entergy Corporation Consolidating Balance Sheet March 31, 2003 (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses ASSETS CURRENT ASSETS Cash and cash equivalents: Cash $ 105,394 $ 6,971 $ 22,214 $ - $ 134,579 Temporary cash investments - at cost, which approximates market 107,896 18,351 116,626 - 242,873 Special deposits - 7 (4) - 3 ----------- ---------- ---------- ----------- ----------- Total cash and cash equivalents 213,290 25,329 138,836 - 377,455 ----------- ---------- ---------- ----------- ----------- Other temporary investments - - - - - Notes receivable 12 408,137 433,659 (797,096) 44,713 Accounts receivable: Customer 345,753 2,333 - - 348,086 Allowance for doubtful accounts (25,954) (2,633) (500) - (29,087) Associated companies (2,529) 168,461 (139,567) (26,365) - Other 123,934 927 147,042 - 271,903 Accrued unbilled revenues 308,045 3,496 - - 311,541 ----------- ---------- ---------- ----------- ----------- Total receivables 749,249 172,584 6,975 (26,365) 902,443 Deferred fuel costs 223,681 - - - 223,681 Accumulated deferred income taxes - 18 - (18) - Fuel inventory - at average cost 116,100 - 2,374 18 118,492 Materials and supplies - at average cost 340,446 50 187,002 - 527,498 Deferred nuclear refueling outage costs 39,705 - 102,840 - 142,546 Prepayments and other 131,167 4,636 28,682 - 164,484 ----------- ---------- ---------- ----------- ----------- TOTAL 1,813,650 610,754 900,368 (823,461) 2,501,312 ----------- ---------- ---------- ----------- ----------- OTHER PROPERTY AND INVESTMENTS Investment in affiliates - at equity 214 9,275,031 968,876 (9,275,034) 969,086 Decommissioning trust funds 825,481 - 1,219,896 - 2,045,377 Non-utility property - at cost (less accumulated depreciation) 222,659 73,125 523 - 296,307 Other 214,967 214,460 354,869 (343,249) 441,047 ----------- ---------- ---------- ----------- ----------- TOTAL 1,263,321 9,562,616 2,544,164 (9,618,283) 3,751,817 ----------- ---------- ---------- ----------- ----------- PROPERTY, PLANT, AND EQUIPMENT Electric 25,656,603 8,605 1,245,758 - 26,910,967 Property under capital lease 763,122 - - - 763,122 Natural gas 212,805 65 - - 212,870 Construction work in progress 797,496 30,144 487,641 (3,949) 1,311,331 Nuclear fuel under capital lease 264,986 - - - 264,986 Nuclear fuel 33,736 - 271,296 - 305,032 ----------- ---------- ---------- ----------- ----------- TOTAL PROPERTY, PLANT AND EQUIPMENT 27,728,748 38,814 2,004,695 (3,949) 29,768,308 Less - accumulated depreciation and amortization 11,939,033 5,113 159,852 - 12,103,999 ----------- ---------- ---------- ----------- ----------- PROPERTY, PLANT AND EQUIPMENT - NET 15,789,715 33,701 1,844,843 (3,949) 17,664,309 ----------- ---------- ---------- ----------- ----------- DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: SFAS 109 regulatory asset - net 849,995 - - - 849,995 Unamortized loss on reacquired debt 152,165 - - - 152,165 Other regulatory assets 1,152,288 - - - 1,152,288 Long-term receivables 23,792 - - - 23,792 Goodwill 374,099 - 3,073 - 377,172 Other 220,599 496,136 731,414 (520,209) 927,939 ----------- ----------- ---------- ------------ ----------- TOTAL 2,772,938 496,136 734,487 (520,209) 3,483,351 ----------- ----------- ---------- ------------ ----------- TOTAL ASSETS $21,639,624 $10,703,207 $6,023,862 $(10,965,902) $27,400,789 =========== =========== ========== ============ =========== *Totals may not foot due to rounding. Entergy Corporation Consolidating Balance Sheet March 31, 2003 (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Currently maturing long-term debt $ 469,317 $ - $ 90,579 $ - $ 559,896 Notes payable: Associated companies - 380,185 406,180 (786,365) - Other 50,047 10,000 304 - 60,351 Account payable: Associated companies (19,482) 159,458 (129,205) (10,771) - Other 518,659 10,749 79,129 - 608,537 Customer deposits 205,546 324 163 - 206,034 Taxes accrued 83,326 8,836 266,309 - 358,471 Accumulated deferred income taxes 52,511 - 46,377 (18) 98,870 Nuclear refueling outage costs 9,754 - - - 9,754 Interest accrued 133,361 8,439 9,961 - 151,762 Obligations under capital leases 154,054 - - - 154,054 Other 63,229 9,651 101,144 (18,344) 155,679 ----------- ---------- ---------- ----------- ----------- TOTAL 1,720,322 587,642 870,941 (815,498) 2,363,408 ----------- ---------- ---------- ----------- ----------- DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes and taxes accrued 4,516,497 11,176 (95,527) - 4,432,146 Accumulated deferred investment tax credits 442,524 - - - 442,524 Obligations under capital leases 159,068 - 1 - 159,068 Other regulatory liabilities 197,067 - - - 197,067 Decommisioning 1,429,990 - 647,060 - 2,077,051 Transition to competition 79,098 - - - 79,098 Regulatory reserves 42,098 - - - 42,098 Accumulated provisions 298,590 1,665 88,672 - 388,927 Other 1,061,283 87,818 501,634 (500,025) 1,150,709 ----------- ---------- ---------- ----------- ----------- TOTAL 8,226,215 100,659 1,141,840 (500,025) 8,968,688 ----------- ---------- ---------- ----------- ----------- Long-term debt 5,667,138 1,042,142 612,835 (66,933) 7,255,182 Preferred stock with sinking fund 22,077 - - - 22,077 Preferred stock without sinking fund 334,337 - 91,940 (91,940) 334,337 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated deferrable debentures 215,000 - - - 215,000 SHAREHOLDERS' EQUITY Common stock 2,225,870 (9,140) 1,696,327 (3,910,575) 2,482 Authorized shares 500,000,000 Issued shares CY 248,174,087 Paid-in capital 1,784,097 5,756,995 1,078,675 (3,945,257) 4,674,510 Retained earnings 1,557,696 3,883,998 615,903 (1,802,218) 4,255,378 Accumulated other comprehensive income (loss) 6,872 (4,342) (41,284) 3,229 (35,525) Less - treasury stock, at cost 120,000 654,748 43,316 (163,316) 654,748 Shares CY 22,597,529 ----------- ----------- ---------- ------------ ----------- TOTAL 5,454,535 8,972,764 3,306,306 (9,491,506) 8,242,097 ----------- ----------- ---------- ------------ ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $21,639,624 $10,703,207 $6,023,862 $(10,965,902) $27,400,789 =========== =========== ========== ============ =========== *Totals may not foot due to rounding. Entergy Corporation Consolidating Balance Sheet December 31, 2002 (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses ASSETS CURRENT ASSETS Cash and cash equivalents: Cash $ 118,625 $ 5,011 $ 46,152 $ - $ 169,788 Temporary cash investments - at cost, which approximates market 969,077 24,518 171,665 - 1,165,260 Special deposits - 31 249 - 280 ----------- ---------- ----------- ----------- ----------- Total cash and cash equivalents 1,087,702 29,560 218,066 - 1,335,328 ----------- ---------- ----------- ----------- ----------- Other temporary investments - - - - - Notes receivable 13 501,161 403,393 (902,490) 2,078 Accounts receivable: Customer 321,942 1,273 - - 323,215 Allowance for doubtful accounts (24,421) (2,364) (500) - (27,285) Associated companies 19,907 159,628 (137,646) (41,889) - Other 112,438 1,083 131,100 - 244,621 Accrued unbilled revenues 318,101 1,032 - - 319,133 ----------- ---------- ----------- ----------- ----------- Total receivables 747,967 160,652 (7,046) (41,889) 859,684 Deferred fuel costs 55,653 - - - 55,653 Accumulated deferred income taxes 14,872 18 - (14,890) - Fuel inventory - at average cost 94,183 - 2,266 18 96,467 Materials and supplies - at average cost 333,977 25 191,898 - 525,900 Deferred nuclear refueling outage costs 51,541 - 112,106 - 163,646 Prepayments and other 131,092 3,557 32,176 - 166,827 ----------- ---------- ----------- ----------- ----------- TOTAL 2,517,000 694,973 952,859 (959,251) 3,205,583 ----------- ---------- ----------- ----------- ----------- OTHER PROPERTY AND INVESTMENTS Investment in affiliates - at equity 214 8,897,127 823,996 (8,897,127) 824,209 Decommissioning trust funds 839,405 - 1,229,793 - 2,069,198 Non-utility property - at cost (less accumulated depreciation) 222,519 74,204 571 - 297,294 Other 21,084 33,677 559,378 (343,249) 270,889 ----------- ---------- ----------- ----------- ----------- TOTAL 1,083,222 9,005,008 2,613,738 (9,240,376) 3,461,591 ----------- ---------- ----------- ----------- ----------- PROPERTY, PLANT, AND EQUIPMENT Electric 25,226,879 8,498 1,554,161 - 26,789,538 Property under capital lease 746,624 - - - 746,624 Natural gas 209,913 57 - - 209,969 Construction work in progress 797,128 27,927 411,786 (3,949) 1,232,891 Nuclear fuel under capital lease 259,433 - - - 259,433 Nuclear fuel 24,475 - 239,134 - 263,609 ----------- ---------- ----------- ----------- ----------- TOTAL PROPERTY, PLANT AND EQUIPMENT 27,264,452 36,482 2,205,081 (3,949) 29,502,064 Less - accumulated depreciation and amortization 12,140,375 4,703 162,035 - 12,307,112 ----------- ---------- ----------- ----------- ----------- PROPERTY, PLANT AND EQUIPMENT - NET 15,124,077 31,779 2,043,046 (3,949) 17,194,952 ----------- ---------- ----------- ----------- ----------- DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: SFAS 109 regulatory asset - net 844,105 - - - 844,105 Unamortized loss on reacquired debt 155,161 - - - 155,161 Other regulatory assets 738,328 - - - 738,328 Long-term receivables 24,703 - - - 24,703 Goodwill 374,099 - 3,073 - 377,172 Other 213,430 492,721 779,032 (538,809) 946,375 ----------- ---------- ----------- ----------- ----------- TOTAL 2,349,827 492,721 782,105 (538,809) 3,085,844 ----------- ---------- ----------- ----------- ----------- TOTAL ASSETS $21,074,127 $10,224,481 $ 6,391,748 $(10,742,385) $26,947,969 =========== ========== =========== =========== =========== *Totals may not foot due to rounding. Entergy Corporation Consolidating Balance Sheet December 31, 2002 (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Currently maturing long-term debt $ 1,110,741 $ - $ 80,579 $ - $1,191,320 Notes payable: Associated companies - 421,155 482,447 (903,602) - Other 47 - 304 - 351 Account payable: Associated companies (11,912) 150,651 (102,580) (36,160) - Other 704,964 17,729 132,752 - 855,446 Customer deposits 198,100 179 163 - 198,442 Taxes accrued 75,044 25,943 284,328 - 385,315 Accumulated deferred income taxes - - 41,359 (14,890) 26,468 Nuclear refueling outage costs 14,244 - - - 14,244 Interest accrued 165,903 3,138 6,399 - 175,440 Obligations under capital leases 153,822 - - - 153,822 Other 68,830 12,844 98,147 (8,479) 171,341 ----------- ---------- ----------- ----------- ----------- TOTAL 2,479,784 631,639 1,023,898 (963,131) 3,172,189 ----------- ---------- ----------- ----------- ----------- DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes and taxes accrued 4,512,358 11,245 (272,804) - 4,250,800 Accumulated deferred investment tax credits 447,925 - - - 447,925 Obligations under capital leases 155,934 - 9 - 155,943 Other regulatory liabilities 185,579 - - - 185,579 Decommisioning 302,202 - 1,263,796 - 1,565,997 Transition to competition 79,098 - - - 79,098 Regulatory reserves 56,438 - - - 56,438 Accumulated provisions 299,462 1,679 88,726 - 389,868 Other 1,044,074 103,273 503,199 (505,314) 1,145,232 ----------- ---------- ----------- ----------- ----------- TOTAL 7,083,069 116,197 1,582,926 (505,314) 8,276,879 ----------- ---------- ----------- ----------- ----------- Long-term debt 5,542,438 915,611 697,352 (68,402) 7,086,999 Preferred stock with sinking fund 24,327 - - - 24,327 Preferred stock without sinking fund 334,337 - 91,940 (91,940) 334,337 Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated deferrable debentures 215,000 - - - 215,000 SHAREHOLDERS' EQUITY Common stock 2,225,870 1,360 1,696,327 (3,921,075) 2,482 Authorized shares 500,000,000 Issued shares CY 248,174,087 Paid-in capital 1,784,097 5,757,779 1,030,284 (3,905,407) 4,666,753 Retained earnings 1,500,609 3,553,724 337,699 (1,453,338) 3,938,693 Accumulated other comprehensive income (loss) 4,595 (4,498) (25,362) 2,906 (22,360) Less - treasury stock, at cost 120,000 747,331 43,316 (163,316) 747,331 Shares CY 25,752,410 ----------- ---------- ----------- ----------- ----------- TOTAL 5,395,171 8,561,034 2,995,632 (9,113,598) 7,838,238 ----------- ---------- ----------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $21,074,127 $10,224,482 $6,391,749 $(10,742,384) $26,947,969 =========== ========== =========== =========== =========== * Totals may not foot due to rounding. Entergy Corporation Consolidating Balance Sheet March 31, 2003 vs December 31, 2002 Increase/(Decrease) (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses ASSETS CURRENT ASSETS Cash and cash equivalents: Cash $ (13,231) $ 1,960 $ (23,938) $ - $ (35,209) Temporary cash investments - at cost, which approximates market (861,181) (6,167) (55,039) - (922,387) Special deposits - (24) (253) - (277) ----------- ---------- ----------- ----------- ----------- Total cash and cash equivalents (874,412) (4,231) (79,230) - (957,873) ----------- ---------- ----------- ----------- ----------- Other temporary investments - - - - - Notes receivable (1) (93,024) 30,266 105,394 42,635 Accounts receivable: Customer 23,811 1,060 - - 24,871 Allowance for doubtful accounts (1,533) (269) - - (1,802) Associated companies (22,436) 8,833 (1,921) 15,524 - Other 11,496 (156) 15,942 - 27,282 Accrued unbilled revenues (10,056) 2,464 - - (7,592) ----------- ---------- ----------- ----------- ----------- Total receivables 1,282 11,932 14,021 15,524 42,759 Deferred fuel costs 168,028 - - - 168,028 Accumulated deferred income taxes (14,872) - - 14,872 - Fuel inventory - at average cost 21,917 - 108 - 22,025 Materials and supplies - at average cost 6,469 25 (4,896) - 1,598 Deferred nuclear refueling outage costs (11,836) - (9,266) - (21,101) Prepayments and other 75 1,079 (3,494) - (2,343) ----------- ---------- ----------- ----------- ----------- TOTAL (703,350) (84,219) (52,491) 135,790 (704,272) ----------- ---------- ----------- ----------- ----------- OTHER PROPERTY AND INVESTMENTS Investment in affiliates - at equity - 377,904 144,880 (377,907) 144,877 Decommissioning trust funds (13,924) - (9,897) - (23,821) Non-utility property - at cost (less accumulated depreciation) 140 (1,079) (48) - (987) Other 193,883 180,783 (204,509) - 170,158 ----------- ---------- ----------- ----------- ----------- TOTAL 180,099 557,608 (69,574) (377,907) 290,227 ----------- ---------- ----------- ----------- ----------- PROPERTY, PLANT, AND EQUIPMENT Electric 429,724 107 (308,403) - 121,429 Property under capital lease 16,498 - - - 16,498 Natural gas 2,892 8 - - 2,901 Construction work in progress 368 2,217 75,855 - 78,440 Nuclear fuel under capital lease 5,553 - - - 5,553 Nuclear fuel 9,261 - 32,162 - 41,423 ----------- ---------- ----------- ----------- ----------- TOTAL PROPERTY, PLANT AND EQUIPMENT 464,296 2,332 (200,386) - 266,244 Less - accumulated depreciation and amortization (201,342) 410 (2,183) - (203,114) ----------- ---------- ----------- ----------- ----------- PROPERTY, PLANT AND EQUIPMENT - NET 665,638 1,922 (198,203) - 469,357 ----------- ---------- ----------- ----------- ----------- DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: SFAS 109 regulatory asset - net 5,890 - - - 5,890 Unamortized loss on reacquired debt (2,996) - - - (2,996) Other regulatory assets 413,960 - - - 413,960 Long-term receivables (911) - - - (911) Goodwill - - - - - Other 7,169 3,415 (47,618) 18,600 (18,435) ----------- ---------- ----------- ----------- ----------- TOTAL 423,111 3,415 (47,618) 18,600 397,508 ----------- ---------- ----------- ----------- ----------- TOTAL ASSETS $ 565,497 $ 478,725 $ (367,887) $ (223,518) $ 452,820 =========== ========== =========== =========== =========== *Totals may not foot due to rounding. Entergy Corporation Consolidating Balance Sheet March 31, 2003 vs December 31, 2002 Increase/(Decrease) (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Currently maturing long-term debt $ (641,424) $ - $ 10,000 $ - $(631,424) Notes payable: Associated companies - (40,970) (76,267) 117,237 - Other 50,000 10,000 - - 60,000 Account payable: Associated companies (7,570) 8,807 (26,625) 25,389 - Other (186,305) (6,980) (53,623) - (246,909) Customer deposits 7,446 145 - - 7,592 Taxes accrued 8,282 (17,107) (18,019) - (26,844) Accumulated deferred income taxes 52,511 - 5,018 14,872 72,402 Nuclear refueling outage costs (4,490) - - - (4,490) Interest accrued (32,542) 5,301 3,562 - (23,679) Obligations under capital leases 232 - - - 232 Other (5,601) (3,193) 2,997 (9,865) (15,662) ----------- ---------- ----------- ----------- ----------- TOTAL (759,462) (43,997) (152,957) 147,633 (808,781) ----------- ---------- ----------- ----------- ----------- DEFERRED CREDITS AND OTHER LIABILITIES Accumulated deferred income taxes and taxes accrued 4,139 (69) 177,277 - 181,346 Accumulated deferred investment tax credits (5,401) - - - (5,401) Obligations under capital leases 3,134 - (8) - 3,125 Other regulatory liabilities 11,488 - - - 11,488 Decommisioning 1,127,788 - (616,736) - 511,053 Transition to competition - - - - - Regulatory reserves (14,340) - - - (14,340) Accumulated provisions (872) (14) (54) - (941) Other 17,209 (15,455) (1,565) 5,289 5,478 ----------- ---------- ----------- ----------- ----------- TOTAL 1,143,146 (15,538) (441,086) 5,289 691,809 ----------- ---------- ----------- ----------- ----------- Long-term debt 124,700 126,531 (84,517) 1,469 168,183 Preferred stock with sinking fund (2,250) - - - (2,250) Preferred stock without sinking fund - - - - - Company-obligated mandatorily redeemable preferred securities of subsidiary trust holding solely junior subordinated deferrable debentures - - - - - SHAREHOLDERS' EQUITY Common stock - (10,500) - 10,500 - Authorized shares Issued shares CY Paid-in capital - (784) 48,391 (39,850) 7,757 Retained earnings 57,087 330,274 278,204 (348,880) 316,685 Accumulated other comprehensive income (loss) 2,277 156 (15,922) 323 (13,165) Less - treasury stock, at cost - (92,583) - - (92,583) ----------- ---------- ----------- ----------- ----------- TOTAL 59,364 411,730 310,674 (377,908) 403,860 ----------- ---------- ----------- ----------- ----------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 565,497 $ 478,725 $ (367,887) $ (223,518) $ (452,820) =========== ========== =========== =========== =========== * Totals may not foot due to rounding. Entergy Corporation Consolidating Income Statement Three Months Ended March 31, 2003 (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses OPERATING REVENUES: Domestic electric $1,602,134 $ - $ - $ (396) $ 1,601,738 Natural gas 80,238 - - - 80,238 Competitive businesses - 14,617 341,190 (60) 355,747 ---------- --------- --------- ----------- ----------- Total 1,682,372 14,617 341,190 (456) 2,037,723 OPERATING EXPENSES: Operating and Maintenance: Fuel, fuel related expenses, and gas purchased for resale 341,439 - 46,601 - 388,040 Purchased power 358,896 4,434 5,716 (347) 368,699 ---------- --------- --------- ----------- ----------- Gross Margin 982,037 10,183 288,873 (109) 1,280,984 Margin % 58.4% 69.7% 84.7% 23.9% 62.9% Nuclear refueling outage expenses 14,736 - 24,156 - 38,892 Provision for turbine commitments, asset impairments and restructuring charges - - (7,743) - (7,743) Other operation and maintenance 332,678 10,278 182,280 (338) 524,898 Decommissioning 24,699 - 12,799 - 37,498 Taxes other than income taxes 81,614 725 15,398 - 97,737 ---------- --------- --------- ----------- ----------- Total 1,154,062 15,437 279,208 (685) 1,448,021 ---------- --------- --------- ----------- ----------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION 528,310 (820) 61,982 229 589,702 ---------- --------- --------- ----------- ----------- Margin % 31.4% (5.6%) 18.2% (50.2%) 28.9% DEPRECIATION AND AMORTIZATION: Depreciation and amortization 198,196 1,289 11,560 - 211,046 Other regulatory charges (credits) 15,253 - - - 15,253 ---------- --------- --------- ----------- ----------- Total 213,449 1,289 11,560 - 226,299 ---------- --------- --------- ----------- ----------- OPERATING INCOME (LOSS) 314,861 (2,109) 50,422 229 363,403 ---------- --------- --------- ----------- ----------- Margin % 18.7% (14.4%) 14.8% (50.2%) 17.8% OTHER INCOME (DEDUCTIONS): Allowance for equity funds used during construction 7,286 - - - 7,286 Gain/(loss) on sale of assets - net 301 - - - 301 Interest and dividend income 10,917 8,563 21,398 (11,054) 29,824 Equity in earnings of unconsolidated equity affiliates - - 128,061 - 128,061 Miscellaneous - net (5,277) 2,939 13,882 (230) 11,315 ---------- --------- --------- ----------- ----------- Total 13,227 11,502 163,341 (11,284) 176,787 ---------- --------- --------- ----------- ----------- INTEREST AND OTHER CHARGES: Interest on long-term debt 107,281 5,241 5,214 - 117,737 Other interest - net 4,898 11,278 7,922 (11,054) 13,044 Distributions on preferred securities of subsidiaries 4,709 - - - 4,709 Allowance for borrowed funds used during construction (5,719) - - - (5,719) ---------- --------- --------- ----------- ----------- Total 111,169 16,519 13,136 (11,054) 129,771 ---------- --------- --------- ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES 216,919 (7,125) 200,627 - 410,419 INCOME TAXES 81,881 (3,568) 74,105 - 152,418 ---------- --------- --------- ----------- ----------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 135,038 (3,557) 126,522 - 258,001 CUMULATIVE EFFECT OF ACCOUNTING CHANGE (net of taxes) (21,333) - 164,255 - 142,922 ---------- --------- --------- ----------- ----------- CONSOLIDATED NET INCOME (LOSS) 113,705 (3,557) 290,777 - 400,923 PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARIES AND OTHER 5,916 - - - 5,916 ---------- --------- --------- ----------- ----------- EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ 107,789 $ (3,557) $ 290,777 $ - $ 395,007 ========== ========= ========= =========== =========== Margin % 6.8% (24.3%) 85.2% - 19.7% EARNINGS (LOSS) PER AVERAGE COMMON SHARE: BASIC $0.48 ($0.01) $1.30 $1.77 DILUTED $0.47 ($0.01) $1.27 $1.73 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC 223,673,332 DILUTED 228,230,756 *Totals may not foot due to rounding. Entergy Corporation Consolidating Income Statement Three Months Ended March 31, 2002 (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses OPERATING REVENUES: Domestic electric $1,401,422 $ - $ - $ (413) $ 1,401,009 Natural gas 46,377 - - - 46,377 Competitive businesses - 9,001 404,656 (210) 413,448 ---------- --------- --------- ----------- ----------- Total 1,447,799 9,001 404,656 (623) 1,860,834 OPERATING EXPENSES: Operating and Maintenance: Fuel, fuel related expenses, and gas purchased for resale 395,879 - 72,982 - 468,861 Purchased power 131,092 115 38,600 (321) 169,486 ---------- --------- --------- ----------- ----------- Gross Margin 920,828 8,886 293,074 (302) 1,222,487 Margin % 63.6% 98.7% 72.4% 48.5% 65.7% Nuclear refueling outage expenses 15,588 - 9,599 - 25,187 Provision for turbine commitments, asset impairments and restructuring charges - - 401,373 - 401,373 Other operation and maintenance 337,544 15,962 171,409 (562) 524,352 Decommissioning 8,193 - 9,995 - 18,188 Taxes other than income taxes 87,999 576 13,795 - 102,370 ---------- --------- --------- ----------- ----------- Total 976,295 16,653 717,753 (883) 1,709,817 ---------- --------- --------- ----------- ----------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION 471,504 (7,652) (313,097) 260 151,017 ---------- --------- --------- ----------- ----------- Margin % 32.6% (85.0%) (77.4%) (41.7%) 8.1% DEPRECIATION AND AMORTIZATION: Depreciation and amortization 189,887 1,474 13,762 - 205,124 Other regulatory charges (credits) 1,563 - - - 1,563 ---------- --------- --------- ----------- ----------- Total 191,450 1,474 13,762 - 206,687 ---------- --------- --------- ----------- ----------- OPERATING INCOME (LOSS) 280,054 (9,126) (326,859) 260 (55,670) ---------- --------- --------- ----------- ----------- Margin % 19.3% (101.4%) (80.8%) (41.7%) (3.0%) OTHER INCOME (DEDUCTIONS): Allowance for equity funds used during construction 6,682 - - - 6,682 Gain/(loss) on sale of assets - net 663 2 - - 665 Interest and dividend income 4,515 7,129 18,716 (6,835) 23,525 Equity in earnings of unconsolidated equity affiliates - - 67,244 - 67,244 Miscellaneous - net (4,522) (2,541) 4,071 (260) (3,251) ---------- --------- --------- ----------- ----------- Total 7,338 4,590 90,031 (7,095) 94,865 ---------- --------- --------- ----------- ----------- INTEREST AND OTHER CHARGES: Interest on long-term debt 107,293 - 16,234 - 123,527 Other interest - net 7,409 5,822 9,083 (6,835) 15,478 Distributions on preferred securities of subsidiaries 4,709 - - - 4,709 Allowance for borrowed funds used during construction (5,638) - - - (5,638) ---------- --------- --------- ----------- ----------- Total 113,773 5,822 25,317 (6,835) 138,076 ---------- --------- --------- ----------- ----------- INCOME (LOSS) BEFORE INCOME TAXES 173,620 (10,357) (262,145) - (98,881) INCOME TAXES 65,376 (4,191) (87,083) - (25,898) ---------- --------- --------- ----------- ----------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF 108,244 (6,166) (175,062) - (72,983) ACCOUNTING CHANGE CUMULATIVE EFFECT OF ACCOUNTING CHANGE (net of taxes) - - - - - ---------- --------- --------- ----------- ----------- CONSOLIDATED NET INCOME (LOSS) 108,244 (6,166) (175,062) - (72,983) PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARIES AND OTHER 5,940 - - - 5,940 ---------- --------- --------- ----------- ----------- EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ 102,304 $ (6,166) $(175,062) $ - $ (78,923) ========== ========= ========= =========== =========== Margin % 7.1% (68.5%) (43.3%) - (4.2%) EARNINGS (LOSS) PER AVERAGE COMMON SHARE: BASIC $0.45 ($0.03) ($0.78) ($0.36) DILUTED $0.45 ($0.03) ($0.78) ($0.36) AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC 221,943,451 DILUTED 221,943,451 *Totals may not foot due to rounding. Entergy Corporation Consolidating Income Statement Three Months Ended March 31, 2003 vs. 2002 Increase/(Decrease) (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses OPERATING REVENUES: Domestic electric $ 200,712 $ - $ - $ 17 $ 200,729 Natural gas 33,861 - - - 33,861 Competitive businesses - 5,616 (63,466) 150 (57,701) --------- --------- ---------- ----------- ---------- Total 234,573 5,616 (63,466) 167 176,890 OPERATING EXPENSES: Operating and Maintenance: - - Fuel, fuel related expenses, and gas purchased for resale (54,440) - (26,381) - (80,821) Purchased power 227,804 4,319 (32,884) (26) 199,213 --------- --------- ---------- ----------- ---------- Gross Margin 61,209 1,297 (4,201) 193 58,498 Margin % (5.2%) (29.1%) 12.2% (24.6%) (2.8%) Nuclear refueling outage expenses (852) - 14,557 - 13,705 Provision for turbine commitments, asset impairments and restructuring charges - - (409,116) - (409,116) Other operation and maintenance (4,866) (5,684) 10,871 224 546 Decommissioning 16,506 - 2,804 - 19,310 Taxes other than income taxes (6,385) 149 1,603 - (4,633) --------- --------- ---------- ----------- ---------- Total 177,767 (1,216) (438,545) 198 (261,796) --------- --------- ---------- ----------- ---------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION 56,806 6,832 375,079 (31) 438,685 --------- --------- ---------- ----------- ---------- Margin % (1.2%) 79.4% 95.5% (8.5%) 20.8% DEPRECIATION AND AMORTIZATION: - Depreciation and amortization 8,309 (185) (2,202) - 5,922 Other regulatory charges (credits) 13,690 - - - 13,690 --------- --------- ---------- ----------- ---------- Total 21,999 (185) (2,202) - 19,612 --------- --------- ---------- ----------- ---------- OPERATING INCOME (LOSS) 34,807 7,017 377,281 (31) 419,073 --------- --------- ---------- ----------- ---------- Margin % (0.6%) 87.0% 95.6% (8.5%) 20.8% OTHER INCOME (DEDUCTIONS): Allowance for equity funds used during construction 604 - - - 604 Gain/(loss) on sale of assets - net (362) (2) - - (364) Interest and dividend income 6,402 1,434 2,682 (4,219) 6,299 Equity in earnings of unconsolidated equity affiliates - - 60,817 - 60,817 Miscellaneous - net (755) 5,480 9,811 30 14,566 --------- --------- ---------- ----------- ---------- Total 5,889 6,912 73,310 (4,189) 81,922 --------- --------- ---------- ----------- ---------- INTEREST AND OTHER CHARGES: Interest on long-term debt (12) 5,241 (11,020) - (5,791) Other interest - net (2,511) 5,456 (1,161) (4,219) (2,434) Distributions on preferred securities of subsidiaries - - - - - Allowance for borrowed funds used during construction (81) - - - (81) --------- --------- ---------- ----------- ---------- Total (2,604) 10,697 (12,181) (4,219) (8,306) --------- --------- ---------- ----------- ---------- INCOME (LOSS) BEFORE INCOME TAXES 43,300 3,233 462,772 (1) 509,302 INCOME TAXES 16,505 623 161,188 - 178,316 --------- --------- ---------- ----------- ---------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 26,795 2,610 301,584 (1) 330,986 CUMULATIVE EFFECT OF ACCOUNTING CHANGE (net of taxes) (21,333) - 164,255 - 142,922 --------- --------- ---------- ----------- ---------- CONSOLIDATED NET INCOME (LOSS) 5,462 2,610 465,839 (1) 473,908 PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARIES AND OTHER (24) - - - (24) --------- --------- ---------- ----------- ---------- EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ 5,486 $ 2,610 $ 465,839 $ (1) $ 473,932 ========= ========= ========== =========== ========== Margin % 6.8% (24.3%) 85.2% - 19.7% EARNINGS (LOSS) PER AVERAGE COMMON SHARE: BASIC $0.03 $0.02 $2.08 - $2.13 DILUTED $0.02 $0.02 $2.05 - $2.09 *Totals may not foot due to rounding. Entergy Corporation Consolidating Income Statement Twelve Months Ended March 31, 2003 (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses OPERATING REVENUES: Domestic electric $ 6,848,868 $ - $ - $ (1,724) $6,847,144 Natural gas 159,213 - - - 159,213 Competitive businesses - 44,518 1,433,268 (2,219) 1,475,567 ----------- --------- ---------- ----------- ---------- Total 7,008,081 44,518 1,433,268 (3,943) 8,481,924 OPERATING EXPENSES: Operating and Maintenance: Fuel, fuel related expenses, and gas purchased for resale 1,886,909 - 186,866 - 2,073,775 Purchased power 992,153 6,658 35,957 (3,222) 1,031,546 ----------- --------- ---------- ----------- ---------- Gross Margin 4,129,019 37,860 1,210,445 (722) 5,376,603 Margin % 58.9% 85.0% 84.5% 18.3% 63.4% Nuclear refueling outage expenses 57,950 - 61,348 - 119,298 Provision for turbine commitments, asset impairments and restructuring charges - - 19,340 - 19,340 Other operation and maintenance 1,673,703 78,517 738,167 (1,730) 2,488,658 Decommissioning 46,964 - 48,763 - 95,726 Taxes other than income taxes 326,820 2,665 46,345 - 375,830 ----------- --------- ---------- ----------- ---------- Total 4,984,499 87,840 1,136,786 (4,951) 6,204,173 ----------- --------- ---------- ----------- ---------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION 2,023,582 (43,322) 296,482 1,008 2,277,751 ----------- --------- ---------- ----------- ---------- Margin % 28.9% (97.3%) 20.7% (25.6%) 26.9% DEPRECIATION AND AMORTIZATION: Depreciation and amortization 778,108 4,957 62,037 - 845,102 Other regulatory charges (credits) (128,146) - - - (128,146) ----------- --------- ---------- ----------- ---------- Total 649,962 4,957 62,037 - 716,956 ----------- --------- ---------- ----------- ---------- OPERATING INCOME (LOSS) 1,373,620 (48,279) 234,445 1,008 1,560,795 ----------- --------- ---------- ----------- ---------- Margin % 19.6% (108.4%) 16.4% (25.6%) 18.4% OTHER INCOME (DEDUCTIONS): Allowance for equity funds used during construction 32,263 - - - 32,263 Gain/(loss) on sale of assets - net 5,032 - 1,216 - 6,248 Interest and dividend income 29,633 36,778 100,172 (41,960) 124,623 Equity in earnings of unconsolidated equity affiliates (2) - 244,697 - 244,695 Miscellaneous - net (13,433) 10,993 25,293 (1,008) 21,845 ----------- --------- ---------- ----------- ---------- Total 53,493 47,771 371,378 (42,968) 429,674 ----------- --------- ---------- ----------- ---------- INTEREST AND OTHER CHARGES: Interest on long-term debt 443,142 5,881 52,789 - 501,813 Other interest - net 25,738 40,396 43,952 (41,960) 68,126 Distributions on preferred securities of subsidiaries 18,838 - - - 18,838 Allowance for borrowed funds used during construction (24,618) - - - (24,618) ----------- --------- ---------- ----------- ---------- Total 463,100 46,277 96,741 (41,960) 564,159 ----------- --------- ---------- ----------- ---------- INCOME (LOSS) BEFORE INCOME TAXES 964,013 (46,785) 509,082 - 1,426,310 INCOME TAXES 330,256 (10,631) 152,628 - 472,253 ----------- --------- ---------- ----------- ---------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 633,757 (36,154) 356,454 - 954,057 CUMULATIVE EFFECT OF ACCOUNTING CHANGE (net of taxes) (21,333) - 164,255 - 142,922 ----------- --------- ---------- ----------- ---------- CONSOLIDATED NET INCOME (LOSS) 612,424 (36,154) 520,709 - 1,096,979 PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARIES AND OTHER 23,688 - - - 23,688 ----------- --------- ---------- ----------- ---------- EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ 588,736 $(36,154) $ 520,709 $ - $1,073,291 =========== ========= ========== =========== ========== Margin % 8.4% (81.2%) 36.3% - 12.7% EARNINGS (LOSS) PER AVERAGE COMMON SHARE: BASIC $2.63 ($0.16) $2.33 $4.80 DILUTED $2.58 ($0.16) $2.29 $4.71 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC 223,473,977 DILUTED 227,776,645 *Totals may not foot due to rounding. Entergy Corporation Consolidating Income Statement Twelve Months Ended March 31, 2002 (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses OPERATING REVENUES: Domestic electric $ 6,775,117 $ - $ - $ (1,826) $6,773,291 Natural gas 121,895 - - - 121,895 Competitive businesses - 31,215 1,907,065 (4,159) 1,934,121 ----------- --------- ---------- ----------- ---------- Total 6,897,012 31,215 1,907,065 (5,985) 8,829,307 OPERATING EXPENSES: Operating and Maintenance: Fuel, fuel related expenses, and gas purchased for resale 2,338,502 - 686,145 - 3,024,647 Purchased power 715,730 159 115,855 (4,704) 827,040 ----------- --------- ---------- ----------- ---------- Gross Margin 3,842,780 31,056 1,105,065 (1,281) 4,977,620 Margin % 55.7% 99.5% 57.9% 21.4% 56.4% Nuclear refueling outage expenses 64,133 - 32,991 - 97,125 Provision for turbine commitments, asset impairments and restructuring charges - - 401,373 - 401 373 Other operation and maintenance 1,441,099 71,077 696,246 (2,788) 2,205,633 Decommissioning 2,481 - 30,369 - 32,850 Taxes other than income taxes 350,220 2,578 46,958 - 399,756 ----------- --------- ---------- ----------- ---------- Total 4,912,165 73,814 2,009,937 (7,492) 6,988,424 ----------- --------- ---------- ----------- ---------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION 1,984,847 (42,599) (102,872) 1,507 1,840,883 ----------- --------- ---------- ----------- ---------- Margin % 28.8% (136.5%) (5.4%) (25.2%) 20.8% DEPRECIATION AND AMORTIZATION: Depreciation and amortization 663,609 4,903 54,567 - 723,080 Other regulatory charges (credits) (18,558) - - - (18,558) ----------- --------- ---------- ----------- ---------- Total 645,051 4,903 54,567 - 704,522 ----------- --------- ---------- ----------- ---------- OPERATING INCOME (LOSS) 1,339,796 (47,502) (157,439) 1,507 1,136,361 ----------- --------- ---------- ----------- ---------- Margin % 19.4% (152.2%) (8.3%) (25.2%) 12.9% OTHER INCOME (DEDUCTIONS): Allowance for equity funds used during construction 27,948 - - - 27,948 Gain/(loss) on sale of assets - net 2,688 48 2,567 - 5,303 Interest and dividend income 61,361 27,251 72,547 (25,305) 135,854 Equity in earnings of unconsolidated equity affiliates - - 203,910 - 203,910 Miscellaneous - net (35,570) 2,829 19,462 (1,507) (14,785) ----------- --------- ---------- ----------- ---------- Total 56,427 30,128 298,486 (26,812) 358,230 ----------- --------- ---------- ----------- ---------- INTEREST AND OTHER CHARGES: Interest on long-term debt 462,358 - 77,118 - 539,476 Other interest - net 95,631 37,524 36,979 (25,305) 144,829 Distributions on preferred securities of subsidiaries 18,838 - - - 18,838 Allowance for borrowed funds used during construction (23,119) - - - (23,120) ----------- --------- ---------- ----------- ---------- Total 553,708 37,524 114,097 (25,305) 680,023 ----------- --------- ---------- ----------- ---------- INCOME (LOSS) BEFORE INCOME TAXES 842,515 (54,898) 26,950 - 814,568 INCOME TAXES 280,156 1,262 39,949 - 321,367 ----------- --------- ---------- ----------- ---------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 562,359 (56,160) (12,999) - 493,201 CUMULATIVE EFFECT OF ACCOUNTING CHANGE (net of taxes) - - 23,482 - 23,482 ----------- --------- ---------- ----------- ---------- CONSOLIDATED NET INCOME (LOSS) 562,359 (56,160) 10,483 - 516,683 PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARIES AND OTHER 23,536 - - - 23,536 ----------- --------- ---------- ----------- ---------- EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ 538,823 $(56,160) $ 10,483 $ - $493,147 =========== ========= ========== =========== ========== Margin % 7.8% (179.9%) 0.5% - 5.6% EARNINGS (LOSS) PER AVERAGE COMMON SHARE: BASIC $2.43 ($0.25) $0.05 $2.23 DILUTED $2.39 ($0.25) $0.05 $2.19 AVERAGE NUMBER OF COMMON SHARES OUTSTANDING: BASIC 221,443,909 DILUTED 225,245,641 *Totals may not foot due to rounding. Entergy Corporation Consolidating Income Statement Twelve Months Ended March 31, 2003 vs. 2002 Increase/(Decrease) (Dollars in thousands) (Unaudited) U.S. Parent & Competitive Eliminations Consolidated Utilities Other Businesses OPERATING REVENUES: Domestic electric $ 73,751 $ - $ - $ 102 $ 73,853 Natural gas 37,318 - - - 37,318 Competitive businesses - 13,303 (473,797) 1,940 (458,554) ---------- -------- ---------- ------------ ---------- Total 111,069 13,303 (473,797) 2,042 (347,383) OPERATING EXPENSES: Operating and Maintenance: - - Fuel, fuel related expenses, and gas purchased for resale (451,593) - (499,279) - (950,872) Purchased power 276,423 6,499 (79,898) 1,483 204,507 ---------- -------- ---------- ------------ ---------- Gross Margin 286,239 6,804 105,380 560 398,982 Margin % 3.2% (14.4%) 26.5% (3.1%) 7.0% Nuclear refueling outage expenses (6,183) - 28,357 - 22,174 Provision for turbine commitments, asset impairments and restructuring charges - - (382,033) - (382,033) Other operation and maintenance 232,604 7,440 41,921 1,059 283,024 Decommissioning 44,483 - 18,394 - 62,876 Taxes other than income taxes (23,400) 87 (613) - (23,926) ---------- -------- ---------- ------------ ---------- Total 72,334 14,026 (873,151) 2,541 (784,250) ---------- -------- ---------- ------------ ---------- EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION, AND AMORTIZATION 38,735 (723) 399,354 (499) 436,867 ---------- -------- ---------- ------------ ---------- Margin % 0.1% 39.2% 26.1% (0.4%) 6.0% DEPRECIATION AND AMORTIZATION: - Depreciation and amortization 114,499 54 7,470 - 122,023 Other regulatory charges (credits) (109,588) - - - (109,588) ---------- -------- ---------- ------------ ---------- Total 4,911 54 7,470 - 12,435 ---------- -------- ---------- ------------ ---------- OPERATING INCOME (LOSS) 33,824 (777) 391,884 (499) 424,432 ---------- -------- ---------- ------------ ---------- Margin % 0.2% 43.7% 24.6% (0.4%) 5.5% OTHER INCOME (DEDUCTIONS): Allowance for equity funds used during construction 4,315 - - - 4,315 Gain/(loss) on sale of assets - net 2,344 (48) (1,351) - 945 Interest and dividend income (31,728) 9,527 27,625 (16,655) (11,231) Equity in earnings of unconsolidated equity affiliates (2) - 40,787 - 40,785 Miscellaneous - net 22,137 8,164 5,831 499 36,630 ---------- -------- ---------- ------------ ---------- Total (2,934) 17,643 72,892 (16,156) 71,444 ---------- -------- ---------- ------------ ---------- INTEREST AND OTHER CHARGES: Interest on long-term debt (19,216) 5,881 (24,329) - (37,664) Other interest - net (69,893) 2,872 6,973 (16,655) (76,703) Distributions on preferred securities of subsidiaries - - - - - Allowance for borrowed funds used during construction (1,499) - - - (1,498) ---------- -------- ---------- ------------ ---------- Total (90,608) 8,753 (17,356) (16,655) (115,865) ---------- -------- ---------- ------------ ---------- INCOME (LOSS) BEFORE INCOME TAXES 121,498 8,113 482,132 (1) 611,741 INCOME TAXES 50,100 (11,893) 112,679 - 150,886 ---------- -------- ---------- ------------ ---------- INCOME (LOSS) BEFORE CUMULATIVE EFFECT OF ACCOUNTING CHANGE 71,398 20,006 369,453 - 460,857 CUMULATIVE EFFECT OF ACCOUNTING CHANGE (net of taxes) (21,333) - 140,773 - 119,440 ---------- -------- ---------- ------------ ---------- CONSOLIDATED NET INCOME (LOSS) 50,065 20,006 510,226 - 580,297 PREFERRED DIVIDEND REQUIREMENTS OF SUBSIDIARIES AND OTHER 152 - - - 152 ---------- -------- ---------- ------------ ---------- EARNINGS (LOSS) APPLICABLE TO COMMON STOCK $ 49,913 $ 20,006 $ 510,226 $ - $ 580,145 ========== ========= ========== ============ ========== Margin % 0.6% 98.7% 35.8% 7.1% EARNINGS (LOSS) PER AVERAGE COMMON SHARE: BASIC $0.20 $0.09 $2.28 $2.57 DILUTED $0.19 $0.09 $2.24 $2.52 *Totals may not foot due to rounding. Entergy Corporation Consolidated Cash Flow Statement Year to Date March 31, 2003 vs. 2002 (Dollars in thousands) (Unaudited) 2003 2002 Variance OPERATING ACTIVITIES Consolidated net income $400,923 $(72,983) $473,906 Noncash items included in net income: Reserve for regulatory adjustments (14,340) 9,718 (24,058) Other regulatory charges (credits) - net 15,253 1,563 13,690 Depreciation, amortization, and decommissioning 248,544 223,312 25,232 Deferred income taxes and investment tax credits 144,368 (193,180) 337,548 Allowance for equity funds used during construction (7,286) (6,682) (604) Cumulative effect of accounting change (142,922) - (142,922) Gain loss on sale of assets - net (301) (665) 364 Equity in undistributed earnings of subsidiaries and unconsolidated affiliates (128,061) (67,244) (60,817) Provision for turbine commitments, asset impairments and restructuring charges (7,743) 401,373 (409,116) Changes in working capital: Receivables (42,759) 73,913 (116,672) Fuel inventory (22,025) (13,232) (8,793) Accounts payable (246,909) (68,720) (178,189) Taxes accrued (26,844) 131,838 (158,682) Interest accrued (23,678) (32,415) 8,737 Deferred fuel (125,901) 45,164 (171,065) Other working capital accounts 9,580 (82,101) 91,681 Provision for estimated losses and reserves (8,318) (1,169) (7,149) Changes in other regulatory assets 12,596 (1,277) 13,873 Other 16,532 6,690 9,842 -------- -------- -------- Net cash flow provided by operating activities 50,709 353,903 (303,194) -------- -------- -------- INVESTING ACTIVITIES Construction/capital expenditures (274,614) (267,110) (7,504) Allowance for equity funds used during construction 7,286 6,682 604 Nuclear fuel purchases (112,155) (85,143) (27,012) Proceeds from sale/leaseback of nuclear fuel 26,887 92,136 (65,249) Proceeds from sale of businesses 29,610 38,848 (9,238) Investment in other nonregulated/nonutility properties (46,290) (9,793) (36,497) Decrease (increase) in other investments (166,439) 39,754 (206,193) Changes in other temporary investments - net - 150,000 (150,000) Decommissioning trust contributions and realized change in trust assets (22,551) (15,747) (6,804) Other regulatory investments (42 127) - (42,127) Other (9,821) 3,343 (13,164) -------- -------- -------- Net cash flow used in investing activities (610,214) (47,030) (563,184) -------- -------- -------- FINANCING ACTIVITIES Proceeds from the issuance of: Long-term debt 356,497 240,017 116,480 Common stock 98,501 66,369 32,132 Retirement of: Long-term debt (796,686) (577,934) (218,752) Repurchase of common stock - - - Redemption of preferred stock (2,250) (1,403) (847) Changes in credit line borrowings - net 30,000 56,333 (26,333) Dividends paid: Common stock (78,142) (73,225) (4,917) Preferred stock (5,916) (5,948) 32 -------- -------- -------- Net cash flow used in financing activities (397,996) (295,791) (102,205) -------- -------- -------- Effect of exchange rates on cash and cash equivalents (372) 640 (1,012) -------- -------- -------- Net increase (decrease) in cash and cash equivalents (957,873) 11,722 (969,595) Cash and cash equivalents at beginning of period 1,335,328 751,573 583,755 -------- ---------- --------- Cash and cash equivalents at end of period $377,455 $763,295 ($385,840) ======== ========== =========