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Exhibit 99.2
Entergy
639 Loyola Avenue
New Orleans, LA 70113
News
Release
Date: | October 21, 2004 | |
For Release: | Immediately | |
Contact: | Morgan Stewart (News Media) | Michele Lopiccolo (Investor Relations) |
Entergy Reports Third Quarter Earnings
New Orleans, La. - Entergy Corporation (NYSE:ETR) today reported third quarter 2004 as-reported earnings of $282.2 million, or $1.22 per share, and operational earnings of $321.4 million, or $1.39 per share. This compares with as-reported and operational earnings of $365.8 million, or $1.57 per share, in third quarter 2003.Special items in the third quarter 2004 totaled ($39.2) million, or (17) cents per share. Entergy-Koch's results are treated as a special item for 2004 consistent with Entergy's announcement in September 2004 of the sale of Entergy-Koch, LP's trading business and its intent to sell Gulf South Pipeline.
"The mildest weather in more than a decade impacted our results this quarter but the underlying strength of our business fundamentals remains sound," saidJ. Wayne Leonard, Entergy's chief executive officer. "Sales in the utility reflected solid growth, after adjusting for the unusual weather, our nuclear business recorded improved results in spite of several unplanned outages, and we continue to distribute value created to our shareholders with the second stepwise increase in the dividend in less than two years."
Entergy Corporation Consolidated Earnings - Reconciliation of GAAP* to non-GAAP Measures | ||||||
Third Quarter and Year-to-Date 2004 vs. 2003 | ||||||
(Per share in U.S. $) | Third Quarter | Year-to-Date | ||||
2004 | 2003 | $ Change | 2004 | 2003 | $ Change | |
As-Reported Earnings | ||||||
Utility, Parent & Other | 1.11 | 1.16 | (0.05) | 2.48 | 2.10 | 0.38 |
Entergy Nuclear | 0.28 | 0.25 | 0.03 | 0.84 | 1.31 | (0.47) |
Energy Commodity Services | (0.17) | 0.16 | (0.33) | (0.08) | 0.78 | (0.86) |
1.22 | 1.57 | (0.35) | 3.24 | 4.19 | (0.95) | |
Less: Special Items | (0.17) | - | (0.17) | (0.05) | 0.32 | (0.37) |
Operational Earnings | 1.39 | 1.57 | (0.18) | 3.29 | 3.87 | (0.58) |
*GAAP refers to United States generally accepted accounting principles.
Third Quarter Financial Highlights
- Utility, Parent & Other results were four percent lower compared to third quarter 2003 due primarily to extremely mild weather and higher operation and maintenance expenses.
- Entergy Nuclear results increased 12 percent over the same period last year due to improved contract pricing and reevaluation of decommissioning liabilities, partially offset by lower generation due to plant outages.
- Energy Commodity Services results were significantly lower due to a loss recorded at Entergy-Koch, LP.
In addition, Entergy's Board of Directors approved a 20 percent increase in the common stock dividend, effective for the December 1 payment, following a 29 percent increase in the dividend approved in July 2003. Entergy also confirmed its $1.5 billion share repurchase program with the early September announcement that a definitive agreement had been reached to sell the energy trading business of Entergy-Koch, LP to Merrill Lynch & Co.
Utility, Parent & Other
For third quarter 2004, Utility, Parent & Other recorded as-reported and operational earnings of $257.5 million, or $1.11 per share, compared to $269.8 million, or $1.16 per share in third quarter 2003.
Third quarter 2004 results were driven by 1) extremely mild weather in 2004 compared to near normal weather experienced in third quarter 2003; 2) higher operation and maintenance expenses due primarily to the continuation of increased employee benefits expenses, referenced in second quarter results, and timing differences; 3) lower interest expense due to debt refinancing efforts in 2003; and 4) reevaluation of the decommissioning liability, in connection with the preparation of a new study in July 2004, to reflect life extension on the River Bend nuclear plant.
Megawatt-hour sales in the residential sector in third quarter 2004, on a weather-adjusted basis, were up two percent compared to third quarter 2003. Commercial and governmental sales, after adjusting for weather, were up nearly four percent. Industrial sales experienced an increase of nearly five percent in third quarter 2004 compared to the same quarter last year with usage by the petroleum refining, chemical and primary metals sectors leading the growth.
Entergy Nuclear
Entergy Nuclear earned $63.7 million, or 28 cents per share, on an as-reported basis in third quarter 2004, compared to $59.6 million, or 25 cents per share, for the same period in the prior year. Operational results in each period equaled as-reported results. The improvement in earnings for third quarter 2004 resulted primarily from 1) increased revenue due to higher contract pricing and the addition of a support services contract for the Cooper Nuclear Station; and, 2) a reduction in the decommissioning liability to reflect changes in assumptions on probability of life extension which were evaluated as part of recent updates of decommissioning-related studies. These positive effects were partially offset by lower generation due to unplanned and planned outages during the period at Vermont Yankee, Indian Point 2, and FitzPatrick plants.
Energy Commodity Services
Energy Commodity Services, which includes earnings contributions from Entergy-Koch, LP and Entergy's non-nuclear wholesale assets business, incurred an as-reported loss of $38.9 million, or 17 cents per share, in third quarter 2004. This compares to earnings of $36.3 million, or 16 cents per share, in as-reported earnings in third quarter 2003. Earnings from Entergy-Koch, LP are excluded from Energy Commodity Services' operational earnings consistent with Entergy's announcement in September 2004 of the sale of Entergy-Koch, LP's trading business and its intent to sell Gulf South Pipeline. Energy Commodity Services had no earnings on an operational basis in third quarter 2004, compared to earnings of 16 cents per share in the same period last year, reflecting the inclusion of earnings from Entergy-Koch, LP, as discussed above.
Factors that contributed to the quarter to quarter earnings decrease were 1) a change in the venture's ability to apply hedge accounting to certain transactions as a result of signing a definitive agreement to sell its energy trading business; and, 2) the exclusion for accounting purposes of the mark-to-market value of certain contracts entered into to hedge physical gas storage positions.
Outlook
"We project operational earnings in the range of $3.70 to $3.80 per share for full year 2004 in spite of the disappointing results produced this quarter due to the mild weather we experienced across our service territory. As-reported earnings are projected in the range of $3.65 to $3.75 per share for full year 2004, reflecting special items recorded in the third quarter of 2004," saidLeo Denault, Entergy's chief financial officer. "We are reaffirming 2005 guidance in the range of $4.60 to $4.85 per share on both as-reported and operational bases. Key assumptions supporting this guidance include normal weather, the continued successful execution of operating strategies across our businesses and the planned share repurchases under our previously announced $1.5 billion program."
Entergy Corporation is an integrated energy company engaged primarily in electric power production, retail distribution operations, energy marketing and trading, and gas transportation. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.6 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy has annual revenues of over $9 billion and approximately 14,000 employees.
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Entergy's online address iswww.entergy.com
In this release and from time to time, Entergy makes statements concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although Entergy believes that these forward-looking statements and the underlying assumptions are reasonable, it cannot provide assurance that they will prove correct. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements involve a number of risks and uncertainties, 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 at local and fede ral regulatory agencies, Entergy's ability to reduce its operation and maintenance costs, particularly at its non-utility nuclear generating facilities, the performance of Entergy's generating plants, and particularly the capacity factor at its nuclear generating facilities, prices for power generated by Entergy's unregulated generating facilities, and the prices and availability of power Entergy must purchase for its utility customers, uncertainty regarding establishment of permanent sites for spent nuclear fuel storage and disposal, Entergy's ability to develop and execute on a point of view regarding prices of electricity, natural gas, and other energy-related commodities, the completion of the sale of Entergy-Koch's U.S. and foreign trading businesses, the ability to sell Entergy-Koch's Gulf South Pipeline at attractive prices, the amount of cash that Entergy-Koch is able to distribute to Entergy, resolution of pending investigations of Entergy-Koch's past trading practices, changes in the energy tradin g market, 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, Entergy's ability to purchase and sell assets at attractive prices and on other attractive terms, changes in utility regulation and in regulation of the nuclear industry, the success of Entergy's strategies to reduce current tax payments, and the effects of litigation and weather.
Entergy Corporation | ||||||||
Utility Electric Energy Sales & Customers | ||||||||
Three Months Ended September 30 | ||||||||
2004 | 2003 | % Inc/(Dec) | ||||||
(Millions of kwh) | ||||||||
Electric Energy Sales: | ||||||||
Residential | 10,738 | 10,763 | (0.2) | |||||
Commercial | 7,753 | 7,539 | 2.8 | |||||
Governmental | 715 | 737 | (3.0) | |||||
Industrial | 10,456 | 9,975 | 4.8 | |||||
Total to Ultimate Customers | 29,662 | 29,014 | 2.2 | |||||
Wholesale | 2,040 | 2,093 | (2.5) | |||||
Total Sales | 31,702 | 31,107 | 1.9 | |||||
Nine Months Ended September 30 | ||||||||
2004 | 2003 | % Inc/(Dec) | ||||||
(Millions of kwh) | ||||||||
Electric Energy Sales: | ||||||||
Residential | 25,375 | 25,776 | (1.6) | |||||
Commercial | 19,860 | 19,525 | 1.7 | |||||
Governmental | 1,924 | 2,033 | (5.4) | |||||
Industrial | 29,868 | 28,855 | 3.5 | |||||
Total to Ultimate Customers | 77,027 | 76,189 | 1.1 | |||||
Wholesale | 6,825 | 7,196 | (5.2) | |||||
Total Sales | 83,852 | 83,385 | 0.6 | |||||
As of September 30 | ||||||||
2004 | 2003 | % Inc/(Dec) | ||||||
Electric Customers (Year to date average): | ||||||||
Residential | 2,283,884 | 2,259,529 | 1.1 | |||||
Commercial | 314,946 | 306,317 | 2.8 | |||||
Governmental | 14,705 | 15,379 | (4.4) | |||||
Industrial | 44,238 | 43,042 | 2.8 | |||||
Total Ultimate Customers | 2,657,773 | 2,624,267 | 1.3 | |||||
Wholesale | 42 | 42 | - | |||||
Total Customers | 2,657,815 | 2,624,309 | 1.3 |