Entergy
639 Loyola Avenue
New Orleans, LA 70113
| Date: | August 1, 2005 |
For Release: | Immediately |
Contact: | Morgan Stewart (News Media) | Michele Lopiccolo (Investor Relations) |
Exhibit 99.2
Entergy Reports Second Quarter Earnings
New Orleans, La. - Entergy Corporation (NYSE:ETR) today reported second quarter 2005 as-reported and operational earnings of $286.2 million, or $1.33 per share. This compares to as-reported earnings of $265.2 million, or $1.14 per share, and operational earnings of $252.2 million, or $1.08 per share, in the second quarter 2004. As-reported earnings in the prior period included the earnings contribution from Entergy-Koch, LP's trading and gas pipeline businesses that were sold in fourth quarter 2004.
"Solid operational results in all areas produced earnings in line with our expectations for the quarter," saidJ. Wayne Leonard, Entergy's chief executive officer. "An unusually busy regulatory agenda was substantially cleared with very positive results across the board."
Entergy Corporation Consolidated Earnings - Reconciliation of GAAP* to non-GAAP Measures | ||||||
Second Quarter and Year-to-Date 2005 vs. 2004 | ||||||
Second Quarter | Year-to-Date | |||||
(Per share in U.S. $) | 2005 | 2004 | $ Change | 2005 | 2004 | $ Change |
As-Reported Earnings | ||||||
Utility, Parent & Other | 1.05 | 0.83 | 0.22 | 1.47 | 1.38 | 0.09 |
Entergy Nuclear | 0.27 | 0.27 | - | 0.63 | 0.56 | 0.07 |
Energy Commodity Services | 0.01 | 0.04 | (0.03) | 0.01 | 0.08 | (0.07) |
1.33 | 1.14 | 0.19 | 2.11 | 2.02 | 0.09 | |
Special Items | - | (0.06) | (a) 0.06 | - | (0.13) | (a) 0.13 |
Operational Earnings | 1.33 | 1.08 | 0.25 | 2.11 | 1.89 | 0.22 |
*GAAP refers to United States generally accepted accounting principles.
(a) Operational earnings for second quarter and year-to-date 2004 were originally reported as $1.14 per share and $2.02 per share, respectively. Following the sales of Entergy-Koch, LP's trading and pipeline businesses, Entergy began treating earnings from Entergy-Koch as a special item, which revises the previously reported operational earnings for quarterly comparisons.
Operational Earnings Highlights for Second Quarter 2005
- Utility, Parent & Other operational results increased due to higher revenues, customer usage, and accretion from Entergy's share repurchase program, partially offset by increased operation and maintenance expense.
- Entergy Nuclear results equaled earnings per share for the same period last year. Lower generation as a result of planned and unplanned outages during the current quarter, and higher operation and maintenance expense were essentially offset by higher contract pricing and accretion.
- Entergy's non-nuclear wholesale assets business showed improved results due to a combination of lower operation and maintenance expense and proceeds from the sale of SO2 allowances.
Other Quarterly Highlights
- Constructive decisions at the Federal Energy Regulatory Commission in the system agreement and affiliate purchased power contracts proceedings.
- Settlement achieved in Entergy Louisiana's rate case proceeding including a new formula rate plan.
- Legislation passed in Texas in support of Entergy Gulf States - Texas.
- Entergy received the 2005 Edison Award, the electric power industry's top honor.
Utility, Parent & Other
In second quarter 2005, Utility, Parent & Other earned $226.8 million, or $1.05 per share, on an as-reported basis, compared to $192.7 million, or 83 cents per share, in second quarter 2004. Operational results in each period equaled as-reported results.
Second quarter 2005 results reflect an increase in net revenue due in part to higher unbilled revenues and higher residential, commercial, and governmental customer usage. Unbilled revenues reflect an estimate of revenues earned for energy delivered since the latest customer billings, net of the prior period reversal, which is now reflected in billed revenues. Second quarter 2005 results also reflect tax benefits from the American Jobs Creation Act of 2004 and accretion from Entergy's share repurchase program. Higher operation and maintenance expense partially offset the impact of the above items. The increased operation and maintenance expense was due to higher employee benefits expense, as well as increased nuclear outage expense and a reserve taken in connection with non-performance by a bankrupt vendor.
Megawatt-hour sales in the residential sector in second quarter 2005, on a weather-adjusted basis, were up slightly, compared to second quarter 2004. Commercial and governmental sales, after adjusting for weather, were up approximately one percent compared to the prior quarter. Industrial sales, after adjusting for the planned loss of one customer to cogeneration, experienced an increase of one percent in second quarter 2005 compared to the second quarter 2004 with usage by chemical customers leading the growth.
Entergy Nuclear
Entergy Nuclear earned $58.3 million, or 27 cents per share, on both as-reported and operational bases in second quarter 2005. This compares to as-reported and operational earnings of $63.0 million, or 27 cents per share, in second quarter 2004. In second quarter 2005 Entergy Nuclear had lower generation resulting from planned and unplanned outages at larger units compared to second quarter 2004. In addition, operation and maintenance expense increased quarter to quarter due to increased outage expense and higher employee benefits expense. Higher contract pricing and accretion partially offset the impact of the lower generation and higher expenses in the current quarter.
Energy Commodity Services
Energy Commodity Services results in second quarter 2005 include only earnings from Entergy's non-nuclear wholesale assets business. Energy Commodity Services as-reported results in second quarter 2004 included earnings from both the non-nuclear wholesale assets business and Entergy-Koch, LP.
As-reported results for Energy Commodity Services in second quarter 2005 were $1.1 million, or one cent per share, compared to $9.5 million, or four cents per share, in second quarter 2004. The lower as-reported results reflect the absence of any earnings from Entergy-Koch, LP in 2005, reflecting the sales of its trading and pipeline businesses in late 2004. Operational results for Energy Commodity Services were also $1.1 million, or one cent per share, in second quarter 2005 compared to a loss of $3.5 million, or two cents per share, one year ago reflecting primarily lower operation and maintenance expense at the non-nuclear wholesale assets business as well as the sale of SO2 allowances.
Outlook
Entergy affirmed as-reported and operational earnings guidance in the lower end of the range of $4.60 to $4.85 per share for full year 2005.
Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.7 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy has annual revenues of more than $10 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 and other proceeding s at local and federal regulatory agencies, Entergy's ability to manage its operation and maintenance costs, 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 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, changes in the financial markets, particularly those affecting the availability of capital and Entergy's ability to refinance existing debt, execute its share repurchase program, and 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 att ractive terms, changes in utility regulation and in regulation of the nuclear industry, the success of Entergy's strategies to reduce tax payments, and the effects of litigation and weather.
Appendix A provides a reconciliation of GAAP as-reported earnings to non-GAAP operational earnings.
Appendix A: Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures | ||||||
(Per share in U.S. $) | ||||||
Second Quarter | Year-to-Date | |||||
2005 | 2004 | Change | 2005 | 2004 | Change | |
As-Reported | ||||||
Utility, Parent & Other | 1.05 | 0.83 | 0.22 | 1.47 | 1.38 | 0.09 |
Entergy Nuclear | 0.27 | 0.27 | - | 0.63 | 0.56 | 0.07 |
Energy Commodity Services | ||||||
Non-nuclear wholesale assets | 0.01 | (0.02) | 0.03 | 0.01 | (0.05) | 0.06 |
Entergy-Koch Trading | - | 0.05 | (0.05) | - | 0.08 | (0.08) |
Gulf South Pipeline | - | 0.01 | (0.01) | - | 0.05 | (0.05) |
Total Energy Commodity Services | 0.01 | 0.04 | (0.03) | 0.01 | 0.08 | (0.07) |
Consolidated As-Reported Earnings | 1.33 | 1.14 | 0.19 | 2.11 | 2.02 | 0.09 |
Less Special Items | ||||||
Utility, Parent & Other | - | - | - | - | - | - |
Entergy Nuclear | - | - | - | - | - | - |
Energy Commodity Services | ||||||
Non-nuclear wholesale assets | - | - | - | - | - | - |
Entergy-Koch Trading | - | 0.05 | (0.05) | - | 0.08 | (0.08) |
Gulf South Pipeline | - | 0.01 | (0.01) | - | 0.05 | (0.05) |
Total Energy Commodity Services | - | 0.06 | (0.06) | - | 0.13 | (0.13) |
Consolidated Special Items | - | 0.06 | (0.06) | - | 0.13 | (0.13) |
Operational | ||||||
Utility, Parent & Other | 1.05 | 0.83 | 0.22 | 1.47 | 1.38 | 0.09 |
Entergy Nuclear | 0.27 | 0.27 | - | 0.63 | 0.56 | 0.07 |
Energy Commodity Services | ||||||
Non-nuclear wholesale assets | 0.01 | (0.02) | 0.03 | 0.01 | (0.05) | 0.06 |
Entergy-Koch Trading | - | - | - | - | - | - |
Gulf South Pipeline | - | - | - | - | - | - |
Total Energy Commodity Services | 0.01 | (0.02) | 0.03 | 0.01 | (0.05) | 0.06 |
Consolidated Operational Earnings | 1.33 | 1.08 | 0.25 | 2.11 | 1.89 | 0.22 |
Entergy Corporation | |||||
Consolidated Income Statement | |||||
Three Months Ended June 30 | |||||
(in thousands) | |||||
2005 | 2004 | % Inc/(Dec) | |||
(unaudited) | |||||
Operating Revenues: | |||||
Domestic electric | $2,124,134 | $1,952,049 | 8.8 | ||
Natural gas | 43,660 | 38,146 | 14.5 | ||
Competitive businesses | 541,725 | 494,902 | 9.5 | ||
Total | 2,709,519 | 2,485,097 | 9.0 | ||
Operating Expenses: | |||||
Operation and maintenance: | |||||
Fuel, fuel-related expenses, and gas purchased for resale | 474,203 | 488,368 | (2.9) | ||
Purchased power | 739,786 | 555,439 | 33.2 | ||
Nuclear refueling outage expenses | 39,150 | 39,099 | 0.1 | ||
Other operation and maintenance | 599,575 | 567,746 | 5.6 | ||
Decommissioning | 36,525 | 37,098 | (1.5) | ||
Taxes other than income taxes | 107,465 | 103,283 | 4.0 | ||
Depreciation and amortization | 213,902 | 215,640 | (0.8) | ||
Other regulatory (credits) - net | (30,697) | (15,888) | 93.2 | ||
Total | 2,179,909 | 1,990,785 | 9.5 | ||
Operating Income | 529,610 | 494,312 | 7.1 | ||
Other Income: | |||||
Allowance for equity funds used during construction | 11,164 | 8,016 | 39.3 | ||
Interest and dividend income | 34,756 | 25,823 | 34.6 | ||
Equity in earnings of unconsolidated equity affiliates | 2,158 | 20,288 | (89.4) | ||
Miscellaneous - net | (11,333) | 13,571 | (183.5) | ||
Total | 36,745 | 67,698 | (45.7) | ||
Interest and Other Charges: |
| ||||
Interest on long-term debt | 109,299 | 116,211 | (5.9) | ||
Other interest - net | 14,058 | 13,563 | 3.6 | ||
Allowance for borrowed funds used during construction | (6,181) | (4,970) | 24.4 | ||
Total | 117,176 | 124,804 | (6.1) | ||
Income Before Income Taxes | 449,179 | 437,206 | 2.7 | ||
Income Taxes | 156,390 | 166,195 | (5.9) | ||
Consolidated Net Income | 292,789 | 271,011 | 8.0 | ||
Preferred dividend requirements of subsidiaries and other | 6,639 | 5,829 | 13.9 | ||
Earnings Applicable to Common Stock | $286,150 | $265,182 | 7.9 | ||
Earnings Per Average Common Share: | |||||
Basic | $1.36 | $1.16 | 17.2 | ||
Diluted | $1.33 | $1.14 | 16.7 | ||
Average Number of Common Shares Outstanding: | |||||
Basic | 211,134,467 | 228,714,654 | |||
Diluted | 215,568,534 | 232,775,049 | |||
Entergy Corporation | |||||
Consolidated Income Statement | |||||
Six Months Ended June 30 | |||||
(in thousands) | |||||
2005 | 2004 | % Inc/(Dec) | |||
(unaudited) | |||||
Operating Revenues: | |||||
Domestic electric | $3,868,516 | $3,653,377 | 5.9 | ||
Natural gas | 130,610 | 121,962 | 7.1 | ||
Competitive businesses | 1,033,806 | 961,307 | 7.5 | ||
Total | 5,032,932 | 4,736,646 | 6.3 | ||
Operating Expenses: | |||||
Operation and maintenance: | |||||
Fuel, fuel-related expenses, and gas purchased for resale | 1,054,284 | 1,038,495 | 1.5 | ||
Purchased power | 1,239,565 | 1,004,959 | 23.3 | ||
Nuclear refueling outage expenses | 78,960 | 80,706 | (2.2) | ||
Other operation and maintenance | 1,134,239 | 1,068,997 | 6.1 | ||
Decommissioning | 73,524 | 75,446 | (2.5) | ||
Taxes other than income taxes | 210,454 | 200,585 | 4.9 | ||
Depreciation and amortization | 438,079 | 426,289 | 2.8 | ||
Other regulatory (credits) - net | (47,462) | (31,977) | 48.4 | ||
Total | 4,181,643 | 3,863,500 | 8.2 | ||
Operating Income | 851,289 | 873,146 | (2.5) | ||
Other Income: | |||||
Allowance for equity funds used during construction | 24,049 | 15,479 | 55.4 | ||
Interest and dividend income | 65,646 | 54,074 | 21.4 | ||
Equity in earnings of unconsolidated equity affiliates | (35) | 40,107 | (100.1) | ||
Miscellaneous - net | 14,469 | 18,740 | (22.8) | ||
Total | 104,129 | 128,400 | (18.9) | ||
Interest and Other Charges: | |||||
Interest on long-term debt | 220,052 | 235,672 | (6.6) | ||
Other interest - net | 26,222 | 19,778 | 32.6 | ||
Allowance for borrowed funds used during construction | (13,690) | (10,124) | 35.2 | ||
Total | 232,584 | 245,326 | (5.2) | ||
Income Before Income Taxes | 722,834 | 756,220 | (4.4) | ||
Income Taxes | 251,425 | 272,192 | (7.6) | ||
Consolidated Net Income | 471,409 | 484,028 | (2.6) | ||
Preferred dividend requirements of subsidiaries and other | 13,263 | 11,685 | 13.5 | ||
Earnings Applicable to Common Stock | $458,146 | $472,343 | (3.0) | ||
Earnings Per Average Common Share: | |||||
Basic | $2.15 | $2.06 | 4.4 | ||
Diluted | $2.11 | $2.02 | 4.5 | ||
Average Number of Common Shares Outstanding: | |||||
Basic | 212,622,976 | 229,489,646 | |||
Diluted | 217,091,580 | 234,007,635 | |||
Entergy Corporation | ||||||||||
Utility Electric Energy Sales & Customers | ||||||||||
Three Months Ended June 30 | ||||||||||
2005 | 2004 | % | % | |||||||
(Millions of kwh) | ||||||||||
Electric Energy Sales: | ||||||||||
Residential | 7,005 | 6,911 | 1.4 | 0.5 | ||||||
Commercial | 6,287 | 6,220 | 1.1 | 0.8 | ||||||
Governmental | 620 | 609 | 1.8 | 1.4 | ||||||
Industrial | 9,810 | 9,922 | (1.1) | (1.1) | ||||||
Total to Ultimate Customers | 23,722 | 23,662 | 0.3 | (0.1) | ||||||
Wholesale | 1,938 | 2,367 | (18.1) | |||||||
Total Sales | 25,660 | 26,029 | (1.4) | |||||||
Six Months Ended June 30 | ||||||||||
2005 | 2004 | % | % | |||||||
(Millions of kwh) | ||||||||||
Electric Energy Sales: | ||||||||||
Residential | 14,575 | 14,637 | (0.4) | (0.3) | ||||||
Commercial | 12,277 | 12,107 | 1.4 | 1.3 | ||||||
Governmental | 1,229 | 1,209 | 1.7 | 1.5 | ||||||
Industrial | 19,406 | 19,412 | - | - | ||||||
Total to Ultimate Customers | 47,487 | 47,365 | 0.3 | 0.2 | ||||||
Wholesale | 3,670 | 4,785 | (23.3) | |||||||
Total Sales | 51,157 | 52,150 | (1.9) | |||||||
As of June 30 | ||||||||||
2005 | 2004 | % | ||||||||
Electric Customers (Year to date average): | ||||||||||
Residential | 2,296,628 | 2,279,341 | 0.8 | |||||||
Commercial | 318,331 | 313,872 | 1.4 | |||||||
Governmental | 14,978 | 14,569 | 2.8 | |||||||
Industrial | 41,446 | 42,507 | (2.5) | |||||||
Total Ultimate Customers | 2,671,383 | 2,650,289 | 0.8 | |||||||
Wholesale | 40 | 42 | (4.8) | |||||||
Total Customers | 2,671,423 | 2,650,331 | 0.8 | |||||||