[Logo of Entergy] Entergy
639 Loyola Avenue
New Orleans, LA 70113
Exhibit 99.2
Date: February 4, 2003 News
Release
For Release: Immediately
Contact: Yolanda Pollard (News Media)
(504) 576-4238
ypollar@entergy.com
Nancy Morovich (Investor Relations)
(504) 576-5506
nmorovi@entergy.com
Entergy Reports Solid Earnings for Fourth Quarter 2002
New Orleans, La. - Entergy Corporation (NYSE:ETR) today announced
fourth quarter 2002 as reported earnings of $75.8 million, or 33 cents per
share, compared with $20.7 million, or 9 cents per share in fourth quarter
2001. On an operational basis, fourth quarter earnings were $77.4 million,
or 34 cents per share, in 2002, compared with $39.8 million, or 18 cents
per share, in 2001. The 89 percent increase in the quarter's operational
earnings was driven by the continued strength of Entergy's competitive
businesses.
For the year 2002, Entergy announced as reported earnings of $599.4
million, or $2.64 per share, and operational earnings of $866.4 million,
or $3.81 per share. These figures compare with $3.23 per share in as
reported and operational earnings in 2001. The year over year decline in
as reported earnings reflects special charges taken in 2002 associated with
closing the North American operations of Entergy's wholesale power
development business.
Fourth quarter highlights for the company include the following:
- Entergy Corporation received the prestigious 2002 Platts/BusinessWeek
Global Power Company of the Year award for its nuclear growth
strategy that has created one of the nation's most efficient and
safest fleet of nuclear plants. It was the second major honor
Entergy received in 2002. In June the company was named the
recipient of the Edison Award, the highest honor presented within
the electricity industry.
- Hurricane Lili moved ashore on Oct. 3, 2002, leaving 243,000 Entergy
customers in Louisiana and Mississippi without power. Six days later,
all customers who were able to receive power were restored, once
again proving Entergy is an industry leader in emergency restoration.
- Entergy Nuclear completed refueling outages at Vermont Yankee and
Indian Point 2 in record time, with no lost time accidents.
"2002 was a year of disappointing performance in our industry, and as
these results became more common and more unexpected, the crisis affected
everyone," said J. Wayne Leonard, Entergy's chief executive officer.
"Despite all of this, Entergy maintained its strong cash position, improved
its credit quality and liquidity, and exceeded its targeted operational
earnings growth. We now look ahead in 2003 with renewed commitment to build
on our excellence in utility performance, grow our nuclear business,
reinforce our energy trading capability, and continue our near five-year
record of exceeding expectations."
Utility Operations
In fourth quarter 2002, as reported and operational utility earnings
were $42.4 million, or 19 cents per share, compared to $44.5 million, or
20 cents per share, in fourth quarter 2001. The decrease in earnings
quarter to quarter was due primarily to higher intercompany tax accruals
and higher operation and maintenance expenses, both of which were largely
offset by higher sales volumes across all customer classes. The increase
in operation and maintenance expenses reflects higher plant outage costs
in fossil, higher customer service support costs, and higher employee
benefits expense. The decrease in earnings quarter over quarter for the
utility was also impacted by an increase in the loss realized at Entergy
New Orleans, Inc. A request for rate relief has been filed by Entergy New
Orleans where inadequate rates continue to negatively impact that company's
financial performance and the overall performance of the utility.
Higher electricity usage in fourth quarter 2002 increased residential
sales by 15 percent, compared to fourth quarter 2001. This significant and
highly unusual increase is due to the confluence of positive factors - a
return to normal weather and an improved economy, and this rate of growth is
not expected to continue going forward. Commercial and governmental sales
were up 5 percent, reflecting increased usage across all commercial customer
classes, while industrial sales experienced an increase of 2 percent quarter
over quarter.
For the year 2002, the utility earned $2.57 per share on an as reported
and operational basis, compared with $2.45 per share as reported, and $2.46
per share operational for 2001. The higher earnings in 2002 were due
primarily to higher sales volumes, reflecting some strengthening in the
economy, and cessation of goodwill amortization, partially offset by higher
operation and maintenance expenses due to higher fossil plant outage costs
and higher nuclear and customer service support costs.
Competitive Non-Regulated Businesses
As reported earnings were $57.1 million, or 25 cents per share, for the
competitive businesses in fourth quarter 2002 compared to $19.1 million, or
9 cents per share, in the same period of 2001. Fourth quarter 2002 results
include a net negative special item of 1 cent per share while 2001 earnings
included special items totaling negative 6 cents per share. The special
amount in 2002 is comprised of impairments recorded in Entergy's non-nuclear
wholesale asset business in connection with the RS Cogen project and
write-down of a gas generation and services contract entered into by
Entergy Power Management Corporation prior to the formation of Entergy-Koch
L.P. The impact of these impairments was largely offset by tax benefits
recorded as a result of the sale in fourth quarter 2002 of the Damhead Creek
project in the UK. Excluding special items, operational earnings increased
73 percent, from 15 cents per share in fourth quarter 2001 to 26 cents per
share in fourth quarter 2002.
For the year 2002, as reported earnings from the competitive businesses
declined to $54.7 million, or 24 cents per share, in 2002, from $233.8
million, or $1.04 per share, in 2001. The decline is primarily due to the
special charge in second quarter 2002, as noted earlier, associated with the
closing of Entergy's wholesale power development business. On an operational
basis, the competitive businesses contributed operational earnings of $321.7
million, or $1.41 per share, compared with $212.4 million, or 95 cents per
share, in 2001.
Entergy Nuclear earned $33.8 million, or 15 cents per share, in fourth
quarter 2002, compared to $28.9 million, or 13 cents per share, in fourth
quarter 2001 on both an as reported and operational basis. The increase was
due primarily to the contribution in 2002 of Vermont Yankee, which was
acquired in July 2002, as well as to higher pricing in 2002 under certain
power purchase contracts. For the year 2002, Entergy Nuclear contributed
operational and as reported earnings of $201 million, or 88 cents per share,
compared with $127.9 million, or 57 cents per share, in 2001.
Energy Commodity Services, which includes earnings contributions from
Entergy-Koch L.P. and Entergy's non-nuclear wholesale assets, reported
earnings of $23.3 million, or 10 cents per share, in fourth quarter 2002,
compared to a loss of $9.8 million, or 4 cents per share, in the same period
last year. The improvement is due primarily to strong earnings in trading,
improved results in the gas pipeline business, and the absence in 2002 of
losses realized in fourth quarter 2001 in connection with asset sales in
the non-nuclear wholesale asset business. Operational earnings in fourth
quarter 2002 were $24.9 million, or 11 cents per share, compared with $2.5
million, or 2 cents per share, in the same period of 2001. The improvement
in operational earnings was due primarily to solid results in both the
trading and gas pipeline and storage businesses. As was the case in the
first three quarters of 2002, the income sharing mechanisms that are part of
the Entergy-Koch partnership agreement allocated substantially all of the
partnership's income to Entergy in the fourth quarter of this year.
Entergy-Koch L.P. contributed higher operational earnings in fourth
quarter 2002 compared to the same period in 2001 primarily as a result of
earnings at Entergy-Koch Trading. In addition, Gulf South Pipeline realized
higher earnings even as volumes of gas transported decreased due to more
favorable transportation contract pricing.
For the year 2002, Energy Commodity Services had a loss of $145.8
million, or 64 cents per share, on an as reported basis, primarily due to
the second quarter charge noted above, compared with earnings of $105.9
million, or 47 cents per share, in 2001. Operational earnings for the year
2002 were $121.2 million, or 53 cents per share, compared to $84.5 million,
or 38 cents per share, in 2001.
Parent & Other
Parent & Other recorded a loss of $23.7 million, or 11 cents per share,
in fourth quarter 2002 on both an as reported and operational basis. This
compares to an as reported loss of $42.9 million, or 20 cents per share, and
an operational loss of $36.1 million, or 17 cents per share, in fourth
quarter 2001. The improved results were due primarily to a decrease in
Parent consolidated tax benefits allocated to other Entergy companies and to
higher interest income. In addition, fourth quarter 2001 as reported results
included the impact of a negative special item of 3 cents per share, recorded
in connection with the write-down of a non-core business investment.
For the year 2002, Parent & Other had a loss of $38.6 million, or 17
cents per share, on an as reported basis, compared with a loss of $57.9
million, or 26 cents per share, in 2001. The improved results reflect the
absence in 2002 of special items recorded at Parent & Other during 2001
related to expenses in connection with a terminated merger and the write-down
of a non-core business investment. For the year, Parent & Other had an
operational loss of $38.6 million, or 17 cents per share, in 2002 compared
with a loss of $39.3 million, or 18 cents per share, in 2001.
Outlook
"Continued emphasis on operating excellence supported by a solid
financial plan produced another quarter of very positive results," said
C. John Wilder, Entergy's chief financial officer. "In 2002 Entergy was
challenged by extremely difficult market conditions. The success achieved
by Entergy as reflected in 2002 results supports our belief that our
business fundamentals are sound and our strategic initiatives are on track.
We enter 2003 with an economy that has yet to fully recover and with
numerous challenges ahead in the energy market. However, we are committed to
diligently manage our businesses consistent with our long-term aspirations
in order to deliver sustained value to our shareholders."
Entergy confirmed 2003 as reported and operational earnings guidance in
the range of $3.75 to $3.95 per share. Earnings guidance for 2003 includes
the impact of Entergy's decision to expense stock options effective first
quarter 2003, which is not expected to be material.
Entergy Corporation, with annual revenues of over $8 billion, is a
major integrated energy company engaged in power production, distribution
operations, and related diversified services, with more than 15,000 employees.
Entergy owns or invests in power plants generating nearly 30,000 megawatts of
electricity domestically and internationally, is the second largest U.S.
nuclear generator, and delivers electricity to about 2.6 million customers
in portions of Arkansas, Louisiana, Mississippi, and Texas. Through
Entergy-Koch, L.P., it is also a leading provider of wholesale energy
marketing and trading services, as well as an operator of natural gas
pipeline and storage facilities.
-30-
Entergy's online address is www.entergy.com
The following constitutes a "Safe Harbor" statement under the
Private Securities Litigation Reform Act of 1995: Investors are
cautioned that forward-looking statements contained herein with
respect to the revenues, earnings, performance, strategies,
prospects and other aspects of the business of Entergy
Corporation or its affiliated companies may involve risks and
uncertainties. A number of factors could cause actual results or
outcomes to differ materially from those indicated by such
forward-looking statements. These factors include, but are not
limited to, risks and uncertainties relating to: the effects of
weather, the performance of generating units and transmission
systems, the possession of nuclear materials, fuel and purchased
power prices and availability, the effects of regulatory
decisions and changes in law, litigation, capital spending
requirements, and the availability of capital, the onset of
competition, the ability to recover net regulatory assets and
other potential stranded costs, the effects of the California
electricity market on the utility industry nationally, advances
in technology, changes in accounting standards, corporate
restructuring and changes in capital structure, the success of
new business ventures, changes in the markets for electricity and
other energy-related commodities, including the use of financial
and derivative instruments and volatility of changes in market
prices, changes in the number of participants and the risk
profile of such participants in the energy marketing and trading
business, changes in interest rates and in financial and foreign
currency markets generally, the economic climate and growth in
Entergy's service territories, changes in corporate strategies,
and other factors.
ENTERGY CORPORATION
Earnings at a glance
Fourth Quarter 2002 2001 %
Operating Revenues $1,878.75 $1,885.31 (0.3)
As Reported Earnings $ 75.76 $ 20.65 266.8
As Reported Earnings per
diluted share* $ 0.33 $ 0.09 266.7
Operational Earnings per
diluted share $ 0.34 $ 0.18 88.9
*Includes Special Items (EPS):
Gain (loss) on disposition
of assets $ 0.14 $(0.17)
Asset and contract
impairments (0.15) -
Damhead Creek gas contract - 0.10
Restructuring - (0.02)
------ ------
Total $(0.01) $(0.09)
====== ======
Year to Date 2002 2001 %
Operating Revenues $8,305.04 $9,620.90 (13.7)
As Reported Earnings $ 599.36 $ 726.20 (17.5)
As Reported Earnings per
diluted share* $ 2.64 $ 3.23 (18.3)
Operational Earnings per
diluted share $ 3.81 $ 3.23 18.0
*Includes Special Items (EPS):
Gain (loss) on disposition
of assets $ 0.23 $(0.02)
Asset and contract
impairments (0.62) -
Turbine commitments (0.52) -
Development costs (0.09) -
Restructuring (0.17) (0.02)
Damhead Creek gas contract - 0.10
Merger expenses - (0.06)
------- ------
Total ($ 1.17) $ -
======= ======
Note - dollars in millions except per share amounts, which are
actual.
Entergy Corporation
Consolidated Income Statement
Three Months Ended December 31
(in thousands)
2002 2001 % Inc/(Dec)
(unaudited)
Operating Revenues:
Domestic electric $1,520,692 $1,395,107 9.0
Natural gas 35,040 26,758 31.0
Competitive businesses 323,014 463,442 (30.3)
---------- ----------
Total 1,878,746 1,885,307 (0.3)
---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 542,106 604,745 (10.4)
Purchased power 206,857 132,597 56.0
Nuclear refueling outage expenses 31,535 24,578 28.3
Provision for turbine commitments, asset impairments,
and restructuring charges 36,899 - -
Other operation and maintenance 671,981 694,835 (3.3)
Decommissioning 5,869 7,938 (26.1)
Taxes other than income taxes 88,709 104,132 (14.8)
Depreciation and amortization 213,774 206,933 3.3
Other regulatory charges (credits) - net 7,504 (14,616) (151.3)
---------- ----------
Total 1,805,234 1,761,142 2.5
---------- ----------
Operating Income 73,512 124,165 (40.8)
---------- ----------
Other Income (Deductions):
Allowance for equity funds used during
construction 7,928 6,950 14.1
Gain (loss) on sales of assets - net 4,232 2,966 42.7
Interest and dividend income 46,400 35,511 30.7
Equity in earnings of unconsolidated equity affiliates 62,376 18,238 242.0
Miscellaneous - net (10,836) (17,151) (36.8)
---------- ----------
Total 110,100 46,514 136.7
---------- ----------
Interest and Other Charges:
Interest on long-term debt 130,779 158,547 (17.5)
Other interest - net 29,889 13,887 115.2
Dividends on preferred securities of subsidiaries 4,709 4,709 -
Allowance for borrowed funds used during
construction (6,059) (5,701) 6.3
---------- ----------
Total 159,318 171,442 (7.1)
---------- ----------
Income Before Income Taxes 24,294 (763) 3,284.0
Income Taxes (57,377) (3,880) 1,378.8
---------- ----------
Income Before Cumulative Effect of an Accounting Change 81,671 3,117 2,520.2
Cumulative Effect of an Accounting Change (net of income taxes) - 23,482 -
---------- ----------
Consolidated Net Income 81,671 26,599 207.0
Preferred dividend requirements of subsidiaries and other 5,916 5,948 (0.5)
---------- ----------
Earnings Applicable to Common Stock $75,755 $20,651 266.8
========== ==========
Earnings Per Average Common Share:
Basic $0.34 $0.09 277.8
Diluted $0.33 $0.09 266.7
Average Number of Common Shares Outstanding:
Basic 222,191,119 221,050,278
Diluted 226,639,072 224,583,984
Entergy Corporation
Consolidated Income Statement
Twelve Months Ended December 31
(in thousands)
2002 2001 % Inc/(Dec)
(unaudited)
Operating Revenues:
Domestic electric $6,646,414 $7,244,827 (8.3)
Natural gas 125,353 185,902 (32.6)
Competitive businesses 1,533,268 2,190,170 (30.0)
---------- ----------
Total 8,305,035 9,620,899 (13.7)
---------- ----------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 2,154,596 3,681,677 (41.5)
Purchased power 832,334 1,021,432 (18.5)
Nuclear refueling outage expenses 105,592 89,145 18.4
Provision for turbine commitments, asset impairments,
and restructuring charges 428,456 - -
Other operation and maintenance 2,488,112 2,151,742 15.6
Decommissioning 30,458 3,189 855.1
Taxes other than income taxes 380,462 399,849 (4.8)
Depreciation and amortization 839,181 721,033 16.4
Other regulatory charges (credits) - net (141,836) (20,510) 591.5
---------- ----------
Total 7,117,355 8,047,557 (11.6)
---------- ----------
Operating Income 1,187,680 1,573,342 (24.5)
---------- ----------
Other Income (Deductions):
Allowance for equity funds used during
construction 31,658 26,209 20.8
Gain (loss) on sales of assets - net 6,612 5,226 26.5
Interest and dividend income 118,325 159,805 (26.0)
Equity in earnings of unconsolidated equity affiliates 205,340 180,956 13.5
Miscellaneous - net (14,182) (22,843) (37.9)
---------- ----------
Total 347,753 349,353 (0.5)
---------- ----------
Interest and Other Charges:
Interest on long-term debt 507,604 544,920 (6.8)
Other interest - net 116,519 197,638 (41.0)
Dividends on preferred securities of subsidiaries 18,838 18,838 -
Allowance for borrowed funds used during
construction (24,538) (21,419) 14.6
---------- ----------
Total 618,423 739,977 (16.4)
---------- ----------
Income Before Income Taxes 917,010 1,182,718 (22.5)
Income Taxes 293,938 455,693 (35.5)
---------- ----------
Income Before Cumulative Effect of an Accounting Change 623,072 727,025 (14.3)
Cumulative Effect of an Accounting Change (net of income taxes) - 23,482 -
---------- ----------
Consolidated Net Income 623,072 750,507 (17.0)
Preferred dividend requirements of subsidiaries and other 23,712 24,311 (2.5)
---------- ----------
Earnings Applicable to Common Stock $599,360 $726,196 (17.5)
========== ==========
Earnings Per Average Common Share:
Basic $2.69 $3.29 (18.2)
Diluted $2.64 $3.23 (18.3)
Average Number of Common Shares Outstanding:
Basic 223,047,431 220,944,270
Diluted 227,303,103 224,733,662
Entergy Corporation
U.S. Utility Electric Energy Sales & Customers
Three Months Ended December
2002 2001 %
(Millions of kwh)
Electric Energy Sales:
Residential 7,279 6,309 15.4
Commercial 6,135 5,873 4.5
Governmental 676 626 7.8
Industrial 10,248 10,098 1.5
------- -------
Total to Ultimate Customers 24,338 22,906 6.2
Wholesale 2,298 1,892 21.5
------- -------
Total Sales 26,636 24,798 7.4
======= =======
Twelve Months Ended December
2002 2001 %
(Millions of kwh)
Electric Energy Sales:
Residential 32,581 31,080 4.8
Commercial 25,354 24,706 2.6
Governmental 2,678 2,593 3.3
Industrial 41,018 41,577 (1.3)
------- -------
Total to Ultimate Customers 101,631 99,956 1.7
Wholesale 9,828 8,896 10.5
------- -------
Total Sales 111,459 108,852 2.4
======= =======
December
2002 2001 %
Electric Customers (Year to date average):
Residential 2,236,507 2,218,410 0.8
Commercial 302,173 296,534 1.9
Governmental 14,994 14,681 2.1
Industrial 41,133 41,125 0.0
--------- ---------
Total to Ultimate Customers 2,594,807 2,570,750 0.9
Wholesale 40 39 2.6
--------- ---------
Total Customers 2,594,847 2,570,789 0.9
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