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FOR IMMEDIATE RELEASE

Entergy Reports First Quarter Earnings

04/26/2016

Productive first quarter positions company to meet full year goals; 2016 guidance affirmed

NEW ORLEANS – Entergy Corporation (NYSE: ETR) reported first quarter 2016 earnings per share of $1.28 on an as-reported basis and $1.35 on an operational basis.

“This quarter was a good start to another important year for Entergy. Given the challenges and opportunities ahead, we are confident that we can deliver on our 2016 earnings commitments as well as our Adjusted Utility, Parent & Other long-term outlook,” said Entergy chairman and chief executive officer Leo Denault. “We accomplished what we set out to do, including the acquisition of the Union Power Station and the finalization of Entergy Arkansas’ rate case. In the quarter we also had industrial sales growth of over six percent. Our results are the outcome of the strategy we have been pursuing for some time to create sustainable value for all our stakeholders in 2016 and beyond.”

Business highlights included the following:

  • Entergy Arkansas, Entergy Louisiana and Entergy New Orleans closed their acquisition of Union Power Station.
  • ELL began construction on the Lake Charles Transmission Project, a $159 million project that will support continued reliable service to a rapidly growing area in our service territory.
  • EAI finalized its 2015 rate case.
  • Entergy Mississippi filed its annual formula rate plan with forward-looking features.
  • Entergy announced it intends to refuel Pilgrim Nuclear Power Station in spring of 2017, then cease operations on May 31, 2019.
  • Entergy was selected as a finalist for the 2016 Secretary of Defense Employer Support Freedom Award.
  • The Environmental Protection Agency named ENOI a 2016 ENERGY STAR® Partner of the Year for its outstanding contributions in implementing energy-efficiency measures.

Consolidated Earnings (GAAP and Non-GAAP measures)

First Quarter 2016 vs. 2015 (See Appendix A for reconciliation of GAAP to non-GAAP measures)

 

First Quarter

 

2016

2015

Change

As-Reported Earnings ($ in millions)

230.0

298.1

(68.1)

Less Special Items

(12.9)

(4.6)

(8.3)

Operational Earnings

242.8

302.7

(59.9)

Weather Impact

(25.4)

14.3

(39.7)

 

 

 

 

As-Reported Earnings (per share in $)

1.28

1.65

(0.37)

Less: Special Items

(0.07)

(0.03)

(0.04)

Operational Earnings

1.35

1.68

(0.33)

Weather Impact

(0.14)

0.08

(0.22)

Totals may not foot due to rounding

 

Consolidated Results

First quarter 2016 EPS were $1.28 on an as-reported basis and $1.35 on an operational basis, compared to first quarter 2015 as-reported EPS of $1.65 and operational EPS of $1.68, which were favorably impacted by weather and income tax items. Summary discussions by business unit are below. Additional details, including information on operating cash flow by business, are provided in Appendix A and a comprehensive analysis of quarterly variances is provided in Appendix B.

Utility, Parent & Other Results

For first quarter 2016, Utility, Parent and Other EPS were 84 cents on an as-reported and an operational basis. In comparison, 2015 first quarter as-reported and operational EPS were 97 cents. The quarter’s results reflected growth in the Utility business, including effects of new rate actions that recover investments and improve Utility returns. However, the impacts from milder weather this winter and tax items recorded in the first quarter of last year led to the overall decline in results.

During the quarter, the Utility completed both EAI’s 2015 rate case and the Union Power Station acquisition. Revenue increases for the Union acquisition included amounts to recover operating expenses for the asset. Utility non-fuel O&M was lower than first quarter 2015 partly due to lower scope of work for fossil outages, deferral of previously-expensed costs resulting from EAI’s rate case order and lower pension and other post-retirement benefit expenses. Increased non-fuel O&M expense for nuclear generation due to higher regulatory compliance costs at ANO partially offset these favorable non-fuel O&M items.

Billed retail sales volume decreased (3.1) percent quarter-over-quarter on the effects of weather. On a weather-adjusted basis, billed volume increased 1.8 percent; the components of the weather-adjusted sales growth were:

  • Industrial sales increase of 6.2 percent,
  • Governmental sales increase of 1.1 percent,
  • Residential sales decrease of (0.6) percent, and
  • Commercial sales decrease of (1.8) percent.

Industrial sales increased on continued growth for new and expansion customers as well as higher sales to existing customers. New and expansion customers across several sectors continued to ramp and come online. Within our existing industrial customers, usage within the petroleum refining sector continued to be robust and comprised the majority of that increase.

For a schedule of Utility, Parent & Other Adjusted EPS excluding special items and weather and normalizing tax items, see Appendix C. Appendix C also contains additional details on the Utility’s performance.

Entergy Wholesale Commodities Results

EWC operational adjusted earnings before interest, taxes, depreciation and amortization were $219 million in first quarter 2016, compared to $254 million in the same period a year ago. The quarter-over-quarter decrease was driven largely by lower energy and capacity prices for EWC’s nuclear assets. Quarter-over-quarter results were also affected by 2015 impairments, which reduced fuel and non-fuel O&M expenses in the current quarter.

EWC Operational Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures

First Quarter 2016 vs. 2015

($ in millions)

First Quarter

 

2016

2015

Change

Net income

80

123

(43)

Add back: interest expense

6

6

-

Add back: income tax expense

52

70

(18)

Add back: depreciation and amortization

56

62

(6)

Subtract: interest and investment income

27

50

(23)

Add back: decommissioning expense

31

35

(4)

Adjusted EBITDA

199

247

(48)

Add back pre-tax special items for:

 

 

 

  Decisions to close VY, FitzPatrick and Pilgrim

20

7

13

Operational adjusted EBITDA

219

254

(35)

Totals may not foot due to rounding

 

EWC earned 44 cents per share on an as-reported basis and 51 cents per share on an operational basis for first quarter 2016, compared to first quarter 2015 as-reported earnings of 68 cents per share and operational earnings of 71 cents per share. The decline was driven by lower operational adjusted EBITDA. Interest and investment income was also lower quarter-over-quarter due to higher realized earnings on decommissioning trusts in 2015 from re-balancing activity.

For additional details on EWC’s performance, see Appendix D and the webcast slide presentation.

Earnings Guidance

Entergy affirmed its 2016 operational earnings guidance in the range of $4.95 to $5.75 per share and Utility, Parent & Other Adjusted EPS guidance range of $4.20 to $4.50. See the webcast slide presentation for additional details.

Earnings Teleconference

A teleconference will be held at 10 a.m. CT on Tuesday, April 26, 2016, to discuss Entergy’s first quarter earnings announcement and the company’s financial performance. The teleconference may be accessed by visiting Entergy’s website at www.entergy.com or by dialing (855) 893-9849, conference ID 85413992, no more than 15 minutes prior to the start of the call. The webcast slide presentation is also posted to Entergy’s website concurrent with this release, which was issued before market open on the day of the call. A replay of the teleconference will be available on Entergy’s website at www.entergy.com and by telephone. The telephone replay will be available through May 3, 2016, by dialing (855) 859-2056, conference ID 85413992. This release and the webcast slide presentation are also available on the Entergy Investor Relations mobile web app at iretr.com.

Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including nearly 10,000 megawatts of nuclear power. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of approximately $11.5 billion and more than 13,000 employees.

Entergy Corporation’s common stock is listed on the New York and Chicago exchanges under the symbol “ETR.”

Additional information regarding Entergy’s results of operations, regulatory proceedings and other matters is available in Entergy’s earnings release, a copy of which will be filed with the U.S. Securities and Exchange Commission, and the webcast slide presentation. Both the earnings release and webcast slide presentation are available on Entergy’s Investor Relations website at www.entergy.com/investor_relations and on Entergy’s Investor Relations mobile web app at iretr.com.

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Cautionary Note Regarding Forward-Looking Statements
 
In this news release, and from time to time, Entergy Corporation makes certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other things, Entergy’s 2016 earnings guidance, its current financial and operational outlook, and other statements of Entergy’s plans, beliefs or expectations included in this news release. 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 are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this news release and in Entergy’s most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and Entergy’s other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with rate proceedings, formula rate plans and other cost recovery mechanisms; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory risks, including any changes resulting from the nuclear crisis in Japan following its catastrophic earthquake and tsunami; (e) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning FitzPatrick, Pilgrim or VY or any of Entergy’s other nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (g) risks and uncertainties associated with strategic transactions that Entergy or its subsidiaries may undertake, including the risk that any such transaction may not be completed as and when expected and the risk that the anticipated benefits of the transaction may not be realized and (h) economic conditions and conditions in commodity and capital markets during the periods covered by the forward-looking statements.

For definitions of certain operational performance measures, as well as GAAP and non-GAAP financial measures and abbreviations and acronyms used in the quarterly materials, see Appendix F and Appendix G.

View complete earnings release (PDF)

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