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FOR IMMEDIATE RELEASE

ENTERGY REPORTS FOURTH QUARTER AND FULL YEAR EARNINGS, INITIATES 2016 OPERATIONAL EARNINGS GUIDANCE

02/18/2016

CONTACT

Kay Jones (Media)
(504) 576-4238
cjone22@entergy.com

Paula Waters (Investor Relations)
(504) 576-4380
pwater1@entergy.com

2015 results consistent with latest guidance; accomplishments set stage for future growth

NEW ORLEANS -- Entergy Corporation (NYSE: ETR) reported fourth quarter 2015 earnings per share of 56 cents on an as-reported basis and $1.58 on an operational basis. For the full year, the company realized a loss of 99 cents per share on an as-reported basis and operational EPS of $6.00 per share. The as-reported loss resulted from asset impairments in the third and fourth quarters reflecting the effects of strategic decisions in the Entergy Wholesale Commodities business to reduce the company's exposure to volatile and poorly structured wholesale power markets. 

"In 2015, we successfully worked through an extensive to-do list aimed at laying the foundation for steady and predictable Utility, Parent & Other earnings growth and improving certainty in our merchant generation business. Some of these actions, while necessary, were difficult for our stakeholders and impacted our as-reported financial results for the year," said Entergy chairman and chief executive officer Leo Denault. "On an operational basis, our final 2015 results are in line with the expectations we shared with you last fall. We are also initiating 2016 guidance indicating strong Utility growth in large part due to the strategic accomplishments of last year, again consistent with indications on Utility, Parent & Other growth since the middle of last year and the ranges we gave at our last Analyst Day in 2014."

Additional business highlights included the following:

· 2016 operational EPS guidance range is $4.95 to $5.75 for Entergy consolidated; the range for Utility, Parent & Other Adjusted EPS is $4.20 to $4.50.
· Entergy Arkansas, Inc. filed an unopposed settlement agreement in its rate case.
· The sale of the Rhode Island State Energy Center power plant closed in December.
· Entergy announced the shutdown date for the James A. FitzPatrick Nuclear Power Plant is planned to be Jan. 27, 2017.
· Independent system operators' reliability studies found that FitzPatrick and the Pilgrim Nuclear Power Station (beyond June 1, 2019) are not required for their respective regions.
· For the 18th consecutive year, the Edison Electric Institute awarded Entergy's storm team with a national storm restoration award.

 

Consolidated Earnings (GAAP and Non-GAAP measures)

Fourth Quarter and Year-to-Date 2015 vs. 2014 (See Appendix A for reconciliation of GAAP to non-GAAP measures)

 

Fourth Quarter

Year-to-Date

 

2015

2014

Change

2015

2014

Change

As-Reported Earnings (Loss) ($ in millions)

99.6

120.1

(20.6)

(176.6)

940.7

(1,117.3)

Less Special Items

(183.0)

(15.2)

(167.8)

(1,252.4)

(109.4)

(1,143.0)

Operational Earnings

282.6

135.3

147.3

1,075.9

1,050.0

25.8

Weather Impact

(6.1)

9.6

(15.7)

34.6

12.8

21.8

 

 

 

 

 

 

 

As-Reported Earnings (Loss) (per share in $)

0.56

0.66

(0.10)

(0.99)

5.22

(6.21)

Less: Special Items

(1.02)

(0.09)

(0.93)

(6.99)

(0.61)

(6.38)

Operational Earnings

1.58

0.75

0.83

6.00

5.83

0.17

Weather Impact

(0.03)

0.05

(0.08)

0.19

0.07

0.12

 

 

 

 

 

 

 

Totals may not foot due to rounding

 

Business Unit Results

In addition to the summary business unit discussions below and results provided in Appendix A, a comprehensive analysis of quarterly and year-to-date variances is provided in Appendix B to this release. Appendix A also provides information on operating cash flow by business.

Utility, Parent & Other Results

For fourth quarter 2015, Utility, Parent and Other EPS were $1.42 on an as-reported and an operational basis. In comparison, 2014 fourth quarter earnings were 35 cents per share on an as-reported basis and 36 cents per share on an operational basis. Operational results for the 2015 quarterly period included a significant income tax item, a portion of which will be shared with customers of Entergy Louisiana, LLC. The quarter's results also reflected the effects of productive investments as well as milder weather, charges reflecting progress in resolving long outstanding regulatory matters and higher operating expenses.

Billed retail sales volume decreased (1.1) percent quarter-to-quarter on the effects of weather. On a weather-adjusted basis, billed volume increased 0.8 percent; the components of the weather-adjusted sales growth were:

· Weather-adjusted residential sales increase of 1.6 percent,
· Commercial sales slight decrease of (0.1) percent on a weather-adjusted basis,
· Weather-adjusted governmental sales increase of 4.2 percent and
· Industrial sales increase of 0.6 percent.

Industrial sales were higher on continued growth for new and expansion customers. Sales to existing industrial customers declined on lower usage from large chlor-alkali customers, due to both outages as well as softer economics. Partially offsetting was favorable macro conditions for existing petroleum refining customers who operated at high levels.

Utility results reflected rate adjustments for the Ninemile Point Unit 6 plant that went in service at the end of 2014 and the Entergy Mississippi, Inc. rate case. Revenue increases from rate actions were largely offset by changes in other line items (e.g., non-fuel operation and maintenance and depreciation expenses).

For the full year, 2015 Utility, Parent and Other EPS were $4.97 on an as-reported and an operational basis. In comparison, 2014 earnings were $3.60 per share on an as-reported basis and $3.64 per share on an operational basis. Operational results for 2015 included significant income tax items, as discussed above. Results also reflected productive investments and favorable weather, as well as higher operating expenses.

For a schedule of Utility, Parent & Other Adjusted EPS for the quarter and full year excluding special items and weather, normalizing tax items and excluding utility charges, see Appendix C.  Appendix C also contains additional details on the Utility's performance for both periods.

Entergy Wholesale Commodities Results

EWC operational adjusted earnings before interest, taxes, depreciation and amortization were $70 million in fourth quarter 2015, compared to $183 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 impairments of FitzPatrick and Pilgrim recorded in third quarter 2015 which lowered fuel and non-fuel O&M expenses.

 

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

Fourth Quarter and Year-to-Date 2015 vs. 2014

($ in millions)

Fourth Quarter

Year-to-Date

 

2015

2014

Change

2015

2014

Change

Net income

(154)

58

(212)

(1,066)

295

(1,361)

Add back: interest expense

8

5

3

27

17

10

Add back: income tax expense

(123)

36

(159)

(610)

177

(787)

Add back: depreciation and amortization

53

63

(10)

239

276

(37)

Subtract: interest and investment income

33

37

(4)

149

114

35

Add back: decommissioning expense

36

38

(2)

138

142

(4)

Adjusted EBITDA

(213)

162

(375)

(1,421)

792

(2,213)

Add back pre-tax special items for:

 

 

 

 

 

 

  HCM implementation

-

1

(1)

-

3

(3)

  Decisions to close VY, FitzPatrick and Pilgrim

5

20

(15)

1,658

154

1,504

  Palisades asset impairment and related write-offs

396

-

396

396

-

396

  Top Deer investment impairment

37

-

37

37

-

37

  Gain on the sale of RISEC

(154)

-

(154)

(154)

-

(154)

Operational adjusted EBITDA

70

183

(113)

515

950

(435)

 

 

 

 

 

 

 

Totals may not foot due to rounding

 

EWC reported an as-reported loss of (86) cents per share in the current quarter compared to a fourth quarter 2014 as-reported EPS of 31 cents. Fourth quarter 2015 as-reported results included non-cash asset impairments for Palisades and EWC's wind investment, which were classified as a special item and therefore, excluded from operational results. The impairment charges resulted from analyzing EWC's remaining assets for impairment in light of Entergy's decisions to operate its other northern U.S. single unit nuclear sites for a shorter period than their operating license expiration dates and the sale of non-nuclear assets in the fourth quarter 2015. Depressed market prices were a significant factor in the analysis resulting in impairment charges for Palisades and the wind investment. The Palisades impairment does not reflect any decision to modify the continuing operations of the plant, which operates under a power purchase agreement that runs until April 2022. The sale of RISEC (a non-nuclear asset) in the current quarter resulted in a 56 cent per share gain, which is also classified as a special and excluded from operational results.

Fourth quarter 2015 EWC operational earnings were 16 cents per share, compared to 39 cents per share in the fourth quarter 2014. This decline was driven by lower operational adjusted EBITDA. The current quarter results also included income tax items.

For the year, EWC reported a loss of $5.96 per share on an as-reported basis and earnings of $1.03 per share on an operational basis, compared to as-reported EPS of $1.62 and operational EPS of $2.19 in 2014. The decline in operational earnings was driven by lower energy and capacity revenue for the nuclear fleet, which is also reflected in the lower operational adjusted EBITDA. The closure of VY at the end of 2014 also contributed to the reduced operational adjusted EBITDA and operational EPS.

For additional details on EWC's performance for the quarter and full year, see Appendix D and the webcast slide presentation.

Earnings Guidance

Entergy is initiating 2016 operational earnings guidance in the range of $4.95 to $5.75 per share. The Utility, Parent & Other Adjusted EPS guidance range is $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 Thursday, Feb. 18, 2016, to discuss Entergy's fourth quarter and full year 2015 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 85410755, 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 Feb. 25, 2016, by dialing (855) 859-2056, conference ID 85410755. 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 quarterly and full year results of operations, regulatory proceedings and other matters is available in Entergy's earnings release package, a copy of which will be filed with the U.S. Securities and Exchange Commission, and the webcast slide presentation. The earnings package contains appendices to this release and financial statements. Both the earnings release package 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 pending acquisition of the Union Power Station near El Dorado, Arkansas, 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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