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FOR IMMEDIATE RELEASE

Entergy Reports Third Quarter Results

10/25/2016

CONTACT

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

David Borde (Investor Relations)
(504) 576-5668
dborde@entergy.com

NEW ORLEANS – Entergy Corporation (NYSE: ETR) reported third quarter 2016 earnings per share of $2.16 on an as-reported basis and $2.31 on an operational basis.

“This quarter’s solid results demonstrate our ability to execute on our strategy of steady, predictable growth at the Utility while reducing EWC’s footprint,” said Entergy chairman and chief executive officer Leo Denault. “The prudent decisions we are making for the benefit of our stakeholders to position the nuclear fleet for sustained operational excellence has near-term effects on our financial outlook. However, our 2019 outlook remains unchanged as we continue to execute on our growth objectives for Utility, Parent & Other earnings and corporate dividends.” 

Business highlights included the following:

  • ETI filed for certification to construct the Montgomery County Power Station, an approximate 993 MW CCGT. This project was selected in ETI’s RFP.
  • Entergy reached an agreement to sell its EWC FitzPatrick nuclear power plant. The transaction is expected to close in second quarter 2017.
  • EAI and ENOI made filings requesting approval of their advanced metering infrastructure investment.
  • Standard & Poor’s upgraded Entergy’s system rating for Entergy and its Utility operating companies by one notch to BBB+.
  • Entergy Corporation was named to the Dow Jones Sustainability North America Index, one of four U.S. electric utility companies designated a sustainability leader on the index.

Consolidated Earnings (GAAP and Non-GAAP Measures)

Third Quarter and Year-to-Date 2016 vs. 2015 (See Appendix A for reconciliation of GAAP to non-GAAP measures and description of special items)

 

Third Quarter

Year-to-Date

 

2016

2015

Change

2016

2015

Change

As-Reported Earnings ($ millions)

388.2

(723.0)

1,111.2

1,185.4

(276.1)

1,461.6

Less Special Items

(27.5)

(1,063.7)

1,036.2

(30.7)

(1,069.4)

1,038.7

Operational Earnings

415.6

340.7

75.0

1,216.2

793.3

422.9

Estimated Weather Impact

33.8

29.3

4.5

(8.0)

40.7

(48.7)

 

 

 

 

 

 

 

As-Reported Earnings (per share in $)

2.16

(4.04)

6.20

6.60

(1.54)

8.14

Less Special Items

(0.15)

(5.94)

5.79

(0.17)

(5.96)

5.79

Operational Earnings

2.31

1.90

0.41

6.77

4.42

2.35

Estimated Weather Impact

0.18

0.16

0.02

(0.04)

0.23

(0.27)

 

 

 

 

 

 

 

Totals may not foot due to rounding

Consolidated Results

Third quarter 2016 EPS were $2.16 on an as-reported basis and $2.31 on an operational basis, compared to a third quarter 2015 as-reported loss of $(4.04) per share and operational EPS of $1.90. Summary discussions by business are below.

Additional details, including information on OCF by business, are provided in Appendix A and a comprehensive analysis of quarterly and year-to-date variances is provided in Appendix B.

Utility, Parent & Other Results

For third quarter 2016, Utility, Parent and Other EPS were $2.12 on an as-reported basis and $1.98 on an adjusted basis. In comparison, third quarter 2015 as-reported EPS were $1.72 and adjusted EPS were $1.56. The current period results reflected growth in the Utility business, including effects of new rate actions that recover investments and improve returns.

Net revenue increased quarter-over-quarter driven largely by the Union acquisition, EAI’s rate case and EMI’s FRP. Revenue increases for the Union acquisition included amounts to recover operating expenses for the assets.

Billed retail sales volume declined quarter-over-quarter. However, estimated volume in the unbilled period was higher than third quarter 2015.

The Utility saw growth from sales to new and expansion industrial customers as they continued to operate, ramp up and come online. However, as was expected, overall industrial sales were down quarter-over-quarter as volume from existing customers declined on lower sales to customers in the pulp and paper, industrial gases and chlor-alkali segments.

Utility non-fuel O&M was lower than third quarter 2015 due partly to lower pension and OPEB expenses. Vegetation expense also declined due to elevated spending in third quarter 2015.

Appendix C contains additional details on Utility financial and operational measures, including a schedule of Utility, Parent & Other Adjusted EPS which excludes special items and weather and normalizes income taxes.

Entergy Wholesale Commodities Results

EWC earned 4 cents per share on an as-reported basis and 19 cents per share on an operational basis for third quarter 2016. In third quarter 2015, EWC recorded an as-reported loss of $(5.76) per share and operational EPS of 18 cents.

The EWC quarter-over-quarter increase was due largely to expenses recorded in 2015 as a result of decisions to close Pilgrim and VY and to sell or close FitzPatrick nuclear plants. These expenses were considered special items and excluded from operational earnings.

Excluding the special items, EWC’s results were essentially flat quarter-over-quarter. Fuel, non-fuel O&M (excluding the special items already discussed above) and depreciation expenses declined as a result of the 2015 impairments. Conversely, energy prices were lower and decommissioning expense increased due partly to the establishment of decommissioning liabilities for Indian Point 3 and FitzPatrick in 2016.

Appendix D contains additional details on EWC financial and operational measures, including a schedule of EWC Operational Adjusted EBITDA calculations.

Earnings Guidance

Entergy affirmed its 2016 operational guidance in the range of $6.60 to $7.40 per share and Utility, Parent & Other Adjusted EPS guidance range of $4.20 to $4.50. See webcast presentation slides for additional details.

The company has provided 2016 earnings guidance with regard to the non-GAAP measures operational earnings per share and Utility, Parent and Other Adjusted EPS. These measures exclude from the corresponding GAAP financial measures the effect of special items, which are non-routine items, such as impairment charges, gains or losses on asset sales, and other gains or losses occurring as a result of strategic decisions such as the company’s recent decisions to shut down or sell certain of its merchant nuclear plants. Consistent with SEC rules, the company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot reasonably estimate all of the special items that may occur for the periods presented. The company’s current estimate for special items in 2016 relates to the decisions to close or sell certain merchant nuclear plants and for DOE litigation awards for those plants; those anticipated special items are expected to decrease as-reported EPS by approximately 35 cents per share. Other special items may occur during the periods presented, the impact of which cannot reasonably be estimated at this time.

Earnings Teleconference

A teleconference will be held at 10 a.m. CT on Tuesday, Oct. 25, 2016, to discuss Entergy’s third 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 85417477, 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 Nov. 1, 2016, by dialing (855) 859-2056, conference ID 85417477. 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.”

Details regarding Entergy’s results of operations, regulatory proceedings and other matters are available in this earnings release, a copy of which will be filed with the SEC, and the webcast slide presentation. Both documents 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.

View complete earnings release (PDF)

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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 costs and 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) the effects of technological changes and changes in 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.

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