News Center > Entergy Reports First Quarter Earnings

For Immediate Release

Entergy Reports First Quarter Earnings

04/27/2015

CONTACT:

Shona Sabnis (Media)
504-576-5010
ssabnis@entergy.com

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

In productive first quarter, company "continues to be line with our expectations," says CEO Leo Denault

NEW ORLEANS, La. -- Entergy Corporation (NYSE: ETR) reported first quarter 2015 earnings per share of $1.65 on an as-reported basis and $1.68 on an operational basis, compared to first quarter 2014 as-reported EPS of $2.24 and operational EPS of $2.29.

"It was a productive first quarter, and in terms of performance, results and growth, we continue to be in line with our expectations," said Entergy Chairman and CEO Leo Denault. "The Utility experienced its seventh straight quarter of industrial sales growth. We continued filling in the details of our resource plan, including the announcement of a new transmission project in Arkansas. We also took important steps to strengthen regulatory frameworks, in part by supporting the passage of new legislation in Arkansas and Mississippi and preparing for a pivotal rate case filing in Arkansas."

Business highlights for the quarter included the following:

  • Arkansas Governor Asa Hutchinson signed legislation that establishes a forward test year formula rate plan and provides additional considerations in setting the return on equity. This legislation should result in more efficient rate making, and allow Entergy Arkansas, Inc. to focus time and resources on activities that create sustainable value for the state, including job growth. Subsequent to quarter-end, on April 24, Entergy Arkansas filed a rate case applying this legislation.
  • In Mississippi, Governor Phil Bryant signed a bill into law that facilitates Entergy Mississippi, Inc.'s investment in electrical infrastructure at proposed economic development sites, even before a specific customer has been identified -- and in doing so, supports growth and job creation in the state.
  • Indian Point Energy Center Unit 3 completed its refueling outage in 23 days, its shortest outage on record.

Consolidated Earnings -- Reconciliation of GAAP to Non-GAAP Measures

First Quarter 2015 vs. 2014

 

First Quarter

 

2015

2014

Change

As-Reported Earnings ($ in millions)

298.1

401.2

(103.1)

Less Special Items:

 

 

 

HCM implementation expenses

--

(3.0)

3.0

Decision to close VY

(4.6)

(5.9)

1.3

Total Special Items

(4.6)

(8.9)

4.3

Operational Earnings

302.7

410.1

(107.4)

Weather Impact

14.3

32.4

(18.1)

 

 

 

 

As-Reported Earnings (per share in $)

1.65

2.24

(0.59)

Less Special Items:

 

 

 

HCM implementation expenses

--

(0.02)

0.02

Decision to close VY

(0.03)

(0.03)

--

Total Special Items

(0.03)

(0.05)

0.02

Operational Earnings

1.68

2.29

(0.61)

Weather Impact

0.08

0.18

(0.10)

Totals may not foot due to rounding      

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

Utility Results

In first quarter 2015, Utility earnings were $1.24 per share on an as-reported and an operational basis, compared to first quarter 2014 as-reported EPS of $1.12 and operational EPS of $1.13. The improved operational results reflected another quarter of industrial sales growth, modest weather-adjusted growth in the residential and commercial classes and the effects of productive investments and customer programs.

Billed retail sales increased 1.5 percent on a weather-adjusted basis. The components of the sales growth were:

  • Weather-adjusted residential sales increased 0.7 percent,
  • Commercial sales increased 0.6 percent on a weather-adjusted basis,
  • Weather-adjusted governmental sales increased 1.7 percent and
  • Industrial sales grew 2.9 percent.

Weather had a positive effect in both the current and the prior periods, but was less favorable in first quarter 2015 than in first quarter 2014.

Higher Utility net revenue also reflected rate adjustments for Ninemile Point Unit 6, recovery of energy efficiency program costs and the Entergy Louisiana, LLC, Entergy Texas, Inc. and Entergy Mississippi rate cases. The earnings effect from these changes was largely offset by changes in other line items (e.g., non-fuel operation and maintenance, depreciation and taxes other than income tax expenses).

Another factor in the quarterly operational improvement was a lower effective income tax rate.

Utility non-fuel O&M was higher quarter over quarter, providing a partial offset to the favorable items noted above. This increase reflected higher fossil generation costs due largely to increased scope for maintenance outages. Nuclear generation spending was also higher in part due to increased regulatory compliance costs.

For additional details on Utility’s performance for the quarter, see Appendix C.

Entergy Wholesale Commodities Results

EWC operational adjusted earnings before interest, taxes, depreciation and amortization were $254 million in first quarter 2015, compared to $455 million in the same period a year ago. Principal reasons for the decrease included the shutdown of the Vermont Yankee Nuclear Power Station at the end of 2014 as well as lower relative wholesale power prices. In the first quarter of last year, sustained cold weather across the entire region combined with limited LNG imports and natural gas infrastructure constraints resulted in significantly higher Northeast spot market prices.

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

First Quarter 2015 vs. 2014

($ in millions)

First Quarter

 

2015

2014

Change

Net income

123

242

(119)

Add back: interest expense

6

5

1

Add back: income tax expense

70

119

(49)

Add back: depreciation and amortization

62

70

(8)

Subtract: interest and investment income

50

26

24

Add back: decommissioning expense

35

34

1

Adjusted EBITDA

247

444

(197)

Add back: special item for HCM implementation expenses (pre-tax)

--

1

(1)

Add back: special item for the decision to close VY (pre-tax)

7

10

(3)

Operational adjusted EBITDA

254

455

(201)

Totals may not foot due to rounding      

VY accounted for more than half of the operational EBITDA decrease ($110 million in first quarter 2014 compared to essentially zero in the current period). Excluding the effects of VY, the change in EBITDA was driven largely by lower net revenue. Wholesale energy prices for EWC’s nuclear fleet were significantly higher in first quarter 2014. Mark-to-market activity also declined quarter-over-quarter. Partially offsetting the negative price variance was higher nuclear production with fewer refueling outage days (23 days for Indian Point 3 in the current quarter versus 80 days for Palisades Power Plant and Indian Point Energy Center Unit 2 in first quarter 2014).

EWC earned 68 cents per share on an as-reported basis and 71 cents per share on an operational basis for first quarter 2015, compared to first quarter 2014 as-reported earnings of $1.35 per share and operational earnings of $1.39 per share. In addition to lower operational adjusted EBITDA, EWC reported a higher effective income tax rate. Higher other income associated with realized decommissioning trust earnings provided a partial offset in results.

For additional details on EWC’s performance for the quarter, see Appendix D.

Parent & Other Results

Parent & Other reported a loss of 27 cents per share on an as-reported and an operational basis for first quarter 2015 compared to an as-reported and operational loss of 23 cents per share in first quarter 2014. No drivers were individually significant.

Earnings Guidance

Entergy affirmed its 2015 operational earnings guidance in the range of $5.10 to $5.90 per share. See webcast presentation slides for additional details.

Earnings Teleconference

A teleconference will be held at 10 a.m. CDT on Tuesday, April 28, 2015, to discuss Entergy’s first quarter 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 87440452, no more than 15 minutes prior to the start of the call. The presentation slides are 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 5, 2015, by dialing (855) 859-2056, conference ID 87440452. This release and presentation slides 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, making it one of the nation’s leading nuclear generators. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $12 billion and approximately 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 results of operations, regulatory proceedings and other matters is available in Entergy’s earnings release package, a copy of which has been filed with the SEC, and the quarterly presentation slides. These 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.

Entergy’s full earnings release package, including appendices and financial statements, is available at http://investor.shareholder.com/entergy/events.

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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 2015 operational 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 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 proposed acquisition of the Union Power Station in El Dorado, Arkansas and the proposed combination of Entergy Louisiana and Entergy Gulf States Louisiana, L.L.C. 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 as well as abbreviations and acronyms used in the quarterly materials, see Appendix F.

View complete earnings release (PDF)