News Center > Entergy Reports Second Quarter Earnings

For Immediate Release

Entergy Reports Second Quarter Earnings

08/04/2015

Contact:

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

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

Sales and productive investments drove top-line Utility growth, overall performance as expected

NEW ORLEANS, La -- Entergy Corporation (NYSE: ETR) reported second quarter 2015 earnings per share of 83 cents on an as-reported basis and an operational basis, compared to second quarter 2014 as-reported EPS of $1.05 and operational EPS of $1.11.

"Once again, financial results in the second quarter were in line with our expectations, and Entergy remains on track to meet its full year guidance," said Entergy Chairman and CEO Leo Denault. "The Utility continues to implement its program to replace aging infrastructure, strengthen reliability and enhance the environmental profile of our generation fleet. The industrial expansion across our service territory also continues to advance. And Entergy Wholesale Commodities, despite market volatility, maintained solid operational and commercial performance."

Business highlights included the following:

  • The U.S. Department of Commerce named the New Orleans-to-Lake Charles chemical corridor to a program designed to accelerate the resurgence of manufacturing in America through federal incentives and grants.
  • The City Council of New Orleans approved storm securitization financing, which was completed in July.
  • Entergy Gulf States Louisiana, L.L.C. and Entergy Louisiana, LLC reached a settlement with all parties in the business combination of the two companies.
  • The St. Charles Power Station was selected in response to a request for proposals for new long-term capacity.
  • The Nuclear Energy Institute issued a report finding that the Indian Point Energy Center contributes an estimated $1.6 billion annually to New York state's economy and $2.5 billion to the nation as a whole.
  • Entergy Corporation issued a $650 million, seven-year note at a 4 percent coupon.

Consolidated Earnings – Reconciliation of GAAP to Non-GAAP Measures

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

 

Second Quarter

Year-to-Date

 

2015

2014

Change

2015

2014

Change

As-Reported Earnings ($ in millions)

148.8

189.4

(40.6)

446.9

590.6

(143.7)

Less Special Items:

 

 

 

 

 

 

HCM implementation expenses

(4.1)

4.1

(7.1)

7.1

Decision to close VY

(1.1)

(6.9)

5.8

(5.7)

(12.7)

7.0

Total Special Items

(1.1)

(11.0)

9.9

(5.7)

(19.8)

14.1

Operational Earnings

149.9

200.3

(50.4)

452.6

610.4

(157.8)

Weather Impact

(2.9)

(9.3)

6.4

11.4

23.2

(11.8)

 

 

 

 

 

 

 

As-Reported Earnings (per share in $)

0.83

1.05

(0.22)

2.48

3.29

(0.81)

Less Special Items:

 

 

 

 

 

 

HCM implementation expenses

(0.02)

0.02

(0.04)

0.04

Decision to close VY

(0.04)

0.04

(0.03)

(0.07)

0.04

Total Special Items

(0.06)

0.06

(0.03)

(0.11)

0.08

Operational Earnings

0.83

1.11

(0.28)

2.51

3.40

(0.89)

Weather Impact

(0.02)

(0.05)

0.03

0.06

0.13

(0.07)

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 Results

In second quarter 2015, Utility earnings were $1.11 per share on an as-reported and an operational basis. In comparison, second quarter 2014 as-reported EPS was $1.15 and operational EPS was $1.17. Operational results reflected sales growth, the effects of productive investments and higher operating expenses.

Billed retail sales volume increased quarter-to-quarter on the effects of weather and residential sales growth. On a weather-adjusted basis, billed volume declined (0.5) percent; the components of the sales growth were:

  • Weather-adjusted residential sales growth of 0.7 percent,
  • Commercial sales decline of (0.2) percent on a weather-adjusted basis,
  • Weather-adjusted governmental sales increase of 1.8 percent and
  • Industrial sales decline of (1.5) percent.

During second quarter 2015, new industrial and expansion projects continued to ramp-up and come into service. However, billed industrial volume declined due largely to extended seasonal outages for existing large refinery customers, as well as existing chlor-alkali customer outages. On a revenue basis, sales growth, including weather-adjusted residential sales resulted in a quarter-over-quarter positive revenue contribution.

Higher Utility net revenue also 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. The earnings effect from these changes was largely offset by changes in other line items (e.g., non-fuel operation and maintenance and depreciation expenses). Higher nuclear generation expenses in part due to increased regulatory compliance at Arkansas Nuclear One, higher vegetation maintenance spending and increased scope of work for fossil generation were also reflected in the higher non-fuel O&M.

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 $62 million in second quarter 2015, compared to $145 million in the same period a year ago. Principal reasons for the EBITDA decrease include lower wholesale power prices and decreased nuclear generation as well as the closure of the Vermont Yankee Nuclear Power Station last year.

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

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

($ in millions)

Second Quarter

Year-to-Date

 

2015

2014

Change

2015

2014

Change

Net income

(4)

26

(30)

120

269

(149)

Add back: interest expense

6

3

3

12

8

4

Add back: income tax expense

(3)

20

(23)

67

138

(71)

Add back: depreciation and amortization

64

71

(7)

126

141

(15)

Subtract: interest and investment income

36

22

14

86

48

38

Add back: decommissioning expense

33

35

(2)

68

69

(1)

Adjusted EBITDA

60

133

(73)

307

577

(270)

Add back:

 

 

 

 

 

 

Special item for HCM implementation (pre-tax)

1

(1)

2

(2)

Special item for the decision to close VY (pre-tax)

2

11

(9)

9

21

(12)

Operational adjusted EBITDA

62

145

(83)

315

600

(285)

Totals may not foot due to rounding

           

Excluding the effects of VY, the change in EBITDA was driven largely by lower net revenue due primarily to lower nuclear energy prices. In addition, nuclear production was lower in the current period with more refueling outage days (34 days for Pilgrim Nuclear Power Station in the current period compared to zero in second quarter 2014).

EWC reported a loss of 2 cents per share on an as-reported basis and an operational basis for second quarter 2015, compared to second quarter 2014 as-reported earnings of 14 cents per share and operational earnings of 18 cents per share. Key drivers for the period-over-period decline in earnings are the lower wholesale prices and generation discussed previously.

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

Parent & Other Results

Parent & Other reported a loss of 26 cents per share on an as-reported and an operational basis for second quarter 2015 compared to an as-reported and operational loss of 24 cents per share in second 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, Aug. 4, 2015, to discuss Entergy's second 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 44024303, 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 Aug. 11, 2015, by dialing (855) 859-2056, conference ID 44024303. 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 U.S. Securities and Exchange Commission, and the quarterly presentation slides. The earnings package contains appendices to this release and financial statements. Both the earnings release package and quarterly presentation slides 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 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 near El Dorado, Arkansas and the proposed combination of Entergy Louisiana and Entergy Gulf States Louisiana, 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.

View complete earnings release (PDF)