News Center > Entergy Reports Third Quarter Results

For Immediate Release

Entergy Reports Third Quarter Results

11/02/2015

CONTACT

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

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

Strategic execution marks quarterly results
 
NEW ORLEANS -- Entergy Corporation (NYSE: ETR) reported a third quarter 2015 as-reported loss of $4.04 per share, including $5.93 per share of non-cash asset impairments for Pilgrim Nuclear Power Station and James A. FitzPatrick Nuclear Power Plant. Entergy recently announced plans to close Pilgrim and today announced the closing of FitzPatrick. On an operational basis, earnings were $1.90 per share in third quarter 2015. These results compare to third quarter 2014 as-reported earnings of $1.27 per share and operational earnings of $1.68 per share.

"This year we have intensified our focus on executing on the strategy we put in place last year, and the results are becoming evident," said Entergy chairman and chief executive officer Leo Denault. "Through our accomplishments in the Utility, we continue to strive to meet and exceed our regulators' and customers' expectations; and strategic decisions regarding the future of the Entergy Wholesale Commodities' fleet set us up to deliver long-term value. Our progress enables us to provide improved returns to our owners, safe operations and reliable service to our customers, a rewarding place to work for our employees and sustainable economic benefits to our communities. We thank our stakeholders for their continued support and look forward to continued growth. 

"While taking these actions are in the long-term best interest of our stakeholders, in the near-term, these decisions to close nuclear plants are very difficult to make knowing the effect they have on all of our four key stakeholder groups -- employees, communities, customers and owners."

Additional business highlights included the following:

· Entergy Gulf States Louisiana, L.L.C. and Entergy Louisiana, LLC became one company on Oct. 1st, now referred to as Entergy Louisiana, LLC.
· Entergy Wholesale Commodities entered into an agreement to sell its Rhode Island State Energy Center power plant.
· Entergy Corporation was named to the Dow Jones Sustainability North America Index, one of four electric utility companies designated a sustainability leader on the index.

Consolidated Earnings – Reconciliation of GAAP to Non-GAAP Measures

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

 

Third Quarter

Year-to-Date

 

2015

2014

Change

2015

2014

Change

As-Reported Earnings (Loss)

($ in millions)

(723.0)

230.0

(953.1)

(276.1)

820.6

(1,096.7)

Less Special Items:

 

 

 

 

 

 

Pilgrim/FitzPatrick asset impairments and related write-offs

 

 

 

 

 

 

(1,062.5)

(1,062.5)

(1,062.5)

(1,062.5)

Decision to close VY

(1.2)

(73.7)

72.5

(6.9)

(86.4)

79.5

HCM implementation expenses

(0.6)

0.6

(7.8)

7.8

Total Special Items

(1,063.7)

(74.3)

(989.4)

(1,069.4)

(94.2)

(975.2)

Operational Earnings

340.7

304.4

36.3

793.3

914.8

(121.5)

Weather Impact

29.3

(20.0)

49.3

40.7

3.2

37.5

 

 

 

 

 

 

 

As-Reported Earnings (Loss)

(per share in $)

(4.04)

1.27

(5.31)

(1.54)

4.56

(6.10)

Less Special Items:

 

 

 

 

 

 

Pilgrim/FitzPatrick asset impairments and related write-offs

 

 

 

 

 

 

(5.93)

(5.93)

(5.92)

(5.92}

HCM implementation expenses

(0.04)

0.04

Decision to close VY

(0.01)

(0.41)

0.40

(0.04)

(0.48)

0.44

Total Special Items

(5.94)

(0.41)

(5.53)

(5.96)

(0.52)

(5.44)

Operational Earnings

1.90

1.68

0.22

4.42

5.08

(0.66)

Weather Impact

0.16

(0.11)

0.27

0.23

0.02

0.21

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

In third quarter 2015, Utility, Parent and Other earnings were $1.72 per share on an as-reported and an operational basis. In comparison, third quarter 2014 as-reported and operational EPS was $1.45. Operational results reflected the effects of productive investments and favorable weather, as well as higher operating expenses. Also contributing to the quarter-over-quarter increase was a regulatory charge recorded in third quarter 2014.

Billed retail sales volume increased quarter-to-quarter on the effects of weather and retail sales growth. On a weather-adjusted basis, billed volume increased 1.8 percent; the components of the sales growth were:

· Weather-adjusted residential sales decline of (0.1) percent,
· Commercial sales increase of 1.2 percent on a weather-adjusted basis,
· Weather-adjusted governmental sales increase of 4.9 percent and
· Industrial sales increase of 4.0 percent.

Industrial sales growth reflected new and expansion projects that continued to ramp up and come into service, as well as growth from existing customers. Petroleum refineries ran at high utilization levels after their extended spring outages in second quarter 2015.

On a revenue basis, volume was primarily driven by weather. Weather reflected a significantly warmer-than-normal summer in third quarter 2015, compared to a cooler-than-normal season last year. Higher Utility net revenue also included 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, and increased industrial usage. The earnings effect from these rate adjustments was largely offset by changes in other line items (e.g., non-fuel operation and maintenance and depreciation expenses). Increased regulatory compliance at Arkansas Nuclear One and higher distribution reliability spending 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 $129 million in third quarter 2015, compared to $165 million in the same period a year ago. The decrease in operational adjusted EBITDA was driven largely by lower nuclear energy and capacity prices.

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

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

($ in millions)

Third Quarter

Year-to-Date

 

2015

2014

Change

2015

2014

Change

Net income

(1,032)

(33)

(999)

(913)

235

(1,148)

Add back: interest expense

7

4

3

19

12

7

Add back: income tax expense

(555)

2

(557)

(488)

141

(629)

Add back: depreciation and amortization

60

72

(12)

187

213

(26)

Subtract: interest and investment income

29

29

116

77

39

Add back: decommissioning expense

33

35

(2)

101

104

(3)

Adjusted EBITDA

(1,515)

51

(1,566)

(1,210)

627

(1,837)

Add back:

 

 

 

 

 

 

Special item for HCM implementation (pre-tax)

1

(1)

3

(3)

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

2

113

(111)

11

134

(123)

Special item for Pilgrim/FitzPatrick asset impairments and related write-offs (pre-tax)

1,642

1,642

1,642

1,642

Operational adjusted EBITDA

129

165

(36)

443

764

(321)

Totals may not foot due to rounding

EWC reported an as-reported loss of $5.76 per share compared to a third quarter 2014 as-reported loss of 18 cents per share. Third quarter 2015 as-reported results included non-cash asset impairments for Pilgrim and FitzPatrick totaling approximately $1.6 billion on a pre-tax basis and approximately $1.1 billion after-tax. Under generally accepted accounting principles, long-lived assets are typically accounted for on a historical cost basis unless a triggering event occurs which requires an impairment evaluation. Both plants experienced a triggering event in the quarter. Applying the accounting rules after these events led to the charges. The impairments were classified as a special item and therefore, excluded from operational results.

Third quarter 2015 EWC operational earnings were 18 cents per share, compared to 23 cents per share in the third quarter 2014. This decline was driven by lower nuclear capacity and energy pricing partially offset by the closure of VY at the end of last year. VY incurred a net operational loss in the third quarter of 2014.

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

Earnings Guidance

Entergy updated its 2015 operational earnings guidance to be $5.50 to $6.10 per share. Current expectations are around $6.00 per share. The updated guidance range reflects year-to-date weather and updated expectations for tax benefits at Utility, Parent and Other as well as lower fuel, refueling outage and depreciation and amortization expenses at EWC resulting from the Pilgrim and FitzPatrick impairments. See webcast presentation slides for additional details.

Earnings Teleconference

A teleconference will be held at 10 a.m. CT on Monday, Nov. 2, 2015, to discuss Entergy's third 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 60315863, 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 Nov. 9, 2015, by dialing (855) 859-2056, conference ID 60315863. 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 will be 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 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.

View complete earnings release (PDF)