ENTERGY CORPORATION NEW ORLEANS, July 29, 2014 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) today reported second quarter 2014 as-reported earnings of $189.4 million, or $1.05 per share, compared with $163.7 million, or 92 cents per share, for second quarter 2013. Operational earnings per share were 10 percent higher than the same quarter a year ago. On an operational basis, Entergy's second quarter 2014 earnings were $200.3 million, or $1.11 per share, compared with $179.7 million, or $1.01 per share, in second quarter 2013.
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"Our focus on operational excellence allowed us to continue to deliver on our commitments in the second quarter. At the Utility, we saw strong quarter-over-quarter industrial sales growth of 5.3 percent, and at Entergy Wholesale Commodities, solid performance was driven largely by improved fleet operations and no refueling outages, which allowed us to provide extended periods of uninterrupted power to the market," said Entergy Chairman and Chief Executive Officer Leo Denault. "These results are further evidence of the progress we've made on many fronts over the past 18 months. The state of Entergy's business is strong."
Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures
Second Quarter and Year-to-Date 2014 vs. 2013
---------------------------------------------
(Per share in U.S. $)
Second Quarter Year-to-Date
-------------- ------------
2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
As-Reported
Earnings 1.05 0.92 0.13 3.29 1.82 1.47
Less Special
Items (0.06) (0.09) 0.03 (0.11) (0.13) 0.02
----- ----- ---- ----- ----- ----
Operational
Earnings 1.11 1.01 0.10 3.40 1.95 1.45
----------- ---- ---- ---- ---- ---- ----
*GAAP refers to United
States generally accepted
accounting principles.
Operational Earnings Per Share Highlights for Second Quarter 2014
-- Entergy Wholesale Commodities earnings increased, driven by higher net
revenue, and partially offset by higher income tax and depreciation
expenses.
-- Utility results were essentially flat. Higher net revenue and lower
non-fuel operation and maintenance expense were offset by higher
depreciation expense and a higher effective income tax rate.
-- Parent & Other results matched the prior period.
Other Business Highlights
-- River Bend was rated in the "excellence" category as compared to peers.
-- Since June, the Utility has signed economic development projects
totaling approximately 100 megawatts.
-- J.D. Power's 2014 satisfaction study of electric utility residential
customers results show that all Entergy utility operating companies
improved their performance by several points over last year.
-- Corporate Responsibility Magazine named Entergy one of America's 100
Best Corporate Citizens.
A teleconference will be held at 10 a.m. CDT on Tuesday, July 29, 2014, to discuss Entergy's second quarter 2014 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 (719) 325-2115, confirmation code 6761108, no more than 15 minutes prior to the start of the call. The presentation slides are also on 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 noon CDT on Tuesday, Aug. 5, 2014, by dialing (719) 457-0820, confirmation code 6761108. This release and presentation slides are also available on the Entergy Investor Relations mobile web app at enter.gy/ir.
Utility
In second quarter 2014, Utility earnings were $207.8 million, or $1.15 per share, on an as-reported basis and $211.3 million, or $1.17 per share, on an operational basis, compared to $196.2 million, or $1.10 per share, on an as-reported basis and $211.1 million, or $1.18 per share, on an operational basis for second quarter 2013. Higher net revenue and lower non-fuel O&M expense were offset by higher depreciation expense and a higher effective income tax rate.
The increase in Utility net revenue was driven largely by pricing adjustments from recent rate actions. The contribution attributable to volume was slightly negative. Higher weather-adjusted billed sales volume, particularly sales to industrial customers, was offset by the effects of weather, including milder weather in late June 2014 reflected in the unbilled period.
Billed retail sales increased 2.6 percent on a weather-adjusted basis. The increase was attributable largely to 5.3 percent growth in the industrial customer class. The industrial increase was led by the refining, chemicals and small industrial segments and was aided by expansions. Growth in Entergy Texas, Inc. and Entergy Gulf States Louisiana, L.L.C. service areas accounted for approximately 85 percent of the total industrial quarter-over-quarter increase.
Residential sales in second quarter 2014, on a weather-adjusted basis, increased 0.2 percent compared to second quarter 2013. Commercial and governmental sales, on a weather-adjusted basis, increased 1.5 percent and 0.4 percent, respectively, quarter over quarter. Industrial sales in the second quarter increased 5.3 percent compared to the same quarter of 2013.
Utility non-fuel O&M was lower than the same quarter a year ago. The decrease reflected lower compensation and benefits costs from fewer employees and lower post-retirement benefit costs.
Entergy Wholesale Commodities
EWC reported as-reported earnings of $25.9 million, or 14 cents per share, and operational earnings of $33.4 million, or 18 cents per share, for second quarter 2014, compared to second quarter 2013 earnings of $11.5 million, or 6 cents per share, on an as-reported basis and $12.7 million, or 7 cents per share, on an operational basis. The increase in operational earnings was driven by higher operational adjusted earnings before interest, income taxes, depreciation and amortization and interest and investment income excluding decommissioning expense and other than temporary impairment losses on decommissioning trust fund assets. The increase was partially offset by higher depreciation and income tax expenses.
EWC operational adjusted EBITDA was $145 million in second quarter 2014, compared to $61 million in the same period a year ago. The quarter-over-quarter increase was attributable to net revenue. EWC's nuclear fleet capacity factor improved on no refueling outages in second quarter 2014 as well as 37 fewer unplanned outage days. Higher realized price, driven by improved Northeast capacity prices, also contributed to the net revenue increase. The realized price for EWC's nuclear fleet was approximately $50 per MWh in the second quarter of this year, compared to $46.40 in the comparable quarter a year ago.
Contribution to second quarter 2014 operational adjusted EBITDA from the Vermont Yankee Nuclear Power Station, scheduled to be closed later this year at the end of its current operating cycle, was approximately $12 million.
Parent & Other
Parent & Other reported a loss of $44.3 million, or 24 cents per share, on an as-reported and operational basis for second quarter 2014, compared to a loss of $44.0 million, or 24 cents per share, on an as-reported and operational basis for second quarter 2013. No line items were individually significant.
Earnings Guidance
Entergy affirmed its previously issued 2014 operational earnings guidance to be in the range of $5.55 to $6.75 per share.
Three-Year Financial Outlook
Entergy's current three-year financial outlook for 2014 through 2016 is summarized below.
Utility operational net income outlook of $1 billion to $1.050 billion by 2016, or 5 to 7 percent compound annual growth rate off 2013 base, through a combination of rate base growth and return on equity improvement. Three major aspects of the Utility growth strategy which support the outlook, include:
-- Productive investment to meet existing and potential demand growth as
well as reliability improvements,
-- Unique economic development opportunity driving 3.5 to 3.75 percent
retail sales growth (CAGR off 2013 weather-adjusted results) to support
rate stability and help fund productive investment and
-- Ongoing engagement and collaboration with regulators on initiatives to
benefit customers.
EWC operational adjusted EBITDA estimates will experience volatility based on commodity market activities at specific points in time. The EWC strategy is to preserve optionality and manage risks in that business. Cornerstones of that strategy include:
-- Operational excellence and disciplined cost management,
-- Robust hedging strategy to position the business to take advantage of
price volatility,
-- Continued pursuit of fair and competitive wholesale markets that provide
proper compensation for needed plants and
-- Ongoing efforts to educate parties on Indian Point's critical role in
the community and to continue along multiple paths to advocate for
continued operations at that plant.
Parent and Other operational earnings per share outlook of $(1.10) to $(1.20) in 2016. Key drivers include level of borrowings as well cost of debt, level of affiliate preferred investments and effective income tax rate.
Entergy continues to reasonably believe that the company can achieve consolidated operational earnings per share growth of 2 to 4 percent CAGR by 2016 (2013 base year), based on factors described above and assuming realization of Entergy's point of view on market power prices.
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 more than 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 $11 billion and approximately 14,000 employees.
Additional information regarding Entergy's quarterly and annual results of operations, regulatory proceedings and other matters is available in Entergy's investor news release dated July 29, 2014, a copy of which has been filed today with the SEC on Form 8-K, and Entergy's 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 enter.gy/ir.
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. 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 involve a number of risks and uncertainties. There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including (a) those factors discussed 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) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; and (f) economic conditions and conditions in commodity and capital markets during the periods covered by the forward-looking statements, in addition to other factors described elsewhere in this release and subsequent securities filings.
Appendix A provides a reconciliation of GAAP consolidated as-reported earnings to non-GAAP consolidated operational earnings.
Table 1: Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures
Second Quarter and Year-to-Date 2014 vs. 2013
(Per share in U.S. $)
Second Quarter Year-to-Date
-------------- ------------
2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
As-Reported
Utility 1.15 1.10 0.05 2.28 1.79 0.49
Entergy Wholesale
Commodities 0.14 0.06 0.08 1.49 0.52 0.97
Parent & Other (0.24) (0.24) - (0.48) (0.49) 0.01
----- ----- --- ----- ----- ----
Consolidated As-
Reported Earnings 1.05 0.92 0.13 3.29 1.82 1.47
Less Special Items
Utility (0.02) (0.08) 0.06 (0.03) (0.12) 0.09
Entergy Wholesale
Commodities (0.04) (0.01) (0.03) (0.08) (0.01) (0.07)
Parent & Other - - - - - -
--- --- --- --- --- ---
Consolidated Special
Items (0.06) (0.09) 0.03 (0.11) (0.13) 0.02
Operational
Utility 1.17 1.18 (0.01) 2.31 1.91 0.40
Entergy Wholesale
Commodities 0.18 0.07 0.11 1.57 0.53 1.04
Parent & Other (0.24) (0.24) - (0.48) (0.49) 0.01
----- ----- --- ----- ----- ----
Consolidated
Operational
Earnings 1.11 1.01 0.10 3.40 1.95 1.45
Appendix B provides a reconciliation of Entergy Wholesale Commodities GAAP net income to non-GAAP operational adjusted EBITDA.
Appendix B: Entergy Wholesale Commodities Operational Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures
Second Quarter and Year-to-Date 2014 vs. 2013
---------------------------------------------
($ in millions)
Second Quarter Year-to-Date
-------------- ------------
2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
Net income 26 12 14 269 94 175
Add back: interest
expense 3 4 (1) 8 7 1
Add back: income tax
expense 20 (15) 35 138 42 96
Add back: depreciation
and amortization 71 50 21 141 100 41
Subtract: interest and
investment income 22 22 - 48 51 (3)
Add back:
decommissioning expense 35 30 5 69 61 8
--- --- --- --- --- ---
Adjusted EBITDA 133 59 74 577 253 324
Add back: special item
for HCM implementation
expenses (pre-tax) 1 2 (1) 2 2 -
Add back: special item
resulting from the
decision to close VY
(pre-tax) 11 - 11 21 - 21
---
Operational adjusted
EBITDA 145 61 84 600 255 345
Totals may not foot due
to rounding
Entergy Corporation
Consolidated Income Statement
Three Months Ended June 30
(in thousands)
2014 2013
---- ----
(unaudited)
Operating Revenues:
Electric $2,373,842 $2,177,210
Natural gas 35,469 33,881
Competitive businesses 587,339 527,117
------- -------
Total 2,996,650 2,738,208
--------- ---------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 604,081 489,608
Purchased power 517,898 485,744
Nuclear refueling outage
expenses 66,497 66,464
Other operation and maintenance 816,609 844,195
Decommissioning 67,250 59,389
Taxes other than income taxes 152,736 144,888
Depreciation and amortization 331,742 297,516
Other regulatory charges
(credits) - net (14,640) 3,892
------- -----
Total 2,542,173 2,391,696
--------- ---------
Operating Income 454,477 346,512
------- -------
Other Income (Deductions):
Allowance for equity funds used
during construction 14,788 16,249
Interest and investment income 24,245 40,541
Miscellaneous - net (14,675) (13,157)
------- -------
Total 24,358 43,633
------ ------
Interest Expense:
Interest expense 164,327 155,768
Allowance for borrowed funds
used during construction (8,516) (6,791)
Total 155,811 148,977
------- -------
Income Before Income Taxes 323,024 241,168
Income Taxes 128,743 73,113
------- ------
Consolidated Net Income 194,281 168,055
Preferred Dividend Requirements
of Subsidiaries 4,898 4,332
----- -----
Net Income Attributable to
Entergy Corporation $189,383 $163,723
======== ========
Earnings Per Average Common Share
Basic $1.06 $0.92
Diluted $1.05 $0.92
Average Number of Common Shares
Outstanding - Basic 179,354,103 178,196,525
Average Number of Common Shares
Outstanding - Diluted 180,045,432 178,614,383
Entergy Corporation
Consolidated Income Statement
Six Months Ended June 30
(in thousands)
2014 2013
---- ----
(unaudited)
Operating Revenues:
Electric $4,600,306 $4,126,490
Natural gas 113,689 87,202
Competitive businesses 1,491,498 1,133,390
--------- ---------
Total 6,205,493 5,347,082
--------- ---------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 1,147,910 999,940
Purchased power 1,092,525 858,873
Nuclear refueling outage
expenses 126,041 127,183
Other operation and maintenance 1,554,590 1,598,453
Decommissioning 133,049 118,494
Taxes other than income taxes 307,204 295,983
Depreciation and amortization 660,465 598,392
Other regulatory charges
(credits) - net (10,645) 9,207
------- -----
Total 5,011,139 4,606,525
--------- ---------
Operating Income 1,194,354 740,557
--------- -------
Other Income (Deductions):
Allowance for equity funds used
during construction 29,917 29,000
Interest and investment income 59,493 78,847
Miscellaneous - net (26,379) (26,779)
------- -------
Total 63,031 81,068
------ ------
Interest Expense:
Interest expense 326,877 308,918
Allowance for borrowed funds
used during construction (15,535) (11,979)
Total 311,342 296,939
------- -------
Income Before Income Taxes 946,043 524,686
Income Taxes 345,709 189,648
------- -------
Consolidated Net Income 600,334 335,038
Preferred Dividend Requirements
of Subsidiaries 9,777 9,915
----- -----
Net Income Attributable to
Entergy Corporation $590,557 $325,123
======== ========
Earnings Per Average Common Share
Basic $3.30 $1.83
Diluted $3.29 $1.82
Average Number of Common Shares
Outstanding - Basic 179,077,503 178,112,709
Average Number of Common Shares
Outstanding - Diluted 179,547,020 178,534,201
Entergy Corporation
Utility Electric Energy Sales & Customers
Three Months Ended June 30
--------------------------
2014 2013 % %
Change Weather-Adjusted
------
(Millions of kWh)
Electric Energy Sales:
Residential 7,266 7,377 (1.5) 0.2
Commercial 6,762 6,684 1.2 1.5
Governmental 587 583 0.6 0.4
Industrial 10,902 10,357 5.3 5.3
Total to Ultimate
Customers 25,517 25,001 2.1 2.6
Wholesale 2,048 590 247.1
----- ---
Total Sales 27,565 25,591 7.7
====== ======
Six Months Ended June 30
------------------------
2014 2013 % %
Change Weather-Adjusted
------
(Millions of kWh)
Electric Energy Sales:
Residential 17,293 15,721 10.0 1.1
Commercial 13,563 13,105 3.5 1.8
Governmental 1,170 1,167 0.3 0.2
Industrial 21,015 20,225 3.9 3.9
Total to Ultimate
Customers 53,041 50,218 5.6 2.4
Wholesale 4,282 1,219 251.3
----- -----
Total Sales 57,323 51,437 11.4
====== ======
June 30
-------
2014 2013 %
Change
------
Electric Customers (End of period):
Residential 2,405,182 2,395,491 0.4
Commercial 344,894 342,014 0.8
Governmental 17,281 16,695 3.5
Industrial 45,071 44,041 2.3
------ ------
Total Ultimate Customers 2,812,428 2,798,241 0.5
Wholesale 11 29 (62.1)
--- ---
Total Customers 2,812,439 2,798,270 0.5
========= =========
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SOURCE Entergy Corporation
