ENTERGY CORPORATION NEW ORLEANS, Nov. 4, 2014 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) today reported third quarter 2014 as-reported earnings of $230.0 million, or $1.27 per share, compared with $239.9 million, or $1.34 per share, for third quarter 2013. On an operational basis, Entergy's third quarter 2014 earnings were $304.4 million, or $1.68 per share, compared with $430.4 million, or $2.41 per share, in third quarter 2013.
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"We're pleased to report that the Utility posted its fifth straight quarter-over-quarter of industrial sales growth - and the second straight quarter over 5 percent, exceeding our expectations for the year," said Entergy Chairman and CEO Leo Denault. "Our nuclear plants also operated well - we posted a 90 percent capacity factor at EWC, for example - and had fewer unplanned outage days. And as it has been for some time, our strategy is sound and our path is clear. Entergy's long-term value is intact."
Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures
Third Quarter and Year-to-Date 2014 vs. 2013
--------------------------------------------
(Per share in U.S. $)
Third Quarter Year-to-Date
------------- ------------
2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
As-Reported
Earnings 1.27 1.34 (0.07) 4.56 3.16 1.40
Less Special
Items (0.41) (1.07) 0.66 (0.52) (1.20) 0.68
----- ----- ---- ----- ----- ----
Operational
Earnings 1.68 2.41 (0.73) 5.08 4.36 0.72
----------- ---- ---- ----- ---- ---- ----
*GAAP refers to United States generally accepted accounting principles.
Operational Earnings Highlights for Third Quarter 2014
-- Utility results were down driven by a higher effective income tax rate,
higher other operation and maintenance expense and a regulatory charge;
these decreases were partially offset by higher net revenue.
-- Entergy Wholesale Commodities earnings declined due to increased
depreciation expense and a higher effective income tax rate on
operational earnings. These items were partially offset by lower other
O&M expense.
-- Parent & Other results declined due primarily to higher income tax
expense.
Other business highlights for the quarter included the following:
-- In a move designed to attract industry and jobs to the state, Entergy
Louisiana, LLC and Entergy Gulf States Louisiana, L.L.C. asked the
Louisiana Public Service Commission for permission to become a single
utility.
-- We also made progress on our rate case in Mississippi, and reached a
constructive settlement with the Mississippi Public Utilities Staff -
one which aligns customer, regulator and state objectives with our own.
-- For the seventh consecutive year, Site Selection magazine named Entergy
one of the nation's top 10 utilities in economic development, citing the
more than 9,000 new jobs created and nearly $21 billion in corporate
facility investment.
-- James A. FitzPatrick Nuclear Power Plant completed its 21st refueling
outage in 44 days, including a complete retube of the plant's main
condenser to improve the plant's capacity factor.
A teleconference will be held at 10 a.m. CST on Tuesday, Nov. 4, 2014, to discuss Entergy's third 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 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 noon CST on Nov. 11, 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 third quarter 2014, Utility earnings were $310.9 million, or $1.72 per share, on an as-reported basis and $311.2 million, or $1.72 per share, on an operational basis, compared to $348.0 million, or $1.95 per share, on an as-reported basis and $363.3 million, or $2.04 per share, on an operational basis for third quarter 2013. The quarter-over-quarter decrease in operational earnings was driven by several factors including a regulatory charge at Entergy Mississippi, Inc., higher other O&M and a higher effective income tax rate. These decreases were partially offset by higher net revenue.
In third quarter 2014, EMI recorded a regulatory charge related to a proposed settlement with the MPUS of EMI's general rate case. The settlement, subject to approval by the Mississippi Public Service Commission, includes EMI's agreement not to pursue recovery of EMI's regulatory asset for new nuclear generation development costs. This charge reduced operational earnings per share by approximately $(0.23).
Other O&M was higher quarter-over-quarter. The increase was driven by nuclear generation spending and Midcontinent Independent System Operator, Inc. regional transmission organization administration fees. Energy efficiency spending and storm reserve accruals were also higher than the comparable quarter a year ago. These expense increases were partially offset by lower compensation and benefits expenses.
Utility net revenue was higher than the same quarter last year with several contributing factors, both positive and negative. Weather-adjusted sales growth and price contributed to the increase. A portion of the price variance was offset in other line items outside of net revenue, including O&M. The effect of milder-than-normal weather in the current quarter partially offset the increase.
Billed retail sales increased 2.0 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 due largely to expansions in the chemicals, refining and primary metals segments as well as growth from small industrial customers.
Residential sales in third quarter 2014, on a weather-adjusted basis, decreased 0.2 percent compared to third quarter 2013. Commercial and governmental sales, on a weather-adjusted basis, increased 0.8 percent and 1.8 percent, respectively, quarter over quarter. Industrial sales in the third quarter increased 5.3 percent compared to the same quarter of 2013.
Entergy Wholesale Commodities
EWC reported a loss of $33.2 million, or 18 cents per share, on an as-reported basis and earnings of $40.8 million, or 23 cents per share, on an operational basis for third quarter 2014. This compares to an as-reported loss of $92.8 million, or 52 cents per share, and operational earnings of $82.3 million, or 46 cents per share, in third quarter 2013. The decrease in operational earnings was driven by a higher effective income tax rate and higher depreciation expense. These items were partially offset by lower other O&M, as noted below.
EWC 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 was $165 million in third quarter 2014, flat from the same period a year ago. Other O&M decreased quarter-over-quarter due primarily to lower compensation and benefits expenses. Offsetting the other O&M variance were several other individually insignificant items
Contribution to third 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 essentially neutral.
Parent & Other
Parent & Other reported a loss of $47.7 million, or 27 cents per share, on an as-reported and operational basis for third quarter 2014, compared to a loss of $15.3 million, or 9 cents per share, on an as-reported and operational basis for third quarter 2013. The quarter-over-quarter decline was due primarily to higher income tax expense.
Earnings Guidance
Entergy affirmed its previously-issued 2014 operational earnings guidance to be in the range of $5.55 to $6.75 per share. Current indications point to full-year results below the midpoint of the guidance range. However, absent the third quarter charge associated with the Mississippi rate case settlement, full-year expectations would be around the midpoint.
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 Nov. 4, 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) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning Vermont Yankee 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; and (g) 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
Third Quarter and Year-to-Date 2014 vs. 2013
(Per share in U.S. $)
Third Quarter Year-to-Date
------------- ------------
2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
As-Reported
Utility 1.72 1.95 (0.23) 4.00 3.74 0.26
Entergy Wholesale
Commodities (0.18) (0.52) 0.34 1.30 - 1.30
Parent & Other (0.27) (0.09) (0.18) (0.74) (0.58) (0.16)
----- ----- ----- ----- ----- -----
Consolidated As-
Reported Earnings 1.27 1.34 (0.07) 4.56 3.16 1.40
Less Special Items
Utility - (0.09) 0.09 (0.03) (0.21) 0.18
Entergy Wholesale
Commodities (0.41) (0.98) 0.57 (0.49) (0.99) 0.50
Parent & Other - - - - - -
--- --- --- --- --- ---
Consolidated Special
Items (0.41) (1.07) 0.66 (0.52) (1.20) 0.68
Operational
Utility 1.72 2.04 (0.32) 4.03 3.95 0.08
Entergy Wholesale
Commodities 0.23 0.46 (0.23) 1.79 0.99 0.80
Parent & Other (0.27) (0.09) (0.18) (0.74) (0.58) (0.16)
----- ----- ----- ----- ----- -----
Consolidated
Operational
Earnings 1.68 2.41 (0.73) 5.08 4.36 0.72
Appendix B provides a reconciliation of Entergy Wholesale Commodities GAAP net income to non-GAAP operational adjusted EBITDA.
Appendix B: Entergy Wholesale Commodities Operational Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures
Third Quarter and Year-to-Date 2014 vs. 2013
--------------------------------------------
($ in millions)
Third Quarter Year-to-Date
------------- ------------
2014 2013 Change 2014 2013 Change
---- ---- ------ ---- ---- ------
Net income (33) (93) 60 235 1 234
Add back: interest
expense 4 4 - 12 11 1
Add back: income tax
expense 2 (107) 109 141 (65) 206
Add back: depreciation
and amortization 72 55 17 213 155 58
Subtract: interest and
investment income 29 21 8 77 72 5
Add back:
decommissioning expense 35 32 3 104 92 12
--- --- --- --- --- ---
Adjusted EBITDA 51 (130) 181 627 122 505
Add back: special item
for HCM implementation
expenses (pre-tax) 1 3 (2) 3 5 (2)
Add back: special item
resulting from the
decision to close VY
(pre-tax) 113 292 (179) 134 292 (158)
---
Operational adjusted
EBITDA 165 165 - 764 419 345
Totals may not foot due to rounding
Entergy Corporation
Consolidated Income Statement
Three Months Ended Sept. 30
(in thousands)
2014 2013
---- ----
(unaudited)
Operating Revenues:
Electric $2,824,055 $2,704,800
Natural gas 28,039 26,113
Competitive businesses 606,016 621,046
------- -------
Total 3,458,110 3,351,959
--------- ---------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 858,901 818,254
Purchased power 465,106 392,545
Nuclear refueling outage
expenses 71,651 64,758
Other operation and maintenance 841,939 839,348
Asset write-off, impairments,
and related charges 163,835 291,505
Decommissioning 68,370 60,848
Taxes other than income taxes 159,735 156,950
Depreciation and amortization 332,079 325,149
Other regulatory charges
(credits) - net 3,635 13,708
----- ------
Total 2,965,251 2,963,065
--------- ---------
Operating Income 492,859 388,894
------- -------
Other Income (Deductions):
Allowance for equity funds used
during construction 16,737 17,676
Interest and investment income 49,547 23,430
Miscellaneous - net (6,644) (10,214)
------ -------
Total 59,640 30,892
------ ------
Interest Expense:
Interest expense 164,482 157,504
Allowance for borrowed funds
used during construction (8,664) (6,453)
Total 155,818 151,051
------- -------
Income Before Income Taxes 396,681 268,735
Income Taxes 161,765 24,553
------- ------
Consolidated Net Income 234,916 244,182
Preferred Dividend Requirements
of Subsidiaries 4,879 4,332
----- -----
Net Income Attributable to
Entergy Corporation $230,037 $239,850
======== ========
Earnings Per Average Common Share
Basic $1.28 $1.35
Diluted $1.27 $1.34
Average Number of Common Shares
Outstanding - Basic 179,610,067 178,283,721
Average Number of Common Shares
Outstanding - Diluted 180,527,116 178,652,210
Entergy Corporation
Consolidated Income Statement
Nine Months Ended Sept. 30
(in thousands)
2014 2013
---- ----
(unaudited)
Operating Revenues:
Electric $7,424,360 $6,831,290
Natural gas 141,727 113,315
Competitive businesses 2,097,516 1,754,436
--------- ---------
Total 9,663,603 8,699,041
--------- ---------
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses,
and gas purchased for resale 2,006,811 1,818,194
Purchased power 1,557,631 1,251,418
Nuclear refueling outage
expenses 197,692 191,940
Other operation and maintenance 2,392,590 2,437,801
Asset write-off, impairments,
and related charges 167,772 291,505
Decommissioning 201,418 179,342
Taxes other than income taxes 466,939 452,934
Depreciation and amortization 992,544 923,541
Other regulatory charges
(credits) - net (7,010) 22,914
------ ------
Total 7,976,387 7,569,589
--------- ---------
Operating Income 1,687,216 1,129,452
--------- ---------
Other Income (Deductions):
Allowance for equity funds used
during construction 46,654 46,675
Interest and investment income 109,040 102,277
Miscellaneous - net (33,026) (36,992)
------- -------
Total 122,668 111,960
------- -------
Interest Expense:
Interest expense 491,359 466,422
Allowance for borrowed funds
used during construction (24,199) (18,432)
Total 467,160 447,990
------- -------
Income Before Income Taxes 1,342,724 793,422
Income Taxes 507,474 214,202
------- -------
Consolidated Net Income 835,250 579,220
Preferred Dividend Requirements
of Subsidiaries 14,656 14,247
------ ------
Net Income Attributable to
Entergy Corporation $820,594 $564,973
======== ========
Earnings Per Average Common Share
Basic $4.58 $3.17
Diluted $4.56 $3.16
Average Number of Common Shares
Outstanding - Basic 179,256,975 178,170,339
Average Number of Common Shares
Outstanding - Diluted 179,867,018 178,520,063
Entergy Corporation
Utility Electric Energy Sales & Customers
Three Months Ended Sept. 30
---------------------------
2014 2013 % %
Change Weather-
Adjusted
(Millions of kWh)
Electric Energy Sales:
Residential 10,869 11,359 (4.3) (0.2)
Commercial 8,281 8,393 (1.3) 0.8
Governmental 659 648 1.7 1.8
Industrial 11,620 11,038 5.3 5.3
Total to Ultimate Customers 31,429 31,438 - 2.0
Wholesale 2,075 667 211.1
----- ---
Total Sales 33,504 32,105 4.4
====== ======
Nine Months Ended Sept. 30
--------------------------
2014 2013 % %
Change Weather-
Adjusted
(Millions of kWh)
Electric Energy Sales:
Residential 28,162 27,080 4.0 0.5
Commercial 21,844 21,498 1.6 1.4
Governmental 1,829 1,814 0.8 0.8
Industrial 32,635 31,264 4.4 4.4
Total to Ultimate Customers 84,470 81,656 3.4 2.2
Wholesale 6,357 1,887 236.9
----- -----
Total Sales 90,827 83,543 8.7
====== ======
Sept. 30
--------
2014 2013 %
Change
------
Electric Customers (End of period):
Residential 2,411,773 2,397,877 0.6
Commercial 344,436 342,291 0.6
Governmental 17,314 16,941 2.2
Industrial 50,770 48,709 4.2
------ ------
Total Ultimate Customers 2,824,293 2,805,818 0.7
Wholesale 9 25 (64.0)
--- ---
Total Customers 2,824,302 2,805,843 0.7
========= =========
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SOURCE Entergy Corporation
