EX-99 5 a16803993.htm Date:

Entergy
639 Loyola Avenue
New Orleans, LA  70113

Exhibit 99.3

 

News
Release

 

Date:

July 28, 2003

For Release:

Immediately

Contact:

Yolanda Pollard (News Media)
(504) 576-4238
ypollar@entergy.com

Nancy Morovich (Investor Relations)
(504) 576-5506
nmorovi@entergy.com

 

Entergy Reports Second Quarter Earnings

New Orleans, La. - Entergy Corporation (NYSE:ETR) today announced second quarter 2003 operational earnings of $270.1 million, or $1.17 per share, which equaled the company record for second quarter operational earnings per share set in 2002. On an as-reported basis, Entergy earned $205.6 million, or 89 cents per share, compared with $241.7 million, or $1.06 per share, in the same period of 2002.

Second quarter 2003 as-reported earnings reflect a loss provision of $65.6 million, or 28 cents per share, related to the River Bend nuclear power plant. In second quarter 2002, as-reported results included a special charge of $25.4 million, or 11 cents per share, associated with the restructuring of Entergy's non-nuclear wholesale assets business.

"Operating results reflect the structural stability we've worked to build into our businesses over the past five years," said J. Wayne Leonard, Entergy's chief executive officer. "Strong execution and results at the Entergy-Koch venture, which is the business specifically structured to manage risks, overcame the temporary impacts of mild weather and nuclear outages we experienced this quarter. We are confident in our ability to achieve continued strong financial results, and in turn, to produce top quartile returns for our shareholders."

Recent highlights include the following:
    • Entergy's Board of Directors approved an increase in the dividend from its current annual level of $1.40 per share to $1.80 per share, commencing with the quarterly dividend payment due September 1. In addition, the Board established an objective to annually grow the dividend consistent with the achievement of the company's financial aspirations.
    • The U.S. Nuclear Regulatory Commission removed the "yellow finding" that was issued for the Indian Point 2 nuclear plant. The NRC has now removed both "red" and "yellow" findings since Entergy purchased Indian Point 2 in 2001, officially reflecting improvements in safety at the plant.
    • The Federal Energy Management Agency and the U.S. Nuclear Regulatory Commission both concluded that emergency plans at the Indian Point Nuclear Energy Center provide reasonable assurance that the health and safety of citizens in surrounding communities are adequately protected.
    • The Nebraska Public Power District selected Entergy from among several national nuclear operating companies to provide management services to the Cooper Nuclear Station.

Utility Operations

Utility as-reported earnings in second quarter 2003 were $121.7 million, or 53 cents per share, compared to $194.9 million, or 85 cents per share, in second quarter 2002. Second quarter 2003 as-reported earnings include a loss provision of $65.6 million, or 28 cents per share, related to an unfavorable decision in Texas on previously disallowed River Bend construction costs.

In second quarter 2003, utility operational earnings were $187.3 million, or 81 cents per share, compared with $194.9 million, or 85 cents per share, in the same period last year. The decrease resulted primarily from lower revenues due to milder weather and decreased sales in the industrial sector.

Usage in the residential sector was essentially flat in second quarter 2003 compared to second quarter 2002. Commercial and governmental sales were up slightly, while industrial sales experienced a 7 percent reduction quarter over quarter. Residential and commercial sales were negatively impacted by weather, while the quarter-on-quarter decline in industrial sales is attributed to the loss of three customers to cogeneration.

Operation and maintenance expenses were significantly lower during second quarter 2003 due primarily to the absence in 2003 of ice storm expenses recorded in second quarter 2002 as a result of a settlement reached with the Arkansas Public Service Commission.

Competitive Non-Regulated Businesses

The competitive businesses, which are comprised of Entergy Nuclear and Energy Commodity Services, recorded as-reported earnings of $93.4 million, or 40 cents per share, compared to $51.5 million, or 23 cents per share, in second quarter 2002. Second quarter 2002 results included a special charge totaling a negative 11 cents per share for asset impairments and restructuring expenses in the non-nuclear wholesale assets business.

Excluding this special charge, operational earnings for the competitive businesses increased 18 percent from $76.9 million, or 34 cents per share, in second quarter 2002 to $92.3 million, or 40 cents per share, in second quarter 2003. The increase reflects strong performance at Energy Commodity Services which more than offset the negative impact of refueling outages at Entergy Nuclear.

Entergy Nuclear earned $44.9 million, or 19 cents per share, on an as-reported basis, compared to $53.5 million, or 24 cents per share, in second quarter 2002. Operational results in each period equaled as-reported results. The decrease in earnings was due primarily to lower generation available for sale as a result of two planned refueling outages and several short unplanned outages. In second quarter 2002, there were no refueling outages. The contribution in 2003 of Vermont Yankee, acquired in July 2002, helped to offset the negative impact of outages during the quarter.

Energy Commodity Services, which includes earnings contributions from Entergy-Koch, LP and Entergy's non-nuclear wholesale assets, recorded as-reported earnings of $48.6 million, or 21 cents per share, in second quarter 2003, compared to a loss of $2 million, or 1 cent per share, in the same period last year. The significant improvement in results reported in 2003 was due primarily to strong earnings in trading and the absence in 2003 of charges recorded in second quarter 2002 for asset impairments and restructuring expenses in the non-nuclear wholesale assets business.

Operational earnings in second quarter 2003 were $47.5 million, or 21 cents per share, compared to $23.4 million, or 10 cents per share, in the same period of 2002 reflecting substantially higher earnings at Entergy-Koch Trading, a subsidiary of Entergy-Koch, LP. Second quarter 2003 earnings from Entergy-Koch's gas transportation subsidiary, Gulf South Pipeline, were essentially flat compared to the same period in 2002. The income sharing mechanisms that are part of the Entergy-Koch partnership agreement allocated substantially all of the partnership's income to Entergy in the second quarter of 2003.

Parent & Other

Parent & Other recorded an as-reported loss of $9.5 million, or 4 cents per share, in second quarter 2003, compared with a loss of $4.7 million, or 2 cents per share, in second quarter 2002. Operational results in each period equaled as-reported results. The loss in second quarter 2003 was due primarily to higher interest expense reflecting the impact of Parent term debt, totaling $500 million, issued since December 2002 at an average coupon rate of 7.2 percent.

Outlook

"Through the first half of 2003, we've achieved results that move us closer to meeting our financial objectives this year," said C. John Wilder, Entergy's chief financial officer. "We are rising to meet the demands of difficult credit markets, constantly changing economic conditions and operational challenges as we continue to produce solid financial results. Year-to-date strong performance at Entergy-Koch Trading supports our decision to raise 2003 earnings guidance to a range $4.05 to $4.25 on an operational basis. On an as-reported basis, revised 2003 earnings guidance is $4.37 to $4.57 per share, reflecting strong trading offset by the River Bend loss provision recorded this quarter. In addition, we are issuing as-reported and operational earnings guidance for 2004 in the range of $4.10 to $4.30 per share."

Entergy Corporation is an integrated energy company engaged primarily in electric power production, retail distribution operations, energy marketing and trading, and gas transportation. Entergy owns and operates power plants with about 30,000 megawatts of electric generating capacity, and it is the second-largest nuclear generator in the United States. Entergy delivers electricity to 2.6 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Through Entergy-Koch, LP, it is also a leading provider of wholesale energy marketing and trading services, as well as an operator of natural gas pipeline and storage facilities. Entergy has annual revenues of over $8 billion and more than 15,000 employees.

-30-

Entergy's online address is www.entergy.com

The following constitutes a "Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: From time to time, Entergy makes statements concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Although Entergy believes that these forward-looking statements and the underlying assumptions are reasonable, it cannot provide assurance that they will prove correct. Forward-looking statements involve a number of risks and uncertainties, and there are factors that could cause actual results to differ materially from those expressed or implied in the statements. Some of those factors include, but are not limited to: resolution of pending and future rate cases and negotiations, various performance-based rate discussions, and other regulatory decisions, including those related to Entergy's utility supply plan, Entergy's ability to reduce its operation and maintenance costs, particularly at its Non-Utility Nuclear generating facilities including the uncertainty of negotiations with unions to agree to such reductions, the performance of Entergy's generating plants, and particularly the capacity factor at its nuclear generating facilities, prices for power generated by Entergy's unregulated generating facilities - particularly the ability to extend or replace the existing power purchase agreements for the Non-Utility Nuclear plants - and the prices and availability of power Entergy must purchase for its utility customers, Entergy's ability to develop and execute on a point of view regarding prices of electricity, natural gas, and other energy-related commodities, Entergy-Koch's profitability in trading electricity, natural gas, and other energy-related commodities, resolution of pending investigations of Entergy-Koch's past trading practices, changes in the number of participants in the energy trading market, and in their creditworthiness and risk profile changes in the financial markets, particularly those affecting the availability of capital and Entergy's ability to refinance existing debt and to fund investments and acquisitions, actions of rating agencies, including changes in the ratings of debt and preferred stock, changes in inflation and interest rates, Entergy's ability to purchase and sell assets at attractive prices and on other attractive terms, volatility and changes in markets for electricity, natural gas, and other energy-related commodities, changes in utility regulation, including the beginning or end of retail and wholesale competition, the ability to recover net utility assets and other potential stranded costs, and the establishment of SeTrans or another regional transmission organization, changes in regulation of nuclear generating facilities and nuclear materials and fuel, including possible shutdown of Indian Point or other nuclear generating facilities, changes in environmental, tax, and other laws, including requirements for reduced emissions of sulfur, nitrogen, carbon, and other substances, the economic climate, and particularly growth in Entergy's service territory, variations in weather, hurricanes, and other disasters, advances in technology, the potential impacts of threatened or actual terrorism and war, the success of Entergy's strategies to reduce taxes, the effects of litigation, changes in accounting standards, changes in corporate governance and securities law requirements and Entergy's ability to attract and retain talented management and directors.

This earnings release includes non-GAAP measures when describing Entergy's results of operations and financial performance. We have prepared a reconciliation of each of these measures to the most directly comparable GAAP measure in Entergy's investor release which is posted on our website at www.entergy.com/earnings.

ENTERGY CORPORATION

Earnings at a glance

 

Second Quarter

2003

  

2002

  

%
           

Operating revenues

$ 2,353.91

  

$ 2,096.58

 		 

12.3

As-reported earnings

$ 205.64

  

$ 241.65

 		 

(14.9)

As-reported earnings per diluted share*

$ 0.89

  

$ 1.06

 		 

(16.0)

Operational earnings per diluted share

$ 1.17

  

$ 1.17

 		 

-

 

*Includes special items (EPS):

          

Abeyed River Bend loss provision

$(0.28)

$ -

Asset impairments

-

(0.04)

Turbine commitments

-

0.10

Restructuring

-

(0.17)

Total

$(0.28)

$ (0.11)

 

Year to Date

2003

  

2002

  

%
           

Operating revenues

$ 4,391.63

  

$3,957.42

 		 

11.0

As-reported earnings

$ 600.65

  

$ 162.73

 		 

269.1

As-reported earnings per diluted share*

$ 2.61

  

$ 0.72

 		 

262.5

Operational earnings per diluted share

$ 2.29

  

$ 1.98

 		 

15.7

 

*Includes special items (EPS):

Abeyed River Bend loss provision

$(0.29)

$ -

SFAS 143 implementation

0.61

-

Asset and contract impairments

-

(0.48)

Turbine commitments

-

(0.52)

Development costs

-

(0.09)

Restructuring

-

(0.17)

Total

$0.32

($ 1.26)

 

 

 

Note - dollars in millions except per share amounts, which are actual.

 

Entergy Corporation

Consolidated Income Statement

Three Months Ended June 30

(in thousands)

2003

2002

% Inc/(Dec)

(unaudited)

Operating Revenues:

    Domestic electric

$1,925,941

$1,686,758

14.2

    Natural gas

33,698

24,982

34.9

    Competitive businesses

394,270

384,841

2.5

Total

2,353,909

2,096,581

12.3

Operating Expenses:

    Operation and maintenance:

       Fuel, fuel-related expenses, and gas purchased for resale

496,014

471,413

5.2

       Purchased power

440,473

233,518

88.6

       Nuclear refueling outage expenses

40,251

24,687

63.0

       Provision for turbine commitments, asset impairments,

        and restructuring charges

-

18,169

- -

       Other operation and maintenance

571,010

727,017

(21.5)

    Decommissioning

34,361

18,193

88.9

    Taxes other than income taxes

100,505

82,194

22.3

    Depreciation and amortization

205,446

205,876

(0.2)

    Other regulatory charges (credits) - net

4,273

(170,645)

102.5

          Total

1,892,333

1,610,422

17.5

Operating Income

461,576

486,159

(5.1)

Other Income (Deductions):

    Allowance for equity funds used during construction

9,740

8,323

17.0

    Gain (loss) on sales of assets - net

761

1,009

(24.6)

    Interest and dividend income

29,927

27,710

8.0

    Equity in earnings of unconsolidated equity affiliates

70,292

16,007

339.1

    Miscellaneous - net

(104,212)

1,624

(6,517.0)

          Total

6,508

54,673

(88.1)

Interest and Other Charges:

    Interest on long-term debt

117,227

121,393

(3.4)

    Other interest - net

16,247

24,902

(34.8)

    Dividends on preferred securities of subsidiaries

4,709

4,709

-

    Allowance for borrowed funds used during construction

(7,449)

(6,291)

18.4

          Total

130,734

144,713

(9.7)

Income Before Income Taxes

337,350

396,119

(14.8)

Income Taxes

125,833

148,534

(15.3)

Consolidated Net Income

211,517

247,585

(14.6)

Preferred dividend requirements of subsidiaries and other

5,876

5,932

(0.9)

Earnings Applicable to Common Stock

$205,641

$241,653

(14.9)

Earnings Per Average Common Share:

    Basic

$0.91

$1.08

(15.7)

    Diluted

$0.89

$1.06

(16.0)

Average Number of Common Shares Outstanding:

    Basic

226,609,159

224,330,654

    Diluted

231,579,242

228,847,752

 

 

 

Entergy Corporation

Consolidated Income Statement

Six Months Ended June 30

(in thousands)

2003

2002

% Inc/(Dec)

(unaudited)

Operating Revenues:

    Domestic electric

$3,527,679

$3,087,767

14.2

    Natural gas

113,936

71,360

59.7

    Competitive businesses

750,017

798,288

(6.0)

          Total

4,391,632

3,957,415

11.0

Operating Expenses:

    Operation and maintenance:

       Fuel, fuel-related expenses, and gas purchased for resale

884,055

940,274

(6.0)

       Purchased power

809,172

403,004

100.8

       Nuclear refueling outage expenses

79,144

49,874

58.7

       Provision for turbine commitments, asset impairments,

        and restructuring charges

(7,743)

419,542

- -

       Other operation and maintenance

1,095,909

1,251,369

(12.4)

    Decommissioning

71,859

36,381

97.5

    Taxes other than income taxes

198,242

184,565

7.4

    Depreciation and amortization

416,492

410,999

1.3

    Other regulatory charges (credits) - net

19,526

(169,082)

111.5

          Total

3,566,656

3,526,926

1.1

Operating Income

824,976

430,489

91.6

Other Income (Deductions):

    Allowance for equity funds used during construction

17,027

15,004

13.5

    Gain (loss) on sales of assets - net

1,062

1,674

(36.6)

    Interest and dividend income

59,751

51,237

16.6

    Equity in earnings of unconsolidated equity affiliates

198,353

83,250

138.3

    Miscellaneous - net

(92,896)

(1,628)

5,606.1

          Total

183,297

149,537

22.6

Interest and Other Charges:

    Interest on long-term debt

234,962

244,919

(4.1)

    Other interest - net

29,291

40,381

(27.5)

    Dividends on preferred securities of subsidiaries

9,419

9,419

- -

    Allowance for borrowed funds used during construction

(13,168)

(11,930)

10.4

          Total

260,504

282,789

(7.9)

Income Before Income Taxes and Cumulative Effect of Accounting Changes

747,769

297,237

151.6

Income Taxes

278,251

122,636

126.9

Income Before Cumulative Effect of Accounting Changes

469,518

174,601

168.9

Cumulative Effect of an Accounting Changes (net of income taxes)

142,922

-

-

Consolidated Net Income

612,440

174,601

250.8

Preferred dividend requirements of subsidiaries and other

11,792

11,872

(0.7)

Earnings Applicable to Common Stock

$600,648

$162,729

269.1

Earnings Per Average Common Share:

    Basic

$2.67

$0.73

265.8

    Diluted

$2.61

$0.72

262.5

Average Number of Common Shares Outstanding:

    Basic

225,149,356

223,143,647

    Diluted

229,916,344

227,588,889

 

Entergy Corporation

Consolidated Income Statement

Twelve Months Ended June 30

(in thousands)

2003

2002

% Inc/(Dec)

(unaudited)

Operating Revenues:

    Domestic electric

$7,086,328

$6,469,210

9.5

    Natural gas

167,929

116,330

44.4

    Competitive businesses

1,484,995

1,832,919

(19.0)

          Total

8,739,252

8,418,459

3.8

Operating Expenses:

    Operation and maintenance:

       Fuel, fuel-related expenses, and gas purchased for resale

2,098,377

2,470,471

(15.1)

       Purchased power

1,238,502

814,661

52.0

       Nuclear refueling outage expenses

134,862

98,735

36.6

       Provision for turbine commitments, asset impairments,

        and restructuring charges

1,171

419,542

(99.7)

       Other operation and maintenance

2,332,650

2,496,542

(6.6)

    Decommissioning

111,894

37,117

201.5

    Taxes other than income taxes

394,139

392,290

0.5

    Depreciation and amortization

844,673

745,583

13.3

    Other regulatory charges (credits) - net

46,772

(202,291)

123.1

          Total

7,203,040

7,272,650

(1.0)

Operating Income

1,536,212

1,145,809

34.1

Other Income (Deductions):

    Allowance for equity funds used during construction

33,680

29,628

13.7

    Gain (loss) on sales of assets - net

6,001

6,705

(10.5)

    Interest and dividend income

126,840

129,970

(2.4)

    Equity in earnings of unconsolidated equity affiliates

298,980

155,218

92.6

    Miscellaneous - net

(83,992)

(19,676)

326.9

          Total

381,509

301,845

26.4

Interest and Other Charges:

    Interest on long-term debt

497,646

530,136

(6.1)

    Other interest - net

59,470

123,369

(51.8)

    Dividends on preferred securities of subsidiaries

18,838

18,838

-

    Allowance for borrowed funds used during construction

(25,776)

(23,918)

7.8

          Total

550,178

648,425

(15.2)

Income Before Income Taxes and Cumulative Effect of Accounting Changes

1,367,543

799,229

71.1

Income Taxes

449,553

304,056

47.9

Income Before Cumulative Effect of Accounting Changes

917,990

495,173

85.4

Cumulative Effect of an Accounting Changes (net of income taxes)

142,922

23,482

508.6

Consolidated Net Income

1,060,912

518,655

104.6

Preferred dividend requirements of subsidiaries and other

23,632

22,791

3.7

Earnings Applicable to Common Stock

$1,037,280

$495,864

109.2

Earnings Per Average Common Share:

    Basic

$4.63

$2.23

107.6

    Diluted

$4.54

$2.19

107.3

Average Number of Common Shares Outstanding:

    Basic

224,088,260

222,245,970

    Diluted

228,314,075

226,080,808

 

Entergy Corporation

U.S. Utility Electric Energy Sales & Customers

Three Months Ended June

2003

2002

%

(Millions of kwh)

Electric Energy Sales:

Residential

7,170

7,202

(0.4)

Commercial

6,164

6,112

0.9

Governmental

664

654

1.5

Industrial

9,556

10,294

(7.2)

    Total to Ultimate Customers

23,554

24,262

(2.9)

Wholesale

2,590

2,444

6.0

    Total Sales

26,144

26,706

(2.1)

Six Months Ended June

2003

2002

%

(Millions of kwh)

Electric Energy Sales:

Residential

15,013

14,476

3.7

Commercial

11,986

11,710

2.4

Governmental

1,297

1,271

2.0

Industrial

18,880

19,884

(5.0)

    Total to Ultimate Customers

47,176

47,341

(0.3)

Wholesale

5,103

4,658

9.6

    Total Sales

52,279

51,999

0.5

Twelve Months Ended June

2003

2002

%

(Millions of kwh)

Electric Energy Sales:

Residential

33,118

31,287

5.9

Commercial

25,630

24,926

2.8

Governmental

2,704

2,620

3.2

Industrial

40,014

40,439

(1.1)

    Total to Ultimate Customers

101,466

99,272

2.2

Wholesale

10,273

8,923

15.1

    Total Sales

111,739

108,195

3.3

June

2003

2002

%

Electric Customers (Year to date average):

Residential

2,245,428

2,233,198

0.5

Commercial

304,718

300,763

1.3

Governmental

15,288

14,912

2.5

Industrial

39,986

39,455

1.3

    Total Ultimate Customers

2,605,420

2,588,328

0.7

Wholesale

42

38

10.5

     Total Customers

2,605,462

2,588,366

0.7