EX-99 3 a02907992.htm

Entergy
639 Loyola Avenue
New Orleans, LA  70113
 

News
Release

Date: July 31, 2007

For Release:

Immediately

Contact:

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

Michele Lopiccolo (Investor Relations)
(504) 576-4879
mlopicc@entergy.com

Exhibit 99.2

Entergy Reports Second Quarter Earnings, Declares Dividend

New Orleans, La. - Entergy Corporation (NYSE:ETR) today reported second quarter 2007 as-reported earnings of $267.6 million, or $1.32 per share, compared with $281.8 million, or $1.33 per share, for second quarter 2006. On an operational basis, Entergy's second quarter 2007 earnings were $267.6 million, or $1.32 per share, compared with $258.0 million, or $1.22 per share, in second quarter 2006.

Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures

Second Quarter and Year-to-Date 2007 vs. 2006

(Per share in U.S. $)

 

Second Quarter

Year-to-Date
 

2007

2006

Change

2007

2006

Change

As-Reported Earnings

1.32

1.33

(0.01)

2.34

2.25

0.09

Less Special Items

-

0.11

(0.11)

-

0.13

(0.13)

Operational Earnings

1.32

1.22

0.10

2.34

2.12

0.22

*GAAP refers to United States generally accepted accounting principles.

Entergy Corporation's Board of Directors yesterday evening declared a quarterly dividend of 75 cents per common share payable Sept.1 to stockholders of record on Aug. 10.

Operational Earnings Highlights for Second Quarter 2007

  • Utility, Parent & Other had lower earnings due to higher operation and maintenance, income tax and interest expense and the effect of essentially normal weather compared to warmer-than-normal weather in 2006.
  • Entergy Nuclear earnings increased as a result of higher revenue from pricing and production from the newly acquired Palisades plant, partially offset by the effect of reduced production due to planned and unplanned outages.
  • Entergy's Non-Nuclear Wholesale Assets business reported higher results due to lower income taxes.

"Efforts to move ahead with the transformation of our asset portfolio resulted in marked success this quarter," said J. Wayne Leonard, Entergy's chairman and chief executive officer. "We reached agreement with a key business partner to preserve the new nuclear option while also taking important steps in advancing value-creating opportunities at both the regulated utility and non-utility nuclear businesses."

Other Highlights

Utility, Parent & Other

In second quarter 2007, Utility, Parent & Other reported earnings of $120.6 million, or 59 cents per share, on as-reported and operational bases, compared to $213.1 million, or $1.00 per share, in as-reported earnings and $189.3 million, or 89 cents per share, in operational earnings for second quarter 2006. Earnings for 2007 include earnings for Entergy New Orleans, Inc. of $11.8 million, or six cents per share, which is being reflected in operational earnings with the company's emergence from Chapter 11 bankruptcy. Entergy New Orleans, Inc. emerged from Chapter 11 bankruptcy during second quarter 2007, and consistent with applicable consolidation accounting and reporting standards, Entergy has re-consolidated Entergy New Orleans, Inc. for financial reporting purposes effective this quarter and retroactive to Jan. 1, 2007.

Earnings for Utility, Parent & Other in second quarter 2007 primarily reflect higher operation and maintenance expense, higher income tax expense and higher interest expense. Higher operation and maintenance expense is due primarily to increased spending in distribution, transmission and fossil associated with a return to normal maintenance activity consistent with pre-storm levels, and increased spending at nuclear for higher NRC fees and an unplanned outage at the River Bend nuclear plant. Higher spending for independent coordinator of transmission and fossil outage scope and schedule differences also contributed. Higher income tax expense is due primarily to the absence in the current quarter of items that reduced tax expense in second quarter 2006 including the effects of flow-through income tax accounting in Arkansas and the resolution of tax audit issues. Higher interest expense is due to debt incurred to pay for storm restoration costs for hurricanes Katrina and Rita, common stock repurchases and funding the Palisades acquisition. In addition, second quarter 2007 earnings were lower compared to one year ago due to the effects of weather which was essentially normal in the current period compared to warmer-than-normal weather in 2006.

Megawatt-hour sales in the residential sector in second quarter 2007, on a weather-adjusted basis, were up one percent compared to second quarter 2006. Commercial and governmental sales, after adjusting for weather, were up three percent. Industrial sales experienced an increase of one percent in second quarter 2007, compared to the same period a year ago.

The increase in the residential segment reflects continued economic recovery in the storm-affected regions that were still experiencing the effects of the 2005 storms in the first half of 2006. The quarter-over- quarter increase in the commercial and industrial sectors reflects a similar pattern in these sectors from the effect of storms. The industrial sector continues to realize some recovery in the refinery and chemical segments, with the latter benefiting from strong export markets. However, continued reduced spot sales to cogeneration customers served to offset a portion of the increase in the industrial sector on a quarter-to-quarter basis.

Entergy Nuclear

Entergy Nuclear earned $108.7 million, or 54 cents per share, on as-reported and operational bases in second quarter 2007, compared to $63.4 million, or 30 cents per share, in second quarter 2006 for as-reported and operational earnings. The improved results in second quarter 2007 resulted from increased revenues from pricing and the production available from Palisades, acquired on April 11. Partially offsetting this increase was reduced production as a result of refueling outages in second quarter 2007 at Vermont Yankee and Pilgrim, and a 24-day unplanned outage at Indian Point 3. There was one refueling outage in second quarter 2006.

Non-Nuclear Wholesale Assets

Entergy's Non-Nuclear Wholesale Assets business recorded earnings of $38.3 million, or 19 cents per share, on both as-reported and operational bases in second quarter 2007 compared to earnings of $5.3 million, or three cents per share, on both as-reported and operational bases in second quarter 2006. The higher results reflect lower income tax expense due to the resolution of tax audit issues.

Outlook

Entergy is reaffirming as-reported and operational earnings guidance for 2007 in the range of $5.40 to $5.70 per share. Year-over-year changes are shown as point estimates and are applied to 2006 actual results to compute the 2007 guidance midpoint. Because there is a range of possible outcomes associated with each earnings driver, a reasonable band is created around the calculated guidance midpoints to produce Entergy's guidance ranges for as-reported and operational earnings. When initially established, earnings guidance for 2007 excluded Entergy New Orleans, Inc. given the uncertainty as it worked through its Chapter 11 Bankruptcy proceeding. While incorporating Entergy New Orleans, Inc. results in operational earnings now creates upside to the calculated guidance midpoint, when considered with other year-to-date outcomes, the current earnings guidance range of $5.40 to $5.70 per share continues to be appropriate.

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, 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. Entergy has annual revenues of more than $10 billion and approximately 14,500 employees.

Additional information regarding Entergy's quarterly results of operations, regulatory proceedings, and other operations is available in Entergy's investor news release dated July 31, 2007, a copy of which has been filed today with the Securities Exchange Commission on Form 8-K and is available on Entergy's investor relations Web site at www.entergy.com/investor_relations.

-30-

In this release, Entergy makes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. Many factors could cause the actual results to differ materially than the forward-looking information provided. These factors are discussed in more detail in Entergy Corporation's 2006 Annual Report on Form 10-K including (a) Forward-Looking Information, (b) Item 1A. Risk Factors, and (c) Item 7. Management's Financial Discussion and Analysis and subsequent SEC filings.

 

Appendix A provides a reconciliation of GAAP as-reported earnings to non-GAAP operational earnings.

Appendix A: Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures

Second Quarter and Year-to-Date 2007 vs. 2006

(Per share in U.S. $)
     
 

Second Quarter

Year-to-Date
 

2007

2006

Change

2007

2006

Change

As-Reported

Utility, Parent & Other

0.59

1.00

(0.41)

1.02

1.54

(0.52)

Entergy Nuclear

0.54

0.30

0.24

1.16

0.69

0.47

Non-Nuclear Wholesale Assets

0.19

0.03

0.16

0.16

0.02

0.14

   Consolidated As-Reported Earnings

1.32

1.33

(0.01)

2.34

2.25

0.09

Less Special Items

Utility, Parent & Other

-

0.11

(0.11)

-

0.13

(0.13)

Entergy Nuclear

-

-

-

-

-

-

Non-Nuclear Wholesale Assets

-

-

-

-

-

-

   Consolidated Special Items

-

0.11

(0.11)

-

0.13

(0.13)

Operational

Utility, Parent & Other

0.59

0.89

(0.30)

1.02

1.41

(0.39)

Entergy Nuclear

0.54

0.30

0.24

1.16

0.69

0.47

Non-Nuclear Wholesale Assets

0.19

0.03

0.16

0.16

0.02

0.14

   Consolidated Operational Earnings

1.32

1.22

0.10

2.34

2.12

0.22

 

 

Entergy Corporation

Consolidated Income Statement

Three Months Ended June 30

(in thousands)

2007

2006

% Inc/(Dec)

(unaudited)

Operating Revenues:

  Domestic electric

$2,194,644 

$2,177,710 

0.8 

  Natural gas

42,909 

13,612 

215.2 

  Competitive businesses

531,799 

437,180 

21.6 

     Total

2,769,352 

2,628,502 

5.4 

Operating Expenses:

  Operation and maintenance:

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

595,602 

661,619 

(10.0)

    Purchased power

601,000 

577,408 

4.1 

    Nuclear refueling outage expenses

44,614 

42,546 

4.9 

    Other operation and maintenance

639,670 

573,234 

11.6 

  Decommissioning

42,080 

36,258 

16.1 

  Taxes other than income taxes

116,348 

91,130 

27.7 

  Depreciation and amortization

238,653 

217,943 

9.5 

  Other regulatory charges (credits) - net

13,345 

(58,929)

(122.6)

      Total

2,291,312 

2,141,209 

7.0 

Operating Income

478,040 

487,293 

(1.9)

Other Income (Deductions):

  Allowance for equity funds used during construction

7,459 

8,908 

(16.3)

  Interest and dividend income

53,948 

35,139 

53.5 

  Equity in earnings of unconsolidated equity affiliates

477 

8,483 

(94.4)

  Miscellaneous - net

(6,459)

(7,965)

(18.9)

     Total

55,425 

44,565 

24.4 

Interest and Other Charges:

  Interest on long-term debt

124,057 

122,670 

1.1 

  Other interest - net

33,553 

15,235 

120.2 

  Allowance for borrowed funds used during construction

(4,386)

(5,405)

(18.9)

  Preferred dividend requirements of subsidiaries and other

6,188 

7,774 

(20.4)

     Total

159,412 

140,274 

13.6 

Income From Continuing Operations Before Income Taxes

374,053 

391,584 

(4.5)

Income Taxes

106,451 

122,901 

(13.4)

Income From Continuing Operations

267,602 

268,683 

(0.4)

Loss From Discontinued Operations (net of taxes of $7,190)

 - 

13,119 

- 

Consolidated Net Income

$267,602 

$281,802 

(5.0)

Earnings Per Average Common Share (from continuing operations):

  Basic

$1.36 

$1.29 

5.4 

  Diluted

$1.32 

$1.27 

3.9 

Loss Per Average Common Share (from discontinued operations):

  Basic

 - 

$0.06 

- 

  Diluted

 - 

$0.06 

 - 

Earnings Per Average Common Share:

  Basic

$1.36 

$1.35 

0.7 

  Diluted

$1.32 

$1.33 

(0.8)

Average Number of Common Shares Outstanding - Basic

196,979,140 

207,982,485 

Average Number of Common Shares Outstanding - Diluted

203,423,646 

211,557,985 

 

Entergy Corporation

Consolidated Income Statement

Six Months Ended June 30

(in thousands)

2007

2006

% Inc/(Dec)

(unaudited)

Operating Revenues:

  Domestic electric

$4,306,104 

$4,270,646 

0.8 

  Natural gas

127,861 

51,027 

150.6 

  Competitive businesses

1,029,446 

874,864 

17.7 

     Total

5,463,411 

5,196,537 

5.1 

Operating Expenses:

  Operation and maintenance:

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

1,383,014 

1,501,791 

(7.9)

    Purchased power

1,045,239 

1,038,778 

0.6 

    Nuclear refueling outage expenses

87,589 

84,540 

3.6 

    Other operation and maintenance

1,204,046 

1,102,664 

9.2 

  Decommissioning

79,910 

71,854 

11.2 

  Taxes other than income taxes

239,031 

194,468 

22.9 

  Depreciation and amortization

471,063 

423,332 

11.3 

  Other regulatory charges (credits) - net

36,885 

(102,946)

(135.8)

     Total

4,546,777 

4,314,481 

5.4 

Operating Income

916,634 

882,056 

3.9 

Other Income (Deductions):

  Allowance for equity funds used during construction

24,717 

24,367 

1.4 

  Interest and dividend income

111,058 

78,968 

40.6 

  Equity in earnings of unconsolidated equity affiliates

2,101 

12,070 

(82.6)

  Miscellaneous - net

(11,778)

(14,170)

(16.9)

    Total

126,098 

101,235 

24.6 

Interest and Other Charges:

  Interest on long-term debt

247,156 

243,151 

1.6 

  Other interest - net

65,768 

32,495 

102.4 

  Allowance for borrowed funds used during construction

(14,915)

(14,450)

3.2 

  Preferred dividend requirements of subsidiaries and other

12,409 

15,812 

(21.5)

    Total

310,418 

277,008 

12.1 

Income From Continuing Operations Before Income Taxes

732,314 

706,283 

3.7 

Income Taxes

252,517 

241,732 

4.5 

Income From Continuing Operations

479,797 

464,551 

3.3 

Loss From Discontinued Operations (net of taxes of $5,986)

 - 

10,880 

- 

Consolidated Net Income

$479,797 

$475,431 

0.9 

Earnings Per Average Common Share (from continuing operations):

  Basic

$2.41 

$2.24 

7.6 

  Diluted

$2.34 

$2.20 

6.4 

Loss Per Average Common Share (from discontinued operations):

  Basic

- 

$0.05 

 - 

  Diluted

- 

$0.05 

- 

Earnings Per Average Common Share:

  Basic

$2.41 

$2.29 

5.2 

  Diluted

$2.34 

$2.25 

4.0 

Average Number of Common Shares Outstanding - Basic

198,754,673 

207,858,104 

Average Number of Common Shares Outstanding - Diluted

204,785,090 

211,467,674 

 

 

Entergy Corporation

Utility Electric Energy Sales & Customers
Entergy New Orleans Re-consolidated

Three Months Ended June 30

2007

2006

%
Change

%
Weather-Adjusted

(Millions of kwh)

Electric Energy Sales:

Residential

6,986

7,240

(3.5)

1.3

Commercial

6,481

6,462

0.3

2.4

Governmental

562

539

4.3

5.3

Industrial

9,813

9,702

1.1

1.1

     Total to Ultimate Customers

23,842

23,943

(0.4)

1.6

Wholesale

1,428

1,861

(23.3)

     Total Sales

25,270

25,804

(2.1)

Six Months Ended June 30

2007

2006

%
Change

%
Weather-Adjusted

(Millions of kwh)

Electric Energy Sales:

Residential

14,777

14,296

3.4

3.7

Commercial

12,597

12,321

2.2

3.1

Governmental

1,111

1,022

8.7

9.3

Industrial

19,137

18,846

1.5

1.5

     Total to Ultimate Customers

47,622

46,485

2.4

Wholesale

3,066

3,823

(19.8)

     Total Sales

50,688

50,308

0.8

June 30

2007

2006

%
Change

Electric Customers (End of period):

Residential

2,274,129

2,224,152

2.2

Commercial

324,923

317,671

2.3

Governmental

15,254

14,735

3.5

Industrial

48,569

46,797

3.8

     Total Ultimate Customers

2,662,875

2,603,355

2.3

Wholesale

30

33

(9.1)

     Total Customers

2,662,905

2,603,388

2.3

Customer count data reflects estimates of customers in the hardest hit areas affected by Hurricane Katrina. Issues associated with temporary housing and resumption of service at permanent dwellings render precise counts difficult at this time.