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Entergy: Paula Waters (Investor Relations)

The following excerpt is from the company's SEC filing.

(504) 576-4380

Entergy Reports Third Quarter Results

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-report ed 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


As-Reported Earnings (Loss)

($ in millions)





Less Special Items:

Pilgrim/FitzPatrick asset impairments

and related write-offs


Decision to close VY



HCM implementation expenses

Total Special Items







Operational Earnings


Weather Impact


(per share in $)



















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

Net income



Add back: interest expense

Add back: income tax expense

Add back: depreciation and amortization

Subtract: interest and investment income

Add back: decommissioning expense





Special item for HCM implementation (pre-tax)

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

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

Operational adjusted EBITDA

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

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

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

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

and on Entergy’s Investor Relations mobile web app at

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.

Third Quarter 2015 Earnings Release Package


Seven appendices are presented in this section as follows:

Appendix A: Consolidated Results and Special Items

Appendix B: Variance Analysis

Appendix C: Utility Performance Measures

Appendix D: EWC Performance Measures

Appendix E: Financial Performance Measures

Appendix F: Definitions, Abbreviations and Acronyms

Appendix G: GAAP to Non-GAAP Reconciliations

Also included in this earnings release package are:

Financial Statements

Accompanying the earnings package is a webcast slide presentation.

Appendix A-1 provides a comparative summary of consolidated EPS for third quarter and year-to-date 2015 versus 2014, including a reconciliation of GAAP as-reported earnings to non-GAAP operational earnings.

Appendix A-1: Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures

(Per share in $)












Consolidated As-Reported Earnings (Loss)

Less Special Items




Consolidated Special Items



Consolidated Operational Earnings

Weather Impact

Detailed earnings variance analyses are included in Appendix B-1 and Appendix B-2.

Appendix A-2 provides the components of OCF contributed by each business with current quarter and year-to-date comparisons.

Appendix A-2: Consolidated Operating Cash Flow

Total Operating Cash Flow

The primary drivers of the $352 million quarter-over-quarter decrease were the receipt of Isaac-related securitization funds in third quarter 2014 and lower EWC net revenue.

Appendix A-3 and Appendix A-4 list special items by business. Amounts are shown on both an EPS basis and a net income basis. Special items are those events that are not routine. Special items are included in as-reported EPS consistent with GAAP, but are excluded from operational EPS. As a result, operational EPS is considered a non-GAAP measure.

Appendix A-3: Special Items by Driver (shown as positive/(negative) impact on EPS)

(After-tax, per share in $)

Total Utility

Decision to close VY

Total EWC

Appendix A-4: Special Items by Income Statement Line Item (shown as positive/(negative) impact on earnings)

(Pre-tax except for Income taxes - other, $ in millions)

Non-fuel O&M


Taxes other than income taxes



Asset write-off and impairments










B: Variance Analysis

Appendix B-1 and Appendix B-2 provide details of current quarter and year-to-date 2015 versus 2014 as-reported and operational earnings variance analysis for Utility, EWC, Parent & Other and Consolidated.

Appendix B-1: As-Reported and Operational EPS Variance Analysis

Third Quarter 2015 vs. 2014

(After-tax, per share in $, sorted in consolidated operational column, most to least favorable)



As- Reported

2014 earnings



Net revenue


Share effect

Decommissioning expense

Depreciation/amortization expense

Interest expense and other charges

Other income (deductions)-other



Appendix B-2: As-Reported and Operational EPS Variance Analysis


Other income (deductions) - other







The current quarter and year to date increases were due to the third quarter 2014 charge associated with the EMI rate case settlement ($60.9 million pre-tax, $40.5 million after-tax).

The as-reported current quarter and year-to date decreases were primarily due to non-cash impairment charges and related write-offs in the current quarter for the Pilgrim and FitzPatrick plants totaling $(5.93)/share. Partially offsetting this decrease was a third quarter 2014 charge for an updated VY decommissioning cost study.

Utility As-Reported Net Revenue

2015 vs. 2014 ($ EPS)

Sales growth/pricing


The current quarter and year-to date increases were due to favorable weather, an increase in industrial usage and pricing. The price variance included the Louisiana FRP rate adjustments for placing Ninemile 6 in rates and the EMI rate case. Year-to-date included higher volume from all classes.

The current quarter and year-to-date decreases were due to the retirement of VY at the end of 2014 along with lower realized nuclear capacity and energy pricing. Also contributing to the decreases in the year-to-date period was the negative net effect of mark-to-market...