Entergy reports record earnings for the year 2001

NEW ORLEANS, Jan. 31, 2002 – Entergy Corporation today announced that earnings for the year 2001 were $3.23 per share, or $726.2 million, compared with $2.97, or $679.3 million, in 2000.

On an operational basis, 2001 earnings were $3.23 compared to $3.12 for the year 2000. Earnings for the year 2001 broke the record for annual earnings set by the company just one year ago.

While fourth quarter 2001 earnings were down from the same period of 2000, primarily as a result of mild weather, Entergy’s earnings marked the 15th consecutive quarter in which the company exceeded the consensus estimate of financial analysts. Entergy’s fourth quarter 2001 consolidated earnings were 9 cents per share, compared with 19 cents per share in fourth quarter 2000.

On an operational basis, Entergy’s fourth quarter 2001 earnings were $39.8 million, or 18 cents per share, compared with $70.9 million, or 31 cents per share, in the year-earlier period. Extremely cold weather in fourth quarter 2000 accounted for 14 cents of the earnings per share for that period. When results for both periods are adjusted for changes in weather, fourth quarter 2001 results were 18 percent higher than one year ago. The 18 percent increase in weather-adjusted operational earnings was driven by solid results at the utility, as well as the non-utility nuclear business, Entergy Nuclear, which is not subject to state and local regulation.

“Difficult economic conditions, weak commodity prices and some of the mildest weather in over 100 years did not deter us from achieving outstanding results in 2001,” said J. Wayne Leonard, Entergy’s chief executive officer. “We continue to create value for all of our stakeholders through our conservative integrated strategy combined with operational excellence and financial strength.”

Utility Operations
In fourth quarter 2001, utility earnings on an operational basis were $44.5 million, or 20 cents per share, equal to the 20 cents per share earned in the same period of 2000. Mild weather in the fourth quarter of 2001 had a minimal impact on earnings, compared with much colder-than-normal weather for the same period of 2000, which accounted for 14 cents of that quarter’s 20 cents in earnings.

Mild weather in the fourth quarter 2001, combined with the continued slowdown in the economy, reduced usage across most retail customer segments from year-earlier levels. Residential sales declined by 11 percent, commercial sales by 1 percent, and industrial sales by 4 percent (after adjusting for the effect of reclassifying certain industrial customers from retail to wholesale). The impact of reduced sales and net revenues was partially offset by lower expenses in 2001. Operation and maintenance expenses per megawatt-hour generated were down 5 percent for the quarter.

For the year 2001, the utility earned $2.46 per share on an operational basis, compared with $2.65 in 2000. The higher earnings in 2000 were due to extreme weather. On a weather-adjusted basis, 2001 earnings improved by 6 percent over 2000 results.

The utility continued to improve reliability and customer service, as evidenced by a reduction of 53 percent in the number of reliability complaints to regulators in fourth quarter 2001 compared with the year-earlier period. Twelve-month-ended measures of average outage frequency and average outage duration decreased by 5 percent and 6 percent, respectively. These improvements were achieved with continued increases in safety, as indicated by a continued reduction in lost-time accidents for the year.

Competitive Non-Regulated Businesses
Entergy’s competitive businesses contributed operational earnings of $31.5 million, or 15 cents per share, an increase of 25 percent from 12 cents per share in fourth quarter 2000. On an as-reported basis, the competitive businesses earned 9 cents per share in fourth quarter 2001, compared to 12 cents a year earlier. Fourth quarter 2001 results include several special items which reduced income by 6 cents. These special items reflect charges taken for the anticipated loss in connection with the planned sale of Latin American assets and severance and restructuring costs incurred at Entergy Wholesale Operations. Partially offsetting these charges was a gain associated with recording the cumulative effect of applying mark to marketing accounting to the Damhead Creek gas contract and a true-up to the gain previously recognized on the sale of the Saltend project.

For the year 2001, the competitive businesses had operational income of $212.4 million, or 95 cents per share, compared to $90.8 million, or 40 cents per share in 2000. The increase in earnings is due primarily to the growth in the non-utility nuclear business combined with very solid performance from Entergy-Koch L.P.

Entergy Nuclear earned $28.9 million, or 13 cents per share, compared to $19.1 million, or 9 cents per share, in fourth quarter 2000. The increase was due primarily to increased revenue resulting from the contribution for the full quarter in 2001 of the Indian Point 2 and Indian Point 3 nuclear units in Buchanan, N.Y., and FitzPatrick nuclear unit in Lycoming, N.Y. Entergy Nuclear’s average capacity factor was 95.4 percent for fourth quarter 2001, a slight improvement over the already excellent performance achieved in fourth quarter 2000. Its net capacity in operation increased by 39 percent over one year ago, and it generated 139 percent more power during fourth quarter 2001 than in the comparable period of 2000.

For the full year, Entergy Nuclear had operational earnings of $127.9 million, or 57 cents, compared to $49.2 million, or 22 cents for the year 2000. The 159 percent increase in earnings is due to a full year of operations at Indian Point 3 and FitzPatrick and the contribution of Indian Point 2 since its acquisition in September 2001.

Energy Commodity Services, the combined reporting of Entergy-Koch L.P. and Entergy Wholesale Operations, contributed operational earnings of $2.5 million, or 2 cents per share, compared with $6.2 million, or 3 cents per share, in fourth quarter 2000. On an as-reported basis, Energy Commodity Services recorded a loss of $9.8 million, or 4 cents per share, in fourth quarter 2001, compared to income of $6.2 million, or 3 cents per share, in the same period last year. Entergy Wholesale Operations recorded the special item of 6 cents per share, as explained above.

Entergy-Koch Trading contributed operational earnings through both its power and gas trading during fourth quarter in spite of the negative effects of reduced market volatility and very mild weather. The Gulf South pipeline realized lower earnings in fourth quarter 2001 due primarily to a 3 percent decrease in pipeline throughput and lower levels of gas storage activity associated with milder-than-normal temperatures. As of the end of fourth quarter 2001, Entergy Wholesale Operations had 2,410 net megawatts of generating capacity in operation, an increase of 99 percent for the year.

For the full year, Energy Commodity Services earned $84.5 million, or 38 cents per share, in operational earnings, compared to $41.6 million, or 18 cents per share, in 2000. The growth in earnings year over year primarily resulted from the strong performance of the trading and gas pipeline businesses of Entergy-Koch L.P., which began operations in February 2001.

Parent & Other
Parent & Other had a loss of 20 cents in fourth quarter 2001, compared with a loss of 13 cents in fourth quarter 2000. The increased loss in fourth quarter 2001 was due primarily to higher income tax benefits being allocated from Parent to Entergy subsidiaries for the 2001 period. These tax benefits are allocated in accordance with Entergy’s consolidated tax allocation agreement, which is required of all public utility holding companies pursuant to Securities and Exchange Commission regulation. Also, higher levels of interest expense negatively impacted Parent & Other results in 2001 compared to 2000. Fourth quarter 2001 results included an adjustment that increased the Parent’s loss by 3 cents per share, treated as a special item, for the write-off of costs associated with the e-commerce investment MyHomeKey.

For the full year, Parent & Other had an operational loss of $39.3 million, or 18 cents per share, in 2001, compared with income of $16.2 million, or 7 cents per share, in 2000. Results in 2001 reflect the impact of significantly higher tax benefits allocated from the Parent to other Entergy subsidiaries. This combined with lower cash balances and the resulting decrease in interest income, as well as higher interest expense, unfavorably impacted the Parent’s results in 2001.

“The year 2001 reflected a steady growth in the financial results across our businesses,” said C. John Wilder, Entergy’s chief financial officer. “Excellent results were achieved during a difficult year for the energy markets and the overall economy. Based on the fundamental strength of our company we are raising our 2002 guidance to $3.40 to $3.60, exclusive of the impact of weather.”

Entergy Corporation, with annual revenues of nearly $10 billion, is a major global energy company engaged in power production, distribution operations, and related diversified services, with more than 14,000 employees.

Entergy owns, manages, or invests in power plants generating more than 30,000 megawatts of electricity domestically and internationally, and delivers electricity to about 2.6 million customers in portions of Arkansas, Louisiana, Mississippi, and Texas. Through Entergy-Koch, L.P., it is also a provider of wholesale energy marketing and trading services.

Entergy’s online address is www.entergy.com

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The Clarion Energy Content Team is made up of editors from various publications, including POWERGRID International, Power Engineering, Renewable Energy World, Hydro Review, Smart Energy International, and Power Engineering International. Contact the content lead for this publication at Jennifer.Runyon@ClarionEvents.com.

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