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Entergy Reports Fourth Quarter Earnings
01/29 7:00 am (PR)
Story 0350 (ETR)

NEW ORLEANS, Jan. 29 /PRNewswire-FirstCall/ -- Entergy Corporation (NYSE: ETR) today reported fourth quarter 2007 as-reported earnings of $193.9 million, or 96 cents per share, compared with $268.3 million, or $1.27 per share, for fourth quarter 2006. On an operational basis, Entergy's fourth quarter 2007 earnings were $225.9 million, or $1.12 per share, compared with $166.9 million, or 79 cents per share, in fourth quarter 2006.

For the year, Entergy's as-reported earnings were $1.1 billion, or $5.60 per share, and operational earnings were $1.2 billion, or $5.76 per share. These results compare with 2006 as-reported earnings of $1.1 billion, or $5.36 per share, and operational earnings of $997.7 million, or $4.72 per share.



Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures Fourth Quarter and Year-to-Date 2007 vs. 2006 (Per share in U.S. $)


Fourth Quarter Year-to-Date
2007 2006 Change 2007 2006 Change
As-Reported Earnings 0.96 1.27 (0.31) 5.60 5.36 0.24
Less Special Items (0.16) 0.48 (0.64) (0.16) 0.64 (0.80)



Operational Earnings 1.12 0.79 0.33 5.76 4.72 1.04
*GAAP refers to United States generally accepted accounting principles.


Operational Earnings Highlights for Fourth Quarter 2007
-- Utility, Parent & Other had lower earnings primarily due to higher
income tax expense.
-- Entergy Nuclear earnings increased as a result of higher revenue from
pricing, production from the Palisades plant acquired in second quarter
2007, and lower income tax expense.
-- Entergy's Non-Nuclear Wholesale Assets business reported higher results
due primarily to lower income tax expense.



"2007 closed with constructive resolution of numerous regulatory matters positioning our utility to advance its growth strategy," said J. Wayne Leonard, Entergy's chairman and chief executive officer. "In addition, the actions necessary to complete the planned non-utility nuclear spin-off remain on track for a third quarter 2008 close. Consistent with that, the Entergy Board of Directors has granted authority for $0.5 billion of the anticipated post-spin $2.5 billion share repurchase program."




Other Highlights
-- Entergy won three awards from Edison Electric Institute including an
Emergency Assistance Award for power restoration efforts following a
January 2007 ice storm in Oklahoma, as well as an Advocacy Excellence
Award for its low-income initiative and an Outstanding Achievement
Award for grassroots nuclear advocacy efforts in New York.
-- Final approvals were received and the separation was completed of
Entergy Gulf States into two distinct companies, Entergy Gulf States
Louisiana, L.L.C., and a Texas company, Entergy Texas, Inc.
-- Entergy Nuclear supplemented its filing with the Nuclear Regulatory
Commission for the spin-off transaction and made related regulatory
filings in New York and Vermont.



Entergy will host a teleconference to discuss this release at 10 a.m. CST on Tuesday, Jan. 29, 2008, with access by telephone, 719 -457 -2080, confirmation code 8984015. The call and presentation slides can also be accessed via Entergy's Web site at www.entergy.com. A replay of the teleconference will be available for seven days thereafter by dialing 719 -457 - 0820, confirmation code 8984015. The replay will also be available on Entergy's Web site at www.entergy.com.

Utility, Parent & Other

In fourth quarter 2007, Utility, Parent & Other had earnings of $25.1 million, or 12 cents per share, on an as-reported basis and $38.8 million, or 19 cents per share, on an operational basis, compared to as-reported earnings of $226.6 million, or $1.08 per share, and operational earnings of $97.5 million, or 47 cents per share, in fourth quarter 2006. Earnings for Utility, Parent & Other in fourth quarter 2007 reflect higher income tax expense and the absence of a regulatory settlement included in fourth quarter 2006 results. Partially offsetting these items were higher revenue due to warmer- than-normal weather, higher transmission revenue, and increased recovery of capacity costs. The higher income tax expense resulted primarily from the absence in the current period of a tax benefit realized in fourth quarter 2006, as well as the effect of annual income tax adjustments occurring in the fourth quarter each year across the Entergy companies.

Megawatt-hour sales in the residential sector in fourth quarter 2007, on a weather-adjusted basis, showed a modest increase compared to fourth quarter 2006. Commercial and governmental sales, after adjusting for weather, were up 1 percent. Industrial sales in the current quarter equaled sales for the same period one year ago.




The residential sales sector showed a modest increase quarter to quarter. While the number of customers increased with a corresponding rise in sales volume, usage per customer showed a slight decline in the quarter. The quarter-over-quarter increase in the commercial and governmental sectors reflects a similar increase in the number of customers. Sales in the industrial sector for fourth quarter 2007 equaled those for the same quarter of 2006 as the loss of one customer to cogeneration earlier in the year was offset by high utilization in the refining segment as well as some recovery in spot sales to cogeneration customers.

For the year 2007, Utility, Parent & Other earned $540.9 million, or $2.67 per share, on an as-reported basis, compared to $838.8 million, or $3.97 per share, in 2006. Operational earnings in 2007 were $554.6 million, or $2.74 per share, compared to $676.2 million, or $3.20 per share, in 2006. The lower operational earnings in 2007 were driven by higher income taxes, non-fuel operations and maintenance, and interest expense. Partially offsetting factors were higher revenues from sales growth and regulatory actions, higher transmission revenue, and the positive effect of accretion associated with Entergy's share repurchase program.

Entergy Nuclear

Entergy Nuclear earned $141.4 million, or 70 cents per share, on an as- reported basis and $159.8 million, or 79 cents per share, on an operational basis in fourth quarter 2007, compared to $57.7 million, or 27 cents per share, for as-reported and operational earnings in fourth quarter 2006. The improved operational results in fourth quarter 2007 came from increased revenues from pricing, the production available from Palisades, which was acquired in second quarter 2007, and lower income tax expense, partially offset by higher expense primarily associated with including Palisades in the portfolio. The lower income tax expense was primarily due to a step-up in the tax basis on the Indian Point 2 non-qualified decommissioning trust fund resulting from a restructuring of the trusts. This basis change resulted in a reduction in deferred taxes on the fund and lowered current tax expense. Annual adjustments in the fourth quarter of each year for consolidated income taxes also lowered income tax expense.

For the year 2007, Entergy Nuclear earned $539.2 million, or $2.66 per share, on an as-reported basis and $557.6 million, or $2.75 per share, on an operational basis, compared with $309.5 million, or $1.46 per share, for 2006 on both as-reported and operational bases. The increase in 2007 operational earnings was primarily due to increased revenue from higher contract pricing and higher generation due to the addition of Palisades to the portfolio. It was partially offset by an increase in planned and unplanned outage days in 2007 compared to 2006.




Non-Nuclear Wholesale Assets

Entergy's Non-Nuclear Wholesale Assets business earned $27.4 million, or 14 cents per share, on both as-reported and operational bases in fourth quarter 2007, compared to a loss of $16.0 million, or 8 cents per share, on an as-reported basis and earnings of $11.7 million, or 5 cents per share, on an operational basis in fourth quarter 2006. Lower income tax expense associated with annual consolidated income tax adjustments was the primary driver to higher results on a quarter-to-quarter basis.

For the year 2007, Entergy's Non-Nuclear Wholesale Assets business earned $54.8 million, or 27 cents per share, on as-reported and operational bases, compared to a loss of $15.7 million, or 7 cents per share, on an as-reported basis and earnings of $12.0 million, or 6 cents per share, on an operational basis in 2006. The increase in operational earnings in 2007 compared to 2006 is also primarily due to lower income tax expense.

Outlook

Entergy is reaffirming 2008 earnings guidance in the range of $6.50 to $6.90 per share on both as-reported and operational bases on a business as usual basis. Guidance for 2008 does not include a special item for expenses anticipated in connection with the plan to pursue separation of Entergy's non- utility nuclear business and to enter into a nuclear services joint venture, both discussed below.

Business Separation

On Nov. 3, 2007, Entergy's Board of Directors approved a plan to pursue a separation of the non-utility nuclear business from Entergy's regulated utility business through a tax-free spin-off of the non-utility nuclear business. SpinCo, the term used to identify the new company yet to be named, will be a new independent publicly traded company. In addition, SpinCo and Entergy Corporation intend to enter into a nuclear services joint venture, with equal ownership.

(MORE TO FOLLOW) Story 0351 Entergy Reports Fourth Quarter Earnings -2 -

Entergy is targeting third quarter 2008 for completion of the spin-off transaction. Progress achieved since the spin-off announcement includes:

-- A steering committee has been formed to lead the overall process and
make final recommendations on all major business and operational
issues; a project management office, with a cross-section of
organizational functions, has been established to coordinate the spin-
off process.



-- A supplement to Entergy's original filing with the Nuclear Regulatory
Commission has been provided to the NRC to reflect the spin-off
transaction.
-- Filings have been made in the states of New York and Vermont as
required under the laws of those states.



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 2.7 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of more than $11 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 Jan. 29, 2008, 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.

In this press 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 Entergy's Annual Report on Form 10 -K under (i) Forward-Looking Statements, (ii) Item 1A. Risk Factors, (iii) Item 7. Management's Financial Discussion and Analysis, and (iv) Current Report on Form 8 -K filed on November 5, 2007 and (b) the following transactional factors (in addition to others described elsewhere in this release and in subsequent securities filings): (i) risks inherent in the contemplated spin-off, joint venture and related transactions (including the level of debt incurred by SpinCo and the terms and costs related thereto), (ii) legislative and regulatory actions, and (iii) conditions of the capital markets during the periods covered by the forward-looking statements. Entergy cannot provide any assurances that the spin-off or any of the proposed transactions related thereto will be completed, nor can it give assurances as to the terms on which such transactions will be consummated. The transaction is subject to certain conditions precedent, including regulatory approvals and the final approval by the Board of Directors of Entergy.

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
Fourth Quarter and Year-to-Date 2007 vs. 2006
(Per share in U.S. $)

Fourth Quarter Year-to-Date
2007 2006 Change 2007 2006 Change
As-Reported
Utility, Parent & Other 0.12 1.08 (0.96) 2.67 3.97 (1.30)
Entergy Nuclear 0.70 0.27 0.43 2.66 1.46 1.20
Non-Nuclear Wholesale
Assets 0.14 (0.08) 0.22 0.27 (0.07) 0.34
Consolidated
As-Reported Earnings 0.96 1.27 (0.31) 5.60 5.36 0.24

Less Special Items

Utility, Parent & Other (0.07) 0.61 (0.68) (0.07) 0.77 (0.84)
Entergy Nuclear (0.09) - (0.09) (0.09) - (0.09)
Non-Nuclear Wholesale
Assets - (0.13) 0.13 - (0.13) 0.13
Consolidated Special
Items (0.16) 0.48 (0.64) (0.16) 0.64 (0.80)

Operational

Utility, Parent & Other 0.19 0.47 (0.28) 2.74 3.20 (0.46)
Entergy Nuclear 0.79 0.27 0.52 2.75 1.46 1.29
Non-Nuclear Wholesale
Assets 0.14 0.05 0.09 0.27 0.06 0.21
Consolidated
Operational Earnings 1.12 0.79 0.33 5.76 4.72 1.04


Entergy Corporation
Consolidated Income Statement
Three Months Ended December 31
(in thousands)
%
2007 2006 Inc/(Dec)
(unaudited)



Operating Revenues:
Domestic electric $2,093,654 $2,031,364 3.1
Natural gas 48,058 20,708 132.1
Competitive businesses 590,188 428,833 37.6
Total 2,731,900 2,480,905 10.1
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 742,536 654,725 13.4
Purchased power 421,090 491,682 (14.4)
Nuclear refueling outage expenses 48,995 41,983 16.7
Other operation and maintenance 778,230 641,707 21.3
Decommissioning 44,391 37,097 19.7
Taxes other than income taxes 120,905 100,567 20.2
Depreciation and amortization 253,585 232,419 9.1
Other regulatory charges (credits) -
net (7,233) 1,830 (495.2)
Total 2,402,499 2,202,010 9.1
Operating Income 329,401 278,895 18.1
Other Income (Deductions):
Allowance for equity funds used during
construction 8,658 7,806 10.9
Interest and dividend income 59,186 82,146 (28.0)

Equity in earnings of unconsolidated
equity affiliates (358) 66,902 (100.5)
Miscellaneous - net (6,979) (680) 926.3
Total 60,507 156,174 (61.3)
Interest and Other Charges:
Interest on long-term debt 125,768 129,393 (2.8)
Other interest - net 37,723 27,971 34.9
Allowance for borrowed funds used
during construction (4,857) (4,943) (1.7)
Preferred dividend requirements of
subsidiaries and other 6,321 5,160 22.5
Total 164,955 157,581 4.7

Income From Continuing Operations Before
Income Taxes 224,953 277,488 (18.9)
Income Taxes 31,060 (1,126) (2,858.4)
Income From Continuing Operations 193,893 278,614 (30.4)
Loss From Discontinued Operations (net of
taxes of ($5,356)) - (10,326) -
Consolidated Net Income $193,893 $268,288 (27.7)

Earnings Per Average Common Share (from

continuing operations):



Basic $1.00 $1.35 (25.9)
Diluted $0.96 $1.32 (27.3)
Loss Per Average Common Share (from
discontinued operations):
Basic - (0.05) -
Diluted - (0.05) -
Earnings Per Average Common Share:
Basic $1.00 $1.30 (23.1)
Diluted $0.96 $1.27 (24.4)
Average Number of Common Shares
Outstanding - Basic 193,989,216 205,741,365
Average Number of Common Shares
Outstanding - Diluted 200,939,727 210,615,114



Entergy Corporation
Consolidated Income Statement
Twelve Months Ended December 31
(in thousands)

%
2007 2006 Inc/(Dec)

(unaudited)

Operating Revenues:
Domestic electric $9,046,301 $9,063,135 (0.2)
Natural gas 206,073 84,230 144.7
Competitive businesses 2,232,024 1,784,793 25.1
Total 11,484,398 10,932,158 5.1
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and
gas purchased for resale 2,934,833 3,144,073 (6.7)
Purchased power 1,986,950 2,138,237 (7.1)


(MORE TO FOLLOW) Story 0352 Entergy Reports Fourth Quarter Earnings -3 -

Nuclear refueling outage
expenses 180,971 169,567 6.7
Other operation and
maintenance 2,649,654 2,335,364 13.5
Decommissioning 167,898 145,884 15.1
Taxes other than income taxes 489,058 428,561 14.1
Depreciation and amortization 963,712 887,792 8.6
Other regulatory charges (credits) -
net 54,954 (122,680) (144.8)


Total 9,428,030 9,126,798 3.3
Operating Income 2,056,368 1,805,360 13.9
Other Income (Deductions):
Allowance for equity funds used during
construction 42,742 39,894 7.1
Interest and dividend income 233,997 198,835 17.7
Equity in earnings of unconsolidated
equity affiliates 3,176 93,744 (96.6)
Miscellaneous - net (24,860) 16,114 (254.3)
Total 255,055 348,587 (26.8)
Interest and Other Charges:
Interest on long-term debt 506,089 498,451 1.5
Other interest - net 155,995 75,502 106.6
Allowance for borrowed funds used
during construction (25,032) (23,931) 4.6
Preferred dividend requirements of
subsidiaries and other 25,105 27,783 (9.6)
Total 662,157 577,805 14.6

Income From Continuing Operations Before
Income Taxes 1,649,266 1,576,142 4.6
Income Taxes 514,417 443,044 16.1
Income From Continuing Operations 1,134,849 1,133,098 0.2


Loss From Discontinued Operations (net of
taxes of $67) - (496) -
Consolidated Net Income $1,134,849 $1,132,602 0.2

Earnings Per Average Common Share (from
continuing operations):
Basic $5.77 $5.46 5.7
Diluted $5.60 $5.36 4.5
Earnings Per Average Common Share (from
discontinued operations):
Basic - - -
Diluted - - -
Earnings Per Average Common Share:
Basic $5.77 $5.46 5.7
Diluted $5.60 $5.36 4.5
Average Number of Common Shares
Outstanding - Basic 196,572,945 207,456,838

Average Number of Common Shares

Outstanding - Diluted 202,780,283 211,452,455


Entergy Corporation



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

Three Months Ended December 31

%
% Weather-
2007 2006 Change Adjusted
(Millions of kwh)
Electric Energy Sales:
Residential 7,376 7,163 3.0 0.2
Commercial 6,700 6,439 4.1 1.3
Governmental 590 588 0.4 (0.7)
Industrial 9,729 9,724 - -
Total to Ultimate
Customers 24,395 23,914 2.0 0.4
Wholesale 1,666 1,470 13.3
Total Sales 26,061 25,384 2.7



Twelve Months Ended December 31
%


% Weather-
2007 2006 Change Adjusted
(Millions of kwh)
Electric Energy Sales:
Residential 33,281 32,579 2.2 1.8
Commercial 27,408 26,745 2.5 2.2
Governmental 2,339 2,212 5.7 5.7
Industrial 38,985 38,886 0.3 0.3
Total to Ultimate
Customers 102,013 100,422 1.6 1.4
Wholesale 6,145 7,137 (13.9)
Total Sales 108,158 107,559 0.6



December 31

%
2007 2006 Change
Electric Customers (End of
period):
Residential 2,284,821 2,238,379 2.1
Commercial 325,109 317,803 2.3


Governmental 14,978 14,477 3.5
Industrial 43,542 44,548 (2.3)
Total Ultimate Customers 2,668,450 2,615,207 2.0
Wholesale 29 32 (9.4)
Total Customers 2,668,479 2,615,239 2.0


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.

SOURCE Entergy Corporation

/CONTACT: News Media, Yolanda Pollard, [phone], [e-mail], or Investor Relations, Michele Lopiccolo, [phone], [e-mail], both of Entergy Corporation /Web site: http://www.entergy.com/

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