Entergy Reports Fourth Quarter Earnings

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NEW ORLEANS, Feb. 8, 2013 /PRNewswire/ -- Entergy Corporation (NYSE: ETR)
today reported fourth quarter 2012 as-reported earnings of $296.3 million, or
$1.66 per share, compared with $154.1 million, or 87 cents per share, for
fourth quarter 2011. On an operational basis, Entergy's fourth quarter 2012
earnings were $307.0 million, or $1.72 per share, compared with $167.2
million, or 94 cents per share, in fourth quarter 2011. For the year,
Entergy's as-reported earnings were $846.7 million, or $4.76 per share, and
operational earnings were $1.1 billion, or $6.23 per share. These results
compare with 2011 as-reported earnings of $1.3 billion, or $7.55 per share,
and operational earnings of $1.4 billion, or $7.62 per share.

(Logo: http://photos.prnewswire.com/prnh/20120913/MM74349LOGO)

Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures
Fourth Quarter and Year-to-Date 2012 vs. 2011
(Per share in U.S. $)
Fourth Quarter Year-to-Date
2012 2011 Change 2012 2011 Change
As-Reported Earnings 1.66 0.87 0.79 4.76 7.55 (2.79)
Less Special Items (0.06) (0.07) 0.01 (1.47) (0.07) (1.40)
Operational Earnings 1.72 0.94 0.78 6.23 7.62 (1.39)
*GAAP refers to United States generally accepted accounting principles.

Operational Earnings Highlights for FourthQuarter 2012

* Utility earnings were higher due largely to lower income tax expense resulting
from a settlement with the Internal Revenue Service completed at the end of 2012
and higher net revenue.
* Entergy Wholesale Commodities earnings decreased due primarily to a higher
effective income tax rate, lower net revenue and higher decommissioning expense.

* Parent & Other results improved due to a decrease in income tax expense on
Parent & Other activities, partially offset by higher interest expense.

"In 2012, Entergy's management team made significant progress on several key
fronts," said Leo Denault, Entergy's chairman and chief executive officer.
"Looking ahead to 2013, we will remain focused on safety and operational
excellence in all aspects of our business as well as successful execution of key
initiatives such as our effort to join the Midwest Independent Transmission
System Operator, a regional transmission organization, and our proposal to spin
off and merge the transmission business with ITC Holdings Corp., working every
day to create sustainable value for all of our stakeholders."

Other Business Highlights

* Entergy Arkansas and Entergy Mississippi completed acquisitions of the Hot
Spring and Hinds power plants.
* Entergy Louisiana successfully completed installation of the Waterford 3
steam generator replacement project.
* Edison Electric Institute honored Entergy with Emergency Recovery and
Emergency Assistance awards for restoration efforts to its own customers
following Hurricane Isaac and to other utility company customers following last
June's derecho weather event and Hurricane Sandy. This is the 15th consecutive
year for Entergy to receive an EEI storm restoration award.

A teleconference will be held at 10 a.m. CT on Friday, Feb. 8, 2013, to
discuss Entergy's fourth quarter 2012 earnings announcement, and may be accessed
by dialing (719) 457-2080, confirmation code 6847131, no more than 15 minutes
prior to the start of the call. The call and presentation slides can also be
accessed via Entergy's website at www.entergy.com. A replay of the
teleconference will be available by telephone and on Entergy's website at
www.entergy.com as soon as practical after the transcript is filed with the
U.S. Securities and Exchange Commission due to filing requirements associated
with the proposed spin-off and merger of Entergy's transmission business with
ITC. The telephone replay will be available through Feb. 15, 2013, by dialing
(719) 457-0820, confirmation code 6847131.

In the fourth quarter 2012, Entergy included subsidiaries previously included
and reported in the Parent & Other segment in the Entergy Wholesale Commodities
segment to improve the alignment of certain intercompany items. The prior period
financial information has been restated to reflect this change. A detailed
discussion of the factors driving quarterly and full-year results at each
business segment follows.

Utility

In fourth quarter 2012, Utility earnings were $279.7 million, or $1.57 per
share, on an as-reported basis and $290.5 million, or $1.63 per share, on an
operational basis, compared to $169.7 million, or 96 cents per share, on both
as-reported and operational bases in fourth quarter 2011. The
quarter-over-quarter increase was due largely to lower income tax expense. The
reduction in income tax expense was driven by a settlement with the IRS,
completed at the end of 2012, regarding the tax treatment of the utilities'
decommissioning liabilities.

Higher net revenue also contributed to the earnings improvement. Fourth quarter
2012 Utility net revenue reflected the net effect of pricing adjustments from
regulatory actions and investments, primarily from placing the Grand Gulf
extended power uprate in service. In addition, net revenue reflected moderate
retail sales growth. Increased sales in the residential segment and commercial
and governmental segment were partially offset by a decline in industrial sales.
The industrial sales decrease was due largely to temporary outages at two large
customers. Both periods had roughly similar negative weather effects.

Residential sales in fourth quarter 2012, on a weather-adjusted basis, increased
2.6 percent compared to fourth quarter 2011. Commercial and governmental sales,
on a weather-adjusted basis, increased 1.0 percent quarter over quarter.
Industrial sales in the fourth quarter decreased 0.6 percent compared to the
same quarter of 2011.

These items were partially offset by higher depreciation expense due primarily
to investments placed in service since the fourth quarter of last year.

For the year 2012, the Utility earned $943.0 million, or $5.30 per share, on
an as-reported basis and $980.1 million, or $5.51 per share, on an
operational basis, compared to $1.1 billion, or $6.20 per share, on an
as-reported basis and an operational basis in 2011. The year-over-year decrease
was due largely to a higher effective income tax rate. Results in both years
reflected tax agreements with the IRS that resulted in significant decreases in
income tax expense. The income tax expense benefit in 2011 exceeded the benefit
in 2012. A portion of the benefits resulting from the third quarter 2011 and the
second quarter 2012 IRS agreements will be shared with customers in the
applicable jurisdictions. This customer sharing was reflected in regulatory
charges in net revenue in the period the income tax adjustments were recorded.
Increased non-fuel operation and maintenance expense, depreciation expense and
interest expense also contributed to the year-over-year earnings decrease.

Partially offsetting was net revenue, which was higher than a year ago due to
the previously noted regulatory charges as well as the net effect of rate
adjustments and weather-adjusted sales volume growth. Overall billed retail
sales declined year-over-year as a result of milder-than-normal weather in 2012
compared to the significant effect of weather in 2011.

Entergy Wholesale Commodities

Entergy Wholesale Commodities as-reported and operational earnings were $58.8
million, or 33 cents per share, for fourth quarter 2012, compared to $155.0
million, or 88 cents per share, for fourth quarter 2011. The decline was
attributable partly to the operational EBITDA (earnings before interest, income
taxes, depreciation and amortization, and interest and investment income
excluding decommissioning expense and special items) drivers noted below. Other
drivers included a higher effective income tax rate and higher decommissioning
expense. The higher decommissioning expense was due to the benefit from an
adjustment to the decommissioning liability recorded in the fourth quarter of
2011.

For the year, EWC earnings were $40.4 million, or 23 cents per share, on an
as-reported basis and $263.9 million, or $1.49 per share, on an operational
basis, compared to as-reported and operational earnings of $488.6 million, or
$2.74 per share, in 2011. In addition to the operational adjusted EBITDA
drivers noted below, an asset impairment of the Vermont Yankee nuclear power
plant recorded in the first quarter of the current year contributed to the
as-reported decrease. Other drivers include a higher effective income tax rate,
partially offset by lower interest expense.

EWC operational adjusted EBITDA was $161 million in the fourth quarter of
2012, compared to $193 million in the same period a year ago. The decline was
due largely to lower net revenue from the nuclear portfolio on lower energy
pricing. The average realized revenue per megawatt hour for the nuclear fleet
was approximately $50, down from $53 in the same period last year.

For the year, EWC operational adjusted EBITDA was $618 million compared to
$862 million in 2011. The year-over-year decrease was driven by lower net
revenue due to lower nuclear energy pricing. Nuclear generation also declined
versus 2011 due to an increase in refueling and unplanned outage days. The
effect of increased outage days was partially offset by the exercise of resupply
options provided for in power purchase agreements. Also partially offsetting in
net revenue was contributions from the Rhode Island State Energy Center power
plant acquired in December 2011. Higher non-fuel operation and maintenance
expense and taxes other than income taxes also contributed to the operational
adjusted EBITDA decline. Decreased nuclear refueling outage expense provided a
partial offset following the first quarter 2012 asset impairment of Vermont
Yankee.

Parent & Other

Parent & Other reported a loss of $42.3 million, or 24 cents per share, on an
as-reported basis and an operational basis for fourth quarter 2012. This
compares to a loss of $170.6 million, or 97 cents per share, on an
as-reported basis and $157.5 million, or 90 cents per share, on an
operational basis in fourth quarter 2011. The increase in results was driven by
lower income tax expense on Parent & Other activities, partially offset by
higher interest expense.

For the year 2012, Parent & Other reported a loss of $136.7 million, or 77
cents per share, on an as-reported basis and $135.7 million, or 77 cents per
share, on an operational basis. This compares to an as-reported loss of $248.7
million, or $1.39 per share, and an operational loss of $235.7 million, or
$1.32 per share, in 2011. Lower income tax expense was the primary factor in
the year-over-year operational earnings per share increase, partially offset by
higher interest expense. In addition to the quarterly income tax effects noted
above, second quarter 2012 benefited from a favorable decision from the U.S.
Court of Appeals for the Fifth Circuit affirming Entergy's entitlement to claim
foreign tax credits for the U.K. Windfall Tax.

Earnings Guidance

Entergy affirmed its previously issued 2013 earnings guidance in the range of
$4.60 to $5.40 per share on both an as-reported basis and an operational basis.
Entergy noted it currently expects to be in the lower half of the operational
guidance range due to updated pension and post-retirement cost estimates.
As-reported earnings guidance for 2013 does not reflect potential future
expenses for the proposed spin-merge of the transmission business with ITC. The
as-reported 2013 guidance will be updated throughout the year as these
transaction-related expenses are incurred.

Long-term Financial Outlook

Entergy believes it offers a long-term, competitive utility investment
opportunity combined with a valuable option represented by a unique, clean,
non-utility generation business located in attractive power markets.

The current long-term financial outlook for 2010 through 2014, excluding the
effects of the proposed spin-merge of the transmission business discussed below,
includes the following:

Earnings:

* Utility net income: Around 6 percent compound annual net income growth rate
over the 2010 - 2014 horizon (2009 base year).
* Entergy Wholesale Commodities results: Revenue projections through 2014 will
experience volatility due to commodity market activities - one of the most
important fundamental drivers for this business. At current sold and forward
prices with its existing asset portfolio and contracts, Entergy Wholesale
Commodities is expected to deliver declining adjusted EBITDA for the period
through 2014 compared to 2010. However, Entergy Wholesale Commodities offers a
valuable long-term option from the potential positive effects of economic growth
(driving increased load, market heat rates, capacity prices and natural gas
prices), aging and unprofitable unit retirements (driving market heat rate
expansion and capacity price increases), rationalization of supply and growth of
demand in natural gas markets, new environmental legislation and/or enforcement
of additional environmental regulations.
* Corporate results: Results will vary depending upon factors including future
effective income tax and interest rates and the amount/timing of share
repurchases, if any.

Capital deployment:

* A balanced capital investment/return program: Entergy continues to see
value-added investment opportunities at the Utility, as well as an investment
outlook at Entergy Wholesale Commodities that supports continued safe, secure
and reliable operations and opportunistic investments. Entergy aspires to fund
this capital program without issuing traditional common equity, while
maintaining a competitive capital return program. Given the company's financial
profile with a mix of utility and non-utility businesses, both common stock
dividends and share repurchases will be considered in establishing return of
capital policies. Over the five year period from 2010 - 2014 under the current
long-term business outlook, capital deployment through dividends and share
repurchases is projected to total around $4 billion. The amount of share
repurchases may vary as a result of material changes in business results,
capital spending or new investment opportunities.

Credit quality:

* Strong liquidity.
* Solid credit metrics that support ready access to capital on reasonable
terms.

Spin-Merge of Transmission Business

In December 2011, the Entergy and ITC boards of directors approved a definitive
agreement under which Entergy will spin off and then merge its electric
transmission business with a subsidiary of ITC. The transaction is targeted to
close in 2013 and is subject to the satisfaction of certain closing conditions.
Primary filings required include the Entergy Utility operating companies' retail
regulators as well as several federal agencies. ITC shareholders must also
approve the transaction.

Additional Information and Where to Find It

On Sept. 25, 2012, ITC filed a registration statement on Form S-4 with the SEC
registering shares of ITC common stock to be issued to Entergy shareholders in
connection with the proposed transactions, but this registration statement has
not become effective. This registration statement includes a proxy statement of
ITC that also constitutes a prospectus of ITC, and will be sent to ITC
shareholders. In addition, Mid South TransCo LLC (TransCo) will file a
registration statement with the SEC registering TransCo common units to be
issued to Entergy shareholders in connection with the proposed transactions.
Entergy shareholders are urged to read the proxy statement/prospectus included
in the ITC registration statement and the proxy statement/prospectus to be
included in the TransCo registration statement (when available) and any other
relevant documents, because they contain important information about ITC,
TransCo and the proposed transactions. ITC shareholders are urged to read the
proxy statement/prospectus and any other relevant documents because they contain
important information about TransCo and the proposed transactions. The proxy
statement/prospectus and other documents relating to the proposed transactions
(when they are available) can be obtained free of charge from the SEC's website
at www.sec.gov. The documents, when available, can also be obtained free of
charge from Entergy upon written request to Entergy Corporation, Investor
Relations, P.O. Box 61000, New Orleans, LA 70161 or by calling Entergy's
Investor Relations information line at 1-888-ENTERGY (368-3749), or from ITC
upon written request to ITC Holdings Corp., Investor Relations, 27175 Energy
Way, Novi, MI 48377 or by calling 248-946-3000.

Entergy Corporation, which celebrates its 100th birthday this year, 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 more
than 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 $10 billion and approximately 15,000 employees.

Additional information regarding Entergy's quarterly results of operations,
regulatory proceedings and other matters is available in Entergy's investor news
release dated Feb. 8, 2013, a copy of which has been filed today with the
Securities and Exchange Commission on Form 8-K and is available on Entergy's
investor relations website at www.entergy.com/investor_relations.

In this news release, and from time to time, Entergy 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: (i) Entergy's Form 10-K for the year ended Dec. 31, 2011;
(ii) Entergy's Form 10-Q for the quarters ended March 31, 2012, June 30, 2012
and Sept. 30, 2012 and (iii) 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) legislative and
regulatory actions and risks and uncertainties associated with claims or
litigation by or against Entergy and its subsidiaries; (f) conditions in
commodity and capital markets during the periods covered by the forward-looking
statements, in addition to other factors described elsewhere in this release and
subsequent securities filings and (g) risks inherent in the proposed spin-off
and subsequent merger of Entergy's electric transmission business with a
subsidiary of ITC Holdings Corp. Entergy cannot provide any assurances that the
spin-off and merger transaction will be completed and cannot give any assurance
as to the terms on which such transaction will be consummated. The spin-off and
merger transaction is subject to certain conditions precedent, including
regulatory approvals and approval by ITC Holdings Corp. shareholders.

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

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

Fourth Quarter and Year-to-Date 2012 vs. 2011
(Per share in U.S. $)
Fourth Quarter Year-to-Date
2012 2011 Change 2012 2011 Change
As-Reported
Utility 1.57 0.96 0.61 5.30 6.20 (0.90)
Entergy Wholesale Commodities 0.33 0.88 (0.55) 0.23 2.74 (2.51)
Parent & Other (0.24) (0.97) 0.73 (0.77) (1.39) 0.62
Consolidated As-Reported Earnings 1.66 0.87 0.79 4.76 7.55 (2.79)

Less Special Items
Utility (0.06) - (0.06) (0.21) - (0.21)
Entergy Wholesale Commodities - - - (1.26) - (1.26)
Parent & Other - (0.07) 0.07 - (0.07) 0.07
Consolidated Special Items (0.06) (0.07) 0.01 (1.47) (0.07) (1.40)

Operational
Utility 1.63 0.96 0.67 5.51 6.20 (0.69)
Entergy Wholesale Commodities 0.33 0.88 (0.55) 1.49 2.74 (1.25)
Parent & Other (0.24) (0.90) 0.66 (0.77) (1.32) 0.55
Consolidated Operational Earnings 1.72 0.94 0.78 6.23 7.62 (1.39)

Appendix B provides a reconciliation of Entergy Wholesale Commodities GAAP net
income to non-GAAP operational adjusted EBITDA.

Appendix B: Entergy Wholesale Commodities Operational Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures
Fourth Quarter and Year-to-Date 2012 vs. 2011
($ in millions)

Fourth Quarter Year-to-Date
2012 2011 Change 2012 2011 Change
Net income 59 156 (97) 40 492 (452)
Add back: interest expense 3 6 (3) 18 33 (15)
Add back: income tax expense 50 18 32 61 176 (115)
Add back: depreciation and amortization 47 46 1 176 179 (3)
Subtract: interest and investment income 28 29 (1) 105 99 6
Add back: decommissioning expense 30 (4) 34 72 81 (9)
Adjusted EBITDA 161 193 (32) 262 862 (600)
Add back: special item for asset impairment - - - 356 - 356
Operational Adjusted EBITDA 161 193 (32) 618 862 (244)

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

2012 2011
(unaudited)
Operating Revenues:
Electric $1,830,897 $1,861,980
Natural gas 37,392 39,366
Competitive businesses 567,971 587,686
Total 2,436,260 2,489,032
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 464,571 571,707
Purchased power 288,984 275,787
Nuclear refueling outage expenses 61,311 64,101
Other operation and maintenance 785,634 790,692
Decommissioning 58,120 23,366
Taxes other than income taxes 132,969 129,533
Depreciation and amortization 307,874 289,531
Other regulatory charges (credits) - net 12,595 1,620
Total 2,112,058 2,146,337
Operating Income 324,202 342,695
Other Income (Deductions):
Allowance for equity funds used during construction 21,773 24,747
Interest and investment income 33,010 33,088
Miscellaneous - net (11,421) (18,773)
Total 43,362 39,062
Interest Expense:
Interest expense 154,434 142,036
Allowance for borrowed funds used during construction (9,435) (10,496)
Total 144,999 131,540
Income Before Income Taxes 222,565 250,217
Income Taxes (79,285) 90,190
Consolidated Net Income 301,850 160,027
Preferred Dividend Requirements of Subsidiaries 5,582 5,887
Net Income Attributable to Entergy Corporation $296,268 $154,140

Earnings Per Average Common Share
Basic $1.67 $0.87
Diluted $1.66 $0.87

Average Number of Common Shares Outstanding - Basic 177,742,807 176,161,769
Average Number of Common Shares Outstanding - Diluted 178,042,364 177,082,570

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

2012 2011
(unaudited)
Operating Revenues:
Electric $7,870,649 $8,673,517
Natural gas 130,836 165,819
Competitive businesses 2,300,594 2,389,737
Total 10,302,079 11,229,073
Operating Expenses:
Operation and maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 2,036,835 2,492,714
Purchased power 1,255,800 1,564,967
Nuclear refueling outage expenses 245,600 255,618
Asset impairment 355,524 -
Other operation and maintenance 3,045,392 2,867,758
Decommissioning 184,760 190,595
Taxes other than income taxes 557,298 536,026
Depreciation and amortization 1,144,585 1,102,202
Other regulatory charges (credits) - net 175,104 205,959
Total 9,000,898 9,215,839
Operating Income 1,301,181 2,013,234
Other Income (Deductions):
Allowance for equity funds used during construction 92,759 84,305
Interest and investment income 127,776 128,994
Miscellaneous - net (53,214) (59,271)
Total 167,321 154,028
Interest Expense:
Interest expense 606,596 551,521
Allowance for borrowed funds used during construction (37,312) (37,894)
Total 569,284 513,627
Income Before Income Taxes 899,218 1,653,635
Income Taxes 30,855 286,263
Consolidated Net Income 868,363 1,367,372
Preferred Dividend Requirements of Subsidiaries 21,690 20,933
Net Income Attributable to Entergy Corporation $846,673 $1,346,439

Earnings Per Average Common Share
Basic $4.77 $7.59
Diluted $4.76 $7.55

Average Number of Common Shares Outstanding - Basic 177,324,813 177,430,208
Average Number of Common Shares Outstanding - Diluted 177,737,565 178,370,695

Entergy Corporation
Utility Electric Energy Sales & Customers

Three Months Ended December 31

2012 2011 % %

Change
Weather-
Adjusted
(Millions of kWh)
Electric Energy Sales:
Residential 7,360 7,274 1.2 2.6
Commercial 6,730 6,672 0.9 1.3
Governmental 583 598 (2.5) (2.3)
Industrial 10,067 10,130 (0.6) (0.6)
Total to Ultimate Customers 24,740 24,674 0.3 0.8
Wholesale 798 1,090 (26.8)
Total Sales 25,538 25,764 (0.9)

Twelve Months Ended December 31

2012 2011 % %

Change
Weather-A
djusted
(Millions of kWh)
Electric Energy Sales:
Residential 34,664 36,684 (5.5) 2.9
Commercial 28,724 28,720 0.0 2.3
Governmental 2,435 2,474 (1.6) (1.0)
Industrial 41,181 40,810 0.9 0.9
Total to Ultimate Customers 107,004 108,688 (1.5) 1.9
Wholesale 3,200 4,111 (22.2)
Total Sales 110,204 112,799 (2.3)

December 31

2012 2011 %

Change
Electric Customers (End of period):
Residential 2,379,955 2,362,444 0.7
Commercial 339,228 336,744 0.7
Governmental 16,642 16,419 1.4
Industrial 42,230 41,173 2.6
Total Ultimate Customers 2,778,055 2,756,780 0.8
Wholesale 23 20 15.0
Total Customers 2,778,078 2,756,800 0.8

SOURCE Entergy Corporation

Michael Burns, News Media, +1-504-576-4238, mburns@entergy.com, Paula Waters,
Investor Relations, +1-504-576-4380, pwater1@entergy.com