NEW ORLEANS, July 31, 2019 /PRNewswire/ -- Entergy
Corporation (NYSE: ETR) reported second quarter 2019 earnings per
share of $1.22 on an as-reported
basis and $1.35 on an adjusted basis
(non-GAAP).
"Our results for the quarter keep us well-positioned to achieve
our full-year financial guidance," said Entergy Chairman and Chief
Executive Officer Leo Denault.
"With a track record of success, clarity in our vision, and
confidence in our strategy going forward, we are raising our 2020
and 2021 adjusted EPS outlooks and narrowing our adjusted EPS
ranges across our forecast period."
Business highlights included the following:
- Entergy narrowed its 2019 adjusted EPS guidance to $5.15 to $5.45 and
raised and narrowed its 2020 and 2021 adjusted EPS outlooks to
$5.45 to $5.75 and $5.80 to
$6.10, respectively.
- The St. Charles Power Station was placed in service on budget
and ahead of schedule.
- Phase 1 of the Western Region economic transmission project was
placed in service.
- The MPSC approved the settlement in Entergy Mississippi's
annual FRP filing.
- Entergy Louisiana and Entergy Arkansas each submitted annual
FRP filings.
- Pilgrim Nuclear Power Station permanently shut down on
May 31, 2019.
- The Edison Electric Institute awarded its Emergency Assistance
Award to Entergy.
- For the fourth consecutive year, Entergy Corporation was named
to The Civic 50, a Points of Light initiative honoring the 50 most
community-minded companies in the United
States.
Consolidated Earnings
(GAAP and Non-GAAP Measures) Second Quarter and
Year-to-Date 2019 vs. 2018 (See Appendix A for reconciliation of
GAAP to non-GAAP measures and description of adjustments)
|
|
Second
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
(After-tax, $ in
millions)
|
|
|
|
|
|
|
As-reported
earnings
|
236
|
245
|
(9)
|
491
|
378
|
113
|
Less
adjustments
|
(26)
|
(14)
|
(12)
|
71
|
(32)
|
103
|
Adjusted earnings
(non-GAAP)
|
262
|
259
|
3
|
420
|
410
|
10
|
Estimated
weather in billed sales
|
12
|
21
|
(9)
|
(12)
|
37
|
(48)
|
|
|
|
|
|
|
|
(After-tax, per share
in $)
|
|
|
|
|
|
|
As-reported
earnings
|
1.22
|
1.34
|
(0.12)
|
2.54
|
2.08
|
0.46
|
Less
adjustments
|
(0.13)
|
(0.08)
|
(0.05)
|
0.36
|
(0.18)
|
0.54
|
Adjusted earnings
(non-GAAP)
|
1.35
|
1.42
|
(0.07)
|
2.18
|
2.26
|
(0.08)
|
Estimated
weather in billed sales
|
0.06
|
0.11
|
(0.05)
|
(0.06)
|
0.20
|
(0.26)
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
Consolidated Results
For second quarter 2019, the company reported earnings of
$236 million, or $1.22 per share, on an as-reported basis and
earnings of $262 million, or
$1.35 per share, on an adjusted
basis. This compared to second quarter 2018 earnings of
$245 million, or $1.34 per share, on an as-reported basis and
earnings of $259 million, or
$1.42 per share on an adjusted
basis.
Summary discussions by business are below. Additional details,
including information on OCF by business, are provided in Appendix
A and a comprehensive analysis of quarterly and year-to-date
variances by business is provided in Appendix B.
Business Segment Results
Utility
For second quarter 2019, the Utility business reported earnings
attributable to Entergy Corporation of $331
million, or $1.70 per share,
on both an as-reported and an adjusted basis. This compared
to second quarter 2018 earnings of $376
million, or $2.05 per share,
on an as-reported basis and $333
million, or $1.82 per share,
on an adjusted basis. Drivers for the quarter included:
- rate activity at Entergy Arkansas, Entergy Louisiana, and
Entergy Texas;
- second quarter 2018 regulatory charges to return benefits of
the lower federal tax rate to customers; and
- higher other income largely due to higher AFUDC-equity
funds.
These increases were partially offset by:
- less favorable weather in second quarter 2019 compared to a
year ago;
- lower sales volume in the unbilled period;
- higher spending on nuclear operations, information technology,
and initiatives to explore new customer products and services;
and
- higher depreciation expense.
On a per share basis, 2019 results reflected higher shares
outstanding from settlement of the company's equity forward.
Appendix C contains additional details on Utility financial and
operating measures.
Parent & Other
For second quarter 2019, Parent & Other reported a loss of
$(69 million), or (35) cents per share, on both an as-reported and
an adjusted basis. This compared to a loss of $(73 million), or (40)
cents per share, on both an as-reported and an adjusted
basis in second quarter 2018.
Entergy Wholesale Commodities
For second quarter 2019, EWC recorded a loss attributable
to Entergy Corporation of $(26
million), or (13) cents per
share on an as-reported basis. This compared to a second quarter
2018 loss of $(57 million), or
(31) cents per share, on an
as-reported basis.
Second quarter 2019 earnings reflected lower impairment charges
as compared to a year ago. EWC also recorded higher gains on
decommissioning trust funds. These items were partially offset by
lower revenue due to the shutdown of Pilgrim and tax benefits
incurred in second quarter 2018.
Appendix D contains additional details on EWC financial and
operating measures, including reconciliation for non-GAAP EWC
adjusted EBITDA.
Earnings per Share Guidance and
Outlook
Entergy narrowed its 2019 adjusted EPS guidance range to
$5.15 to $5.45 per share from $5.10 to $5.50.
In addition, with its customers in mind, the company identified
investment opportunities to improve reliability and enable new
customer products and services. Combined with non-fuel O&M
efficiencies, customers will receive an improved level of service
with minimal bill impacts. As a result, the company is increasing
its 2020 and 2021 adjusted EPS outlook ranges to $5.45 to $5.75 and
$5.80 to $6.10, respectively.
See webcast presentation slides for additional details.
The company has provided 2019 earnings guidance and 2020 and
2021 outlooks with regard to the non-GAAP measure of Entergy
adjusted EPS. This measure excludes from the corresponding GAAP
financial measure the effect of adjustments as described below
under "Non-GAAP Financial Measures." The company has not provided a
reconciliation of such non-GAAP guidance or outlooks to guidance or
outlooks presented on a GAAP basis because it cannot predict and
quantify with a reasonable degree of confidence all of the
adjustments that may occur during the periods. One such adjustment
will be the exclusion of EWC earnings from Entergy adjusted EPS. We
currently estimate that the contribution of EWC to Entergy's
as-reported EPS will be approximately (95)
cents, (35) cents and
$(1.35) per share in 2019, 2020 and
2021, respectively. These estimates are subject to substantial
uncertainty due to, among other things, the potential effects of
the strategic decision to exit the EWC business.
Earnings Teleconference
A teleconference will be held at 10:00
a.m. Central Time on Wednesday, July 31, 2019, to discuss
Entergy's quarterly earnings announcement and the company's
financial performance. The teleconference may be accessed by
visiting Entergy's website at www.entergy.com or by dialing
844-309-6569, conference ID 7299636, no more than
15 minutes prior to the start of the call. The webcast slide
presentation is 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 www.entergy.com and by telephone. The telephone
replay will be available through August 7,
2019, by dialing 855-859-2056, conference ID 7299636.
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 9,000 megawatts of nuclear power. Entergy
delivers electricity to 2.9 million utility customers in
Arkansas, Louisiana, Mississippi, and Texas. Entergy has annual revenues of
approximately $11 billion and nearly
13,700 employees.
Entergy Corporation's common stock is listed on the New York
Stock Exchange and NYSE Chicago under the symbol "ETR."
Details regarding Entergy's results of operations, regulatory
proceedings and other matters are available in this earnings
release, a copy of which will be filed with the SEC, and the
webcast slide presentation. Both documents are available on
Entergy's Investor Relations website at
www.entergy.com/investor_relations.
Entergy maintains a web page as part of its Investor Relations
website, entitled Regulatory & Other Information, which
provides investors with key updates of certain regulatory
proceedings and important milestones on the execution of its
strategy. While some of this information may be considered material
information, investors should not rely exclusively on this page for
all relevant company information.
For definitions of certain operating measures, as well as GAAP
and non-GAAP financial measures and abbreviations and acronyms used
in the earnings release materials, see Appendix F.
Non-GAAP Financial Measures
This news release contains non-GAAP financial measures, which
are generally numerical measures of a company's performance,
financial position, or cash flows that either exclude or include
amounts that are not normally excluded or included in the most
directly comparable measure calculated and presented in accordance
with GAAP. Entergy has provided quantitative reconciliations within
this release of the non-GAAP financial measures to the most
directly comparable GAAP financial measures.
Entergy reports earnings using the non-GAAP measure of Entergy
adjusted earnings, which excludes the effect of certain
"adjustments," including the removal of the Entergy Wholesale
Commodities segment in light of the company's decision to exit the
merchant power business. Adjustments are unusual or non-recurring
items or events or other items or events that management believes
do not reflect the ongoing business of Entergy, such as the results
of the EWC segment, significant tax items and other items such as
certain costs, expenses, or other specified items. In addition to
reporting GAAP consolidated earnings on a per share basis, Entergy
reports its adjusted earnings on a per share basis. These per share
measures represent the applicable earnings amount divided by the
diluted average number of common shares outstanding for the
period.
Management uses the non-GAAP financial measures of adjusted
earnings and adjusted earnings per share for, among other things,
financial planning and analysis; reporting financial results to the
board of directors, employees, stockholders, analysts and
investors; and internal evaluation of financial performance.
Entergy believes that these non-GAAP financial measures provide
useful information to investors in evaluating the ongoing results
of Entergy's business, comparing period to period results, and
comparing Entergy's financial performance to the financial
performance of other companies in the utility sector.
Other non-GAAP measures, including adjusted EBITDA; adjusted
ROE; adjusted ROIC; gross liquidity; debt to capital, excluding
securitization debt; net debt to net capital, excluding
securitization debt; parent debt to total debt, excluding
securitization debt; FFO; FFO to debt, excluding securitization
debt; and FFO to debt, excluding securitization debt, return of
unprotected excess ADIT, and severance and retention payments
associated with exit of EWC, are measures Entergy uses internally
for management and board discussions and to gauge the overall
strength of its business. Entergy believes the above data provides
useful information to investors in evaluating Entergy's ongoing
financial results and flexibility and assists investors in
comparing Entergy's credit and liquidity to the credit and
liquidity of others in the Utility sector. In addition, other
financial measures including net income (or earnings), adjusted for
preferred dividends and tax-effected interest expense; return on
average invested capital; and return on average common equity are
included on both an adjusted and as-reported basis. In each case,
the metrics defined as "adjusted" (other than EWC's adjusted
EBITDA) would exclude the effect of adjustments as defined above.
EWC's adjusted EBITDA represents EWC's earnings before interest,
taxes, and depreciation and amortization, and also excludes
decommissioning expense.
These non-GAAP financial measures reflect an additional way of
viewing aspects of Entergy's operations that, when viewed with
Entergy's GAAP results and the accompanying reconciliations to
corresponding GAAP financial measures, provide a more complete
understanding of factors and trends affecting Entergy's business.
These non-GAAP financial measures should not be used to the
exclusion of GAAP financial measures. Investors are strongly
encouraged to review Entergy's consolidated financial statements
and publicly filed reports in their entirety and not to rely on any
single financial measure. Although certain of these measures
are intended to assist investors in comparing Entergy's performance
to other companies in the utility sector, non-GAAP financial
measures are not standardized; therefore, it might not be possible
to compare these financial measures with other companies' non-GAAP
financial measures having the same or similar names.
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
2019 earnings guidance; its current financial and operational
outlooks; and other statements of Entergy's plans, beliefs or
expectations included in this news release. Readers are cautioned
not to place undue reliance on these forward-looking statements,
which apply only as of the date of 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 (1) rate
proceedings, formula rate plans and other cost recovery mechanisms,
including the risk that costs may not be recoverable to the extent
anticipated by the utilities and (2) implementation of the
ratemaking effects of changes in law; (c) uncertainties associated
with efforts to remediate the effects of major storms and recover
related restoration costs; (d) risks associated with operating
nuclear facilities, including plant relicensing, operating,
and regulatory costs and risks; (e) changes in decommissioning
trust fund values or earnings or in the timing or cost of
decommissioning Entergy's 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 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; (h) effects of changes in federal, state, or local
laws and regulations and other governmental actions or policies,
including changes in monetary, fiscal, tax, environmental, or
energy policies; (i) the effects of technological changes and
changes in commodity markets, capital markets or economic
conditions; and (j) impacts from a terrorist attack, cybersecurity
threats, data security breaches or other attempts to disrupt
Entergy's business or operations, and other catastrophic
events.
Second Quarter 2019 Earnings Release
Appendices and Financial Statements
Appendices
Appendices are presented in this section as
follows:
- A: Consolidated Results and Adjustments
- B: Earnings Variance Analysis
- C: Utility Financial and Operating Measures
- D: EWC Financial and Operating Measures
- E: Consolidated Financial Measures
- F: Definitions and Abbreviations and Acronyms
- G: GAAP to Non-GAAP Reconciliations
Financial Statements
Financial statements are
presented in this section.
A: Consolidated Results and Adjustments
Appendix A-1
provides a comparative summary of consolidated earnings, including
a reconciliation of as-reported earnings (GAAP) to adjusted
earnings (non-GAAP).
Appendix A-1:
Consolidated Earnings - Reconciliation of GAAP to Non-GAAP
Measures
Second Quarter and
Year-to-Date 2019 vs. 2018 (See Appendix A-3 and Appendix A-4 for
details on adjustments)
|
|
Second
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
(After-tax, $ in
millions)
|
|
|
|
|
|
|
Earnings
(loss)
|
|
|
|
|
|
|
Utility
|
331
|
376
|
(44)
|
562
|
591
|
(29)
|
Parent &
Other
|
(69)
|
(73)
|
4
|
(141)
|
(137)
|
(4)
|
EWC
|
(26)
|
(57)
|
31
|
71
|
(75)
|
146
|
Consolidated
|
236
|
245
|
(9)
|
491
|
378
|
113
|
|
|
|
|
|
|
|
Less
adjustments
|
|
|
|
|
|
|
Utility
|
-
|
43
|
(43)
|
-
|
43
|
(43)
|
Parent &
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
EWC
|
(26)
|
(57)
|
31
|
71
|
(75)
|
146
|
Consolidated
|
(26)
|
(14)
|
(12)
|
71
|
(32)
|
103
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) (non-GAAP)
|
|
|
|
|
|
|
Utility
|
331
|
333
|
(1)
|
562
|
548
|
14
|
Parent &
Other
|
(69)
|
(73)
|
4
|
(141)
|
(137)
|
(4)
|
EWC
|
-
|
-
|
-
|
-
|
-
|
-
|
Consolidated
|
262
|
259
|
3
|
420
|
410
|
10
|
Estimated weather
in billed sales
|
12
|
21
|
(9)
|
(12)
|
37
|
(48)
|
|
|
|
|
|
|
|
Diluted average
number of common
shares outstanding (in millions)
|
194
|
183
|
|
193
|
182
|
|
|
|
|
|
|
|
|
(After-tax, per share
in $) (a)
|
|
|
|
|
|
|
Earnings
(loss)
|
|
|
|
|
|
|
Utility
|
1.70
|
2.05
|
(0.35)
|
2.91
|
3.24
|
(0.33)
|
Parent &
Other
|
(0.35)
|
(0.40)
|
0.05
|
(0.73)
|
(0.75)
|
0.02
|
EWC
|
(0.13)
|
(0.31)
|
0.18
|
0.36
|
(0.41)
|
0.77
|
Consolidated
|
1.22
|
1.34
|
(0.12)
|
2.54
|
2.08
|
0.46
|
|
|
|
|
|
|
|
Less
adjustments
|
|
|
|
|
|
|
Utility
|
-
|
0.23
|
(0.23)
|
-
|
0.23
|
(0.23)
|
Parent &
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
EWC
|
(0.13)
|
(0.31)
|
0.18
|
0.36
|
(0.41)
|
0.77
|
Consolidated
|
(0.13)
|
(0.08)
|
(0.05)
|
0.36
|
(0.18)
|
0.54
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) (non-GAAP)
|
|
|
|
|
|
|
Utility
|
1.70
|
1.82
|
(0.12)
|
2.91
|
3.01
|
(0.10)
|
Parent &
Other
|
(0.35)
|
(0.40)
|
0.05
|
(0.73)
|
(0.75)
|
0.02
|
EWC
|
-
|
-
|
-
|
-
|
-
|
-
|
Consolidated
|
1.35
|
1.42
|
(0.07)
|
2.18
|
2.26
|
(0.08)
|
Estimated weather
in billed sales
|
0.06
|
0.11
|
(0.05)
|
(0.06)
|
0.20
|
(0.26)
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
(a)
|
Per share amounts are
calculated by dividing the corresponding earnings (loss) by the
diluted average number of common shares outstanding for the
period.
|
See Appendix B for detailed earnings variance analysis. See
Appendix A-3 for adjustments by driver.
Appendix A-2 provides a comparative summary of OCF, by
business.
Appendix A-2:
Consolidated Operating Cash Flow
|
Second Quarter and
Year-to-Date 2019 vs. 2018
|
($ in
millions)
|
|
Second
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Utility
|
699
|
626
|
73
|
1,154
|
1,149
|
5
|
Parent &
Other
|
(45)
|
(58)
|
13
|
(123)
|
(115)
|
(8)
|
EWC
|
(102)
|
(45)
|
(57)
|
22
|
46
|
(24)
|
Consolidated
|
552
|
523
|
29
|
1,053
|
1,080
|
(27)
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
|
OCF increased quarter-over-quarter due primarily to a lower
amount of unprotected excess ADIT returned to customers, lower
nuclear refueling outage spending, and lower ARO spending at EWC.
Higher severance and retention payments at EWC partially offset the
increase.
Appendix A-3 and Appendix A-4 list adjustments by business.
Amounts are shown on both an earnings and EPS basis. Adjustments
are included in as-reported earnings consistent with GAAP but are
excluded from adjusted earnings. As a result, adjusted earnings is
considered a non-GAAP measure.
Appendix A-3:
Adjustments by Driver (shown as positive/(negative) impact on
earnings or EPS)
|
Second Quarter and
Year-to-Date 2019 vs. 2018
|
(Pre-tax except for
income tax effects and total, $ in millions)
|
|
Second
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
|
|
|
|
|
|
|
(Pre-tax except for
income tax effects and total, $ in millions)
|
|
|
|
|
|
|
Utility
|
|
|
|
|
|
|
2012 / 2013 IRS
settlement
|
-
|
43
|
(43)
|
-
|
43
|
(43)
|
Total
Utility
|
-
|
43
|
(43)
|
-
|
43
|
(43)
|
EWC
|
|
|
|
|
|
|
Income before income
taxes
|
(35)
|
(86)
|
52
|
128
|
(105)
|
234
|
Income
taxes
|
9
|
30
|
(21)
|
(57)
|
31
|
(88)
|
Preferred dividend
requirements of subsidiaries
|
(1)
|
(1)
|
-
|
(1)
|
(1)
|
-
|
Total EWC
|
(26)
|
(57)
|
31
|
71
|
(75)
|
146
|
|
|
|
|
|
|
|
Total
adjustments
|
(26)
|
(14)
|
(12)
|
71
|
(32)
|
103
|
|
|
|
|
|
|
|
(After-tax, per share
in $) (b)
|
|
|
|
|
|
|
Utility
|
|
|
|
|
|
|
2012 / 2013 IRS
settlement
|
-
|
0.23
|
(0.23)
|
-
|
0.23
|
(0.23)
|
Total
Utility
|
-
|
0.23
|
(0.23)
|
-
|
0.23
|
(0.23)
|
EWC
|
|
|
|
|
|
|
Total EWC
|
(0.13)
|
(0.31)
|
0.18
|
0.36
|
(0.41)
|
0.77
|
|
|
|
|
|
|
|
Total
adjustments
|
(0.13)
|
(0.08)
|
(0.05)
|
0.36
|
(0.18)
|
0.54
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
(b)
|
Per share amounts are
calculated by dividing the corresponding earnings (loss) by the
diluted average number of common shares outstanding for the
period.
|
Appendix A-4:
Adjustments by Income Statement Line Item (shown as
positive/(negative) impact on earnings)
|
Second Quarter and
Year-to-Date 2019 vs. 2018
|
(Pre-tax except for
Income taxes and total, $ in millions)
|
|
Second
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Utility
|
|
|
|
|
|
|
Income
taxes
|
-
|
43
|
(43)
|
-
|
43
|
(43)
|
EWC
|
|
|
|
|
|
|
Operating
revenues
|
290
|
309
|
(19)
|
723
|
728
|
(5)
|
Fuel and fuel-related
expenses
|
(26)
|
(19)
|
(7)
|
(51)
|
(39)
|
(12)
|
Purchased
power
|
(15)
|
(18)
|
3
|
(31)
|
(35)
|
4
|
Non-fuel
O&M
|
(200)
|
(200)
|
1
|
(401)
|
(393)
|
(7)
|
Asset write-off and
impairments
|
(16)
|
(69)
|
53
|
(90)
|
(142)
|
52
|
Decommissioning
expense
|
(64)
|
(60)
|
(4)
|
(128)
|
(118)
|
(9)
|
Taxes other than
income taxes
|
(20)
|
(22)
|
2
|
(33)
|
(39)
|
6
|
Depreciation/amortization exp.
|
(38)
|
(39)
|
1
|
(76)
|
(77)
|
1
|
Other income
(deductions)–other
|
64
|
40
|
24
|
232
|
26
|
206
|
Interest exp. and
other charges
|
(9)
|
(8)
|
(0)
|
(18)
|
(17)
|
(1)
|
Income
taxes
|
9
|
30
|
(21)
|
(57)
|
31
|
(88)
|
Preferred
dividend
|
(1)
|
(1)
|
-
|
(1)
|
(1)
|
-
|
Total EWC
|
(26)
|
(57)
|
31
|
71
|
(75)
|
146
|
|
|
|
|
|
|
|
Total adjustments
(after-tax)
|
(26)
|
(14)
|
(12)
|
71
|
(32)
|
103
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
|
B: Earnings Variance Analysis
Appendix B-1 and
Appendix B-2 provide details of current quarter and year-to-date
2019 versus 2018 as-reported and adjusted earnings variance
analysis for Utility, Parent & Other, and EWC.
Appendix B:
As-Reported and Adjusted Earnings Variance Analysis (c),
(d)
|
Second Quarter 2019
vs. 2018
|
(After-tax, per share
in $)
|
|
Utility
|
|
Parent &
Other
|
|
EWC
|
|
Consolidated
|
|
As-
Reported
|
Adjusted
|
|
As-
Reported
|
Adjusted
|
|
As-
Reported
|
|
As-
Reported
|
Adjusted
|
2018
earnings
|
2.05
|
1.82
|
|
(0.40)
|
(0.40)
|
|
(0.31)
|
|
1.34
|
1.42
|
Operating revenue
less:
Fuel,
fuel-related expenses and
gas purchased
for resale,
Purchased
power, and
Regulatory
charges (credits)
|
0.18
|
0.18
|
(e)
|
-
|
-
|
|
(0.10)
|
(f)
|
0.08
|
0.18
|
Non-fuel
O&M
|
(0.11)
|
(0.11)
|
(g)
|
0.03
|
0.03
|
|
-
|
|
(0.08)
|
(0.08)
|
Asset write-offs and
impairments
|
-
|
-
|
|
-
|
-
|
|
0.23
|
(h)
|
0.23
|
-
|
Decommissioning
expense
|
(0.01)
|
(0.01)
|
|
-
|
-
|
|
(0.02)
|
|
(0.03)
|
(0.01)
|
Taxes other than
income taxes
|
(0.03)
|
(0.03)
|
|
-
|
-
|
|
0.01
|
|
(0.02)
|
(0.03)
|
Depreciation/amortization exp.
|
(0.05)
|
(0.05)
|
(i)
|
-
|
-
|
|
-
|
|
(0.05)
|
(0.05)
|
Other income
(deductions)–other
|
0.05
|
0.05
|
(j)
|
(0.01)
|
(0.01)
|
|
0.10
|
(k)
|
0.14
|
0.04
|
Interest exp. and
other charges
|
(0.03)
|
(0.03)
|
|
-
|
-
|
|
-
|
|
(0.03)
|
(0.03)
|
Income
taxes–other
|
(0.24)
|
(0.01)
|
(l)
|
0.01
|
0.01
|
|
(0.05)
|
(m)
|
(0.28)
|
-
|
Share
effect
|
(0.11)
|
(0.11)
|
(n)
|
0.02
|
0.02
|
|
0.01
|
|
(0.08)
|
(0.09)
|
2019
earnings
|
1.70
|
1.70
|
|
(0.35)
|
(0.35)
|
|
(0.13)
|
|
1.22
|
1.35
|
|
|
|
|
|
|
|
|
|
|
|
Appendix B-2:
As-Reported and Adjusted Earnings Variance Analysis (c),
(d)
|
Year-to-Date 2019 vs.
2018
|
(After-tax, per share
in $)
|
|
Utility
|
|
Parent &
Other
|
|
EWC
|
|
Consolidated
|
|
As-
Reported
|
Adjusted
|
|
As-
Reported
|
Adjusted
|
|
As-
Reported
|
|
As-
Reported
|
Adjusted
|
2018
earnings
|
3.24
|
3.01
|
|
(0.75)
|
(0.75)
|
|
(0.41)
|
|
2.08
|
2.26
|
Operating revenue
less:
Fuel,
fuel-related expenses and
gas purchased
for resale,
Purchased
power, and
Regulatory
charges (credits)
|
0.25
|
0.25
|
(e)
|
-
|
-
|
|
(0.06)
|
(f)
|
0.19
|
0.25
|
Non-fuel
O&M
|
(0.09)
|
(0.09)
|
(g)
|
0.02
|
0.02
|
|
(0.03)
|
|
(0.10)
|
(0.07)
|
Asset write-offs and
impairments
|
-
|
-
|
|
-
|
-
|
|
0.22
|
(h)
|
0.22
|
-
|
Decommissioning
expense
|
(0.02)
|
(0.02)
|
|
-
|
-
|
|
(0.04)
|
|
(0.06)
|
(0.02)
|
Taxes other than
income taxes
|
(0.02)
|
(0.02)
|
|
-
|
-
|
|
0.03
|
|
0.01
|
(0.02)
|
Depreciation/amortization exp.
|
(0.09)
|
(0.09)
|
(i)
|
-
|
-
|
|
-
|
|
(0.09)
|
(0.09)
|
Other income
(deductions)–other
|
0.08
|
0.08
|
(j)
|
(0.02)
|
(0.02)
|
|
0.89
|
(k)
|
0.95
|
0.06
|
Interest exp. and
other charges
|
(0.05)
|
(0.05)
|
(o)
|
(0.03)
|
(0.03)
|
|
(0.01)
|
|
(0.09)
|
(0.08)
|
Income
taxes–other
|
(0.21)
|
0.02
|
(l)
|
0.01
|
0.01
|
|
(0.21)
|
(m)
|
(0.41)
|
0.03
|
Preferred dividend
requirements
|
(0.01)
|
(0.01)
|
|
-
|
-
|
|
-
|
|
(0.01)
|
(0.01)
|
Share
effect
|
(0.17)
|
(0.17)
|
(n)
|
0.04
|
0.04
|
|
(0.02)
|
|
(0.15)
|
(0.13)
|
2019
earnings
|
2.91
|
2.91
|
|
(0.73)
|
(0.73)
|
|
0.36
|
|
2.54
|
2.18
|
|
|
|
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding.
|
|
(c)
|
Utility revenue and
Utility income taxes exclude $61 million in second quarter 2019 and
$278 million in second quarter 2018 for the return of unprotected
excess ADIT to customers (net effect is neutral to earnings).
On a year-to-date basis, Utility revenue and Utility income taxes
exclude $122 million in 2019 and $278 million in 2018.
|
(d)
|
EPS effect is
calculated by multiplying the pre-tax amount by the estimated
income tax rate that is expected to apply and dividing by diluted
average number of common shares outstanding for the prior period;
income taxes–other represents income tax differences other than the
tax effect of individual line items.
|
(e)
|
The second quarter
and year-to-date earnings increases were primarily driven by rate
activity from E-AR's FRP, E-LA's FRP, E-LA's AMI rider, as well as
E-TX's base rate case. Second quarter 2019 also included recovery
of the St. Charles Power Station. In addition, in the second
quarter and year-to-date 2018, E-LA recorded regulatory charges to
return the benefits of the lower effective federal tax rate to
customers. Partially offsetting was the net effect of
volume/weather primarily due to the effects of
weather and lower volume in the unbilled period.
|
(f)
|
The second quarter
and year-to-date earnings decreases were due largely to lower
revenues due to the shutdown of Pilgrim in May 2019, as well as
impacts on fuel expense from EWC plant impairments. The
year-to-date decrease was partially offset by higher nuclear energy
volume.
|
(g)
|
The second quarter
and year-to-date earnings decreases from higher Utility non-fuel
O&M reflected higher spending on information technology,
initiatives to explore new customer products and services, and
fossil-fueled generation due to higher scope of work during
outages. These were partially offset by lower E-MS storm damage
provisions (offset in operating revenue). The second quarter
variance also included higher spending on nuclear operations,
including higher outage costs and amortization. The year-to-date
variance reflected lower nuclear spending in addition to the items
previously noted.
|
(h)
|
The second quarter
and year-to-date earnings increases from lower EWC asset write-offs
and impairments were due to lower refueling outage costs being
impaired in 2019, as well as a gain on the sale of a switchyard at
Pilgrim.
|
(i)
|
The second quarter
and year-to-date earnings decreases from higher Utility
depreciation expense were due primarily to higher plant in service,
including the St. Charles Power Station, partially offset by
updated Grand Gulf depreciation rates.
|
(j)
|
The second quarter
and year-to date earnings increases from Utility other income
(deductions)–other were due largely to higher AFUDC-equity funds
from higher CWIP in 2019, including the Lake Charles Power Station,
Montgomery County Power Station and New Orleans Power
Station. Changes in decommissioning trust fund activity also
contributed.
|
(k)
|
The second quarter
and year-to-date earnings increases from higher EWC other income
(deductions)–other were due largely to gains on the decommissioning
trust fund investments in 2019.
|
(l)
|
The second quarter
and year-to-date as-reported earnings decreases from higher Utility
income taxes were primarily due to the settlement of the 2012 /
2013 IRS audit totaling $43 million in second quarter
2018.
|
(m)
|
The second quarter
and year-to-date earnings decreases from higher EWC income taxes
were primarily due to $13 million in tax benefits from the
settlement of the 2012 / 2013 IRS audit in second quarter 2018. The
year-to date earnings decrease also reflected an accrual of $29
million of tax expense, which resulted from the sale of Vermont
Yankee in January 2019.
|
(n)
|
The second quarter
and year-to-date earnings per share decreases from share effect
were due to settlement of the equity forward (6.8 million shares
settled in December 2018 and 8.4 million shares settled in May
2019).
|
(o)
|
The year-to-date
earnings decrease from higher Utility interest expense was largely
due to higher debt balances at E-AR and E-LA.
|
|
Utility
As-Reported Operating revenue less
Fuel, fuel-related expenses and gas purchased
for resale; Purchased power; and Regulatory
charges (credits) Variance Analysis
2019 vs. 2018 ($
EPS)
|
|
2Q
|
YTD
|
Volume/weather
|
(0.17)
|
(0.33)
|
Retail electric
price
Reg. charges for
lower tax rate
|
0.22
0.11
|
0.34
0.22
|
Other
|
0.02
|
0.02
|
Total
|
0.18
|
0.25
|
C: Utility Financial and Operating Measures
Appendix
C-1 and Appendix C-2 provides comparative summaries of Utility
operating and financial measures.
|
Appendix C-1: Utility
Operating and Financial Measures
|
|
Second Quarter and
Year-to-Date 2019 vs. 2018
|
|
|
Second
Quarter
|
Year-to-Date
|
|
|
2019
|
2018
|
%
Change
|
% Weather
Adjusted (p)
|
2019
|
2018
|
%
Change
|
% Weather
Adjusted (p)
|
|
GWh billed
|
|
|
|
|
|
|
|
|
|
Residential
|
7,652
|
7,749
|
(1.3)
|
0.4
|
16,123
|
17,036
|
(5.4)
|
-
|
|
Commercial
|
6,841
|
6,943
|
(1.5)
|
(0.4)
|
13,264
|
13,675
|
(3.0)
|
(0.9)
|
|
Governmental
|
626
|
612
|
2.3
|
2.3
|
1,227
|
1,220
|
0.6
|
0.8
|
|
Industrial
|
11,965
|
12,219
|
(2.1)
|
(2.1)
|
23,648
|
23,624
|
0.1
|
0.1
|
|
Total retail
sales
|
27,084
|
27,523
|
(1.6)
|
(0.9)
|
54,262
|
55,555
|
(2.3)
|
(0.2)
|
|
Wholesale
|
3,170
|
2,566
|
23.5
|
|
6,984
|
5,810
|
20.2
|
|
|
Total sales
|
30,254
|
30,089
|
0.5
|
|
61,246
|
61,365
|
(0.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of electric
retail customers
|
|
|
|
|
|
|
|
|
|
Residential
|
2,489,842
|
2,479,833
|
0.4
|
|
|
|
|
|
|
Commercial
|
358,545
|
356,688
|
0.5
|
|
|
|
|
|
|
Governmental
|
17,906
|
17,966
|
(0.3)
|
|
|
|
|
|
|
Industrial
|
41,416
|
43,212
|
(4.2)
|
|
|
|
|
|
|
Total retail
customers
|
2,907,709
|
2,897,699
|
0.3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-fuel O&M per
MWh
|
$22.79
|
$22.05
|
3.4
|
|
$21.44
|
$21.05
|
1.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On a weather-adjusted basis for second quarter 2019, billed
sales decreased (0.9) percent, including lower industrial and
commercial sales. Industrial billed sales volume decreased (2.1)
percent driven by lower sales to cogeneration customers as well as
existing customers. This was partially offset by continued
growth from new and expansion customers. Residential billed sales
increased 0.4 percent.
Appendix C-2: Utility
Operating Measures
|
Twelve Months Ended
June 30, 2019 vs. 2018
|
|
Twelve Months Ended
June 30
|
|
2019
|
2018
|
%
Change
|
% Weather
Adjusted (p)
|
GWh billed
|
|
|
|
|
Residential
|
36,194
|
35,893
|
0.8
|
0.3
|
Commercial
|
29,015
|
29,096
|
(0.3)
|
(0.4)
|
Governmental
|
2,588
|
2,529
|
2.3
|
1.9
|
Industrial
|
48,408
|
48,067
|
0.7
|
0.7
|
Total retail
sales
|
116,205
|
115,585
|
0.5
|
0.3
|
|
|
|
|
|
Calculations may
differ due to rounding
|
Certain prior year
data has been reclassified to conform with current year
presentation
|
(p)
|
The effects of
weather were estimated using heating degree days and cooling degree
days for the billing cycles from certain locations within each
jurisdiction and comparing to "normal" weather based on 20-year
historical data. The models used to estimate weather are updated
periodically and are subject to change.
|
D: EWC Financial and Operating Measures
Appendix D-1
provides a comparative summary of EWC adjusted EBITDA
(non-GAAP).
Appendix D-1: EWC
Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures
Second Quarter and Year-to-Date 2019 vs. 2018
|
($ in
millions)
|
Second
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Net income
(loss)
|
(25)
|
(56)
|
31
|
72
|
(74)
|
146
|
Add back: interest
expense
|
9
|
8
|
1
|
18
|
17
|
1
|
Add back: income
taxes
|
(9)
|
(30)
|
21
|
57
|
(31)
|
88
|
Add back:
depreciation and amortization
|
38
|
39
|
(1)
|
76
|
77
|
(1)
|
Subtract: interest
and investment income
|
75
|
58
|
17
|
257
|
56
|
201
|
Add back:
decommissioning expense
|
64
|
60
|
4
|
128
|
118
|
10
|
Adjusted EBITDA
(non-GAAP)
|
2
|
(37)
|
39
|
94
|
50
|
44
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
|
Appendix D-2 provides a comparative summary of EWC operating and
financial measures.
Appendix D-2: EWC
Operating and Financial Measures
|
Second Quarter and
Year-to-Date 2019 vs. 2018
|
|
Second
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
% Change
|
2019
|
2018
|
% Change
|
Owned capacity (MW)
(q)
|
3,274
|
3,962
|
(17.4)
|
3,274
|
3,962
|
(17.4)
|
GWh billed
|
7,258
|
7,281
|
(0.3)
|
14,461
|
14,277
|
1.3
|
|
|
|
|
|
|
|
EWC Nuclear
Fleet
|
|
|
|
|
|
|
Capacity
factor
|
92%
|
86%
|
7.0
|
89%
|
85%
|
4.7
|
GWh billed
|
6,703
|
6,713
|
(0.1)
|
13,392
|
13,121
|
2.1
|
Production cost per
MWh
|
$24.82
|
$17.15
|
44.7
|
$21.92
|
$17.93
|
22.3
|
Average
energy/capacity revenue per MWh
|
$37.85
|
$41.82
|
(9.5)
|
$48.55
|
$49.21
|
(1.4)
|
Refueling outage
days
|
|
|
|
|
|
|
Indian Point
2
|
-
|
20
|
|
-
|
33
|
|
Indian Point
3
|
8
|
-
|
|
29
|
-
|
|
Palisades
|
-
|
-
|
|
-
|
-
|
|
Pilgrim
|
-
|
-
|
|
-
|
-
|
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
(q)
|
Second quarter and
year-to-date 2019 exclude Pilgrim (688MW), which was shut down May
31, 2019.
|
See the appendix in the webcast slide presentation for EWC
hedging and price disclosures.
E: Consolidated Financial Measures
Appendix E provides
comparative financial measures. Financial measures in this table
include those calculated and presented in accordance with GAAP, as
well as those that are considered non-GAAP financial measures.
Appendix E: GAAP
and Non-GAAP Financial Measures
|
Second Quarter 2019
vs. 2018 (See Appendix G for reconciliation of GAAP to non-GAAP
financial measures)
|
|
|
For 12 months ending
June 30
|
2019
|
2018
|
Change
|
GAAP
Measures
|
|
|
|
As-reported
ROIC
|
5.5%
|
3.2%
|
2.3%
|
As-reported
ROE
|
10.8%
|
3.6%
|
7.2%
|
|
|
|
|
Non-GAAP
Measures
|
|
|
|
Adjusted
ROIC
|
5.5%
|
5.2%
|
0.3%
|
Adjusted ROE
|
11.0%
|
10.1%
|
0.9%
|
|
|
|
|
As of June 30 ($ in
millions)
|
2019
|
2018
|
Change
|
GAAP
Measures
|
|
|
|
Cash and
cash equivalents
|
636
|
813
|
(177)
|
Revolver
capacity
|
4,120
|
3,885
|
235
|
Commercial
paper
|
1,635
|
1,945
|
(310)
|
Total debt
|
19,054
|
17,881
|
1,173
|
Securitization
debt
|
360
|
483
|
(123)
|
Debt to
capital
|
65.5%
|
68.5%
|
(3.0%)
|
Off-balance sheet
liabilities:
|
|
|
|
Debt of
joint ventures – Entergy's share
|
58
|
64
|
(6)
|
Leases
– Entergy's share (r)
|
-
|
429
|
(429)
|
Power
purchase agreements accounted for as leases (r)
|
-
|
136
|
(136)
|
Total off-balance
sheet liabilities
|
58
|
629
|
(571)
|
|
|
|
|
Non-GAAP Financial
Measures
|
|
|
|
Debt to capital,
excluding securitization debt
|
65.1%
|
67.9%
|
(2.8%)
|
Gross
liquidity
|
4,756
|
4,698
|
58
|
Net debt to net
capital, excluding securitization debt
|
64.3%
|
66.9%
|
(2.6%)
|
Parent debt to total
debt, excluding securitization debt
|
19.4%
|
24.0%
|
(4.6%)
|
FFO to debt, excluding
securitization debt
|
11.8%
|
15.4%
|
(3.6%)
|
FFO to debt, excluding
securitization debt, return of unprotected excess ADIT, and
severance and retention payments associated with exit of
EWC
|
15.8%
|
15.9%
|
(0.1%)
|
|
|
|
|
(r)
|
As of January 1,
2019, Entergy adopted ASC 842, the new lease accounting standard.
As a result, Entergy re-evaluated all agreements and put all
agreements that qualified as operating leases on the balance sheet,
and there are no longer any off-balance sheet liabilities for
leases.
|
F: Definitions and Abbreviations and Acronyms
Appendix
F-1 provides definitions of certain operating measures, as well as
GAAP and non-GAAP financial measures.
Appendix F-1:
Definitions
|
Utility Operating
and Financial Measures
|
GWh billed
|
Total number of GWh
billed to retail and wholesale customers
|
Non-fuel
O&M
|
Operation and
maintenance expenses excluding fuel, fuel-related expenses and gas
purchased for resale and purchased power
|
Non-fuel O&M per
MWh
|
Non-fuel O&M per
MWh of billed sales
|
Number of electric
retail customers
|
Average number of
customers for the quarter
|
|
|
EWC Operating and
Financial Measures
|
Adjusted EBITDA
(non-GAAP)
|
Earnings before
interest, depreciation and amortization and income taxes and
excluding decommissioning expense
|
Average revenue under
contract per kW-month (applies to capacity contracts
only)
|
Revenue on a per unit
basis at which capacity is expected to be sold to third parties,
given existing contract prices and/or auction awards
|
Average revenue per
MWh on contracted volumes
|
Revenue on a per unit
basis at which generation output reflected in contracts is expected
to be sold to third parties (including offsetting positions) at the
minimum contract prices and at forward market prices at a point in
time, given existing contract or option exercise prices based on
expected dispatch or capacity, excluding the revenue associated
with the amortization of the below-market PPA for Palisades.
Revenue will fluctuate due to factors including positive or
negative basis differentials and other risk management
costs
|
Bundled capacity and
energy contracts
|
A contract for the
sale of installed capacity and related energy, priced per MWh
sold
|
Capacity
contracts
|
A contract for the
sale of the installed capacity product in regional markets managed
by NYISO and MISO
|
Capacity
factor
|
Normalized percentage
of the period that the nuclear plants generate power
|
Expected sold and
market total revenue per MWh
|
Total energy and
capacity revenue on a per unit basis at which total planned
generation output and capacity is expected to be sold given
contract terms and market prices at a point in time, including
positive or negative basis differentials and other risk management
costs, divided by total planned MWh of generation, excluding the
revenue associated with the amortization of the Palisades
below-market PPA
|
Firm LD
|
Transaction that
requires receipt or delivery of energy at a specified delivery
point (usually at a market hub not associated with a specific
asset) or settles financially on notional quantities; if a party
fails to deliver or receive energy, defaulting party must
compensate the other party as specified in the contract, a portion
of which may be capped through the use of risk management
products
|
Appendix F-1:
Definitions
|
EWC Operating and
Financial Measures (continued)
|
GWh billed
|
Total number of GWh
billed to customers and financially-settled instruments
|
Owned capacity
(MW)
|
Installed capacity
owned by EWC
|
Percent of capacity
sold forward
|
Percent of planned
qualified capacity sold to mitigate price uncertainty under
physical or financial transactions
|
Percent of planned
generation under contract
|
Percent of planned
generation output sold or purchased forward under contracts,
forward physical contracts, forward financial contracts or options
that mitigate price uncertainty that may or may not require
regulatory approval or approval of transmission rights or other
conditions precedent; positions that are no longer classified as
hedges are netted in the planned generation under
contract
|
Planned net MW in
operation
|
Amount of installed
capacity to generate power and/or sell capacity, assuming intent to
shutdown Indian Point 2 (April 30, 2020), Indian Point 3 (April 30,
2021) and Palisades (May 31, 2022)
|
Planned TWh of
generation
|
Amount of output
expected to be generated by EWC resources considering plant
operating characteristics and outage schedules, assuming intent to
shutdown Indian Point 2 (April 30, 2020), Indian Point 3 (April 30,
2021) and Palisades (May 31, 2022)
|
Production cost per
MWh
|
Fuel and non-fuel
O&M expenses according to accounting standards that directly
relate to the production of electricity per MWh (based on net
generation)
|
Refueling outage
days
|
Number of days lost
for a scheduled refueling and maintenance outage during the
period
|
Unit-contingent
|
Transaction under
which power is supplied from a specific generation asset; if the
asset is in operational outage, seller is generally not liable to
buyer for any damages, unless the contract specifies certain
conditions such as an availability guarantee
|
|
Financial Measures
– GAAP
|
As-reported
ROE
|
12-months rolling net
income attributable to Entergy Corporation divided by average
common equity
|
As-reported
ROIC
|
12-months rolling net
income attributable to Entergy Corporation adjusted for preferred
dividends and tax-effected interest expense divided by average
invested capital
|
Debt of joint
ventures – Entergy's share
|
Entergy's share of
debt issued by business joint ventures at EWC
|
Debt to
capital
|
Total debt divided by
total capitalization
|
Leases – Entergy's
share
|
Operating leases held
by subsidiaries capitalized at implicit interest rate
|
Revolver
capacity
|
Amount of undrawn
capacity remaining on corporate and subsidiary revolvers
|
Securitization
debt
|
Debt associated with
securitization bonds issued to recover storm costs from hurricanes
Rita, Ike and Gustav at E-TX and Hurricane Isaac at E-NO; the 2009
ice storm at E-AR and investment recovery of costs associated with
the cancelled Little Gypsy repowering project at E-LA
|
Total debt
|
Sum of short-term and
long-term debt, notes payable and commercial paper and capital
leases on the balance sheet
|
|
|
Appendix F-1:
Definitions
|
Financial Measures -
Non-GAAP
|
Adjusted
EPS
|
As-reported EPS
excluding adjustments
|
Adjusted
ROE
|
12-months rolling
adjusted net income attributable to Entergy Corporation divided by
average common equity
|
Adjusted
ROIC
|
12-months rolling
adjusted net income attributable to Entergy Corporation adjusted
for preferred dividends and tax-effected interest expense divided
by average invested capital
|
Adjustments
|
Unusual or
non-recurring items or events or other items or events that
management believes do not reflect the ongoing business of Entergy,
such as the results of the EWC segment, significant tax items and
other items such as certain costs, expenses, or other specified
items
|
Debt to capital,
excluding securitization debt
|
Total debt divided by
total capitalization, excluding securitization debt
|
FFO
|
OCF less
AFUDC-borrowed funds, working capital items in OCF (receivables,
fuel inventory, accounts payable, prepaid taxes and taxes accrued,
interest accrued and other working capital accounts) and
securitization regulatory charges
|
FFO to debt,
excluding securitization debt
|
12-months rolling
adjusted FFO as a percentage of end of period total debt excluding
securitization debt
|
FFO to debt,
excluding securitization debt, return of unprotected excess ADIT,
and severance and retention payments associated with exit of
EWC
|
12-months rolling
adjusted FFO as a percentage of end of period total debt excluding
securitization debt, return of unprotected excess ADIT, and
severance and retention payments associated with exit of
EWC
|
Gross
liquidity
|
Sum of cash and
revolver capacity
|
Net debt to net
capital, excluding securitization debt
|
Total debt less cash
and cash equivalents divided by total capitalization less cash and
cash equivalents, excluding securitization debt
|
Parent debt to total
debt, excluding securitization debt
|
End of period Entergy
Corporation debt, including amounts drawn on credit revolver and
commercial paper facilities, as a percent of consolidated total
debt, excluding securitization debt
|
|
|
Appendix F-2 explains abbreviations and acronyms used in the
quarterly earnings materials.
Appendix F-2:
Abbreviations and Acronyms
|
ADIT
|
Accumulated deferred
income taxes
|
ISO
|
Independent system
operator
|
AFUDC – borrowed
funds
|
Allowance for
borrowed funds used during construction
|
LPSC
|
Louisiana Public
Service Commission
|
AFUDC – equity
funds
|
Allowance for equity
funds used during construction
|
LTM
|
Last twelve
months
|
AMI
|
Advanced metering
infrastructure
|
LTSA
|
Long-term service
agreement
|
ANO
|
Units 1 and 2 of
Arkansas Nuclear One owned by E-AR (nuclear)
|
MISO
|
Midcontinent
Independent System Operator, Inc.
|
APSC
|
Arkansas Public
Service Commission
|
Moody's
|
Moody's Investor
Service
|
ARO
|
Asset retirement
obligation
|
MPSC
|
Mississippi Public
Service Commission
|
bps
|
Basis
points
|
MTEP
|
MISO Transmission
Expansion Planning
|
CCGT
|
Combined cycle gas
turbine
|
Nelson 6
|
Unit 6 of Roy S.
Nelson plant (coal)
|
CCN
|
Certificate of
convenience & necessity
|
NEPOOL
|
New England Power
Pool
|
CCNO
|
Council of the City
of New Orleans, Louisiana
|
Ninemile 6
|
Ninemile Point Unit 6
(CCGT)
|
COD
|
Commercial operation
date
|
Non-fuel
O&M
|
Non-fuel operation
and maintenance expense
|
CT
|
Simple cycle
combustion turbine
|
NDT
|
Nuclear
decommissioning trust
|
CWIP
|
Construction work in
progress
|
NRC
|
Nuclear Regulatory
Commission
|
DCRF
|
Distribution cost
recovery factor
|
NYISO
|
New York Independent
System Operator, Inc.
|
E-AR
|
Entergy Arkansas,
LLC
|
NYPA
|
New York Power
Authority
|
E-LA
|
Entergy Louisiana,
LLC
|
NYSE
|
New York Stock
Exchange
|
E-MS
|
Entergy Mississippi,
LLC
|
O&M
|
Operation and
maintenance expense
|
E-NO
|
Entergy New Orleans,
LLC
|
OCF
|
Net cash flow
provided by operating activities
|
E-TX
|
Entergy Texas,
Inc.
|
OpCo
|
Operating
Company
|
EBITDA
|
Earnings before
interest, income taxes, depreciation and amortization
|
OPEB
|
Other post-employment
benefits
|
ENGC
|
Entergy Nuclear
Generation Company
|
P&O
|
Parent &
Other
|
ENP
|
Entergy Nuclear
Palisades, LLC
|
Palisades
|
Palisades Power Plant
(nuclear)
|
EPS
|
Earnings per
share
|
Pilgrim
|
Pilgrim Nuclear Power
Station (nuclear)
|
ETR
|
Entergy
Corporation
|
PPA
|
Power purchase
agreement or purchased power agreement
|
EWC
|
Entergy Wholesale
Commodities
|
PUCT
|
Public Utility
Commission of Texas
|
FERC
|
Federal Energy
Regulatory Commission
|
RICE
|
Reciprocating
Internal Combustion Engine
|
FFO
|
Funds from
operations
|
RFP
|
Request for
proposals
|
FRP
|
Formula rate
plan
|
ROE
|
Return on
equity
|
GAAP
|
U.S. generally
accepted accounting principles
|
ROIC
|
Return on invested
capital
|
Grand Gulf or
GGNS
|
Unit 1 of Grand Gulf
Nuclear Station (nuclear), 90% owned or leased by SERI
|
RS Cogen
|
RS Cogen facility
(CCGT cogeneration)
|
Indian Point
1
|
Indian Point Energy
Center Unit 1 (nuclear) (shut down in 1974)
|
RSP
|
Rate Stabilization
Plan (E-LA Gas)
|
Indian Point 2 or
IP2
|
Indian Point Energy
Center Unit 2 (nuclear)
|
S&P
|
Standard &
Poor's
|
Indian Point 3 or
IP3
|
Indian Point Energy
Center Unit 3 (nuclear)
|
SCPS
|
St. Charles Power
Station (CCGT)
|
IPEC
|
Indian Point Energy
Center (nuclear)
|
SEC
|
U.S. Securities and
Exchange Commission
|
ISES 2
|
Unit 2 of
Independence Steam Electric Station (coal)
|
SERI
|
System Energy
Resources, Inc.
|
IRS
|
Internal Revenue
Service
|
TCRF
|
Transmission cost
recovery factor
|
|
|
Union
|
Union Power Station
(CCGT)
|
|
|
UPSA
|
Unit Power Sales
Agreement
|
|
|
Vermont
Yankee
|
Vermont Yankee
Nuclear Power Station (nuclear, sold January 11, 2019)
|
|
|
WACC
|
Weighted-average cost
of capital
|
G: GAAP to Non-GAAP Reconciliations
Appendix G-1 and
Appendix G-2 provide reconciliations of various non-GAAP financial
measures disclosed in this release to their most comparable GAAP
measure.
Appendix G-1:
Reconciliation of GAAP to Non-GAAP Financial Measures - ROIC,
ROE
|
($ in millions except
where noted)
|
|
Second
Quarter
|
|
|
2019
|
2018
|
As-reported net
income (loss) attributable to Entergy Corporation, rolling 12
months
|
(A)
|
961
|
297
|
Preferred
dividends
|
|
15
|
14
|
Tax effected interest
expense
|
|
543
|
510
|
As-reported net
income (loss) attributable to Entergy Corporation, rolling 12
months adjusted for preferred dividends and tax effected interest
expense
|
(B)
|
1,519
|
821
|
|
|
|
|
Adjustments in prior
quarters
|
|
8
|
(517)
|
Adjustments
|
|
(26)
|
(14)
|
Total
adjustments
|
(C)
|
(18)
|
(531)
|
EWC preferred
dividends and tax-effected interest expense, rolling
12 months
|
|
30
|
24
|
|
|
|
|
Total adjustments,
including preferred dividends and tax effected interest expense
(non-GAAP)
|
(D)
|
12
|
(507)
|
|
|
|
|
Adjusted earnings,
rolling 12 months (non-GAAP)
|
(A-C)
|
979
|
828
|
Adjusted earnings,
rolling 12 months including preferred dividends and tax- effected
interest expense (non-GAAP)
|
(B-D)
|
1,507
|
1,328
|
|
|
|
|
Average invested
capital
|
(E)
|
27,586
|
25,480
|
|
|
|
|
Average common
equity
|
(F)
|
8,910
|
8,197
|
|
|
|
|
As-reported
ROIC
|
(B/E)
|
5.5%
|
3.2%
|
Adjusted ROIC
(non-GAAP)
|
[(B-D)/E]
|
5.5%
|
5.2%
|
As-reported
ROE
|
(A/F)
|
10.8%
|
3.6%
|
Adjusted ROE
(non-GAAP)
|
[(A-C)/F]
|
11.0%
|
10.1%
|
|
|
|
|
Calculations may
differ due to rounding
|
|
Appendix G-2:
Reconciliation of GAAP to Non-GAAP Financial Measures – Debt Ratios
excluding Securitization Debt; Gross Liquidity; FFO to Debt,
excluding Securitization Debt; FFO to Debt, excluding
Securitization Debt, Return of Unprotected Excess ADIT, and
Severance and Retention Payments Associated with Exit of
EWC
|
($ in millions except
where noted)
|
|
Second
Quarter
|
|
|
2019
|
2018
|
Total debt
|
(A)
|
19,054
|
17,881
|
Less securitization
debt
|
(B)
|
360
|
483
|
Total debt, excluding
securitization debt
|
(C)
|
18,694
|
17,398
|
Less cash and cash
equivalents
|
(D)
|
636
|
813
|
Net debt, excluding
securitization debt
|
(E)
|
18,058
|
16,585
|
|
|
|
|
Total
capitalization
|
(F)
|
29,071
|
26,102
|
Less securitization
debt
|
(B)
|
360
|
483
|
Total capitalization,
excluding securitization debt
|
(G)
|
28,711
|
25,619
|
Less cash and cash
equivalents
|
(D)
|
636
|
813
|
Net capital,
excluding securitization debt
|
(H)
|
28,075
|
24,806
|
|
|
|
|
Debt to
capital
|
(A/F)
|
65.5%
|
68.5%
|
Debt to capital,
excluding securitization debt (non-GAAP)
|
(C/G)
|
65.1%
|
67.9%
|
Net debt to net
capital, excluding securitization debt (non-GAAP)
|
(E/H)
|
64.3%
|
66.9%
|
|
|
|
|
Revolver
capacity
|
(I)
|
4,120
|
3,885
|
|
|
|
|
Gross liquidity
(non-GAAP)
|
(D+I)
|
4,756
|
4,698
|
|
|
|
|
Entergy Corporation
notes:
|
|
|
|
Due September
2020
|
|
450
|
450
|
Due July
2022
|
|
650
|
650
|
Due September
2026
|
|
750
|
750
|
Total parent long-term
debt
|
(J)
|
1,850
|
1,850
|
Revolver
draw
|
(K)
|
150
|
390
|
Commercial
paper
|
(L)
|
1,635
|
1,945
|
Unamortized debt
issuance and discounts
|
(M)
|
(9)
|
(11)
|
Total parent
debt
|
(J+K+L+M)
|
3,626
|
4,174
|
|
|
|
|
Parent debt to total
debt, excluding securitization debt (non-GAAP)
|
[(J+K+L+M)/C]
|
19.4%
|
24.0%
|
|
|
|
|
Appendix G-2:
Reconciliation of GAAP to Non-GAAP Financial Measures – Debt Ratios
excluding Securitization Debt; Gross Liquidity; FFO to Debt,
excluding Securitization Debt; FFO to Debt, excluding
Securitization Debt, Return of Unprotected Excess ADIT, and
Severance and Retention Payments Associated with Exit of EWC
(continued)
|
($ in millions except
where noted)
|
|
Second
Quarter
|
|
|
2019
|
2018
|
Total debt
|
(A)
|
19,054
|
17,881
|
Less securitization
debt
|
(B)
|
360
|
483
|
Total debt, excluding
securitization debt
|
(C)
|
18,694
|
17,398
|
|
|
|
|
Net cash flow
provided by operating activities, rolling 12 months
|
(D)
|
2,358
|
2,884
|
|
|
|
|
AFUDC – borrowed
funds, rolling 12 months
|
(E)
|
(67)
|
(53)
|
|
|
|
|
Working capital items
in net cash flow provided by operating activities (rolling 12
months):
|
|
|
|
Receivables
|
|
17
|
(149)
|
Fuel
inventory
|
|
24
|
(1)
|
Accounts
payable
|
|
(19)
|
190
|
Taxes
accrued
|
|
9
|
28
|
Interest
accrued
|
|
7
|
3
|
Other working capital
accounts
|
|
(81)
|
(48)
|
Securitization
regulatory charges
|
|
121
|
123
|
Total
|
(F)
|
78
|
146
|
|
|
|
|
FFO, rolling 12
months (non-GAAP)
|
(G)=(D+E-F)
|
2,213
|
2,685
|
|
|
|
|
FFO to debt,
excluding securitization debt (non-GAAP)
|
(G/C)
|
11.8%
|
15.4%
|
|
|
|
|
Estimated return of
unprotected excess ADIT (rolling 12 months pre-tax)
|
(H)
|
651
|
76
|
Severance and
retention payments associated with exit of EWC (rolling 12 months
pre-tax)
|
(I)
|
97
|
-
|
|
|
|
|
FFO to debt,
excluding securitization debt, return of unprotected excess ADIT,
and severance and retention payments associated with exit of EWC
(non-GAAP)
|
[(G+H+I)/(C)]
|
15.8%
|
15.9%
|
|
|
|
|
Calculations may
differ due to rounding
|
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SOURCE Entergy Corporation