NEW ORLEANS, Oct. 30, 2019 /PRNewswire/ -- Entergy Corporation
(NYSE: ETR) reported third quarter 2019 earnings per share of
$1.82 on an as-reported basis and
$2.52 on an adjusted basis
(non-GAAP).
"With another successful quarter, we are increasing the midpoint
of our 2019 guidance and narrowing the range," said Entergy
Chairman and Chief Executive Officer Leo
Denault. "The fundamentals supporting our steady,
predictable growth are strong and give us confidence in our
financial outlooks."
Business highlights included the following:
- Entergy updated its 2019 adjusted EPS guidance range to
$5.25 to $5.45, raising the midpoint 5 cents and narrowing the range.
- The MPSC approved Entergy Mississippi's acquisition of the
Choctaw Generating Station.
- Entergy completed the sale of Pilgrim Nuclear Power
Station.
- Construction began on Capital Region Solar, a 50 MW solar
project, from which Entergy Louisiana will purchase the
output.
- Entergy was named as one of the nation's top utilities in
economic development by Site Selection magazine for the
12th consecutive year.
- Entergy was named to the 2019 Dow Jones Sustainability North
America Index and received perfect scores in five areas, including
climate strategy; this is the 18th consecutive year Entergy has
appeared on the World or North America Index or both.
|
Consolidated Earnings
(GAAP and Non-GAAP Measures)
|
Third Quarter and
Year-to-Date 2019 vs. 2018 (See Appendix A for reconciliation of
GAAP to non-GAAP measures and description of
adjustments)
|
|
Third
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
(After-tax, $ in
millions)
|
|
|
|
|
|
|
As-reported
earnings
|
365
|
536
|
(171)
|
856
|
915
|
(58)
|
Less
adjustments
|
(141)
|
105
|
(246)
|
(70)
|
73
|
(143)
|
Adjusted earnings
(non-GAAP)
|
506
|
431
|
75
|
927
|
842
|
85
|
Estimated
weather in billed sales
|
13
|
5
|
7
|
1
|
42
|
(41)
|
|
|
|
|
|
|
|
(After-tax, per share
in $)
|
|
|
|
|
|
|
As-reported
earnings
|
1.82
|
2.92
|
(1.10)
|
4.38
|
5.01
|
(0.63)
|
Less
adjustments
|
(0.70)
|
0.57
|
(1.27)
|
(0.36)
|
0.39
|
(0.75)
|
Adjusted earnings
(non-GAAP)
|
2.52
|
2.35
|
0.17
|
4.74
|
4.62
|
0.12
|
Estimated
weather in billed sales
|
0.06
|
0.03
|
0.03
|
0.01
|
0.23
|
(0.22)
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
Consolidated Results
For third quarter 2019, the company reported earnings of
$365 million, or $1.82 per share, on an as-reported basis and
earnings of $506 million, or
$2.52 per share, on an adjusted
basis. This compared to third quarter 2018 earnings of $536 million, or $2.92 per share, on an as-reported basis and
earnings of $431 million, or
$2.35 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 an analysis of quarterly and year-to-date variances by
business is provided in Appendix B.
Business Segment Results
Utility
For third quarter 2019, the Utility business reported earnings
attributable to Entergy Corporation of $578 million, or
$2.88 per share, on both an
as-reported and an adjusted basis. This compared to third quarter
2018 earnings of $505 million, or
$2.75 per share, on both an
as-reported and an adjusted basis. Drivers for the quarter
included:
- rate activity at Entergy Arkansas, Entergy Louisiana, Entergy
Mississippi, and Entergy Texas;
- higher sales volume, primarily in the unbilled period;
- third quarter 2018 regulatory charges to return benefits of the
lower federal tax rate to customers; and
- lower nuclear generation O&M.
These drivers were partially offset by:
- higher depreciation expense;
- higher spending on information technology, loss reserves,
initiatives to explore new customer products and services, as well
as distribution operations; and
- lower other income largely due to lower gains on
decommissioning trust funds.
On a per share basis, 2019 results reflected higher common
shares outstanding.
Appendix C contains additional details on Utility financial and
operating measures.
Parent & Other
For third quarter 2019, Parent & Other reported a
loss attributable to Entergy Corporation of $(72 million), or (36)
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 third
quarter 2018.
Entergy Wholesale Commodities
For third quarter 2019, EWC reported a loss attributable to
Entergy Corporation of $(141
million), or (70) cents per
share on an as-reported basis. This compared to third quarter 2018
earnings attributable to Entergy Corporation of $105 million, or 57
cents per share, on an as-reported basis. Drivers for the
quarter included:
- tax items recorded in third quarter 2018;
- lower revenue due to the shutdown of Pilgrim and lower capacity
pricing;
- lower gains on decommissioning trust funds;
- higher asset write-offs, impairments and related charges as
compared to a year ago; and
- higher refueling outage expenses at Palisades.
These drivers were partially offset by lower spending on nuclear
operations. On a per share basis, 2019 results reflected higher
common shares outstanding.
Appendix D contains additional details on EWC financial and
operating measures, including reconciliation for non-GAAP EWC
adjusted EBITDA.
Earnings per Share Guidance
Entergy updated its 2019 adjusted EPS guidance range to
$5.25 to $5.45 per share from $5.15 to $5.45 per
share, raising the midpoint 5 cents
and narrowing the range.
See webcast presentation slides for additional details.
The company has provided 2019 earnings guidance 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 to guidance 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 (70) cents in 2019, excluding the impact of a
potential tax item. These estimates are subject to substantial
uncertainty due to, among other things, the potential effects of
exiting the EWC business.
Earnings Teleconference
A teleconference will be held at 10:00
a.m. Central Time on Wednesday, October 30, 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 8727128, 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 November 6,
2019, by dialing 855-859-2056, conference ID 8727128.
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 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
$11 billion and approximately 13,500
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) excludes 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.
Third 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: Other 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
Third Quarter and
Year-to-Date 2019 vs. 2018 (See Appendix A-3 and Appendix A-4 for
details on adjustments)
|
|
Third
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
(After-tax, $ in
millions)
|
|
|
|
|
|
|
Earnings
(loss)
|
|
|
|
|
|
|
Utility
|
578
|
505
|
73
|
1,140
|
1,095
|
45
|
Parent &
Other
|
(72)
|
(73)
|
1
|
(213)
|
(211)
|
(3)
|
EWC
|
(141)
|
105
|
(246)
|
(70)
|
30
|
(100)
|
Consolidated
|
365
|
536
|
(171)
|
856
|
915
|
(58)
|
|
|
|
|
|
|
|
Less
adjustments
|
|
|
|
|
|
|
Utility
|
-
|
-
|
-
|
-
|
43
|
(43)
|
Parent &
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
EWC
|
(141)
|
105
|
(246)
|
(70)
|
30
|
(100)
|
Consolidated
|
(141)
|
105
|
(246)
|
(70)
|
73
|
(143)
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) (non-GAAP)
|
|
|
|
|
|
|
Utility
|
578
|
505
|
73
|
1,140
|
1,052
|
88
|
Parent &
Other
|
(72)
|
(73)
|
1
|
(213)
|
(211)
|
(3)
|
EWC
|
-
|
-
|
-
|
-
|
-
|
-
|
Consolidated
|
506
|
431
|
75
|
927
|
842
|
85
|
Estimated weather
in billed sales
|
13
|
5
|
7
|
1
|
42
|
(41)
|
|
|
|
|
|
|
|
Diluted average
number of common shares outstanding (in millions)
|
200
|
184
|
|
196
|
183
|
|
|
|
|
|
|
|
|
(After-tax, per share
in $) (a)
|
|
|
|
|
|
|
Earnings
(loss)
|
|
|
|
|
|
|
Utility
|
2.88
|
2.75
|
0.13
|
5.83
|
6.00
|
(0.17)
|
Parent &
Other
|
(0.36)
|
(0.40)
|
0.04
|
(1.09)
|
(1.15)
|
0.06
|
EWC
|
(0.70)
|
0.57
|
(1.27)
|
(0.36)
|
0.16
|
(0.52)
|
Consolidated
|
1.82
|
2.92
|
(1.10)
|
4.38
|
5.01
|
(0.63)
|
|
|
|
|
|
|
|
Less
adjustments
|
|
|
|
|
|
|
Utility
|
-
|
-
|
-
|
-
|
0.23
|
(0.23)
|
Parent &
Other
|
-
|
-
|
-
|
-
|
-
|
-
|
EWC
|
(0.70)
|
0.57
|
(1.27)
|
(0.36)
|
0.16
|
(0.52)
|
Consolidated
|
(0.70)
|
0.57
|
(1.27)
|
(0.36)
|
0.39
|
(0.75)
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) (non-GAAP)
|
|
|
|
|
|
|
Utility
|
2.88
|
2.75
|
0.13
|
5.83
|
5.77
|
0.06
|
Parent &
Other
|
(0.36)
|
(0.40)
|
0.04
|
(1.09)
|
(1.15)
|
0.06
|
EWC
|
-
|
-
|
-
|
-
|
-
|
-
|
Consolidated
|
2.52
|
2.35
|
0.17
|
4.74
|
4.62
|
0.12
|
Estimated weather
in billed sales
|
0.06
|
0.03
|
0.03
|
0.01
|
0.23
|
(0.22)
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
(a)
|
Per share amounts are
calculated by dividing the corresponding earnings (loss) by the
diluted average number of common shares outstanding for the
period.
|
See Appendix B for detailed earnings variance analysis. See
Appendix A-3 for adjustments by driver.
Appendix A-2 provides a comparative summary of OCF, by
business.
Appendix A-2:
Consolidated Operating Cash Flow
|
Third Quarter and
Year-to-Date 2019 vs. 2018
|
($ in
millions)
|
|
Third
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Utility
|
1,143
|
845
|
298
|
2,297
|
1,994
|
303
|
Parent &
Other
|
(93)
|
(99)
|
6
|
(216)
|
(214)
|
(2)
|
EWC
|
15
|
33
|
(18)
|
37
|
79
|
(42)
|
Consolidated
|
1,065
|
780
|
286
|
2,118
|
1,860
|
259
|
|
|
|
|
|
|
|
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
pension contributions, and lower asset retirement obligation
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)
|
Third Quarter and
Year-to-Date 2019 vs. 2018
|
(Pre-tax except for
Income taxes, Preferred dividend requirements of subsidiaries,
and Total, $ in millions)
|
|
Third
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
|
|
|
|
|
|
|
(Pre-tax except for
income taxes, preferred dividend requirements of subsidiaries, and
totals, $ in millions)
|
|
|
|
|
|
|
Utility
|
|
|
|
|
|
|
2012 / 2013 IRS
settlement
|
-
|
-
|
-
|
-
|
43
|
(43)
|
Total Utility
|
-
|
-
|
-
|
-
|
43
|
(43)
|
EWC
|
|
|
|
|
|
|
Income before income
taxes
|
(171)
|
(30)
|
(141)
|
(43)
|
(135)
|
93
|
Income
taxes
|
31
|
136
|
(105)
|
(26)
|
167
|
(193)
|
Preferred dividend
requirements of subsidiaries
|
(1)
|
(1)
|
-
|
(2)
|
(2)
|
-
|
Total EWC
|
(141)
|
105
|
(246)
|
(70)
|
30
|
(100)
|
|
|
|
|
|
|
|
Total
adjustments
|
(141)
|
105
|
(246)
|
(70)
|
73
|
(143)
|
|
|
|
|
|
|
|
(After-tax, per share
in $) (b)
|
|
|
|
|
|
|
Utility
|
|
|
|
|
|
|
2012 / 2013 IRS
settlement
|
-
|
-
|
-
|
-
|
0.23
|
(0.23)
|
Total Utility
|
-
|
-
|
-
|
-
|
0.23
|
(0.23)
|
EWC
|
|
|
|
|
|
|
Total EWC
|
(0.70)
|
0.57
|
(1.27)
|
(0.36)
|
0.16
|
(0.52)
|
|
|
|
|
|
|
|
Total
adjustments
|
(0.70)
|
0.57
|
(1.27)
|
(0.36)
|
0.39
|
(0.75)
|
|
|
|
|
|
|
|
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)
|
Third Quarter and
Year-to-Date 2019 vs. 2018
|
(Pre-tax except for
Income taxes, Preferred dividend, and totals, $ in
millions)
|
|
Third
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Utility
|
|
|
|
|
|
|
Income
taxes
|
-
|
-
|
-
|
-
|
43
|
(43)
|
Total
Utility
|
-
|
-
|
-
|
-
|
43
|
(43)
|
EWC
|
|
|
|
|
|
|
Operating
revenues
|
300
|
380
|
(80)
|
1,024
|
1,108
|
(84)
|
Fuel and fuel-related
expenses
|
(26)
|
(19)
|
(6)
|
(76)
|
(58)
|
(19)
|
Purchased
power
|
(18)
|
(20)
|
2
|
(49)
|
(54)
|
6
|
Nuclear refueling
outage expense
|
(12)
|
-
|
(12)
|
(36)
|
(3)
|
(33)
|
Other
O&M
|
(136)
|
(209)
|
73
|
(513)
|
(600)
|
87
|
Asset write-off and
impairments
|
(198)
|
(155)
|
(43)
|
(289)
|
(297)
|
9
|
Decommissioning
expense
|
(60)
|
(56)
|
(4)
|
(187)
|
(175)
|
(13)
|
Taxes other than
income taxes
|
(13)
|
(19)
|
6
|
(46)
|
(58)
|
12
|
Depreciation/amortization exp.
|
(38)
|
(40)
|
2
|
(114)
|
(116)
|
3
|
Other income
(deductions)–other
|
34
|
116
|
(82)
|
266
|
143
|
124
|
Interest exp. and
other charges
|
(6)
|
(9)
|
3
|
(24)
|
(25)
|
1
|
Income
taxes
|
31
|
136
|
(105)
|
(26)
|
167
|
(193)
|
Preferred
dividend
|
(1)
|
(1)
|
-
|
(2)
|
(2)
|
-
|
Total
EWC
|
(141)
|
105
|
(246)
|
(70)
|
30
|
(100)
|
|
|
|
|
|
|
|
Total
adjustments
|
(141)
|
105
|
(246)
|
(70)
|
73
|
(143)
|
|
|
|
|
|
|
|
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-1:
As-Reported and Adjusted Earnings Variance Analysis (c),
(d)
|
Third 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
|
2.75
|
2.75
|
|
(0.40)
|
(0.40)
|
|
0.57
|
|
2.92
|
2.35
|
Operating revenue
less:
Fuel,
fuel-related expenses and gas
purchased for resale, Purchased
power, and Regulatory charges
(credits)
|
0.91
|
0.91
|
(e)
|
-
|
-
|
|
(0.36)
|
(f)
|
0.55
|
0.91
|
Nuclear refueling
outage expense
|
(0.01)
|
(0.01)
|
|
-
|
-
|
|
(0.05)
|
(g)
|
(0.06)
|
(0.01)
|
Other
O&M
|
(0.11)
|
(0.11)
|
(h)
|
-
|
-
|
|
0.31
|
(i)
|
0.20
|
(0.11)
|
Asset write-offs and
impairments
|
-
|
-
|
|
-
|
-
|
|
(0.18)
|
(j)
|
(0.18)
|
-
|
Decommissioning
expense
|
(0.02)
|
(0.02)
|
|
-
|
-
|
|
(0.02)
|
|
(0.04)
|
(0.02)
|
Taxes other than
income taxes
|
(0.04)
|
(0.04)
|
|
-
|
-
|
|
0.03
|
|
(0.01)
|
(0.04)
|
Depreciation/amortization exp.
|
(0.23)
|
(0.23)
|
(k)
|
-
|
-
|
|
0.01
|
|
(0.22)
|
(0.23)
|
Other income
(deductions)–other
|
(0.08)
|
(0.08)
|
(l)
|
-
|
-
|
|
(0.35)
|
(m)
|
(0.43)
|
(0.08)
|
Interest exp. and
other charges
|
(0.04)
|
(0.04)
|
|
-
|
-
|
|
0.01
|
|
(0.03)
|
(0.04)
|
Income
taxes–other
|
0.01
|
0.01
|
|
0.01
|
0.01
|
|
(0.73)
|
(n)
|
(0.71)
|
0.02
|
Share
effect
|
(0.26)
|
(0.26)
|
(o)
|
0.03
|
0.03
|
|
0.06
|
(o)
|
(0.17)
|
(0.23)
|
2019
earnings
|
2.88
|
2.88
|
|
(0.36)
|
(0.36)
|
|
(0.70)
|
|
1.82
|
2.52
|
|
|
|
|
|
|
|
|
|
|
|
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
|
6.00
|
5.77
|
|
(1.15)
|
(1.15)
|
|
0.16
|
|
5.01
|
4.62
|
Operating revenue
less:
Fuel,
fuel-related expenses and gas
purchased for resale, Purchased
power, and Regulatory charges
(credits)
|
1.16
|
1.16
|
(e)
|
-
|
-
|
|
(0.42)
|
(f)
|
0.74
|
1.16
|
Nuclear refueling
outage expense
|
(0.02)
|
(0.02)
|
|
-
|
-
|
|
(0.14)
|
(g)
|
(0.16)
|
(0.02)
|
Other
O&M
|
(0.19)
|
(0.19)
|
(h)
|
0.01
|
0.01
|
|
0.38
|
(i)
|
0.20
|
(0.18)
|
Asset write-offs and
impairments
|
-
|
-
|
|
-
|
-
|
|
0.04
|
|
0.04
|
-
|
Decommissioning
expense
|
(0.04)
|
(0.04)
|
|
-
|
-
|
|
(0.05)
|
(p)
|
(0.09)
|
(0.04)
|
Taxes other than
income taxes
|
(0.06)
|
(0.06)
|
(q)
|
-
|
-
|
|
0.05
|
(r)
|
(0.01)
|
(0.06)
|
Depreciation/amortization exp.
|
(0.32)
|
(0.32)
|
(k)
|
-
|
-
|
|
0.01
|
|
(0.31)
|
(0.32)
|
Other income
(deductions)–other
|
0.01
|
0.01
|
|
(0.02)
|
(0.02)
|
|
0.53
|
(m)
|
0.52
|
(0.01)
|
Interest exp. and
other charges
|
(0.09)
|
(0.09)
|
(s)
|
(0.03)
|
(0.03)
|
|
0.01
|
|
(0.11)
|
(0.12)
|
Income
taxes–other
|
(0.20)
|
0.03
|
(t)
|
0.02
|
0.02
|
|
(0.95)
|
(n)
|
(1.13)
|
0.05
|
Preferred dividend
requirements
|
(0.01)
|
(0.01)
|
|
-
|
-
|
|
-
|
|
(0.01)
|
(0.01)
|
Share
effect
|
(0.41)
|
(0.41)
|
(o)
|
0.08
|
0.08
|
(o)
|
0.02
|
|
(0.31)
|
(0.33)
|
2019
earnings
|
5.83
|
5.83
|
|
(1.09)
|
(1.09)
|
|
(0.36)
|
|
4.38
|
4.74
|
|
|
|
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
(c)
|
Utility revenue,
Utility other O&M and Utility income taxes
exclude $93 million, $3 million, and $96 million respectively in
third quarter 2019 and $277 million, $6 million, and $283 million
respectively in third 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, Utility other
O&M and Utility income taxes exclude $216 million, $3
million, and $219 million respectively in 2019 and $555 million, $6
million, and $561 million respectively in 2018 (net effect is
neutral to earnings).
|
(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 third quarter and
year-to-date earnings increases were primarily driven by rate
activity from E-AR's FRP, E-LA's FRP, including recovery of the St.
Charles Power Station, E-LA's AMI rider, E-TX's base rate case, and
E-MS's FRP. In addition, in the third quarter and year-to-date
2018, E-LA recorded regulatory charges to return the benefits of
the lower effective federal tax rate to customers. Also
contributing was the net effect of volume/weather primarily
due to higher volume in the unbilled period, net of lower billed
sales volume.
|
(f)
|
The third quarter and
year-to-date earnings decreases were due largely to lower revenues
from the shutdown of Pilgrim in May 2019, lower capacity prices,
and impacts on fuel expense from EWC plant impairments, partially
offset by higher nuclear energy volume.
|
(g)
|
The third quarter and
year-to-date earnings decreases from higher EWC nuclear
refueling outage expense is due primarily to increased outage
amortization at Palisades due to the plant no longer being
impaired.
|
(h)
|
The third quarter and
year-to-date earnings decreases from higher Utility other
O&M reflected higher spending on information technology,
loss reserves, initiatives to explore new customer products and
services, and distribution operations. These were partially offset
by lower spending on nuclear operations. The year-to-date variance
also reflected lower energy efficiency costs (largely offset in
operating revenue and/or regulatory charges
(credits)).
|
(i)
|
The third quarter and
year-to-date earnings increases from lower EWC other O&M
is due largely to a decrease in severance and retention expense, as
well as the Pilgrim plant shutdown in May 2019.
|
(j)
|
The third quarter
earnings decrease from higher EWC asset write-offs and
impairments was due to a $191 million loss (pre-tax) on the
sale of Pilgrim in third quarter 2019, compared to $155 million
(pre-tax) of impairment charges in third quarter 2018 primarily due
to an upward revision of Pilgrim's ARO and a write-off of materials
and supplies at Pilgrim.
|
(k)
|
The third 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, as well as the third
quarter 2018 depreciation adjustment related to Grand Gulf,
partially offset by the ongoing effect of Grand Gulf's lower
depreciation rate (variances from Grand Gulf are largely offset in
operating revenue).
|
(l)
|
The third quarter
earnings decrease from lower Utility other income
(deductions)–other was due largely to differences in
decommissioning trust fund returns.
|
(m)
|
The third quarter
earnings decrease from lower EWC other income
(deductions)–other was due largely to lower gains on the
decommissioning trust fund investments in 2019 as compared to 2018,
as well as a $16 million pension settlement charge in third quarter
2019 related to the exit of the EWC business. The year-to-date
earnings increase from higher EWC other income
(deductions)–other was due largely to higher gains on the
decommissioning trust fund investments in 2019 as compared to 2018.
These gains were partially offset by the pension settlement charge
mentioned above.
|
(n)
|
The third quarter and
year-to-date earnings decreases from higher EWC income taxes
were due primarily to two tax items in third quarter 2018.
First, a restructuring of an interest in an EWC decommissioning
trust fund resulted in a reduction in income tax expense of $107
million. Second, the conclusion of a state income tax audit
resulted in a benefit of $23 million. 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 and
$13 million in tax benefits from the settlement of the 2012 / 2013
IRS audit in second quarter 2018.
|
(o)
|
The third 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).
|
(p)
|
The year-to-date
earnings decrease from higher EWC decommissioning expense
was due to the acceleration of the ARO accretion for Indian Point
and Palisades, as those plants move closer to their projected
decommissioning dates.
|
(q)
|
The year-to date
earnings decrease from higher Utility taxes other than income
taxes was primarily higher ad valorem at E-AR, E-LA, and
E-MS.
|
(r)
|
The year-to-date
earnings increase from lower EWC taxes other than income
taxes was primarily due to a true-up as well as lower ad
valorem taxes due to a lower assessment at Palisades.
|
(s)
|
The year-to-date
earnings decrease from higher Utility interest expense and other
charges was largely due to higher debt balances at E-AR and
E-LA.
|
(t)
|
The year-to-date
as-reported earnings decrease from higher Utility income
taxes was primarily due to the settlement of the 2012 / 2013
IRS audit totaling $43 million in second quarter 2018.
|
Utility
as-reported operating revenue less fuel, fuel-
related expenses and gas purchased for resale;
purchased power; and regulatory charges (credits)
variance analysis
2019 vs. 2018 ($
EPS)
|
|
3Q
|
YTD
|
Volume/weather
|
0.20
|
(0.13)
|
Retail electric
price
|
0.52
|
0.85
|
Reg. charges for
lower tax rate
|
0.07
|
0.31
|
Other, including
Grand Gulf recovery
|
0.12
|
0.13
|
Total
|
0.91
|
1.16
|
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
|
Third Quarter and
Year-to-Date 2019 vs. 2018
|
|
Third
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
%
Change
|
% Weather
Adjusted (u)
|
2019
|
2018
|
%
Change
|
% Weather
Adjusted (u)
|
GWh billed
|
|
|
|
|
|
|
|
|
Residential
|
11,627
|
11,821
|
(1.6)
|
(2.9)
|
27,749
|
28,857
|
(3.8)
|
(1.2)
|
Commercial
|
8,499
|
8,726
|
(2.6)
|
(3.3)
|
21,764
|
22,401
|
(2.8)
|
(1.8)
|
Governmental
|
705
|
714
|
(1.3)
|
(1.8)
|
1,932
|
1,934
|
(0.1)
|
(0.2)
|
Industrial
|
12,861
|
12,879
|
(0.1)
|
(0.1)
|
36,509
|
36,503
|
-
|
-
|
Total
retail sales
|
33,692
|
34,140
|
(1.3)
|
(1.9)
|
87,954
|
89,695
|
(1.9)
|
(0.8)
|
Wholesale
|
3,025
|
2,978
|
1.6
|
|
10,009
|
8,788
|
13.9
|
|
Total
sales
|
36,717
|
37,118
|
(1.1)
|
|
97,963
|
98,483
|
(0.5)
|
|
|
|
|
|
|
|
|
|
|
Number of electric
retail customers
|
|
|
|
|
|
|
|
|
Residential
|
|
|
|
|
2,497,790
|
2,482,698
|
0.6
|
|
Commercial
|
|
|
|
|
356,259
|
357,050
|
(0.2)
|
|
Governmental
|
|
|
|
|
17,630
|
17,867
|
(1.3)
|
|
Industrial
|
|
|
|
|
48,532
|
49,491
|
(1.9)
|
|
Total
retail customers
|
|
|
|
|
2,920,211
|
2,907,106
|
0.5
|
|
|
|
|
|
|
|
|
|
|
Other O&M and
refueling outage expense per MWh
|
$19.02
|
$18.12
|
5.0
|
|
$20.53
|
$19.95
|
2.9
|
|
|
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
On a weather-adjusted basis for third quarter 2019, retail
billed sales decreased (1.9) percent. Industrial billed sales
volume decreased (0.1) percent driven by lower sales to small
industrials and cogeneration customers. This was partially
offset by continued growth from new and expansion customers.
Residential billed sales decreased (2.9) percent partly due to
fewer days billed compared to a year ago.
Appendix C-2: Utility
Operating Measures
|
Twelve Months Ended
September 30, 2019 vs. 2018
|
|
Twelve Months Ended
September 30
|
|
2019
|
2018
|
%
Change
|
% Weather
Adjusted (u)
|
GWh billed
|
|
|
|
|
Residential
|
35,999
|
36,881
|
(2.4)
|
(1.0)
|
Commercial
|
28,789
|
29,551
|
(2.6)
|
(1.8)
|
Governmental
|
2,579
|
2,560
|
0.7
|
0.6
|
Industrial
|
48,390
|
48,443
|
(0.1)
|
(0.1)
|
Total retail
sales
|
115,757
|
117,435
|
(1.4)
|
(0.8)
|
|
|
|
|
|
Calculations may
differ due to rounding
|
(u)
|
The effects of
weather were estimated using heating degree days and cooling degree
days for the billing cycles from certain locations within each
jurisdiction and comparing to "normal" weather based on 20-year
historical data. The models used to estimate weather are updated
periodically and are subject to change.
|
D: EWC Financial and Operating Measures
Appendix D-1
provides a comparative summary of EWC adjusted EBITDA
(non-GAAP).
Appendix D-1: EWC
Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP
Measures
|
Third Quarter and
Year-to-Date 2019 vs. 2018
|
($ in
millions)
|
Third
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
Change
|
2019
|
2018
|
Change
|
Net income
(loss)
|
(141)
|
106
|
(247)
|
(69)
|
31
|
(100)
|
Add back: interest
expense
|
6
|
9
|
(3)
|
24
|
25
|
(1)
|
Add back: income
taxes
|
(31)
|
(136)
|
105
|
26
|
(167)
|
193
|
Add back:
depreciation and amortization
|
38
|
40
|
(2)
|
114
|
116
|
(2)
|
Subtract: interest
and investment income
|
59
|
127
|
(68)
|
316
|
183
|
133
|
Add back:
decommissioning expense
|
60
|
56
|
4
|
187
|
174
|
13
|
Adjusted EBITDA
(non-GAAP)
|
(127)
|
(52)
|
(75)
|
(34)
|
(5)
|
(29)
|
|
|
|
|
|
|
|
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
|
Third Quarter and
Year-to-Date 2019 vs. 2018
|
|
Third
Quarter
|
Year-to-Date
|
|
2019
|
2018
|
% Change
|
2019
|
2018
|
% Change
|
Owned capacity (MW)
(u)
|
3,274
|
3,962
|
(17.4)
|
3,274
|
3,962
|
(17.4)
|
GWh billed
|
6,847
|
7,576
|
(9.6)
|
21,308
|
21,853
|
(2.5)
|
|
|
|
|
|
|
|
EWC Nuclear
Fleet
|
|
|
|
|
|
|
Capacity
factor
|
98%
|
90%
|
8.9
|
91%
|
86%
|
5.8
|
GWh billed
|
6,210
|
6,976
|
(11.0)
|
19,602
|
20,096
|
(2.5)
|
Production cost per
MWh
|
$15.68
|
$17.15
|
(8.6)
|
$17.87
|
$17.93
|
(0.3)
|
Average
energy/capacity revenue per MWh
|
$42.15
|
$48.97
|
(13.9)
|
$46.53
|
$49.13
|
(5.3)
|
Refueling outage
days
|
|
|
|
|
|
|
Indian Point
2
|
-
|
-
|
|
-
|
33
|
|
Indian Point
3
|
-
|
-
|
|
29
|
-
|
|
Palisades
|
-
|
-
|
|
-
|
-
|
|
|
|
|
|
|
|
|
Calculations may
differ due to rounding
|
(v)
|
Third quarter and
year-to-date 2019 exclude Pilgrim (688MW), which was shut down May
31, 2019.
|
See the appendix in the webcast slide presentation for EWC
hedging and price disclosures.
E: Consolidated Financial Measures
Appendix E provides
comparative financial measures. Financial measures in this table
include those calculated and presented in accordance with GAAP, as
well as those that are considered non-GAAP financial measures.
Appendix E: GAAP
and Non-GAAP Financial Measures
|
Third Quarter 2019
vs. 2018 (See Appendix G for reconciliation of GAAP to non-GAAP
financial measures)
|
|
|
For 12 months ending
September 30
|
2019
|
2018
|
Change
|
GAAP
Measures
|
|
|
|
As-reported
ROIC
|
4.8%
|
3.7%
|
1.1%
|
As-reported
ROE
|
8.6%
|
5.1%
|
3.5%
|
|
|
|
|
Non-GAAP
Measures
|
|
|
|
Adjusted
ROIC
|
5.6%
|
5.5%
|
0.1%
|
Adjusted ROE
|
11.4%
|
10.7%
|
0.7%
|
|
|
|
|
As of September 30 ($
in millions)
|
2019
|
2018
|
Change
|
GAAP
Measures
|
|
|
|
Cash and
cash equivalents
|
956
|
988
|
(32)
|
Revolver
capacity
|
4,115
|
3,653
|
462
|
Commercial
paper
|
1,918
|
1,947
|
(29)
|
Total debt
|
19,441
|
18,485
|
956
|
Securitization
debt
|
338
|
463
|
(125)
|
Debt to
capital
|
65.4%
|
68.2%
|
(2.8%)
|
Off-balance sheet
liabilities:
|
|
|
|
Debt of
joint ventures – Entergy's share
|
56
|
62
|
(6)
|
Leases
– Entergy's share (v)
|
-
|
429
|
(429)
|
Power
purchase agreements accounted for as leases (v)
|
-
|
136
|
(136)
|
Total off-balance
sheet liabilities
|
56
|
627
|
(571)
|
|
|
|
|
Non-GAAP Financial
Measures
|
|
|
|
Debt to capital,
excluding securitization debt
|
65.0%
|
67.7%
|
(2.7%)
|
Gross
liquidity
|
5,071
|
4,641
|
430
|
Net debt to net
capital, excluding securitization debt
|
63.8%
|
66.4%
|
(2.6%)
|
Parent debt to total
debt, excluding securitization debt
|
20.5%
|
24.5%
|
(4.0%)
|
FFO to debt, excluding
securitization debt
|
14.2%
|
13.1%
|
1.1%
|
FFO to debt, excluding
securitization debt, return of unprotected excess ADIT, and
severance and retention payments associated with exit of
EWC
|
17.6%
|
15.0%
|
2.6%
|
|
|
|
|
(w)
|
As of January 1,
2019, Entergy adopted Financial Accounting Standards Board
Accounting Standards Codification 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 Financial
and Operating Measures
|
GWh billed
|
Total number of GWh
billed to retail and wholesale customers
|
Other O&M and
refueling outage expense per MWh
|
Other operation and
maintenance expense plus nuclear refueling outage expense per MWh
of billed sales
|
Number of electric
retail customers
|
Number of electric
customers at the end of the period
|
|
|
EWC Financial and
Operating 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
|
|
|
Appendix F-1:
Definitions
|
EWC Financial and
Operating 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 other
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 on the balance
sheet associated with securitization bonds that is secured by
certain future customer collections
|
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, 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
|
ALJ
|
Administrative law
judge
|
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
|
NDT
|
Nuclear
decommissioning trust
|
CT
|
Simple cycle
combustion turbine
|
NRC
|
Nuclear Regulatory
Commission
|
CWIP
|
Construction work in
progress
|
NY PSC
|
New York Public
Service 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
|
OCF
|
Net cash flow
provided by operating activities
|
E-NO
|
Entergy New Orleans,
LLC
|
OpCo
|
Operating
Company
|
E-TX
|
Entergy Texas,
Inc.
|
OPEB
|
Other post-employment
benefits
|
EBITDA
|
Earnings before
interest, income taxes, depreciation and amortization
|
Other
O&M
|
Other non-fuel
operation and maintenance expense
|
ENP
|
Entergy Nuclear
Palisades, LLC
|
P&O
|
Parent &
Other
|
EPS
|
Earnings per
share
|
Palisades
|
Palisades Power Plant
(nuclear)
|
ETR
|
Entergy
Corporation
|
Pilgrim
|
Pilgrim Nuclear Power
Station (nuclear, sold August 26, 2019)
|
EWC
|
Entergy Wholesale
Commodities
|
PMR
|
Performance
Management Rider
|
FERC
|
Federal Energy
Regulatory Commission
|
PPA
|
Power purchase
agreement or purchased power agreement
|
FFO
|
Funds from
operations
|
PUCT
|
Public Utility
Commission of Texas
|
FRP
|
Formula rate
plan
|
RICE
|
Reciprocating
Internal Combustion Engine
|
GAAP
|
U.S. generally
accepted accounting principles
|
RFP
|
Request for
proposals
|
Grand Gulf or
GGNS
|
Unit 1 of Grand Gulf
Nuclear Station (nuclear), 90% owned or leased by SERI
|
ROE
|
Return on
equity
|
Indian Point
1
|
Indian Point Energy
Center Unit 1 (nuclear) (shut down in 1974)
|
ROIC
|
Return on invested
capital
|
Indian Point 2 or
IP2
|
Indian Point Energy
Center Unit 2 (nuclear)
|
RS Cogen
|
RS Cogen facility
(CCGT cogeneration)
|
Indian Point 3 or
IP3
|
Indian Point Energy
Center Unit 3 (nuclear)
|
RSP
|
Rate Stabilization
Plan (E-LA Gas)
|
IPEC
|
Indian Point Energy
Center (nuclear)
|
S&P
|
Standard &
Poor's
|
ISES 2
|
Unit 2 of
Independence Steam Electric Station (coal)
|
SCPS
|
St. Charles Power
Station (CCGT)
|
IRS
|
Internal Revenue
Service
|
SEC
|
U.S. Securities and
Exchange Commission
|
|
|
SERI
|
System Energy
Resources, Inc.
|
|
|
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: Other 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)
|
|
Third
Quarter
|
|
|
2019
|
2018
|
As-reported net
income (loss) attributable to Entergy Corporation, rolling 12
months
|
(A)
|
790
|
435
|
Preferred
dividends
|
|
16
|
14
|
Tax effected interest
expense
|
|
548
|
520
|
As-reported net
income (loss) attributable to Entergy Corporation, rolling 12
months adjusted for preferred dividends and tax effected interest
expense
|
(B)
|
1,354
|
969
|
|
|
|
|
Adjustments in prior
quarters
|
|
(123)
|
(586)
|
Adjustments
|
|
(141)
|
105
|
Total
adjustments
|
(C)
|
(264)
|
(481)
|
|
|
|
|
EWC preferred
dividends and tax-effected interest expense, rolling
12 months
|
|
27
|
27
|
|
|
|
|
Total adjustments,
including preferred dividends and tax effected interest expense
(non-GAAP)
|
(D)
|
(237)
|
(454)
|
|
|
|
|
Adjusted earnings,
rolling 12 months (non-GAAP)
|
(A-C)
|
1,054
|
916
|
Adjusted earnings,
rolling 12 months including preferred dividends and tax- effected
interest expense (non-GAAP)
|
(B-D)
|
1,591
|
1,423
|
|
|
|
|
Average invested
capital
|
(E)
|
28,413
|
26,107
|
|
|
|
|
Average common
equity
|
(F)
|
9,224
|
8,551
|
|
|
|
|
As-reported
ROIC
|
(B/E)
|
4.8%
|
3.7%
|
Adjusted ROIC
(non-GAAP)
|
[(B-D)/E]
|
5.6%
|
5.5%
|
As-reported
ROE
|
(A/F)
|
8.6%
|
5.1%
|
Adjusted ROE
(non-GAAP)
|
[(A-C)/F]
|
11.4%
|
10.7%
|
|
|
|
|
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)
|
|
Third
Quarter
|
|
|
2019
|
2018
|
Total debt
|
(A)
|
19,441
|
18,485
|
Less securitization
debt
|
(B)
|
338
|
463
|
Total debt, excluding
securitization debt
|
(C)
|
19,103
|
18,022
|
Less cash and cash
equivalents
|
(D)
|
956
|
988
|
Net debt, excluding
securitization debt
|
(E)
|
18,147
|
17,034
|
|
|
|
|
Total
capitalization
|
(F)
|
29,730
|
27,095
|
Less securitization
debt
|
(B)
|
338
|
463
|
Total capitalization,
excluding securitization debt
|
(G)
|
29,392
|
26,632
|
Less cash and cash
equivalents
|
(D)
|
956
|
988
|
Net capital,
excluding securitization debt
|
(H)
|
28,436
|
25,644
|
|
|
|
|
Debt to
capital
|
(A/F)
|
65.4%
|
68.2%
|
Debt to capital,
excluding securitization debt (non-GAAP)
|
(C/G)
|
65.0%
|
67.7%
|
Net debt to net
capital, excluding securitization debt (non-GAAP)
|
(E/H)
|
63.8%
|
66.4%
|
|
|
|
|
Revolver
capacity
|
(I)
|
4,115
|
3,653
|
|
|
|
|
Gross liquidity
(non-GAAP)
|
(D+I)
|
5,071
|
4,641
|
|
|
|
|
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)
|
155
|
630
|
Commercial
paper
|
(L)
|
1,918
|
1,947
|
Unamortized debt
issuance and discounts
|
(M)
|
(9)
|
(10)
|
Total parent
debt
|
(J+K+L+M)
|
3,914
|
4,417
|
|
|
|
|
Parent debt to total
debt, excluding securitization debt (non-GAAP)
|
[(J+K+L+M)/C]
|
20.5%
|
24.5%
|
|
|
|
|
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)
|
|
Third
Quarter
|
|
|
2019
|
2018
|
Total debt
|
(A)
|
19,441
|
18,485
|
Less securitization
debt
|
(B)
|
338
|
463
|
Total debt, excluding
securitization debt
|
(C)
|
19,103
|
18,022
|
|
|
|
|
Net cash flow
provided by operating activities, rolling 12 months
|
(D)
|
2,644
|
2,770
|
|
|
|
|
AFUDC – borrowed
funds, rolling 12 months
|
(E)
|
(67)
|
(57)
|
|
|
|
|
Working capital items
in net cash flow provided by operating activities (rolling 12
months):
|
|
|
|
Receivables
|
|
21
|
(53)
|
Fuel
inventory
|
|
(18)
|
26
|
Accounts
payable
|
|
(158)
|
258
|
Taxes
accrued
|
|
(7)
|
10
|
Interest
accrued
|
|
12
|
(3)
|
Other working capital
accounts
|
|
(97)
|
(9)
|
Securitization
regulatory charges
|
|
120
|
125
|
Total
|
(F)
|
(127)
|
354
|
|
|
|
|
FFO, rolling 12
months (non-GAAP)
|
(G)=(D+E-F)
|
2,704
|
2,359
|
|
|
|
|
FFO to debt,
excluding securitization debt (non-GAAP)
|
(G/C)
|
14.2%
|
13.1%
|
|
|
|
|
Estimated return of
unprotected excess ADIT (rolling 12 months pre-tax)
|
(H)
|
469
|
342
|
Severance and
retention payments associated with exit of EWC (rolling 12 months
pre-tax)
|
(I)
|
183
|
-
|
|
|
|
|
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)]
|
17.6%
|
15.0%
|
|
|
|
|
Calculations may
differ due to rounding
|
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SOURCE Entergy Corporation