Entergy Reports First Quarter Earnings
NEW ORLEANS, May 1, 2019 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) reported first quarter 2019 earnings per share of $1.32 on an as-reported basis and 82 cents on an adjusted basis (non-GAAP), which excludes the EWC segment in light of the company's strategic decision to exit the merchant power business.
"We had a productive start to 2019. While weather was a headwind, we remain firmly on track to achieve our full-year financial guidance, as well as our longer-term outlooks," said Entergy Chairman and Chief Executive Officer Leo Denault. "With our announcement of a sale of Indian Point, we now have definitive agreements in place to sell all of our merchant nuclear assets."
Business highlights included the following:
-- Entergy announced an agreement for post-shutdown sale of Indian Point
Units 1, 2 and 3.
-- Pilgrim returned to Column 1 in the NRC regulatory oversight program.
-- Entergy Arkansas announced plans for a build-own-transfer of a 100
megawatt solar facility.
-- Entergy Arkansas and Entergy Texas each issued requests for proposals
for 200 megawatts of solar resources.
-- Entergy Mississippi made its annual formula rate plan filing.
-- Entergy was named for a fourth consecutive year to the list of America's
Top Corporations for Women's Business Enterprise by the Women's Business
Enterprise National Council.
Consolidated Earnings (GAAP and Non-GAAP Measures)
First Quarter 2019 vs. 2018 (See Appendix A for reconciliation of
GAAP to non-GAAP measures and description of adjustments)
---
First Quarter
2019 2018
Change
---
(After-tax, $ in
millions)
As-
reported
earnings 255 133 122
Less
adjustments 97 (18) 115
---
Adjusted
earnings
(non-
GAAP) 158 151 7
Estimated
weather
in
billed
sales (23) 16 (40)
(After-tax, per share in
$)
As-
reported
earnings 1.32 0.73 0.59
Less
adjustments 0.50 (0.10) 0.60
---
Adjusted
earnings
(non-
GAAP) 0.82 0.83 (0.01)
Estimated
weather
in
billed
sales (0.12) 0.09 (0.21)
--- ---
Calculations may differ due to rounding
Consolidated Results
For first quarter 2019, the company reported earnings of $255 million, or $1.32 per share, on an as-reported basis and earnings of $158 million, or 82 cents per share, on an adjusted basis. This compared to first quarter 2018 earnings of $133 million, or 73 cents per share, on an as-reported basis and earnings of $151 million, or 83 cents 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 variances by business is provided in Appendix B.
Business Segment Results
Utility
For first quarter 2019, the Utility business reported earnings attributable to Entergy Corporation of $231 million, or $1.20 per share, on both an as-reported and adjusted basis. This compared to first quarter 2018 earnings of $215 million, or $1.19 per share, on both an as-reported and adjusted basis. The current period results reflected higher net revenue. On a per share basis, 2019 results reflected a higher share count resulting from the company's equity forward.
Excluding the return of unprotected excess ADIT, which is directly offset in income taxes, net revenue increased quarter-over-quarter, driven by regulatory actions at Entergy Arkansas, Entergy Louisiana and Entergy Texas. Also, first quarter 2018 included regulatory charges to return benefits of the lower federal tax rate to customers. This was partially offset by unfavorable weather in first quarter 2019 compared to favorable weather a year ago.
On a weather-adjusted basis, billed sales increased 0.6 percent driven by industrial sales. Residential and commercial sales decreased (0.3) percent and (1.4) percent respectively. Industrial billed sales volume increased 2.4 percent with higher sales to both new and expansion customers as well as existing customers. The increase was driven largely by the chlor-alkali segment. Sales to petroleum refining customers were also higher.
Appendix C contains additional details on Utility financial and operating measures.
Parent & Other
For first quarter 2019, Parent & Other reported a loss of $(73 million), or (38) cents per share, on both an as-reported and adjusted basis. This compared to a loss of $(64 million), or (36) cents per share, on both an as-reported and adjusted basis in first quarter 2018.
Entergy Wholesale Commodities
For first quarter 2019, EWC recorded earnings attributable to Entergy Corporation of $97 million, or 50 cents per share on an as-reported basis. This compared to a first quarter 2018 loss of $(18 million), or (10) cents per share, on an as-reported basis.
First quarter 2019 earnings reflected higher other income, primarily due to gains on decommissioning trust funds, as well as higher net revenue due to higher nuclear energy volume. These items were partially offset by a tax item related to the sale of Vermont Yankee in January 2019.
Appendix D contains additional details on EWC financial and operating measures, including reconciliation for non-GAAP EWC adjusted EBITDA.
Earnings Guidance
Entergy affirmed its 2019 adjusted earnings guidance range of $5.10 to $5.50 per share. 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 2019. 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 $(1.20) per share in 2019. This estimate is 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 9:00 a.m. Central Time on Wednesday, May 1, 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 1060279, 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 May 8, 2019, by dialing 855-859-2056, conference ID 1060279.
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; net revenue; 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" would exclude the effect of adjustments as defined above.
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.
First 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
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
First Quarter 2019 vs. 2018 (See Appendix A-3 and Appendix A-4
for details on adjustments)
---
First Quarter
2019 2018
Change
---
(After-tax, $ in
millions)
Earnings (loss)
Utility 231 215 16
Parent
&
Other (73) (64) (9)
EWC 97 (18) 115
---
Consolidated 255 133 122
Less adjustments
Utility -
Parent
&
Other -
EWC 97 (18) 115
---
Consolidated 97 (18) 115
Adjusted earnings (loss)
(non-GAAP)
Utility 231 215 16
Parent
&
Other (73) (64) (9)
EWC -
Consolidated 158 151 7
Estimated
weather
in
billed
sales (23) 16 (40)
Diluted
average
number
of
common
shares
outstanding
(in
millions) 192.2 181.4
(After-tax, per share in
$) (a)
Earnings (loss)
Utility 1.20 1.19 0.01
Parent
&
Other (0.38) (0.36) (0.02)
EWC 0.50 (0.10) 0.60
---
Consolidated 1.32 0.73 0.59
Less adjustments
Utility -
Parent
&
Other -
EWC 0.50 (0.10) 0.60
---
Consolidated 0.50 (0.10) 0.60
Adjusted earnings (loss)
(non-GAAP)
Utility 1.20 1.19 0.01
Parent
&
Other (0.38) (0.36) (0.02)
EWC -
Consolidated 0.82 0.83 (0.01)
Estimated
weather
in
billed
sales (0.12) 0.09 (0.21)
--- ---
Calculations may differ due to rounding
(a) Per share amounts are calculated by
dividing the corresponding
earnings (loss) by the diluted
average number of common shares
outstanding for the period.
See Appendix B for detailed earnings variance analysis. See Appendix A-3 for adjustments by driver.
Appendix A-2 provides a comparative summary of OCF, by business.
Appendix A-2: Consolidated Operating Cash Flow
First Quarter 2019 vs. 2018
---
($ in millions)
First Quarter
2019 2018
Change
---
Utility 455 523 (68)
Parent & Other (78) (57) (21)
EWC 124 91 33
---
Consolidated 501 557 (56)
Calculations may differ due to
rounding
OCF decreased quarter-over-quarter due primarily to the return of the unprotected excess ADIT to customers, as well as unfavorable weather at the Utility. Lower pension contributions partially offset the decrease.
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)
First Quarter 2019 vs. 2018
---
First Quarter
2019 2018
Change
---
(Pre-tax except for income tax effects
and total, $ in millions)
EWC
Income before income
taxes 163 (19) 182
Income taxes 66 (1) 67
Preferred dividend
requirements of
subsidiaries 1 1
Total EWC 97 (18) 115
Total adjustments 97 (18) 115
(After-tax, per share in $)
EWC
Total EWC 0.50 (0.10) 0.60
Total adjustments 0.50 (0.10) 0.60
--- ---
Calculations may differ due to
rounding
Appendix A-4: Adjustments by Income Statement Line Item (shown as positive/(negative) impact on
earnings)
First Quarter 2019 vs. 2018
---
(Pre-tax except for Income taxes and total, $ in millions)
First Quarter
2019 2018
Change
EWC
Net revenue 393 382 11
Non-fuel O&M (201) (193) (8)
Asset write-off and impairments (74) (73) (1)
Decommissioning expense (63) (58) (5)
Taxes other than income taxes (13) (16) 4
Depreciation/amortization exp. (38) (38)
Other income (deductions)-other 169 (14) 183
Interest exp. and other charges (9) (8) (1)
Income taxes (66) 1 (67)
Preferred dividend (1) (1)
---
Total EWC 97 (18) 115
Total adjustments (after-tax) 97 (18) 115
--- ---
Calculations may differ due to
rounding
B: Earnings Variance Analysis
Appendix B provides details of current quarter 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 (b), (c)
First Quarter 2019 vs. 2018
---
(After-tax, per share in $)
Utility Parent & Other
EWC Consolidated
As-Reported
Adjusted
As-Reported
Adjusted
As-
As-
Adjusted
Reported
Reported
2018 earnings 1.19 1.19 (0.36) (0.36) (0.10) 0.73 0.83
Net revenue 0.07 0.07 (d) 0.05 (e) 0.12 0.07
Non-fuel O&M 0.02 0.02 (0.02) (0.02) (0.03) (0.03) -
Asset write-offs and impairments -
Decommissioning expense (0.01) (0.01) (0.02) (0.03) (0.01)
Taxes other than income taxes 0.01 0.01 0.01 0.02 0.01
Depreciation/amortization exp. (0.04) (0.04) (0.04) (0.04)
Other income (deductions)-other 0.03 0.03 (0.01) (0.01) 0.79 (f) 0.81 0.02
Interest exp. and other charges (0.03) (0.03) (0.03) (0.03) (0.06) (0.06)
Income taxes-other 0.03 0.03 0.01 0.01 (0.16) (g) (0.12) 0.04
Share effect (0.07) (0.07) (h) 0.03 0.03 (0.04) (0.08) (0.04)
2019 earnings 1.20 1.20 (0.38) (0.38) 0.50 1.32 0.82
Calculations may differ due to rounding.
(b) Utility net revenue and Utility income taxes exclude $61
million for the return of unprotected excess ADIT to
customers (net effect is neutral to earnings).
(c) 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.
(d) The earnings increase from higher Utility net revenue was
primarily driven by rate activity from E-AR's and E-
LA's FRPs, E-LA's AMI rider and E-TX's base rate case.
In addition, in first quarter 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, which was
negative in first quarter 2019 and positive in first
quarter 2018.
(e) The earnings increase from higher EWC net revenue
reflected higher volume from merchant nuclear plants.
(f) The earnings increase from higher EWC other income
(deductions)-other was due largely to unrealized gains
on the decommissioning trust fund investments in first
quarter 2019.
(g) The earnings decrease from higher EWC income taxes is
primarily due to an accrual of $29 million of tax
expense, which resulted from the sale of Vermont Yankee
in January 2019.
(h) The earnings per share decrease from share effect is due
to the equity forward including the settlement of 6.8
million shares in December 2018.
Utility As-Reported Net Revenue
Variance Analysis
2019 vs. 2018 ($ EPS)
---
1Q
Volume/weather (0.16)
Retail electric price 0.12
Reg. charges for lower tax rate 0.12
Other (0.01)
Total 0.07
--- ---
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
First Quarter 2019 vs. 2018
---
First Quarter
2019 2018
%
% Weather
Adjusted (i)
Change
---
GWh billed
Residential 8,471 9,287 (8.8) (0.3)
Commercial 6,423 6,732 (4.6) (1.4)
Governmental 601 608 (1.2) (0.7)
Industrial 11,683 11,405 2.4 2.4
---
Total retail sales 27,178 28,032 (3.0) 0.6
Wholesale 3,814 3,244 17.6
Total sales 30,992 31,276 (0.9)
Number of electric retail customers
Residential 2,483,785 2,476,056 0.3
Commercial 357,613 356,034 0.4
Governmental 18,111 17,945 0.9
Industrial 40,890 40,856 0.1
Total retail customers 2,900,399 2,890,891 0.3
Net revenue ($ in
millions) 1,416 1,460 (3.0)
Non-fuel O&M per MWh $20.12 $20.09 0.1
---
Appendix C-2: Utility Operating Measures
Twelve Months Ended March 31, 2019 vs. 2018
---
Twelve Months Ended March 31
2019 2018
%
% Weather
Adjusted (i)
Change
---
GWh billed
Residential 36,291 35,484 2.3 (0.6)
Commercial 29,117 29,039 0.3 (0.7)
Governmental 2,574 2,525 1.9 1.2
Industrial 48,662 48,057 1.3 1.3
Total retail sales 116,644 115,105 1.3 0.2
Calculations may differ due to rounding
(i) The effects of weather were
estimated using heating
degree days and cooling
degree days for the billing
cycles from certain
locations within each
jurisdiction and comparing
to "normal" weather based on
20-year historical data. The
models used to estimate
weather are updated
periodically and are subject
to change.
D: EWC Financial and Operating Measures
Appendix D-1 provides a comparative summary of EWC adjusted EBITDA (non-GAAP).
Appendix D-1: EWC Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP
Measures
First Quarter 2019 vs. 2018
---
($ in millions) First Quarter
2019 2018
Change
---
Net income (loss) 97 (18) 115
Add back: interest
expense 9 8 1
Add back: income
taxes 66 (1) 67
Add back:
depreciation and
amortization 38 38
Subtract: interest
and investment
income 181 (1) 182
Add back:
decommissioning
expense 63 58 5
---
Adjusted EBITDA
(non-GAAP) 92 86 6
Calculations may differ due to
rounding
Appendix D-2 provides a comparative summary of EWC operating and financial measures.
Appendix D-2: EWC Operational and Financial Measures
First Quarter 2019 vs. 2018 (See Appendix G for reconciliation of GAAP to non-
GAAP measures)
---
First Quarter
2019 2018
% Change
---
Owned
capacity
(MW) 3,962 3,962
GWh billed 7,203 6,996 3.0
Net revenue
($ in
millions) 393 382 2.9
EWC Nuclear Fleet
---
Capacity
factor 85% 83% 2.4
GWh billed 6,690 6,408 4.4
Production
cost per
MWh $20.04 $18.75 6.9
Average
energy/
capacity
revenue
per MWh $57.99 $56.96 1.8
Net revenue
($ in
millions) 389 379 2.6
Refueling outage days
Indian
Point 2 13
Indian
Point 3 21
Calculations may differ due to
rounding
See 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
First Quarter 2019 vs. 2018 (See Appendix G for reconciliation of GAAP to non-GAAP
financial measures)
---
For 12 months
ending March 31 2019 2018
Change
---
GAAP Measures
As-reported ROIC 5.6% 3.9% 1.7%
As-reported ROE 11.4% 5.8% 5.6%
Non-GAAP Measures
Adjusted ROIC 5.5% 5.0% 0.5%
Adjusted ROE 11.5% 9.4% 2.1%
As of March 31 ($
in millions) 2019 2018
Change
---
GAAP Measures
Cash and cash
equivalents 983 1,206 (223)
Revolver capacity 3,950 3,010 940
Commercial paper 1,942 655 1,287
Total debt 19,325 17,680 1,645
Securitization debt 398 520 (122)
Debt to capital 67.8% 68.4% (0.6%)
Off-balance sheet liabilities:
Debt of joint
ventures -
Entergy's share 59 66 (7)
Leases - Entergy's
share (j) 429 (429)
Power purchase
agreements
accounted for as
leases (j) 136 (136)
Total off-balance
sheet liabilities 59 631 (572)
Non-GAAP Financial Measures
Debt to capital,
excluding
securitization
debt 67.3% 67.7% (0.4%)
Gross liquidity 4,933 4,216 717
Net debt to net
capital, excluding
securitization
debt 66.1% 66.1% 0.0%
Parent debt to
total debt,
excluding
securitization
debt 21.7% 21.1% 0.6%
FFO to debt,
excluding
securitization
debt 11.1% 14.8% (3.7%)
FFO to debt,
excluding
securitization
debt, return of
unprotected excess
ADIT, and
severance and
retention payments
associated with
exit of EWC 15.0% 15.3% (0.3%)
(j) 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. Non-GAAP financial measures remove the effects of financial events that are not routine from commonly used financial measures.
Appendix F-1: Definitions
---
Utility Operating and Financial Measures
---
GWh billed Total number of GWh billed to
retail and wholesale customers
Net revenue Operating revenues less fuel,
fuel related expenses and gas
purchased for resale; purchased
power and other regulatory
charges (credits) - net
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 Non-fuel O&M per MWh of billed
MWh sales
Number of retail Number of customers at the end of
customers the prior year
EWC Operating and Financial Measures
---
Average revenue Revenue on a per unit basis at
under contract which capacity is expected to be
per kW-month sold to third parties, given
(applies to existing contract prices and/or
capacity auction awards
contracts only)
Average revenue Revenue on a per unit basis at
per MWh on which generation output
contracted reflected in contracts is
volumes 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 market price
changes affecting revenue
received on puts, collars and
call options, positive or
negative basis differentials,
option premiums and market
prices at the time of option
expiration, costs to convert
firm LD to unit-contingent and
other risk management costs
Bundled capacity A contract for the sale of
and energy installed capacity and related
contracts energy, priced per MWh sold
Capacity A contract for the sale of the
contracts installed capacity product in
regional markets managed by ISO
New England, NYISO and MISO
Capacity factor Normalized percentage of the
period that the nuclear plants
generate power
Expected sold and Total energy and capacity revenue
market total on a per unit basis at which
revenue per MWh total planned generation output
and capacity is expected to be
sold given contract terms and
market prices at a point in
time, including estimates for
market price changes affecting
revenue received on puts,
collars and call options,
positive or negative basis
differentials, option premiums
and market prices at time of
option expiration, costs to
convert Firm LD to unit-
contingent 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
Net revenue Operating revenues less fuel and
fuel-related expenses and
purchased power
Offsetting positions Transactions for the purchase of
energy, generally to offset a Firm
LD transaction
Owned capacity (MW) Installed capacity owned by EWC
Percent of capacity Percent of planned qualified
sold forward capacity sold to mitigate price
uncertainty under physical or
financial transactions
Percent of planned Percent of planned generation
generation under output sold or purchased forward
contract 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 Amount of installed capacity to
operation generate power and/or sell
capacity, assuming intent to
shutdown Pilgrim (May 31, 2019),
Indian Point 2 (April 30, 2020),
Indian Point 3 (April 30, 2021)
and Palisades (May 31, 2022)
Planned TWh of Amount of output expected to be
generation generated by EWC resources
considering plant operating
characteristics and outage
schedules, assuming intent to
shutdown Pilgrim (May 31, 2019),
Indian Point 2 (April 30, 2020),
Indian Point 3 (April 30, 2021)
and Palisades (May 31, 2022)
Production cost per Fuel and non-fuel O&M expenses
MWh according to accounting standards
that directly relate to the
production of electricity per MWh
(based on net generation)
Refueling outage Number of days lost for a scheduled
days 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 12-months rolling
ROE net income
attributable to
Entergy
Corporation
divided by
average common
equity
As-reported 12-months
ROIC rolling net
income
attributable to
Entergy
Corporation
adjusted for
preferred
dividends and
tax-effected
interest expense
divided by
average invested
capital
Book value per End of period
share common equity
divided by end
of period shares
outstanding
Debt of joint Entergy's share
ventures - of debt issued
Entergy's by business
share joint ventures
at EWC
Debt to Total debt
capital divided by total
capitalization
Leases - Operating leases
Entergy's held by
share subsidiaries
capitalized at
implicit
interest rate
Revolver Amount of undrawn
capacity capacity
remaining on
corporate and
subsidiary
revolvers
Securitization Debt associated
debt 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
Error occurred while generating ASCII Content for table
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 - Allowance for borrowed funds used
borrowed during construction
funds
IT
Information technology
AFUDC - Allowance for equity funds used
equity during construction
funds
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
MISO Midcontinent Independent System Operator,
One owned by E-AR (nuclear) 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
NOPS New Orleans Power Station (RICE/natural
gas)
DCRF Distribution cost recovery factor
NorthStar NorthStar Decommissioning Holdings, LLC
E-AR
Entergy Arkansas, LLC
NRC
Nuclear Regulatory Commission
E-LA
Entergy Louisiana, LLC
NYISO New York Independent System Operator, Inc.
E-MS
Entergy Mississippi, LLC
NYPA
New York Power Authority
E-NO
Entergy New Orleans, LLC
NYSE
New York Stock Exchange
E-TX
Entergy Texas, Inc.
O&M Operation and maintenance expense
EBITDA Earnings before interest, income Net cash flow provided by operating
taxes, depreciation and activities
amortization
OCF
ENGC Entergy Nuclear Generation Company
OpCo
Operating Company
ENP Entergy Nuclear Palisades, LLC
OPEB
Other post-employment benefits
EPS
Earnings per share
P&O
Parent & Other
ETR
Entergy Corporation
Palisades
Palisades Power Plant (nuclear)
EWC Entergy Wholesale Commodities
Pilgrim Pilgrim Nuclear Power Station (nuclear)
FERC Federal Energy Regulatory
PPA Power purchase agreement or purchased
Commission power agreement
FFO
Funds from operations
PUCT Public Utility Commission of Texas
FitzPatrick James A. FitzPatrick Nuclear Power
Plant (nuclear, sold March 31,
2017)
RICE Reciprocating Internal Combustion Engine
FRP
Formula rate plan
RFP
Request for proposals
GAAP U.S. generally accepted accounting
principles
ROE
Return on equity
Grand Gulf Unit 1 of Grand Gulf Nuclear
or GGNS Station (nuclear), 90% owned or
leased by SERI
ROIC
Return on invested capital
Indian Point Indian Point Energy Center Unit 1
1 or IP1 (nuclear) (shut down in 1974)
RS Cogen RS Cogen facility (CCGT cogeneration)
Indian Point Indian Point Energy Center Unit 2
2 or IP2 (nuclear)
RSP Rate Stabilization Plan (E-LA Gas)
Indian Point Indian Point Energy Center Unit 3
3 or IP3 (nuclear)
S&P
Standard & Poor's
IPEC Indian Point Energy Center
(nuclear)
SCPS St. Charles Power Station (CCGT)
ISES 2 Unit 2 of Independence Steam
Electric Station (coal)
SEC U.S. Securities and Exchange Commission
IRS
Internal Revenue Service
SERI
System Energy Resources, Inc.
TCRF Transmission cost recovery factor
Union
Union Power Station (CCGT)
UPSA
Unit Power Sales Agreement
VPUC Vermont Public Utility Commission
VY or Vermont Yankee Vermont Yankee Nuclear Power Station
(nuclear)
WACC Weighted-average cost of capital
WPEC Washington Parish Energy Center (CT/
natural gas)
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) First Quarter
2019 2018
As-reported net income (loss) attributable to Entergy Corporation, rolling 12 months
(A) 970 462
Preferred dividends 15 14
Tax effected interest expense 539 499
As-reported net income (loss) attributable to Entergy Corporation, rolling 12 months adjusted for preferred dividends and tax effected interest expense
(B) 1,524 975
Adjustments in prior quarters (103) (276)
EWC adjustments 97 (18)
Total adjustments
(C) (6) (294)
EWC preferred dividends and tax-effected interest expense, rolling 12 months 30 22
Total adjustments, including preferred dividends and tax effected interest expense (non-GAAP)
(D) 24 (272)
Adjusted earnings, rolling 12 months (non-GAAP)
(A-C) 976 756
Adjusted earnings, rolling 12 months including preferred dividends and tax- effected interest expense (non-GAAP)
(B-D) 1,501 1,247
Average invested capital
(E) 27,184 24,862
Average common equity
(F) 8,473 8,016
As-reported ROIC
(B/E) 5.6% 3.9%
Adjusted ROIC (non-GAAP)
[(B-D)/E] 5.5% 5.0%
As-reported ROE
(A/F) 11.4% 5.8%
Adjusted ROE (non-GAAP)
[(A-C)/F] 11.5% 9.4%
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) First Quarter
2019 2018
Total debt
(A) 19,325 17,680
Less securitization
debt
(B) 398 520
Total debt, excluding
securitization debt
(C) 18,927 17,160
Less cash and cash
equivalents
(D) 983 1,206
Net debt, excluding
securitization debt
(E) 17,944 15,954
Total capitalization
(F) 28,515 25,853
Less securitization
debt
(B) 398 520
Total capitalization,
excluding
securitization debt
(G) 28,117 25,333
Less cash and cash
equivalents
(D) 983 1,206
Net capital, excluding
securitization debt
(H) 27,134 24,127
Debt to capital
(A/F) 67.8% 68.4%
Debt to capital,
excluding
securitization debt
(non-GAAP)
(C/G) 67.3% 67.7%
Net debt to net
capital, excluding
securitization debt
(non-GAAP)
(E/H) 66.1% 66.1%
Revolver capacity
(I) 3,950 3,010
Gross liquidity (non-
GAAP)
(D+I) 4,933 4,216
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) 320 1,125
Commercial paper
(L) 1,942 655
Unamortized debt
issuance and discounts
(M) (9) (11)
Total parent debt
(J+K+L+M) 4,103 3,619
Parent debt to total
debt, excluding
securitization debt
(non-GAAP)
[(J+K+L+M)/C] 21.7% 21.1%
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) First Quarter
2019 2018
Total debt
(A) 19,325 17,680
Less securitization debt
(B) 398 520
Total debt, excluding
securitization debt
(C) 18,927 17,160
Net cash flow provided by
operating activities,
rolling 12 months
(D) 2,329 2,652
AFUDC - borrowed funds,
rolling 12 months
(E) (65) (49)
Working capital items in net cash flow provided by
operating activities (rolling 12 months):
Receivables 7 (123)
Fuel inventory 58 (26)
Accounts payable 103 81
Taxes accrued 51 36
Interest accrued (5) 5
Other working capital accounts (178) (25)
Securitization regulatory charges 121 121
Total
(F) 157 69
FFO, rolling 12 months
(non-GAAP)
(G)=(D+E-F) 2,107 2,534
FFO to debt, excluding
securitization debt (non-
GAAP)
(G/C) 11.1% 14.8%
Estimated return of
unprotected excess ADIT
(rolling 12 months pre-
tax)
(H) 692
Severance and retention
payments associated with
exit of EWC (rolling 12
months pre-tax)
(I) 43 100
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)] 15.0% 15.3%
Calculations may differ due to
rounding
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SOURCE Entergy Corporation
