Entergy reports third quarter earnings
Company narrows guidance range and updates longer-term outlooks
NEW ORLEANS, Oct. 31, 2024 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) reported third quarter 2024 earnings per share of $2.99 on both an as-reported and an adjusted (non-GAAP) basis.
"We achieved outstanding results across operational, regulatory, resilience, and growth dimensions," said Drew Marsh, Entergy Chair and Chief Executive Officer. "These outcomes are the result of strong execution and leveraging a stakeholder engagement model that starts with the customer and ensures value is created for all stakeholders."
Business highlights included the following:
-- Entergy narrowed its 2024 adjusted EPS guidance range to $7.15 to $7.35
(pre-split) and updated longer-term outlooks.
-- E-LA filed for approval of significant new transmission and generation
investment to support a new large customer.
-- E-MS announced plans to build its first new natural gas power station in
50 years.
-- E-AR's 100-megawatt Walnut Bend Solar was placed in service.
-- E-AR closed on West Memphis Solar and Driver Solar.
-- E-LA issued an RFP using its new streamlined process to acquire 3
gigawatts of solar resources.
-- The LPSC approved several items for E-LA including its FRP renewal, the
gas LDC sale, the settlement with SERI to resolve all complaints against
SERI (subject to FERC approval), and an agreement to divest E-LA's share
of Grand Gulf energy and capacity to E-MS.
-- Filings submitted to the MPSC and FERC to divest E-LA's share of Grand
Gulf energy and capacity to E-MS.
-- The CCNO approved $100 million of E-NO's resilience plan for investment
over the next two years.
-- The PUCT approved an E-TX DCRF filing.
-- Entergy's Board of Directors declared a quarterly dividend of $1.20 per
share, a six percent increase.
-- Entergy's Board of Directors approved a two-for-one stock split of
Entergy's common stock, effective with trading starting December 13,
2024.
-- Entergy was named as one of the nation's top utilities in economic
development by Site Selection magazine for the 17(th) consecutive year.
Consolidated earnings (GAAP and non-GAAP measures)
Third quarter and year-to-date 2024 vs. 2023 (See Appendix A for reconciliation of GAAP to non-GAAP measures and description of adjustments)
Third quarter
Year-to-date
---
2024 2023 Change 2024 2023 Change
(After-tax, $ in millions)
As-reported earnings 645 667 (22) 769 1,369 (600)
Less adjustments - (27) 27 (517) 42 (559)
Adjusted earnings (non-GAAP) 645 694 (49) 1,286 1,327 (41)
Estimated weather impact 41 135 (94) 70 103 (33)
(After-tax, per share in $)
As-reported earnings 2.99 3.14 (0.15) 3.58 6.45 (2.87)
Less adjustments - (0.13) 0.13 (2.41) 0.20 (2.61)
Adjusted earnings (non-GAAP) 2.99 3.27 (0.28) 5.99 6.25 (0.26)
Estimated weather impact 0.19 0.64 (0.45) 0.33 0.48 (0.16)
Calculations may differ due to rounding
Consolidated results
For third quarter 2024, the company reported earnings of $645 million, or $2.99 per share, on an as-reported basis and an adjusted basis. This compared to third quarter 2023 earnings of $667 million, or $3.14 per share, on an as-reported basis and $694 million, or $3.27 per share, on an adjusted basis.
Summary discussions of results by business follow. Additional details, including information on OCF by business, are provided in Appendix A. A more detailed analysis of variances by business is provided in Appendix B.
Business results
Utility
For third quarter 2024, the Utility business reported earnings attributable to Entergy Corporation of $787 million, or $3.65 per share, on an as-reported basis and an adjusted basis. This compared to third quarter 2023 earnings of $752 million, or $3.54 per share, on an as-reported basis and $810 million, or $3.82 per share, on an adjusted basis. There were several drivers for the third quarter as-reported increase.
In third quarter 2023, as a result of Entergy Arkansas' offer to forgo its opportunity to seek recovery of costs resulting from the March 2013 ANO stator incident, Entergy Arkansas recorded a write-off totaling $(78 million) ($(59 million) after tax). The write-off was considered an adjustment and excluded from adjusted earnings.
Other drivers for the increase included:
-- the net effect of regulatory actions across the operating companies,
-- higher other income (deductions) primarily due to a decrease in
non-service pension costs, and
-- lower other O&M.
These drivers were partially offset by:
-- the effects of weather on retail volume,
-- higher depreciation expense, and
-- higher interest expense.
On a per share basis, third quarter 2024 results reflected higher diluted average number of common shares outstanding due to the settlement of equity forwards in fourth quarter 2023 under the company's ATM program, option exercises under the company's stock-based compensation plans, and the dilutive effect from unsettled equity forwards under the company's ATM program as a result of an increase in the stock price.
Appendix C contains additional details on Utility operating and financial measures.
Parent & Other
For third quarter 2024, Parent & Other reported a loss attributable to Entergy Corporation of
$(142 million), or (66) cents per share, on an as-reported basis and an adjusted basis. This compared to a third quarter 2023 loss of $(85 million), or (40) cents per share, on an as-reported basis, and a loss of $(117 million), or (55) cents per share, on an adjusted basis.
Drivers for the third quarter variances included:
-- the effects of the third quarter 2023 DOE spent fuel litigation
settlement related to IPEC on asset write-offs and impairments
(considered an adjustment and excluded from adjusted earnings),
-- lower other income (deductions) due to lower non-service pension income
and changes in legal provisions, and
-- higher interest expense.
On a per share basis, third quarter 2024 results reflected higher diluted average number of common shares outstanding (see drivers in Utility section).
Earnings per share guidance
Entergy announced a two-for-one forward stock split of Entergy's issued common stock. Each record holder of common stock as of the close of market on December 5, 2024, will receive one additional share of common stock for each then-held share, to be distributed after market close on December 12, 2024. Trading is expected to commence on a split-adjusted basis at market open on December 13, 2024.
Entergy narrowed its 2024 adjusted EPS guidance to a range of $7.15 to $7.35 (pre-split). See webcast presentation for additional details.
The company has provided 2024 earnings guidance with regard to the non-GAAP measure of adjusted earnings per share. 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 period. Potential adjustments include the exclusion of regulatory charges related to outstanding regulatory complaints and significant income tax items.
Earnings teleconference
A teleconference will be held at 10:00 a.m. Central Time on Thursday, October 31, 2024, to discuss Entergy's quarterly earnings announcement and the company's financial performance. The teleconference may be accessed by visiting Entergy's website at
investors.entergy.com/investors/events-and-presentations or by dialing 888-440-4149, conference ID 9024832, no more than 15 minutes prior to the start of the call. The webcast presentation is also being posted to Entergy's website concurrent with this news release. A replay of the teleconference will be available on Entergy's website at investors.entergy.com/investors/events-and-presentations and by telephone. The telephone replay will be available through November 7, 2024, by dialing 800-770-2030, conference ID 9024832.
Entergy is a Fortune 500 company that powers life for 3 million customers through our operating companies in Arkansas, Louisiana, Mississippi, and Texas. We're investing in the reliability, resilience and growth of the energy system while helping our region transition to cleaner, more efficient energy solutions. With roots in our communities for more than 100 years, Entergy is a nationally recognized leader in sustainability and corporate citizenship. Since 2018, we have delivered more than $100 million in economic benefits each year to local communities through philanthropy, volunteerism, and advocacy. Entergy is headquartered in New Orleans, Louisiana, and has approximately 12,000 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 presentation. Both documents are available on Entergy's Investor Relations website at investors.entergy.com/investors/events-and-presentations.
Entergy maintains a web page as part of its Investor Relations website entitled Regulatory and other information, which provides investors with key updates on 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 E.
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 news 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." 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 significant tax items, and other items such as certain costs, expenses, or other specified items. In addition to reporting GAAP 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 ROE; adjusted ROE, excluding affiliate preferred; FFO to adjusted debt; gross liquidity; net liquidity; adjusted Parent debt to total adjusted debt; adjusted debt to adjusted capitalization; and adjusted net debt to adjusted net capitalization 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. These metrics are defined in Appendix E.
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, statements regarding Entergy's 2024 earnings guidance; financial and operational outlooks; industrial load growth outlooks; statements regarding its climate transition and resilience plans, goals, beliefs, or expectations; 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 or on the timeline anticipated by the utilities and (2) implementation of the ratemaking effects of changes in law; (c) uncertainties associated with (1) realizing the benefits of its resilience plan, including impacts of the frequency and intensity of future storms and storm paths, as well as the pace of project completion and (2) 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 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 executing on business strategies, including (1) strategic transactions that Entergy or its subsidiaries may undertake and 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, and (2) Entergy's ability to meet the rapidly growing demand for electricity, including from hyperscale data center and other large customers, and to manage the impacts of such growth on customers and Entergy's business; (h) direct and indirect impacts to Entergy or its customers from pandemics, terrorist attacks, geopolitical conflicts, cybersecurity threats, data security breaches, or other attempts to disrupt Entergy's business or operations, and/or other catastrophic events; and (i) effects on Entergy or its customers of (1) 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; (2) changes in commodity markets, capital markets, or economic conditions; and (3) technological change, including the costs, pace of development, and commercialization of new and emerging technologies.
Third quarter 2024 earnings release appendices and financial statements
Appendices
A: Consolidated results and adjustments
B: Earnings variance analysis
C: Utility operating and financial measures
D: Consolidated financial measures
E: Definitions and abbreviations and acronyms
F: Other GAAP to non-GAAP reconciliations
Financial statements
Consolidating balance sheets
Consolidating income statements
Consolidated cash flow statements
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 2024 vs. 2023 (See Appendix A-2 and Appendix A-3 for details on adjustments)
Third quarter Year-to-date
---
2024 2023 Change 2024 2023 Change
(After-tax, $ in millions)
As-reported earnings (loss)
Utility 787 752 35 1,423 1,663 (240)
Parent & Other (142) (85) (57) (654) (294) (359)
Consolidated 645 667 (22) 769 1,369 (600)
Less adjustments
Utility - (59) 59 (267) 10 (277)
Parent & Other - 32 (32) (250) 32 (282)
Consolidated - (27) 27 (517) 42 (559)
Adjusted earnings (loss) (non-GAAP)
Utility 787 810 (24) 1,690 1,653 36
Parent & Other (142) (117) (25) (403) (326) (77)
Consolidated 645 694 (49) 1,286 1,327 (41)
Estimated weather impact 41 135 (94) 70 103 (33)
Diluted average number of common shares outstanding (in millions) 216 212 3 215 212 3
(After-tax, per share in $) (a)
As-reported earnings (loss)
Utility 3.65 3.54 0.11 6.63 7.84 (1.21)
Parent & Other (0.66) (0.40) (0.26) (3.04) (1.39) (1.66)
Consolidated 2.99 3.14 (0.15) 3.58 6.45 (2.87)
Less adjustments
Utility - (0.28) 0.28 (1.24) 0.05 (1.29)
Parent & Other - 0.15 (0.15) (1.17) 0.15 (1.32)
Consolidated - (0.13) 0.13 (2.41) 0.20 (2.61)
Adjusted earnings (loss) (non-GAAP)
Utility 3.65 3.82 (0.17) 7.87 7.79 0.08
Parent & Other (0.66) (0.55) (0.11) (1.88) (1.54) (0.34)
Consolidated 2.99 3.27 (0.28) 5.99 6.25 (0.26)
Estimated weather impact 0.19 0.64 (0.45) 0.33 0.48 (0.16)
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.
Appendix A-2 and Appendix A-3 detail adjustments by business. 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-2: Adjustments by driver (shown as positive/(negative) impact on earnings or EPS)
Third quarter and year-to-date 2024 vs. 2023
Third quarter Year-to-date
---
2024 2023 Change 2024 2023 Change
(Pre-tax except for income taxes and totals; $ in millions)
Utility
2Q24 E-LA global agreement to resolve its FRP extension filing - (151) (151)
and other retail matters
1Q24 E-AR write-off of a regulatory asset related to the - (132) (132)
opportunity sales proceeding
1Q24 E-NO increase in customer sharing of income tax benefits - (79) (79)
as a result of the 2016-2018 IRS audit resolution
3Q23 E-AR write-off of assets related to the ANO stator incident - (78) 78 (78) 78
1Q23 impacts from E-LA storm cost approval and securitization, - (87) 87
including customer sharing (excluding income tax item below)
Income tax effect on Utility adjustments above - 20 (20) 95 47 48
1Q23 E-LA income tax benefit resulting from securitization - 129 (129)
Total Utility - (59) 59 (267) 10 (277)
Parent & Other
2Q24 pension lift out - (317) (317)
3Q23 DOE spent nuclear fuel litigation settlement (IPEC) - 40 (40) 40 (40)
Income tax effect on Parent & Other adjustments above - (9) 9 67 (9) 75
Total Parent & Other - 32 (32) (250) 32 (282)
Total adjustments - (27) 27 (517) 42 (559)
(After-tax, per share in $) (b)
Utility
2Q24 E-LA global agreement to resolve its FRP extension filing - (0.52) (0.52)
and other retail matters
1Q24 E-AR write-off of a regulatory asset related to the - (0.45) (0.45)
opportunity sales proceeding
1Q24 E-NO increase in customer sharing of income tax benefits - (0.27) (0.27)
as a result of the 2016-2018 IRS audit resolution
3Q23 E-AR write-off of assets related to the ANO stator incident - (0.28) 0.28 (0.28) 0.28
1Q23 impacts from E-LA storm cost approval and securitization, - 0.32 (0.32)
including customer sharing
Total Utility - (0.28) 0.28 (1.24) 0.05 (1.29)
Parent & Other
2Q24 pension lift out - (1.17) (1.17)
3Q23 DOE spent nuclear fuel litigation settlement (IPEC) - 0.15 (0.15) 0.15 (0.15)
Total Parent & Other - 0.15 (0.15) (1.17) 0.15 (1.32)
Total adjustments - (0.13) 0.13 (2.41) 0.20 (2.61)
Calculations may differ due to rounding
(b) Per share amounts are calculated by multiplying the corresponding earnings (loss) by the estimated income tax rate that is expected to apply and dividing by
the diluted average number of common shares outstanding for the period.
Appendix A-3: Adjustments by income statement line item (shown as positive/ (negative) impact on earnings)
Third quarter and year-to-date 2024 vs. 2023
(Pre-tax except for income taxes and totals; $ in millions)
Third quarter Year-to-date
---
2024 2023 Change 2024 2023 Change
Utility
Operating revenues - 31 (31)
Other O&M - (1) (1)
Asset write-offs, impairments, and related charges - (78) 78 (132) (78) (53)
Other regulatory charges (credits) - net - (229) (103) (125)
Other income (deductions) - (15) 15
Income taxes - 20 (20) 95 176 (81)
Total Utility - (59) 59 (267) 10 (277)
Parent & Other
Asset write-offs, impairments, and related charges - 40 (40) 40 (40)
Other income (deductions) - (317) (317)
Income taxes - (9) 9 67 (9) 75
Total Parent & Other - 32 (32) (250) 32 (282)
Total adjustments - (27) 27 (517) 42 (559)
Calculations may differ due to rounding
Appendix A-4 provides a comparative summary of OCF by business.
Appendix A-4: Consolidated operating cash flow
Third quarter and year-to-date 2024 vs. 2023
($ in millions)
Third quarter Year-to-date
---
2024 2023 Change 2024 2023 Change
Utility 1,600 1,387 213 3,225 3,301 (76)
Parent
&
Other (37) 18 (55) (117) (70) (47)
Consolidated 1,562 1,405 157 3,109 3,231 (122)
Calculations may differ due to rounding
OCF increased for the quarter primarily due to lower Utility fuel and purchased power payments, timing of pension contributions, and higher Utility customer receipts. The increases were partially offset by higher interest payments and a DOE award received in third quarter 2023.
B: Earnings variance analysis
Appendix B-1 and Appendix B-2 provide details of current quarter and year-to-date 2024 versus 2023 as-reported and adjusted earnings per share variances for Utility and Parent & Other.
Appendix B-1: As-reported and adjusted earnings per share variance analysis (c), (d), (e)
Third quarter 2024 vs. 2023
(After-tax, per share in $)
Utility Parent & Other Consolidated
As- Adjusted As- Adjusted As- Adjusted
reported reported reported
2023 earnings (loss) 3.54 3.82 (0.40) (0.55) 3.14 3.27
Operating revenue less: (0.09) (0.09) (f) (0.02) (0.02) (0.11) (0.11)
fuel, fuel-related expenses and gas purchased
for resale; purchased power; and other
regulatory charges (credits) - net
Nuclear refueling outage expenses 0.01 0.01 0.01 0.01
Other O&M 0.10 0.10 (g) 0.10 0.10
Asset write-offs, impairments, and related charges 0.28 (h) (0.15) (i) 0.13
Decommissioning (0.01) (0.01) (0.01) (0.01)
Taxes other than income taxes 0.02 0.02 0.02 0.02
Depreciation and amortization (0.21) (0.21) (j) (0.21) (0.21)
Other income (deductions) 0.15 0.15 (k) (0.07) (0.07) (l) 0.07 0.07
Interest expense (0.08) (0.08) (m) (0.06) (0.06) (n) (0.14) (0.14)
Income taxes - other (0.01) (0.01) 0.04 0.04 0.03 0.03
Preferred dividend requirements and 0.01 0.01 0.01 0.01
noncontrolling interests
Share effect (0.06) (0.06) (o) 0.01 0.01 (0.05) (0.05)
2024 earnings (loss) 3.65 3.65 (0.66) (0.66) 2.99 2.99
Calculations may differ due to rounding
Appendix B-2: As-reported and adjusted earnings per share variance analysis (c), (d), (e)
Year-to-date 2024 vs. 2023
(After-tax, per share in $)
Utility Parent & Other Consolidated
As- Adjusted As- Adjusted As- Adjusted
reported reported reported
2023 earnings (loss) 7.84 7.79 (1.39) (1.54) 6.45 6.25
Operating revenue less: (0.25) 0.33 (f) (0.05) (0.05) (p) (0.30) 0.28
fuel, fuel-related expenses and gas purchased
for resale; purchased power; and other
regulatory charges (credits) - net
Nuclear refueling outage expenses (0.01) (0.01) (0.01) (0.01)
Other O&M (0.26) (0.25) (g) 0.02 0.02 (0.24) (0.24)
Asset write-offs, impairments, and related charges (0.18) (h) (0.15) (i) (0.33)
Decommissioning (0.03) (0.03) (0.03) (0.03)
Taxes other than income taxes (0.02) (0.02) (0.02) (0.02)
Depreciation and amortization (0.49) (0.49) (j) (0.49) (0.49)
Other income (deductions) 0.85 0.78 (k) (1.36) (0.18) (l) (0.51) 0.60
Interest expense (0.19) (0.19) (m) (0.17) (0.17) (n) (0.36) (0.36)
Income taxes - other (0.56) 0.05 (q) 0.02 0.02 (0.54) 0.07
Preferred dividend requirements and 0.01 0.01 0.01 0.01
noncontrolling interests
Share effect (0.08) (0.09) (o) 0.04 0.02 (0.04) (0.07)
2024 earnings (loss) 6.63 7.87 (3.04) (1.88) 3.58 5.99
Calculations may differ due to rounding
(c) Utility operating revenue and Utility income taxes - other excluded the following for the amortization of unprotected excess ADIT (net effect
was neutral to earnings) ($ in millions):
3Q24 3Q23 YTD24 YTD23
Utility operating revenue 6 5 22 8
Utility income taxes - other (6) (5) (22) (8)
(d) Utility regulatory charges (credits) - net and Utility preferred dividend requirements and noncontrolling interests excluded the following for the effects of
HLBV accounting and the approved deferral (net effect was neutral to earnings) ($ millions):
3Q24 3Q23 YTD24 YTD23
Utility regulatory charges (credits) - net (3) (3) (9) (10)
Utility preferred dividend requirements and 3 3 9 10
noncontrolling interests
(e) 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 income tax effect of individual line
items. Share effect captures the per share impact from the change in diluted average number of common shares outstanding.
Utility as-reported operating revenue less fuel, fuel-related expenses
and gas purchased for resale; purchased power;
and other regulatory charges (credits) - net variance analysis
2024 vs. 2023 ($ EPS)
3Q YTD
Electric volume / weather (0.41) (0.06)
Retail electric price 0.32 0.79
2Q24 E-LA global agreement to resolve its FRP - (0.52)
extension filing and other retail matters
2Q24 E-MS 2024 FRP relate-back - 0.03
1Q24 E-NO provision for increased income tax sharing - (0.27)
3Q23 E-TX adjustments to regulatory provisions (0.11) (0.11)
3Q23 E-TX base rate case relate-back 0.03 0.03
3Q23 SERI depreciation rate settlement 0.14 0.14
1Q23 impacts from E-LA storm cost approval and - 0.22
securitization, including customer sharing
E-LA wholesale contract termination (0.03) (0.09)
Reg. provisions for decommissioning items (0.03) (0.44)
Other, including Grand Gulf recovery - 0.03
Total (0.09) (0.25)
(f) The third quarter and year-to-date variances included several drivers. The third quarter variances included the effects of weather on retail volume, which
was partially offset by a wholesale contract termination (the sales from this agreement are now included in retail sales). The variances also reflected
regulatory actions including E-AR's FRP, E-LA's FRP (including riders), and E-MS's FRP. Additionally, the variances included the net effect of the third
quarter 2023 adjustments to regulatory provisions at E-TX, changes in regulatory provisions for decommissioning items (based on regulatory treatment,
decommissioning-related variances were offset in other line items and were largely earnings neutral), and a third quarter 2023 regulatory provision recorded
at SERI for the refund of excess depreciation previously collected from customers as a result of FERC approving lower depreciation rates retroactive to March
2022 (largely offset by a retroactive reduction in depreciation expense). The year-to-date as-reported variance also reflected several items that were
considered adjustments and excluded from adjusted earnings. (1) A regulatory charge of $(150 million) ($(111 million) after tax) was recorded in second
quarter 2024 as a result of E-LA reaching an agreement in principle to provide $184 million of customer credits, including for increasing customer sharing
of income tax benefits resulting from the 2016-2018 IRS audit resolution (a reserve of $38 million was previously established) to resolve several open
matters. (2) A regulatory charge for $(79 million) ($(57 million) after tax) was recorded in first quarter 2024 by E-NO to provide for sharing additional
income tax benefits from the 2016-2018 IRS audit resolution with customers. (3) E-LA recorded items in first quarter 2023 which resulted from its
securitization including $(103 million) ($(76 million) after tax) for a regulatory provision for customer sharing and $31 million ($31 million after tax) for
a true-up of carrying charges on storm costs. The year-to-date variances also included the effects of E-TX's base rate case relate-back portion in
retail electric price.
(g) The third quarter earnings increase from lower Utility other O&M was largely due to a decrease in power delivery expenses primarily due to the timing of
vegetation maintenance costs and lower compensation and benefits costs. The year-to-date earnings decrease from higher Utility other O&M was primarily due
to higher contract costs related to operational performance, customer service, and organizational health initiatives; higher energy efficiency costs; the
recognition of an E-AR DOE award judgment in the third quarter 2023; higher bad debt expense; higher MISO transmission costs; higher non-nuclear generation
expenses primarily due to the scope of work performed in 2024 compared to 2023; and a gain recorded in second quarter 2023 on the partial sale of a service
center as part of an eminent domain proceeding. The year-to-date earnings decrease was partially offset by lower power delivery expenses due to the timing
of vegetation maintenance costs.
(h) The third quarter as-reported earnings increase from lower Utility asset write-offs and impairments was primarily due to a $(78 million) ($(59 million)
after-tax) E-AR write-off in third quarter 2023, which resulted from E-AR's agreement to forgo its opportunity to seek recovery of costs associated with
the ANO Stator incident in 2013 (considered an adjustment and excluded from adjusted earnings). The year-to-date as-reported earnings decrease from higher
Utility asset write-offs and impairments also reflected the first quarter 2024 write-off of an E-AR regulatory asset totaling $(132 million) ($(97
million) after tax) related to the opportunity sales proceeding (considered an adjustment and excluded from adjusted earnings).
(i) The third quarter and year-to-date as-reported earnings decreases from Parent & Other asset write-offs and impairments were due to recording a spent fuel
litigation settlement related to IPEC in third quarter 2023 (considered an adjustment and excluded from adjusted earnings).
(j) The third quarter and year-to-date earnings decreases from higher Utility depreciation and amortization were primarily due to a reduction in depreciation
expense in third quarter 2023 resulting from FERC approval of lower depreciation rates at SERI retroactive to March 2022 (largely offset by a regulatory
provision to refund the excess depreciation previously collected from customers) and higher plant in service. The year-to-date decrease also reflected the
recognition of depreciation expense from E-TX's 2022 base rate case relate-back effective January 2024 and an increase in depreciation rates for E-TX
effective June 2023. The year-to-date decrease was partially offset by lower depreciation rates for SERI effective June 2023.
(k) The third quarter and year-to-date earnings increases from higher Utility other income (deductions) were largely due to a decrease in non-service pension
costs and changes in nuclear decommissioning trust returns, including portfolio rebalancing in 2024 (based on regulatory treatment, decommissioning-related
variances are offset in other line items and were largely earnings neutral). Higher AFUDC-equity due to higher construction work in progress also contributed
to the increase. The year-to-date increase also reflected higher intercompany dividend income from affiliate preferred membership interests related to 2023
storm cost securitizations (largely offset at P&O), and a $(15 million) ($(15 million) after tax) charge recorded in first quarter 2023 to account for LURC's
1% beneficial interest in the storm trust established as part of E-LA's 2023 storm cost securitization (considered an adjustment and excluded from adjusted
earnings).
(l) The third quarter and year-to-date as-reported earnings decreases from lower Parent & Other other income (deductions) were partly due to changes in legal
provisions and lower non-service pension income. The year-to-date decrease also reflected a second quarter 2024 $(317 million) ($(250 million) after tax)
one-time non-cash pension settlement charge associated with the purchase of a group annuity contract to settle certain pension liabilities (considered an
adjustment and excluded from adjusted earnings) as well as higher intercompany dividends associated with affiliate preferred membership interests resulting
from E-LA's securitizations (largely offset at Utility).
(m) The third quarter and year-to-date earnings decreases from higher Utility interest expense were primarily due to higher interest rates as well as higher
debt balances.
(n) The third quarter and year-to-date earnings decreases from higher Parent & Other interest expense were primarily due to the issuance of $1.2 billion of
junior subordinated debentures in May 2024. The year-to-date decrease also reflected higher interest on commercial paper borrowings.
(o) The third quarter and year-to-date earnings per share impacts from share effect reflected higher shares outstanding due to the settlement of equity forwards
in fourth quarter 2023 under the company's ATM program, option exercises under the company's stock-based compensation plans, and the dilutive effect of
unsettled equity forwards under the company's ATM program as a result of an increase in the stock price.
(p) The year-to-date earnings decrease from lower P&O net revenue was primarily due to lower capacity revenues resulting from the first quarter 2024 termination
of a municipal requirements contract.
(q) The year-to-date as-reported earnings decrease from Utility income taxes - other was largely due to a $129 million income tax benefit recorded in first
quarter 2023 related to storm cost securitization financing (considered an adjustment and excluded from adjusted earnings). Excluding this item, there were
several individually insignificant items that partially offset the as-reported decrease.
C: Utility operating and financial measures
Appendix C provides a comparison of Utility operating and financial measures.
Appendix C: Utility operating and financial measures
Third quarter and year-to-date 2024 vs. 2023
Third quarter
Year-to-date
---
2024 2023 % Change % Weather 2024 2023 % Change % Weather
adjusted adjusted
(r) (r)
GWh sold
Residential 11,519 12,661 (9.0) 1.3 28,499 28,963 (1.6) (0.2)
Commercial 8,394 8,648 (2.9) 2.0 21,797 21,865 (0.3) 0.7
Governmental 684 700 (2.3) (0.3) 1,883 1,887 (0.2) 0.8
Industrial 15,150 13,781 9.9 9.9 42,174 39,823 5.9 5.9
Total retail sales 35,747 35,790 (0.1) 5.0 94,353 92,538 2.0 2.7
Wholesale 3,727 3,916 (4.8) 10,737 11,589 (7.4)
Total sales 39,474 39,706 (0.6) 105,090 104,127 0.9
Number of electric retail customers
Residential 2,601,894 2,581,652 0.8
Commercial 371,579 370,966 0.2
Governmental 18,015 18,008
Industrial 49,550 50,380 (1.6)
Total retail customers 3,041,038 3,021,006 0.7
Other O&M and nuclear refueling outage exp. per MWh $19.01 $19.70 (3.5) $20.87 $20.34 2.6
Calculations may differ due to rounding
(r) The effects of weather were estimated using heating degree days and cooling degree days for the period from certain locations within each jurisdiction and
comparing to "normal" weather based on 20-year historical data. The models used to estimate weather are updated periodically and are subject to change.
For the quarter, on a weather-adjusted basis, retail sales increased 5.0 percent. Industrial sales increased 9.9 percent mainly due to higher sales to large industrial customers primarily in the petroleum refining industry. Residential sales were 1.3 percent higher and commercial sales increased 2.0 percent.
D: Consolidated financial measures
Appendix D provides comparative financial measures. Financial measures in this table include those calculated and presented in accordance with GAAP, as well as those that are considered non-GAAP financial measures.
Appendix D: GAAP and non-GAAP financial measures
Third quarter 2024 vs. 2023 (See Appendix F for reconciliation of GAAP to non-GAAP financial measures)
For 12 months ending September 30 2024 2023 Change
GAAP measure
As-reported ROE 12.2 % 11.4 % 0.8 %
Non-GAAP financial measure
Adjusted ROE 9.7 % 11.1 % (1.4) %
As of September 30 ($ in millions, except where noted) 2024 2023 Change
GAAP measures
Cash and cash equivalents 1,412 1,520 (108)
Available revolver capacity 4,345 4,346 (1)
Commercial paper 1,122 1,351 (229)
Total debt 29,100 27,619 1,481
Junior subordinated debentures 1,200 1,200
Securitization debt 249 278 (29)
Debt to capital 65 % 66 % (1) %
Storm escrows 336 416 (80)
Non-GAAP financial measures ($ in millions, except where noted)
Adjusted debt to adjusted capitalization 64 % 66 % (2) %
Adjusted net debt to adjusted net capitalization 63 % 65 % (2) %
Gross liquidity 5,757 5,865 (108)
Net liquidity 6,361 4,978 1,383
Adjusted parent debt to total adjusted debt 20 % 20 % 1 %
FFO to adjusted debt 13.5 % 12.4 % 1.1 %
Calculations may differ due to rounding
E: Definitions and abbreviations and acronyms
Appendix E-1 provides definitions of certain operating measures, as well as GAAP and non-GAAP financial measures.
Appendix E-1: Definitions
Utility operating and financial measures
GWh sold
Total number of GWh sold to retail and wholesale customers
Number of electric retail
Average number of electric customers over the period
customers
Other O&M and refueling
Other operation and maintenance expense plus nuclear refueling outage expense per MWh of total sales
outage expense per MWh
Financial measures - GAAP
As-reported ROE
Last twelve months net income attributable to Entergy Corp. divided by avg. common equity
Debt to capital
Total debt divided by total capitalization
Available 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
Financial measures - non-GAAP
Adjusted capitalization
Capitalization excluding securitization debt
Adjusted debt
Debt excluding securitization debt and 50% of junior subordinated debentures
Adjusted debt to adjusted
Adjusted debt divided by adjusted capitalization
capitalization
Adjusted EPS
As-reported earnings minus adjustments, divided by the diluted average number of common shares outstanding
Adjusted net capitalization
Adjusted capitalization minus cash and cash equivalents
Adjusted net debt
Adjusted debt minus cash and cash equivalents
Adjusted net debt to adjusted
Adjusted net debt divided by adjusted net capitalization
net capitalization
Adjusted Parent debt Entergy Corp. debt, including amounts drawn on credit revolver and commercial paper facilities, minus 50% of junior subordinated
debentures
Adjusted Parent debt to total
Adjusted Parent debt divided by consolidated adjusted debt
adjusted debt
Adjusted ROE
Last twelve months adjusted earnings divided by average common equity
Adjusted ROE excluding Last twelve months adjusted earnings, excluding dividend income from affiliate preferred as well as the after-tax cost of debt financing
for preferred investment, divided by average common equity adjusted to exclude the estimated equity associated with the affiliate
preferred investment
affiliate preferred
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 significant tax items, and other items such as certain costs, expenses, or other specified items
FFO OCF minus AFUDC-borrowed funds, working capital items in OCF (receivables, fuel inventory, accounts payable, taxes accrued, interest
accrued, deferred fuel costs, and other working capital accounts), 50% of interest on junior subordinated debentures, and securitization
regulatory charges
FFO to adjusted debt
Last twelve months FFO divided by end of period adjusted debt
Gross liquidity
Sum of cash and cash equivalents plus available revolver capacity
Net liquidity Sum of cash and cash equivalents, available revolver capacity, escrow accounts available for certain storm expenses, and equity sold
forward but not yet settled minus commercial paper borrowing
Appendix E-2 explains abbreviations and acronyms used in the quarterly earnings materials.
Appendix E-2: Abbreviations and acronyms
ADIT Accumulated deferred income taxes IPEC
Indian Point Energy Center (nuclear)
(sold 5/28/21)
AFUDC - Allowance for borrowed funds used
during
borrowed funds construction
Internal Revenue Service
IRS
AFUDC - equity Allowance for equity funds used
during
Lake Charles Power Station
construction LCPS
Local distribution company
Advanced metering system LDC
AMS
Liquified natural gas
Arkansas Nuclear One (nuclear) LNG
ANO
Louisiana Public Service Commission
Arkansas Public Service Commission LPSC
APSC
Last twelve months
At the market equity issuance program LTM
ATM Louisiana Utility Restoration Corporation
Barrels LURC
bbl Midcontinent Independent System Operator, Inc.
Billion cubic feet per day MISO
Bcf/d
Million British thermal units
Basis points MMBtu
bps
Moody's Ratings
Compound annual growth rate Moody's
CAGR
Mississippi Public Service Commission
Combined cycle combustion turbine MPSC
CCCT
MISO Transmission Expansion Plan
Combined cycle gas turbine MTEP
CCGT
National Balancing Point
Certificate for convenience and
necessity NBP
CCN
Nuclear decommissioning trust
Council of the City of New Orleans NDT
CCNO
Natural gas liquid
Carbon capture and sequestration NGL
CCS
New York Stock Exchange
Cash from operations NYSE
CFO
Operations and maintenance
Commercial operation date O&M
COD Orange County Advanced Power Station (CCCT)
Combustion turbine OCAPS
CT Net cash flow provided by operating activities
Distribution cost recovery factor OCF
DCRF
Utility operating company
U.S. Department of Energy OpCo
DOE
Other post-employment benefits
Distribution Recovery Mechanism
(rider within OPEB
DRM E-LA's FRP) Other non-fuel operation and maintenance expense
Other O&M
Entergy Arkansas, LLC P&O
Parent & Other
E-AR
Entergy Louisiana, LLC PMR
Performance Management Rider
E-LA
Entergy Mississippi, LLC PPA Power purchase agreement or purchased power
agreement
PUCT
E-MS
Entergy New Orleans, LLC
Public Utility Commission of Texas
RECs
E-NO
Entergy Texas, Inc.
Renewable Energy Certificates
RFP
E-TX
Edison Electric Institute
Request for proposals
ROE
EEI
Earnings per share
Return on equity
RPCR
EPS Environmental, social, and governance
Resilience plan cost recovery rider
RSP
ESG
Entergy Corporation
Rate Stabilization Plan (E-LA gas)
S&P
ETR Federal Energy Regulatory Commission
Standard & Poor's
SEC
FERC
Funds from operations U.S. Securities and Exchange Commission
SERI
FFO
Formula rate plan
System Energy Resources, Inc.
TCRF
FRP U.S. generally accepted accounting
principles
Transmission cost recovery factor
TRAM
GAAP Grid Resilience and Innovation
Partnerships
Tax reform adjustment mechanism
(DOE grant program) TRM
GRIP UPSA Transmission Recovery Mechanism (rider within E-
LA's FRP)
Generation Cost Recovery Rider
WACC
Unit Power Sales Agreement
Unit 1 of Grand Gulf Nuclear Station
(nuclear),
GCRR 90% owned or leased by SERI WTI
Weighted-average cost of capital
Grand Gulf or Hypothetical liquidation at book
value
West Texas Intermediate
GGNS
HLBV
F: Other GAAP to non-GAAP reconciliations
Appendix F-1, Appendix F-2, and Appendix F-3 provide reconciliations of various non-GAAP financial measures disclosed in this news release to their most comparable GAAP measure.
Appendix F-1: Reconciliation of GAAP to non-GAAP financial measures - ROE
(LTM $ in millions except where noted) Third quarter
2024 2023
As-reported net income attributable to Entergy Corporation (A) 1,757 1,475
Adjustments (B) 360 41
Adjusted earnings (non-GAAP) (C)=(A-
B) 1,397 1,434
Average common equity (average of beginning and ending balances) (D) 14,362 12,894
As-reported ROE (A/D) 12.2 % 11.4 %
Adjusted ROE (non-GAAP) (C/D) 9.7 % 11.1 %
Calculations may differ due to rounding
Appendix F-2: Reconciliation of GAAP to non-GAAP financial measures - FFO to adjusted debt
($ in millions except where noted) Third quarter
2024 2023
Total debt (A) 29,100 27,619
Securitization debt (B) 249 278
50% junior subordinated debentures (C) 600
Adjusted debt (non-GAAP) (D)=(A-B-
C) 28,251 27,341
Net cash flow provided by operating activities, LTM (E) 4,172 4,007
AFUDC - borrowed funds, LTM (F) 46 39
50% of the interest expense associated with junior subordinated debentures, LTM (G) (15)
Working capital items in net cash flow provided by operating activities, LTM:
Receivables 46 (6)
Fuel inventory 26 (47)
Accounts payable 32 (346)
Taxes accrued 39 23
Interest accrued 11 32
Deferred fuel costs 347 1,048
Other working capital accounts (198) (170)
Securitization regulatory charges, LTM 24 32
Total (H) 328 566
FFO, LTM (non-GAAP) (I)=(E-F-
G-H) 3,814 3,402
FFO to adjusted debt (non-GAAP) (I/D) 13.5 % 12.4 %
Calculations may differ due to rounding
Appendix F-3: Reconciliation of GAAP to non-GAAP financial measures - adjusted debt ratios; gross liquidity; and net liquidity
($ in millions except where noted) Third quarter
2024 2023
Total debt
(A) 29,100 27,619
Securitization debt
(B) 249 278
50% junior subordinated debentures
(C) 600
Adjusted debt (non-GAAP) (D)=(A-B-C) 28,251 27,341
Cash and cash equivalents
(E) 1,412 1,520
Adjusted net debt (non-GAAP) (F)=(D-E) 26,839 25,821
Commercial paper
(G) 1,122 1,351
Total capitalization
(H) 44,461 41,657
Securitization debt
(B) 249 278
Adjusted capitalization (non-GAAP) (I)=(H-B) 44,212 41,379
Cash and cash equivalents
(E) 1,412 1,520
Adjusted net capitalization (non-GAAP) (J)=(I-E) 42,800 39,859
Total debt to total capitalization
(A/H) 65 % 66 %
Adjusted debt to adjusted capitalization (non-GAAP)
(D/I) 64 % 66 %
Adjusted net debt to adjusted net capitalization (non-GAAP)
(F/J) 63 % 65 %
Available revolver capacity
(K) 4,345 4,346
Storm escrows
(L) 336 416
Equity sold forward, not yet settled (s)
(M) 1,390 48
Gross liquidity (non-GAAP) (N)=(E+K) 5,757 5,865
Net liquidity (non-GAAP) (N-G+L+M) 6,361 4,978
Entergy Corporation notes:
Due September 2025 800 800
Due September 2026 750 750
Due June 2028 650 650
Due June 2030 600 600
Due June 2031 650 650
Due June 2050 600 600
Junior subordinated debentures due December 2054 1,200
Total Parent long-term debt
(O) 5,250 4,050
Revolver draw
(P)
Unamortized debt issuance costs and discounts
(Q) (47) (39)
Total parent debt (R)=(G+O+P+Q) 6,326 5,363
Adjusted Parent debt (non-GAAP) (S)=(R-C) 5,726 5,363
Adjusted parent debt to total adjusted debt (non-GAAP)
(S/D) 20 % 20 %
Calculations may differ due to rounding
(s) Reflects adjustments, including for common dividends between issuance
and settlement.
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SOURCE Entergy Corporation
