NEW ORLEANS, Oct. 24, 2017 /PRNewswire/ — Entergy Corporation (NYSE: ETR) reported third quarter 2017 earnings per share of $2.21 on an as-reported basis and $2.35 on an operational basis (non-GAAP), which excludes the effects of special items.

Entergy Corporation Logo. (PRNewsFoto/Entergy Corporation) (PRNewsFoto/) (PRNewsFoto/)

«Today we are reporting a strong third quarter, and we now expect to finish the year in the top half of our Utility, Parent & Other adjusted earnings guidance range,» said Entergy Chairman and Chief Executive Officer Leo Denault. «We have completed most of our key deliverables for the year that support our strategy to achieve steady, predictable growth at the Utility, while managing risk and an orderly exit of our merchant power business. We are affirming our 2017 guidance and our longer-term outlooks.»

Business highlights included the following:

  • Entergy Arkansas reached an unopposed settlement with the Arkansas Attorney General and other intervenors on the recovery of nuclear costs in its 2017 and 2018 test year FRP filings.  The settlement is subject to approval by the APSC.
  • Entergy Arkansas and Entergy Texas filed settlement agreements for their AMI proceedings.
  • Entergy Louisiana filed its application to extend and modify its annual formula rate plan.
  • The PUCT approved Entergy Texas’ DCRF settlement agreement.
  • The utility companies successfully restored power to approximately 250,000 customers in the wake of Hurricane Harvey.
  • Entergy plans to operate Palisades Power Plant until no later than May 31, 2022, under the existing power purchase agreement with Consumers Energy.
  • Entergy was named to the 2017 Dow Jones Sustainability North America Index; this is the 16th 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 2017 vs. 2016 (See Appendix A for reconciliation of GAAP to non-GAAP earnings and description of special items)

Third Quarter

Year-to-Date

2017

2016

Change

2017

2016

Change

(After-tax, $ in millions)

As-reported earnings

398.2

388.2

10.0

890.7

1,185.4

(294.7)

Less special items

(25.5)

(27.5)

1.9

(271.9)

(30.7)

(241.2)

Operational earnings (non-GAAP)

423.7

415.6

8.1

1,162.6

1,216.2

(53.5)

  Estimated weather in billed sales

(44.7)

33.8

(78.5)

(89.9)

(8.0)

(81.9)

(After-tax, per share in $)

As-reported earnings

2.21

2.16

0.05

4.94

6.60

(1.66)

Less special items

(0.14)

(0.15)

0.01

(1.51)

(0.17)

(1.34)

Operational earnings (non-GAAP)

2.35

2.31

0.04

6.45

6.77

(0.32)

  Estimated weather in billed sales

(0.25)

0.18

(0.43)

(0.50)

(0.04)

(0.46)

Calculations may differ due to rounding

Consolidated Results

For third quarter 2017, the company reported earnings of $398 million, or $2.21 per share, on an as-reported basis and $424 million, or $2.35 per share, on an operational basis. This compared to third quarter 2016 earnings of $388 million, or $2.16 per share, on an as-reported basis and $416 million, or $2.31 per share, on an operational basis. Summary discussions by business are below.

Additional details, including information on OCF by business, are provided in Appendix A and a comprehensive analysis of quarterly and year-to-date variances is provided in Appendix B.

Utility, Parent & Other Results

For third quarter 2017, the Utility business earned net income attributable to Entergy Corporation of $401 million, or $2.22 per share, compared to $443 million, or $2.47 per share, in third quarter 2016. Drivers for the quarterly decrease included lower net revenue and higher operating expenses.

Net revenue decreased quarter-over-quarter, driven by unfavorable weather in the current quarter compared to favorable weather a year ago. For third quarter 2017, cooling degree days were 16 percent below normal, compared to 14 percent above normal in third quarter 2016. Excluding the effects of weather, net revenue was higher reflecting weather-adjusted sales growth and new rate actions to recover investments that benefit customers.

On a weather-adjusted basis, billed sales increased 3.5 percent, including 3.8 percent and 2.5 percent for residential and commercial billed sales, respectively. Industrial billed sales volume increased 4.0 percent with higher sales to both new and expansion customers as well as existing customers. The increase was driven largely by the primary metals and chlor-alkali segments. Sales to petroleum refining and industrial gases customers were also higher.

Utility non-fuel O&M increased quarter-over-quarter, driven by higher spending on nuclear operations including nuclear refueling outage expenses. Depreciation and amortization as well as taxes other than income taxes were also higher. In addition, other income increased period-over-period due partly to higher AFUDC-equity funds.

Parent & Other recognized a loss of $(58) million, or (32) cents per share, for third quarter 2017, compared to a loss of $(63) million, or (35) cents per share, for third quarter 2016.

On a combined basis, Utility, Parent & Other (non-GAAP) contributed $1.90 to third quarter 2017 consolidated EPS and $2.12 to third quarter 2016 consolidated EPS. On an adjusted basis, normalizing weather and income taxes, Utility, Parent & Other (non-GAAP) contributed $2.15 per share in third quarter 2017 to consolidated EPS, compared to $1.98 in third quarter 2016.

Appendix C contains additional details on Utility financial and operating measures, including reconciliation for non-GAAP Utility, Parent & Other adjusted earnings and EPS.

Entergy Wholesale Commodities Results

For third quarter 2017, EWC earned net income attributable to Entergy Corporation of $55 million, or 31 cents per share, compared to $8 million, or 4 cents per share, for third quarter 2016. On an operational basis, EWC earned $81 million, or 45 cents per share, in third quarter 2017, compared to $35 million, or 19 cents per share, in third quarter 2016.

The sale of FitzPatrick at the end of first quarter 2017 affected period-over-period variances for multiple line items. In third quarter 2016, the plant contributed a (15) cent loss to as-reported EPS and 2 cents to operational EPS.

Excluding FitzPatrick, revenue from nuclear plants increased due to higher capacity prices. Current period earnings also reflected the impacts of previous impairments, specifically lower fuel and refueling outage expenses. Other income increased largely from higher realized earnings on decommissioning trust funds. Partially offsetting the increases was higher decommissioning expense due in part to the agreement with NYPA to transfer the Indian Point Unit 3 decommissioning liability and associated trust to Entergy.

Appendix D contains additional details on EWC financial and operating measures, including the calculation of EWC operational adjusted EBITDA (non-GAAP).

Earnings Guidance

Entergy affirmed its 2017 operational earnings guidance range of $6.80 to $7.40 per share and its Utility, Parent & Other adjusted guidance range of $4.25 to $4.55 per share. See webcast presentation slides for additional details.

The company has provided 2017 earnings guidance with regard to the non-GAAP measures of operational EPS and Utility, Parent & Other adjusted EPS. These measures exclude from the corresponding GAAP financial measures the effect of special items 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 special items that may occur during 2017. The only anticipated special items that the company can reasonably estimate at this time are those that relate to the decisions to sell or close the company’s merchant nuclear plants; these estimated costs, which are excluded from the earnings guidance, are expected to decrease as-reported EPS by approximately $(2.10) per share.

Earnings Teleconference

A teleconference will be held from 10:00 a.m. to 10:40 a.m. Central Time on Tuesday, Oct. 24, 2017, 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 56951898, 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 Oct. 31, 2017, by dialing 855-859-2056, conference ID 56951898. This release and the webcast slide presentation are also available on the Entergy Investor Relations mobile web app at iretr.com.

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 $10.8 billion and nearly 13,000 employees.

Entergy Corporation’s common stock is listed on the New York and Chicago stock exchanges 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 and on Entergy’s Investor Relations mobile web app at iretr.com.

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. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position, or cash flows that either excludes or includes 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.

Certain non-GAAP financial measures in this news release could differ from GAAP only in that the figure or ratio states or includes operational earnings. Operational earnings are not calculated in accordance with GAAP because they exclude the effect of «special items.» Special items are unusual or non-recurring items or events or other items or events that management believes do not reflect the ongoing business of Entergy, and may include items such as impairments, gains or losses on asset sales, and other gains or losses occurring as a result of strategic decisions such as Entergy’s recent decisions to shut down or sell its merchant nuclear plants. 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 operational and as-reported basis. In each case, the metrics defined as «operational» would exclude the effect of special items as defined above. Entergy reports the combination of the Utility segment with Parent & Other as Utility, Parent & Other, which is all of Entergy excluding the EWC segment, since management uses this combination in making decisions about its ongoing business in light of its decision to exit the merchant power business. Entergy also reports Utility, Parent & Other adjusted earnings, which combines the Utility segment with Parent & Other, excludes applicable special items and normalizes weather and income tax expense for the periods presented, because it believes that these financial metrics provide useful information to investors in evaluating the ongoing results of Entergy’s businesses and assist investors in comparing Entergy’s financial performance to the financial performance of other companies in the Utility sector. In addition to reporting earnings per share on a consolidated basis, Entergy reports on a per share basis the earnings or loss of each of its segments, together with the combination of the Utility segment and Parent & Other. These per share measures represent the net income or loss of such segment or segments divided by the diluted average number of shares of common stock outstanding over the period. Entergy believes such per share measures provide useful information to investors in understanding the results of operations of those businesses and their contribution to Entergy’s consolidated results of operations.

Other non-GAAP measures, including adjusted EBITDA; operational adjusted EBITDA; gross liquidity; debt to capital ratio, excluding securitization debt; net debt to net capital ratio, excluding securitization debt; parent debt to total debt ratio, excluding securitization debt; debt to operational adjusted EBITDA, excluding securitization debt; operational FFO to debt ratio, excluding securitization debt are measures Entergy uses internally for management and board discussions and cash budgeting and performance monitoring activities 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.

The non-GAAP financial measures and other reported adjusted items in this release are presented in addition to, and in conjunction with, results presented in accordance with GAAP. These non-GAAP financial measures should not be used to the exclusion of GAAP financial measures. 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. Investors are strongly encouraged to review Entergy’s consolidated financial statements and publicly filed reports in their entirety and to not rely on any single financial measure. 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 2017 earnings guidance, its current financial and operational outlook, 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 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; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory costs and risks, including any changes resulting from the nuclear crisis in Japan following its catastrophic earthquake and tsunami; (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; and (i) the effects of technological changes and changes in commodity markets, capital markets or economic conditions, during the periods covered by the forward-looking statements.

Third Quarter 2017 Earnings Release Appendices and Financial Statements

Appendices
Appendices are presented in this section as follows:

  • A: Consolidated Results and Special Items
  • 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 Special Items
Appendix A-1 provides a comparative summary of consolidated earnings, including a reconciliation of as-reported earnings (GAAP) to operational earnings (non-GAAP).

Appendix A-1: Consolidated Earnings – Reconciliation of GAAP to Non-GAAP Measures

Third Quarter and Year-to-Date 2017 vs. 2016 (See Appendix A-3 and Appendix A-4 for details on special items, including income tax effects on adjustments)

Third Quarter

Year-to-Date

2017

2016

Change

2017

2016

Change

(After-tax, $ in millions)

Earnings

Utility

400.8

443.3

(42.5)

809.0

1,013.8

(204.8)

Parent & Other

(57.9)

(62.8)

4.9

(169.1)

(165.4)

(3.8)

EWC

55.2

7.7

47.5

250.8

337.0

(86.2)

Consolidated

398.2

388.2

10.0

890.7

1,185.4

(294.7)

Less special items

Utility

Parent & Other

EWC

(25.5)

(27.5)

1.9

(271.9)

(30.7)

(241.2)

Consolidated

(25.5)

(27.5)

1.9

(271.9)

(30.7)

(241.2)

Operational (non-GAAP)

Utility

400.8

443.3

(42.5)

809.0

1,013.8

(204.8)

Parent & Other

(57.9)

(62.8)

4.9

(169.1)

(165.4)

(3.8)

EWC

80.7

35.2

45.6

522.7

367.7

155.0

Consolidated

423.7

415.6

8.1

1,162.6

1,216.2

(53.5)

Estimated weather in billed sales

(44.7)

33.8

(78.5)

(89.9)

(8.0)

(81.9)

Diluted average number of common shares outstanding (in millions)

180.5

180.0

180.2

179.5

(After-tax, per share in $) (a)

Earnings

Utility

2.22

2.47

(0.25)

4.49

5.64

(1.15)

Parent & Other

(0.32)

(0.35)

0.03

(0.94)

(0.92)

(0.02)

EWC

0.31

0.04

0.27

1.39

1.88

(0.49)

Consolidated

2.21

2.16

0.05

4.94

6.60

(1.66)

Less special items

Utility

Parent & Other

EWC

(0.14)

(0.15)

0.01

(1.51)

(0.17)

(1.34)

Consolidated

(0.14)

(0.15)

0.01

(1.51)

(0.17)

(1.34)

Operational (non-GAAP)

Utility

2.22

2.47

(0.25)

4.49

5.64

(1.15)

Parent & Other

(0.32)

(0.35)

0.03

(0.94)

(0.92)

(0.02)

EWC

0.45

0.19

0.26

2.90

2.05

0.85

Consolidated

2.35

2.31

0.04

6.45

6.77

(0.32)

Estimated weather in billed sales

(0.25)

0.18

(0.43)

(0.50)

(0.04)

(0.46)

Calculations may differ due to rounding

(a) 

Per share amounts are calculated by dividing the corresponding line item in the chart above by the diluted average number of common shares outstanding over the period.

See Appendix B for detailed earnings variance analysis. See Appendix A-3 for special items by driver.

Appendix A-2 provides the components of OCF contributed by each business.

Appendix A-2: Consolidated Operating Cash Flow

Third Quarter and Year-to-Date 2017 vs. 2016

($ in millions)

Third Quarter

Year-to-Date

2017

2016

Change

2017

2016

Change

Utility

878

929

(51)

2,005

2,078

(73)

Parent & Other

(92)

(53)

(39)

(318)

(162)

(156)

EWC

107

124

(17)

26

336

(310)

Total OCF

893

1,000

(107)

1,713

2,252

(540)

Calculations may differ due to rounding

OCF decreased quarter-over-quarter, driven in part by the receipt of DOE litigation proceeds in third quarter 2016. Unfavorable weather in the quarter, compared to favorable weather a year ago, also contributed. Positive weather-adjusted sales growth partially offset the decrease.

Appendix A-3 and Appendix A-4 list special items by business. Amounts are shown on both a net income and per share basis. Special items are included in as-reported earnings consistent with GAAP, but are excluded from operational earnings. As a result, operational earnings is considered a non-GAAP measure.

Appendix A-3: Special Items by Driver (shown as positive/(negative) impact on earnings or EPS)

Third Quarter and Year-to-Date 2017 vs. 2016

Third Quarter

Year-to-Date

2017

2016

Change

2017

2016

Change

(Pre-tax except for income tax effects and total, $ in millions)

EWC

Items associated with decisions to close or sell EWC nuclear plants

(39.3)

(42.4)

3.2

(503.0)

(81.3)

(421.7)

Gain on the sale of FitzPatrick

16.3

16.3

DOE litigation awards

33.8

(33.8)

Income tax effect on adjustments above (b)

13.7

15.0

(1.2)

170.4

16.8

153.6

Income tax benefit resulting from FitzPatrick transaction

44.5

44.5

   Total EWC

(25.5)

(27.5)

1.9

(271.9)

(30.7)

(241.2)

Total special items

(25.5)

(27.5)

1.9

(271.9)

(30.7)

(241.2)

(After-tax, per share in $) (c)

EWC

Items associated with decisions to close or sell EWC nuclear plants

(0.14)

(0.15)

0.01

(1.82)

(0.29)

(1.53)

Gain on the sale of FitzPatrick

0.06

0.06

DOE litigation awards

0.12

(0.12)

Income tax benefit resulting from FitzPatrick transaction

0.25

0.25

   Total EWC

(0.14)

(0.15)

0.01

(1.51)

(0.17)

(1.34)

Total special items

(0.14)

(0.15)

0.01

(1.51)

(0.17)

(1.34)

Calculations may differ due to rounding

(b) 

Income tax effect is calculated by multiplying the pre-tax amount by the estimated income tax rate that is expected to apply.

(c) 

EPS effect is calculated by multiplying the pre-tax amount by the estimated income tax rate that is expected to apply to each adjustment and then dividing by the diluted average number of common shares outstanding.

Appendix A-4: Special Items by Income Statement Line Item (shown as positive/(negative) impact on earnings)

Third Quarter and Year-to-Date 2017 vs. 2016

(Pre-tax except for Income taxes and total, $ in millions)

Third Quarter

Year-to-Date

2017

2016

Change

2017

2016

Change

EWC

Net revenue

7.5

(7.5)

91.0

7.5

83.6

Non-fuel O&M

(21.6)

(29.3)

7.7

(179.0)

(18.1)

(160.9)

Taxes other than income taxes

(1.5)

(1.8)

0.3

(8.1)

(3.7)

(4.3)

Asset write-off and impairments

(16.2)

(18.8)

2.6

(421.6)

(33.2)

(388.4)

Gain on sale of assets

16.3

16.3

Miscellaneous net (other income)

14.6

14.6

Income taxes (d)

13.7

15.0

(1.2)

214.8

16.8

198.0

   Total EWC

(25.5)

(27.5)

1.9

(271.9)

(30.7)

(241.2)

Total special items (after-tax)

(25.5)

(27.5)

1.9

(271.9)

(30.7)

(241.2)

Calculations may differ due to rounding

(d) 

Income taxes include the income tax effect of the special items which were calculated using the estimated income tax rate that is expected to apply to each item. The year-to-date 2017 period also includes the income tax benefit which resulted from the FitzPatrick transaction.

B: Earnings Variance Analysis
Appendix B-1 and Appendix B-2 provide details of current quarter and year-to-date 2017 versus 2016 as-reported and operational earnings variance analysis for Utility, Parent & Other and EWC.

Appendix B-1: As-Reported and Operational EPS Variance Analysis (e)

Third Quarter 2017 vs. 2016

(After-tax, per share in $, sorted in consolidated operational column, most to least favorable)

Utility

Parent & Other

EWC

Consolidated

As-
Reported

Opera-
tional

As-
Reported

Opera-
tional

As-

Reported

Opera-
tional

As-

Reported

Opera-

tional

2016 earnings

2.47

2.47

(0.35)

(0.35)

0.04

0.19

2.16

2.31

Non-fuel O&M

(0.06)

(0.06)

(f)

(0.01)

(0.01)

0.22

0.19

(g)

0.15

0.12

Other income (deductions)–other

0.07

0.07

(h)

(0.01)

(0.01)

0.06

0.06

(i)

0.12

0.12

Income taxes – other

(0.01)

(0.01)

0.05

0.05

(j)

0.02

0.02

0.06

0.06

Preferred dividend requirements

0.01

0.01

0.01

0.01

Asset write-offs and impairments

0.01

0.01

Decommissioning expense

0.01

0.01

(0.04)

(0.04)

(0.03)

(0.03)

Taxes other than income taxes

(0.06)

(0.06)

(k)

0.02

0.02

(0.04)

(0.04)

Depreciation/amortization exp.

(0.05)

(0.05)

(l)

(0.05)

(0.05)

Net revenue

(0.16)

(0.16)

(m)

(0.02)

0.01

(0.18)

(0.15)

2017 earnings

2.22

2.22

(0.32)

(0.32)

0.31

0.45

2.21

2.35

 

Appendix B-2: As-Reported and Operational EPS Variance Analysis (e)

Year-to-Date 2017 vs. 2016

(After-tax, per share in $, sorted in consolidated operational column, most to least favorable)

Utility

Parent & Other

EWC

Consolidated

As-
Reported

Opera-
tional

As-
Reported

Opera-
tional

As-

Reported

Opera-
tional

As-

Reported

Opera-

tional

2016 earnings

5.64

5.64

(0.92)

(0.92)

1.88

2.05

6.60

6.77

Other income (deductions)–other

0.16

0.16

(h)

0.26

0.21

(i)

0.42

0.37

Non-fuel O&M

(0.35)

(0.35)

(f)

(0.01)

(0.01)

(0.12)

0.46

(g)

(0.48)

0.10

Interest exp. and other charges

0.05

0.05

(n)

(0.02)

(0.02)

0.03

0.03

Preferred dividend requirements

0.02

0.02

0.02

0.02

Asset write-offs and impairments

(1.40)

(o)

(1.40)

Gain on sale of assets

0.06

(p)

0.06

Income taxes – other

(0.79)

(0.79)

(q)

0.01

0.01

1.02

0.77

(r)

0.24

(0.01)

Taxes other than income taxes

(0.12)

(0.12)

(k)

0.05

0.07

(s)

(0.07)

(0.05)

Depreciation/amortization exp.

(0.14)

(0.14)

(l)

(0.01)

(0.01)

(0.15)

(0.15)

Decommissioning expense

(0.28)

(0.28)

(t)

(0.28)

(0.28)

Net revenue

0.02

0.02

(0.07)

(0.37)

(u)

(0.05)

(0.35)

2017 earnings

4.49

4.49

(0.94)

(0.94)

1.39

2.90

4.94

6.45

Calculations may differ due to rounding

See appendix in the webcast slide presentation for additional details on EWC line item variances.

(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; income taxes – other represents income tax differences other than the tax effect of individual line items.

(f) 

The current quarter decrease reflected a reduction in third quarter 2016 expense which resulted from final court decisions in several lawsuits against the DOE related to spent nuclear fuel storage costs. For the quarter and year-to-date, the increases in nuclear generation and refueling outage expenses were partly offset by lower fossil-fueled generation expense. The year-to-date decrease also reflected higher transmission and distribution expenses due to higher vegetation maintenance costs, the first quarter 2016 $18 million (pre-tax) cost deferral at EAI for previously-expensed costs related to post Fukushima and flood barrier compliance and increased compensation and benefits expense due partly to a revision to estimated incentive compensation expense in first quarter 2016.

(g) 

The current quarter and year-to-date variances reflected the sale of FitzPatrick and lower refueling outage expenses (due to impairments). The year-to-date as-reported decrease reflected higher severance and retention expenses which resulted from decisions to close or sell EWC’s nuclear plants; the 2017 year-to-date period also included costs associated with the agreement to sell FitzPatrick. These expenses were classified as special items. The year-to-date variances also reflected a second quarter 2016 reduction in expense as a result of final court decisions in litigation against the DOE for the reimbursement of spent nuclear fuel storage costs; a portion of the amount (12 cents) was considered a special item.

(h) 

The current quarter and year-to-date increases reflected higher AFUDC-equity funds due to increased construction work in progress and higher realized gains on decommissioning trust fund investments (substantially offset in net revenue).

(i) 

The current quarter and year-to-date increases reflected higher realized gains on decommissioning trust fund investments. In the year-to-date period, 5 cents was from gains on the receipt of nuclear decommissioning trust funds from NYPA in January 2017 (classified as a special item and excluded from operational EPS).

(j) 

The current quarter increase was due to an inter-company adjustment in third quarter 2016 (offset at EWC).

(k) 

The current quarter and year-to-date decreases were due largely to higher franchise and ad valorem taxes.

(l) 

The current quarter and year-to-date decreases were due partly to a third quarter 2016 reduction in depreciation expense which resulted from final court decisions in several lawsuits against the DOE related to spent nuclear fuel storage costs. Additions to plant in service also contributed.

Utility As-Reported Net Revenue

Variance Analysis

2017 vs. 2016 ($ EPS)

Third Quarter

Year-to-Date

Estimated weather in billed sales

(0.43)

(0.46)

Volume/unbilled

0.20

0.12

Retail electric price

0.06

0.21

Regulatory sharing

0.06

Other

0.01

0.09

Total

(0.16)

0.02

(m) 

The current quarter decrease was driven by weather, which was negative in third quarter 2017 and positive in third quarter 2016. Partially offsetting the effects of weather, weather-adjusted billed sales volume was higher for residential, commercial and industrial classes. Net revenue also reflected rate changes including EAI’s 2017 FRP, ETI’s TCRF and the timing of recovery of purchased power capacity costs at ELL through its FRP.

(n) 

The year-to-date increase was partly due to the third quarter 2016 interest expense recorded as a result of a FERC order on EAI’s opportunity sales case. Higher AFUDC-borrowed funds due to increased construction work in progress also contributed.

(o) 

The year-to-date decrease was due to nuclear fuel spending, nuclear refueling outage spending and expenditures for capital assets being charged to expense as incurred as a result of the impaired value of the EWC nuclear plants’ long-lived assets due to the significantly reduced remaining estimated operating lives (classified as special items).

(p) 

The year-to-date increase was due to a gain on the sale of FitzPatrick (classified as a special item).

(q) 

The year-to-date decrease was due to the second quarter 2016 reversal of a portion of the provision for uncertain tax positions totaling $136 million for positions resolved in the 2010-2011 tax audit. This was partly offset by customer sharing recorded as a regulatory charge ($16 million pre-tax, included in net revenue).

(r) 

The year-to-date increase was largely due to the net effect of income tax elections in second quarter 2017 and 2016. Both tax items resulted from internal reorganizations which, for tax purposes, allowed the company to recognize deductions for decommissioning liabilities today; those deductions created permanent tax losses. The reductions in income tax expense were $373 million in second quarter 2017 and $238 million in second quarter 2016. The as-reported increase also included a tax benefit which resulted from the re-determination of FitzPatrick’s tax basis as a result of the sale of the plant in first quarter 2017 (classified as a special item).

(s) 

The year-to-date increase was driven largely by the sale of FitzPatrick.

(t) 

The year-to-date decrease resulted partly from the establishment of decommissioning liabilities at FitzPatrick and Indian Point 3 in August 2016 from the agreement with NYPA to transfer decommissioning liabilities and associated trusts to Entergy. Revisions to the estimated decommissioning liabilities from the early shutdown decisions for Indian Point and Palisades in fourth quarter 2016 also contributed to the decrease.

(u) 

The year-to-date decrease reflected lower volume for nuclear assets, including the absence of FitzPatrick after it was sold in first quarter 2017, partially offset by lower fuel expense. The as-reported variance also reflected cost reimbursements from the buyer related to the FitzPatrick sale (classified as a special item).

C: Utility Financial and Operating Measures
Appendix C-1 provides a comparative summary of Utility, Parent & Other adjusted earnings and EPS contribution, each of which excludes the effects of special items and normalizes weather and income tax expense.

Appendix C-1: Utility, Parent & Other Adjusted Earnings and EPS – Reconciliation of GAAP to Non-GAAP Measures

Third Quarter and Year-to-Date 2017 vs. 2016 (See Appendix A for details on special items)

Third Quarter

Year-to-Date

2017

2016

Change

2017

2016

Change

($ in millions)

Utility earnings

400.8

443.3

(42.5)

809.0

1,013.8

(204.8)

Parent & Other earnings (loss)

(57.9)

(62.8)

4.9

(169.1)

(165.4)

(3.8)

UP&O earnings

343.0

380.5

(37.5)

639.9

848.4

(208.5)

Less:

Special items

Estimated weather

(72.7)

55.0

(127.7)

(146.1)

(12.9)

(133.2)

Tax effect of estimated weather (v)

28.0

(21.1)

49.1

56.3

5.0

51.3

Estimated weather (after-tax)

(44.7)

33.8

(78.5)

(89.9)

(8.0)

(81.9)

Customer sharing

(16.1)

16.1

Tax effect of customer sharing (v)

6.2

(6.2)

Other income tax items

0.2

(6.6)

6.8

(8.7)

131.8

(140.5)

Tax items, net of customer sharing

0.2

(6.6)

6.8

(8.7)

121.9

(130.6)

UP&O adjusted earnings

387.5

353.2

34.3

738.4

734.4

4.0

(After-tax, per share in $) (w)

Utility earnings

2.22

2.47

(0.25)

4.49

5.64

(1.15)

Parent & Other earnings (loss)

(0.32)

(0.35)

0.03

(0.94)

(0.92)

(0.02)

UP&O earnings

1.90

2.12

(0.22)

3.55

4.72

(1.17)

Less:

Special items

Estimated weather

(0.25)

0.18

(0.43)

(0.50)

(0.04)

(0.46)

Other income tax items, net of customer sharing

(0.04)

0.04

(0.05)

0.67

(0.72)

UP&O adjusted earnings

2.15

1.98

0.17

4.10

4.09

0.01

Calculations may differ due to rounding

(v) 

Income tax effect is calculated by multiplying the pre-tax amount by the estimated income tax rates that are expected to apply to those adjustments.

(w) 

Per share amounts are calculated by dividing the corresponding line item in the chart above by the diluted average number of common shares outstanding over the period.

Appendix C-2 provides a comparative summary of Utility operating and financial measures.

Appendix C-2: Utility Operating and Financial Measures

Third Quarter and Year-to-Date 2017 vs. 2016

Third Quarter

Year-to-Date

2017

2016

%

Change

% Weather
Adjusted (x)

2017

2016

%

Change

% Weather
Adjusted (x)

GWh billed

Residential

10,833

11,817

(8.3)

3.8

25,810

27,035

(4.5)

1.1

Commercial

8,271

8,650

(4.4)

2.5

21,595

21,938

(1.6)

0.9

Governmental

682

703

(3.0)

(0.8)

1,885

1,912

(1.4)

(0.7)

Industrial

12,503

12,017

4.0

4.0

35,829

34,581

3.6

3.6

   Total retail sales

32,289

33,187

(2.7)

3.5

85,119

85,466

(0.4)

2.0

Wholesale

3,387

2,733

23.9

8,255

9,452

(12.7)

   Total sales

35,676

35,920

(0.7)

93,374

94,918

(1.6)

Number of electric retail customers

Residential

2,472,199

2,454,761

0.7

Commercial

355,186

352,175

0.9

Governmental

17,803

17,662

0.8

Industrial

47,090

49,606

(5.1)

   Total retail customers

2,892,278

2,874,204

0.6

Net revenue ($ in millions)

1,811

1,859

(2.6)

4,765

4,758

0.1

Non-fuel O&M per MWh

$17.94

$17.39

3.2

$20.22

$18.82

7.4

Calculations may differ due to rounding

Appendix C-3 provides a summary of Utility retail sales on a twelve-months-ended basis.

Appendix C-3: Utility Retail Sales

Twelve Months Ended September 30 2017 vs. 2016

Twelve months ended September 30

2017

2016

%

Change

% Weather
Adjusted (x)

GWh billed

Residential

33,887

34,420

(1.5)

1.2

Commercial

28,854

28,916

(0.2)

1.0

Governmental

2,520

2,540

(0.8)

(0.2)

Industrial

46,987

45,733

2.7

2.7

   Total retail sales

112,248

111,609

0.6

1.7

Calculations may differ due to rounding

(x) 

The effects of weather were estimated using monthly heating degree days and cooling degree days 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 subject to change.

D: EWC Financial and Operating Measures
Appendix D-1 provides a comparative summary of EWC operational adjusted EBITDA (non-GAAP).

Appendix D-1: EWC Operational Adjusted EBITDA – Reconciliation of GAAP to Non-GAAP Measures

Third Quarter and Year-to-Date 2017 vs. 2016

($ in millions)

Third Quarter

Year-to-Date

2017

2016

Change

2017

2016

Change

Net income

56

8

48

252

339

(87)

Add back: interest expense

5

5

18

18

Add back: income taxes

26

6

20

(508)

(177)

(331)

Add back: depreciation and amortization

52

53

(1)

157

155

2

Subtract: interest and investment income

41

27

14

143

87

56

Add back: decommissioning expense

60

47

13

195

117

78

Adjusted EBITDA (non-GAAP)

158

93

65

(29)

365

(394)

Add back pre-tax special items for:

Items associated with decisions to close or sell EWC nuclear plants

39

42

(3)

503

81

422

Gain on the sale of FitzPatrick

(16)

(16)

DOE litigation awards

(34)

34

Operational adjusted EBITDA (non-GAAP)

197

135

62

458

412

46

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 2017 vs. 2016 (See Appendix G for reconciliation of GAAP to non-GAAP measures)

Third Quarter

Year-to-Date

2017

2016

% Change

2017

2016

% Change

Owned capacity (MW) (y)

3,962

4,880

(18.8)

GWh billed

8,234

9,372

(12.1)

22,616

26,484

(14.6)

As-reported net revenue ($ in millions)

392

396

(1.0)

1,136

1,156

(1.7)

Operational net revenue (non-GAAP) ($ in millions)

392

389

0.8

1,045

1,148

(9.0)

EWC Nuclear Fleet

Capacity factor

98%

90%

8.9

79%

85%

(7.1)

GWh billed

7,633

8,674

(12.0)

20,861

24,670

(15.4)

Production cost per MWh

$14.91

$23.77

(37.3)

$18.68

$22.91

(18.5)

Average energy/capacity revenue per MWh (z)

$48.82

$47.41

3.0

$51.82

$48.99

5.8

As-reported net revenue ($ in millions)

391

396

(1.3)

1,129

1,151

(1.9)

Operational net revenue (non-GAAP) ($ in millions)

391

389

0.5

1,038

1,143

(9.2)

Refueling outage days

FitzPatrick

42

Indian Point 2

102

Indian Point 3

66

Palisades

27

Pilgrim

43

(y) 

FitzPatrick was sold on 3/31/17 and investments in wind generation were sold in November 2016.

(z) 

Average energy and capacity revenue per MWh excluding FitzPatrick was $49.24 in third quarter 2017, $50.06 in year-to-date 2017 and $53.73 in year-to-date 2016.

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

Third Quarter 2017 vs. 2016 (See Appendix G for reconciliation of GAAP to non-GAAP financial measures)

For 12 months ending September 30

2017

2016

Change

GAAP Measures

ROIC – as-reported

(1.8%)

7.0%

(8.8%)

ROE – as-reported

(9.4%)

13.4%

(22.8%)

Book value per share

$48.38

$56.21

($7.83)

End of period shares outstanding (in millions)

179.6

179.1

0.5

Non-GAAP Measures

ROIC – operational

6.5%

7.9%

(1.4%)

ROE – operational

13.0%

15.6%

(2.6%)

As of September 30 ($ in millions)

2017

2016

Change

GAAP Measures

Cash and cash equivalents

546

1,307

(761)

Revolver capacity

4,213

4,243

(30)

Commercial paper

1,272

264

1,008

Total debt

16,224

15,073

1,151

Securitization debt

582

698

(116)

Debt to capital

64.6%

59.4%

5.2%

Off-balance sheet liabilities:

Debt of joint ventures – Entergy’s share

68

74

(6)

Leases – Entergy’s share

397

359

38

Power purchase agreements accounted for as leases

166

195

(29)

Total off-balance sheet liabilities

631

628

3

Non-GAAP Financial Measures

Debt to capital, excluding securitization debt

63.8%

58.3%

5.5%

Gross liquidity

4,759

5,550

(791)

Net debt to net capital, excluding securitization debt

62.9%

55.9%

7.0%

Parent debt to total debt, excluding securitization debt

20.9%

19.4%

1.5%

Debt to operational adjusted EBITDA, excluding securitization debt

4.6x

4.2x

0.4x

Operational FFO to debt, excluding securitization debt

15.3%

21.1%

(5.8%)

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 revenue 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 MWh

Non-fuel O&M per MWh of billed sales

Number of retail customers

Number of customers at the end of the period

EWC Operating and Financial Measures

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 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 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 ISO New England, 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 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 (does not include amounts from investment in wind generation that was accounted for under the equity method of accounting and which was sold in November 2016)

Net revenue

Operating revenue less fuel, 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 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 Pilgrim (May 31, 2019), Palisades (not later than May 31, 2022), Indian Point 2 (April 30, 2020) and Indian Point 3 (April 30, 2021)

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 Pilgrim (May 31, 2019), Palisades (not later than May 31, 2022), Indian Point 2 (April 30, 2020) and Indian Point 3 (April 30, 2021)

Production cost per MWh

Fuel and non-fuel O&M expenses according to accounting standards that directly relate to the production of electricity per MWh (based on net generation), excluding special items

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

Book value per share

End of period common equity divided by end of period shares outstanding

Debt of joint ventures – Entergy’s share

Entergy’s share of debt issued by business joint ventures at EWC

Debt to capital ratio

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, including Entergy Nuclear Vermont Yankee

ROIC – as-reported

12-months rolling net income attributable to Entergy Corporation adjusted for preferred dividends and tax-effected interest expense divided by average invested capital

ROE – as-reported

12-months rolling net income attributable to Entergy Corporation divided by average common equity

Securitization debt

Debt associated with securitization bonds issued to recover storm costs from hurricanes Rita, Ike and Gustav at ETI and Hurricane Isaac at ENOI; the 2009 ice storm at EAI and investment recovery of costs associated with the cancelled Little Gypsy repowering project at ELL

 

Appendix F-1: Definitions

Financial Measures – Non-GAAP

Total debt

Sum of short-term and long-term debt, notes payable and commercial paper and capital leases on the balance sheet

Adjusted EBITDA

Earnings before interest, depreciation and amortization and income taxes and excluding decommissioning expense; for Entergy consolidated, also excludes AFUDC-equity funds and subtracts securitization proceeds

Utility, Parent & Other

Combines the Utility segment with Parent & Other, which is all of Entergy excluding the EWC segment

Adjusted EPS

As-reported EPS excluding special items and normalizing weather and income taxes

Debt to capital ratio, excluding securitization debt

Total debt divided by total capitalization, excluding securitization debt

Debt to operational adjusted EBITDA, excluding securitization debt

End of period total debt excluding securitization debt divided by 12-months rolling operational adjusted EBITDA

FFO

OCF less AFUDC-borrowed funds, working capital items in OCF (receivables, fuel inventory, accounts payable, prepaid taxes and taxes accrued, interest accrued and other working capital accounts) and securitization regulatory charges

Operational FFO to debt, excluding securitization debt

12-months rolling operational FFO as a percentage of end of period total debt excluding securitization debt

Gross liquidity

Sum of cash and revolver capacity

Operational adjusted EBITDA

Adjusted EBITDA excluding effects of special items

Operational EPS

As-reported EPS excluding special items

Operational FFO

FFO excluding the effects of special items

Parent debt to total debt ratio, 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

Net debt to net capital ratio, excluding securitization debt

Total debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents, excluding securitization debt

ROIC – operational

12-months rolling operational net income attributable to Entergy Corporation adjusted for preferred dividends and tax-effected interest expense divided by average invested capital

ROE – operational

12-months rolling operational net income attributable to Entergy Corporation divided by average common equity

Appendix F-2 explains abbreviations and acronyms used in the quarterly earnings materials.

Appendix F-2: Abbreviations and Acronyms

ADIT

Accumulated deferred income taxes

Michigan PSC

Michigan Public Service Commission

AFUDC – borrowed funds

Allowance for borrowed funds used during construction

MISO

Midcontinent Independent System Operator, Inc.

AFUDC – equity funds

Allowance for equity funds used during construction

Moody’s

Moody’s Investor Service 

ALJ

Administrative Law Judge

MPSC

Mississippi Public Service Commission

AMI

Advanced metering infrastructure

MTEP

MISO Transmission Expansion Planning

APSC

Arkansas Public Service Commission

Nelson 6

Unit 6 of Roy S. Nelson plant (coal)

ARO

Asset retirement obligation

NEPOOL

New England Power Pool

CCGT

Combined cycle gas turbine

Ninemile 6

Ninemile Point Unit 6 (CCGT)

CCNO

Council of the City of New Orleans, Louisiana

Non-fuel O&M

Non-fuel operation and maintenance expense

COD

Commercial operation date

NDT

Nuclear decommissioning trust

CT

Simple cycle combustion turbine

NRC

Nuclear Regulatory Commission

CZM

Coastal Zone Management

NYISO

New York Independent System Operator, Inc.

DCRF

Distribution cost recovery factor

NYPA

New York Power Authority

DOE

U.S. Department of Energy

NYSE

New York Stock Exchange

EAI

Entergy Arkansas, Inc.

O&M

Operation and maintenance expense

EBITDA

Earnings before interest, income taxes, depreciation and amortization

OCF

Net cash flow provided by operating activities

EEI

Edison Electric Institute

OpCo

Operating Company

ELL

Entergy Louisiana, LLC

OPEB

Other post-employment benefits

EMI

Entergy Mississippi, Inc.

Palisades

Palisades Power Plant (nuclear)

ENOI

Entergy New Orleans, Inc.

PSDAR

Post-Shutdown Decommissioning Activities Report

ENVY

Entergy Nuclear Vermont Yankee

Pilgrim

Pilgrim Nuclear Power Station (nuclear)

ESI

Entergy Services, Inc.

PPA

Power purchase agreement or purchased power agreement

EPS

Earnings per share

PUCT

Public Utility Commission of Texas

ETI

Entergy Texas, Inc.

RFP

Request for proposal

ETR

Entergy Corporation

RISEC

Rhode Island State Energy Center (CCGT)

EWC

Entergy Wholesale Commodities

ROE

Return on equity

FERC

Federal Energy Regulatory Commission

ROIC

Return on invested capital

FFO

Funds from operations

RPCE

Rough production cost equalization

Firm LD

Firm liquidated damages

RS Cogen

RS Cogen facility (CCGT cogen)

FitzPatrick

James A. FitzPatrick Nuclear Power Plant (nuclear, sold March 31, 2017)

RSP

Rate Stabilization Plan (ELL Gas)

FRP

Formula rate plan

S&P

Standard & Poor’s

GAAP

U.S. generally accepted accounting principles

SEC

U.S. Securities and Exchange Commission

Grand Gulf

Unit 1 of Grand Gulf Nuclear Station (nuclear), 90% owned or leased by System Energy

SERI

System Energy Resources, Inc.

Indian Point 1 

Indian Point Energy Center Unit 1 (nuclear)

SPDES

State Pollutant Discharge Elimination System

Indian Point 2

Indian Point Energy Center Unit 2 (nuclear)

TCRF

Transmission cost recovery factor

Indian Point 3

Indian Point Energy Center Unit 3 (nuclear)

Top Deer

Top Deer Wind Ventures, LLC

IPEC

Indian Point Energy Center (nuclear)

Union

Union Power Station (CCGT)

ISO

Independent system operator

UP&O

Utility, Parent & Other

ISES

Independence Steam Electric Station (coal)

VY

Vermont Yankee Nuclear Power Station (nuclear)

LPSC

Louisiana Public Service Commission

WACC

Weighted-average cost of capital

LTM

Last twelve months

WQC 

Water Quality Certification

YOY

Year-over-year

 

G: GAAP to Non-GAAP Reconciliations
Appendix G-1, Appendix G-2 and Appendix G-3 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 – EWC Operational Net Revenue

($ in millions except where noted)

Third Quarter

Year-to-Date

2017

2016

2017

2016

As-reported net revenue

(A)

392

396

1,136

1,156

Special items included in net revenue:

Items associated with decisions to close or sell EWC nuclear plants

8

91

8

Total special items included in net revenue

(B)

8

91

8

Operational net revenue (non-GAAP)

(A-B)

392

389

1,045

1,148

EWC Nuclear

As-reported EWC Nuclear net revenue

(C)

391

396

1,129

1,151

Special items included in EWC Nuclear net revenue:

Items associated with decisions to close or sell EWC nuclear plants

8

91

8

Total special items included in EWC nuclear net revenue

(D)

8

91

8

Operational EWC nuclear net revenue (non-GAAP)

(C-D)

391

389

1,038

1,143

Calculations may differ due to rounding

 

Appendix G-2: Reconciliation of GAAP to Non-GAAP Financial Measures – ROIC, ROE

($ in millions except where noted)

Third Quarter

2017

2016

As-reported net income (loss) attributable to Entergy Corporation, rolling 12 months

(A)

(878)

1,285

Preferred dividends

14

21

Tax effected interest expense

404

407

As-reported net income (loss) attributable to Entergy Corporation, rolling 12 months adjusted for preferred dividends and tax effected interest expense

(B)

(460)

1,713

Special items in prior quarters

(2,071)

(186)

Items associated with decisions to close or sell EWC nuclear plants

(25)

(27)

Total special items, rolling 12 months

(C)

(2,097)

(212)

Operational earnings, rolling 12 months adjusted for preferred dividends and tax effected interest expense (non-GAAP)

(B-C)

1,637

1,925

Operational earnings, rolling 12 months (non-GAAP)

(A-C)

1,219

1,497

Average invested capital

(D)

25,246

24,443

Average common equity

(E)

9,380

9,613

ROIC – as-reported

(B/D)

(1.8%)

7.0%

ROIC – operational

[(B-C)/D]

6.5%

7.9%

ROE – as-reported

(A/E)

(9.4%)

13.4%

ROE – operational

[(A-C)/E]

13.0%

15.6%

Calculations may differ due to rounding

 

Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures – Debt Ratios excluding Securitization Debt; Gross Liquidity; Debt to Operational Adjusted EBITDA, excluding Securitization Debt; Operational FFO to Debt Ratio, excluding Securitization Debt

($ in millions except where noted)

Third Quarter

2017

2016

Total debt

(A)

16,224

15,073

Less securitization debt

(B)

582

698

Total debt, excluding securitization debt

(C)

15,642

14,375

Less cash and cash equivalents

(D)

546

1,307

Net debt, excluding securitization debt

(E)

15,096

13,068

Total capitalization

(F)

25,118

25,375

Less securitization debt

(B)

582

698

Total capitalization, excluding securitization debt

(G)

24,536

24,677

Less cash and cash equivalents

(D)

546

1,307

Net capital, excluding securitization debt

(H)

23,990

23,370

Debt to capital

(A/F)

64.6%

59.4%

Debt to capital, excluding securitization debt

(C/G)

63.8%

58.3%

Net debt to net capital, excluding securitization debt

(E/H)

62.9%

55.9%

Revolver capacity

(I)

4,213

4,243

Gross liquidity

(D+I)

4,759

5,550

Entergy Corporation notes:

Due January 2017

500

Due September 2020

450

450

Due July 2022

650

650

Due September 2026

750

750

Total parent long-term debt

(J)

1,850

2,350

Revolver draw

(K)

150

180

Commercial paper

(L)

1,272

264

Total parent debt

(J)+(K)+(L)

3,272

2,794

Parent debt to total debt, excluding securitization debt

[((J)+(K)+(L))/(C)]

20.9%

19.4%

 

Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures – Debt Ratios excluding Securitization Debt; Gross Liquidity; Debt to Operational Adjusted EBITDA, excluding Securitization Debt; Operational FFO to Debt Ratio, excluding Securitization Debt (continued)

($ in millions except where noted)

Third Quarter

2017

2016

Total debt

(A)

16,224

15,073

Less securitization debt

(B)

582

698

Total debt, excluding securitization debt

(C)

15,642

14,375

As-reported consolidated net income (loss), rolling 12 months

(864)

1,306

Add back (rolling 12 months):

 Interest expense

656

661

 Income taxes

(1,054)

(377)

 Depreciation and amortization

1,389

1,340

 Regulatory charges (credits)

(21)

196

 Decommissioning expense

407

303

Subtract (rolling 12 months):

 Securitization proceeds

144

140

 Interest and investment income

223

157

 AFUDC-equity funds

85

62

Adjusted EBITDA, rolling 12 months (non-GAAP)

(D)

61

3,070

Add back special items (rolling 12 months pre-tax):

 Items associated with decisions to close or sell EWC  nuclear plants

3,331

482

 DOE litigation awards

(34)

 Top Deer investment impairment

37

 Gain on the sale of RISEC

(154)

 Gain on the sale of FitzPatrick

(16)

Operational adjusted EBITDA, rolling 12 months (non-GAAP)

(E)

3,376

3,401

Debt to operational adjusted EBITDA, excluding securitization debt

(C)/(E)

4.6x

4.2x

Net cash flow provided by operating activities, rolling 12 months

(F)

2,459

3,194

AFUDC-borrowed funds, rolling 12 months

(G)

(41)

(32)

Working capital items in net cash flow provided by operating activities (rolling 12 months):

 Receivables

(24)

(10)

 Fuel inventory

30

24

 Accounts payable

(1)

55

 Prepaid taxes and taxes accrued

9

3

 Interest accrued

9

 Other working capital accounts

28

(59)

 Securitization regulatory charges

114

111

 Total

(H)

156

133

FFO, rolling 12 months

(F)+(G)-(H)

2,262

3,029

Add back special items (rolling 12 months pre-tax):

 Items associated with decisions to close or sell EWC nuclear plants

126

6

Operational FFO, rolling 12 months

(I)

2,388

3,035

Operational FFO to debt, excluding securitization debt

(I)/(C)

15.3%

21.1%

Calculations may differ due to rounding

 

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SOURCE Entergy Corporation