August 1, 2018 - 6:45 AM EDT
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Entergy Reports Second Quarter Earnings

NEW ORLEANS, Aug. 1, 2018 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) reported second quarter 2018 earnings per share of $1.34 on an as-reported basis and $1.79 on an operational basis (non-GAAP), which excludes the effects of special items. Results included 31 cents of income tax benefits from the settlement of its 2012-2013 IRS audit.

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

"Our results this quarter keep us on track to meet the strategic, operational and financial objectives that we reinforced at our Analyst Day in June," said Entergy Chairman and Chief Executive Officer Leo Denault. "We continue to make significant progress toward transitioning to a pure play utility, as evidenced by our announcement to sell EWC's Pilgrim and Palisades nuclear plants after their scheduled shutdowns."

Business highlights included the following:

  • Entergy entered into purchase and sale agreements for EWC's Pilgrim and Palisades nuclear plants.
  • The LPSC approved Entergy Louisiana's planned acquisition of Washington Parish Energy Center.
  • ANO Units 1 and 2 returned to Column 1 of the NRC's reactor oversight process.
  • Entergy Louisiana and Entergy Arkansas each submitted annual formula rate plan filings and Entergy New Orleans and Entergy Texas each filed base rate cases.
  • In June, Entergy Corporation completed a $1.15 billion common stock offering with a forward component.
  • For the third consecutive year, Entergy Corporation was named to The Civic 50, a Points of Light initiative honoring the 50 most community-minded companies in the nation.

Consolidated Earnings (GAAP and Non-GAAP Measures)

Second Quarter and Year-to-Date 2018 vs. 2017 (See Appendix A for reconciliation of GAAP to non-GAAP measures and description of special items)


Second Quarter

Year-to-Date


2018

2017

Change

2018

2017

Change

(After-tax, $ in millions)







As-reported earnings

245

410

(165)

378

493

(114)

Less special items

(82)

(151)

70

(160)

(246)

87

Operational earnings (non-GAAP)

327

561

(234)

538

739

(201)

  Estimated weather in billed sales

21

(16)

36

37

(45)

82








(After-tax, per share in $)







As-reported earnings

1.34

2.27

(0.93)

2.08

2.74

(0.66)

Less special items

(0.45)

(0.84)

0.39

(0.88)

(1.37)

0.49

Operational earnings (non-GAAP)

1.79

3.11

(1.32)

2.96

4.11

(1.15)

  Estimated weather in billed sales

0.11

(0.09)

0.20

0.20

(0.25)

0.45








Calculations may differ due to rounding

Consolidated Results

For second quarter 2018, the company reported earnings of $245 million, or $1.34 per share, on an as-reported basis and earnings of $327 million, or $1.79 per share, on an operational basis. This compared to second quarter 2017 earnings of $410 million, or $2.27 per share, on an as-reported basis and earnings of $561 million, or $3.11 per share on an operational basis. Second quarter 2017 results included a $373 million, or $2.07 per share income tax item at EWC.

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

Utility, Parent & Other Results

For second quarter 2018, the Utility business reported earnings attributable to Entergy Corporation of $376 million, or $2.05 per share, compared to $243 million, or $1.35 per share, in second quarter 2017. Drivers for the quarterly increase included higher retail sales volume and lower income taxes, partially offset by higher operating expenses.

The current period results reflected a $278 million reduction in income taxes, with a corresponding reduction in net revenue, for the amortization of unprotected excess ADIT. Approximately $150 million was credited to customer bills and the balance was recorded as a regulatory charge for recovery of certain rate base and related assets. The net effect was neutral to earnings.

Excluding the $278 million unprotected excess ADIT, net revenue increased, driven by higher retail sales volume, including favorable weather in second quarter 2018 compared to unfavorable weather a year ago. Weather-adjusted billed sales declined period over period, but was more than offset by higher volume in the unbilled period. Rate actions to recover investments that benefit customers also contributed to the increase. Current period results also included regulatory provisions recorded to return benefits of the lower federal tax rate to customers at Entergy Louisiana and Entergy New Orleans.

On a weather-adjusted basis, billed sales decreased (1.3) percent, including (3.4) percent and (1.6) percent for residential and commercial sales, respectively. Industrial sales volume was essentially flat driven by continued growth from new and expansion customers as well as small industrials, largely offset by decreased cogeneration sales.

Excluding the $278 million unprotected excess ADIT, income taxes were lower driven by tax benefits from the settlement of the 2012-2013 IRS audit and the reduction of the federal income tax rate.

Utility non-fuel O&M increased quarter-over-quarter. The primary driver was higher spending on fossil operations. Energy efficiency spending and storm reserves were also higher, but were largely offset in net revenue.

For second quarter 2018, Parent & Other reported a loss of $(73 million), or (40) cents per share, compared to a loss of $(57 million), or (32) cents per share, in second quarter 2017.

On a combined basis, Utility, Parent & Other (non-GAAP) contributed $1.65 to second quarter 2018 consolidated EPS compared to $1.03 in second quarter 2017 consolidated EPS. On an adjusted basis, excluding special items and normalizing weather and income taxes, Utility, Parent & Other contributed $1.23 in second quarter 2018 to consolidated EPS, compared to $1.12 in second quarter 2017.

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

Entergy Wholesale Commodities Results

For second quarter 2018, EWC recorded a loss attributable to Entergy Corporation of $(57 million), or (31) cents per share, on an as-reported basis and earned $25 million, or 14 cents per share, on an operational basis. This compared to second quarter 2017 earnings of $223 million, or $1.24 per share, on an as-reported basis and earnings of $375 million, or $2.08 per share, on an operational basis. The prior period results included an income tax item which reduced income taxes and increased earnings by $373 million, or $2.07 per share.

As-reported results in both periods reflected impairments and other expenses recorded as a result of strategic decisions for the wholesale business. These items totaled $(82 million), or (45) cents per share, in second quarter 2018, compared to $(151 million), or (84) cents per share, a year ago. These costs were considered special items and excluded from operational earnings.

Quarterly earnings also reflected higher net revenue as a result of higher nuclear energy volume, partially offset by lower nuclear energy pricing.

Appendix D contains additional details on EWC financial and operating measures, including a reconciliation for non-GAAP EWC operational adjusted EBITDA.

Earnings Guidance

Entergy affirmed its 2018 consolidated operational earnings guidance range of $6.25 to $6.85 per share and its Utility, Parent & Other adjusted guidance range of $4.50 to $4.90 per share.

The company has provided 2018 earnings guidance with regard to the non-GAAP measures of consolidated 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 2018. 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 $(2.75) per share in 2018.

Earnings Teleconference

A teleconference will be held at 9:00 a.m. Central Time on Wednesday, August 1, 2018, 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 3594779, no more than 15 minutes prior to the start of the call. The webcast slide presentation is also posted to Entergy's website concurrent with this release, which was issued before market open on the day of the call. A replay of the teleconference will be available on Entergy's website at www.entergy.com and by telephone. The telephone replay will be available through August 8, 2018, by dialing 855-859-2056, conference ID 3594779. 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 $11 billion and more than 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.

Entergy maintains a web page as part of its Investor Relations website, entitled "Regulatory and Other Information," which provides investors with key updates of regulatory proceedings and important milestones on the execution of its strategy. While some of this information may be considered material information, investors should not rely exclusively on this page for all relevant company information.

For definitions of certain operating measures, as well as GAAP and non-GAAP financial measures and abbreviations and acronyms used in the earnings release materials, see Appendix F.

Non-GAAP Financial Measures

This news release contains non-GAAP financial measures. 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 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. The methodologies employed to determine the normalized weather and income tax expense adjustments, each of which is further described in this release, involve estimations and the judgement of management.

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 for 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; operational FFO to debt ratio, excluding securitization debt and operational FFO to debt ratio, excluding securitization debt and return of unprotected excess ADIT 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 2018 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 (1) rate proceedings, formula rate plans and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent anticipated by the utilities and (2) implementation of the ratemaking effects of changes in law; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) 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.

Second Quarter 2018 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

Second Quarter and Year-to-Date 2018 vs. 2017 (See Appendix A-3 and Appendix A-4 for details on special items, including income tax effects on adjustments)


Second Quarter

Year-to-Date


2018

2017

Change

2018

2017

Change

(After-tax, $ in millions)







Earnings (loss)







Utility

376

243

132

591

408

182

Parent & Other

(73)

(57)

(16)

(137)

(111)

(26)

EWC

(57)

223

(280)

(75)

196

(271)

Consolidated

245

410

(165)

378

493

(114)








Less special items







Utility

-

-

-

-

-

-

Parent & Other

-

-

-

-

-

-

EWC

(82)

(151)

70

(160)

(246)

87

Consolidated

(82)

(151)

70

(160)

(246)

87








Operational earnings (loss) (non-GAAP)







Utility

376

243

132

591

408

182

Parent & Other

(73)

(57)

(16)

(137)

(111)

(26)

EWC

25

375

(350)

84

442

(358)

Consolidated

327

561

(234)

538

739

(201)

Estimated weather in billed sales

21

(16)

36

37

(45)

82








Diluted average number of common shares outstanding (in millions)

183.0

180.2


182.2

180.0









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







Earnings (loss)







Utility

2.05

1.35

0.70

3.24

2.27

0.97

Parent & Other

(0.40)

(0.32)

(0.08)

(0.75)

(0.62)

(0.13)

EWC

(0.31)

1.24

(1.55)

(0.41)

1.09

(1.50)

Consolidated

1.34

2.27

(0.93)

2.08

2.74

(0.66)








Less special items







Utility

-

-

-

-

-

-

Parent & Other

-

-

-

-

-

-

EWC

(0.45)

(0.84)

0.39

(0.88)

(1.37)

0.49

Consolidated

(0.45)

(0.84)

0.39

(0.88)

(1.37)

0.49








Operational earnings (loss) (non-GAAP)







Utility

2.05

1.35

0.70

3.24

2.27

0.97

Parent & Other

(0.40)

(0.32)

(0.08)

(0.75)

(0.62)

(0.13)

EWC

0.14

2.08

(1.94)

0.47

2.46

(1.99)

Consolidated

1.79

3.11

(1.32)

2.96

4.11

(1.15)

Estimated weather in billed sales

0.11

(0.09)

0.20

0.20

(0.25)

0.45








Calculations may differ due to rounding

(a)

Per share amounts are calculated by dividing the corresponding earnings (loss) by the diluted average number of common shares outstanding for the period.

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

Appendix A-2 provides a comparative summary OCF, by business.

Appendix A-2: Consolidated Operating Cash Flow

Second Quarter and Year-to-Date 2018 vs. 2017

($ in millions)


Second Quarter

Year-to-Date


2018

2017

Change

2018

2017

Change

Utility

626

569

57

1,149

1,127

22

Parent & Other

(58)

(51)

(7)

(115)

(226)

111

EWC

(45)

(228)

183

46

(81)

127

Consolidated

523

290

232

1,080

820

260








Calculations may differ due to rounding

OCF increased quarter-over-quarter due primarily to lower severance and retention payments at EWC and increased collections for fuel and purchased power cost recovery at the Utility. Another contributing factor was lower refueling outage costs at both EWC and the Utility. The increase was partially offset by the return of the unprotected excess ADIT to customers.

Appendix A-3 and Appendix A-4 list special items by business. Amounts are shown on both an earnings and EPS 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)

Second Quarter and Year-to-Date 2018 vs. 2017

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


Second Quarter

Year-to-Date


2018

2017

Change

2018

2017

Change








EWC







Items associated with decisions to close or sell EWC nuclear plants

(103)

(233)

129

(202)

(464)

262

Gain on the sale of FitzPatrick

-

-

-

-

16

(16)

Income tax effect on adjustments above (b)

22

82

(60)

42

157

(114)

Income tax benefit resulting from FitzPatrick transaction

-

-

-

-

45

(45)

Total EWC

(82)

(151)

70

(160)

(246)

87








Total special items

(82)

(151)

70

(160)

(246)

87








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







EWC







Items associated with decisions to close or sell EWC nuclear plants

(0.45)

(0.84)

0.39

(0.88)

(1.68)

0.80

Gain on the sale of FitzPatrick

-

-

-

-

0.06

(0.06)

Income tax benefit resulting from FitzPatrick transaction

-

-

-

-

0.25

(0.25)

Total EWC

(0.45)

(0.84)

0.39

(0.88)

(1.37)

0.49








Total special items

(0.45)

(0.84)

0.39

(0.88)

(1.37)

0.49








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 for the period.

 

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

Second Quarter and Year-to-Date 2018 vs. 2017

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


Second Quarter

Year-to-Date


2018

2017

Change

2018

2017

Change

EWC







Net revenue

-

1

(1)

-

91

(91)

Non-fuel O&M

(32)

(37)

5

(57)

(157)

100

Taxes other than income taxes

(2)

(3)

1

(3)

(7)

4

Asset write-off and impairments

(69)

(194)

125

(142)

(405)

264

Gain on sale of assets

-

-

-

-

16

(16)

Miscellaneous net (other income)

-

-

-

-

15

(15)

Income taxes (d)

22

82

(60)

42

201

(159)

   Total EWC

(82)

(151)

70

(160)

(246)

87








Total special items (after-tax)

(82)

(151)

70

(160)

(246)

87








Calculations may differ due to rounding

(d)

Income taxes included 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 included the income tax benefit which resulted from the FitzPatrick transaction.

B: Earnings Variance Analysis
Appendix B provides details of current quarter 2018 versus 2017 as-reported and operational earnings variance analysis for Utility, Parent & Other and EWC.

Appendix B-1: As-Reported and Operational Earnings Variance Analysis

Second Quarter 2018 vs. 2017

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


Utility


Parent & Other


EWC


Consolidated


As-
Reported

Opera-
tional


As-
Reported

Opera-
tional


As-

Reported

Opera-
tional


As-

Reported

Opera-

tional

2017 earnings

243

243


(57)

(57)


223

375


410

561

Net revenue

(179)

(179)

(e)

-

-


22

22

(f)

(157)

(157)

Non-fuel O&M

(31)

(31)

(g)

(5)

(5)


(6)

(11)


(42)

(47)

Asset write-offs and impairments

-

-


-

-


125

-

(h)

125

-

Decommissioning expense

3

3


-

-


-

-


3

3

Taxes other than income taxes

(2)

(2)


-

-


(3)

(3)


(5)

(5)

Depreciation/amortization exp.

(14)

(14)


-

-


13

13


(1)

(1)

Other income (deductions)–other

(11)

(11)


(1)

(1)


(4)

(4)


(16)

(16)

Interest exp. and other charges

(5)

(5)


(7)

(7)


(2)

(2)


(14)

(14)

Income taxes

371

371

(i)

(3)

(3)


(425)

(365)

(j)

(57)

3

2018 earnings

376

376


(73)

(73)


(57)

25


245

327













 

Appendix B-2: As-Reported and Operational Earnings Variance Analysis

Year-to-Date 2018 vs. 2017

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


Utility


Parent & Other


EWC


Consolidated


As-
Reported

Opera-
tional


As-
Reported

Opera-
tional


As-

Reported

Opera-
tional


As-

Reported

Opera-

tional

2017 earnings

408

408


(111)

(111)


196

442


493

739

Net revenue

(124)

(124)

(e)

-

-


(90)

1

(f)

(214)

(123)

Non-fuel O&M

(66)

(66)

(g)

(5)

(5)


92

(8)

(k)

21

(79)

Asset write-offs and impairments

-

-


-

-


263

-

(h)

263

-

Decommissioning expense

6

6


-

-


17

17

(l)

23

23

Taxes other than income taxes

(17)

(17)

(m)

-

-


3

(1)


(14)

(18)

Depreciation/amortization exp.

(28)

(28)

(n)

-

-


28

28

(o)

-

-

Gain on sale of assets

-

-


-

-


(16)

-

(p)

(16)

-

Other income (deductions)–other

-

-


(2)

(2)


(61)

(46)

(q)

(63)

(48)

Interest exp. and other charges

(7)

(7)


(11)

(11)


(4)

(4)


(22)

(22)

Income taxes

417

417

(i)

(8)

(8)


(502)

(344)

(j)

(93)

65

2018 earnings

591

591


(137)

(137)


(75)

84


378

538













Calculations may differ due to rounding

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

Utility Net Revenue

Variance Analysis

2018 vs. 2017 (Pre-tax, $ in millions)


Second Quarter

Year-to-Date

Estimated weather

53

123

Volume/unbilled

48

36

Retail electric price

10

28

Unprotected excess ADIT

(278)

(278)

Reg. provisions for lower tax rate

(29)

(58)

Other

17

25

Total

(179)

(124)

 

(e) 

The second quarter and year-to-date earnings decreases from lower Utility net revenue were driven by unprotected excess ADIT (offset in income taxes), as well as regulatory provisions at E-LA and E-NO to reflect regulatory agreements to return the benefits of the lower federal tax rate to customers. The decreases were partially offset by higher retail sales volume, including the effects of weather and volume in the unbilled period. In the second quarter, weather-adjusted billed sales volume decreased, however this was more than offset by higher volume in the unbilled period. 2018 results also included rate changes from E-AR's 2018 FRP and E-TX's DCRF.

(f) 

The second quarter earnings increase from higher EWC net revenue reflected higher volume from merchant nuclear plants, partially offset by lower nuclear energy prices. The year-to-date as-reported variance reflected cost reimbursements from the buyer related to the FitzPatrick sale in first quarter 2017 (classified as a special item and offset in non-fuel O&M).

(g) 

The second quarter earnings decrease from higher Utility non-fuel O&M was due primarily to higher spending on fossil operations. Energy efficiency spending and storm reserves were also higher (largely offset in net revenue). The year-to-date variance was due to higher spending on fossil and nuclear operations, as well as higher vegetation spending. Higher energy efficiency spending and storm reserves also contributed (largely offset in net revenue). This was partly offset by higher nuclear insurance refunds in 2018 compared to 2017.

(h) 

The second quarter and year-to-date as-reported earnings increases from lower EWC asset write-offs and impairments were due to lower impairment charges for EWC nuclear plants, partly due to Palisades no longer being impaired as a result of the decision to operate that plant until May 2022, as well as lower refueling outage costs charged to impairment (classified as special items).

(i)      

The second quarter and year-to-date earnings increases from lower Utility income taxes were primarily due to the amortization of the unprotected excess ADIT (offset in net revenue), tax benefits from the settlement of the 2012-2013 IRS audit totaling $44 million and the change in the federal income tax rate.

(j)

The second quarter and year-to-date earnings decreases from higher EWC income taxes were due primarily to a tax election in second quarter 2017 that reduced income taxes by $373 million. 2018 results also reflected $13 million in tax benefits from the settlement of the 2012-2013 IRS audit and the change in the federal income tax rate. The year-to-date as-reported earnings decrease also reflected a tax benefit in first quarter 2017, which resulted from the sale of FitzPatrick (classified as a special item).

(k) 

The as-reported earnings increase from lower EWC non-fuel O&M was due primarily to costs incurred in first quarter 2017 related to the agreement to sell FitzPatrick (classified as a special item and offset in net revenue).

(l) 

The earnings increase from lower EWC decommissioning expense was due primarily to the sale of FitzPatrick in first quarter 2017.

(m) 

The earnings decrease from higher Utility taxes other than income taxes was due to higher franchise, ad valorem and payroll taxes.

(n) 

The earnings decrease from higher depreciation expense was due primarily to higher plant in service.

(o) 

The earnings increase from lower depreciation expense was due primarily to the decision to operate Palisades until May 2022, thereby extending the period in which the plant is depreciated.

(p) 

The as-reported earnings decrease from lower EWC gain on sale of assets was due to the gain on the sale of FitzPatrick in first quarter 2017 (classified as a special item).

(q) 

The earnings decrease from lower EWC other income (deductions)–other was due largely to losses on the decommissioning trust fund investments in first quarter 2018, including unrealized losses on equity investments that were previously recorded as other comprehensive income on the balance sheet, now recorded to the income statement. The as-reported earnings decrease also reflected the absence of gains on the receipt of the Indian Point 3 and FitzPatrick decommissioning trust funds from NYPA in first quarter 2017 (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

Second Quarter and Year-to-Date 2018 vs. 2017 (See Appendix A for details on special items)


Second Quarter

Year-to-Date


2018

2017

Change

2018

2017

Change

($ in millions)







Utility as-reported earnings

376

243

132

591

408

182

Parent & Other as-reported (loss)

(73)

(57)

(16)

(137)

(111)

(26)

UP&O as-reported earnings

303

187

116

454

297

156








Less:







Special items

-

-

-

-

-

-

Estimated weather (r)

28

(26)

53

49

(73)

123

Tax effect of estimated weather (s)

(7)

10

(17)

(13)

28

(41)

Estimated weather impact (after-tax)

21

(16)

36

37

(45)

82








Other income tax items (t)

57

1

57

64

(9)

72








UP&O adjusted earnings

224

202

23

353

351

2








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







Utility as-reported earnings

2.05

1.35

0.70

3.24

2.27

0.97

Parent & Other as-reported (loss)

(0.40)

(0.32)

(0.08)

(0.75)

(0.62)

(0.13)

UP&O as-reported earnings

1.65

1.03

0.62

2.49

1.65

0.84








Less:







Special items

-

-

-

-

-

-

Estimated weather

0.11

(0.09)

0.20

0.20

(0.25)

0.45

Other income tax items

0.31

-

0.31

0.35

(0.05)

0.40

UP&O adjusted earnings

1.23

1.12

0.11

1.94

1.95

(0.01)















Calculations may differ due to rounding

(r)

The effects of weather were estimated using heating degree days and cooling degree days for the billing cycles from certain locations within each jurisdiction and comparing to "normal" weather based on 20-year historical data. The models used to estimate weather are updated periodically and are subject to change.

(s) 

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

(t) 

Other income tax items represent the adjustment made to income tax expense to reflect a statutory tax rate estimated to be 25.5% in 2018 and 38.5% in 2017. The second quarter and year-to-date 2018 periods exclude $278 million reduction in net revenue and income taxes for unprotected excess ADIT (no earnings impact).

(u) 

Per share amounts are calculated by dividing the corresponding earnings (loss) by the diluted average number of common shares outstanding for the period.

Appendix C-2 and Appendix C-3 provides comparative summaries of Utility operating and financial measures.


Appendix C-2: Utility Operating and Financial Measures

Second Quarter and Year-to-Date 2018 vs. 2017


Second Quarter

Year-to-Date


2018

2017

%

Change

% Weather
Adjusted (v)

2018

2017

%

Change

% Weather
Adjusted (v)

GWh billed









Residential

7,749

7,340

5.6%

(3.4%)

17,036

14,977

13.7%

0.6%

Commercial

6,943

6,886

0.8%

(1.6%)

13,675

13,325

2.6%

0.3%

Governmental

612

609

0.5%

(0.5%)

1,220

1,202

1.5%

0.8%

Industrial

12,219

12,209

0.1%

0.1%

23,624

23,326

1.3%

1.3%

Total retail sales

27,523

27,044

1.8%

(1.3%)

55,555

52,830

5.2%

0.8%

Wholesale

2,566

1,845

39.1%


5,810

4,867

19.4%


Total sales

30,089

28,889

4.2%


61,365

57,697

6.4%











Number of electric retail customers









Residential





2,481,598

2,470,348

0.5%


Commercial





357,177

355,751

0.4%


Governmental





17,917

17,844

0.4%


Industrial





47,694

45,872

4.0%


Total retail customers





2,904,386

2,889,815

0.5%











Net revenue ($ in millions)

1,382

1,549

(10.8%)


2,842

2,954

(3.8%)


Non-fuel O&M (per MWh in $)

22.05

21.88

0.8%


21.05

21.25

(0.9%)
























 

Appendix C-3: Utility Operating Measures

Twelve Months Ended June 30, 2018 vs. 2017


Twelve Months Ended June 30


2018

2017

%

Change

% Weather
Adjusted (v)

GWh billed





Residential

35,893

34,871

2.9%

1.6%

Commercial

29,096

29,234

(0.5%)

1.0%

Governmental

2,529

2,540

(0.4%)

(0.2%)

Industrial

48,067

46,501

3.4%

3.4%

   Total retail sales

115,585

113,146

2.2%

2.1%






Calculations may differ due to rounding

Certain prior year data has been reclassified to conform with current year presentation

(v) 

The effects of weather were estimated using heating degree days and cooling degree days for the billing cycles from certain locations within each jurisdiction and comparing to "normal" weather based on 20-year historical data. The models used to estimate weather are updated periodically and are subject to change.

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

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

Second Quarter and Year-to-Date 2018 vs. 2017

($ in millions)

Second Quarter

Year-to-Date


2018

2017

Change

2018

2017

Change

Net income (loss)

(56)

224

(280)

(74)

197

(271)

Add back: interest expense

8

6

2

17

12

5

Add back: income taxes

(30)

(455)

425

(31)

(533)

502

Add back: depreciation and amortization

39

52

(13)

77

105

(28)

Subtract: interest and investment income

58

59

(1)

56

102

(46)

Add back: decommissioning expense

60

60

-

118

135

(17)

Adjusted EBITDA (non-GAAP)

(37)

(172)

135

50

(186)

236

Add back pre-tax special items for:







Items associated with decisions to close or sell EWC nuclear plants

103

233

(129)

202

464

(262)

Gain on the sale of FitzPatrick

-

-

-

-

(16)

16

Operational adjusted EBITDA (non-GAAP)

66

61

5

252

261

(10)








Calculations may differ due to rounding

Appendix D-2 provides a comparative summary of EWC operating and financial measures.

Appendix D-2: EWC Operating and Financial Measures

Second Quarter and Year-to-Date 2018 vs. 2017 (See Appendix G for reconciliation of GAAP to non-GAAP measures)


Second Quarter

Year-to-Date


2018

2017

% Change

2018

2017

% Change

Owned capacity (MW)




3,962

3,962

-

GWh billed

7,281

6,019

21.0

14,277

14,382

(0.7)

As-reported net revenue ($ in millions)

272

250

8.8

654

744

(12.1)

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

272

250

8.8

654

653

0.2








EWC Nuclear Fleet







Capacity factor

86%

59%

45.8

85%

71%

19.7

GWh billed

6,713

5,393

24.5

13,121

13,228

(0.8)

Production cost per MWh

$17.15

$27.11

(36.7)

$17.93

$20.96

(14.5)

Average energy/capacity revenue per MWh (w)

$41.82

$51.76

(19.2)

$49.21

$53.79

(8.5)

As-reported net revenue ($ in millions)

267

247

8.1

646

738

(12.6)

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

267

246

8.4

646

647

(0.3)

Refueling outage days







FitzPatrick

-

-


-

42


Indian Point 2

20

-


33

-


Indian Point 3

-

47


-

66


Palisades

-

27


-

27


Pilgrim

-

43


-

43









Calculations may differ due to rounding

(w) 

Average energy and capacity revenue per MWh excluding FitzPatrick was $52.02 in year-to-date 2017.

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

Second Quarter 2018 vs. 2017 (See Appendix G for reconciliation of GAAP to non-GAAP financial measures)



For 12 months ending June 30

2018

2017

Change





GAAP Measures




ROIC – as-reported

3.2%

(1.9%)

5.1%

ROE – as-reported

3.6%

(9.8%)

13.4%





Non-GAAP Measures




ROIC – operational

6.4%

6.5%

(0.1%)

ROE – operational

13.4%

13.3%

0.1%





As of June 30 ($ in millions)

2018

2017

Change





GAAP Measures




Cash and cash equivalents

813

934

(121)

Revolver capacity

3,885

4,163

(278)

Commercial paper

1,945

1,147

798

Total debt

17,881

16,285

1,596

Securitization debt

483

602

(119)

Debt to capital ratio

68.5%

65.5%

3.0%

Off-balance sheet liabilities:




Debt of joint ventures – Entergy's share

64

70

(6)

Leases – Entergy's share

429

397

32

Power purchase agreements accounted for as leases

136

166

(30)

Total off-balance sheet liabilities

629

633

(4)





Non-GAAP Financial Measures




Debt to capital ratio, excluding securitization debt

67.9%

64.7%

3.2%

Gross liquidity

4,698

5,097

(399)

Net debt to net capital ratio, excluding securitization debt

66.9%

63.2%

3.7%

Parent debt to total debt ratio, excluding securitization debt

24.1%

20.5%

3.6%

Operational FFO to debt ratio, excluding securitization debt

15.4%

15.2%

0.2%

Operational FFO to debt ratio, excluding securitization debt and return of unprotected excess ADIT

15.9%

15.2%

0.7%





F: Definitions and Abbreviations and Acronyms
Appendix F-1 provides definitions of certain operating measures, as well as GAAP and non-GAAP financial measures. Non-GAAP financial measures remove the effects of financial events that are not routine from commonly used financial measures.

Appendix F-1: Definitions

Utility Operating and Financial Measures

GWh billed

Total number of GWh billed to retail and wholesale customers

Net revenue

Operating revenues less fuel, fuel related expenses and gas purchased for resale; purchased power and other regulatory charges (credits) – net

Non-fuel O&M

Operation and maintenance expenses excluding fuel, fuel-related expenses and gas purchased for resale and purchased power

Non-fuel O&M per MWh

Non-fuel O&M per MWh of billed sales

Number of electric retail customers

Number of electric customers at the end of the period



EWC Operating and Financial Measures

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

Average revenue under contract (applies to capacity contracts only) (in $/kW-month)

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

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

Net revenue

Operating revenues 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 (average)

Amount of installed capacity to generate power and/or sell capacity, assuming intent to shutdown Pilgrim (May 31, 2019), Indian Point 2 (April 30, 2020), Indian Point 3 (April 30, 2021) and Palisades (May 31, 2022)

Planned TWh of 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), Indian Point 2 (April 30, 2020), Indian Point 3 (April 30, 2021) and Palisades (May 31, 2022)

Production cost per MWh

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

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

ROE – as-reported

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

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

Securitization debt

Debt associated with securitization bonds issued to recover storm costs from hurricanes Rita, Ike and Gustav at E-TX and Hurricane Isaac at E-NO; the 2009 ice storm at E-AR and investment recovery of costs associated with the cancelled Little Gypsy repowering project at E-LA

Total debt

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





 

Appendix F-1: Definitions

Financial Measures - Non-GAAP

Adjusted EBITDA

Earnings before interest, depreciation and amortization and income taxes and excluding decommissioning expense

Debt to capital ratio, excluding securitization debt

Total debt divided by total capitalization, excluding securitization debt

FFO

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

Gross liquidity

Sum of cash and revolver capacity

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

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

Operational FFO to debt ratio, excluding securitization debt

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

Operational FFO to debt ratio, excluding securitization debt and return of unprotected excess ADIT

12-months rolling operational FFO as a percentage of end of period total debt excluding securitization debt and return of unprotected excess ADIT

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

ROE – operational

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

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

UP&O adjusted earnings

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

Utility, Parent & Other

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



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

Appendix F-2: Abbreviations and Acronyms 

ADIT

Accumulated deferred income taxes

LPSC

Louisiana Public Service Commission

AFUDC - borrowed funds

Allowance for borrowed funds used during construction

LTM

Last twelve months

AMI

Advanced metering infrastructure

MISO

Midcontinent Independent System Operator, Inc.

ANO

Units 1 and 2 of Arkansas Nuclear One owned by E-AR (nuclear)

Moody's

Moody's Investor Service 

APSC

Arkansas Public Service Commission

MPSC

Mississippi Public Service Commission

ARO

Asset retirement obligation

MTEP

MISO Transmission Expansion Planning

bps

Basis points

Nelson 6

Unit 6 of Roy S. Nelson plant (coal)

CCGT

Combined cycle gas turbine

NEPOOL

New England Power Pool

CCNO

Council of the City of New Orleans, Louisiana

Ninemile 6

Ninemile Point Unit 6 (CCGT)

COD

Commercial operation date

Non-fuel O&M

Non-fuel operation and maintenance expense

CT

Simple cycle combustion turbine

NDT

Nuclear decommissioning trust

DCRF

Distribution cost recovery factor

NOPS

New Orleans Power Station (reciprocating internal combustion engine/natural gas)

E-AR

Entergy Arkansas, Inc.

NorthStar

NorthStar Decommissioning Holdings, LLC

E-LA

Entergy Louisiana, LLC

NRC

Nuclear Regulatory Commission

E-MS

Entergy Mississippi, Inc.

NYISO

New York Independent System Operator, Inc.

E-NO

Entergy New Orleans, LLC

NYPA

New York Power Authority

E-TX

Entergy Texas, Inc.

NYSE

New York Stock Exchange

EBITDA

Earnings before interest, income taxes, depreciation and amortization

O&M

Operation and maintenance expense

ENGC

Entergy Nuclear Generation Company

OCF

Net cash flow provided by operating activities

ENP

Entergy Nuclear Palisades, LLC

OpCo

Operating Company

ENVY

Entergy Nuclear Vermont Yankee

OPEB

Other post-employment benefits

ESI

Entergy Services, Inc.

Palisades

Palisades Power Plant (nuclear)

EPS

Earnings per share

Pilgrim

Pilgrim Nuclear Power Station (nuclear)

ETR

Entergy Corporation

PPA

Power purchase agreement or purchased power agreement

EWC

Entergy Wholesale Commodities

PUCT

Public Utility Commission of Texas

FERC

Federal Energy Regulatory Commission

RICE

Reciprocating Internal Combustion Engine

FFO

Funds from operations

RFP

Request for proposals

Firm LD

Firm liquidated damages

ROE

Return on equity

FitzPatrick

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

ROIC

Return on invested capital

FRP

Formula rate plan

RPCE

Rough production cost equalization

GAAP

U.S. generally accepted accounting principles

RS Cogen

RS Cogen facility (CCGT cogeneration)

Grand Gulf or GGNS

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

RSP

Rate Stabilization Plan (E-LA Gas)

Indian Point 1 or IP1

Indian Point Energy Center Unit 1 (nuclear) (shut down in 1974)

S&P

Standard & Poor's

Indian Point 2 or IP2

Indian Point Energy Center Unit 2 (nuclear)

SEC

U.S. Securities and Exchange Commission

Indian Point 3 or IP3

Indian Point Energy Center Unit 3 (nuclear)

SERI

System Energy Resources, Inc.

IPEC

Indian Point Energy Center (nuclear)

TCRF

Transmission cost recovery factor

IRS

Internal Revenue Service

Union

Union Power Station (CCGT)

ISO

Independent system operator

UPSA

Unit Power Sales Agreement

ISES 2

Unit 2 of Independence Steam Electric Station (coal)

UP&O

Utility, Parent & Other



VPUC

Vermont Public Utility Commission



VY or Vermont Yankee

Vermont Yankee Nuclear Power Station (nuclear)



WACC

Weighted-average cost of capital



WPEC

Washington Parish Energy Center (CT/natural gas)

G: GAAP to Non-GAAP Reconciliations
Appendix G-1, 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)


Second Quarter

Year-to-Date



2018

2017

2018

2017

EWC






As-reported net revenue

(A)

272

250

654

744

Special items included in net revenue:






EWC Nuclear costs associated with decisions to close or sell plants


-

1

-

91

Total special items included in net revenue

(B)

-

1

-

91

Operational net revenue

(A-B)

272

250

654

653







EWC Nuclear






As-reported EWC Nuclear net revenue

(C)

267

247

646

738

Special items included in EWC Nuclear net revenue:






EWC Nuclear costs associated with decisions to close or sell plants


-

1

-

91

Total special items included in EWC Nuclear net revenue

(D)

-

1

-

91

Operational EWC Nuclear net revenue

(C-D)

267

247

646

647







Calculations may differ due to rounding

 

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

($ in millions except where noted)


Second Quarter



2018

2017

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

(A)

297

(888)

Preferred dividends


14

15

Tax effected interest expense


510

404

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

(B)

821

(469)





Special items in prior quarters


(720)

(1,947)

Items associated with decisions to close or sell EWC nuclear plants


(82)

(151)

Total special items, rolling 12 months

(C)

(802)

(2,098)





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

(B-C)

1,624

1,629





Operational earnings, rolling 12 months (non-GAAP)

(A-C)

1,099

1,210





Average invested capital

(D)

25,480

24,886





Average common equity

(E)

8,197

9,064





ROIC – as-reported

(B/D)

3.2%

(1.9%)

ROIC – operational

[(B-C)/D]

6.4%

6.5%

ROE – as-reported

(A/E)

3.6%

(9.8%)

ROE – operational

[(A-C)/E]

13.4%

13.3%





Calculations may differ due to rounding

 

Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures – Debt Ratios excluding Securitization Debt; Gross Liquidity; FFO to Debt, excluding Securitization Debt and Return of Unprotected Excess ADIT

($ in millions except where noted)


Second Quarter



2018

2017

Total debt

(A)

17,881

16,285

Less securitization debt

(B)

483

602

Total debt, excluding securitization debt

(C)

17,398

15,683

Less cash and cash equivalents

(D)

813

934

Net debt, excluding securitization debt

(E)

16,585

14,749





Total capitalization

(F)

26,102

24,859

Less securitization debt

(B)

483

602

Total capitalization, excluding securitization debt

(G)

25,619

24,257

Less cash and cash equivalents

(D)

813

934

Net capital, excluding securitization debt

(H)

24,806

23,323





Debt to capital ratio

(A/F)

68.5%

65.5%

Debt to capital ratio, excluding securitization debt

(C/G)

67.9%

64.7%

Net debt to net capital ratio, excluding securitization debt

(E/H)

66.9%

63.2%





Revolver capacity

(I)

3,885

4,163





Gross liquidity

(D+I)

4,698

5,097





Entergy Corporation notes:




Due September 2020


450

450

Due July 2022


650

650

Due September 2026


750

750

Total parent long-term debt

(J)

1,850

1,850

Revolver draw

(K)

390

225

Commercial paper

(L)

1,945

1,147

Total parent debt

(J+K+L)

4,185

3,222





Parent debt to total debt ratio, excluding securitization debt

[(J+K+L)/C]

24.1%

20.5%





 

Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures – Debt Ratios excluding Securitization Debt; Gross Liquidity; FFO to Debt, excluding Securitization Debt and Return of Unprotected Excess ADIT (continued)

($ in millions except where noted)


Second Quarter



2018

2017

Total debt

(A)

17,881

16,285

Less securitization debt

(B)

483

602

Total debt, excluding securitization debt

(C)

17,398

15,683





Net cash flow provided by operating activities, rolling 12 months

(D)

2,884

2,566





AFUDC-borrowed funds, rolling 12 months

(E)

(53)

(37)





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




Receivables


(149)

(33)

Fuel inventory


(1)

35

Accounts payable


190

139

Prepaid taxes and taxes accrued


28

(38)

Interest accrued


3

(2)

Other working capital accounts


(48)

62

Securitization regulatory charges


123

115

Total

(F)

146

278





FFO, rolling 12 months

(G)=(D+E-F)

2,685

2,251





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




Items associated with decisions to close or sell EWC nuclear plants


-

126

Operational FFO, rolling 12 months

(H)

2,685

2,377





Operational FFO to debt ratio, excluding securitization debt

(H/C)

15.4%

15.2%





Estimated return of unprotected excess ADIT (rolling 12 months pre-tax)

(I)

76

-





Operational FFO to debt ratio, excluding securitization debt and return of unprotected excess ADIT

[(H)+(I)/(C]

15.9%

15.2%





Calculations may differ due to rounding

 

Cision View original content with multimedia:http://www.prnewswire.com/news-releases/entergy-reports-second-quarter-earnings-300689962.html

SOURCE Entergy Corporation


Source: PR Newswire (August 1, 2018 - 6:45 AM EDT)

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