Entergy Reports Third Quarter Earnings

Third Quarter

Year-to-Date

2018

2019

2018

Change

(After-tax, $ in millions)

As-reported earnings

365

536

(171)

856

915

(58)

Less adjustments

(141)

105

(246)

(70)

73

(143)

Adjusted earnings (non-GAAP)

506

431

75

927

842

85

  Estimated weather in billed sales

13

5

7

1

42

(41)

(After-tax, per share in $)

As-reported earnings

1.82

2.92

(1.10)

4.38

5.01

(0.63)

Less adjustments

(0.70)

0.57

(1.27)

(0.36)

0.39

(0.75)

Adjusted earnings (non-GAAP)

2.52

2.35

0.17

4.74

4.62

0.12

  Estimated weather in billed sales

0.06

0.03

0.03

0.01

0.23

(0.22)

Calculations may differ due to rounding

Third Quarter

Year-to-Date

2019

2018

Change

2019

2018

Change

(After-tax, $ in millions)

Earnings (loss)

Utility

578

505

73

1,140

1,095

45

Parent & Other

(72)

(73)

1

(213)

(211)

(3)

EWC

(141)

105

(246)

(70)

30

(100)

Consolidated

365

536

(171)

856

915

(58)

Less adjustments

Utility

-

-

-

-

43

(43)

Parent & Other

-

-

-

-

-

-

EWC

(141)

105

(246)

(70)

30

(100)

Consolidated

(141)

105

(246)

(70)

73

(143)

Adjusted earnings (loss) (non-GAAP)

Utility

578

505

73

1,140

1,052

88

Parent & Other

(72)

(73)

1

(213)

(211)

(3)

EWC

-

-

-

-

-

-

Consolidated

506

431

75

927

842

85

Estimated weather in billed sales

13

5

7

1

42

(41)

Diluted average number of common shares outstanding (in millions)

200

184

196

183

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

Earnings (loss)

Utility

2.88

2.75

0.13

5.83

6.00

(0.17)

Parent & Other

(0.36)

(0.40)

0.04

(1.09)

(1.15)

0.06

EWC

(0.70)

0.57

(1.27)

(0.36)

0.16

(0.52)

Consolidated

1.82

2.92

4.38

5.01

(0.63)

Less adjustments

Utility

-

-

-

-

0.23

(0.23)

Parent & Other

-

-

-

-

-

-

EWC

(0.70)

0.57

(1.27)

(0.36)

0.16

(0.52)

Consolidated

(0.70)

0.57

(1.27)

(0.36)

0.39

(0.75)

Adjusted earnings (loss) (non-GAAP)

Utility

2.88

2.75

0.13

5.83

5.77

0.06

Parent & Other

(0.36)

(0.40)

0.04

(1.09)

(1.15)

0.06

EWC

-

-

-

-

-

-

Consolidated

2.52

2.35

0.17

4.74

4.62

0.12

Estimated weather in billed sales

0.06

0.03

0.03

0.01

0.23

(0.22)

Calculations may differ due to rounding

(a) 

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

Appendix A-2: Consolidated Operating Cash Flow

Third Quarter and Year-to-Date 2019 vs. 2018

($ in millions)

Third Quarter

Year-to-Date

2019

2018

Change

2019

2018

Change

Utility

1,143

845

298

2,297

1,994

303

Parent & Other

(93)

(99)

6

(216)

(214)

(2)

EWC

15

33

(18)

37

79

(42)

Consolidated

1,065

780

286

2,118

1,860

259

Calculations may differ due to rounding

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

Third Quarter and Year-to-Date 2019 vs. 2018

(Pre-tax except for Income taxes, Preferred dividend requirements of subsidiaries,  and Total, $ in millions) 

Third Quarter

Year-to-Date

2019

2018

Change

2019

2018

Change

(Pre-tax except for income taxes, preferred dividend requirements of subsidiaries, and totals, $ in millions)

Utility

2012 / 2013 IRS settlement

-

-

-

-

43

(43)

    Total Utility

-

-

-

-

43

(43)

EWC

Income before income taxes

(171)

(30)

(141)

(43)

(135)

93

Income taxes

31

136

(105)

(26)

167

(193)

Preferred dividend requirements of subsidiaries

(1)

(1)

-

(2)

(2)

-

    Total EWC

(141)

105

(246)

(70)

30

(100)

Total adjustments

(141)

105

(246)

(70)

73

(143)

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

Utility

2012 / 2013 IRS settlement

-

-

-

-

0.23

(0.23)

    Total Utility

-

-

-

-

0.23

(0.23)

EWC

    Total EWC

(0.70)

0.57

(1.27)

(0.36)

0.16

(0.52)

Total adjustments

(0.70)

0.57

(1.27)

(0.36)

0.39

(0.75)

Calculations may differ due to rounding

(b) 

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

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

Third Quarter and Year-to-Date 2019 vs. 2018

(Pre-tax except for Income taxes, Preferred dividend, and totals, $ in millions)

Third Quarter

Year-to-Date

2019

2018

Change

2019

2018

Change

Utility

Income taxes

-

-

-

-

43

(43)

  Total Utility

-

-

-

-

43

(43)

EWC

Operating revenues

300

380

(80)

1,024

1,108

(84)

Fuel and fuel-related expenses

(26)

(19)

(6)

(76)

(58)

(19)

Purchased power

(18)

(20)

2

(49)

(54)

6

Nuclear refueling outage expense

(12)

-

(12)

(36)

(3)

(33)

Other O&M

(136)

(209)

73

(513)

(600)

87

Asset write-off and impairments

(198)

(155)

(43)

(289)

(297)

9

Decommissioning expense

(60)

(56)

(4)

(187)

(175)

(13)

Taxes other than income taxes

(13)

(19)

6

(46)

(58)

12

Depreciation/amortization exp.

(38)

(40)

2

(114)

(116)

3

Other income (deductions)–other

34

116

(82)

266

143

124

Interest exp. and other charges

(6)

(9)

3

(24)

(25)

1

Income taxes

31

136

(105)

(26)

167

(193)

Preferred dividend

(1)

(1)

-

(2)

(2)

-

   Total EWC

(141)

105

(246)

(70)

30

(100)

Total adjustments

(141)

105

(246)

(70)

73

(143)

Calculations may differ due to rounding

Appendix B-1: As-Reported and Adjusted Earnings Variance Analysis (c), (d)

Third Quarter 2019 vs. 2018

(After-tax, per share in $)

Utility

Parent & Other

EWC

Consolidated

As-
Reported

Adjusted

As-
Reported

Adjusted

As-

Reported

As-

Reported

Adjusted

2018 earnings

2.75

2.75

(0.40)

(0.40)

0.57

2.92

2.35

Operating revenue less:

  Fuel, fuel-related expenses and gas purchased for resale, Purchased power, and Regulatory charges (credits)

0.91

0.91

(e) 

-

-

(0.36)

(f)

0.55

0.91

Nuclear refueling outage expense

(0.01)

(0.01)

-

-

(0.05)

(g)

(0.06)

(0.01)

Other O&M

(0.11)

(0.11)

(h)

-

-

0.31

(i)

0.20

(0.11)

Asset write-offs and impairments

-

-

-

-

(0.18)

(j)

(0.18)

-

Decommissioning expense

(0.02)

(0.02)

-

-

(0.02)

(0.04)

(0.02)

Taxes other than income taxes

(0.04)

(0.04)

-

-

0.03

(0.01)

(0.04)

Depreciation/amortization exp.

(0.23)

(0.23)

(k)

-

-

0.01

(0.22)

(0.23)

Other income (deductions)–other

(0.08)

(0.08)

(l)

-

-

(0.35)

(m)

(0.43)

(0.08)

Interest exp. and other charges

(0.04)

(0.04)

-

-

0.01

(0.03)

(0.04)

Income taxes–other

0.01

0.01

0.01

0.01

(0.73)

(n)

(0.71)

0.02

Share effect

(0.26)

(0.26)

(o)

0.03

0.03

0.06

(o)

(0.17)

(0.23)

2019 earnings

2.88

2.88

(0.36)

(0.36)

(0.70)

1.82

2.52

Appendix B-2: As-Reported and Adjusted Earnings Variance Analysis (c), (d)

Year-to-Date 2019 vs. 2018

(After-tax, per share in $)

Utility

Parent & Other

EWC

Consolidated

As-
Reported

Adjusted

As-
Reported

Adjusted

As-
Reported

As-

Reported

Adjusted

2018 earnings

6.00

5.77

(1.15)

(1.15)

0.16

5.01

4.62

Operating revenue less:

  Fuel, fuel-related expenses and gas purchased for resale, Purchased power, and Regulatory charges (credits)

1.16

1.16

(e) 

-

-

(0.42)

(f)

0.74

1.16

Nuclear refueling outage expense

(0.02)

(0.02)

-

-

(0.14)

(g)

(0.16)

(0.02)

Other O&M

(0.19)

(0.19)

(h)

0.01

0.01

0.38

(i)

0.20

(0.18)

Asset write-offs and impairments

-

-

-

-

0.04

0.04

-

Decommissioning expense

(0.04)

(0.04)

-

-

(0.05)

(p)

(0.09)

(0.04)

Taxes other than income taxes

(0.06)

(0.06)

(q)

-

-

0.05

(r)

(0.01)

(0.06)

Depreciation/amortization exp.

(0.32)

(0.32)

(k)

-

-

0.01

(0.31)

(0.32)

Other income (deductions)–other

0.01

0.01

(0.02)

(0.02)

0.53

(m)

0.52

(0.01)

Interest exp. and other charges

(0.09)

(0.09)

(s)

(0.03)

(0.03)

0.01

(0.11)

(0.12)

Income taxes–other

(0.20)

0.03

(t)

0.02

0.02

(0.95)

(n)

(1.13)

0.05

Preferred dividend requirements

(0.01)

(0.01)

-

-

-

(0.01)

(0.01)

Share effect

(0.41)

(0.41)

(o)

0.08

0.08

(o)

0.02

(0.31)

(0.33)

2019 earnings

5.83

5.83

(1.09)

(1.09)

(0.36)

4.38

4.74

Calculations may differ due to rounding

(c)

Utility revenue, Utility other O&M and Utility income taxes exclude $93 million, $3 million, and $96 million respectively in third quarter 2019 and $277 million, $6 million, and $283 million respectively in third quarter 2018 for the return of unprotected excess ADIT to customers (net effect is neutral to earnings).  On a year-to-date basis, Utility revenue, Utility other O&M and Utility income taxes exclude $216 million, $3 million, and $219 million respectively in 2019 and $555 million, $6 million, and $561 million respectively in 2018 (net effect is neutral to earnings).

(d) 

EPS effect is calculated by multiplying the pre-tax amount by the estimated income tax rate that is expected to apply and dividing by diluted average number of common shares outstanding for the prior period; income taxes–other represents income tax differences other than the tax effect of individual line items.

(e) 

The third quarter and year-to-date earnings increases were primarily driven by rate activity from E-AR's FRP, E-LA's FRP, including recovery of the St. Charles Power Station, E-LA's AMI rider, E-TX's base rate case, and E-MS's FRP. In addition, in the third quarter and year-to-date 2018, E-LA recorded regulatory charges to return the benefits of the lower effective federal tax rate to customers.  Also contributing was the net effect of volume/weather primarily due to higher volume in the unbilled period, net of lower billed sales volume.

(f)

The third quarter and year-to-date earnings decreases were due largely to lower revenues from the shutdown of Pilgrim in May 2019, lower capacity prices, and impacts on fuel expense from EWC plant impairments, partially offset by higher nuclear energy volume.

(g) 

The third quarter and year-to-date earnings decreases from higher EWC nuclear refueling outage expense is due primarily to increased outage amortization at Palisades due to the plant no longer being impaired.

(h) 

The third quarter and year-to-date earnings decreases from higher Utility other O&M reflected higher spending on information technology, loss reserves, initiatives to explore new customer products and services, and distribution operations. These were partially offset by lower spending on nuclear operations. The year-to-date variance also reflected lower energy efficiency costs (largely offset in operating revenue and/or regulatory charges (credits)).

(i) 

The third quarter and year-to-date earnings increases from lower EWC other O&M is due largely to a decrease in severance and retention expense, as well as the Pilgrim plant shutdown in May 2019.

(j) 

The third quarter earnings decrease from higher EWC asset write-offs and impairments was due to a $191 million loss (pre-tax) on the sale of Pilgrim in third quarter 2019, compared to $155 million (pre-tax) of impairment charges in third quarter 2018 primarily due to an upward revision of Pilgrim's ARO and a write-off of materials and supplies at Pilgrim.

(k) 

The third quarter and year-to-date earnings decreases from higher Utility depreciation expense were due primarily to higher plant in service, including the St. Charles Power Station, as well as the third quarter 2018 depreciation adjustment related to Grand Gulf, partially offset by the ongoing effect of Grand Gulf's lower depreciation rate (variances from Grand Gulf are largely offset in operating revenue).

(l)

The third quarter earnings decrease from lower Utility other income (deductions)–other was due largely to differences in decommissioning trust fund returns.

(m) 

The third quarter earnings decrease from lower EWC other income (deductions)–other was due largely to lower gains on the decommissioning trust fund investments in 2019 as compared to 2018, as well as a $16 million pension settlement charge in third quarter 2019 related to the exit of the EWC business. The year-to-date earnings increase from higher EWC other income (deductions)–other was due largely to higher gains on the decommissioning trust fund investments in 2019 as compared to 2018. These gains were partially offset by the pension settlement charge mentioned above.

(n) 

The third quarter and year-to-date earnings decreases from higher EWC income taxes were due primarily to two tax items in third quarter 2018.  First, a restructuring of an interest in an EWC decommissioning trust fund resulted in a reduction in income tax expense of $107 million. Second, the conclusion of a state income tax audit resulted in a benefit of $23 million. The year-to date earnings decrease also reflected an accrual of $29 million of tax expense, which resulted from the sale of Vermont Yankee in January 2019 and $13 million in tax benefits from the settlement of the 2012 / 2013 IRS audit in second quarter 2018.

(o) 

The third quarter and year-to-date earnings per share decreases from share effect were due to settlement of the equity forward (6.8 million shares settled in December 2018 and 8.4 million shares settled in May 2019).

(p) 

The year-to-date earnings decrease from higher EWC decommissioning expense was due to the acceleration of the ARO accretion for Indian Point and Palisades, as those plants move closer to their projected decommissioning dates.

(q) 

The year-to date earnings decrease from higher Utility taxes other than income taxes was primarily higher ad valorem at E-AR, E-LA, and E-MS.

(r) 

The year-to-date earnings increase from lower EWC taxes other than income taxes was primarily due to a true-up as well as lower ad valorem taxes due to a lower assessment at Palisades.

(s) 

The year-to-date earnings decrease from higher Utility interest expense and other charges was largely due to higher debt balances at E-AR and E-LA.

(t) 

The year-to-date as-reported earnings decrease from higher Utility income taxes was primarily due to the settlement of the 2012 / 2013 IRS audit totaling $43 million in second quarter 2018.

3Q

YTD

Volume/weather

0.20

Retail electric price

0.52

0.85

Reg. charges for lower tax rate

0.07

0.31

Other, including Grand Gulf recovery

0.12

0.13

0.91

1.16

Appendix C-1: Utility Operating and Financial Measures

Third Quarter and Year-to-Date 2019 vs. 2018

Third Quarter

Year-to-Date

2019

2018

%

Change

% Weather
Adjusted (u)

2019

2018

%

Change

% Weather
Adjusted (u)

GWh billed

Residential

11,627

11,821

(1.6)

(2.9)

27,749

28,857

(3.8)

(1.2)

Commercial

8,499

8,726

(2.6)

(3.3)

21,764

22,401

(2.8)

(1.8)

Governmental

705

714

(1.3)

(1.8)

1,932

1,934

(0.1)

(0.2)

Industrial

12,861

12,879

(0.1)

(0.1)

36,509

36,503

-

-

   Total retail sales

33,692

34,140

(1.3)

(1.9)

87,954

89,695

(1.9)

(0.8)

Wholesale

3,025

2,978

1.6

10,009

8,788

13.9

   Total sales

36,717

37,118

(1.1)

97,963

98,483

(0.5)

Number of electric retail customers

Residential

2,497,790

2,482,698

0.6

Commercial

356,259

357,050

(0.2)

Governmental

17,630

17,867

(1.3)

Industrial

48,532

49,491

(1.9)

   Total retail customers

2,920,211

2,907,106

0.5

Other O&M and refueling outage expense per MWh

$19.02

$18.12

5.0

$20.53

$19.95

2.9

Calculations may differ due to rounding

Appendix C-2: Utility Operating Measures

Twelve Months Ended September 30, 2019 vs. 2018

Twelve Months Ended September 30

2019

2018

%

Change

% Weather
Adjusted (u)

GWh billed

Residential

35,999

36,881

(2.4)

(1.0)

Commercial

28,789

29,551

(2.6)

(1.8)

Governmental

2,579

2,560

0.7

0.6

Industrial

48,390

48,443

(0.1)

(0.1)

Total retail sales

115,757

117,435

(1.4)

(0.8)

Calculations may differ due to rounding

(u) 

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

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

Third Quarter and Year-to-Date 2019 vs. 2018

($ in millions)

Third Quarter

Year-to-Date

2019

2018

Change

2019

2018

Change

Net income (loss)

(141)

106

(247)

(69)

31

(100)

Add back: interest expense

6

9

(3)

24

25

(1)

Add back: income taxes

(31)

(136)

105

26

(167)

193

Add back: depreciation and amortization

38

40

(2)

114

116

(2)

Subtract: interest and investment income

59

127

(68)

316

183

133

Add back: decommissioning expense

60

56

4

187

174

13

Adjusted EBITDA (non-GAAP)

(127)

(52)

(75)

(34)

(5)

(29)

Calculations may differ due to rounding

Appendix D-2: EWC Operating and Financial Measures

Third Quarter and Year-to-Date 2019 vs. 2018

Third Quarter

Year-to-Date

2019

2018

% Change

2019

2018

% Change

Owned capacity (MW) (u)

3,274

3,962

(17.4)

3,274

3,962

(17.4)

GWh billed

6,847

7,576

(9.6)

21,308

21,853

(2.5)

EWC Nuclear Fleet

Capacity factor

98%

90%

8.9

91%

86%

5.8

GWh billed

6,210

6,976

(11.0)

19,602

20,096

(2.5)

Production cost per MWh

$15.68

$17.15

(8.6)

$17.87

$17.93

(0.3)

Average energy/capacity revenue per MWh

$42.15

$48.97

(13.9)

$46.53

$49.13

(5.3)

Refueling outage days

Indian Point 2

-

-

-

33

Indian Point 3

-

-

29

-

Palisades

-

-

-

-

Calculations may differ due to rounding

(v) 

Third quarter and year-to-date 2019 exclude Pilgrim (688MW), which was shut down May 31, 2019.

Appendix E: GAAP and Non-GAAP Financial Measures

Third Quarter 2019 vs. 2018 (See Appendix G for reconciliation of GAAP to non-GAAP financial measures)

For 12 months ending September 30

2019

2018

Change

GAAP Measures

As-reported ROIC

4.8%

3.7%

1.1%

As-reported ROE

8.6%

5.1%

3.5%

Non-GAAP Measures

Adjusted ROIC

5.6%

5.5%

0.1%

Adjusted ROE

11.4%

10.7%

0.7%

As of September 30 ($ in millions)

2019

2018

Change

GAAP Measures

Cash and cash equivalents

956

988

(32)

Revolver capacity 

4,115

3,653

462

Commercial paper

1,918

1,947

(29)

Total debt

19,441

18,485

956

Securitization debt

338

463

(125)

Debt to capital

65.4%

68.2%

(2.8%)

Off-balance sheet liabilities:

  Debt of joint ventures – Entergy's share

56

62

(6)

  Leases – Entergy's share (v)

-

429

(429)

  Power purchase agreements accounted for as leases (v)

-

136

(136)

Total off-balance sheet liabilities

56

627

(571)

Non-GAAP Financial Measures

Debt to capital, excluding securitization debt

65.0%

67.7%

(2.7%)

Gross liquidity

5,071

4,641

430

Net debt to net capital, excluding securitization debt

63.8%

66.4%

(2.6%)

Parent debt to total debt, excluding securitization debt

20.5%

24.5%

(4.0%)

FFO to debt, excluding securitization debt

14.2%

13.1%

1.1%

FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC

17.6%

15.0%

2.6%

(w)

As of January 1, 2019, Entergy adopted Financial Accounting Standards Board Accounting Standards Codification 842, the new lease accounting standard. As a result, Entergy re-evaluated all agreements and put all agreements that qualified as operating leases on the balance sheet, and there are no longer any off-balance sheet liabilities for leases.

Appendix F-1: Definitions 

Utility Financial and Operating Measures

GWh billed

Total number of GWh billed to retail and wholesale customers

Other O&M and refueling outage expense per MWh

Other operation and maintenance expense plus nuclear refueling outage expense per MWh of billed sales

Number of electric retail customers

Number of electric customers at the end of the period

EWC Financial and Operating Measures

Adjusted EBITDA (non-GAAP)

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

Average revenue under contract per kW-month (applies to capacity contracts only)

Revenue on a per unit basis at which capacity is expected to be sold to third parties, given existing contract prices and/or auction awards

Average revenue per MWh on contracted volumes

Revenue on a per unit basis at which generation output reflected in contracts is expected to be sold to third parties (including offsetting positions) at the minimum contract prices and at forward market prices at a point in time, given existing contract or option exercise prices based on expected dispatch or capacity, excluding the revenue associated with the amortization of the below-market PPA for Palisades.  Revenue will fluctuate due to factors including positive or negative basis differentials and other risk management costs

Bundled capacity and energy contracts

A contract for the sale of installed capacity and related energy, priced per MWh sold

Capacity contracts

A contract for the sale of the installed capacity product in regional markets managed by NYISO and MISO

Capacity factor

Normalized percentage of the period that the nuclear plants generate power

Expected sold and market total revenue per MWh

Total energy and capacity revenue on a per unit basis at which total planned generation output and capacity is expected to be sold given contract terms and market prices at a point in time, including positive or negative basis differentials and other risk management costs, divided by total planned MWh of generation, excluding the revenue associated with the amortization of the Palisades below-market PPA

Appendix F-1: Definitions

EWC Financial and Operating Measures (continued)

GWh billed

Total number of GWh billed to customers and financially-settled instruments

Owned capacity (MW)

Installed capacity owned by EWC

Percent of capacity sold forward

Percent of planned qualified capacity sold to mitigate price uncertainty under physical or financial transactions

Percent of planned generation under contract

Percent of planned generation output sold or purchased forward under contracts, forward physical contracts, forward financial contracts or options that mitigate price uncertainty that may or may not require regulatory approval or approval of transmission rights or other conditions precedent; positions that are no longer classified as hedges are netted in the planned generation under contract

Planned net MW in operation

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

Planned TWh of generation

Amount of output expected to be generated by EWC resources considering plant operating characteristics and outage schedules, assuming intent to shutdown Indian Point 2 (April 30, 2020), Indian Point 3 (April 30, 2021) and Palisades (May 31, 2022)

Production cost per MWh

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

Refueling outage days

Number of days lost for a scheduled refueling and maintenance outage during the period

Unit-contingent

Transaction under which power is supplied from a specific generation asset; if the asset is in operational outage, seller is generally not liable to buyer for any damages, unless the contract specifies certain conditions such as an availability guarantee

Financial Measures – GAAP

As-reported ROE

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

As-reported ROIC

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

Debt of joint ventures – Entergy's share

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

Debt to capital

Total debt divided by total capitalization

Leases – Entergy's share

Operating leases held by subsidiaries capitalized at implicit interest rate

Revolver capacity

Amount of undrawn capacity remaining on corporate and subsidiary revolvers

Securitization debt

Debt on the balance sheet associated with securitization bonds that is secured by certain future customer collections

Total debt

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

Appendix F-1: Definitions

Financial Measures - Non-GAAP

Adjusted EPS

As-reported EPS excluding adjustments

Adjusted ROE

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

Adjusted ROIC

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

Adjustments

Unusual or non-recurring items or events or other items or events that management believes do not reflect the ongoing business of Entergy, such as the results of the EWC segment, significant tax items and other items such as certain costs, expenses, or other specified items

Debt to capital, excluding securitization debt

Total debt divided by total capitalization, excluding securitization debt

FFO

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

FFO to debt, excluding securitization debt

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

FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC

12-months rolling adjusted FFO as a percentage of end of period total debt excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC

Gross liquidity

Sum of cash and revolver capacity

Net debt to net capital, excluding securitization debt

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

Parent debt to total debt, excluding securitization debt

End of period Entergy Corporation debt, including amounts drawn on credit revolver and commercial paper facilities, as a percent of consolidated total debt, excluding securitization debt

Appendix F-2: Abbreviations and Acronyms

ADIT

Accumulated deferred income taxes

ISO

Independent system operator

AFUDC – borrowed funds

Allowance for borrowed funds used during construction

LPSC

Louisiana Public Service Commission

ALJ

Administrative law judge

LTM

Last twelve months

AMI

Advanced metering infrastructure

LTSA

Long-term service agreement

ANO

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

MISO

Midcontinent Independent System Operator, Inc.

APSC

Arkansas Public Service Commission

Moody's

Moody's Investor Service 

ARO

Asset retirement obligation

MPSC

Mississippi Public Service Commission

bps

Basis points

MTEP

MISO Transmission Expansion Planning

CCGT

Combined cycle gas turbine

Nelson 6

Unit 6 of Roy S. Nelson plant (coal)

CCN

Certificate of convenience & necessity 

NEPOOL

New England Power Pool

CCNO

Council of the City of New Orleans, Louisiana

Ninemile 6

Ninemile Point Unit 6 (CCGT)

COD

Commercial operation date

NDT

Nuclear decommissioning trust

CT

Simple cycle combustion turbine

NRC

Nuclear Regulatory Commission

CWIP

Construction work in progress

NY PSC

New York Public Service Commission

DCRF

Distribution cost recovery factor

NYISO

New York Independent System Operator, Inc.

E-AR

Entergy Arkansas, LLC

NYPA

New York Power Authority

E-LA

Entergy Louisiana, LLC

NYSE

New York Stock Exchange

E-MS

Entergy Mississippi, LLC

OCF

Net cash flow provided by operating activities

E-NO

Entergy New Orleans, LLC

OpCo

Operating Company

E-TX

Entergy Texas, Inc.

OPEB

Other post-employment benefits

EBITDA

Earnings before interest, income taxes, depreciation and amortization

Other O&M

Other non-fuel operation and maintenance expense

ENP

Entergy Nuclear Palisades, LLC

P&O

Parent & Other

EPS

Earnings per share

Palisades

Palisades Power Plant (nuclear)

ETR

Entergy Corporation

Pilgrim

Pilgrim Nuclear Power Station (nuclear, sold August 26, 2019)

EWC

Entergy Wholesale Commodities

PMR

Performance Management Rider

FERC

Federal Energy Regulatory Commission

PPA

Power purchase agreement or purchased power agreement

FFO

Funds from operations

PUCT

Public Utility Commission of Texas

FRP

Formula rate plan

RICE

Reciprocating Internal Combustion Engine

GAAP

U.S. generally accepted accounting principles

RFP

Request for proposals

Grand Gulf or GGNS

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

ROE

Return on equity

Indian Point 1

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

ROIC

Return on invested capital

Indian Point 2 or IP2

Indian Point Energy Center Unit 2 (nuclear)

RS Cogen

RS Cogen facility (CCGT cogeneration)

Indian Point 3 or IP3

Indian Point Energy Center Unit 3 (nuclear)

RSP

Rate Stabilization Plan (E-LA Gas)

IPEC

Indian Point Energy Center (nuclear)

S&P

Standard & Poor's

ISES 2

Unit 2 of Independence Steam Electric Station (coal)

SCPS

St. Charles Power Station (CCGT) 

IRS

Internal Revenue Service

SEC

U.S. Securities and Exchange Commission

SERI

System Energy Resources, Inc.

TCRF

Transmission cost recovery factor

Union

Union Power Station (CCGT)

UPSA

Unit Power Sales Agreement

Vermont Yankee

Vermont Yankee Nuclear Power Station (nuclear, sold January 11, 2019)

WACC

Weighted-average cost of capital

Appendix G-1: Reconciliation of GAAP to Non-GAAP Financial Measures - ROIC, ROE

($ in millions except where noted)

Third Quarter

2019

2018

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

(A)

790

435

Preferred dividends

16

14

Tax effected interest expense

548

520

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

(B)

1,354

969

Adjustments in prior quarters

(123)

(586)

Adjustments

(141)

105

  Total adjustments

(C)

(264)

(481)

EWC preferred dividends and tax-effected interest expense, rolling 12     months

27

27

Total adjustments, including preferred dividends and tax effected interest expense (non-GAAP)

(D)

(237)

(454)

Adjusted earnings, rolling 12 months (non-GAAP)

(A-C)

1,054

916

Adjusted earnings, rolling 12 months including preferred dividends and tax- effected interest expense (non-GAAP)

(B-D)

1,591

1,423

Average invested capital

(E)

28,413

26,107

Average common equity

(F)

9,224

8,551

As-reported ROIC

(B/E)

4.8%

3.7%

Adjusted ROIC (non-GAAP)

[(B-D)/E]

5.6%

5.5%

As-reported ROE

(A/F)

8.6%

5.1%

Adjusted ROE (non-GAAP)

[(A-C)/F]

11.4%

10.7%

Calculations may differ due to rounding

Appendix G-2: Reconciliation of GAAP to Non-GAAP Financial Measures – Debt Ratios excluding Securitization Debt; Gross Liquidity; FFO to Debt, excluding Securitization Debt; FFO to Debt, excluding Securitization Debt, Return of Unprotected Excess ADIT, and Severance and Retention Payments Associated with Exit of EWC

($ in millions except where noted)

Third Quarter

2019

2018

Total debt

(A)

19,441

18,485

Less securitization debt

(B)

338

463

Total debt, excluding securitization debt

(C)

19,103

18,022

Less cash and cash equivalents

(D)

956

988

Net debt, excluding securitization debt

(E)

18,147

17,034

Total capitalization

(F)

29,730

27,095

Less securitization debt

(B)

338

463

Total capitalization, excluding securitization debt

(G)

29,392

26,632

Less cash and cash equivalents

(D)

956

988

Net capital, excluding securitization debt

(H)

28,436

25,644

Debt to capital

(A/F)

65.4%

68.2%

Debt to capital, excluding securitization debt (non-GAAP)

(C/G)

65.0%

67.7%

Net debt to net capital, excluding securitization debt (non-GAAP)

(E/H)

63.8%

66.4%

Revolver capacity

(I)

4,115

3,653

Gross liquidity (non-GAAP)

(D+I)

5,071

4,641

Entergy Corporation notes:

Due September 2020

450

450

Due July 2022

650

650

Due September 2026

750

750

Total parent long-term debt

(J)

1,850

1,850

Revolver draw

(K)

155

630

Commercial paper

(L)

1,918

1,947

Unamortized debt issuance and discounts

(M)

(9)

(10)

Total parent debt

(J+K+L+M)

3,914

4,417

Parent debt to total debt, excluding securitization debt (non-GAAP)

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

20.5%

24.5%

Appendix G-2: Reconciliation of GAAP to Non-GAAP Financial Measures – Debt Ratios excluding Securitization Debt; Gross Liquidity; FFO to Debt, excluding Securitization Debt; FFO to Debt, excluding Securitization Debt, Return of Unprotected Excess ADIT, and Severance and Retention Payments Associated with Exit of EWC (continued)

($ in millions except where noted)

Third Quarter

2019

2018

Total debt

(A)

19,441

18,485

Less securitization debt

(B)

338

463

Total debt, excluding securitization debt

(C)

19,103

18,022

Net cash flow provided by operating activities, rolling 12 months

(D)

2,644

2,770

AFUDC – borrowed funds, rolling 12 months

(E)

(67)

(57)

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

Receivables

21

(53)

Fuel inventory

(18)

26

Accounts payable

(158)