ENTERGY CORPORATION NEW ORLEANS, April 26, 2016 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) reported first quarter 2016 earnings per share of $1.28 on an as-reported basis and $1.35 on an operational basis.
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"This quarter was a good start to another important year for Entergy. Given the challenges and opportunities ahead, we are confident that we can deliver on our 2016 earnings commitments as well as our Adjusted Utility, Parent & Other long-term outlook," said Entergy chairman and chief executive officer Leo Denault. "We accomplished what we set out to do, including the acquisition of the Union Power Station and the finalization of Entergy Arkansas' rate case. In the quarter we also had industrial sales growth of over six percent. Our results are the outcome of the strategy we have been pursuing for some time to create sustainable value for all our stakeholders in 2016 and beyond."
Business highlights included the following:
-- Entergy Arkansas, Entergy Louisiana and Entergy New Orleans closed their
acquisition of Union Power Station.
-- ELL began construction on the Lake Charles Transmission Project, a $159
million project that will support continued reliable service to a
rapidly growing area in our service territory.
-- EAI finalized its 2015 rate case.
-- Entergy Mississippi filed its annual formula rate plan with
forward-looking features.
-- Entergy announced it intends to refuel Pilgrim Nuclear Power Station in
spring of 2017, then cease operations on May 31, 2019.
-- Entergy was selected as a finalist for the 2016 Secretary of Defense
Employer Support Freedom Award.
-- The Environmental Protection Agency named ENOI a 2016 ENERGY STAR®
Partner of the Year for its outstanding contributions in implementing
energy-efficiency measures.
Consolidated Earnings (GAAP and Non-GAAP measures)
First Quarter 2016 vs. 2015 (See Appendix A for reconciliation of GAAP to non-
GAAP measures)
------------------------------------------------------------------------------
First Quarter
-------------
2016 2015 Change
---- ---- ------
As-Reported
Earnings ($ in
millions) 230.0 298.1 (68.1)
Less Special
Items (12.9) (4.6) (8.3)
----- ---- ----
Operational
Earnings 242.8 302.7 (59.9)
Weather Impact (25.4) 14.3 (39.7)
As-Reported
Earnings (per
share in $) 1.28 1.65 (0.37)
Less: Special
Items (0.07) (0.03) (0.04)
----- ----- -----
Operational
Earnings 1.35 1.68 (0.33)
Weather Impact (0.14) 0.08 (0.22)
-------------- ----- ---- -----
Totals may not foot due
to rounding
Consolidated Results
First quarter 2016 EPS were $1.28 on an as-reported basis and $1.35 on an operational basis, compared to first quarter 2015 as-reported EPS of $1.65 and operational EPS of $1.68, which were favorably impacted by weather and income tax items. Summary discussions by business unit are below. Additional details, including information on operating cash flow by business, are provided in Appendix A and a comprehensive analysis of quarterly variances is provided in Appendix B.
Utility, Parent & Other Results
For first quarter 2016, Utility, Parent and Other EPS were 84 cents on an as-reported and an operational basis. In comparison, 2015 first quarter as-reported and operational EPS were 97 cents. The quarter's results reflected growth in the Utility business, including effects of new rate actions that recover investments and improve Utility returns. However, the impacts from milder weather this winter and tax items recorded in the first quarter of last year led to the overall decline in results.
During the quarter, the Utility completed both EAI's 2015 rate case and the Union Power Station acquisition. Revenue increases for the Union acquisition included amounts to recover operating expenses for the asset. Utility non-fuel O&M was lower than first quarter 2015 partly due to lower scope of work for fossil outages, deferral of previously-expensed costs resulting from EAI's rate case order and lower pension and other post-retirement benefit expenses. Increased non-fuel O&M expense for nuclear generation due to higher regulatory compliance costs at ANO partially offset these favorable non-fuel O&M items.
Billed retail sales volume decreased (3.1) percent quarter-over-quarter on the effects of weather. On a weather-adjusted basis, billed volume increased 1.8 percent; the components of the weather-adjusted sales growth were:
-- Industrial sales increase of 6.2 percent,
-- Governmental sales increase of 1.1 percent,
-- Residential sales decrease of (0.6) percent, and
-- Commercial sales decrease of (1.8) percent.
Industrial sales increased on continued growth for new and expansion customers as well as higher sales to existing customers. New and expansion customers across several sectors continued to ramp and come online. Within our existing industrial customers, usage within the petroleum refining sector continued to be robust and comprised the majority of that increase.
For a schedule of Utility, Parent & Other Adjusted EPS excluding special items and weather and normalizing tax items, see Appendix C. Appendix C also contains additional details on the Utility's performance.
Entergy Wholesale Commodities Results
EWC operational adjusted earnings before interest, taxes, depreciation and amortization were $219 million in first quarter 2016, compared to $254 million in the same period a year ago. The quarter-over-quarter decrease was driven largely by lower energy and capacity prices for EWC's nuclear assets. Quarter-over-quarter results were also affected by 2015 impairments, which reduced fuel and non-fuel O&M expenses in the current quarter.
EWC Operational Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures
First Quarter 2016 vs. 2015
---------------------------
($ in millions) First Quarter
-------------
2016 2015 Change
---- ---- ------
Net income 80 123 (43)
Add back: interest
expense 6 6 -
Add back: income tax
expense 52 70 (18)
Add back: depreciation
and amortization 56 62 (6)
Subtract: interest and
investment income 27 50 (23)
Add back:
decommissioning expense 31 35 (4)
--- --- ---
Adjusted EBITDA 199 247 (48)
Add back pre-tax special items for:
Decisions to close VY,
FitzPatrick and Pilgrim 20 7 13
--- --- ---
Operational adjusted
EBITDA 219 254 (35)
Totals may not foot due
to rounding
EWC earned 44 cents per share on an as-reported basis and 51 cents per share on an operational basis for first quarter 2016, compared to first quarter 2015 as-reported earnings of 68 cents per share and operational earnings of 71 cents per share. The decline was driven by lower operational adjusted EBITDA. Interest and investment income was also lower quarter-over-quarter due to higher realized earnings on decommissioning trusts in 2015 from re-balancing activity.
For additional details on EWC's performance, see Appendix D and the webcast slide presentation.
Earnings Guidance
Entergy affirmed its 2016 operational earnings guidance in the range of $4.95 to $5.75 per share and Utility, Parent & Other Adjusted EPS guidance range of $4.20 to $4.50. See the webcast slide presentation for additional details.
Earnings Teleconference
A teleconference will be held at 10 a.m. CT on Tuesday, April 26, 2016, to discuss Entergy's first quarter 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 (855) 893-9849, conference ID 85413992, no more than 15 minutes prior to the start of the call. The webcast slide presentation is also posted to Entergy's website concurrent with this release, which was issued before market open on the day of the call. A replay of the teleconference will be available on Entergy's website at www.entergy.com and by telephone. The telephone replay will be available through May 3, 2016, by dialing (855) 859-2056, conference ID 85413992. 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 10,000 megawatts of nuclear power. Entergy delivers electricity to 2.8 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of approximately $11.5 billion and more than 13,000 employees.
Entergy Corporation's common stock is listed on the New York and Chicago exchanges under the symbol "ETR."
Additional information regarding Entergy's results of operations, regulatory proceedings and other matters is available in Entergy's earnings release, a copy of which will be filed with the U.S. Securities and Exchange Commission, and the webcast slide presentation. Both the earnings release and webcast slide presentation 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.
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 2016 earnings guidance, its current financial and operational outlook, and other statements of Entergy's plans, beliefs or expectations included in this news release. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this news release and in Entergy's most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and Entergy's other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with rate proceedings, formula rate plans and other cost recovery mechanisms; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory 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 FitzPatrick, Pilgrim or VY or any of Entergy's other 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 and (h) economic conditions and conditions in commodity and capital markets during the periods covered by the forward-looking statements.
For definitions of certain operational performance measures, as well as GAAP and non-GAAP financial measures and abbreviations and acronyms used in the quarterly materials, see Appendix F and Appendix G.
First Quarter 2016 Earnings Release Appendices and Financial Statements
Appendices
Seven appendices are presented in this section as follows:
-- Appendix A: Consolidated Results and Special Items
-- Appendix B: Variance Analysis
-- Appendix C: Utility Financial and Performance Measures
-- Appendix D: EWC Performance Measures
-- Appendix E: Consolidated Financial Performance Measures
-- Appendix F: Definitions, Abbreviations and Acronyms
-- Appendix G: GAAP to Non-GAAP Reconciliations
Also included in this earnings release are:
-- Financial Statements
Accompanying this earnings release is a webcast slide presentation, which is 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.
A: Consolidated Results and Special Items
Appendix A-1 provides a comparative summary of consolidated EPS for first quarter 2016 versus 2015, including a reconciliation of GAAP as-reported earnings to non-GAAP operational earnings.
Appendix A-1: Consolidated Earnings - Reconciliation of GAAP to Non-
GAAP Measures
First Quarter 2016 vs. 2015 (See Appendix A-3 and Appendix A-4 for
details on special items)
(Per share in $)
First Quarter
-------------
2016 2015 Change
---- ---- ------
As-Reported
Utility 1.09 1.24 (0.15)
Parent &
Other (0.25) (0.27) 0.02
EWC 0.44 0.68 (0.24)
Consolidated
As-
Reported
Earnings 1.28 1.65 (0.37)
Less Special Items
Utility - - -
Parent &
Other - - -
EWC (0.07) (0.03) (0.04)
----- ----- -----
Consolidated
Special
Items (0.07) (0.03) (0.04)
Operational
Utility 1.09 1.24 (0.15)
Parent &
Other (0.25) (0.27) 0.02
EWC 0.51 0.71 (0.20)
---- ---- -----
Consolidated
Operational
Earnings 1.35 1.68 (0.33)
Weather
Impact (0.14) 0.08 (0.22)
------- ----- ---- -----
Detailed earnings variance analysis is included in Appendix B.
Appendix A-2 provides the components of OCF contributed by each business.
Appendix A-2: Consolidated Operating Cash Flow
First Quarter 2016 vs. 2015
---------------------------
($ in millions)
First Quarter
-------------
2016 2015 Change
---- ---- ------
Utility 459 454 5
Parent & Other (62) (51) (11)
EWC 136 208 (72)
--- --- ---
Total Operating Cash Flow 533 611 (78)
------------------------- --- --- ---
Totals may not foot due
to rounding
The primary driver of the $78 million quarter-over-quarter decrease was lower EWC net revenue.
Appendix A-3 and Appendix A-4 list special items by business. Amounts are shown on both an EPS basis and a net income basis. Special items are those events that are not routine. Special items are included in as-reported EPS consistent with GAAP, but are excluded from operational EPS. As a result, operational EPS is considered a non-GAAP measure.
Appendix A-3: Special Items by Driver (shown as positive/(negative) impact on
EPS)
First Quarter 2016 vs. 2015
---------------------------
(After-tax, per share in $)
First Quarter
-------------
2016 2015 Change
---- ---- ------
EWC
Decisions to close
VY, FitzPatrick and
Pilgrim (0.07) (0.03) (0.04)
Total EWC (0.07) (0.03) (0.04)
Total Special Items (0.07) (0.03) (0.04)
------------------- ----- ----- -----
Appendix A-4: Special Items by Income Statement Line Item
(shown as positive/(negative) impact on earnings)
First Quarter 2016 vs. 2015
---------------------------
(Pre-tax except for Income taxes - other, $ in millions)
First Quarter
-------------
2016 2015 Change
---- ---- ------
EWC
Non-fuel O&M (11.5) (7.5) (4.0)
Taxes other than
income taxes (1.0) 0.3 (1.3)
Asset write-off and
impairments (7.4) - (7.4)
Income taxes - other 7.0 2.5 4.5
--- --- ---
Total EWC (12.9) (4.6) (8.3)
Total Special Items (12.9) (4.6) (8.3)
------------------- ----- ---- ----
Totals may not foot due
to rounding
B: Variance Analysis
Appendix B provides details of current quarter 2016 versus 2015 as-reported and operational earnings variance analysis for Utility, Parent & Other, EWC and Consolidated.
Appendix B: As-Reported and Operational EPS Variance Analysis
First Quarter 2016 vs. 2015
---------------------------
(After-tax, per share in $, sorted in consolidated operational column, most to least favorable)
Utility Parent & Other EWC Consolidated
As-Reported Opera-tional As-Reported Opera-tional As- Reported Opera-tional As- Reported Opera-tional
----------- ------------ ----------- ------------ ------------ ------------ ------------ ------------
2015 earnings 1.24 1.24 (0.27) (0.27) 0.68 0.71 1.65 1.68
Non-fuel O&M 0.13 0.13 (a) (0.01) (0.01) 0.06 0.07 (b) 0.18 0.19
Taxes other than income taxes 0.02 0.02 - - 0.01 0.01 0.03 0.03
Share effect 0.01 0.01 - - - - 0.01 0.01
Decommissioning expense (0.01) (0.01) - - 0.01 0.01 - -
Asset write-offs and impairments - - - - (0.03) - (0.03) -
Interest expense and other charges - - (0.01) (0.01) - - (0.01) (0.01)
Depreciation/amortization expense (0.03) (0.03) - - 0.02 0.02 (0.01) (0.01)
Other income (deductions)-other (0.03) (0.03) - - (0.07) (0.07) (c) (0.10) (0.10)
Income taxes - other (0.12) (0.12) (d) 0.04 0.04 (0.03) (0.03) (0.11) (0.11)
Net revenue (0.12) (0.12) (e) - - (0.21) (0.21) (f) (0.33) (0.33)
2016 earnings 1.09 1.09 (0.25) (0.25) 0.44 0.51 1.28 1.35
---- ---- ----- ----- ---- ---- ---- ----
See appendix in the webcast slide presentation for additional details on EWC line item variances.
(a) The quarter-over-quarter increase is
attributable to several drivers. Fossil
spending was lower quarter-over-
quarter due largely to lower scope of
work for outage activity. Pension and
OPEB expenses were also lower stemming
partly from a higher discount rate.
Additionally, EAI recorded a deferral
of $17.6 million for costs previously
expensed related to post-Fukushima and
flood barrier compliance. These items
were partially offset by higher nuclear
generation spending primarily due to an
increase in regulatory compliance costs
at ANO and an increase in nuclear labor
costs, including contract labor.
(b) The increase in the current quarter was
due largely to lower refueling outage
expense resulting from impairments
recorded in the 2015. Pension and OPEB
expenses were also lower, but largely
offset by other benefit cost variances.
(c) The decrease quarter-over-quarter was
largely due to realized earnings from
decommissioning trusts in the first
quarter 2015 from rebalancing of VY's
decommissioning trust.
(d) The quarter-over-quarter decrease was
attributable to a first quarter 2015
reversal of a portion of the provision
for uncertain tax provisions related to
interest accrual of approximately $24
million.
(e) The quarterly decrease was driven by
weather. The effects of weather were
unfavorable in the current quarter and
favorable a year ago. The current
quarter results also include a $(0.03)
per share charge to reflect the
estimated impact for recent FERC orders
on opportunity sales cases (incremental
interest expense was recorded, as
well). Excluding these items, net
revenue increased due primarily to the
EAI rate case, which was effective Feb.
24, 2016 and industrial sales growth.
(f) The decrease in the current quarter was
driven by lower energy pricing for
nuclear assets; capacity pricing was
also somewhat lower. The sale of RISEC
facility in December 2015 also
contributed to the decline. These
decreases were partially offset by
lower nuclear fuel expense (largely
resulting from 2015 impairments) and
slightly higher nuclear generation with
fewer unplanned outage days.
Utility As-Reported Net Revenue
Variance Analysis
2016 vs. 2015 ($ EPS)
--------------------
First Quarter
-------------
Weather (0.22)
Sales growth/pricing 0.14
Other (0.04)
-----
Total (0.12)
----- -----
C: Utility Financial and Performance Measures
Appendix C-1 provides a comparative summary of Utility, Parent & Other Adjusted EPS, excluding the effects of special items and weather and normalizing tax items.
Appendix C-1: Utility, Parent & Other Adjusted EPS - Reconciliation of
GAAP to Non-GAAP Measures
First Quarter 2016 vs. 2015 (See Appendix A for details on special items)
------------------------------------------------------------------------
(per share in $) First Quarter
-------------
2016 2015 Change
---- ---- ------
As-Reported
Earnings 0.84 0.97 (0.13)
Less:
Special Items - - -
Weather (0.14) 0.08 (0.22)
Tax Items 0.03 0.13 (0.10)
---- ---- -----
Adjusted
Earnings 0.95 0.76 0.19
Adjusted U/P&O includes a
$(0.05) per share charge for
the FERC's recent
opportunity sales decision
and a $0.06 cost deferral
from EAI's 2015 rate case
decision
Appendix C-2 provides a comparative summary of Utility operational performance measures.
Appendix C-2: Utility Operational Performance Measures
First Quarter 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to non-GAAP measures)
-------------------------------------------------------------------------------------------
First Quarter
-------------
2016 2015 % Change % Weather Adjusted
---- ---- -------- ------------------
GWh billed
Residential 8,137 9,433 (13.7) (0.6)
Commercial 6,511 6,721 (3.1) (1.8)
Governmental 600 592 1.4 1.1
Industrial 11,055 10,406 6.2 6.2
------ ------ --- ---
Total Retail Sales 26,303 27,152 (3.1) 1.8
Wholesale 3,140 1,811 73.4
Total Sales 29,443 28,963 1.7
Number of electric retail customers
Residential 2,443,022 2,419,228 1.0
Commercial 350,136 345,616 1.3
Governmental 17,686 17,383 1.7
Industrial 40,823 41,047 (0.5)
Total Retail Customers 2,851,667 2,823,274 1.0
Net Revenue ($
millions) 1,375 1,410 (2.5)
As-reported non-fuel
O&M per MWh 18.56 20.17 (8.0)
Operational non-fuel
O&M per MWh 18.56 20.17 (8.0)
See appendix in the webcast slide presentation for information on select regulatory cases.
D: EWC Performance Measures
Appendix D-1 provides a comparative summary of EWC operational performance measures.
Appendix D-1: EWC Operational Performance Measures
First Quarter 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to
non-GAAP measures)
-------------------------------------------------------------------------
First Quarter
-------------
2016 2015 % Change
---- ---- --------
Owned
capacity
(MW)
(g) 4,880 5,463 (10.7%)
GWh
billed 9,246 9,592 (3.6%)
As-
reported
average
total
revenue
per
MWh $56.47 $67.00 (15.7%)
Adjusted
average
total
revenue
per
MWh $56.10 $66.60 (15.8%)
Net
revenue
($
millions) 466 527 (11.6%)
As-
reported
non-
fuel
O&M
per
MWh 25.14 25.89 (2.9%)
Operational
non-
fuel
O&M
per
MWh 23.90 25.11 (4.8%)
EWC Nuclear Fleet
-----------------
Capacity
factor 90% 90% -
GWh
billed 8,688 8,618 0.8%
As-
reported
average
total
revenue
per
MWh $57.43 $65.78 (12.7%)
Adjusted
average
total
revenue
per
MWh $57.04 $65.34 (12.7%)
Production
cost
per
MWh $21.91 $25.61 (14.4%)
Net
revenue
($
millions) 464 511 (9.2%)
Refueling outage days
Indian
Point
2 25
Indian Point 3 23
(g) First quarter 2016 excludes
RISEC (583 MW) that was
sold in December 2015.
See appendix in the webcast slide presentation for EWC hedging and price disclosures.
E: Consolidated Financial Performance Measures
Appendix E provides comparative financial performance measures for the current quarter. Financial performance measures in this table include those calculated and presented in accordance with GAAP, as well as those that are considered non-GAAP measures.
As-reported measures are computed in accordance with GAAP as they include all components of net income, including special items. Operational measures are non-GAAP measures as they are calculated using operational net income, which excludes the impact of special items.
Appendix E: GAAP and Non-GAAP Financial Performance Measures
First Quarter 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to non-GAAP
measures)
----------------------------------------------------------------------------------
For
12
months
ending
March
31 2016 2015 Change
---- ---- ------
GAAP Measures
ROIC
-
as-
reported 0.7% 5.1% (4.4%)
ROE
-
as-
reported (2.5%) 8.3% (10.8%)
Book
value
per
share $52.38 $56.45 ($4.07)
End
of
period
shares
outstanding
(millions) 178.7 179.5 (0.8)
Non-GAAP Measures
ROIC
-
operational 5.8% 5.6% 0.2%
ROE
-
operational 10.4% 9.4% 1.0%
As of March 31 ($ in
millions)
GAAP Measures
Cash
and
cash
equivalents 1,092 1,181 (89)
Revolver
capacity 3,794 3,779 15
Commercial
paper
outstanding 578 762 (184)
Total
debt 15,092 14,044 1,048
Securitization
debt 752 762 (10)
Debt
to
capital
ratio 60.9% 57.4% 3.5%
Off-balance sheet
liabilities:
Debt
of
joint
ventures
-
Entergy's
share 77 81 (4)
Leases
-
Entergy's
share 359 422 (63)
Power
purchase
agreements
accounted
for
as
leases 195 224 (29)
--- --- ---
Total
off-
balance
sheet
liabilities 631 727 (96)
Non-GAAP Measures
Debt
to
capital
ratio,
excluding
securitization
debt 59.7% 56.0% 3.7%
Gross
liquidity 4,886 4,960 (74)
Net
debt
to
net
capital
ratio,
excluding
securitization
debt 57.8% 53.7% 4.1%
Parent
debt
to
total
debt
ratio,
excluding
securitization
debt 19.5% 20.9% (1.4%)
Debt
to
operational
adjusted
EBITDA,
excluding
securitization
debt 4.6 3.9 0.7
Operational
FFO
to
debt
ratio,
excluding
securitization
debt 21.0% 28.2% (7.2%)
F: Definitions, Abbreviations and Acronyms
Appendix F-1 provides definitions of certain operational performance measures, as well as GAAP and non-GAAP financial measures. Non-GAAP measures provide metrics that remove the effect of financial events that are not routine from commonly used financial metrics.
Appendix F-1: Definitions
-------------------------
Utility Operational Performance Measures
----------------------------------------
GWh billed Total number of GWh billed to
all retail and wholesale
customers
Net revenue Operating revenue less fuel,
fuel related expenses and gas
purchased for resale, purchased
power and other regulatory
charges (credits) -net
Non-fuel O&M Operation and maintenance
expenses excluding fuel, fuel-
related expenses and gas
purchased for resale and
purchased power
Non-fuel O&M per MWh Non-fuel O&M per MWh of billed
sales
Number of retail customers Number of customers at end of
period
EWC Operational Performance Measures
------------------------------------
As-reported average total As-reported revenue per MWh
revenue per MWh billed, excluding revenue from
investments in wind generation
accounted for under the equity
method of accounting
Adjusted average total As-reported average total
revenue per MWh revenue per MWh, excluding
revenue from the amortization
of the Palisades below-market
PPA
Average revenue under Revenue on a per unit basis at
contract per kW-month which capacity is expected to
(applies to capacity be sold to third parties, given
contracts only) existing contract prices and/
or auction awards
Average revenue per MWh on Revenue on a per unit basis at
contracted volumes which generation output
reflected in contracts is
expected to be sold to third
parties (including offsetting
positions) at the minimum
contract prices and at forward
market prices at a point in
time, given existing contract
or option exercise prices based
on expected dispatch or
capacity, excluding the revenue
associated with the
amortization of the below-
market PPA for Palisades;
revenue will fluctuate due to
factors including market price
changes affecting revenue
received on puts, collars and
call options, positive or
negative basis differentials,
option premiums and market
prices at the time of option
expiration, costs to convert
firm LD to unit-contingent and
other risk management costs
Bundled capacity and energy A contract for the sale of
contracts 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-NE, the NYISO and MISO
Capacity factor Normalized percentage of the
period that the nuclear plants
generate power
Expected sold and market Total energy and capacity
total revenue per MWh 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
GWh billed Total number of GWh billed to
customers, excluding
investments in wind generation
accounted for under the equity
method of accounting and
financially-settled
instruments
Appendix F-1: Definitions
-------------------------
EWC Operational Performance Measures (continued)
-----------------------------------------------
Net revenue Operating revenue less fuel, fuel
related expenses and purchased
power
Non-fuel O&M Operation and maintenance expenses
excluding fuel, fuel-related
expenses and gas purchased for
resale, purchased power and
investments in wind generation
accounted for under the equity
method of accounting
Non-fuel O&M per MWh Non-fuel O&M per MWh billed
Offsetting positions Transactions for the purchase of
energy, generally to offset a Firm
LD transaction
Owned capacity (MW) Installed capacity owned and
operated by EWC, including
investments in wind generation
accounted for under the equity
method of accounting; RISEC (non-
nuclear) was sold on Dec. 17, 2015
Percent of capacity sold Percent of planned qualified
forward capacity sold to mitigate price
uncertainty under physical or
financial transactions
Percent of planned Percent of planned generation output
generation under contract sold or purchased forward under
contracts, forward physical
contracts, forward financial
contracts or options that mitigate
price uncertainty that may or may
not require regulatory approval or
approval of transmission rights or
other conditions precedent;
positions that are no longer
classified as hedges are netted in
the planned generation under
contract
Planned net MW in operation Amount of installed capacity to
generate power and/or sell
capacity, assuming intent to
shutdown Pilgrim on May 31, 2019
and FitzPatrick on Jan. 27, 2017
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 on May 31, 2019
and FitzPatrick on Jan. 27, 2017,
uninterrupted normal plant
operation and timely renewal of
plant operating licenses at IPEC
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 scheduled
refueling outage during the period
Unit-contingent Transaction under which power is
supplied from a specific generation
asset; if the asset is on
operational outage, seller is
generally not liable to buyer for
any damages, unless the contract
specifies certain conditions such
as an availability guarantee
Financial Measures - GAAP
-------------------------
Book value per share End of period
common equity
divided by end
of period shares
outstanding
Debt of joint Entergy's share
ventures -Entergy's of debt issued
share by business
joint ventures
at EWC
Debt to capital ratio Total debt
divided by total
capitalization
Leases -Entergy's Operating leases
share held by
subsidiaries
capitalized at
implicit
interest rate
Revolver capacity Amount of undrawn
capacity
remaining on
corporate and
subsidiary
revolvers,
including
Entergy Nuclear
Vermont Yankee
ROIC - as-reported 12-months
rolling net
income
attributable to
Entergy
Corporation or
Subsidiary (Net
Income) adjusted
for preferred
dividends and
tax-effected
interest expense
divided by
average invested
capital
ROE - as-reported 12-months rolling
Net Income
divided by
average common
equity
Securitization debt Debt associated
with
securitization
bonds issued to
recover storm
costs from
hurricanes Rita,
Ike and Gustav
at ETI and
Hurricane Isaac
at ENOI; the
2009 ice storm
at EAI and
investment
recovery of
costs associated
with the
cancelled Little
Gypsy repowering
project at ELL
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
excluding decommissioning expense and
other than temporary impairment losses
on decommissioning trust fund assets;
for Entergy consolidated, also excludes
AFUDC-equity funds and subtracts
securitization proceeds
Adjusted EPS As-reported earnings per share
excluding special items and weather and
normalizing for income tax
Debt to capital ratio, excluding Total debt divided by total
securitization debt capitalization, excluding
securitization debt
Debt to EBITDA End of period total debt excluding
securitization debt divided by
12-months rolling operational adjusted
EBITDA
FFO Net cash flow provided by operations
less AFUDC-borrowed funds, working
capital items in operating cash flow
(receivables, fuel inventory, accounts
payable, prepaid taxes and taxes
accrued, interest accrued and other
working capital accounts) and
securitization regulatory charge
FFO to debt 12-months rolling operational FFO as a
percentage of end of period total debt
excluding securitization debt
Gross liquidity Sum of cash and revolver capacity
Operational adjusted EBITDA Adjusted EBITDA excluding effects of
special items
Operational earnings As-reported Net Income adjusted to
exclude the impact of special items
Operational FFO FFO excluding effects of special items
Parent debt to total debt End of period Entergy Corporation debt,
including amounts drawn on credit
revolver and commercial paper
facilities, as a percent of total debt
excluding securitization debt
Net debt to net capital ratio, Total debt less cash and cash
excluding securitization debt equivalents divided by total
capitalization less cash and cash
equivalents, excluding securitization
debt
ROIC - operational 12-months rolling operational Net
Income adjusted for preferred dividends
and tax-effected interest expense
divided by average invested capital
ROE - operational 12-months rolling operational Net Income
divided by average common equity
Appendix F-2 explains abbreviations and acronyms used in the quarterly earnings materials.
Appendix F-2: Abbreviations and Acronyms
----------------------------------------
AFUDC- Allowance for borrowed funds used
during MISO Midcontinent Independent System Operator, Inc.
borrowed
funds construction
MPSC Mississippi Public Service Commission
AFUDC- Allowance for equity funds used
during MTEP MISO Transmission Expansion Planning
equity funds construction
NEPOOL New England Power Pool
ADIT Accumulated deferred income taxes Ninemile 6 Ninemile Point Unit 6
ANO Arkansas Nuclear One (nuclear) NOAA National Oceanic and Atmosphere Administration
APSC Arkansas Public Service Commission Non-fuel O&M Non-fuel operation and maintenance expense
BP Basis point NRC Nuclear Regulatory Commission
CCGT Combined cycle gas turbine NYISO New York Independent System Operator, Inc.
CCNO Council of the City of New Orleans,
Louisiana NYPA New York Power Authority
COD Commercial operation date NYS New York State
Cooper Cooper Nuclear Station NYSDEC New York State Department of Environmental
Conservation
CT Simple cycle combustion turbine
CZM Coastal zone management NYSDOS New York State Department of State
DCRF Distribution cost recovery factor NYSE New York Stock Exchange
EAI Entergy Arkansas, Inc. O&M Operation and maintenance expense
EBITDA Earnings before interest, income
taxes, OCF Operating cash flow
depreciation and amortization
OPEB Other post-employment benefits
EGSL Entergy Gulf States Louisiana,
L.L.C. Palisades Palisades Power Plant (nuclear)
ELL Entergy Louisiana, LLC Pilgrim Pilgrim Nuclear Power Station (nuclear)
EMI Entergy Mississippi, Inc. PPA Power purchase agreement or purchased power
agreement
ENOI Entergy New Orleans, Inc.
ESI Entergy Services, Inc. PUCT Public Utility Commission of Texas
EPS Earnings per share RFO Refueling outage
ETI Entergy Texas, Inc. RFP Request for proposal
ETR Entergy Corporation RISEC Rhode Island State Energy Center (CCGT)
EWC Entergy Wholesale Commodities ROE Return on equity
FCA Forward capacity auction ROIC Return on invested capital
FERC Federal Energy Regulatory
Commission ROS Rest of state
FFO Funds from operations RPCE Rough production cost equalization
Firm LD Firm liquidated damages SEC U.S. Securities and Exchange Commission
FitzPatrick James A. FitzPatrick Nuclear Power
Plant (nuclear) SEMARI Southeast Massachusetts/Rhode Island
FRP Formula rate plan SERI System Energy Resources, Inc.
GAAP Generally accepted accounting
principles SPDES State Pollutant Discharge Elimination System
Grand Gulf Unit No. 1 of Grand Gulf Nuclear
Station (nuclear), 90% owned or
leased by System Energy SPP Southwest Power Pool
TCRF Transmission cost recovery factor
HCM Human Capital Management program Top Deer Top Deer Wind Ventures, LLC
Indian Point Indian Point Energy Center Unit 2
2 (nuclear) Union Union Power Station
Indian Point Indian Point Energy Center Unit 3
3 (nuclear) UP&O Utility, Parent & Other
IPEC Indian Point Energy Center
(nuclear) VY Vermont Yankee Nuclear Power Station (nuclear)
ISES Independence Steam Electric Station
(coal) WACC Weighted-average cost of capital
ISO Independent system operator WOTAB West of the Atchafalaya Basin
ISO-NE ISO New England Waterford 3 Unit No. 3 (nuclear) of the Waterford Steam
Electric Station, 100% owned or leased by Entergy
Louisiana
LEUG Louisiana Energy Users Group
LHV Lower Hudson Valley WQC Water Quality Certification
LPSC Louisiana Public Service Commission YOY Year-over-year
LTM Last twelve months
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 -
Utility and EWC Non-fuel O&M per MWh, EWC and EWC Nuclear Average Total
Revenue per MWh
------------------------------------------------------------------------
($ in
thousands
except
where
noted) First Quarter
2016 2015
---- ----
Utility
-------
As-
reported
Utility
non-
fuel O&M (A) 546,581 584,300
Operational
Utility
non-
fuel O&M (B) 546,581 584,300
Utility
billed
sales
(GWh) (C) 29,443 28,963
As-
reported
Utility
non-
fuel O&M
per MWh (A/C) 18.56 20.17
Operational
Utility
non-
fuel O&M
per MWh (B/C) 18.56 20.17
EWC
---
As-
reported
EWC non-
fuel O&M (D) 232,463 248,326
Special
Items
included
in non-
fuel
O&M:
Decisions
to close
VY,
FitzPatrick
and
Pilgrim 11,521 7,489
Total
special
items
included
in non-
fuel O&M (E) 11,521 7,489
Operational
EWC non-
fuel O&M (D-E) 220,942 240,837
EWC
billed
sales
(GWh) (F) 9,246 9,592
As-
reported
EWC non-
fuel O&M
per MWh (D/F) 25.14 25.89
Operational
EWC non-
fuel O&M
per MWh [(D-E)/(F)] 23.90 25.11
As-
reported
EWC
operating
revenue (G) 522,079 642,590
Less
Palisades
below-
market
PPA
amortization (H) 3,364 3,800
Adjusted
EWC
operating
revenue (G-H) 518,715 638,790
As-
reported
EWC
nuclear
operating
revenue (I) 498,901 566,908
Less
Palisades
below-
market
PPA
amortization (H) 3,364 3,800
Adjusted
EWC
nuclear
operating
revenue (I-H) 495,537 563,109
As-
reported
EWC
average
total
revenue
per MWh (G)/(F) 56.47 67.00
Adjusted
EWC
average
total
revenue
per MWh [(G-H)/(F)] 56.10 66.60
EWC
nuclear
billed
sales
(GWh) (J) 8,688 8,618
As-
reported
EWC
nuclear
average
total
revenue
per MWh (I)/(J) 57.43 65.78
Adjusted
EWC
nuclear
average
total
revenue
per MWh [(I-H)/(J)] 57.04 65.34
-------- ----------- ----- -----
Totals may not foot due
to rounding
Appendix G-2: Reconciliation of GAAP to Non-GAAP Financial Measures -
ROE, ROIC Metrics
---------------------------------------------------------------------
($ in
millions) First Quarter
-------------
2016 2015
---- ----
As-reported
net income
(loss)
attributable
to Entergy
Corporation,
rolling 12
months (A) (245) 838
Preferred
dividends 20 20
Tax effected
interest
expense 398 389
--- ---
As-reported
net income effected
attributable interest
to Entergy expense
Corporation,
rolling 12
months
adjusted for
preferred
dividends
and tax 173 1,247
Special items (B)
in prior
quarters (1,248) (101)
Decisions to
close VY,
FitzPatrick
and Pilgrim (13) (5)
Total special
items,
rolling 12
months (C) (1,261) (105)
Operational
earnings,
rolling 12
months
adjusted for
preferred
dividends
and tax
effected
interest
expense (B-C) 1,434 1,352
Operational
earnings,
rolling 12
months (A-C) 1,016 943
Average
invested
capital (D) 24,627 24,298
Average
common
equity (E) 9,747 10,041
ROIC - as-
reported % (B/D) 0.7 5.1
ROIC -
operational
% [(B-C)/D] 5.8 5.6
ROE - as-
reported % (A/E) (2.5) 8.3
ROE -
operational
% [(A-C)/E] 10.4 9.4
------------ --------- ---- ---
Totals may not foot due
to rounding
Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures - Credit
and Liquidity Metrics
----------------------------------------------------------------------------
($ in millions) First Quarter
-------------
2016 2015
---- ----
Total debt (A) 15,092 14,044
Less securitization
debt (B) 752 762
--- ---
Total debt, excluding
securitization debt (C) 14,340 13,282
Less cash and cash
equivalents (D) 1,092 1,181
----- -----
Net debt, excluding
securitization debt (E) 13,248 12,101
Total capitalization (F) 24,771 24,483
Less securitization
debt (B) 752 762
--- ---
Total capitalization,
excluding
securitization debt (G) 24,019 23,721
Less cash and cash
equivalents (D) 1,092 1,181
----- -----
Net capital, excluding
securitization debt (H) 22,927 22,540
Debt to capital ratio
% (A/F) 60.9 57.4
Debt to capital ratio,
excluding
securitization debt % (C/G) 59.7 56.0
Net debt to net
capital ratio,
excluding
securitization debt % (E/H) 57.8 53.7
Revolver capacity (I) 3,794 3,779
Gross liquidity (D+I) 4,886 4,960
Entergy Corporation
notes:
Due September 2015 - 550
Due January 2017 500 500
Due September 2020 450 450
Due July 2022 650 -
Total parent long-
term debt (J) 1,600 1,500
Revolver draw (K) 616 508
Commercial paper (L) 578 762
--- ---
Total parent debt (J)+(K)+(L) 2,794 2,770
Parent debt to total
debt ratio, excluding
securitization debt % [((J)+(K)+(L))/(C)] 19.5 20.9
---------------------- ----------------- ---- ----
Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures - Credit
and Liquidity Metrics (continued)
----------------------------------------------------------------------------
($ in millions) First Quarter
-------------
2016 2015
---- ----
Total debt (A) 15,092 14,044
Less securitization
debt (B) 752 762
--- ---
Total debt,
excluding
securitization
debt (C) 14,340 13,282
As-reported
consolidated net
income (loss),
rolling 12 months (245) 857
Add back: interest
expense, rolling
12 months 647 632
Add back: income
tax expense,
rolling 12 months (653) 523
Add back:
depreciation and
amortization,
rolling 12 months 1,340 1,322
Add back:
regulatory charges
(credits), rolling
12 months 166 (7)
Subtract:
securitization
proceeds, rolling
12 months 136 129
Subtract: interest
and investment
income, rolling 12
months 152 181
Subtract: AFUDC-
equity funds,
rolling 12 months 59 61
Add back:
decommissioning
expense, rolling
12 months 279 277
--- ---
Adjusted EBITDA,
rolling 12 months (D) 1,187 3,233
Add back: special
item for HCM
implementation
expenses, rolling
12 months (pre-
tax) - 11
Add back: special
item resulting
from decisions to
close VY,
FitzPatrick and
Pilgrim, rolling
12 months (pre-
tax) 1,670 152
Add back: special
item for Palisades
asset impairment
and related write-
offs, rolling 12
months (pre-tax) 396 -
Add back: Top Deer
investment
impairment,
rolling 12 months
(pre-tax) 37 -
Add back: special
item for gain on
the sale of RISEC,
rolling 12 months
(pre-tax) (154) -
Operational
adjusted EBITDA,
rolling 12 months (E) 3,136 3,396
Debt to operational
adjusted EBITDA,
excluding
securitization
debt (C)/(E) 4.6 3.9
Net cash flow
provided by
operating
activities,
rolling 12 months (F) 3,213 3,733
AFUDC-borrowed
funds used during
construction,
rolling 12 months (G) (30) (33)
Working capital
items in net cash
flow provided by
operating
activities,
rolling 12 months:
Receivables 92 72
Fuel inventory 1 (35)
Accounts payable (49) (200)
Prepaid taxes and
taxes accrued 134 (51)
Interest accrued 4 7
Other working
capital accounts (118) 137
Securitization
regulatory charge 106 97
--- ---
Total (H) 170 27
FFO, rolling 12
months (F)+(G)-(H) 3,013 3,673
Add back: special
item for HCM
implementation
expenses, rolling
12 months (pre-
tax) - 23
Add back: special
item resulting
from decisions to
close VY,
FitzPatrick and
Pilgrim, rolling
12 months (pre-
tax) 4 56
Operational FFO,
rolling 12 months (I) 3,017 3,752
Operational FFO to
debt ratio,
excluding
securitization
debt % (I)/(C) 21.0 28.2
------------------ ------- ---- ----
Totals may not foot due
to rounding
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SOURCE Entergy Corporation
