ENTERGY CORPORATION NEW ORLEANS, Feb. 15, 2017 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) reported a fourth quarter 2016 loss of $(9.88) per share on an as-reported basis and earnings of 31 cents per share on an operational basis. For the full year, the company reported a loss of $(3.26) per share on an as-reported basis and operational earnings of $7.11 per share. The as-reported losses for the quarter and full year resulted from asset impairments reflecting the effects of strategic decisions in the EWC business.
"2016 was a pivotal year for our company - a year in which our objectives were ambitious and our execution was on the mark," said Entergy chairman and chief executive officer Leo Denault. "We completed our plan to exit the merchant power business and transition to a pure-play utility. While previously disclosed charges at our EWC business led to an as-reported loss, adjusted earnings at our core Utility, Parent & Other business increased by more than 40 percent in 2016. Our strong operational results for the year are the outcome of disciplined execution on our strategy over the past few years, a strategy intended to fundamentally reposition our company and set it on a steady, predictable earnings and dividend trajectory."
Business highlights included the following:
-- Entergy initiated 2017 consolidated operational EPS guidance of $4.75 to
$5.35 and Utility, Parent & Other adjusted EPS guidance of $4.25 to
$4.55.
-- Entergy raised its dividend for the second consecutive year.
-- The LPSC approved ELL's application to construct the St. Charles Power
Station.
-- ELL and EMI made filings requesting approval for AMI investment.
-- Entergy made several announcements related to its wholesale strategy,
including agreements which will result in the early closure of Indian
Point Units 2 and 3 (in 2020 and 2021, respectively) and Palisades (in
2018).
-- Moody's placed the ratings of Entergy Corporation under "review for
upgrade" and S&P revised its outlook on Entergy to "positive" from
"stable."
-- For the 19(th) consecutive year, the Edison Electric Institute awarded
Entergy's storm team with emergency response awards for recovery and/or
assistance.
Consolidated Earnings (GAAP and Non-GAAP Measures)
Fourth Quarter and Year-to-Date 2016 vs. 2015 (See Appendix A for reconciliation of GAAP to non-GAAP measures and description of special items)
----------------------------------------------------------------------------------------------------------------------------------------------
Fourth Quarter Year-to-Date
-------------- ------------
2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
As-Reported
Earnings
(Loss) ($ in
millions) (1,769.1) 99.6 (1,868.7) (583.6) (176.6) (407.1)
Less Special
Items (1,824.6) (183.0) (1,641.5) (1,855.3) (1,252.4) (602.9)
-------- ------ -------- -------- -------- ------
Operational
Earnings 55.5 282.6 (227.1) 1,271.7 1,075.9 195.8
Estimated
Weather
Impact
(after-tax) 19.1 (6.1) 25.2 11.1 34.6 (23.5)
As-Reported
Earnings
(Loss) (per
share in $) (9.88) 0.56 (10.44) (3.26) (0.99) (2.27)
Less Special
Items (10.19) (1.02) (9.17) (10.37) (6.99) (3.38)
------ ----- ----- ------ ----- -----
Operational
Earnings 0.31 1.58 (1.27) 7.11 6.00 1.11
Estimated
Weather
Impact 0.11 (0.03) 0.14 0.06 0.19 (0.13)
Totals may not foot due
to rounding
Consolidated Results
For fourth quarter 2016, the company reported a loss of $(9.88) per share on an as-reported basis and EPS of 31 cents on an operational basis, compared to fourth quarter 2015 EPS of 56 cents on an as-reported basis and operational EPS of $1.58. For the full year, the company reported an as-reported loss of $(3.26) per share and operational EPS of $7.11, compared to a 2015 as-reported loss of (99) cents per share and operational EPS of $6.00. Summary discussions by business are below.
Additional details, including information on OCF by business, are provided in Appendix A and a comprehensive analysis of quarterly and year-to-date variances is provided in Appendix B.
Utility, Parent & Other Results
For fourth quarter 2016, Utility, Parent & Other EPS were 35 cents on an as-reported basis and 27 cents on an adjusted basis. In fourth quarter 2015, Utility, Parent & Other as-reported EPS were $1.42 and a (12) cents per share loss on an adjusted basis. 2015 results included a significant income tax item, a portion of which was reserved for sharing with customers of ELL. Last year's results also reflected charges for outstanding regulatory matters; there were similar, but smaller, charges in the current period.
The current period results reflected continued growth in the Utility business, including effects of new rate actions that recover investments that benefit customers and improve returns.
Net revenue increased quarter-over-quarter driven largely by the Union acquisition, EAI's rate case and EMI's FRP. Revenue increases for Union included amounts to recover operating expenses for the assets.
Billed retail sales volume increased quarter-over-quarter. The increase was partly due to weather, but the Utility realized higher billed sales, even on a weather-adjusted basis, across all customer classes. However, estimated volume in the current unbilled period was lower than fourth quarter 2015.
Utility non-fuel O&M was higher than fourth quarter 2015 due partly to an increase in nuclear generation spending and higher fossil spending primarily related to Union. Pension and OPEB expenses declined quarter-over-quarter.
For the full year, 2016 Utility, Parent & Other EPS were $5.10 on an as-reported basis and $4.38 on an adjusted basis. In comparison, 2015 earnings were $4.97 per share on an as-reported basis and $3.08 per share on an adjusted basis. As-reported results for 2015 included significantly higher income tax items and more favorable weather. Results for 2016 also reflected the effects of continued investment as well as lower operating expenses and lower charges for outstanding regulatory matters.
Appendix C contains additional details on Utility financial and operational measures, including a schedule of Utility, Parent & Other adjusted earnings and EPS which excludes special items and weather and normalizes income taxes.
Entergy Wholesale Commodities Results
For fourth quarter 2016, EWC recorded a $(10.23) per share loss on an as-reported basis and an operational loss of (4) cents per share. For the comparable period in 2015, EWC recorded an as-reported loss of (86) cents per share and operational EPS of 16 cents.
The decrease in EWC's as-reported results was due largely to impairments and other expenses recorded as a result of strategic decisions for the wholesale business, including decisions to close Palisades and IPEC. Fourth quarter 2015 results also included a gain on the sale of Rhode Island State Energy Center. All of these were considered special items and excluded from operational earnings.
The quarter-over-quarter decline was also due partly to income tax items recorded in 2015, lower price and volume for nuclear assets and higher decommissioning expense (due partly to the establishment of decommissioning liabilities for Indian Point 3 and FitzPatrick in 2016 as a result of a trust transfer agreement Entergy entered into with NYPA). In the current period, EWC results also reflected expense reductions which resulted from recording final court decisions in several lawsuits against the DOE related to spent nuclear fuel storage costs.
For the full year, EWC reported a loss of $(8.36) per share on an as-reported basis and operational EPS of $2.01. In 2015, EWC realized an as-reported loss of $(5.96) per share and operational EPS of $1.03. Both periods reflected the effects of strategic decisions for the EWC business. Other drivers included lower net revenue from the nuclear business, higher decommissioning expense and lower realized earnings on decommissioning trusts. Conversely, 2016 results included significant income tax benefits recorded in the second quarter.
Appendix D contains additional details on EWC financial and operational measures, including a schedule of EWC operational adjusted EBITDA calculations.
Earnings Guidance
Entergy initiated its 2017 operational guidance in the range of $4.75 to $5.35 per share and Utility, Parent & Other adjusted EPS guidance range of $4.25 to $4.55. See webcast presentation slides for additional details.
The company has provided 2017 earnings guidance with regard to the non-GAAP measures of operational EPS and Utility, Parent and Other Adjusted EPS. These measures exclude from the corresponding GAAP financial measures the effect of special items, such as impairment charges, gains or losses on asset sales, and other gains or losses occurring as a result of strategic decisions such as the company's recent decisions to shut down or sell its merchant nuclear plants. The company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot reasonably estimate all of the special items that may occur for the periods presented. The company's current estimate for special items in 2017 relates to the decisions to close or sell its merchant nuclear plants; those anticipated special items are expected to decrease as-reported EPS by approximately $2.35 per share. Other special items may occur during the periods presented, the impact of which cannot reasonably be estimated at this time.
Earnings Teleconference
A teleconference will be held at 10 a.m. central time on Wednesday, Feb. 15, 2017, to discuss Entergy's fourth 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 844-309-6569, conference ID 52887956, 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 Feb. 22, 2017, by dialing 855-859-2056, conference ID 52887956. 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 2.9 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of approximately $10.8 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.
For definitions of certain operational performance measures, as well as GAAP and non-GAAP financial measures and abbreviations and acronyms used in the earnings release materials, see Appendix F and Appendix G.
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 and the presentation of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Certain non-GAAP 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 non-routine items or events that management believes do not reflect the ongoing business of Entergy, and may include items such as impairment charges, gains or losses on asset sales, and other gains or losses occurring as a result of strategic decisions such as Entergy's recent decisions to shut down or sell its merchant nuclear plants. Operational earnings per share are presented for each of Entergy's reportable business segments as well as on a consolidated basis. In addition, other financial measures including net income (or earnings), adjusted for preferred dividends and tax effected interest expense; non-fuel operation and maintenance expenses; average total 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 also reports Utility, Parent & Other adjusted earnings and earnings per share, which exclude from GAAP earnings the special items described above and weather and normalizes tax expense for the periods presented. Management believes that financial metrics calculated using operational earnings or otherwise adjusted as described above could provide useful information to investors in evaluating the ongoing results of Entergy's businesses and could assist investors in comparing Entergy's operating performance to the operating performance of others in the Utility sector.
Other non-GAAP measures, including adjusted EBITDA; operational adjusted EBITDA; gross liquidity; debt to capital ratio, excluding securitization debt; net debt to net capital ratio, excluding securitization debt; parent debt to total debt ratio, excluding securitization debt; debt to operational adjusted EBITDA, excluding securitization debt; operational FFO to debt ratio, excluding securitization debt; are measures Entergy uses internally for management and board discussions and cash budgeting and performance monitoring activities to gauge the overall strength of its business. Entergy believes the above data could provide useful information to investors in evaluating Entergy's ongoing financial results and flexibility, and could assist 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, could provide a more complete understanding of factors and trends affecting Entergy's business. Investors are strongly encouraged to review Entergy's consolidated financial statements and publicly filed reports in their entirety and to not rely on any single financial measure. Non-GAAP financial measures are not standardized; therefore, it might not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.
Cautionary Note Regarding Forward-Looking Statements
In this news release, and from time to time, Entergy Corporation makes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other things, Entergy's 2017 earnings guidance, its current financial and operational outlook, and other statements of Entergy's plans, beliefs or expectations included in this news release. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this press release. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this news release and in Entergy's most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and Entergy's other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with rate proceedings, formula rate plans and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent anticipated by the utilities; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory costs and risks, including any changes resulting from the nuclear crisis in Japan following its catastrophic earthquake and tsunami; (e) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning Entergy's nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (g) risks and uncertainties associated with strategic transactions that Entergy or its subsidiaries may undertake, including the risk that any such transaction may not be completed as and when expected and the risk that the anticipated benefits of the transaction may not be realized; (h) effects of changes in federal, state or local laws and regulations and other governmental actions or policies, including changes in monetary, fiscal, tax, environmental or energy policies; and (i) the effects of technological changes and changes in commodity markets, capital markets or economic conditions, during the periods covered by the forward-looking statements.
Fourth Quarter 2016 Earnings Release Appendices and Financial Statements
Appendices
Seven appendices are presented in this section as follows:
-- A: Consolidated Results and Special Items
-- B: Variance Analysis
-- C: Utility Financial and Operational Measures
-- D: EWC Financial and Operational Measures
-- E: Consolidated Financial Performance Measures
-- F: Definitions, Abbreviations and Acronyms
-- G: GAAP to Non-GAAP Reconciliations
A: Consolidated Results and Special Items
Appendix A-1 provides a comparative summary of consolidated EPS for current quarter and year-to-date 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
Fourth Quarter and Year-to-Date 2016 vs. 2015 (See Appendix A-3 and Appendix A-4 for details on special items)
(Per share in $)
Fourth Quarter Year-to-Date
-------------- ------------
2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
As-reported
Utility 0.67 1.75 (1.08) 6.34 6.12 0.22
Parent & Other (0.32) (0.33) 0.01 (1.24) (1.15) (0.09)
EWC (10.23) (0.86) (9.37) (8.36) (5.96) (2.40)
Consolidated as-
reported
earnings (9.88) 0.56 (10.44) (3.26) (0.99) (2.27)
Less special items
Utility - - - - - -
Parent & Other - - - - - -
EWC (10.19) (1.02) (9.17) (10.37) (6.99) (3.38)
------ ----- ----- ------ ----- -----
Consolidated
special items (10.19) (1.02) (9.17) (10.37) (6.99) (3.38)
Operational
Utility 0.67 1.75 (1.08) 6.34 6.12 0.22
Parent & Other (0.32) (0.33) 0.01 (1.24) (1.15) (0.09)
EWC (0.04) 0.16 (0.20) 2.01 1.03 0.98
----- ---- ----- ---- ---- ----
Consolidated
operational
earnings 0.31 1.58 (1.27) 7.11 6.00 1.11
Estimated weather
impact 0.11 (0.03) 0.14 0.06 0.19 (0.13)
Totals may not foot due
to rounding
See Appendix B for detailed earnings variance analysis. See Appendix A-3 for special items by driver.
Appendix A-2 provides the components of OCF contributed by each business for current quarter and year-to-date 2016 versus 2015.
Appendix A-2: Consolidated Operating Cash Flow
Fourth Quarter and Year-to-Date 2016 vs. 2015
---------------------------------------------
($ in millions)
Fourth Quarter Year-to-Date
-------------- ------------
2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
Utility 783 858 (75) 2,861 2,907 (46)
Parent & Other 53 3 50 (108) (78) (30)
EWC (90) 81 (171) 246 462 (216)
--- --- ---- --- --- ----
Total OCF 746 942 (195) 2,999 3,291 (292)
Totals may not foot due
to rounding
The quarter-over-quarter OCF decrease reflected timing in the recovery of fuel and purchased power costs, net of increases in Utility net revenue, and higher pension funding. These items were partially offset by changes in working capital.
For the full year, OCF declined due to timing in the recovery of fuel and purchased power costs, net of increases in Utility net revenue, and lower EWC net revenues. These items were partially offset by receipt of DOE litigation awards, lower severance and retention payments and lower refueling outage payments at EWC.
For both the fourth quarter and full year, intercompany income tax payments contributed to the line of business variances.
Appendix A-3 and Appendix A-4 list special items by business. Amounts are shown on both a net income basis and an EPS basis. Special items are included in as-reported earnings consistent with GAAP, but are excluded from operational earnings. As a result, operational EPS is considered a non-GAAP measure.
Appendix A-3: Special Items by Driver (shown as positive/(negative) impact on earnings or EPS)
Fourth Quarter and Year-to-Date 2016 vs. 2015
---------------------------------------------
Fourth Quarter Year-to-Date
-------------- ------------
2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
(Pre-tax except for income tax effects and total, $ in millions)
EWC
EWC Nuclear plant
impairments and
costs associated
with decisions to
close or sell
plants (2,828.5) (400.7) (2,427.8) (2,909.8) (2,053.5) (856.3)
Top Deer investment
impairment - (36.8) 36.8 - (36.8) 36.8
Gain on the sale of
RISEC - 154.0 (154.0) - 154.0 (154.0)
DOE litigation
awards for VY and
FitzPatrick - - - 33.8 - 33.8
Income tax effect
on adjustments
above (a) 1,003.9 100.4 903.5 1,020.7 683.8 336.9
------- ----- ----- ------- ----- -----
Total EWC (1,824.6) (183.0) (1,641.5) (1,855.3) (1,252.4) (602.9)
Total special items (1,824.6) (183.0) (1,641.5) (1,855.3) (1,252.4) (602.9)
(After-tax, per share in $) (b)
EWC
EWC Nuclear plant
impairments and
costs associated
with decisions to
close or sell
plants (10.19) (1.45) (8.74) (10.49) (7.42) (3.07)
Top Deer investment
impairment - (0.13) 0.13 - (0.13) 0.13
Gain on the sale of
RISEC - 0.56 (0.56) - 0.56 (0.56)
DOE litigation
awards for VY and
FitzPatrick - - - 0.12 - 0.12
Total EWC (10.19) (1.02) (9.17) (10.37) (6.99) (3.38)
Total special items (10.19) (1.02) (9.17) (10.37) (6.99) (3.38)
Totals may not foot due
to rounding
(a) Income tax effect is
calculated by multiplying the
pre-tax amount by the
estimated income tax rate
that is expected to apply
(b) 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 fully diluted average
shares outstanding for the
period
Appendix A-4: Special Items by Income Statement Line Item (shown as positive/(negative) impact on earnings)
Fourth Quarter and Year-to-Date 2016 vs. 2015
---------------------------------------------
(Pre-tax except for Income taxes - other and Total, $ in millions)
Fourth Quarter Year-to-Date
-------------- ------------
2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
EWC
Net revenue 33.3 - 33.3 40.7 - 40.7
Non-fuel O&M (57.5) (6.2) (51.3) (75.6) (17.0) (58.6)
Taxes other than income
taxes (1.8) (0.5) (1.3) (5.5) (0.3) (5.2)
Asset write-off and
impairments (2,802.5) (394.0) (2,408.5) (2,835.6) (2,036.2) (799.4)
Gain on sale of asset - 154.0 (154.0) - 154.0 (154.0)
Miscellaneous net
(other income) - (36.8) 36.8 - (36.8) 36.8
Income taxes (c) 1,003.9 100.4 903.5 1,020.7 683.8 336.9
------- ----- ----- ------- ----- -----
Total EWC (1,824.6) (183.0) (1,641.5) (1,855.3) (1,252.4) (602.9)
Total special items
(after-tax) (1,824.6) (183.0) (1,641.5) (1,855.3) (1,252.4) (602.9)
Totals may not foot due
to rounding
(c) Income taxes represents 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
B: Variance Analysis
Appendix B-1 and Appendix B-2 provide details of current quarter and year-to-date 2016 versus 2015 as-reported and operational earnings variance analysis for Utility, Parent & Other, EWC and Consolidated.
Appendix B-1: As-Reported and Operational EPS Variance Analysis (d)
Fourth 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- Opera-tional As- Opera-
Reported Reported tional
------ ------
2015 earnings 1.75 1.75 (0.33) (0.33) (0.86) 0.16 0.56 1.58
Net revenue 0.83 0.83 (e) - - 0.03 (0.09) (f) 0.86 0.74
Asset write-offs and
impairments 0.24 0.24 (g) - - (8.66) - (h) (8.42) 0.24
Taxes other than income
taxes (0.01) (0.01) - - 0.02 0.03 0.01 0.02
Preferred dividend
requirements 0.01 0.01 - - - - 0.01 0.01
Other income
(deductions)-other 0.02 0.02 0.03 0.03 0.09 (0.04) (i) 0.14 0.01
Gain on sale of asset - - - - (0.56) - (j) (0.56) -
Interest expense and other
charges (0.01) (0.01) (0.02) (0.02) 0.01 0.01 (0.02) (0.02)
Depreciation/
amortization expense (0.05) (0.05) (k) - - 0.03 0.03 (0.02) (0.02)
Non-fuel O&M (0.11) (0.11) (l) (0.01) (0.01) (0.14) 0.05 (m) (0.26) (0.07)
Decommissioning expense (0.01) (0.01) - - (0.08) (0.08) (n) (0.09) (0.09)
Income taxes - other (1.99) (1.99) (o) 0.01 0.01 (0.11) (0.11) (p) (2.09) (2.09)
2016 earnings 0.67 0.67 (0.32) (0.32) (10.23) (0.04) (9.88) 0.31
---- ---- ----- ----- ------ ----- ----- ----
Appendix B-2: As-Reported and Operational EPS Variance Analysis (d)
Year-to-Date 2016 vs. 2015
--------------------------
(After-tax, per share in $, sorted in consolidated operational column, most to least favorable)
Utility Parent & Other EWC Consolidated
As- Opera- As- Opera-tional As- Opera-tional As- Opera-
Reported tional Reported Reported Reported Tional
-------- ------ -------- -------- -------- ------
2015 earnings 6.12 6.12 (1.15) (1.15) (5.96) 1.03 (0.99) 6.00
Net revenue 1.21 1.21 (e) - - (0.45) (0.60) (f) 0.76 0.61
Non-fuel O&M 0.25 0.25 (l) (0.03) (0.03) 0.14 0.35 (m) 0.36 0.57
Asset write-offs and
impairments 0.24 0.24 (g) - - (2.87) - (h) (2.63) 0.24
Taxes other than income
taxes 0.04 0.04 - - 0.06 0.08 (q) 0.10 0.12
Gain on sale of asset - - - - (0.56) - (j) (0.56) -
Other income
(deductions)-other 0.05 0.05 (r) 0.02 0.02 0.03 (0.10) (i) 0.10 (0.03)
Depreciation/
amortization expense (0.17) (0.17) (k) - - 0.14 0.14 (s) (0.03) (0.03)
Interest expense and other
charges (0.05) (0.05) (t) (0.04) (0.04) 0.02 0.02 (0.07) (0.07)
Income taxes - other (1.32) (1.32) (o) (0.04) (0.04) 1.23 1.23 (p) (0.13) (0.13)
Decommissioning expense (0.03) (0.03) - - (0.14) (0.14) (n) (0.17) (0.17)
2016 earnings 6.34 6.34 (1.24) (1.24) (8.36) 2.01 (3.26) 7.11
---- ---- ----- ----- ----- ---- ----- ----
Totals may not foot due
to rounding
See appendix in the webcast slide presentation for additional details on EWC line item variances.
(d) EPS effect is calculated by
multiplying the pre-tax
amount by the estimated
income tax rate that is
expected to apply and then
dividing by the fully diluted
average shares outstanding
for the period; income taxes
- other represents income tax
differences other than the
tax effect of individual line
items.
Utility As-Reported Net Revenue
Variance Analysis
2016 vs. 2015 ($ EPS)
--------------------
Fourth Year-to-
Quarter
Date
----
Estimated weather 0.14 (0.13)
Sales growth/pricing 0.29 1.15
Regulatory charges 0.38 0.32
Other 0.02 (0.13)
---- -----
Total 0.83 1.21
----- ---- ----
(e) The current quarter and year-to-date
increases were due partly to rate
changes associated with the Union
acquisition, EAI's rate case and EMI's
FRP. In addition, regulatory charges
recorded in fourth quarter 2015, which
were for tax sharing agreements,
reduced net revenue in that period. The
effect of weather was positive quarter-
over-quarter but negative in the year-
to-date variance. The year-to-date
increase also reflected higher
industrial usage.
(f) The current quarter and year-to-date
as-reported results included cost
reimbursements which are part of the
FitzPatrick sale agreement (classified
as special items and offset in non-
fuel O&M). The current quarter and
year-to-date periods also reflected
lower energy price and volume for
nuclear assets. The sale of the RISEC
facility in December 2015 also reduced
net revenue period-over-period. In
the year-to-date period, nuclear fuel
expense declined due largely to
impairments recorded in 2015.
(g) The current quarter and year-to-date
increases were driven by regulatory
charges recorded in fourth quarter 2015
arising from the Waterford 3
replacement steam generator prudence
review proceeding and the System
Agreement termination settlement
agreement.
(h) The as-reported current quarter and
year-to-date decreases were due
primarily to non-cash impairment
charges and related write-offs for
Palisades and Indian Point Units 2 and
3 recorded in fourth quarter 2016. EWC
also recorded impairment charges and
related write-offs in 2015 for
Pilgrim, FitzPatrick and Palisades.
Both periods also included write-offs
of ongoing capital investment for
plants that continue to operate.
(i) The current quarter and year-to-date
as-reported increases were due largely
to the fourth quarter 2015 asset
impairment on EWC's ownership interest
in the Top Deer wind generation
investment, which was accounted for
under the equity method of accounting
(classified as a special item). The
year-to-date operational decrease was
due primarily to higher realized gains
in 2015 on decommissioning trusts,
including the rebalancing of VY's
decommissioning trust portfolio.
(j) The as-reported decreases in the
current quarter and year-to-date
periods were attributable to the fourth
quarter 2015 gain on sale of the RISEC
facility (classified as a special
item).
(k) The current quarter and year-to-date
decreases were due primarily to
additions to plant, including Union,
which was acquired in March 2016. In
the year-to-date period, the decrease
was partially offset by a reduction in
depreciation expense which resulted
from litigation awards from the DOE in
connection with spent nuclear fuel
storage costs in third quarter 2016.
(l) The current quarter decrease reflected
higher nuclear generation spending
(higher overall scope of work and
higher labor costs) and increased
fossil spending primarily related to
the Union plant (offset in net
revenue). Lower pension and OPEB
expenses, stemming partly from a higher
discount rate, partly offset the
decreases. The year-to-date increase
reflected lower pension and OPEB
expenses and lower spending on fossil
outages. Non-fuel O&M expense was also
reduced as a result of litigation
awards from the DOE in connection with
spent nuclear fuel storage costs, a
deferral recorded at EAI in first
quarter 2016 and lower energy
efficiency costs. The expense decreases
were partially offset by Union expenses
(acquired in 2016) (offset in net
revenue) and higher nuclear generation
spending.
(m) The current quarter and year-to-date
as-reported results included higher
expenses resulting from the decisions
to close or sell merchant nuclear
plants (these expenses were considered
special items and excluded from
operational results). Fourth quarter
2016 also included FitzPatrick plant
costs that are being reimbursed and
offset in net revenue (also considered
a special item). The current quarter
and year-to-date variances also
reflected the sale of the RISEC
facility in December 2015, a reduction
in expense for DOE litigation awards in
connection with spent nuclear fuel
storage costs and lower benefit
expenses. These were partially offset
by higher site expenses and an increase
in costs related to Pilgrim's response
to a planned NRC enhanced inspection.
The year-to-date increase also
reflected a reduction in expense for
litigation proceeds received from the
DOE in second quarter 2016
(approximately 12 cents EPS received
for VY and FitzPatrick was considered a
special item) and lower refueling
outage expense, largely as a result of
2015 impairments.
(n) The current quarter and year-to-date
decreases were due to the establishment
of decommissioning liabilities for
Indian Point 3 and FitzPatrick in 2016
and revisions to decommissioning cost
studies at other EWC nuclear facilities
in 2015.
(o) The current quarter and year-to-date
decreases were due primarily to an
income tax item in fourth quarter 2015
of approximately $334 million resulting
from the ELL business combination (this
was partly offset by customer sharing
recorded as a regulatory charge,
included in net revenue). A 2015 audit
settlement in Mississippi of $15
million also contributed to the
decreases. The year-to-date decrease
also reflected a first quarter 2015
adjustment of $24 million involving the
reversal of a portion of the provision
for uncertain tax provisions related to
interest accrual. These items were
partly offset by the second quarter
2016 reversal of a portion of the
provision for uncertain tax positions
totaling $136 million for two previous
positions that were resolved in the
2010-2011 tax audit (this was partly
offset by customer sharing recorded as
a regulatory charge, included in net
revenue).
(p) The current quarter decrease was due
largely to state tax effects from the
2015 settlement on the 2008/2009 audit.
The year-to-date increase also
reflected the second quarter 2016 tax
election which reduced income tax
expense by $238 million.
(q) The year-to-date increase was due
largely to lower sales and use tax and
the effect of the 2015 New York state
audit settlement.
(r) The year-to-date increase was due
primarily to higher AFUDC-equity
funds, resulting from higher average
CWIP balances.
(s) The year-to-date increase resulted
from 2015 impairments, recording the
effects of DOE litigation proceeds
related to spent nuclear fuel storage
costs and the sale of RISEC.
(t) The year-to-date decrease resulted
primarily from higher interest expense
on long-term debt resulting from
additional debt issuances.
C: Utility Financial and Operational Measures
Appendix C-1 provides a comparative summary of Utility, Parent & Other adjusted earnings and EPS, which excludes the effects of special items and weather and normalizes income tax expense.
Appendix C-1: Utility, Parent & Other Adjusted Earnings and EPS - Reconciliation of GAAP to Non-GAAP Measures
Fourth Quarter and Year-to-Date 2016 vs. 2015 (See Appendix A for details on special items)
------------------------------------------------------------------------------------------
Fourth Quarter Year-to-Date
-------------- ------------
2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
($ in millions)
Utility
as-
reported
earnings 120.4 313.7 (193.3) 1,134.2 1,096.9 37.3
Parent &
Other as-
reported
earnings
(loss) (57.1) (59.5) 2.3 (222.5) (205.6) (16.9)
UP&O as-
reported
earnings 63.3 254.3 (191.0) 911.7 891.3 20.4
Less:
Special
items - - - - - -
Weather 31.0 (9.9) 40.9 18.1 56.3 (38.2)
Tax effect
of
weather
(u) (12.0) 3.8 (15.8) (7.0) (21.7) 14.7
----- --- ----- ---- ----- ----
Estimated
weather
impact
(after-
tax) 19.1 (6.1) 25.1 11.1 34.6 (23.5)
Customer
sharing - (107.0) 107.0 (16.1) (107.0) 90.9
Tax effect
of
customer
sharing - 41.2 (41.2) 6.2 41.2 (35.0)
Other tax
items (4.9) 347.5 (352.4) 126.9 370.0 (243.1)
---- ----- ------ ----- ----- ------
Tax items,
net of
customer
sharing (4.9) 281.6 (286.5) 117.0 304.2 (187.2)
UP&O
adjusted
earnings
(loss) 49.2 (21.3) 70.5 783.6 552.5 231.1
(After tax, per share in $)
UP&O as-
reported
earnings 0.35 1.42 (1.07) 5.10 4.97 0.13
Less:
Special
items - - - - - -
Weather 0.11 (0.03) 0.14 0.06 0.19 (0.13)
UP&O tax
items,
net of
customer
sharing (0.03) 1.57 (1.60) 0.66 1.70 (1.04)
----- ---- ----- ---- ---- -----
UP&O
adjusted
earnings
(loss) 0.27 (0.12) 0.39 4.38 3.08 1.30
--------- ---- ----- ---- ---- ---- ----
Totals may not foot due
to rounding
(u) Income tax effect is
calculated by multiplying the
pre-tax amount by the
estimated income tax rates
that are expected to apply to
those adjustments
Appendix C-2 provides a comparative summary of Utility operational performance measures.
Appendix C-2: Utility Operational Performance Measures
Fourth Quarter and Year-to-Date 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to non-GAAP measures)
-------------------------------------------------------------------------------------------------------------
Fourth Quarter Year-to-Date
-------------- ------------
2016 2015% % 2016 2015% %
Weather Weather
Change Adjusted Change Adjusted
--- ------ --- ------ --------
GWh billed
Residential 8,077 7,385 9.4% 1.5% 35,112 36,068 (2.7%) (0.1%)
Commercial 7,259 6,979 4.0% 1.1% 29,197 29,348 (0.5%) (0.9%)
Governmental 635 627 1.2% 1.2% 2,547 2,514 1.3% 1.3%
Industrial 11,158 11,152 0.1% 0.1% 45,739 44,382 3.1% 3.1%
------ ------ --- --- ------ ------ --- ---
Total retail sales 27,129 26,143 3.8% 0.8% 112,595 112,312 0.3% 1.0%
Wholesale 1,602 1,739 (7.9%) 11,054 9,274 19.2%
Total sales 28,731 27,882 3.0% 123,649 121,586 1.7%
Number of electric retail customers
Residential 2,452,686 2,431,984 0.9%
Commercial 352,147 348,840 0.9%
Governmental 17,731 17,899 (0.9%)
Industrial 46,252 46,572 (0.7%)
Total retail customers 2,868,816 2,845,295 0.8%
As-reported net
revenue ($ in
millions) 1,421 1,181 20.3% 6,179 5,829 6.0%
As-reported non-fuel
O&M per MWh $24.62 $24.05 2.4% $20.16 $21.06 (4.3%)
Operational non-fuel
O&M per MWh $24.62 $24.05 2.4% $20.16 $21.06 (4.3%)
The effects of weather were estimated using monthly heating degree days and cooling degree days from certain locations within each jurisdiction and comparing to "normal" weather based on 20 year historical data. The models used to estimate weather are updated periodically and subject to change.
D: EWC Financial and Operational Measures
Appendix D-1 provides a comparative summary of EWC operational adjusted EBITDA.
Appendix D-1: EWC Operational Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures
Fourth Quarter and Year-to-Date 2016 vs. 2015
---------------------------------------------
($ in millions) Fourth Quarter Year-to-Date
-------------- ------------
2016 2015 Change 2016 2015 Change
---- ---- ------ ---- ---- ------
Net income (1,832) (154) (1,678) (1,493) (1,066) (427)
Add back: interest
expense 5 8 (3) 23 27 (4)
Add back: income taxes (1,016) (123) (893) (1,192) (610) (582)
Add back: depreciation
and amortization 45 53 (8) 200 239 (39)
Subtract: interest and
investment income 21 33 (12) 108 149 (41)
Add back: decommissioning
expense 58 36 22 175 138 37
--- --- --- --- --- ---
Adjusted EBITDA (2,761) (213) (2,548) (2,396) (1,421) (975)
Add back pre-tax special items for:
EWC Nuclear plant
impairments and costs
associated with
decisions to close or
sell plants 2,829 401 2,428 2,910 2,054 856
Top Deer investment
impairment - 37 (37) - 37 (37)
Gain on the sale of RISEC - (154) 154 - (154) 154
DOE litigation awards for
VY and FitzPatrick - - - (34) - (34)
--- --- --- --- --- ---
Operational adjusted
EBITDA 68 70 (2) 480 515 (35)
Totals may not foot due
to rounding
Appendix D-2 provides a comparative summary of EWC operational performance measures.
Appendix D-2: EWC Operational Performance Measures
Fourth Quarter and Year-to-Date 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to non-GAAP measures)
-------------------------------------------------------------------------------------------------------------
Fourth Quarter Year-to-Date
-------------- ------------
2016 2015 % Change 2016 2015 % Change
---- ---- -------- ---- ---- --------
Owned capacity (MW) (v) 4,800 4,880 -
GWh billed 9,397 10,135 (7.3%) 35,881 39,745 (9.7%)
As-reported
average total
revenue per
MWh $54.07 $45.21 19.6% $51.55 $51.88 (0.6%)
Adjusted
operational
average total
revenue per
MWh $43.72 $44.83 (2.5%) $48.16 $51.49 (6.5%)
As-reported
net revenue
($ in
millions) 387 379 2.1% 1,542 1,666 (7.4%)
As-reported
non-fuel O&M
per MWh $33.86 $27.67 22.4% $27.75 $25.99 6.8%
Operational
non-fuel O&M
per MWh $27.74 $27.06 2.5% $25.65 $25.57 0.3%
EWC Nuclear Fleet
-----------------
Capacity
factor 91% 94% (3.2%) 87% 91% (4.4%)
GWh billed 8,881 9,561 (7.1%) 33,551 35,859 (6.4%)
As-reported
average total
revenue per
MWh $54.25 $44.71 21.3% $51.90 $51.49 0.8%
Adjusted
operational
average total
revenue per
MWh $43.29 $44.31 (2.3%) $48.28 $51.07 (5.5%)
Production
cost per MWh $23.00 $22.63 1.6% $22.93 $25.30 (9.4%)
As-reported
net revenue
($ in
millions) 382 371 3.0% 1,533 1,613 (5.0%)
Refueling outage days
Indian Point 2 - - 102 -
Indian Point 3 - - - 23
Palisades - 19 - 32
Pilgrim - - - 34
(v) Investments in wind generation
were sold in November 2016
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
Fourth Quarter 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to non-
GAAP measures)
-------------------------------------------------------------------------------
For 12
months
ending
December
31 2016 2015 Change
---- ---- ------
GAAP Measures
ROIC -
as-
reported (0.7%) 1.0% (1.7%)
ROE -
as-
reported (6.7%) (1.8%) (4.9%)
Book
value
per
share $45.12 $51.89 ($6.77)
End of
period
shares
outstanding
(millions) 179.1 178.4 0.7
Non-GAAP Measures
ROIC -
operational 7.2% 6.3% 0.9%
ROE -
operational 14.7% 11.2% 3.5%
As of
December
31 ($ in
millions) 2016 2015 Change
---- ---- ------
GAAP Measures
Cash and
cash
equivalents 1,188 1,351 (163)
Revolver
capacity 3,720 3,582 138
Commercial
paper 344 422 (78)
Total
debt 15,275 13,850 1,425
Securitization
debt 661 775 (114)
Debt to
capital 64.8% 59.1% 5.7%
Off-balance sheet liabilities:
Debt of
joint
ventures
-
Entergy's
share 72 77 (5)
Leases -
Entergy's
share 397 359 38
Power
purchase
agreements
accounted
for as
leases 166 195 (29)
--- --- ---
Total
off-
balance
sheet
liabilities 635 631 4
Non-GAAP Measures
Debt to
capital,
excluding
securitization
debt 63.8% 57.7% 6.1%
Gross
liquidity 4,908 4,933 (25)
Net debt
to net
capital,
excluding
securitization
debt 61.8% 55.0% 6.8%
Parent
debt to
total
debt,
excluding
securitization
debt 19.8% 21.9% (2.1%)
Debt to
operational
adjusted
EBITDA,
excluding
securitization
debt 4.1x 4.1x -
Operational
FFO to
debt,
excluding
securitization
debt 18.8% 25.7% (6.9%)
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 remove the effects of financial events that are not routine from commonly used financial measures.
Appendix F-1: Definitions
-------------------------
Utility Operational Performance Measures
----------------------------------------
GWh billed Total number of GWh billed to retail and
wholesale customers
Net revenue Operating revenue less fuel, fuel
related expenses and gas purchased for
resale, purchased power and other
regulatory charges (credits) - net
Non-fuel O&M Operation and maintenance expenses
excluding fuel, fuel-related expenses
and gas purchased for resale and
purchased power
Non-fuel O&M per MWh Non-fuel O&M per MWh of billed sales
Number of retail
customers Number of customers at end of period
EWC Operational Performance Measures
------------------------------------
As-reported average As-reported revenue per MWh billed
total revenue per MWh (does not include revenue from
investment in wind generation that was
accounted for under the equity method
of accounting, which was sold in
November 2016
Adjusted average total As-reported average total revenue per
revenue per MWh MWh, excluding revenue from special
items included in operating revenue and
the amortization of the Palisades
below-market PPA and VY capacity
revenue
Average revenue under Revenue on a per unit basis at which
contract per kW-month capacity is expected to be sold to
(applies to capacity third parties, given existing contract
contracts only) prices and/or auction awards
Average revenue per MWh Revenue on a per unit basis at which
on contracted volumes 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 A contract for the sale of installed
energy contracts 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 energy and capacity revenue on a
total revenue per MWh 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 Operational Performance Measures (continued)
-----------------------------------------------
GWh billed Total number of GWh billed to customers
and financially-settled instruments
(does not include amounts from
investment in wind generation that was
accounted for under the equity method
of accounting and which was sold in
November 2016
Net revenue Operating revenue less fuel, fuel-
related expenses and purchased power
Non-fuel O&M Operation and maintenance expenses
excluding fuel, fuel-related expenses
and gas purchased for resale, purchased
power (does not include amounts from
investment in wind generation that was
accounted for under the equity method
of accounting and which was sold in
November 2016
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; RISEC (non-nuclear) was sold in
December 2015 and investment in wind
generation was sold in November 2016
Percent of capacity sold Percent of planned qualified capacity
forward sold to mitigate price uncertainty
under physical or financial
transactions
Percent of planned Percent of planned generation output
generation under sold or purchased forward under
contract 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 Amount of installed capacity to generate
operation power and/or sell capacity, assuming
intent to sell FitzPatrick in first
half of 2017 and shutdown Pilgrim (May
31, 2019), Palisades (Oct. 1, 2018),
Indian Point 2 (April 30, 2020) and
Indian Point 3 (April 30, 2021)
Planned TWh of Amount of output expected to be
generation generated by EWC resources considering
plant operating characteristics and
outage schedules, assuming intent to
sell FitzPatrick in first half of 2017;
to shutdown Pilgrim (May 31, 2019),
Palisades (Oct. 1, 2018), Indian Point
2 (April 30, 2020) and Indian Point 3
(April 30, 2021); uninterrupted normal
plant operation
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 in operational
outage, seller is generally not liable
to buyer for any damages, unless the
contract specifies certain conditions
such as an availability guarantee
Financial Measures - GAAP
-------------------------
Book value per share End of period common equity divided by
end of period shares outstanding
Debt of joint ventures - Entergy's share of debt issued by
Entergy's share business joint ventures at EWC
Debt to capital ratio Total debt divided by total
capitalization
Leases - Entergy's share Operating leases held by subsidiaries
capitalized at implicit interest rate
Revolver capacity Amount of undrawn capacity remaining on
corporate and subsidiary revolvers,
including Entergy Nuclear Vermont
Yankee
ROIC - as-reported 12-months rolling net income
attributable to Entergy Corporation
adjusted for preferred dividends and
tax-effected interest expense divided
by average invested capital
ROE - as-reported 12-months rolling net income
attributable to Entergy Corporation
divided by average common equity
Securitization debt Debt associated with securitization
bonds issued to recover storm costs
from hurricanes Rita, Ike and Gustav at
ETI and Hurricane Isaac at ENOI; the
2009 ice storm at EAI and investment
recovery of costs associated with the
cancelled Little Gypsy repowering
project at ELL
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; for
Entergy consolidated, also excludes
AFUDC-equity funds and subtracts
securitization proceeds
Adjusted EPS As-reported EPS excluding special items
and weather and normalizing for income
tax
Debt to capital ratio, Total debt divided by total
excluding capitalization, excluding
securitization debt securitization debt
Debt to operational End of period total debt excluding
adjusted EBITDA, securitization debt divided by
excluding 12-months rolling operational adjusted
securitization debt EBITDA
FFO OCF less AFUDC-borrowed funds, working
capital items in OCF (receivables, fuel
inventory, accounts payable, prepaid
taxes and taxes accrued, interest
accrued and other working capital
accounts) and securitization regulatory
charges
Operational FFO to debt, 12-months rolling operational FFO as a
excluding percentage of end of period total debt
securitization debt excluding securitization debt
Gross liquidity Sum of cash and revolver capacity
Operational adjusted Adjusted EBITDA excluding effects of
EBITDA special items
Operational EPS As-reported EPS adjusted to exclude the
impact of special items
Operational FFO FFO excluding effects of special items
Parent debt to total End of period Entergy Corporation debt,
debt ratio, excluding including amounts drawn on credit
securitization debt revolver and commercial paper
facilities, as a percent of total debt
excluding securitization debt
Net debt to net capital Total debt less cash and cash
ratio, excluding equivalents divided by total
securitization debt capitalization less cash and cash
equivalents, excluding securitization
debt
ROIC - operational 12-months rolling operational net
income attributable to Entergy
Corporation adjusted for preferred
dividends and tax-effected interest
expense divided by average invested
capital
ROE - operational 12-months rolling operational net income
attributable to Entergy Corporation
divided by average common equity
Appendix F-2 explains abbreviations and acronyms used in the quarterly earnings materials.
Appendix F-2: Abbreviations and Acronyms
----------------------------------------
ADIT Accumulated deferred income taxes ISFSI Independent spent fuel storage
installation
AFUDC - Allowance for borrowed funds used
during construction LPSC Louisiana Public Service Commission
borrowed
funds
AFUDC - Allowance for equity funds used
equity during construction
funds LTM Last twelve months
ALJ Administrative law judge MISO Midcontinent Independent System
Operator, Inc.
AMI Advanced metering infrastructure Moody's Moody's Investor Service
ANO Arkansas Nuclear One (nuclear) MPSC Mississippi Public Service Commission
APSC Arkansas Public Service Commission MTEP MISO Transmission Expansion Planning
ARO Asset retirement obligation NEPOOL New England Power Pool
CCGT Combined cycle gas turbine Ninemile 6 Ninemile Point Unit 6
CCNO Council of the City of New Orleans, Non-fuel O&M Non-fuel operation and maintenance
Louisiana expense
COD Commercial operation date NDT Nuclear decommissioning trust
Cooper Cooper Nuclear Station NRC Nuclear Regulatory Commission
CT Simple cycle combustion turbine NYISO New York Independent System Operator,
Inc.
CWIP Construction work in progress NYS New York State
CZM Coastal zone management NYSDEC New York State Department of
Environmental Conservation
DCRF Distribution cost recovery factor NYSDOS New York State Department of State
DOE U.S. Department of Energy NYPA New York Power Authority
EAI Entergy Arkansas, Inc. NYPSC New York Public Service Commission
EBITDA Earnings before interest, income
taxes, depreciation and
amortization NYSE New York Stock Exchange
EGSL Entergy Gulf States Louisiana,
L.L.C. O&M Operation and maintenance expense
ELL Entergy Louisiana, LLC OCF Net cash flow provided by operating
activities
EMI Entergy Mississippi, Inc. OPEB Other post-employment benefits
ENOI Entergy New Orleans, Inc. Palisades Palisades Power Plant (nuclear)
ENVY Entergy Nuclear Vermont Yankee Pilgrim Pilgrim Nuclear Power Station (nuclear)
ESI Entergy Services, Inc. PPA Power purchase agreement or purchased
power agreement
EPS Earnings per share PUCT Public Utility Commission of Texas
ETI Entergy Texas, Inc. RFP Request for proposal
ETR Entergy Corporation RISEC Rhode Island State Energy Center (CCGT)
EWC Entergy Wholesale Commodities ROE Return on equity
FERC Federal Energy Regulatory
Commission ROIC Return on invested capital
FFO Funds from operations RPCE Rough production cost equalization
Firm LD Firm liquidated damages RSP Rate Stabilization Plan (ELL Gas)
FitzPatrick James A. FitzPatrick Nuclear Power
Plant (nuclear) SEC U.S. Securities and Exchange Commission
FRP Formula rate plan SERI System Energy Resources, Inc.
GAAP U.S. generally accepted accounting SPDES State Pollutant Discharge Elimination
principles System
Grand Gulf Unit 1 of Grand Gulf Nuclear
Station (nuclear), 90% owned or
leased by System Energy TCRF Transmission cost recovery factor
Indian Point Indian Point Energy Center Unit 1
1 (nuclear) Top Deer Top Deer Wind Ventures, LLC
Indian Point Indian Point Energy Center Unit 2
2 (nuclear) Union Union Power Station (CCGT)
Indian Point Indian Point Energy Center Unit 3
3 (nuclear) UP&O Utility, Parent & Other
IPEC Indian Point Energy Center
(nuclear) VPSB Vermont Public Service Board
ISO Independent system operator VY Vermont Yankee Nuclear Power Station
(nuclear)
ISES Independence Steam Electric Station
(coal) WACC Weighted-average cost of capital
WQC Water Quality Certification
YOY Year-over-year
G: GAAP to Non-GAAP Reconciliations
Appendix G-1, Appendix G-2 and Appendix G-3 provide reconciliations of various non-GAAP financial measures disclosed in this release to their most comparable GAAP measure.
Appendix G-1: Reconciliation of GAAP to Non-GAAP Financial Measures - Utility and EWC Non-fuel O&M per MWh, EWC and EWC Nuclear
Average Total Revenue per MWh
-------------------------------------------------------------------------------------------------------------------------------
($ in thousands
except where
noted) Fourth Quarter Year-to-Date
2016 2015 2016 2015
---- ---- ---- ----
Utility
-------
As-reported
Utility non-
fuel O&M (A) 701,288 670,638 2,487,333 2,560,620
Operational
Utility non-
fuel O&M (B) 701,288 670,638 2,487,333 2,560,620
Utility billed
sales (GWh) (C) 28,731 27,882 123,649 121,586
As-reported
Utility non-
fuel O&M per
MWh (A/C) $24.41 $24.05 $20.12 $21.06
Operational
Utility non-
fuel O&M per
MWh (B/C) $24.41 $24.05 $20.12 $21.06
EWC
---
As-reported EWC
non-fuel O&M (D) 318,193 280,425 995,797 1,033,144
Special items
included in
non-fuel O&M:
EWC Nuclear
costs
associated with
decisions to
close or sell
plants 57,513 6,205 109,392 16,979
DOE litigation
awards for VY
and FitzPatrick - - (33,823) -
Total special
items included
in non-fuel
O&M (E) 57,513 6,205 75,569 16,979
Operational EWC
non-fuel O&M (D-E) 260,680 274,220 920,228 1,016,165
EWC billed sales
(GWh) (F) 9,397 10,135 35,881 39,745
As-reported EWC
non-fuel O&M
per MWh (D/F) $33.86 $27.67 $27.75 $25.99
Operational EWC
non-fuel O&M
per MWh [(D-E)/(F)] $27.74 $27.06 $25.65 $25.57
As-reported EWC
operating
revenue (G) 508,104 458,184 1,849,638 2,061,827
Special items
included in
operating
revenue:
Decision to sell
FitzPatrick (H) 88,983 - 96,461 -
Operational EWC
operating
revenue (G-H) 419,121 458,184 1,753,177 2,061,827
Less Palisades
below-market
PPA
amortization
and VY capacity
revenue (q) (I) 8,338 3,800 25,062 15,200
Adjusted
operational EWC
operating
revenue [(G-H)]-(I) 410,783 454,384 1,728,115 2,046,627
As-reported EWC
average total
revenue per MWh (G)/(F) $54.07 $45.21 $51.55 $51.88
Adjusted
operational EWC
average total
revenue per MWh [[(G-H)]-(I)/(F)] $43.72 $44.83 $48.16 $51.49
As-reported EWC
nuclear
operating
revenue (J) 481,826 423,647 1,741,246 1,831,308
Special items
included in
operating
revenue:
Decision to sell
or close
FitzPatrick (K) 88,983 - 96,461 -
Operational EWC
nuclear
operating
revenue (J-K) 392,843 427,447 1,644,785 1,846,508
Less Palisades
below-market
PPA
amortization
and VY capacity
revenue (q) (L) 8,338 3,800 25,062 15,200
Adjusted
operational EWC
nuclear
operating
revenue [(J-K)]-(L) 384,505 456,164 1,619,723 1,407,660
EWC nuclear
billed sales
(GWh) (M) 8,881 9,561 33,551 35,859
As-reported EWC
nuclear average
total revenue
per MWh (J)/(M) $54.25 $44.71 $51.90 $51.49
Adjusted
operational EWC
nuclear average
total revenue
per MWh [[(J-K)]-(L)/(M)] $43.29 $44.31 $48.28 $51.07
Totals may not foot due
to rounding
(q) VY capacity revenue which is
largely offset by purchased
capacity following decision
to close VY
Appendix G-2: Reconciliation of GAAP to Non-GAAP Financial Measures - ROIC, ROE
($ in millions except
where noted) Fourth Quarter
--------------
2016 2015
---- ----
As-reported net
income (loss)
attributable to
Entergy Corporation,
rolling 12 months (A) (584) (177)
Preferred dividends 19 20
Tax effected interest
expense 410 396
--- ---
As-reported net
income (loss)
attributable to
Entergy Corporation,
rolling 12 months
adjusted for
preferred dividends
and tax effected
interest expense (B) (155) 239
Special items in
prior quarters (30) (1,070)
EWC Nuclear plant
impairments and
costs associated
with decisions to
close or sell plants (1,825) (259)
Top Deer investment
impairment - (24)
Gain on the sale of
RISEC - 100
Total special items,
rolling 12 months (C) (1,855) (1,253)
Operational earnings,
rolling 12 months
adjusted for
preferred dividends
and tax effected
interest expense (B-C) 1,700 1,492
Operational earnings,
rolling 12 months (A-C) 1,271 1,076
Average invested
capital (D) 23,492 23,827
Average common equity (E) 8,669 9,632
ROIC - as-reported (B/D) (0.7)% 1.0%
ROIC - operational [(B-C)/D] 7.2% 6.3%
ROE - as-reported (A/E) (6.7)% (1.8)%
ROE - operational [(A-C)/E] 14.7% 11.2%
Totals may not foot due
to rounding
Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures - Debt
Ratios excluding Securitization Debt; Gross Liquidity; Debt to Operational
Adjusted EBITDA excluding Securitization Debt; Operational FFO to Debt
Ratio, excluding Securitization Debt
---------------------------------------------------------------------------
($ in
millions
except
where
noted) Fourth Quarter
--------------
2016 2015
---- ----
Total debt (A) 15,275 13,850
Less
securitization
debt (B) 661 775
--- ---
Total debt,
excluding
securitization
debt (C) 14,614 13,075
Less cash
and cash
equivalents (D) 1,188 1,351
----- -----
Net debt,
excluding
securitization
debt (E) 13,426 11,724
Total
capitalization (F) 23,560 23,425
Less
securitization
debt (B) 661 775
--- ---
Total
capitalization,
excluding
securitization
debt (G) 22,899 22,650
Less cash
and cash
equivalents (D) 1,188 1,351
----- -----
Net
capital,
excluding
securitization
debt (H) 21,711 21,299
Debt to
capital (A/F) 64.8 59.1
Debt to
capital,
excluding
securitization
debt (C/G) 63.8 57.7
Net debt to
net
capital,
excluding
securitization
debt (E/H) 61.8 55.0
Revolver
capacity (I) 3,720 3,582
Gross
liquidity (D+I) 4,908 4,933
Entergy
Corporation
notes:
Due January
2017 - 500
Due
September
2020 450 450
Due July
2022 650 650
Due
September
2026 750 -
Total
parent
long-term
debt (J) 1,850 1,600
Revolver
draw (K) 700 835
Commercial
paper (L) 344 422
--- ---
Total
parent
debt (J)+(K)+(L) 2,894 2,857
Parent debt
to total
debt,
excluding
securitization
debt [((J)+(K)+(L))/(C)] 19.8% 21.9%
Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures -
Debt Ratios excluding Securitization Debt; Gross Liquidity; Debt to
Operational Adjusted EBITDA excluding Securitization Debt; Operational
FFO to Debt Ratio, excluding Securitization Debt (continued)
-----------------------------------------------------------------------
($ in
millions
except
where
noted) Fourth Quarter
--------------
2016 2015
---- ----
Total debt (A) 15,275 13,850
Less
securitization
debt (B) 661 775
--- ---
Total
debt,
excluding
securitization
debt (C) 14,614 13,075
As-
reported
consolidated
net
income
(loss),
rolling
12 months (565) (157)
Add back:
interest
expense,
rolling
12 months 666 643
Add back:
income
taxes,
rolling
12 months (817) (643)
Add back:
depreciation
and
amortization,
rolling
12 months 1,347 1,337
Add back:
regulatory
charges
(credits),
rolling
12 months 94 175
Subtract:
securitization
proceeds,
rolling
12 months 132 137
Subtract:
interest
and
investment
income,
rolling
12 months 145 187
Subtract:
AFUDC-
equity
funds,
rolling
12 months 68 52
Add back:
decommissioning
expense,
rolling
12 months 327 280
--- ---
Adjusted
EBITDA,
rolling
12 months (D) 707 1,259
Add back:
special decisions
item to close
resulting or sell
from EWC plants
Nuclear (pre-
plant tax)
impairments
and costs
associated
with 2,910 2,054
Add back:
special (pre-
item for tax)
DOE
litigation
awards
for VY
and
FitzPatrick,
rolling
12 months (34) -
Add back:
special
item for
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) 3,583 3,196
Debt to
operational
adjusted
EBITDA,
excluding
securitization
debt (C)/(E) 4.1x 4.1x
Net cash
flow
provided
by
operating
activities,
rolling
12 months (F) 2,999 3,291
AFUDC-
borrowed
funds
used
during
construction,
rolling
12 months (G) (34) (27)
Working
capital months:
items in
net cash
flow
provided
by
operating
activities,
rolling
12
Receivables (97) 38
Fuel
inventory 38 (12)
Accounts
payable 174 (135)
Prepaid
taxes and
taxes
accrued (29) 82
Interest
accrued (7) (11)
Other
working
capital
accounts 31 (114)
Securitization
regulatory
charges 114 107
--- ---
Total (H) 224 (45)
FFO,
rolling
12 months (F)+(G)-(H) 2,741 3,309
Add back:
special decisions
item to close
resulting or sell
from EWC plants
Nuclear (pre-
plant tax)
impairments
and costs
associated
with 6 55
Operational
FFO,
rolling
12 months (I) 2,747 3,364
Operational
FFO to
debt,
excluding
securitization
debt (I)/(C) 18.8% 25.7%
Totals may not foot due
to rounding
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/entergy-reports-fourth-quarter-and-full-year-financial-results-initiates-2017-earnings-guidance-300407785.html
SOURCE Entergy Corporation
