ETR Entergy Corp

Consolidated Earnings (GAAP and Non-GAAP Measures)

Third Quarter and Year-to-Date 2021 vs. 2020 (See Appendix A for reconciliation of GAAP to non-GAAP measures

and description of adjustments)

Third Quarter

Year-to-Date

2021

2020

Change

2021

2020

Change

(After-tax, $ in millions)

As-reported earnings

531

521

11

860

1,000

Less adjustments

30

7

(201)

4

(205)

Adjusted earnings (non-GAAP)

494

491

4

1,061

996

64

  Estimated weather in billed sales

(2)

1

(3)

4

(53)

57

(After-tax, per share in $)

As-reported earnings

2.63

2.59

0.04

4.26

4.98

(0.72)

Less adjustments

0.18

0.15

0.03

(1.00)

0.02

(1.02)

Adjusted earnings (non-GAAP)

2.45

2.44

0.01

5.26

4.96

0.30

  Estimated weather in billed sales

(0.01)

0.01

(0.02)

0.02

(0.26)

0.28

Calculations may differ due to rounding

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

Third Quarter and Year-to-Date 2021 vs. 2020

Third Quarter

Year-to-Date

2021

2020

Change

2021

2020

Change

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

Utility

Gain on sale

15

-

15

15

-

15

Income tax effect on adjustment above

(4)

-

(4)

(4)

-

(4)

Total Utility

11

-

11

11

-

11

EWC

Income before income taxes

35

43

(8)

(258)

12

(270)

Income taxes

(9)

(12)

3

47

(6)

54

Preferred dividend requirements

(1)

(1)

-

(2)

(2)

-

Total EWC

26

30

(4)

(212)

4

(216)

Total adjustments

37

30

7

(201)

4

(205)

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

Utility

Gain on sale

0.05

-

0.05

0.05

-

0.05

Total Utility

0.05

-

0.05

0.05

-

0.05

EWC

Total EWC

0.13

0.15

(0.02)

(1.05)

0.02

(1.07)

Total adjustments

0.18

0.15

0.03

(1.00)

0.02

(1.02)

Calculations may differ due to rounding
(b)   Per share amounts are calculated by dividing the corresponding earnings (loss) by the diluted average number of common shares outstanding for the period.

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

Third Quarter and Year-to-Date 2021 vs. 2020

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

Third Quarter

Year-to-Date

2021

2020

Change

2021

2020

Change

Utility

Other O&M

15

-

15

15

-

15

Income taxes

(4)

-

(4)

(4)

-

(4)

Total Utility

11

-

11

11

-

11

EWC

Operating revenues

162

214

(52)

559

747

(187)

Fuel and fuel-related expenses

(24)

(14)

(10)

(63)

(51)

(12)

Purchased power

(22)

(29)

7

(58)

(49)

(9)

Nuclear refueling outage expense

(11)

(11)

(1)

(34)

(35)

1

Other O&M

(51)

(114)

63

(233)

(385)

152

Asset write-off and impairments

-

(4)

5

(345)

(16)

(329)

Decommissioning expense

(14)

(51)

37

(106)

(152)

46

Taxes other than income taxes

(2)

(10)

8

(15)

(44)

30

Depreciation/amortization exp.

(9)

(21)

12

(36)

(81)

45

Other income (deductions)–other

9

87

(78)

84

97

(13)

Interest exp. and other charges

(3)

(5)

2

(11)

(17)

6

Income taxes

(9)

(12)

3

47

(6)

54

Preferred dividend requirements

(1)

(1)

-

(2)

(2)

-

Total EWC

26

30

(4)

(212)

4

(216)

Total adjustments

37

30

7

(201)

4

(205)

Calculations may differ due to rounding

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

Third Quarter 2021 vs. 2020

(After-tax, per share in $)

Utility

Parent & Other

EWC

Consolidated

As-
Reported

Adjusted

As-
Reported

Adjusted

As-

Reported

As-

Reported

Adjusted

2020 earnings (loss)

2.74

2.74

(0.30)

(0.30)

0.15

2.59

2.44

Operating revenue less:

  Fuel, fuel-related expenses and

  gas purchased for resale,

  Purchased power, and

  Regulatory charges (credits)–net

0.17

0.17

(e)

0.00

0.00

(0.22)

(f)

(0.05)

0.17

Nuclear refueling outage expense

0.01

0.01

0.00

0.00

0.00

0.01

0.01

Other O&M

(0.04)

(0.09)

(g)

0.00

0.00

0.24

(h)

0.20

(0.09)

Asset write-offs and impairments

0.00

0.00

0.00

0.00

0.02

0.02

0.00

Decommissioning expense

(0.01)

(0.01)

0.00

0.00

0.15

(i)

0.14

(0.01)

Taxes other than income taxes

(0.07)

(0.07)

(j)

0.00

0.00

0.03

(0.04)

(0.07)

Depreciation/amortization exp.

(0.12)

(0.12)

(k)

0.00

0.00

0.05

(l)

(0.07)

(0.12)

Other income (deductions)–other

0.22

0.22

(m)

0.00

0.00

(0.31)

(n)

(0.09)

0.22

Interest exp. and other charges

(0.03)

(0.03)

(0.03)

(0.03)

0.01

(0.05)

(0.06)

Income taxes–other

(0.04)

(0.04)

0.01

0.01

0.01

(0.02)

(0.03)

Preferred dividend requirements

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Share effect

(0.01)

(0.01)

0.00

0.00

0.00

(0.01)

(0.01)

2021 earnings (loss)

2.82

2.77

(0.32)

(0.32)

0.13

2.63

2.45

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

Year-to-date 2021 vs. 2020

(After-tax, per share in $)

Utility

Parent & Other

EWC

Consolidated

As-
Reported

Adjusted

As-
Reported

Adjusted

As-

Reported

As-

Reported

Adjusted

2020 earnings (loss)

6.05

6.05

(1.09)

(1.09)

0.02

4.98

4.96

Operating revenue less:

  Fuel, fuel-related expenses and

  gas purchased for resale,

  Purchased power, and

  Regulatory charges (credits)–net

1.60

1.60

(e)

0.00

0.00

(0.82)

(f)

0.78

1.60

Nuclear refueling outage expense

0.03

0.03

0.00

0.00

0.00

0.03

0.03

Other O&M

(0.56)

(0.61)

(g)

0.00

0.00

0.60

(h)

0.04

(0.61)

Asset write-offs and impairments

0.00

0.00

0.00

0.00

(1.29)

(o)

(1.29)

0.00

Decommissioning expense

(0.03)

(0.03)

0.00

0.00

0.18

(i)

0.15

(0.03)

Taxes other than income taxes

(0.09)

(0.09)

(j)

0.00

0.00

0.12

(p)

0.03

(0.09)

Depreciation/amortization exp.

(0.36)

(0.36)

(k)

0.00

0.00

0.18

(l)

(0.18)

(0.36)

Other income (deductions)–other

0.17

0.17

(m)

0.04

0.04

(0.05)

(n)

0.16

0.21

Interest exp. and other charges

(0.12)

(0.12)

(q)

(0.02)

(0.02)

0.02

(0.12)

(0.14)

Income taxes–other

(0.46)

(0.46)

(r)

0.17

0.17

(s)

(0.01)

(0.30)

(0.29)

Preferred dividend requirements

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Share effect

(0.02)

(0.02)

0.00

0.00

0.00

(0.02)

(0.02)

2021 earnings (loss)

6.21

6.16

(0.90)

(0.90)

(1.05)

4.26

5.26

Calculations may differ due to rounding

(c)

Utility operating revenue / regulatory charges (credits)–net and Utility income taxes–other exclude $17 million in third quarter 2021 and $16 million in third quarter 2020 for the return of unprotected excess ADIT to customers (net effect is neutral to earnings). On a year-to-date basis, Utility operating revenue / regulatory charges (credits)–net and Utility income taxes–other exclude $72 million in 2021 and $61 million in 2020 for the return of unprotected excess ADIT to customers (net effect is neutral to earnings).

(d)

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

(e)

The third quarter and year-to-date earnings increases were driven by regulatory actions including E-LA's FRP; E-TX's GCRR, TCRF, and DCRF; E-NO's NOPS recovery; and E-MS's FRP. The variances also reflected a few other items: regulatory charges (credits)–net for the difference between decommissioning expenses and decommissioning trust earnings plus decommissioning costs collected in revenue (largely earnings neutral, offset in Utility other income (deductions)–other; a reserve adjustment for the FERC MSS-4 ROE decision; and higher Grand Gulf revenue. For the quarter, retail sales volume including volume in the unbilled period partially offset the increase.  Volume for the year-to-date period contributed to the increase. The year-to-date variance also reflected recovery of LCPS, the reversal of a regulatory provision for E-AR's 2019 netting adjustment, a regulatory credit for E-MS (primarily for its 2020 lookback evaluation), and a first quarter 2020 regulatory liability for tax sharing with E-LA customers (partially offsets the Hurricane Isaac Act 55 income tax item discussed in footnote r).

(f)

The third quarter and year-to-date earnings decreases were due largely to lower revenues from the shutdown of Indian Point 3 in April 2021. The year-to-date decrease also reflected the shutdown of Indian Point 2 in April 2020.

(g)

The third quarter and year-to-date earnings decreases from higher Utility other O&M reflected higher distribution operations expenses primarily due to contractor and reliability costs; higher non-nuclear generation expenses due partly to materials and supplies, contractor spending, and expenses associated with new plants placed in service; and higher benefits costs. These items were partially offset by a $15 million pre-tax gain on the sale of an asset (considered an adjustment and excluded from adjusted earnings). The year-to-date decrease also reflected higher scope of work performed during non-nuclear plant outages, higher nuclear generation expenses, lower nuclear insurance refunds, higher MISO expenses, and higher contract costs related to new customer initiatives.

(h)

The third quarter and year-to-date earnings increases from lower EWC other O&M were due largely to the shutdown of Indian Point 3 in April 2021 and lower severance and retention costs. The year-to-date increase also reflected the shutdown of Indian Point 2 in April 2020. 

(i)

The third quarter and year-to-date earnings increases from lower EWC decommissioning expense were due to the sale of Indian Point in May 2021. 

(j)

The third quarter and year-to-date earnings decreases from higher Utility taxes other than income taxes were due to higher franchise taxes and higher ad valorem taxes.

(k)

The third quarter and year-to-date earnings decreases from higher Utility depreciation expense were due primarily to higher plant in service, including MCPS. The year-to-date decrease also reflected LCPS. 

(l)

The third quarter and year-to-date earnings increases from lower EWC depreciation expense were due primarily to the shutdown of Indian Point 3 in April 2021. The year-to-date variance also reflected the Indian Point 2 shutdown in April 2020.

(m)

The third quarter and year-to-date earnings increases from higher Utility other income (deductions)–other were due largely to differences in decommissioning trust fund returns (based on regulatory treatment, decommissioning-related variances are largely earnings neutral). The year-to-date increase was partially offset by lower AFUDC as a result of higher construction work in progress in 2020. 

(n)

The third quarter and year-to-date earnings decrease from lower EWC other income (deductions)–other were due largely to lower gains on decommissioning trust fund investments, including the absence of earnings from nuclear decommissioning trust funds that were transferred in the sale of Indian Point.  In the year-to-date period, the decrease was partially offset by lower non-service pension costs. 

(o)

The year-to-date earnings decrease from higher EWC asset write-offs and impairments was due primarily to a $340 million ($268 million net-of-tax) loss which resulted from the sale of Indian Point in May 2021.

(p)

The year-to-date earnings increase from lower EWC taxes other than income taxes was due primarily to the shutdown of Indian Point 2 in April 2020 and Indian Point 3 in April 2021. 

(q)

The year-to-date earnings decrease from higher Utility interest expense was due primarily to higher debt balances at E-LA and E-MS, as well as lower AFUDC as a result of higher construction work in progress in 2020.

(r)

The year-to-date earnings decrease from Utility income taxes–other primarily relates to two first quarter 2020 items. First, a $55 million tax benefit was recorded in first quarter 2020 as a result of an IRS settlement related to Act 55 financing of Hurricane Isaac costs (partly offset by customer sharing, discussed in footnote e); and second, an annual tax accrual related to stock-based compensation resulted in a $22 million income tax benefit in first quarter 2020. 

(s)

The year-to-date earnings increase from Parent & Other income taxes–other reflected a reversal of a $9 million valuation allowance related to the interest expense limitation in second quarter 2021. The year-to-date increase also reflected $23 million of income tax expense recorded in first quarter 2020 as a result of the IRS settlement related to the Hurricane Isaac Act 55 financing (discussed in footnote r).

Third Quarter and Year-to-Date 2021 vs. 2020

($ in millions)

Third Quarter

Year-to-Date

2021

2020

Change

2021

2020

Change

Net income (loss)

26

31

(5)

(210)

6

(216)

Add back: interest expense

3

5

(2)

11

17

(6)

Add back: income taxes

9

12

(3)

(47)

6

(54)

Add back: depreciation and amortization

9

21

(12)

36

81

(45)

Subtract: interest and investment income

3

95

(92)

100

130

(30)

Add back: decommissioning expense

14

51

(37)

106

152

(46)

Adjusted EBITDA (non-GAAP)

57

24

33

(205)

132

(337)

Calculations may differ due to rounding

Appendix F-1: Definitions 

Utility Financial and Operating Measures

GWh billed

Total number of GWh billed to retail and wholesale customers

Number of electric retail customers

Average number of electric customers over the period

Other O&M and refueling outage expense per MWh

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

EWC Financial and Operating Measures

Adjusted EBITDA (non-GAAP)

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

Average revenue per MWh on contracted volumes

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

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

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

Bundled capacity and energy contracts

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

Capacity factor

Normalized percentage of the period that the nuclear plants generate power

Expected sold and market total revenue per MWh

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

GWh billed

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

Owned capacity (MW)

Installed capacity owned by EWC

Percent of capacity sold forward

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

Percent of planned generation under contract (unit contingent)

Percent of planned generation output sold under unit-contingent contracts

Planned net MW in operation (average)

Average installed nuclear capacity to generate power and/or sell capacity, reflecting the shutdown of Palisades (May 31, 2022)

Planned TWh of generation

Amount of output expected to be generated by EWC nuclear resources considering plant operating characteristics, reflecting the shutdown of Palisades (May 31, 2022)

Production cost per MWh

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

EWC Financial and Operating Measures (continued)

Unit contingent

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

Financial Measures – GAAP

As-reported ROE

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

As-reported ROIC

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

Debt of joint ventures – Entergy's share

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

Debt to capital

Total debt divided by total capitalization

Available revolver capacity

Amount of undrawn capacity remaining on corporate and subsidiary revolvers

Securitization debt

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

Total debt

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

Financial Measures – Non-GAAP

Adjusted EPS

As-reported EPS excluding adjustments

Adjusted ROE

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

Adjusted ROIC

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

Adjustments

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

Debt to capital, excluding securitization debt

Total debt divided by total capitalization, excluding securitization debt

FFO

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

FFO to debt, excluding securitization debt

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

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

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

Gross liquidity

Sum of cash and available revolver capacity

Net debt to net capital, excl. securitization debt

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

Net liquidity

Sum of cash and available revolver capacity less commercial paper borrowing

Net liquidity, including storm escrows

Sum of cash, available revolver capacity, and escrow accounts available for certain storm expenses, less commercial paper borrowing

Parent debt to total debt, excl. securitization debt

Entergy Corp. debt, incl. amounts drawn on credit revolver and commercial paper facilities, as a percent of consolidated total debt, excl. securitization debt

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

(LTM $ in millions except where noted)

2021

2020

As-reported net income (loss) attributable to Entergy Corporation

(A)

1,248

1,385

Preferred dividends

18

18

Tax-effected interest expense

609

582

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

(B)

1,875

1,985

Adjustments

(C)

45

252

EWC preferred dividends and tax-effected interest expense included in adjustments

15

20

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

(D)

60

272

Adjusted earnings (non-GAAP)

(A-C)

1,202

1,134

Adjusted earnings, excluding preferred dividends and tax- effected interest expense (non-GAAP)

(B-D)

1,815

1,713

Average invested capital (average of beginning and ending balances)

(E)

35,178

31,442

Average common equity (average of beginning and ending balances)

(F)

11,012

10,403

As-reported ROIC

(B/E)

5.3%

6.3%

Adjusted ROIC (non-GAAP)

[(B-D)/E]

5.2%

5.4%

As-reported ROE

(A/F)

11.3%

13.3%

Adjusted ROE (non-GAAP)

[(A-C)/F]

10.9%

10.9%

Calculations may differ due to rounding

Appendix G-2: Reconciliation of GAAP to Non-GAAP Financial Measures – Debt ratios excluding securitization debt; gross liquidity; net liquidity; net liquidity, including storm escrows

($ in millions except where noted)

Third Quarter

2021

2020

Total debt

(A)

25,695

22,127

Less securitization debt

(B)

90

209

Total debt, excluding securitization debt

(C)

25,606

21,918

Less cash and cash equivalents

(D)

1,000

1,240

Net debt, excluding securitization debt

(E)

24,605

20,678

Commercial paper

(F)

1,006

1,398

Total capitalization

(G)

37,202

33,153

Less securitization debt

(B)

90

209

Total capitalization, excluding securitization debt

(H)

37,112

32,944

Less cash and cash equivalents

(D)

1,000

1,240

Net capital, excluding securitization debt

(I)

36,112

31,704

Debt to capital

(A/G)

69.1%

66.7%

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

(C/H)

69.0%

66.5%

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

(E/I)

68.1%

65.2%

Available revolver capacity

(J)

3,925

4,125

Storm escrows

(K)

33

373

Gross liquidity (non-GAAP)

(D+J)

4,925

5,364

Net liquidity (non-GAAP)

(D+J-F)

3,919

3,966

Net liquidity, including storm escrows (non-GAAP)

(D+J-F+K)

3,952

4,339

Entergy Corporation notes:

Due July 2022

650

650

Due September 2025

800

800

Due September 2026

750

750

Due June 2028

650

-

Due June 2030

600

600

Due June 2031

650

-

Due June 2050

600

600

Total Entergy Corporation notes

(L)

4,700

3,400

Revolver draw

(M)

325

150

Unamortized debt issuance costs and discounts

(N)

(51)

(40)

Total parent debt

(F+L+M+N)

5,981

4,909

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

[(F+L+M+N)/C]

23.4%

22.4%

Calculations may differ due to rounding

Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures – FFO to debt, excluding securitization debt; FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC

($ in millions except where noted)

Third Quarter

2021

2020

Total debt

(A)

25,695

22,127

Less securitization debt

(B)

90

209

Total debt, excluding securitization debt

(C)

25,606

21,918

Net cash flow provided by operating activities, LTM

(D)

2,331

3,069

AFUDC – borrowed funds, LTM

(E)

(34)

(55)

Working capital items in net cash flow provided by operating activities, LTM:

Receivables

(183)

(71)

Fuel inventory

20

(14)

Accounts payable

326

277

Taxes accrued

20

188

Interest accrued

26

14

Other working capital accounts

(124)

(98)

Securitization regulatory charges, LTM

98

125

Total

(F)

184

421

FFO, LTM (non-GAAP)

(G)=(D+E-F)

2,113

2,594

FFO to debt, excluding securitization debt (non-GAAP)

(G/C)

8.3%

11.8%

Estimated return of unprotected excess ADIT, LTM

(H)

85

119

Severance and retention payments associated with exit of EWC, LTM pre-tax

(I)

158

17

FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC (non-GAAP)

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

9.2%

12.5%

Calculations may differ due to rounding