NEW ORLEANS, April 26, 2017 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) reported first quarter 2017 earnings per share of 46 cents on an as-reported basis and 99 cents on an operational basis, including an estimated negative (16) cents effect from unusually mild weather.
"Entergy's first quarter results are in line with our expectations and we are affirming our full-year guidance," said Entergy Chairman and Chief Executive Officer Leo Denault. "These results are a good start to another important year for Entergy as we build on the momentum from last year's achievements. We are confident that we have the right strategy, leadership and workforce to deliver on our operational plan and financial outlooks."
Business highlights included the following:
-- The sale of EWC's FitzPatrick plant to Exelon Generation was completed on March 31, 2017. -- The settlement on Indian Point is being implemented on the agreed-upon schedule. -- ELL signed a purchase and sale agreement for an approximately 360 megawatt gas-fired CT. Washington Parish Energy Center One, LLC, a subsidiary of Calpine Corporation, will construct the plant and ELL will purchase the plant once it is complete. The transaction is expected to close in 2021. -- EAI and ELL made primary selections from proposals offered in response to their RFPs for renewable resources. -- The PUCT issued a final order in our TCRF filing. -- Moody's upgraded Entergy Corporation's issuer rating to Baa2 from Baa3. -- Entergy was included in Corporate Responsibility Magazine's annual list of the 100 Best Corporate Citizens.
Consolidated Earnings (GAAP and Non-GAAP Measures) First Quarter 2017 vs. 2016 (See Appendix A for reconciliation of GAAP to non- GAAP measures and description of special items) ------------------------------------------------------------------------------ First Quarter ------------- 2017 2016 Change ---- ---- ------ As-Reported Earnings ($ in millions) 82.6 230.0 (147.4) Less Special Items (95.1) (12.9) (82.2) ----- ----- ----- Operational Earnings 177.7 242.8 (65.1) Estimated Weather Impact (after-tax) (29.2) (25.4) (3.8) As-Reported Earnings (per share in $) 0.46 1.28 (0.82) Less Special Items (0.53) (0.07) (0.46) ----- ----- ----- Operational Earnings 0.99 1.35 (0.36) Estimated Weather Impact (0.16) (0.14) (0.02)
Totals may not foot due to rounding
Consolidated Results
For first quarter 2017, the company reported earnings of 46 cents per share on an as-reported basis and EPS of 99 cents on an operational basis, as compared to first quarter 2016 EPS of $1.28 on an as-reported basis and operational EPS of $1.35.
Additional details, including information on OCF 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 2017, Utility EPS were 92 cents on both an as-reported basis and an operational basis. In first quarter 2016, Utility as-reported and operational EPS were $1.09. The current period results reflected the effects of new rate actions to recover investments that benefit customers. However, the impacts of higher operating expenses and weather led to the overall decline in results.
Net revenue increased quarter-over-quarter, driven by regulatory actions across the utility jurisdictions, including EAI's 2017 FRP rate changes. Sales volume declined due to lower residential and commercial sales across the service territory, including the effects of weather.
Industrial sales growth was positive. Growth from new and expanding customers was partly offset by lower sales to existing customers, primarily in the refining segment. Sales to refiners were down on customer outages, which were expected.
Utility non-fuel O&M increased quarter-over-quarter. First quarter 2016 included a favorable deferral of previously-expensed costs which resulted from EAI's rate case order. In 2017, fossil spending was higher, primarily related to the acquisition of Union in March of last year. Higher spending on nuclear operations was largely offset by lower regulatory compliance costs at ANO.
In first quarter 2017, Parent & Other reported a loss of (30) cents per share on both an as-reported basis and an operational basis. In first quarter 2016, Parent & Other reported an as-reported and operational loss of (25) cents per share.
On a combined basis, Utility, Parent & Other EPS were 62 cents on an as-reported basis and 83 cents on an adjusted basis. In first quarter 2016, Utility, Parent & Other as-reported EPS were 84 cents and adjusted EPS were 95 cents. Adjusted earnings exclude special items and the effects of weather and normalize income taxes.
Appendix C contains additional details on Utility financial and operational measures, including a schedule of Utility, Parent & Other adjusted earnings and EPS.
Entergy Wholesale Commodities Results
For first quarter 2017, EWC recorded a loss of (16) cents per share on an as-reported basis and operational EPS of 37 cents. For the comparable period in 2016, EWC earned 44 cents per share on an as-reported basis and operational EPS of 51 cents.
The decrease in EWC's as-reported results was due largely to impairments and other items recorded as a result of strategic decisions for the wholesale business. Impairments were for fuel purchases and refueling outage costs as well as capital spending. First quarter 2017 as-reported results also included items which resulted from the FitzPatrick transaction, including a gain on that sale and an income tax benefit. All of these were considered special items and excluded from operational earnings.
Excluding the items above, earnings from FitzPatrick's operations declined. The plant was sold on March 31, 2017.
From the remaining plants, net revenue declined due to lower power prices. This was partially offset by lower nuclear fuel costs, which were affected by impairments. Non-fuel O&M reflected lower refueling outage expense, which was also affected by impairments. Decommissioning expense increased due primarily to the transfer of Indian Point 3 liability from NYPA. This was partially offset by an increase in other income, which was due to earnings on decommissioning trusts.
Appendix D contains additional details on EWC financial and operational measures, including a schedule of EWC operational adjusted EBITDA calculations.
Earnings Guidance
Entergy affirmed 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 & Other adjusted EPS. These measures exclude from the corresponding GAAP financial measures the effect of special items as described below under "Non-GAAP Financial Measures". The company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot 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 $2.10 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, April 26, 2017, to discuss Entergy's quarterly earnings announcement and the company's financial performance. The teleconference may be accessed by visiting Entergy's website at www.entergy.com or by dialing 844-309-6569, conference ID 56943997, 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, 2017, by dialing 855-859-2056, conference ID 56943997. This release and the webcast slide presentation are also available on the Entergy Investor Relations mobile web app at iretr.com.
Entergy Corporation is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergy owns and operates power plants with approximately 30,000 megawatts of electric generating capacity, including nearly 9,000 megawatts of nuclear power. Entergy delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy has annual revenues of approximately $10.8 billion and nearly 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 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 items or events that management believes do not reflect the ongoing business of Entergy, and may include items such as impairment, 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; operational net revenue; return on average invested capital; and return on average common equity are included on both an operational and as-reported basis. In each case, the metrics defined as "operational" would exclude the effect of special items as defined above. Entergy 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 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, 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.
First Quarter 2017 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 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, 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 2017 vs. 2016 (See Appendix A-3 and Appendix A-4 for details on special items) (Per share in $) First Quarter ------------- 2017 2016 Change ---- ---- ------ As-reported Utility 0.92 1.09 (0.17) Parent & Other (0.30) (0.25) (0.05) EWC (0.16) 0.44 (0.60) Consolidated as- reported earnings 0.46 1.28 (0.82) Less special items Utility - - - Parent & Other - - - EWC (0.53) (0.07) (0.46) ----- ----- ----- Consolidated special items (0.53) (0.07) (0.46) Operational Utility 0.92 1.09 (0.17) Parent & Other (0.30) (0.25) (0.05) EWC 0.37 0.51 (0.14) ---- ---- ----- Consolidated operational earnings 0.99 1.35 (0.36) Estimated weather impact (0.16) (0.14) (0.02)
Totals may not foot due to rounding
See Appendix B for detailed earnings variance analysis. See Appendix A-3 for special items by driver.
Appendix A-2 provides the components of OCF contributed by each business.
Appendix A-2: Consolidated Operating Cash Flow First Quarter 2017 vs. 2016 --------------------------- ($ in millions) First Quarter ------------- 2017 2016 Change ---- ---- ------ Utility 558 459 99 Parent & Other (176) (62) (114) EWC 147 136 11 --- --- --- Total OCF 529 533 (3)
Totals may not foot due to rounding
OCF was relatively flat quarter-over-quarter. Reduced cash flow from the timing of recovery for fuel and purchased power at the Utility and lower net revenue at EWC (excluding revenue from the FitzPatrick reimbursement agreement) were largely offset by cash flow from income taxes and reduced spending on Vermont Yankee decommissioning. Intercompany income tax payments also 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) First Quarter 2017 vs. 2016 --------------------------- First Quarter ------------- 2017 2016 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 (230.9) (19.9) (211.0) Gain on the sale of FitzPatrick 16.3 - 16.3 Income tax effect on adjustments above (a) 75.1 7.0 68.1 Income tax benefit resulting from FitzPatrick transaction 44.5 - 44.5 Total EWC (95.1) (12.9) (82.2) Total special items (95.1) (12.9) (82.2) (After-tax, per share in $) (b) EWC EWC Nuclear plant impairments and costs associated with decisions to close or sell plants (0.84) (0.07) (0.77) Gain on the sale of FitzPatrick 0.06 - 0.06 Income tax benefit resulting from FitzPatrick transaction 0.25 - 0.25 Total EWC (0.53) (0.07) (0.46) Total special items (0.53) (0.07) (0.46)
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) First Quarter 2017 vs. 2016 --------------------------- (Pre-tax except for Income taxes and Total, $ in millions) First Quarter ------------- 2017 2016 Change ---- ---- ------ EWC Net revenue 90.6 - 90.6 Non-fuel O&M (120.3) (11.5) (108.8) Taxes other than income taxes (4.1) (1.0) (3.1) Asset write-off and impairments (211.8) (7.4) (204.4) Gain on sale of assets 16.3 - 16.3 Miscellaneous net (other income) 14.6 - 14.6 Income taxes (c) 119.6 7.0 112.6 ----- --- ----- Total EWC (95.1) (12.9) (82.2) Total special items (after- tax) (95.1) (12.9) (82.2)
Totals may not foot due to rounding
(c) Income taxes include 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 as well as an income tax benefit which resulted from the FitzPatrick transaction
B: Variance Analysis
Appendix B provides details of as-reported and operational earnings variance analysis for Utility, Parent & Other, EWC and Consolidated.
Appendix B: As-Reported and Operational EPS Variance Analysis (d) First Quarter 2017 vs. 2016 --------------------------- (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 ------ ------ 2016 earnings 1.09 1.09 (0.25) (0.25) 0.44 0.51 1.28 1.35 Other income (deductions)-other 0.03 0.03 - - 0.11 0.06 (e) 0.14 0.09 Preferred dividend requirements 0.01 0.01 - - - - 0.01 0.01 Interest expense and other charges 0.02 0.02 (0.01) (0.01) - - 0.01 0.01 Asset write-offs and impairments - - - - (0.74) - (f) (0.74) - Gain on sale of assets - - - - 0.06 - (g) 0.06 - Taxes other than income taxes (0.03) (0.03) - - 0.01 0.02 (0.02) (0.01) Depreciation/ amortization expense (0.05) (0.05) (h) - - 0.01 0.01 (0.04) (0.04) Non-fuel O&M (0.20) (0.20) (i) - - (0.25) 0.15 (j) (0.45) (0.05) Income taxes - other (0.04) (0.04) (0.04) (0.04) 0.26 0.01 (k) 0.18 (0.07) Net revenue 0.10 0.10 (l) - - 0.10 (0.23) (m) 0.20 (0.13) Decommissioning expense (0.01) (0.01) - - (0.16) (0.16) (n) (0.17) (0.17) 2017 earnings 0.92 0.92 (0.30) (0.30) (0.16) 0.37 0.46 0.99 ---- ---- ----- ----- ----- ---- ---- ----
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. (e) The increase was driven largely by realized earnings on decommissioning trust funds. Approximately 5 cents, classified as special item, was from gains on the receipt of nuclear decommissioning trust funds from NYPA in January 2017. (f) The decrease was due to an increase in impairments recorded for refueling outage costs, nuclear fuel purchases and capital expenditures (classified as special items and excluded from operational results). (g) The increase was due to a gain on the sale of FitzPatrick (classified as a special item and excluded from operational results). (h) The decrease was due largely to additions to plant in service, including the Union Power Station acquired in March 2016. (i) The decrease was due to several drivers. In first quarter 2016, EAI recorded a deferral for $18 million (pre-tax) for previously-expensed costs related to post Fukushima and flood barrier compliance. Fossil spending was higher for Union expenses (Union was acquired in March 2016) and overall higher scope of work. Compensation and benefits expense increased due partly to a revision to estimated incentive compensation expense in first quarter 2016. Expense associated with loss reserves also increased. Spending for nuclear operations was higher, but was largely offset by lower spending associated with regulatory compliance costs at ANO. (j) The as-reported decrease reflected higher expenses related to the agreement to sell FitzPatrick and other costs which resulted from decisions to close or sell EWC's nuclear plants (classified as a special item and excluded from operational results). Partially offsetting was lower refueling outage expense, which was affected by impairments. (k) The as-reported increase resulted from the re-determination of FitzPatrick's tax basis as a result of the sale of the plant (classified as a special item and excluded from operational results).
Utility As-Reported Net Revenue Variance Analysis 2017 vs. 2016 ($ EPS) -------------------- First Quarter ------------- Estimated weather (0.02) Sales growth/pricing 0.09 Other 0.03 ---- Total 0.10 ----- ----
(l) The increase reflected full-quarter effects from the first quarter 2016 EAI rate case and rate actions associated with the Union acquisition (a portion of those increases was for Union operating expenses) as well as EAI's FRP rate increase in 2017. EMI's 2016 FRP and ETI's TCRF rate changes also contributed. In addition, in first quarter 2016 EAI recorded a charge to reflect the estimated impact from a FERC order on opportunity sales case. Partially offsetting was lower volume, including the effects of weather. (m) The as-reported increase included cost reimbursements from the buyer related to the FitzPatrick sale (classified as special items and excluded from operational results). Operational revenue from FitzPatrick was also lower. Pricing for nuclear assets was also a factor in the decline. Partially offsetting was lower fuel expense, which was affected by impairments. (n) The decrease resulted primarily from the establishment of decommissioning liabilities at Indian Point 3 and FitzPatrick in August 2016 (resulted from agreement with NYPA to transfer decommissioning liabilities and associated trusts to Entergy). Revisions to the estimated decommissioning cost liabilities for Indian Point and Palisades in the fourth quarter 2016 also contributed to the decrease.
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 First Quarter 2017 vs. 2016 (See Appendix A for details on special items) ------------------------------------------------------------------ First Quarter ------------- 2017 2016 Change ---- ---- ------ ($ in millions) Utility as- reported earnings 164.7 194.9 (30.2) Parent & Other as- reported earnings (loss) (54.4) (44.0) (10.4) UP&O as- reported earnings 110.3 151.0 (40.6) Less: Special items - - - Weather (47.5) (41.3) (6.2) Tax effect of weather (o) 18.3 15.9 2.4 ---- ---- --- Estimated weather impact (after- tax) (29.2) (25.4) (3.8) Other income tax items (9.4) 6.0 (15.4) UP&O adjusted earnings 148.9 170.3 (21.4) (After tax, per share in $) UP&O as- reported earnings 0.62 0.84 (0.22) Less: Special items - - - Weather (0.16) (0.14) (0.02) Other income tax items (0.05) 0.03 (0.08) ----- ---- ----- UP&O adjusted earnings 0.83 0.95 (0.12) --------- ---- ---- -----
Totals may not foot due to rounding
(o) Income tax effect is calculated by multiplying the pre-tax amount by the estimated income tax rates that are expected to apply to those adjustments
Appendix C-2 provides a comparative summary of Utility operational and financial measures.
Appendix C-2: Utility Operational and Financial Measures First Quarter 2017 vs. 2016 (See Appendix G for reconciliation of GAAP to non-GAAP measures) ------------------------------------------------------------------------------------------- First Quarter ------------- 2017 2016% % Weather Adjusted (p) Change --- --- GWh billed Residential 7,637 8,137 (6.1) (4.2) Commercial 6,439 6,511 (1.1) (1.7) Governmental 593 600 (1.1) (1.6) Industrial 11,117 11,055 0.6 0.6 ------ ------ --- --- Total retail sales 25,786 26,303 (2.0) (1.6) Wholesale 3,022 3,140 (3.8) Total sales 28,808 29,443 (2.2) Number of electric retail customers Residential 2,469,879 2,443,022 1.1 Commercial 355,138 350,136 1.4 Governmental 18,229 17,686 3.1 Industrial 41,043 40,823 0.5 Total retail customers 2,884,289 2,851,667 1.1 Net revenue ($ in millions) 1,404 1,375 2.1 Non-fuel O&M per MWh 20.97 $18.56 13.0 Appendix C-3: Utility Operational Measures Last Twelve Months Retail Sales ------------------------------- First Quarter ------------- 2017 2016% % Weather Adjusted (p) Change --- --- GWh billed Residential 34,612 34,773 (0.5) (1.1) Commercial 29,125 29,138 - (0.9) Governmental 2,540 2,522 0.7 0.6 Industrial 45,801 45,031 1.7 1.7 Total retail sales 112,078 111,463 0.6 0.1
Totals may not foot due to rounding
(p) The effects of weather were estimated using monthly heating degree days and cooling degree days from certain locations within each jurisdiction and comparing to "normal" weather based on 20 year historical data. The models used to estimate weather are updated periodically and subject to change.
D: EWC Financial and Operational Measures
Appendix D-1 provides a comparative summary of EWC operational adjusted EBITDA.
Appendix D-1: EWC Operational Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures First Quarter 2017 vs. 2016 --------------------------- ($ in millions) First Quarter ------------- 2017 2016 Change ---- ---- ------ Net income (loss) (27) 80 (107) Add back: interest expense 6 6 - Add back: income taxes (78) 52 (130) Add back: depreciation and amortization 53 56 (3) Subtract: interest and investment income 43 27 16 Add back: decommissioning expense 75 31 44 --- --- --- Adjusted EBITDA (15) 199 (214) Add back pre-tax special items for: EWC Nuclear plant impairments and costs associated with decisions to close or sell plants 231 20 211 Gain on the sale of FitzPatrick (16) - (16) --- --- --- Operational adjusted EBITDA 200 219 (19)
Totals may not foot due to rounding
Appendix D-2 provides a comparative summary of EWC operational and financial measures.
Appendix D-2: EWC Operational and Financial Measures First Quarter 2017 vs. 2016 (See Appendix G for reconciliation of GAAP to non- GAAP measures) ------------------------------------------------------------------------------ First Quarter ------------- 2017 2016 % Change ---- ---- -------- Owned capacity (MW) (q) 4,800 4,880 (1.6) GWh billed 8,363 9,246 (9.6) As- reported net revenue ($ in millions) 494 466 6.0 Operational net revenue ($ in millions) 404 466 (13.3) EWC Nuclear Fleet ----------------- Capacity factor 80% 90% (11.1) GWh billed 7,835 8,688 (9.8) Production cost per MWh $23.00 $21.91 5.0 Average energy and capacity revenue per MWh (r) $55.15 $56.16 (1.8) As- reported net revenue ($ in millions) 491 464 5.8 Operational net revenue ($ in millions) 401 464 (13.6) Refueling outage days FitzPatrick 42 - Indian Point 2 - 25 Indian Point 3 19 -
(q) Investments in wind generation were sold in November 2016; includes FitzPatrick, which was sold on 3/31/17 (r) Average energy and capacity revenue per MWh excluding FitzPatrick was $55.27 in first quarter 2017 and $63.45 in first quarter 2016
See appendix in the webcast slide presentation for EWC hedging and price disclosures.
E: Consolidated Financial Measures
Appendix E provides comparative financial measures. Financial measures in this table include those calculated and presented in accordance with GAAP, as well as those that are considered non-GAAP measures.
As-reported measures in this table are computed in accordance with GAAP as they include all components of net income, including special items. Operational measures in this table 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 Measures First Quarter 2017 vs. 2016 (See Appendix G for reconciliation of GAAP to non- GAAP measures) ------------------------------------------------------------------------------ For 12 months ending March 31 2017 2016 Change ---- ---- ------ GAAP Measures ROIC - as- reported (1.3%) 0.7% (2.0%) ROE - as- reported (8.4%) (2.5%) (5.9%) Book value per share $44.90 $52.38 ($7.48) End of period shares outstanding (millions) 179.4 178.7 0.7 Non-GAAP Measures ROIC - operational 6.7% 5.8% 0.9% ROE - operational 13.9% 10.4% 3.5% As of March 31 ($ in millions) 2017 2016 Change ---- ---- ------ GAAP Measures Cash and cash equivalents 1,083 1,092 (9) Revolver capacity 4,185 3,794 391 Commercial paper 1,088 578 510 Total debt 15,611 15,092 519 Securitization debt 637 752 (115) Debt to capital 65.4% 60.9% 4.5% Off-balance sheet liabilities: Debt of joint ventures - Entergy's share 71 77 (6) Leases - Entergy's share 397 359 38 Power purchase agreements accounted for as leases 166 195 (29) --- --- --- Total off- balance sheet liabilities 634 631 3 Non-GAAP Measures Debt to capital, excluding securitization debt 64.4% 59.7% 4.7% Gross liquidity 5,268 4,886 382 Net debt to net capital, excluding securitization debt 62.7% 57.8% 4.9% Parent debt to total debt, excluding securitization debt 21.1% 19.5% 1.6% Debt to operational adjusted EBITDA, excluding securitization debt 4.4x 4.6x (0.2x) Operational FFO to debt, excluding securitization debt 17.3% 21.0% (3.7%)
F: Definitions, Abbreviations and Acronyms
Appendix F-1 provides definitions of certain operational 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 and Financial 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 and Financial Measures -------------------------------------- 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 and Financial 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 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; 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 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 shutdown Pilgrim (May 31, 2019), Palisades (Oct. 1, 2018), Indian Point 2 (April 30, 2020) and Indian Point 3 (April 30, 2021) Production cost per MWh Fuel and non-fuel O&M expenses according to accounting standards that directly relate to the production of electricity per MWh (based on net generation), excluding special items Refueling outage days Number of days lost for a scheduled refueling and maintenance outage during the period Unit-contingent Transaction under which power is supplied from a specific generation asset; if the asset is in operational outage, seller is generally not liable to buyer for any damages, unless the contract specifies certain conditions such as an availability guarantee Financial Measures - GAAP ------------------------- 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 Appendix F-1: Definitions ------------------------- Financial Measures - Non-GAAP Total debt Sum of short-term and long-term debt, notes payable and commercial paper and capital leases on the balance sheet 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 LPSC Louisiana Public Service Commission AFUDC - Allowance for borrowed funds used during LTM Last twelve months borrowed funds construction Michigan PSC Michigan Public Service Commission MISO Midcontinent Independent System Operator, Inc. AFUDC - Allowance for equity funds used during equity funds construction Moody's Moody's Investor Service MPSC ALJ Administrative law judge Mississippi Public Service Commission AMI Advanced metering infrastructure MTEP MISO Transmission Expansion Planning Nelson 6 ANO Arkansas Nuclear One (nuclear) Unit 6 of Roy S. Nelson plant (coal) NEPOOL APSC Arkansas Public Service Commission New England Power Pool Ninemile 6 ARO Asset retirement obligation Ninemile Point Unit 6 ASLB Atomic Safety and Licensing Board Non-fuel O&M Non-fuel operation and maintenance expense CCGT Combined cycle gas turbine NDT Nuclear decommissioning trust CCNO Council of the City of New Orleans, Louisiana NRC Nuclear Regulatory Commission COD Commercial operation date NYISO New York Independent System Operator, Inc. Cooper Cooper Nuclear Station NYS New York State CT Simple cycle combustion turbine NYSDEC New York State Department of Environmental CZM Coastal zone management Conservation NYSDOS New York State Department of State DCRF Distribution cost recovery factor NYPA New York Power Authority DOE U.S. Department of Energy NYSE New York Stock Exchange EAI Entergy Arkansas, Inc. O&M Operation and maintenance expense EBITDA Earnings before interest, income taxes, depreciation and amortization OCF Net cash flow provided by operating activities OPEB Other post-employment benefits EGSL Entergy Gulf States Louisiana, L.L.C. Palisades Palisades Power Plant (nuclear) ELL Entergy Louisiana, LLC PDSAR Post-Shutdown Decommissioning Activities Report EMI Entergy Mississippi, Inc. Pilgrim Pilgrim Nuclear Power Station (nuclear) ENOI Entergy New Orleans, Inc. PPA Power purchase agreement or purchased power ENVY Entergy Nuclear Vermont Yankee agreement ESI Entergy Services, Inc. PUCT Public Utility Commission of Texas EPS Earnings per share RFP Request for proposal ETI Entergy Texas, Inc. RISEC Rhode Island State Energy Center (CCGT) ETR Entergy Corporation ROE Return on equity EWC Entergy Wholesale Commodities ROIC Return on invested capital FCA Forward Capacity Auction RPCE Rough production cost equalization FERC Federal Energy Regulatory Commission RS Cogen RS Cogen facility (CCGT cogen) FFO Funds from operations RSP Rate Stabilization Plan (ELL Gas) Firm LD Firm liquidated damages SEC U.S. Securities and Exchange Commission FitzPatrick James A. FitzPatrick Nuclear Power Plant (nuclear, sold March 31, 2017) SERI System Energy Resources, Inc. FRP Formula rate plan SPDES State Pollutant Discharge Elimination System GAAP U.S. generally accepted accounting principles TCRF Transmission cost recovery factor Grand Gulf Unit 1 of Grand Gulf Nuclear Station (nuclear), Top Deer Top Deer Wind Ventures, LLC 90% owned or leased by System Energy Union Union Power Station (CCGT) UP&O Utility, Parent & Other Indian Point 1 Indian Point Energy Center Unit 1 (nuclear) VPSB Vermont Public Service Board Indian Point 2 Indian Point Energy Center Unit 2 (nuclear) Vermont Yankee Nuclear Power Station (nuclear) Indian Point 3 Indian Point Energy Center Unit 3 (nuclear) VY Weighted-average cost of capital IPEC Indian Point Energy Center (nuclear) WACC WQC Water Quality Certification ISO Independent system operator ISES Independence Steam Electric Station (coal) YOY Year-over-year Lower Hudson Valley LHV ---
G: GAAP to Non-GAAP Reconciliations
Appendix G-1, Appendix G-2 and Appendix G-3 provide reconciliations of various non-GAAP financial measures disclosed in this release to their most comparable GAAP measure.
Appendix G-1: Reconciliation of GAAP to Non-GAAP Financial Measures - EWC Operational Net Revenue --------------------------------------------------------------------- ($ in thousands except where noted) First Quarter 2017 2016 ---- ---- As-reported net revenue (A) 494 466 Special items included in net revenue: EWC Nuclear costs associated with decisions to close or sell plants 91 - Total special items included in net revenue (B) 404 466 Operational net revenue (A-B) EWC Nuclear ----------- As-reported EWC Nuclear net revenue (C) 491 464 Special items included in EWC Nuclear net revenue: EWC Nuclear costs associated with decisions to close or sell plants 91 - Total special items included in EWC Nuclear net revenue (D) 401 464 Operational EWC Nuclear net revenue (C-D)
Totals may not foot due to rounding
Appendix G-2: Reconciliation of GAAP to Non-GAAP Financial Measures - ROIC, ROE ($ in millions except where noted) First Quarter ------------- 2017 2016 ---- ---- As-reported net income (loss) attributable to Entergy Corporation, rolling 12 months (A) (731) (245) Preferred dividends 17 20 Tax effected interest expense 409 398 --- --- As-reported net income (loss) expense attributable to Entergy Corporation, rolling 12 months adjusted for preferred dividends and tax effected interest (305) 173 (B) Special items in prior quarters (1,842) (1,248) EWC Nuclear plant impairments and costs associated with decisions to close or sell plants (150) (13) Gain on the sale of FitzPatrick 11 - Income tax benefit resulting from FitzPatrick transaction 45 - Total special items, rolling 12 months (C) (1,937) (1,261) Operational earnings, rolling 12 months adjusted for preferred dividends and tax effected interest expense (B-C) 1,632 1,434 Operational earnings, rolling 12 months (A-C) 1,206 1,016 Average invested capital (D) 24,321 24,627 Average common equity (E) 8,709 9,747 ROIC - as- reported (B/D) (1.3%) 0.7% ROIC - operational [(B-C)/D] 6.7% 5.8% ROE - as- reported (A/E) (8.4%) (2.5)% ROE - operational [(A-C)/E] 13.9% 10.4%
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) First Quarter ------------- 2017 2016 ---- ---- Total debt (A) 15,611 15,092 Less securitization debt (B) 637 752 --- --- Total debt, excluding securitization debt (C) 14,974 14,340 Less cash and cash equivalents (D) 1,083 1,092 --- ----- Net debt, excluding securitization debt (E) 13,891 13,248 Total capitalization (F) 23,871 24,771 Less securitization debt (B) 637 752 --- --- Total capitalization, excluding securitization debt (G) 23,234 24,019 Less cash and cash equivalents (D) 1,083 1,092 --- ----- Net capital, excluding securitization debt (H) 22,151 22,927 Debt to capital (A/F) 65.4% 60.9% Debt to capital, excluding securitization debt (C/G) 64.4% 59.7% Net debt to net capital, excluding securitization debt (E/H) 62.7% 57.8% Revolver capacity (I) 4,185 3,794 Gross liquidity (D+I) 5,268 4,886 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) 225 616 Commercial paper (L) 1,088 578 --- --- Total parent debt (J)+(K)+(L) 3,163 2,794 Parent debt to total debt, excluding securitization debt [((J)+(K)+(L))/(C)] 21.1% 19.5% 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) First Quarter ------------- 2017 2016 ---- ---- Total debt (A) 15,611 15,092 Less securitization debt (B) 637 752 --- --- Total debt, excluding securitization debt (C) 14,974 14,340 As-reported consolidated net income (loss), rolling 12 months (714) (224) Add back (rolling 12 months): Interest expense 664 647 Income taxes (949) (653) Depreciation and amortization 1,360 1,340 Regulatory charges (credits) 8 166 Decommissioning expense 373 279 Subtract (rolling 12 months): Securitization proceeds 143 136 Interest and investment income 169 152 AFUDC-equity funds 68 59 Adjusted EBITDA, rolling 12 months (D) 362 1,208 Add back special items (rolling 12 months pre-tax): EWC Nuclear plant impairments and costs associated with decisions to close or sell plants 3,121 2,066 DOE litigation awards for VY and FitzPatrick (34) - Top Deer investment impairment - 37 Gain on the sale of RISEC - (154) Gain on the sale of FitzPatrick (16) - Operational adjusted EBITDA, rolling 12 months (E) 3,433 3,157 Debt to operational adjusted EBITDA, excluding securitization debt (C)/(E) 4.4x 4.6x Net cash flow provided by operating activities, rolling 12 months (F) 2,995 3,213 AFUDC-borrowed funds used during construction, rolling 12 months (G) (34) (30) Working capital items in net cash flow provided by operating activities (rolling 12 months): Receivables (17) 92 Fuel inventory 54 1 Accounts payable 194 (49) Prepaid taxes and taxes accrued (72) 134 Interest accrued 6 4 Other working capital accounts 119 (118) Securitization regulatory charges 114 106 --- --- Total (H) 398 170 FFO, rolling 12 months (F)+(G)-(H) 2,563 3,013 Add back special items (rolling 12 months pre-tax): EWC Nuclear plant impairments and costs associated with decisions to close or sell plants 24 4 Operational FFO, rolling 12 months (I) 2,587 3,017 Operational FFO to debt, excluding securitization debt (I)/(C) 17.3% 21.0%
Totals may not foot due to rounding
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/entergy-reports-first-quarter-earnings-300446036.html
SOURCE Entergy Corporation