Entergy reports first quarter earnings
Entergy Corporation (NYSE: ETR) announced Q1 2022 earnings of $1.36 per share, down from $1.66 in Q1 2021. Despite a strong operational start, there was a decline in earnings attributed to higher operating expenses and interest costs. Key developments included significant investments in transmission upgrades totaling $186 million and a commitment to renewable resources with ongoing RFPs for 2,000 megawatts. The company reaffirmed its 2022 adjusted EPS guidance of $6.15 to $6.45, indicating a positive outlook despite evident challenges in its earnings performance.
- Affirmed 2022 adjusted EPS guidance of $6.15 to $6.45.
- Completed $186 million in transmission upgrades to improve grid resilience.
- Q1 2022 earnings declined to $276 million from $335 million in Q1 2021.
- Increased operating and interest expenses affecting profitability.
Company affirms guidance and financial outlooks
NEW ORLEANS, April 27, 2022 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) reported first quarter 2022 earnings per share of
"We had a strong start for 2022 and continued to make important operational, strategic, and financial progress across the business," said Leo Denault, Entergy Chairman and Chief Executive Officer. "With favorable weather and higher-than-planned retail sales, we are ahead of schedule and solidly on track to achieve our 2022 objectives."
Business highlights included the following:
- E-LA completed an
$86M transmission upgrade in Lafourche Parish, improving the resilience and reliability of the local power grid. - E-LA completed a
$100M transmission improvement project in north Louisiana that will increase resilience and reliability and provide economic benefits. - E-TX selected several resources from its 2021 solar RFP totaling at least 400 megawatts of capacity.
- E-AR filed for approval of a new 250-megawatt solar facility, Driver Solar.
- E-AR and E-LA announced their intent to issue RFPs totaling 2,000 megawatts of renewable resources.
- E-TX issued securitization bonds, completing recovery of its 2020 storm costs.
- The LPSC approved cost recovery and financing for E-LA's 2020 storms, including a
$290 million storm reserve as well as$1 billion escrow designated for Hurricane Ida costs. - E-NO submitted a filing seeking approval to issue
$150M in securitized bonds to replenish its storm escrow. - E-MS filed its annual FRP.
Consolidated earnings (GAAP and non-GAAP Measures) | |||
First quarter 2022 vs. 2021 (See Appendix A for reconciliation of GAAP to non-GAAP measures and description of adjustments) | |||
First quarter | |||
2022 | 2021 | Change | |
(After-tax, $ in millions) | |||
As-reported earnings | 276 | 335 | (58) |
Less adjustments | 7 | 38 | (30) |
Adjusted earnings (non-GAAP) | 269 | 297 | (28) |
Estimated weather impact | 16 | 23 | (7) |
(After-tax, per share in $) | |||
As-reported earnings | 1.36 | 1.66 | (0.30) |
Less adjustments | 0.04 | 0.19 | (0.15) |
Adjusted earnings (non-GAAP) | 1.32 | 1.47 | (0.15) |
Estimated weather impact | 0.08 | 0.11 | (0.03) |
Calculations may differ due to rounding |
Consolidated results
For first quarter 2022, the company reported earnings of
Summary discussions by business are below. Additional details, including information on OCF by business, are provided in Appendix A. An analysis of quarterly variances by business is provided in Appendix B.
Business segment results
Utility
For first quarter 2022, the Utility business reported earnings attributable to Entergy Corporation of
- the first quarter 2021 reversal of a regulatory provision at E-AR for its 2019 netting adjustment;
- higher operating expenses including other O&M, taxes other than income taxes, and depreciation expense; and
- higher interest expense.
These drivers were partially offset by the net effect of regulatory actions across the operating companies.
On a per share basis, first quarter 2022 results reflected higher common shares outstanding.
Appendix C contains additional details on Utility operating and financial measures.
Parent & Other
For first quarter 2022, Parent & Other reported a loss attributable to Entergy Corporation of
Entergy Wholesale Commodities
For first quarter 2022, EWC reported earnings attributable to Entergy Corporation of
4 cents per share, on an as-reported basis. This compared to a first quarter 2021 earnings attributable to Entergy Corporation of
- lower revenue primarily due to the shutdown of Indian Point 3, and
- the absence of earnings from NDTs as a result of the sale of Indian Point.
These drivers were partially offset by:
- lower other O&M due primarily to the shutdown of Indian Point 3, and
- lower decommissioning expenses primarily due to the sale of Indian Point.
Appendix D contains additional details on EWC operating and financial measures, including reconciliation for non-GAAP EWC adjusted EBITDA.
Earnings per share guidance
Entergy affirmed its 2022 adjusted EPS guidance range of
The company has provided 2022 earnings guidance with regard to the non-GAAP measure of Entergy adjusted EPS. This measure excludes from the corresponding GAAP financial measure the effect of adjustments 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 predict and quantify with a reasonable degree of confidence all of the adjustments that may occur during the period. One such adjustment will be the exclusion of EWC earnings from Entergy adjusted EPS. We currently estimate that the contribution of EWC to Entergy's as-reported EPS will be approximately 20 cents in 2022. This estimate is subject to substantial uncertainty due to, among other things, the potential effects of exiting the EWC business.
Earnings teleconference
A teleconference will be held at 10:00 a.m. Central Time on Wednesday, April 27, 2022, 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 7789889, no more than 15 minutes prior to the start of the call. The webcast presentation is also being posted to Entergy's website concurrent with this news release. 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 4, 2022, by dialing 855-859-2056, conference ID 7789889.
Entergy Corporation, a Fortune 500 company headquartered in New Orleans, powers life for 3 million customers through its operating companies across Arkansas, Louisiana, Mississippi, and Texas. Entergy is creating a cleaner, more resilient energy future for everyone with our diverse power generation portfolio, including increasingly carbon-free energy sources. With roots in the Gulf South region for more than a century, Entergy is a recognized leader in corporate citizenship, delivering more than
Entergy Corporation's common stock is listed on the New York Stock Exchange and NYSE Chicago 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 presentation. Both documents are available on Entergy's Investor Relations website at www.entergy.com/investor_relations.
Entergy maintains a web page as part of its Investor Relations website, entitled Regulatory and Other Information, which provides investors with key updates on certain regulatory proceedings and important milestones on the execution of its strategy. While some of this information may be considered material information, investors should not rely exclusively on this page for all relevant company information.
For definitions of certain operating measures, as well as GAAP and non-GAAP financial measures and abbreviations and acronyms used in the earnings release materials, see Appendix F.
Non-GAAP financial measures
This news release contains non-GAAP financial measures, which are generally numerical measures of a company's performance, financial position, or cash flows that either exclude or include 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 news release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.
Entergy reports earnings using the non-GAAP measure of Entergy adjusted earnings, which excludes the effect of certain "adjustments," including the removal of the Entergy Wholesale Commodities segment in light of the company's exit from the merchant power business. Adjustments are 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. In addition to reporting GAAP consolidated earnings on a per share basis, Entergy reports its adjusted earnings on a per share basis. These per share measures represent the applicable earnings amount divided by the diluted average number of common shares outstanding for the period.
Management uses the non-GAAP financial measures of adjusted earnings and adjusted earnings per share for, among other things, financial planning and analysis; reporting financial results to the board of directors, employees, stockholders, analysts, and investors; and internal evaluation of financial performance. Entergy believes that these non-GAAP financial measures provide useful information to investors in evaluating the ongoing results of Entergy's business, comparing period to period results, and comparing Entergy's financial performance to the financial performance of other companies in the utility sector.
Other non-GAAP measures, including adjusted EBITDA; adjusted ROE; adjusted ROE, excluding affiliate preferred; gross liquidity; net liquidity; net liquidity, including storm escrows; debt to capital, excluding securitization debt; net debt to net capital, excluding securitization debt; parent debt to total debt, excluding securitization debt; FFO to debt, excluding securitization debt; and FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC, are measures Entergy uses internally for management and board discussions and to gauge the overall strength of its business. Entergy believes the above data provides useful information to investors in evaluating Entergy's ongoing financial results and flexibility, and assists investors in comparing Entergy's credit and liquidity to the credit and liquidity of others in the utility sector. In addition, ROE is included on both an adjusted and an as-reported basis. Metrics defined as "adjusted" (other than EWC's adjusted EBITDA) exclude the effect of adjustments as defined above. EWC's adjusted EBITDA represents EWC's earnings before interest, taxes, and depreciation and amortization, and also excludes decommissioning expense.
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, provide a more complete understanding of factors and trends affecting Entergy's business. These non-GAAP financial measures should not be used to the exclusion of GAAP financial measures. Investors are strongly encouraged to review Entergy's consolidated financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Although certain of these measures are intended to assist investors in comparing Entergy's performance to other companies in the utility sector, 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, statements regarding Entergy's 2022 earnings guidance; its current financial and operational outlooks; 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 (1) rate proceedings, formula rate plans, and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent or on the timeline anticipated by the utilities and (2) implementation of the ratemaking effects of changes in law; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) risks associated with operating nuclear facilities, including plant relicensing, operating, and regulatory costs and risks; (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 executing on business strategies, including strategic transactions that Entergy or its subsidiaries may undertake and 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; (i) the effects of changes in commodity markets, capital markets, or economic conditions; (j) impacts from a terrorist attack, cybersecurity threats, data security breaches, or other attempts to disrupt Entergy's business or operations, and/or other catastrophic events; (k) the direct and indirect impacts of the COVID-19 pandemic on Entergy and its customers; and (l) the effects of technological change, including the costs, pace of development and commercialization of new and emerging technologies.
First quarter 2022 earnings release appendices and financial statements
Appendices
A: Consolidated results and adjustments
B: Earnings variance analysis
C: Utility operating and financial measures
D: EWC operating and financial measures
E: Consolidated financial measures
F: Definitions and abbreviations and acronyms
G: Other GAAP to Non-GAAP reconciliations
Financial statements
Consolidating balance sheets
Consolidating income statements
Consolidated cash flow statements
A: Consolidated results and adjustments
Appendix A-1 provides a comparative summary of consolidated earnings, including a reconciliation of as-reported earnings (GAAP) to adjusted earnings (non-GAAP).
Appendix A-1: Consolidated earnings - reconciliation of GAAP to non-GAAP measures First Quarter 2022 vs. 2021 (See Appendix A-2 and Appendix A-3 for details on adjustments) | |||
First quarter | |||
2022 | 2021 | Change | |
(After-tax, $ in millions) | |||
As-reported earnings (loss) | |||
Utility | 340 | 357 | (16) |
Parent & Other | (71) | (60) | (12) |
EWC | 7 | 38 | (30) |
Consolidated | 276 | 335 | (58) |
Less adjustments | |||
Utility | - | - | - |
Parent & Other | - | - | - |
EWC | 7 | 38 | (30) |
Consolidated | 7 | 38 | (30) |
Adjusted earnings (loss) (non-GAAP) | |||
Utility | 340 | 357 | (16) |
Parent & Other | (71) | (60) | (12) |
EWC | - | - | - |
Consolidated | 269 | 297 | (28) |
Estimated weather impact | 16 | 23 | (7) |
Diluted average number of common | 203.9 | 201.1 | |
(After-tax, per share in $) (a) | |||
As-reported earnings (loss) | |||
Utility | 1.67 | 1.77 | (0.10) |
Parent & Other | (0.35) | (0.30) | (0.05) |
EWC | 0.04 | 0.19 | (0.15) |
Consolidated | 1.36 | 1.66 | (0.30) |
Less adjustments | |||
Utility | - | - | - |
Parent & Other | - | - | - |
EWC | 0.04 | 0.19 | (0.15) |
Consolidated | 0.04 | 0.19 | (0.15) |
Adjusted earnings (loss) (non-GAAP) | |||
Utility | 1.67 | 1.77 | (0.10) |
Parent & Other | (0.35) | (0.30) | (0.05) |
EWC | - | - | - |
Consolidated | 1.32 | 1.47 | (0.15) |
Estimated weather impact | 0.08 | 0.11 | (0.03) |
Calculations may differ due to rounding | ||
(a) | Per share amounts are calculated by dividing the corresponding earnings (loss) by the diluted average number of common shares outstanding for the period. | |
See Appendix B for detailed earnings variance analysis.
Appendix A-2 and Appendix A-3 list adjustments by business. Adjustments are included in as-reported earnings consistent with GAAP but are excluded from adjusted earnings. As a result, adjusted earnings is considered a non-GAAP measure.
Appendix A-2: Adjustments by driver (shown as positive/(negative) impact on earnings or EPS) | |||
First quarter 2022 vs. 2021 | |||
First quarter | |||
2022 | 2021 | Change | |
(Pre-tax except for income taxes, preferred dividend requirements, and totals; $ in millions) | |||
EWC | |||
Income before income taxes | 11 | 54 | (43) |
Income taxes | (3) | (16) | 13 |
Preferred dividend requirements | (1) | (1) | - |
Total EWC | 7 | 38 | (30) |
Total adjustments | 7 | 38 | (30) |
(After-tax, per share in $) (b) | |||
EWC | |||
Total EWC | 0.04 | 0.19 | (0.15) |
Total adjustments | 0.04 | 0.19 | (0.15) |
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-3: Adjustments by income statement line item (shown as positive/(negative) impact on earnings) | ||||
First quarter 2022 vs. 2021 | ||||
(Pre-tax except for income taxes, preferred dividend requirements, and totals; $ in millions) | ||||
First quarter | ||||
2022 | 2021 | Change | ||
EWC | ||||
Operating revenue | 150 | 248 | (98) | |
Fuel and fuel-related expenses | (26) | (21) | (5) | |
Purchased power | (14) | (18) | 4 | |
Nuclear refueling outage expenses | (11) | (11) | - | |
Other O&M | (41) | (99) | 58 | |
Asset write-off and impairments | (1) | (3) | 3 | |
Decommissioning expense | (14) | (53) | 39 | |
Taxes other than income taxes | (10) | (6) | (3) | |
Depreciation/amortization exp. | (9) | (13) | 4 | |
Other income (deductions)–other | (13) | 34 | (47) | |
Interest exp. and other charges | (1) | (4) | 3 | |
Income taxes | (3) | (16) | 13 | |
Preferred dividend requirements | (1) | (1) | - | |
Total EWC | 7 | 38 | (30) | |
Total adjustments (after-tax) | 7 | 38 | (30) | |
Calculations may differ due to rounding | |
Appendix A-4 provides a comparative summary of OCF by business.
Appendix A-4: Consolidated operating cash flow | |||
First quarter 2022 vs. 2021 | |||
($ in millions) | |||
First quarter | |||
2022 | 2021 | Change | |
Utility | 495 | (77) | 572 |
Parent & Other | (35) | (22) | (13) |
EWC | 78 | 49 | 29 |
Consolidated | 538 | (50) | 588 |
Calculations may differ due to rounding | |
OCF increased for the quarter due to several drivers, including higher Utility customer collections, lower fuel and purchased power payments (including costs related to Winter Storm Uri in 2021), lower pension contributions, and higher proceeds from the DOE regarding spent fuel litigation. The increase was partially offset by higher non-capital storm restoration spending.
Intercompany income tax payments contributed to the line of business variances.
B: Earnings variance analysis
Appendix B provides details of current quarter 2022 versus 2021 as-reported and adjusted earnings per share variances for Utility, Parent & Other, and EWC.
Appendix B: As-reported and adjusted earnings per share variance analysis (c), (d), (e) | ||||||||||
First quarter 2022 vs. 2021 | ||||||||||
(After-tax, per share in $) | ||||||||||
Utility | Parent & Other | EWC | Consolidated | |||||||
As- | Adjusted | As- | Adjusted | As- reported | As- reported | Adjusted | ||||
2021 earnings (loss) | 1.77 | 1.77 | (0.30) | (0.30) | 0.19 | 1.66 | 1.47 | |||
Operating revenue less: Fuel, fuel-related expenses and gas purchased for resale, Purchased power, and Regulatory charges (credits)–net | 0.43 | 0.43 | (f) | - | - | (0.39) | (g) | 0.04 | 0.43 | |
Other O&M | (0.10) | (0.10) | (h) | (0.01) | (0.01) | 0.23 | (i) | 0.12 | (0.11) | |
Asset write-offs and impairments | - | - | - | - | 0.01 | 0.01 | - | |||
Decommissioning expense | (0.01) | (0.01) | - | - | 0.15 | (j) | 0.14 | (0.01) | ||
Taxes other than income taxes | (0.07) | (0.07) | (k) | - | - | (0.01) | (0.08) | (0.07) | ||
Depreciation/amortization exp. | (0.11) | (0.11) | (l) | - | - | 0.02 | (0.09) | (0.11) | ||
Other income (deductions) | (0.17) | (0.17) | (m) | (0.01) | (0.01) | (0.18) | (n) | (0.36) | (0.18) | |
Interest expense | (0.06) | (0.06) | (o) | (0.03) | (0.03) | 0.01 | (0.08) | (0.09) | ||
Income taxes–other | 0.01 | 0.01 | - | - | 0.01 | 0.02 | 0.01 | |||
Share effect | (0.02) | (0.02) | - | - | - | (0.02) | (0.02) | |||
2022 earnings (loss) | 1.67 | 1.67 | (0.35) | (0.35) | 0.04 | 1.36 | 1.32 | |||
Calculations may differ due to rounding | |
(c) | Utility operating revenue / regulatory charges and Utility income taxes-other exclude |
(d) | Utility regulatory charges (credits) and Utility preferred dividend and noncontrolling interest exclude |
(e) | 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. |
(f) | The earnings increase was primarily driven by regulatory actions including E-AR's FRP; E-LA's FRP; E-MS's FRP and ad valorem rider; E-NO's FRP; and E-TX's GCRR, TCRF, and DCRF. The variance also reflected a change in regulatory provisions for decommissioning items (the difference between expense and trust earnings plus costs collected in revenue, largely earnings neutral) and a regulatory provision for the true-up of E-LA and E-TX cost of debt from 2020 storms. Partially offsetting was the first quarter 2021 reversal of an E-AR regulatory provision. |
(g) | The earnings decrease was due largely to the shutdown of Indian Point 3 in April 2021. |
(h) | The earnings decrease from higher Utility other O&M was due primarily to higher customer service center support expenses, higher nuclear generation expenses, higher transmission expenses, and higher distribution operations expenses. These items were partially offset by higher nuclear insurance refunds. |
(i) | The earnings increase from lower EWC other O&M was due largely to the shutdown of Indian Point 3 in April 2021 and lower severance and retention expenses. |
(j) | The earnings increase from lower EWC decommissioning expense was due primarily to the sale of Indian Point in May 2021. |
(k) | The earnings decrease from higher Utility taxes other than income taxes was due to increases in ad valorem and franchise taxes. |
(l) | The earnings decrease from higher Utility depreciation expense was due primarily to higher plant in service. |
(m) | The earnings decrease from lower Utility other income (deductions) was due largely to changes in decommissioning trust fund returns (based on regulatory treatment, decommissioning-related variances are largely earnings neutral). |
(n) | The earnings decrease from lower EWC other income (deductions) was due largely to the absence of earnings from nuclear decommissioning trust funds that were transferred in the sale of Indian Point in May 2021 and the performance of Palisades decommissioning trust investments. The decrease was partially offset by lower non-service pension costs. |
(o) | The earnings decrease from higher Utility interest expense was due primarily to higher debt balances. |
Utility as-reported operating revenue less fuel, fuel-related 2022 vs. 2021 ($ EPS) | |
1Q | |
Volume/weather | (0.05) |
Retail electric price | 0.33 |
1Q21 reversal of reg. provision for E-AR's FRP 2019 netting adj. | (0.16) |
1Q22 reg. provision for true-up of E-LA and E-TX cost of debt from 2020 storms | 0.05 |
Reg. provisions for decommissioning items | 0.22 |
Other, including Grand Gulf recovery | 0.04 |
Total | 0.43 |
C: Utility operating and financial measures
Appendix C provides comparative summaries of Utility operating and financial measures.
Appendix C: Utility operating and financial measures | ||||
First quarter 2022 vs. 2021 | ||||
First quarter | ||||
2022 | 2021 | % | % Weather | |
GWh sold | ||||
Residential | 8,454 | 8,663 | (2.4) | (3.6) |
Commercial | 6,271 | 6,111 | 2.6 | 5.2 |
Governmental | 584 | 581 | 0.5 | 0.5 |
Industrial | 12,496 | 11,738 | 6.5 | 6.5 |
Total retail sales | 27,805 | 27,093 | 2.6 | 2.9 |
Wholesale | 3,641 | 4,299 | (15.3) | |
Total sales | 31,446 | 31,392 | 0.2 | |
Number of electric retail customers | ||||
Residential | 2,548,138 | 2,532,172 | 0.6 | |
Commercial | 368,951 | 360,323 | 2.4 | |
Governmental | 18,173 | 17,811 | 2.0 | |
Industrial | 46,477 | 44,622 | 4.2 | |
Total retail customers | 2,981,739 | 2,954,928 | 0.9 | |
Other O&M and refueling outage | 3.8 | |||
Calculations may differ due to rounding | ||
(p) | The effects of weather were estimated using heating degree days and cooling degree days for the period from certain locations within each jurisdiction and comparing to "normal" weather based on 20-year historical data. The models used to estimate weather are updated periodically and are subject to change. | |
On a weather-adjusted basis retail sales increased 2.9 percent. Residential sales decreased (3.6) percent and commercial sales increased 5.2 percent, including the impact of the COVID-19 pandemic on first quarter 2021. Industrial sales volume increased 6.5 percent due to higher sales to cogeneration customers, higher sales to existing large industrial customers (primarily chemicals and pulp and paper industries, partially offset by lower petroleum refining), an increase in demand from expansion projects (primarily in the chemicals, transportation, and petroleum refining industries), and higher sales to mid-to-small industrial customers.
D: EWC operating and financial measures
Appendix D-1 provides a comparative summary of EWC operating and financial measures.
Appendix D-1: EWC operating and financial measures | |||
First quarter 2022 vs. 2021 | |||
First quarter | |||
2022 | 2021 | % Change | |
Owned capacity (MW) (q) | 1,205 | 2,246 | (46.3) |
GWh billed | 2,225 | 4,413 | (49.6) |
EWC Nuclear Fleet | |||
Capacity factor | 1.0 | ||
GWh billed | 1,766 | 3,988 | (55.7) |
Production cost per MWh | 38.0 | ||
Average energy/capacity revenue per MWh | 13.8 | ||
Calculations may differ due to rounding | ||
(q) | 2022 is lower due to the shutdown of IP3 (1,041MW) on April 30, 2021. | |
See the appendix in the webcast presentation for EWC hedging and price disclosures.
Appendix D-2 provides a comparative summary of EWC adjusted EBITDA (non-GAAP).
Appendix D-2: EWC adjusted EBITDA - reconciliation of GAAP to non-GAAP measures | |||
First quarter 2022 vs. 2021 | |||
($ in millions) | First quarter | ||
2022 | 2021 | Change | |
Net income (loss) | 8 | 38 | (30) |
Add back: interest expense | 1 | 4 | (3) |
Add back: income taxes | 3 | 16 | (13) |
Add back: depreciation and amortization | 9 | 13 | (4) |
Subtract: interest and investment income | (17) | 48 | (65) |
Add back: decommissioning expense | 14 | 53 | (39) |
Adjusted EBITDA (non-GAAP) | 51 | 76 | (24) |
Calculations may differ due to rounding | |
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 financial measures.
Appendix E: GAAP and non-GAAP financial measures | |||
First quarter 2022 vs. 2021 (See appendix G for reconciliation of GAAP to non-GAAP financial measures) | |||
For 12 months ending March 31 | 2022 | 2021 | Change |
GAAP measure | |||
As-reported ROE | (5.7)% | ||
Non-GAAP measure | |||
Adjusted ROE | (0.8)% | ||
As of March 31 ($ in millions, except where noted) | 2022 | 2021 | Change |
GAAP measures | |||
Cash and cash equivalents | 702 | 1,743 | (1,041) |
Available revolver capacity | 4,129 | 4,220 | (92) |
Commercial paper | 1,343 | 1,028 | 315 |
Total debt | 28,630 | 25,803 | 2,827 |
Securitization debt | 55 | 147 | (92) |
Debt to capital | |||
Off-balance sheet liabilities: | |||
Debt of joint ventures – Entergy's share | 5 | 15 | (10) |
Total off-balance sheet liabilities | 5 | 15 | (10) |
Storm escrows | 33 | 72 | (39) |
Non-GAAP measures ($ in millions, except where noted) | |||
Debt to capital, excluding securitization debt | |||
Net debt to net capital, excluding securitization debt | |||
Gross liquidity | 4,830 | 5,963 | (1,133) |
Net liquidity | 3,487 | 4,935 | (1,448) |
Net liquidity, including storm escrows | 3,521 | 5,007 | (1,487) |
Parent debt to total debt, excluding securitization debt | (0.8)% | ||
FFO to debt, excluding securitization debt | |||
FFO to debt, excluding securitization debt, return of unprotected excess ADIT, | |||
Calculations may differ due to rounding |
F: Definitions and abbreviations and acronyms
Appendix F-1 provides definitions of certain operating measures, as well as GAAP and non-GAAP financial measures.
Appendix F-1: Definitions | ||
Utility operating and financial measures | ||
GWh sold | Total number of GWh sold to retail and wholesale customers | |
Number of electric retail | Average number of electric customers over the period | |
Other O&M and refueling | Other operation and maintenance expense plus nuclear refueling outage expense per MWh of total sales | |
EWC Operating and financial measures | ||
Adjusted EBITDA (non-GAAP) | Earnings before interest, income taxes, and depreciation and amortization, and excluding decommissioning expense | |
Average revenue per MWh | 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) | |
Capacity factor | Normalized percentage of the period that the nuclear plants generate power | |
Expected sold and market | 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 | Percent of planned qualified capacity sold to mitigate price uncertainty under physical or financial transactions | |
Percent of planned | Percent of planned generation output sold under unit-contingent contracts | |
Planned net MW in | 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) | |
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 | |
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 | |
Appendix F-1: Definitions (continued) | |
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 |
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 | 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 | 12-months rolling FFO as a percentage of end of period total debt excluding securitization debt |
FFO to debt, excl. | 12-months rolling FFO excluding return of unprotected excess ADIT and severance and retention payments associated with the 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, | 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 | Sum of cash, available revolver capacity, and escrow accounts available for certain storm expenses, less commercial paper borrowing |
Parent debt to total 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 F-2 explains abbreviations and acronyms used in the quarterly earnings materials.
Appendix F-2: Abbreviations and acronyms | |||
ADIT AFUDC AFUDC – borrowed funds ALJ AMI APSC ARO ATM bps CCGT CCNO CFO COD DCRF DOE DSM E-AR E-LA E-MS E-NO E-TX EBITDA EPS ETR EWC FERC FFO FIN 48 GAAP GCRR Grand Gulf or GGNS HLBV
| Accumulated deferred income taxes Allowance for funds used during construction Allowance for borrowed funds used during construction Administrative law judge Advanced metering infrastructure Arkansas Public Service Commission Asset retirement obligation At the market equity issuance program Basis points Combined cycle gas turbine Council of the City of New Orleans Cash from operations Commercial operation date Distribution cost recovery factor U.S. Department of Energy Demand side management Entergy Arkansas, LLC Entergy Louisiana, LLC Entergy Mississippi, LLC Entergy New Orleans, LLC Entergy Texas, Inc. Earnings before interest, income taxes, and depreciation and amortization Engineering,procurement,and construction Earnings per share Entergy Corporation Entergy Wholesale Commodities Federal Energy Regulatory Commission Funds from operations FASB Interpretation No.48, "Accounting for Uncertainty in Income Taxes" Formula rate plan U.S. generally accepted accounting principles Generation Cost Recovery Rider Unit 1 of Grand Gulf Nuclear Station (nuclear), Hypothetical liquidation at book value
| IIRR-G Indian Point 3 IPEC or ISES 2 LPSC LTM MISO Moody's MPSC MTEP Nelson 6 NDT NRC NYSE OCAPS OCF OpCo OPEB Other O&M Palisades PMR PPA RFP ROE RS Cogen RSP S&P SEC SERI TCRF UPSA WACC
| Infrastructure investment recovery rider - gas Indian Point Energy Center Unit 3 (nuclear) Indian Point Energy Center (nuclear) Unit 2 of Independence Steam Electric Station (coal) Louisiana Public Service Commission Last twelve months Midcontinent Independent System Operator, Inc. Moody's Investor Service Mississippi Public Service Commission MISO Transmission Expansion Plan Unit 6 of Roy S. Nelson plant (coal) Nuclear decommissioning trust U.S. Nuclear Regulatory Commission New York Stock Exchange Orange County Advanced Power Station Net cash flow provided by operating activities Utility operating company Other post-employment benefits Other non-fuel operation and maintenance expense Parent & Other Palisades Power Plant (nuclear) Performance Management Rider Power purchase agreement or purchased power agreement Public Utility Commission of Texas Request for proposals Return on equity RS Cogen facility (CCGT cogeneration) Rate Stabilization Plan (E-LA Gas) Standard & Poor's U.S. Securities and Exchange Commission System Energy Resources, Inc. Transmission cost recovery factor Unit Power Sales Agreement Weighted-average cost of capital
|
G: Other 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 news release to their most comparable GAAP measure.
Appendix G-1: Reconciliation of GAAP to non-GAAP financial measures – ROE | |||
(LTM $ in millions except where noted) | First quarter | ||
2022 | 2021 | ||
As-reported net income (loss) attributable to Entergy Corporation | (A) | 1,060 | 1,604 |
Adjustments | (B) | (127) | 399 |
Adjusted earnings (non-GAAP) | (A-B) | 1,187 | 1,205 |
Average common equity (average of beginning and ending balances) | (C) | 11,364 | 10,621 |
As-reported ROE | (A/C) | ||
Adjusted ROE (non-GAAP) | [(A-B)/C] | ||
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) | First quarter | ||
2022 | 2021 | ||
Total debt | (A) | 28,630 | 25,803 |
Less securitization debt | (B) | 55 | 147 |
Total debt, excluding securitization debt | (C) | 28,575 | 25,656 |
Less cash and cash equivalents | (D) | 702 | 1,743 |
Net debt, excluding securitization debt | (E) | 27,874 | 23,914 |
Commercial paper | (F) | 1,343 | 1,028 |
Total capitalization | (G) | 40,626 | 37,075 |
Less securitization debt | (B) | 55 | 147 |
Total capitalization, excluding securitization debt | (H) | 40,571 | 36,928 |
Less cash and cash equivalents | (D) | 702 | 1,743 |
Net capital, excluding securitization debt | (I) | 39,870 | 35,185 |
Debt to capital | (A/G) | ||
Debt to capital, excluding securitization debt (non-GAAP) | (C/H) | ||
Net debt to net capital, excluding securitization debt (non-GAAP) | (E/I) | ||
Available revolver capacity | (J) | 4,129 | 4,220 |
Storm escrows | (K) | 33 | 72 |
Gross liquidity (non-GAAP) | (D+J) | 4,830 | 5,963 |
Net liquidity (non-GAAP) | (D+J-F) | 3,487 | 4,935 |
Net liquidity, including storm escrows (non-GAAP) | (D+J-F+K) | 3,521 | 5,007 |
Entergy Corporation notes: | |||
Due July 2022 | 650 | 650 | |
Due September 2025 | 800 | 800 | |
Due September 2026 | 750 | 750 | |
Due June 2028 | 650 | 650 | |
Due June 2030 | 600 | 600 | |
Due June 2031 | 650 | 650 | |
Due June 2050 | 600 | 600 | |
Total Entergy Corporation notes | (L) | 4,700 | 4,700 |
Revolver draw | (M) | 150 | 55 |
Unamortized debt issuance costs and discounts | (N) | (47) | (54) |
Total parent debt | (F+L+M+N) | 6,145 | 5,728 |
Parent debt to total debt, excluding securitization debt (non-GAAP) | [(F+L+M+N)/C] | ||
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 the exit of EWC | |||
($ in millions except where noted) | First quarter | ||
2022 | 2021 | ||
Total debt | (A) | 28,630 | 25,803 |
Less securitization debt | (B) | 55 | 147 |
Total debt, excluding securitization debt | (C) | 28,575 | 25,656 |
Net cash flow provided by operating activities, LTM | (D)
| 2,888 | 1,981 |
AFUDC – borrowed funds, LTM | (E) | (29) | (43) |
Working capital items in net cash flow provided by operating | |||
Receivables | 91 | (262) | |
Fuel inventory | 6 | 15 | |
Accounts payable | 162 | 90 | |
Taxes accrued | 130 | 21 | |
Interest accrued | 26 | 9 | |
Other working capital accounts | (105) | (165) | |
Securitization regulatory charges, LTM | 71 | 124 | |
Total | (F) | 382 | (170) |
FFO, LTM (non-GAAP) | (G)=(D+E-F) | 2,477 | 2,109 |
FFO to debt, excluding securitization debt (non-GAAP) | (G/C) | ||
Estimated return of unprotected excess ADIT, LTM | (H) | 66 | 80 |
Severance and retention payments associated with exit of EWC, LTM | (I) | 119 | 55 |
FFO to debt, excluding securitization debt, return of unprotected | [(G+H+I)/(C)] | ||
Calculations may differ due to rounding |
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SOURCE Entergy Corporation
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