Entergy reports second quarter earnings
Important settlements reached; guidance and outlooks affirmed
"We successfully executed on key operational, customer, and regulatory fronts," said
Business highlights included the following:
- E-LA reached an agreement in principle with the LPSC Staff and other parties to (1) extend and modify the formula rate plan, (2) establish the base FRP rate change for the 2023 test year, and (3) provide customer credits, including increasing customer sharing of tax benefits, to resolve several open matters; the agreement is subject to LPSC approval.
- SERI reached an agreement in principle with the LPSC Staff that substantially resolves the major litigation at SERI; the agreement is subject to LPSC and
FERC approval. - The MPSC approved E-MS's FRP settlement.
- E-TX filed for a CCN to construct two hydrogen-capable power stations: the
Legend Power Station , a 754-megawatt carbon-capture-enabled CCCT facility, and theLone Star Power Station , a
453-megawatt CT facility. - E-TX filed for a CCN for two owned solar facilities totaling 311 megawatts.
- E-TX submitted a DCRF filing to recover distribution investment since the rate case test year.
- The LPSC approved an enhanced renewable RFP process for up to 3 gigawatts of renewable resources.
-
Entergy andNextEra Energy Resources, LLC announced a joint development agreement that will accelerate the development of up to 4.5 gigawatts of new, utility-owned solar generation and energy storage projects. - E-TX filed Phase I of its Future Ready Resiliency Plan, which includes
$335 million of investment to be completed over 3 years. - E-AR and E-NO each submitted their annual FRP filings.
- Entergy was named to The Civic 50, a Points of Light initiative honoring the 50 most community-minded companies in the
U.S.
Consolidated earnings (GAAP and non-GAAP measures) |
||||||
Second quarter and year-to-date 2024 vs. 2023 (See Appendix A for reconciliation of GAAP to non-GAAP measures and description of adjustments) |
||||||
|
Second quarter |
Year-to-date |
||||
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
(After-tax, $ in millions) |
|
|
|
|
|
|
As-reported earnings |
49 |
391 |
(342) |
124 |
702 |
(578) |
Less adjustments |
(362) |
- |
(362) |
(517) |
69 |
(586) |
Adjusted earnings (non-GAAP) |
411 |
391 |
20 |
641 |
634 |
8 |
Estimated weather impact |
56 |
15 |
41 |
30 |
(32) |
62 |
|
|
|
|
|
|
|
(After-tax, per share in $) |
|
|
|
|
|
|
As-reported earnings |
0.23 |
1.84 |
(1.62) |
0.58 |
3.31 |
(2.73) |
Less adjustments |
(1.69) |
- |
(1.69) |
(2.41) |
0.32 |
(2.74) |
Adjusted earnings (non-GAAP) |
1.92 |
1.84 |
0.07 |
2.99 |
2.99 |
0.01 |
Estimated weather impact |
0.26 |
0.07 |
0.19 |
0.14 |
(0.15) |
0.29 |
|
|
|
|
|
|
|
Calculations may differ due to rounding |
Consolidated results
For second quarter 2024, the company reported earnings of
Summary discussions by business follow. Additional details, including information on OCF by business, are provided in Appendix A. An analysis of variances by business is provided in Appendix B.
Business results
Utility
For second quarter 2024, the Utility business reported earnings attributable to
Second quarter 2024 results included expenses totaling
Other drivers for the quarter included:
- higher retail sales volume including the effects of weather,
- the net effect of regulatory actions across the operating companies, and
- lower non-service pension costs included in other income (deductions).
These drivers were partially offset by:
- higher operating expenses including other O&M and depreciation, and
- higher interest expense.
On a per share basis, second quarter 2024 results reflected higher diluted average number of common shares outstanding.
Appendix C contains additional details on Utility operating and financial measures.
Parent & Other
For second quarter 2024, Parent & Other reported a loss attributable to
The quarter-over-quarter as-reported decline was primarily due to a
Higher interest expense was also a driver for the quarter.
On a per share basis, second quarter 2024 results reflected higher diluted average number of common shares outstanding.
Earnings per share guidance
Entergy affirmed its 2024 adjusted EPS guidance range of
The company has provided 2024 earnings guidance with regard to the non-GAAP measure of adjusted earnings per share. 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. Potential adjustments include the exclusion of regulatory charges related to outstanding regulatory complaints and significant income tax items.
Earnings teleconference
A teleconference will be held at
investors.entergy.com/investors/events-and-presentations or by dialing 888-440-4149, conference ID 9024832, 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 investors.entergy.com/investors/events-and-presentations and by telephone. The telephone replay will be available through
Entergy is a Fortune 500 company that powers life for 3 million customers through our operating companies in
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
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 E.
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." 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 significant tax items, and other items such as certain costs, expenses, or other specified items. In addition to reporting GAAP 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 ROE; adjusted ROE, excluding affiliate preferred; FFO to adjusted debt; gross liquidity; net liquidity; adjusted Parent debt to total adjusted debt; adjusted debt to adjusted capitalization; and adjusted net debt to adjusted net capitalization 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. Metrics defined as "adjusted" exclude the effect of adjustments as defined above.
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,
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 (1) realizing the benefits of its resilience plan, including impacts of the frequency and intensity of future storms and storm paths, as well as the pace of project completion and (2) 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 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) direct and indirect impacts to Entergy or its customers from pandemics, terrorist attacks, geopolitical conflicts, cybersecurity threats, data security breaches, or other attempts to disrupt Entergy's business or operations, and/or other catastrophic events; and (i) effects on Entergy or its customers of (1) 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; (2) the effects of changes in commodity markets, capital markets, or economic conditions; and (3) the effects of technological change, including the costs, pace of development, and commercialization of new and emerging technologies.
Second quarter 2024 earnings release appendices and financial statements
Appendices
A: Consolidated results and adjustments
B: Earnings variance analysis
C: Utility operating and financial measures
D: Consolidated financial measures
E: Definitions and abbreviations and acronyms
F: 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 Second quarter and year-to-date 2024 vs. 2023 (See Appendix A-2 and Appendix A-3 for details on adjustments) |
||||||
|
Second quarter |
Year-to-date |
||||
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
(After-tax, $ in millions) |
|
|
|
|
|
|
As-reported earnings (loss) |
|
|
|
|
|
|
Utility |
441 |
514 |
(73) |
636 |
912 |
(275) |
Parent & Other |
(392) |
(123) |
(269) |
(512) |
(209) |
(303) |
Consolidated |
49 |
391 |
(342) |
124 |
702 |
(578) |
|
|
|
|
|
|
|
Less adjustments |
|
|
|
|
|
|
Utility |
(112) |
- |
(112) |
(267) |
69 |
(336) |
Parent & Other |
(250) |
- |
(250) |
(250) |
- |
(250) |
Consolidated |
(362) |
- |
(362) |
(517) |
69 |
(586) |
|
|
|
|
|
|
|
Adjusted earnings (loss) (non-GAAP) |
|
|
|
|
|
|
Utility |
553 |
514 |
39 |
903 |
843 |
60 |
Parent & Other |
(142) |
(123) |
(19) |
(262) |
(209) |
(52) |
Consolidated |
411 |
391 |
20 |
641 |
634 |
8 |
Estimated weather impact |
56 |
15 |
41 |
30 |
(32) |
62 |
|
|
|
|
|
|
|
Diluted average number of common shares outstanding (in millions) |
214 |
212 |
2 |
214 |
212 |
2 |
|
|
|
|
|
|
|
(After-tax, per share in $) (a) |
|
|
|
|
|
|
As-reported earnings (loss) |
|
|
|
|
|
|
Utility |
2.06 |
2.42 |
(0.37) |
2.97 |
4.30 |
(1.33) |
Parent & Other |
(1.83) |
(0.58) |
(1.25) |
(2.39) |
(0.99) |
(1.40) |
Consolidated |
0.23 |
1.84 |
(1.62) |
0.58 |
3.31 |
(2.73) |
|
|
|
|
|
|
|
Less adjustments |
|
|
|
|
|
|
Utility |
(0.52) |
- |
(0.52) |
(1.25) |
0.32 |
(1.57) |
Parent & Other |
(1.17) |
- |
(1.17) |
(1.17) |
- |
(1.17) |
Consolidated |
(1.69) |
- |
(1.69) |
(2.41) |
0.32 |
(2.74) |
|
|
|
|
|
|
|
Adjusted earnings (loss) (non-GAAP) |
|
|
|
|
|
|
Utility |
2.58 |
2.42 |
0.16 |
4.22 |
3.97 |
0.24 |
Parent & Other |
(0.66) |
(0.58) |
(0.08) |
(1.22) |
(0.99) |
(0.24) |
Consolidated |
1.92 |
1.84 |
0.07 |
2.99 |
2.99 |
0.01 |
Estimated weather impact |
0.26 |
0.07 |
0.19 |
0.14 |
(0.15) |
0.29 |
|
|
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 detail 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) |
||||||
Second quarter and year-to-date 2024 vs. 2023 |
||||||
|
Second quarter |
Year-to-date |
||||
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
(Pre-tax except for income taxes and totals; $ in millions) |
|
|
|
|
|
|
Utility |
|
|
|
|
|
|
2Q24 E-LA global agreement to resolve its FRP extension filing and other retail matters |
(151) |
- |
(151) |
(151) |
- |
(151) |
1Q24 E-AR write-off of a regulatory asset related to the opportunity sales proceeding |
- |
- |
- |
(132) |
- |
(132) |
1Q24 E-NO increase in customer sharing of tax benefits as a result of the 2016–2018 |
- |
- |
- |
(79) |
- |
(79) |
1Q23 impacts from E-LA storm cost approval and securitization, including customer sharing (excluding income tax item below) |
- |
- |
- |
- |
(87) |
87 |
Income tax effect on Utility adjustments above |
39 |
- |
39 |
95 |
27 |
68 |
1Q23 E-LA income tax benefit resulting from securitization |
- |
- |
- |
- |
129 |
(129) |
Total Utility |
(112) |
- |
(112) |
(267) |
69 |
(336) |
|
|
|
|
|
|
|
Parent & Other |
|
|
|
|
|
|
2Q24 pension lift out |
(317) |
- |
(317) |
(317) |
- |
(317) |
Income tax effect on Parent & Other adjustment above |
67 |
- |
67 |
67 |
- |
67 |
Total Parent & Other |
(250) |
- |
(250) |
(250) |
- |
(250) |
|
|
|
|
|
|
|
Total adjustments |
(362) |
- |
(362) |
(517) |
69 |
(586) |
|
|
|
|
|
|
|
(After-tax, per share in $) (b) |
|
|
|
|
|
|
Utility |
|
|
|
|
|
|
2Q24 E-LA global agreement to resolve its FRP extension filing and other retail matters |
(0.52) |
- |
(0.52) |
(0.52) |
- |
(0.52) |
1Q24 E-AR write-off of a regulatory asset related to the opportunity sales proceeding |
- |
- |
- |
(0.45) |
- |
(0.45) |
1Q24 E-NO increase in customer sharing of tax benefits as a result of the 2016–2018 |
- |
- |
- |
(0.27) |
- |
(0.27) |
1Q23 impacts from E-LA storm cost approval and securitization, including customer sharing |
- |
- |
- |
- |
0.32 |
(0.32) |
Total Utility |
(0.52) |
- |
(0.52) |
(1.25) |
0.32 |
(1.57) |
|
|
|
|
|
|
|
Parent & Other |
|
|
|
|
|
|
2Q24 pension lift out |
(1.17) |
- |
(1.17) |
(1.17) |
- |
(1.17) |
Total Parent & Other |
(1.17) |
- |
(1.17) |
(1.17) |
- |
(1.17) |
|
|
|
|
|
|
|
Total adjustments |
(1.69) |
- |
(1.69) |
(2.41) |
0.32 |
(2.74) |
|
|
|
|
|
|
|
Calculations may differ due to rounding |
|
(b) |
Per share amounts are calculated by multiplying the corresponding earnings (loss) by the estimated income tax rate that is expected to apply and dividing 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) |
||||||
Second quarter and year-to-date 2024 vs. 2023 |
||||||
(Pre-tax except for income taxes and totals; $ in millions) |
||||||
|
Second quarter |
Year-to-date |
||||
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
Utility |
|
|
|
|
|
|
Operating revenues |
- |
- |
- |
- |
31 |
(31) |
Other O&M |
(1) |
- |
(1) |
(1) |
- |
(1) |
Asset write-offs, impairments, and related charges |
- |
- |
- |
(132) |
- |
(132) |
Other regulatory charges (credits) – net |
(150) |
- |
(150) |
(229) |
(103) |
(125) |
Other income (deductions) – other |
- |
- |
- |
- |
(15) |
15 |
Income taxes |
39 |
- |
39 |
95 |
156 |
(61) |
Total Utility |
(112) |
- |
(112) |
(267) |
69 |
(336) |
|
|
|
|
|
|
|
Parent & Other |
|
|
|
|
|
|
Other income (deductions) – other |
(317) |
- |
(317) |
(317) |
- |
(317) |
Income taxes |
67 |
- |
67 |
67 |
- |
67 |
Total Parent & Other |
(250) |
- |
(250) |
(250) |
- |
(250) |
|
|
|
|
|
|
|
Total adjustments |
(362) |
- |
(362) |
(517) |
69 |
(586) |
|
|
|
|
|
|
|
Calculations may differ due to rounding |
Appendix A-4 provides a comparative summary of OCF by business.
Appendix A-4: Consolidated operating cash flow |
||||||
Second quarter and year-to-date 2024 vs. 2023 |
||||||
($ in millions) |
|
|
|
|||
|
Second quarter |
Year-to-date |
||||
|
2024 |
2023 |
Change |
2024 |
2023 |
Change |
Utility |
1,111 |
936 |
174 |
1,626 |
1,915 |
(289) |
Parent & Other |
(85) |
(70) |
(15) |
(79) |
(88) |
9 |
Consolidated |
1,025 |
866 |
159 |
1,546 |
1,826 |
(280) |
|
|
|
|
|
|
|
Calculations may differ due to rounding |
OCF increased for the quarter primarily due to the timing of payments to vendors and higher customer receipts.
B: Earnings variance analysis
Appendix B-1 and Appendix B-2 provide details of current quarter and year-to-date 2024 versus 2023 as-reported and adjusted earnings per share variances for Utility and Parent & Other.
Appendix B-1: As-reported and adjusted earnings per share variance analysis (c), (d), (e) |
||||||||
Second quarter 2024 vs. 2023 |
||||||||
(After-tax, per share in $) |
||||||||
|
Utility |
|
Parent & Other |
|
Consolidated |
|||
|
As- reported |
Adjusted |
|
As- reported |
Adjusted |
|
As- reported |
Adjusted |
2023 earnings (loss) |
2.42 |
2.42 |
|
(0.58) |
(0.58) |
|
1.84 |
1.84 |
Operating revenue less: |
(0.16) |
0.36 |
(f) |
(0.02) |
(0.02) |
|
(0.19) |
0.33 |
Nuclear refueling outage expenses |
(0.01) |
(0.01) |
|
- |
- |
|
(0.01) |
(0.01) |
Other O&M |
(0.15) |
(0.14) |
(g) |
- |
- |
|
(0.15) |
(0.14) |
Asset write-offs, impairments, and related charges |
- |
- |
|
- |
- |
|
- |
- |
Decommissioning |
(0.01) |
(0.01) |
|
- |
- |
|
(0.01) |
(0.01) |
Taxes other than income taxes |
(0.01) |
(0.01) |
|
- |
- |
|
(0.01) |
(0.01) |
Depreciation and amortization |
(0.13) |
(0.13) |
(h) |
- |
- |
|
(0.13) |
(0.13) |
Other income (deductions) |
0.18 |
0.18 |
(i) |
(1.17) |
0.01 |
(j) |
(0.99) |
0.19 |
Interest expense |
(0.07) |
(0.07) |
(k) |
(0.07) |
(0.07) |
(l) |
(0.14) |
(0.14) |
Income taxes – other |
0.03 |
0.03 |
|
(0.01) |
(0.01) |
|
0.02 |
0.02 |
Preferred dividend requirements and noncontrolling interests |
- |
- |
|
- |
- |
|
- |
- |
Share effect |
(0.02) |
(0.03) |
|
0.02 |
0.01 |
|
- |
(0.02) |
2024 earnings (loss) |
2.06 |
2.58 |
|
(1.83) |
(0.66) |
|
0.23 |
1.92 |
|
|
|
|
|
|
|
|
|
Calculations may differ due to rounding |
Appendix B-2: As-reported and adjusted earnings per share variance analysis (c), (d), (e) |
||||||||
Year-to-date 2024 vs. 2023 |
||||||||
(After-tax, per share in $) |
||||||||
|
Utility |
|
Parent & Other |
|
Consolidated |
|||
|
As- reported |
Adjusted |
|
As- reported |
Adjusted |
|
As- reported |
Adjusted |
2023 earnings (loss) |
4.30 |
3.97 |
|
(0.99) |
(0.99) |
|
3.31 |
2.99 |
Operating revenue less: |
(0.16) |
0.42 |
(f) |
(0.03) |
(0.03) |
|
(0.19) |
0.39 |
Nuclear refueling outage expenses |
(0.02) |
(0.02) |
|
- |
- |
|
(0.02) |
(0.02) |
Other O&M |
(0.36) |
(0.36) |
(g) |
0.02 |
0.02 |
|
(0.34) |
(0.34) |
Asset write-offs, impairments, and related charges |
(0.46) |
- |
(m) |
- |
- |
|
(0.46) |
- |
Decommissioning |
(0.02) |
(0.02) |
|
- |
- |
|
(0.02) |
(0.02) |
Taxes other than income taxes |
(0.04) |
(0.04) |
|
- |
- |
|
(0.04) |
(0.04) |
Depreciation and amortization |
(0.29) |
(0.29) |
(h) |
- |
- |
|
(0.29) |
(0.29) |
Other income (deductions) |
0.71 |
0.64 |
(i) |
(1.29) |
(0.11) |
(j) |
(0.58) |
0.53 |
Interest expense |
(0.11) |
(0.11) |
(k) |
(0.11) |
(0.11) |
(l) |
(0.22) |
(0.22) |
Income taxes – other |
(0.55) |
0.05 |
(n) |
(0.02) |
(0.02) |
|
(0.57) |
0.04 |
Preferred dividend requirements and noncontrolling interests |
- |
- |
|
- |
- |
|
- |
- |
Share effect |
(0.03) |
(0.04) |
|
0.02 |
0.01 |
|
(0.01) |
(0.03) |
2024 earnings (loss) |
2.97 |
4.22 |
|
(2.39) |
(1.22) |
|
0.58 |
2.99 |
|
|
|
|
|
|
|
|
|
Calculations may differ due to rounding |
|
(c) |
Utility operatingrevenue and Utility income taxes – other excluded the following for the amortization of unprotected excess ADIT affecting customers' bills (net effect is neutral to earnings) ($ in millions): |
|
2Q24 |
2Q23 |
YTD24 |
YTD23 |
Utility operating revenue |
8 |
5 |
16 |
3 |
Utility income taxes – other |
(8) |
(5) |
(16) |
(3) |
(d) |
Utility regulatory charges (credits) – net and Utility preferred dividend requirements and noncontrolling interests excluded the following for the effects of HLBV accounting and the approved deferral (net effect is neutral to earnings) ($ millions): |
|
2Q24 |
2Q23 |
YTD24 |
YTD23 |
Utility regulatory charges (credits) – net |
(2) |
(5) |
(5) |
(8) |
Utility preferred dividend requirements and noncontrolling interests |
2 |
5 |
5 |
8 |
(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 income tax effect of individual line items. Share effect captures the per share impact from the change in diluted average number of common shares outstanding. |
Utility as-reported operating revenue less fuel, fuel-related expenses and gas purchased for resale; purchased power; and other regulatory charges (credits) – net variance analysis 2024 vs. 2023 ($ EPS) |
||
|
2Q |
YTD |
Electric volume / weather |
0.28 |
0.35 |
Retail electric price |
0.23 |
0.49 |
2Q24 E-LA global agreement to resolve its FRP extension filing and other retail matters |
(0.52) |
(0.52) |
2Q24 E-MS 2024 FRP rate implementation |
0.03 |
0.03 |
1Q24 E-NO provision for increased income tax sharing |
- |
(0.27) |
1Q23 impacts from E-LA storm cost approval and securitization, including customer sharing |
- |
0.22 |
E-LA wholesale contract termination |
(0.04) |
(0.06) |
Reg. provisions for decommissioning items |
(0.10) |
(0.41) |
Other, including Grand Gulf recovery |
(0.04) |
0.01 |
Total |
(0.16) |
(0.16) |
(f) |
The second quarter and year-to-date as-reported decreases included the effects of recording a |
(g) |
The second quarter and year-to-date earnings decreases from higher Utility other O&M were driven by an increase in contract costs related to operational performance, customer service, and organizational health initiatives; higher energy efficiency costs primarily due to the timing of recovery from customers; a second quarter 2023 gain on the partial sale of a service center as part of an eminent domain proceeding; and higher MISO transmission costs. The year-to-date decrease also reflected higher compensation and benefits costs due primarily to higher healthcare claims activity; the recognition of an E-AR DOE judgment in first quarter 2023; and higher nuclear generation expenses, primarily due to a higher scope of work performed in 2024 as compared to 2023, including during plant outages. |
(h) |
The second quarter and year-to-date earnings decreases from higher Utility depreciation and amortization were primarily due to higher plant in service, the recognition of depreciation from E-TX's 2022 base rate case relate back, and an increase in depreciation rates for E-TX effective |
(i) |
The second quarter and year-to-date earnings increases from higher Utility other income (deductions) were largely due to changes in nuclear decommissioning trust returns, including portfolio rebalancing in 2024 (based on regulatory treatment, decommissioning-related variances are offset in other line items and are largely earnings neutral). Lower non-service pension costs also contributed to the increase. The year-to-date increase also reflected higher intercompany dividend income from affiliate preferred membership interests related to 2023 storm cost securitizations (largely offset in P&O), and a |
(j) |
The second quarter and year-to-date as-reported earnings decreases from Parent & Other other income (deductions) were due to a |
(k) |
The second quarter and year-to-date earnings decreases from higher Utility interest expense were primarily due to higher interest rates as well as higher debt balances. |
(l) |
The second quarter and year-to-date earnings decreases from higher Parent & Other interest expense were primarily due to higher commercial paper balances and the issuance of |
(m) |
The year-to-date as-reported earnings decrease from higher Utility asset write-offs, impairments, and related charges was due to the first quarter 2024 write-off of an E-AR regulatory asset totaling |
(n) |
The year-to-date as-reported earnings decrease from Utility income taxes – other was largely due to a |
C: Utility operating and financial measures
Appendix C provides a comparison of Utility operating and financial measures.
Appendix C: Utility operating and financial measures |
||||||||
Second quarter and year-to-date 2024 vs. 2023 |
||||||||
|
Second quarter |
Year-to-date |
||||||
|
2024 |
2023 |
% Change |
% Weather |
2024 |
2023 |
% Change |
% Weather |
GWh sold |
|
|
|
|
|
|
|
|
Residential |
9,557 |
9,027 |
5.9 |
0.3 |
17,315 |
16,303 |
6.2 |
0.8 |
Commercial |
7,236 |
6,969 |
3.8 |
2.0 |
13,460 |
13,217 |
1.8 |
0.4 |
Governmental |
626 |
608 |
3.0 |
1.9 |
1,198 |
1,185 |
1.1 |
1.3 |
Industrial |
13,973 |
13,301 |
5.1 |
5.1 |
26,633 |
26,041 |
2.3 |
2.3 |
Total retail sales |
31,392 |
29,905 |
5.0 |
2.9 |
58,606 |
56,746 |
3.3 |
1.4 |
Wholesale |
3,052 |
3,171 |
(3.8) |
|
7,010 |
7,674 |
(8.7) |
|
Total sales |
34,444 |
33,076 |
4.1 |
|
65,616 |
64,420 |
1.9 |
|
|
|
|
|
|
|
|
|
|
Number of electric retail customers |
|
|
|
|
|
|
|
|
Residential |
|
|
|
|
2,592,846 |
2,571,543 |
0.8 |
|
Commercial |
|
|
|
|
370,219 |
368,731 |
0.4 |
|
Governmental |
|
|
|
|
18,042 |
18,146 |
(0.6) |
|
Industrial |
|
|
|
|
42,294 |
43,359 |
(2.5) |
|
Total retail customers |
|
|
|
|
3,023,401 |
3,001,779 |
0.7 |
|
|
|
|
|
|
|
|
|
|
Other O&M and nuclear refueling outage exp. per MWh |
20.99 |
20.53 |
2.2 |
|
|
|
6.0 |
|
|
|
|
|
|
|
|
|
|
Calculations may differ due to rounding |
|
(o) |
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. |
For the quarter, on a weather-adjusted basis, retail sales increased 2.9 percent, with increases across all customer classes. Industrial sales was the biggest contributor with 5.1 percent growth mainly due to higher sales to large industrial customers primarily in the petroleum refining industry.
D: Consolidated financial measures
Appendix D 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 D: GAAP and non-GAAP financial measures |
|||
Second quarter 2024 vs. 2023 (See Appendix F for reconciliation of GAAP to non-GAAP financial measures) |
|||
|
|
||
For 12 months ending |
2024 |
2023 |
Change |
GAAP measure |
|
|
|
As-reported ROE |
12.8 % |
11.0 % |
1.8 % |
|
|
|
|
Non-GAAP financial measure |
|
|
|
Adjusted ROE |
10.4 % |
10.6 % |
(0.2) % |
|
|
|
|
As of |
2024 |
2023 |
Change |
GAAP measures |
|
|
|
Cash and cash equivalents |
1,355 |
1,194 |
161 |
Available revolver capacity |
4,345 |
4,216 |
129 |
Commercial paper |
932 |
1,108 |
(176) |
Total debt |
28,846 |
27,362 |
1,484 |
Junior subordinated debentures |
1,200 |
- |
1,200 |
Securitization debt |
249 |
278 |
(29) |
Debt to capital |
66 % |
67 % |
(1) % |
Storm escrows |
333 |
411 |
(78) |
|
|
|
|
Non-GAAP financial measures ($ in millions, except where noted) |
|
|
|
Adjusted debt to adjusted capitalization |
64 % |
67 % |
(2) % |
Adjusted net debt to adjusted net capitalization |
63 % |
66 % |
(2) % |
Gross liquidity |
5,700 |
5,410 |
290 |
Net liquidity |
5,915 |
4,761 |
1,154 |
Adjusted parent debt to total adjusted debt |
20 % |
19 % |
0 % |
FFO to adjusted debt |
13.8 % |
11.7 % |
2.1 % |
|
|
|
|
Calculations may differ due to rounding |
E: Definitions and abbreviations and acronyms
Appendix E-1 provides definitions of certain operating measures, as well as GAAP and non-GAAP financial measures.
Appendix E-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 |
Financial measures – GAAP |
|
As-reported ROE |
Last twelve months net income attributable to |
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 |
Financial measures – non-GAAP |
|
Adjusted capitalization |
Capitalization excluding securitization debt |
Adjusted debt |
Debt excluding securitization debt and 50% of junior subordinated debentures |
Adjusted debt to adjusted |
Adjusted debt divided by adjusted capitalization |
Adjusted EPS |
As-reported earnings minus adjustments, divided by the diluted average number of common shares outstanding |
Adjusted net capitalization |
Adjusted capitalization minus cash and cash equivalents |
Adjusted net debt |
Adjusted debt minus cash and cash equivalents |
Adjusted net debt to adjusted |
Adjusted net debt, divided by adjusted net capitalization |
Adjusted Parent debt |
|
Adjusted Parent debt to total |
Adjusted Parent debt divided by total adjusted debt |
Adjusted ROE |
Last twelve months adjusted earnings divided by average common equity |
Adjusted ROE excluding |
Last twelve months adjusted earnings, excluding dividend income from affiliate preferred as well as the after-tax cost of debt financing for preferred investment, divided by average common equity adjusted to exclude the estimated equity associated with the affiliate preferred investment |
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 significant tax items, and other items such as certain costs, expenses, or other specified items |
FFO |
OCF minus AFUDC-borrowed funds, working capital items in OCF (receivables, fuel inventory, accounts payable, taxes accrued, interest accrued, deferred fuel costs, and other working capital accounts), 50% of interest on junior subordinated debentures, and securitization regulatory charges |
FFO to adjusted debt |
Last twelve months FFO divided by end of period adjusted debt |
Gross liquidity |
Sum of cash and available revolver capacity |
Net liquidity |
Sum of cash, available revolver capacity, escrow accounts available for certain storm expenses, and equity sold forward but not yet settled minus commercial paper borrowing |
Appendix E-2 explains abbreviations and acronyms used in the quarterly earnings materials.
Appendix E-2: Abbreviations and acronyms |
|||
A&G ADIT
AFUDC – AMS ANO APSC ATM bbl Bcf/d bps CAGR CCCT CCGT CCN CCNO CCS CFO COD
CWIP DCRF
DRM E-AR E-LA E-MS E-NO E-TX EEI EPS ESG ETR
FFO FRP GAAP
GRIP GCRR
Grand Gulf or |
Administrative and general expenses Accumulated deferred income taxes
Allowance for borrowed funds used during Advanced metering system Arkansas Nuclear One (nuclear)
At the market equity issuance program Barrels Billion cubic feet per day Basis points Compound annual growth rate Combined cycle combustion turbine Combined cycle gas turbine Certificate for convenience and necessity
Cash from operations Commercial operation date Combustion turbine Construction work in process Distribution cost recovery factor
Distribution Recovery Mechanism (rider within
Earnings per share Environmental, social, and governance
Funds from operations Formula rate plan
Grid Resilience and Innovation Partnerships Generation Cost Recovery Rider
Unit 1 of |
HLBV
IPEC
LDC LNG LPSC LTM LURC MISO MMBtu Moody's MPSC MTEP NBP NDT NGL NYSE O&M OCF OpCo OPEB
Other O&M P&O PMR
PPA PUCT RFP ROE RSP S&P
SERI TCJA TCRF TRAM
TRM UPSA WACC WTI |
Hypothetical liquidation at book value
Indian Point Energy Center (nuclear)
Local distribution company Liquified natural gas
Last twelve months
Million British thermal units Moody's Investor Service
MISO Transmission Expansion Plan
Nuclear decommissioning trust Natural gas liquid
Operations and maintenance Net cash flow provided by operating activities Utility operating company Other post-employment benefits
Other non-fuel operation and maintenance Parent & Other Performance Management Rider
Power purchase agreement or purchased power
Request for proposals Return on equity
Rate Stabilization Plan (
Tax Cuts and Jobs Act of 2017 Transmission cost recovery factor Tax reform adjustment mechanism
Transmission Recovery Mechanism (rider within Unit Power Sales Agreement Weighted-average cost of capital West Texas Intermediate |
F: Other GAAP to non-GAAP reconciliations
Appendix F-1, Appendix F-2, and Appendix F-3 provide reconciliations of various non-GAAP financial measures disclosed in this news release to their most comparable GAAP measure.
Appendix F-1: Reconciliation of GAAP to non-GAAP financial measures – ROE |
|||
(LTM $ in millions except where noted) |
|
Second quarter |
|
|
|
2024 |
2023 |
As-reported net income attributable to |
(A) |
1,779 |
1,369 |
Adjustments |
(B) |
333 |
49 |
|
|
|
|
Adjusted earnings (non-GAAP) |
(C)=(A-B) |
1,446 |
1,320 |
|
|
|
|
Average common equity (average of beginning and ending balances) |
(D) |
13,902 |
12,474 |
|
|
|
|
As-reported ROE |
(A/D) |
12.8 % |
11.0 % |
Adjusted ROE (non-GAAP) |
(C/D) |
10.4 % |
10.6 % |
|
|
|
|
Calculations may differ due to rounding |
Appendix F-2: Reconciliation of GAAP to non-GAAP financial measures – FFO to adjusted debt |
|||
($ in millions except where noted) |
|
Second quarter |
|
|
|
2024 |
2023 |
Total debt |
(A) |
28,846 |
27,362 |
Securitization debt |
(B) |
249 |
278 |
50% junior subordinated debentures |
(C) |
600 |
- |
Adjusted debt (non-GAAP) |
(D)=(A-B-C) |
27,997 |
27,084 |
|
|
|
|
Net cash flow provided by operating activities, LTM |
(E)
|
4,015 |
3,595 |
|
|
|
|
AFUDC – borrowed funds, LTM |
(F) |
(42) |
(37) |
|
|
|
|
50% of the interest expense associated with junior subordinated debentures, LTM |
(G) |
(5) |
- |
|
|
|
|
Working capital items in net cash flow provided by operating activities, LTM: |
|
|
|
Receivables |
|
(151) |
132 |
Fuel inventory |
|
17 |
(53) |
Accounts payable |
|
(17) |
(413) |
Taxes accrued |
|
52 |
(20) |
Interest accrued |
|
36 |
23 |
Deferred fuel costs |
|
331 |
837 |
Other working capital accounts |
|
(182) |
(169) |
Securitization regulatory charges, LTM |
|
30 |
40 |
Total |
(H) |
115 |
377 |
|
|
|
|
FFO, LTM (non-GAAP) |
(I)=(E+F-G-H) |
3,862 |
3,182 |
|
|
|
|
FFO to adjusted debt (non-GAAP) |
(I/D) |
13.8 % |
11.7 % |
|
|
|
|
|
|
|
|
Calculations may differ due to rounding |
Appendix F-3: Reconciliation of GAAP to non-GAAP financial measures – adjusted debt ratios; gross liquidity; and net liquidity |
|||
($ in millions except where noted) |
|
Second quarter |
|
|
|
2024 |
2023 |
Total debt |
(A) |
28,846 |
27,362 |
Securitization debt |
(B) |
249 |
278 |
50% junior subordinated debentures |
(C) |
600 |
- |
Adjusted debt (non-GAAP) |
(D)=(A-B-C) |
27,997 |
27,084 |
Cash and cash equivalents |
(E) |
1,355 |
1,194 |
Adjusted net debt (non-GAAP) |
(F)=(D-E) |
26,642 |
25,889 |
|
|
|
|
Commercial paper |
(G) |
932 |
1,108 |
|
|
|
|
Total capitalization |
(H) |
43,747 |
40,949 |
Securitization debt |
(B) |
249 |
278 |
Adjusted capitalization (non-GAAP) |
(I)=(H-B) |
43,498 |
40,671 |
Cash and cash equivalents |
(E) |
1,355 |
1,194 |
Adjusted net capitalization (non-GAAP) |
(J)=(I-E) |
42,143 |
39,477 |
|
|
|
|
Total debt to total capitalization |
(A/H) |
66 % |
67 % |
Adjusted debt to adjusted capitalization (non-GAAP) |
(D/I) |
64 % |
67 % |
Adjusted net debt to adjusted net capitalization (non-GAAP) |
(F/J) |
63 % |
66 % |
|
|
|
|
Available revolver capacity |
(K) |
4,345 |
4,216 |
|
|
|
|
Storm escrows |
(L) |
333 |
411 |
Equity sold forward, not yet settled (p) |
(M) |
815 |
48 |
|
|
|
|
Gross liquidity (non-GAAP) |
(N)=(E+K) |
5,700 |
5,410 |
Net liquidity (non-GAAP) |
(N-G+L+M) |
5,915 |
4,761 |
|
|
|
|
|
|
|
|
Due |
|
800 |
800 |
Due |
|
750 |
750 |
Due |
|
650 |
650 |
Due |
|
600 |
600 |
Due |
|
650 |
650 |
Due |
|
600 |
600 |
Junior subordinated debentures due |
|
1,200 |
- |
Total Parent long-term debt |
(O) |
5,250 |
4,050 |
Revolver draw |
(P) |
- |
150 |
Unamortized debt issuance costs and discounts |
(Q) |
(48) |
(40) |
Total parent debt |
(R)=(G+O+P+Q) |
6,134 |
5,268 |
|
|
|
|
Adjusted Parent debt (non-GAAP) |
(S)=(R-C) |
5,534 |
5,268 |
|
|
|
|
Adjusted parent debt to total adjusted debt (non-GAAP) |
(S/D) |
20 % |
19 % |
|
|
|
|
Calculations may differ due to rounding |
|
(p) |
Reflects adjustments, including for common dividends between issuance and settlement. |
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