Results in top half of guidance range for
8th consecutive year
NEW
ORLEANS, Feb. 22, 2024 /PRNewswire/ -- Entergy
Corporation (NYSE: ETR) reported fourth quarter 2023 earnings per
share of $4.64 on an as-reported
basis and 52 cents on an adjusted
(non-GAAP) basis. For the full year, the company reported 2023
earnings per share of $11.10 on an
as-reported basis and $6.77 on an
adjusted basis.
"2023 was a year of successful execution to support our
customers," said Drew Marsh, Entergy
Chair and Chief Executive Officer. "We delivered meaningful
outcomes that included our best forced outage rates in a decade, a
system that withstood record summer demand, as well as timely
delivery of new service and clean energy options to support our
rapidly growing customer base."
Business highlights included the following:
- Mississippi approved
legislation to bring Amazon Web Services' $10 billion data center complexes to the
state.
- The LPSC approved two solar facilities that will add
approximately 225 megawatts of renewable capacity for E-LA.
- The APSC approved E-AR's annual FRP.
- The CCNO issued its order on E-NO's Hurricane Ida restoration
costs, determining that all costs were prudent.
- Entergy was named to a Dow Jones Sustainability Index for the
22nd consecutive year.
- Newsweek named Entergy as one of America's most responsible
companies.
Consolidated earnings
(GAAP and non-GAAP measures)
|
Fourth quarter and full
year 2023 vs. 2022 (See Appendix A for
reconciliation of GAAP to non-GAAP measures and description
of adjustments)
|
|
Fourth
quarter
|
Full year
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
(After-tax, $ in
millions)
|
|
|
|
|
|
|
As-reported
earnings
|
988
|
106
|
881
|
2,357
|
1,103
|
1,253
|
Less
adjustments
|
877
|
(1)
|
877
|
919
|
(217)
|
1,136
|
Adjusted earnings
(non-GAAP)
|
111
|
107
|
4
|
1,438
|
1,320
|
118
|
Estimated
weather impact
|
(12)
|
(1)
|
(12)
|
91
|
86
|
5
|
|
|
|
|
|
|
|
(After-tax, per share
in $)
|
|
|
|
|
|
|
As-reported
earnings
|
4.64
|
0.51
|
4.13
|
11.10
|
5.37
|
5.73
|
Less
adjustments
|
4.12
|
-
|
4.12
|
4.33
|
(1.05)
|
5.38
|
Adjusted earnings
(non-GAAP)
|
0.52
|
0.51
|
0.01
|
6.77
|
6.42
|
0.35
|
Estimated
weather impact
|
(0.06)
|
-
|
(0.05)
|
0.43
|
0.42
|
0.01
|
|
|
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
Consolidated results
For fourth quarter 2023, the company reported earnings of
$988 million, or $4.64 per share, on an as-reported basis, and
earnings of $111 million, or
52 cents per share, on an adjusted
basis. This compared to fourth quarter 2022 earnings of
$106 million, or 51 cents per share, on an as-reported basis, and
earnings of $107 million, or
51 cents per share, on an adjusted
basis.
For full year 2023, the company reported earnings of
$2,357 million, or $11.10 per share, on an as-reported basis, and
earnings of $1,438 million, or
$6.77 per share, on an adjusted
basis. This compared to 2022 earnings of $1,103 million, or $5.37 per share, on an as-reported basis, and
earnings of $1,320 million, or
$6.42 per share, on an adjusted
basis.
Summary discussions for the full year results 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 segment results
Utility
For full year 2023, the Utility business reported earnings
attributable to Entergy Corporation of $2,507 million, or $11.81 per share, on an as-reported basis,
and earnings of $1,896 million, or
$8.93 per share, on an adjusted
basis. This compared to full year 2022 earnings of $1,407 million, or $6.84 per share, on an as-reported basis,
and earnings of $1,686 million, or
$8.20 per share, on an adjusted
basis. Several drivers contributed to the year-over-year
change.
In fourth quarter 2023, as a result of the 2016–2018 IRS audit
resolution, the company recorded a $568
million income tax benefit as well as a $(98 million) ($(72
million) after tax) regulatory provision to share the
benefits with customers (considered an adjustment and excluded from
adjusted earnings).
Also in fourth quarter 2023, the company recorded the reversal
of a $106 million regulatory
liability associated with Hurricane Isaac securitization, initially
recorded in 2017 as a result of the Tax Cuts and Jobs Act
(considered an adjustment and excluded from adjusted earnings).
In third quarter 2023 as a result of E-AR's offer to forgo its
opportunity to seek recovery of costs resulting from the
March 2013 ANO stator incident, E-AR
recorded a write-off of replacement power costs and undepreciated
property, plant, and equipment totaling $(78
million) ($(59 million) after
tax) (considered an adjustment and excluded from adjusted
earnings).
In first quarter 2023, as a result of E-LA receiving
securitization proceeds for storm cost recovery, the company
recorded the following (considered adjustments and excluded from
adjusted earnings):
- a $129 million reduction in
income tax expense,
- $31 million of carrying costs on
storm expenditures not previously recorded,
- a $(15 million) reduction in
other income to account for LURC's 1 percent beneficial interest in
a trust established as part of the securitization, and
- a $(103 million) ($(76 million) after tax) reserve to share the
benefits from securitization with customers.
In second quarter 2022, results included a regulatory charge of
$(551 million) ($(413 million) after tax) that SERI recorded to
increase a regulatory liability to reflect the effects of a partial
settlement agreement and offer of settlement related to pending
proceedings before the FERC (considered an adjustment and excluded
from adjusted earnings).
Also in second quarter 2022, as a result of receiving approvals
for storm cost recovery and issuance of securitized debt at E-LA
and E-TX, the companies recorded the following:
- $59 million ($54 million after tax) carrying costs on storm
expenditures not previously recorded (the equity portion of
carrying costs related to prior years was considered an adjustment
and excluded from adjusted earnings),
- a $(32 million) reduction in
other income to account for LURC's 1 percent beneficial interest in
a trust established as part of E-LA's securitization (considered an
adjustment and excluded from adjusted earnings),
- a $283 million reduction in
income tax expense (considered an adjustment and excluded from
adjusted earnings), and
- $(224 million) ($(165 million) after tax) reserve to share the
benefits from securitization with customers (considered an
adjustment and excluded from adjusted earnings).
Other drivers for the year included:
- the net effect of regulatory actions across the operating
companies,
- higher other income (deductions) primarily from affiliate
preferred investments (offset at P&O and largely earnings
neutral at the consolidated level) and higher allowance for equity
funds used during construction, and
- lower other O&M.
The drivers were partially offset by:
- higher operating expenses including depreciation expense, taxes
other than income taxes, nuclear refueling outage expense, and
decommissioning expense;
- various regulatory charges (credits); and
- higher interest expense.
On a per share basis, 2023 results reflected higher diluted
average number of common shares outstanding.
Appendix C contains additional details on Utility operating and
financial measures.
Parent & Other
For full year 2023, Parent & Other reported a loss attributable
to Entergy Corporation of $(151
million), or (71) cents per
share, on an as-reported basis, and a loss of $(458 million) or $(2.16) per share on an adjusted basis. This
compared to a full year 2022 loss of $(303
million), or $(1.48) per
share, on an as-reported basis, and a loss of $(366 million), or $(1.78) per share on an adjusted basis.
In 2022, the wind down of EWC was completed and that business is
no longer a reportable segment. Starting in 2023, the remaining
activity from EWC is included in Parent & Other. For
comparability, EWC 2022 results are also included in Parent &
Other. For the full year 2022, EWC reported earnings of
$63 million, or 31 cents per share, on an as-reported basis,
which included revenue and operating expenses from Palisades until
the plant was shut down in May 2022,
and decommissioning expense and earnings on the decommissioning
trust until the plant was sold in June
2022. EWC's 2022 results also included a gain of
$166 million ($130 million after tax) that resulted from the
sale of Palisades and an accrual for an uncertain tax position that
resulted from a state tax audit.
Other drivers for the full year Parent & Other variance
included:
- a reduction in income tax expense in fourth quarter 2023 as a
result of the 2016–2018 IRS audit resolution (considered an
adjustment and excluded from adjusted earnings);
- the effects of the third quarter 2023 DOE spent fuel litigation
settlement on asset write-offs and impairments (considered an
adjustment and excluded from adjusted earnings);
- lower other income (deductions) due primarily to higher
dividends associated with affiliate preferred investments (offset
at Utility and largely earnings neutral at the consolidated level),
partially offset by the timing of charitable contributions and
higher non-service pension income;
- higher interest expense due primarily to higher short-term
borrowing rates; and
- higher other O&M for non-nuclear generation assets
(previously included in EWC segment, partially offset by revenue
from those assets).
On a per share basis, 2023 results reflected higher diluted
average number of common shares outstanding.
Earnings per share
guidance
Entergy initiated its 2024 adjusted EPS guidance range of
$7.05 to $7.35. See webcast presentation for additional
details.
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 10:00
a.m. Central Time on Thursday, February 22, 2024, 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
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 www.entergy.com and by telephone. The telephone replay will
be available through February 29,
2024, by dialing 800-770-2030, conference ID 9024832.
Entergy is a Fortune 500 company that powers life for 3 million
customers through our operating companies in Arkansas, Louisiana, Mississippi, and Texas. We're investing in the reliability and
resilience of the energy system while helping our region transition
to cleaner, more efficient energy solutions. With roots in our
communities for more than 100 years, Entergy is a nationally
recognized leader in sustainability and corporate citizenship.
Since 2018, we have delivered more than $100
million in economic benefits each year to local communities
through philanthropy, volunteerism, and advocacy. Entergy is
headquartered in New Orleans,
Louisiana, and has approximately 12,000 employees.
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/investors.
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 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 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; and FFO to debt, excluding securitization
debt, 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" 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, 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 2024 earnings guidance; current financial and
operational outlooks; industrial load growth outlooks; statements
regarding its climate transition and resilience plans, goals,
beliefs, or expectations; 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 (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.
###
Fourth quarter 2023 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
Fourth quarter and full
year 2023 vs. 2022 (See Appendix A-2
and Appendix A-3 for details on adjustments)
|
|
Fourth
quarter
|
Full year
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
(After-tax, $ in
millions)
|
|
|
|
|
|
|
As-reported earnings
(loss)
|
|
|
|
|
|
|
Utility
|
844
|
241
|
603
|
2,507
|
1,407
|
1,101
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
-
|
(12)
|
12
|
-
|
63
|
(63)
|
All other
|
144
|
(122)
|
266
|
(151)
|
(366)
|
215
|
Total Parent &
Other
|
144
|
(135)
|
278
|
(151)
|
(303)
|
153
|
Consolidated
|
988
|
106
|
881
|
2,357
|
1,103
|
1,253
|
|
|
|
|
|
|
|
Less
adjustments
|
|
|
|
|
|
|
Utility
|
602
|
12
|
590
|
611
|
(280)
|
891
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
-
|
(12)
|
12
|
-
|
63
|
(63)
|
All other
|
275
|
-
|
275
|
307
|
-
|
307
|
Total Parent &
Other
|
275
|
(12)
|
287
|
307
|
63
|
245
|
Consolidated
|
877
|
(1)
|
877
|
919
|
(217)
|
1,136
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) (non-GAAP)
|
|
|
|
|
|
|
Utility
|
242
|
229
|
13
|
1,896
|
1,686
|
209
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
-
|
-
|
-
|
-
|
-
|
-
|
All other
|
(132)
|
(122)
|
(9)
|
(458)
|
(366)
|
(92)
|
Total Parent &
Other
|
(132)
|
(122)
|
(9)
|
(458)
|
(366)
|
(92)
|
Consolidated
|
111
|
107
|
4
|
1,438
|
1,320
|
118
|
Estimated weather
impact
|
(12)
|
(1)
|
(12)
|
91
|
86
|
5
|
|
|
|
|
|
|
|
Diluted average number
of common shares outstanding (in millions)
|
213
|
209
|
4
|
212
|
206
|
7
|
|
|
|
|
|
|
|
(After-tax, per share
in $) (a)
|
|
|
|
|
|
|
As-reported earnings
(loss)
|
|
|
|
|
|
|
Utility
|
3.96
|
1.15
|
2.81
|
11.81
|
6.84
|
4.96
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
-
|
(0.06)
|
0.06
|
-
|
0.31
|
(0.31)
|
All other
|
0.67
|
(0.58)
|
1.26
|
(0.71)
|
(1.78)
|
1.07
|
Total Parent &
Other
|
0.67
|
(0.64)
|
1.32
|
(0.71)
|
(1.48)
|
0.77
|
Consolidated
|
4.64
|
0.51
|
4.13
|
11.10
|
5.37
|
5.73
|
|
|
|
|
|
|
|
Less
adjustments
|
|
|
|
|
|
|
Utility
|
2.82
|
0.06
|
2.77
|
2.88
|
(1.36)
|
4.24
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
-
|
(0.06)
|
0.06
|
-
|
0.31
|
(0.31)
|
All other
|
1.29
|
-
|
1.29
|
1.45
|
-
|
1.45
|
Total Parent &
Other
|
1.29
|
(0.06)
|
1.35
|
1.45
|
0.31
|
1.14
|
Consolidated
|
4.12
|
-
|
4.12
|
4.33
|
(1.05)
|
5.38
|
|
|
|
|
|
|
|
Adjusted earnings
(loss) (non-GAAP)
|
|
|
|
|
|
|
Utility
|
1.14
|
1.09
|
0.05
|
8.93
|
8.20
|
0.72
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
-
|
-
|
-
|
-
|
-
|
-
|
All other
|
(0.62)
|
(0.58)
|
(0.04)
|
(2.16)
|
(1.78)
|
(0.38)
|
Total Parent &
Other
|
(0.62)
|
(0.58)
|
(0.04)
|
(2.16)
|
(1.78)
|
(0.38)
|
Consolidated
|
0.52
|
0.51
|
0.01
|
6.77
|
6.42
|
0.35
|
Estimated weather
impact
|
(0.06)
|
-
|
(0.05)
|
0.43
|
0.42
|
0.01
|
|
|
|
|
|
|
|
|
|
|
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)
|
Fourth quarter and full
year 2023 vs. 2022
|
|
Fourth
quarter
|
Full year
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
(Pre-tax except for
income taxes and totals; $ in millions)
|
|
|
|
|
|
|
Utility
|
|
|
|
|
|
|
Customer sharing of
tax benefits as a result of the 2016–2018 IRS
audit resolution
|
(98)
|
-
|
(98)
|
(98)
|
-
|
(98)
|
E-AR write-off of
assets related to the ANO stator incident
|
-
|
-
|
-
|
(78)
|
-
|
(78)
|
Impacts from storm
cost approvals and securitizations, including
customer sharing (excluding income tax items
below)
|
-
|
-
|
-
|
(87)
|
(215)
|
128
|
SERI regulatory charge
resulting from partial settlement and offer of
settlement for pending litigation
|
-
|
-
|
-
|
-
|
(551)
|
551
|
Impacts from FERC's
December 2022 SERI order on the
sale-leaseback complaint
|
-
|
20
|
(20)
|
-
|
20
|
(20)
|
Income tax effect on
Utility adjustments above
|
26
|
(8)
|
35
|
73
|
183
|
(110)
|
2016–2018 IRS audit
resolution
|
568
|
-
|
568
|
568
|
-
|
568
|
E-LA reversal of
regulatory liability associated with Hurricane Isaac
securitization, initially recorded in 2017 as a
result of the TCJA
|
106
|
-
|
106
|
106
|
-
|
106
|
E-LA income tax
benefit resulting from securitization
|
-
|
-
|
-
|
129
|
283
|
(154)
|
Total
Utility
|
602
|
12
|
590
|
611
|
(280)
|
891
|
|
|
|
|
|
|
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
|
|
|
|
|
|
Income before income
taxes
|
-
|
(4)
|
4
|
-
|
119
|
(119)
|
Income
taxes
|
-
|
(8)
|
8
|
-
|
(54)
|
54
|
Preferred dividend
requirement
|
-
|
(1)
|
1
|
-
|
(2)
|
2
|
Total 2022
EWC
|
-
|
(12)
|
12
|
-
|
63
|
(63)
|
All Other
|
|
|
|
|
|
|
2016–2018 IRS audit
resolution
|
275
|
-
|
275
|
275
|
-
|
275
|
DOE spent nuclear fuel
litigation settlement (IPEC)
|
-
|
-
|
-
|
40
|
-
|
40
|
Income tax effect on
adjustments above
|
-
|
-
|
-
|
(9)
|
-
|
(9)
|
Total Parent &
Other
|
275
|
(12)
|
288
|
307
|
63
|
245
|
|
|
|
|
|
|
|
Total
adjustments
|
877
|
(1)
|
877
|
919
|
(217)
|
1,136
|
|
|
|
|
|
|
|
(After-tax, per share
in $) (b)
|
|
|
|
|
|
|
Utility
|
|
|
|
|
|
|
Customer sharing of
tax benefits as a result of the 2016–2018 IRS
audit resolution
|
(0.34)
|
-
|
(0.34)
|
(0.34)
|
-
|
(0.34)
|
E-AR write-off of
assets related to the ANO stator incident
|
-
|
-
|
-
|
(0.28)
|
-
|
(0.28)
|
Impacts from storm
cost approvals and securitizations, including
customer sharing (excluding income tax items
below)
|
-
|
-
|
-
|
(0.29)
|
(0.79)
|
0.51
|
SERI regulatory charge
resulting from partial settlement and offer of
settlement for pending litigation
|
-
|
-
|
-
|
-
|
(2.01)
|
2.01
|
Impacts from FERC's
December 2022 SERI order on the
sale-leaseback complaint
|
-
|
0.06
|
(0.06)
|
-
|
0.06
|
(0.06)
|
2016–2018 IRS audit
resolution
|
2.67
|
-
|
2.67
|
2.67
|
-
|
2.67
|
E-LA reversal of
regulatory liability associated with Hurricane Isaac
securitization, initially recorded in 2017 as a
result of the TCJA
|
0.50
|
-
|
0.50
|
0.50
|
-
|
0.50
|
E-LA income tax
benefit resulting from securitization
|
-
|
-
|
-
|
0.61
|
1.38
|
(0.77)
|
Total
Utility
|
2.82
|
0.06
|
2.77
|
2.88
|
(1.36)
|
4.24
|
|
|
|
|
|
|
|
Parent &
Other
|
|
|
|
|
|
|
Total 2022
EWC
|
-
|
(0.06)
|
0.06
|
-
|
0.31
|
(0.31)
|
2016–2018 IRS audit
resolution
|
1.29
|
-
|
1.29
|
1.30
|
-
|
1.30
|
DOE spent nuclear fuel
litigation settlement (IPEC)
|
-
|
-
|
-
|
0.15
|
-
|
0.15
|
Total Parent &
Other
|
1.29
|
(0.06)
|
1.35
|
1.45
|
0.31
|
1.14
|
|
|
|
|
|
|
|
Total
adjustments
|
4.12
|
-
|
4.12
|
4.33
|
(1.05)
|
5.38
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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)
|
Fourth quarter and full
year 2023 vs. 2022
|
(Pre-tax except for
income taxes, preferred dividend requirements, and totals; $ in
millions)
|
|
Fourth
quarter
|
Full year
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
Utility
|
|
|
|
|
|
|
Operating
revenues
|
-
|
-
|
-
|
31
|
46
|
(16)
|
Asset write-offs and
impairments
|
-
|
-
|
-
|
(78)
|
-
|
(78)
|
Other regulatory
charges (credits)–net
|
(98)
|
-
|
(98)
|
(174)
|
(775)
|
601
|
Other income
(deductions)
|
-
|
-
|
-
|
(15)
|
(37)
|
22
|
Depreciation and
amortization
|
-
|
33
|
(33)
|
-
|
33
|
(33)
|
Income taxes
|
700
|
(21)
|
721
|
848
|
453
|
395
|
Total
Utility
|
602
|
12
|
590
|
611
|
(280)
|
891
|
|
|
|
|
|
|
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
|
|
|
|
|
|
Operating
revenues
|
-
|
43
|
(43)
|
-
|
343
|
(343)
|
Fuel and
fuel-related expenses
|
-
|
(18)
|
18
|
-
|
(98)
|
98
|
Purchased
power
|
-
|
(20)
|
20
|
-
|
(83)
|
83
|
Nuclear
refueling outage expenses
|
-
|
-
|
-
|
-
|
(18)
|
18
|
Other
O&M
|
-
|
(10)
|
10
|
-
|
(103)
|
103
|
Asset write-offs
and impairments
|
-
|
-
|
-
|
-
|
163
|
(163)
|
Decommissioning
|
-
|
-
|
-
|
-
|
(28)
|
28
|
Taxes other than
income taxes
|
-
|
(3)
|
3
|
-
|
(16)
|
16
|
Depreciation and
amortization
|
-
|
(1)
|
1
|
-
|
(14)
|
14
|
Other income
(deductions)
|
-
|
8
|
(8)
|
-
|
(18)
|
18
|
Interest
expense
|
-
|
(3)
|
3
|
-
|
(8)
|
8
|
Income
taxes
|
-
|
(8)
|
8
|
-
|
(54)
|
54
|
Preferred
dividend requirements
|
-
|
(1)
|
1
|
-
|
(2)
|
2
|
Total 2022
EWC
|
-
|
(12)
|
12
|
-
|
63
|
(63)
|
All Other
|
|
|
|
|
|
|
Asset write-offs
and impairments
|
-
|
-
|
-
|
40
|
-
|
40
|
Income
taxes
|
275
|
-
|
275
|
267
|
-
|
267
|
Total Parent &
Other
|
275
|
(12)
|
287
|
307
|
63
|
245
|
|
|
|
|
|
|
|
Total
adjustments
|
877
|
(1)
|
877
|
919
|
(217)
|
1,136
|
|
|
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
Appendix A-4 provides a comparative summary of OCF by
business.
Appendix A-4:
Consolidated operating cash flow
|
Fourth quarter and full
year 2023 vs. 2022
|
($ in
millions)
|
|
|
|
|
Fourth
quarter
|
Full year
|
|
2023
|
2022
|
Change
|
2023
|
2022
|
Change
|
Utility
|
1,576
|
1,089
|
487
|
4,878
|
3,031
|
1,847
|
Parent &
Other
|
|
|
|
|
|
|
2022 EWC
|
-
|
(103)
|
103
|
-
|
(81)
|
81
|
All other
|
(513)
|
(210)
|
(303)
|
(584)
|
(365)
|
(219)
|
Total Parent &
Other
|
(513)
|
(313)
|
(200)
|
(584)
|
(446)
|
(138)
|
Consolidated
|
1,063
|
776
|
287
|
4,294
|
2,585
|
1,709
|
|
|
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
OCF increased year-over-year due primarily to lower fuel and
purchased power payments at the Utility, higher non-capital storm
restoration spending in 2022, lower pension contributions, and
higher interest received due primarily to shorter-term financing
interest earnings at E-LA and interest on storm reserve escrow
accounts. The increase was partially offset by lower receipts from
Utility customers (primarily lower fuel revenue), receipt of E-NO's
storm securitization proceeds in 2022, higher interest paid, and
the wind down of EWC.
Affiliate preferred dividend payments contributed to the Utility
and Parent & Other variances but was neutral at the
consolidated level.
Intercompany income tax payments contributed to the Utility and
Parent & Other variances but was not a material driver for the
consolidated result.
B: Earnings variance analysis
Appendix B-1 and Appendix B-2 provide details of current quarter
and full year 2023 versus 2022 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)
|
Fourth quarter 2023 vs.
2022
|
(After-tax, per share
in $)
|
|
|
|
Parent &
Other
|
|
|
|
Utility
|
|
2022 EWC
(f)
|
|
All other
|
|
Consolidated
|
|
As-
reported
|
Adjusted
|
|
As-
reported
|
|
As-
reported
|
Adjusted
|
|
As-
reported
|
Adjusted
|
2022 earnings
(loss)
|
1.15
|
1.09
|
|
(0.06)
|
|
(0.58)
|
(0.58)
|
|
0.51
|
0.51
|
Operating revenue
less:
fuel, fuel-related expenses and
gas purchased for resale;
purchased power; and other
regulatory charges (credits)–net
|
(0.24)
|
0.11
|
(g)
|
(0.02)
|
|
0.01
|
0.01
|
|
(0.24)
|
0.12
|
Nuclear refueling
outage expense
|
(0.01)
|
(0.01)
|
|
-
|
|
-
|
-
|
|
(0.01)
|
(0.01)
|
Other
O&M
|
(0.22)
|
(0.22)
|
(h)
|
0.04
|
|
(0.05)
|
(0.05)
|
(i)
|
(0.24)
|
(0.27)
|
Asset write-offs and
impairments
|
(0.01)
|
(0.01)
|
|
-
|
|
(0.01)
|
(0.01)
|
|
(0.02)
|
(0.02)
|
Decommissioning
expense
|
(0.01)
|
(0.01)
|
|
-
|
|
-
|
-
|
|
(0.01)
|
(0.01)
|
Taxes other than income
taxes
|
-
|
-
|
|
0.01
|
|
-
|
-
|
|
0.01
|
-
|
Depreciation/amortization exp.
|
(0.21)
|
(0.09)
|
(j)
|
-
|
|
(0.01)
|
(0.01)
|
|
(0.21)
|
(0.10)
|
Other income
(deductions)
|
0.20
|
0.20
|
(k)
|
(0.03)
|
|
0.05
|
0.05
|
(l)
|
0.22
|
0.25
|
Interest
expense
|
(0.04)
|
(0.04)
|
|
0.01
|
|
(0.03)
|
(0.03)
|
|
(0.07)
|
(0.08)
|
Income taxes –
other
|
3.41
|
0.13
|
(m)
|
0.04
|
|
1.32
|
-
|
(n)
|
4.78
|
0.14
|
Share effect
|
(0.07)
|
(0.02)
|
(o)
|
-
|
|
(0.01)
|
0.01
|
|
(0.09)
|
(0.01)
|
2023 earnings
(loss)
|
3.96
|
1.14
|
|
-
|
|
0.67
|
(0.62)
|
|
4.64
|
0.52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
Appendix B-2:
As-reported and adjusted earnings per share variance
analysis (c), (d),
(e)
|
Full year 2023 vs.
2022
|
(After-tax, per share
in $)
|
|
|
|
Parent &
Other
|
|
|
|
Utility
|
|
2022 EWC
(f)
|
|
All other
|
|
Consolidated
|
|
As-
reported
|
Adjusted
|
|
As-
reported
|
|
As-
reported
|
Adjusted
|
|
As-
reported
|
Adjusted
|
2022 earnings
(loss)
|
6.84
|
8.20
|
|
0.31
|
|
(1.78)
|
(1.78)
|
|
5.37
|
6.42
|
Operating revenue
less:
fuel, fuel-related expenses and
gas purchased for resale;
purchased power; and other
regulatory charges (credits)–net
|
2.89
|
0.85
|
(g)
|
(0.62)
|
|
0.06
|
0.06
|
(p)
|
2.33
|
0.91
|
Nuclear refueling
outage expense
|
(0.05)
|
(0.05)
|
(q)
|
0.07
|
|
-
|
-
|
|
0.03
|
(0.05)
|
Other
O&M
|
0.22
|
0.22
|
(r)
|
0.40
|
|
(0.09)
|
(0.09)
|
(i)
|
0.53
|
0.13
|
Asset write-offs and
impairments
|
(0.29)
|
(0.01)
|
(s)
|
(0.63)
|
|
0.14
|
(0.01)
|
(t)
|
(0.78)
|
(0.02)
|
Decommissioning
expense
|
(0.04)
|
(0.04)
|
|
0.11
|
|
-
|
-
|
|
0.07
|
(0.04)
|
Taxes other than income
taxes
|
(0.13)
|
(0.13)
|
(u)
|
0.06
|
|
(0.01)
|
(0.01)
|
|
(0.08)
|
(0.14)
|
Depreciation/amortization exp.
|
(0.34)
|
(0.22)
|
(j)
|
0.06
|
|
(0.02)
|
(0.02)
|
|
(0.30)
|
(0.24)
|
Other income
(deductions)
|
0.70
|
0.59
|
(k)
|
0.07
|
|
(0.20)
|
(0.20)
|
(v)
|
0.56
|
0.38
|
Interest
expense
|
(0.24)
|
(0.24)
|
(w)
|
0.03
|
|
(0.14)
|
(0.14)
|
(x)
|
(0.35)
|
(0.38)
|
Income taxes –
other
|
2.63
|
0.04
|
(m)
|
0.14
|
|
1.32
|
(0.02)
|
(n)
|
4.09
|
0.02
|
Preferred dividend
requirements
and noncontrolling interests
|
-
|
-
|
|
0.01
|
|
(0.01)
|
(0.01)
|
|
-
|
(0.01)
|
Share effect
|
(0.39)
|
(0.30)
|
(o)
|
-
|
|
0.02
|
0.07
|
(o)
|
(0.37)
|
(0.23)
|
2023 earnings
(loss)
|
11.81
|
8.93
|
|
-
|
|
(0.71)
|
(2.16)
|
|
11.10
|
6.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
|
|
(c)
|
Utility
operating revenue and Utility income taxes -
other exclude the following for the amortization of unprotected
excess ADIT affecting customers' bills (net effect is neutral to
earnings) ($ in millions):
|
|
4Q23
|
4Q22
|
FY23
|
FY22
|
Utility operating
revenue
|
5
|
5
|
13
|
(45)
|
Utility income taxes -
other
|
(5)
|
(5)
|
(13)
|
45
|
|
|
(d)
|
Utility regulatory
charges (credits) and Utility preferred dividend
requirements and noncontrolling interest exclude the following
for the effects of HLBV accounting and the approved deferral (net
effect is neutral to earnings) ($ millions):
|
|
4Q23
|
4Q22
|
FY23
|
FY22
|
Utility regulatory
charges (credits)
|
4
|
14
|
14
|
26
|
Utility preferred
dividend requirements and
noncontrolling interest
|
(4)
|
(14)
|
(14)
|
(26)
|
|
|
(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.
|
(f)
|
In 2022, the wind down
of EWC was completed and that business is no longer a reportable
segment. Starting in 2023, the remaining activity from EWC is
included in Parent & Other "All other." EWC 2022 results were
largely attributable to Palisades nuclear plant, which was shut
down and sold in second quarter 2022. Financial results in 2022
included revenue and operating expenses from Palisades until the
plant was shut down in May 2022, and decommissioning expense and
earnings on the decommissioning trust until the plant was sold in
June 2022. Second quarter 2022 results also included a gain of
$166 million ($130 million after tax) that resulted from the sale
of Palisades. Third quarter 2022 results included an accrual for an
uncertain tax position that resulted from a state tax
audit.
|
Utility as-reported
operating revenue less fuel, fuel-related expenses
and gas purchased for resale; purchased power; and
other regulatory charges (credits)-net variance analysis
2023 vs. 2022 ($
EPS)
|
|
4Q
|
FY
|
Electric volume /
weather
|
(0.06)
|
0.02
|
Retail electric
price
|
0.20
|
1.14
|
4Q23 E-LA and E-NO
customer sharing of IRS audit resolution
|
(0.34)
|
(0.35)
|
3Q23 E-TX adjustments
to regulatory provisions
|
-
|
0.11
|
3Q23 E-TX base rate
case relate-back
|
(0.01)
|
(0.04)
|
3Q23 SERI depreciation
rate settlement (largely offset by a
retroactive reduction in depreciation
expense)
|
-
|
(0.15)
|
1Q23 E-LA provision for
customer sharing of securitization
benefits
|
-
|
(0.37)
|
1Q23 E-LA true-up of
carrying charges on storm costs
|
-
|
0.15
|
3Q22 reg. credit for
E-MS 2021 FRP lookback true-up
|
-
|
(0.05)
|
3Q22 reg. credit for
retroactive portion of E-MS 2022 FRP rate
change
|
-
|
(0.03)
|
2Q22 increase in
provision for potential refunds in SERI
complaints
|
-
|
2.01
|
2Q22 E-LA provision for
customer sharing of securitization
benefits
|
-
|
0.81
|
2Q22 reg. provisions
for true-up of E-LA and E-TX equity
carrying costs on 2020 storms
|
-
|
(0.26)
|
2Q22 / 1Q22 reg.
provisions for true-up of E-LA and E-TX cost
of debt from 2020 storms
|
-
|
(0.07)
|
Reg. provisions for
decommissioning items
|
(0.01)
|
(0.02)
|
Grand Gulf
recovery
|
(0.02)
|
(0.09)
|
Other
|
-
|
0.08
|
Total
|
(0.24)
|
2.89
|
|
|
(g)
|
The fourth quarter and
full year variances reflect regulatory actions including E-AR's
FRP, E-LA's FRP (including riders), E-MS's FRP, various E-MS
riders, E-NO's FRP, and E-TX's base rate increase. In fourth
quarter 2023, E-LA and E-NO recorded a regulatory provision for
customer sharing of income tax benefits as a result of the
2016–2018 IRS audit resolution (considered an adjustment and
excluded from adjusted earnings). The effects of weather on retail
volume were also a driver for the quarter. The full year variance
also reflected various regulatory provisions (detailed in the table
to the right), including customer sharing and other items related
to securitization and storm cost recovery (the majority of which
were considered adjustments and excluded from adjusted
earnings).
|
(h)
|
The fourth quarter
earnings decrease from higher Utility other O&M
reflected an increase in contract costs related to operational
performance, customer service, and organizational health
initiatives and higher power delivery expenses due primarily to an
increase in vegetation management. The decrease was partially
offset by lower MISO costs, a portion of which was the result of
MISO changing its ancillary generator services market rules
(largely offset by lower ancillary generator revenues), and lower
benefits costs.
|
(i)
|
The fourth quarter and
full year earnings decreases from higher Parent & Other
other O&M were due primarily to the business
activity that was previously reported within EWC and is now
included in Parent & Other in 2023.
|
(j)
|
The fourth quarter and
full year earnings decreases from higher Utility
depreciation/amortization expense were due to higher plant
in service, updated depreciation rates for E-TX, and a fourth
quarter 2022 adjustment to SERI's depreciation expense that
resulted from FERC's December 2022 order on the sale-leaseback
complaint (considered an adjustment and excluded from adjusted
earnings). This was partially offset by the approval of lower
depreciation rates at SERI retroactive to March 2022 (largely
offset by a regulatory provision to refund the excess depreciation
previously collected from customers).
|
(k)
|
The fourth quarter and
full year earnings increases from higher Utility other income
(deductions) were due largely to higher intercompany dividend
income from affiliated preferred membership interests related to
storm cost securitizations (largely offset in P&O). The full
year earnings increase also reflected a few additional drivers.
AFUDC-equity increased due to higher construction work in progress.
In second quarter 2022, two items were recorded as a result of E-LA
securitization: a $32 million charge to account for LURC's 1%
beneficial interest in a trust established as part of E-LA's 2022
securitization (considered an adjustment and excluded from adjusted
earnings), and an adjustment to AFUDC-equity for the approved
equity component of carrying costs on 2020 storms not previously
recorded (the portion related to prior years was considered an
adjustment and excluded from adjusted earnings). Additionally, the
full year increase included changes in nuclear decommissioning
trust returns (based on regulatory treatment,
decommissioning-related variances are largely earnings neutral).
The full year increase was partially offset by storm restoration
carrying costs recorded in first quarter and second quarter 2022, a
$(15 million) ($(15 million) after tax) charge recorded in first
quarter 2023 to account for LURC's 1% beneficial interest in a
trust established as part of E-LA's 2023 storm cost securitization
(considered an adjustment and excluded from adjusted earnings), and
lower carrying costs on deferred fuel balances.
|
(l)
|
The fourth quarter
earnings increase from higher Parent & Other other income
(deductions) was due to the timing of charitable
contributions and income recorded on legacy EWC pension plans. The
increase was partially offset by changes in intercompany dividends
associated with affiliate preferred membership interests resulting
from E-LA's securitizations (largely offset at Utility).
|
(m)
|
The fourth quarter and
full year earnings increases from Utility income taxes -
other reflected several items. In the fourth quarter 2023, a
$568 million income tax benefit was recorded as a result of the
resolution of the 2016–2018 IRS audit (considered an adjustment and
excluded from adjusted earnings). Also in fourth quarter 2023, E-LA
recorded the reversal of a $106 million regulatory liability
associated with the Hurricane Ida securitization, originally
recorded in 2017 as a result of the TCJA (considered an adjustment
and excluded from adjusted earnings). In the fourth quarter 2022, a
$(13 million) increase in income tax expense was recorded as a
result of FERC's sale-leaseback order (considered an adjustment and
excluded from adjusted earnings). Additional true-ups totaling $18
million were recorded in the fourth quarter 2023 compared to $(6
million) in fourth quarter 2022. The full year increase also
reflected two additional drivers: a $129 million income tax benefit
recorded in first quarter 2023 related to storm cost securitization
financing and a $283 million income tax benefit recorded in second
quarter 2022 related to securitization financing (both items were
considered adjustments and excluded from adjusted
earnings).
|
(n)
|
The fourth quarter and
full year as-reported earnings increases from Parent & Other
income taxes - other was due largely to a $275 million
income tax benefit resulting from the resolution of the 2016–2018
IRS audit (considered an adjustment and excluded from adjusted
earnings).
|
(o)
|
The fourth quarter and
full year earnings per share impacts from share effect were
due to settlement of equity forward sales in November 2022,
November 2023, and December 2023 under the company's ATM
program.
|
(p)
|
The full year earnings
increase from Parent & Other operating revenue less fuel,
fuel related expenses and gas purchased for resale was due to
business activity that was previously reported within EWC and is
now included in Parent & Other in 2023.
|
(q)
|
The full year earnings
decrease from higher Utility nuclear refueling outage
expense was due primarily to higher amortization of ANO 1
refueling outage costs.
|
(r)
|
The full year earnings
increase from lower Utility other O&M reflected lower
compensation and benefits costs; lower MISO costs, a portion of
which was the result of MISO changing its ancillary generator
services market rules (largely offset by lower ancillary generator
revenues); lower non-nuclear generation expenses due primarily to a
reduced scope of work; lower customer service center support costs;
lower nuclear generation expenses due primarily to a reduced scope
of work and lower labor costs; and the recognition of a DOE award
for spent fuel litigation. The increase was partially offset by
higher contract costs related to operational performance, customer
service, and organizational health initiatives; higher power
delivery expenses due primarily to an increase in vegetation
management; and higher insurance expenses due primarily to lower
nuclear insurance refunds in 2023.
|
(s)
|
The full year
as-reported earnings decrease from higher Utility asset
write-offs and impairments was due to a third quarter 2023 E-AR
write-off totaling $(78 million) ($(59 million) after tax) related
to the 2013 ANO stator incident (considered an adjustment and
excluded from adjusted earnings).
|
(t)
|
The full year
as-reported earnings increase from lower Parent & Other
asset write-offs and impairments was due to recording a
spent fuel litigation settlement related to IPEC in third quarter
2023 (considered an adjustment and excluded from adjusted
earnings).
|
(u)
|
The full year earnings
decrease from higher Utility taxes other than income taxes
was due to higher ad valorem taxes.
|
(v)
|
The full year earnings
decrease from lower Parent & Other other income
(deductions) was due primarily to changes in dividends from
affiliate preferred membership resulting from E-LA's
securitizations (largely offset in Utility), partially offset by
the timing of charitable contributions, and higher non-service
pension income.
|
(w)
|
The full year earnings
decrease from higher Utility interest expense was due
primarily to higher interest rates as well as higher debt
balances.
|
(x)
|
The full year earnings
decrease from higher Parent & Other interest expense was
due primarily to higher interest rates on commercial paper and
revolver facilities as well as higher commercial paper balances,
partially offset by lower long-term debt balances.
|
C: Utility operating and financial measures
Appendix C provides a comparison of Utility operating and
financial measures.
Appendix C: Utility
operating and financial measures
|
|
|
|
|
Fourth quarter and full
year 2023 vs. 2022
|
|
|
|
|
|
Fourth
quarter
|
Full year
|
|
2023
|
2022
|
%
Change
|
% Weather
adjusted (y)
|
2023
|
2022
|
%
Change
|
% Weather
adjusted (y)
|
GWh sold
|
|
|
|
|
|
|
|
|
Residential
|
7,409
|
7,916
|
(6.4)
|
(2.4)
|
36,372
|
37,134
|
(2.1)
|
(0.6)
|
Commercial
|
6,355
|
6,284
|
1.1
|
0.5
|
28,221
|
27,982
|
0.9
|
(0.6)
|
Governmental
|
572
|
583
|
(1.9)
|
(2.0)
|
2,458
|
2,512
|
(2.1)
|
(2.9)
|
Industrial
|
12,984
|
12,599
|
3.1
|
3.1
|
52,807
|
52,501
|
0.6
|
0.6
|
Total retail
sales
|
27,320
|
27,382
|
(0.2)
|
0.8
|
119,858
|
120,129
|
(0.2)
|
(0.1)
|
Wholesale
|
3,599
|
3,597
|
0.1
|
|
15,189
|
15,968
|
(4.9)
|
|
Total sales
|
30,919
|
30,979
|
(0.2)
|
|
135,047
|
136,097
|
(0.8)
|
|
|
|
|
|
|
|
|
|
|
Number of electric
retail
customers
|
|
|
|
|
|
|
|
|
Residential
|
|
|
|
|
2,581,555
|
2,564,646
|
0.7
|
|
Commercial
|
|
|
|
|
368,665
|
371,407
|
(0.7)
|
|
Governmental
|
|
|
|
|
17,999
|
18,304
|
(1.7)
|
|
Industrial
|
|
|
|
|
46,060
|
47,711
|
(3.5)
|
|
Total retail
customers
|
|
|
|
|
3,014,279
|
3,002,068
|
0.4
|
|
|
|
|
|
|
|
|
|
|
Other O&M and
nuclear
refueling outage exp. per MWh
|
$28.13
|
$26.01
|
8.2
|
|
$22.13
|
$22.32
|
(0.9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
(y)
|
The effects of weather
were estimated using heating degree days and cooling degree days
for the period from certain locations within each jurisdiction and
comparing to "normal" weather based on 20-year historical data. The
models used to estimate weather are updated periodically and are
subject to change.
|
For the full year, excluding the effects of weather, retail
sales were essentially flat. Residential and commercial sales each
declined (0.6) percent. Industrial sales increased 0.6 percent due
to an increase in demand from new/expansion customers, mainly
in the primary metals, industrial gases, and petrochemicals
industries and higher sales to small industrial customers. The
industrial sales increase was partially offset by lower sales to
cogen customers.
D: Consolidated financial measures
Appendix D provides
comparative financial measures. Financial measures in this table
include those calculated and presented in accordance with GAAP, as
well as those that are considered non-GAAP financial measures.
Appendix D: GAAP and
non-GAAP financial measures
|
Full year 2023 vs.
2022 (See Appendix F for reconciliation of GAAP to non-GAAP
financial measures)
|
|
|
For 12 months ending
December 31
|
2023
|
2022
|
Change
|
GAAP measure
|
|
|
|
As-reported
ROE
|
17.1 %
|
9.0 %
|
8.1 %
|
|
|
|
|
Non-GAAP financial
measure
|
|
|
|
Adjusted ROE
|
10.4 %
|
10.7 %
|
(0.3) %
|
|
|
|
|
As of December 31 ($ in
millions, except where noted)
|
2023
|
2022
|
Change
|
GAAP
measures
|
|
|
|
Cash and
cash equivalents
|
133
|
224
|
(91)
|
Available
revolver capacity
|
4,346
|
4,241
|
105
|
Commercial
paper
|
1,138
|
828
|
310
|
Total debt
|
26,335
|
26,829
|
(494)
|
Securitization
debt
|
263
|
293
|
(30)
|
Debt to
capital
|
63.8 %
|
66.9 %
|
(3.1) %
|
|
|
|
|
Storm
escrows
|
323
|
402
|
(79)
|
|
|
|
|
Non-GAAP financial
measures ($ in millions, except where noted)
|
|
|
|
Debt to capital,
excluding securitization debt
|
63.5 %
|
66.6 %
|
(3.1) %
|
Net debt to net
capital, excluding securitization debt
|
63.4 %
|
66.5 %
|
(3.0) %
|
Gross
liquidity
|
4,478
|
4,465
|
13
|
Net
liquidity
|
3,340
|
3,638
|
(298)
|
Net liquidity,
including storm escrows
|
3,663
|
4,040
|
(377)
|
Parent debt to total
debt, excluding securitization debt
|
19.8 %
|
18.8 %
|
1.0 %
|
FFO to debt, excluding
securitization debt
|
14.3 %
|
12.4 %
|
1.9 %
|
|
|
|
|
|
|
|
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
customers
|
Average number of
electric customers over the period
|
Other O&M and
refueling
outage expense per MWh
|
Other operation and
maintenance expense plus nuclear refueling outage expense per MWh
of total sales
|
|
|
Financial measures –
GAAP
|
As-reported
ROE
|
12-months rolling net
income attributable to Entergy Corp. divided by avg. common
equity
|
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 EPS
|
As-reported EPS
excluding adjustments
|
Adjusted ROE
|
12-months rolling
adjusted net income attributable to Entergy Corp. divided by avg.
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 significant tax items, and other items such as certain
costs, expenses, or other specified items. In 2022, the results of
the EWC segment were considered an adjustment in light of the
company's exit from the merchant nuclear power business.
|
Debt to capital,
excluding
securitization debt
|
Total debt divided by
total capitalization, excluding securitization debt
|
FFO
|
OCF less AFUDC-borrowed
funds, working capital items in OCF (receivables, fuel inventory,
accounts payable, taxes accrued, interest accrued, deferred fuel
costs, and other working capital accounts), and securitization
regulatory charges
|
FFO to debt,
excluding
securitization debt
|
12-months rolling FFO
as a percentage of end of period total debt excluding
securitization debt
|
Gross
liquidity
|
Sum of cash and
available revolver capacity
|
Net debt to net
capital, excl.
securitization debt
|
Total debt less cash
and cash equivalents divided by total capitalization less cash and
cash equivalents, excluding securitization debt
|
Net
liquidity
|
Sum of cash and
available revolver capacity less commercial paper
borrowing
|
Net liquidity,
including storm
escrows
|
Sum of cash, available
revolver capacity, and escrow accounts available for certain storm
expenses, less commercial paper borrowing
|
Parent debt to total
debt, excl.
securitization debt
|
Entergy Corp. debt,
including amounts drawn on credit revolver and commercial paper
facilities, as a percent of consolidated total debt, excluding
securitization debt
|
Appendix E-2 explains abbreviations and acronyms used in the
quarterly earnings materials.
Appendix E-2:
Abbreviations and acronyms
|
ADIT
|
Accumulated deferred
income taxes
|
HLBV
|
Hypothetical
liquidation at book value
|
AFUDC
|
Allowance for funds
used during construction
|
IPEC
|
Indian Point
Energy Center (nuclear)
(sold
5/28/21)
|
AFUDC –
borrowed funds
|
Allowance for borrowed
funds used during construction
|
IRS
|
Internal
Revenue Service
|
AFUDC –
equity
|
Allowance for equity
funds used during construction
|
LDC
|
Local
distribution company
|
ALJ
|
Administrative law
judge
|
LNG
|
Liquified
natural gas
|
AMI
|
Advanced metering
infrastructure
|
LPSC
|
Louisiana
Public Service Commission
|
ANO
|
Arkansas Nuclear One
(nuclear)
|
LTM
|
Last twelve
months
|
APSC
|
Arkansas Public Service
Commission
|
LURC
|
Louisiana
Utility Restoration Corporation
|
ATM
|
At the market equity
issuance program
|
MISO
|
Midcontinent
Independent System Operator, Inc.
|
bbl
|
Barrels
|
MMBtu
|
Million
British thermal units
|
Bcf/D
|
Billion cubic feet per
day
|
Moody's
|
Moody's
Investor Service
|
bps
|
Basis
points
|
MPSC
|
Mississippi
Public Service Commission
|
CAGR
|
Compound annual growth
rate
|
MTEP
|
MISO
Transmission Expansion Plan
|
CCGT
|
Combined cycle gas
turbine
|
NBP
|
National
Balancing Point
|
CCN
|
Certificate for
convenience and necessity
|
NYSE
|
New York Stock
Exchange
|
CCNO
|
Council of the City of
New Orleans
|
O&M
|
Operations and
maintenance
|
CFO
|
Cash from
operations
|
OCAPS
|
Orange County
Advanced Power Station
|
COD
|
Commercial operation
date
|
OCF
|
Net cash flow
provided by operating activities
|
DCRF
|
Distribution cost
recovery factor
|
OpCo
|
Utility
operating company
|
DOE
|
U.S. Department of
Energy
|
OPEB
|
Other
post-employment benefits
|
DRM
|
Distribution Recovery
Mechanism (rider within
E-LA's FRP)
|
Other
O&M
|
Other non-fuel
operation and maintenance
expense
|
E-AR
|
Entergy Arkansas,
LLC
|
P&O
|
Parent &
Other
|
E-LA
|
Entergy Louisiana,
LLC
|
Palisades
|
Palisades Power Plant
(nuclear) (shut down May
2022, sold June 2022)
|
E-MS
|
Entergy Mississippi,
LLC
|
PMR
|
Performance
Management Rider
|
E-NO
|
Entergy New Orleans,
LLC
|
PPA
|
Power purchase
agreement or purchased power
agreement
|
E-TX
|
Entergy Texas,
Inc.
|
PUCT
|
Public Utility
Commission of Texas
|
EEI
|
Edison Electric
Institute
|
RFP
|
Request for
proposals
|
EPS
|
Earnings per
share
|
ROE
|
Return on
equity
|
ESG
|
Environmental, social,
and governance
|
RSP
|
Rate
Stabilization Plan (E-LA Gas)
|
ETR
|
Entergy
Corporation
|
S&P
|
Standard &
Poor's
|
EWC
|
Entergy Wholesale
Commodities
|
SEC
|
U.S. Securities
and Exchange Commission
|
FERC
|
Federal Energy
Regulatory Commission
|
SERI
|
System Energy
Resources, Inc.
|
Fifth
Circuit
|
U.S. Fifth Circuit
Court of Appeals
|
TCJA
|
Tax Cuts and Jobs
Act of 2017
|
FFO
|
Funds from
operations
|
TCRF
|
Transmission cost
recovery factor
|
FIN 48
|
FASB Interpretation
No.48, "Accounting for
Uncertainty in Income Taxes"
|
TRAM
|
Tax reform
adjustment mechanism
|
FRP
|
Formula rate
plan
|
TRM
|
Transmission
Recovery Mechanism (rider within
E-LA's FRP)
|
GAAP
|
U.S. generally accepted
accounting principles
|
UPSA
|
Unit Power Sales
Agreement
|
GRIP
|
Grid Resilience and
innovative Partnership
(DOE grant program)
|
WACC
|
Weighted-average
cost of capital
|
GCRR
|
Generation Cost
Recovery Rider
|
|
|
Grand Gulf or
GGNS
|
Unit 1 of Grand Gulf
Nuclear Station (nuclear),
90% owned or leased by SERI
|
|
|
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)
|
|
Fourth
quarter
|
|
|
2023
|
2022
|
As-reported net income
(loss) attributable to Entergy Corporation
|
(A)
|
2,357
|
1,103
|
Adjustments
|
(B)
|
919
|
(217)
|
|
|
|
|
Adjusted earnings
(non-GAAP)
|
(A-B)
|
1,438
|
1,320
|
|
|
|
|
Average common equity
(average of beginning and ending balances)
|
(C)
|
13,795
|
12,302
|
|
|
|
|
As-reported
ROE
|
(A/C)
|
17.1 %
|
9.0 %
|
Adjusted ROE
(non-GAAP)
|
[(A-B)/C]
|
10.4 %
|
10.7 %
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
Appendix F-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)
|
|
Fourth
quarter
|
|
|
2023
|
2022
|
Total debt
|
(A)
|
26,335
|
26,829
|
Less securitization
debt
|
(B)
|
263
|
293
|
Total debt, excluding
securitization debt
|
(C)
|
26,072
|
26,536
|
Less cash and cash
equivalents
|
(D)
|
133
|
224
|
Net debt, excluding
securitization debt
|
(E)
|
25,939
|
26,312
|
|
|
|
|
Commercial
paper
|
(F)
|
1,138
|
828
|
|
|
|
|
Total
capitalization
|
(G)
|
41,297
|
40,113
|
Less securitization
debt
|
(B)
|
263
|
293
|
Total capitalization,
excluding securitization debt
|
(H)
|
41,034
|
39,820
|
Less cash and cash
equivalents
|
(D)
|
133
|
224
|
Net capital, excluding
securitization debt
|
(I)
|
40,901
|
39,596
|
|
|
|
|
Debt to
capital
|
(A/G)
|
63.8 %
|
66.9 %
|
Debt to capital,
excluding securitization debt (non-GAAP)
|
(C/H)
|
63.5 %
|
66.6 %
|
Net debt to net
capital, excluding securitization debt (non-GAAP)
|
(E/I)
|
63.4 %
|
66.5 %
|
|
|
|
|
Available revolver
capacity
|
(J)
|
4,346
|
4,241
|
|
|
|
|
Storm
escrows
|
(K)
|
323
|
402
|
|
|
|
|
Gross liquidity
(non-GAAP)
|
(D+J)
|
4,478
|
4,465
|
Net liquidity
(non-GAAP)
|
(D+J-F)
|
3,340
|
3,638
|
Net liquidity,
including storm escrows (non-GAAP)
|
(D+J-F+K)
|
3,663
|
4,040
|
|
|
|
|
Entergy Corporation
notes:
|
|
|
|
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)
|
4,050
|
4,050
|
Revolver
draw
|
(M)
|
-
|
150
|
Unamortized debt
issuance costs and discounts
|
(N)
|
(37)
|
(43)
|
Total parent
debt
|
(F+L+M+N)
|
5,151
|
4,985
|
Parent debt to total
debt, excluding securitization debt (non-GAAP)
|
[(F+L+M+N)/C]
|
19.8 %
|
18.8 %
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
Appendix F-3:
Reconciliation of GAAP to non-GAAP financial measures – FFO to
debt, excluding securitization debt
|
($ in millions except
where noted)
|
|
Fourth
quarter
|
|
|
2023
|
2022
|
Total debt
|
(A)
|
26,335
|
26,829
|
Less securitization
debt
|
(B)
|
263
|
293
|
Total debt, excluding
securitization debt
|
(C)
|
26,072
|
26,536
|
|
|
|
|
Net cash flow provided
by operating activities, LTM
|
(D)
|
4,294
|
2,585
|
|
|
|
|
AFUDC – borrowed
funds, LTM
|
(E)
|
(40)
|
(28)
|
|
|
|
|
Working capital items
in net cash flow provided by operating
activities, LTM:
|
|
|
|
Receivables
|
|
102
|
(157)
|
Fuel
inventory
|
|
(45)
|
7
|
Accounts
payable
|
|
(135)
|
(102)
|
Taxes
accrued
|
|
10
|
4
|
Interest
accrued
|
|
19
|
4
|
Deferred fuel
costs
|
|
759
|
(394)
|
Other working capital
accounts
|
|
(210)
|
(157)
|
Securitization
regulatory charges, LTM
|
|
31
|
62
|
Total
|
(F)
|
531
|
(733)
|
|
|
|
|
FFO, LTM
(non-GAAP)
|
(G)=(D+E-F)
|
3,724
|
3,290
|
|
|
|
|
FFO to debt, excluding
securitization debt (non-GAAP)
|
(G/C)
|
14.3 %
|
12.4 %
|
|
|
|
|
|
|
|
|
|
|
|
Calculations may differ
due to rounding
|
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SOURCE Entergy Corporation