PR Newswire | Apr 28, 2021 06:31AM EDT

04/28 05:30 CDT

Entergy Reports First Quarter EarningsCompany affirms guidance and financial outlooks NEW ORLEANS, April 28, 2021

NEW ORLEANS, April 28, 2021 /PRNewswire/ -- Entergy Corporation (NYSE: ETR) reported first quarter 2021 earnings per share of $1.66 on an as-reported basis and $1.47 on an adjusted basis (non-GAAP).

"We had a strong first quarter and our team successfully executed on several fronts," said Entergy Chairman and Chief Executive Officer Leo Denault. "We reached settlements on several important issues, reducing risk, providing long-term clarity, and solidifying a clear path for our future growth. This enables us to continue to make investments in a cleaner generation fleet and a more reliable delivery system that benefit our customers and our communities, and that support the long-term growth of our business."

Business highlights included the following:

* Entergy Louisiana, Entergy Arkansas, and Entergy Texas issued RFPs for up to 500, 300, and 200 megawatts of renewable resources, respectively. * Entergy Arkansas resolved its formula rate plan, including a five-year extension. * Entergy Louisiana reached an agreement on a three-year extension of its formula rate plan. * Entergy Mississippi submitted its annual formula rate plan filing. * Entergy Texas reached settlements on its TCRF and DCRF filings. * Entergy and Holtec filed a joint settlement agreement among all parties with the NY PSC for the sale of Indian Point. * Entergy and five other utilities formed the Electric Highway Coalition, a multi-state electric vehicle charging initiative. * Entergy ranked among the top energy and utility companies on the 2021 Corporate Equality Index by the Human Rights Campaign Foundation.

Consolidated Earnings (GAAP and Non-GAAP Measures)

First Quarter 2021 vs. 2020 (See Appendix A for reconciliation of GAAP tonon-GAAP measures and description of adjustments)

First Quarter

2021 2020 Change

(After-tax, $ in millions)

As-reported earnings 335 119 216

Less adjustments 38 (111) 149

Adjusted earnings (non-GAAP) 297 230 67

Estimated weather in billed sales 24 (50) 73

(After-tax, per share in $)

As-reported earnings 1.66 0.59 1.07

Less adjustments 0.19 (0.55) 0.74

Adjusted earnings (non-GAAP) 1.47 1.14 0.33

Estimated weather in billed sales 0.12 (0.25) 0.37

Calculations may differ due to rounding

Consolidated Results

For first quarter 2021, the company reported earnings of $335 million, or $1.66 per share, on an as-reported basis, and earnings of $297 million, or $1.47 per share, on an adjusted basis. This compared to first quarter 2020 earnings of $119 million, or 59 cents per share, on an as-reported basis, and earnings of $230 million, or $1.14 per share, on an adjusted basis.

Summary discussions by business are below. Additional details, including information on OCF by business, are provided in Appendix A. An analysis of quarterly variances by business is provided in Appendix B.

Business Segment Results

Utility

For first quarter 2021, the Utility business reported earnings attributable to Entergy Corporation of $357 million, or $1.77 per share, on both an as-reported and an adjusted basis. This compared to first quarter 2020 earnings of $320 million, or $1.59 per share, on both an as-reported and an adjusted basis. Drivers for the quarter included:

* higher retail sales volume, including the net effects of weather and COVID-19; * the net effect of regulatory actions across the operating companies; and * the reversal of a regulatory provision at E-AR for its 2019 netting adjustment, originally recorded in fourth quarter 2020.

These drivers were partially offset by:

* two income tax items recorded in first quarter 2020, which was partially offset at P&O; * higher other O&M primarily due to higher nuclear and non-nuclear generation expenses; and * higher depreciation and interest expenses.

Appendix C contains additional details on Utility financial and operating measures.

Parent & Other

For first quarter 2021, Parent & Other reported a loss attributable to Entergy Corporation of $(60 million), or (30) cents per share, on both an as-reported and an adjusted basis. This compared to a first quarter 2020 loss of $(90 million), or (45) cents per share, on both an as-reported and an adjusted basis. A primary driver was an income tax item recorded in first quarter 2020, which was partially offset at the Utility.

Entergy Wholesale Commodities

For first quarter 2021, EWC reported earnings attributable to Entergy Corporation of $38 million, or 19 cents per share, on an as-reported basis. This compared to a first quarter 2020 loss attributable to Entergy Corporation of $(111 million), or (55) cents per share, on an as-reported basis. Drivers for the quarter included:

* performance of decommissioning trust funds; and * lower operating expenses primarily due to the shutdown of Indian Point 2.

These drivers were partially offset by:

* lower revenue primarily due to the shutdown of Indian Point 2.

Appendix D contains additional details on EWC financial and operating measures, including reconciliation for non-GAAP EWC adjusted EBITDA.

Earnings Per Share Guidance

Entergy affirmed its 2021 adjusted EPS guidance range of $5.80 to $6.10. See webcast presentation for additional details.

The company has provided 2021 earnings guidance with regard to the non-GAAP measure of Entergy adjusted EPS. This measure excludes from the corresponding GAAP financial measure the effect of adjustments as described below under "Non-GAAP Financial Measures." The company has not provided a reconciliation of such non-GAAP guidance to guidance presented on a GAAP basis because it cannot predict and quantify with a reasonable degree of confidence all of the adjustments that may occur during the period. One such adjustment will be the exclusion of EWC earnings from Entergy adjusted EPS. We currently estimate that the contribution of EWC to Entergy's as-reported EPS will be approximately $(1.70) in 2021. This estimate is subject to substantial uncertainty due to, among other things, the potential effects of exiting the EWC business.

Earnings Teleconference

A teleconference will be held at 10:00 a.m. Central Time on Wednesday, April 28, 2021, to discuss Entergy's quarterly earnings announcement and the company's financial performance. The teleconference may be accessed by visiting Entergy's website at www.entergy.com or by dialing 844-309-6569, conference ID 3529059, no more than 15 minutes prior to the start of the call. The webcast presentation is also posted to Entergy's website concurrent with this news release, which was issued before market open on the day of the call. A replay of the teleconference will be available on Entergy's website at www.entergy.com and by telephone. The telephone replay will be available through May 5, 2021, by dialing 855-859-2056, conference ID 3529059.

Entergy Corporation is an integrated energy company engaged in electric power production, transmission and retail distribution operations. Entergy delivers electricity to nearly 3 million utility customers in Arkansas, Louisiana, Mississippi and Texas. Entergy owns and operates one of the cleanest large-scale U.S. power generating fleets with approximately 30,000 megawatts of electric generating capacity, including 8,000 megawatts of nuclear power. Headquartered in New Orleans, Louisiana, Entergy has annual revenues of $10 billion and 13,400 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/investor_relations.

Entergy maintains a web page as part of its Investor Relations website, entitled Regulatory and Other Information, which provides investors with key updates of certain regulatory proceedings and important milestones on the execution of its strategy. While some of this information may be considered material information, investors should not rely exclusively on this page for all relevant company information.

For definitions of certain operating measures, as well as GAAP and non-GAAP financial measures and abbreviations and acronyms used in the earnings release materials, see Appendix F.

Non-GAAP Financial Measures

This news release contains non-GAAP financial measures, which are generally numerical measures of a company's performance, financial position, or cash flows that either exclude or include amounts that are not normally excluded or included in the most directly comparable measure calculated and presented in accordance with GAAP. Entergy has provided quantitative reconciliations within this news release of the non-GAAP financial measures to the most directly comparable GAAP financial measures.

Entergy reports earnings using the non-GAAP measure of Entergy adjusted earnings, which excludes the effect of certain "adjustments," including the removal of the Entergy Wholesale Commodities segment in light of the company's decision to exit the merchant power business. Adjustments are unusual or non-recurring items or events or other items or events that management believes do not reflect the ongoing business of Entergy, such as the results of the EWC segment, significant tax items, and other items such as certain costs, expenses, or other specified items. In addition to reporting GAAP consolidated earnings on a per share basis, Entergy reports its adjusted earnings on a per share basis. These per share measures represent the applicable earnings amount divided by the diluted average number of common shares outstanding for the period.

Management uses the non-GAAP financial measures of adjusted earnings and adjusted earnings per share for, among other things, financial planning and analysis; reporting financial results to the board of directors, employees, stockholders, analysts, and investors; and internal evaluation of financial performance. Entergy believes that these non-GAAP financial measures provide useful information to investors in evaluating the ongoing results of Entergy's business, comparing period to period results, and comparing Entergy's financial performance to the financial performance of other companies in the utility sector.

Other non-GAAP measures, including adjusted EBITDA; adjusted ROE; adjusted ROE, excluding affiliate preferred; adjusted ROIC; gross liquidity; net liquidity; net liquidity, including storm escrows; debt to capital, excluding securitization debt; net debt to net capital, excluding securitization debt; parent debt to total debt, excluding securitization debt; FFO to debt, excluding securitization debt; and FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC, are measures Entergy uses internally for management and board discussions and to gauge the overall strength of its business. Entergy believes the above data provides useful information to investors in evaluating Entergy's ongoing financial results and flexibility, and assists investors in comparing Entergy's credit and liquidity to the credit and liquidity of others in the utility sector. In addition, other financial measures including net income (or earnings) adjusted for preferred dividends and tax-effected interest expense and FFO are included on both an adjusted and an as-reported basis. In each case, the metrics defined as "adjusted" (other than EWC's adjusted EBITDA) exclude the effect of adjustments as defined above. EWC's adjusted EBITDA represents EWC's earnings before interest, taxes, and depreciation and amortization, and also excludes decommissioning expense.

These non-GAAP financial measures reflect an additional way of viewing aspects of Entergy's operations that, when viewed with Entergy's GAAP results and the accompanying reconciliations to corresponding GAAP financial measures, provide a more complete understanding of factors and trends affecting Entergy's business. These non-GAAP financial measures should not be used to the exclusion of GAAP financial measures. Investors are strongly encouraged to review Entergy's consolidated financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. Although certain of these measures are intended to assist investors in comparing Entergy's performance to other companies in the utility sector, non-GAAP financial measures are not standardized; therefore, it might not be possible to compare these financial measures with other companies' non-GAAP financial measures having the same or similar names.

Cautionary Note Regarding Forward-Looking Statements

In this news release, and from time to time, Entergy Corporation makes certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other things, statements regarding Entergy's 2021 earnings guidance; its current financial and operational outlooks; and other statements of Entergy's plans, beliefs, or expectations included in this news release. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this news release. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Forward-looking statements are subject to a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this news release and in Entergy's most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q, and Entergy's other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with (1) rate proceedings, formula rate plans, and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent anticipated by the utilities and (2) implementation of the ratemaking effects of changes in law; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) risks associated with operating nuclear facilities, including plant relicensing, operating, and regulatory costs and risks; (e) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning Entergy's nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (g) risks and uncertainties associated with executing on business strategies, including strategic transactions that Entergy or its subsidiaries may undertake and the risk that any such transaction may not be completed as and when expected and the risk that the anticipated benefits of the transaction may not be realized; (h) effects of changes in federal, state, or local laws and regulations and other governmental actions or policies, including changes in monetary, fiscal, tax, environmental, or energy policies; (i) the effects of changes in commodity markets, capital markets, or economic conditions; (j) impacts from a terrorist attack, cybersecurity threats, data security breaches, or other attempts to disrupt Entergy's business or operations, and/or other catastrophic events; (k) the direct and indirect impacts of the COVID-19 pandemic on Entergy and its customers; and (l) the effects of technological change, including the costs, pace of development and commercialization of new and emerging technologies.

First Quarter 2021 Earnings Release Appendices and Financial Statements

Appendices

A: Consolidated Results and AdjustmentsB: Earnings Variance AnalysisC: Utility Financial and Operating MeasuresD: EWC Financial and Operating MeasuresE: Consolidated Financial MeasuresF: Definitions and Abbreviations and AcronymsG: Other GAAP to Non-GAAP Reconciliations

Financial Statements

Consolidating Balance SheetsConsolidating Income StatementsConsolidated Cash Flow Statements

A: Consolidated Results and AdjustmentsAppendix A-1 provides a comparative summary of consolidated earnings, including a reconciliation of as-reported earnings (GAAP) to adjusted earnings (non-GAAP).

Appendix A-1: Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures First Quarter 2021 vs. 2020 (See Appendix A-3 and Appendix A-4 for details on adjustments)

First Quarter

2021 2020 Change

(After-tax, $ in millions)

As-reported earnings (loss)

Utility 357 320 37

Parent & Other (60) (90) 30

EWC 38 (111) 149

Consolidated 335 119 216



Less adjustments

Utility - - -

Parent & Other - - -

EWC 38 (111) 149

Consolidated 38 (111) 149



Adjusted earnings (loss) (non-GAAP)

Utility 357 320 37

Parent & Other (60) (90) 30

EWC - - -

Consolidated 297 230 67

Estimated weather in billed sales 24 (50) 73



Diluted average number of common shares outstanding (in 201 201 millions)



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

As-reported earnings (loss)

Utility 1.77 1.59 0.18

Parent & Other (0.30)(0.45)0.15

EWC 0.19 (0.55)0.74

Consolidated 1.66 0.59 1.07



Less adjustments

Utility - - -

Parent & Other - - -

EWC 0.19 (0.55)0.74

Consolidated 0.19 (0.55)0.74



Adjusted earnings (loss) (non-GAAP)

Utility 1.77 1.59 0.18

Parent & Other (0.30)(0.45)0.15

EWC - - -

Consolidated 1.47 1.14 0.33

Estimated weather in billed sales 0.12 (0.25)0.37

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 provides a comparative summary of OCF, by business.

Appendix A-2: Consolidated Operating Cash Flow

First Quarter 2021 vs. 2020

($ in millions)

First Quarter

2021 2020 Change

Utility (77) 603 (680)

Parent & Other (22) (81) 59

EWC 49 137 (88)

Consolidated (50) 659 (709)



Calculations may differ due to rounding

OCF decreased quarter-over-quarter due primarily to the timing of fuel and purchased power cost recovery, primarily related to increased fuel costs from Winter Storm Uri, payments related to hurricane restoration (non-capital portion), and higher pension funding. Intercompany income tax payments contributed to the line of business variances but were immaterial at the consolidated level.

Appendix A-3 and Appendix A-4 list adjustments by business. Adjustments are included in as-reported earnings consistent with GAAP but are excluded from adjusted earnings. As a result, adjusted earnings is considered a non-GAAP measure.

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

First Quarter 2021 vs. 2020

First Quarter

2021 2020 Change

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

EWC

Income before income taxes 54 (141) 195

Income taxes (16) 31 (46)

Preferred dividend requirements (1) (1) -

Total EWC 38 (111) 149

Total adjustments 38 (111) 149

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

EWC

Total EWC 0.19 (0.55) 0.74

Total adjustments 0.19 (0.55) 0.74

Calculations may differ due to rounding

(b) Per share amounts are calculated by dividing the corresponding earnings(loss) by the diluted average number of common shares outstanding for theperiod.



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

First Quarter 2021 vs. 2020

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

First Quarter

2021 2020 Change

EWC

Operating revenue 248 333 (84)

Fuel and fuel-related expenses (21) (20) (1)

Purchased power (18) (11) (7)

Nuclear refueling outage expenses (11) (12) 1

Other O&M (99) (131) 32

Asset write-off and impairments (3) (5) 2

Decommissioning expense (53) (50) (3)

Taxes other than income taxes (6) (20) 14

Depreciation/amortization exp. (13) (35) 22

Other income (deductions)-other 34 (184) 218

Interest exp. and other charges (4) (5) 1

Income taxes (16) 31 (46)

Preferred dividend requirements (1) (1) -

Total EWC 38 (111) 149

Total adjustments (after-tax) 38 (111) 149

Calculations may differ due to rounding

B: Earnings Variance AnalysisAppendix B-1 provides details of current quarter 2021 versus 2020 as-reported and adjusted earnings variance analysis for Utility, Parent & Other, and EWC.

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

First Quarter 2021 vs. 2020

(After-tax, per share in $)

Utility Parent & Other EWC Consolidated

As- As- As- As- Reported Adjusted Reported Adjusted Adjusted Reported Reported

2020 earnings 1.59 1.59 (0.45) (0.45) (0.55) 0.59 1.14(loss)

Operatingrevenue less:

Fuel,fuel-relatedexpenses and

gas purchased 0.80 0.80 (e) - - (0.36) (f) 0.44 0.80for resale,

Purchasedpower, and

Regulatorycharges(credits)

Nuclearrefueling 0.02 0.02 - - - 0.02 0.02outage expense

Other O&M (0.14) (0.14) (g) - - 0.13 (h) (0.01) (0.14)

Assetwrite-offs and - - - - 0.01 0.01 -impairments

Decommissioning (0.01) (0.01) - - (0.01) (0.02) (0.01)expense

Taxes otherthan income - - - - 0.05 (i) 0.05 -taxes

Depreciation/amortization (0.14) (0.14) (j) - - 0.09 (k) (0.05) (0.14)exp.

Other income(deductions) 0.11 0.11 (l) 0.02 0.02 0.86 (m) 0.99 0.13-other

Interest exp.and other (0.05) (0.05) (n) 0.01 0.01 - (0.04) (0.04)charges

Income (0.41) (0.41) (o) 0.12 0.12 (p) (0.03) (0.32) (0.29)taxes-other

Preferreddividend - - - - - - -requirements

Share effect - - - - - - -

2021 earnings 1.77 1.77 (0.30) (0.30) 0.19 1.66 1.47(loss)

Calculations may differ due to rounding

Utility operating revenue / regulatory charges and Utility income(c) taxes-other exclude $41 million, in first quarter 2021 and $30 million in first quarter 2020 for the return of unprotected excess ADIT to customers (net effect is neutral to earnings).

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

The earnings increase was primarily driven by higher volume/weather, including the net effects of COVID-19; E-LA's FRP, including recovery of LCPS; E-TX's GCRR, TCRF and DCRF; E-NO NOPS recovery; and E-MS's FRP and vegetation rider. The variance also reflected the reversal of a regulatory provision for E-AR's 2019 netting adjustment (which was subsequently(e) adjusted) and a first quarter 2020 regulatory liability for tax sharing with E-LA customers (partially offsets the Hurricane Isaac Act 55 income tax item discussed in footnote o). Partially offsetting was lower regulatory credits for the difference between decommissioning expenses and decommissioning trust earnings plus decommissioning costs collected in revenue (largely earnings neutral, offset in Utility other income (deductions)-other).

(f) The earnings decrease was due largely to lower revenues from the shutdown of Indian Point 2 in April 2020.

The earnings decrease from higher Utility other O&M was due primarily to(g) higher non-nuclear generation expenses related to new plants in service, primarily LCPS, higher vegetation costs, higher nuclear generation expense, and lower nuclear insurance refunds.

(h) The earnings increase from lower EWC other O&M was due largely to the shutdown of Indian Point 2 in April 2020.

(i) The earnings increase from lower EWC taxes other than income taxes was due primarily to lower payroll taxes and lower ad valorem taxes.

(j) The earnings decrease from higher Utility depreciation expense was due primarily to higher plant in service, including LCPS and MCPS.

(k) The earnings increase from lower EWC depreciation expense was due primarily to the shutdown of Indian Point 2 in April 2020.

The earnings increase from higher Utility other income (deductions)-other(l) was due largely to changes in decommissioning trust fund returns (based on regulatory treatment, decommissioning-related variances are largely earnings neutral), partially offset by lower AFUDC as a result of lower construction work in progress.

(m) The earnings increase from higher EWC other income (deductions)-other was due largely to performance of nuclear decommissioning trust fund investments.

(n) The earnings decrease from higher Utility interest expense was due primarily to higher debt balances at E-LA and lower AFUDC as a result of lower construction work in progress.

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

The earnings increase from Parent & Other income taxes-other reflected $23(p) million of income tax expense recorded in first quarter 2020 as a result of the IRS settlement related to the Hurricane Isaac Act 55 financing (discussed in footnote o).

Utility as-reported operating revenue less fuel, fuel-related expenses and gas purchased for resale; purchased power; and regulatory charges (credits) variance analysis 2021 vs. 2020 ($ EPS)

1Q

Volume/weather 0.36

Retail electric price 0.27

Reg. provision for E-AR FRP 0.16

Reg. liability for tax sharing 0.10

Other, including reg. credit for decommissioning items(0.09)

Total 0.80

C: Utility Financial and Operating MeasuresAppendix C provides comparative summaries of Utility operating and financial measures.

Appendix C: Utility Operating and Financial Measures

First Quarter 2021 vs. 2020

First Quarter

2021 2020 % % Weather ChangeAdjusted (q)

GWh billed

Residential 9,599 8,126 18.1 2.2

Commercial 6,134 6,244 (1.8) (4.2)

Governmental 579 595 (2.7) (1.9)

Industrial 11,458 11,815 (3.0) (3.0)

Total retail sales 27,770 26,780 3.7 (1.6)

Wholesale 4,299 3,117 37.9

Total sales 32,069 29,897 7.3



Number of electric retail customers

Residential 2,532,1722,504,2431.1

Commercial 360,323 356,303 1.1

Governmental 17,811 17,724 0.5

Industrial 44,622 44,443 0.4

Total retail customers 2,954,9282,922,7131.1



Other O&M and refueling outage $19.80 $20.20 (2.0) expense per MWh



Calculations may differ due to rounding (q) The effects of weather were estimated using heating degree days and cooling degree days for the billing cycles from certain locations within eachjurisdiction and comparing to "normal" weather based on 20-year historical data. The models used to estimate weather are updated periodically and are subject to change.

On a weather-adjusted basis billed retail sales decreased (1.6) percent, including the impacts from COVID-19. Residential billed sales increased 2.2 percent and commercial billed sales decreased (4.2) percent. Industrial billed sales volume decreased (3.0) percent reflecting lower sales to existing large and small customers, partially offset by continued growth from new/expansion customers.

D: EWC Financial and Operating MeasuresAppendix D-1 provides a comparative summary of EWC adjusted EBITDA (non-GAAP).

Appendix D-1: EWC Adjusted EBITDA - Reconciliation of GAAP to Non-GAAP Measures

First Quarter 2021 vs. 2020

($ in millions) First Quarter

2021 2020 Change

Net income (loss) 38 (110) 148

Add back: interest expense 4 5 (1)

Add back: income taxes 16 (31) 47

Add back: depreciation and amortization 13 35 (22)

Subtract: interest and investment income 48 (172) 220

Add back: decommissioning expense 53 50 3

Adjusted EBITDA (non-GAAP) 76 122 (46)

Calculations may differ due to rounding

Appendix D-2 provides a comparative summary of EWC operating and financial measures.

Appendix D-2: EWC Operating and Financial Measures

First Quarter 2021 vs. 2020

First Quarter

2021 2020 % Change

Owned capacity (MW) (r) 2,246 3,274 (31.4)

GWh billed 4,413 6,757 (34.7)



EWC Nuclear Fleet

Capacity factor 99% 99% -

GWh billed 3,988 6,259 (36.3)

Production cost per MWh $18.46$15.4219.7

Average energy/capacity revenue per MWh$52.04$48.447.4



Calculations may differ due to rounding (r) 2020 excludes IP2 (1,028MW), shut down April 30, 2020.

See the appendix in the webcast presentation for EWC hedging and price disclosures.

E: Consolidated Financial MeasuresAppendix E provides comparative financial measures. Financial measures in this table include those calculated and presented in accordance with GAAP, as well as those that are considered non-GAAP financial measures.

Appendix E: GAAP and Non-GAAP Financial Measures

First Quarter 2021 vs. 2020 (See Appendix G for reconciliation of GAAP to non-GAAP financial measures)



For 12 months ending March 31 2021 2020 Change

GAAP Measures

As-reported ROIC 6.4% 5.6% 0.8%

As-reported ROE 15.1% 11.5% 3.6%



Non-GAAP Financial Measures

Adjusted ROIC 5.2% 5.6% (0.4%)

Adjusted ROE 11.3% 11.8% (0.5%)



As of March 31 ($ in millions, except where noted) 2021 2020 Change

GAAP Measures

Cash and cash equivalents 1,743 1,464 279

Available revolver capacity 4,220 3,348 872

Commercial paper 1,028 1,942 (914)

Total debt 25,80321,4654,338

Securitization debt 147 271 (124)

Debt to capital 69.6% 67.2% (2.4%)

Off-balance sheet liabilities:

Debt of joint ventures - Entergy's share 15 53 (38)

Total off-balance sheet liabilities 15 53 (38)



Storm escrow balances 72 373 (301)



Non-GAAP Financial Measures ($ in millions, except where noted)

Debt to capital, excluding securitization debt 69.5% 66.9% 2.6%

Net debt to net capital, excluding securitization debt 68.0% 65.3% 2.7%

Gross liquidity 5,963 4,811 1,152

Net liquidity 4,935 2,870 2,065

Net liquidity, including storm escrow balances 5,007 3,242 1,765

Parent debt to total debt, excluding securitization debt22.3% 22.2% 0.1%

FFO to debt, excluding securitization debt 8.2% 14.3% (6.1%)

FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention 8.7% 16.0% (7.3%)payments associated with exit of EWC



Calculations may differ due to rounding

F: Definitions and Abbreviations and AcronymsAppendix F-1 provides definitions of certain operating measures, as well as GAAP and non-GAAP financial measures.

Appendix F-1: Definitions

Utility Financial and Operating Measures

GWh billed Total number of GWh billed to retail and wholesale customers

Number of electric Average number of electric customers over the periodretail customers

Other O&M and Other operation and maintenance expense plus nuclearrefueling outage refueling outage expense per MWh of billed salesexpense per MWh

EWC Financial and Operating Measures

Adjusted EBITDA Earnings before interest, income taxes, and depreciation(non-GAAP) and amortization, and excluding decommissioning expense

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

Average revenueunder contract per Revenue on a per unit basis at which capacity is expectedkW-month (applies to to be sold to third parties, given existing contractcapacity contracts prices and/or auction awardsonly)

Bundled capacity and A contract for the sale of installed capacity and relatedenergy contracts energy, priced per MWh sold

Capacity contracts A contract for the sale of the installed capacity product in regional markets

Capacity factor Normalized percentage of the period that the nuclear plants generate power

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

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

Owned capacity (MW) Installed capacity owned by EWC

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

Percent of plannedgeneration under Percent of planned generation output sold under contractscontract (unitcontingent)

Planned net MW in Average installed capacity to generate power and/or selloperation (average) capacity, reflecting the shutdown of Indian Point 3 (April 30, 2021) and Palisades (May 31, 2022)

Amount of output expected to be generated by EWC resourcesPlanned TWh of considering plant operating characteristics, reflectinggeneration the shutdown of Indian Point 3 (April 30, 2021) and Palisades (May 31, 2022)

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

Refueling outage Number of days lost for a scheduled refueling anddays maintenance outage during the period

Appendix F-1: Definitions (continued)

EWC Financial and Operating Measures (continued)

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

Financial Measures - GAAP

12-months rolling net income attributable toAs-reported ROE Entergy Corporation divided by avg. common equity

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

Debt of joint ventures - Entergy's share of debt issued by businessEntergy's share joint ventures at EWC

Debt to capital Total debt divided by total capitalization

Available revolver capacity Amount of undrawn capacity remaining on corporate and subsidiary revolvers

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

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

Financial Measures - Non-GAAP

Adjusted EPS As-reported EPS excluding adjustments

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

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

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

Debt to capital, excluding Total debt divided by total capitalization,securitization debt excluding securitization debt

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

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

FFO to debt, excl. 12-months rolling FFO excluding return ofsecuritization debt, return of unprotected excess ADIT and severance andunprotected excess ADIT, and retention payments associated with exit ofseverance and retention EWC as a percentage of end of period total debtpayments associated with exit excluding securitization debtof EWC

Gross liquidity Sum of cash and available revolver capacity

Net debt to net capital, excl. Total debt less cash and cash equivalentssecuritization debt 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 Sum of cash, available revolver capacity, andescrows escrow accounts available for certain storm expenses, less commercial paper borrowing

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

Appendix F-2 explains abbreviations and acronyms used in the quarterly earnings materials.

Appendix F-2: Abbreviations and Acronyms

ADIT Accumulated deferred income taxes IRS Internal Revenue Service

Allowance for funds used during Unit 2 of IndependenceAFUDC construction ISES 2 Steam Electric Station (coal)

AFUDC - Allowance for borrowed funds used Independent systemborrowed during construction ISO operatorfunds

AG Attorney General LCPS Lake Charles Power Station (CCGT)

ALJ Administrative law judge LPSC Louisiana Public Service Commission

AMI Advanced metering infrastructure LTM Last twelve months

ANO Units 1 and 2 of Arkansas Nuclear MCPS Montgomery County Power One owned by E-AR (nuclear) Station (CCGT)

APSC Arkansas Public Service MISO Midcontinent Independent Commission System Operator, Inc.

ARO Asset retirement obligation Moody's Moody's Investor Service

bps Basis points MPSC Mississippi Public Service Commission

CCGT Combined cycle gas turbine MTEP MISO Transmission Expansion Plan

CCN Certificate of convenience and Nelson 6 Unit 6 of Roy S. Nelson necessity plant (coal)

CCNO Council of the City of New NDT Nuclear decommissioning Orleans trust

Choctaw Choctaw County Generating Station NGO Non-governmental (CCGT) organization

COD Commercial operation date NOPA IRS Notice of Proposed Adjustment

CT Simple cycle combustion turbine NOPS New Orleans Power Station

CWIP Construction work in progress NOSS New Orleans Solar Station

DCRF Distribution cost recovery factor NRC U.S. Nuclear Regulatory Commission

DOE U.S. Department of Energy NY PSC New York Public Service Commission

DSM Demand side management NYS AG New York State Attorney General

New York StateE-AR Entergy Arkansas, LLC NYS DEC Department of Environmental Conservation

New York StateE-LA Entergy Louisiana, LLC NYS DPS Department of Public Service

E-MS Entergy Mississippi, LLC NYISO New York Independent System Operator, Inc.

E-NO Entergy New Orleans, LLC NYSE New York Stock Exchange

E-TX Entergy Texas, Inc. OCF Net cash flow provided by operating activities

Earnings before interest, income Orange County PowerEBITDA taxes, and depreciation and OCPS Station amortization

ENP Entergy Nuclear Palisades, LLC OpCo Utility operating company

EPS Earnings per share OPEB Other post-employment benefits

ETR Entergy Corporation Other O&M Other non-fuel operation and maintenance expense

EWC Entergy Wholesale Commodities P&O Parent & Other

FERC Federal Energy Regulatory Palisades Palisades Power Plant Commission (nuclear)

FFO Funds from operations PMR Performance Management Rider

FASB Interpretation No.48, Power purchase agreementFIN 48 "Accounting for Uncertainty in PPA or purchased power Income Taxes" agreement

FRP Formula rate plan PSC Public service commission

GAAP U.S. generally accepted PUCT Public Utility accounting principles Commission of Texas

GCRR Generation Cost Recovery Rider RICE Reciprocating internal combustion engine

Grand Gulf Unit 1 of Grand Gulf Nuclearor GGNS Station (nuclear), 90% owned or RFP Request for proposals leased by SERI

IIRR-G Infrastructure investment ROE Return on equity recovery rider - gas

Indian Indian Point Energy Center Unit 1 ROIC Return on investedPoint 1 (nuclear) (shut down in 1974) capital

Indian Indian Point Energy Center Unit 2 RS Cogen facility (CCGTPoint 2 or (nuclear) (shut down April 30, RS Cogen cogeneration)IP2 2020)

Indian Indian Point Energy Center Unit 3 Rate Stabilization PlanPoint 3 or (nuclear) RSP (E-LA Gas)IP3

IPEC or Indian Point Energy CenterIndian (nuclear) S&P Standard & Poor'sPoint

IRP Integrated resource plan SEC U.S. Securities and Exchange Commission

SERI System Energy Resources, Inc.

TCRF Transmission cost recovery factor

UPSA Unit Power Sales Agreement

WACC Weighted-average cost of capital

WPEC Washington Parish Energy Center

G: Other GAAP to Non-GAAP ReconciliationsAppendix G-1, Appendix G-2, and Appendix G-3 provide reconciliations of various non-GAAP financial measures disclosed in this news release to their most comparable GAAP measure.

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

(LTM $ in millions except where noted) First Quarter

2021 2020

As-reported net income (loss) attributable to Entergy (A) 1,604 1,105Corporation

Preferred dividends 18 17

Tax-effected interest expense 594 559

As-reported net income (loss) attributable to EntergyCorporation adjusted for preferred dividends and (B) 2,216 1,681tax-effected interest expense

Adjustments (C) 399 (31)

EWC preferred dividends and tax-effected interest 19 22expense included in adjustments

Total adjustments, excluding EWC preferred dividends 418 (9)and tax-effected interest expense (non-GAAP) (D)

Adjusted earnings (non-GAAP) (A-C) 1,205 1,136

Adjusted earnings, excluding preferred dividends and (B-D) 1,798 1,690tax- effected interest expense (non-GAAP)

Average invested capital (average of beginning and (E) 34,509 30,229ending balances)

Average common equity (average of beginning and ending (F) 10,621 9,597balances)

As-reported ROIC (B/E) 6.4% 5.6%

Adjusted ROIC (non-GAAP) [(B-D)/E] 5.2% 5.6%

As-reported ROE (A/F) 15.1% 11.5%

Adjusted ROE (non-GAAP) [(A-C)/F] 11.3% 11.8%

Calculations may differ due to rounding

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

($ in millions except where noted) First Quarter

2021 2020

Total debt (A) 25,803 21,465

Less securitization debt (B) 147 271

Total debt, excluding securitization debt (C) 25,656 21,193

Less cash and cash equivalents (D) 1,743 1,464

Net debt, excluding securitization debt (E) 23,914 19,730

Commercial paper (F) 1,028 1,942

Total capitalization (G) 37,075 31,943

Less securitization debt (B) 147 271

Total capitalization, excluding securitization debt (H) 36,928 31,672

Less cash and cash equivalents (D) 1,743 1,464

Net capital, excluding securitization debt (I) 35,185 30,208

Debt to capital (A/G) 69.6% 67.2%

Debt to capital, excluding securitization debt (C/H) 69.5% 66.9%(non-GAAP)

Net debt to net capital, excluding securitization (E/I) 68.0% 65.3%debt (non-GAAP)

Available revolver capacity (J) 4,220 3,348

Storm escrows (K) 72 373

Gross liquidity (non-GAAP) (D+J) 5,963 4,811

Net liquidity (non-GAAP) (D+J-F) 4,935 2,870

Net liquidity, including storm escrows (non-GAAP) (D+J-F+K) 5,007 3,242

Entergy Corporation notes:

Due September 2020 - 450

Due July 2022 650 650

Due September 2025 800 -

Due September 2026 750 750

Due June 2028 650 -

Due June 2030 600 -

Due June 2031 650 -

Due June 2050 600 -

Total Entergy Corporation notes (L) 4,700 1,850

Revolver draw (M) 55 922

Unamortized debt issuance costs and discounts (N) (54) (8)

Total parent debt (F+L+M+N) 5,728 4,706

Parent debt to total debt, excluding securitization [(F+L+M+N)/C] 22.3% 22.2%debt (non-GAAP)

Calculations may differ due to rounding

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

($ in millions except where noted) First Quarter

2021 2020

Total debt (A) 25,803 21,465

Less securitization debt (B) 147 271

Total debt, excluding securitization debt (C) 25,656 21,193

(D)Net cash flow provided by operating activities, LTM 1,981 2,974

AFUDC - borrowed funds, LTM (E) (43) (63)

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

Receivables (262) (71)

Fuel inventory 15 (39)

Accounts payable 90 (136)

Taxes accrued 21 (21)

Interest accrued 9 17

Other working capital accounts (165) 17

Securitization regulatory charges, LTM 124 122

Total (F) (170) (111)

FFO, LTM (non-GAAP) (G)=(D+E-F) 2,109 3,023

FFO to debt, excluding securitization debt (G/C) 8.2% 14.3%(non-GAAP)

Estimated return of unprotected excess ADIT, LTM (H) 80 236

Severance and retention payments associated with (I) 55 141exit of EWC, LTM pre-tax

FFO to debt, excluding securitization debt, returnof unprotected excess ADIT, and severance and [(G+H+I)/(C)] 8.7% 16.0%retention payments associated with exit of EWC(non-GAAP)

Calculations may differ due to rounding

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SOURCE Entergy Corporation