News Release > Entergy reports second quarter earnings

Entergy reports second quarter earnings

08/01/2024

Important settlements reached; guidance and outlooks affirmed

NEW ORLEANS – Entergy Corporation (NYSE: ETR) reported second quarter 2024 earnings per share of 23 cents on an as-reported basis and $1.92 on an adjusted (non-GAAP) basis.

"We successfully executed on key operational, customer, and regulatory fronts," said Drew Marsh, Entergy Chair and Chief Executive Officer. "Having achieved several important milestones, we have paved the way to capture the robust growth in front of us and unlock exceptional value for all of our stakeholders."

Business highlights included the following:

• E-LA reached an agreement in principle with the LPSC Staff and other parties to (1) extend and modify the formula rate plan, (2) establish the base FRP rate change for the 2023 test year, and (3) provide customer credits, including increasing customer sharing of tax benefits, to resolve several open matters; the agreement is subject to LPSC approval.
• SERI reached an agreement in principle with the LPSC Staff that substantially resolves the major litigation at SERI; the agreement is subject to LPSC and FERC approval.
• The MPSC approved E-MS's FRP settlement.
• E-TX filed for a CCN to construct two hydrogen-capable power stations: the Legend Power Station, a 754-megawatt carbon-capture-enabled CCCT facility, and the Lone Star Power Station, a 453-megawatt CT facility.
• E-TX filed for a CCN for two owned solar facilities totaling 311 megawatts.
• E-TX submitted a DCRF filing to recover distribution investment since the rate case test year.
• The LPSC approved an enhanced renewable RFP process for up to 3 gigawatts of renewable resources.
• Entergy and NextEra Energy Resources, LLC announced a joint development agreement that will accelerate the development of up to 4.5 gigawatts of new, utility-owned solar generation and energy storage projects.
• E-TX filed Phase I of its Future Ready Resiliency Plan, which includes $335 million of investment to be completed over 3 years.
• E-AR and E-NO each submitted their annual FRP filings.
• Entergy was named to The Civic 50, a Points of Light initiative honoring the 50 most community-minded companies in the U.S.

Calculations may differ due to rounding

Consolidated results

For second quarter 2024, the company reported earnings of $49 million, or 23 cents per share, on an as-reported basis, and earnings of $411 million, or $1.92 per share, on an adjusted basis. This compared to second quarter 2023 earnings of $391 million, or $1.84 per share, on an as-reported and an adjusted basis.

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

Business results

Utility

For second quarter 2024, the Utility business reported earnings attributable to Entergy Corporation of $441 million, or $2.06 per share, on an as-reported basis and $553 million, or $2.58 per share, on an adjusted basis. This compared to second quarter 2023 earnings of $514 million, or $2.42 per share, on an as-reported and an adjusted basis.

Second quarter 2024 results included expenses totaling $(151 million) ($(112 million) after tax) recorded as a result of Entergy Louisiana's agreement in principle with the LPSC Staff and other parties. The settlement, if approved, will extend and modify the formula rate plan; establish the base FRP rate change for the 2023 test year; and provide $184 million of customer rate credits, including increasing customer sharing of income tax benefits resulting from the 2016-2018 IRS audit resolution (a reserve of $38 million was previously established), to resolve several open matters, including all formula rate plans prior to the 2023 test year (considered an adjustment and excluded from adjusted earnings).

Other drivers for the quarter included:

• higher retail sales volume including the effects of weather,
• the net effect of regulatory actions across the operating companies, and
• lower non-service pension costs included in other income (deductions).

These drivers were partially offset by:

• higher operating expenses including other O&M and depreciation, and
• higher interest expense.

On a per share basis, second quarter 2024 results reflected higher diluted average number of common shares outstanding.

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

Parent & Other

For second quarter 2024, Parent & Other reported a loss attributable to Entergy Corporation of $(392 million), or $(1.83) per share, on an as-reported basis, and a loss of $(142 million), or (66) cents per share, on an adjusted basis. This compared to a second quarter 2023 loss of $(123 million), or (58) cents per share, on an as-reported and an adjusted basis.

The quarter-over-quarter as-reported decline was primarily due to a $(317 million) ($(250 million) after tax) settlement charge recognized as a result of a group annuity contract purchased in May 2024 to settle certain pension liabilities, also referred to as the pension lift out (considered an adjustment and excluded from adjusted earnings).

Higher interest expense was also a driver for the quarter.

On a per share basis, second quarter 2024 results reflected higher diluted average number of common shares outstanding.

Earnings per share guidance

Entergy affirmed its 2024 adjusted EPS guidance range of $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, August 1, 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 investors.entergy.com/investors/events-and-presentations or by dialing 888-440-4149, conference ID 9024832, no more than 15 minutes prior to the start of the call. The webcast presentation is also being posted to Entergy's website concurrent with this news release. A replay of the teleconference will be available on Entergy's website at investors.entergy.com/investors/events-and-presentations and by telephone. The telephone replay will be available through August 8, 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 investors.entergy.com/investors/events-and-presentations.

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

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

Non-GAAP financial measures

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

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

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

Other non-GAAP measures, including adjusted ROE; adjusted ROE, excluding affiliate preferred; FFO to adjusted debt; gross liquidity; net liquidity; adjusted Parent debt to total adjusted debt; adjusted debt to adjusted capitalization; and adjusted net debt to adjusted net capitalization are measures Entergy uses internally for management and board discussions and to gauge the overall strength of its business. Entergy believes the above data provides useful information to investors in evaluating Entergy's ongoing financial results and flexibility and assists investors in comparing Entergy's credit and liquidity to the credit and liquidity of others in the utility sector. Metrics defined as "adjusted" exclude the effect of adjustments as defined above.

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

Cautionary note regarding forward-looking statements

In this news release, and from time to time, 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.

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