Entergy Reports Third Quarter Results

Consolidated Earnings (GAAP and Non-GAAP Measures)

Third Quarter and Year-to-Date 2016 vs. 2015 (See Appendix A for reconciliation of GAAP to non-GAAP measures and description of special items)

Third Quarter

Year-to-Date

2016

2015

Change

2016

2015

Change

As-Reported Earnings ($ millions)

388.2

(723.0)

1,111.2

1,185.4

(276.1)

1,461.6

Less Special Items

(27.5)

(1,063.7)

1,036.2

(30.7)

(1,069.4)

1,038.7

Operational Earnings

415.6

340.7

75.0

1,216.2

793.3

422.9

Estimated Weather Impact

33.8

29.3

4.5

(8.0)

40.7

(48.7)

As-Reported Earnings (per share in $)

2.16

(4.04)

6.20

6.60

(1.54)

8.14

Less Special Items

(0.15)

(5.94)

5.79

(0.17)

(5.96)

5.79

Operational Earnings

2.31

1.90

0.41

6.77

4.42

2.35

Estimated Weather Impact

0.18

0.16

0.02

(0.04)

0.23

(0.27)

Totals may not foot due to rounding

Appendix A-1: Consolidated Earnings - Reconciliation of GAAP to Non-GAAP Measures

Third Quarter and Year-to-Date 2016 vs. 2015 (See Appendix A-3 and Appendix A-4 for details on special items)

(Per share in $)

Third Quarter

Year-to-Date

2016

2015

Change

2016

2015

Change

As-reported

Utility

2.47

2.01

0.46

5.64

4.36

1.28

Parent & Other

(0.35)

(0.29)

(0.06)

(0.92)

(0.81)

(0.11)

EWC

0.04

(5.76)

5.80

1.88

(5.09)

6.97

  Consolidated as-reported earnings

2.16

(4.04)

6.20

6.60

(1.54)

8.14

Less special items

Utility

-

-

-

-

-

-

Parent & Other

-

-

-

-

-

-

EWC

(0.15)

(5.94)

5.79

(0.17)

(5.96)

5.79

  Consolidated special items

(0.15)

(5.94)

5.79

(0.17)

(5.96)

5.79

Operational

Utility

2.47

2.01

0.46

5.64

4.36

1.28

Parent & Other

(0.35)

(0.29)

(0.06)

(0.92)

(0.81)

(0.11)

EWC

0.19

0.18

0.01

2.05

0.87

1.18

  Consolidated operational earnings

2.31

1.90

0.41

6.77

4.42

2.35

Estimated weather impact

0.18

0.16

0.02

(0.04)

0.23

(0.27)

Appendix A-2: Consolidated Operating Cash Flow

Third Quarter and Year-to-Date 2016 vs. 2015

($ in millions)

Third Quarter

Year-to-Date

2016

2015

Change

2016

2015

Change

Utility

929

833

96

2,078

2,049

29

Parent & Other

(53)

13

(66)

(162)

(81)

(81)

EWC

124

165

(41)

336

381

(45)

  Total OCF

1,000

1,011

(11)

2,252

2,350

(97)

Totals may not foot due to rounding

Appendix A-3: Special Items by Driver (shown as positive/(negative) impact on EPS)

Third Quarter and Year-to-Date 2016 vs. 2015

(After-tax, per share in $)

Third Quarter

Year-to-Date

2016

2015

Change

2016

2015

Change

EWC

Decisions to close VY and Pilgrim and decision to sell or close FitzPatrick

(0.15)

(5.94)

5.79

(0.29)

(5.96)

5.67

DOE litigation awards for VY and FitzPatrick

-

-

-

0.12

-

0.12

  Total EWC

(0.15)

(5.94)

5.79

(0.17)

(5.96)

5.79

Total special items

(0.15)

(5.94)

5.79

(0.17)

(5.96)

5.79

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

Third Quarter and Year-to-Date 2016 vs. 2015

(Pre-tax except for Income taxes – other and Total, $ in millions)

Third Quarter

Year-to-Date

2016

2015

Change

2016

2015

Change

EWC

Net revenue

7.5

-

7.5

7.5

-

7.5

Non-fuel O&M

(29.3)

(1.7)

(27.5)

(18.1)

(10.8)

(7.3)

Taxes other than income taxes

(1.8)

(0.1)

(1.7)

(3.7)

0.2

(3.9)

Asset write-off and impairments

(18.8)

(1,642.2)

1,623.4

(33.2)

(1,642.2)

1,609.0

Income taxes – other

15.0

580.3

(565.4)

16.8

583.4

(566.6)

  Total EWC

(27.5)

(1,063.7)

1,036.2

(30.7)

(1,069.4)

1,038.7

Total special items (after-tax)

(27.5)

(1,063.7)

1,036.2

(30.7)

(1,069.4)

1,038.7

Totals may not foot due to rounding

Appendix B-1: As-Reported and Operational EPS Variance Analysis

Third Quarter 2016 vs. 2015

(After-tax, per share in $, sorted in consolidated operational column, most to least favorable)

Utility

Parent & Other

EWC

Consolidated

As-Reported

Opera-tional

As-Reported

Opera-tional

As- Reported

Opera-tional

As- Reported

Opera-tional

2015 earnings

2.01

2.01

(0.29)

(0.29)

(5.76)

0.18

(4.04)

1.90

Net revenue

0.37

0.37

(a)

-

-

(0.04)

(0.07)

(b)

0.33

0.30

Non-fuel O&M

0.13

0.13

(c)

(0.01)

(0.01)

(0.02)

0.08

(d)

0.10

0.20

Taxes other than income taxes

0.04

0.04

-

-

-

-

0.04

0.04

Other income (deductions)-other

0.01

0.01

-

-

-

-

0.01

0.01

Asset write-offs and impairments

-

-

-

-

5.86

-

(e)

5.86

-

Share effect

(0.01)

(0.01)

-

-

-

-

(0.01)

(0.01)

Interest expense and other charges

(0.02)

(0.02)

-

-

0.01

0.01

(0.01)

(0.01)

Depreciation/amortization expense

(0.04)

(0.04)

-

-

0.02

0.02

(0.02)

(0.02)

Income taxes – other

(0.01)

(0.01)

(0.05)

(0.05)

(f)

0.02

0.02

(0.04)

(0.04)

Decommissioning expense

(0.01)

(0.01)

-

-

(0.05)

(0.05)

(g)

(0.06)

(0.06)

2016 earnings

2.47

2.47

(0.35)

(0.35)

0.04

0.19

2.16

2.31

Appendix B-2: As-Reported and Operational EPS Variance Analysis

Year-to-Date 2016 vs. 2015

(After-tax, per share in $, sorted in consolidated operational column, most to least favorable)

Utility

Parent & Other

EWC

Consolidated

As-Reported

Opera-tional

As-Reported

Opera-tional

As- Reported

Opera-tional

As- Reported

Opera-tional

2015 earnings

4.36

4.36

(0.81)

(0.81)

(5.09)

0.87

(1.54)

4.42

Income taxes – other

0.66

0.66

(h)

(0.05)

(0.05)

(f)

1.33

1.33

(i)

1.94

1.94

Non-fuel O&M

0.36

0.36

(c)

(0.03)

(0.03)

0.25

0.28

(d)

0.58

0.61

Taxes other than income taxes

0.05

0.05

(j)

-

-

0.04

0.05

(k)

0.09

0.10

Asset write-offs and impairments

-

-

-

-

5.80

-

(e)

5.80

-

Depreciation/amortization expense

(0.12)

(0.12)

(l)

-

-

0.11

0.11

(m)

(0.01)

(0.01)

Preferred dividend requirements

(0.01)

(0.01)

-

-

-

-

(0.01)

(0.01)

Other income (deductions)-other

0.03

0.03

(0.01)

(0.01)

(0.06)

(0.06)

(n)

(0.04)

(0.04)

Interest expense and other charges

(0.04)

(0.04)

(0.02)

(0.02)

-

-

(0.06)

(0.06)

Decommissioning expense

(0.03)

(0.03)

-

-

(0.05)

(0.05)

(g)

(0.08)

(0.08)

Net revenue

0.38

0.38

(a)

-

-

(0.45)

(0.48)

(b)

(0.07)

(0.10)

2016 earnings

5.64

5.64

(0.92)

(0.92)

1.88

2.05

6.60

6.77

(a) 

The current quarter and year-to-date increases were due primarily to rate changes associated with the Union acquisition, EAI's rate case and EMI's FRP. Volume in the unbilled period also contributed to the net revenue increase. Partially offsetting the increase in the year-to-date period was a $16 million (pre-tax) reserve recorded in second quarter 2016 for the portion of a tax benefit to be shared with customers. The effect of weather was slightly favorable quarter-over-quarter but unfavorable in the year-to-date variance.

Third
Quarter

Year-to-

Date

Estimated weather

0.02

Sales growth/pricing

0.41

0.89

Other

(0.06)

(0.24)

0.37

0.38

(b)

The current quarter and year-to-date decreases were driven by lower energy pricing for nuclear assets. The sale of the RISEC facility in December 2015 also contributed to the decline. These decreases were partially offset by lower nuclear fuel expense (due largely to 2015 impairments). In the year-to-date period, volume from nuclear assets was lower due largely to the extended IP2 refueling outage.

(c) 

The current quarter and year-to-date increases reflected lower pension and OPEB expenses stemming partly from a higher discount rate, lower vegetation maintenance costs and energy efficiency costs, including the effects of true-ups. Non-fuel O&M expense was also reduced as a result of litigation awards from the DOE in connection with spent nuclear fuel storage costs. The expense decreases were partially offset by the Union acquisition (offset in net revenue). The quarter variance also reflected lower nuclear generation spending in 2016 due primarily to a decrease in regulatory compliance costs and expenses related to the ELL business combination. The year-to-date variance reflected a deferral recorded at EAI in first quarter 2016 and lower spending on fossil outages. These items were partially offset by higher nuclear generation spending due primarily to an overall higher scope of work done during plant outages in 2016 and higher nuclear labor costs, including contract labor.

(d) 

The current quarter as-reported decrease was driven by higher expenses resulting from the decisions to close or sell certain nuclear plants (these expenses were considered special items and excluded from operational results). The current quarter operational and year-to-date variances increased, reflecting lower refueling outage expense (largely as a result of 2015 impairments) and the sale of the RISEC facility in December 2015. The year-to-date variance also reflected a reduction in expense for litigation proceeds received from the DOE in connection with spent nuclear fuel storage costs in second quarter 2016 (approximately 12 cents EPS received for VY and FitzPatrick was considered a special item).

(e)

The as-reported current quarter and year-to-date increases were primarily due to non-cash impairment charges and related write-offs recorded in third quarter 2015 for Pilgrim and FitzPatrick. Partially offsetting was capital recorded as non-fuel O&M for those nuclear plants that have closed (VY) or are identified to close or be sold (Pilgrim and FitzPatrick).

(f) 

The current quarter and year-to-date decreases were due to an inter-company adjustment recorded (offset at EWC).

(g) 

The current quarter and year-to-date decreases were due to the establishment of decommissioning liabilities for Indian Point 3 and FitzPatrick in 2016 and revisions to decommissioning cost studies at other EWC nuclear facilities in 2015.

(h) 

The year-to-date increase was due largely to the reversal of a portion of the provision for uncertain tax positions totaling $136 million for two previous positions that were resolved in the 2010-2011 tax audit in second quarter 2016. This was partly offset by customer sharing recorded as a regulatory charge ($16 million pre-tax, included in net revenue). Partially offsetting was a first quarter 2015 reversal of a portion of the provision for uncertain tax provisions related to interest accrual of approximately $24 million.

(i)

The year-to-date increase was attributable largely to a tax election which reduced income tax expense by $238 million.

(j) 

The year-to-date increase was due primarily to lower franchise taxes and lower payroll taxes.

(k) 

The year-to-date increase was due largely to lower sales and use tax and the effect of prior year's New York state audit settlement.

(l) 

The year-to-date decrease was due primarily to additions to plant, including the Union acquisition in March 2016. The decrease was partially offset by depreciation expense reduction which resulted from litigation awards from the DOE in connection with spent nuclear fuel storage costs in the current quarter.

(m) 

The year-to-date increase resulted from 2015 impairments, recording the effects of DOE litigation proceeds related to spent nuclear fuel storage costs and the sale of RISEC.

(n) 

The year-to-date decrease was due largely to realized earnings from decommissioning trusts in 2015 from rebalancing of VY's decommissioning trust.

Appendix C-1: Utility, Parent & Other Adjusted EPS - Reconciliation of GAAP to Non-GAAP Measures

Third Quarter and Year-to-Date 2016 vs. 2015 (See Appendix A for details on special items)

(Per share in $)

Third Quarter

Year-to-Date

2016

2015

Change

2016

2015

Change

As-reported EPS

2.12

1.72

0.40

4.72

3.55

1.17

Less:

  Special items

-

-

-

-

-

-

  Estimated weather

0.18

0.16

0.02

(0.04)

0.23

(0.27)

  Income taxes, net of sharing

(0.04)

-

(0.04)

0.67

0.13

0.54

Adjusted EPS

1.98

1.56

0.42

4.09

3.19

0.90

Appendix C-2: Utility Operational Performance Measures

Third Quarter and Year-to-Date 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to non-GAAP measures)

Third Quarter

Year-to-Date

2016

2015

%

Change

% Weather Adjusted

2016

2015

%

Change

% Weather Adjusted

GWh billed

Residential

11,817

11,887

(0.6%)

(0.6%)

27,035

28,683

(5.7%)

(0.6%)

Commercial

8,650

8,744

(1.1%)

(2.0%)

21,938

22,370

(1.9%)

(1.5%)

Governmental

703

692

1.6%

1.0%

1,912

1,886

1.4%

1.3%

Industrial

12,017

12,087

(0.6%)

(0.6%)

34,581

33,230

4.1%

4.1%

Total retail sales

33,187

33,410

(0.7%)

(0.9%)

85,466

86,169

(0.8%)

1.0%

Wholesale

2,733

2,586

5.7%

9,452

7,535

25.4%

Total sales

35,920

35,996

(0.2%)

94,918

93,704

1.3%

Number of electric retail customers

Residential

2,454,761

2,434,079

0.8%

Commercial

352,175

348,920

0.9%

Governmental

17,662

17,779

(0.7%)

Industrial

49,606

49,941

(0.7%)

Total retail customers

2,874,204

2,850,719

0.8%

Net revenue ($ millions)

1,859

1,750

6.2%

4,758

4,648

2.4%

As-reported non-fuel O&M per MWh

$17.39

$18.42

(5.6%)

$18.82

$20.17

(6.7%)

Operational non-fuel O&M per MWh

$17.39

$18.42

(5.6%)

$18.82

$20.17

(6.7%)

The effects of weather are estimated using monthly heating degree days and cooling degree days 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 subject to change.

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

Third Quarter and Year-to-Date 2016 vs. 2015

($ in millions)

Third Quarter

Year-to-Date

2016

2015

Change

2016

2015

Change

Net income

8

(1,032)

1,040

339

(913)

1,252

Add back: interest expense

5

7

(2)

18

19

(1)

Add back: income tax expense

6

(555)

561

(177)

(488)

311

Add back: depreciation and amortization

53

60

(7)

155

187

(32)

Subtract: interest and investment income

27

29

(2)

87

116

(29)

Add back: decommissioning expense

47

33

14

117

101

16

Adjusted EBITDA

93

(1,515)

1,608

365

(1,210)

1,575

Add back pre-tax special items for:

  Decisions to close VY and Pilgrim and decision to sell or close FitzPatrick

42

1,644

(1,602)

81

1,653

(1,572)

  DOE litigation awards for VY and FitzPatrick

-

-

-

(34)

-

(34)

Operational adjusted EBITDA

135

129

6

412

443

(31)

Totals may not foot due to rounding

Appendix D-2: EWC Operational Performance Measures

Third Quarter and Year-to-Date 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to non-GAAP measures)

Third Quarter

Year-to-Date

2016

2015

% Change

2016

2015

% Change

Owned capacity (MW) (o)

4,880

5,463

(10.7%)

4,880

5,463

(10.7%)

GWh billed

9,372

10,440

(10.2%)

26,484

29,610

(10.6%)

As-reported average total revenue per MWh

$50.72

$49.97

1.5%

$50.65

$54.16

(6.5%)

Adjusted operational average total revenue per MWh

$49.03

$49.61

(1.2%)

$49.74

$53.77

(7.5%)

Net revenue ($ millions)

396

410

(3.4%)

1,156

1,287

(10.2%)

As-reported non-fuel O&M per MWh

$27.78

$24.49

13.4%

$25.59

$25.42

0.7%

Operational non-fuel O&M per MWh

$24.65

$24.32

1.4%

$24.90

$25.06

(0.6%)

EWC Nuclear Fleet

Capacity factor

90%

92%

(2.2%)

85%

90%

(5.6%)

GWh billed

8,674

9,125

(4.9%)

24,670

26,298

(6.2%)

As-reported average total revenue per MWh

$51.01

$50.41

1.2%

$51.05

$53.96

(5.4%)

Adjusted operational average total revenue per MWh

$49.19

$49.99

(1.6%)

$50.07

$53.53

(6.5%)

Production cost per MWh

$23.77

$26.90

(11.6%)

$22.91

$26.24

(12.7%)

Net revenue ($ millions)

396

395

0.3%

1,151

1,240

(7.2%)

Refueling outage days

  Indian Point 2

-

-

102

-

  Indian Point 3

-

-

-

23

  Palisades

-

13

-

13

  Pilgrim

-

-

-

34

(o)

Third quarter and year-to-date 2016 exclude RISEC (583 MW) that was sold in December 2015

Appendix E: GAAP and Non-GAAP Financial Performance Measures

Third Quarter 2016 vs. 2015 (See Appendix G for reconciliation of GAAP to non-GAAP measures)

For 12 months ending September 30

2016

2015

Change

GAAP Measures

ROIC - as-reported

7.0%

1.1%

5.9%

ROE - as-reported

13.4%

(1.6%)

15.0%

Book value per share

$56.21

$51.33

$4.88

End of period shares outstanding (millions)

179.1

178.4

0.7

Non-GAAP Measures

ROIC - operational

7.9%

5.6%

2.3%

ROE - operational

15.6%

9.6%

6.0%

As of September 30 ($ in millions)

2016

2015

Change

GAAP Measures

Cash and cash equivalents

1,307

1,041

266

Revolver capacity

4,243

3,869

374

Commercial paper

264

664

(400)

Total debt

15,073

14,144

929

Securitization debt

698

814

(116)

Debt to capital

59.4%

60.2%

(0.8%)

Off-balance sheet liabilities:

Debt of joint ventures - Entergy's share

74

78

(4)

Leases - Entergy's share

359

422

(63)

Power purchase agreements accounted for as leases

195

224

(29)

Total off-balance sheet liabilities

628

724

(96)

Non-GAAP Measures

Debt to capital, excluding securitization debt

58.3%

58.7%

(0.4%)

Gross liquidity

5,550

4,910

640

Net debt to net capital, excluding securitization debt

55.9%

56.7%

(0.8%)

Parent debt to total debt, excluding securitization debt

19.4%

20.9%

(1.5%)

Debt to operational adjusted EBITDA, excluding securitization debt

4.2x

3.9x

0.3x

Operational FFO to debt, excluding securitization debt

21.1%

25.4%

(4.3%)

Appendix F-1: Definitions

Utility Operational Performance Measures

GWh billed

Total number of GWh billed to all retail and wholesale customers

Net revenue

Operating revenue less fuel, fuel related expenses and gas purchased for resale, purchased power and other regulatory charges (credits) - net

Non-fuel O&M

Operation and maintenance expenses excluding fuel, fuel-related expenses and gas purchased for resale and purchased power

Non-fuel O&M per MWh

Non-fuel O&M per MWh of billed sales

Number of retail customers

Number of customers at end of period

EWC Operational Performance Measures

As-reported average total revenue per MWh

As-reported revenue per MWh billed (does not include revenue from investments in wind generation that is accounted for under the equity method of accounting)

Adjusted average total revenue per MWh

As-reported average total revenue per MWh, excluding revenue from the amortization of the Palisades below-market PPA and VY capacity revenue

Average revenue under contract per kW-month (applies to capacity contracts only)

Revenue on a per unit basis at which capacity is expected to be sold to third parties, given existing contract prices and/or auction awards

Average revenue per MWh on contracted volumes

Revenue on a per unit basis at which generation output reflected in contracts is expected to be sold to third parties (including offsetting positions) at the minimum contract prices and at forward market prices at a point in time, given existing contract or option exercise prices based on expected dispatch or capacity, excluding the revenue associated with the amortization of the below-market PPA for Palisades; revenue will fluctuate due to factors including market price changes affecting revenue received on puts, collars and call options, positive or negative basis differentials, option premiums and market prices at the time of option expiration, costs to convert firm LD to unit-contingent and other risk management costs

Bundled capacity and energy contracts

A contract for the sale of installed capacity and related energy, priced per MWh sold

Capacity contracts

A contract for the sale of the installed capacity product in regional markets managed by ISO-NE, the NYISO and MISO

Capacity factor

Normalized percentage of the period that the nuclear plants generate power

Expected sold and market total revenue per MWh

Total energy and capacity revenue on a per unit basis at which total planned generation output and capacity is expected to be sold given contract terms and market prices at a point in time, including estimates for market price changes affecting revenue received on puts, collars and call options, positive or negative basis differentials, option premiums and market prices at time of option expiration, costs to convert Firm LD to unit-contingent 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

Firm LD

Transaction that requires receipt or delivery of energy at a specified delivery point (usually at a market hub not associated with a specific asset) or settles financially on notional quantities; if a party fails to deliver or receive energy, defaulting party must compensate the other party as specified in the contract; a portion of which may be capped through the use of risk management products

GWh billed

Total number of GWh billed to customers and financially-settled instruments (does not include amounts from investments in wind generation that are accounted for under the equity method of accounting)

Appendix F-1: Definitions

EWC Operational Performance Measures (continued)

Net revenue

Operating revenue less fuel, fuel related expenses and purchased power

Non-fuel O&M

Operation and maintenance expenses excluding fuel, fuel-related expenses and gas purchased for resale, purchased power (does not include amounts from investments in wind generation that are accounted for under the equity method of accounting)

Non-fuel O&M per MWh

Non-fuel O&M per MWh billed

Offsetting positions

Transactions for the purchase of energy, generally to offset a Firm LD transaction

Owned capacity (MW)

Installed capacity owned and operated by EWC, including investments in wind generation accounted for under the equity method of accounting; RISEC (non-nuclear) was sold on Dec. 17, 2015

Percent of capacity sold forward

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

Percent of planned generation under contract

Percent of planned generation output sold or purchased forward under contracts, forward physical contracts, forward financial contracts or options that mitigate price uncertainty that may or may not require regulatory approval or approval of transmission rights or other conditions precedent; positions that are no longer classified as hedges are netted in the planned generation under contract

Planned net MW in operation

Amount of installed capacity to generate power and/or sell capacity, assuming intent to shutdown Pilgrim on May 31, 2019 and sell FitzPatrick in second quarter 2017

Planned TWh of generation

Amount of output expected to be generated by EWC resources considering plant operating characteristics and outage schedules, assuming intent to shutdown Pilgrim on May 31, 2019 and to sell FitzPatrick in second quarter 2017, uninterrupted normal plant operation and timely renewal of plant operating licenses at IPEC

Production cost per MWh

Fuel and non-fuel O&M expenses according to accounting standards that directly relate to the production of electricity per MWh (based on net generation), excluding special items

Refueling outage days

Number of days lost for scheduled refueling outage during the period

Unit-contingent

Transaction under which power is supplied from a specific generation asset; if the asset is on 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

Book value per share

End of period common equity divided by end of period shares outstanding

Debt of joint ventures - Entergy's share

Entergy's share of debt issued by business joint ventures at EWC

Debt to capital ratio

Total debt divided by total capitalization

Leases - Entergy's share

Operating leases held by subsidiaries capitalized at implicit interest rate

Revolver capacity

Amount of undrawn capacity remaining on corporate and subsidiary revolvers, including Entergy Nuclear Vermont Yankee

ROIC - as-reported

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

ROE - as-reported

12-months rolling net income attributable to Entergy Corporation divided by average common equity

Securitization debt

Debt associated with securitization bonds issued to recover storm costs from hurricanes Rita, Ike and Gustav at ETI and Hurricane Isaac at ENOI; the 2009 ice storm at EAI and investment recovery of costs associated with the cancelled Little Gypsy repowering project at ELL

Total debt

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

Appendix F-1: Definitions

Financial Measures - Non-GAAP

Adjusted EBITDA

Earnings before interest, depreciation and amortization and income taxes excluding decommissioning expense; for Entergy consolidated, also excludes AFUDC-equity funds and subtracts securitization proceeds

Adjusted EPS

As-reported EPS excluding special items and weather and normalizing for income tax

Debt to capital ratio, excluding securitization debt

Total debt divided by total capitalization, excluding securitization debt

Debt to EBITDA

End of period total debt excluding securitization debt divided by 12-months rolling operational adjusted EBITDA

FFO

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

FFO to debt

12-months rolling operational FFO as a percentage of end of period total debt excluding securitization debt

Gross liquidity

Sum of cash and revolver capacity

Operational adjusted EBITDA

Adjusted EBITDA excluding effects of special items

Operational EPS

As-reported EPS adjusted to exclude the impact of special items

Operational FFO

FFO excluding effects of special items

Parent debt to total debt

End of period Entergy Corporation debt, including amounts drawn on credit revolver and commercial paper facilities, as a percent of total debt excluding securitization debt

Net debt to net capital ratio, excluding securitization debt

Total debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents, excluding securitization debt

ROIC - operational

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

ROE - operational

12-months rolling operational net income attributable to Entergy Corporation divided by average common equity

Appendix F-2: Abbreviations and Acronyms

ADIT

Accumulated deferred income taxes

LPSC

Louisiana Public Service Commission

AFUDC -

borrowed funds

Allowance for borrowed funds used during construction

LTM

Last twelve months

MISO

Midcontinent Independent System Operator, Inc.

AFUDC -

equity funds

Allowance for equity funds used during construction

MPSC

Mississippi Public Service Commission

MTEP

MISO Transmission Expansion Planning

ALJ

Administrative law judge

NEPOOL

New England Power Pool

AMI

Advanced metering infrastructure

Ninemile 6

Ninemile Point Unit 6

ANO

Arkansas Nuclear One (nuclear)

NOAA

National Oceanic and Atmosphere Administration

APSC

Arkansas Public Service Commission

Non-fuel O&M

Non-fuel operation and maintenance expense

BP

Basis point

NRC

Nuclear Regulatory Commission

CCGT

Combined cycle gas turbine

NYISO

New York Independent System Operator, Inc.

CCNO

Council of the City of New Orleans, Louisiana

NYS

New York State

COD

Commercial operation date

NYSDEC

New York State Department of Environmental Conservation

Cooper

Cooper Nuclear Station

CT

Simple cycle combustion turbine

NYSDOS

New York State Department of State

CZM

Coastal zone management

NYSE

New York Stock Exchange

DCRF

Distribution cost recovery factor

NYSERDA

New York State Energy Research and Development Authority

DOE

U.S. Department of Energy

EAI

Entergy Arkansas, Inc.

O&M

Operation and maintenance expense

EBITDA

Earnings before interest, income taxes, depreciation and amortization

OCF

Net cash flow provided by operating activities

OPEB

Other post-employment benefits

EGSL

Entergy Gulf States Louisiana, L.L.C.

Palisades

Palisades Power Plant (nuclear)

ELL

Entergy Louisiana, LLC

Pilgrim

Pilgrim Nuclear Power Station (nuclear)

EMI

Entergy Mississippi, Inc.

PPA

Power purchase agreement or purchased power agreement

ENOI

Entergy New Orleans, Inc.

ESI

Entergy Services, Inc.

PUCT

Public Utility Commission of Texas

EPS

Earnings per share

RFP

Request for proposal

ETI

Entergy Texas, Inc.

RISEC

Rhode Island State Energy Center (CCGT)

ETR

Entergy Corporation

ROE

Return on equity

EWC

Entergy Wholesale Commodities

ROIC

Return on invested capital

FERC

Federal Energy Regulatory Commission

RPCE

Rough production cost equalization

FFO

Funds from operations

RSP

Rate Stabilization Plan (ELL Gas)

Firm LD

Firm liquidated damages

SEC

U.S. Securities and Exchange Commission

FitzPatrick

James A. FitzPatrick Nuclear Power Plant (nuclear)

SERI

System Energy Resources, Inc.

FRP

Formula rate plan

SPDES

State Pollutant Discharge Elimination System

GAAP

Generally accepted accounting principles

SPP

Southwest Power Pool

Grand Gulf

Unit No. 1 of Grand Gulf Nuclear Station (nuclear),   90% owned or leased by System Energy

TCRF

Transmission cost recovery factor

Top Deer

Top Deer Wind Ventures, LLC

HCM

Human Capital Management program

Union

Union Power Station (CCGT)

Indian Point 2

Indian Point Energy Center Unit 2 (nuclear)

UP&O

Utility, Parent & Other

Indian Point 3

Indian Point Energy Center Unit 3 (nuclear)

VY

Vermont Yankee Nuclear Power Station (nuclear)

IPEC

Indian Point Energy Center (nuclear)

WACC

Weighted-average cost of capital

ISES

Independence Steam Electric Station (coal)

WOTAB

West of the Atchafalaya Basin

ISO

Independent system operator

WQC

Water Quality Certification

ISO-NE

ISO New England

YOY

Year-over-year

Appendix G-1: Reconciliation of GAAP to Non-GAAP Financial Measures - Utility and EWC Non-fuel O&M per MWh, EWC and EWC Nuclear Average Total Revenue per MWh

($ in thousands except where noted)

Third Quarter

Year-to-Date

2016

2015

2016

2015

Utility

As-reported Utility non-fuel O&M

(A)

624,646

663,142

1,786,048

1,889,982

Operational Utility non-fuel O&M

(B)

624,646

663,142

1,786,048

1,889,982

Utility billed sales (GWh)

(C)

35,920

35,996

94,918

93,704

As-reported Utility non-fuel O&M per MWh

(A/C)

17.39

18.42

18.82

20.17

Operational Utility non-fuel O&M per MWh

(B/C)

17.39

18.42

18.82

20.17

EWC

As-reported EWC non-fuel O&M

(D)

260,319

255,656

677,604

752,719

Special items included in non-fuel O&M:

Decisions to close VY and Pilgrim and decision to sell or close FitzPatrick

29,254

1,706

51,879

10,774

 DOE litigation awards for VY and FitzPatrick

-

-

(33,823)

-

     Total special items included in non-fuel O&M

(E)

29,254

1,706

18,056

10,774

Operational EWC non-fuel O&M

(D-E)

231,065

253,950

659,548

741,945

EWC billed sales (GWh)

(F)

9,372

10,440

26,484

29,610

As-reported EWC non-fuel O&M per MWh

(D/F)

27.78

24.49

25.59

25.42

Operational EWC non-fuel O&M per MWh

[(D-E)/(F)]

24.65

24.32

24.90

25.06

As-reported EWC operating revenue

(G)

475,345

521,746

1,341,534

1,603,643

Special items included in operating revenue:

Decision to sell or close FitzPatrick

(H)

7,479

-

7,479

-

Operational EWC operating revenue

(G-H)

467,866

521,746

1,334,055

1,603,643

Less Palisades below-market PPA amortization and VY capacity revenue (p)

(I)

8,338

3,800

16,724

11,400

Adjusted operational EWC operating revenue

[(G-H)]-(I)

459,528

517,946

1,317,331

1,592,243

As-reported EWC average total revenue per MWh

(G)/(F)

50.72

49.97

50.65

54.16

Adjusted operational EWC average total revenue per MWh

[[(G-H)]-(I)/(F)]

49.03

49.61

49.74

53.77

As-reported EWC nuclear operating revenue

(J)

442,488

459,964

1,259,420

1,419,060

Special items included in operating revenue:

Decision to sell or close FitzPatrick

(K)

7,479

-

7,479

-

Operational EWC nuclear operating revenue

(J-K)

435,009

459,964

1,251,941

1,419,060

Less Palisades below-market PPA amortization and VY capacity revenue (p)

(L)

8,338

3,800

16,724

11,400

Adjusted operational EWC nuclear operating revenue

[(J-K)]-(L)

426,671

456,164

1,235,217

1,407,660

EWC nuclear billed sales (GWh)

(M)

8,674

9,125

24,670

26,298

As-reported EWC nuclear average total revenue per MWh

(J)/(M)

51.01

50.41

51.05

53.96

Adjusted operational EWC nuclear average total revenue per MWh

[[(J-K)]-(L)/(M)]

49.19

49.99

50.07

53.53

Totals may not foot due to rounding

(p)

VY capacity revenue which is largely offset by purchased capacity following decision to close VY

Appendix G-2: Reconciliation of GAAP to Non-GAAP Financial Measures - ROIC, ROE Metrics

($ in millions)

Third Quarter

2016

2015

As-reported net income attributable to Entergy Corporation, rolling 12 months

(A)

1,285

(156)

Preferred dividends

21

19

Tax effected interest expense

407

396

As-reported net income attributable to Entergy Corporation, rolling 12 months adjusted for preferred dividends and tax effected interest expense

(B)

1,713

259

Special items in prior quarters

(186)

(21)

Decisions to close VY and Pilgrim and decision to sell or close FitzPatrick

(27)

(1,064)

  Total special items, rolling 12 months

(C)

(212)

(1,085)

Operational earnings, rolling 12 months adjusted for preferred dividends and tax effected interest expense

(B-C)

1,925

1,344

Operational earnings, rolling 12 months

(A-C)

1,497

929

Average invested capital

(D)

24,443

23,819

Average common equity

(E)

9,613

9,653

ROIC - as-reported

(B/D)

7.0

1.1

ROIC - operational 

[(B-C)/D]

7.9

5.6

ROE - as-reported 

(A/E)

13.4

(1.6)

ROE - operational 

[(A-C)/E]

15.6

9.6

Totals may not foot due to rounding

Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures - Credit and Liquidity Metrics

($ in millions)

Third Quarter

2016

2015

Total debt

(A)

15,073

14,144

Less securitization debt

(B)

698

814

Total debt, excluding securitization debt

(C)

14,375

13,330

Less cash and cash equivalents

(D)

1,307

1,041

  Net debt, excluding securitization debt

(E)

13,068

12,289

Total capitalization

(F)

25,375

23,512

Less securitization debt

(B)

698

814

Total capitalization, excluding securitization debt

(G)

24,677

22,698

Less cash and cash equivalents

(D)

1,307

1,041

Net capital, excluding securitization debt

(H)

23,370

21,657

Debt to capital

(A/F)

59.4%

60.2%

Debt to capital, excluding securitization debt

(C/G)

58.3%

58.7%

Net debt to net capital, excluding securitization debt

(E/H)

55.9%

56.7%

Revolver capacity

(I)

4,243

3,869

Gross liquidity

(D+I)

5,550

4,910

Entergy Corporation notes:

  Due January 2017

500

500

  Due September 2020

450

450

  Due July 2022

650

650

  Due September 2026

750

-

    Total parent long-term debt

(J)

2,350

1,600

Revolver draw

(K)

180

525

Commercial paper

(L)

264

664

Total parent debt

(J)+(K)+(L)

2,794

2,789

Parent debt to total debt, excluding securitization debt

[((J)+(K)+(L))/(C)]

19.4%

20.9%

Appendix G-3: Reconciliation of GAAP to Non-GAAP Financial Measures - Credit and Liquidity Metrics (continued)

($ in millions)

Third Quarter

2016

2015

Total debt

(A)

15,073

14,144

Less securitization debt

(B)

698

814

Total debt, excluding securitization debt

(C)

14,375

13,330

As-reported consolidated net income, rolling 12 months

1,306

(156)

Add back: interest expense, rolling 12 months

661

644

Add back: income tax expense, rolling 12 months

(377)

(35)

Add back: depreciation and amortization, rolling 12 months

1,340

1,333

Add back: regulatory charges (credits), rolling 12 months

196

29

Subtract: securitization proceeds, rolling 12 months

140

134

Subtract: interest and investment income, rolling 12 months

157

186

Subtract: AFUDC-equity funds, rolling 12 months

62

56

Add back: decommissioning expense, rolling 12 months

303

279

  Adjusted EBITDA, rolling 12 months

(D)

3,070

1,718

Add back: special item for HCM implementation expenses, rolling 12 months (pre-tax)

-

3

Add back: special item resulting from decisions to close VY and Pilgrim and decision to sell or close FitzPatrick, rolling 12 months (pre-tax)

86

1,673

Add back: special item for DOE litigation awards for VY and FitzPatrick, rolling 12 months (pre-tax)

(34)

-

Add back: special item for Palisades asset impairment and related write-offs, rolling 12 months (pre-tax)

396

-

Add back: special item for Top Deer investment impairment, rolling 12 months (pre-tax)

37

-

Add back: special item for gain on the sale of RISEC, rolling 12 months (pre-tax)

(154)

-

  Operational adjusted EBITDA, rolling 12 months

(E)

3,401

3,394

Debt to operational adjusted EBITDA, excluding securitization debt

(C)/(E)

4.2x

3.9x

Net cash flow provided by operating activities, rolling 12 months

(F)

3,194

3,348

AFUDC-borrowed funds used during construction, rolling 12 months

(G)

(32)

(29)

Working capital items in net cash flow provided by operating activities, rolling 12 months:

  Receivables

(10)

(5)

  Fuel inventory

24

(34)

  Accounts payable

55

(63)

  Prepaid taxes and taxes accrued

3

25

  Interest accrued

9

(5)

  Other working capital accounts

(59)

(17)

  Securitization regulatory charge

111

104

       Total

(H)

133

5

FFO, rolling 12 months

(F)+(G)-(H)

3,029

3,314

Add back: special item for HCM implementation expenses, rolling 12 months (pre-tax)

-

11

Add back: special item resulting from decisions to close VY and Pilgrim and decision to sell or close FitzPatrick, rolling 12 months (pre-tax)

6

56

Operational FFO, rolling 12 months

(I)

3,035

3,381

Operational FFO to debt ratio, excluding securitization debt

(I)/(C)

21.1%

25.4%

Totals may not foot due to rounding