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Equity
 3 Months Ended
Mar. 31, 2018
Equity
EQUITY (Entergy Corporation and Entergy Louisiana)

Common Stock

Earnings per Share
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents Entergy’s basic and diluted earnings per share calculations included on the consolidated income statements:
 
For the Three Months Ended March 31,
 
2018
 
2017
 
(In Millions, Except Per Share Data)
Basic earnings per share
Income
 
Shares
 
$/share
 
Income
 
Shares
 
$/share
Net income attributable to Entergy Corporation

$132.8

 
180.7

 

$0.73

 

$82.6

 
179.3

 

$0.46

Average dilutive effect of:
 
 
 
 
 
 
 
 
 
 
 
Stock options
 
 
0.2

 
—

 
 
 
0.1

 
—

Other equity plans
 
 
0.5

 
—

 
 
 
0.4

 
—

Diluted earnings per share

$132.8

 
181.4

 

$0.73

 

$82.6

 
179.8

 

$0.46


    
The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 4 million for the three months ended March 31, 2018 and approximately 4.9 million for the three months ended March 31, 2017.

Entergy’s stock options and other equity compensation plans are discussed in Note 5 to the financial statements herein and in Note 12 to the financial statements in the Form 10-K.

Treasury Stock

During the three months ended March 31, 2018, Entergy Corporation issued 281,614 shares of its previously repurchased common stock to satisfy stock option exercises, vesting of shares of restricted stock, and other stock-based awards.  Entergy Corporation did not repurchase any of its common stock during the three months ended March 31, 2018.

Retained Earnings

On April 11, 2018, Entergy Corporation’s Board of Directors declared a common stock dividend of $0.89 per share, payable on June 1, 2018, to holders of record as of May 10, 2018.

Entergy implemented ASU No. 2016-01 “Financial Instruments (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” effective January 1, 2018. The ASU requires investments in equity securities, excluding those accounted for under the equity method or resulting in consolidation of the investee, to be measured at fair value with changes recognized in net income. Entergy implemented this standard using a modified retrospective method, and recorded an adjustment increasing retained earnings and reducing accumulated other comprehensive income by $633 million as of January 1, 2018 for the cumulative effect of the unrealized gains and losses on investments in equity securities held by the decommissioning trust funds that do not meet the criteria for regulatory accounting treatment. See Note 9 to the financial statements herein for further discussion of effects of the new standard.

Entergy implemented ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” effective January 1, 2018. The ASU requires entities to recognize the income tax consequences of intra-entity asset transfers, other than inventory, at the time the transfer occurs.  Entergy implemented this standard using a modified retrospective method, and recorded an adjustment decreasing retained earnings by $56 million as of January 1, 2018 for the cumulative effect of recording deferred tax assets on previously-recognized intra-entity asset transfers.

Entergy adopted ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” in the first quarter 2018. The ASU allows a one-time reclassification from accumulated other comprehensive income to retained earnings for certain tax effects resulting from the Tax Cuts and Jobs Act that would otherwise be stranded in accumulated other comprehensive income.  Entergy’s policy for releasing income tax effects from accumulated other comprehensive income for available-for-sale securities is to use the portfolio approach.  Entergy elected to reclassify the $15.5 million of stranded tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act to retained earnings ($32 million decrease) or the regulatory liability for income taxes ($16.5 million increase). Entergy’s reclassification only includes the effect of the change in the federal corporate income tax rate on accumulated other comprehensive income.

Comprehensive Income

Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy and Entergy Louisiana. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2018 by component:
 
Cash flow
hedges
net
unrealized
gain (loss)
 
Pension
and
other
postretirement
liabilities
 
Net
unrealized
investment
gain (loss)
 
Total
Accumulated
Other
Comprehensive
Income (Loss)
 
(In Thousands)
 
 
 
 
 
 
 
 
Ending balance, December 31, 2017

($37,477
)
 

($531,099
)
 

$545,045

 

($23,531
)
Implementation of accounting standards
—

 
—

 
(632,617
)
 
(632,617
)
Beginning balance, January 1, 2018

($37,477
)
 

($531,099
)
 

($87,572
)
 

($656,148
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
71,566

 
—

 
838

 
72,404

Amounts reclassified from accumulated other comprehensive income (loss)
23,861

 
16,574

 
(33,694
)
 
6,741

Net other comprehensive income (loss) for the period
95,427

 
16,574

 
(32,856
)
 
79,145

 
 
 
 
 
 
 
 
Reclassification pursuant to ASU 2018-02
(7,756
)
 
(90,966
)
 
114,227

 
15,505

 
 
 
 
 
 
 
 
Ending balance, March 31, 2018

$50,194

 

($605,491
)
 

($6,201
)
 

($561,498
)

The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2017 by component:
 
Cash flow
hedges
net
unrealized
gain (loss)
 
Pension
and
other
postretirement
liabilities
 
Net
unrealized
investment
gain (loss)
 
Foreign
currency
translation
 
Total
Accumulated
Other
Comprehensive
Income (Loss)
 
(In Thousands)
Beginning balance, January 1, 2017

$3,993

 

($469,446
)
 

$429,734

 

$748

 

($34,971
)
Other comprehensive income (loss) before reclassifications
32,608

 
—

 
39,872

 
—

 
72,480

Amounts reclassified from accumulated other comprehensive income (loss)
(33,136
)
 
8,632

 
(2,045
)
 
—

 
(26,549
)
Net other comprehensive income (loss) for the period
(528
)
 
8,632

 
37,827

 
—

 
45,931

Ending balance, March 31, 2017

$3,465

 

($460,814
)
 

$467,561

 

$748

 

$10,960

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the three months ended March 31, 2018 and 2017:
 
 
Pension and Other
Postretirement Liabilities
 
 
2018
 
2017
 
 
(In Thousands)
Beginning balance, January 1,
 

($46,400
)
 

($48,442
)
Amounts reclassified from accumulated other
comprehensive income (loss)
 
(501
)
 
(370
)
Net other comprehensive income (loss) for the period
 
(501
)
 
(370
)
 
 
 
 
 
Reclassification pursuant to ASU 2018-02
 
(10,049
)
 
—

 
 
 
 
 
Ending balance, March 31,
 

($56,950
)
 

($48,812
)
    
 
 
 
 
 


Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy for the three months ended March 31, 2018 and 2017 are as follows:

Amounts reclassified
from AOCI

Income Statement Location
 
2018
 
2017
 
 

(In Thousands)


Cash flow hedges net unrealized gain (loss)

 
 


   Power contracts

($30,082
)
 

$51,227


Competitive business operating revenues
   Interest rate swaps
(122
)
 
(250
)

Miscellaneous - net
Total realized gain (loss) on cash flow hedges
(30,204
)
 
50,977




6,343

 
(17,841
)

Income taxes
Total realized gain (loss) on cash flow hedges (net of tax)

($23,861
)
 

$33,136






 
 


Pension and other postretirement liabilities


 
 


   Amortization of prior-service credit

$5,426

 

$6,562


(a)
   Amortization of loss
(24,952
)
 
(21,571
)

(a)
   Settlement loss
(1,616
)
 
—


(a)
Total amortization
(21,142
)
 
(15,009
)



4,568

 
6,377


Income taxes
Total amortization (net of tax)

($16,574
)
 

($8,632
)




 
 


Net unrealized investment gain (loss)

 
 


Realized gain (loss)

$53,314

 

$4,010


Interest and investment income

(19,620
)
 
(1,965
)

Income taxes
Total realized investment gain (loss) (net of tax)

$33,694

 

$2,045






 
 


Total reclassifications for the period (net of tax)

($6,741
)
 

$26,549





(a)
These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost.  See Note 6 to the financial statements herein for additional details.
 
 
 
 
 
 



Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy Louisiana for the three months ended March 31, 2018 and 2017 are as follows:
 
 
Amounts reclassified
from AOCI
 
Income Statement Location
 
 
2018
 
2017
 
 
 
 
(In Thousands)
 
 
Pension and other postretirement liabilities
 
 
 
 
 
 
   Amortization of prior-service credit
 

$1,934

 

$1,934

 
(a)
   Amortization of loss
 
(1,257
)
 
(1,332
)
 
(a)
Total amortization
 
677

 
602

 
 
 
 
(176
)
 
(232
)
 
Income taxes
Total amortization (net of tax)
 
501

 
370

 
 
 
 
 
 
 
 
 
Total reclassifications for the period (net of tax)
 

$501

 

$370

 
 

(a)
These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost.  See Note 6 to the financial statements herein for additional details.
 
 
 
 
 
 
 
Entergy Louisiana [Member]  
Equity
EQUITY (Entergy Corporation and Entergy Louisiana)

Common Stock

Earnings per Share
 
 
 
 
 
 
 
 
 
 
 
 
The following table presents Entergy’s basic and diluted earnings per share calculations included on the consolidated income statements:
 
For the Three Months Ended March 31,
 
2018
 
2017
 
(In Millions, Except Per Share Data)
Basic earnings per share
Income
 
Shares
 
$/share
 
Income
 
Shares
 
$/share
Net income attributable to Entergy Corporation

$132.8

 
180.7

 

$0.73

 

$82.6

 
179.3

 

$0.46

Average dilutive effect of:
 
 
 
 
 
 
 
 
 
 
 
Stock options
 
 
0.2

 
—

 
 
 
0.1

 
—

Other equity plans
 
 
0.5

 
—

 
 
 
0.4

 
—

Diluted earnings per share

$132.8

 
181.4

 

$0.73

 

$82.6

 
179.8

 

$0.46


    
The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 4 million for the three months ended March 31, 2018 and approximately 4.9 million for the three months ended March 31, 2017.

Entergy’s stock options and other equity compensation plans are discussed in Note 5 to the financial statements herein and in Note 12 to the financial statements in the Form 10-K.

Treasury Stock

During the three months ended March 31, 2018, Entergy Corporation issued 281,614 shares of its previously repurchased common stock to satisfy stock option exercises, vesting of shares of restricted stock, and other stock-based awards.  Entergy Corporation did not repurchase any of its common stock during the three months ended March 31, 2018.

Retained Earnings

On April 11, 2018, Entergy Corporation’s Board of Directors declared a common stock dividend of $0.89 per share, payable on June 1, 2018, to holders of record as of May 10, 2018.

Entergy implemented ASU No. 2016-01 “Financial Instruments (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities” effective January 1, 2018. The ASU requires investments in equity securities, excluding those accounted for under the equity method or resulting in consolidation of the investee, to be measured at fair value with changes recognized in net income. Entergy implemented this standard using a modified retrospective method, and recorded an adjustment increasing retained earnings and reducing accumulated other comprehensive income by $633 million as of January 1, 2018 for the cumulative effect of the unrealized gains and losses on investments in equity securities held by the decommissioning trust funds that do not meet the criteria for regulatory accounting treatment. See Note 9 to the financial statements herein for further discussion of effects of the new standard.

Entergy implemented ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory” effective January 1, 2018. The ASU requires entities to recognize the income tax consequences of intra-entity asset transfers, other than inventory, at the time the transfer occurs.  Entergy implemented this standard using a modified retrospective method, and recorded an adjustment decreasing retained earnings by $56 million as of January 1, 2018 for the cumulative effect of recording deferred tax assets on previously-recognized intra-entity asset transfers.

Entergy adopted ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income,” in the first quarter 2018. The ASU allows a one-time reclassification from accumulated other comprehensive income to retained earnings for certain tax effects resulting from the Tax Cuts and Jobs Act that would otherwise be stranded in accumulated other comprehensive income.  Entergy’s policy for releasing income tax effects from accumulated other comprehensive income for available-for-sale securities is to use the portfolio approach.  Entergy elected to reclassify the $15.5 million of stranded tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act to retained earnings ($32 million decrease) or the regulatory liability for income taxes ($16.5 million increase). Entergy’s reclassification only includes the effect of the change in the federal corporate income tax rate on accumulated other comprehensive income.

Comprehensive Income

Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy and Entergy Louisiana. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2018 by component:
 
Cash flow
hedges
net
unrealized
gain (loss)
 
Pension
and
other
postretirement
liabilities
 
Net
unrealized
investment
gain (loss)
 
Total
Accumulated
Other
Comprehensive
Income (Loss)
 
(In Thousands)
 
 
 
 
 
 
 
 
Ending balance, December 31, 2017

($37,477
)
 

($531,099
)
 

$545,045

 

($23,531
)
Implementation of accounting standards
—

 
—

 
(632,617
)
 
(632,617
)
Beginning balance, January 1, 2018

($37,477
)
 

($531,099
)
 

($87,572
)
 

($656,148
)
 
 
 
 
 
 
 
 
Other comprehensive income (loss) before reclassifications
71,566

 
—

 
838

 
72,404

Amounts reclassified from accumulated other comprehensive income (loss)
23,861

 
16,574

 
(33,694
)
 
6,741

Net other comprehensive income (loss) for the period
95,427

 
16,574

 
(32,856
)
 
79,145

 
 
 
 
 
 
 
 
Reclassification pursuant to ASU 2018-02
(7,756
)
 
(90,966
)
 
114,227

 
15,505

 
 
 
 
 
 
 
 
Ending balance, March 31, 2018

$50,194

 

($605,491
)
 

($6,201
)
 

($561,498
)

The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2017 by component:
 
Cash flow
hedges
net
unrealized
gain (loss)
 
Pension
and
other
postretirement
liabilities
 
Net
unrealized
investment
gain (loss)
 
Foreign
currency
translation
 
Total
Accumulated
Other
Comprehensive
Income (Loss)
 
(In Thousands)
Beginning balance, January 1, 2017

$3,993

 

($469,446
)
 

$429,734

 

$748

 

($34,971
)
Other comprehensive income (loss) before reclassifications
32,608

 
—

 
39,872

 
—

 
72,480

Amounts reclassified from accumulated other comprehensive income (loss)
(33,136
)
 
8,632

 
(2,045
)
 
—

 
(26,549
)
Net other comprehensive income (loss) for the period
(528
)
 
8,632

 
37,827

 
—

 
45,931

Ending balance, March 31, 2017

$3,465

 

($460,814
)
 

$467,561

 

$748

 

$10,960

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

The following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the three months ended March 31, 2018 and 2017:
 
 
Pension and Other
Postretirement Liabilities
 
 
2018
 
2017
 
 
(In Thousands)
Beginning balance, January 1,
 

($46,400
)
 

($48,442
)
Amounts reclassified from accumulated other
comprehensive income (loss)
 
(501
)
 
(370
)
Net other comprehensive income (loss) for the period
 
(501
)
 
(370
)
 
 
 
 
 
Reclassification pursuant to ASU 2018-02
 
(10,049
)
 
—

 
 
 
 
 
Ending balance, March 31,
 

($56,950
)
 

($48,812
)
    
 
 
 
 
 


Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy for the three months ended March 31, 2018 and 2017 are as follows:

Amounts reclassified
from AOCI

Income Statement Location
 
2018
 
2017
 
 

(In Thousands)


Cash flow hedges net unrealized gain (loss)

 
 


   Power contracts

($30,082
)
 

$51,227


Competitive business operating revenues
   Interest rate swaps
(122
)
 
(250
)

Miscellaneous - net
Total realized gain (loss) on cash flow hedges
(30,204
)
 
50,977




6,343

 
(17,841
)

Income taxes
Total realized gain (loss) on cash flow hedges (net of tax)

($23,861
)
 

$33,136






 
 


Pension and other postretirement liabilities


 
 


   Amortization of prior-service credit

$5,426

 

$6,562


(a)
   Amortization of loss
(24,952
)
 
(21,571
)

(a)
   Settlement loss
(1,616
)
 
—


(a)
Total amortization
(21,142
)
 
(15,009
)



4,568

 
6,377


Income taxes
Total amortization (net of tax)

($16,574
)
 

($8,632
)




 
 


Net unrealized investment gain (loss)

 
 


Realized gain (loss)

$53,314

 

$4,010


Interest and investment income

(19,620
)
 
(1,965
)

Income taxes
Total realized investment gain (loss) (net of tax)

$33,694

 

$2,045






 
 


Total reclassifications for the period (net of tax)

($6,741
)
 

$26,549





(a)
These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost.  See Note 6 to the financial statements herein for additional details.
 
 
 
 
 
 



Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy Louisiana for the three months ended March 31, 2018 and 2017 are as follows:
 
 
Amounts reclassified
from AOCI
 
Income Statement Location
 
 
2018
 
2017
 
 
 
 
(In Thousands)
 
 
Pension and other postretirement liabilities
 
 
 
 
 
 
   Amortization of prior-service credit
 

$1,934

 

$1,934

 
(a)
   Amortization of loss
 
(1,257
)
 
(1,332
)
 
(a)
Total amortization
 
677

 
602

 
 
 
 
(176
)
 
(232
)
 
Income taxes
Total amortization (net of tax)
 
501

 
370

 
 
 
 
 
 
 
 
 
Total reclassifications for the period (net of tax)
 

$501

 

$370

 
 

(a)
These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost.  See Note 6 to the financial statements herein for additional details.