This document discusses evapotranspiration and the water and energy budgets in watershed hydrology. It explains that evapotranspiration is the sum of evaporation from open water and soil surfaces and transpiration from plants. A water budget equation shows that evapotranspiration can be calculated as precipitation minus runoff, change in storage, and drainage. An energy budget partitions net radiation at the surface into latent heat, sensible heat, and ground heat fluxes. The relationship between water and energy budgets is also explained.