Entergy Corporation · NYSE:ETR
Entergy — EEI Financial Conference 2023
49 slides from Entergy's conference presentation, Nov 10, 2023
Slide 1: Pathway to Premier
Pathway to Premier EEI Financial Conference Nov. 12–14, 2023 Customer service Resilient infrastructure 0 (Posted Nov. 10, 2023) Clean energy Industrial growth
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements In this presentation, 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
Slide 3: About Entergy
About Entergy Vertically integrated utility with five operating companies operating in four states – AR, LA, MS, and TX 3 million retail customers 24,075 owned and leased generating assets 16,096 circuit miles of interconnected high-voltage transmission lines 105,864 circuit miles of distribution li
Slide 4: Pathway to Premier
Pathway to Premier Delivering growth through meeting our customers’ needs Unique growth Clean energy Reliability and Affordability a opportunity transition resilience priority Strong industrial sales New clean energy to To reduce financial and Actively pursuing ways opportunity driven by support gro
Slide 5: Industrial customer base is healthy and growing
Industrial customer base is healthy and growing Fundamentals, customer engagement, and service agreements support outlooks Cumulative retail sales growth vs 2022; TWh ~16 ~12 ~6% – 7% Industrial CAGR 26E vs 22 ~5 ~1 23E 24E 25E 26E Residential Commercial Industrial 4 Note: Industrial sales, as compa
Slide 6: Large industrials key driver for growth
Large industrials key driver for growth A history of growth that continues to accelerate Industrial sales; TWh 50 Large Source of growth 40 30 20 Small 10 Relatively Cogen flat 0 16 17 18 19 20 21 22 23E 24E 25E 26E 5
Slide 7: Strong backlog of service agreements
Strong backlog of service agreements Trend shows accelerating growth Electric service agreements in place with future in-service dates; MW 2,000 1,500 1,000 500 0 20 21 22 23 6
Slide 8: Industrial base and growth is diverse
Industrial base and growth is diverse 2022 industrial volume Cumulative large industrial growth vs 2022 by industry, TWh By grouping Cogen Small Large Large by segment Chlor-alkali Petroleum refining Petrochemicals Primary metals 23E 24E 25E 26E Industrial gases Transportation Agricultural chemicals
Slide 9: Key drivers of customer growth
Key drivers of customer growth Benefiting from unique advantages, accelerators, and market trends Illustrative ETR large industrial growth drivers; 2026E vs 2022 Other Data center demand from cloud and AI Gulf Coast trends advantages, supportive IRA and metrics clean energy transition 8
Slide 10: Gulf Coast advantages for ETR industrials
Gulf Coast advantages for ETR industrials ETR industrial growth stronger and steadier ETR large industrial sales vs. industrial Why the Gulf region is attractive production index; 2010 to present 5.2% World-class infrastructure CAGR Favorable commodity spreads Workforce availability ETR large indust
Slide 11: IRA is accelerating clean H2 and ammonia projects
IRA is accelerating clean H2 and ammonia projects Creates opportunity for load growth and demand for more clean energy Illustrative Prospective hydrogen and blue ammonia projects in ETR service area ~45% of announced blue hydrogen projects in the U.S. are in ETR’s region Clean ammonia / blue hydroge
Slide 12: Strong runway for continued growth
Strong runway for continued growth LNG growth ramping up beyond 26E Cumulative large industrial growth vs 2022 by industry; TWh Illustrative Technology / other Chlor-alkali Industrial gases Petrochemicals ~70% Transportation / of new LNG LNG announcements in ETR region Data centers Primary metals 23
Slide 13: Industrial decarbonization longer-term opportunity
Industrial decarbonization longer-term opportunity Entergy has significant “rate of change” potential How industrials can Industrial scope 1 emissions by state; meet their goals 2022 annual short tons of CO2 (millions) Process improvements Energy ~127 (estimated) efficiency Industrial Forms of elect
Slide 14: Dynamic resource planning framework
Dynamic resource planning framework Evolves with customer demands and market changes Reliability Affordability • Reduced MISO reliability • Renewables economics benefits for renewables more challenged (net of): Core • More dispatchable generation − lower capacity credit needed to reliably serve − hi
Slide 15: Strong renewables and carbon-managed additions
Strong renewables and carbon-managed additions Resource mix supports our clean energy transition Illustrative Total generation capacity 12/31/2022 2026E1 2031E1, 2 H2 and carbon Other5 LMR + battery capture capable4 Modern Nuclear gas Renewables3 27 GW ~31 GW ~36 GW Legacy gas Coal Includes owned re
Slide 16: T&D focused on improving reliability, resilience
T&D focused on improving reliability, resilience Meeting customer demands across multiple fronts Growth Reliability Resilience Types of New lines and Targeted T&D Assets hardened investment substations upgrades and to latest enhancements; standards; will self-healing accelerate with technology regul
Slide 17: Proposing $15B accelerated resilience plan
Proposing $15B accelerated resilience plan Preliminary capital plan includes $0.9B 24E–26E By function Cumulative proposed accelerated resilience investment; $B 15 Transmission E-TX 12 E-NO ~$15B Distribution E-MS 9 6 E-LA Proposing By geographic location $2.3B 24E–26E Other 3 0 E-AR ~$15B 23E 24E 2
Slide 18: Proposed plan could lower Gulf Coast risk by ~55%
Proposed plan could lower Gulf Coast risk by ~55% Regulatory and stakeholder processes will determine investment level and timeline Estimated reduction in restoration costs1 Illustrative 0% 2026 (financial plan assumption) (10)% 2026 (recommended plan) (20)% (30)% (40)% (50)% 2035 (recommended plan)
Slide 19: Process to support investment in 2024 and beyond
Process to support investment in 2024 and beyond Continuing to make regulatory and investment readiness progress Accelerated resilience regulatory review timeline Illustrative Early Summer Preparing to ramp up OpCo 3Q22 4Q22 1Q23 2Q23 3Q23 4Q23 2024 2024 investment in 1Q24 E-NO Targeted • Executing
Slide 20: Aggressively pursuing actions to manage bills
Aggressively pursuing actions to manage bills O&M discipline Federal programs Entergy operating companies Sales growth and customer trends Investment in technology, fuel efficiency Residential trends Number of customers Weather-adjusted usage per customer 11 22 26E 19
Slide 21: Affordability remains a priority
Affordability remains a priority Illustrative Illustrative Weighted average Utility residential bill Share of income spent on residential (Entergy utilities)1; $ electricity (Entergy utilities)2; % 5 <2% CAGR vs 22 4 Fuel 3 Non- 2 fuel 1 0 22 23E 24E 25E 26E 01 06 11 16 21 26E 1. Weighted average re
Slide 22: Capital plan supports customer needs
Capital plan supports customer needs 2024E–2026E preliminary capital plan by function Utility support / other $1.0B Distribution Generation baseline $5.7B1 $2.4B Other new generation $3.4B $19.6B Accelerated resilience plan Transmission recommended to regulators $3.8B1 includes ~$2.3B 24E–26E; will
Slide 23: Optimizing capital to meet customer needs
Optimizing capital to meet customer needs Illustrative Potential incremental capital; $B Considerations • Customer benefits and affordability 19.6 • Timeliness for regulatory recovery • Credit and incremental financing needs Preliminary Accelerated Customer Incremental Accelerated Capital capital pl
Slide 24: Investing for customers drives rate base growth
Investing for customers drives rate base growth Cumulative investment plan and depreciation Projected rate base1; $B expense; $B 49 20 43 36 40 13 6 6 4 2 24E 25E 26E 23E 24E 25E 26E 1. Internal estimates based on last-approved rate base adjusted for assumed changes in the major rate base components
Slide 25: Credit and cash flow
Credit and cash flow On track for near-term objectives and strengthening over time Key ETR credit metrics Cumulative OCF outlook; $B Expected in Agency range or better expectation by 12/31/23 Moody’s ~$14B CFO pre-working capital >14% 24E–26E to debt Parent debt to total debt <25% Standard & Poo
Slide 26: Plan for steady, predictable adjusted EPS growth
Plan for steady, predictable adjusted EPS growth Targeting 60% – 65% dividend payout Entergy adjusted EPS; $ 8.05–8.45 7.50–7.90 7.05–7.35 6.42 6.55–6.85 $6.30 original guidance midpoint 22 23E guidance 24E outlook 25E outlook 26E outlook As-reported 5.37 25 1. Based on original 2022 guidance midpoi
Slide 27: Continued progress on strategic objectives
Continued progress on strategic objectives Unique growth Clean energy Reliability and Affordability a opportunity transition resilience priority • 6% – 7% industrial • Expanding renewables • Investing in reliability and • Pursuing multiple growth CAGR outlook • Planning for carbon- resilience opport
Slide 28: Sustainability
27 Sustainability =) entergy
Slide 29: A focus on sustainability leadership
A focus on sustainability leadership Environmental Social Robust stewardship responsibility governance For a Promoting safety, Managing risks cleaner world opportunity, and equity and opportunities • Among the cleanest large-scale • Live safe all day, every day • Diverse board with an effective mix
Slide 30: Among the cleanest large-scale fleets in the U.S.
Among the cleanest large-scale fleets in the U.S. CO2 emission rates of top 20 privately- / investor-owned power producers; lbs per MWh Entergy Utility Based on Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States, published Sept. 2022 (2020 data) 29
Slide 31: Planned exit from coal
Planned exit from coal Intend to retire all coal-fired capacity by the end of 2030 Coal generation of top 20 privately- / investor-owned power producers; TWh • Less than 5% of 2022 revenue from coal assets • Less than 2% of rate base comprised of coal assets Entergy Utility Based on Benchmarking Air
Slide 32: Renewables plan makes progress against CO2 goals
Renewables plan makes progress against CO2 goals Entergy Utility CO2 emission rates; lbs per MWh Carbon-free capacity; % of total U.S. power sector avg. 1,130 852 725 565 Net Carbon- zero ~15% managed 50% 2000 2010 2022 2030 2050 ~40% Carbon-free goal goal 22% (50% reduction vs. 2000 baseline) 2022
Slide 33: Actively expanding renewable footprint
Actively expanding renewable footprint Regulatory items pending Owned / Est. in In service MW Project MW PPA service1 Owned 301 ETR OpCo filings: PPA 533 Coastal Prairie Solar (E-LA) 175 PPA 2025 834 Sterlington Solar (E-LA) 49 Owned 2025 224 Approved / in progress Owned / Est. in Other matters: Pro
Slide 34: Achieving net-zero emissions by 2050
Achieving net-zero emissions by 2050 Near-term Legacy asset retirements Path to net zero Actively pursuing advanced Renewables and storage technology solutions that will Nuclear license extensions help enable net-zero emissions by 2050 Carbon capture and utilization Hydrogen-fueled generation Clean
Slide 35: Diversity, inclusion, and belonging
Diversity, inclusion, and belonging Diversity Our goal is to retain a workforce that • Attract, develop, grow, and retain a diverse reflects the rich diversity of the representation of high-performing talent communities in which we serve. • Encourage and celebrate our diversity of backgrounds, persp
Slide 36: Awards and recognition
Awards and recognition Edison Electric JUST Capital Newsweek Dow Jones Sustainability Sustainable Supply Institute and CNBC America’s Greatest Workplace Index Chain Alliance – 2022 Emergency JUST 100 for Diversity and America’s North America Utility Member of the Response Award Ranking Most Responsi
Slide 37: Board diversity
Board diversity Effective mix of skills, experience, backgrounds, and perspectives Board skills Board demographics Number of Board members with specified skill Age (years) Tenure (years) Finance / accounting 12 8% 17% 50% 0 to 5 25% 51 to 60 Technology / transformation 11 61 to 69 6 to 10 Risk manag
Slide 38: Extensive and transparent sustainability reporting
Extensive and transparent sustainability reporting Visit entergy.com/sustainability Select disclosures Integrated Report Climate Policy Priorities and Advocacy TCFD-aligned Climate Report / 2022 Update Diversity, inclusion and belonging strategy CDP Climate Change Questionnaire Performance data tabl
Slide 39: Financial disclosures
38 Financial disclosures =) entergy
Slide 40: Adjusted EPS – preliminary 24E drivers
Adjusted EPS – preliminary 24E drivers Category Considerations Retail volume • Preliminary estimate for weather-adjusted sales growth ~3% (strong industrial growth, slight residential and commercial growth) - EPS contribution expected to be higher than rule of thumb because of new demand charges • Y
Slide 41: Preliminary three-year capital plan by OpCo
Preliminary three-year capital plan by OpCo Preliminary 2024E–2026E Utility capital plan; $M Function E-AR E-LA E-MS E-NO E-TX SERI ESL Utility Generation 1,975 2,590 950 45 2,255 420 - 8,235 Transmission 280 2,085 515 80 890 - - 3,850 Distribution 1,235 2,510 950 345 1,435 - - 6,475 Utility support
Slide 42: Maintaining credit with higher capital plan
Maintaining credit with higher capital plan Without incremental equity Capital plan evolution1; $B Maintaining credit metrics2 Illustrative + Customer growth + Reliability + MTEP + Minor storm capital 28 >14% >14% 25 − Accelerated resilience timing Analyst day Change Current Analyst day Incremental
Slide 43: Sources and uses
Sources and uses Three-year sources and uses (2024E–2026E); $B Supports credit objectives ATM able to fill all equity needs (unchanged since 2022 analyst day) Targeting 60% – 65% dividend payout Sources Uses OCF1 Capital investment New debt and nuclear fuel LDC sale proceeds Dividends Equity 2
Slide 44: Debt maturity schedule
Debt maturity schedule Debt maturity schedule as of 9/30/231; $M Company 4Q23 2024 2025 2026 E-AR 40 375 - 690 E-LA 6852 1,7003 300 720 E-MS 100 100 - - E-NO - 85 78 85 E-TX - - - 130 SERI - - 200 - Total Utility 825 2,260 578 1,625 - ETR Corp. - 800 750 Total 825 2,260 1,378 2,375 Calculations may
Slide 45: Planned financing and interest rate assumptions
Planned financing and interest rate assumptions Preliminary financing plan1; $M Company 4Q23 2024E 2025E 2026E Long-term debt E-AR - 830 80 765 E-LA - 1,740 1,455 1,250 E-MS - 300 320 350 E-NO - 75 140 125 E-TX - 300 625 745 SERI - 300 180 - Total Utility debt - 3,545 2,800 3,235 Wtd. avg. rate assu
Slide 46: Regulation G reconciliations and acronyms and abbreviations
Regulation G reconciliations and acronyms and abbreviations 45
Slide 47: Regulation G reconciliation
Regulation G reconciliation Table 1: ETR adjusted earnings Reconciliation of GAAP to non-GAAP measures 2022 (Pre-tax, $ in millions) Net income (loss) attributable to ETR Corp. 1,103 Less adjustments: Utility - E-LA and E-TX true-up for carrying costs on storm expenditures 41 Utility - E-LA contribu
Slide 48: Acronyms and abbreviations
Acronyms and abbreviations AFUDC Allowance for funds used during construction FFO Funds from operations AI Artificial intelligence FRP Formula rate plan ATM At the market equity issuance program GAAP U.S. generally accepted accounting principles CAGR Compound annual growth rate IRA Inflation Reducti
Slide 49: Entergy
5) entergy