Slide 1: First quarter 2024 earnings call
First quarter 2024 earnings call April 24, 2024 0
Slide 2: Caution regarding forward-looking statements and Regulation G compliance
Caution regarding forward-looking statements and Regulation G compliance 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, am
Slide 3: Table of contents
Table of contents Section Slides Business discussion 3–8 Appendix Sustainability highlights 10–11 2024 regulatory milestones 12 Utility 13–37 Financial disclosures 39–40 Financial summaries and Regulation G reconciliations 42–46 2
Slide 4: First quarter results
First quarter results Entergy adjusted EPS; $ 0.09 (0.15) Key takeaways • Quarter over quarter decline affected by timing of Utility other O&M 1.14 1.08 • Expectation for full year Utility other O&M consistent with guidance • Firmly on track to achieve 2024 adjusted EPS guidance 1Q23 Utility P&O 1Q2
Slide 5: First quarter adjusted EPS
First quarter adjusted EPS Entergy adjusted EPS; $ (0.21) 0.36 (0.19) 0.04 (0.03) (0.03) 1.14 1.08 1Q23 Utility Utility Utility Utility Utility P&O / other 1 1Q24 operating other other other interest rev. less fuel, O&M operating income 1 expense purch. power, expenses 1,2 and reg. chgs.1 Calculatio
Slide 6: First quarter operating cash flow
First quarter operating cash flow Quarter-over-quarter variance driven largely by working capital items Entergy OCF; $M Key drivers (-) Utility customer receipts, including deferred fuel collection in 2023 (-) Timing of payments to vendors 960 521 1Q23 1Q24 5
Slide 7: Credit
Credit Twelve-month ended FFO remains strong, unchanged from 4Q23 Agency Outlook: Key ETR credit metrics expectation in range or better1 Moody’s CFO pre-working capital to debt >14% Parent debt to total debt <25% Standard & Poor’s FFO to debt 14% – 17% Credit ratings2 (outlooks) E-AR E-LA E-MS
Slide 8: Equity needs
Equity needs Fulfilled through 2024; 30% completed for 2025–2026 Estimated 2021–2024 equity need; $B Estimated 2025–2026 equity need; $B Not yet settled 0.43 1.40 1.20 1.20 0.97 Equity need Settled as of Equity need ATM completed Remainder 2021–2024 12/31/231 2025–2026 through to be sourced 3/31/24
Slide 9: Adjusted EPS guidance and outlooks
Adjusted EPS guidance and outlooks Targeting 60% – 65% dividend payout Entergy adjusted EPS; $ 8.05–8.45 7.50–7.90 6.77 7.05–7.35 $6.70 original guidance midpoint 23 24E guidance 25E outlook 26E outlook As-reported 11.10 8 1. Based on original 2023 guidance midpoint of $6.70
Slide 10: Appendix
Appendix 5 entergy
Slide 11: 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 12: Extensive and transparent sustainability reporting
Extensive and transparent sustainability reporting Visit entergy.com/sustainability Select disclosures EEI's ESG Quantitative Template Performance data table Sustainable Accounting Standards EEI's ESG Qualitative Template Global Reporting Initiative index Board disclosure Environmental Social Govern
Slide 13: 2024 regulatory milestones
2024 regulatory milestones 1Q 2Q 3Q 4Q E-AR FRP rates effective E-LA resilience and grid hardening • E-NO gas LDC sale • MTEP 2024 approval E-LA Sterlington and plan decision (LPSC) decision (requested) (MISO) Coastal Prairie Solar • E-NO resilience and grid hardening (CCNO) • E-TX resilience
Slide 14: Utility overview
Utility overview E-AR E-LA1 E-MS E-NO1 E-TX • Electric utility – • Electric and gas utility • Electric utility – • Electric and gas utility • Electric utility – 730,000 customers – 1,105,000 electric 459,000 customers – 208,000 electric 512,000 customers • Authorized ROE: customers • Authorized ROE:
Slide 15: Utility 2023 weather-adjusted electric retail sales
Utility 2023 weather-adjusted electric retail sales Governmental E-TX E-AR 2% 17% 19% Residential 30% E-NO 5% By Industrial 45% By operating E-MS segment company 11% Commercial E-LA 23% 48% 14
Slide 16: Utility generation overview
Utility generation overview Renewables 1 Renewables 2% Coal 1% 8% Purchases CT / CCGT 17% 44% CT / CCGT Coal Nuclear 43% 4% 22% Owned and 2023 sources of energy leased capability as of 12/31/23 Nuclear 27% Legacy gas / oil Legacy gas 25% 7% 15 1. Includes generation from both owned and purchased pow
Slide 17: Jurisdictional base rate filing frameworks
Jurisdictional base rate filing frameworks E-AR E-LA1 E-MS E-NO E-TX2 SERI Latest filing 7/7/23 (FRP) 5/31/23 (FRP) 3/1/24 (FRP) 4/28/23 (FRP) 7/1/22 Monthly cost of date (rate case) service Rate effective Jan. following Sept. following filing April following Sept. following filing 35 days after Imm
Slide 18: Industrial customer metrics remain supportive
Industrial customer metrics remain supportive Refining margins, Light Louisiana Sweet crude; Chlor-alkali, polyvinyl chloride margins, 321 crack spread $ per metric ton Jan-16 Jan-18 Jan-20 Jan-22 Jan-24 Jan-16 Jan-18 Jan-20 Jan-22 Jan-24 Steel, capacity utilization % Petrochemicals, polyethylene ma
Slide 19: U.S. to European spreads driving LNG expansion
U.S. to European spreads driving LNG expansion Ammonia exports benefiting; tight inventories support refining margins NBP to Henry Hub spread; $/MMbtu U.S. LNG export capacity; Bcf/d Has DOE permit Needs DOE permit Non-ETR additions ~14 Bcf/d through 2022 ETR additions Jan-16 Jan-18 Jan-20 Jan-22 Ja
Slide 20: Actively expanding renewable footprint
Actively expanding renewable footprint 935 MW of renewables in service Approved / in progress Regulatory items pending Owned / Est. in Owned / Est. in Project MW PPA service1 Project MW PPA service1 Driver Solar (E-AR) 250 Owned 2024 ETR OpCo filings: West Memphis Solar (E-AR) 180 Owned 2024 Mondu S
Slide 21: Entergy Arkansas
Entergy Arkansas E-AR (currently in rates) Metric Detail Authorized ROE 9.15% – 10.15% Rate base $10.1B retail rate base (2024 test year) WACC (after-tax) 5.62% Equity ratio 38.7% (47.0% excluding $1.9B ADIT at 0% rate) Regulatory construct Forward test year FRP; result outside ROE band reset to mid
Slide 22: Entergy Louisiana
Entergy Louisiana E-LA (currently in rates) Metric Detail – electric1 Detail – gas2 Authorized ROE 9.0% – 10.0% 9.3% – 10.3% Rate base $15.7B (12/31/22 test year)3 $0.15B + $0.3B TRM rider + $0.2B DRM rider – $(0.4B) tax (9/30/22 test year) reform rider WACC (after-tax) 6.66% 6.93% Equity ratio 49.5
Slide 23: E-LA resilience and grid hardening filing
E-LA resilience and grid hardening filing Modified Phase 1 approved Approval highlights (docket U-36625) • Modified Phase 1 includes $1.9B of investment over five years • Cost recovery via a forward-looking rider with semi-annual true-ups • Rider includes recovery for retired assets 22 See discussio
Slide 24: E-LA recommends modifying and extending FRP
E-LA recommends modifying and extending FRP Procedural schedule extended to allow for settlement discussions FRP and rate case summaries (docket U-36959) Proposed FRP modifications Rate case1 FRP2 • Remove cap on distribution recovery mechanism Rate effective years 2024 2024–2026 • Amortization of p
Slide 25: E-LA enhanced renewable RFP process
E-LA enhanced renewable RFP process Procedural schedule extended to allow for settlement discussions Filing highlights (docket U-36697) • Requests: ‒ Approval of alternative process to secure up to 3,000 MW of solar resources ‒ Expansion of the Geaux Green Option tariff ‒ Approval of new Geaux Zero
Slide 26: E-LA natural gas LDC business sale
E-LA natural gas LDC business sale Filing highlights (docket S-37079) • Purchase and sale agreements to sell natural gas LDC businesses to affiliates of Bernhard Capital Partners • Terms include a transition period following regulatory approvals, to allow the purchaser time to set up systems to run
Slide 27: E-LA Bayou Power Station filing
E-LA Bayou Power Station filing Project overview (docket U-37131) Item Details MW 112 Estimated cost ~$411M including transmission interconnection and other related costs Location Leeville, LA Targeted in-service date 2028 Proposed recovery mechanism FRP with deferral until costs can be reflected in
Slide 28: Entergy Mississippi
Entergy Mississippi E-MS (currently in rates)1 Metric Detail Authorized ROE 10.88% performance-adjusted midpoint (10.56% + 0.32% performance factor); 9.88% – 11.89% range (annual redetermination based on formula) Rate base $4.5B (2024 forward test year) WACC (after-tax) 7.50% Equity ratio 49.67% Reg
Slide 29: E-MS annual FRP filing
E-MS annual FRP filing Annual FRP (docket 2023-UN-142) 2024 2023 Filing highlights forward test year look-back Allowed ROE midpoint, incl. performance factor 10.88% 10.81% Allowed ROE range 9.88% – 11.89% 9.81% – 11.81% Earned ROE 7.97% 10.25% Rate base $4.5B $4.2B WACC (after-tax) 7.50% 7.06% Equit
Slide 30: Entergy New Orleans
Entergy New Orleans E-NO (currently in rates) Metric Detail – electric Detail – gas1 Authorized ROE 8.85% – 9.85% (9.35% midpoint) Rate base $1.2B $0.2B (12/31/22 test year plus known and measurables through 12/31/23) WACC (after-tax) 6.86% Equity ratio 51% Regulatory FRP with forward-looking featur
Slide 31: E-NO resilience and grid hardening filing
E-NO resilience and grid hardening filing Filing highlights (docket UD 21-03) • Three-year (2025-2027) Phase I plan includes $168M in hardening projects ‒ Excludes resilience project that will be co-funded by the DOE as part of a successful Grid Resilience and Innovation Partnerships program • Propo
Slide 32: E-NO natural gas LDC business sale
E-NO natural gas LDC business sale Filing highlights (docket R-24-49) • Purchase and sale agreements to sell natural gas LDC businesses to affiliates of Bernhard Capital Partners • Terms include a transition period following regulatory approvals, to allow the purchaser time to set up systems to run
Slide 33: Entergy Texas
Entergy Texas E-TX (currently in rates) Metric Detail Authorized ROE 9.57% Rate base $4.4B (12/31/21 test year) WACC (after-tax) 6.61% Equity ratio 51.2% Regulatory construct Historical test year rate case1; Interim rate base riders: TCRF, DCRF, and GCRR Key rate changes in $54M base rate change (6/
Slide 34: System Energy Resources
System Energy Resources Grand Gulf Nuclear Station Energy and capacity allocation1 SERI (most recent monthly bill) 2 Metric Detail E-NO 17% E-AR Principal asset An ownership and leasehold interest in Grand 36% Gulf Nuclear Station Authorized ROE 10.94%3 (E-NO, E-LA); 9.65% (E-AR, E-MS) Last calculat
Slide 35: SERI global settlements with MPSC, APSC, CCNO
SERI global settlements with MPSC, APSC, CCNO All settled under same terms; ~85% of SERI litigation risk resolved Highlights MPSC APSC CCNO Allocation of SERI’s 39.95% 24.19% 19.74% sales1 Settlement date Nov. 2022 Oct. 2023 April 2024 Settlement amount $235M $142M $116M ROE2 9.65% 9.65% 9.65% Equit
Slide 36: SERI FERC cases
SERI FERC cases LPSC complaint regarding GGNS sale-leaseback renewal and uncertain tax position (docket EL18-152) • Complaint alleging (1) SERI is double-recovering costs by including lease payments and capital additions in UPSA billings and (2) SERI incorrectly excluded FIN 48 liabilities associate
Slide 37: SERI FERC cases
SERI FERC cases ROE complaints and equity complaint (consolidated dockets EL17-41, EL18-142, EL18-204) • APSC, MPSC, and LPSC filed ROE complaints; LPSC also alleged that SERI’s equity component was unjust and unreasonable (complaints consolidated) • 3/24/21: ALJ initial decision issued Next steps D
Slide 38: SERI FERC cases
SERI FERC cases Prudence complaint (docket EL21-56) • LPSC, APSC, and CCNO filed a complaint alleging operational prudence claims, primarily: the performance and/or management of the 2012 extended power uprate of Grand Gulf was imprudent and SERI imprudently operated Grand Gulf during the period 201
Slide 39: Financial disclosures
38 Financial disclosures 5 entergy
Slide 40: Progress against guidance
Progress against guidance Guidance YTD Driver assumption1 result1 Full-year comments ETR adjusted EPS 7.05–7.35 1.08 • Guidance affirmed Estimated weather in sales Normal (0.12) Weather-adj. retail sales volume ~4% ~(0.1)% • Now expect ~0.35 YoY primarily due to additional industrial customers ~0.20
Slide 41: 2024 ETR adjusted EPS sensitivities
2024 ETR adjusted EPS sensitivities Estimated annual Variable Description of sensitivity EPS impact Utility Retail sales growth 1% change in residential MWh sold +/- 0.09 1% change in commercial MWh sold +/- 0.05 1% change in industrial MWh sold +/- 0.02 Other O&M 1% change in expense +/- 0.10 Rate
Slide 42: Financial summaries and Regulation G reconciliations
Financial summaries and Regulation G reconciliations 41
Slide 43: Earnings summary
Earnings summary Table 1: First quarter earnings summary $ in millions Per share in $ 1Q24 1Q23 1Q24 1Q23 As-reported (after-tax) Utility 195 397 0.91 1.87 Parent & Other (120) (86) (0.56) (0.41) Consolidated 75 311 0.35 1.47 Less adjustments Utility (155) 69 (0.72) 0.32 Parent & Other - - - - Conso
Slide 44: Regulation G reconciliations
Regulation G reconciliations Table 2: ETR adjusted earnings Reconciliation of GAAP to non-GAAP measures 1Q24 1Q23 (Pre-tax except for income taxes and totals; $ in millions) Net income (loss) attributable to ETR Corp. 75 311 Less adjustments: Utility - E-AR write-off of a regulatory asset related to
Slide 45: Regulation G reconciliations
Regulation G reconciliations Table 3: ETR adjusted earnings Reconciliation of GAAP to non-GAAP measures (Pre-tax except for income taxes and totals; $ in millions) 2023 Net income (loss) attributable to ETR Corp. 2,357 Less adjustments: Utility - customer-sharing of tax benefits as a result of the 2
Slide 46: Regulation G reconciliations
Regulation G reconciliations Table 3: ETR adjusted earnings (continued) Reconciliation of GAAP to non-GAAP measures (After-tax, per share in $) 2023 Net income (loss) attributable to ETR Corp. 11.10 Less adjustments: Utility - customer-sharing of tax benefits as a result of the 2016-2018 IRS audit r
Slide 47: Utility book ROEs
Utility book ROEs Table 4: Utility book ROE summary LTM ending March 31, 2024 ($ in millions) E-AR E-LA E-MS E-NO E-TX Utility1 As-reported earnings available to common stock (a) 311 1,209 199 170 284 2,305 Less adjustments: 3Q23 E-AR write-off of assets related to the ANO stator incident (59) (59)
Slide 48: ETR ETR
5) entergy