Slide 1: Pathway to Premier
Pathway to Premier Entergy Corporation First quarter 2023 earnings call April 26, 2023 Customer service Resilient infrastructure 0 Clean energy Industrial growth
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 – 10 Appendix Sustainability highlights 12 – 13 2023 planned activities 14 Utility 15 – 36 Financial disclosures 38 – 41 Financial summaries and Regulation G reconciliations 43 – 46 2
Slide 4: First quarter results
First quarter results Entergy adjusted EPS; $ Key takeaways • Results reflect mild weather in 1Q23 • Flex levers help deliver steady, predictable results • On track to achieve financial objectives; 1.32 affirming 2023 guidance and longer-term 1.14 outlooks 1Q22 Utility P&O 1Q23 See Financial summari
Slide 5: First quarter adjusted EPS
First quarter adjusted EPS Entergy adjusted EPS; $ 1.32 1.14 1Q22 Utility Utility Utility Utility P&O excl. Share effect / 1Q23 operating other other net interest 4 income taxes 4 other 1,2 rev. less fuel, O&M operating purch. power, expenses3 and reg. chgs.1,2 See Financial summaries and Regulation
Slide 6: 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-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Jan-16 Jan-17 Jan-18 Jan-19 Jan-20 Jan-21 Jan-22 Jan-23 Steel, capacity util
Slide 7: 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 New capacity (~85% in ETR region) ~14 Bcf/d through 2022 Jan-16 Jan-18 Jan-20 Jan-22 Jan-24 Jan-26 16 17 18 19 20 21
Slide 8: First quarter operating cash flow
First quarter operating cash flow Consolidated OCF; $M Key drivers (+) Higher Utility customer receipts (+) Lower non-capital storm spending (+) Lower pension contributions 960 (-) Wind down of EWC 538 (-) Higher Utility interest payments 1Q22 1Q23 7
Slide 9: Credit and liquidity
Credit and liquidity Credit ratings1 (outlooks) E-AR E-LA E-MS E-NO E-TX SERI ETR Key updates S&P A A A BBB A A BBB+ • E-LA received $1.5B securitization (stable) (stable) (stable) (developing) (stable) (stable) (stable) financing Moody’s A2 A2 A2 Baa2 A3 Baa1 Baa2 • Deferred fuel balances declined
Slide 10: Equity needs through 2024
Equity needs through 2024 Estimated 2021–2024 equity needs; $B 1.30 2.50 1.07 0.13 Estimate as of Changes to equity needs ATM completed Remainder to be sourced 2020 analyst day (credit update, pension through 3/31/23 as of 3/31/23 improvement) 9 Calculations may differ due to rounding
Slide 11: Adjusted EPS guidance and outlooks
Adjusted EPS guidance and outlooks Targeting 60% – 65% dividend payout Entergy adjusted EPS; $ 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 As-reported 5.37 10 1. Based on original 2022 guidance midpoint of $6.30
Slide 12: Appendix
11 Appendix 5 entergy
Slide 13: 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 • Developing and maintaining a • Diverse board with an effective mix
Slide 14: 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 15: 2023 planned activities
2023 planned activities 1Q 2Q 3Q 4Q E-AR FRP rates • Filing for E-TX 2021 • E-AR 2021 renewable • MTEP 2023 approval effective renewable RFP selections RFP decision (APSC) • E-LA renewable RFP Filing for E-AR 2021 • Announcement of E-TX 2022 • E-MS 2022 renewable decision (LPSC) renewable RFP re
Slide 16: Utility overview
Utility overview E-AR E-LA E-MS E-NO E-TX • Electric utility – • Electric and gas utility • Electric utility – • Electric and gas utility • Electric utility – 730,000 customers – 1,101,000 electric 461,000 customers – 211,000 electric 499,000 customers • Authorized ROE: customers • Authorized ROE: c
Slide 17: Utility 2022 weather-adjusted electric retail sales
Utility 2022 weather-adjusted electric retail sales Governmental E-TX E-AR 2% 18% 18% Residential 30% E-NO 5% By Industrial 44% By operating segment E-MS company 11% Commercial E-LA 24% 48% 16
Slide 18: Utility generation overview
Utility generation overview Renewables 1 Renewables 2% Coal 1% Purchases 9% 16% CT / CCGT 44% CT / CCGT Coal 42% Nuclear 5% 2022 21% Owned and sources of leased capability energy as of 12/31/22 Nuclear 27% Legacy gas / oil Legacy gas 25% 8% 17 1. Includes generation from both owned and purchased pow
Slide 19: Jurisdictional base rate filing frameworks
Jurisdictional base rate filing frameworks E-AR E-LA E-MS E-NO E-TX1 SERI Latest filing 7/7/22 (FRP) 5/31/22 (FRP) 3/1/23 (FRP) 4/29/22 (FRP) 7/1/22 Monthly cost of date (rate case) service Next filing 7/7/23 (FRP) By 5/31/23 (FRP) By 3/1/24 (FRP) By 4/30/23 (FRP) 20272 Every month date (rate case)
Slide 20: Deferred fuel balances and recovery frameworks
Deferred fuel balances and recovery frameworks Current deferred fuel balances for electric sales declined more than $400M Deferred fuel at Deferred fuel at 12/31/22, $M1 3/31/23, $M1 Baseline recovery framework2 E-AR 140 523 • Rates reset annually based on projected cost for the period and deferred
Slide 21: Actively expanding renewable footprint
Actively expanding renewable footprint In service Regulatory filings pending Owned/ Est. in MW Project MW PPA service1 Owned 301 Flat Fork Solar (E-AR) 200 PPA 2025 PPA 533 Forgeview Solar (E-AR) 200 PPA 2025 834 Iberville Solar (E-LA) 175 PPA 2025 Sterlington Solar (E-LA) 49 Owned 2025 Wildwood Sol
Slide 22: Entergy Arkansas
Entergy Arkansas E-AR (currently in rates) Metric Detail Authorized ROE 9.15% – 10.15% Rate base $9.2B retail rate base (2023 test year) WACC (after-tax) 5.25% Equity ratio 37.8% (47.0% excluding $1.9B ADIT at 0% cost rate) Regulatory construct Forward test year FRP; result outside authorized ROE ra
Slide 23: Entergy Louisiana
Entergy Louisiana E-LA (currently in rates) Metric Detail – electric1 Detail – gas Authorized ROE 9.0% – 10.0% 9.3% – 10.3% Rate base $14.4B (12/31/21 test year)2 $0.13B + $0.4B for transmission rider (9/30/21 test year) + $0.2B for distribution rider - ($0.5B) for tax reform rider WACC (after-tax)
Slide 24: E-LA resilience and grid hardening filing
E-LA resilience and grid hardening filing Resilience and grid hardening filing highlights (docket LPSC U-36625) • Plan includes $9.6B investment over 10 years • Phase I seeks approval of $5B of projects over the first five years • Proposed recovery via forward-looking rider with semi-annual true-ups
Slide 25: E-LA Sterlington Solar filing
E-LA Sterlington Solar filing Project overview (docket U-36685) Item Details MW 49 Location Sterlington, LA Targeted in-service date 4Q25 Proposed recovery mechanism FRP, with deferral until costs can be reflected in rates if needed Key dates Date Event 8/11/23 Staff and intervenors direct testimony
Slide 26: Entergy Mississippi
Entergy Mississippi E-MS (currently in rates)1 Metric Detail Authorized ROE 10.75% performance-adjusted midpoint (10.40% + 0.35% performance factor); 9.68% – 11.82% range (annual redetermination based on formula) Rate base $4.18B (2023 forward test year) WACC (after-tax) 7.03% Equity ratio 46.76% Re
Slide 27: E-MS annual FRP filing
E-MS annual FRP filing Annual FRP (docket 2018-UN-205) 2023 2022 Filing highlights forward test year look-back Allowed ROE midpoint, incl. performance 10.75% 10.29% factor Allowed ROE range 9.68% – 11.82% 9.20% – 11.38% Earned ROE 8.47% 8.92% Rate base $4.2B $4.0B WACC (after-tax) 7.03% 6.71% Equity
Slide 28: Entergy New Orleans
Entergy New Orleans E-NO (currently in rates) Metric Detail – electric Detail – gas Authorized ROE 8.85% – 9.85% (9.35% midpoint) Rate base $1.2B (12/31/21 test year $0.2B (12/31/21 test year plus known and measurables plus known and measurables through 12/31/22) through 12/31/22) WACC (after-tax) 6
Slide 29: E-NO resilience and grid hardening filing
E-NO resilience and grid hardening filing Resilience and grid hardening filing highlights (docket UD 21-03) • Plan includes $1 billion1 investment over 10 years • Phase I seeks approval of $0.6B of projects over the first five years • Proposed recovery via forward-looking rider Proposed key dates (s
Slide 30: E-NO Ida cost certification filing
E-NO Ida cost certification filing $209M securitization financing completed December 2022 Storm cost review (docket UD-22-05) Storm cost summary, $M Storm cost Carrying costs Total Hurricane Ida 170 91 179 Key dates Date Event 7/11/23 Intervenor direct testimony 8/15/23 Advisors direct testimony 8/2
Slide 31: Entergy Texas
Entergy Texas E-TX (currently in rates) Metric Detail Authorized ROE 9.65% Rate base $2.4B (12/31/17 test year) + $1.7B in cost recovery riders WACC (after-tax) 7.73% Equity ratio 50.9% Regulatory construct Rate case and cost recovery riders (distribution, transmission, and generation) Key rate chan
Slide 32: E-TX base rate case filing
E-TX base rate case filing Filing highlights (docket 53719) Major drivers of proposed rate change • Proposed ROE: 10.8% Category Annual $M • Rate base: $4.4B New rate base 200 • Proposed cost of debt: 3.47% Change in ROE 42 • WACC (after-tax): 7.24% Cost of debt (78) • Equity ratio: 51.21% Change in
Slide 33: System Energy Resources
System Energy Resources Grand Gulf Nuclear Station Energy and capacity allocation1 SERI (most recent monthly bill)2 Metric Detail E-NO Principal asset An ownership and leasehold interest in Grand 17% E-AR 36% Gulf Nuclear Station Authorized ROE 10.94%3 Last calculated rate base $1.76B WACC (after-ta
Slide 34: SERI settlement with MPSC
SERI settlement with MPSC Settlement approved and refunds have been made Highlights of SERI / MPSC global settlement • In Nov. 2022, SERI refunded $235 million to E-MS resolving all disputes between SERI and the MPSC in FERC dockets described on slides that follow (the settlement also specified an R
Slide 35: SERI FERC cases
SERI FERC cases LPSC complaint regarding GGNS sale-leaseback renewal and uncertain tax position (docket EL18-152) • Complaint alleging (1) SERI double-recovering costs by including lease payments and capital additions in UPSA billings and (2) SERI incorrectly excluded FIN 48 liabilities associated w
Slide 36: 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 now consolidated) • ALJ initial decision issued 3/24/21 Next step
Slide 37: SERI FERC cases
SERI FERC cases Prudence complaint (docket EL21-56) • In March 2021, the LPSC, APSC, and CCNO filed a complaint alleging operational prudence claims, primarily: 1. based on the plant’s capacity factor and alleged safety performance, SERI imprudently operated Grand Gulf during the period 2016–2020, a
Slide 38: Financial disclosures
37 Financial disclosures 5 entergy
Slide 39: Progress against guidance
Progress against guidance Guidance YTD Driver assumption1 Result1 Full-year comments ETR adjusted EPS 6.55–6.85 1.14 Guidance affirmed Weather-adjusted retail sales volume ~1% 1% Now expect ~$0.05 favorable to guidance due to 1Q23 sales mix Estimated weather in sales Normal (0.22) Utility refueling
Slide 40: E-LA received $1.5B securitization proceeds
E-LA received $1.5B securitization proceeds Assets Liabilities and equity Inc. stmt. Investment Reg. Cash in affiliates asset Debt Equity Interest E-LA Receive securitization $1.5B $(1.5B) proceeds Affiliate preferred $(1.5B) $1.5B 7.5% investment1 Equity infusion from parent $1.5B $1.5B Reduce debt
Slide 41: Income on affiliate preferred investment
Income on affiliate preferred investment Estimated earnings impact, $M1 1Q22 2Q22 3Q22 4Q22 2022 E-LA 32 43 55 55 185 P&O (32) (43) (55) (55) (186) ETR2 - (1) (1) (1) (1) 1Q23 2Q23E 3Q23E 4Q23E 2023E E-LA 55 82 82 82 301 P&O (55) (83) (83) (83) (304) ETR2 (1) (1) (1) (1) (3) 1Q24E 2Q24E 3Q24E 4Q24E
Slide 42: 2023 ETR adjusted EPS sensitivities
2023 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 43: Financial summaries and Regulation G reconciliations
Financial summaries and Regulation G reconciliations 42
Slide 44: Earnings summary
Earnings summary Table 1: First quarter earnings summary $ in millions Per share in $ 1Q23 1Q22 1Q23 1Q22 As-reported (after-tax) Utility 397 340 1.87 1.67 Parent & Other 2022 EWC - 7 - 0.04 All other (86) (71) (0.41) (0.35) Total Parent & Other (86) (64) (0.41) (0.31) Consolidated 311 276 1.47 1.36
Slide 45: Utility book ROEs
Utility book ROEs Table 2: Utility book ROE summary LTM ending March 31, 2023 ($ in millions) E-AR E-LA E-MS E-NO E-TX Utility1 As-reported earnings available to common stock (a) 291 947 190 59 293 1,463 Less adjustments: SERI depreciation adjustment - - - - - 24 SERI sale-leaseback reg. liability /
Slide 46: Regulation G reconciliations
Regulation G reconciliations Table 3: ETR adjusted earnings Reconciliation of GAAP to non-GAAP measures 1Q23 1Q22 (Pre-tax, $ in millions) Net income (loss) attributable to ETR Corp. 311 276 Less adjustments: Utility - E-LA true-up for carrying costs on storm expenditures 31 - Utility - E-LA contrib
Slide 47: Regulation G reconciliations
Regulation G reconciliations Table 3: ETR adjusted earnings Reconciliation of GAAP to non-GAAP measures 2022 (Pre-tax, $ in millions) 1,103 Net income (loss) attributable to ETR Corp. Less adjustments: Utility - E-LA and E-TX true-up for the equity component of carrying costs for 2020 storms (prior
Slide 48: ETR2
5) entergy