Slide 1: Pathway to Premier
Pathway to Premier Entergy Corporation Second quarter 2023 earnings call August 2, 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 3–8 Appendix Sustainability highlights 10 – 11 2023 planned activities 12 Utility 13 – 38 Financial disclosures 40 – 42 Financial summaries and Regulation G reconciliations 44 – 47 2
Slide 4: Second quarter results
Second quarter results Results keep us on track to achieve adjusted EPS guidance and outlooks Entergy adjusted EPS; $ Key takeaways 0.25 (0.19) 2Q results driven by: • Customer-centric investments including regulatory actions along with higher 1.78 1.84 depreciation expense, taxes other than income
Slide 5: Second quarter adjusted EPS
Second quarter adjusted EPS Entergy adjusted EPS; $ 0.30 (0.17) 0.12 (0.04) (0.06) (0.09) 1.78 1.84 1 2Q22 Utility Utility Utility Utility Income taxes Share effect / 2Q23 operating other other net interest4 other 2, 4 rev. less fuel, O&M operating purch. power, expenses 3 1,2 and reg. chgs. See Fin
Slide 6: Second quarter operating cash flow
Second quarter operating cash flow Consolidated OCF; $M Key drivers Lower fuel and purchased power payments partially offset by Utility customer receipts (primarily fuel revenue) 866 278 2Q22 2Q23 5
Slide 7: Credit and liquidity
Credit and liquidity Credit ratings1 (outlooks) E-AR E-LA E-MS E-NO E-TX SERI ETR S&P A A A BBB A BBB BBB+ (stable) (stable) (stable) (developing) (stable) (negative) (stable) Moody’s A2 A2 A2 Baa2 A3 Baa2 Baa2 (stable) (stable) (stable) (stable) (stable) (negative) (negative) Key ETR credit metrics
Slide 8: Equity needs through 2024
Equity needs through 2024 Estimated 2021–2024 equity needs; $B 0.05 Not yet settled1 1.20 1.07 0.08 Equity need ATM completed Remainder to be sourced 2021 through 2024 through 6/30/23 as of 6/30/23 Calculations may differ due to rounding 7 1. Does not reflect adjustments, including for common divide
Slide 9: 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 8 1. Based on original 2022 guidance midpoint of $6.30
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 • Developing and maintaining a • Diverse board with an effective mix
Slide 12: 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 13: 2023 planned activities
2023 planned activities 1Q 2Q 3Q 4Q E-AR FRP rates • Filing for E-TX 2021 renewable • E-AR 2021 renewable • MTEP 2023 approval effective RFP selections (now expected 1Q24) RFP decision (APSC) • E-LA renewable RFP Filing for E-AR 2021 • Announcement of E-TX 2022 (now expected 4Q23) decision (LPSC
Slide 14: 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 15: 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% 14
Slide 16: 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% 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-LA E-MS E-NO E-TX1 SERI Latest filing 7/7/23 (FRP) 5/31/23 (FRP) 3/1/23 (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 Imme
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-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 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 Non-ETR additions ETR ~14 Bcf/d through 2022 additions Jan-16 Jan-18 Jan-20 Jan-22 Jan-24 Jan-26 16 17 18 19 20 21 22
Slide 20: 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 Coastal Prairie Solar (E-LA) 175 PPA 2025 Sterlington Solar (E-LA) 49 Owned 2026 Approv
Slide 21: 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 22: E-AR annual FRP filing
E-AR annual FRP filing Filing highlights (docket 16-036-FR) 2022 test 2024 test year year Earned ROE 7.29% 8.11% Rate base (ADIT incl. in WACC, not rate base) $8.8B $10.2B WACC (after-tax) 5.16% 5.62% Equity ratio (traditional equity ratio) 47% 47% Revenue requirements to midpoint $50M $81M Rate cha
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 $0.15B + $0.4B for transmission rider (9/30/22 test year) + $0.2B for distribution rider - ($0.5B) for tax reform rider WACC (after-tax)
Slide 24: E-LA annual FRP filing
E-LA annual FRP filing Annual FRP (docket U-36822) Filing highlights 2022 test year Earned ROE 8.33% Allowed ROE 9.0% – 10.0% (9.5% midpoint) Rate base $15.7B plus $0.5B for transmission and distribution plant closings through 8/31/23 WACC (after-tax) 6.66% Equity ratio 49.51% Major drivers of propo
Slide 25: E-LA resilience and grid hardening filing
E-LA resilience and grid hardening filing Resilience and grid hardening filing highlights (docket 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 Key
Slide 26: 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 2026 Proposed recovery mechanism FRP, with deferral until costs can be reflected in rates if needed Key dates Date Event 8/11/23 Staff and intervenor direct testimony
Slide 27: E-LA enhanced renewable RFP process
E-LA enhanced renewable RFP process For up to 3,000 megawatts of solar 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 tariff ‒ Proposed recovery via
Slide 28: Entergy Mississippi
Entergy Mississippi E-MS (currently in rates) Metric Detail Authorized ROE 10.81% performance-adjusted midpoint (10.40% + 0.41% performance factor); 9.74% – 11.88% range (annual redetermination based on formula) Rate base $4.2B (2023 forward test year) WACC (after-tax) 7.06% Equity ratio 46.76% Regu
Slide 29: 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 30: E-NO annual FRP filing
E-NO annual FRP filing Annual FRP (docket UD-18-07) Major drivers of proposed rate change; $M Filing highlights Electric Gas Electric Gas Earned ROE 7.34% 3.52% Expenses (O&M and A&G) 19 4 Allowed ROE 9.35% Investment in plant 3 1 Rate base 1.2B 0.2B WACC (after-tax) 6.86% Income taxes (4) – Equity
Slide 31: 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 Carrying cost cost Total Hurricane Ida 170 91 179 Key dates Date Event 8/15/23 Advisors direct testimony 8/29/23 Hearing officer to certify the r
Slide 32: 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 $1B1 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 (subject
Slide 33: Entergy Texas
Entergy Texas E-TX (currently in rates)1 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 Rate case and cost recovery riders (distribution, transmission, and generation) Key rate changes in last $54M interim base r
Slide 34: E-TX base rate case filing
E-TX base rate case filing Parties filed unopposed settlement agreement on 5/10/23 Settlement highlights (docket 53719) • ROE: 9.57% • Rate base: $4.4B • WACC (after-tax): 6.61% • Equity ratio: 51.21% Proposed rate change summary Key dates Category Annual $M Date Event Base rate change 252 8/3/23 PU
Slide 35: 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 $1.73B WACC (after-ta
Slide 36: 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 37: 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 38: 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 39: 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 40: Financial disclosures
39 Financial disclosures 5 entergy
Slide 41: Progress against guidance (page 1 of 2)
Progress against guidance (page 1 of 2) Guidance Driver assumption1 YTD result1 Full-year comments ETR adjusted EPS 6.55–6.85 2.99 Guidance affirmed Estimated weather in sales Normal (0.15) Weather-adj. retail sales volume ~1% 0% • Now expect ~0.7% YoY sales growth (industrial growth, flat residenti
Slide 42: Progress against guidance (page 2 of 2)
Progress against guidance (page 2 of 2) Guidance Driver assumption1 YTD result1 Full-year comments Parent & Other excl. income tax ~0.25 0.01 Now expect ~$0.15 YoY due to lower residual EWC revenue and parent rate, share effect, and affiliate interest 2 preferred 3 Effective income tax rate ~24% ~24
Slide 43: 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 44: Financial summaries and Regulation G reconciliations
Financial summaries and Regulation G reconciliations 43
Slide 45: Earnings summary
Earnings summary Table 1: Second quarter earnings summary $ in millions Per share in $ 2Q23 2Q22 2Q23 2Q22 As-reported (after-tax) Utility 514 153 2.42 0.75 Parent & Other 2022 EWC - 87 - 0.42 All other (123) (80) (0.58) (0.39) Total Parent & Other (123) 7 (0.58) 0.03 Consolidated 391 160 1.84 0.78
Slide 46: Regulation G reconciliations
Regulation G reconciliations Table 2: ETR adjusted earnings Reconciliation of GAAP to non-GAAP measures 2Q23 2Q22 (Pre-tax, $ in millions) Net income (loss) attributable to ETR Corp. 391 160 Less adjustments: Utility - E-LA and E-TX true-up for carrying costs on storm expenditures - 41 Utility - E-L
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) 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 contrib
Slide 48: Utility book ROEs
Utility book ROEs Table 4: Utility book ROE summary LTM ending June 30, 2023 ($ in millions) E-AR E-LA E-MS E-NO E-TX Utility1 As-reported earnings available to common stock (a) 296 893 203 53 283 1,825 Less adjustments: SERI depreciation adjustment 24 SERI sale-leaseback reg. liability / DTA turnar
Slide 49: ETR
5) entergy