Entergy Louisiana, LLC COLLATERAL TR MT Q4 FY2024 earnings call

• 2024 was a transformational year for Entergy, with strong financial performance and progress in growing and derisking the business. - The industrial segment experienced robust growth, with 8% annual growth and 15% fourth - quarter growth, and two large hyperscale data centers were added to the outlook in 2024. - Focus on stakeholder engagement led to the successful completion of several regulatory processes, including final approvals of SERI settlements, first - phase approvals of over $2 billion in resilience investment, approval of the gas LDC sale, and multiple rate actions. - In 2025, the regulatory calendar is busy with activities such as formula rate plan filings, consideration of transmission distribution riders in Texas, and decisions on new customer - driven generation and transmission investments. - Entergy has a four - year capital plan of $37 billion, which includes investment in renewables, gas plants, a FEED study at the Lake Charles Power Station for CCS, and expansion of the nuclear footprint. - Seven restoration projects were completed in Louisiana in 2024, and more projects are expected in 2025. - Employees are building a culture to support rapid growth and change.

In 2024, Entergy reported an adjusted EPS of $3.65, which was within the top half of the guidance range. Weather - adjusted retail sales grew approximately 4%, with industrial sales showing strong growth, up 8% for the year and 15% for the fourth quarter. The industrial segment is expected to have a compound annual growth rate of 12% to 13% from 2024 through 2028. Data centers represent the largest growth category, with 5 to 10 gigawatts of opportunity within the pipeline. At the end of 2024, the book FFO to adjusted debt was 14.7%, and S&P upgraded the Series issuer credit rating from BBB to BBB -.

• 2025 adjusted EPS guidance ranges from $3.75 to $3.95. - The long - term growth rate through 2028 is greater than 8%. - In 2025, weather - adjusted retail sales growth is expected to be 6%, with industrial growth at 11% to 12% driven by large customers. - The higher capital plan has led to an upward revision of the longer - term outlooks.

• Weather events like hurricanes and winter storms can impact operations and restoration efforts. - There are financial risks associated with new nuclear investments. - There is uncertainty in regulatory processes that may affect capital plans and rate recoveries. - There are risks related to fuel prices and equipment supply that can impact generation planning.

Q: Just to elaborate on the core drivers of the $3 billion CapEx update. It’s skewed to generation and renewables. So does that kind of imply you’re starting to trend towards the high end of that load growth especially as we think about the ramp - up for something like Hub 8, which I think is up to a $12 billion site?

A: As you said in the capital plan, it is largely generation for both dispatchable and renewables, but it does have some distribution investment and there’s some incremental nuclear investments to support the reliability of those as well. All of that is baked into the outlook that we have here. And as you noted, we increased the outlook as we go out into the back end of that period, reflecting those investments and the earnings on those investments.

Q: You're not the only CEO that's talking about new nuclear, I'm just kind of curious if you just hone in on just specifically what you mean by new nuclear because one of your commissioners in Louisiana kind of highlighted large scale. And so I'm not sure if there's an appetite for SMRs in the state, and you seem to focus a little bit on the larger scale side. So is there room for large - scale reactors if there's ample risk sharing, either on the federal backstop, et cetera? Or when you mean new nuclear, are you really specific to SMRs?

A: We actually are looking at all forms of new nuclear, the large scale, like an AP1000, which as you all know, there are some that exist now in our country and several under construction around the world and several more that are planned. So that is, in some sense, viable supply chain for new nuclear today. And so certainly, we would be looking at that because in a lot of ways, that could derisk entry into the new nuclear space. But we are also looking at SMRs. We have MOU with Holtec to investigate their new technology. And of course, we're looking at others like GE's technology and some of the other ones that are around. So we're not exclusive to any particular new nuclear technology at this point. We are primarily looking at what's going to give our stakeholders the best risk profile and the best value. Those are going to be the driving components for us.