ENTERGY CORP /DE/ Q3 FY2024 earnings call

• Strong quarterly adjusted EPS of $2.99 reported, with the bottom of the guidance range raised by $0.10. Longer-term outlook enhanced due to new capital investment for industrial sales and clean energy products. • Industrial sales growth story robust, with an industrial sales compound annual growth rate of 11% to 12% through 2028, 300 basis points higher due to a large new customer in Louisiana. • Progress on renewables: Entergy Arkansas has multiple solar projects in service and under development; announced large dispatchable generation projects, including hydrogen-ready dual fuel combined cycle units. • Storm preparedness: Outstanding response to Hurricane Francine, restoring 90% of customers in 3 days. Resilience programs: Accelerated resilience plans in Louisiana, New Orleans, and Texas, with grants received. • Regulatory approvals: Louisiana Public Service Commission approved formula rate plan extension, sale of LDC business, and divestiture of Grand Gulf Energy share to Mississippi. • Transitions: Bill Abler moving to commercial planning and operations for utilities; Rod West retiring from Entergy after 25 years.

No specific breakdown of product segments by revenue contribution provided in the transcript.

• Raised the bottom of the 2024 adjusted EPS guidance range by $0.10. • Raised longer-term outlook driven by new capital investment for industrial sales and renewables. • Capital plan through 2028 is $7 billion higher than at Analyst Day, driven by new transmission and incremental generation investments. • Board approved 2-for-1 stock split, trading to begin December 13, with outlooks reported on a pre-split basis.

• Managing risks associated with large capital projects, especially nuclear, including ensuring appropriate ownership structure and spreading project risks. • Need to ensure customer support for investments, particularly with large-scale nuclear projects, considering the scale relative to company size.

Q: Congrats on the great quarter and updates, especially on the 2026 EPS inflection. Can you provide color on what drove the major change and if more deals are coming soon?

A: The step-up in EPS is supported by incremental capital for significant customer growth. There are ongoing conversations with large potential customers, but specific details on new deals aren't disclosed.

Q: Regarding the deal to transfer SERI from Louisiana to Mississippi, does it create additional capacity needs for Louisiana and thoughts on consolidating SERI?

A: Capacity needs for Louisiana are manageable within the plan. Anticipate FERC approval for the transfer, with no further changes at this point.

Q: Thoughts on the sustainability of the 8%-9% EPS growth past 2026 and long-term drivers?

A: Underlying drivers include onshoring, clean energy, electrification, and technology, with ongoing conversations with large potential high load factor customers in various industries.

Q: Is there a potential nuclear ownership structure and what are the challenges?

A: Looking at various structures, but the scale of nuclear projects poses risks due to their size relative to company assets. Ownership role is anticipated, but challenges include managing risks and ensuring customer support.

Q: Can you clarify on the guidance change, is the capital spending only related to the one large customer?

A: There is more to the capital spending than just the one large customer; it includes significant additional solar investment and incremental transmission investment for other customers as well.

Q: Is the framework for the new customer in Louisiana replicable?

A: The framework of ensuring new customers support their fair share is replicable, using stakeholder engagement to align all parties and ensure benefits for all.

Q: How long will the nuclear uprate evaluation take and what's the timeline?

A: Varies by plant and upgrade; most upgrades are in Arkansas and Louisiana, with some already in progress and others needing more customer support.

Q: Can you provide granularity on the EPS step-up and capital from the one large customer?

A: Not broken out specifically, but the step-up is from a blend of sales growth, investment in generation, transmission, and renewables for multiple customers.

Q: Regarding the dividend, is there an ultimate stabilized target for the payout ratio?

A: No specific target set, but the payout ratio will decline as the business grows, while targeting 6% dividend growth.