Entergy Corp Q3 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : Hey, guys. Morning, Drew. Congrats, obviously, on a great quarter and a lot of updates. Obviously, big news on the '26 inflection to 8% to 9% EPS growth. Can you provide color on kind of what drove such a major change? The Northern Louisiana customer deal looks huge with 2.2 gigs of new generation and associated agreements. But have you changed kind of your probability of other load into connections? Do you see more deals coming soon? And is the investment fully covered under the rate agreement, or does it rely on the FRP as well? Thanks.

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : I guess, is the investment fully covered under the rate agreement, or does it rely on the FRP as well?

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : Got it. And then the deal to transfer SERI from Louisiana to LPSC to MS, does that create an additional capacity need for Louisiana? Can you satisfy that with the 3 gigs of solar, or does there need to be a resource adequacy backstop? And any kind of thoughts on consolidating SERI into a single-state Mississippi asset? Thanks, guys.

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : Got it. Perfect. And then just before I sign off, I just want to take a second and obviously congratulate Rod. I know -- we know none of what we're seeing today could have kind of been done without his leadership, and he's been such an integral part of Entergy's success. I mean, he coined the phrase stakeholder engagement. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 3:00PM, ETR.N - Q3 2024 Entergy Corp Earnings Call So I'm personally looking forward to seeing him kind of transfer his skills to another utility. God knows some could really use his skills. And obviously, big congrats to Bill Abler. He knows what he means to us. Hopefully, one day, I can see him all the time. I can hit his Peloton output, but that's all I ask. See you guys soon.

Question: Nicholas Campanella - Barclays - Analyst : Hey. Thank you. And first off, I'll echo Shar's comments. What a way to pass the torch, and congrats to Bill and Rod. It's been great work with you guys. So I just wanted to ask quickly, you kind of mentioned the growth rate is stepping up here post-2025. Can you talk about that 8% to 9% being sustainable past 2028, and what are the long-term drivers that may be allowed for that?

Question: Nicholas Campanella - Barclays - Analyst : All right. Well, thank you for that. And then secondly, I can't help but notice when you kind of talked about some of the drivers here. You mentioned that you're looking at advanced nuclear. Can you just kind of expand on some of your comments? Would this all kind of be within the regulated cohort? And in regards to the working group that you talked about with new nuclear, who is in that group, and would that kind of -- are you kind of pointing to something more of like a large-scale, multi-state effort on like an AP1000 or otherwise? Thank you.

Question: Nicholas Campanella - Barclays - Analyst : All right. Thanks so much.

Question: Julien Dumoulin-Smith - Jefferies LLC - Analyst : Hey. Good morning, team, and seriously, congratulations to all. Rod, Bill, team, I mean, just kudos all around. This culminates things very nicely here, honestly. Maybe just following up on what Nick was just saying a second ago here. I mean, as you think about the resource mix here, I mean, you mentioned a lot about solar and solar in storage, hybrid resources. But again, going back to this SMR conversation that's been front and center here, I mean, is there a potential of a nuclear structure that would be ownership versus more of a build on transfer? I don't want to be holding it up too much, but obviously with the amount of load growth that you guys are looking at, you all would be seriously considering it, I imagine. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 3:00PM, ETR.N - Q3 2024 Entergy Corp Earnings Call

Question: Julien Dumoulin-Smith - Jefferies LLC - Analyst : Excellent. And given the backdrop here, I mean, you seem to be having real success in attracting -- you have a track record of attracting large industrial resources over the years, and now you're seemingly successful in pivoting that same track record into looking at data centers. I mean, to what extent could you continue to see these transformational-type customers announced? I mean, is there a lot more there that you could see across your various states here? I mean, I hesitate to say that this is it, especially given how much you've tailored yourself to some of these larger loads over the years.

Question: Julien Dumoulin-Smith - Jefferies LLC - Analyst : All right. Fair enough, guys. Thank you very much. I'll leave it there. Congrats again.

Question: Ross Fowler - BofA Global Research (US) - Analyst : Thanks. Morning. And Rod and Bill, congratulations to you both. Look forward to seeing you both at EEI. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 3:00PM, ETR.N - Q3 2024 Entergy Corp Earnings Call So just a couple questions, one on the nuclear side. The recent Nuclear Summit hosted by the Mississippi Public Service Commission, that highlighted a lot of regulatory support for nuclear in the state. Would you say other states and jurisdictions across your service territory are aligned with that, or how should I think about that?

Question: Ross Fowler - BofA Global Research (US) - Analyst : Okay, thank you. And then maybe on the industrial project in Northern Louisiana, I appreciate we're going to get into a lot more detail here in a little bit over a week at EEI, but it looks like from the filing, they're going to pay for about 1.5 gigs of solar. And then can you just let us know, is this a data center or not a data center, and is this involved with the Holly Ridge East Site or the Northeast Site? Or is that another site up there that could be further developed? Thanks.

Question: Ross Fowler - BofA Global Research (US) - Analyst : Okay. I'll wait for EEI. Thanks, guys.

Question: Steve Fleishman - Wolfe Research - Analyst : Great. Thank you. Thanks for the Halloween treat. I thought I was too old to get those. And Rod, definitely wish you the best, and I'm sure we will cross paths. So I just want to clarify on the guidance change, the CapEx and sales change, is all of that directly this one customer and related spending? Or is there other pieces to it, or is it really just the one customer? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 3:00PM, ETR.N - Q3 2024 Entergy Corp Earnings Call

Question: Steve Fleishman - Wolfe Research - Analyst : Okay. So it's the capital, but I mean, is the spending on the capital related to getting the system ready for that incremental load, or just the -- there's a little bit of other stuff, I guess, on the edges.

Question: Steve Fleishman - Wolfe Research - Analyst : And then you have already -- you'd already announced some new gas plants in Texas, CCGT there. Is the cost roughly similar for -- since it sounds like the engineering and such is going to be very similar to these other CCGTs?

Question: Steve Fleishman - Wolfe Research - Analyst : Okay. And then on the balance sheet and such, it seems like the incremental equity needed to fund the incremental CapEx is relatively modest. I think you had -- I can't remember the exact number, but you had a decent amount of -- not that different than the $3 billion already. So is that just because the cash flows are getting better and the like covering a lot of it?

Question: Steve Fleishman - Wolfe Research - Analyst : Okay. And then the metrics, are you comfortably above the 14%? And have you started including the nuclear PTC and some of that stuff yet, or is that still not included?

Question: Steve Fleishman - Wolfe Research - Analyst : Okay. Last question, just since you brought up new nuclear, just -- I know you can't go into all sorts of details, things are still being developed, but maybe, Drew, you could just talk to how you're approaching the risk you would be willing to take on developing new nuclear? And also they tend to be very large capital projects, and so just in terms of like project risk?

Question: Steve Fleishman - Wolfe Research - Analyst : Got it. Thank you very much.

Question: Jeremy Tonet - JPMorgan) - Analyst : Hi. Good morning. Rod, thank you very much for saving this great update for the end here. We appreciate it. We'll miss you. And Bill, we'll miss you from your currency as well, but thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 3:00PM, ETR.N - Q3 2024 Entergy Corp Earnings Call Maybe just moving to the business here and want to come back to the tariff commentary for this new customer here. Do you see this as a framework that's replicable going forward, or is this kind of one-time in nature? Just wanted to see, I guess, your thoughts on the outlook there.

Question: Jeremy Tonet - JPMorgan) - Analyst : Wonderful. Thank you. And then just moving back to the nuclear side real quick here. Just wanted to see, I guess, as you think about the uprate tier specifically, how long do you expect this evaluation to take? Is this about having new customers that cover the uprate cost in their tariff, or just thinking about gating items or timelines moving forward on the uprate specifically?

Question: Jeremy Tonet - JPMorgan) - Analyst : Got it. That's helpful. Thank you. And again, Rod, we'll miss you. Thanks.

Question: Bill Appicelli - UBS Securities LLC - Analyst : Hi. Great. Thank you. Just a question. Just to clarify, is all of the CapEx from this new large customer reflected in this update today? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 3:00PM, ETR.N - Q3 2024 Entergy Corp Earnings Call

Question: Bill Appicelli - UBS Securities LLC - Analyst : Is all of the potential CapEx from the new large customer reflected in the update today?

Question: Bill Appicelli - UBS Securities LLC - Analyst : Okay. And then you talked a little bit about it, but maybe what's the customer bill impact relative to the outlook at the Analyst Day? If this new customer is willing to pay a little bit more, it sounds like, in terms of the variable and cost, how does that outlook change?

Question: Bill Appicelli - UBS Securities LLC - Analyst : Okay. And then just one last question. You mentioned about the potential for a nuclear clean tariff. I guess, how does that interplay with some of the development, but is that more around just existing nuclear energy and what customers are willing to pay for that, and how would that sort of impact the rate design?

Question: Bill Appicelli - UBS Securities LLC - Analyst : Okay. All right, great. Thank you very much.

Question: Sophie Karp - KeyBanc Capital Markets Inc. - Analyst : Hi. Good morning. Thank you for the great update today. Just a couple of questions to clarify. I don't know if you can sort of provide more granularity on the step-up in the EPS and the capital. Obviously, you said some of it from the one large new customer and some of it is other. How much of that is from that one large customer? Is there a way to kind of help us think about that?

Question: Sophie Karp - KeyBanc Capital Markets Inc. - Analyst : Got it. So this customer, it sounds like you didn't need to request any new tariff to accommodate this investment and to make it so that the customer pays for their share of fixed costs and et cetera. So the existing tariffs are sufficient to kind of continue these arrangements with future customers. Is that correct?

Question: Sophie Karp - KeyBanc Capital Markets Inc. - Analyst : Got it. Thank you. And then, on the transfer of SERI or Louisiana share to Mississippi, does Mississippi have to approve it, or have they already approved it?

Question: Sophie Karp - KeyBanc Capital Markets Inc. - Analyst : And lastly, I guess, on nuclear, I'm just kind of curious if there's anything that you think you need to see in this nuclear development, particularly as it relates to SMRs, before you're ready to pull the trigger on your own project. I understand -- I can appreciate this is REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 3:00PM, ETR.N - Q3 2024 Entergy Corp Earnings Call very long-dated and a very slow rolling process, but would you be comfortable being one of the first movers, I guess, in this space if it's sufficiently derisked? Or would you like to see somebody else successfully build a few of those projects before you step into it?

Question: Sophie Karp - KeyBanc Capital Markets Inc. - Analyst : Got it. Thank you. I appreciate the comments.

Question: Michael Lonegan - Evercore ISI Institutional Equities - Analyst : Hi. Thanks for taking my questions, and congrats to Rod, Bill, and Liz. So given the favorable weather versus normal, you talked about flexing O&M again this year, but you maintain 2025 EPS guidance. Would you say you're planning conservatively for next year, or are there new offsets you are contemplating? I know you're going to give more detailed preliminary drivers at EEI for '25, but maybe you could give a little bit of a preview into why you maintain that guidance.

Question: Michael Lonegan - Evercore ISI Institutional Equities - Analyst : Great. Thanks. And then, secondly for me, on the dividend, you're still targeting 6% dividend growth that you mentioned at the Analyst Day. Obviously the higher longer-term EPS outlook implies a continued reduction in the payout ratio. Do you have an ultimate stabilized target for the payout ratio over the longer term? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. OCTOBER 31, 2024 / 3:00PM, ETR.N - Q3 2024 Entergy Corp Earnings Call

Question: Michael Lonegan - Evercore ISI Institutional Equities - Analyst : Great. Thanks for taking my questions.