Earnings Teleconference 1 st Quarter 2017 April 26, 2017
Table of Contents Section Slides Strategic execution 3 Quarterly results 4–7 2017 guidance and longer-term financial outlooks 8–10 Cash and credit profile 11 Appendix and Regulation G Reconciliations 12 Utility overview 13 Utility companies’ regulatory overview 14–22 Generation projects overview 23–27 AM I regulatory approval processes 28 EWC overview 29 EWC EPS variance details 30–31 EWC Nuclear plant updates 32–33 Hedging and price disclosures 34–36 NRC financial assurance filings 37 Estimated special items 38 2017 guidance information 39–40 2016 Integrated Report 41 Regulation G reconciliations 42-47 1
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, among other things, Entergy’s 2017 earnings guidance, its current financial and operational outlook, statements of Entergy’s plans, beliefs or expectations included in this presentation. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this presentation. Except to the extent required by the federal securities laws, Entergy undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements are subject to a number of risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this presentation and in Entergy’s most recent Annual Report on Form 10-K, any subsequent Quarterly Reports on Form 10-Q and Entergy’s other reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with rate proceedings, formula rate plans and other cost recovery mechanisms, including the risk that costs may not be recoverable to the extent anticipated by the utilities; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) nuclear plant relicensing, operating and regulatory costs and risks, including any changes resulting from the nuclear crisis in Japan following its catastrophic earthquake and tsunami; (e) changes in decommissioning trust fund values or earnings or in the timing or cost of decommissioning Entergy’s nuclear plant sites; (f) legislative and regulatory actions and risks and uncertainties associated with claims or litigation by or against Entergy and its subsidiaries; (g) risks and uncertainties associated with strategic transactions that Entergy or its subsidiaries may undertake, including the risk that any such transaction may not be completed as and when expected and the risk that the anticipated benefits of the transact ion may not be realized; (h) effects of changes in federal, state or local laws and regulations and other governmental actions or policies, including changes in monetary, fiscal, tax, environmental or energy policies; and (i) the effects of technological changes and changes in commodity markets, capital markets or economic conditions, during the periods covered by the forward-looking statements. This presentation includes the non-GAAP financial measures of operational EPS, adjusted EPS, normalized ROE, parent debt to total debt, operational FFO to debt and debt to operational adjusted EBITDA when describing Entergy’s results of operations and financial performance. We have prepared reconciliations of these financial measures to the most directly comparable GAAP measure. These reconciliations can be found on slides 42-47. Further information can be found in Entergy’s investor earnings releases, which are posted on our website at www.entergy.com. 2
Strategic Execution 2017 Key M ilestones 1 (subject to change) 1Q 2Q 3Q 4Q � • • • IPEC closure ELL annual FRP filing EAI FRP filing M TEP 17 approval • • • announcement New Orleans Power Palisades PPA EAI FRP decision � • NYPA trust transfer Station CCNO termination decision EAI, ELL and EM I AM I � Final IPEC WQC/ decision by the M ichigan PSC decisions • • • SPDES issued ENOI renewable RFP ENOI AM I decision ETI AM I filing � • • EM I FRP filing selection ELL annual FRP M ontgomery County � � ETI TCRF decision FitzPatrick implementation Power Station PUCT � • EAI and ELL transaction close Lake Charles Power decision • • renewable RFP EM I FRP decision Station LPSC decision Annual dividend selections review � IPEC CZM concurrence � VY license transfer filing with the NRC 1 Estimated timing for completion of key milestones; some subject to regulatory approvals or other requirements or factors 3 that could lead to changes
First Quarter 2017 EPS Summary As-Reported UP&O EPS Operational Consolidated EPS Adjusted 1 0.95 0.83 0.84 0.62 1.35 0.46 1.28 1Q17 1Q16 0.99 EWC EPS 1Q17 1Q16 0.51 0.44 0.37 (0.16) 1Q17 1Q16 4 1 Excludes special items and weather and normalizes income taxes
First Quarter Utility, Parent & Other EPS Comparison As-Reported UP&O EPS Operational First Quarter 2017 0.05 0.16 Adjusted 0.00 0.83 0.78 0.62 0.62 Adjusted Performance Drivers UP&O Exclude UP&O Exclude Normalize UP&O As-Reported Specials Operational Weather Income Taxes Adjusted • Higher O&M • Higher depreciation Partially offset by: • Higher net revenue First Quarter 2016 0.14 0.00 (0.03) 0.95 0.84 0.84 UP&O Exclude UP&O Exclude Normalize UP&O As-Reported Specials Operational Weather Income Taxes Adjusted 5 See Appendix B in the earnings release for a comprehensive analysis of quarterly EPS variances
First Quarter EWC EPS Comparison As-Reported EWC EPS Operational First Quarter 2017 Operational Performance Drivers 0.53 0.37 • FitzPatrick (sold 3/ 31/ 17) (0.16) • Lower power prices • Higher decommissioning EWC Exclude EWC expense As-Reported Specials Operational Largely offset by: • Lower non-fuel O&M First Quarter 2016 • Higher earnings on decommissioning trust 0.07 0.51 0.44 EWC Exclude EWC As-Reported Specials Operational See Appendix B in the earnings release and slide 30 for a comprehensive analysis of quarterly EPS variances 6 See Regulation G reconciliations in appendix for details on special items
First Quarter OCF Comparison Consolidated OCF; $M OCF Contribution by Business; $M Business Segment 1Q17 1Q16 Change Utility 558 459 99 Parent & Other (176) (62) (114) 533 529 EWC 147 136 11 Total 529 533 (3) Totals may not foot due to rounding 1Q17 1Q16 Performance Drivers • Reduced cash flow from the timing of recovery for fuel and purchased power at the Utility and lower net revenue at EWC (excluding revenue from the FitzPatrick reimbursement agreement) • Largely offset by cash flow from income taxes and reduced spending on Vermont Y ankee decommissioning • Intercompany income tax payments contributed to the line of business variances 7
2017 Earnings Guidance Entergy affirmed its 2017 EPS guidance ranges 2017 EPS Guidance 1 ; $ 4.75–5.35 Range 5.05 Midpoint 4.25–4.55 Range 4.40 Midpoint UP&O ETR Consolidated Adjusted EPS Operational EPS 8 8 1 Prepared February 2017
Utility, Parent & Other Financial Outlook 1 ; $ UP&O Adjusted EPS 4.90–5.30 4.50–4.90 4.25–4.55 17E Guidance 18E Outlook 19E Outlook 9 1 Excludes special items and weather and normalizes income taxes
EWC Operational Adjusted EBITDA Outlook Based on March 31, 2017 market prices EWC Operational Adjusted EBITDA; $M Non-nuclear assets 575 and Cooper contract 400 300 15 140 17E 18E 19E 20E 21E Estimate at 575 420 300 130 20 12/ 31/ 16 10 See estimated special items on slide 38
Cash and Credit Profile Credit Ratings 1 (outlook) Financial Performance M easures Parent Debt to T otal Debt; % Entity S&P M oody’s EAI A (pos.) A2 (stable) Target 18–20 21.1 ELL A (pos.) A2 (stable) EM I A (pos.) A2 (stable) 1Q17 Target ENOI A (pos.) Baa2 (stable) Debt to EBITDA; Times FFO to Debt; % ETI A (pos.) Baa1 (stable) SERI A (pos.) Baa1 (stable) Max range 4.4 Min range 3.5–4.5 Entergy BBB+ Baa2 (stable) 17.3 13–23 (pos.) 1Q17 Target 1Q17 Target 11 1 Senior secured ratings for the OpCos and SERI; corporate credit rating for Entergy
Appendix and Regulation G Reconciliations 12
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