Entergy Corporation

Good morning, my name is Aaron and I will be your conference operator for today at this time, I would like to welcome everyone to introduce fourth quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise and after the speakers remarks, there will be a question and answer session, if you would like to ask a question during this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, simply press star followed by the number one again. Please also note that we ask that you limit yourself to an initial question followed with a follow-up question when you are given the opportunity to speak. Thank you. And with that, I'd like to now turn the call over to Liz Hunter, Vice President of Investor Relations for InterG Corporation.

Good morning, and thank you for joining us. We will begin today with comments from Entergy's chair and CEO, Drew Marsh, and then Kimberly Fontan, our CFO, will review results. In an effort to accommodate everyone who has questions, we request that each person ask no more than two questions. In today's call, management will make certain forward-looking statements. Actual results could differ materially from these forward-looking statements, due to a number of factors which are set forth in our earnings release, our slide presentation, and our SEC filings. Entergy does not assume any obligation to update these forward-looking statements. Management will also discuss non-GAAP financial information. Reconciliations to the applicable GAAP measures are included in today's press release and slide presentation, both of which can be found on the investor relations section of our website. And now I will turn the call over to Drew.

Thank you, Liz. And good morning, everyone. 2024 was a transformational year for Entergy. We had strong financial performance while also making meaningful progress to grow and de-risk our business. For financial results, we are reporting 2024 adjusted EPS of $3.65, which is in the top half of our guidance range. In addition, we are raising our capital outlook beyond 2025. Because growth in most years is now greater than our previous range of 8% to 9%, and we see additional growth opportunities, we are simplifying our disclosure by removing the top end of the range. To that end, we're now simply noting our long-term growth rate through 2028 as greater than 8%. Kimberly will review the details. Our achievements in 2024 position us well to capture the growth opportunities we have on the horizon. Starting with the customer, we continue to see strong growth in our industrial segment. Industrial sales were up 8% for the year and 15% for the fourth quarter. We have seen strong growth from the natural advantages of the Gulf South for many years, and we added two large hyperscale data centers to our outlooks in 2024. This growth brings important value to our stakeholders, particularly the communities we serve and our existing customer base. Today we are announcing a new electric service agreement with a large customer in Mississippi. The customer has not announced their project, so we can't provide additional details at this time. In addition, we anticipate signing an ESA with Meta to expand their capacity needs as detailed in supplemental testimony submitted by Intergy Louisiana last week. For the combined utility, we see industrial sales compound annual growth at 12% to 13% from 2024 through 2028. When working with very large potential customers, we aim to find ways to deliver what those companies need when they need it. At the same time, we include protections for existing customers through tools such as minimum bills, contributions in aid of construction, and credit terms. These new customers also provide community enhancements through significant ad valorem taxes and direct investments, such as workforce development and infrastructure improvements. Through this work, we continue to have a robust and diverse pipeline for potential growth above our current plan. Data centers remain the largest growth category, and we continue to have 5 to 10 gigawatts of data center opportunity within our larger pipeline. We also remain well-positioned to capture additional projects as a one-stop shop. We have extensive experience bringing large customers online. Our vertically integrated model allows us to provide complete technical solutions. Our local relationships help our new customers connect with critical stakeholders. And our strong partnerships with vendors support additional growth potential. Regarding our relationships with stakeholders, our focus on stakeholder engagement has helped us move forward with our ongoing journey to be the premier utility. This starts with putting the customer first and making sure our stakeholders fully understand their potential value. In the last year, we successfully concluded several regulatory processes through this approach. Those include final approvals of the series settlements, first phase approvals of more than $2 billion of resilience investment in Louisiana, Texas, and New Orleans, LPSC and New Orleans City Council approval of the gas LDC sale, several rate actions across multiple jurisdictions, including the Louisiana formula rate plan renewal and the recent regulatory approvals to divest Entergy Louisiana's 16% of Grand Gulf capacity and energy to Entergy Mississippi. Looking at 2025, our regulatory calendar is busy, but with more customary items. We have several formula rate plan filings. In addition, we could file transmission distribution riders in Texas if needed. We anticipate decisions on new customer-driven generation and transmission investments, including utilization of Louisiana's accelerated review process for renewables. We also expect to clarify cost recovery for the 2024 storms and lay the groundwork in Louisiana and New Orleans for more timely storm cost recovery, which will benefit customers. In addition to the regulatory calendar, We are engaging in the legislative processes in both Texas and Arkansas. It's very early in those sessions and we are looking at options to support investment needed for new growth opportunities to help us create significant value for our communities and to create space for more risk management investments in resilience to benefit customers. Our regulatory calendar supports a strong capital plan to serve customer growth in our region and improve the resilience and reliability of our system for the benefit of customers. We plan to invest $37 billion over the next four years, 2025 through 2028. Driven by our customer requests, we'll continue to expand our renewables portfolio. We have active requests for proposals for new renewables in Arkansas and Louisiana in addition to the planned 1,500 megawatts associated with the META project. Our plans include investment in several new, modern, and efficient gas plants. This includes the Orange County Advanced Power Station in Texas and the Delta Blues facility in Mississippi that are already under construction. We also have pending regulatory approval requests for a combustion turbine in Arkansas, three combined cycle facilities in Louisiana, and one of each in Texas. We have a strong track record for building highly efficient combined cycle projects despite external challenges. This gives us confidence in our ability to successfully complete the projects we are undertaking today to serve our customers' demands. We have secured critical long lead time equipment with Mitsubishi Power Americas and Siemens Energy. Through these partnerships, we have clear line of sight to acquire additional equipment for subsequent projects beyond our current plan. We also have longstanding relationships with our EPC partners that can support additional projects. Each of our combined cycle plants will be configured to enable future carbon capture and sequestration. Our current capital plan does not include dollars for CCS, but we are actively working on developing projects, including customer supported investment and third party ownership options. We have a feed study underway at the Lake Charles Power Station, but an expectation to move towards a decision this year. We're also exploring expansion of our nuclear footprint. including upgrades at each of our nuclear stations and incremental 20-year license extensions. In addition, we continue to evaluate potential new nuclear options with customers and partners. As we've stated previously, these opportunities are not in our base plan. We will carefully manage financial risk with any new nuclear investment. While we have been working hard to meet customers' capacity and energy needs, We have also been actively reducing other risks facing stakeholders. Our transmission plans have grown, supporting growth and improving reliability and resilience. Our current plan includes investment from the most recent MTEP 10-year plan approved in December, which included 49 projects and $1.8 billion of investment to support reliability. Additionally, we have proposed projects totaling $3.7 billion in MTEP 25, to meet NERC's reliability standards as we grow. In addition, work authorized by the Accelerated Resilience Approvals is underway. In 2024, we completed seven projects in Louisiana, one of which was in New Orleans. We expect the number of completed projects will grow exponentially in 2025, and we plan to seek approvals for subsequent phases on a timeline that would seamlessly ensure ongoing progress. As you know, we experienced two hurricanes in 2024, and our teams performed admirably, providing safe and efficient restoration. For Francine, we leveraged learning from previous storm responses, including Beryl, enabling our crews to restore 90% of our customers within three days. Intergenes workers also assisted other utilities in the restoration efforts following devastating storms in the southeast, lending over 900 people to support Helene, and more than 1,100 to support Milton. And as many of you have heard, we experienced a winter weather event, ENZO, in January, which brought extremely low temperatures. Our operations performed well throughout the event as our system and four of our five operating companies set new winter peak records. Another risk that we actively manage is financial health, and specifically credit. We continue to make positive progress on our credit metrics in 2024, which provides financial flexibility as well as long-term customer benefits through lower cost of capital. Our work in 2024 benefited our stakeholders, including our customers, communities, and all of you as owners. None of this could happen without also benefiting the other critical stakeholder, our innovative, hardworking, and dedicated employees. Our employees have embraced the opportunities ahead of us. We are building a culture that supports rapid growth and change. I thank each and every employee for all they do to make Entergy successful. This is an exciting time as we continue our journey to be the premier utility. We have a very strong outlook that includes double digit industrial sales growth and adjusted EPS CAGR well above 8%. A strong balance sheet an improving risk profile for all stakeholders and we continue to talk to potential customers that could bring incremental growth and additional benefits for our stakeholders our employees and our partners are excited about our plan and they are ready to meet the opportunities ahead i'll now turn the call over to kimberly thank you drew good morning everyone as drew said 2024 was a very exciting year i'll provide some additional detail on the financial picture