54th Edison Electric Institute Financial Conference November 10–12, 2019 Creating sustainable value 0 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 2019 earnings guidance, its current financial and operational outlooks, and other statements of Entergy’s plans, beliefs or expectations included in this presentation. Readers are cautioned not to place undue reliance on these forwardlooking 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 (1) 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 and (2) implementation of the ratemaking effects of changes in law; (c) uncertainties associated with efforts to remediate the effects of major storms and recover related restoration costs; (d) risks associated with operating nuclear facilities, including plant relicensing, operating and regulatory costs and risks; (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 transaction 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; (i) the effects of technological changes and changes in commodity markets, capital markets or economic conditions; and (j) impacts from a terrorist attack, cybersecurity threats, data security breaches or other attempts to disrupt Entergy’s business or operations, and other catastrophic events. This presentation includes the non-GAAP financial measures of ETR adjusted EPS; adjusted ROE; parent debt to total debt, excluding securitization debt; FFO to debt, excluding securitization debt; and FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC 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, which can be found in the appendix of this presentation. Further information can be found in Entergy’s investor earnings releases, which are posted on the company’s website at www.entergy.com and which contain further information on non-GAAP financial measures. 1 CUSTOMERS EMPLOYEES COMMUNITIES OWNERS We exist to grow a world-class energy business that creates sustainable value for our four stakeholders 2 Clear objective to create sustainable value .II Grow the managing risk WE POWER Solid track record of delivering on our strategy Invest in the Utility Constructive regulation Exit merchant business ✓ $15B capital investment over the last five years ✓ Arkansas legislation / E-AR forward test year FRP ✓ Two major generation projects completed ahead of schedule ✓ E-MS FRP with forwardlooking features ✓ E-LA FRP improvements ✓ Agreements to sell Palisades and Indian Point ✓ Four major generation projects underway (new builds and an acquisition) ✓ E-TX DCRF and TCRF ✓ Significant risk reduction ✓ AMI deployment in process ✓ Transmission expansion ✓ Focus on nuclear operations ✓ Sales of FitzPatrick, VY, Pilgrim, RISEC and wind ventures ✓ Texas legislation to allow generation rider • Power price ✓ System Agreement termination • NDT returns • Operational • Decommissioning ✓ MTEP 16, 17 and 18 approved 4 2019 key deliverables Continuing to execute on our strategy 1Q 2Q ✓ E-AR renewable RFP issuance ✓ E-TX renewable RFP issuance (added 1Q) ✓ E-MS annual FRP filing ✓ Pilgrim return to Column 1 in the NRC regulatory oversight program ✓ St. Charles Power Station ✓ in service ✓ E-LA annual FRP • filing ✓ E-MS FRP decision ✓ Western Region Phase 1 ✓ economic transmission ✓ project completion ✓ Indian Point Unit 3 final ✓ refueling outage ✓ Pilgrim shutdown ✓ Agreement to sell Indian Point post-shutdown (added 2Q) 3Q E-MS Choctaw decision (approved 4Q) E-MS Sunflower Solar project decision (now expected 4Q) E-AR annual FRP filing E-NO rate case decision (decision in 4Q) E-LA FRP rates effective Note: Estimated timing as of February 2019; regulatory activity or other factors could lead to changes 4Q • ~1M advanced meters installed ✓ E-MS Choctaw acquisition ✓ Southwest Louisiana Improvement Project completion (transmission) • E-AR FRP decision (settlement reached) • SERI ROE initial decision (ALJ) (now expected 2Q20) • MTEP 19 approval ✓ Pilgrim sale (completed 3Q) ✓ Annual dividend review 5 ETR adjusted EPS guidance and financial outlook Expect to align dividend growth rate with EPS growth rate in 4Q211 ETR adjusted EPS; $ 5.25–5.45 5.45–5.75 19E guidance 20E outlook 1 2 Subject to Board of Directors final decision in 4Q21 Based off of original 2019E guidance midpoint of $5.30 5.80–6.10 21E outlook 6.15–6.45 22E outlook 6 Steady rate base growth Supports long-term earnings growth Projected rate base1; $B 32 – 33 25 – 26 19E 1 27.25 – 28.25 20E 29.5 – 30.5 21E 22E Internal estimates based on last-approved rate base adjusted for assumed changes in the major rate base components and includes CWIP; deferred taxes are deducted from rate base for all OpCos, including E-AR 7 Robust Utility 2020E–2022E investment plan Preliminary three-year capital plan, by function Generation – $4.3B $11.4B Transmission – $2.0B Distribution and Utility support – $5.1B 8 Clear line of sight $11.4B Utility investment plan ~90% ready for execution from a regulatory approval standpoint ~90% recovered through timely mechanisms Forward-looking FRPs • Traditional FRPs • Riders 9 Generation investment Includes new, cleaner, more efficient generation projects Generation plan; $B 5 4.3 4 3 2 Lake Charles Power Station Mid 2020 New Orleans Power Station Mid 2020 Washington Parish Energy Center 2020 Montgomery County Power Station Mid 2021 1 0 20E-22E Renewables New generation Nuclear Non-nuclear baseline 10 Generation resources Modernization provides cost-effective, reliable, and efficient generation Illustrative Owned Utility non-nuclear plant capability; MW by year of commercial operation Additional resources needed (gas and renewables)3 Announced additions2 CCGT / CT Legacy gas Solar Coal 1955 60 65 70 75 80 85 90 95 2000 05 As of 9/30/2019; excludes hydro 1 Assumed deactivations through 2030, planning assumptions only, subject to change 2 Projects under construction, approved, or in the regulatory review processes; see slides 51 and 52 for project details 3 2022E-2030E; subject to integrated resource planning processes and regulatory approvals 10 15 20E 25E 30E 11 Solid capital projects management organization Strong track record of successful execution Executive oversight EPC partnering program Project management Detailed project reviews Intrusive project management Portfolio controls experts 12 Transmission investment Transmission plan; $B 2 2.0 1 Reliability and growth – To satisfy reliability requirements (NERC, SERC, etc.) and to enable growth in our communities Asset management – To replace equipment or improve efficiency with better technology 0 20E-22E Reliability and growth Asset management Economic Economic – To maximize benefits to our customers from our participation in the MISO market by eliminating congestion when economic 13 Distribution and Utility support investment Distribution and Utility support plan; $B Grid modernization • Advanced metering infrastructure 6 5.1 5 • Enterprise asset management systems • Workforce management systems 4 3 • Customer relationship management systems 2 1 0 20E-22E Grid modernization Utility support Distribution baseline • New and improved customer engagement portal • Distribution automation • Distribution and outage management systems • Geospatial information systems 14 Creating headroom for additional investment Goal is to provide incremental services to customers at similar bill level Creating headroom in customer bills… • Production cost efficiencies (including fuel) • Other O&M efficiencies • Capital investments which provide productivity improvements • Energy efficiency • Industrial growth • Customer partnerships ...to provide incremental customer benefits General rule of thumb: every $1 of identified savings creates ~$7 to $8 in investment capacity 15 Continuous improvement We’re in the early stages of what we can accomplish Continuous improvement • An ongoing journey to improve processes • A focus on enhancing skills, expanding knowledge, and sharpening abilities • Building a team to optimize our business The result: working smarter and making the business more efficient 16 Potential incremental investment – distribution Enhanced reliability Infrastructure upgrades Targeted low-performing circuits and specific reliability improvements (transformers, crossarms, conductor replacement, lightning mitigation, etc.) To harden the grid (poles, under-ground, etc.) Integrated planning projects Preparing the grid for dynamic power flow, solar integration Modernization Distribution automation, smart sensors, resiliency investments 17 Potential incremental investment – customer solutions Our innovation team develops customer solutions, products, and services Projects currently in various stages of development: • Shared solar power solution that makes clean energy participation easy • Residential rooftop solar program • Energy resilience service / customercited generation that is available to the Utility in times of need • Electrification / shore power services which extends grid to marine vessels in port • Targeted microgrid for lowest reasonable cost solution • Energy efficiency service • Centralized solution for demand side management 18 No shortage of investment opportunities incremental to the current plan New segment of investment opportunity Generation Transmission Distribution Customer Solutions Well positioned to implement optimal solutions 19 Track record of strong industrial growth Weather-adjusted billed retail sales 2019E – 2022E sales growth • Total retail: ~1% – 1.5% CAGR • ~3% – 4% industrial partially offset by declining residential and commercial sales 09 10 11 12 13 Residential 14 15 Commercial 16 17 Governmental 18 19E 20E 21E 22E Industrial 20 Strong industrial base in ETR service area Expect growth to continue with new and expansion customers 2020E industrial sales by segment 2020E–2022E new and expansion by segment Illustrative Illustrative 20E 21E 22E Existing small Petroleum refining Chlor-alkali Chlor-alkali Petrochemicals Transportation Cogen Petrochemicals Industrial gases Primary metals Industrial gases Other chemicals Primary metals Transportation Other Other 21 Focused on the customer Goal to maintain rate advantage 2018 average retail price by parent company; ₵ per kWh <2% CAGR ETR bill outlook Without return of unprotected excess ADIT Nonfuel ETR 7.32 Fuel 18 Source: S&P Global Market Intelligence Regulated Retail Price of Electricity published 6/12/19 Illustrative Average monthly residential bill; $ 19E 20E 21E 22E Levers to help control bills • Fuel efficiency • Industrial growth • Operational savings • Securitizations rolling off • Energy efficiency • New products and services 22 Securitizations in rates Securitizations in rates1,2 Illustrative 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 E-MS – Katrina ($55.2M; $0.00 per month) E-TX – Rita ($329.5M; ~$3.50 per month) E-LA (Legacy ELL) – Katrina / Rita ($687.7M; $0.00 per month) E-LA (Legacy EGSL) – Katrina / Rita ($278.4M; $0.00 per month) E-TX – Gustav / Ike ($545.9M; ~$5.00 per month) E-AR – Ice Storm ($124.1M; ~$1.00 per month) E-LA (Legacy ELL) – Gustav/Ike ($468.9M; ~$2.50 per month) E-LA (Legacy EGSL) – Gustav/Ike ($244.1M; ~$2.00 per month) E-LA (Legacy ELL) – Little Gypsy ($207.2M; ~$1.00 per month) E-LA (Legacy ELL) – Isaac ($243.85M; ~$1.50 per month) E-LA (Legacy EGSL) – Isaac ($71M; ~$0.50 per month) E-NO – Isaac ($98.7M; ~$3.00 per month) 1 2 Principal balances at time of issuance Monthly bill effects assume typical 1,000 kWh monthly bill and can fluctuate monthly 23 Commitment to credit Parent debt to total debt1; % FFO to debt1; % 17.6% excluding certain items2  25% 20.5 3Q19 Cumulative OCF; $B  15% ~$10.4B over next 3 years 14.2 3Q19 Target Target by 2020 20E 21E 22E Credit ratings3 (outlook) S&P Moody’s E-AR E-LA E-MS E-NO E-TX SERI ETR A A A A A A BBB+ (stable) (stable) (stable) (stable) (stable) (stable) (stable) A2 A2 A2 Baa2 Baa1 Baa1 Baa2 (stable) (stable) (stable) (stable) (positive) (stable) (stable) As of third quarter 2019 teleconference 1 LTM, excluding securitization debt; see appendix for Regulation G reconciliation 2 Excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC; see appendix for Regulation G reconciliation 3 Senior secured ratings for the OpCos and SERI; corporate credit rating for Entergy 24 Exiting EWC Portfolio in 2016 FitzPatrick Vermont Yankee Indian Point Portfolio today Pilgrim Palisades Indian Point Palisades Agreements to sell RISEC Wind ventures 25 Eliminating EWC risk ETR strategy Operational Shut down Sale and transfer Carried risks • Power price • Operating • NDT returns • Decommissioning Carried risks • Power price • Operating • NDT returns • Decommissioning Carried risks • Power price • Operating • NDT returns • Decommissioning 26 EWC risk analysis Expect slightly positive net cash to parent 2019 through 2022 Power price risk A $5/MWh (energy) and $0.50/kWm (capacity) reduction1 in market prices would reduce revenue ~$20M (cumulative through 2022) Operating risk 95% Reduction 30 day unplanned outage would reduce revenue ~$20M–$40M Jan 17 Sept 19 NDT returns risk • IPEC: no contribution required • Palisades: no contribution needed with ~4.5% after-tax return o ~$15M contribution if 100 bps lower o Can re-balance to lock in gains (currently ~15% equity) 1 As of 9/30/19, energy and capacity market price reductions of ~20% and ~25%, respectively Decommissioning risk Sales / transfers eliminate decommissioning risk for Entergy 27 Sustainability - a history of action First U.S. utility to set voluntary greenhouse gas emissions stabilization goal First Low Income Customer Assistance Summit 2000 1999 Power restored to devastated communities following hurricanes Katrina and Rita 2002 2011 2005 2001 Entergy Charitable Foundation established to support education and communities Launched $5 million workforce training initiative Environmental vision statement adopted by board of directors Inaugural Diversity and Inclusion Summit convened New climate report released and announced enhanced greenhouse gas emission reduction goal 2018 2016 Environment 2020 commitment announced 2019 Sustainability organization established Named to DJSI for first of 18 consecutive years 28 Environmental leadership New goal: reduce CO2 emission rate to 50% below year 2000 levels by 2030 Climate Report aligned with TCFD reporting framework ~3,500 to 4,000 MW of owned renewables potential by 2030 35% of utility generation virtually emissions-free in 2018 Figures for Utility only First U.S. utility to commit voluntarily to stabilizing greenhouse gas emissions 23% reduction in absolute CO2 emissions and 28% reduction in CO2 emission rates (2000-2018) 29 One of the cleanest large-scale generating fleets in U.S. CO2 emission rates of top 20 privately / investor-owned power producers (lbs/MWh) ETR Source: MJ Bradley, Benchmarking Air Emissions of the 100 Largest Electric Power Producers in the United States, published June 2019 Entergy emission rate includes Utility and merchant plants 30 Our people and our culture are critical to our success Organizational objectives Our human resources mission To enable Entergy’s people to deliver on its business strategy while making the company a great place to work • Relentless focus on safety • Recruitment, development, and retention of top talent • A culture focused on diversity, inclusion and belonging and continuous learning and development • Employees who take ownership in the business and drive creative, collaborative, and innovative customer solutions 31 Social responsibility 2018 Philanthropy Invested more than $18 million $7.4M - Education and workforce development $4.2M - Poverty solutions / social services $2.6M - Community improvement and enrichment $1.7M - Environmental $1.0M - Healthy families $1.0M - Arts and culture $0.7M - Disaster relief Top corporate social responsibility priorities include: Workforce Poverty development and Environmental solutions education programs Help qualifying customers achieve economic selfsufficiency, become better educated on managing their bills, and receive billpayment assistance Address education and skill gaps in our local communities, and improve availability of a skilled and ready workforce Engage customers, employees and environmental nonprofits in both conservation and advocacy Partner with communities to help them assess environmental risks and develop mitigation strategies 32 Awards and recognition 2019 DOW JONES SUSTAINABILITY INDEX, only electric utility to earn honor for 18 years in a row. 2019 AMERICA’S TOP CORPORATIONS FOR WOMEN’S BUSINESS ENTERPRISES for a fourth consecutive year by the Women’s Business Enterprise National Council. 2019 TOP UTILITIES IN ECONOMIC DEVELOPMENT for the 12th straight year. 2019 EMERGENCY ASSISTANCE AWARD for the 21st consecutive year. 2019 BEST PLACE TO WORK FOR DISABILITY INCLUSION by the Disability Equality Index. 2019 THE CIVIC 50 for the fourth consecutive year, a Points of Light initiative honoring the 50 most communityminded companies in the U.S. 2018 HIRE VETS MEDALLION PROGRAM DEMONSTRATION PLATINUM AWARD from the U.S. Department of Labor. 2018 CORPORATE CITIZENSHIP AWARDS FINALIST by the U.S. Chamber of Commerce Foundation. 2019 TOP WORKPLACES IN NEW ORLEANS again recognized by the Times-Picayune as one of the best places to work in the greater New Orleans area. 2018 BEST COMPANIES FOR DIVERSITY for the fifth consecutive year by Black Enterprise Magazine. A 2019 TREE LINE USA UTILITY for the 14th consecutive year by the Arbor Day Foundation. 33 Strategic execution driving strong shareholder returns Total shareholder return1: ETR and UTY 81.7% 54.0% 40.0% 38.4% 18.2% Last three years Last twelve months ETR 1 As of 11/8/19 21.9% 2019 to date UTY 34 Well-positioned for continued value creation  Strong growth trajectory supported by visible, executable utility investment plan  Clarity on dividend growth strategy  Progressive regulatory mechanisms  Positive regulatory relationships  Among the lowest retail rates in the U.S.  Region that benefits from strong industrial growth  Industry leader in critical measures of sustainability  One of the cleanest large-scale generation fleets in the country  Definitive agreements in place to sell remaining merchant nuclear assets  Foundation on which we will continue to grow and innovate These attributes make Entergy a compelling long-term investment today 35 "Enterg? WE POWER Appendix Utility overview 2018 electric retail sales1; % Governmental 2 Industrial 32 Residential 41 • Electric utility • Electric and gas utility • 711,000 customers • Number of customers – Electric 1,084,000 – Gas 93,000 • Authorized ROE range: 9.25%–10.25% • Forward test year FRP 25 Coal CT/CCGT/ 31 hydro/solar 10 Nuclear 24 35 • Authorized ROE ranges: – Electric 9.2%–10.4% – Gas 9.45%–10.45% • Electric FRP, gas RSP Commercial 2018 generation portfolio2; % E-LA E-AR E-MS E-NO E-TX • Electric utility • Electric and gas utility • Electric utility • 450,000 customers • 454,000 customers • Authorized ROE range: 9.33%–11.35% • Number of customers – Electric 202,000 – Gas 107,000 • FRP with forward-looking features • Authorized ROE range: 8.85%–9.85% Legacy gas/oil See operating company slides 38–45 for more details Note: Customer counts at the end of period 12/31/18 1 Percent of 2018 weather-adjusted GWh electric retail sales 2 Percent of owned and leased MW capability for generation portfolio as of 12/31/18 • Authorized ROE: 9.65% • Rate case • FRP with forward-looking features 37 Operating company leadership SERVING 2.9 MILLION CUSTOMERS LAURA LANDREAUX President and CEO, E-AR E-AR 2018 highlights • 711K customers • $2.0B operating revenue • $10.4B total assets PHILLIP MAY President and CEO, E-LA E-LA 2018 highlights • 1,084K customers • $4.3B operating revenue • $19.7B total assets Electric and/or gas service area HALEY FISACKERLY President and CEO, E-MS E-MS 2018 highlights • 450K customers • $1.3B operating revenue • $3.9B total assets DAVID ELLIS President and CEO, E-NO E-NO 2018 highlights • 202K customers • $0.7B operating revenue • $1.6B total assets SALLIE RAINER President and CEO, E-TX E-TX 2018 highlights • 454K customers • $1.6B operating revenue • $4.4B total assets 38 Entergy Arkansas E-AR (currently in rates) Metric Authorized ROE Detail 9.25%–10.25% Rate base $7.5B retail rate base (2019 test year) WACC 5.26% (after-tax) Equity ratio 36.55% (46.38% excluding $1.7B ADIT at 0% cost rate) Regulatory construct Forward test year FRP; result outside authorized ROE range resets to midpoint; maximum rate change 4% of filing year total retail revenue; trueup of projection to actuals netted with future projection Base rate change $67M increase effective 1/2/19 Riders MISO, capacity costs, Grand Gulf, tax adjustment, energy efficiency, fuel and purchased power 39 Entergy Arkansas Annual FRP filing 2019 evaluation report – docket 16-036-FR Settlement highlights Earned ROE Rate base (ADIT incl. in WACC, not rate base) WACC (after-tax) Equity ratio (traditional equity ratio) Revenue requirements to midpoint Rate change requested 2020 test year 2018 test year 8.29% 9.01% $8.0B $7.1B 5.20% 4.99% 36.49% (47.76% excluding 35.40% (48.35% excluding $1.9B ADIT at 0% cost rate) $1.8B ADIT at 0% cost rate) $57.2M $25.1M (collected $72.2M in 2018) $10M ($57M 2020 test year less $(47M)1 2018 test year true-up) Key dates Date 12/13/19 1/2/20 Event Requested decision Requested rate adjustment Calculations may differ due to rounding See discussion of Rate and Regulatory Matters in the most recent Form 10-K and/or any subsequent Form 10-Qs 1 Previously recorded $47M regulatory provision for the portion of the 2020 rate action associated with the 2018 test year true-up 40 Entergy Louisiana E-LA (currently in rates) Metric Authorized ROE Last filed rate base WACC (after-tax) Equity ratio Regulatory construct Base rate change Riders / specific recovery 1 2 3 4 Detail – electric1 Detail – gas2 9.2%–10.4% 9.45%–10.45% $10.4B (12/31/18 test year) + $0.07B (9/30/18 test $0.3B included in year) transmission rider + $0.8B SCPS included in capacity rider 6.98% 7.04% 48.64% 48.26% FRP; 60/40 customer/ RSP3 company sharing outside bandwidth Total change from cost of $3M service $25M4 Capacity, MISO, transmission, fuel Gas infrastructure Pending finalization of the 2018 test year filing (docket U-35205) and the 2017 test year filing (docket U-34951) Pending finalization of the 2018 test year filing (docket U-35118) 50 bps dead band, 51 bps–200 bps 50% sharing, >200 bps adjust to 200 bps plus 75 bps sharing; for infrastructure costs, 100% sharing above the band Does not include MISO/capacity/other or tax reform adjustment mechanism 41 Entergy Mississippi E-MS (currently in rates) Metric Authorized ROE Detail 10.35% performance-adjusted midpoint (9.92% + 0.43% performance factor); 9.33%–11.35% range (annual redetermination based on formula) Rate base WACC Equity ratio Regulatory construct $2.6B (2019 forward test year) 7.24% (after-tax) 49.67% FRP with forward-looking features; performance-based bandwidth; subject to annual “look-back” evaluation; maximum rate increase 4% of test year retail revenue (higher requires base rate case) Base rate change $33M increase (2019 test year), including $15M for depreciation rate increase; $(11M) refund for 2018 lookback (July 2019 – May 2020; reserved in 4Q18) Riders1 1 PMR, Grand Gulf, fuel, MISO, unit power cost, storm damage, energy efficiency, ad valorem tax adjustment, grid modernization, restructuring credit Commission has agreed on timely recovery of Choctaw Power Station; specific mechanism not yet approved 42 Entergy New Orleans E-NO (approved)1 Metric Authorized ROE Detail – electric 9.35% Detail – gas 9.35% Rate base WACC (after-tax) $0.8B (12/31/18 test year and known and measurables through 12/31/19) 7.09% $0.1B (12/31/18 test year and known and measurables through 12/31/19) 7.09% Equity ratio 50% 50% Regulatory construct FRP with forwardlooking features $(16M), including ~$(6M) for depreciation rate decrease Fuel FRP with forwardlooking features $(2M) Base rate change approved Riders / specific recovery 1 Approved by the CCNO, rates not yet in effect; see slide 44 Purchased gas 43 Entergy New Orleans Base rate case filing Result CCNO approval (docket UD-18-07): • Base rate changes: $(16M) electric and $(2M) gas • Allowed ROE: 9.35% • Rate base: $0.8B electric and $0.1B gas (12/31/18 test year with known and measurable through 12/31/19) • WACC (after-tax): 7.09% • Equity ratio: 50% • Approved FRP mechanism: − Electric and gas (separate filings) − Three years (2019–2021 test years) with known and measurable through filing year − +/- 50 bps bandwidth; reset to midpoint • Also includes green pricing and new options for electrical vehicle charging infrastructure Impact • • Negative E-NO credit impact Limits ability to finance customercentric investments, e.g., grid modernization, reliability Potential next steps • • • File a rate case Pursue rehearing Appeal resolution 44 Entergy Texas E-TX (currently in rates) 1 Metric Authorized ROE Detail 9.65% Rate base $2.4B (12/31/17 test year) WACC Equity ratio Regulatory construct Base rate change Riders 7.73% (after-tax) 50.90% Rate case $53M increase1 Fuel, capacity, DCRF, TCRF, rate case expenses, AMI surcharge, tax reform, among others Does not include the Tax Reduction rider 45 System Energy Resources, Inc. SERI – generation company Metric Principal asset Grand Gulf Nuclear Station Authorized ROE Last calculated rate base WACC (after-tax) Equity ratio Regulatory construct Detail An ownership and leasehold interest in Grand Gulf 10.94%1 $1.4B (9/30/19) 8.47% 65.00%1,2 Monthly cost of service Energy and capacity allocation3; % E-AR E-NO 17 36 33 E-MS 14 E-LA 1 2 3 Ongoing proceeding at FERC challenging SERI’s authorized ROE and equity component (see next slide) For SERI ratemaking, the sale leaseback obligation is excluded from the capital structure and instead is treated as an operating lease and recovered as an O&M cost Reflects percentages under SERI’s UPSA 46 System Energy Resources, Inc. FERC proceedings (page 1 of 2) ROE complaints and equity complaint (dockets EL17-41, EL18-142, EL18-204) APSC, MPSC, and LPSC filed ROE complaints at FERC; LPSC also alleged that SERI’s equity component was unjust and unreasonable (these complaints are now consolidated) Key dates (consolidated dockets) Date 12/9/19 1/27/20 6/19/20 TBD Event Complainants and Staff rebuttal testimony on capital structure Hearing starts ALJ initial decision expected FERC decision See discussion of Rate and Regulatory Matters in the most recent Form 10-K and/or any subsequent Form 10-Qs 47 System Energy Resources, Inc. FERC proceedings (page 2 of 2) LPSC complaint regarding GGNS sale-leaseback renewal (docket EL18-152) Complaint alleging (1) SERI was imprudent in renewing the sale-leaseback, (2) SERI violated the filed rate when it included the cost of capital additions associated with the sale-leaseback interest in UPSA billings, (3) SERI is doublerecovering costs by including both the lease payments and the capital additions in UPSA billings, and (4) SERI incorrectly excluded ADIT associated with uncertain tax positions from UPSA billings Key dates Date 11/12/19 1/6/20 2/7/20 4/6/20 TBD Event Hearing Initial briefs Reply briefs ALJ initial decision expected FERC decision See discussion of Rate and Regulatory Matters in the most recent Form 10-K and/or any subsequent Form 10-Qs 48 Multiple regulatory mechanisms Supporting timely recovery of costs Mechanism Benefits Forward-looking ratemaking Annual evaluation; matches current rates and costs  FRP Annual evaluation; simpler process that aligns current rates and costs better than traditional rate cases  Rider mechanisms (transmission, distribution, capacity and/or MISO) Recovery of specific costs outside of typical base rate process Plant acquisition/ construction Recovery of specific, large investments outside of typical base rate process 1 E-AR E-LA E-MS E-NO E-TX               tbd1 Texas passed legislation that allows the PUCT to approve a rider to recover reasonable and necessary generation investment 49 Jurisdictional base rate filing guidelines E-AR E-LA E-MS E-NO E-TX SERI Rate case filed 5/15/18 TBD Monthly cost of service1 Every month 35 days after filing2 Immediate 12-month historical test year with available updates Actual current month expense and prior monthend balance sheet n/a Monthly cost of service continues until terminated by mutual agreement Latest filing FRP filed 7/5/19 FRP filed 5/31/19 FRP filed 3/15/19 Next filing date Rate effective date Evaluation period FRP: July 2020 FRP: by 5/31/20 FRP: by 3/15/20 Rate case filed 9/21/18 FRP: by 4/30/20 January following filing September following filing June following filing September following filing FRP term / post FRP framework Forward test year ended 12/31 Historical test Historical test Historical test year ended 12/31 year ended 12/31 year ended 12/31 plus new plus certain plus certain generation and known and known and transmission measurable measurable closed to plant changes through changes through above baseline 12/31 12/31 through 8/31 of filing year Five years Three years No specified Three years (2017–2021 test (2017−2019 test termination; (2019–2021 years); option to years); option to option to file rate test years) request FRP request FRP case as needed extension, file rate extension, file case, or do nothing rate case, or do nothing 1 2 Not required to be filed per FERC order May be suspended for an additional 150 days 50 Clean natural gas generation projects Estimated Estimated cost in service Project OpCo Location MW Choctaw Generating Station E-MS French Camp, MS ~810 CCGT $401M1 20192 Purchase complete Lake Charles Power Station E-LA Westlake, LA ~994 CCGT $872M3 2020 Under construction New Orleans Power Station E-NO New Orleans, LA ~128 RICE $210M3 2020 Under construction Washington Parish Energy Center E-LA Bogalusa, LA ~361 CT $261M3 2020 Under construction Montgomery County Power Station E-TX Willis, TX ~993 CCGT $937M3 2021 Under construction 1 2 3 Includes planned improvements Original in-service date 2003 Includes transmission interconnection and other related costs Status 51 Renewable generation projects Estimated Owned / PPA in service Project In process OpCo Location MW Rooftop solar Solar Chicot Solar Capital Region Solar E-NO E-LA E-AR E-LA New Orleans, LA Various Chicot County, AR Baton Rouge, LA 5 ~30 100 50 Owned PPA PPA PPA 2019 2019 / 2020 2020 2020 E-NO E-NO E-NO New Orleans, LA St. James Parish, LA Washington Parish, LA 20 20 50 Owned PPA PPA 2020 2021 2021 E-MS E-AR Sunflower County, MS 100 Searcy, AR 100 (incl. 10MW battery) Owned Owned 2021 2021 Approved New Orleans Solar Station St. James Solar Iris Solar In regulatory review Sunflower Solar Searcy Solar RFPs Solar Solar E-AR E-TX TBD TBD 200 200 Owned 2022 / 2023 Owned and PPA 2022 / 2023 52 E-MS – Sunflower Solar Project overview – docket 2018-UA-267 Item Details MW Estimated total investment Plant type Location Closing date In-service date Recovery mechanism Status 100 $153M1 Solar PV Sunflower County, MS Targeting 4Q21 Targeting 4Q21 Proposing a mechanism to the FRP for adjustment outside of sharing, to begin contemporaneously with closing E-MS filed joint CCN petition with Sunflower Solar Project, LLC for approval of build-own-transfer structured transaction Key dates Date Event 4Q19 Targeted decision See Management’s Financial Discussion and Analysis in the most recent Form 10-K and/or any subsequent Form 10-Qs 1 Includes acquisition cost of $138M plus other related costs 53 E-AR – Searcy Solar Project overview – docket 19-019-U Item Details MW Plant type Location Closing date In-service date Recovery mechanism Status 100 (including 10MW battery) Solar PV and battery Searcy, AR Targeting 4Q21 Targeting 4Q21 Requesting a rider outside of the FRP for recovery of renewable acquisitions E-AR filed for approval of a build-own-transfer agreement with Searcy Solar and for all related certificates and approvals Key dates Date Event 11/14/19 11/22/19 11/25/19 1/7–8/20 1Q20 Staff / intervenor surrebuttal Company sur-surrebuttal Opening statements Hearing Targeted decision See Management’s Financial Discussion and Analysis in the most recent Form 10-K and/or any subsequent Form 10-Qs 54 EWC overview Region breakdown; % MW as of 9/30/19 EWC nuclear plants NYISO MISO 37 63 Planned closing date Indian Point 1 Indian Point 2 Indian Point 3 Shut down 4/30/20 4/30/21 Net MW n/a 1,028 1,041 811 Energy market (closest hubs) n/a NYISO (Zone G) NYISO (Zone G) MISO (Indiana) Net book value (9/30/19)1 Generation portfolio; % MW as of 9/30/19 Gas and oil Palisades 5/31/22 $240M $84M NDT balance (9/30/19) $534M $676M $893M $492M ARO liability balance (9/30/19)2 $236M $813M $793M $579M3 Other EWC non-nuclear plants 6 6 COD Fuel / technology Net MW owned Market 88 ISES 2 1983 Coal 121 MISO Nelson 6 1982 Coal 60 MISO RS Cogen 2002 CCGT cogen 213 MISO Nuclear 1 2 3 Entergy’s adjusted investment in the companies being sold ARO liability balances are based on most recent estimates and are subject to change Includes $40M for Big Rock Point 55 Indian Point and Palisades transactions Transaction highlights Item Structure Purchaser Conditions to close include NDT Status Indian Point Equity sale of IPEC owners Nuclear Asset Management Co., LLC (Holtec International subsidiary) • Permanent shutdown and reactor defuel • NRC approval • New York Public Service Commission action on the ownership transfer • New York State Department of Environmental Conservation action on the decommissioning plan • No NDT minimum balance or contribution • Limitations on withdrawals • Controls on investment management between signing and closing Executed purchase and sale agreement Palisades Equity sale of ENP Nuclear Asset Management Co., LLC (Holtec International subsidiary) • Permanent shutdown and reactor defuel • NRC approval • Pilgrim transaction close (completed 3Q) • Minimum NDT balance Executed purchase and sale agreement Targeted timeline Event NRC filing NY PSC filing Targeted close Indian Point 4Q19 4Q19 May 2021 See Management’s Financial Discussion and Analysis in the most recent Form 10-K and/or any subsequent Form 10-Qs Palisades TBD n/a By the end of 2022 56 Preliminary Utility capital plan Preliminary 2020E–2022E Utility capital plan; $M Function E-AR E-LA E-MS E-NO E-TX SERI ESL Utility Generation 1,250 1,700 450 90 410 385 – 4,285 Transmission 235 970 310 55 425 – – 1,995 Distribution 680 1,225 580 365 885 – – 3,735 Utility support 300 485 150 75 125 50 150 1,335 Total capital investment 2,465 4,380 1,490 585 1,845 435 150 11,350 Total depreciation expense1 1,080 2,000 695 235 610 355 n/a 4,975 1 Depreciation for ESL is allocated to each OpCo 57 Preliminary view of 2020 ETR adjusted EPS drivers ETR adjusted EPS; $ Regulatory actions 5.35 2019 guidance midpoint Net revenue Illustrative Depreciation Other tax Net interest (including AFUDC) Capital investment Share effect Other O&M Other 5.60 Dilution Other 2020 outlook midpoint 58 ETR adjusted EPS – 2020 key drivers and assumptions Category Considerations Sales growth • Preliminary weather-adjusted sales growth estimate based on actuals through 9/30/19 ~1.5%–2.0%, driven by industrial sales, partially offset by lower residential and commercial sales • YTD 3Q19 weather in billed sales $0.01 • Full year of 2019 rate actions: E-LA FRP (effective 9/2019); E-MS FRP (effective 7/2019); St. Charles Power Station (effective 6/2019); Choctaw (effective 11/2019) and E-NO rate case (retroactive to 8/2019) • Pending filings: E-AR FRP • Expected 2020 filings: E-MS, E-NO and E-LA FRPs • LCPS, NOPS and WPEC in service Retail price • • Utility RFO • Utility investment effects • Utility other O&M • Utility book ROE • P&O • Effective income tax rate • Fully diluted avg. shares • 2020E ~$2.61B, ~$30M YoY increase Pension discount rate currently assumed at 4.0% ~$20M YoY decrease Depreciation expense expected to increase with continued investment – Average depreciation rate ~2.9% Net interest expense expected to be higher Mid-9% range ~$(1.50) including share effects ~23% ~201 million shares 59 Debt maturity schedule Debt maturities; $M as of 9/30/19 Company Rest of year 2019 2020E 2021E 2022E E-AR - - 515 - E-LA - 320 390 200 E-MS - - - - E-NO - 25 - - E-TX - - 200 - SERI - - 154 134 Total - 345 1,259 334 EWC - 139 - - 1,9181 450 - 650 1,918 934 1,259 984 Long-term debt ETR Corp. Total Debt 1 Commercial paper borrowings 60 2019E–2022E projected financing plan Projected financings1; $M as of 9/30/19 2019E YTD 9/30 Rest of year Company Total 2020E 2021E 2022E Utility long-term debt E-AR 350 - 350 130 785 170 E-LA 525 - 525 565 590 375 E-MS 300 145 445 90 140 65 E-NO - 70 70 110 55 30 E-TX 1,0352 - 1,035 170 540 - SERI 134 - 134 - 95 125 Total 2,344 215 2,559 1,065 2,205 765 - - - 750 - 750 608 - 608 - ETR Corp. Senior notes Equity 1 2 Subject to change; does not include short-term borrowings or potential for future economic refinancing activities Includes $35M of preferred securities ~5%–10% of 2021E–2022E Utility capital investment 61 Estimated EWC adjusted EBITDA Reflects 9/30/19 market prices Estimated EWC adjusted EBITDA; $M 19E 20E 21E 22E Operating revenues, less fuel and fuel-related expenses, and purchased power 1,125 795 530 155 Other O&M and nuclear refueling outage exp. (650) (485) (335) (110) Severance and retention Asset impairments (capital) Asset impairments (fuel, refuel, other) Net gain / (loss) on sale of assets1 Other (100) (45) (75) (190) (135) (80) (10) (30) (115) (40) (10) (25) (215) (80) (15) (10) 175 (20) Estimated adjusted EBITDA (70) 75 (175) 175 Note: The table above reflects estimates for EWC operations and the costs associated with the strategic decision to exit the EWC business. Other items may occur during the periods presented, the impact of which cannot reasonably be estimated at this time. 1 Net gain / (loss) on sale of assets represents current estimates (subject to change). Primary variables in ultimate gain / (loss) are values of NDTs and asset retirement obligations, financial results from plant operations and the level of any unrealized deferred tax balances at closing. 62 EWC capital plan EWC capital plan; $M 2019E 2020E 2021E 2022E Pilgrim 5 - - - Indian Point 40 10 10 - 45 10 10 - 45 30 10 5 90 40 20 5 150 110 70 30 To be impaired as incurred Palisades / other Total EWC capital Estimated depreciation expense 63 ?EntergyD WE POWER Regulation reconciliations Utility book ROE summary Table 1: Utility book ROE summary LTM ending September 30, 2019 ($ in millions) E-AR 244 E-LA 727 E-MS 112 E-NO 50 E-TX 182 Utility1 1,528 Tax item from E-AR restructuring Reserve for guaranteed sharing with E-AR customers Income tax on customer sharing - - - - - 170 (40) - - - - - 10 4Q18 reversal of a portion of the tax reform recorded in 4Q17 Total adjustments - - - - 38 38 (b) - - - - 38 179 (c) = (a)-(b) 244 727 112 50 143 1,349 (d) 3,040 6,036 1,340 467 1,508 12,864 8.0% 12.0% 8.0% 12.0% 8.4% 8.4% As-reported earnings available to common stock (a) Less adjustments: Adjusted earnings available to common stock Average common equity As-reported ROE Adjusted ROE (a) / (d) (c) / (d) 10.6% 12.0% 11.9% 10.6% 9.5% 10.5% Calculations may differ due to rounding 1 Utility earnings do not equal the sum of the operating companies due primarily to SERI (as-reported earnings ~$98.5M, adjusted earnings ~$98.5M and average common equity ~$707M) and the tax item from restructuring (net of sharing) adjustment at Entergy Utility Holding Co, as well as preferred dividend requirements 65 Regulation G reconciliations Table 2: Parent debt to total debt, excluding securitization debt Reconciliation of GAAP to Non-GAAP measures ($ in millions) Entergy Corporation notes: Due September 2020 Due July 2022 Due September 2026 Total parent long-term debt Revolver draw Commercial paper Unamortized debt issuance costs and discounts Total parent debt (a) Total debt Less securitization debt Total debt, excluding securitization debt (b) Parent debt to total debt, excluding securitization debt (a)/(b) Calculations may differ due to rounding 3Q19 450 650 750 1,850 155 1,918 (9) 3,914 19,441 338 19,103 20.5% 66 Regulation G reconciliations Table 3: FFO to debt, excluding securitization debt; FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments associated with exit of EWC Reconciliation of GAAP to Non-GAAP measures ($ in millions) 3Q19 Total debt 19,441 Less securitization debt 338 Total debt, excluding securitization debt (a) 19,103 OCF (LTM) AFUDC-borrowed funds (LTM) Less working capital in OCF (LTM): Receivables Fuel inventory Accounts payable Taxes accrued Interest accrued Other working capital accounts Securitization regulatory charges Total FFO (LTM) FFO to debt, excluding securitization debt Estimated return of unprotected excess ADIT (LTM pre-tax) Severance and retention payments assoc. with exit of EWC (LTM pre-tax) FFO to debt, excluding securitization debt, return of unprotected excess ADIT, and severance and retention payments assoc. with exit of EWC Calculations may differ due to rounding 2,644 (67) (b) (b)/(a) (c) (d) (b+c+d)/(a) 21 (18) (158) (7) 12 (97) 120 (127) 2,704 14.2% 469 183 17.6% 67 Abbreviations and acronyms (1 of 2) ADIT AFUDC – borrowed funds ALJ AMI ANO APSC ARO bps CAGR CCGT CCNO Choctaw COD CT CWIP DCRF DJSI EBITDA E-AR E-LA E-MS E-NO Accumulated deferred income taxes Allowance for borrowed funds used during construction Administrative law judge Automated metering infrastructure Arkansas Nuclear One (nuclear), units 1 and 2 Arkansas Public Service Commission Asset retirement obligation Basis points Compound annual growth rate ESL ETR E-TX EWC FERC FFO FitzPatrick Combined cycle gas turbine Council of the City of New Orleans Choctaw Generating Station (CCGT) FRP GAAP Grand Gulf Commercial operation date Simple cycle combustion turbine Construction work in progress Distribution cost recovery factor Dow Jones Sustainability Index Earnings before interest, income taxes, depreciation and amortization Entergy Arkansas, LLC Entergy Louisiana, LLC Entergy Mississippi, LLC Entergy New Orleans, LLC ENP EPC Indian Point 1 Indian Point 2 or IP2 Indian Point 3 or IP3 Indian Point or IPEC ISES 2 lbs LCPS LPSC LTSA MISO Entergy Nuclear Palisades, LLC Engineering, procurement, construction Entergy Services, LLC Entergy Corporation Entergy Texas, Inc. Entergy Wholesale Commodities Federal Energy Regulatory Commission Funds from operations James A. FitzPatrick Nuclear Power Plant (nuclear), sold March 2017 Formula rate plan U.S. generally accepted accounting principles Unit 1 of Grand Gulf Nuclear Station (90% owned or leased by SERI) Unit 1 of Indian Point Energy Center (nuclear), shut down in 1974 Unit 2 of Indian Point Energy Center (nuclear) Unit 3 of Indian Point Energy Center (nuclear) Indian Point Energy Center (nuclear) Unit 2 of Independence Steam Electric Station (coal) Pounds Lake Charles Power Station (CCGT) Louisiana Public Service Commission Long-term service agreement Midcontinent Independent System Operator, Inc. 68 Abbreviations and acronyms (2 of 2) MCPS Moody's MPSC MTEP NDT Nelson 6 NEPOOL NERC NGO Ninemile 6 NOPS NRC NYISO NYPSC O&M OCF OpCo OPEB Other O&M Palisades Pilgrim PMR PPA Montgomery County Power Station (CCGT) Moody's Investor Service Mississippi Public Service Commission MISO Transmission Expansion Planning Nuclear decommissioning trust Unit 6 of Roy S. Nelson plant (coal) New England Power Pool North American Electric Reliability Corporation Non-governmental organization Unit 6 of Ninemile Point (CCGT) New Orleans Power Station (RICE) Nuclear Regulatory Commission New York Independent System Operator, Inc. New York Public Service Commission Operation and maintenance expense Net cash flow provided by operating activities Operating company Other post-employment benefits Other operation and maintenance expense Palisades Power Plant (nuclear) Pilgrim Nuclear Power Station (nuclear) Power Management Rider Power purchase agreement or purchase power agreement PUCT RFP RICE RISEC ROE ROP RS Cogen RSP S&P SCPS SERC SERI TCFD TCFD TCRF TSR Union UPSA UTY Vermont Yankee or VY WACC WPEC YTD Public Utility Commission of Texas Request for proposals Reciprocating internal combustion engine Rhode Island State Energy Center (CCGT), sold Dec. 2015 Return on equity Reactor oversight process (NRC) RS Cogen facility (CCGT cogeneration) Rate stabilization plan (E-LA gas) Standard & Poor's St. Charles Power Station (CCGT) SERC Reliability Corporation System Energy Resources, Inc. Task Force on Climate-related Financial Disclosures Task Force on Climate-related Financial Disclosures Transmission cost recovery factor Total shareholder return Union Power Station (CCGT) Unit Power Sales Agreement PHLX (Philadelphia Stock Exchange) Utility Sector Index Vermont Yankee Nuclear Power Station (nuclear), sold January 2019 Weighted average cost of capital Washington Parish Energy Center (CT) Year to date 69