Good morning. My name is Greg, and I will be your conference operator today. I would like to welcome everyone to the Entergy Corporation First Quarter Earnings Conference Call. I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz, you have the floor.

Thank you, Greg, and thanks to everyone for joining this morning. 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. Good morning, everyone. We had a very productive start to the year with progress on activities that support our near- and long-term objectives. Important updates to facilitate customer growth include new customer announcements, regulatory outcomes and new legislation. Starting with our financial results for the first quarter. Today, we are reporting adjusted earnings per share of $0.82. We're on track for 2025 guidance, and we remain well positioned to attain our greater than 8% adjusted earnings per share compound annual growth rate for the outlook period. Kimberly will discuss our financial results in more detail. As you've heard us say, we aim to create value for all our stakeholders, customers, employees, communities and owners, and customers are listed first because everything starts there. The opportunities driving our industrial sales growth continue to be robust. There is increasing visibility into our growth including three announcements from large customers since our last call. In March, Hyundai Motor Group announced a $5.8 billion investment in Hyundai Steel, a manufacturing facility and an engine for economic growth in Ascension Parish, Louisiana. Then in early April, CF Industries announced that it had reached its final investment decision on its $4 billion investment in a low-carbon blue ammonia facility, which will be located near Hyundai Steel. This project was first announced in 2022. And yesterday, Woodside announced that they have reached FID on their $17.5 billion LNG facility, bringing jobs and investment to Coastal Louisiana. These projects are expected to come online in 2028 and into 2029 and were assumed in our outlook last quarter. These customers diversify our industrial mix. They also provide important benefits to the nearby communities through substantial local investments, significant growth and workforce development. We've demonstrated a long history of powering industrial growth as businesses establish and expand operations in the Gulf South region. Hyundai Steel, CF Industries and Woodside LNG are examples of this trend continuing. As more companies consider investment in the U.S., the Gulf South remains a very attractive option with low power costs, robust energy and transportation infrastructure, access to diverse energy sources, a business-friendly environment, a proven workforce and welcoming communities. Data centers are a more recent addition to our large customer portfolio, and we remain in productive discussions for many potential projects. We continue to receive strong interest and optimism from hyperscale developers about the incredible opportunity before them. And our data center pipeline remains in the 5 to 10 gigawatt range. We are executing on our capital plan to support that strong customer growth as well as improved reliability and resilience. We continue to make progress in the Orange County Advanced Power Station. The project is approximately 70% complete with more than 1 million man-hours worked with no safety incidents. The project remains on schedule and on budget with a projected in-service date by summer of next year. Delta Blues advanced power station in Mississippi is in the earlier phase of construction and is also on schedule and on budget. At the same time, we're exploring the potential to increase the capacity of our existing combined cycle natural gas facilities by nearly 500 megawatts. For nuclear, we completed the spring refueling outage at River Bend on schedule. During the outage, we conducted extensive work on the main generator to support long-term reliable operations. The Waterford 3 refueling outage is now underway. Planned work includes replacement of low-pressure turbine rotors that will improve efficiency and pave the way to increase the capacity of the plant by an estimated 40 megawatts in the fall of 2026. We continue to assess potential capacity upgrades at our other nuclear plants that could total approximately 275 megawatts. As we mentioned before, we have an NRC early site permit for a potential new nuclear facility at Grand Gulf, which expires in April 2027. We intend to renew the permit for another 20 years to maintain a viable option for new nuclear. We are in discussions with customers, potential partners and other stakeholders regarding that opportunity. As you can see, our operations and project management development teams are doing a great job keeping us on track to support our customers' needs. In addition to our efforts in operations, we are working with our regulators and other stakeholders on important dockets that address infrastructure needs to support growth, reliability and resilience. Efficient review processes are critical to stay on track to meet our customers' expectations. Entergy Louisiana received approval from its Public Service Commission to place the capital investment from Hurricane Francine into rate, subject to a future prudence review. This means our recovery started less than 2 months from filing and 6 months after the storm. A faster recovery reduces carrying costs and supports Entergy Louisiana's credit, both of which help keep costs low for customers. The LPSC also approved a $0.5 billion West Bank 230 kV transmission project that will support customer growth and economic development. In addition, we have a major 500 kV transmission project in Louisiana that is pending commission review. Separately, we received the final approval needed for Entergy Louisiana's gas LDC sale from the East Baton Rouge Parish Council. We're targeting to close the sale of both Entergy Louisiana and Entergy New Orleans gas businesses in July. Entergy Louisiana’s filings to support its hyperscale data center customer continues to move forward, parties have filed testimony, and the hearing is scheduled for mid-July. We remain on track for an LPSC decision in October. For Entergy Louisiana's 3 gigawatt solar RFP, the first round of procurement is complete, and we're moving forward with two proposals for owned assets that total 400 megawatts. Proposals in the second quarter were received in mid-April, and we are targeting selections later this quarter. In Texas, the PUCT approved placing $137 million of transmission investments into rates. We have also requested a certificate of convenience and necessity for a large transmission project in Texas known as SETEX, S-E-T-E-X. The hearing is scheduled for May, and we are targeting a commission decision by the end of August. Entergy Texas's request for generation CCNs are continuing as expected. Hearings for Legend and Lone Star dispatchable generation projects as well as renewable resources are complete, briefings have begun, and no parties have disputed the need for new generation to meet growing demand. We are targeting decisions in the third quarter. In Arkansas, the APSC issued a certificate of environmental compatibility and public need for Lake Catherine Unit 5. This plant is important to support Arkansas' customer demand. Entergy Mississippi received approval to build a combined cycle gas plant in Ridgeland County. This facility will serve the growing demand in our Mississippi service area. And Entergy Mississippi also filed its annual formula rate plan with no rate change requested. We expect the commission to take this up over the next few months. Turning to legislative matters. Arkansas recently completed its session, setting the stage for future growth in the state. Act 373 signed into law by the governor supports economic development and growth and will benefit our customers and communities. Specifically, the legislation allows recovery for new generation capacity and certain transmission investments outside of the formula rate plans 4% cap. Additionally, it streamlines and simplifies the process for certification of public need to allow for a faster response to economic development while maintaining regulatory oversight. Additionally, the new law allows utilities to recover carrying costs on construction work in process during construction, thus lowering costs for customers. Texas is also in a legislative session. One of the bills of interest for us will accelerate the regulatory review and approval for storm securitization to 150 days, significantly faster than previous reviews. More timely reviews benefit customers through lower carrying costs and improved credit. The Texas legislative session continues through June 2. Turning to tariffs. We know tariffs are certainly a topic that we know you're interested in. It's top of mind for us as well, and we are actively engaged in monitoring as the landscape evolves. There are several considerations and the bottom line is that we believe tariff impacts are manageable. The current tariffs would primarily impact capital expenditures, and we estimate that the impact to be approximately 1% of our $37 billion 4-year capital plan. The vast majority of the dollar impact is in the back end of our forecast period, which provides time to continue to reduce those effects through additional supply sources. To mitigate potential impacts, we are working with our suppliers to develop alternative supply sourcing strategies. In addition, our ongoing cost management efforts as well as contingencies in our spending plans will help us manage our costs. For example, at Analyst Day last summer, we talked about our disciplined capital prioritization and review processes to drive customer value. To date, we've identified greater than $1 billion of capital that was redeployed into other projects to benefit customers. We're making every effort to reduce the effects of tariffs for our customers, who are working hard to make ends meet and competing in a global marketplace. To that point, we're also actively monitoring what this means for our customers' businesses. Our large industrial customers are highly competitive in domestic and global markets. Commodity spreads continue to be supportive, in part due to the structural advantage of low-cost natural gas. I'd like to highlight a few specific examples. LNG exports are likely to increase due to the natural gas advantage, which would help bridge the trade deficit. And I just mentioned the Woodside announcement as a case in point. Ammonia has a strong competitive position due to low natural gas prices in the U.S. and companies are moving forward in investment in clean energy technologies, as the CF Industries example illustrates. The petrochemical sector also enjoys structural advantages from low-cost natural gas liquid feedstocks and potential decreases in global production would likely come from the European Union. Beyond the price advantage of natural gas, companies seeking domestically produced materials to manage tariffs could cause sectors such as steel, which are not currently running at full capacity to ramp up production. Overall, commodity fundamentals still favor U.S. manufacturing. As a result, our service area remains well positioned to capture new onshoring and industrial development with the Gulf Coast advantage that we talked about for some time and that I mentioned earlier. These foundational elements can facilitate even further expansion of the broad industrial manufacturing base and supporting services in our region. As I said, we believe tariff impacts are manageable, and with everything we know today, we remain confident in the guidance and outlook initiated on last quarter's call. Before I wrap up, tomorrow, our COO, Pete Norgeot, is retiring. Over his 10-plus years in Entergy, Pete transformed our power generation team, closed out our exit from the merchant power business. In the last couple of years as COO, he recentered us on public safety while preparing us to manage the large capital investments responding to customer demand. Pete is also a good friend. We will miss him, and we wish him well in the next chapter. Moving into the COO role is Kimberly Cook-Nelson, who has been driving our sale improving nuclear operations over the last few years. A leader in the nuclear industry bringing a wealth of leadership experience, operational discipline, and project management skills to the COO role, which has served us well for the growth investment road ahead. Finally, John Dinelli is taking over as Chief Nuclear Officer. He is a long-time Entergy employee having started here when we purchased Indian Point. He has held many leadership roles within the nuclear organization and recently served as our Nuclear COO, helping lead the cultural changes needed to continue our relentless pursuit of improvement in nuclear operations. While we are sad to see Pete go, we're excited about the new opportunities that will come from the leadership of Kimberly and John. And finally, we're starting to learn of the passing of Alexis Herman over the weekend. From her beginnings in Alabama along the Gulf Coast, she attended Xavier University right here in New Orleans, and then went on to become Secretary of Labor, among many other accomplishments. Of course, we know her from her 20 years of service on our Board of Directors. Beyond her outstanding wisdom and insight, she was a friend, a mentor, and an inspiration to all of us, and we will miss her dearly. Although we are sad, Alexis would be proud of our great start to the year. We are on the path to meet our stakeholders' expectations in 2025 with solid progress across key customer, operational, legislative and regulatory fronts. We are executing on our plan to realize the opportunity in front of us, and we're confident we can be successful. As we continue to put our customers first, we will deliver premium value to each of our key stakeholders. I'll now turn the call over to Kimberly.

Thank you, Drew. Good morning, everyone. Today, I will review our financial results as well as our guidance and outlook. I'll also talk about tax credits and their potential financial impacts. Starting with earnings. Our adjusted earnings per share for the quarter was $0.82. This result keeps us firmly on track for our adjusted EPS guidance for the year. The quarter's adjusted EPS drivers are shown on Slide 4. Key highlights include higher retail sales volume, including the effects of weather, effects from regulatory actions, including recovery of investments to benefit customers and lower other O&M than first quarter last year. These favorable effects were partially offset by higher interest expenses and depreciation as a result of investments. First quarter weather-adjusted retail sales growth was strong at 5.2%, while the industrial sales increase was the biggest driver at 9.3%, reflecting increases in usage from customer additions over the course of 2024 as well as continued ramp of new and expansion customers. Slide 5 provides our credit ratings and affirms that our credit metric outlooks remain better than agency thresholds. Our ongoing focus on credit has created flexibility to manage volatility and headwinds. Availability and transferability of renewable tax credits continue to be a topic of interest. Nuclear production tax credits or PTCs became effective in 2024. The Treasury department has not issued guidance on how to determine gross receipts for purposes of calculating the amount of nuclear PTCs generated. We are evaluating our position with respect to these credits and will finalize our position prior to our 2024 corporate tax filings. As a reminder, cash benefits from nuclear PTCs are not included in our outlook. So any nuclear PTCs that are realized would be positive to our plan. Our 2027 and 2028 outlooks include tax credits of approximately $170 million and $350 million, respectively, on more than $5 billion of renewable investments through 2028. If the transferability rules change, we would expect to monetize the credits using tax equity. We continue to safe harbor as many projects as possible in the event that the credit phase out sooner than the current rules provide. However, even if we were to lose all the renewable tax credits assumed in our guidance, our credit metrics would still exceed rating agency's thresholds. Turning to Slide 6. Our equity needs are unchanged since our last update. During the quarter, we executed an approximately $1.5 billion block equity forward, including the Green Shield. Prior to the equity block, we contracted roughly $230 million using ATM forwards. With these transactions, we have successfully secured our equity needs into 2027, and we've contracted approximately 2/3 of our needs through 2028, ensuring access to capital needed to execute on our capital plan. No forwards were settled during the quarter. As shown on Slide 7, we are affirming our adjusted EPS guidance and outlooks. For 2025, we're firmly on track. Weather and other updates in the first quarter create flexibility to manage the business in response to potential volatility and other headwinds. Looking ahead to the second quarter, we expect other O&M to be roughly $0.05 higher than last year, primarily due to planned power generation spending, including the timing of outages and timing of vegetation management expenses. We have confidence in our plan and our ability to deliver on our guidance and outlooks. We had a strong start to the year and have a solid plan to support our growing customer base. We are excited about the opportunities before us and remain well positioned to execute and deliver successful outcomes. And now the Entergy team is available for questions.

Our first question today comes from Shar Pourreza with Guggenheim Partners.

Congrats on a great quarter. It's actually Constantine here for Shar. Just as we're thinking about the Arkansas generation build, do you feel the state is now fully competitive on the data center front in terms of providing turnkey interconnection? Have there been any inbound thus far? Or do you need any further rate design improvement?

Drew mentioned that they believe the state is now fully competitive. They are currently in discussions with potential customers in Arkansas and have received significant interest, so they are pursuing opportunities in that area.

Excellent. And then maybe in terms of the financing updates, just last quarter, the guidance was for 75% of the equity to be after 2026, and it looks like that might be accelerating slightly. Does that imply an acceleration of credit metric improvement or any other moving pieces you want to highlight?

Yes, there hasn't been a substantial change in the timing of the equity needed. We contracted forward into '27. But our credit metrics through '28 continue to build towards and up to 15%. So we see strong flexibility in credit, but I wouldn't assume a whole lot of shift in the equity needs and the timing of the equity in that period.

And anything that drove such a big forward volume in 1Q relative to last quarter? Or is that just kind of optimization?

Yes, really was taking risk off the table. We had an opportunity to execute on that forward. Given volatility and the equity that we needed that we believed we could continue to satisfy with the ATM, but we had an opportunity to close some of that out, so we took advantage of that. And set ourselves up to be able to manage volatility over the next couple of years.

And our next question comes from the line of Jeremy Tonet with JPMorgan.

Just wanted to look at the sales a little bit here. I think that your residential customer count might have been up just under 1% quarter-over-quarter. And your weather normalized sales, if I'm seeing this right, residential went up about 4.5%. Just wondering if you could talk a bit more about drivers there?

Jeremy, it's Kimberly. I wouldn't look too much at the specifics on the quarter-over-quarter. You're going to see some volatility in the accounts. But we expect our residential sales to be about 1% for the full year, I mean our sales overall to be about 5.5%. So still strong sales over the year, but you're going to see some volatility in a given quarter on a quarter-over-quarter basis.

Got it. That's helpful. And just moving to industrial sales. And as you said, it will be volatile in any given quarter, but it seems like there's a degree of macro uncertainty out there that might be weighing on industrial activity a bit. Just wondering if you could provide any thoughts from your viewpoint on your service territory?

Yes. When we think about our industrial customers, we have had more than 5% growth for over 15 years, and that's included a number of periods where there were various economic factors happening in those periods. And I think the three industrial customers that Drew referenced in his comments coming in just this quarter over the last couple of months underscores the opportunity that we have for our traditional customers. We continue to have significant opportunity in the data center space. So our customers are making 30-year decisions. There's our short-term volatility that they may have to manage through, but we see those decisions coming through, and we continue to see a lot of opportunity through our pipeline as we go forward.

And I'll just point to the rule of thumb that we have in our materials for industrial sales is that a 1% change in a given year represents about $0.01 of impact. So it's pretty well derisked because of the high level of demand charges that we have in the industrial customer space.

Got it. That's helpful. And just one last one, if I could. Just as far as these winning new packages here and increasing the pipeline of big activity. I wonder if you could provide more color what it looks like, I guess, on conversations with data centers or other large industrial users, how you see that, I guess, coming together in this environment? Has anything changed?

Yes, we mentioned having 5 to 10 gigawatts in discussions regarding data centers. Those discussions are still strong and ongoing. Our pipeline with other customers hasn't changed significantly since our last update. We continue to have productive conversations. Our forecast reflects a weighted probability basis. The customers Drew mentioned are included in our forecast, and they are currently achieving a higher success rate, which allows us to continue serving them. However, if this trend continues, we may need to consider additional capital to support ongoing growth.

Yes, that's a good point. Outside of data centers, we probably consider everything, and the three announcements we provided were included in our forecast on a probability-weighted basis. Now the sales expectation for them is much higher than we initially anticipated, taking up space that other probability-weighted customers might have occupied. Therefore, there may be additional capital needed if those customers come in, and we do expect some of them to do so.

And our next question comes from the line of David Arcaro with Morgan Stanley.

I was wondering if you could provide an update or an overview of your system as you consider these large load customers in the pipeline. How quickly can you offer them service to connect? Time to power has been a focus for that group, so I’m curious about the latest regarding how quickly you can accommodate new large load customers.

Yes. This is Drew, and then I'll see if Kimberly wants to add anything. But we do have positions in queues in order to provide generation to potential customers. As you all know, those queues are full. But our positions, we believe, would allow us to continue to offer up opportunities for customers. At this point, it's near the back end of our period because there's just a lot to do to make room for all this. The three customers that we were talking about today are all in the 2028, moving into 2029 timeframe. So that's kind of where we are in terms of potential opportunity, and so it doesn't really matter what kind of customers we're talking about, that's where that opportunity will be sitting.

Got it. Yes, that makes sense. Could you provide a quick clarification on the tariff exposure? Would you consider the tariff exposure to be related to earnings exposure? Are you referring to projects that have already been approved but are now going to be more expensive, or are these issues that will be resolved through regulatory processes in the future? I understand you are trying to offset it, but how do you view any earnings exposure from that?

Yes, David. Most of that exposure, as you noted, is in '27 and '28. And most of it is also tied to new generation, specific components to how we build those facilities. So we think that gives us time to find additional suppliers and mitigate that. We don't see that being a real earnings effect. Drew mentioned some of the things we're doing to mitigate that, but we think that, that is manageable within the forecast period.

And our next question comes from the line of Nick Campanella with Barclays.

Thanks for all the updates. I just want to ask on '25. It just seems like you're off to a good start. Are you trending higher in the fiscal '25 plan just given the weather tailwinds or other headwinds to kind of consider for later this year?

Yes, we had a strong start to the year, but like any year, we use that to navigate the uncertainties of the business. We have summer approaching, which could either be extremely hot or quite mild, so we need to monitor how that develops. However, we will leverage that flexibility to manage effectively, and we are confident that we will meet our targets by the end of the year.

Okay. Great. Regarding the new customer generation and transmission filing, I know we're nearing hearings as a midterm data point. Is there any chance that the parties will seek to settle issues in this proceeding, or do you expect it to continue directly into the October order?

Yes. This is Drew. Yes, there is always the potential to settle. We will look at that if those opportunities arise. Certainly, we'd always prefer to settle rather than go to hearing if we could. But we have a good schedule, and there's a lot of support for this investment in the state and among the stakeholders. So we're confident that we will manage through the process and get the outcome that will benefit the customers and communities.

And our next question comes from the line of Paul Fremont with Ladenburg.

Congratulations on a strong quarter. I guess my first question is, can you give us a sense of the load that's associated with the three customers?

Paul, unfortunately, I can't. We don't have authorization to talk about specific customer load. So I wouldn't mention that to you. I would say these are large industrial facilities, and they would be on par with things that you might see elsewhere. But I can't give you specifics, unfortunately.

And then that your transmission filing in Texas, is that a 365, 500, or 345 kV line that you're proposing? And I guess how many miles should we think of additional transmission?

Yes, that's a 500 kV line, and it stretches 130 to 160 miles. There's a slide in the materials that you can reference. This will ideally connect with the line we are seeking approval for in Louisiana. Along with customer support, I believe this will provide significant resilience benefits to help us during storms.

What would be the completion date if you were awarded the project?

We think it would be just outside of our outlook period in 2029.

Our next question comes from the line of Steve Fleishman with Wolfe Research.

I wanted to ask about the sales guidance for '25. It has been slightly reduced. Can you provide any explanation for that?

Steve, it really is just as we get line of sight over the course of the year, we know the industrials will come in. Their ramps may vary that come in, large load comes in a little bit of variety over the course of the year. So still at 5.5%, we still see strong sales, but just a little bit of clarity on how that's going to come in.

Okay. And then last quarter, I think you had the second Mississippi customer that you kind of announced but hadn't been named. Is there any more clarity on that customer?

Yes. So we are still moving forward with that customer. They have not announced themselves. So we are working to their schedule, but there's nothing new from our end. We are moving forward on everything we needed to do to serve that customer.

Okay. Regarding the regulatory situation with the Texas plants that you're planning to build, it seems the staff opposed it mainly because they felt there should have been a request for proposal. Can you share your thoughts on how you might address that issue constructively?

Sure. As I mentioned earlier, there is unanimous agreement on the need for additional generation in Texas, and it is important to act quickly to support the low growth in the region. This is well documented and provides the reasoning for our urgency. We have already secured the Orange County plant through a complete RFP process, with no other competing bids. For the current project, rather than undergoing a lengthy full RFP, we have bid out some major components. While there is an RFP included, it is not for the entire project, and this is reflected in our records. We understand the staff's concerns, but we are confident that there is support for us to proceed and reach a successful conclusion. Of course, we still need to complete the process with the commission, which must also agree, but we believe the evidence in the record will support our need to move forward swiftly.

And our next question comes from the line of Sophie Karp with KeyBanc Capital Markets.

I have a couple of questions regarding the generation portfolio and your perspective on it. I'm interested in your views on what market signals could prompt you to reconsider nuclear options and potentially advance those opportunities. Additionally, some of your competitors have mentioned that constructing gas plants takes a significant amount of time. What is your experience with this, and how quickly can you currently build a gas plant?

Yes. We are currently exploring opportunities in nuclear, including the early site permit in Mississippi. We are engaging with stakeholders such as customers and vendors about this. There are no significant market signals that we can identify at the moment. A critical factor for us is managing the construction risk, and of course, we need a customer willing to invest in that. There is substantial political support in Mississippi, Louisiana, Arkansas, and Texas, with some states considering legislation to promote nuclear investments, which we view positively. However, we need to address the commercial question upfront to advance nuclear development more quickly. As for combined cycles, the key factor is your queue position. We have queue positions that would allow us to construct plants in 2028 and 2029, aligned with the customer projects we are seeing for that timeframe. If you have queue positions, it aligns with what others are experiencing. There may be some uncommitted positions for 2027, but that's the earliest we can anticipate coming online in our service area. If you are not in the queue now and are trying to gain entry, you're likely looking at 2030 or 2031, which is further off.

And then my other question is on the legislature that you mentioned in Arkansas and in Texas, I believe that improves recovery mechanisms for a plant under construction and storm recovery. How should we think about potential financial impacts of those? Obviously, this is a positive, but how much would that be, I guess, accretive on a normal year to you guys?

From the Arkansas legislation, we can start construction earlier because it allows for earlier recovery, either through AFUDC or cash CWIP instead. We haven’t measured that impact yet, but we will be assessing which specific investments can utilize that mechanism and how it will benefit our customers. This information will be available in upcoming quarters. Overall, it will help us move more quickly and provide lower costs to customers due to early CWIP recovery. In Texas, the focus is more on managing risk with various legislation, including wildfire-related laws. However, I am uncertain if there will be significant changes to the financials based on the outcomes of the legislative session. From a securitization standpoint, the timing of cost recovery is crucial as it helps reduce costs for customers by minimizing carrying costs during the period before recovering those funds.

And our next question comes from the line of Ryan Levine with Citi.

I have two related questions, particularly to Louisiana. How does the Woodside FID decision impact the availability of power time to market for new potential data center customers in your service territory? And then related, given the macro uncertainty, any color you can share around GDP sensitivity to your load or customer activity in your plan and how that could impact the large load customer conversations?

Ryan, I'll address the first part of your question regarding the data center and how the large customers affect that. We've talked before that our large traditional customers are in a probability weighted pipeline in our forecast. The large data centers we consider them binary. So we look at what does it take to make sure that we can supply those and then we also add that as needed when we add that large customer. That's what you saw in the last couple of quarters. So they're not mutually exclusive, but they're also not as dependent on each other. We look at that supply for the probability weighted, and then you look at the supply for the specific large customers. So we think that we can continue to serve data centers over time. Obviously, Drew talked about the timing on construction, but we think we still have a lot of opportunity there.

To clarify your second question, Ryan, you’re inquiring about macro drivers and how they might impact Woodside specifically.

Those factors would influence some data center discussions, especially if the economy slows down, which may lessen your load and allow you to increase your reserve margins.

I believe that data centers are similar to our traditional industrial customers in that they are focused on long-term investments. They are looking beyond any short-term macroeconomic effects, such as tariffs or a potential recession. This perspective is evident in our discussions with them, as they consider future opportunities rather than just immediate investments. Therefore, the primary motivation for them appears to be long-term expectations rather than short-term macroeconomic factors.

It is not recession-proof, if that's what you're asking. However, we have some of the most competitive industrials in the world due to the investment that has occurred over the last 15 years in our service territory. In any macroeconomic change, they would be the last to shut down and the first to revive. From an earnings perspective, our sensitivity is quite low. A $0.01 impact translates to roughly a 1% change in our industrial sales, highlighting both the low sensitivity and the importance of the demand charges we have. I believe our industrial customers will remain strong through any downturn.

And our next question comes from Anthony Crowdell with Mizuho.

Just a couple of quick questions on transferability. I appreciate you gave us some numbers, but what's the impact to your FFO to debt metric if transferability were to sunset?

Yes, it's Kimberly. The numbers I provided indicate that we didn't specify a percentage for FFO, but we will be above our threshold. Additionally, we plan to maintain some of that through other methods like safe harboring or potentially tax equity partnerships. This represents a general scenario, but we anticipate being able to manage it effectively. Regardless, we still expect to be above our threshold.

Great. And maybe this is more of a question for the rating agency. But if one of the options is tax equity, do you know if its treatment is included in the FFO calculation or if it is just the sum of the transferability?

Yes. We've done a few of those already over the last few years, and they are treated in the normal course. So I wouldn't expect that to be any different.

And our next question comes from the line of Andrew Weisel with Scotiabank.

If I could first just elaborate on the slight reduction to the load growth forecast. First, just to clarify, you're saying it's about the pace of new customers ramping, not about usage from existing customers. Is that right?

Yes. I think that's a fair assumption.

Okay. Great. And then I recognize the EPS impact is modest, but can you detail you originally guided to 11% to 12% industrial growth in 2025, what's your new forecast to the industrial class?

I don't think it's substantially changed. I think it'd still be close to that range. Really, this is about, like I said, timing, ramping, but not a significant change in where we are.

Okay. Very good. And then one more, if I may. I appreciate the easy-to-read list of the significant investment proposals on Slide 15, and it does add up to a lot of potential spending, mostly in Louisiana and Texas and across generation and transmission. My question is how much of that is already included in the CapEx plan? And is there sort of a risk adjustment for some or all of these projects? And would there be upside or downside to the plan pending regulatory approval?

$37 billion through 2028. What you're seeing on Slide 15 is a list of investments, and I would assume those are all included in the financial plan. For anything that isn’t in the financial plan, we would need to evaluate that in the future based on additional customers and similar factors.

And our last question today comes from the line of Travis Miller with Morningstar.

Given the recent discussions regarding large load demands and the potential need for new generation and transmission, have you adjusted your strategic approach when considering contracts with these customers? For example, are you moving from shorter-term contracts to longer-term offtake agreements or fixed price contracts? I'm curious if there have been any shifts in your strategy.

Not really. One of our advantages is that we've been serving large industrial customers for a while. We can leverage the structures and frameworks from our previous contracts, which include credit provisions, fixed demand charges, minimum bill charges, and other features like termination provisions. I don't believe our strategy has changed significantly. However, we have had to be disciplined in our approach to ensure that we maintain our existing customers' satisfaction while we onboard new ones.

Sure. Okay. That makes sense. And then a specific one on the Louisiana new customer. Finally, is there a precedent either in Louisiana or other states you serve or other states you've researched for a decision like this? Is there any kind of precedent ruling you've seen?

I'm sorry, I missed the first part — a precedent ruling on transmission investment in Louisiana.

No, the new customer investment.

The new customer is established. The components involved are not new; they consist of standard generation and transmission investments that have previously been requested. We are targeting a specific customer in this case. This focus is beneficial as it demonstrates how we will manage the overall effect on existing customer bills, which should enhance the conversation. However, the investments themselves are not new for the commission to review.

And that does conclude our Q&A session today. Thank you so much, everyone. I will now turn the call back to Liz Hunter for closing comments. Liz?

Thank you, Greg, and thanks to everyone for participating this morning. Our quarterly report on Form 10-Q is due to the SEC on May 12. It provides more details and disclosures about our financial statements. Events that occur prior to the date of our 10-Q filing that provide additional evidence of conditions that existed at the date of the balance sheet would be reflected in our financial statements in accordance with generally accepted accounting principles. Also, as a reminder, we maintain a web page as part of Entergy's Investor Relations website called Regulatory and Other Information, which provides key updates of regulatory proceedings and important milestones on our strategic execution. While some of this information may be considered material information, you should not rely exclusively on this page for all relevant company information. And this concludes our call. Thank you very much.