Entergy Corporation

Operator: Good morning. My name is John, and I will be your conference operator today. At this time, I would like to welcome everyone to Entergy First Quarter 2026 Earnings Call and teleconference. [Operator Instructions]. I will now turn the call over to Liz Hunter, Vice President of Investor Relations for Entergy Corporation. Liz? Liz Hunter: Good morning. Thank you, John, 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 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. Andrew Marsh: Thank you, Liz. Good morning, everyone. We had a productive first quarter in which we delivered strong financial results. We launched our Fair Share Plus pledge and we advanced customer initiatives with the execution of several electric service agreements, including the one with Meta that improve our financial outlook well into the future. Beginning with financial results. Today, we are reporting first quarter adjusted earnings per share of $0.86. 2026 guidance remains on track and we are increasing our already strong adjusted EPS outlook driven by 8.5% Retail sales growth. Now I'll cover the business updates in the quarter, and as always, I'll start with the customer. For several years, we've worked with stakeholders to recruit data centers and capture the transformative impact they can have on our communities through investment, jobs and other support, while at the same time, protecting and benefiting existing customers. Earlier this year, we formalized that commitment with the launch of our Fair Share Plus pledge. The Fair Share Plus pledge is a set of guiding principles that ensures that data centers pay their fair share for the power they consume, plus additional benefits for customers and communities. Our pledge aligns with the Rate Payer Protection Pledge that our customers signed with the White House. Fair Share is achieved in several ways; minimum builds and contract lengths cover incremental costs, termination provisions ensure current customers avoid unneeded costs, clean energy terms support a potential future transition and strong credit terms give us confidence in all of it. Fair Share also means that data centers cover their portion of fixed costs that our current customers pay for, today. The fair share portion alone is a source of the estimated $7 billion of benefits we have highlighted and current customers' bills will be lower than they otherwise would have been because data centers are paying for the incremental infrastructure they need as well as their share of fixed costs. The Plus component is all of the community benefits originally envisioned by our state and local leaders, including well-paying jobs and targeted workforce development, a substantial influx of new support for schools, nonprofits and other state and community needs and multiplier effects from new businesses and employment opportunities that come about, because of the data centers. The plus component also includes a stronger electric system with reliability and resilience benefits, lower average fuel costs driven by more efficient generation and specific customer benefits like low-income or energy efficiency support. The plus component is clearly valuable and it is in addition to our estimated $7 billion in customer benefits. We're proud that the framework we committed to more than 2 years ago was already providing significant benefits for our customers and communities. And those benefits will compound well into the future. I cannot say enough about the tremendous work our employees have done to create this transformative opportunity for our communities while also providing so much value for our existing customers, and we aren't done yet. In late March, we announced a new Electric Service Agreement with Meta for another data center in North Louisiana. The Fair Share value from this agreement alone is expected to be $2 billion, which is included in the $7 billion I mentioned. In the Plus category, over the next 20 years, Meta has made other commitments. $140 million for energy efficiency programs and $60 million for our Power to Care program. Entergy Louisiana will match Power to Care funding, bringing the increase to $120 million. For context, that is a 5x annual increase for 2025 levels that will meaningfully improve outcomes for our most vulnerable customers. Shortly after executing the agreement, Entergy Louisiana filed an application with Louisiana Public Service Commission, requesting approval for assets needed as a result of adding the new Meta data center to the system. The investment includes 7 new combined cycle units, transmission infrastructure and battery storage facilities. The cost of the proposed facilities will be covered by payments from Meta, whether from their tariff or other contributions, yet all customers will realize reliability and resilience benefits and lower fuel costs from these investments. We also agreed to pursue another 2.5 gigawatts of renewables, and further investigate CCS, nuclear upgrades and new nuclear to support Meta's clean energy goals. We'll add projects to the plan as assets are identified. This month, the commission affirmed at our request falls under their new Louisiana Lightning Initiative, and they directed that the procedural schedule should support a decision at the December B&E meeting. The commission's Lightning initiative as part of Governor Landry's Project Lightning feed to support economic development that provide significant benefits to state and local communities. We are requesting approval for more than $15 billion in capital with about $14 billion in our 4-year plan. As a result of the agreement and pending the approval request, we're also raising our sales and adjusted EPS outlook. Kimberly will discuss in more detail. Beyond the Meta agreement, so far this year, we have signed ESAs totaling over 1,000 megawatts. These agreements were from multiple industries across all our operating companies, and they indicate that customer growth beyond data centers remains robust in our region. We also continue to receive data center interest within our service area. After all agreements signed to date, including the recent agreement with Meta, we still have a pipeline of 7 gigawatts to 12 gigawatts of potential data center customers that are not in our plan. Moving beyond the customer growth update. I'd like to cover a few more items. Operational excellence remains a key focus area, and we will talk in more detail about that at Investor Day. For today, I'll share a couple of highlights. Orange County Advanced Power Station achieved its first fire milestone, bringing it one step closer to delivering reliable power for our customers in Texas. We expect the plant to be fully online in late summer. Recently, our power delivery team identified more than $30 million in capital savings on the Commodore to Churchill 230 kV project. Our engineers developed a solution, which improved the design, lowers material costs and enables faster customer delivery. Importantly, the improvement can be applied to future large transmission projects. This kind of innovative thinking, combined with the scale of our capital plan will continue to lower cost for customers and unlock additional customer investment opportunities. Entergy Texas is working to expand its spinning generation capacity to serve a growing customer base. Following the commission's feedback, they issued an RFP in February for combined cycle capacity and energy. Across our system, we continue to expand our renewables portfolio, driven by our customers' desire for clean energy options. We have active RFPs for more than 1,600 megawatts of renewables and storage, and we have over 4,500 megawatts of renewables and storage in various stages of negotiation after selections from prior RFPs in Arkansas, Louisiana and Mississippi. Roughly 2/3 of the megawatts in negotiation would be owned. In addition, we are actively managing proposals through Louisiana's Accelerated Renewable Review Process. These are important tools to help us identify projects supporting customers' clean energy goals. As we indicated on the previous earnings call, Entergy Arkansas filed its base rate case in late February, requesting a $45 million rate change, which is less than 2%. Because bill impacts vary by customer type, the residential impact would be less than 1%. Some of the features that we requested include an optional time-of-use rate that provides residential customers with the opportunity to lower bills by shifting energy use to lower-cost hours, and low income rates that provide a 50% discount on the customer charge for households to qualify for LIHEAP assistance. We also elected to resume Entergy Arkansas for [indiscernible] FRP after the rate case is resolved. Entergy Mississippi filed its annual formula rate plan with no change requested. Arkansas and Mississippi, both have mechanisms that provide cash allowance for funds used during construction, for investments to support significant economic development projects. To that end, Entergy Arkansas filed its first annual generating Arkansas Jobs Act rider in March and Entergy Mississippi updated its interim facilities rate adjustment in January. One additional comment about Mississippi, the state recently passed legislation authorizing securitization of costs associated with Winter Storm Fern. Kimberly will provide additional details on that as well. Beyond Fair Share Plus, our employees continue to work every day for the benefit of the communities we serve. We recently participated in the industry's LIHEAP Action Day in Washington, D.C. to advocate for energy affordability for our customers in need. Congress approved an appropriations package that includes a $20 million increase for LIHEAP, which reflects growing recognition of the program's importance. For more than 15 years, Entergy has also provided free tax preparation for low- to moderate-income customers at sites throughout Entergy's region. In 2025, we helped customers receive $54 million in earned income tax credits, putting money directly into our customers' pockets. Finally, we are very excited about our upcoming Investor Day in June. We plan to walk through the clear line of sight for our multiyear strategy and outlook in detail. And you'll hear directly from our leadership team on the opportunities ahead. Highlights will include a conversation with large customers on how we partner together to create better outcomes for our key stakeholders. A view into our operational strategy to successfully execute on the large build cycle ahead of us. A discussion of the work we are doing to unlock additional capital deployment opportunities, a review of our approach to maintaining financial discipline, and finally, a deeper dive into the significant near- and long-term customer growth opportunities to sustain our strong growth well beyond our 5-year outlook. We had a productive start to 2026 with solid progress and execution across the business, and by continuing to put our customers first, we will deliver premium value to each of our key stakeholders. We look forward to discussing this in more detail with you at our Investor Day. I'll now turn the call over to Kimberly for the financial update. Kimberly Fontan: Thank you, Drew. Good morning, everyone. I'll now review our financial results and provide an update on our long-term outlook. Our results for the quarter were straightforward. Our adjusted EPS was $0.86 as shown on Slide 4. The primary drivers were from the effects of investments made for our customers, including regulatory actions net of higher depreciation expense, taxes other than income taxes and interest expense from financing capital expenditures. The per share increase was partially offset by a higher share count from settling equity forwards. Industrial sales growth was very strong at 15% and new and expansion projects continue to ramp up their operations. Overall Retail sales increased 6%. The earnings contribution from Retail sales growth was essentially neutral as higher revenue from the Industrial growth was offset by the effects of weather, including positive weather in the first quarter of last year. As Drew discussed, the Meta contract creates significant customer and community benefits. In addition, we are refreshing our outlook to reflect the new agreement and other minor updates. The highlights are summarized on Slide 5. This agreement further strengthens our Retail sales outlook. We now expect approximately 8.5% compound annual Retail sales growth through 2029, driven by 16% Industrial growth. Data centers continue to be a significant driver along with growth from a variety of traditional Gulf South industries, including LNG, industrial gases, petrochemicals, agricultural chemicals and primary metals. As a reminder, we only add hyperscale data centers to our plan once we have a signed Electric Service Agreement, and then we include them at minimum bill levels. This conservative approach ensures that we can count on the revenue that we've included in our plan. Our customer-centric forward year capital plan is now $57 billion, which is [ $14 billion ] higher than our plan last quarter. The increase includes the investment needs resulting from the new customer agreement, primarily 7 new CCCTs as well as Battery Storage projects. All 7 CCCT have in-service dates in 2030 and 2031, such as not all of the capital for these units is in our 4-year horizon. For the transmission investments in the filing, we've made a conservative assumption not to include them as we work through financing options. We have also not yet included the Renewables or River Bend nuclear upgrade investments discussed in our filings. These would be added to the plan as specific projects are firmed up. The equity associated with our 4-year plan is now $6.6 billion at the lower end of our target range of 10% to 15% of the total capital plan. Our strategy to be proactive in addressing our equity needs provides certainty and flexibility, giving us ample time to raise capital. We have successfully sold forward contracts through our robust ATM program as well as the block transaction we executed last March. The agreements we have in place cover about 30% of our 4-year need. With $1.9 billion already contracted, that leaves $4.7 billion to be sourced, which is not expected to be needed until late 2027 through 2029. Our forecast also includes $3 billion of hybrid instruments [ at parent ]. Slide 6 summarizes our credit ratings and affirms that our credit metric outlooks remain better than rating agency thresholds. Our plan reflects FFO to debt at or above 15% from Moody's metrics throughout the period, giving us capacity to manage events in the business as they occur. While financial health is bolstered by the way -- by the work we've done to strengthen our balance sheet and create benefits for customers, including structuring large agreements to protect existing customers in our credit, solidifying our pension funded status and receiving constructive regulatory mechanisms. You may recall, our system experienced an ice storm earlier this year. Mississippi's recent legislation provides a path to securitize the storm cost, which we estimate in the $200 million range. This will lower the overall cost for customers. We will submit our filing by October 5 and we expect the commission to issue a decision within 60 days of our filing. As shown on Slide 7, we are affirming our 2026 adjusted EPS guidance and updating our outlook. For 2026, we're firmly on track, and we remain confident that we will deliver on our guidance. Looking ahead to the second quarter, with other movements in our plan, we expect other O&M to be approximately $0.15 higher than the same quarter last year, reflecting higher vegetation spending and the timing of nuclear maintenance. Beyond 2026, today's update reflects our new capital plan, which includes investment resulting from the latest customer agreement as well as other updates since the third quarter. Our adjusted EPS outlook for next year is now $0.20 higher. As the investment accumulates the increase grows ratably to $0.50 in 2029 to $6.40. We will extend our full outlook to 2030 at our Investor Day in June. As a preview, the 2028 to 2029 year-over-year adjusted earnings per share growth was 12%. We expect approximately the same for 2030. Entergy is executing a differentiated growth strategy, delivering strong, sustainable results. Through our disciplined customer-centric approach, we are creating value for all our key stakeholders, including our owners. Our plan is solid with clear line of sight to achieve our outlook, and we have significant opportunities before us. This update makes our already strong growth profile stand out even more. And now we're happy to take your questions. Operator: [Operator Instructions] Our first question comes from the line of Shar Pourreza with Wells Fargo. Shahriar Pourreza: So obviously, a great update this quarter with the Meta deal. Just -- I just want to be crystal clear here as today's results just kind of raise the bar again. Does the CapEx increase today fully support the deal? Or do you see additional CapEx and earnings accretion as we shift focus to the Analyst Day? I mean, you just had a strong update. So should we assume there could be further updates to the capital plan in addition to the roll forward in the June Day Analyst Day? Kimberly Fontan: Shar, it's Kimberly. As I noted $14 billion was added to the plan. The filings had about $15 billion and the CCCTs close outside the period. But what's not in the plan is the renewables that are under the agreement as well as some of the nuclear pieces. So certainly, there is more opportunity, both in the period and beyond. But what we've provided here today is largely around the generation pieces that you see in the filing. Andrew Marsh: And what we would probably expect for our Investor Day through '29 because it's only 6 weeks away. It's a very short window. So we try to give you a preview of it this time today. Shahriar Pourreza: Got it. That's perfect. And then just lastly, in terms of financing, I guess what are the specific mechanisms that keep incremental equity funding for the $15 billion in new CapEx under 20%. Is that something that would get replicated beyond the current CapEx plan? I mean most of the new investment is in Louisiana, but do you see the same accretion from DC clustering in Arkansas and Mississippi? Kimberly Fontan: Yes, we have been able to maintain that 10% to 15% rate, on our capital plan for some time. And I don't see any factors that change that. There's a number of factors that help support that, whether it's the mechanisms that we have, the forward mechanisms, the recovery of AFUDC during the construction period. I mentioned funding of our pension status. So it's a variety of mechanisms, but no fundamental structural change that I see that causes that to really shift as we think about new capital. Operator: Our next question comes from the line of Nicholas Campanella with Barclays. Nicholas Campanella: Productive quarter, like you said. So thanks [indiscernible]. So I just wanted to follow up on some of your prepared. You said that you have a pipeline of 7 to 12 gigawatts that are still not in the plan. You used to have this nice slide around EEI, which kind of showed how much equipment you secured to facilitate growth above the plan. So can you just kind of talk about after this Meta announcement after the other gigawatt that you highlighted as well that you executed on in the quarter, what is the equipment outlook look like for you now? Kimberly Fontan: Hi Nick, it's Kimberly. Appreciate the question. Yes, Drew did confirm that even after this agreement, our pipeline is still 7 to 12 gigawatts and that underscores the fact that we continue to see that pipeline, things move through the pipeline and that pipeline refresh. From an equipment perspective, we'll give you a full update in just a few weeks at Investor Day, but we have additional turbines both on that side, and we're not seeing it still relative to continuing to ensure that we can support that incremental growth as well as we'll talk about what else is out there relative to all of our other industrial customers in just a few weeks. Nicholas Campanella: Okay. Looking forward to that. And there was some discussions in the filing at the regulator about exploring kind of new large-scale nuclear studies at certain sites. And Drew, just maybe given your involvement in NEI, maybe can you kind of talk about where the company stands on committing to large-scale NUC at this point? What the industry still needs to move forward and what Entergy would need to kind of move forward? And this is -- is this something that we should be keeping in mind as we kind of get to this Analyst Day update. Andrew Marsh: Thanks, Nick. Certainly, new nuclear is something that we believe we will need when we look out into the long term. Certainly, we talked about this in the past. We don't think we'll get to something like 2050 without having new nuclear as part of our portfolio. So it's something that we are continuing to actively explore and investigate and agreement that we signed with Meta helps move that forward a little bit. We are in the same spot from a financial risk perspective that we always have been. And that is that there is significant challenges that we still have to overcome from a -- from a cost and a cost uncertainty perspective. And we are mindful of what that could mean to the balance sheet of Entergy Louisiana or any of our operating companies. So we are going to enter into any agreement that that creates an existential risk right off the bat. And we've said that many times. At our Investor Day, we'll have some ideas about how we could manage that and how we could move the needle on the cost and the risk associated with construction that could help us get there. But our balance sheet isn't big enough to cover the whole risk by ourselves, and we're aware of that. Operator: Our next question comes from the line of Jeremy Tonet with JPMorgan. Diana Niles: This is Diana Niles on the call for Jeremy. Andrew Marsh: Absolutely. Diana Niles: So I was hoping, could you elaborate on the 1,000 megawatts of additional ESAs beyond the Meta agreement and maybe how you would characterize the kind of Industrial breakdown there and ramp going forward? Andrew Marsh: Yes, there are things that you're familiar with, steel, petrochems, I don't have a specific by industry breakdown, lots of smaller ones. There are many that are in the less than 20-megawatts kind of range. But altogether, they add up to 1,000 megawatts. I don't have a specific breakdown for you. And I will also add that one of the things that I just got to remind you of here in the room, we probability weight those non-data centers projects. So those are still probability weighted. They're not all in at 100%. And as Kimberly noted in our remarks, the data centers only go in whenever we have a signed ESA. Diana Niles: Got it. So to maybe clarify there, there could be upside should the more traditional industrial load all come on at the full capacity? Andrew Marsh: That's true. That is correct. It were all to come on. It's probability weighted for a reason because that doesn't usually happen. But if they were all to come on, yes, there would be upside. Diana Niles: Got it. And maybe to piggyback on the prior question, and apologies if you already spoke to it, and I didn't hear. But I saw that the study in the Meta agreement speaks to AP-1000s. Was that selection of technology a preference from Entergy or from the customer? Andrew Marsh: Well, we are supportive of any of the technology that are out there, and we're investigating and talking with the vendors for all kinds of different technologies. Certainly, the AP-1000 is one that is had been constructed and built and there is a full design. And it's also a technology that we're familiar with because it's BWR. So I think those are things that we are -- that we are comfortable with. And so I think there's some benefits associated with that. But we are more or less agnostic to the technology. What we're more concerned about is the risk sharing for construction. Operator: Our next question comes from the line of Richard Sunderland with Truist Securities. Unknown Analyst: Speaking to some of those other CapEx elements for Meta that are outside of the plan. Could you speak a little bit more to sort of guardrails, timing, other elements you have [indiscernible] before you would go and add those to the plan? And then, I guess, similarly on the size and scope, I know the transmission you outlined, but what are you thinking about as an order of magnitude on the other buckets? Kimberly Fontan: Yes. Richard, certainly, we saw Meta as well as other customers have made commitments or signed up for new solar in multiple of gigawatt amounts. We do have open RFPs to build those as well as we're looking at our own self-build that we would put into those RFPs to fill that. And we would be looking to fill that over the next several years. So you could see some of that come into this 4-year plan, and you could see some of it stretch a little bit beyond that. But from a size and scope perspective, 2,500 megawatts in this Meta agreement, 1,500 megawatts in the previous agreement, all provides a good framing around incremental solar that we could have, and then you can have incremental in other areas as well as asset solar, but it could also be batteries as well. Unknown Analyst: Got it. That's helpful context. And then just turning back to the 7 to 12 gigawatts backlog. I'm curious if the the Meta addition today, did that move through the backlog until you then backfilled with new interest to get back to the 7 to 12 gigawatts? And then even on the Industrial side, just like how have some of those trends been relative to crystallizing the 1,000 megawatts that you also referenced today? If you could provide any color there? Kimberly Fontan: Yes. So on the 7 to 12 gigawatts, you're exactly right. Meta would have moved through that. It's now in our plan. So it's not in the 7 to 12 megawatt that references data center opportunity that's outside of our plan. We -- our 7 to 12 gigawatts was never our full scope of plan. So as things move through, we've got additional things coming in as well as we've had additional interest. On the broader customers, what Drew referenced on the 1,000 megawatts is really closing out specific customers that either getting them to sign agreements which would adjust the probabilities as well. But we'll give you a full update on that pipeline again in a few weeks, but that continues to be strong as well. Operator: Our next question comes from the line of Paul Zimbardo with Jefferies. Paul Zimbardo: Good morning, can you hear me okay? Andrew Marsh: Yes, you're breaking up, but we can hear you now. Paul Zimbardo: Good, good. And again, setting a [indiscernible] from by saying a productive quarter, my goodness. I did want to clarify and Kimberly really mention a little bit, just in terms of the conservatism -- the kind of the minimum take-or-pay minimum bill -- is there any way to frame kind of what that benefit can be to earnings or cash flow? Just any parameters would be helpful there. Kimberly Fontan: Yes, we haven't given specifics around the minimum bill levels except to say that on all of our industrial customers, we have minimums or demand charges and all the hyperscalers. It is significantly higher than what we've had on traditional customers for the amount of incremental investments that they drive on to the system. In the forecast period, I would think about these customers are going to be ramping up. And so their minimum bills are coming in during the period and they go into the ramping period. So you're going to have more opportunity once they get to full load versus a minimum bill, but certainly there could be some opportunity near term if perhaps they ramp fast faster. But generally, I would think about it as we haven't given it, but the minimums are pretty substantial. So there is some margin but it's not equal to what's already there. Paul Zimbardo: Okay. No, that's helpful. And one other [indiscernible] again, I can't wait for the Investor Day. Just as we think about the capital you put into the plan today, relative to the $0.50 of increase in 2029. Is there any information on shaping? Is that kind of back-end weighted into 2029 non-CapEx? Just it seems like there's more earnings to come, not to ask a leading question, but more earnings to come from that capital. Any flavor you could provide would be helpful. Kimberly Fontan: Yes. So you can see the shaping of the earnings through '27, '28, '29 in the materials. And then in my comments, I did note for a preview to '30 that we would expect the year-over-year from '29 to '30 to be roughly the same as the year-over-year from '28 to '29. So that gives you some indication of how that shapes into that fifth year. Operator: Our next question comes from the line of Bill Appicelli with UBS Financial. William Appicelli: Just isolating the Meta update here. I mean is the $14 billion of incremental capital entirely attributable to the expansion of that agreement? Kimberly Fontan: Yes, Bill, you can see the filing. That's pretty close to what is included there in the filing. There's something -- and I went through what we included and what not -- what wasn't, but that's essentially the add here. Andrew Marsh: There has been other capital added since our last earnings change. You recall that we added Cottonwood and there's been some other things that have happened. But certainly, the $14 billion is the key driver here. William Appicelli: Right. And then on top of that, there is still some residual generation spend that will show up in '30. And then you talked about the transmission renewables also not included, right? So when we think about the totality of what that Meta deal is worth in terms of CapEx, it's obviously something north of the $14 billion, right? It's an incremental several billion. Is that fair? Kimberly Fontan: Yes. Drew mentioned in his comments that it was more than $15 billion that happens outside the period. And certainly, depending on where the solar and battery, the renewable lands gives you some upside opportunity there. William Appicelli: Okay. And then when should the full earnings run rate be realized on the meta expansion? Is that -- I know you're talking about the CODs are in [ '30 ], I think, into [ '31 ], right? So is that -- when we think about the the entirety of the return on the capital being reflected in financials, is that sort of at that point in time, is that sort of '31 mid-31 period? Kimberly Fontan: Yes. The CCCTs finished closing in '31. So most of your capital is in by then we gave you the ramp-up through '30. And we'll talk about what longer-term visually looks like without giving specific outlook at Investor Day. Operator: Our next question comes from the line of Steve Fleishman with Wolfe Search. Steven Fleishman: I think my my questions -- a lot of my questions got answered on this, but just -- it sounds like there is meaningful earnings that come from the Meta CapEx, even though it is largely in play through '29, the earnings tail a little later just as the projects come on, is that not that $0.50 is not a lot, but... Kimberly Fontan: Yes. See, what you're seeing with all construction projects, you've got AFUDC, that sort of thing, leading up to the construction, leading to the close through the construction period. And then again, in '30, I would see a similar uptick in ratably as to what we saw in the years that we gave you for getting you to the similar type of growth rate in '30. Steven Fleishman: Great. And then just the $14 billion that you added to CapEx, is that before KAYAK or after KAYAK because we don't have rate base to kind of match up to from you? Kimberly Fontan: Yes. I would think about that related to the CCCT is largely overnight costs. So we did -- I mentioned the transmission wasn't included and then the financing costs largely are not included in there either. Steven Fleishman: Okay. You also mentioned this renewables RFP separate from Meta, the 4.5 gigawatts, of which 2/3 would be owned. Is that in your plan at 2/3 owned or not? Kimberly Fontan: About half of that is not in our plan, is the way to think about that. So pretty good upside there relative. So we had some projects that we had worked to safe harbor or just get ahead of relative to other solar interest, but there's a good bit of that, that's not in the plan. Steven Fleishman: And then just on -- I know you don't need equity for a while, timing-wise, late '27 or '28, '29. Just how are you thinking about just though approaching equity or you continue to try to get out ahead of that? And just any thoughts on ways to approach getting the equity for this? Kimberly Fontan: Yes. To your point, we don't require equity until well into '27, but we have been proactive about ensuring that we stay ahead of that 30% is already on the table. But the ATM has been an effective tool. We were able to use a block last year. But I would expect that we don't require additional equity until '27. So we can't speak to the specific timing, but I would think about it that way. Operator: Our next question comes from the line of Sophie Karp with KeyBanc Capital Markets. Sophie Karp: Congratulations on a strong update here. So maybe if you could talk a little bit about the regulatory maintenance that you have, particularly in Louisiana and other areas that they experienced significant growth. Do you feel like you have sufficient regulatory recovery mechanisms in place? And is there a risk of some regulatory fatigue if the capital growth as much as it has been growing? Andrew Marsh: Thanks, Sophie. It's a good question. I think we have adequate regulatory mechanisms in place. Certainly, you've seen our regulators begin to change some of their processes. A good example is in Louisiana, the Louisiana Lightning Initiative to accelerate reviews for strong economic development projects. And I think that's really the key is that we are providing significant benefits for customers, communities, I think the regulators will be very supportive of these kind of ongoing activities. And I don't know that there would be necessarily any fatigue associated with that. And that's why we've really been focused on these things. If we can't provide that, obviously, that would be a different story. But we've been able to do that pretty well so far, and we'd expect to be able to continue that story going forward. Sophie Karp: And then maybe real quick, if you could maybe come and give us some color on how the -- I guess the situation in oil markets and around the conflict in the Middle East, is impacting your industrial customers? Is it a positive for them? Or is it a negative for them? Like what is the situation on the ground in your territory? Andrew Marsh: Great question. So the I guess, generally, it's been -- I would say it's probably been positive for most of our industrial customers. The things that they are looking at are spread between oil and gas, that have obviously increased geographic spreads between the Gulf Coast and the Asia, Europe, those have increased. And so our industrial customers along the Gulf Coast have a -- I would say, probably benefited somewhat from the conflict over there. But simply because it's dislocated the prices a little bit. But I would say it's not out of alignment with where we've been over the last decade to 15 years. I'd say prices were, as you know, for oil a little bit lower early in the year. Obviously, they're higher now. But that the spreads that they pay attention to, those are the same spreads that they've been seeing for a long period of time. And frankly, we would expect them to continue to stay in place well after the conflicts are resolved. Operator: Our next question comes from the line of Steve D’Ambrisi with RBC Capital Markets. Stephen D’Ambrisi: I just had a quick one. If I look at the change in terawatt hour sales growth from 4Q to this update, it looks like it's just about 3-terawatt hours. And so if I try to back into what that means from an incremental load from data centers, it seems like it's only 400 or 450 megawatts. And so can you just talk a little bit about how the Meta facility ramps because if it's 5.5 incremental gigawatts, it feels like there's a ton of terawatt hour sales that are going to come beyond 2029. So I just want to understand what that means both for earned returns and also like capital deployment beyond '29? Kimberly Fontan: Steve, it's Kimberly. You cut out a little bit, but I think your question was -- how does the Meta agreement ramp? And how do I think about the terawatt hour sales that you're seeing. Yes. Certainly, we have to build to support this customer. You see that in the CCCT deployment, which come online in '30 and '31. So they are able to get some ramp in the period, but your full loads aren't going to come online until all of those offsets come online. But recall that we have minimum builds on these customers as they ramp and that minimum bill is reflective of ensuring that they cover the incremental costs that they drive over the life of the contract. So that minimum bill may not be directly in sync with the ramp for example. So what we've included in our forecast is the minimum bill here, but you should continue to see ramp as those assets come online. Stephen D’Ambrisi: Okay. And any -- just again, like it seems like it's really a very small amount in '29, and I know you rolled to '30, but any flavor for what adding 5 gigawatts to the existing sales forecast does like to sales CAGR through 2032 or something like that? Because it just -- it seems very, very like a significant incremental step-up. I just want to understand like if that has customer benefits or rate benefits that you can pass back? Or is there any way to think about that? Kimberly Fontan: Yes, we'll give you the sales growth through '30 in just a few weeks, and then we'll show you sort of how we think about opportunities longer term, but all customers are benefiting from this ramp and from the minimum bill to the point that Drew made, both from the fair share component, ensuring that they're paying their portion of the incremental cost and that will flow through the traditional mechanisms in Louisiana, similar in other jurisdictions. So there is opportunity and benefit there for other customers. But we'll provide you that sales forecast in just a few weeks through 2030. Operator: Our next question comes from the line of Chris Ellinghaus with Siebert Williams. Christopher Ellinghaus: Drew, vis-a-vis the Iran issue, is that providing some impetus were interest in new ESAs in their sort of calculus of where the world markets are? Andrew Marsh: Perhaps, I mean, certainly, we have a lot of natural advantages associated with where we're located. We're along the river and the Gulf Coast, we have access to global markets, and we have significant energy infrastructure with pipelines and low energy costs and rail and other transport availability to domestic markets. I mean we're well situated with a supportive community that values industrial investment. All of that has meant that when people look around for places to invest in industrial facilities, they look at the Gulf Coast. And certainly, over the last few years, we've seen a lot of interest in on-shoring because of geopolitical uncertainty. And I would say that this current situation is just more continuation of that. So to the extent that people around the world are looking for a stable place to invest. And given the opportunities that are here and the advantages associated with the Gulf Coast, it becomes a natural potential location when you're looking around the world. It's a very attractive place to invest. So certainly, this situation is not -- I would say it's probably causing people to look maybe even a little bit more, but it's not a new scenario. And it goes with the long-term kind of commodity spread discussion that I was talking about just a minute ago. Christopher Ellinghaus: Sure. That makes sense. I'm just curious whether it was expediting anybody's thought process. Are there any other Cottonwood type transactions in your mind sort of in the hopper? Andrew Marsh: Well, there's -- I mean, we normally don't talk about M&A, but I will say, in this case, there's really just not much in terms of other generators that are around. So I would not say that we'd expect that asset M&A to be a significant part of our potential capital outlay going forward beyond Cottonwood. Christopher Ellinghaus: Okay. Given the significant increase to the CapEx. Can you give us any idea of how it might alter your thinking about the cadence of dividend payouts over the 4-year horizon? Kimberly Fontan: Sure. It's Kimberly. We have historically had a 6% growth rate on our dividend, and we're obviously growing faster than that. And so that has an effect on your payout ratio, but that's been our philosophy to balance the growth rate in the earnings in our sales growth rate relative to the growth rate in the dividend to date, that's the philosophy that we've taken to date. And I think that, that is an appropriate balance as we think about that over the next 4 years. Christopher Ellinghaus: Okay. That helps. Lastly, I guess, Mississippi data center interest just seems to be exploding. Can you talk about -- or maybe this is something for June, what's in the plan at this point? And is there a significant bucket of unplanned at this point? Kimberly Fontan: Yes. I would reference you back to our 7 to 12 gigawatts, which is not OpCo specific, but that's our enterprise view of the data centers. We don't provide that breakdown sort of either where they are in the pipeline or where they are specifically by OpCo. But still, significant opportunity before us, one that we're working to shore up and to capture as much as we can. So lots of opportunity there, but no specifics by operating company. Andrew Marsh: And the data centers that are in our plan, are already signed. We do not have any data centers in our plan that are prospective. Operator: Our last question for today comes from the line of Andrew Weisel with Scotiabank. Andrew Weisel: Two for me. First, in terms of financing the incremental $15 million of CapEx or so for Meta. I understand that Meta is going to be paying for that under the Fair Share Plus commitment great setup, of course, but you're obviously including that in the CapEx and the equity plan. Maybe just remind me or help me understand how that works from a timing and cash flow perspective? If you're not going to collect the revenue or how and when will you collect the revenues relative to the construction and equipment payments and how and when will the $2 billion or $7 billion be returned to customers. How does that work in terms of the timing and how that impacts your credit metrics? I know you reiterated the credit metrics, but how does that work in terms of the short-term impacts of credit rating metrics and your conversations with the agencies and cash flows? Kimberly Fontan: Yes. Our Fair Share Plus as a reminder, is our commitment in ensuring that these customers are paying their fair share, and that covers a number of areas. One is ensuring that they're paying to support not just the incremental cost that they drive, but also the embedded costs that are already in customers' bill. So that shows up in ways like in Mississippi, we've talked before about Super Power in Mississippi, where they're deploying $300 million of capital without incremental cost to customers because of the embedded costs that AWS is supporting enables us to continue to make investments for customers without incremental cost. So I think about it that way. Another example is in Louisiana, we have securitized storm costs on their bills already related to previous storms, and these customers will pick up their allocable portion of those costs. So customers that were paying and will see slightly less cost. That's how that $7 billion effectively flows back to customers. Andrew Weisel: Okay. In terms of the credit metrics and timing issues, is that -- how does that work? And is there going to be a temporary pressure on the credit metrics during construction? Kimberly Fontan: Yes. As I noted in my comments, our credit metrics on a Moody's basis are 15% or better throughout the 4-year forecast period during this heavy construction period and that has a lot to do with all the constructive mechanisms we have as well as how we are contracting. So that doesn't, in and of itself, put pressure on metrics because, again, it's enabling you to make investments as these customers pay a portion of incremental costs that customers otherwise would have paid for previously. Andrew Weisel: Okay. Very impressive. And one last one, if I may. The 15% industrial sales growth in the first quarter was notably better than your guidance of 10% for the year and a big pickup from last year's full year results of 7%. You mentioned in the remarks that it was a combination of new and expansion projects. Can you just elaborate a little bit on what you're seeing? And does that change your full year -- your expectation for the full year? Kimberly Fontan: Yes, we did have a good first quarter. But on a year-over-year basis, we expected customers to ramp up. That's what you're seeing there. We -- it doesn't change what we expect for the full year. It does shore up that -- those customers are coming online. But even if the volumes were off a little bit, you wouldn't see a decrement because of the minimum bills and other structures that we have, to support. So we're comfortable with our guidance and our -- and we're pleased to see the volumes starting to come in. Andrew Weisel: Does it position you towards the high end? Or is it too early to say something like that? Kimberly Fontan: Yes, it's way too early. It's first quarter. So we've got -- we obviously have to get through the summer and then all the way through the end of the year. Operator: Thanks, Andrew. And that concludes our Q&A session for today. I will now turn the call back over to Liz for closing remarks. Liz Hunter: Thank you, John, and thanks, everyone, for participating this morning. Our quarterly report on Form 10-Q will be filed with the SEC at a later date and provides more details and disclosures about our financial statements. Events that occur prior to the date of our filing may provide additional evidence of conditions that existed at the date of the balance sheet will 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. Operator: Ladies and gentlemen, this concludes today's conference call. You may now disconnect your lines.