Good day, ladies and gentlemen. And welcome to the Entergy's Corporation Third Quarter 2017 Earnings Release and Teleconference. At this time, all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today's program is being recorded. And now I would like to introduce your host for today's program David Borde, Vice President, Investor Relations. Please go ahead.

Good morning and thank you for joining us. We will begin today with comments from Entergy's Chairman and CEO, Leo Denault; and then, Drew Marsh, our CFO, will review results. In an effort to accommodate everyone who has questions we request that each person ask no more than one question and one follow up. And just a reminder, with EEI only days away, today's call is scheduled for 40 minutes. In today's call, management will make certain forward-looking statements. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Additional information concerning these risks and uncertainties is included in our earnings release, our slide presentation, and the company's 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 Leo.

Thank you David, and good morning. Today, we're reporting a strong third quarter with operational earnings per share of $2.35 and utility, parent and other adjusted earnings per share of $2.15. We now expect to finish the year in the top half of our utility, parent and other adjusted earnings guidance range. Furthermore, we continue to execute on our strategy to achieve steady predictable growth at the utility, while managing risk and an orderly exit of our merchant power business as shown on Slide 3 with three quarters behind us, we've successfully completed most of the key deliverables that we set for 2017. Significant accomplishments we've made over the past several years position us well to achieve our financial outlooks in the coming years, which support our long-term dividend growth aspiration. As a result, today we are affirming our 2017 guidance and our longer term outlooks for utility, parent and other. With the EEI conference days away, we are keeping today's call focused on quarterly results as well as progress, updates on our key deliverables. We will defer questions on long-term strategy to EEI, while I will be giving a formal business update presentation. Now moving onto developments for our business since our last earnings call. First, Entergy Arkansas' formula rate plan proceeding, we reached an unopposed settlement agreement with the attorney general and the other members of the joint rate pair advocates. If approved, the settlement would resolve all challenges to the prudence of the nuclear costs included in the 2017 and 2018 test year filings. We also agreed to a process to review the costs associated with ANO's state or incident and placement in column 4 by the NRC. As a reminder these costs were not part of the 2017 and 2018 test year FRPs. The settlement agreement…

Thank you Leo, good morning everyone. I'd like to start this quarter's financial review with the key takeaways on Slide 4. As you can see, Entergy's operational earnings are up from last year driven by higher utility, parent and other adjusted earnings and higher EWC operational EPS partially offset by $0.25 of negative weather. We're also affirming our 2017 guidance ranges for consolidated operational EPS for utility, parent and other adjusted EPS. In the utility, parent and other results summarized on Slide 5 you can see weather was negative in the current quarter compared to positive a year ago which accounts for $0.43 swing in the operational earnings. Across our system, cooling degree days reflected in our build sales were 16% lower than normal this year compared to 14% higher last year. On an adjusted view, earnings were $0.17 [ph] higher than third quarter 2016 driven by higher net revenue excluding the effects of weather. This reflected positive build retail sales growth and new base rates and riders to recover productive investment to benefit customers. For the industrial group, we saw solid sales growth from existing as well as new and expansion customers, largely from primary metals and chloro-alkali sectors. Partially offsetting the net revenue benefit were higher operating expenses including non-fuel O&M, depreciation and taxes other than income taxes. Last year's DOE award which reduced expenses in that period was also a driver. Turning to EWC's results on Slide 6, operational earnings increased $0.26 from third quarter 2016. The sale of Fitzpatrick affected variances for multiple line items but had a small impact on the overall variance. Excluding Fitzpatrick revenue from nuclear plants increased due largely to higher capacity prices. And EWC's nuclear fleet ran strong this quarter at a 98% capacity factor. Nuclear fuel and refueling outage expenses…

[Operator Instructions] Our first question comes from the line of Julien Dumoulin-Smith from Bank of America. Your question please.

So just wanted to follow up, first off, congratulations on Arkansas. I wanted to just see if - what your latest thoughts were about earning your ROE there. Obviously, you want to delay some of the conversation, longer term strategic thinking until EEI, but at least right now, what are you thinking your trajectory is towards earning your ROE again, assuming the current settlement stays. Obviously, there could be some shift still, but the status quo expectations.

Julien, this is Rod. Good morning. I think our point of view hasn't changed in terms of what we've stated in the past and that is, we've reflected both the rate case and FRP settlements in Arkansas, the operation of the - both the cap and the true up mechanisms, such that by '19, we expect to approach our allowed ROE in Arkansas. And so all of that is reflected in our existing outlooks.

Right. Absolutely. But '18 is still something of a transition year.

I think that's fair.

Okay. Excellent. And then turning to Louisiana, obviously, I'm looking for action here pretty shortly. Can you talk about what the specific impact on the transmission tracker you're talking about there, what would that mean in terms of your ability to earn and how meaningful is that within the scheme of what you're talking about there across the various points?

Yeah. When you think about the - what we're seeking in the FRP renewal, that transmission tracker is really for us a recognition that the lion's share of the transmission spend that we have line of sight on is in front of us and a forward-looking mechanism would reduce the likelihood of a lag for us and our expectation is that that would allow us to earn and sustain our ROEs over the period. And so, we're in the middle of negotiations with the parties in Louisiana and they have the same line of sight that we do on our capital outlook and we're hopeful that they'll respond favorably to the approach.

Excellent. And very quickly on the decommissioning trust true-up or to the extent it's necessary, what's the timeline do you think that you could actually get this resolved in terms of thinking about any kind of bigger arrangement to deal with that? Is that, shall we say, nearer term opportunity, if you could kind of summarize that, apologies if I didn't hear it clearly in the remarks.

Hey, Julien. This is Dew. I don't think I put a specific timeline out there in the remarks and with the movement of Palisades to 2022, it gives a lot more room to finalize that. We are moving forward on Vermont Yankee, so that piece of it will be finalized hopefully next year. But the other parts on Pilgrim Palisades and Indian Point might take a little bit longer. That doesn't mean, we won't make progress on it though. We are continuing to, well, I'm talking about longer it could be, longer for a transaction or something of that nature. But we are making progress on our own sort of go it alone strategies and other things around how we're going to de-fuel the plant and things like that. Expectations around those things, we could firm up as early as next year. We can continue to make progress on our overall objective.

Thank you. Our next question comes from the line of Jonathan Arnold from Deutsche Bank. Your question please.

I have a question about the number you gave for weather and the $0.25 negative versus $0.18 positive and I think if I heard you right, you said the cooling degrees across the service territory was 16% below normal. My question, when we look at the sort of raw cooling degree data, it just looks much closer to normal than that. So I'm curious, are you showing an index that includes humility or other factors or just what are we missing there.

No. That's weighted on our specific - different city than our service territory, Jonathan. It is just raw cooling degree data, we're not factoring humidity or other things in there at this point.

Okay. That's helpful to know. So just pure CDD. That was my question.

Yeah. But it is weighted by the various cities in our jurisdiction and relative size of those loads in the area.

Thank you. Our next question comes from the line of Praful Mehta from Citigroup. Your question please.

So firstly on sales growth at the utility level, just clearly you have had some improvement. So wanted to understand that you're tracking now above the plan. Does that mean that 2018 will be benefited by that? Is that benefit going to flow through to 2018 as well or do you see that more as a 2017 impact in terms of retail sales.

Praf, this is Rod. Good morning. I don't believe that the volatility we're seeing, whether it be positive or negative in '17 changes our point of view. At the end of the day, we still see, as Drew alluded to earlier, our growth driven by industrials with residential sort of being flat, flat to negative. So I think the short answer is no. We don't see that as changing our point of view.

And then on slide 35, on the EWC side, the hedging price has obviously gone up, but I'm assuming that's purely because of the PPA of Palisades, is that right?

That's correct, Praful.

So - and the EBITDA impact that you also mentioned from EWC, which has also gone up from a guidance perspective, that increased looked quite substantial in the 100 million range, is that also just Palisades or are there other impacts there as well that impacted your guidance for EWC?

No. That's primarily driven by Palisades. There are other minor things going on at the other plants, but what you're seeing, the effect that you're seeing is Palisades.

And just finally just clarifying on the decommissioning side, you mentioned that your goal still is to be cash neutral on the EWC side through the wind down through 2022, incorporating some contributions that you expect on decommissioning. Just wanted to understand, have you talked about what you expect to be contributing into decommissioning at this point and what is the whole you expect to be for that?

So we haven't disclosed that yet, Praful, since we're in ongoing commercial discussions with third parties on the potential decommissioning of those facilities. So we haven't disclosed those, but we did change the number that we put out this time slightly before we had - we've just sort of given you a general idea of where we were relative to our goal and this time, we gave you a more specific number, we're about 100 million out. And so we are continuing to work that down and we are making progress and I think we probably do have line of sight to close the gap, we just haven't been able to do that in our financials just yet. And when we do that, that will be cash that should be available to the parent and be able to reduce some of the parent debt or be reinvested in to the utility business.

Thank you. Our next question comes from the line of Stephen Byrd from Morgan Stanley. Your question please.

Congratulations on the progress in Arkansas. I wondered if you could just speak a little bit further. Leo, I know in prepared remarks, you talked about the scope a little bit, but I wasn't completely clear on the exact scope of this recent settlement. Could you just speak to that in terms of new costs particularly?

Sure. It's Rod. Good morning. When you think about the settlement, what we reached a settlement on, with the AG and the other interveners was solely around the NSP costs. If you think about the 130 or so million that it was a subject of our '17 filing with the '18 forward-looking test year, the nuclear cost represented about 53 million of that. And so we resolved with the parties on the settlement of just the NSP or the nuclear related spend and we also got the testimony from the APSC staff. And so that portion of the FRP, at least as it relates to the interveners is resolved with no outstanding issues. What remains is the rest of the non-nuclear spend component of the formula rate plan. By the way, we also resolved with the parties the prior year's settlement that was already in rate. So that's really not anything incremental since we were already recovering that prior spend in rates. And so between now and November 1, our objective is to resolve the remaining non-nuclear aspects of the formula rate plan and those issues are what we would consider to be normal and expected inquiries and debates around timing of spend, certain assets being used in useful, known and measurable for purposes of the cap, but at the end of the day, all of those issues will be resolved between now and November 1 and ultimately be resolved in the true-up mechanism next year, to the extent that it's above that 4% cap. And so, nothing out of the ordinary. This is a significant resolution with the nuclear spend and everything else is what we consider to be the basic blocking and tackling of closing out the FRP.

Well, that's great progress, Rod. And just if I can understand the, so staff was the party for this settlement, their testimony, I view it as constructive, but can you help me understand the intersection between staff and the settlement.

Sure. The staff was not a party to this specific settlement. Staff, of course, representing their point of view to the commission. And so both the settlement that we've reached with the AG and the JRA, I know them as the interveners. So the AG in the hospitals and industrials, that will all be presented to the Arkansas Public Service Commission who is the ultimate arbiter of all of the settlements. And so the staff is one voice and certainly a significant one from our vantage point that gets presented to the commission, essentially identifying any outstanding issues that may remain. From our point of view, resolution with the interveners, with the support of testimony from the staff gives us confidence that we provide a pretty strong case for settlement to the APSC.

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

So just on the 2018, you mentioned that your forecast assumes conservative assumptions, including flat sales. Is that flat overall sales and are you just being conservative or is there a reason that you think they'll be flat overall sales.

Hey, Steve. This is Drew. A couple of things there. One is, we haven't really changed our outlook for 2018 all that much. We had previously seen industrial sales kind of move out. So we weren't anticipating much in terms of industrial sales. So that's kind of flat and we're anticipating overall flat as well. But our residential and commercial hasn't really changed. It's been - '17 has caught up a little bit and so it's tracking, as we said, back where we were anticipating it previously at the beginning of the year. So now that our sales in 2018 for residential and commercial are the same, but starting point has changed from '17. So it's basically flat, residential, commercial, industrial and total.

Thank you. Our next question comes from the line of Michael Lapides from Goldman Sachs. Your question please.

Just on Entergy Louisiana, you're filing for the formula rate plan reset and when would those new rates go no effect, is it still kind of the September timeframe or would it be before that in 2018?

Mike, it's Rod. You're right. It's September '18 and that's just the reason why we're seeking to get the settlement. If we're going to reach a settlement to get that issue resolved by the December, early first quarter of '18, so that the Public Service Commission and their staff has the ability to review, approve and comment on, so that rates could go into effect by September '18. That's the normal rate making path that I think Leo made reference to in his comments.

And then the current FRP filing where you didn't request to change, that's because you aren't within the ROE band. I'm just trying to think about whether you would anticipate needing a sizable rate increase to get to the midpoint or are you kind of already close to it there when you think about your 2017 expectations at Entergy Louisiana?

Well, we certainly have a request for an increase to the midpoint. That number is not public. But we do have a point of view that the interveners are working through on getting to the midpoint. But Michael, it's not public at this point.

Thank you. Our final question comes from the line of Shar Pourezza from Guggenheim Partners. Your question please.

Most of my questions were answered. Just, Drew, one thing I'm not clear on is on the sale of the decommissioning trust funds, what's sort of driving the complexity that's causing sort of the sales to get somewhat pushed out, especially since you've got sort of a benchmark deal already with Vermont Yankee? And then just a follow up is can you confirm if there is any other buyers out there outside of the NorthStar JV.

Yeah. So, Shar, those are good questions. So, a couple of things are driving the timeline. One is it's first of a kind. And so it - any kind of first of a kind transaction is going to take you a little longer. But second, we're working on creating a market here. And so you alluded to any other buyers outside of the NorthStar JV and yeah, the answer is yes. There are a few. But it's taken a while to get everybody up to speed and give them access to materials, give them access to plants to make sure that they have a good sense of what they're trying to accomplish and so forth. And so, as we are going through this first of a kind transaction, we're trying to build a market for us to sell into. So it's taking us a little bit longer than we anticipated. But having said all that, we are finding some robust interest. I mean I'm not saying there is 10 buyers out there, but there's 4 or 5 people that have serious capabilities and serious interests that we are looking at. And so, the market is coming along, but it is taking us a little while to get it all together.

Thank you. This does conclude the question-and-answer session of today's program. I'd like to hand the program back to David Borde for any further remarks.

Thank you, Jonathan and thanks to everyone for participating this morning. Before we close, we remind you to refer to our release and website for safe harbor and Regulation G compliance statements. Our annual report on Form 10-Q is due to the SEC on November 9 and provides more details and disclosures about our financial statements. The 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. This concludes our call. Thank you and we'll see you all at EEI.

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.