Good day, ladies and gentlemen. And welcome to the Entergy’s Corporation Second Quarter Earnings Teleconference. At this time, all participants are in a listen-only mode and later we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions]. As a reminder, this conference is being recorded. I would now like to introduce your host for today’s conference call Mr. David Borde, Vice President, Investor Relations. Sir, you may begin.

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. In today's call, management will make certain forward-looking statements and 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 in the Investor Relations section of our website. And now I will turn the call over to Leo.

Thank you, David and good morning, everyone. We had another productive quarter executing on our strategy to deliver steady predictable growth in earnings at our core utility business, which supports our long-term dividend growth aspiration. 2017 is on pace to be another year with significant accomplishments on multiple fronts that continue to position us to deliver on our outlooks. Specifically, the Louisiana Commission approved the Lake Charles Power Station project. The Texas Commission approved to the Montgomery County Power Station project, Entergy Louisiana filed for approval of the Washington Parish Energy Center. The Mississippi and Louisiana commissions were the first of our jurisdictions to approve deployment of advanced metering infrastructure. The State of Texas passed legislation that clarifies the applicability of existing advanced meter regulation to Entergy Texas and we now have made our formal AMI filing. Entergy Arkansas and Entergy Louisiana filed their annual Formula Rate Plans. The Mississippi Commission approved Entergy Mississippi's 2017 test year FRP. And finally, Entergy Texas filed a settlement to increase its distribution cost recovery line. In many instances these results are the product of the strong collaborative efforts between our teams and our regulators and their staffs for the benefit of our customers. And with these projects decisions and approvals more than 85% of our cumulative capital plan through 2019 is ready for execution from a regulatory approval standpoint. And more importantly, we continue to manage the effects of our investments and rate actions on our customers. In fact, in a recent report from S&P Global Market Intelligence based on data from the Energy Information Administration indicates that in 2016 Entergy provided power to its retail customers at the lowest average retail price in the United States. Today we are reporting that Utility, Parent & Other adjusted earnings per share contributed $1.12 to…

Thank you, Leo. Good morning everyone. I'd like to start the quarterly financial review with a key takeaway on the platform. Starting with our core business on the upper right Utility, Parent & Other adjusted earnings were $1.12 per share, normalizing the effect of weather and income taxes. This result keeps us in the middle of our UP&O guidance range for the year. Turning to top left corner, our consolidated earnings were $3.11 per share on an operational view last to a year ago. Entergy as reported earnings per share were $2.27, including special items related to decisions to sell or close EWC nuclear plants. This quarter special reduced earnings by $0.84 and included $0.48 for refuelling outage and fuel impairments, $0.22 for capital that was immediate expense and $0.14 for severance and retention costs. Similar to last year, our operational earnings for the quarter reflected tax items. You previously noted the potential of our tax item this year that was not included in our guidance. Therefore as we communicated last quarter we are now shifting our 2017 consolidated operational earnings guidance upward by $2.05 per share to reflect the magnitude of the tax item, as you can see in the bottom right corner. Utility, Parent and Other results are summarized on slide 5. Operational earnings were a $1.03 and adjusted earnings were a $1.12. Weather is estimated to have reduced operational earnings by $0.09 in the quarter. On an adjusted view, earnings were strict and lower than second quarter of 2016, as higher expenses for nuclear operations consistent with our plan were partly offset by higher net revenue. Net revenue increased from new base rate and riders to recover productive investment to benefit customers. Billed retail sales increased on a weather adjusted basis with growth across all customer classes.…

[Operator Instructions] Our first question comes from the line of Praful Mehta of Citigroup. Your line is open.

Thank so much. Hi, guys.

Good morning, Praful.

Morning. So a quickly on nuclear O&M, saw the nuclear O&M was higher, the utility side as well. Just wanted to understand is that related with the improvement in nuclear operations and also wanted to understand for instance you often saw what's the process in terms of recovery of that or getting that as part of the regular proceeding on the regulatory side?

This is Drew, Praful. And I’ll take the first part and turn it over Rod for the second part. So yes, it is related to the ongoing improvement efforts that we are making within the nuclear organization and the same dollars that we highlighted last fall at EEI when we talked about the expectations for spending within the nuclear business going forward. So they are the same thing.

Hey. Good morning, Praful. It’s Rod. And on the on the process of - in SP recovery and the Arkansas FRB, the ex-parte rules are in effect that FRP process is undergoing with an expectation that a December decision is part of the procedural schedule. Discovery is under way in both the NSP and other costs associated with Arkansas that drive our point of view on revenue requirements are well supported by the record. And so we expect to get resolution on your question within SP by year end and alongside the rest of Arkansas is operating costs.

Got you. Thanks. And then secondly on the tax part, there was a meaningful I guess benefit tax deductions on decommissioning liabilities Drew that you talked about. Could you just give a little be more color of what that is and how –again, I guess what's the way that you get that benefit?

Well, Praful, essentially it's an acceleration of the decommissioning liability to become a deduction today. And the way it happens, it's very similar to the same transaction that we had last year, only a little larger because of the decommissioning liabilities are larger this year. There's a lot that goes on in that transaction in addition to the deduction. There are offsetting gains, there are basis step ups, there are reserves. But it doesn't all that back to zero and that's where the earnings comes in. So you know, we have certainly worked with the IRS. We've worked through external counsel to make sure that we have the interpretation of the code correct. But – and we're comfortable where we are. I think those are those are sort of the main drivers, it's that decommissioning liability recognition that is the main driver of the deduction today.

Understood. Thanks, guys.

Thank you.

Thank you. Our next question comes from the line of Chris Turnure of JPMorgan. Your line is open.

Good morning. Just to follow up on the last question on the Arkansas FRP, you said that by year end you would expect a final decision there. Have you had any conversations with interveners or other parties to give you an indication as to whether the nuclear cost issue would be settled or agreed upon in this exact schedule or if that would get deferred again? I mean, kind of what are you thinking there?

I think one of the reasons I think I stated ex-parte rules are in effect is that we're not allowed to engage at least on the commission staff side of the equation. And so it's early and I would expect us looking at the procedural schedule that we get some indication sometime in the October timeframe, as we begin to get our responses to the positions we've taken from some of the stakeholders. But everything right now is happening on paper with RFIs consistent with the procedural schedule. RFIs is being requests for information amongst the parties.

Okay. And then transitioning to either do you see, you mentioned I think the multiyear cash flow outlook was slightly positive now versus roughly neutral before, excluding any kind of decommissioning activity or funding needs. What has really driven that change and kind of has anything changed on the expense O&M expect front there specifically?

A little bit, but that hasn't been the primary driver. We've also been able to reduce our capital expectations and reduce some of our fuel cost expectations. Those have been probably much bigger drivers than the O&M side and those - but those are being offset little bit by the fall in market prices. So we didn't make as much progress as we hoped, but still enough to say that we are a bit ahead of neutral at this point.

Okay, great. That's all I have. Thanks.

Thank you.

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

Hey, guys. Thanks for taking my question. I want to ask about a couple of the regulated periods. First of all in Arkansas, Do I understand correctly you're asking for almost - you're showing that your revenue requirement request is almost $130 million, but due to the caps you can't actually get that much in the way of new revenue increases?

Yes, that's correct Michael. You know, that you have it exactly right.

So we should assume that at least for 2018 there's probably a little bit of under earning in Arkansas just due to the ballpark $16 million spread between the two unless you’re somehow able to manage O&M down or you get above average demand growth?

Michael, throughout, I think directionally you're right. We expect to get substantially close to the allowed ROEs by ‘19 and beyond, as we work through both the 4% cap and the true up mechanisms that will take us through that ‘17 and ‘18 timeframe. But keep in mind that we affirmed our outlooks and in doing so we contemplated the allowed ROEs and earnings for Arkansas during that period. So it's consistent.

Got it. And then in both Louisiana and Mississippi on the electric side in the $4 million process, you're not asking for revenue increases. Do either of those subsidiaries see the impact of some of the higher nuclear costs? And if so, why wouldn’t those costs kind of flow through and therefore you need recovery at those expenses?

In Louisiana we're filing to renew the FRP process that expires in - with the ‘16 thresh year and we are not seeking specific of the nuclear costs outside of the normal rate making process. And so it is with Mississippi, where Mississippi despite the fact that we have grand golf sitting in the state of Mississippi, grand golf is a FERC regulated facility that's not part of Mississippi's rate based recovery mechanism. So Mississippi recovers their grand gold associated costs through recovery rider.

Got it. And I guess last thing, you mentioned the grand golf and kind of the FERC oversight of grand golf, just curious what's embedded in that in guidance for the ongoing rate case or rate complaint that's under way there?

That's true. You know, we have contemplated something different than our expectations or I guess the current ROE that we haven't - we haven't published what that is because we have ongoing proceeding. But it is based into your outlook.

Are you actually currently baking in your earnings numbers and seen this in some of the transmission cases where companies went ahead and started booking for earnings purposes a low ROE. Are you actually still booking the original ROE for Syria or are you booking something lower than that due to the complaint?

We're booking something lower. Michael, we're not booking the full amount at this point.

Got it. Okay, guys. Thank you, much appreciate it.

Thank you.

Thank you. Our next question comes from the line of Shahriar Pourreza of Guggenheim Partners. Your line is open.

Good morning, guys.

Morning, Shahriar.

Good morning.

So let me just ask on the decommissioning activities and the sale process, it's been going on for some time. Can you just maybe elaborate on sort of the interest level there? And then what the process looks like. Are you still looking at Pilgrim Palisades to potentially the end point? And then - or is this just as simple as saying Northstar has made an announcement and that you expected to make something by year end? Just a little bit of color on that process if you could?

Sure, Shahriar. You know, we'll continuing to work down the path on that front, that is still a key objective for us. But as we talked about on the call last quarter, it's a pretty involved process and as we've gone along in Vermont, Vermont has been very engaged on the discovery process. It's been more than probably we were all anticipating in terms of the volume of information, but we continue to believe that we are making good progress on that. But because of the engagement level and the process is likely going to be a little bit slower than what we had anticipated. I don't think it will change our expectations on closed rate because we weren’t playing close until the end of 2018 anyway, but it's slowing down the regulatory process. And in turn that slowing down our expectations for where we might go with Pilgrim in Palisades and ultimately the end point. So we are thinking about that we're working down those paths. But these are first of the kind transactions and they're probably taking us a little longer than anticipated, but there's still an objective for us.

Okay. That's helpful. And then just on the same topic. It's good to see that you're modestly you know, cash positive here, despite the down moving on the power curves. But, do you expect that if there is a sale process with the remaining three assets from the decommissioning activities that would have a material impact to the cash flow trajectory of that of that business?

We are assuming some cash in our current outlooks to be used for that purpose. And so I don't know that it should have a material change in our outlook. But that that process remains missing. And what we have out there is based on our expectations for the decommissioning costs, not necessarily a third party. So there could be a little bit difference and we are aiming through these processes to try and bring our expectations down a little bit so. So we do have something built into our outlooks already, particularly it's going to be reflected mostly in that parent debt to total debt number. But I don't know that we have an expectation this point to be materially different than that.

Okay, great. Thanks, guys.

Thank you.

Thank you. Our next question is from the line of Neel Mitra of Tudor Pickering. Your line is open.

Hi, good morning.

Morning, Neel.

Just had a quick question on scheduling with the Arkansas FRP. I believe the procedural schedule had a final decision in sometime in January and I guess you guys are assuming that you're going to get something in December. Just wanted to understand the discrepancy in and you know, when you think that could ultimately play out and actually matters if it's in January versus December?

This is Rod. We had the procedural schedule with a hearing and the decision in December that with a rate adjustment would take place in January.

Okay. So the final decision will come in December and then the…

The actual rate impact or adjustment would be made at the beginning of the year.

Okay, great. And then could you kind of remind me you know, on a rough percentage level the Nuclear Sustainability plan you know, in each jurisdiction how involved it is, Arkansas, Louisiana, Mississippi et cetera?

This is Drew. I think that the easiest way to think about it and I don't know we have any updated disclosures around it, but you know, there's two points - it's almost my eyesight. You know, we have two units in Arkansas. We have two units in Louisiana and then you have Grand Gulf which is in Syria and it's sort of allocated amongst the few of utilities. So I think that's probably the easiest way to think about it.

You know, are there some sites that are going to require more capital spending in O&M than others or for our purposes should be kind of just weighted equally?

I think awaited more or less equally. There aren't any, you know, we have sort of like visual controls and condenser type projects and most of them. And so there there's not - there's not a project a plan in particular it has a very large capital expectation. And the O&M is pretty much the same, increase is pretty much the same across each unit.

Got it. That's very helpful. Thank you.

Thank you.

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

Yes. Good morning, guys.

Good morning.

I'm just curious, I mean, one of your fellow utilities as it goes, I think over the last of the several states just announced a major rate base wind project. I'm curious whether you think that's something that might be an opportunity for Entergy, also something along those lines?

You know, Jonathan we are obviously like everyone else we're watching what's happening with the price points, or renewable storage. New technologies, we've deployed renewables from the solar standpoint, which is more applicable in our service territory. If it's going to be source in our service territory, not without a lot of transmission of a structure to come in. And as I mentioned, as part of our New Orleans filing we have also made a commitment per hundred megawatts renewables there. We see them playing a bigger role in our strategy going forward. The majority of what we add in the future will be natural gas and then transitioning into renewables and then other technologies as they become cost competitive. Big wind farms like that for us. We haven't found that make a lot of sense. I wouldn't rule it out. But right now our focus is probably on smaller more targeted projects within the footprint of our service territory and so.

Okay. And then separate topic, I think Leo you mentioned might so in the planning process in your prepared remarks and I'm not sure, did you indicated you thought there might be some incremental opportunities coming out of that or is that - we should we think about those being within the context of the current plan?

It's most likely in the context of the current plan.

Okay. All right. That’s it. Thank you very much.

Thank you, Jonathan.

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

Yeah. Hi, good morning. Just a quick question on the quarter, I think were a lot of nuclear outages in the quarter and should we view that as primarily being doing the work on the Nuclear Sustainability plan or operational issues?

I'll let Chris give some color. But I will say it's probably a little bit of both. You know, the biggest outage I think we had at EWC was related to the [indiscernible]. But then there was a lot of work that went on with the nuclear strategic plan in the utility.

Especially if I'd characterize it the same way this is of course, the seven outage that were planned normal refuelling outages and then those outages we do take some extra time to improve the safety and the reliability of plants. So it's a combination of the two.

Okay. And then Drew, at the end of your comments you mentioned that - and please re-characterize, as I think you said you kind of better firmed up with these plant approvals for 2019 and beyond outlook for the Utility and Other . And then – but then there some pressures I thought on ‘18 from sales and pension. Could you could you just give a little more color there and what also you know, what should we expect at EI this year, you're going to get some of like drivers like you normally do?

Sure. We’ll probably come out with the same type of drivers that we typically do see. ‘19 and beyond that was I think analogous to what Leo was talking about with continued execution on the major capital projects that are going to lead us into the future in terms of rate base growth. And so you know our earnings growth should follow that rate base growth over time. But at any given period, what I wanted to say was you know, we always have risks around both positive and negative for sales growth and pension you know. The pension growth risk hi highlighted at 4.5%, we might be 25 basis points below that right now. So $0.05 to $0.10 of risk for ’18 sitting there. And then you know kind of using rules of thumb you know, probably the same kind of risk on or opportunity on sales right now. So I just want to make sure that everybody's aware that those risks on a near term basis are always out there. But over you know, a couple of cycles in the regulatory process, so should smooth out and the main driver is long - term going to be the capital growth in our rate base.

Okay. Thank you.

Thank you.

Thank you. Our next question comes from the line of Greg Gordon of Evercore ISI. Your line is open.

Thanks. Most of my questions have been answered. But pardon me if I missed this, but I know that you continue to say as you did in the first quarter that you're doing better on O&M relative to the baseline expectation and guidance. Can you refresh our memories specifically what areas you are doing better than budget?

This is Drew. Greg, so the main areas where we have been doing better are in the utility related – I am talking about year-to-date, there a little bit difference on second half of the year because some of it's project driven. But the main things is year-to-date have been expectations around primarily our power generation business, it was primarily our fossil generation. We have been able to operate at lower costs year-to-date there and capture some of that. And we've also seen some lower insurance costs. We were anticipating lower insurance costs this year, but some of the premiums are coming even better than what we are anticipating. So that's been helping out. And those are things that we would continue to expect to see through the balance of the year. Some of the other pieces are timing related cost if we thought we were going to spend you know, like the second quarter, but they're now in the third quarter of that kind of thing. And those we are anticipating in the second half of the year, as part of what I've laid out. But the main things have been in our power generation business, not including nuclear and in some of our you know, traditional sort of overhead costs.

Great. Thank you.

Thank you.

Thanks, Greg.

Thank you. And our last question comes from the line of Charles Fishman of Morningstar. Your line is open.

Thank you. Leo, I believe you said the industrial sales are ahead of plan year-to-date. Can you give a little more color as far as on long-term, I mean are you still pretty bullish on industrial sales and what growth rate are you - can you look at. I know you talked a lot about that in the past?

Yeah. Actually Drew said it, so I'll let him start…

It works for me.

So when it works for me too because Drew's a smarter guy than I am, so I appreciate the comment.

So Charles the industrial growth expectation is that will continue on for the next few years. Although in ’18 we are anticipating a slight slow don to the industrial growth and that's because one of the – or actually a couple of the main drivers for ‘18 growth, those projects have been delayed and are now expected to come online in ‘19. And they were pretty large customers. So while we still are expecting large growth over the next few years comparable to what we are expecting this year on average it's going to be a little off center, a little less than ’18, probably a little bit more than ’19.

So going forward lumpy, but you're still seeing in that same growth trajectory in the Mississippi Delta, correct?

That’s correct, for the next couple of years, next few years.

Okay…

You know, once you get out beyond like ’20, ‘21 it's a little lumpier. But you know we - because we're talking about these large industrial customers you can usually see them coming a couple years out. So we're basing our industrial growth based on those large customers being added to the system. And beyond that it's hard to see because they're not yet you know, reaching their financial decision points in order to me make decisions to go forward.

Okay. That was all I have. Thank you.

Thanks, Charles.

Thank you. And at this time, I'd like to turn the conference back over to Mr. David Borde for any closing remarks.

Thank you, Amanda and thank 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 August 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. And then finally please note that we've added a new page to Entergy Investor Relations website called regulatory and other information, which contains information that we think will be helpful to investors. We plan to provide key updates to regulatory proceedings and important milestones on the execution of our strategy and the company plans to use its corporate Twitter feed to notify investors of updates to this web page. While some of this information may be considered material, investors should not rely exclusively on this new website for all relevant company information. The website will not provide updates of every filing made in every regulatory proceeding or updates of all progress made on a strategic execution. This concludes our call. Thank you.

Ladies and gentlemen, thank you for your participant in today's conference. This does conclude the program. You may now disconnect. Everybody have a great day.