Andrew Marsh - CFO and EVP David Borde - VP of IR William Mohl - President, Entergy Wholesale Commodity Leo Denault - Chairman & CEO Theodore Bunting - Group President of Utility Operations

Michael Lapides - Goldman Sachs Group Inc. Jonathan Arnold - Deutsche Bank AG, Research Division Julien Dumoulin-Smith - UBS Investment Bank Shahriar Pourreza - Guggenheim Securities, LLC Steven Fleishman - Wolfe Research LLC Stephen Byrd - Morgan Stanley Research Division Praful Mehta - Citigroup Inc. Paul Patterson - Glenrock Associates

Good day, ladies and gentlemen. Welcome to the Entergy Corporation's Second Quarter 2016 Earnings Release and Teleconference. [Operator Instructions] As a reminder, this conference is being recorded. I’d now like to turn the conference over to David Borde, Vice President, Investor Relations. Sir, you may begin.

Thank you. 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 within the meaning of the Private Securities Litigation Reform Act of 1995. 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 the company's SEC filings. 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. By any measure, this was a solid quarter. Strong growth in our core business, absent any impact of taxes or weather was coupled with significant accomplishment. We spent the first half of 2016 working to execute on our strategy and the results we are reporting today are a reflection of that work. We've made progress towards meeting our objective of steady predictable growth at the Utility, while reducing our EWC footprint. We delivered solid results through the first half of the year. Our Utility, Parent & Other adjusted earnings increased 35% this quarter versus last year and are in line with our growth expectations for our core business. Most importantly, we continue to set up the business to achieve our longer term targets. Our extensive 2016 to-do list on slide three is a road map of the execution of our strategy, and it's a good way to illustrate some of what we've accomplished. At the Utility, we received a favorable ALJ recommendation for the St. Charles Power Station. The result of the Entergy Louisiana request for proposal was announced with the self-build alternative and one long-term power purchase agreement selected. The self-build alternative was also selected in the Entergy Texas request for proposal. Entergy New Orleans filed for approval for a new gas-fired combustion turbine. Entergy Mississippi received a revenue increased under its first formula rate plan filing with forward-looking features. Entergy Louisiana made its 2015 test year formula rate plan filing. Entergy Arkansas made its first forward test year formula rate plan filing. Entergy Texas received approval on its transmission cost recovery Factor Rider. We received a confirmatory action letter from the NRC for ANO, and the letter is consistent with our expectation and we saw over 7% industrial growth versus last year. At EWC, we entered into negotiations for the sale of our FitzPatrick Nuclear Plant. Finally, we’ve met with many of you on our Analyst Day in June, where we highlighted our progress towards effectively shifting our investment profile to a pure-play utility. We're achieving this shift by continuing to invest in the Utility for the benefit of our customers, while maintaining reasonable rates. One of these investments is the St. Charles Power Station project, which received a favorable recommendation from the Administrative Law Judge in July. We expect the certification decision from the LPSC in August. We're encouraged with the ALJ's recommendation that the project serves the public convenience and necessity; it is in the public interest. The ALJ further recommends that Entergy Louisiana's decision to commence construction is prudent, and the selection of the project is consistent with the terms of the LPSC's market-based mechanisms order. We also continue to make progress for our plants for CCGT in Texas. In April, the RFP process resulted in the selection of the self-build alternative, and in the third quarter, we will begin the necessary filings for regulatory approval. We are on a similar path in Louisiana with the RFP process also resulted in the selection of the self-build alternative, and we expect to make the necessary regulatory filings in the third quarter. That same RFP result in the selection of a long-term power purchase agreement for an existing CCGT resource, and we also plan to seek approval of the PPA from the LPSC. Entergy New Orleans has filed an application with the New Orleans City Council seeking approval to build New Orleans’ PowerStation, the natural gas-fired combustion turbine plant at the existing Michoud site. This request follows the early June deactivations of our 1960's era of Michoud units 2 and 3. These units are a prime example of the aging infrastructure in our service territory. The decision to deactivate these units was based on economics, maintenance and operational considerations. A new plant will provide a long-term local resource that can meet the city's particular resource needs at the lowest reasonable cost to customers. We've requested strategic council approval by January 31, 2017. If approved as requested, the new plant is expected to be placed in service in the second half of 2019. These investments will provide more cost-effective, reliable and efficient generating resources for our customers. By building these plants, we will reduce the average age of our fleet and improve the heat rate in key areas of our system. For example, by 2025, in the low-tab region, we will have reduced the age of our fleet by approximately 19 years. Also when we meet south region, we will have reduced the age of our fleet by 18 years. And with new units operating at heat rates of less than 7,000, the efficiency of our fossil generation portfolio will be improved by roughly 800 BTUs years per TWH fleet-wide by 2025. Additionally, the new CCGT units will on average produce 41% fewer carbon dioxide emissions than our Legacy gas units. In addition to addressing our aging infrastructure, we also need to control fuel volatility in our customer's builds. Our nuclear assets are critical to this objective, as they provide valuable fuel diversity to our Utility fleet. The low volatility of nuclear fuel price effectively access a hedge against the high volatility of natural gas prices. Beyond fuel diversity, our nuclear assets also provide other significant benefits, as large scale virtually emissions-free resources, these assets minimize our environmental footprint around high-capacity factors and provide stable base load generation. Nuclear generation also offers a host of economic benefits and contributes to the financial health of the communities, in which these assets sit, including thousands of good-paying jobs, tax benefits to local state and federal governments and billions of dollars in economic output. Investing in the long-term sustainability of our existing nuclear assets to preserve these benefits for our four stakeholders is an important part of our utility strategy. We've drafted the framework for our nuclear sustainability plan that will preserve these benefits and that framework is now under external peer review. We're working on firming up the cost estimates and steps for implementation. We are currently on track with our commitment to provide you with more specifics at EEI this November. We also have a path forward at Arkansas Nuclear One. The NRC issued its confirmatory action letter shortly after our Analyst Day and adopted our proposed comprehensive recovery plan. The letter confirmed that the plan we developed will lead us to sustained performance improvement. We will work diligently to complete the agreed upon actions listed in the letter to the satisfaction of the NRC. We believe we will be able to demonstrate to the NRC our ability to exit Column IV as early as late 2017. However, our goal is not to simply exit Column IV, but to return to sustained operational excellence and to be considered one of the industry's strongest performers. We're rounding other generation portfolio with renewable and energy initiatives I talked about last quarter. Entergy New Orleans, solar generation project with battery storage technology was placed in-service in June. Entergy Arkansas's power purchase agreement will support construction. We have an 81-megawatt solar energy generating facility, which is expected to be completed in 2018. Entergy Mississippi's three new solar installations are online and capable of generating 500 KWH. And we have three renewable requests for proposals outstanding at Entergy Arkansas, Entergy Louisiana and Entergy New Orleans. In the Arkansas and New Orleans RFPs, bidders will have an opportunity to provide acquisition proposals, and New Orleans proposal also includes a self-build option. Proposals are due in August for the Arkansas and Louisiana RFPs and in October, for New Orleans’ RFP. Final selections will be made in December of 2016, February of 2017 and April of 2017 for Louisiana, Arkansas and New Orleans respectively. In addition to our generation supply plan, we’re also executing on our transmission investment plan. In Arkansas, we placed in-service a new 23 mile, 230 kV line and completed a new 500 kV substation to serve Big River Steel. These two projects represent over $100 million of investment. In Mississippi, we completed a new distribution substation and kicked off two new projects for another new substation and 115 kV line additions and upgrades. These new projects are expected to be in-service in 2017, in total, nearly $75 million of investment. And in Texas, we placed three major projects in-service between May and July, which totaled roughly $140 million in investment. These are just a few examples of major transmission projects that facilitate improved system reliability, compliance with NERC standards, enhanced economic development, all we do is transmission congestion. And all of these factors can ultimately contribute to a lower cost of service for our customers. At Analyst Day, we focused on investing in new technology to migrate towards a flexible, reliable and innovative integrated energy network. We're beginning the first phases of this process with advanced meters that changed the way we manage our distribution system, reducing operating costs and providing savings for customers. Since Analyst Day, we finalized our vendor and technology partners and have initiated the design phase of our project. Regulatory filings are expected to begin in September with the first filing to be made before the Louisiana Public Service Commission. Filings in other jurisdictions will follow. Advanced metering is a foundational technology that supports other technologies to reduce costs and provide customers greater control and options over their energy usage. We've initiated a great engineering study to assess the best path forward, incorporating these technologies and then integrate it to energy network for each of the operating companies. We will provide more information in due course. These investments in technology and infrastructure deliver the same benefits as our more traditional investment in generation and transmission, namely a more efficient electric system with enhanced electric reliability and reduced environmental footprint and reduced cost to serve our customers. Over the past couple of years, we've improved our regulatory constructs to give us the ability to make investments that support economic development, create jobs, improve reliability in our systems and reduce our environmental impact. With many of those constricts now in place, we've moved into a rhythm of filing annual formula rate plans. Entergy Mississippi received an order approving a revenue increase for its first FRP filing with forward-looking features and rate adjustments were implemented at the end of June. Entergy Louisiana made its 2015 test year FRP filing at the end of May. And last month, Entergy Arkansas made its first FRP filing with a forward test year. And at Entergy Texas, we've been working on the implementation of the transmission cost recovery factor. We received approval on this rider in late June and recovery of transmission spend through this rider will relate back to April 14th. I'll take a moment now to talk briefly about EWC, starting with an update on Pilgrim, which is currently preparing for its NRC inspection. Many of the same team members who put together the comprehensive recovery plan for ANO are working on the plan for Pilgrim. We expect to be ready for the NRC to conduct its inspection this fall with the confirmatory action letter potentially to be issued in the spring. And finally, in mid-July, we announced that we are in discussion with Exelon on the sale of our FitzPatrick Nuclear Plant. The opportunity to change the future FitzPatrick has a significant positive impact on our employees and the surrounding communities, and we're willing to consider any viable option to keeping the plant to open. In that spirit, we applaud The New York PSC's decision to adopt the Clean Energy Standard Program. It is a critical component of a potential transaction. We are reviewing the order to confirm it addresses the issues we'd hoped, but at this point, we are very encouraged. As negotiations for a sale continue, we continue to proceed along two parallel paths, preparing for the plant’s permanent shutdown and decommissioning under the current plan while also preparing for a possible refueling in continued operation in the event of the sale. We are hopeful that negotiations can be completed this month. Regardless of the outcome, our focus continues to be on the safe and reliable operation of the plant for as long as it continues to operate. We will also do our best to support our employees in the community throughout this transition, whether that leads to a sale to a new owner or the safe shutdown and decommissioning of the plant. I'd like to thank our hundreds of employees at FitzPatrick, who continue to do their best work every day to run the plant safely and reliably amid the uncertainty of the plant’s future and the additional burden of preparing for two possible paths forward. They continued to show a first rate level of professionalism, dedication and hard work throughout this time of transition. What I've said so far you can see that we've accomplished a lot to achieve our objectives, and our employees continue to do so by meeting our obligations to the communities we serve. These communities are home to both our customers and our employees, along with our owners represent our four key stakeholders. When we buy serving all four of our stakeholders are we truly successful. In just the last few weeks, we've received recognition from three different organizations for a civic-minded approach to doing business. First, I'm proud to say that Entergy Corporation was recently named to the Civic 50, an initiative of points of light, honoring the 50 most community-minded companies in the nation. Being named to the Civic 50 acknowledges the number of ways our employees power life for all of our stakeholders. Our team members not only provide reliable and affordable electric power and gas to customers, but also actively support strategic initiatives that support improved educational and employment opportunities, boost economic development and protect the environment. It’s also been awarded the Pro Patria Award from the Employer Support of the Garden Reserve Louisiana Committee for promoting supportive work environments for members of the National Guard and Reserve. And finally, our legal department was recently named the Recipient of 2016 Pro Bono Partner Award from the Pro Bono Institute. This national award recognizes innovative team approaches to pro bono work involving in-house legal departments. In a partnership with the Louisiana Civil Justice Center and the Orleans Parish Civil District Court, our lawyers helped to establish and staffed the self-help Resource Center. We are pleased that with the assistance of our law department, the Self-Help Resource Center has to date been able to serve more than 10,000 vulnerable citizens who otherwise would not have access to legal assistance. Each of these awards shows that we view our company as part of a broader community. In its recent study conducted by Market Strategies International, Entergy was designated a Most Trusted Brand in 2016, ranking first among electric utilities. Our employees work hard every day to earn the trust of our customers in our border communities. I'd also like to acknowledge the nearly 3,200 workers who helped with our recent storm restoration efforts. Severe storms, lighting and high winds left 170,000 customers in Arkansas, Louisiana and Mississippi without power, roughly 800 of our own Entergy employees partnered with 2,500 linemen, vegetation workers and support personnel of 15 states. Power was restored to more than 90% of the affected customers in less than three days. Times like these are when our people truly shine. These and other actions we take every day are the way that we power life. In summary, this was a very solid quarter. Our financial results with our adjusted utility parent and other earning increasing 35% versus last year and our accomplishments toward implementing our investment plan to benefit customers and our continued strategic actions at EWC provide a clear path toward our objectives. Our results for the first half of 2016 have demonstrated our ability to continue to execute on our strategy. And so with our objectives for strategy firmly in place, we continue down this path to pursue steady predictable growth of the Utility, while reducing the EWC footprint. For the second half of 2016, we look forward to continuing to deliver solid results for each of our four stakeholders. With that, I'll turn the call over to Drew.

Thank you, Leo. Good morning, everyone. I'll start with the key takeaways on slide four. Quickly pointing to the top right corner for our core business, Utility, Parent & Other adjusted earnings for the quarter came in strong, 35% above last year and in line with what we expected. As you may recall, our adjusted view removes special items, weather and tax effects. Our full-year view of Utility, Parent & Other adjusted earnings remains on target with our original guidance. Looking at the bottom left corner, EWC operational results were essentially flat after normalizing income taxes. Turning to details beginning on slide five, the blue bars show our consolidated operational earnings, which were $3.11 per share in the current period. This compares to $0.83 a year ago. This quarter's results were higher than last year due to a few factors, most significant of which was income taxes, which increased earnings about $2 per share net of customers sharing. While these tax items are beneficial and we previously discussed their potential, they were not included in our original guidance due to their uncertainty. In the current period, as reported results included special items related to EWC nuclear plants that we've identified to close, these special items include a portion of the proceeds we received during the quarter for DOE litigation as we talked about at Analyst Day in June, as well as severance and retention costs and capital spending, which were expensed because the plants are impaired. Operational earnings per share for Utility, Parent & Other increased $0.92 quarter-over-quarter, shown on slide six. Looking at the orange bars, on an adjusted view, excluding the effects of weather and income tax items, Utility, Parent & Other results increased $0.31. This growth reflects rate actions to recover productive investment that benefit customers and improves returns. Specific drivers include the Union Power Station acquisition and Entergy Arkansas rate case. Also contributing to the earnings increase was a non-fuel O&M expense, which declined on lower fossil spending and decreased compensation and benefits expense. Utility, Parent & Other's increased and as reported income included $0.68 for income taxes, net of approximately $0.06 for additional customer sharing reflected in that revenue. During the quarter, we’ve resolved tax matters within the 2010, 2011 audit. As a result, we recognize tax items totaling approximately $135 million. Though these tax items come up after other businesses purposes, they are important to us because they provide real benefits. For example, tax sharing has reduced customer bills more than $300 million over the past 14 years. Turning to EWC's second quarter results, summarized on slide seven, operational earnings were $1.34 in the current quarter compared to a slight loss a year ago. A $238 million reduction in income tax expense from the tax collection accounted for virtually all of EWC's earnings this quarter. Excluding this item, EWC's earnings would have been $0.01, slightly higher than last year. Effects from 2015 impairments and lower non-fuel O&M expense were largely offset by lower prices and volume for EWC's nuclear fleet. Slide eight shows operating cash flow this quarter of $719 million, slightly lower than the same quarter in 2015. Our 2016 earnings guidance is summarized on slide nine. As you can see, we are affirming our original guidance for Utility, Parent & Other and adjusted EPS of $4.20 to $4.50, with expectations still around the middle of the guidance range. As we mentioned at Analyst Day, we’ve improved incremental nuclear spending for this year, we expect to mitigate those costs with a number of items across the business. This is reflected in our affirmation of 2016 guidance today. We are also updating our consolidated Entergy operational guidance range of $6.60 to $7.40 for the $7 per share midpoint. This update is due largely to the income tax items recorded in the second quarter. Absent those tax items and consistent with our previous discussions, we’d expect to be around the bottom of the original guidance range due primarily to the unfavorable weather, the extended outage of Indian Point 2, and lower market prices. To be clear, we do not expect additional significant income taxes for the remainder of this year. I'll also note that while industrial sales growth has been strong at 6.7% for the first half of the year, we expect that to taper off in the second half of 2016, particularly from our biggest segment, Refiners, as they ran very well in the third and fourth quarters of last year, and they're expected to have a number of maintenance outages this fall. In addition, you may recall that high product inventory levels and a strong dollar contributed to a temporary negative industrial growth in the second quarter of last year. Similar macro factors and supply/demand rebalancing in oil markets may present challenges for US refiners in the fall. As a reminder, fixed demand charges represent about 50% of our industrial revenue and to an extent we see volatility in sales from existing large industrial customers, the revenue impact should be small. Beyond the fall, we continue to see new and expanding customer growth for the next few years. Moving to the longer term view, Slide 10 shows our adjusted Utility, Parent & Other outlook for 2017 through 2019, which is unchanged. I'll reiterate that our current outlook reflects pension discount rate assumptions from earlier in the year, which were 4.75% at 2017, 5% in '18 and 5.25% in '19. As a point of reference, our recent forward test year FRP filing for Entergy Arkansas assumed a 4.25% pension discount rate in 2017. If you looked at the market today, that rate would be closer to 4% or perhaps even lower. Also, 2017, 2018 and 2019 do not currently include the effects of the Nuclear Sustainability Plan or expected mitigations in rate treatment. As Leo said, investing in the long-term sustainability of our existing nuclear assets to preserve the benefit of nuclear for our stakeholders is an important part of the Utility strategy. We are working to identify the cost mitigations, but to the extent we are not completely successful, by the time we get to 2019, we will have gone through a rate proceeding in each of the affected jurisdictions, and we believe that these prudently incurred costs and expected mitigations should be reflected in rates. As such, our long-term earnings plan, 2019 and beyond, should not be significantly affected by the Nuclear Sustainability Plan. As we committed at Analyst Day, we will provide a full update, including all of these items at EEI later this year. Slide 11 provides EWC's EBITDA outlook assuming market prices as of the end of the quarter. Our current estimates reflect market prices as of June 30. And as you know, prices have come down a bit since then. Before I close, I'd like to highlight two items. Last week, Moody's Investor Services changed Entergy Mississippi's rating outlook to positive from stable. Moody's specifically noted EMI successful implementation of its formula rate plan with forward-looking features. Moody's views the FRP as a significant credit positive since it provide a dependable and clear framework for timely operating cost recovery. Also during the quarter, we completed several re-financings, issuing $840 million of operating company debt and average coupon of 3.1%. The majority of the issuances were economic re-financings, which replaced about $660 million to debt with an average rate of 6.1%, creating annual interest savings of about $20 million pretax. These interest savings will help offset the effect of the potentially lower-than-planned pension discount rate. As Leo mentioned, results through the first half of the year have been solid and in line with our growth expectations for our core Utility, Parent & Other business. That said, we know we still have work to do to achieve our longer-term aspirations, and we will continue to work toward that end. And now, the Entergy team is available to answer questions.

[Operator Instructions] Our first question comes from Shahriar Pourreza of Guggenheim Securities.

Hey, good morning, guys.

Good morning, Shah.

So, this may be a little bit semantics, but I thought at the Analyst Day you highlighted that expectation for '16 should sort of be at the midpoint to top end of expectations when you're accounting for tax benefits, especially when you think about today's results and relatively warm July, and you still expect to come in sort of at the midpoint. So is there something that's coming in weaker-than-expected since the Analyst Day?

This is Drew, Shah. I think at Analyst Day, we tried to guide towards the bottom end of our original guidance range absent the taxes, and I think if you add the tax back, you'll find that - as I guess if you take it out the new guidance range, you'll find we're kind of backed down at the bottom of our original guidance range is where we've been talking about for a little bit of time now. With the taxes, I think at Analyst Day, we tried to say that there were a number of things in the hopper that could take us to the top of the range or potentially even over the range, which is, I think the way we described it. But I think that's outside of those things, I think we're still about in the same area that we were describing at Analyst Day.

Okay. Got it. Super helpful. And then just lastly on the sustainability plan, it's great that you have a schedule - you sort of have a framework there and you're on schedule to provide kind of numbers at EEI, but since there's a framework there, is there anything that you can just provide directionally or sort of are the expectations still within the hundreds of millions of cost that you discussed at the Analyst Day briefly?

Yeah, Shah, this is Leo. We're not really going to give more detail about that. As I mentioned, we've got a framework. We really got the outline of the plan really well in hand. Chris and his team have been working it, it passed their peer review check as he’d mentioned in his outline at our Analyst Day, and we're on track to be able to provide you the numbers as well as what we think the impact is going to be based on our mitigations strategies and regulatory recovery, et cetera.

Got it. Thanks. Congrats on the solid results.

Thank you.

Thank you. Our next question is from Michael Lapides with Goldman Sachs.

Hey, guys. Want to dive a little further into the Nuclear Sustainability program, and the only reason why I ask is when we talk to other companies, a lot of other companies - and in fact, the Nuclear Energy Institute at its annual briefing, spent a lot of time on this as well talking about being able to take cost out of the Nuclear business, meaning to keep the reliability levels elevated in the 90%, 91% range, but to be able to reduce cost, and that seems to be an industry-wide effort. It seems your disclosure over the last six to nine months is actually in the opposite direction in terms of the cost structure. And can you just talk a little bit about what makes Entergy different than the rest of effectively the US nuclear industry in that regard? Do you view this as a temporary issue? Do you view this as a multi-year, three to five, five to seven year issue? And what got you to this point relative to where it seems like the industry trade group is talking about?

Yeah, Michael, I'll just briefly - again, I'm not going to get into sustainability plan until the way to give you the details of it, and that will be later in the year in the EEI, and we are participating with the industry in all of those analyses of the nuclear promise, et cetera. And so, all of that will be part of our thinking when we look at the plan, but the - with situation we have with a couple of units in Column 4, our operations haven't been up to our expectations, and so we're working to make sure that we put in place a plan that sustains the ability for us, as I mentioned in my prepared remarks, to once again be considered one of the top performers in the industry. And that's really where we are trying to get to is move from where we are to top performer, but we are also obviously participating with all the industry-wide efforts, nuclear promise as you mentioned, and other things as well.

Got it. Do you feel this is as more capital intensive or is this more kind of operating cost intensive?

Michael, as we said at Analyst Day, it will be somewhat above, but again, I'm going to defer giving any details until we get to November.

Got it. Okay. Last thing, can you just - I want to make sure, Drew, I understood your comments when kind of going through some of the puts and takes on multi-year guidance. Pension, a headwind, I think that's a headwind for everybody in the industry that didn't have a pension tracker, the nuclear sustainability program a headwind, the tailwind is offsetting these are obviously your above average expected demand growth levels and the move to more formula rate plans and kind of more formulaic revenue increase programs. Anything I'm leaving out in those three or four items kind of puts and takes?

Yeah, I think we are aggressively looking for ways to offset some of these costs with the other things in the business. I mentioned interest rates helping offset some of the pension costs, right. That's a bit of a double-edged sword, but we are looking high and low within the business to find other offsets, and there's little bits and pieces here and there that are going to help us out. Insurances is helping us out a little bit this year and we think it will help us some going forward. There are other O&M areas that we're looking at. Depreciation’s been a bit helpful this year. So, I think there's just a number of things that are out there that we're trying to turn over every rock right now to make sure we mitigate as much of the expected headwinds as you're describing them as possible. And that's our objective, to make sure that we get to appoint in the fall where we can update you and try to maintain those same guidance ranges. And then, as I mentioned, and you were alluding to, we do have rate actions over the next few years planned that we think we'll get it back to a point where we can be a step beyond track for 2019 and beyond.

Got it. Thank you, Drew. Much appreciate it.

Thank you.

Thank you. Our next question is from Jonathan Arnold with Deutsche Bank, you may begin.

Good morning, guys.

Good morning, Jonathan.

Just a quick one, can you remind us what the sort of critical timelines are on the FitzPatrick decision, the shot versus sale? And maybe if there is - is there a fat path now that you have the CEC, which is stay open and not sell?

Well, let me just get to the last one. I don't know that there's a stay open and not sell option necessarily, but the other two are certainly what we're working for. The last thing we need to do is create a third path for people have to start working down, but Bill, why don’t you go ahead and talk about where was it.

Sure. So, Jonathan, obviously, yesterday's order was a step in the right direction as it related to the CES and putting a value on this ex in New York, so between now and the end of the month, we need to be able to successfully negotiate a deal with Exelon, so a commercial arrangement, and then there obviously are a number of regulatory approvals that will have to take place in order to have assurances that the transaction will move forward, largely those our state-driven. If in the event that all those regulatory approvals are met, then we would proceed down the path with Exelon and then the plant would be refueled in January. If we're unable to reach commercial agreements with Exelon or we're not able to achieve those regulatory approvals, we'll begin the regular decommissioning process and stay on the same path that we have previously been on. But as Leo pointed out, we are - there are no plans to continue to run the plant under Entergy ownership as we've made a commitment to reduce the size of the EWC footprint and that would not be consistent with that strategy.

So, January refuel helping to reach an agreement by the end of August, that you need some approvals in the interim, is there a date sort of somewhere in the middle there which - by which you really need those approvals that's sooner than January?

Yeah, Jonathan, that's something that’s still in flux right now, so we're working through that and I really can't comment on the details.

Okay, great. Thank you for the extra color. And then secondly, shall I ask on the EWC, you said this was a tax election, can you give a little more color as to what you've elected and what that cash impact is best to say - what does it meant for earnings?

Well, Jonathan, it's a restructuring for tax purposes and it builds off of work that we've done over the past 15 years in the tax area. And it's going to be part of the 2016 audit cycle, but based on private letter rulings that we received in the past, legal opinions that we received, audit settlements that we've made, we believe that this is the appropriate way to go about accounting for the restructuring that we have, and we’ll work through that with the IRS over the next few years.

And can you comment on the cash timing?

The cash timing, as you know, we have low-cash taxes right now, and we would expect to keep those. We've talked about a 10% kind of targeted cash tax rate from here on out, but from here on through our current forecasting period, we would expect that to be about the same.

Okay. Thank you.

Thank you, Jonathan.

Thank you. Our next question is from Stephen Byrd with Morgan Stanley, you may begin.

Hi, good morning.

Good morning, Stephen.

I want to talk about the power-demand outlook for residential and commercial that we've been seeing some fairly low numbers there, some negative numbers. In your view, what are some of the drivers, both negative and positive that you're looking at that could cause either surprise to the upside or the downside? What sort of the prospects for those changing to be more supportive, more positive? Any big drivers that you see or is it really hard to extrapolate just from a couple of quarters?

Stephen, this is Theo. I think your last comment is probably [indiscernible] extrapolate from just the last couple of quarters. I mean clearly, as we’ve talked about on other calls, as other utilities also - we see the effects of energy efficiency, both at the state level and through different federal law guidelines having impacts. And we feel like our usage per customer starting - it's been on a decline again, I think consistent with what we've seen with the industry. We've started to see some flattening out relative to that. And I think also you have the macroeconomic impacts from a demand perspective, and I think as you go forward, the macroeconomic impacts clearly would be the first that you’d point to in terms of positives as you could change that. If you look through our region and you look at our gross state product forecast, we saw a kind of a downward trend over the past year or so. We see that starting to pick back up and clearly that materialize, you could see some positive impacts as it relates to that, but we'll continue to see impacts around energy efficiency as we go forward. And as we get further through the year, especially the third quarter, because it's one of our largest quarters from a sales perspective, I think we'll have a better perspective and point of view around what we think the longer term trend will take us.

Okay, understood. And then wanted to shift to Indian Point and just check on the status on the newer PUC investigation into the automatic shut down there, would it be possible to get an update in terms of where that stands and what the next steps are in that investigation?

Yes, Stephen, this is Bill. That investigation continues, really have nothing new to report. We have fully cooperated with the state, but I'm not aware of any specific milestones associated with that investigation.

Understood. Thank you very much.

Thank you. Our next question is from Steve Fleishman with Wolfe Research.

Hi, good morning. Hi, Leo. Just at a high level, any thought process on how the New York ruling might affect your views on Indian Point? And maybe way out of the box, any thought on chances that something like this could happen in Massachusetts with Pilgrim?

Well, certainly, there's no push for something like this in Massachusetts at the moment. The - as far as it relates to what's going on with Indian Point, as we understand it, the way the proposal has shifted, it went from excluding Indian Point to potentially including it. Meet certain criteria with the next couple of years, so we view that as positive. We don't think that clean air should be discriminatory about where it shows up in the state, so certainly, that could, down the road, cut off the bat tales as it might be in terms of pricing related to Indian Point, given the criteria that the plant be financially challenged, et cetera, to qualify for the program. But other than that, it's really too early to say what it might be for the Indian Point. And again, there's really no push for something similar in Massachusetts that I'm aware of.

One other question with this role. My recollection is that you guys actually challenged a contract with the Dunkirk plant in New York that might argue have some similarities to this rule. So I'm curious how you differentiate the legal support for this will versus that Dunkirk plant?

Steven, in general, we think it's different because this order places a value on the attribute associated with zero emissions at the generation as opposed to more of a contact for differences that was associated with Dunkirk litigation.

Okay. And then another question just on the kind of - and Leo, you laid out a lot of different programs you're doing, could you just remind kind of any of the things that you're talking about that may not already be in your current capital plans supporting the growth for 2019?

Yes, Steven. And they're certainly not everything that we would have - that we would likely identify associated with integrated energy network. There is probably more out there associated with that. It think we referenced toward the backend or beyond that time horizon we've been talking at Analyst Day. We mentioned the 6 billion to 8 billion number at that point in time, but that, obviously, goes out beyond the period we're talking here now. Also in the world of gas price volatility, et cetera, where there's nothing in there for anything, we might do the hedge that if you were to include investments in the like and the potential for where we come out and some of the renewable RFPs, et cetera. So when you get to the back-end and certainly and beyond it, there's a significant amount of other things that we're investigating that could be part of the capital program in addition to what we need. And again, as we've mentioned before, we've got a pretty solid generation and transmission capital program. And we’re doing that from a position, as we've mentioned before, be in short generation and across the system. And we would continue to anticipate that, that would be short across the system as we go forward in these capital investments create a significant amount of benefits to our customers and as it relates to reduced congestion, lower production cost, lower emissions, you name it, particularly given the age of our fleet, these things are really, really beneficial to our customers.

Great. One last quick one on the pension discount rate, my recollection from the Analyst Day was that a 50-basis-point move is like a $0.14 a share sensitivity. Is that still correct? Do I hear it right?

I think our rule of thumb is $0.06 for every 25 basis points for Entergy overall. And so it's, I guess, $0.12 for 50 basis points. And then about 3/4 of that is Utility. The other quarter is EWC.

Thank you.

Thank you. Our next question is from Praful Mehta with Citi Mac.

A big question again on FitzPatrick. And in terms of how we should think about the sales price, given the price of the nuclear credit is pretty clear and for insurers, how are you kind of looking at what is the adequate consideration you should be getting from for the sale? Is it the value of the MTV of those cash flow? Is there something else? Is there another threshold you're looking at in terms of the recovery of additional cost? Any kind of benchmarks we should be thinking about there?

Well, Praful, as you might guess right now, that's between us and Exelon. And I appreciate the question. There's just no way I can comment.

All right. Fair enough. Okay. So, I guess on the tax impact that you had at EWC, I just wanted to understand, is there any reason why it's not included like from a one-time versus an operating earnings basis? Is there something we should be thinking about that item, the $1.33? Why it's not included from a one-time operating income perspective?

Well, I mean, we pointed out and tried to make it very clear where the number is and what the impact is, but taxes are something that we work on every day just like every other line item in the income statement. So we consider taxes to be an operational item. Now having said that, particularly in Utility where we are targeting steady predictable growth, we want to make sure it's very clear where the tax are falling out, so we're providing an adjusted number for you. But we do think taxes are part of operational earnings, and we would never call them out as a special items.

Okay. And then just quickly on Indian Point, in terms of asset life today as we think about valuing Indian Point, is there any different view today you have, given what's happening in New York in terms of how you would view the asset life of Indian Point?

Well, we've always viewed that we're on a path towards relicensing of the plant. I think what we - with what we've seen in New York, I would mentioned that with the CES does, if that goes through as planned, it certainly provides a backstop for - against lower prices while during the course of the program. So it's not nearly necessarily what the life of it issue is as much as maybe probability distribution of prices that it would receive.

Thank you.

Thank you. Our next question comes from Julien Dumoulin-Smith with UBS. Julien Dumoulin-Smith: Good morning.

Good morning, Julien. Julien Dumoulin-Smith: So perhaps to follow-up on the last series of questions, if you will, for Indian Point, is there a potential here to eventually transact - does this call it backstop against lower prices, make it more of a transactable asset or what do you see as the strategic fit of Indian Point given the added visibility or certainty provided by potential here?

From a strategic point standpoint, Julian, we're still - as I mentioned in my remarks and we mentioned at Analyst Day and we've been mentioning for several years now, our views is that the business should be separate. And we've been proceeding down that path for the last several years. The only thing that changes from time to time is the methodology we would use. So for example, we look at New England and something like from [indiscernible], for example, separation came about because prices didn't support the economics of the plant, and we were forced into shutting it down to the extent that something becomes transactable as part of that separation, certainly that's a preferable route as it was with the Rhode Island State Energy Center when we sold that and if we're successful to sell Fitzpatrick. So I'll say it again, it does impact, I would guess, the probability distribution of prices it might receive. We still believe that we're going to get the plant relicensed, so that we'd indicate a long life of the plant. And then the other aspect it was always - has always been part of transacting, which was part of the benefit with regulatory approvals that we would require to get something done. All those are the same. We're just incrementally changing the dynamic as we proceed down the licensing pathway to be successful or if something like this occurs where, again, it changes the downside price risk. Julien Dumoulin-Smith: Got it. And just to be clear about this, the CapEx that's contemplated or that you're preparing for EEI, does the development in New York changed at all, either with respect to FitzPatrick and or refilling and/or Indian Point to be clear?

Those would be part of the mix when we look at what we're going to do, but again, we're not going to save that more detail until we get there. Julien Dumoulin-Smith: Got it. All right, thank you.

Thank you. And our last question comes from Paul Patterson with Glenrock Associates, you may begin.

I just want to sort of follow up a little bit on [indiscernible] question. I wasn't completely clear on what was the driver of the tax benefit at EWC? Was there a revaluation of some sort or recognition of the liability? Just what is it that triggered this tax benefit?

Ultimately ends up being a stop up in basis form for some of our nuclear assets and liabilities that are sitting at EWC, Paul.

A step up in tax basis?

Yes.

And that's driven by what?

It's driven by the restructuring in the transaction, again, recognized through the transaction. It was recognized - I think from a tax perspective, it's deemed to be transferred when you make that reelection that we're talking about.

Okay. So it's associated with FitzPatrick, is that?

I do think we've said where it's associated.

Thanks so much on the rest of my questions. Thank you.

Thank you. I would like to turn the call over to David Borde for closing remarks.

Shannon, and thanks for all 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 quarterly report on Form 10-Q is due to the SEC on August 9 and provides more detail and disclosures about our financial statements. Please note that the events that occurred 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. The call was recorded and can be accessed on our website or by dialing 855-859-2056. Confirmation ID 85416349, and the telephone replay will be available until August 9, and this concludes our call. Thank you.

Ladies and gentlemen, this concludes today's conference. Thanks for your participation, and have a wonderful day.