Executive Summary

Entergy affirmed 2018 consolidated operational EPS guidance of $6.25–$6.85 and Utility, Parent & Other adjusted EPS guidance of $4.50–$4.90; management signaled tracking “about in the middle” for the year, with Utility, Parent & Other “right on track” .
Q1 2018 consolidated results: revenue $2.72B, as-reported EPS $0.73, operational EPS $1.16, up vs Q1 2017 on lower tax rate and favorable weather; partially offset by decommissioning trust MTM losses from ASU 2016‑01 implementation at EWC .
Regulatory execution remained a tailwind: New Orleans Power Station approval, Louisiana FRP settlement approval; tax reform benefits returned to customers through regulatory mechanisms dampened net revenue uplift at certain utilities .
Key narrative for stock reaction: guidance affirmation, constructive regulatory outcomes, and clarity on tax reform/ADIT return and FRP mechanics; offset by EWC trust volatility under new accounting .

What Went Well and What Went Wrong

What Went Well
- Affirmed 2018 guidance; CFO: “expecting to be about in the middle” of consolidated operational EPS range; Utility, Parent & Other “right on track” .
- Regulatory wins: approval for New Orleans Power Station; LPSC approved Entergy Louisiana FRP settlement; Mississippi annual FRP filing submitted .
- Weather and lower federal tax rate supported YoY EPS; estimated weather contributed $0.09 in Q1 2018 vs $(0.16) in Q1 2017 .
What Went Wrong
- EWC decommissioning trust MTM losses under ASU 2016‑01 reduced earnings; management highlighted unfavorable effects from implementation on EWC .
- Utility non-fuel O&M higher YoY (nuclear operations, energy efficiency, storm reserve, fossil work), partly offset by insurance refunds .
- Net revenue uplift from rate changes was more than offset at certain utilities by regulatory provisions returning tax reform benefits to customers in Q1 2018 .

Financial Results

Metric	Q1 2017	Q3 2017	Q4 2017	Q1 2018
Revenue ($USD Billions)	$2.59	$3.24	$2.62	$2.72
EPS (As-reported, $)	$0.46	$2.21	$(2.66)	$0.73
EPS (Operational, $)	$0.99	$2.35	$0.76	$1.16
Operating Income ($USD Millions)	$195.5	$729.5	$211.9	$335.7
Operating Income Margin (%)	7.6% (195.5/2,588.5)	22.5% (729.5/3,243.6)	8.1% (211.9/2,623.8)	12.3% (335.7/2,723.9)

Notes: Operating income margin is calculated from cited revenue and operating income.

Segment earnings (after-tax, $mm)

As-reported

Segment	Q1 2017	Q1 2018
Utility	165	215
Parent & Other	(54)	(64)
EWC	(28)	(18)
Consolidated	83	133

Operational (non-GAAP)

Segment	Q1 2017	Q1 2018
Utility	165	215
Parent & Other	(54)	(64)
EWC	67	60
Consolidated	178	211

KPIs and drivers

KPI	Q1 2017	Q1 2018
Estimated weather impact (EPS, $)	$(0.16)	$0.09
Utility net revenue variance from weather (pre-tax, $mm, 2018 vs 2017)	—	+$69
Consolidated Operating Cash Flow ($mm)	529	557
Diluted shares outstanding (mm)	179.8	181.4

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Consolidated Operational EPS	FY 2018	$6.25–$6.85 (initiated on 2/23/18)	$6.25–$6.85	Maintained
Utility, Parent & Other Adjusted EPS	FY 2018	$4.50–$4.90	$4.50–$4.90	Maintained
Expected impact of special items on as‑reported EPS	FY 2018	—	Approximately $(2.55) per share (excluded from non‑GAAP guidance)	New disclosure detail

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3 2017, Q4 2017)	Current Period (Q1 2018)	Trend
Guidance outlook	Q3: Affirmed 2017 guidance and longer-term outlooks . Q4: Initiated 2018 consolidated operational EPS $6.25–$6.85; Utility, Parent & Other adjusted $4.50–$4.90 .	Affirmed both ranges; CFO expects around the midpoint; Utility, Parent & Other “right on track” .	Stable; confidence improved toward midpoint.
Tax reform and ADIT return	Q4: Large tax revaluation; regulatory mechanisms to return benefits; created net regulatory liabilities; no EPS impact from revaluation .	Plan to return roughly half of unprotected excess ADIT in 2018, remainder over four years; Mississippi FRP filing requested no base rate change due to lower federal tax rate .	Ongoing return execution; customer bill moderation.
FRP/regulatory framework	Q3: Progress across AR, TX, LA FRPs and AMI approvals .	Louisiana FRP settlement approved; FRP includes new transmission rider to improve timeliness of recovery; first filing by end of June for September effective rates .	Constructive, supports earning allowed returns.
Decommissioning trust/ASU 2016‑01	—	Unfavorable EWC impact from implementing ASU 2016‑01; MTM losses on equity investments flowed through income .	Newly negative 2018 accounting headwind at EWC.
Nuclear fleet milestones	Q3: Plan to operate Palisades until May 2022; restoration performance recognized .	Indian Point 2 completed final refueling before retirement .	De-risking merchant nuclear continues.

Management Commentary

“We’ve had a solid start to 2018 with success on key projects and regulatory initiatives. Our results keep us on track to achieve our full year guidance and long-term outlooks.” — Leo Denault, Chairman & CEO .
“Entergy affirmed its 2018 consolidated operational earnings guidance range of $6.25 to $6.85 per share and its Utility, Parent & Other adjusted guidance range of $4.50 to $4.90 per share.” .
“We are expecting to be about in the middle [of consolidated operational guidance]... For Utility Parent & Other, we are right on track as of first quarter.” — CFO Drew Marsh (Q&A) .
Prior quarter context: “2017 was another productive year... Initiates 2018 consolidated operational EPS guidance of $6.25 to $6.85 and Utility, Parent & Other adjusted EPS guidance of $4.50 to $4.90.” — Leo Denault (Q4 release) .

Q&A Highlights

Guidance positioning: In response to where results track vs guidance, CFO indicated consolidated operational EPS trending “about in the middle” and Utility, Parent & Other “right on track” .
Returning excess ADIT: Management outlined a plan to return roughly half in 2018 and the remainder over four years; Mississippi FRP filing requested no base rate change due to lower federal tax rate .
FRP mechanics: Louisiana FRP includes a new transmission rider to improve recovery timeliness; initial filing targeted by end of June with September effective rates .
Trust fund volatility: Management flagged decommissioning trust volatility under ASU 2016‑01 as a headwind affecting EWC results .

Estimates Context

S&P Global consensus estimates for Q1 2018 EPS and revenue were unavailable via API at time of analysis due to request limit; as a result, we cannot formally assess beat/miss vs Wall Street consensus for this quarter (S&P Global data access error) [GetEstimates error].
Internally, YoY operational EPS increased to $1.16 from $0.99 on weather and lower tax rate; sequentially, operational EPS improved vs Q4 2017 $0.76; revenue also rose YoY to $2.72B from $2.59B .

Key Takeaways for Investors

Guidance intact; management tone constructive with mid-point bias and stable Utility, Parent & Other trajectory — supportive for multiple and estimate stability near-term .
Regulatory execution (LA FRP settlement, NOPS approval) and FRP mechanics (new transmission rider) enhance earnings visibility and ROE realization prospects .
Tax reform pass-through moderates customer bills but can mask underlying rate-driven revenue uplift in the quarter; investors should adjust for regulatory give-backs when assessing Utility momentum .
Watch EWC exposure to decommissioning trust MTM under ASU 2016‑01 — a non-operational, but potentially noisy, earnings item in 2018 .
Weather tailwinds aided Q1; normalized views (Utility, Parent & Other adjusted) and OCF trends remain the better gauge of run-rate fundamentals .
Near-term positioning: With guidance affirmed and regulatory catalysts progressing, pullbacks tied to EWC/trust volatility may be opportunities for investors focused on the core regulated growth story .

Sources: Q1 2018 8‑K Item 2.02 and Exhibit 99.1, including appendices and financial statements ; Q4 2017 8‑K and press release ; Q3 2017 8‑K and press release ; Q1 2018 earnings call transcript excerpts .

ENTERGY ARKANSAS, LLC (EAI)·Q1 2018 Earnings Summary