Entergy Corp Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : Hey, guys. Good morning.

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : Good morning, Drew. Just to elaborate on the core drivers of the $3 billion CapEx update. It's skewed to generation and renewables. So does that kind of imply you're starting to trend towards the high end of that load growth especially as we think about the ramp-up for something like Hub 8, which I think is up to a $12 billion site. Thanks. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 18, 2025 / 3:00PM, ETR.N - Q4 2024 Entergy Corp Earnings Call

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : Got it. Perfect. And then, two, you're not the only CEO that's talking about new nuclear I'm just kind of curious if you just hone in on just specifically what you mean by new nuclear because one of your commissioners in Louisiana kind of highlighted large scale. And so I'm not sure if there's an appetite for in the state, and you seem to focus a little bit on the larger scale side. So is there room for large-scale reactors if there's ample risk sharing, either on the federal backstop, et cetera? Or when you mean new nuclear, are you really specific to SMRs? Thanks.

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : And is there -- just to follow up on that one. Is there conversations at the federal level? Or is there any sort of data points we should be kind of monitoring around that? Thanks.

Question: Shar Pourreza - Guggenheim Securities, LLC - Analyst : Okay. Perfect. Thanks, guys. Big congrats on the execution. It's obviously very evident. Congrats.

Question: Nicholas Campanella - Barclays - Analyst : Hey, good morning, and thanks for taking my question. What an update. Hey, yeah, so I guess just -- you signed a few more customers, the growth rate is now uncap per se. And when I think about kind of this 5 gigawatts to 10 gigawatts in the pipeline. How would you kind of simplistically frame every 1 gigawatt affecting growth? Is it -- if you get another gig into the plan with similar frameworks that you just got in Mississippi and Louisiana, could that add another 100 basis points to the CAGR? Or what's kind of the simple way to frame it here since you're kind of letting people dream about where it can go? Thanks.

Question: Nicholas Campanella - Barclays - Analyst : Okay. That's great. I appreciate it. And then I just wanted to address -- you have a lot of organic opportunities in the growth plan today. I just wanted to acknowledge that there's an adjacent service territory that's also kind of running a sale process. And can you just address what your appetite is for anything inorganic at this point, given everything that's in front of you?

Question: Nicholas Campanella - Barclays - Analyst : Thank you.

Question: David Arcaro - Morgan Stanley & Co. LLC - Analyst : Hi, thanks. Good morning.

Question: David Arcaro - Morgan Stanley & Co. LLC - Analyst : I was wondering, would you be able to frame kind of the time to market that you're able to offer for new data center customers as you look at that pipeline? Do you have -- is there a certain amount of available capacity, whether it's transmission or generation on your system? Or is most of this going to take incremental new infrastructure to enable in terms of future customers?

Question: David Arcaro - Morgan Stanley & Co. LLC - Analyst : Got it. Okay. Understood. And then you gave a little bit more color, I think, on the gas turbine landscape and some of the partnerships you have. I was just wondering if there's any other color you would be able to provide on the availability of production slots for gas turbines and how the pricing has trended just as you're looking out even further in your generation planning here?

Question: David Arcaro - Morgan Stanley & Co. LLC - Analyst : Okay. Great. Appreciate the color. Thank you.

Question: Jeremy Tonet - J.P. Morgan Securities LLC - Analyst : Hi, good morning.

Question: Jeremy Tonet - J.P. Morgan Securities LLC - Analyst : Thanks for all the details this morning. I want to pivot towards Arkansas, if I could. And just wanted any thoughts on the economic development working group in efforts to expand the existing, I guess, data center incentives there? And specifically, do you see large C&I customers taking notice of the potential in the state?

Question: Jeremy Tonet - J.P. Morgan Securities LLC - Analyst : Got it. Makes sense. And then just want to pivot towards the financing side, if I could. Just wondering if you could walk us through a little bit more how you're able to finance $3 billion of incremental CapEx with only the $300 million of incremental equity here. And just wondering if more of your growth projects hit, how should we think about, I guess, the -- any rules of thumb for equity funding going forward? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 18, 2025 / 3:00PM, ETR.N - Q4 2024 Entergy Corp Earnings Call

Question: Jeremy Tonet - J.P. Morgan Securities LLC - Analyst : Got it. Very helpful. I'll leave it there. Thanks.

Question: Michael Lonegan - Evercore ISI Institutional Equities - Analyst : Hi, good morning. Thanks for taking my question.

Question: Michael Lonegan - Evercore ISI Institutional Equities - Analyst : The resiliency programs, Phase 2 totals greater than $2 billion approved and underway. You talked about the timing of Phase 1, Phase 2 request plan when and where can we expect them? And what is included in your capital plan versus what could be incremental?

Question: Michael Lonegan - Evercore ISI Institutional Equities - Analyst : Great. Thanks. And then on the dividend, you've had a target of 6% per year. Is that a firm commitment you have? You have this 5 gigawatt to 10 gigawatt pipeline, a lot of additional capital could be coming into your plan?

Question: Michael Lonegan - Evercore ISI Institutional Equities - Analyst : Great. Thank you.

Question: Steve Fleishman - Wolfe Research - Analyst : Yes. Hey, good morning. Thanks.

Question: Steve Fleishman - Wolfe Research - Analyst : Congrats on being continued strong outlook. I guess, first, on the credit metrics we've been waiting, I think, for the nuclear PTC piece of it for you all. Is that still not included in your metrics? And if they don't define it, when would you include it?

Question: Steve Fleishman - Wolfe Research - Analyst : Okay. Great. And then Drew, I think you mentioned legislative activity in Texas and Arkansas to support growth. Could you talk to a little bit more what you're either seeing or where you're supporting in those states?

Question: Steve Fleishman - Wolfe Research - Analyst : Okay. One last clarification. So the updated plan does include this unnamed Mississippi customer and the and then the expansion at Meta, although some of that might be going beyond '28 in terms of some of the benefits because the sales growth didn't change that much?

Question: Steve Fleishman - Wolfe Research - Analyst : As you're building the investment for. Okay. Thank you. I appreciate it.

Question: Julien Smith - Jefferies LLC - Analyst : Hey, good morning. Very nicely done. Really, Kudos to all of you. Maybe to follow up -- absolutely, absolutely, really. Maybe just to follow up a little bit on the conversation on the cash flows. You all provide a little bit of a slide showing at least as present, your Moody's and S&P projections and a little bit of a downtick in '26. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 18, 2025 / 3:00PM, ETR.N - Q4 2024 Entergy Corp Earnings Call Can you speak a little bit to how you think about earned ROEs as you lean into this ramp in spend? Are you thinking that there could be some pressure on earned returns? Or do you think when you look at the outlook that you'll be able to manage through the uptick in spending without having an impact on earned returns given some of the dynamics, whether it's legislative or otherwise?

Question: Julien Smith - Jefferies LLC - Analyst : Well, truly incredible on both fronts. And then maybe a little bit of a nuanced follow-up here. You talked about the nuclear earlier. It seems like Texas is really contemplating a new nuclear fund of sorts. Any thoughts about tapping into that? Is that driving some of the accelerated thought process in your mind as you talk about it today?

Question: Julien Smith - Jefferies LLC - Analyst : Yes. I appreciate the risk emphasis. Thank you very much. All the best.

Question: Paul Patterson Patterson - Glenrock Associates LLC - Analyst : Hey, congratulations, guys.

Question: Paul Patterson Patterson - Glenrock Associates LLC - Analyst : Just -- I know you guys are focused on -- and I apologize if I missed this, I know you guys are focused on affordability, and you mentioned the -- these large customers paying for themselves. Could you -- would this update sort of give us a flavor where you see rates kind of going through this forecast period?

Question: Paul Patterson Patterson - Glenrock Associates LLC - Analyst : Okay. And then just on the new nuke, when do you think we might see potential announcement? What's the earliest that we could maybe hear something on that?

Question: Paul Patterson Patterson - Glenrock Associates LLC - Analyst : Awesome. Thanks so much.

Question: Travis Miller - Morningstar, Inc. - Analyst : Thank you. Good morning.

Question: Travis Miller - Morningstar, Inc. - Analyst : A quick one here. The Amazon facility. Wondering if you had any update on progress there or filings, et cetera, the Mississippi.

Question: Paul Patterson Patterson - Glenrock Associates LLC - Analyst : Great. Okay. And then higher level, when you're going out there and talking with not just data centers, but any of the large load customers, who's the competition? What are their services are they looking at -- is it on site? Is it some other provider? Just wondering kind of very high level with the large load customers, who you're competing against essentially for these large contracts?

Question: Travis Miller - Morningstar, Inc. - Analyst : Yeah, okay. Very good. That's helpful. Thank you.

Question: Travis Miller - Morningstar, Inc. - Analyst : Thanks for your questions. And ladies and gentlemen, that will conclude our Q&A session for today. Liz, I'd like to turn the call back over to you.