The paragraph details the opening of Entergy's Fourth Quarter 2024 Earnings Conference Call. Aaron, the conference operator, introduces the call and outlines the format, including a question-and-answer session. Liz Hunter, Vice President of Investor Relations, then introduces the presentation, which will feature comments from Chair and CEO Drew Marsh and CFO Kimberly Fontan. Liz mentions the use of forward-looking statements and non-GAAP financial information, with references to various documents available on the company's website. Drew Marsh takes over to report that 2024 was a transformational year for Entergy, highlighted by strong financial performance and strategic growth. The company achieved an adjusted EPS of $3.65, within the upper half of its guidance range, and is increasing its capital outlook beyond 2025.

The paragraph discusses the company's strong growth trajectory, highlighting an expected annual growth rate of over 8% through 2028. The industrial segment experienced significant growth, and the company is capitalizing on opportunities in the Gulf South, including adding hyperscale data centers in 2024. Future plans include a new electric service agreement in Mississippi and an anticipated expansion with Meta. The company is projecting 12% to 13% compound annual growth in industrial sales from 2024 to 2028. To accommodate new large customers, the company ensures protections for existing customers and contributes to community enhancements through taxes and investments. The company maintains a robust pipeline for future growth.

The paragraph discusses the growth and development of data centers and the progress made in advancing utility projects. The company remains committed to capturing data center opportunities and leveraging its vertically integrated model and local relationships to support growth. It highlights successful regulatory approvals and processes in Louisiana, Texas, and New Orleans, including resilience investments and rate actions. Looking ahead to 2025, it outlines a busy regulatory calendar with plans for rate filings, potential transmission riders in Texas, and generation and transmission investments. The company also aims to improve cost recovery processes for storm-related expenses to benefit customers.

The paragraph outlines the company's investment plans and strategies for supporting growth and resilience in Texas and Arkansas. Over the next four years, the company plans to invest $37 billion to serve customer growth and improve system reliability, focusing on expanding their renewables portfolio and constructing new gas plants. There are active proposals for new renewable projects in Arkansas and Louisiana, along with new gas facilities already under construction in Texas and Mississippi. Pending regulatory approvals exist for additional facilities in Arkansas, Louisiana, and Texas. The company has secured partnerships for acquiring equipment necessary for these projects, with future carbon capture and sequestration capabilities in mind, and maintains strong relationships with EPC partners to support further projects.

The company's current capital plan does not allocate funds for carbon capture and storage (CCS), but efforts are underway to develop projects with customer and third-party investment. A FEED study at Lake Charles Power Station is in progress, with a decision expected soon. They are exploring nuclear expansion, including upgrades and license extensions at existing stations, while evaluating new nuclear opportunities with partners. Although these initiatives aren't in the base plan, financial risks will be managed. Their transmission strategy involves a $1.8 billion investment from a recently approved 10-year plan and proposed projects totaling $3.7 billion to meet reliability standards. In 2024, seven resilience projects were completed in Louisiana, with more expected in 2025. They are seeking phased approvals for ongoing progress. Lessons from past hurricane responses, like storm Francine, have improved restoration efforts, with 90% of customers restored within three days.

Entergy workers aided other utilities in storm recovery efforts, deploying over 900 staff for Helene and over 1,100 for Milton. During a January winter weather event, they set new winter peak records due to efficient operations. The company has improved its credit metrics in 2024, offering financial flexibility and long-term customer advantages. This success is attributed to the dedication of employees who support rapid growth and change. Entergy is optimistic about future growth, with expectations of double-digit industrial sales growth and an EPS CAGR above 8%. The company is strengthening its balance sheet and risk profile, while exploring opportunities with potential customers for further growth. Employees and partners are eager to embrace upcoming opportunities. Kimberly Fontan will now discuss the financial details of 2024 and projections for 2025.

Entergy implemented a 2-for-1 stock split in December, doubling its share count, which is reflected in updated EPS data. For 2024, adjusted EPS was $3.65, benefiting from investments for current and new customers, despite increased depreciation and interest expenses. Weather-adjusted retail sales grew by 4%, largely due to industrial growth in sectors like petroleum refining. Entergy's 2024 credit metrics closed strongly, with a book FFO to adjusted debt of 14.7%. S&P upgraded Entergy's credit rating following a settlement approval, potentially lowering borrowing costs. Entergy plans a $37 billion capital investment over four years, mainly in Mississippi and Louisiana, including projects for renewable energy, growth support, and reliability improvements.

The paragraph discusses the company's financial strategy and guidance. They have increased their equity requirements by $300 million for 2026 and have already secured $1.4 billion through their ATM program for 2025 and 2026. They still need to source an additional $3.3 billion, mainly required in 2027 and 2028. Their long-term growth outlook has increased to over 8% through 2028. For 2025, their adjusted earnings per share guidance is between $3.75 and $3.95, with a 6% growth in weather-adjusted retail sales, driven primarily by the industrial sector. The guidance reflects investments, construction costs, and expenses. Utility O&M costs are expected to be stable compared to the previous year. The growth is supported by Gulf Coast advantages and large data centers, and Entergy Louisiana is updating its agreement with Meta for increased capacity without needing additional generation.

In the paragraph, Entergy discusses an increase in load that will necessitate additional transmission facilities, with costs expected to be covered by customers. Despite this, the incremental volume isn't anticipated to significantly impact sales during the forecast period. Entergy takes a conservative approach by not including large customers in their forecasts without signed agreements, ensuring financial planning at minimum bill levels. They express pride in 2024 accomplishments and optimism for 2025. The company emphasizes prioritizing customer needs and creating stakeholder value as they explore unique growth opportunities. During a Q&A session, Shar Pourreza from Guggenheim Partners inquires about a $3 billion capital expenditure update focused on generation and renewables, to which Kimberly Fontan explains the plans covering distribution and nuclear investments, impacting future earnings.

The paragraph discusses the exploration of new nuclear technologies by Drew Marsh, with a focus on both large-scale reactors like the AP1000 and small modular reactors (SMRs). While they are considering large-scale reactors due to an existing supply chain, they are also investigating SMRs through partnerships, like the MOU with Holtec, and exploring technologies from companies such as GE. The primary focus is on risk profile and value for stakeholders. Most discussions occur at the state level, with some engagement with the Nuclear Energy Institute (NEI) at the federal level, where developments are rapidly evolving.

The paragraph discusses the growth potential in the nuclear sector, highlighting bipartisan interest and ongoing conversations in the field. Nicholas Campanella from Barclays asks about the growth implications of adding gigawatts to the pipeline, specifically in relation to recent expansions in Mississippi and Louisiana. Kimberly Fontan responds by explaining that growth isn't a straightforward one-for-one calculation, as it depends on the specific investment required to support customers and the system overall. Drew Marsh adds that the business model of data centers, such as those used by large companies like Amazon and Meta, also significantly influences growth potential.

The paragraph features a conversation involving Nicholas Campanella, Kimberly Fontan, and David Arcaro, focusing on growth opportunities and potential acquisitions within the data center space. Nicholas asks about the company's interest in inorganic growth, and Kimberly explains that they consider opportunities that meet specific criteria, such as not being a distraction, creating value, and being executable. David then inquires about the time to market for new data center customers and whether there is available capacity or if new infrastructure is needed. Kimberly responds that it depends on the customer's location and their specific needs.

The paragraph discusses the company's ongoing efforts to collaborate with customers and stakeholders to manage project timelines and build processes effectively. They highlight strong partnerships with equipment vendors and contractors, especially in Mississippi, where legislative efforts have helped reduce time to build infrastructure. The exchange between David Arcaro and Drew Marsh reveals the company's strategic management of production slots for gas turbines, transformers, and other critical equipment, with efforts to secure both current and future needs. They acknowledge challenges with rising costs and tougher pricing but remain confident in meeting their project expectations.

The paragraph is a conversation between Jeremy Tonet from JPMorgan and Drew Marsh, discussing economic development in Arkansas. Jeremy asks about potential expansions of data center incentives and whether large commercial and industrial customers are showing interest. Drew confirms significant interest in the state, particularly in areas like hyperscale data centers, and explains efforts with stakeholders to facilitate economic development, similar to past initiatives in the state's steel industry. He also mentions opportunities in lithium mining. The conversation then shifts to financing, where Jeremy inquires about funding $3 billion in capital expenditure with only $300 million in equity. Kimberly Fontan responds, noting a typical run rate of 10% to 15% for equity funding over their forecast period.

The paragraph discusses financial strategies for a project, highlighting the importance of optimizing operating cash flow, utilizing mechanisms like cash and CWIP, and ensuring large customers pay their fair share. It mentions additional opportunities due to a largely fully funded pension and emphasizes managing equity needs. Jeremy Tonet acknowledges the explanation and moves on to a question from Michael Lonegan regarding resiliency programs. Drew Marsh responds that the first phase is ramping up, with the second phase expected for approval around the end of the year. Kimberly may address what is included in the capital plan versus any incremental elements.

The paragraph discusses the company's current and future financial and operational strategies. The company aims to maintain its programs without ramping down and then up again, which would be more efficient and productive. Kimberly Fontan explains the plan to add incremental capital similar to previous phases once regulatory clarity is achieved, mentioning a successful mechanism in Louisiana. Regarding dividends, the company has a target of a 6% increase per year, with a potential decline in payout ratio but not in the percentage increase itself. Steve Fleishman inquires about credit metrics related to nuclear PTC, and Kimberly Fontan confirms that it is not yet included in the metrics, pending further definition.

In the paragraph, Drew Marsh discusses the potential legislative activities in Texas and Arkansas aimed at supporting economic growth and resilience. He highlights the possibility of bills in Arkansas that could aid economic development and mentions interest in initiatives in Texas focused on resilience, such as accelerated cost recovery and asset management. However, it is early in the legislative process, with few bills filed so far. The company's focus is on opportunities that could improve credit and customer benefits.

The paragraph discusses a financial update related to an unnamed Mississippi customer and an expansion at Meta. Kimberly Fontan confirms that the forecast includes both updates, although the Meta expansion's benefits are expected to extend beyond 2028, with minimal impact on current sales volume. Steve Fleishman and Drew Marsh discuss the related investments and earnings per share (EPS). Julien Smith from Jefferies asks about cash flow projections, noting a slight dip in 2026 due to changes in Moody's and S&P ratings. He inquires about potential pressure on earned returns due to increased spending. Kimberly Fontan explains that the 2026 downturn is influenced by one-time items like a change in Louisiana's state tax rate, impacting credit metrics that are gradually building towards 15%.

The paragraph discusses a conversation between Julien Smith and Drew Marsh about financial outlooks and potential opportunities related to nuclear energy. From a Return on Equity (ROE) perspective, improvements are expected from 9% to 9.5% over a forecast period, and these plans are being worked on with stakeholders. Julien Smith inquires about the possibility of Texas creating a new nuclear fund, and Drew Marsh expresses interest, noting that if such a fund materializes, it would be a valuable tool for risk management. Drew emphasizes their focus on managing risks using various available support mechanisms at both state and federal levels, as well as through collaborations with different stakeholders. The overall conversation emphasizes using opportunities to manage risks effectively within their frameworks.

In the paragraph, Paul Patterson discusses affordability and rate forecasts with Kimberly Fontan, who mentions a slight increase, driven by gas prices and investments, but expects moderation when sales increase. Paul also inquires about a potential new nuclear project announcement, to which Drew Marsh responds that no announcement is imminent this year, though discussions are ongoing. Finally, Travis Miller asks about an Amazon facility in Mississippi, and Drew Marsh confirms that construction is underway, with the first substation completed and operational.

In this paragraph, Drew Marsh discusses the competitive landscape for attracting large load customers, such as data centers, to Mississippi. He emphasizes that while they face global competition, their value proposition is strong. As a vertically integrated utility, they can offer a comprehensive technical solution, including transmission, generation with green attributes, and retail access. Additionally, their established relationships within local communities and stakeholder engagement strategies enhance their competitiveness in attracting large economic development projects.

The paragraph is the conclusion of a Q&A session during a conference call. Liz Hunter thanks the participants and mentions that their annual report on Form 10-K is due on March 3rd, containing details about financial statements, and any relevant pre-filing events will be included per GAAP. Liz also points out that Entergy's investor relations website has a page for regulatory updates and strategic milestones but advises not to rely solely on this for complete company information. The call concludes with a final thank you.

This summary was generated with AI and may contain some inaccuracies.