In the Entergy Corporation First Quarter Earnings Conference Call, the conference operator Greg introduces the session and hands it over to Liz Hunter, VP of Investor Relations. Liz outlines the agenda, which includes comments from CEO Drew Marsh and CFO Kimberly Fontan on financial results and updates on customer growth initiatives. Drew Marsh reports a productive start to the year and announces an adjusted earnings per share of $0.82 for the first quarter. The company is on track to meet its 2025 guidance with an expected growth rate greater than 8% in adjusted earnings per share. The call will also address forward-looking statements and non-GAAP financial information.

The paragraph discusses a company's commitment to creating value for its stakeholders, with a focus on customers. It highlights significant industrial investments in Louisiana, including Hyundai Motor Group's $5.8 billion investment in Hyundai Steel, CF Industries' $4 billion low-carbon blue ammonia facility, and Woodside's $17.5 billion LNG facility. These projects are expected to come online between 2028 and 2029 and will diversify the industrial mix while benefiting local communities through investments, job creation, and workforce development. The Gulf South region is considered an attractive investment area due to its low power costs, robust infrastructure, diverse energy sources, and business-friendly environment. The company is also engaging in discussions for potential data center projects as part of its customer portfolio expansion.

The paragraph highlights the progress and plans of a company in expanding and enhancing its energy infrastructure. It mentions strong interest from hyperscale developers and outlines projects like the Orange County Advanced Power Station, which is 70% complete, and the Delta Blues Power Station in Mississippi, both on schedule and budget. The company plans to increase capacity at its natural gas facilities by 500 megawatts and improve efficiency at its nuclear plants, with a potential increase of 275 megawatts. It also intends to renew an NRC permit for a potential new nuclear facility. Overall, the company is focused on meeting customer demands through reliable and resilient energy solutions.

The paragraph discusses Entergy Louisiana's efforts to work with regulators and stakeholders on infrastructure projects to support growth and reliability. The Louisiana Public Service Commission approved the inclusion of Hurricane Francine's capital investment in rates, and a $0.5 billion West Bank transmission project to support growth. A major transmission project is also pending review. Final approval for the sale of Entergy Louisiana's gas business was received, targeting completion in July. Progress continues on filings for a hyperscale data center, with a decision expected in October. For a 3 gigawatt solar project, the first procurement round is complete, advancing 400 megawatts of proposals. In Texas, $137 million in transmission investments were approved, and a new transmission project is proposed.

The paragraph outlines upcoming and ongoing regulatory and legislative activities related to Entergy's operations in Texas, Arkansas, and Mississippi. Scheduled hearings and decisions for power generation projects aim to meet increasing demand, with Entergy Texas and Mississippi advancing new facilities and a Mississippi rate plan filed with no change. Arkansas has passed Act 373 to expedite infrastructure development and economic growth, allowing cost recovery for new capacity, easing certification processes, and reducing customer costs by recovering construction carrying costs. Texas is examining legislation to expedite storm securitization reviews, benefiting customers with quicker, more cost-effective outcomes.

The paragraph discusses the impact of tariffs on a company's capital expenditures, estimating a 1% impact on its $37 billion, 4-year capital plan. The company is working to mitigate these effects by developing alternative supply sourcing strategies and employing cost management efforts. They are focused on reducing the effects of tariffs on customers and ensuring competitiveness in global markets. The paragraph highlights that LNG exports and ammonia have competitive advantages due to low U.S. natural gas prices, which supports bridging the trade deficit.

The paragraph discusses several key points, starting with companies investing in clean energy technologies and enjoying benefits from low-cost natural gas, particularly in the U.S. manufacturing sector. This creates a favorable environment for onshoring and industrial development in the Gulf Coast. It also mentions the retirement of Entergy's COO, Pete Norgeot, who significantly transformed the company's power generation team and managed large capital investments. Kimberly Cook-Nelson is set to succeed him, bringing her leadership experience in nuclear operations. Furthermore, John Dinelli will assume the role of Chief Nuclear Officer. The overall outlook remains positive despite potential tariff impacts.

The paragraph discusses personnel changes and accomplishments at Entergy. Pete, a long-time employee and leadership figure, is leaving, while Kimberly and John are taking on new leadership roles. The company mourns the passing of Alexis Herman, a former Board member known for her wisdom and service. Despite these changes, Entergy remains optimistic about meeting stakeholder expectations and executing plans for improvement and customer value in 2025. The paragraph concludes with Kimberly Fontan addressing financial results, noting adjusted earnings per share of $0.82 for the quarter, which aligns with the company's annual EPS guidance. She also mentions upcoming discussions on tax credits and potential financial impacts.

The paragraph highlights key factors influencing the company's financial performance, including increased retail sales volume driven by weather and regulatory actions, offset by higher interest and depreciation from investments. Industrial sales growth was notably strong, primarily due to customer additions and expansions in 2024. The company maintains solid credit metrics and flexibility to handle economic challenges. There's ongoing interest in renewable tax credits, with nuclear production tax credits beginning in 2024, though guidance on these credits is pending. The company expects significant tax credits in 2027 and 2028 tied to renewable investments, with plans to monetize these credits if transferability rules change. Despite potential changes, their credit metrics should remain strong.

In the quarter, the company secured approximately $1.5 billion in equity through a block equity forward, including $230 million from ATM forwards, ensuring their equity needs are covered through 2027 and two-thirds into 2028. Despite no forward settlements in the quarter, they are reaffirming their adjusted EPS guidance and future outlook, expecting slightly higher O&M costs in the second quarter due to planned expenditures. Confident in their plans and guided outcomes, the company had a strong start to the year and is ready to answer questions. In response to a question from Guggenheim Partners about Arkansas' competitiveness for data centers, Andrew Marsh confirmed that the state is fully competitive and doesn't require further rate design improvements.

The paragraph discusses updates on customer interest and financial strategies for a company. The company is actively engaging with potential customers in Arkansas and has seen significant interest there. Financially, they are maintaining a flexible approach towards equity needs and credit metrics, with no substantial changes in the timing of equity required post-2026, despite some forward equity contracts extending into 2027. The company capitalized on an opportunity to manage risk and volatility, particularly in the context of equity needs. Additionally, in response to a question about residential sales, it's noted that while there was an increase in residential customer count and weather-normalized sales, these figures may exhibit volatility quarter-over-quarter, so shouldn't be overanalyzed.

The paragraph discusses the company's expectations for sales, highlighting a projected 1% growth in residential sales and 5.5% in overall sales for the year. While acknowledging potential quarterly volatility, the context suggests strong annual sales. Jeremy Tonet queries about industrial sales, noting macroeconomic uncertainties potentially affecting industrial activity. Kimberly Fontan describes the historical 5% growth in industrial sales despite economic challenges and mentions opportunities in traditional and data center markets. Andrew Marsh adds that a 1% change in industrial sales has a minimal financial impact due to demand charges. Jeremy Tonet shows interest in the company's efforts to increase activity and expansion in the pipeline.

In the paragraph, Kimberly Fontan and Andrew Marsh discuss the ongoing and robust discussions with data centers and other large industrial users concerning their power needs. They mention that the pipeline of potential projects remains strong and unchanged from previous projections, with a probability-weighted forecast. Success rates with certain customers have been higher than anticipated, potentially necessitating additional capital for continued growth. David Arcaro from Morgan Stanley inquires about the speed at which new large load customers can be connected to the system, noting that quick "time to power" is a priority for these customers. Andrew Marsh acknowledges the importance of this and invites Kimberly to add any further insights.

The paragraph involves a conversation between participants discussing the status of their positions in queues to provide generation to potential customers. These queues are full; however, they believe their positions will allow them to offer opportunities, particularly in the 2028-2029 time frame. David Arcaro seeks clarification on tariff exposure, questioning if it's related to earnings exposure and whether it affects already approved or future projects. Kimberly Fontan responds by noting that most exposure is tied to new generation projects in 2027 and 2028, with plans to mitigate this through suppliers, indicating no significant earnings effect. The operator then welcomes Nick Campanella from Barclays, who inquires about fiscal year 2025, suggesting a positive start and seeking clarification on potential headwinds or tailwinds.

In this paragraph, Kimberly Fontan discusses the company's ability to manage business uncertainty and expresses confidence in meeting their year-end outlook despite potential variations in summer weather. Nicholas Campanella raises a question about the possibility of settling issues related to a new customer generation and transmission filing. Andrew Marsh, referred to as Drew, responds that while there is potential to settle, they have strong support from the state and stakeholders for the investment and are confident in achieving a beneficial outcome. Paul Fremont, from Ladenburg, congratulates the company on a strong quarter and inquires about specific customer load, to which Marsh replies that he cannot disclose details but mentions they're large industrial facilities. Fremont also asks about a transmission filing in Texas, particularly the specifications of a proposed line.

The paragraph features a Q&A segment where Andrew Marsh and Kimberly Fontan discuss various topics related to a project involving additional transmission lines and sales forecasting. Marsh mentions the proposed transmission project includes a 500 kV line spanning 130 to 160 miles, potentially operational by 2029. The line would terminate with a line in Louisiana to enhance resilience against storms. Fontan addresses a slight reduction in the sales guidance for 2025, attributing it to variable ramp-ups in industrial loads throughout the year. Steven Fleishman from Wolfe Research inquires about a Mississippi customer pending announcement, which Marsh confirms is still in progress. Finally, regulatory issues with Texas plant construction are mentioned, with staff pushing back due to the lack of a Request for Proposals (RFP).

In the paragraph, Andrew Marsh discusses the need for incremental power generation in Texas due to its growth and the urgency to act quickly. He mentions that their Orange County plant had no competing bids and emphasizes that even though they did not conduct a full Request for Proposal (RFP) for the current project, they bid out significant components, and this is documented in the record. There is support for their approach, but they require the commission's approval to proceed. In response to Sophie Karp's questions, Marsh indicates that they are exploring nuclear opportunities, such as an early site permit in Mississippi, and acknowledges the challenges in building gas plants, noting that they are actively working to address these issues.

The paragraph discusses the efforts and considerations involved in advancing nuclear and combined cycle energy projects in several U.S. states, including Mississippi, Louisiana, Arkansas, and Texas. It highlights the political support and legislative efforts aimed at facilitating nuclear investments in these states. The key challenges include managing construction risks and securing customer funding. The timeline for building combined cycle plants is dependent on existing queue positions, with potential operations beginning in 2028-2029, while new entrants into the queue may face timelines extending to 2030-2031. Sophie Karp inquires about the financial implications of legislative measures in Arkansas and Texas aimed at improving recovery mechanisms for plant construction and storm recovery, to which Kimberly Fontan responds.

The paragraph discusses the impact of Arkansas legislation, which allows for earlier cost recovery and lower customer costs through CWIP instead of AFUDC during construction. In Texas, legislative mechanisms focus on risk management, with no significant financial changes expected. Securitization aids in timely cost recovery, reducing customer costs. Ryan Levine from Citi asks about the Woodside FID decision's impact on power availability for data centers in Louisiana and macroeconomic factors influencing large customer loads and GDP sensitivity. Kimberly Fontan explains that large data center customers are treated as binary in their forecast, ensuring supply is added when needed, as seen in recent quarters.

The paragraph discusses the relationship between macroeconomic factors and the operations of data centers and industrial customers. It highlights that while data centers, like traditional industrial customers, make long-term investments and are not heavily influenced by short-term economic changes, such as tariffs or recessions. Andrew Marsh asserts that these customers focus on long-term growth and are likely to continue investing despite macroeconomic fluctuations. However, he points out that their core business is not entirely recession-proof, though they support some of the most competitive industrials globally. These industrials, due to significant past investments, would be resilient in a macroeconomic change, being the last to shut down and first to resume operations.

The paragraph discusses the resilience and low sensitivity of industrial markets, particularly in the Gulf Coast, to economic downturns. It mentions that a 1% change in industrial sales only affects earnings by $0.01, indicating strong demand and robust operation expectations for industrial customers despite potential downturns. The conversation shifts to financial aspects, focusing on the transferability and its impact on the FFO (Funds From Operations) to debt metric. Despite the potential sunset of transferability, the company expects to remain above its threshold, considering options like safe harboring and tax equity partnerships to manage the financial impact. The company has experience with tax equity, and it is treated as usual in the FFO calculations.

In the paragraph, during a discussion, Andrew Weisel from Scotiabank asks Kimberly Fontan to clarify a reduction in the load growth forecast, confirming it's due to the pace of new customer ramping rather than existing customer usage. Fontan confirms this assumption and states that the EPS impact is minor, with industrial growth forecast in 2025 still expected to be close to the original 11% to 12% despite timing changes. Weisel asks about the significant investment proposals listed in a presentation and how much is already included in the CapEx plan, querying about potential risks and regulatory approval impacts. Fontan mentions that a $37 billion plan through 2028 includes listed investments, and any future additions would depend on customer growth. The operator then transitions to taking a question from Travis Miller of Morningstar.

In the conversation, Travis Miller asks Andrew Marsh if there has been any strategic shift in contracting with large industrial customers, especially in terms of switching from shorter-term contracts to longer-term or fixed-price contracts due to increased demand for new generation and transmission. Andrew Marsh responds that their strategy has not significantly changed, as they have experience working with large industrial customers and have adapted existing contracting frameworks, including credit provisions and minimum bill charges, for the current environment, particularly for data centers. When asked about precedent for a new customer investment in Louisiana, Marsh explains that the investment components are standard and have been requested before, with a specific customer being served in this instance.

The paragraph discusses a company's strategy to manage the impact of investments on customer bills, highlighting existing long-term contract approvals and tariffs, particularly in Louisiana, to serve large industrial customers. It also concludes a Q&A session and provides information about the company's forthcoming quarterly report, which will be filed with the SEC on May 12 and contain more financial details. The paragraph emphasizes the importance of the company's Investor Relations website for updates on regulatory proceedings and strategic execution, noting that while some material information can be found there, it should not be solely relied upon for all company information. The call is then concluded.

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