Entergy(ETR) - 2024 Q4 - Annual Report

Financial Performance - Entergy Corporation reported a revenue increase of 5% year-over-year, reaching $12.5 billion for the fiscal year 2023[28]. - The company achieved a net income of$1.2 billion, reflecting a 10% increase compared to the previous year[28]. - Entergy's net income attributable to the corporation for 2024 was $1,826,704, a decrease of 27$2,507,127 in 2023[48]. - Operating revenues for 2024 were $11,806 million, down from$12,023 million in 2023, reflecting a decrease of 1.8%[52]. - Consolidated net income attributable to Entergy Corporation for 2024 was $1,055,590, a decline of 55.3$2,356,536 in 2023[215]. - Basic earnings per share decreased to $2.47 in 2024 from$5.57 in 2023, reflecting a 55.7% drop[215]. - Total operating revenues for 2024 were $11,879,653, a decrease of 2.2$12,147,412 in 2023[215]. - Operating income increased to $2,651,090 in 2024, up 1.3$2,617,975 in 2023[215]. - Total operating expenses decreased to $9,228,563 in 2024, down 3.2$9,529,437 in 2023[215]. - Interest expense rose to $1,203,588 in 2024, an increase of 15.1$1,046,164 in 2023[215]. - Comprehensive income attributable to Entergy Corporation for 2024 was $1,260,819, a decrease of 47.1$2,385,830 in 2023[220]. Customer and Market Growth - Customer growth was noted at 2.5%, with a total of 3 million customers served across its operating regions[28]. - The anticipated load growth may not materialize, posing risks to Entergy's financial performance[34]. - The impact of geopolitical events, such as the military activities between Russia and Ukraine, on electricity demand and supply chain disruptions[36]. - The effects of inflation and economic conditions on customer demand for electricity[34]. Investment and Capital Expenditures - Entergy expects to invest approximately $20 billion over the next five years in infrastructure improvements and renewable energy projects[28]. - Planned capital investments for 2025 total$8.395 billion, with generation investments at $4.105 billion and transmission investments at$1.55 billion[101]. - Construction/capital expenditures for 2024 were $4,838,339, an increase from$4,440,652 in 2023[223]. Renewable Energy and Sustainability - The company is focusing on expanding its renewable energy portfolio, targeting a 30% increase in renewable generation capacity by 2025[28]. - Entergy's commitment to achieve net-zero carbon emissions by 2050, with increasing investments in renewable power generation and carbon capture technologies[34]. - Entergy's focus on enhancing its carbon-free energy capacity and reducing its carbon emission rate[34]. Operational Efficiency and Cost Management - Entergy plans to enhance its operational efficiency, aiming for a 15% reduction in operational costs by 2024[28]. - The company is actively pursuing strategic acquisitions to bolster its market position, with potential targets in the renewable energy sector[28]. - Entergy's strategies to manage capital projects effectively to meet the growing demand for electricity, particularly from large data centers[34]. - Other operation and maintenance expenses increased from $2,838 million in 2023 to$2,851 million in 2024, primarily due to higher compensation and benefits costs, energy efficiency expenses, and transmission costs[61]. Regulatory and Compliance Challenges - The company anticipates regulatory challenges but remains committed to maintaining compliance and adapting to new regulations[28]. - Entergy Arkansas implemented a formula rate plan rate increase effective January 2024, contributing to the retail electric price variance[59]. - The LPSC has proposed new reporting and compliance obligations for utilities, including grid hardening plans and storm restoration plans[127]. - Entergy's rates are subject to regulatory rate-setting processes, impacting multiple financial statement line items and disclosures[209]. Debt and Financing - Entergy's debt to capital ratio increased to 65.3% in 2024 from 63.8% in 2023, primarily due to net issuance of long-term debt[83]. - Entergy Corporation has a credit facility with a borrowing capacity of $3 billion, with an estimated interest rate of 5.96$1.2 billion of junior subordinated debentures in May 2024 and higher commercial paper balances[68]. - Entergy expects to issue approximately $4.7 billion of equity through 2028, with$1.4 billion already contracted under forward sale agreements as of December 31, 2024[138]. Pension and Employee Benefits - Entergy's estimated qualified pension cost for 2025 is $85.3 million, a decrease from$391.5 million in 2024, which included settlement costs of $328 million[180]. - Entergy contributed$270 million to its qualified pension plans in 2024 and estimates contributions will be approximately $240 million in 2025[188]. - The company reported a pension settlement charge of$319,675 in 2024, indicating a new strategy in managing pension liabilities[223]. Technology and Innovation - Entergy's new technology initiatives include investments in smart grid technology, projected to improve service reliability by 20%[28]. - Entergy's ability to effectively implement new technologies and manage associated challenges, including data security[34]. - Increased cybersecurity risks due to remote work arrangements and the potential impact on operational control[36]. Environmental and Legal Risks - Entergy is subject to various federal and state laws and regulations, which expose it to environmental, litigation, and other risks[191]. - Entergy conducts studies to determine the extent of required environmental remediation and has recorded liabilities based on the likelihood of loss and expected dollar amounts[192]. - The company regularly reviews lawsuits in which it is named as a defendant and assesses the likelihood of loss, recording liabilities for cases deemed probable[193].