10-KPeriod: FY2018

ENTERGY CORP /DE/ Annual Report, Year Ended Dec 31, 2018

Filed February 26, 2019For Securities:ETR

Summary

Entergy Corporation, an integrated energy company, primarily engages in electric power production and retail distribution, serving 2.9 million utility customers across Arkansas, Louisiana, Mississippi, and Texas. The company's strategy centers on operating a world-class utility business focused on safety, reliability, customer service, and sustainability. Entergy operates through two main segments: Utility and Entergy Wholesale Commodities. The Utility segment, which includes five wholly-owned retail electric utility subsidiaries, is the core of its business, focusing on modernization and customer service. The Entergy Wholesale Commodities segment is undergoing an exit from the merchant power business, involving the operation, shutdown, or sale of its nuclear power plants. The company's financial performance and operations are heavily influenced by regulatory frameworks, with significant detail provided on rate-setting mechanisms, fuel cost recovery clauses, and various riders across its operating subsidiaries. Capital investments are focused on modernizing operations and infrastructure to ensure reliability and meet future demand.

Financial Statements
Beta
Revenue$11.01B
Operating Expenses$10.54B
Operating Income$469.37M
Interest Expense$768.32M
Net Income$862.55M
EPS (Basic)$2.34
EPS (Diluted)$2.31
Shares Outstanding (Basic)362.82M
Shares Outstanding (Diluted)366.76M

Key Highlights

  • 1Entergy Corporation is a diversified utility company serving 2.9 million customers in four states, with a strategic focus on its core utility business.
  • 2The company operates through two primary segments: Utility and Entergy Wholesale Commodities, with the latter undergoing an exit from the merchant power business.
  • 3Entergy's utility operations are subject to significant state and federal regulation, impacting rates, operations, and capital recovery.
  • 4The company is actively investing in modernizing its operations and infrastructure, including significant planned capital expenditures across its utility subsidiaries.
  • 5Fuel and purchased power costs are recovered through various regulatory mechanisms, with Entergy Louisiana and Entergy Mississippi hedging a portion of their natural gas price exposure.
  • 6Nuclear power generation remains a significant part of Entergy's portfolio, but the company is managing the exit from its merchant nuclear power plants.
  • 7Environmental regulations and compliance are ongoing considerations, with significant disclosures on air quality, water quality, and waste management.

Frequently Asked Questions

Entergy operates primarily through two segments: Utility and Entergy Wholesale Commodities. The Utility segment focuses on electric power generation, transmission, distribution, and retail sales in Arkansas, Louisiana, Mississippi, and Texas. The Entergy Wholesale Commodities segment is involved in the operation, shutdown, or sale of its nuclear power plants and related activities.

Entergy's utility operating companies generally recover fuel and purchased power costs through rate mechanisms such as energy cost recovery riders, fuel adjustment clauses, and purchased gas adjustment clauses. These mechanisms are subject to periodic regulatory review and true-up adjustments to reflect actual costs.

Entergy is in the process of exiting its merchant power business, which includes the planned shutdown or sale of its nuclear power plants. The company is managing the operational aspects and decommissioning liabilities associated with these plants during this transition.

Entergy's utility operations are subject to regulation by federal agencies such as the FERC, which oversees wholesale electricity sales and interstate transmission, and state regulatory bodies like the Arkansas Public Service Commission (APSC), Louisiana Public Service Commission (LPSC), Mississippi Public Service Commission (MPSC), and the Texas Public Utility Commission (PUCT). These regulatory bodies determine retail rates, service standards, and fuel cost recovery mechanisms.