10-QPeriod: Q1 FY2021

ENTERGY CORP /DE/ Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 6, 2021For Securities:ETR

Summary

Entergy Corporation's (ETR) Q1 2021 results, as detailed in this 10-Q filing, show resilience despite operational challenges, particularly from Winter Storm Uri and ongoing COVID-19 impacts. While consolidated net income figures are not explicitly presented for the parent company, the subsidiary-level analysis reveals varying performance across regions. Entergy Arkansas saw a significant increase in net income driven by regulatory liability reversals and higher sales volume, although this was partially offset by increased fuel costs due to the winter storm. Entergy Louisiana experienced a net income decrease, largely due to a prior-year tax settlement's impact and higher operational expenses, though it also faced substantial storm-related costs requiring recovery filings. Overall, the company's diversified operations and regulatory frameworks are being tested by extreme weather events and pandemic-related economic pressures, but appear to be managed through established recovery mechanisms and capital management strategies.

Financial Highlights

44 data points
Beta

Revenue

$2.84B

Net Income

$339.14M

11.9% Net Margin

EPS (Diluted)

$0.83

Total Assets

$58.67B

Cash & Equivalents

$1.74B

Free Cash Flow

-$49.56M

Financial Statements
Beta
Revenue$2.84B
Operating Expenses$2.34B
Operating Income$508.00M
Interest Expense$205.89M
Net Income$339.14M
EPS (Basic)$0.83
EPS (Diluted)$0.83
Shares Outstanding (Basic)401.05M
Shares Outstanding (Diluted)402.12M

Key Highlights

  • 1Winter Storm Uri significantly increased fuel and purchased power costs across Entergy's operating subsidiaries, notably impacting Entergy Arkansas ($145M increase) and Entergy Louisiana ($285M increase).
  • 2Entergy Arkansas reported a substantial increase in net income ($48.4 million) primarily due to the reversal of a regulatory liability for a netting adjustment and higher sales volume/favorable weather.
  • 3Entergy Louisiana's net income decreased by $22.8 million, largely influenced by a significant prior-year IRS settlement and increased operating expenses, alongside substantial storm restoration costs.
  • 4Entergy Louisiana is seeking recovery for approximately $2.05 billion in storm restoration costs related to Hurricanes Laura, Delta, Zeta, and Winter Storm Uri.
  • 5Entergy Texas experienced a net income increase of $17.4 million, driven by higher retail electric prices and sales volume/weather, despite elevated costs from Winter Storm Uri.
  • 6System Energy Resources, Inc. faces potential significant financial impact from ongoing FERC proceedings regarding its authorized return on equity and capital structure, with an ALJ decision proposing refunds totaling approximately $59 million.
  • 7All subsidiaries reported effective internal controls and procedures as of March 31, 2021, with no material changes identified in internal controls over financial reporting during the quarter.

Frequently Asked Questions

Winter Storm Uri significantly increased fuel and purchased power costs for several Entergy subsidiaries. For example, Entergy Arkansas saw costs rise by approximately $105 million in February 2021 compared to February 2020, and Entergy Louisiana's costs increased by approximately $190 million over the same period. Entergy Texas also reported a substantial increase in fuel and purchased power costs due to the storm.

Entergy's subsidiaries are utilizing established regulatory processes to recover costs. For instance, Entergy Louisiana has filed for recovery of approximately $2.05 billion for restoration efforts related to Hurricanes Laura, Delta, Zeta, and Winter Storm Uri. Entergy Arkansas is recovering a portion of increased fuel costs from Winter Storm Uri through its energy cost recovery rider, and Entergy Louisiana has received approval to defer and recover incremental fuel costs over five months. Entergy Texas is also seeking recovery for restoration costs associated with hurricanes and Winter Storm Uri.

Yes, System Energy Resources, Inc. is involved in a significant Federal Energy Regulatory Commission (FERC) proceeding. An Administrative Law Judge (ALJ) has issued an initial decision that could result in refunds of approximately $59 million related to its authorized return on equity and capital structure, plus interest. The company is challenging this decision. Additionally, Entergy Arkansas and Entergy Mississippi settled environmental claims related to coal-burning units, with the settlement approved by a U.S. District Court in March 2021. Entergy Louisiana is also awaiting further instructions from a U.S. District Court regarding its challenge to an APSC order on opportunity sales payments.

As of March 31, 2021, management, including Principal Executive Officers and Principal Financial Officers, concluded that the disclosure controls and procedures for each registrant were effective. Furthermore, no changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.