Entergy Earnings Call Insights: Earned Regulatory ROEs and Cash Generation of Assets
Entergy Corp (NYSE:ETR) recently reported its fourth quarter earnings and discussed the following topics in its earnings conference call.
Earned Regulatory ROEs
Julien Dumoulin-Smith – UBS: Quick first question here for you. On the – given all the rate cases are coming, what was your earned regulatory ROEs across your jurisdictions, and I was specifically thinking about 2012 or those jurisdictions where you are filing?
Leo P. Denault – Chairman and CEO: Theo?
Theo Bunting – Group President, Utility Operations: In 2012, I think if you look at what the earned ROEs were, they were – actually they were within – a little above the allowed ROEs in the jurisdiction we were talking of filing, principally Arkansas and Louisiana. So, as it relates to 2012, ROEs in those jurisdictions were fairly close to slightly above the allowed ROEs.
Julien Dumoulin-Smith – UBS: Sorry, you said Arkansas and Louisiana. Then with respect to Texas, if you could just comment where that is and perhaps specifically in the back half of the year and how that’s trending given the PPA?
Andrew Marsh – EVP and CFO: I mean, obviously, as Leo spoke earlier, we have our challenges in Texas and as you would expect given the impacts we talked about realistically in the filing of our rate case, if you remember back a couple of quarters ago and the impact of not recovering that capacity cost (indiscernible) ROEs, we talked about ROEs maybe impacting earned ROEs to a level of somewhere close to 6% and obviously you’ll see that impact in 2012 in Texas. So, obviously, it’s not as nice a picture in say Arkansas and Louisiana; but as Leo laid out, we do have options in terms of how we’ll work to address that and that’s our objective and goal in 2013 is to pursue the path have available to improve that result.