Item 4. Controls and Procedures

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of March 31, 2024, evaluations were performed under the supervision and with the participation of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy (each individually a “Registrant” and collectively the “Registrants”) management, including their respective Principal Executive Officers (PEO) and Principal Financial Officers (PFO). The evaluations assessed the effectiveness of the Registrants’ disclosure controls and procedures. Based on the evaluations, each PEO and PFO has concluded that, as to the Registrant or Registrants for which they serve as PEO or PFO, the Registrant’s or Registrants’ disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms; and that the Registrant’s or Registrants’ disclosure controls and procedures are also effective in reasonably assuring that such information is accumulated and communicated to the Registrant’s or Registrants’ management, including their respective PEOs and PFOs, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Under the supervision and with the participation of each Registrant’s management, including its respective PEO and PFO, each Registrant evaluated changes in internal control over financial reporting that occurred during the quarter ended March 31, 2024 and found no change that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

ENTERGY ARKANSAS, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Entergy Arkansas experienced a net loss of $32.3 million for the three months ended March 31, 2024 compared to net income of $59.4 million for the three months ended March 31, 2023 primarily due to a $131.8 million ($99.1 million net-of-tax) charge to reflect the write-off of a previously recorded regulatory asset as a result of an adverse decision in the opportunity sales proceeding in March 2024. Partially offsetting the charge to Entergy Arkansas’s earnings were higher retail electric price and higher volume/weather. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the opportunity sales proceeding.

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:


			Amount
			(In Millions)
2023 operating revenues			$582.7
Fuel, rider, and other revenues that do not significantly affect net income			14.1
Retail electric price			15.1
Volume/weather			10.1

2024 operating revenues			$622.0

Entergy Arkansas’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs such that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues that do not significantly affect net income” includes the revenue variance associated with these items.

The retail electric price variance is primarily due to an increase in formula rate plan rates effective January 2024. See Note 2 to the financial statements in the Form 10-K for discussion of the 2023 formula rate plan filing.

The volume/weather variance is primarily due to the effect of more favorable weather on residential sales and an increase in industrial usage. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the technology industry, and an increase in demand from small industrial customers. The increased usage from these industrial customers has a relatively smaller effect on operating revenues because a larger portion of the revenues from those customers comes from fixed charges.

Entergy Arkansas, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Arkansas for the three months ended March 31, 2024 and 2023 are as follows:


	2024	2023	% Change
	(GWh)
Residential	1,966	1,802	9
Commercial	1,280	1,239	3
Industrial	2,268	2,050	11
Governmental	46	46	—
Total retail	5,560	5,137	8
Sales for resale:
Associated companies	462	564	(18)
Non-associated companies	966	1,568	(38)
Total	6,988	7,269	(4)

See Note 12 to the financial statements herein for additional discussion of Entergy Arkansas’s operating revenues.

Other Income Statement Variances

Fuel, fuel-related expenses, and gas purchased for resale includes a credit of $9 million, recorded in first quarter 2024, for costs related to net metering. The costs were incurred in 2023 and included within Entergy Arkansas’s annual redetermination of its energy cost recovery rider filed in March 2024 due to a change in law in the state of Arkansas. See Note 2 to the financial statements herein for discussion of the March 2024 energy cost recovery rider filing.

Other operation and maintenance expenses increased primarily due to:

the effects of recording a final judgment in first quarter 2023 to resolve claims in the ANO damages case against the DOE related to spent nuclear fuel storage costs. The damages awarded included the reimbursement of approximately $10.3 million of spent nuclear fuel storage costs previously recorded as other operation and maintenance expenses. See Note 8 to the financial statements in the Form 10-K for discussion of the spent nuclear fuel litigation;
an increase of $3.8 million in energy efficiency expenses primarily due to the timing of recovery from customers;
an increase of $2.5 million in power delivery expenses primarily due to higher vegetation maintenance costs due to timing;
an increase of $2.3 million in compensation and benefits costs primarily due to higher healthcare claims activity in 2024; and
an increase of $2.2 million in contract costs related to operational performance, customer service, and organizational health initiatives.

Asset write-offs includes a $131.8 million ($99.1 million net-of-tax) charge to reflect the write-off of a previously recorded regulatory asset as a result of an adverse decision in the opportunity sales proceeding in March 2024. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the opportunity sales proceeding.

Depreciation and amortization expenses increased primarily due to additions to plant in service.

Entergy Arkansas, LLC and Subsidiaries

Management's Financial Discussion and Analysis

Entergy Arkansas records a regulatory charge or credit for the difference between asset retirement obligation-related expenses and nuclear decommissioning trust earnings plus asset retirement obligation-related costs collected in revenue.

Other income increased primarily due to changes in decommissioning trust fund activity, including portfolio rebalancing of the decommissioning trust funds in first quarter 2024.

Income Taxes

The effective income tax rate was 24.8% for the first quarter 2024. The difference in the effective income tax rate for the first quarter 2024 versus the federal statutory rate of 21% was primarily due to certain book and tax differences related to utility plant items and the accrual for state income taxes, partially offset by the amortization of state accumulated deferred income taxes as a result of tax rate changes.

The effective income tax rate was 14.9% for the first quarter 2023. The difference in the effective income tax rate for the first quarter 2023 versus the federal statutory rate of 21% was primarily due to the amortization of state accumulated deferred income taxes as a result of tax rate changes and certain book and tax differences related to utility plant items, partially offset by the accrual for state income taxes.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” herein and in the Form 10-K for discussion of income tax legislation and regulation.

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:


	2024	2023
	(In Thousands)
Cash and cash equivalents at beginning of period	$3,632	$5,278

Net cash provided by (used in):
Operating activities	287,251	274,037
Investing activities	(371,389)	(306,032)
Financing activities	126,073	186,302
Net increase in cash and cash equivalents	41,935	154,307

Cash and cash equivalents at end of period	$45,567	$159,585

Operating Activities

Net cash flow provided by operating activities increased $13.2 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to higher collections from customers. The increase was partially offset by:

the timing of recovery of fuel and purchased power costs. See Note 2 to the financial statements herein and in the Form 10-K for a discussion of fuel and purchased power cost recovery;

Entergy Arkansas, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

the refund of $41.7 million received from System Energy in January 2023 related to the sale-leaseback renewal costs and depreciation litigation as calculated in System Energy’s January 2023 compliance report filed with the FERC. The refund was subsequently applied to the under-recovered deferred fuel balance. See Note 2 to the financial statements in the Form 10-K for further discussion of the refund and the related proceedings;
the timing of payments to vendors;
an increase of $23 million in interest paid; and
an increase of $5.6 million in pension contributions in 2024. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K and Note 6 to the financial statements herein for a discussion of qualified pension and other postretirement benefits funding.

Investing Activities

Net cash flow used in investing activities increased $65.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to the initial payment of approximately $169.7 million in February 2024 for the purchase of the Walnut Bend Solar facility. The increase was partially offset by:

a decrease of $53 million in distribution construction expenditures primarily due to lower capital expenditures for storm restoration in 2024;
a decrease of $27.2 million as a result of fluctuations in nuclear fuel activity due to variations from year to year in the timing and pricing of fuel reload requirements, materials and services deliveries, and the timing of cash payments during the nuclear fuel cycle;
a decrease of $8.1 million in nuclear construction expenditures primarily due to decreased spending on various nuclear projects in 2024; and
a decrease of $5.8 million in non-nuclear generation construction expenditures primarily due to a lower scope of work, including during plant outages, performed in 2024 as compared to 2023.

See Note 14 to the financial statements herein for discussion of the Walnut Bend Solar facility purchase.

Financing Activities

Net cash flow provided by financing activities decreased $60.2 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to the issuance of $425 million of 5.15% Series mortgage bonds in January 2023 and net repayments of $70.2 million in 2024 compared to net borrowings of $31.5 million in 2023 on the nuclear fuel company variable interest entity’s credit facility. The decrease was partially offset by:

a capital contribution of approximately $275 million received from Entergy Corporation in 2024 in anticipation of upcoming expenditures, including the acquisition of the Walnut Bend Solar facility;
$80 million in common equity distributions paid in 2023 in order to maintain Entergy Arkansas’s capital structure;
the issuance of $70 million of 5.54% Series O notes by the Entergy Arkansas nuclear fuel company variable interest entity in March 2024; and
money pool activity.

Decreases in Entergy Arkansas’s payable to the money pool are a use of cash flow, and Entergy Arkansas’s payable to the money pool decreased $145.4 million for the three months ended March 31, 2024 compared to decreasing by $180.8 million for the three months ended March 31, 2023. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Entergy Arkansas, LLC and Subsidiaries

Management's Financial Discussion and Analysis

See Note 4 to the financial statements herein and Note 5 to the financial statements in the Form 10-K for more details on long-term debt.

Capital Structure

Entergy Arkansas’s debt to capital ratio is shown in the following table. The decrease in the debt to capital ratio for Entergy Arkansas is primarily due to the capital contribution of $275 million received from Entergy Corporation in 2024.


	March 31, 2024		December 31, 2023
Debt to capital	54.0	%	55.5	%
Effect of subtracting cash	(0.3	%)	—	%
Net debt to net capital (non-GAAP)	53.7	%	55.5	%

Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings, finance lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt and equity. Net capital consists of capital less cash and cash equivalents. Entergy Arkansas uses the debt to capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Arkansas’s financial condition. The net debt to net capital ratio is a non-GAAP measure. Entergy Arkansas also uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Arkansas’s financial condition because net debt indicates Entergy Arkansas’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Uses and Sources of Capital

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources” in the Form 10-K for a discussion of Entergy Arkansas’s uses and sources of capital. The following are updates to the information provided in the Form 10-K.

Entergy Arkansas’s receivables from or (payables to) the money pool were as follows:


March 31, 2024	December 31, 2023	March 31, 2023	December 31, 2022
(In Thousands)
$8,505	($145,385)	$11,035	($180,795)

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

Entergy Arkansas has a credit facility in the amount of $150 million scheduled to expire in June 2028. Entergy Arkansas also has a $25 million credit facility scheduled to expire in April 2026. The $150 million credit facility includes fronting commitments for the issuance of letters of credit against $5 million of the borrowing capacity of the facility. As of March 31, 2024, there were no cash borrowings and no letters of credit outstanding under the credit facilities. In addition, Entergy Arkansas is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of March 31, 2024, $2.1 million in letters of credit were outstanding under Entergy Arkansas’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for discussion of the credit facilities.

The Entergy Arkansas nuclear fuel company variable interest entity has a credit facility in the amount of $80 million scheduled to expire in June 2025. As of March 31, 2024, there were no loans outstanding under the

Entergy Arkansas, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

credit facility for the Entergy Arkansas nuclear fuel company variable interest entity. See Note 4 to the financial statements herein for discussion of the nuclear fuel company variable interest entity credit facility.

State and Local Rate Regulation and Fuel-Cost Recovery

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – State and Local Rate Regulation and Fuel-Cost Recovery” in the Form 10-K for a discussion of state and local rate regulation and fuel-cost recovery. The following are updates to that discussion.

Fuel and purchased power cost recovery

Energy Cost Recovery Rider

In March 2024 Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider, which reflected a decrease in the rate from $0.01883 per kWh to $0.00882 per kWh. Due to a change in law in the state of Arkansas, the annual redetermination included $9 million, recorded as a credit to fuel expense in first quarter 2024, for recovery attributed to net metering costs in 2023. The primary reason for the rate decrease is a large over-recovered balance as a result of lower natural gas prices in 2023. To mitigate the effect of projected increases in natural gas prices in 2024, Entergy Arkansas adjusted the over-recovered balance included in the March 2024 annual redetermination filing by $43.7 million. This adjustment is expected to reduce the rate change that will be reflected in the 2025 energy cost rate redetermination. The redetermined rate of $0.00882 per kWh became effective with the first billing cycle in April 2024 through the normal operation of the tariff.

Opportunity Sales Proceeding

See Note 2 to the financial statements in the Form 10-K for discussion of the Entergy Arkansas opportunity sales proceeding. As discussed in the Form 10-K, in September 2020, Entergy Arkansas filed a complaint in the U.S. District Court for the Eastern District of Arkansas challenging the APSC’s denial of recovery of $135 million of payments to other Utility operating companies in December 2018 relating to off-system sales of electricity from 2002-2009, as ordered by the FERC. The complaint also involved a challenge to the $13.7 million, plus interest, of related refunds ordered by the APSC and paid by Entergy Arkansas in August 2020. The trial was held in February 2023. Following the trial, Entergy Arkansas filed a motion with the United States Court of Appeals for the Eighth District to expedite the appeal filed by Arkansas Electric Energy Consumers, Inc. The United States Court of Appeals for the Eighth District granted Entergy Arkansas’s request, and oral arguments were held in June 2023. In August 2023 the United States Court of Appeals for the Eighth District affirmed the order of the court denying Arkansas Electric Energy Consumers, Inc.’s motion to intervene.

In March 2024 the U.S. District Court for the Eastern District of Arkansas issued a judgment in favor of the APSC and against Entergy Arkansas. In March 2024 Entergy Arkansas filed a notice of appeal and a motion to expedite oral arguments with the United States Court of Appeals for the Eighth District and the court granted the motion to expedite and issued an order establishing that the briefing will occur in May 2024 through July 2024. As a result of the adverse decision by the U.S. District Court for the Eastern District of Arkansas, Entergy Arkansas concluded that it could no longer support the recognition of its $131.8 million regulatory asset reflecting the previously-expected recovery of a portion of the costs at issue in the opportunity sales proceeding and recorded a $131.8 million ($99.1 million net-of-tax) charge to earnings in first quarter 2024.

Federal Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Federal Regulation” in the Form 10-K for a discussion of federal regulation.

Entergy Arkansas, LLC and Subsidiaries

Management's Financial Discussion and Analysis

Nuclear Matters

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Nuclear Matters” in the Form 10-K for a discussion of nuclear matters.

Environmental Risks

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks” in the Form 10-K for a discussion of environmental risks.

Critical Accounting Estimates

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Arkansas’s accounting for nuclear decommissioning costs, utility regulatory accounting, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

New Accounting Pronouncements

See the “New Accounting Pronouncements” section of Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements and the “New Accounting Pronouncements” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis herein for updates to the discussion of new accounting pronouncements.


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)


		2024	2023
	(In Thousands)
OPERATING REVENUES
Electric		$622,045	$582,749

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale		106,439	113,509
Purchased power		52,320	64,751
Nuclear refueling outage expenses		14,088	15,341
Other operation and maintenance		178,041	156,819
Asset write-offs		131,775	—
Decommissioning		22,647	21,350
Taxes other than income taxes		36,224	32,351
Depreciation and amortization		102,991	96,441
Other regulatory charges (credits) - net		48,619	(20,844)
TOTAL		693,144	479,718

OPERATING INCOME (LOSS)		(71,099)	103,031

OTHER INCOME
Allowance for equity funds used during construction		5,532	4,843
Interest and investment income		72,760	7,479
Miscellaneous - net		(3,581)	(2,100)
TOTAL		74,711	10,222

INTEREST EXPENSE
Interest expense		49,265	45,367
Allowance for borrowed funds used during construction		(2,699)	(1,945)
TOTAL		46,566	43,422

INCOME (LOSS) BEFORE INCOME TAXES		(42,954)	69,831

Income taxes		(10,674)	10,434

NET INCOME (LOSS)		(32,280)	59,397

Net loss attributable to noncontrolling interest		(1,818)	(1,629)

EARNINGS (LOSS) APPLICABLE TO MEMBER'S EQUITY		($30,462)	$61,026

See Notes to Financial Statements.

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ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
	2024	2023
	(In Thousands)
OPERATING ACTIVITIES
Net income (loss)	($32,280)	$59,397
Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	144,309	134,779
Deferred income taxes, investment tax credits, and non-current taxes accrued	8,754	15,495
Asset write-offs	131,775	—
Changes in assets and liabilities:
Receivables	27,640	57,003
Fuel inventory	(289)	(15,255)
Accounts payable	(36,137)	(58,227)
Taxes accrued	4,735	10,647
Interest accrued	16,868	35,905
Deferred fuel costs	18,179	87,581
Other working capital accounts	13,059	(3,948)
Provisions for estimated losses	4,387	(6,600)
Other regulatory assets	197,825	(27,001)
Other regulatory liabilities	21,357	45,201
Pension and other postretirement funded status	(15,541)	(7,998)
Other assets and liabilities	(217,390)	(52,942)
Net cash flow provided by operating activities	287,251	274,037

INVESTING ACTIVITIES
Construction expenditures	(180,227)	(255,248)
Allowance for equity funds used during construction	5,532	4,843
Payment for purchase of plant	(169,694)	—
Nuclear fuel purchases	(44,445)	(55,974)
Proceeds from sale of nuclear fuel	33,213	17,549
Proceeds from nuclear decommissioning trust fund sales	204,049	32,798
Investment in nuclear decommissioning trust funds	(211,342)	(38,948)
Changes in money pool receivable - net	(8,505)	(11,035)



Decrease (increase) in other investments	30	(17)
Net cash flow used in investing activities	(371,389)	(306,032)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	179,937	514,206
Retirement of long-term debt	(180,405)	(62,505)


Capital contribution from parent	275,000	—
Changes in money pool payable - net	(145,385)	(180,795)
Common equity distributions paid	—	(80,000)
Other	(3,074)	(4,604)
Net cash flow provided by financing activities	126,073	186,302

Net increase in cash and cash equivalents	41,935	154,307
Cash and cash equivalents at beginning of period	3,632	5,278
Cash and cash equivalents at end of period	$45,567	$159,585

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$31,793	$8,823

Noncash investing activities:
Accrued construction expenditures	$35,791	$64,396

See Notes to Financial Statements.


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$12,713	$520
Temporary cash investments	32,854	3,112
Total cash and cash equivalents	45,567	3,632
Accounts receivable:
Customer	159,501	157,520
Allowance for doubtful accounts	(6,522)	(7,182)
Associated companies	132,614	124,672
Other	85,474	89,532
Accrued unbilled revenues	91,459	117,119
Total accounts receivable	462,526	481,661

Fuel inventory - at average cost	57,784	57,495
Materials and supplies - at average cost	374,295	358,302
Deferred nuclear refueling outage costs	24,996	35,463
Prepayments and other	24,412	40,866
TOTAL	989,580	977,419

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds	1,501,909	1,414,009
Other	800	801
TOTAL	1,502,709	1,414,810

UTILITY PLANT
Electric	14,971,311	14,821,814
Construction work in progress	488,814	340,601
Nuclear fuel	184,962	213,722
TOTAL UTILITY PLANT	15,645,087	15,376,137
Less - accumulated depreciation and amortization	6,066,097	6,002,203
UTILITY PLANT - NET	9,578,990	9,373,934

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets	1,687,536	1,885,361
Other	147,166	21,334
TOTAL	1,834,702	1,906,695

TOTAL ASSETS	$13,905,981	$13,672,858

See Notes to Financial Statements.


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$375,000	$375,000
Accounts payable:
Associated companies	50,607	225,344
Other	195,003	215,502
Customer deposits	118,498	113,186
Taxes accrued	109,886	105,151
Interest accrued	52,238	35,370
Deferred fuel costs	106,461	88,282
Other	52,388	55,683
TOTAL	1,060,081	1,213,518

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	1,440,879	1,437,053
Accumulated deferred investment tax credits	26,970	27,270
Regulatory liability for income taxes - net	390,470	392,496
Other regulatory liabilities	782,564	759,181
Decommissioning	1,568,620	1,560,057
Accumulated provisions	63,346	58,959
Pension and other postretirement liabilities	114,843	8,901
Long-term debt	4,300,636	4,298,080
Other	154,432	156,673
TOTAL	8,842,760	8,698,670

Commitments and Contingencies

EQUITY
Member's equity	3,983,609	3,739,071
Noncontrolling interest	19,531	21,599
TOTAL	4,003,140	3,760,670

TOTAL LIABILITIES AND EQUITY	$13,905,981	$13,672,858

See Notes to Financial Statements.


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)

	Noncontrolling Interest	Member's Equity	Total
	(In Thousands)

Balance at December 31, 2022	$27,825	$3,753,990	$3,781,815

Net income (loss)	(1,629)	61,026	59,397
Common equity distributions	—	(80,000)	(80,000)



Distributions to noncontrolling interest	(104)	—	(104)
Balance at March 31, 2023	$26,092	$3,735,016	$3,761,108
















Balance at December 31, 2023	$21,599	$3,739,071	$3,760,670

Net loss	(1,818)	(30,462)	(32,280)

Capital contribution from parent	—	275,000	275,000



Distributions to noncontrolling interest	(250)	—	(250)
Balance at March 31, 2024	$19,531	$3,983,609	$4,003,140



















See Notes to Financial Statements.

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Net income decreased $61.3 million primarily due to the net effects of Entergy Louisiana’s storm cost securitization in March 2023, including a $133.4 million reduction in income tax expense, partially offset by a $103.4 million ($76.4 million net-of-tax) regulatory charge to reflect Entergy Louisiana’s obligation to share the benefits of the securitization with customers; higher other operation and maintenance expenses; and higher depreciation and amortization expenses. The decrease was partially offset by higher other income, higher volume/weather, and higher retail electric price. See Note 2 to the financial statements in the Form 10-K for discussion of the March 2023 storm cost securitization.

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:


			Amount
			(In Millions)
2023 operating revenues			$1,345.2
Fuel, rider, and other revenues that do not significantly affect net income			(138.8)
Storm restoration carrying costs			(30.6)
Retail electric price			11.3
Volume/weather			15.3
2024 operating revenues			$1,202.4

Entergy Louisiana’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs such that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues that do not significantly affect net income” includes the revenue variance associated with these items.

Storm restoration carrying costs represent the equity component of storm restoration carrying costs recognized as part of the securitization of Hurricane Ida restoration costs in March 2023. See Note 2 to the financial statements in the Form 10-K for discussion of the March 2023 storm cost securitization.

The retail electric price variance is primarily due to an increase in formula rate plan revenues, including increases in the distribution and transmission recovery mechanisms, effective September 2023. See Note 2 to the financial statements in the Form 10-K for discussion of the formula rate plan proceeding.

The volume/weather variance is primarily due to the effect of more favorable weather on residential sales and an increase in weather-adjusted residential usage.

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Louisiana for the three months ended March 31, 2024 and 2023 are as follows:


	2024	2023	% Change
	(GWh)
Residential	2,815	2,685	5
Commercial	2,455	2,447	—
Industrial	7,761	7,832	(1)
Governmental	199	194	3
Total retail	13,230	13,158	1
Sales for resale:
Associated companies	1,258	1,677	(25)
Non-associated companies	382	224	71
Total	14,870	15,059	(1)

See Note 12 to the financial statements herein for additional discussion of Entergy Louisiana’s operating revenues.

Other Income Statement Variances

Other operation and maintenance expenses increased primarily due to:

an increase of $10.4 million in non-nuclear generation expenses primarily due to a higher scope of work, including during plant outages, performed in 2024 as compared to 2023;
an increase of $3.1 million in contract costs related to operational performance, customer service, and organizational health initiatives; and
an increase of $2.5 million in compensation and benefits costs primarily due to higher healthcare claims activity in 2024.

Taxes other than income taxes increased primarily due to increases in ad valorem taxes resulting from higher assessments.

Depreciation and amortization expenses increased primarily due to additions to plant in service.

Other regulatory charges (credits) - net includes a regulatory charge of $103.4 million, recorded in first quarter 2023, to reflect Entergy Louisiana’s obligation to provide credits to its customers as described in an LPSC ancillary order issued in the Hurricane Ida securitization regulatory proceeding. See Note 2 to the financial statements in the Form 10-K for discussion of the March 2023 storm cost securitization. In addition, Entergy Louisiana records a regulatory charge or credit for the difference between asset retirement obligation-related expenses and nuclear decommissioning trust earnings plus asset retirement obligation-related costs collected in revenue.

Other income increased primarily due to:

an increase of $24.1 million in affiliated dividend income from affiliated preferred membership interests, related to storm cost securitizations;
changes in decommissioning trust fund activity, including portfolio rebalancing of the River Bend decommissioning trust fund in first quarter 2024; and
a $14.6 million charge in first quarter 2023 for the LURC’s 1% beneficial interest in the storm trust II established as part of the March 2023 storm cost securitization.

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

See Note 2 to the financial statements in the Form 10-K for discussion of the storm cost securitizations.

Income Taxes

The effective income tax rate was 17.6% for the first quarter 2024. The difference in the effective income tax rate for the first quarter 2024 versus the federal statutory rate of 21% was primarily due to the book and tax differences related to the non-taxable income distributions earned on preferred membership interests and certain book and tax differences related to utility plant items, partially offset by the accrual for state income taxes and the amortization of state accumulated deferred income taxes as a result of tax rate changes.

The effective income tax rate was (83.2%) for the first quarter 2023. The difference in the effective income tax rate for the first quarter 2023 versus the federal statutory rate of 21% was primarily due to the reduction in income tax expense as a result of the March 2023 securitization of storm costs pursuant to Louisiana Act 55, as supplemented by Act 293 of the Louisiana Legislature’s Regular Session of 2021, book and tax differences related to the non-taxable income distributions earned on preferred membership interests, and certain book and tax differences related to utility plant items, partially offset by the accrual for state income taxes and the amortization of state accumulated deferred income taxes as a result of tax rate changes. See Notes 2 and 10 to the financial statements herein for a discussion of the March 2023 storm cost securitization under Act 293.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” herein and in the Form 10-K for discussion of income tax legislation and regulation.

Planned Sale of Gas Distribution Business

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Planned Sale of Gas Distribution Businesses” in the Form 10-K for discussion of the planned sale of Entergy Louisiana’s gas distribution business.

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:


	2024	2023
	(In Thousands)
Cash and cash equivalents at beginning of period	$2,772	$56,613

Net cash provided by (used in):
Operating activities	304,836	539,761
Investing activities	(483,943)	(2,038,403)
Financing activities	949,534	2,521,881
Net increase in cash and cash equivalents	770,427	1,023,239

Cash and cash equivalents at end of period	$773,199	$1,079,852

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Operating Activities

Net cash flow provided by operating activities decreased $234.9 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to:

higher fuel costs and the timing of recovery of fuel and purchased power costs. See Note 2 to the financial statements in the Form 10-K for a discussion of fuel and purchased power cost recovery;
lower collections from customers;
the timing of payments to vendors;
the refund of $27.8 million received from System Energy in January 2023 related to the sale-leaseback renewal costs and depreciation litigation as calculated in System Energy’s January 2023 compliance report filed with the FERC. See Note 2 to the financial statements in the Form 10-K for further discussion of the refund and the related proceedings; and
an increase of $7.2 million in pension contributions in 2024. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K and Note 6 to the financial statements herein for a discussion of qualified pension and other postretirement benefits funding.

The decrease was partially offset by a decrease of $11 million in spending on nuclear refueling outages.

Investing Activities

Net cash flow used in investing activities decreased $1,554.5 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to:

an increase in investment in affiliates in 2023 due to the $1,457.7 million purchase by the storm trust II of preferred membership interests issued by an Entergy affiliate. See Note 2 to the financial statements in the Form 10-K for a discussion of the March 2023 storm cost securitization and the storm trust II’s investment in preferred membership interests;
a decrease of $78 million in nuclear construction expenditures primarily due to decreased spending on various nuclear projects in 2024;
a decrease of $45.2 million as a result of fluctuations in nuclear fuel activity due to variations from year to year in the timing and pricing of fuel reload requirements, materials and services deliveries, and the timing of cash payments during the nuclear fuel cycle;
an increase of $38.4 million in redemptions of the preferred membership interests held by the storm trusts in 2024 as compared to 2023, as part of periodic redemptions that are expected to occur, subject to certain conditions, for the preferred membership interests that were issued in connection with the storm cost securitizations. See Note 2 to the financial statements in the Form 10-K for a discussion of the storm cost securitizations;
a decrease of $31.6 million in distribution construction expenditures primarily due to a lower scope of work, including lower capital expenditures for storm restoration in 2024;
a decrease of $22.7 million in non-nuclear generation construction expenditures primarily due to a lower scope of work, including during plant outages, performed in 2024 as compared to 2023; and
a decrease of $15.9 million in transmission construction expenditures primarily due to lower capital expenditures for storm restoration in 2024 and decreased spending on various transmission projects in 2024.

The decrease was partially offset by money pool activity.

Increases in Entergy Louisiana’s receivables from the money pool are a use of cash flow, and Entergy Louisiana’s receivable from the money pool increased $218.1 million for the three months ended March 31, 2024 compared to increasing by $77.4 million for the three months ended March 31, 2023. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements,

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Financing Activities

Net cash flow provided by financing activities decreased $1,572.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to:

proceeds from securitization of $1.5 billion received by the storm trust II in 2023;
a capital contribution of approximately $1.5 billion in 2023 received indirectly from Entergy Corporation related to the March 2023 storm cost securitization; and
an increase in net long-term repayments of $42.7 million on the nuclear fuel company variable interest entities’ credit facilities.

The decrease was partially offset by:

the issuances of $500 million of 5.35% Series mortgage bonds and $700 million of 5.70% Series mortgage bonds in March 2024;
a decrease of $62.8 million in common equity distributions paid in 2024 in order to maintain Entergy Louisiana’s capital structure;
a decrease of $50 million in 2024 in net repayments on Entergy Louisiana’s revolving credit facility; and
money pool activity.

Decreases in Entergy Louisiana’s payable to the money pool are a use of cash flow, and Entergy Louisiana’s payable to the money pool decreased $156.2 million for the three months ended March 31, 2024 compared to decreasing by $226.1 million for the three months ended March 31, 2023.

See Note 4 to the financial statements herein and Note 5 to the financial statements in the Form 10-K for more details on long-term debt. See Note 2 to the financial statements in the Form 10-K for a discussion of the storm cost securitizations.

Capital Structure

Entergy Louisiana’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy Louisiana is primarily due to the issuances of long-term debt in 2024.


	March 31, 2024		December 31, 2023
Debt to capital	47.7	%	44.9	%


Effect of subtracting cash	(1.9	%)	0.0	%
Net debt to net capital (non-GAAP)	45.8	%	44.9	%

Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings, finance lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt and equity. Net capital consists of capital less cash and cash equivalents. Entergy Louisiana uses the debt to capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Louisiana’s financial condition. The net debt to net capital ratio is a non-GAAP measure. Entergy Louisiana also uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Louisiana’s financial condition because net debt indicates Entergy Louisiana’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Uses and Sources of Capital

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources” in the Form 10-K for a discussion of Entergy Louisiana’s uses and sources of capital. The following are updates to the information provided in the Form 10-K.

Entergy Louisiana’s receivables from or (payables to) the money pool were as follows:


March 31, 2024	December 31, 2023	March 31, 2023	December 31, 2022
(In Thousands)
$218,098	($156,166)	$77,354	($226,114)

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

Entergy Louisiana has a credit facility in the amount of $350 million scheduled to expire in June 2028. The credit facility includes fronting commitments for the issuance of letters of credit against $15 million of the borrowing capacity of the facility. As of March 31, 2024, there were no cash borrowings and no letters of credit outstanding under the credit facility. In addition, Entergy Louisiana is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of March 31, 2024, $11.8 million in letters of credit were outstanding under Entergy Louisiana’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

The Entergy Louisiana nuclear fuel company variable interest entities have two separate credit facilities, each in the amount of $105 million and scheduled to expire in June 2025. As of March 31, 2024, $38.9 million in loans were outstanding under the credit facility for the Entergy Louisiana River Bend nuclear fuel company variable interest entity. As of March 31, 2024, $31.2 million in loans were outstanding under the credit facility for the Entergy Louisiana Waterford nuclear fuel company variable interest entity. See Note 4 to the financial statements herein for additional discussion of the nuclear fuel company variable interest entity credit facilities.

Alternative RFP and Certification

As discussed in the Form 10-K, in March 2023, Entergy Louisiana made the first phase of a bifurcated filing to seek approval from the LPSC for an alternative to the requests for proposals (RFP) process that would enable the acquisition of up to 3 GW of solar resources on a faster timeline than the current RFP and certification process allows. The initial phase of the filing established the need for the acquisition of additional resources and the need for an alternative to the RFP process. The second phase of the filing, which contains the details of the proposal for the alternative competitive procurement process and the information necessary to support certification, was filed in May 2023. In addition to the acquisition of up to 3 GW of solar resources, the filing also seeks approval of a new renewable energy credits-based tariff, Rider Geaux ZERO. Several parties have intervened, and a procedural schedule was established in May 2023 with a hearing scheduled for March 2024. In March 2024 the hearing in this matter was rescheduled to June 2024.

System Resilience and Storm Hardening

As discussed in the Form 10-K, in December 2022, Entergy Louisiana filed an application with the LPSC seeking a public interest finding regarding Phase I of Entergy Louisiana’s Future Ready resilience plan and approval of a rider mechanism to recover the program’s costs. Phase I in the December 2022 application reflected the first five years of a ten-year resilience plan and included investment of approximately $5 billion, including hardening investment, transmission dead-end structures, enhanced vegetation management, and telecommunications improvement. The LPSC staff and certain intervenors filed direct testimony in August, September, and October 2023. The LPSC staff filed cross-answering testimony in October 2023. The testimony largely supports

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

implementation of some level of accelerated investment in resilience, but raises various issues related to the magnitude of the investment, the cost recovery mechanism applicable to the investment, and the ratemaking for the investment. In April 2024 the LPSC approved a framework which includes an initial five-year resilience plan providing for an investment of approximately $1.9 billion and a rider to recover the associated costs. The plan is subject to specified reporting requirements and includes a performance review of the hardened assets. Entergy Louisiana is permitted to make future filings for additional investments.

Bayou Power Station

In March 2024, Entergy Louisiana filed an application with the LPSC seeking certification that the public convenience and necessity would be served by the construction of the Bayou Power Station, a 112 MW aggregated capacity floating natural gas power station with black-start capability in Leeville, Louisiana and an associated microgrid that would serve nearby areas, including Port Fourchon, Golden Meadow, Leeville, and Grand Isle. The current estimated cost of the Bayou Power Station is $411 million, including estimated costs of transmission interconnection and other related costs. Subject to timely approval by the LPSC and receipt of other permits and approvals, commercial operation is expected to occur by the end of 2028. No procedural schedule has been set at this time.

Nelson Industrial Steam Company

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Nelson Industrial Steam Company” in the Form 10-K for information on Entergy Louisiana’s Nelson Industrial Steam Company partnership.

State and Local Rate Regulation and Fuel-Cost Recovery

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – State and Local Rate Regulation and Fuel Cost Recovery” in the Form 10-K for a discussion of state and local rate regulation and fuel-cost recovery. The following are updates to that discussion.

Retail Rates

2023 Entergy Louisiana Rate Case and Formula Rate Plan Extension Request

As discussed in the Form 10-K, in August 2023, Entergy Louisiana filed an application for approval of a regulatory blueprint necessary for it to strengthen the electric grid for the State of Louisiana, which contains a dual-path request to update rates through either: (1) extension of Entergy Louisiana’s current formula rate plan (with certain modifications) for three years (the Rate Mitigation Proposal), which is Entergy Louisiana’s recommended path; or (2) implementation of rates resulting from a cost-of-service study (the Rate Case path). The application complies with Entergy Louisiana’s previous formula rate plan extension order requiring that for Entergy Louisiana to obtain another extension of its formula rate plan that included a rate reset, Entergy Louisiana would need to submit a full cost-of-service/rate case. Entergy Louisiana’s filing supports the need to extend Entergy Louisiana’s formula rate plan with credit supportive mechanisms needed to facilitate investment in the distribution, transmission, and generation functions.

A status conference was held in October 2023 at which a procedural schedule was adopted that included three technical conferences and a hearing date of August 2024. In March 2024 the parties agreed to an eight week extension of all deadlines to allow for continuation of settlement negotiations, and the ALJ issued an order with an amended procedural schedule that includes hearing dates commencing in October 2024.

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Industrial and Commercial Customers

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Industrial and Commercial Customers” in the Form 10-K for a discussion of industrial and commercial customers.

Federal Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Federal Regulation” in the Form 10-K for a discussion of federal regulation.

Nuclear Matters

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Nuclear Matters” in the Form 10-K for a discussion of nuclear matters. The following is an update to that discussion.

NRC Reactor Oversight Process

As discussed in the Form 10-K, the NRC’s Reactor Oversight Process is a program to collect information about plant performance, assess the information for its safety significance, and provide for appropriate licensee and NRC response. The NRC evaluates plant performance by analyzing two distinct inputs: inspection findings resulting from the NRC’s inspection program and performance indicators reported by the licensee. The evaluations result in the placement of each plant in one of the NRC’s Reactor Oversight Process Action Matrix columns: “licensee response column,” or Column 1, “regulatory response column,” or Column 2, “degraded cornerstone column,” or Column 3, “multiple/repetitive degraded cornerstone column,” or Column 4, and “unacceptable performance,” or Column 5. Plants in Column 1 are subject to normal NRC inspection activities. Plants in Column 2, Column 3, or Column 4 are subject to progressively increasing levels of inspection by the NRC with, in general, progressively increasing levels of associated costs. Continued plant operation is not permitted for plants in Column 5. River Bend and Waterford 3 are currently in Column 1.

In July 2023 the NRC placed River Bend in Column 2, effective April 2023, based on failure to inspect wiring associated with the high pressure core spray system. In August 2023 the NRC issued a finding and notice of violation related to a radiation monitor calibration issue at River Bend. In December 2023, River Bend successfully completed the inspection of the high pressure core spray system issue and in February 2024, River Bend completed the supplemental inspection of the radiation monitor calibration issue, each in accordance with the NRC’s inspection policies for nuclear plants in Column 2. The NRC issued its inspection report on both issues in March 2024 and River Bend was returned to Column 1.

Environmental Risks

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks” in the Form 10-K for a discussion of environmental risks.

Critical Accounting Estimates

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Louisiana’s accounting for nuclear decommissioning costs, utility regulatory accounting, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

New Accounting Pronouncements


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)


		2024	2023
	(In Thousands)
OPERATING REVENUES
Electric		$1,172,793	$1,319,752
Natural gas		29,647	25,456
TOTAL		1,202,440	1,345,208

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale		240,087	375,270
Purchased power		200,280	194,934
Nuclear refueling outage expenses		17,513	15,273
Other operation and maintenance		260,979	246,371
Decommissioning		19,664	18,586
Taxes other than income taxes		69,839	63,955
Depreciation and amortization		189,544	176,095
Other regulatory charges (credits) - net		(8,354)	73,996
TOTAL		989,552	1,164,480

OPERATING INCOME		212,888	180,728

OTHER INCOME
Allowance for equity funds used during construction		7,285	9,061
Interest and investment income		62,963	28,843
Interest and investment income - affiliated		80,404	55,426
Miscellaneous - net		(47,175)	(48,085)
TOTAL		103,477	45,245

INTEREST EXPENSE
Interest expense		97,195	97,171
Allowance for borrowed funds used during construction		(2,477)	(4,393)
TOTAL		94,718	92,778

INCOME BEFORE INCOME TAXES		221,647	133,195

Income taxes		38,924	(110,829)

NET INCOME		182,723	244,024

Net income attributable to noncontrolling interests		795	554

EARNINGS APPLICABLE TO MEMBER'S EQUITY		$181,928	$243,470

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)


		2024	2023
	(In Thousands)

Net Income		$182,723	$244,024

Other comprehensive loss
Pension and other postretirement adjustment (net of tax benefit of $746 and $290)		(2,024)	(786)
Other comprehensive loss		(2,024)	(786)

Comprehensive Income		180,699	243,238
Net income attributable to noncontrolling interests		795	554
Comprehensive Income Applicable to Member’s Equity		$179,904	$242,684

See Notes to Financial Statements.

(Page left blank intentionally)


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
	2024	2023
	(In Thousands)
OPERATING ACTIVITIES
Net income	$182,723	$244,024
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	226,874	210,138
Deferred income taxes, investment tax credits, and non-current taxes accrued	126,334	(70,518)
Changes in working capital:
Receivables	39,860	119,726
Fuel inventory	4,236	(4,489)
Accounts payable	(109,430)	(127,171)
Taxes accrued	(26,684)	11,627
Interest accrued	(9,995)	(12,730)
Deferred fuel costs	6,940	173,809
Other working capital accounts	(101,798)	(99,650)
Changes in provisions for estimated losses	5,497	2,050
Changes in other regulatory assets	11,834	492,055
Changes in other regulatory liabilities	51,414	155,296
Effect of securitization on regulatory asset	—	(491,150)
Changes in pension and other postretirement funded status	(12,466)	(3,556)
Other	(90,503)	(59,700)
Net cash flow provided by operating activities	304,836	539,761
INVESTING ACTIVITIES
Construction expenditures	(327,980)	(484,581)
Allowance for equity funds used during construction	7,285	9,061


Nuclear fuel purchases	(48,914)	(72,003)
Proceeds from sale of nuclear fuel	38,790	16,637
Payments to storm reserve escrow account	(3,299)	(3,037)

Purchase of preferred membership interests of affiliate	—	(1,457,676)
Redemption of preferred membership interests of affiliate	85,027	46,643

Proceeds from nuclear decommissioning trust fund sales	149,334	111,263
Investment in nuclear decommissioning trust funds	(166,123)	(127,338)
Changes in money pool receivable - net	(218,098)	(77,354)

Decrease (increase) in other investments	35	(18)

Net cash flow used in investing activities	(483,943)	(2,038,403)
FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	1,693,150	526,764
Retirement of long-term debt	(513,009)	(540,008)
Proceeds received by storm trust related to securitization	—	1,457,676
Capital contribution from parent	—	1,457,676


Changes in money pool payable - net	(156,166)	(226,114)

Common equity distributions paid	(97,500)	(160,250)

Other	23,059	6,137
Net cash flow provided by financing activities	949,534	2,521,881

Net increase in cash and cash equivalents	770,427	1,023,239
Cash and cash equivalents at beginning of period	2,772	56,613
Cash and cash equivalents at end of period	$773,199	$1,079,852

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized	$105,176	$107,408
Income taxes	$—	($6,037)
Non-cash investing activities:
Accrued construction expenditures	$84,035	$119,635

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$407	$2,255
Temporary cash investments	772,792	517
Total cash and cash equivalents	773,199	2,772
Accounts receivable:
Customer	253,020	264,776
Allowance for doubtful accounts	(4,639)	(6,156)
Associated companies	285,374	82,292
Other	64,545	74,685
Accrued unbilled revenues	197,708	202,173
Total accounts receivable	796,008	617,770
Deferred fuel costs	17,860	24,800
Fuel inventory - at average cost	53,582	57,818
Materials and supplies - at average cost	681,893	652,180
Deferred nuclear refueling outage costs	86,339	96,047

Prepayments and other	152,695	71,613
TOTAL	2,561,576	1,523,000

OTHER PROPERTY AND INVESTMENTS
Investment in affiliate preferred membership interests	4,411,218	4,496,245
Decommissioning trust funds	2,239,614	2,107,384
Non-utility property - at cost (less accumulated depreciation)	403,281	404,043
Storm reserve escrow account	247,118	243,819
Other	9,448	9,367
TOTAL	7,310,679	7,260,858

UTILITY PLANT
Electric	28,168,201	27,800,467
Natural gas	319,273	315,658
Construction work in progress	439,770	592,803
Nuclear fuel	288,150	333,472
TOTAL UTILITY PLANT	29,215,394	29,042,400
Less - accumulated depreciation and amortization	10,668,272	10,570,707
UTILITY PLANT - NET	18,547,122	18,471,693

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets	1,637,018	1,648,852
Deferred fuel costs	168,122	168,122
Other	51,577	36,945
TOTAL	1,856,717	1,853,919

TOTAL ASSETS	$30,276,094	$29,109,470

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$1,400,000	$1,400,000
Accounts payable:
Associated companies	81,390	283,016
Other	348,340	467,414
Customer deposits	170,276	167,905
Taxes accrued	39,779	66,463
Interest accrued	81,661	91,656

Other	81,512	87,468
TOTAL	2,202,958	2,563,922

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	2,504,203	2,391,442
Accumulated deferred investment tax credits	92,101	93,242
Regulatory liability for income taxes - net	194,251	193,754
Other regulatory liabilities	1,458,606	1,407,689
Decommissioning	1,871,637	1,836,240
Accumulated provisions	269,366	263,869
Pension and other postretirement liabilities	259,631	271,928
Long-term debt	9,202,315	8,020,689
Other	564,233	493,176
TOTAL	16,416,343	14,972,029

Commitments and Contingencies

EQUITY
Member’s equity	11,558,975	11,473,614
Accumulated other comprehensive income	52,774	54,798
Noncontrolling interests	45,044	45,107
TOTAL	11,656,793	11,573,519

TOTAL LIABILITIES AND EQUITY	$30,276,094	$29,109,470

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)

	Noncontrolling Interests	Member’s Equity	Accumulated Other Comprehensive Income	Total
	(In Thousands)

Balance at December 31, 2022	$31,735	$9,406,343	$55,370	$9,493,448

Net income	554	243,470	—	244,024
Other comprehensive loss	—	—	(786)	(786)
Capital contribution from parent	—	1,457,676	—	1,457,676
Common equity distributions	—	(160,250)	—	(160,250)
Beneficial interest in storm trust	14,577	—	—	14,577
Distribution to LURC	(470)	—	—	(470)
Other	—	(28)	—	(28)
Balance at March 31, 2023	$46,396	$10,947,211	$54,584	$11,048,191























Balance at December 31, 2023	$45,107	$11,473,614	$54,798	$11,573,519

Net income	795	181,928	—	182,723
Other comprehensive loss	—	—	(2,024)	(2,024)

Non-cash contribution from parent	—	976	—	976
Common equity distributions	—	(97,500)	—	(97,500)


Distributions to LURC	(858)	—	—	(858)
Other	—	(43)	—	(43)
Balance at March 31, 2024	$45,044	$11,558,975	$52,774	$11,656,793
























See Notes to Financial Statements.

ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Net income increased $6.5 million primarily due to higher retail electric price, partially offset by lower volume/weather.

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:


			Amount
			(In Millions)
2023 operating revenues			$412.4
Fuel, rider, and other revenues that do not significantly affect net income			(2.1)
Retail electric price			8.8
Volume/weather			(4.2)
2024 operating revenues			$414.9

Entergy Mississippi’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs such that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues that do not significantly affect net income” includes the revenue variance associated with these items.

The retail electric price variance is primarily due to an increase in formula rate plan rates effective April 2023. See Note 2 to the financial statements in the Form 10-K for discussion of the formula rate plan filing.

The volume/weather variance is primarily due to a decrease in commercial and industrial usage and a decrease in weather-adjusted residential usage, partially offset by the effect of more favorable weather on residential sales. The decrease in industrial usage is primarily due to a decrease in demand from small industrial customers and a decrease in demand from large industrial customers, primarily in the wood products industry.

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Mississippi for the three months ended March 31, 2024 and 2023 are as follows:


	2024	2023	% Change
	(GWh)
Residential	1,186	1,089	9
Commercial	963	1,015	(5)
Industrial	494	567	(13)
Governmental	87	92	(5)
Total retail	2,730	2,763	(1)
Sales for resale:
Non-associated companies	1,988	1,564	27
Total	4,718	4,327	9

See Note 12 to the financial statements herein for additional discussion of Entergy Mississippi’s operating revenues.

Other Income Statement Variances

Taxes other than income taxes increased primarily due to increases in ad valorem taxes resulting from higher assessments.

Interest expense increased primarily due to the issuance of $300 million of 5.0% Series mortgage bonds in May 2023, partially offset by the repayment of a $150 million unsecured term loan in 2023, of which $50 million was repaid in May 2023 and $100 million was repaid in December 2023.

Income Taxes

The effective income tax rates were 22.2% for the first quarter 2024 and 24.4% for the first quarter 2023. The differences in the effective income tax rates for the first quarter 2024 and the first quarter 2023 versus the federal statutory rate of 21% were primarily due to the accrual for state income taxes, partially offset by certain book and tax differences related to utility plant items.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” herein and in the Form 10-K for discussion of income tax legislation and regulation.

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:


	2024	2023
	(In Thousands)
Cash and cash equivalents at beginning of period	$6,630	$16,979

Net cash provided by (used in):
Operating activities	34,401	36,861
Investing activities	(112,436)	(111,842)
Financing activities	73,530	94,154
Net increase (decrease) in cash and cash equivalents	(4,505)	19,173

Cash and cash equivalents at end of period	$2,125	$36,152

Operating Activities

Net cash flow provided by operating activities decreased $2.5 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to the timing of payments to vendors and the timing of recovery of fuel and purchased power costs, substantially offset by higher collections from customers. See Note 2 to the financial statements in the Form 10-K for a discussion of fuel and purchased power cost recovery.

Investing Activities

Net cash flow used in investing activities increased $0.6 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to money pool activity, substantially offset by:

a decrease of $7.2 million in distribution construction expenditures primarily due to lower capital expenditures for storm restoration in 2024;
a decrease of $6.7 million in facilities construction expenditures primarily due to the construction of a new transmission office in 2023; and
a decrease of $4.8 million in transmission construction expenditures primarily due to decreased spending on various transmission projects in 2024.

Decreases in Entergy Mississippi’s receivable from the money pool are a source of cash flow, and Entergy Mississippi’s receivable from the money pool decreased $25.4 million for the three months ended March 31, 2023. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, including to reduce the Registrant Subsidiaries’ need for external short-term borrowings.

Financing Activities

Net cash flow provided by financing activities decreased $20.6 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to money pool activity and a decrease of $15.5 million in prepaid deposits related to contributions-in-aid-of-construction primarily for customer and generator interconnection agreements, partially offset by $12.5 million in common equity distributions paid in first quarter 2023 in order to maintain Entergy Mississippi’s capital structure.

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Decreases in Entergy Mississippi’s payable to the money pool are a use of cash flow, and Entergy Mississippi’s payable to the money pool decreased $17.5 million for the three months ended March 31, 2024.

Capital Structure

Entergy Mississippi’s debt to capital ratio is shown in the following table.


	March 31, 2024		December 31, 2023
Debt to capital	51.3	%	50.5	%
Effect of subtracting cash	(0.1	%)	(0.1	%)
Net debt to net capital (non-GAAP)	51.2	%	50.4	%

Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings, finance lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt and equity. Net capital consists of capital less cash and cash equivalents. Entergy Mississippi uses the debt to capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Mississippi’s financial condition. The net debt to net capital ratio is a non-GAAP measure. Entergy Mississippi uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Mississippi’s financial condition because net debt indicates Entergy Mississippi’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Uses and Sources of Capital

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources” in the Form 10-K for a discussion of Entergy Mississippi’s uses and sources of capital. The following are updates to the information provided in the Form 10-K.

Entergy Mississippi’s receivables from or (payables to) the money pool were as follows:


March 31, 2024	December 31, 2023	March 31, 2023	December 31, 2022
(In Thousands)
($56,220)	($73,769)	$1,498	$26,879

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

Entergy Mississippi has a credit facility in the amount of $150 million scheduled to expire in July 2025. As of March 31, 2024, $100 million in cash borrowings were outstanding under the credit facility. In addition, Entergy Mississippi is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO and for other purposes. As of March 31, 2024, $17.4 million in MISO letters of credit and $10.2 million in non-MISO letters of credit were outstanding under this facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

State and Local Rate Regulation and Fuel-Cost Recovery

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - State and Local Rate Regulation and Fuel-Cost Recovery” in the Form 10-K for a discussion of state and local rate regulation and fuel-cost recovery. The following are updates to that discussion.

Retail Rates

2024 Formula Rate Plan Filing

In March 2024, Entergy Mississippi submitted its formula rate plan 2024 test year filing and 2023 look-back filing showing Entergy Mississippi’s earned return on rate base for the historical 2023 calendar year to be within the formula rate plan bandwidth and projected earned return for the 2024 calendar year to be below the formula rate plan bandwidth. The 2024 test year filing showed a $63.4 million rate increase was necessary to reset Entergy Mississippi’s earned return on rate base to the specified point of adjustment of 7.10%, within the formula rate plan bandwidth. The 2023 look-back filing compared actual 2023 results to the approved benchmark return on rate base and reflected no change in formula rate plan revenues. In accordance with the provisions of the formula rate plan, Entergy Mississippi implemented a $32.6 million interim rate increase, reflecting a cap equal to 2% of 2023 retail revenues, effective April 2024. A final order is expected in second quarter 2024, with the resulting rates, including amounts above the 2% cap of retail revenues, effective July 2024.

In December 2014 the MPSC ordered Entergy Mississippi to file an updated depreciation study at least once every four years. Pursuant to this order and Entergy Mississippi’s filing cycle, Entergy Mississippi would have filed an updated depreciation report with its formula rate plan filing in 2023. However, in July 2022 the MPSC directed Entergy Mississippi to file its next depreciation study in connection with its 2024 formula rate plan filing notwithstanding the MPSC’s prior order. Accordingly, Entergy Mississippi filed a depreciation study in February 2024. The study showed a need for an increase in annual depreciation expense of $55.2 million. The calculated increase in annual depreciation expense was excluded from Entergy Mississippi’s 2024 formula rate plan revenue increase request as the $63.4 million rate increase determined in the formula rate plan 2024 test year filing was just lower than the cap on changes to formula rate plan revenues, set at 4% of retail revenues. Entergy Mississippi expects to engage in further discussions with the MPSC regarding the timing of implementing changes to depreciation rates and for recovery of the depreciation expense.

Storm Cost Recovery Filings with Retail Regulators

As discussed in the Form 10-K, Entergy Mississippi has approval from the MPSC to collect a storm damage provision of $1.75 million per month. If Entergy Mississippi’s accumulated storm damage provision balance exceeds $15 million, the collection of the storm damage provision ceases until such time that the accumulated storm damage provision becomes less than $10 million.

In December 2023, Entergy Mississippi filed a Notice of Storm Escrow Disbursement and Request for Interim Relief notifying the MPSC that Entergy Mississippi had requested disbursement of approximately $34.5 million of storm escrow funds from its restricted storm escrow account. The filing also requested authorization from the MPSC, on a temporary basis, that the $34.5 million of storm escrow funds be credited to Entergy Mississippi’s storm damage provision, pending the MPSC’s review of Entergy Mississippi’s storm-related costs, and that Entergy Mississippi continue to bill its monthly storm damage provision without suspension in the event the storm damage provision balance exceeds $15 million, in anticipation of a subsequent filing by Entergy Mississippi in this proceeding. The storm damage reserve exceeded $15 million upon receipt of the storm escrow funds. Because the MPSC had not entered an order on Entergy Mississippi’s filing on the requested relief to continue billing this provision, Entergy Mississippi suspended billing the monthly storm damage provision effective with February 2024 bills.

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

In March 2024, Entergy Mississippi made a combined dual filing which included a Notice of Intent to Make Routine Change in Rates and Schedules and a Motion for Determination relating to the above-described Notice of Storm Escrow Disbursement. The Notice of Intent proposed a new storm damage mitigation and restoration rider to supersede both the current storm damage rate schedule and the vegetation management rider schedule, in which the collection of both expenses would be combined. The proposal requests that the MPSC authorize Entergy Mississippi to collect a storm damage provision of $5.2 million per month. Furthermore, if Entergy Mississippi’s accumulated storm damage provision balance exceeds $70 million, collection of the storm damage provision would cease until such time that the accumulated storm damage provision becomes less than $60 million. The new storm damage mitigation and restoration rider will go into effect July 2024 if the notice is not suspended by the MPSC. Should the proposal not go into effect and the collection of both expenses not be combined, Entergy Mississippi proposed to collect a storm damage provision of $3.5 million per month, in which the storm damage reserve balance is not to exceed $50 million or become less than $40 million.

Federal Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Federal Regulation” in the Form 10-K for a discussion of federal regulation.

Nuclear Matters

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Nuclear Matters” in the Form 10-K for a discussion of nuclear matters.

Environmental Risks

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Environmental Risks” in the Form 10-K for a discussion of environmental risks.

Critical Accounting Estimates

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Mississippi’s accounting for utility regulatory accounting, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

New Accounting Pronouncements


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)


		2024	2023
	(In Thousands)
OPERATING REVENUES
Electric		$414,856	$412,428

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale		117,850	161,285
Purchased power		67,655	63,814
Other operation and maintenance		71,206	69,818
Taxes other than income taxes		38,310	35,734
Depreciation and amortization		65,917	64,029
Other regulatory charges (credits) - net		(6,491)	(32,843)
TOTAL		354,447	361,837

OPERATING INCOME		60,409	50,591

OTHER INCOME
Allowance for equity funds used during construction		1,918	1,884
Interest and investment income		193	464
Miscellaneous - net		(1,621)	(2,083)
TOTAL		490	265

INTEREST EXPENSE
Interest expense		26,397	23,944
Allowance for borrowed funds used during construction		(747)	(783)
TOTAL		25,650	23,161

INCOME BEFORE INCOME TAXES		35,249	27,695

Income taxes		7,817	6,755

NET INCOME		27,432	20,940

Net loss attributable to noncontrolling interest		(2,302)	(2,141)

EARNINGS APPLICABLE TO MEMBER'S EQUITY		$29,734	$23,081

See Notes to Financial Statements.

(Page left blank intentionally)


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
	2024	2023
	(In Thousands)
OPERATING ACTIVITIES
Net income	$27,432	$20,940
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization	65,917	64,029
Deferred income taxes, investment tax credits, and non-current taxes accrued	(9,162)	8,142
Changes in assets and liabilities:
Receivables	36,151	36,802
Fuel inventory	(1,012)	(3,014)
Accounts payable	(15,691)	(33,508)
Taxes accrued	(75,046)	(80,166)
Interest accrued	5,960	11,078
Deferred fuel costs	28,337	67,005
Other working capital accounts	(6,853)	(9,515)
Provisions for estimated losses	(977)	1,900
Other regulatory assets	(3,166)	1,020
Other regulatory liabilities	(2,701)	(44,487)
Pension and other postretirement funded status	(6,014)	(4,062)
Other assets and liabilities	(8,774)	697
Net cash flow provided by operating activities	34,401	36,861

INVESTING ACTIVITIES
Construction expenditures	(114,260)	(138,760)
Allowance for equity funds used during construction	1,918	1,884
Changes in money pool receivable - net	—	25,381

Increase in other investments	(94)	(347)
Net cash flow used in investing activities	(112,436)	(111,842)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	99,860	99,916


Changes in money pool payable - net	(17,549)	—
Common equity distributions paid	—	(12,500)
Other	(8,781)	6,738
Net cash flow provided by financing activities	73,530	94,154

Net increase (decrease) in cash and cash equivalents	(4,505)	19,173
Cash and cash equivalents at beginning of period	6,630	16,979
Cash and cash equivalents at end of period	$2,125	$36,152

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$19,838	$12,211
Income taxes	$2,353	$—
Noncash investing activities:
Accrued construction expenditures	$43,943	$57,649

See Notes to Financial Statements.


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$28	$30
Temporary cash investments	2,097	6,600
Total cash and cash equivalents	2,125	6,630
Accounts receivable:
Customer	107,254	121,389
Allowance for doubtful accounts	(3,064)	(3,312)
Associated companies	4,127	4,997
Other	17,246	17,697
Accrued unbilled revenues	50,522	71,465
Total accounts receivable	176,085	212,236

Fuel inventory - at average cost	17,208	16,196
Materials and supplies - at average cost	101,096	95,526
Prepayments and other	11,054	12,740
TOTAL	307,568	343,328

OTHER PROPERTY AND INVESTMENTS
Non-utility property - at cost (less accumulated depreciation)	4,493	4,497
Storm reserve escrow account	749	656

TOTAL	5,242	5,153

UTILITY PLANT
Electric	7,526,466	7,455,145
Construction work in progress	201,824	139,635
TOTAL UTILITY PLANT	7,728,290	7,594,780
Less - accumulated depreciation and amortization	2,386,782	2,346,327
UTILITY PLANT - NET	5,341,508	5,248,453

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets	582,242	579,076
Other	75,918	51,996
TOTAL	658,160	631,072

TOTAL ASSETS	$6,312,478	$6,228,006

See Notes to Financial Statements.


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$100,000	$100,000
Accounts payable:
Associated companies	101,428	133,571
Other	119,163	92,659
Customer deposits	93,532	92,637
Taxes accrued	40,088	115,134
Interest accrued	27,497	21,537
Deferred fuel costs	158,982	130,645
Other	22,725	26,463
TOTAL	663,415	712,646

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	811,729	821,744
Accumulated deferred investment tax credits	13,479	13,811
Regulatory liability for income taxes - net	186,057	188,714
Other regulatory liabilities	33,652	33,696
Asset retirement cost liabilities	19,644	8,229
Accumulated provisions	38,504	39,481

Long-term debt	2,229,695	2,129,510
Other	80,657	71,961
TOTAL	3,413,417	3,307,146

Commitments and Contingencies

EQUITY
Member's equity	2,219,195	2,189,461
Noncontrolling interest	16,451	18,753
TOTAL	2,235,646	2,208,214

TOTAL LIABILITIES AND EQUITY	$6,312,478	$6,228,006

See Notes to Financial Statements.


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)

	Noncontrolling Interest	Member's Equity	Total
		(In Thousands)

Balance at December 31, 2022	$3,347	$2,037,190	$2,040,537

Net income (loss)	(2,141)	23,081	20,940
Common equity distributions	—	(12,500)	(12,500)
Balance at March 31, 2023	$1,206	$2,047,771	$2,048,977










Balance at December 31, 2023	$18,753	$2,189,461	$2,208,214

Net income (loss)	(2,302)	29,734	27,432

Balance at March 31, 2024	$16,451	$2,219,195	$2,235,646











See Notes to Financial Statements.

ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Entergy New Orleans experienced a net loss of $49.0 million for the three months ended March 31, 2024 compared to net income of $10.1 million for the three months ended March 31, 2023 primarily due to a $78.5 million ($57.4 million net-of-tax) regulatory charge, recorded in first quarter 2024, primarily to reflect a settlement in principle between Entergy New Orleans and the City Council in April 2024 for additional sharing with customers of income tax benefits from the resolution of the 2016-2018 IRS audit. See Note 10 to the financial statements herein for discussion of the April 2024 settlement in principle and Note 3 to the financial statements in the Form 10-K for discussion of the resolution of the 2016-2018 IRS audit.

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:


			Amount
			(In Millions)
2023 operating revenues			$208.8
Fuel, rider, and other revenues that do not significantly affect net income			(14.2)
Volume/weather			(3.1)
Retail electric price			1.5
2024 operating revenues			$193.0

Entergy New Orleans’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs such that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues that do not significantly affect net income” includes the revenue variance associated with these items.

The volume/weather variance is primarily due to a decrease in commercial and industrial usage, partially offset by the effect of more favorable weather on residential sales. The decrease in industrial usage is primarily due to a decrease in demand from existing customers.

The retail electric price variance is primarily due to an increase in formula rate plan rates effective September 2023 in accordance with the terms of the 2023 formula rate plan filing. See Note 2 to the financial statements in the Form 10-K for discussion of the formula rate plan filing.

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy New Orleans for the three months ended March 31, 2024 and 2023 are as follows:


	2024	2023	% Change
	(GWh)
Residential	480	453	6
Commercial	443	487	(9)
Industrial	85	99	(14)
Governmental	177	182	(3)
Total retail	1,185	1,221	(3)
Sales for resale:
Non-associated companies	505	1,043	(52)
Total	1,690	2,264	(25)

See Note 12 to the financial statements herein for additional discussion of Entergy New Orleans’s operating revenues.

Other Income Statement Variances

Other operation and maintenance expenses increased primarily due to:

an increase of $1.3 million in loss provisions;
an increase of $1.3 million in power delivery expenses primarily due to higher reliability costs and higher readiness and response costs;
an increase of $1.1 million in compensation and benefits costs primarily due to higher healthcare claims activity in 2024;
an increase of $1.0 million in bad debt expense;
an increase of $0.9 million due to higher gas infrastructure replacement deferrals in 2023;
an increase of $0.7 million in contract costs related to operational performance, customer service, and organizational health initiatives;
an increase of $0.7 million in energy efficiency expenses primarily due to higher energy efficiency costs, partially offset by the timing of recovery from customers; and
several individually insignificant items.

Depreciation and amortization expenses increased primarily due to additions to plant in service.

Other regulatory charges (credits) - net includes a regulatory charge of $78.5 million, recorded in first quarter 2024, primarily to reflect a settlement in principle between Entergy New Orleans and the City Council in April 2024 for additional sharing with customers of income tax benefits from the resolution of the 2016-2018 IRS audit. See Note 10 to the financial statements herein for discussion of the April 2024 settlement in principle and Note 3 to the financial statements in the Form 10-K for discussion of the resolution of the 2016-2018 IRS audit.

Other income decreased primarily due to lower interest earned on money pool investments.

Income Taxes

The effective income tax rate was 28.3% for the first quarter 2024. The difference in the effective income tax rate for the first quarter 2024 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes.

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

The effective income tax rate was 32.0% for the first quarter 2023. The difference in the effective income tax rate for the first quarter 2023 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes and the amortization of state accumulated deferred income taxes as a result of tax rate changes, partially offset by certain book and tax differences related to utility plant items.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” herein and in the Form 10-K for discussion of income tax legislation and regulation.

Planned Sale of Gas Distribution Business

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Planned Sale of Gas Distribution Businesses” in the Form 10-K for discussion of the planned sale of Entergy New Orleans’s gas distribution business.

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:


	2024	2023
	(In Thousands)
Cash and cash equivalents at beginning of period	$26	$4,464

Net cash provided by (used in):
Operating activities	9,139	71,578
Investing activities	(36,893)	85,156
Financing activities	27,754	14,688
Net increase in cash and cash equivalents	—	171,422

Cash and cash equivalents at end of period	$26	$175,886

Operating Activities

Net cash flow provided by operating activities decreased $62.4 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to the refund of $34 million received from System Energy in January 2023 related to the sale-leaseback renewal costs and depreciation litigation as calculated in System Energy’s January 2023 compliance report filed with the FERC and lower collections from customers. The decrease was partially offset by the timing of payments to vendors. See Note 2 to the financial statements in the Form 10-K for further discussion of the refund and the related proceedings.

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Investing Activities

Entergy New Orleans’s investing activities used $36.9 million of cash for the three months ended March 31, 2024 compared to providing $85.2 million of cash for the three months ended March 31, 2023 primarily due to:

money pool activity;
a decrease of $8.7 million in transmission construction expenditures primarily due to higher spending in 2023 related to Entergy New Orleans’s construction of the New Orleans Sewerage and Water Board Sullivan substation; and
a decrease of $4.2 million in distribution construction expenditures primarily due to a lower scope of work on projects in 2024 as compared to 2023, partially offset by higher capital expenditures for storm restoration in 2024.

Decreases in Entergy New Orleans’s receivable from the money pool are a source of cash flow, and Entergy New Orleans’s receivable from the money pool decreased $134.7 million for the three months ended March 31, 2023. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Financing Activities

Net cash flow provided by financing activities increased $13.1 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to money pool activity, partially offset by a $15 million advance received in 2023 related to Entergy New Orleans’s construction of the New Orleans Sewerage and Water Board Sullivan substation.

Increases in Entergy New Orleans’s payable to the money pool are a source of cash flow, and Entergy New Orleans’s payable to the money pool increased by $28.1 million for the three months ended March 31, 2024.

Capital Structure

Entergy New Orleans’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy New Orleans is primarily due to net loss in 2024.


	March 31, 2024		December 31, 2023
Debt to capital	47.4	%	45.8	%
Effect of excluding securitization bonds	(0.2	%)	(0.2	%)
Debt to capital, excluding securitization bonds (non-GAAP) (a)	47.2	%	45.6	%
Effect of subtracting cash	—	%	—	%
Net debt to net capital, excluding securitization bonds (non-GAAP) (a)	47.2	%	45.6	%

(a)Calculation excludes the securitization bonds, which are non-recourse to Entergy New Orleans.

Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings, finance lease obligations, long-term debt, including the currently maturing portion, and the long-term payable due to an associated company. Capital consists of debt and equity. Net capital consists of capital less cash and cash equivalents. The debt to capital ratio excluding securitization bonds and net debt to net capital ratio excluding securitization bonds are non-GAAP measures. Entergy New Orleans uses the debt to capital ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy New Orleans’s financial condition because the securitization bonds are non-recourse to Entergy New Orleans, as more fully described in Note 5 to the financial statements in the Form 10-K.

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy New Orleans also uses the net debt to net capital ratio excluding securitization bonds in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy New Orleans’s financial condition because net debt indicates Entergy New Orleans’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Uses and Sources of Capital

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources” in the Form 10-K for a discussion of Entergy New Orleans’s uses and sources of capital. The following are updates to the information provided in the Form 10-K.

Entergy New Orleans’s receivables from or (payables to) the money pool were as follows:


March 31, 2024	December 31, 2023	March 31, 2023	December 31, 2022
(In Thousands)
($49,776)	($21,651)	$12,584	$147,254

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

Entergy New Orleans has a credit facility in the amount of $25 million scheduled to expire in June 2024. The credit facility includes fronting commitments for the issuance of letters of credit against $10 million of the borrowing capacity of the facility. As of March 31, 2024, there were no cash borrowings and no letters of credit outstanding under the credit facility. In addition, Entergy New Orleans is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of March 31, 2024, a $0.5 million letter of credit was outstanding under Entergy New Orleans’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

System Resilience and Storm Hardening

As discussed in the Form 10-K, in October 2021 the City Council passed a resolution and order establishing a docket and procedural schedule with respect to system resiliency and storm hardening. In July 2022, Entergy New Orleans filed with the City Council a response identifying a preliminary plan for storm hardening and resiliency projects, including microgrids, to be implemented over ten years at an approximate cost of $1.5 billion. In February 2023 the City Council approved a revised procedural schedule requiring Entergy New Orleans to make a filing in April 2023 containing a narrowed list of proposed hardening projects. In April 2023, Entergy New Orleans filed the required application and supporting testimony seeking City Council approval of the first phase (five years and $559 million) of a ten-year infrastructure hardening plan totaling approximately $1 billion. Entergy New Orleans also sought, among other relief, City Council approval of a rider to recover from customers the costs of the infrastructure hardening plan. In February 2024 the City Council approved a resolution authorizing Entergy New Orleans to implement a resilience project to be partially funded by $55 million of matching funding through the DOE’s Grid Resilience and Innovation Partnerships program. The resolution also requires Entergy New Orleans to submit, no later than July 2024, a revised resilience plan consisting of projects over a three-year period. In March 2024, Entergy New Orleans filed the requested three-year resilience plan, which includes $168 million in hardening projects. The three-year resilience plan is in addition to the previously authorized resilience project to be partially funded by the DOE’s Grid Resilience and Innovation Partnerships program. The filing requests an expedited technical conference in May 2024, which request is pending.

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

State and Local Rate Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – State and Local Rate Regulation” in the Form 10-K for a discussion of state and local rate regulation. The following are updates to that discussion.

Retail Rates

2024 Formula Rate Plan Filing

In April 2024, Entergy New Orleans submitted to the City Council its formula rate plan 2023 test year filing. Without the requested rate change in 2024, the 2023 test year evaluation report produced an electric earned return on equity of 8.66% and a gas earned return on equity of 5.87% compared to the authorized return on equity for each of 9.35%. Entergy New Orleans seeks approval of a $12.6 million rate increase based on the formula set in the 2018 rate case, which was approved again by the City Council in 2023. The formula results in an increase in authorized electric revenues of $7.0 million and an increase in authorized gas revenues of $5.6 million. The filing is subject to review by the City Council and other parties over a 75-day review period, followed by a 25-day period to resolve any disputes among the parties. Resulting rates will be effective with the first billing cycle of September 2024 pursuant to the formula rate plan tariff. For any disputed rate adjustments, however, the City Council would set a procedural schedule that would extend the process for City Council approval of disputed rate adjustments.

Renewable Portfolio Standard Rulemaking

As discussed in the Form 10-K, in May 2021 the City Council established the Renewable and Clean Portfolio Standard. In May 2023, Entergy New Orleans submitted its compliance demonstration report to the City Council for the 2022 compliance year, which describes and demonstrates Entergy New Orleans’s compliance with the Renewable and Clean Portfolio Standard in 2022 and satisfies certain informational requirements. Entergy New Orleans requested, among other things, that the City Council determine that Entergy New Orleans achieved the target under the portfolio standard for 2022 and remains within the customer protection cost cap, and that the City Council approve a proposal to recover costs associated with 2022 compliance. In April 2024 the City Council approved a resolution finding Entergy New Orleans was in compliance with the 2022 requirements and that Entergy New Orleans did not exceed the customer protection cost cap, as well as approving Entergy New Orleans’s proposal to recover costs.

Income Tax Audits

As discussed in Note 3 to the financial statements in the Form 10-K, in November 2023 the IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report for each federal filer under audit. Based on prior regulatory agreements and general rate-making principles, in fourth quarter 2023 Entergy New Orleans recorded a regulatory liability and associated regulatory charge of $60 million ($44 million net-of-tax). In April 2024, Entergy New Orleans and the City Council entered into a settlement in principle whereby Entergy New Orleans agreed to share with customers $138 million of income tax benefits from the resolution of the 2016–2018 IRS audit. Based on this settlement in principle, in first quarter 2024 Entergy New Orleans increased the associated regulatory liability from $60 million to $138 million and recorded a corresponding $78 million regulatory charge ($57 million net-of-tax). The settlement in principle requires that the regulatory liability be amortized over 25 years with the unamortized balance included in rate base and the amortization treated as a reduction to Entergy New Orleans’s retail revenue requirement.

Federal Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Federal Regulation” in the Form 10-K for a discussion of federal regulation.

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Nuclear Matters

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Nuclear Matters” in the Form 10-K for a discussion of nuclear matters.

Environmental Risks

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks” in the Form 10-K for a discussion of environmental risks.

Critical Accounting Estimates

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy New Orleans’s accounting for utility regulatory accounting, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

New Accounting Pronouncements


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)


		2024	2023
	(In Thousands)
OPERATING REVENUES
Electric		$156,941	$169,695
Natural gas		36,020	39,125
TOTAL		192,961	208,820

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale		30,825	52,024
Purchased power		60,382	66,620
Other operation and maintenance		43,332	33,227
Taxes other than income taxes		15,422	16,424
Depreciation and amortization		20,914	19,575
Other regulatory charges (credits) - net		81,520	(1,101)
TOTAL		252,395	186,769

OPERATING INCOME (LOSS)		(59,434)	22,051

OTHER INCOME
Allowance for equity funds used during construction		378	450
Interest and investment income		141	2,051
Miscellaneous - net		(29)	(227)
TOTAL		490	2,274

INTEREST EXPENSE
Interest expense		9,526	9,619
Allowance for borrowed funds used during construction		(157)	(219)
TOTAL		9,369	9,400

INCOME (LOSS) BEFORE INCOME TAXES		(68,313)	14,925

Income taxes		(19,333)	4,783

NET INCOME (LOSS)		($48,980)	$10,142

See Notes to Financial Statements.


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
	2024	2023
	(In Thousands)
OPERATING ACTIVITIES
Net income (loss)	($48,980)	$10,142
Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:
Depreciation and amortization	20,914	19,575
Deferred income taxes, investment tax credits, and non-current taxes accrued	(25,534)	5,147
Changes in assets and liabilities:
Receivables	(89,009)	26,040
Fuel inventory	638	2,920
Accounts payable	(19,282)	(14,313)
Prepaid taxes and taxes accrued	8,632	1,687
Interest accrued	1,132	(361)
Deferred fuel costs	369	6,965
Other working capital accounts	(10,924)	(12,303)
Provisions for estimated losses	1,758	1,645
Other regulatory assets	9,257	2,267
Other regulatory liabilities	166,532	31,170
Pension and other postretirement funded status	(1,896)	(1,113)
Other assets and liabilities	(4,468)	(7,890)
Net cash flow provided by operating activities	9,139	71,578

INVESTING ACTIVITIES
Construction expenditures	(32,418)	(46,098)
Allowance for equity funds used during construction	378	450
Change in money pool receivable - net	—	134,670

Payments to storm reserve escrow account	(1,877)	(811)
Changes in securitization account	(2,976)	(3,055)

Net cash flow provided by (used in) investing activities	(36,893)	85,156

FINANCING ACTIVITIES


Contribution from customer for construction	—	15,000
Change in money pool payable - net	28,125	—

Other	(371)	(312)
Net cash flow provided by financing activities	27,754	14,688

Net increase in cash and cash equivalents	—	171,422
Cash and cash equivalents at beginning of period	26	4,464
Cash and cash equivalents at end of period	$26	$175,886

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$8,047	$9,630

Noncash investing activities:
Accrued construction expenditures	$4,941	$5,707

See Notes to Financial Statements.


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT ASSETS

Cash and cash equivalents	$26	$26


Securitization recovery trust account	5,402	2,426
Accounts receivable:
Customer	64,955	67,258
Allowance for doubtful accounts	(6,564)	(7,770)
Associated companies	99,303	1,657
Other	4,484	5,270
Accrued unbilled revenues	24,333	31,087
Total accounts receivable	186,511	97,502
Deferred fuel costs	5,779	6,148
Fuel inventory - at average cost	2,660	3,298
Materials and supplies - at average cost	30,479	30,019
Prepaid taxes	—	1,574
Prepayments and other	21,476	11,482
TOTAL	252,333	152,475

OTHER PROPERTY AND INVESTMENTS
Non-utility property - at cost (less accumulated depreciation)	832	832
Storm reserve escrow account	80,609	78,731

TOTAL	81,441	79,563

UTILITY PLANT
Electric	2,060,223	2,046,928
Natural gas	404,839	401,846
Construction work in progress	30,622	25,424
TOTAL UTILITY PLANT	2,495,684	2,474,198
Less - accumulated depreciation and amortization	866,798	858,672
UTILITY PLANT - NET	1,628,886	1,615,526

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets (includes securitization property of $— as of March 31, 2024 and $506 as of December 31, 2023)	173,110	182,367
Deferred fuel costs	4,080	4,080
Other	84,305	63,964
TOTAL	261,495	250,411

TOTAL ASSETS	$2,224,155	$2,097,975

See Notes to Financial Statements.


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$163,000	$85,000
Payable due to associated company	1,275	1,275
Accounts payable:
Associated companies	91,598	76,736
Other	31,667	39,813
Customer deposits	32,705	32,420
Taxes accrued	7,058	—
Interest accrued	9,666	8,534


Other	8,565	8,953
TOTAL	345,534	252,731

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	169,742	195,615
Accumulated deferred investment tax credits	15,699	16,457
Regulatory liability for income taxes - net	35,154	36,061
Other regulatory liabilities	257,873	90,434

Accumulated provisions	89,882	88,124

Long-term debt (includes securitization bonds of $5,476 as of March 31, 2024 and $5,415 as of December 31, 2023)	506,275	584,171
Long-term payable due to associated company	7,004	7,004
Other	39,218	20,624
TOTAL	1,120,847	1,038,490

Commitments and Contingencies

EQUITY
Member's equity	757,774	806,754
TOTAL	757,774	806,754

TOTAL LIABILITIES AND EQUITY	$2,224,155	$2,097,975

See Notes to Financial Statements.


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)

			Member's Equity
			(In Thousands)

Balance at December 31, 2022			$702,816









Net income			10,142

Balance at March 31, 2023			$712,958


Balance at December 31, 2023			$806,754









Net loss			(48,980)

Balance at March 31, 2024			$757,774

See Notes to Financial Statements.

ENTERGY TEXAS, INC. AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Net income decreased $4.9 million primarily due to higher depreciation and amortization expenses and higher other operation and maintenance expenses, partially offset by higher retail electric price.

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:


			Amount
			(In Millions)
2023 operating revenues			$507.5
Fuel, rider, and other revenues that do not significantly affect net income			(73.3)
Volume/weather			0.7
Retail electric price			9.6
2024 operating revenues			$444.5

Entergy Texas’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs such that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues that do not significantly affect net income” includes the revenue variance associated with these items.

The volume/weather variance is insignificant and primarily due to an increase in weather-adjusted residential usage and the effect of more favorable weather on residential sales, substantially offset by a decrease in industrial usage. The increase in weather-adjusted residential usage is primarily due to an increase in customers. The decrease in industrial usage is primarily due to a decrease in demand from cogeneration customers.

The retail electric price variance is primarily due to an increase in base rates effective June 2023. See Note 2 to the financial statements in the Form 10-K for discussion of the 2022 base rate case.

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Texas for the three months ended March 31, 2024 and 2023 are as follows:


	2024	2023	% Change
	(GWh)
Residential	1,311	1,247	5
Commercial	1,083	1,061	2
Industrial	2,053	2,193	(6)
Governmental	63	63	—
Total retail	4,510	4,564	(1)
Sales for resale:
Non-associated companies	117	104	13
Total	4,627	4,668	(1)

See Note 12 to the financial statements herein for additional discussion of Entergy Texas’s operating revenues.

Other Income Statement Variances

Other operation and maintenance expenses increased primarily due to:

an increase of $3.6 million in power delivery expenses primarily due to higher transmission repairs and maintenance costs, higher transmission and distribution management overhead costs, higher vegetation maintenance costs due to timing, and higher metering costs;
an increase of $2.7 million in compensation and benefits costs primarily due to higher healthcare claims activity in 2024;
an increase of $1.6 million in contract costs related to operational performance, customer service, and organizational health initiatives;
an increase of $1.3 million in non-nuclear generation expenses primarily due to a higher scope of work performed in 2024 as compared to 2023; and
several individually insignificant items.

Depreciation and amortization expenses increased primarily due to:

the recognition of $13.8 million in depreciation expense in first quarter 2024 for the 2022 base rate case relate back period, effective over six months beginning January 2024. The recognition of depreciation expense for the relate back period is effective over the same period as collections from the relate back surcharge rider and results in no effect on net income;
an increase in depreciation rates effective with an increase in base rates in June 2023; and
additions to plant in service.

See Note 2 to the financial statements in the Form 10-K for discussion of the 2022 base rate case.

Other income increased primarily due to an increase in the allowance for equity funds used during construction due to higher construction work in progress in 2024, including the Orange County Advanced Power Station project.

Interest expense increased primarily due to the issuance of $350 million of 5.80% Series mortgage bonds in August 2023, partially offset by an increase in the allowance for borrowed funds used during construction due to higher construction work in progress in 2024, including the Orange County Advanced Power Station project.

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Income Taxes

The effective income tax rates were 19.1% for the first quarter 2024 and 18.9% for the first quarter 2023. The differences in the effective income tax rates for the first quarter 2024 and the first quarter 2023 versus the federal statutory rate of 21% were primarily due to book and tax differences related to the allowance for equity funds used during construction and certain book and tax differences related to utility plant items, partially offset by the accrual for state income taxes.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” herein and in the Form 10-K for discussion of income tax legislation and regulation.

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:


	2024	2023
	(In Thousands)
Cash and cash equivalents at beginning of period	$21,986	$3,497

Net cash provided by (used in):
Operating activities	110,907	198,102
Investing activities	34,303	(108,019)
Financing activities	10,740	(1,416)
Net increase in cash and cash equivalents	155,950	88,667

Cash and cash equivalents at end of period	$177,936	$92,164

Operating Activities

Net cash flow provided by operating activities decreased $87.2 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to lower collections from customers, the timing of payments to vendors, and the timing of recovery of fuel and purchased power costs. The decrease was partially offset by a decrease of $13.0 million in interest paid. See Note 2 to the financial statements herein and in the Form 10-K for a discussion of fuel and purchased power cost recovery.

Investing Activities

Entergy Texas’s investing activities provided $34.3 million of cash for the three months ended March 31, 2024 compared to using $108.0 million of cash for the three months ended March 31, 2023 primarily due to the following activity:

money pool activity;
an increase of $9.1 million in non-nuclear generation construction expenditures primarily due to higher spending on the Orange County Advanced Power Station project;
an increase of $9.7 million in transmission construction expenditures primarily due to a higher scope of work on projects performed in 2024 as compared to 2023; and

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

an increase of $12.9 million in distribution construction expenditures primarily due to higher capital expenditures as a result of increased development in Entergy Texas’s service area.

Decreases in Entergy Texas’s receivable from the money pool are a source of cash flow, and Entergy Texas’s receivable from the money pool decreased $267.6 million for the three months ended March 31, 2024 compared to decreasing by $92.9 million for the three months ended March 31, 2023. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Financing Activities

Entergy Texas’s financing activities provided $10.7 million of cash for the three months ended March 31, 2024 compared to using $1.4 million of cash for the three months ended March 31, 2023 primarily due to an increase of $12.5 million in prepaid deposits related to contributions-in-aid-of-construction primarily for customer and generator interconnection agreements.

Capital Structure

Entergy Texas’s debt to capital ratio is shown in the following table.


	March 31, 2024		December 31, 2023
Debt to capital	50.6	%	50.9	%
Effect of excluding securitization bonds	(2.1	%)	(2.1	%)
Debt to capital, excluding securitization bonds (non-GAAP) (a)	48.5	%	48.8	%
Effect of subtracting cash	(1.5	%)	(0.2	%)
Net debt to net capital, excluding securitization bonds (non-GAAP) (a)	47.0	%	48.6	%

(a)Calculation excludes the securitization bonds, which are non-recourse to Entergy Texas.

Net debt consists of debt less cash and cash equivalents. Debt consists of finance lease obligations and long-term debt, including the currently maturing portion. Capital consists of debt and equity. Net capital consists of capital less cash and cash equivalents. The debt to capital ratio excluding securitization bonds and net debt to net capital ratio excluding securitization bonds are non-GAAP measures. Entergy Texas uses the debt to capital ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy Texas’s financial condition because the securitization bonds are non-recourse to Entergy Texas, as more fully described in Note 5 to the financial statements in the Form 10-K. Entergy Texas also uses the net debt to net capital ratio excluding securitization bonds in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Texas’s financial condition because net debt indicates Entergy Texas’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Uses and Sources of Capital

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources” in the Form 10-K for a discussion of Entergy Texas’s uses and sources of capital. The following are updates to information provided in the Form 10-K.

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy Texas’s receivables from the money pool were as follows:


March 31, 2024	December 31, 2023	March 31, 2023	December 31, 2022
(In Thousands)
$50,244	$317,882	$6,536	$99,468

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

Entergy Texas has a credit facility in the amount of $150 million scheduled to expire in June 2028. The credit facility includes fronting commitments for the issuance of letters of credit against $30 million of the borrowing capacity of the facility. As of March 31, 2024, there were no cash borrowings and $1.1 million in letters of credit outstanding under the credit facility. In addition, Entergy Texas is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of March 31, 2024, $76.5 million in letters of credit were outstanding under Entergy Texas’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

State and Local Rate Regulation and Fuel-Cost Recovery

Federal Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Federal Regulation” in the Form 10-K for a discussion of federal regulation.

Nuclear Matters

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Nuclear Matters” in the Form 10-K for a discussion of nuclear matters.

Industrial and Commercial Customers

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Industrial and Commercial Customers” in the Form 10-K for a discussion of industrial and commercial customers.

Environmental Risks

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Environmental Risks” in the Form 10-K for a discussion of environmental risks.

Critical Accounting Estimates

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Texas’s accounting for utility regulatory accounting, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

New Accounting Pronouncements


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)


		2024	2023
	(In Thousands)
OPERATING REVENUES
Electric		$444,491	$507,506

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale		96,137	167,530
Purchased power		94,343	107,758
Other operation and maintenance		77,960	64,430
Taxes other than income taxes		24,567	27,996
Depreciation and amortization		89,505	59,391
Other regulatory charges (credits) - net		(975)	10,924
TOTAL		381,537	438,029

OPERATING INCOME		62,954	69,477

OTHER INCOME
Allowance for equity funds used during construction		9,248	5,089
Interest and investment income		3,904	1,417
Miscellaneous - net		(2,312)	439
TOTAL		10,840	6,945

INTEREST EXPENSE
Interest expense		31,966	26,962
Allowance for borrowed funds used during construction		(3,602)	(1,896)
TOTAL		28,364	25,066

INCOME BEFORE INCOME TAXES		45,430	51,356

Income taxes		8,686	9,683

NET INCOME		36,744	41,673

Preferred dividend requirements		518	518

EARNINGS APPLICABLE TO COMMON STOCK		$36,226	$41,155

See Notes to Financial Statements.

(Page left blank intentionally)


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
	2024	2023
	(In Thousands)
OPERATING ACTIVITIES
Net income	$36,744	$41,673
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization	89,505	59,391
Deferred income taxes, investment tax credits, and non-current taxes accrued	1,438	(6,536)
Changes in assets and liabilities:
Receivables	13,059	63,210
Fuel inventory	1,009	(8,445)
Accounts payable	(17,830)	(44,804)
Taxes accrued	(28,917)	(21,586)
Interest accrued	5,287	(12,656)
Deferred fuel costs	38,863	107,238
Other working capital accounts	(11,186)	9,245
Provisions for estimated losses	(1,358)	522
Other regulatory assets	24,181	21,535
Other regulatory liabilities	(7,959)	(3,283)
Pension and other postretirement funded status	(4,648)	(1,960)
Other assets and liabilities	(27,281)	(5,442)
Net cash flow provided by operating activities	110,907	198,102

INVESTING ACTIVITIES
Construction expenditures	(235,625)	(205,191)
Allowance for equity funds used during construction	9,248	5,089

Changes in money pool receivable - net	267,638	92,932
Changes in securitization account	(5,958)	(849)
Increase in other investments	(1,000)	—

Net cash flow provided by (used in) investing activities	34,303	(108,019)

FINANCING ACTIVITIES






Preferred stock dividends paid	(518)	(518)
Other	11,258	(898)
Net cash flow provided by (used in) financing activities	10,740	(1,416)

Net increase in cash and cash equivalents	155,950	88,667
Cash and cash equivalents at beginning of period	21,986	3,497
Cash and cash equivalents at end of period	$177,936	$92,164

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$25,940	$38,923
Income taxes	$2,447	$—
Noncash investing activities:
Accrued construction expenditures	$276,548	$104,805

See Notes to Financial Statements.


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$26	$1,497
Temporary cash investments	177,910	20,489
Total cash and cash equivalents	177,936	21,986
Securitization recovery trust account	11,153	5,195
Accounts receivable:
Customer	86,081	88,468
Allowance for doubtful accounts	(1,100)	(1,484)
Associated companies	56,939	329,941
Other	28,833	24,416
Accrued unbilled revenues	62,662	72,771
Total accounts receivable	233,415	514,112
Deferred fuel costs	100,156	139,019
Fuel inventory - at average cost	49,838	50,847
Materials and supplies - at average cost	144,081	123,020

Prepayments and other	31,522	35,232
TOTAL	748,101	889,411

OTHER PROPERTY AND INVESTMENTS
Investments in affiliates - at equity	170	214
Non-utility property - at cost (less accumulated depreciation)	376	376
Other	15,117	15,068
TOTAL	15,663	15,658

UTILITY PLANT
Electric	8,003,032	7,931,340
Construction work in progress	1,022,362	857,707
TOTAL UTILITY PLANT	9,025,394	8,789,047
Less - accumulated depreciation and amortization	2,414,265	2,363,919
UTILITY PLANT - NET	6,611,129	6,425,128

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $246,746 as of March 31, 2024 and $250,324 as of December 31, 2023)	572,425	596,606
Other	158,880	129,769
TOTAL	731,305	726,375

TOTAL ASSETS	$8,106,198	$8,056,572

See Notes to Financial Statements.


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT LIABILITIES

Accounts payable:
Associated companies	$55,706	$74,423
Other	173,694	195,703
Customer deposits	40,695	39,999
Taxes accrued	49,970	78,887
Interest accrued	36,572	31,285

Other	20,985	16,237
TOTAL	377,622	436,534

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	818,667	814,905
Accumulated deferred investment tax credits	7,776	7,963
Regulatory liability for income taxes - net	108,234	114,759
Other regulatory liabilities	41,579	43,013
Asset retirement cost liabilities	15,598	11,743
Accumulated provisions	8,122	9,480
Long-term debt (includes securitization bonds of $257,683 as of March 31, 2024 and $257,592 as of December 31, 2023)	3,225,444	3,225,092
Other	348,268	274,421
TOTAL	4,573,688	4,501,376

Commitments and Contingencies

EQUITY
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 46,525,000 shares in 2024 and 2023	49,452	49,452
Paid-in capital	1,200,125	1,200,125
Retained earnings	1,866,561	1,830,335
Total common shareholder's equity	3,116,138	3,079,912
Preferred stock without sinking fund	38,750	38,750
TOTAL	3,154,888	3,118,662

TOTAL LIABILITIES AND EQUITY	$8,106,198	$8,056,572

See Notes to Financial Statements.


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)

		Common Equity
	Preferred Stock	Common Stock	Paid-in Capital	Retained Earnings	Total
	(In Thousands)

Balance at December 31, 2022	$38,750	$49,452	$1,050,125	$1,541,134	$2,679,461

Net income	—	—	—	41,673	41,673

Preferred stock dividends	—	—	—	(518)	(518)
Balance at March 31, 2023	$38,750	$49,452	$1,050,125	$1,582,289	$2,720,616














Balance at December 31, 2023	$38,750	$49,452	$1,200,125	$1,830,335	$3,118,662

Net income	—	—	—	36,744	36,744


Preferred stock dividends	—	—	—	(518)	(518)
Balance at March 31, 2024	$38,750	$49,452	$1,200,125	$1,866,561	$3,154,888












See Notes to Financial Statements.

SYSTEM ENERGY RESOURCES, INC.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

System Energy’s principal asset consists of an ownership interest and a leasehold interest in Grand Gulf. The capacity and energy from its 90% interest is sold under the Unit Power Sales Agreement to its only four customers, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90% interest in Grand Gulf pursuant to the Unit Power Sales Agreement. Payments under the Unit Power Sales Agreement are System Energy’s only source of operating revenues. As discussed in “Complaints Against System Energy” below and in Note 2 to the financial statements in the Form 10-K, System Energy and the Unit Power Sales Agreement are currently the subject of several litigation proceedings at the FERC (or on appeal from the FERC to the United States Court of Appeals for the Fifth Circuit).

Results of Operations

Net Income

Net income increased $3.6 million primarily due to an increase in operating revenues resulting from changes in rate base, partially offset by the lower authorized rate of return on equity and capital structure limitations on monthly bills issued to Entergy Arkansas per the November 2023 settlement agreement with the APSC. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the settlement with the APSC.

Income Taxes

The effective income tax rates were 20.5% for the first quarter 2024 and 23.5% for the first quarter 2023. The difference in the effective income tax rate for the first quarter 2023 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes and provisions, partially offset by book and tax differences related to the allowance for equity funds used during construction.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” herein and in the Form 10-K for discussion of income tax legislation and regulation.

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:


	2024	2023
	(In Thousands)
Cash and cash equivalents at beginning of period	$60	$2,940

Net cash provided by (used in):
Operating activities	70,339	(32,839)
Investing activities	(188,259)	48,231
Financing activities	229,361	241,671
Net increase in cash and cash equivalents	111,441	257,063

Cash and cash equivalents at end of period	$111,501	$260,003

Operating Activities

System Energy’s operating activities provided $70.3 million of cash for the three months ended March 31, 2024 compared to using $32.8 million of cash for the three months ended March 31, 2023 primarily due to aggregate refunds of $103.5 million made in January 2023 related to the sale-leaseback renewal costs and depreciation litigation as calculated in System Energy’s January 2023 compliance report filed with the FERC. See Note 2 to the financial statements in the Form 10-K for further discussion of the refunds and the related proceedings.

Investing Activities

System Energy’s investing activities used $188.3 million of cash for the three months ended March 31, 2024 compared to providing $48.2 million of cash for the three months ended March 31, 2023 primarily due to:

an increase of $114.9 million as a result of fluctuations in nuclear fuel activity due to variations from year to year in the timing and pricing of fuel reload requirements, material and services deliveries, and the timing of cash payments during the nuclear fuel cycle; and
money pool activity.

Increases in System Energy’s receivable from the money pool are a use of cash flow and System Energy’s receivable from the money pool increased $31.5 million for the three months ended March 31, 2024 compared to decreasing by $76.4 million for the three months ended March 31, 2023. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

Financing Activities

Net cash flow provided by financing activities decreased $12.3 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to the issuance of $325 million of 6.00% Series mortgage bonds in March 2023 and money pool activity. The decrease was partially offset by:

a capital contribution of $150 million received from Entergy Corporation in January 2024 in order to maintain System Energy’s capital structure;
net long-term borrowings of $91.7 million in 2024 compared to net repayments of $16.7 million in 2023 on the nuclear fuel company variable interest entity’s credit facility; and
the repayment, prior to maturity, in March 2023 of a $50 million term loan due in November 2023.

Decreases in System Energy’s payable to the money pool are a use of cash flow, and System Energy’s payable to the money pool decreased $12.2 million for the three months ended March 31, 2024.

See Note 4 to the financial statements herein and Note 5 to the financial statements in the Form 10-K for more details on long-term debt.

Capital Structure

System Energy’s debt to capital ratio is shown in the following table. The decrease in the debt to capital ratio is primarily due to the capital contribution of $150 million received from Entergy Corporation in 2024, partially offset by the net issuance of long-term debt in 2024.


	March 31, 2024		December 31, 2023
Debt to capital	43.7	%	45.4	%
Effect of subtracting cash	(3.5	%)	—	%
Net debt to net capital (non-GAAP)	40.2	%	45.4	%

Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings and long-term debt, including the currently maturing portion. Capital consists of debt and common equity. Net capital consists of capital less cash and cash equivalents. System Energy uses the debt to capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating System Energy’s financial condition. The net debt to net capital ratio is a non-GAAP measure. System Energy uses the net debt to net capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating System Energy’s financial condition because net debt indicates System Energy’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Uses and Sources of Capital

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources” in the Form 10-K for a discussion of System Energy’s uses and sources of capital. The following are updates to the information provided in the Form 10-K.

System Energy’s receivables from or (payables to) the money pool were as follows:


March 31, 2024	December 31, 2023	March 31, 2023	December 31, 2022
(In Thousands)
$31,456	($12,246)	$18,590	$94,981

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

See Note 4 to the financial statements in the Form 10-K for a description of the money pool.

The System Energy nuclear fuel company variable interest entity has a credit facility in the amount of $120 million scheduled to expire in June 2025. As of March 31, 2024, $113.2 million in loans were outstanding under the System Energy nuclear fuel company variable interest entity credit facility. See Note 4 to the financial statements herein for additional discussion of the variable interest entity credit facility.

Federal Regulation

See the “Rate, Cost-recovery, and Other Regulation - Federal Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis in the Form 10-K and Note 2 to the financial statements herein and in the Form 10-K for a discussion of federal regulation.

Complaints Against System Energy

See Note 2 to the financial statements in the Form 10-K for information regarding pending complaints against System Energy. The following are updates to that discussion.

Return on Equity and Capital Structure Complaints

As discussed in the Form 10-K, in March 2021 the FERC ALJ issued an initial decision in the proceeding initiated by the LPSC, the MPSC, the APSC, and the City Council against System Energy regarding the return on equity component of the Unit Power Sales Agreement. With regard to System Energy’s authorized return on equity, the ALJ determined that the existing return on equity of 10.94% is no longer just and reasonable, and that the replacement authorized return on equity, based on application of the FERC’s Opinion No. 569-A methodology, should be 9.32%. The ALJ further determined that System Energy should pay refunds for a fifteen-month refund period (January 2017-April 2018) based on the difference between the current return on equity and the replacement authorized return on equity. The ALJ determined that the April 2018 complaint concerning the authorized return on equity should be dismissed, and that no refunds for a second fifteen-month refund period should be due. With regard to System Energy’s capital structure, the ALJ determined that System Energy’s actual equity ratio is excessive and that the just and reasonable equity ratio is 48.15% equity, based on the average equity ratio of the proxy group used to evaluate the return on equity for the second complaint. The ALJ further determined that System Energy should pay refunds for a fifteen-month refund period (September 2018-December 2019) based on the difference between the actual equity ratio and the 48.15% equity ratio. If the ALJ’s initial decision is upheld, the estimated refund for this proceeding is approximately $24.8 million, which includes interest through March 31, 2024, and the estimated resulting annual rate reduction would be approximately $14.1 million. As a result of the settlement agreements with the MPSC and the APSC, both the estimated refund and rate reduction exclude Entergy Mississippi's and Entergy Arkansas’s portions. See “System Energy Settlement with the MPSC” in the Form 10-K and see “System Energy Settlement with the APSC” below and in the Form 10-K for discussion of the settlements. The estimated refund will continue to accrue interest until a final FERC decision is issued.

The ALJ initial decision is an interim step in the FERC litigation process, and an ALJ’s determinations made in an initial decision are not controlling on the FERC. In April 2021, System Energy filed its brief on exceptions, in which it challenged the initial decision’s findings on both the return on equity and capital structure issues. Also in April 2021 the LPSC, the APSC, the MPSC, the City Council, and the FERC trial staff filed briefs on exceptions. Reply briefs opposing exceptions were filed in May 2021 by System Energy, the FERC trial staff, the LPSC, the APSC, the MPSC, and the City Council. Refunds, if any, that might be required will only become due after the FERC issues its order reviewing the initial decision.

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

Grand Gulf Sale-leaseback Renewal Complaint and Uncertain Tax Position Rate Base Issue

As discussed in the Form 10-K, in May 2018 the LPSC filed a complaint against System Energy and Entergy Services related to System Energy’s renewal of a sale-leaseback transaction originally entered into in December 1988 for an 11.5% undivided interest in Grand Gulf Unit 1. The APSC, the MPSC, and the City Council subsequently intervened in the proceeding. A hearing was held before a FERC ALJ in November 2019. In April 2020 the ALJ issued the initial decision, and in December 2022 the FERC issued an order on the ALJ’s initial decision, which affirmed it in part and modified it in part. The FERC’s order directed System Energy to calculate refunds on three issues, and to provide a compliance report detailing the calculations. The FERC’s order also disallows the future recovery of sale-leaseback renewal costs, which is estimated at approximately $11.5 million annually for purchases from Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans through July 2036. The three refund issues are rental expenses related to the renewal of the sale-leaseback arrangements; refunds, if any, for the revenue requirement impact of including accumulated deferred income taxes resulting from the decommissioning uncertain tax positions from 2004 through the present; and refunds for the net effect of correcting the depreciation inputs for capital additions attributable to the portion of plant subject to the sale-leaseback.

In January 2023, System Energy filed its compliance report with the FERC. With respect to the sale-leaseback renewal costs, System Energy calculated a refund of $89.8 million, which represented all of the sale-leaseback renewal rental costs that System Energy recovered in rates, with interest. With respect to the decommissioning uncertain tax position issue, System Energy calculated that no additional refunds are owed because it had already provided a one-time historical credit (for the period January 2016 through September 2020) of $25.2 million based on the accumulated deferred income taxes that resulted from the IRS’s partial acceptance of the decommissioning tax position, and because it has been providing an ongoing rate base credit for the accumulated deferred income taxes that resulted from the IRS’s partial acceptance of the decommissioning tax position since October 2020. With respect to the depreciation refund, System Energy calculated a refund of $13.7 million, which is the net total of a refund to customers for excess depreciation expense previously collected, plus interest, offset by the additional return on rate base that System Energy previously did not collect, without interest.

In January 2023, System Energy filed a request for rehearing of the FERC’s determinations in the December 2022 order on sale-leaseback refund issues and future lease cost disallowances, the FERC’s prospective policy on uncertain tax positions, and the proper accounting of System Energy’s accumulated deferred income taxes adjustment for the Tax Cuts and Jobs Act of 2017; and a motion for confirmation of its interpretation of the December 2022 order’s remedy concerning the decommissioning tax position. In January 2023 the retail regulators filed a motion for confirmation of their interpretation of the refund requirement in the December 2022 FERC order and a provisional request for rehearing. In February 2023 the FERC issued a notice that the rehearing requests have been deemed denied by operation of law. The deemed denial of the rehearing request initiates a sixty-day period in which aggrieved parties may petition for federal appellate court review of the underlying FERC orders; however, the FERC may issue a substantive order on rehearing as long as it continues to have jurisdiction over the case. In March 2023, System Energy filed in the United States Court of Appeals for the Fifth Circuit a petition for review of the December 2022 order. In March 2023, System Energy also filed an unopposed motion to stay the proceeding in the Fifth Circuit pending the FERC’s disposition of the pending motions, and the court granted the motion to stay.

In August 2023 the FERC issued an order addressing arguments raised on rehearing and partially setting aside the prior order (rehearing order). The rehearing order addresses rehearing requests that were filed in January 2023 separately by System Energy and the LPSC, the APSC, and the City Council.

In the rehearing order, the FERC directs System Energy to recalculate refunds for two issues: (1) refunds of rental expenses related to the renewal of the sale-leaseback arrangements and (2) refunds for the net effect of correcting the depreciation inputs for capital additions associated with the sale-leaseback. With regard to the sale-leaseback renewal rental expenses, the rehearing order allows System Energy to recover an implied return of and on the depreciated cost of the portion of the plant subject to the sale-leaseback as of the expiration of the initial lease

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

term. With regard to the depreciation input issue, the rehearing order allows System Energy to offset refunds so that System Energy may collect interest on the rate base recalculations that were part of the overall depreciation rate recalculations. The rehearing order further directs System Energy to submit within 60 days of the date of the rehearing order an additional compliance filing to revise the total refunds for these two issues. As discussed above, System Energy’s January 2023 compliance filing calculated $103.5 million in total refunds, and the refunds were paid in January 2023. In October 2023, System Energy filed its compliance report with the FERC as directed in the August 2023 rehearing order. The October 2023 compliance report reflected recalculated refunds totaling $35.7 million for the two issues resulting in $67.8 million in refunds that could be recouped by System Energy. As discussed below in “System Energy Settlement with the APSC,” System Energy reached a settlement in principle with the APSC to resolve several pending cases under the FERC’s jurisdiction, including this one, pursuant to which it has agreed not to recoup the $27.3 million calculated for Entergy Arkansas in the compliance filing. Consistent with the compliance filing, in October 2023, Entergy Louisiana and Entergy New Orleans paid recoupment amounts of $18.2 million and $22.3 million, respectively, to System Energy.

On the third refund issue identified in the rehearing requests, concerning the decommissioning uncertain tax positions, the rehearing order denied all rehearing requests, re-affirmed the remedy contained in the December 2022 order, and did not direct System Energy to recalculate refunds or to submit an additional compliance filing. On this issue, as reflected in its January 2023 compliance filing, System Energy believes it has already paid the refunds due under the remedy that the FERC outlined for the uncertain tax positions issue in its December 2022 order. In August 2023 the LPSC issued a media release in which it stated that it disagrees with System Energy’s determination that the rehearing order requires no further refunds to be made on this issue.

In September 2023, System Energy filed a protective appeal of the rehearing order with the United States Court of Appeals for the Fifth Circuit. The appeal was consolidated with System Energy’s prior appeal of the December 2022 order.

In September 2023 the LPSC filed with the FERC a request for rehearing and clarification of the rehearing order. The LPSC requests that the FERC reverse its determination in the rehearing order that System Energy may collect an implied return of and on the depreciated cost of the portion of the plant subject to the sale-leaseback, as of the expiration of the initial lease term, as well as its determination in the rehearing order that System Energy may offset the refunds for the depreciation rate input issue and collect interest on the rate base recalculations that were part of the overall depreciation rate recalculations. In addition, the LPSC requests that the FERC either confirm the LPSC’s interpretation of the refund associated with the decommissioning uncertain tax positions or explain why it is not doing so. In October 2023 the FERC issued a notice that the rehearing request has been deemed denied by operation of law. In November 2023 the FERC issued a further notice stating that it would not issue any further order addressing the rehearing request. Also in November 2023 the LPSC filed with the United States Court of Appeals for the Fifth Circuit a petition for review of the FERC’s August 2023 rehearing order and denials of the September 2023 rehearing request.

In December 2023 the United States Court of Appeals for the Fifth Circuit lifted the abeyance on the consolidated System Energy appeals and it also consolidated the LPSC’s appeal with the System Energy appeals. In March 2024, separate petition briefs were filed by System Energy and by the LPSC. Also in March 2024, the City Council filed an intervenor brief supporting the LPSC. Briefing will continue through July 2024.

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

LPSC Additional Complaints

As discussed in the Form 10-K, in May 2020 the LPSC authorized its staff to file additional complaints at the FERC related to the rates charged by System Energy for Grand Gulf energy and capacity supplied to Entergy Louisiana under the Unit Power Sales Agreement. The following are updates to that discussion.

Unit Power Sales Agreement Complaint

As discussed in the Form 10-K, the first of the additional complaints was filed by the LPSC, the APSC, the MPSC, and the City Council in September 2020. The first complaint raises two sets of rate allegations: violations of the filed rate and a corresponding request for refunds for prior periods; and elements of the Unit Power Sales Agreement are unjust and unreasonable and a corresponding request for refunds for the 15-month refund period and changes to the Unit Power Sales Agreement prospectively. In May 2021 the FERC issued an order addressing the complaint, establishing a refund effective date of September 21, 2020, establishing hearing procedures, and holding those procedures in abeyance pending the FERC’s review of the initial decision in the Grand Gulf sale-leaseback renewal complaint discussed above.

In November 2021 the LPSC, the APSC, and the City Council filed direct testimony and requested the FERC to order refunds for prior periods and prospective amendments to the Unit Power Sales Agreement. System Energy filed answering testimony in January 2022. In March 2022 the FERC trial staff filed direct and answering testimony recommending refunds and prospective modifications to the Unit Power Sales Agreement.

In April 2022, System Energy filed cross-answering testimony in response to the FERC trial staff’s recommendations. In June 2022 the FERC trial staff submitted revised answering testimony, in which it recommended additional refunds associated with the accumulated deferred income tax balances in account 190. Also in June 2022, System Energy filed revised and supplemental cross-answering testimony to respond to the FERC trial staff’s testimony and oppose its revised recommendation.

In May 2022 the LPSC, the APSC, and the City Council filed rebuttal testimony and asserted new claims. In June 2022 a new procedural schedule was adopted, providing for additional rounds of testimony and for the hearing to begin in September 2022. The hearing concluded in December 2022. Also in December 2022, a motion to extend the briefing schedule and the May 2023 deadline for the initial decision was granted.

In November 2022, System Energy filed a partial settlement agreement with the APSC, the City Council, and the LPSC that resolved the following issues raised in the Unit Power Sales Agreement complaint: advance collection of lease payments, aircraft costs, executive incentive compensation, money pool borrowings, advertising expenses, deferred nuclear refueling outage costs, industry association dues, and termination of the capital funds agreement. The settlement provided that System Energy would provide a black-box refund of $18 million (inclusive of interest), plus additional refund amounts with interest to be calculated for certain issues to be distributed to Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans as the Utility operating companies other than Entergy Mississippi purchasing under the Unit Power Sales Agreement. The settlement further provided that if the APSC, the City Council, or the LPSC agrees to the global settlement System Energy entered into with the MPSC (see “System Energy Settlement with the MPSC” in the Form 10-K for discussion of the settlement), and such global settlement includes a black-box refund amount, then the black-box refund for this settlement agreement shall not be incremental or in addition to the global black-box refund amount. The settlement agreement addressed other matters as well, including adjustments to rate base beginning in October 2022, exclusion of certain other costs, and inclusion of money pool borrowings, if any, in short-term debt within the cost of capital calculation used in the Unit Power Sales Agreement. In April 2023 the FERC approved the settlement agreement. The refund provided for in the settlement agreement was included in the May 2023 service month bills under the Unit Power Sales Agreement.

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

In May 2023 the presiding ALJ issued an initial decision finding that System Energy should have excluded multiple identified categories of accumulated deferred income taxes from rate base when calculating Unit Power Sales Agreement bills. Based on this finding, the initial decision recommended refunds; System Energy estimates that those refunds for Entergy Louisiana and Entergy New Orleans would total approximately $69.7 million plus $94.3 million of interest through March 31, 2024. The initial decision also finds that the Unit Power Sales Agreement should be modified such that a cash working capital allowance of negative $36.4 million is applied prospectively. If the FERC ultimately orders these modifications to cash working capital be implemented, the estimated annual revenue requirement impact is expected to be immaterial. On the other non-settled issues for which the complainants sought refunds or changes to the Unit Power Sales Agreement, the initial decision ruled against the complainants.

The initial decision is an interim step in the FERC litigation process, and an ALJ’s determination made in an initial decision is not controlling on the FERC. System Energy disagrees with the ALJ’s findings concerning the accumulated deferred income taxes issues and cash working capital. In July 2023, System Energy filed a brief on exceptions to the initial decision’s accumulated deferred income taxes findings. Also in July 2023, the APSC, the LPSC, the City Council, and the FERC trial staff filed separate briefs on exceptions. The APSC’s brief on exceptions challenges the ALJ’s determinations on the money pool interest and retained earnings issues. The LPSC’s brief on exceptions challenges the ALJ’s determinations regarding the sale-leaseback transaction costs, legal fees, and retained earnings issues. The City Council’s brief on exceptions challenges the ALJ’s determinations on the money pool and cash management issues. The FERC trial staff’s brief on exceptions challenges the ALJ’s determinations on the cash working capital issue as well as certain of the accumulated deferred income taxes issues. In August 2023 all parties filed separate briefs opposing exceptions. System Energy filed a brief opposing the exceptions of the APSC, the LPSC, and the City Council. The APSC, the LPSC, and the City Council filed separate briefs opposing the exceptions raised by System Energy and the FERC trial staff. The FERC trial staff filed its own brief opposing certain exceptions raised by System Energy, the APSC, the LPSC, and the City Council. The case is now pending a decision by the FERC. Refunds, if any, that might be required will become due only after the FERC issues its order reviewing the initial decision.

LPSC Petition for a Writ of Mandamus

In March 2024 the LPSC filed a petition for a writ of mandamus, requesting that the United States Court of Appeals for the Fifth Circuit direct the FERC to take action on (1) System Energy’s pending compliance filings (and the LPSC’s protests) in response to the FERC’s orders on the uncertain tax position rate base issue, as discussed above; and (2) the ALJ’s pending initial decision in the return on equity and capital structure proceeding, also as discussed above. System Energy filed a notice of intervention in the proceeding.

In March 2024 the United States Court of Appeals for the Fifth Circuit directed the FERC to respond to the LPSC’s petition. Also in March 2024, System Energy filed its response to the LPSC’s petition, in which it opposed the request for action on the compliance filing and took no position on the request for action on the return on equity and capital structure case. Later in March 2024, the FERC responded opposing both parts of the LPSC’s petition, and the LPSC filed an opposed motion for leave to answer and its answer to the FERC’s and System Energy’s responses.

System Energy Settlement with the APSC

As discussed in the Form 10-K, in October 2023, System Energy, Entergy Arkansas, and additional named Entergy parties involved in multiple docketed proceedings pending before the FERC reached a settlement in principle with the APSC to globally resolve all of their actual and potential claims in those dockets and with System Energy’s past implementation of the Unit Power Sales Agreement. The settlement also covers the amended and supplemental complaint, discussed in “Grand Gulf Prudence Complaint” above and in the Form 10-K, filed by the LPSC, the APSC, and the City Council at the FERC in October 2023. System Energy, Entergy Arkansas, additional Entergy parties, and the APSC filed the settlement agreement and supporting materials with the FERC in November

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

The Unit Power Sales Agreement is a FERC-jurisdictional formula rate tariff for sales of energy and capacity from System Energy’s owned and leased share of Grand Gulf to Entergy Mississippi, Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans. System Energy previously settled with the MPSC with respect to these complaints before the FERC.

The terms of the settlement with the APSC align with the $588 million global black box settlement reached between System Energy and the MPSC in June 2022 and provide for Entergy Arkansas to receive a black box refund of $142 million from System Energy, inclusive of $49.5 million already received by Entergy Arkansas from System Energy. In November 2022 the FERC approved the System Energy settlement with the MPSC and stated that the settlement “appears to be fair and reasonable and in the public interest.”

In addition to the black box refund of $142 million described above, beginning with the November 2023 service month, the settlement provides for Entergy Arkansas’s bills from System Energy to be adjusted to reflect an authorized rate of return on equity of 9.65% and a capital structure not to exceed 52% equity.

In December 2023 the FERC trial staff and the LPSC filed comments. The FERC trial staff commented that it “believes that the settlement is fair, and in the public interest,” and neither it nor the LPSC oppose the settlement. In December 2023 the $93 million black box refund to Entergy Arkansas was reclassified from long-term other regulatory liabilities to accounts payable - associated companies on System Energy’s balance sheet. In March 2024 the FERC approved the settlement “because it appears to be fair and reasonable and in the public interest.”

System Energy Settlement with the City Council

In April 2024, System Energy, Entergy New Orleans, and additional named Entergy parties involved in multiple docketed proceedings pending before the FERC reached a settlement in principle with the City Council to globally resolve all of their actual and potential claims in those dockets and with System Energy’s past implementation of the Unit Power Sales Agreement. The settlement also covers the amended and supplemental complaint, discussed above in “Grand Gulf Prudence Complaint,” filed at the FERC in October 2023. System Energy, Entergy New Orleans, additional Entergy parties, and the City Council intend to file the settlement agreement and supporting materials with the FERC no later than May 10, 2024. The Unit Power Sales Agreement is a FERC-jurisdictional formula rate tariff for sales of energy and capacity from System Energy’s owned and leased share of Grand Gulf to Entergy Mississippi, Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans. As discussed above and in Note 2 to the financial statements in the Form 10-K, System Energy previously settled with the MPSC and APSC with respect to these complaints before the FERC. Entergy Mississippi and Entergy Arkansas have nearly 65% of System Energy’s share of Grand Gulf’s output, after purchases from affiliates are considered. The settlements with the APSC, the MPSC, and the City Council represent almost 85% of System Energy’s share of the output of Grand Gulf.

The terms of the settlement with the City Council align with the $588 million global black box settlement amount reflected in the prior settlements reached between System Energy and the MPSC in June 2022 and between System Energy and the APSC in November 2023. The settlement provides for Entergy New Orleans to receive a black box refund of $116 million from System Energy, inclusive of approximately $18 million already received by Entergy New Orleans from System Energy. In November 2022 the FERC approved the System Energy settlement with the MPSC, and in March 2024 the FERC approved the System Energy settlement with the APSC. In both settlements, the FERC stated that the settlements “appear to be fair and reasonable and in the public interest.” In March 2024 the $98 million black box refund to Entergy New Orleans was reclassified from long-term other regulatory liabilities to accounts payable - associated companies on System Entergy’s balance sheet.

In addition to the black box refund of $116 million described above, beginning with the June 2024 service month, the settlement provides for Entergy New Orleans’ bills from System Energy to be adjusted to reflect an authorized rate of return on equity of 9.65% and a capital structure not to exceed 52% equity.

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

System Energy Regulatory Liability for Pending Complaints

As discussed in the Form 10-K, System Energy had recorded a regulatory liability related to complaints against System Energy, which was consistent with the settlement agreements reached with the MPSC and the APSC, taking into account amounts already or expected to be refunded. As discussed above in “Settlement with the City Council,” in first quarter 2024 the $98 million black box refund to Entergy New Orleans was reclassified from the regulatory liability to accounts payable - associated companies on System Energy’s balance sheet. System Energy’s remaining regulatory liability related to complaints against System Energy as of March 31, 2024 is $80 million.

Unit Power Sales Agreement

System Energy Formula Rate Annual Protocols Formal Challenge Concerning 2022 Calendar Year Bills

In February 2024, pursuant to the protocols procedures discussed in Note 2 to the financial statements in the Form 10-K, the LPSC and the City Council filed with the FERC a formal challenge to System Energy’s implementation of the formula rate during calendar year 2022. The formal challenge alleges: (1) that the equity ratio charged in rates was excessive; and (2) that all issues in the pending Unit Power Sales Agreement complaint proceeding should also be reflected in calendar year 2022 bills. These allegations are identical to issues that were raised in the formal challenge to the calendar year 2020 and 2021 bills.

In March 2024, System Energy filed an answer to the formal challenge in which it requested that the FERC deny the formal challenge as a matter of law, or else hold the proceeding in abeyance pending the resolution of related dockets.

Nuclear Matters

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Nuclear Matters” in the Form 10-K for a discussion of nuclear matters.

Environmental Risks

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Environmental Risks” in the Form 10-K for a discussion of environmental risks.

Critical Accounting Estimates

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in System Energy’s accounting for nuclear decommissioning costs, utility regulatory accounting, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

New Accounting Pronouncements


SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)


		2024	2023
	(In Thousands)
OPERATING REVENUES
Electric		$152,620	$171,572

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale		13,117	18,847
Nuclear refueling outage expenses		6,661	6,619
Other operation and maintenance		51,423	50,200
Decommissioning		10,707	10,287
Taxes other than income taxes		7,209	7,282
Depreciation and amortization		29,678	37,137
Other regulatory charges (credits) - net		(4,973)	(6,459)
TOTAL		113,822	123,913

OPERATING INCOME		38,798	47,659

OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction		2,434	1,818
Interest and investment income		7,973	5,764
Miscellaneous - net		237	(9,078)
TOTAL		10,644	(1,496)

INTEREST EXPENSE
Interest expense		11,171	10,491
Allowance for borrowed funds used during construction		(859)	(355)
TOTAL		10,312	10,136

INCOME BEFORE INCOME TAXES		39,130	36,027

Income taxes		8,012	8,482

NET INCOME		$31,118	$27,545

See Notes to Financial Statements.

(Page left blank intentionally)


SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
	2024	2023
	(In Thousands)
OPERATING ACTIVITIES
Net income	$31,118	$27,545
Adjustments to reconcile net income to net cash flow provided by (used in) operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	51,714	63,793
Deferred income taxes, investment tax credits, and non-current taxes accrued	11,452	10,801
Changes in assets and liabilities:
Receivables	8,832	(8,198)
Accounts payable	116,460	(21,866)
Prepaid taxes and taxes accrued	(14,091)	(15,836)
Interest accrued	883	(58)
Other working capital accounts	(25,431)	2,837
Other regulatory assets	(5,358)	(3,247)
Other regulatory liabilities	(23,057)	(47,212)
Pension and other postretirement funded status	(3,806)	(1,652)
Other assets and liabilities	(78,377)	(39,746)
Net cash flow provided by (used in) operating activities	70,339	(32,839)

INVESTING ACTIVITIES
Construction expenditures	(39,563)	(26,472)
Allowance for equity funds used during construction	2,434	1,818
Nuclear fuel purchases	(111,959)	(21,994)
Proceeds from sale of nuclear fuel	—	24,976
Decrease (increase) in other investments	23	(4)
Proceeds from nuclear decommissioning trust fund sales	136,035	60,067
Investment in nuclear decommissioning trust funds	(143,773)	(66,551)
Changes in money pool receivable - net	(31,456)	76,391

Net cash flow provided by (used in) investing activities	(188,259)	48,231

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	233,933	473,687
Retirement of long-term debt	(142,326)	(232,016)
Capital contribution from parent	150,000	—

Change in money pool payable - net	(12,246)	—



Net cash flow provided by financing activities	229,361	241,671

Net increase in cash and cash equivalents	111,441	257,063
Cash and cash equivalents at beginning of period	60	2,940
Cash and cash equivalents at end of period	$111,501	$260,003

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized	$10,357	$11,304
Income taxes	($2,326)	$—
Noncash investing activities:
Accrued construction expenditures	$48,856	$36,604

See Notes to Financial Statements.


SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$117	$60
Temporary cash investments	111,384	—
Total cash and cash equivalents	111,501	60
Accounts receivable:
Associated companies	74,348	54,544
Other	9,681	6,861
Total accounts receivable	84,029	61,405

Materials and supplies - at average cost	158,916	155,565
Deferred nuclear refueling outage costs	28,466	8,603


Prepayments and other	8,696	3,373
TOTAL	391,608	229,006

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds	1,424,256	1,342,317
TOTAL	1,424,256	1,342,317

UTILITY PLANT
Electric	5,590,516	5,495,728

Construction work in progress	77,429	130,866
Nuclear fuel	233,919	160,655
TOTAL UTILITY PLANT	5,901,864	5,787,249
Less - accumulated depreciation and amortization	3,502,472	3,493,299
UTILITY PLANT - NET	2,399,392	2,293,950

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets	451,718	446,360

Other	12,966	730
TOTAL	464,684	447,090

TOTAL ASSETS	$4,679,940	$4,312,363

See Notes to Financial Statements.


SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$72	$57

Accounts payable:
Associated companies	209,617	118,523
Other	85,273	73,580
Taxes accrued	13,310	27,401

Interest accrued	13,837	12,954


Other	4,353	4,354
TOTAL	326,462	236,869

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	417,081	405,744
Accumulated deferred investment tax credits	45,648	46,960
Regulatory liability for income taxes - net	107,229	107,458
Other regulatory liabilities	760,084	782,912
Decommissioning	1,094,941	1,084,234
Pension and other postretirement liabilities	27,904	19,491
Long-term debt	830,926	738,402
Other	8	1,754
TOTAL	3,283,821	3,186,955

Commitments and Contingencies

COMMON EQUITY
Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 2024 and 2023	1,066,850	916,850
Retained earnings (accumulated deficit)	2,807	(28,311)
TOTAL	1,069,657	888,539

TOTAL LIABILITIES AND EQUITY	$4,679,940	$4,312,363

See Notes to Financial Statements.


SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CHANGES IN COMMON EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)

	Common Stock	Retained Earnings (Accumulated Deficit)	Total
	(In Thousands)

Balance at December 31, 2022	$1,086,850	($137,083)	$949,767

Net income	—	27,545	27,545

Balance at March 31, 2023	$1,086,850	($109,538)	$977,312










Balance at December 31, 2023	$916,850	($28,311)	$888,539

Net income	—	31,118	31,118
Capital contribution from parent	150,000	—	150,000

Balance at March 31, 2024	$1,066,850	$2,807	$1,069,657









See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES

PART II. OTHER INFORMATION

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