Cover and table of contents

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Cover and table of contents

__________________________________________________________________________________________

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


(Mark One)
☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

			For the transition period from ____________ to ____________


Commission File Number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number, and IRS Employer Identification No.	Commission File Number	Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number, and IRS Employer Identification No.

1-11299	ENTERGY CORPORATION	1-35747	ENTERGY NEW ORLEANS, LLC
	(a Delaware corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 576-4000		(a Texas limited liability company) 1600 Perdido Street New Orleans, Louisiana 70112 Telephone (504) 670-3702
	72-1229752		82-2212934


1-10764	ENTERGY ARKANSAS, LLC	1-34360	ENTERGY TEXAS, INC.
	(a Texas limited liability company) 425 West Capitol Avenue Little Rock, Arkansas 72201 Telephone (501) 377-4000		(a Texas corporation) 2107 Research Forest Drive The Woodlands, Texas 77380 Telephone (409) 981-2000
	83-1918668		61-1435798


1-32718	ENTERGY LOUISIANA, LLC	1-09067	SYSTEM ENERGY RESOURCES, INC.
	(a Texas limited liability company) 4809 Jefferson Highway Jefferson, Louisiana 70121 Telephone (504) 576-4000		(an Arkansas corporation) 1340 Echelon Parkway Jackson, Mississippi 39213 Telephone (601) 368-5000
	47-4469646		72-0752777


1-31508	ENTERGY MISSISSIPPI, LLC
	(a Texas limited liability company) 308 East Pearl Street Jackson, Mississippi 39201 Telephone (601) 368-5000
	83-1950019

__________________________________________________________________________________________

Securities registered pursuant to Section 12(b) of the Act:


Registrant	Title of Class	Trading Symbol	Name of Each Exchange on Which Registered

Entergy Corporation	Common Stock, $0.01 Par Value	ETR	New York Stock Exchange
	Common Stock, $0.01 Par Value	ETR	NYSE Chicago, Inc.

Entergy Arkansas, LLC	Mortgage Bonds, 4.875% Series due September 2066	EAI	New York Stock Exchange

Entergy Louisiana, LLC	Mortgage Bonds, 4.875% Series due September 2066	ELC	New York Stock Exchange

Entergy Mississippi, LLC	Mortgage Bonds, 4.90% Series due October 2066	EMP	New York Stock Exchange

Entergy New Orleans, LLC	Mortgage Bonds, 5.0% Series due December 2052	ENJ	New York Stock Exchange
	Mortgage Bonds, 5.50% Series due April 2066	ENO	New York Stock Exchange

Entergy Texas, Inc.	5.375% Series A Preferred Stock, Cumulative, No Par Value (Liquidation Value $25 Per Share)	ETI/PR	New York Stock Exchange

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants were required to submit such files). Yes ☑ No ☐

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


	Large accelerated filer	Accelerated filer	Non-accelerated filer	Smaller reporting company	Emerging growth company
Entergy Corporation	ü
Entergy Arkansas, LLC			ü
Entergy Louisiana, LLC			ü
Entergy Mississippi, LLC			ü
Entergy New Orleans, LLC			ü
Entergy Texas, Inc.			ü
System Energy Resources, Inc.			ü

If an emerging growth company, indicate by check mark if the registrants have elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrants are shell companies (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑


Common Stock Outstanding						Outstanding at July 31, 2024
Entergy Corporation			($0.01 par value)			213,830,846

Entergy Corporation, Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, Entergy Texas, Inc., and System Energy Resources, Inc. separately file this combined Quarterly Report on Form 10-Q. Information contained herein relating to any individual company is filed by such company on its own behalf. Each company makes representations only as to itself and makes no other representations whatsoever as to any other company. This combined Quarterly Report on Form 10-Q supplements and updates the Annual Report on Form 10-K for the calendar year ended December 31, 2023 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, filed by the individual registrants with the SEC, and should be read in conjunction therewith.

TABLE OF CONTENTS


			Page Number

Forward-looking Information			iii
Definitions			vii

Part I. Financial Information

Entergy Corporation and Subsidiaries
Management’s Financial Discussion and Analysis			1
Consolidated Income Statements			18
Consolidated Statements of Comprehensive Income			19
Consolidated Statements of Cash Flows			20
Consolidated Balance Sheets			22
Consolidated Statements of Changes in Equity			24
Notes to Financial Statements
Note 1. Commitments and Contingencies			26
Note 2. Rate and Regulatory Matters			27
Note 3. Equity			41
Note 4. Revolving Credit Facilities, Lines of Credit, Short-term Borrowings, and Long-term Debt			47
Note 5. Stock-based Compensation			52
Note 6. Retirement and Other Postretirement Benefits			53
Note 7. Business Segment Information			61
Note 8. Risk Management and Fair Values			62
Note 9. Decommissioning Trust Funds			76
Note 10. Income Taxes			82
Note 11. Variable Interest Entities			83
Note 12. Revenue			84
Note 13. Asset Retirement Obligations			88
Note 14. Acquisitions			89
Item 3. Quantitative and Qualitative Disclosures About Market Risk			90
Item 4. Controls and Procedures			90
Entergy Arkansas, LLC and Subsidiaries
Management’s Financial Discussion and Analysis			91
Consolidated Income Statements			101
Consolidated Statements of Cash Flows			103
Consolidated Balance Sheets			104
Consolidated Statements of Changes in Equity			106
Entergy Louisiana, LLC and Subsidiaries
Management’s Financial Discussion and Analysis			107
Consolidated Income Statements			119
Consolidated Statements of Comprehensive Income			120
Consolidated Statements of Cash Flows			121
Consolidated Balance Sheets			122
Consolidated Statements of Changes in Equity			124

TABLE OF CONTENTS


			Page Number

Entergy Mississippi, LLC and Subsidiaries
Management’s Financial Discussion and Analysis			125
Consolidated Income Statements			134
Consolidated Statements of Cash Flows			135
Consolidated Balance Sheets			136
Consolidated Statements of Changes in Equity			138
Entergy New Orleans, LLC and Subsidiaries
Management’s Financial Discussion and Analysis			139
Consolidated Statements of Operations			148
Consolidated Statements of Cash Flows			149
Consolidated Balance Sheets			150
Consolidated Statements of Changes in Member’s Equity			152
Entergy Texas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis			153
Consolidated Income Statements			163
Consolidated Statements of Cash Flows			165
Consolidated Balance Sheets			166
Consolidated Statements of Changes in Equity			168
System Energy Resources, Inc.
Management’s Financial Discussion and Analysis			169
Income Statements			181
Statements of Cash Flows			183
Balance Sheets			184
Statements of Changes in Common Equity			186

Part II. Other Information

Item 1. Legal Proceedings			187
Item 1A. Risk Factors			187
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			187
Item 5. Other Information			188
Item 6. Exhibits			191
Signature			194

FORWARD-LOOKING INFORMATION

In this combined report and from time to time, Entergy Corporation and the Registrant Subsidiaries each makes statements as a registrant concerning its expectations, beliefs, plans, objectives, goals, projections, strategies, and future events or performance. Such statements are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,” “could,” “project,” “believe,” “anticipate,” “intend,” “goal,” “commitment,” “expect,” “estimate,” “continue,” “potential,” “plan,” “predict,” “forecast,” and other similar words or expressions are intended to identify forward-looking statements but are not the only means to identify these statements. Although each of these registrants believes that these forward-looking statements and the underlying assumptions are reasonable, it cannot provide assurance that they will prove correct. Any forward-looking statement is based on information current as of the date of this combined report and speaks only as of the date on which such statement is made. Except to the extent required by the federal securities laws, each registrant undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Forward-looking statements involve a number of risks and uncertainties. There are factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements, including (a) those factors discussed or incorporated by reference in Item 1A. Risk Factors in the Form 10-K and in this report, (b) those factors discussed or incorporated by reference in Management’s Financial Discussion and Analysis in the Form 10-K and in this report, and (c) the following factors (in addition to others described elsewhere in this combined report and in subsequent securities filings):

resolution of pending and future rate cases and related litigation, formula rate proceedings and related negotiations, including various performance-based rate discussions, Entergy’s utility supply plan, and recovery of fuel and purchased power costs, as well as delays in cost recovery resulting from these proceedings;
regulatory and operating challenges and uncertainties and economic risks associated with the Utility operating companies’ participation in MISO, including the benefits of continued MISO participation, the effect of current or projected MISO market rules, market design and market and system conditions in the MISO markets, the absence of a minimum capacity obligation for load serving entities in MISO and the consequent ability of some load serving entities to “free ride” on the energy market without paying appropriate compensation for the capacity needed to produce that energy, the allocation of MISO system transmission upgrade costs, delays in developing or interconnecting new generation or other resources or other adverse effects arising from the volume of requests in the MISO transmission interconnection queue, the MISO-wide base rate of return on equity allowed or any MISO-related charges and credits required by the FERC, and the effect of planning decisions that MISO makes with respect to future transmission investments by the Utility operating companies;
changes in utility regulation, including, with respect to retail and wholesale competition, the ability to recover net utility assets and other potential stranded costs, and the application of more stringent return on equity criteria, transmission reliability requirements, or market power criteria by the FERC or the U.S. Department of Justice;
changes in the regulation or regulatory oversight of Entergy’s owned or operated nuclear generating facilities, nuclear materials and fuel, and the effects of new or existing safety or environmental concerns regarding nuclear power plants and fuel;
resolution of pending or future applications, and related regulatory proceedings and litigation, for license modifications or other authorizations required of nuclear generating facilities and the effect of public and political opposition on these applications, regulatory proceedings, and litigation;
the performance of and deliverability of power from Entergy’s generation resources, including the capacity factors at Entergy’s nuclear generating facilities;
increases in costs and capital expenditures that could result from changing regulatory requirements, changing economic conditions, and emerging operating and industry issues, and the risks related to recovery of these costs and capital expenditures from Entergy’s customers (especially in an increasing cost environment);

iii

FORWARD-LOOKING INFORMATION (Continued)

the commitment of substantial human and capital resources required for the safe and reliable operation and maintenance of Entergy’s utility system, including its nuclear generating facilities;
Entergy’s ability to develop and execute on a point of view regarding future prices of electricity, natural gas, and other energy-related commodities;
the prices and availability of fuel and power Entergy must purchase for its Utility customers, particularly given the recent and ongoing significant growth in liquified natural gas exports and the associated significantly increased demand for natural gas and resulting increase in natural gas prices, and Entergy’s ability to meet credit support requirements for fuel and power supply contracts;
volatility and changes in markets for electricity, natural gas, uranium, emissions allowances, and other energy-related commodities, and the effect of those changes on Entergy and its customers;
changes in law resulting from federal or state energy legislation or legislation subjecting energy derivatives used in hedging and risk management transactions to governmental regulation;
changes in environmental laws and regulations, agency positions, or associated litigation, including requirements for reduced emissions of sulfur dioxide, nitrogen oxide, greenhouse gases, mercury, particulate matter and other regulated air emissions, heat and other regulated discharges to water, waste management and disposal, remediation of contaminated sites, wetlands protection and permitting, and reporting, and changes in costs of compliance with environmental laws and regulations;
changes in laws and regulations, agency positions, or associated litigation related to protected species and associated critical habitat designations;
the effects of changes in federal, state, or local laws and regulations, and other governmental actions or policies, including changes in monetary, fiscal, tax, environmental, trade/tariff, domestic purchase requirements, or energy policies and related laws, regulations, and other governmental actions, including as a result of prolonged litigation over proposed legislation or regulatory actions;
the effects of full or partial shutdowns of the federal government or delays in obtaining government or regulatory actions or decisions;
uncertainty regarding the establishment of interim or permanent sites for spent nuclear fuel and nuclear waste storage and disposal and the level of spent fuel and nuclear waste disposal fees charged by the U.S. government or other providers related to such sites;
variations in weather and the occurrence of hurricanes and other storms and disasters, including uncertainties associated with efforts to remediate the effects of hurricanes, ice storms, wildfires, or other weather events and the recovery of costs associated with restoration, including the ability to access funded storm reserves, federal and local cost recovery mechanisms, securitization, and insurance, as well as any related unplanned outages;
effects of climate change, including the potential for increases in extreme weather events, such as hurricanes, heat waves, drought or wildfires, and sea levels or coastal land and wetland loss;
the risk that an incident at any nuclear generation facility in the U.S. could lead to the assessment of significant retrospective assessments and/or retrospective insurance premiums as a result of Entergy’s participation in a secondary financial protection system and a utility industry mutual insurance company;
changes in the quality and availability of water supplies and the related regulation of water use and diversion;
Entergy’s ability to manage its capital projects, including by completing projects timely and within budget, to obtain the anticipated performance or other benefits of such capital projects, and to manage its capital and operation and maintenance costs;
the effects of supply chain disruptions, including those driven by geopolitical developments or trade-related governmental actions, on Entergy’s ability to complete its capital projects in a timely and cost-effective manner;
Entergy’s ability to purchase and sell assets at attractive prices and on other attractive terms;
the economic climate, and particularly economic conditions in Entergy’s Utility service area and events and circumstances that could influence economic conditions in those areas, including power prices and inflation, and the risk that anticipated load growth may not materialize;

FORWARD-LOOKING INFORMATION (Continued)

changes to federal income tax laws, regulations, and interpretive guidance, including the Inflation Reduction Act of 2022 and the continued impact of the Tax Cuts and Jobs Act of 2017, and any related intended or unintended consequences on financial results and future cash flows;
the effects of Entergy’s strategies to reduce tax payments;
the effect of increased interest rates and other changes in the financial markets and regulatory requirements for the issuance of securities, particularly as they affect access to and cost of capital and Entergy’s ability to refinance existing securities and fund investments and acquisitions;
actions of rating agencies, including changes in the ratings of debt and preferred stock, changes in general corporate ratings, and changes in the rating agencies’ ratings criteria;
changes in inflation and interest rates and the impacts of inflation or a recession on our customers;
the effects of litigation, including the outcome and resolution of the proceedings involving System Energy currently before the FERC and any appeals of FERC decisions in those proceedings;
the effects of government investigations, proceedings, or audits;
changes in technology, including (i) Entergy’s ability to effectively assess, implement, and manage new or emerging technologies, including its ability to maintain and protect personally identifiable information while doing so, (ii) the emergence of artificial intelligence (including machine learning), which may present ethical, security, legal, operational, or regulatory challenges, (iii) the impact of changes relating to new, developing, or alternative sources of generation such as distributed energy and energy storage, renewable energy, energy efficiency, demand side management, and other measures that reduce load and government policies incentivizing development or utilization of the foregoing, and (iv) competition from other companies offering products and services to Entergy’s customers based on new or emerging technologies or alternative sources of generation;
Entergy’s ability to effectively formulate and implement plans to increase its carbon-free energy capacity and to reduce its carbon emission rate and aggregate carbon emissions, including its commitment to achieve net-zero carbon emissions by 2050 and the related increasing investment in renewable power generation sources, and the potential impact on its business and financial condition of attempting to achieve such objectives;
the effects, including increased security costs, of threatened or actual terrorism, cyber attacks or data security breaches, physical attacks on or other interference with facilities or infrastructure, natural or man-made electromagnetic pulses that affect transmission or generation infrastructure, accidents, and war or a catastrophic event such as a nuclear accident or a natural gas pipeline explosion;
impacts of perceived or actual cybersecurity or data security threats or events on Entergy and its subsidiaries, its vendors, suppliers or other third parties interconnected through the grid, which could, among other things, result in disruptions to its operations, including but not limited to, the loss of operational control, temporary or extended outages, or loss of data, including but not limited to, sensitive customer, employee, financial or operations data;
the effects of a catastrophe, pandemic (or other health-related event), or a global or geopolitical event such as the military activities between Russia and Ukraine, or Israel and Hamas, including resultant economic and societal disruptions; fuel procurement disruptions; volatility in the capital markets (and any related increased cost of capital or any inability to access the capital markets or draw on available bank credit facilities); reduced demand for electricity, particularly from commercial and industrial customers; increased or unrecoverable costs; supply chain, vendor, and contractor disruptions, including as a result of trade-related sanctions; delays in completion of capital or other construction projects, maintenance, and other operations activities, including prolonged or delayed outages; impacts to Entergy’s workforce availability, health, or safety; increased cybersecurity risks as a result of many employees telecommuting; increased late or uncollectible customer payments; regulatory delays; executive orders affecting, or increased regulation of, Entergy’s business; changes in credit ratings or outlooks as a result of any of the foregoing; or other adverse impacts on Entergy’s ability to execute on its business strategies and initiatives or, more generally, on Entergy’s results of operations, financial condition, and liquidity;

FORWARD-LOOKING INFORMATION (Concluded)

Entergy’s ability to attract and retain talented management, directors, and employees with specialized skills;
Entergy’s ability to attract, retain, and manage an appropriately qualified workforce;
changes in accounting standards and corporate governance best practices;
declines in the market prices of marketable securities and resulting funding requirements and the effects on benefits costs for Entergy’s defined benefit pension and other postretirement benefits plans;
future wage and employee benefits costs, including changes in discount rates and returns on benefit plan assets;
changes in decommissioning trust fund values or earnings or in the timing of, requirements for, or cost to decommission Entergy’s nuclear plant sites and the implementation of decommissioning of such sites following shutdown;
the effectiveness of Entergy’s risk management policies and procedures and the ability and willingness of its counterparties to satisfy their financial and performance commitments; and
Entergy and its subsidiaries’ ability to successfully execute on their business strategies, including their ability to complete strategic transactions that they may undertake.

DEFINITIONS

Certain abbreviations or acronyms used in the text and notes are defined below:


Abbreviation or Acronym			Term

ALJ			Administrative Law Judge
ANO 1 and 2			Units 1 and 2 of Arkansas Nuclear One (nuclear), owned by Entergy Arkansas
APSC			Arkansas Public Service Commission
Board			Board of Directors of Entergy Corporation
Cajun			Cajun Electric Power Cooperative, Inc.
capacity factor			Actual plant output divided by maximum potential plant output for the period
City Council			Council of the City of New Orleans, Louisiana
COVID-19			The novel coronavirus disease declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention in March 2020
DOE			United States Department of Energy
Entergy			Entergy Corporation and its direct and indirect subsidiaries
Entergy Corporation			Entergy Corporation, a Delaware corporation
Entergy Gulf States, Inc.			Predecessor company for financial reporting purposes to Entergy Gulf States Louisiana that included the assets and business operations of both Entergy Gulf States Louisiana and Entergy Texas
Entergy Gulf States Louisiana			Entergy Gulf States Louisiana, L.L.C., a Louisiana limited liability company formally created as part of the jurisdictional separation of Entergy Gulf States, Inc. and the successor company to Entergy Gulf States, Inc. for financial reporting purposes. The term is also used to refer to the Louisiana jurisdictional business of Entergy Gulf States, Inc., as the context requires. Effective October 1, 2015, the business of Entergy Gulf States Louisiana was combined with Entergy Louisiana.
Entergy Louisiana			Entergy Louisiana, LLC, a Texas limited liability company formally created as part of the combination of Entergy Gulf States Louisiana and the company formerly known as Entergy Louisiana, LLC (Old Entergy Louisiana) into a single public utility company and the successor to Old Entergy Louisiana for financial reporting purposes
Entergy Texas			Entergy Texas, Inc., a Texas corporation formally created as part of the jurisdictional separation of Entergy Gulf States, Inc. The term is also used to refer to the Texas jurisdictional business of Entergy Gulf States, Inc., as the context requires.
Entergy Wholesale Commodities			Prior to January 1, 2023, one of Entergy’s reportable business segments consisting of non-utility business activities primarily comprised of the ownership, operation, and decommissioning of nuclear power plants, the ownership of interests in non-nuclear power plants, and the sale of the electric power produced by its operating power plants to wholesale customers
EPA			United States Environmental Protection Agency
FERC			Federal Energy Regulatory Commission
Form 10-K			Annual Report on Form 10-K for the calendar year ended December 31, 2023, filed with the SEC by Entergy Corporation and its Registrant Subsidiaries
GAAP			Generally Accepted Accounting Principles
Grand Gulf			Unit No. 1 of Grand Gulf Nuclear Station (nuclear), 90% owned or leased by System Energy
GWh			Gigawatt-hour(s), which equals one million kilowatt-hours
Independence			Independence Steam Electric Station (coal), owned 16% by Entergy Arkansas, 25% by Entergy Mississippi, and 7% by Entergy Power, LLC
Indian Point 2			Unit 2 of Indian Point Energy Center (nuclear), previously owned as part of Entergy’s non-utility business, which ceased power production in April 2020 and was sold in May 2021

vii

DEFINITIONS (Continued)


Abbreviation or Acronym			Term

Indian Point 3			Unit 3 of Indian Point Energy Center (nuclear), previously owned as part of Entergy’s non-utility business, which ceased power production in April 2021 and was sold in May 2021
IRS			Internal Revenue Service
ISO			Independent System Operator
kW			Kilowatt, which equals one thousand watts
kWh			Kilowatt-hour(s)
LPSC			Louisiana Public Service Commission
LURC			Louisiana Utilities Restoration Corporation
MISO			Midcontinent Independent System Operator, Inc., a regional transmission organization
MMBtu			One million British Thermal Units
MPSC			Mississippi Public Service Commission
MW			Megawatt(s), which equals one thousand kilowatts
MWh			Megawatt-hour(s)
Nelson Unit 6			Unit No. 6 (coal) of the Nelson Steam Electric Generating Station, 70% of which is co-owned by Entergy Louisiana (57.5%) and Entergy Texas (42.5%) and 10.9% of which is owned by EAM Nelson Holding, LLC
Net debt to net capital ratio			Gross debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents, which is a non-GAAP measure
NRC			Nuclear Regulatory Commission
Palisades			Palisades Nuclear Plant (nuclear), previously owned as part of Entergy’s non-utility business, which ceased power production in May 2022 and was sold in June 2022
Parent & Other			The portions of Entergy not included in the Utility segment, primarily consisting of the activities of the parent company, Entergy Corporation, and other business activity, including Entergy’s non-utility operations business which owns interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers and also provides decommissioning services to nuclear power plants owned by non-affiliated entities in the United States
PPA			Purchased power agreement or power purchase agreement
PUCT			Public Utility Commission of Texas
Registrant Subsidiaries			Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, Entergy Texas, Inc., and System Energy Resources, Inc.
River Bend			River Bend Station (nuclear), owned by Entergy Louisiana
SEC			Securities and Exchange Commission
System Agreement			Agreement, effective January 1, 1983, as modified, among the Utility operating companies relating to the sharing of generating capacity and other power resources. The agreement terminated effective August 2016.
System Energy			System Energy Resources, Inc.
Unit Power Sales Agreement			Agreement, dated as of June 10, 1982, as amended and approved by the FERC, among Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy, relating to the sale of capacity and energy from System Energy’s share of Grand Gulf
Utility			Entergy’s reportable segment that generates, transmits, distributes, and sells electric power, with a small amount of natural gas distribution in portions of Louisiana
Utility operating companies			Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas

viii

DEFINITIONS (Concluded)


Abbreviation or Acronym			Term

Vermont Yankee			Vermont Yankee Nuclear Power Station (nuclear), previously owned as part of Entergy’s non-utility business, which ceased power production in December 2014 and was disposed of in January 2019
Waterford 3			Unit No. 3 (nuclear) of the Waterford Steam Electric Station, owned by Entergy Louisiana
weather-adjusted usage			Electric usage excluding the effects of deviations from normal weather
White Bluff			White Bluff Steam Electric Generating Station, 57% owned by Entergy Arkansas

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ENTERGY CORPORATION AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Entergy operates primarily through a single reportable segment, Utility. The Utility segment includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and operation of a small natural gas distribution business in portions of Louisiana. See “Planned Sale of Gas Distribution Businesses” herein and in the Form 10-K for discussion of the planned sale of the Entergy New Orleans and Entergy Louisiana gas distribution businesses. See Note 7 to the financial statements herein for discussion of and financial information regarding Entergy’s business segment.

Results of Operations

Second Quarter 2024 Compared to Second Quarter 2023

Following are income statement variances for Utility, Parent & Other, and Entergy comparing the second quarter 2024 to the second quarter 2023 showing how much the line item increased or (decreased) in comparison to the prior period.


	Utility	Parent & Other (a)	Entergy
	(In Thousands)
2023 Net Income (Loss) Attributable to Entergy Corporation	$514,227	($122,983)	$391,244

Operating revenues	122,657	(15,063)	107,594
Fuel, fuel-related expenses, and gas purchased for resale	(60,277)	(890)	(61,167)
Purchased power	1,801	(7,632)	(5,831)
Other regulatory charges (credits) - net	224,108	—	224,108
Other operation and maintenance	41,842	39	41,881
Taxes other than income taxes	3,925	17	3,942
Depreciation and amortization	36,401	24	36,425

Other income (deductions)	50,001	(314,439)	(264,438)
Interest expense	20,977	17,732	38,709
Other expenses	6,532	1	6,533
Income taxes	(31,472)	(69,690)	(101,162)
Preferred dividend requirements of subsidiaries and noncontrolling interests	2,040	—	2,040

2024 Net Income (Loss) Attributable to Entergy Corporation	$441,008	($392,086)	$48,922

(a)Parent & Other includes eliminations, which are primarily intersegment activity.

Second quarter 2024 results of operations include: (1) a $317 million ($250 million net-of-tax) settlement charge, reflected in Parent & Other above, recognized as a result of a group annuity contract purchased in May 2024 to settle certain pension liabilities; and (2) expenses of $151 million ($112 million net-of-tax), recorded at Utility in second quarter 2024, primarily consisting of regulatory charges to reflect the effects of an agreement in principle between Entergy Louisiana and the LPSC staff and the intervenors in July 2024 to renew Entergy Louisiana’s formula rate plan and resolve a number of other retail dockets and matters, including all formula rate plan test years prior to 2023. See Note 6 to the financial statements herein for discussion of the group annuity contract and settlement charge. See Note 2 to the financial statements herein for discussion of the Entergy Louisiana agreement in principle and the subsequently filed global stipulated settlement agreement.

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Operating Revenues

Utility

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


			Amount
			(In Millions)
2023 operating revenues			$2,819
Fuel, rider, and other revenues that do not significantly affect net income			8
Volume/weather			79
Retail electric price			35
2024 operating revenues			$2,941

The Utility operating companies’ 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 the effect of more favorable weather on residential and commercial 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 petroleum refining industry.

The retail electric price variance is primarily due to:

an increase in Entergy Arkansas’s formula rate plan rates effective January 2024;
an increase in Entergy Louisiana’s formula rate plan revenues, including increases in the distribution and transmission recovery mechanisms, effective September 2023; and
an increase in Entergy Mississippi’s formula rate plan rates effective April 2024.

See Note 2 to the financial statements herein and in the Form 10-K for discussion of the regulatory proceedings discussed above.

Total electric energy sales for Utility for the three months ended June 30, 2024 and 2023 are as follows:


	2024	2023	% Change
	(GWh)
Residential	9,557	9,027	6
Commercial	7,236	6,969	4
Industrial	13,973	13,301	5
Governmental	626	608	3
Total retail	31,392	29,905	5
Sales for resale	3,052	3,171	(4)
Total	34,444	33,076	4

See Note 12 to the financial statements herein for additional discussion of operating revenues.

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Other Income Statement Items

Utility

Other operation and maintenance expenses increased from $644 million for the second quarter 2023 to $686 million for the second quarter 2024 primarily due to:

an increase of $12 million in contract costs related to operational performance, customer service, and organizational health initiatives;
an increase of $11 million in energy efficiency expenses primarily due to the timing of recovery from customers;
a gain of $7 million on the partial sale of a service center at Entergy Texas in April 2023 as part of an eminent domain proceeding; and
an increase of $5 million in transmission costs allocated by MISO. See Note 2 to the financial statements in the Form 10-K for discussion of the recovery of these costs.

Depreciation and amortization expenses increased primarily due to:

additions to plant in service;
the recognition of $14 million in depreciation expense in second quarter 2024 at Entergy Texas 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; and
an increase in depreciation rates at Entergy Texas, effective June 2023.

The increase was partially offset by a reduction in depreciation expense at System Energy as a result of the approval by the FERC in August 2023 of the settlement establishing updated depreciation rates used in calculating Grand Gulf plant depreciation and amortization expenses under the Unit Power Sales Agreement. See Note 2 to the financial statements in the Form 10-K for discussion of the Unit Power Sales Agreement depreciation amendment proceeding. See Note 2 to the financial statements in the Form 10-K for discussion of the 2022 base rate case at Entergy Texas.

Other regulatory charges (credits) - net includes regulatory charges of $150 million, recorded by Entergy Louisiana in second quarter 2024, to reflect the effects of an agreement in principle between Entergy Louisiana and the LPSC staff and the intervenors in July 2024 to renew Entergy Louisiana’s formula rate plan and resolve a number of other retail dockets and matters, including all formula rate plan test years prior to 2023. See Note 2 to the financial statements herein for discussion of the Entergy Louisiana agreement in principle and the subsequently filed global stipulated settlement agreement. In addition, Entergy 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 decommissioning trust funds in second quarter 2024; and
a decrease of $11 million in net periodic pension and other postretirement benefits non-service costs primarily as a result of pension settlement charges recorded in second quarter 2023 and a reduction in 2024 in the amortization of deferred pension losses as a result of an amendment to a qualified pension plan spinning-off predominantly inactive participants into a new qualified plan, extending the amortization period for deferred losses. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K, Note 6 to the financial statements herein, and Note 11

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

to the financial statements in the Form 10-K for further discussion of pension and other postretirement benefits costs.

Interest expense increased primarily due to:

the issuance by Entergy Arkansas of $300 million of 5.30% Series mortgage bonds in August 2023;
the issuances by Entergy Arkansas of $400 million of 5.75% Series mortgage bonds and $400 million of 5.45% Series mortgage bonds, each in May 2024; and
the issuance by Entergy Texas of $350 million of 5.80% Series mortgage bonds in August 2023.

Parent and Other

Other income (deductions) decreased primarily due to a $317 million ($250 million net-of-tax) non-cash settlement charge recognized as a result of a group annuity contract purchased in May 2024 to settle certain pension liabilities. See Note 6 to the financial statements herein for discussion of the group annuity contract and settlement charge.

Interest expense increased primarily due to higher commercial paper balances and the issuance of $1.2 billion of junior subordinated debentures in May 2024. See Note 4 to the financial statements herein for discussion of Entergy’s commercial paper program.

Income Taxes

The effective income tax rate was 39.4% for the second quarter 2024. The difference in the effective income tax rate for the second quarter 2024 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes, a provision for uncertain tax positions, and amortization of accumulated deferred income taxes as a result of tax rate changes, partially offset by certain book and tax differences related to utility plant items and book and tax differences related to the allowance for equity funds used during construction.

The effective income tax rate was 25.6% for the second quarter 2023. The difference in the effective income tax rate for the second quarter 2023 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes.

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Six Months Ended June 30, 2024 Compared to Six Months Ended June 30, 2023

Following are income statement variances for Utility, Parent & Other, and Entergy comparing the six months ended June 30, 2024 to the six months ended June 30, 2023 showing how much the line item increased or (decreased) in comparison to the prior period.


	Utility	Parent & Other (a)	Entergy
	(In Thousands)
2023 Net Income (Loss) Attributable to Entergy Corporation	$911,529	($209,350)	$702,179

Operating revenues	(53,161)	(25,676)	(78,837)
Fuel, fuel-related expenses, and gas purchased for resale	(344,322)	1,388	(342,934)
Purchased power	2,028	(18,004)	(15,976)
Other regulatory charges (credits) - net	309,781	—	309,781
Other operation and maintenance	102,763	(5,378)	97,385
Asset write-offs, impairments, and related charges	131,775	—	131,775
Taxes other than income taxes	11,295	(361)	10,934
Depreciation and amortization	82,147	22	82,169

Other income (deductions)	185,805	(340,449)	(154,644)
Interest expense	30,890	29,281	60,171
Other expenses	10,450	2	10,452
Income taxes	69,202	(70,396)	(1,194)
Preferred dividend requirements of subsidiaries and noncontrolling interests	1,932	—	1,932

2024 Net Income (Loss) Attributable to Entergy Corporation	$636,232	($512,029)	$124,203

(a)Parent & Other includes eliminations, which are primarily intersegment activity.

Results of operations for the six months ended June 30, 2024 include: (1) a $317 million ($250 million net-of-tax) settlement charge, reflected in Parent & Other above, recognized as a result of a group annuity contract purchased in May 2024 to settle certain pension liabilities; (2) expenses of $151 million ($112 million net-of-tax), recorded at Utility in second quarter 2024, primarily consisting of regulatory charges to reflect the effects of an agreement in principle between Entergy Louisiana and the LPSC staff and the intervenors in July 2024 to renew Entergy Louisiana’s formula rate plan and resolve a number of other retail dockets and matters, including all formula rate plan test years prior to 2023; (3) a $132 million ($97 million net-of-tax) charge, recorded at Utility, to reflect the write-off of a previously recorded regulatory asset as a result of an adverse decision in the Entergy Arkansas opportunity sales proceeding in March 2024; and (4) a $78 million ($57 million net-of-tax) regulatory charge, recorded at Utility 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 6 to the financial statements herein for discussion of the group annuity contract and settlement charge. See Note 2 to the financial statements herein for discussion of the Entergy Louisiana agreement in principle and the subsequently filed global stipulated settlement agreement. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the Entergy Arkansas opportunity sales proceeding. 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.

Results of operations for the six months ended June 30, 2023 include a $129 million reduction in income tax expense as a result of the Hurricane Ida securitization in March 2023, which also resulted in a $103 million ($76 million net-of-tax) regulatory charge, recorded at Utility, to reflect Entergy Louisiana’s obligation to provide credits to its customers as described in an LPSC ancillary order issued as part of the securitization regulatory proceeding.

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

See Notes 2 and 3 to the financial statements in the Form 10-K for discussion of the Entergy Louisiana March 2023 storm cost securitization.

Operating Revenues

Utility

Following is an analysis of the change in operating revenues comparing the six months ended June 30, 2024 to the six months ended June 30, 2023:


			Amount
			(In Millions)
2023 operating revenues			$5,767
Fuel, rider, and other revenues that do not significantly affect net income			(201)
Storm restoration carrying costs			(31)
Retail electric price			81
Volume/weather			98
2024 operating revenues			$5,714

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

The retail electric price variance is primarily due to:

an increase in Entergy Arkansas’s formula rate plan rates effective January 2024;
an increase in Entergy Louisiana’s formula rate plan revenues, including increases in the distribution and transmission recovery mechanisms, effective September 2023;
increases in Entergy Mississippi’s formula rate plan rates effective April 2023 and April 2024; and
an increase in Entergy Texas’s base rates effective June 2023, partially offset by the implementation of the generation cost recovery relate-back rider for the Hardin County Peaking Facility effective over three months beginning in May 2023.

See Note 2 to the financial statements herein and in the Form 10-K for discussion of the regulatory proceedings discussed above.

The volume/weather variance is primarily due to the effect of more favorable weather on residential and commercial sales.

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Utility for the six months ended June 30, 2024 and 2023 are as follows:


	2024	2023	% Change
	(GWh)
Residential	17,315	16,303	6
Commercial	13,460	13,217	2
Industrial	26,633	26,041	2
Governmental	1,198	1,185	1
Total retail	58,606	56,746	3
Sales for resale	7,010	7,674	(9)
Total	65,616	64,420	2

See Note 12 to the financial statements herein for additional discussion of operating revenues.

Other Income Statement Items

Utility

Other operation and maintenance expenses increased from $1,264 million for the six months ended June 30, 2023 to $1,367 million for the six months ended June 30, 2024 primarily due to:

an increase of $21 million in contract costs related to operational performance, customer service, and organizational health initiatives;
an increase of $15 million in energy efficiency expenses primarily due to the timing of recovery from customers;
an increase of $14 million in compensation and benefits costs primarily due to higher healthcare claims activity in 2024;
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 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 $7 million in 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 $7 million in transmission costs allocated by MISO. See Note 2 to the financial statements in the Form 10-K for discussion of the recovery of these costs; and
a gain of $7 million on the partial sale of a service center at Entergy Texas in April 2023 as part of an eminent domain proceeding.

Asset write-offs, impairments, and related charges includes a $132 million ($97 million net-of-tax) charge to reflect the write-off, at Entergy Arkansas, of a previously recorded regulatory asset as a result of an adverse decision in the Entergy Arkansas opportunity sales proceeding in March 2024. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the Entergy Arkansas opportunity sales proceeding.

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

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Depreciation and amortization expenses increased primarily due to:

additions to plant in service;
the recognition of $28 million in depreciation expense in 2024 at Entergy Texas 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; and
an increase in depreciation rates at Entergy Texas, effective June 2023.

Other regulatory charges (credits) - net includes:

regulatory charges of $150 million, recorded by Entergy Louisiana in second quarter 2024, to reflect the effects of an agreement in principle between Entergy Louisiana and the LPSC staff and the intervenors in July 2024 to renew Entergy Louisiana’s formula rate plan and resolve a number of other retail dockets and matters, including all formula rate plan test years prior to 2023. See Note 2 to the financial statements here in for discussion of the Entergy Louisiana agreement in principle and the subsequently filed global stipulated settlement agreement;
a regulatory charge of $103 million, recorded by Entergy Louisiana in first quarter 2023, to reflect its 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 Entergy Louisiana March 2023 storm cost securitization; and
a regulatory charge of $78 million, recorded by Entergy New Orleans 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.

In addition, Entergy 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 decommissioning trust funds in 2024;
a decrease of $26 million in net periodic pension and other postretirement benefits non-service costs primarily as a result of pension settlement charges recorded in 2023 and a reduction in 2024 in the amortization of deferred pension losses as a result of an amendment to a qualified pension plan spinning-off predominantly inactive participants into a new qualified plan, extending the amortization period for deferred losses. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K, Note 6 to the financial statements herein, and Note 11 to the financial statements in the Form 10-K for further discussion of pension and other postretirement benefits costs;
an increase of $21 million in intercompany dividend income from affiliated preferred membership interests related to storm cost securitizations. The intercompany dividend income on the affiliate preferred

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

membership interests is eliminated for consolidation purposes and has no effect on net income since the investment is in another Entergy subsidiary; and

a $15 million charge, recorded by Entergy Louisiana 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. See Note 2 to the financial statements in the Form 10-K for discussion of the Entergy Louisiana March 2023 storm cost securitization.

Interest expense increased primarily due to:

the issuance by Entergy Arkansas of $300 million of 5.30% Series mortgage bonds in August 2023;
the issuances by Entergy Arkansas of $400 million of 5.75% Series mortgage bonds and $400 million of 5.45% Series mortgage bonds, each in May 2024; and
the issuance by Entergy Texas of $350 million of 5.80% Series mortgage bonds in August 2023.

Parent and Other

Other income (deductions) decreased primarily due to:

a $317 million ($250 million net-of-tax) non-cash settlement charge recognized as a result of a group annuity contract purchased in May 2024 to settle certain pension liabilities. See Note 6 to the financial statements herein for discussion of the group annuity contract and settlement charge; and
the elimination for consolidation purposes of intercompany dividend income of $21 million from affiliated preferred membership interests, as discussed above.

Income Taxes

The effective income tax rate was 29.9% for the six months ended June 30, 2024. The difference in the effective income tax rate for the six months ended June 30, 2024 versus the federal statutory rate of 21% was primarily due to the accrual for state income taxes, amortization of accumulated deferred income taxes as a result of tax rate changes, and a provision for uncertain tax positions, partially offset by certain book and tax differences related to utility plant items and book and tax differences related to the allowance for equity funds used during construction.

The effective income tax rate was 7.3% for the six months ended June 30, 2023. The difference in the effective income tax rate for the six months ended June 30, 2023 versus the federal statutory rate of 21% was primarily due to the reduction in income tax expense as a result of the securitization of Hurricane Ida storm costs pursuant to Louisiana Act 55, as supplemented by Act 293 of the Louisiana Legislature’s Regular Session of 2021. See Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the Entergy Louisiana 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” in the Form 10-K for discussion of income tax legislation and regulation. The following is an update to that discussion.

Entergy Arkansas, Entergy Louisiana, and System Energy have the potential to generate zero-emission nuclear power production tax credits for electricity generated by their respective nuclear power facilities. Based on

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

guidance provided by the United States Treasury Department and the IRS, the production tax credits will be calculated by multiplying the kWh of qualifying electricity by $0.003, with the value of the credits decreasing ratably, or phasing out, once the annual gross receipts from the sale of nuclear power exceed a certain threshold. If certain prevailing wage requirements are satisfied, the calculation of the credit, as described in the preceding sentence, is multiplied by a factor of five. Additional guidance is needed from the United States Treasury Department and/or the IRS to determine how the value of these credits will be calculated for power generated from nuclear facilities of rate-regulated utilities. Due to the uncertainty of value, if any, of credits Entergy Arkansas, Entergy Louisiana, or System Energy may receive, such credits have not been recognized for the nuclear power produced through the second quarter of 2024. If credits are recognized in future periods, the value of such credits is expected to be provided to customers. As such, recognition of production tax credits is not expected to have a material effect on the results of operations of Entergy, Entergy Arkansas, Entergy Louisiana, or System Energy.

Entergy Wholesale Commodities Exit from the Merchant Power Business

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business” in the Form 10-K for discussion of the exit from the merchant power business.

Planned Sale of Gas Distribution Businesses

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 and Entergy Louisiana’s gas distribution businesses. The following is an update to that discussion.

In July 2024 the LPSC staff issued a report recommending LPSC approval of the application of Delta States Utilities LA, LLC (a Bernhard Capital Partners Management LP affiliate) and Entergy Louisiana and the transaction described therein as being in the public interest and proposing certain conditions. Entergy Louisiana anticipates that the LPSC will review the matter at its August Business and Executive meeting.

Liquidity and Capital Resources

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources” in the Form 10-K for a discussion of Entergy’s capital structure, capital spending plans and other uses of capital, and sources of capital. The following are updates to that discussion.

Capital Structure and Resources

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


	June 30, 2024		December 31, 2023
Debt to capital	65.9	%	63.8	%
Effect of excluding securitization bonds	(0.2	%)	(0.3	%)
Debt to capital, excluding securitization bonds (non-GAAP) (a)	65.7	%	63.5	%
Effect of subtracting cash	(1.1	%)	(0.1	%)
Net debt to net capital, excluding securitization bonds (non-GAAP) (a)	64.6	%	63.4	%

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

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

As of June 30, 2024, 21.3% of the debt outstanding is at the parent company, Entergy Corporation, and 78.2% is at the Utility. The remaining 0.5% of the debt outstanding relates to the Vermont Yankee credit facility, as discussed in Note 4 to the financial statements herein. Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable and commercial paper, finance lease obligations, and long-term debt, including the currently maturing portion. Capital consists of debt, equity, and subsidiaries’ preferred stock without sinking fund. 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 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’s financial condition because the securitization bonds are non-recourse to Entergy, as more fully described in Note 5 to the financial statements in the Form 10-K. Entergy 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’s financial condition because net debt indicates Entergy’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Entergy Corporation has in place a credit facility that has a borrowing capacity of $3 billion and expires in June 2029. The facility includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the credit facility. The commitment fee is currently 0.225% of the undrawn commitment amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation. As there were no borrowings under the facility for the six months ended June 30, 2024, the estimated interest rate as of June 30, 2024 that would have been applied to outstanding borrowings under the facility was 6.94%. The following is a summary of the amounts outstanding and capacity available under the credit facility as of June 30, 2024:


Capacity	Borrowings	Letters of Credit	Capacity Available
(In Millions)
$3,000	$—	$4	$2,996

Entergy Corporation’s credit facility includes a covenant requiring Entergy to maintain a consolidated debt ratio, as defined, of 65% or less of its total capitalization. The calculation of this debt ratio under Entergy Corporation’s credit facility is different than the calculation of the debt to capital ratio above. Entergy is currently in compliance with the covenant and expects to remain in compliance with this covenant. If Entergy fails to meet this ratio, or if Entergy Corporation or one of the Registrant Subsidiaries (except Entergy New Orleans and System Energy) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the Entergy Corporation credit facility’s maturity date may occur. See Note 4 to the financial statements herein for additional discussion of the Entergy Corporation credit facility and discussion of the Registrant Subsidiaries’ credit facilities.

Entergy Corporation has a commercial paper program with a Board-approved program limit of $2 billion. As of June 30, 2024, Entergy Corporation had $932.4 million of commercial paper outstanding. The weighted-average interest rate for the six months ended June 30, 2024 was 5.67%.

Equity Issuances and Equity Distribution Program

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Sources of Capital - Equity Issuances and Equity Distribution Program” in the Form 10-K and Note 3 to the financial statements herein for discussion of the equity distribution program.

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Capital Expenditure Plans and Other Uses of Capital

See the table and discussion in the Form 10-K under “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Capital Expenditure Plans and Other Uses of Capital,” that sets forth the amounts of Entergy’s planned construction and other capital investments for 2024 through 2026. The following are updates to that discussion.

Following are the current annual amounts of Entergy’s planned construction and other capital investments.


Planned construction and capital investments	2024	2025	2026
	(In Millions)
Generation	$2,215	$2,850	$2,470
Transmission	1,245	1,580	1,930
Distribution	2,080	2,470	2,045
Utility Support	355	295	315
Total	$5,895	$7,195	$6,760

The updated capital plan for 2024-2026 reflects accelerated resilience spending and a change in the timing of capital investment for certain potential generation projects. The capital plan includes amounts Entergy plans to spend on routine capital projects that are necessary to support reliability of its service, equipment, or systems and to support normal customer growth. In addition to routine capital projects, the capital plan also includes amounts Entergy plans to spend on non-routine capital investments for which Entergy is either contractually obligated, has Board approval, or otherwise expects to make to satisfy regulatory or legal requirements. Amounts include the following types of construction and capital investments:

Investments in generation projects to modernize, decarbonize, and diversify Entergy’s portfolio, including Walnut Bend Solar, West Memphis Solar, Driver Solar, Bayou Power Station, Orange County Advanced Power Station, Lone Star Power Station, Segno Solar, Votaw Solar, and potential construction of additional generation;
Investments in Entergy’s Utility nuclear fleet;
Transmission spending to improve reliability and resilience while also supporting renewables expansion and customer growth; and
Distribution and Utility support spending to improve reliability, resilience, and customer experience through projects focused on asset renewals and enhancements and grid stability.

Renewables

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. In May 2024 the LPSC voted to approve the application, and in June 2024 the LPSC issued an order reflecting that approval.

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Segno Solar and Votaw Solar

In July 2024, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s certificate of convenience and necessity to construct, own, and operate the Segno Solar facility, a 170 MW solar facility to be located in Polk County, Texas, and the Votaw Solar facility, a 141 MW solar facility to be located in Hardin County, Texas. The Segno Solar facility will cost an estimated $351.6 million, and the Votaw Solar facility will cost an estimated $303.8 million, in each case inclusive of estimated transmission interconnection and upgrade costs. Subject to receipt of required regulatory approval and other conditions, the Segno Solar facility is expected to be in service by early 2027, and the Votaw Solar facility is expected to be in service by mid-2028.

Other Generation

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. A procedural schedule has been established with a hearing in December 2024.

Legend Power Station and Lone Star Power Station

In June 2024, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s certificate of convenience and necessity to construct, own, and operate the Legend Power Station, a 754 MW combined-cycle combustion turbine facility, which will be enabled with both carbon capture and storage and hydrogen co-firing optionality, to be located in Jefferson County, Texas, and the Lone Star Power Station, a 453 MW simple-cycle combustion turbine facility, which will be enabled with hydrogen co-firing optionality, to be located in Liberty County, Texas. Legend Power Station will cost an estimated $1.46 billion and Lone Star Power Station will cost an estimated $735.3 million, in each case inclusive of the estimated costs of the generation facilities, interconnection costs, transmission network upgrades, and an allowance for funds used during construction. As described in the application, Entergy Texas is considering alternative financing approaches for Legend Power Station and plans to pursue the financing option that is in the best interest of customers. In July 2024 the PUCT referred the proceeding to the State Office of Administrative Hearings and, also in July 2024, the ALJ with the State Office of Administrative Hearings adopted a procedural schedule, with a hearing on the merits scheduled to begin in October 2024. Subject to receipt of required regulatory approval and other conditions, both facilities are expected to be in service by mid-2028.

Resilience and Grid Hardening

Entergy Louisiana

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. 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 with cost recovery via a forward-looking rider with semi-annual true-ups. The plan is subject to specified reporting requirements and includes a performance review of the

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

hardened assets. The LPSC order approving the framework does not include any restrictions on Entergy Louisiana’s ability to file applications for approval of additional investments in resilience.

Entergy New Orleans

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 required 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 with the City Council for approval 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. In July 2024 the City Council held a technical conference regarding Entergy New Orleans’s three-year resilience plan.

Entergy Texas

In June 2024, Entergy Texas filed an application with the PUCT requesting approval of Phase I of its Texas Future Ready Resiliency Plan, a cost-effective set of measures to begin accelerating the resiliency of Entergy Texas’s transmission and distribution system. Phase I is comprised of projects totaling approximately $335.1 million, including approximately $198 million of projects contingent upon Entergy Texas’s receipt of grant funds in that amount from the Texas Energy Fund. The projects in Phase I include distribution and transmission hardening and modernization projects and targeted vegetation management projects to mitigate the risk of wildfire. Work on these projects is expected to commence within approximately three years of PUCT approval. The PUCT referred the proceeding to the State Office of Administrative Hearings in June 2024. In July 2024, Entergy Texas filed a motion, on behalf of the parties to the proceeding, requesting the ALJ with the State Office of Administrative Hearings adopt an agreed proposed procedural schedule, with a hearing on the merits scheduled for September 2024. A PUCT decision is expected in fourth quarter 2024.

Dividends

Declarations of dividends on Entergy’s common stock are made at the discretion of the Board. Among other things, the Board evaluates the level of Entergy’s common stock dividends based upon earnings per share from the Utility segment and the Parent and Other portion of the business, financial strength, and future investment opportunities. At its July 2024 meeting, the Board declared a dividend of $1.13 per share.

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

Cash Flow Activity

As shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the six months ended June 30, 2024 and 2023 were as follows:


	2024	2023
	(In Millions)
Cash and cash equivalents at beginning of period	$133	$224

Net cash provided by (used in):
Operating activities	1,546	1,826
Investing activities	(2,466)	(2,445)
Financing activities	2,142	1,589
Net increase in cash and cash equivalents	1,222	970

Cash and cash equivalents at end of period	$1,355	$1,194

Operating Activities

Net cash flow provided by operating activities decreased $280 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to lower collections from Utility customers, including the effect of higher deferred fuel collections in 2023, and the timing of payments to vendors.

Investing Activities

Net cash flow used in investing activities increased $21 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to:

the initial payment of approximately $170 million in February 2024 for the purchase of the Walnut Bend Solar facility by Entergy Arkansas; and
an increase of $34 million in transmission construction expenditures primarily due to increased spending on various transmission projects in 2024 and increased development in the Utility service area, partially offset by lower capital expenditures for storm restoration in 2024.

The increase was partially offset by:

a decrease of $115 million in nuclear construction expenditures primarily due to decreased spending on various nuclear projects in 2024;
a decrease of $44 million in distribution construction expenditures primarily due to lower capital expenditures for storm restoration in 2024 and a lower scope of work on projects in 2024 as compared to 2023; and
the substantial completion payment of approximately $30 million in April 2023 for the purchase of the Sunflower Solar facility by the Entergy Mississippi tax equity partnership.

See Note 14 to the financial statements herein for discussion of the Walnut Bend Solar facility purchase and Note 14 to the financial statements in the Form 10-K for discussion of the Sunflower Solar facility purchase.

Financing Activities

Net cash flow provided by financing activities increased $553 million for the six months ended June 30, 2024 compared to the six months ended June 30, 2023 primarily due to long-term debt activity providing

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

approximately $2,688 million of cash in 2024 compared to providing approximately $216 million of cash in 2023. The increase was partially offset by:

proceeds from securitization of $1.5 billion received by the storm trust II at Entergy Louisiana in 2023; and
net repayments of $206 million of commercial paper in 2024 as compared to net issuances of $281 million of commercial paper in 2023.

See Note 2 to the financial statements in the Form 10-K for a discussion of the Entergy Louisiana March 2023 storm cost securitization. See Note 4 to the financial statements herein and Notes 4 and 5 to the financial statements in the Form 10-K for details of Entergy’s commercial paper program and long-term debt.

Rate, Cost-recovery, and Other Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Rate, Cost-recovery, and Other Regulation” in the Form 10-K for discussions of rate regulation, federal regulation, and related regulatory proceedings.

State and Local Rate Regulation and Fuel-Cost Recovery

See Note 2 to the financial statements herein for updates to the discussion in the Form 10-K regarding these proceedings.

Federal Regulation

See Note 2 to the financial statements herein for updates to the discussion in the Form 10-K regarding federal regulatory proceedings.

Market and Credit Risk Sensitive Instruments

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS – Market and Credit Risk Sensitive Instruments” in the Form 10-K for a discussion of market and credit risk sensitive instruments. The following is an update to that discussion.

Some of the agreements to sell the power produced by Entergy’s non-utility operations business contain provisions that require an Entergy subsidiary to provide credit support to secure its obligations under such agreement. The primary form of credit support used to satisfy these requirements is an Entergy Corporation guarantee. Cash and letters of credit are also acceptable forms of credit support. At June 30, 2024, based on power prices at that time, Entergy had liquidity exposure of $6 million under the guarantees in place supporting its non-utility operations business transactions and $3 million of posted cash collateral.

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

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

Entergy Corporation and Subsidiaries

Management’s Financial Discussion and Analysis

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. All of the nuclear generating plants owned and operated by Entergy’s Utility business are currently in Column 1, except Waterford 3. Entergy expects the NRC to determine that Waterford 3 entered Column 2, effective second quarter 2024, based on exceeding the threshold for reactor scrams in June 2024. Waterford 3 will remain in Column 2 until a supplemental inspection is satisfactorily completed.

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’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 Note 1 to the financial statements in the Form 10-K for discussion of new accounting pronouncements. The following is an update to that discussion.

In March 2024 the SEC issued final rules that require registrants to provide certain climate-related disclosures in annual reports and registration statements in order to enhance and standardize climate-related disclosures for investors. The final rules require a registrant to disclose, among other things: material climate-related risks; activities to mitigate or adapt to such risks; information about the registrant’s board of directors’ oversight of climate-related risks and management’s role in managing material climate-related risks; and information on any climate-related targets or goals that are material to the registrant’s business, results of operations, or financial condition. In addition, the final rules require disclosure of Scope 1 and/or Scope 2 greenhouse gas emissions on a phased-in basis by certain larger registrants when those emissions are material; the filing of an attestation report covering the required disclosure of such registrants’ Scope 1 and/or Scope 2 emissions, also on a phased-in basis; and disclosure of the financial statement effects of severe weather events and other natural conditions. The phase-in compliance period is effective for Entergy beginning with its annual report for the fiscal year ending December 31, 2025. In April 2024 the SEC stayed the final rules, pending judicial review of consolidated challenges to the rules by the Court of Appeals for the Eighth Circuit. Entergy is evaluating the impact the final rules will have on its disclosures and will continue to monitor developments related to the SEC’s stay of the rules and the litigation challenging such rules.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three and Six Months Ended June 30, 2024 and 2023
(Unaudited)

	Three Months Ended		Six Months Ended
	2024	2023	2024	2023
	(In Thousands, Except Share Data)
OPERATING REVENUES
Electric	$2,906,047	$2,785,244	$5,612,553	$5,668,654
Natural gas	35,357	33,503	101,024	98,084
Other	12,216	27,279	34,671	60,347
TOTAL	2,953,620	2,846,026	5,748,248	5,827,085

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	522,550	583,717	1,139,166	1,482,100
Purchased power	200,705	206,536	428,847	444,823
Nuclear refueling outage expenses	38,277	34,785	76,540	72,018
Other operation and maintenance	701,775	659,894	1,388,806	1,291,421
Asset write-offs, impairments, and related charges	—	—	131,775	—
Decommissioning	54,193	51,152	107,574	101,644
Taxes other than income taxes	187,520	183,578	379,949	369,015
Depreciation and amortization	505,363	468,938	1,005,024	922,855
Other regulatory charges (credits) - net	125,607	(98,501)	234,954	(74,827)
TOTAL	2,335,990	2,090,099	4,892,635	4,609,049

OPERATING INCOME	617,630	755,927	855,613	1,218,036

OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction	29,275	24,867	56,070	48,013
Interest and investment income	70,587	45,428	221,283	93,687
Miscellaneous - net	(342,549)	(48,544)	(393,294)	(102,997)
TOTAL	(242,687)	21,751	(115,941)	38,703

INTEREST EXPENSE
Interest expense	301,263	261,349	579,006	516,678
Allowance for borrowed funds used during construction	(11,686)	(10,481)	(22,229)	(20,072)
TOTAL	289,577	250,868	556,777	496,606

INCOME BEFORE INCOME TAXES	85,366	526,810	182,895	760,133

Income taxes	33,634	134,796	54,627	55,821

CONSOLIDATED NET INCOME	51,732	392,014	128,268	704,312

Preferred dividend requirements of subsidiaries and noncontrolling interests	2,810	770	4,065	2,133

NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION	$48,922	$391,244	$124,203	$702,179

Earnings per average common share:
Basic	$0.23	$1.85	$0.58	$3.32
Diluted	$0.23	$1.84	$0.58	$3.31

Basic average number of common shares outstanding	213,617,110	211,449,211	213,380,414	211,400,230
Diluted average number of common shares outstanding	214,376,721	212,201,529	214,155,768	212,173,254

See Notes to Financial Statements.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three and Six Months Ended June 30, 2024 and 2023
(Unaudited)

	Three Months Ended		Six Months Ended
	2024	2023	2024	2023
	(In Thousands)

Net Income	$51,732	$392,014	$128,268	$704,312

Other comprehensive income (loss)
Pension and other postretirement adjustment (net of tax expense (benefit) of $65,371, ($1,065), $64,170, and ($335))	246,489	(3,292)	242,821	(1,265)
Other comprehensive income (loss)	246,489	(3,292)	242,821	(1,265)

Comprehensive Income	298,221	388,722	371,089	703,047
Preferred dividend requirements of subsidiaries and noncontrolling interests	2,810	770	4,065	2,133
Comprehensive Income Attributable to Entergy Corporation	$295,411	$387,952	$367,024	$700,914

See Notes to Financial Statements.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2024 and 2023
(Unaudited)
	2024	2023
	(In Thousands)
OPERATING ACTIVITIES
Consolidated net income	$128,268	$704,312
Adjustments to reconcile consolidated net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	1,206,492	1,116,843
Deferred income taxes, investment tax credits, and non-current taxes accrued	15,998	43,502
Asset write-offs, impairments, and related charges	131,775	—
Pension settlement charge	316,738	—
Changes in working capital:
Receivables	(187,554)	65,259
Fuel inventory	18,324	(43,493)
Accounts payable	(149,554)	(267,820)
Taxes accrued	16,546	(25,080)
Interest accrued	23,560	6,807
Deferred fuel costs	134,953	563,610
Other working capital accounts	(120,277)	(148,738)
Changes in provisions for estimated losses	4,630	(16,564)
Changes in regulatory assets	260,722	391,188
Changes in other regulatory liabilities	380,394	308,058
Effect of securitization on regulatory asset	—	(491,150)
Changes in pension and other postretirement funded status	(131,539)	(128,379)
Other	(503,020)	(252,383)
Net cash flow provided by operating activities	1,546,456	1,825,972

INVESTING ACTIVITIES
Construction/capital expenditures	(2,124,279)	(2,311,465)
Allowance for equity funds used during construction	56,070	48,013
Nuclear fuel purchases	(161,483)	(134,698)
Payment for purchase of plant and assets	(172,614)	(30,433)
Proceeds from sale of assets	—	11,000
Insurance proceeds received for property damages	—	6,184

Changes in securitization account	3,976	7,803
Payments to storm reserve escrow accounts	(9,595)	(9,080)

Decrease (increase) in other investments	(9,689)	262
Litigation proceeds for reimbursement of spent nuclear fuel storage costs	—	17,933
Proceeds from nuclear decommissioning trust fund sales	1,201,162	435,903
Investment in nuclear decommissioning trust funds	(1,250,039)	(486,853)
Net cash flow used in investing activities	(2,466,491)	(2,445,431)

See Notes to Financial Statements.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2024 and 2023
(Unaudited)
	2024	2023
	(In Thousands)
FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt	5,068,266	2,489,886

Treasury stock	45,982	4,078

Retirement of long-term debt	(2,379,903)	(2,273,773)


Changes in commercial paper - net	(205,820)	280,765
Capital contribution from noncontrolling interest	—	25,708
Proceeds received by storm trust related to securitization	—	1,457,676
Other	105,540	66,898
Dividends paid:
Common stock	(482,255)	(452,442)
Preferred stock	(9,159)	(9,159)
Net cash flow provided by financing activities	2,142,651	1,589,637

Net increase in cash and cash equivalents	1,222,616	970,178

Cash and cash equivalents at beginning of period	132,548	224,164

Cash and cash equivalents at end of period	$1,355,164	$1,194,342

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$532,742	$490,201
Income taxes	$7,822	$31,231
Noncash investing activities:
Accrued construction expenditures	$537,463	$535,714

See Notes to Financial Statements.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$82,850	$71,609
Temporary cash investments	1,272,314	60,939
Total cash and cash equivalents	1,355,164	132,548
Accounts receivable:
Customer	777,791	699,411
Allowance for doubtful accounts	(16,642)	(25,905)
Other	227,075	225,334
Accrued unbilled revenues	592,785	494,615
Total accounts receivable	1,581,009	1,393,455
Deferred fuel costs	78,434	169,967
Fuel inventory - at average cost	174,475	192,799
Materials and supplies - at average cost	1,576,459	1,418,969
Deferred nuclear refueling outage costs	134,500	140,115
Prepayments and other	247,056	213,016
TOTAL	5,147,097	3,660,869

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds	5,265,003	4,863,710
Non-utility property - at cost (less accumulated depreciation)	417,553	418,546
Storm reserve escrow accounts	332,801	323,206
Other	71,920	69,494
TOTAL	6,087,277	5,674,956

PROPERTY, PLANT, AND EQUIPMENT
Electric	68,241,911	66,850,474
Natural gas	732,677	717,503
Construction work in progress	2,682,373	2,109,703
Nuclear fuel	682,247	707,852
TOTAL PROPERTY, PLANT, AND EQUIPMENT	72,339,208	70,385,532
Less - accumulated depreciation and amortization	27,171,548	26,551,203
PROPERTY, PLANT, AND EQUIPMENT - NET	45,167,660	43,834,329

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $243,478 as of June 30, 2024 and $250,830 as of December 31, 2023)	5,408,682	5,669,404
Deferred fuel costs	172,201	172,201
Goodwill	374,099	374,099
Accumulated deferred income taxes	16,510	16,367
Other	392,771	301,171
TOTAL	6,364,263	6,533,242

TOTAL ASSETS	$62,766,297	$59,703,396

See Notes to Financial Statements.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
June 30, 2024 and December 31, 2023
(Unaudited)
	2024	2023
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$1,517,072	$2,099,057
Notes payable and commercial paper	932,351	1,138,171
Accounts payable	1,314,661	1,566,745
Customer deposits	462,222	446,146
Taxes accrued	450,759	434,213
Interest accrued	237,757	214,197
Deferred fuel costs	262,348	218,927
Pension and other postretirement liabilities	56,521	59,508
Other	253,489	219,528
TOTAL	5,487,180	6,396,492

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	4,321,771	4,245,982
Accumulated deferred investment tax credits	199,745	205,973
Regulatory liability for income taxes - net	1,042,248	1,033,242
Other regulatory liabilities	3,488,314	3,116,926
Decommissioning and asset retirement cost liabilities	4,683,902	4,505,782
Accumulated provisions	467,200	462,570
Pension and other postretirement liabilities	519,861	648,413
Long-term debt (includes securitization bonds of $248,670 as of June 30, 2024 and $263,007 as of December 31, 2023)	26,301,092	23,008,839
Other	1,353,919	1,116,661
TOTAL	42,378,052	38,344,388

Commitments and Contingencies

Subsidiaries’ preferred stock without sinking fund	219,410	219,410

EQUITY
Preferred stock, no par value, authorized 1,000,000 shares in 2024 and 2023; issued shares in 2024 and 2023 - none	—	—
Common stock, $0.01 par value, authorized 499,000,000 shares in 2024 and 2023; issued 280,975,348 shares in 2024 and 2023	2,810	2,810
Paid-in capital	7,785,921	7,795,411
Retained earnings	11,582,332	11,940,384
Accumulated other comprehensive income (loss)	80,361	(162,460)
Less - treasury stock, at cost (67,166,752 shares in 2024 and 68,126,778 shares in 2023)	4,883,695	4,953,498
Total shareholders’ equity	14,567,729	14,622,647
Subsidiaries’ preferred stock without sinking fund and noncontrolling interests	113,926	120,459
TOTAL	14,681,655	14,743,106

TOTAL LIABILITIES AND EQUITY	$62,766,297	$59,703,396

See Notes to Financial Statements.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Six Months Ended June 30, 2024
(Unaudited)

		Shareholders’ Equity
	Subsidiaries’ Preferred Stock and Noncontrolling Interests	Common Stock	Treasury Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
	(In Thousands)

Balance at December 31, 2023	$120,459	$2,810	($4,953,498)	$7,795,411	$11,940,384	($162,460)	$14,743,106

Consolidated net income (a)	1,255	—	—	—	75,281	—	76,536
Other comprehensive loss	—	—	—	—	—	(3,668)	(3,668)
Common stock issuances related to stock plans	—	—	30,881	(25,842)	—	—	5,039
Common stock dividends declared	—	—	—	—	(240,959)	—	(240,959)

Distributions to noncontrolling interests	(1,108)	—	—	—	—	—	(1,108)
Preferred dividend requirements of subsidiaries (a)	(4,580)	—	—	—	—	—	(4,580)
Balance at March 31, 2024	$116,026	$2,810	($4,922,617)	$7,769,569	$11,774,706	($166,128)	$14,574,366

Consolidated net income (a)	2,810	—	—	—	48,922	—	51,732
Other comprehensive income	—	—	—	—	—	246,489	246,489


Common stock issuances related to stock plans	—	—	38,922	16,352	—	—	55,274
Common stock dividends declared	—	—	—	—	(241,296)	—	(241,296)
Distributions to noncontrolling interests	(330)	—	—	—	—	—	(330)
Preferred dividend requirements of subsidiaries (a)	(4,580)	—	—	—	—	—	(4,580)
Balance at June 30, 2024	$113,926	$2,810	($4,883,695)	$7,785,921	$11,582,332	$80,361	$14,681,655






See Notes to Financial Statements.

(a) Consolidated net income and preferred dividend requirements of subsidiaries for first quarter 2024 and second quarter 2024 each includes $4 million of preferred dividends on subsidiaries’ preferred stock without sinking fund that is not presented as equity.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Six Months Ended June 30, 2023
(Unaudited)

		Common Shareholders’ Equity
	Subsidiaries' Preferred Stock and Noncontrolling Interests	Common Stock	Treasury Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Income (Loss)	Total
	(In Thousands)

Balance at December 31, 2022	$97,907	$2,797	($4,978,994)	$7,632,895	$10,502,041	($191,754)	$13,064,892

Consolidated net income (a)	1,364	—	—	—	310,935	—	312,299
Other comprehensive income	—	—	—	—	—	2,027	2,027
Common stock issuances related to stock plans	—	—	19,599	(15,118)	—	—	4,481
Common stock dividends declared	—	—	—	—	(226,194)	—	(226,194)
Beneficial interest in storm trust	14,577	—	—	—	—	—	14,577
Distributions to noncontrolling interests	(574)	—	—	—	—	—	(574)
Preferred dividend requirements of subsidiaries (a)	(4,580)	—	—	—	—	—	(4,580)
Balance at March 31, 2023	$108,694	$2,797	($4,959,395)	$7,617,777	$10,586,782	($189,727)	$13,166,928

Consolidated net income (a)	770	—	—	—	391,244	—	392,014
Other comprehensive loss	—	—	—	—	—	(3,292)	(3,292)
Common stock issuances related to stock plans	—	—	600	16,528	—	—	17,128
Common stock dividends declared	—	—	—	—	(226,248)	—	(226,248)
Capital contribution from noncontrolling interest	25,708	—	—	—	—	—	25,708
Distributions to noncontrolling interests	(113)	—	—	—	—	—	(113)
Preferred dividend requirements of subsidiaries (a)	(4,580)	—	—	—	—	—	(4,580)
Balance at June 30, 2023	$130,479	$2,797	($4,958,795)	$7,634,305	$10,751,778	($193,019)	$13,367,545









See Notes to Financial Statements.

(a) Consolidated net income and preferred dividend requirements of subsidiaries for first quarter 2023 and second quarter 2023 each includes $4 million of preferred dividends on subsidiaries’ preferred stock without sinking fund that is not presented as equity.

ENTERGY CORPORATION AND SUBSIDIARIES

NOTES TO FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. COMMITMENTS AND CONTINGENCIES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy and the Registrant Subsidiaries are involved in a number of legal, regulatory, and tax proceedings before various courts, regulatory authorities, and governmental agencies in the ordinary course of business. While management is unable to predict with certainty the outcome of such proceedings, management does not believe that the ultimate resolution of these matters will have a material adverse effect on Entergy’s results of operations, cash flows, or financial condition, except as otherwise discussed in the Form 10-K or in this report. Entergy discusses regulatory proceedings in Note 2 to the financial statements in the Form 10-K and herein and discusses tax proceedings in Note 3 to the financial statements in the Form 10-K and Note 10 to the financial statements herein.

Vidalia Purchased Power Agreement

See Note 8 to the financial statements in the Form 10-K for information on Entergy Louisiana’s Vidalia purchased power agreement.

Spent Nuclear Fuel Litigation

See Note 8 to the financial statements in the Form 10-K for information on Entergy’s spent nuclear fuel litigation.

Nuclear Insurance

See Note 8 to the financial statements in the Form 10-K for information on nuclear liability and property insurance associated with Entergy’s nuclear power plants.

Non-Nuclear Property Insurance

See Note 8 to the financial statements in the Form 10-K for information on Entergy’s non-nuclear property insurance program.

Employment and Labor-related Proceedings

See Note 8 to the financial statements in the Form 10-K for information on Entergy’s employment and labor-related proceedings.

Asbestos Litigation (Entergy Arkansas, Entergy Louisiana, Entergy New Orleans, and Entergy Texas)

See Note 8 to the financial statements in the Form 10-K for information regarding asbestos litigation.

Grand Gulf - Related Agreements

See Note 8 to the financial statements in the Form 10-K for information regarding Grand Gulf-related agreements.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Nelson Industrial Steam Company (Entergy Louisiana)

See Note 8 to the financial statements in the Form 10-K for information on Entergy Louisiana’s Nelson Industrial Steam Company partnership.

NOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Regulatory Assets and Regulatory Liabilities

See Note 2 to the financial statements in the Form 10-K for information regarding regulatory assets and regulatory liabilities in the Utility business presented on the balance sheets of Entergy and the Registrant Subsidiaries. The following are updates to that discussion.

Fuel and purchased power cost recovery

Entergy Arkansas

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.

Entergy Mississippi

In June 2024 the MPSC approved a joint stipulation agreement between Entergy Mississippi and the Mississippi Public Utilities Staff for Entergy Mississippi’s 2024 formula rate plan filing. The 2024 formula rate plan filing included the conclusion of the modified interim adjustments to Entergy Mississippi’s energy cost recovery rider and power management rider, which were approved in October 2022 and allowed Entergy Mississippi to recover certain under-collected fuel balances. The stipulation provided for Entergy Mississippi to reduce its net energy cost factor. See “Retail Rate Proceedings - Filings with the MPSC (Entergy Mississippi) - Retail Rates - 2024 Formula Rate Plan Filing” below for further discussion of the 2024 formula rate plan filing and the joint stipulation agreement.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Retail Rate Proceedings

See Note 2 to the financial statements in the Form 10-K for information regarding retail rate proceedings involving the Utility operating companies. The following are updates to that discussion.

Filings with the APSC (Entergy Arkansas)

Retail Rates

2024 Formula Rate Plan Filing

In July 2024, Entergy Arkansas filed with the APSC its 2024 formula rate plan filing to set its formula rate for the 2025 calendar year. The filing contained an evaluation of Entergy Arkansas’s earnings for the 2025 projected year and a netting adjustment for the 2023 historical year. The filing showed that Entergy Arkansas’s earned rate of return on common equity for the 2025 projected year was 8.43% resulting in a revenue deficiency of $69.5 million. The earned rate of return on common equity for the 2023 historical year was 7.48% resulting in a $33.1 million netting adjustment. The total proposed revenue change for the 2025 projected year and 2023 historical year netting adjustment is $102.6 million. By operation of the formula rate plan, Entergy Arkansas’s recovery of the revenue requirement is subject to a four percent annual revenue constraint. Because Entergy Arkansas’s revenue requirement in this filing exceeded the constraint, the resulting increase was limited to $82.6 million. This filing is subject to review by the APSC, which is expected to issue its order on the filing in December 2024.

Grand Gulf Credit Rider

In June 2024, Entergy Arkansas filed with the APSC a tariff to provide retail customers a credit resulting from the terms of the settlement agreement between Entergy Arkansas, System Energy, additional named Entergy parties, and the APSC pertaining to System Energy’s billings for wholesale sales of energy and capacity from the Grand Gulf nuclear plant. See “Complaints Against System Energy - System Energy Settlement with the APSC” below and in the Form 10-K for discussion of the settlement. In July 2024 the APSC approved the tariff, under which Entergy Arkansas will refund retail customers a total of $100.6 million with a one-time bill credit during the August 2024 billing cycle.

Filings with the LPSC (Entergy Louisiana)

Retail Rates - Electric

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 in August 2024. In March 2024 the parties agreed to an eight-week

Entergy Corporation and Subsidiaries

Notes to Financial Statements

extension of all deadlines to allow for continuation of settlement negotiations, and the ALJ issued an order with an amended procedural schedule. In July 2024 the parties agreed to extend further the procedural schedule to facilitate the continuation of settlement negotiations, with the hearing commencing in December 2024.

In July 2024, Entergy Louisiana reached an agreement in principle with the LPSC staff and the intervenors in the proceeding and filed with the LPSC a joint motion to suspend the procedural schedule to allow for all parties to finalize a stipulated settlement agreement.

In August 2024, Entergy Louisiana and the LPSC staff jointly filed a global stipulated settlement agreement for consideration by the LPSC with key terms as follows:

continuation of the formula rate plan for 2024-2026 (test years 2023-2025);
a base formula rate plan revenue increase of $120 million for test year 2023, effective for rates beginning September 2024;
a $140 million cumulative cap on base formula rate plan revenue increases, if needed, for test years 2024 and 2025, excluding outside the bandwidth items;
$184 million of customer rate credits to be given over two years, including increasing customer sharing of income tax benefits resulting from the 2016-2018 IRS audit, to resolve any remaining disputed issues stemming from formula rate plan test years prior to test year 2023, including but not limited to the investigation into Entergy Services costs billed to Entergy Louisiana. As discussed in Note 3 to the financial statements in the Form 10-K, a $38 million regulatory liability was recorded in 2023 in connection with the 2016-2018 IRS audit;
$75.8 million of customer rate credits, as provided for in the System Energy global settlement, to be credited over three years subject to and conditioned upon FERC approval of the System Energy global settlement. See “Complaints Against System Energy – System Energy Settlement with the LPSC” below for further details of the System Energy global settlement;
$5.8 million of customer rate credits provided for in the Entergy Louisiana formula rate plan global settlement agreement approved by the LPSC in November 2023 credited over one year. See Note 2 to the financial statements in the Form 10-K for the discussion of the November 2023 Entergy Louisiana formula rate plan global settlement agreement;
an increase in the allowed midpoint return on common equity from 9.5% to 9.7%, with a bandwidth of 40 basis points above and below the midpoint, for the extended term of the formula rate plan, except that for test year 2023 in which the authorized return on common equity shall have no bearing on the change in base formula rate plan revenue described above and, for test year 2024, any earnings above the authorized return on common equity shall be returned to customers through a credit;
an increase in nuclear depreciation rates by $15 million in each of the 2023, 2024, and 2025 test years outside of the formula rate plan bandwidth calculation; and
for the transmission recovery mechanism and the distribution recovery mechanism, no change to the existing floors, but the caps for both would be $350 million for test year 2023, $375 million for test year 2024, and $400 million for test year 2025. LPSC-approved transmission projects will be exempt from the transmission recovery mechanism cap.

The terms of the global stipulated settlement agreement are subject to approval by the LPSC and will not go into effect unless/until such approval is obtained. Entergy Louisiana anticipates the global stipulated settlement agreement to be considered by the LPSC at its Business and Executive meeting on August 14, 2024.

Based on the July 2024 agreement in principle, in second quarter 2024 Entergy Louisiana recorded expenses of $151 million ($111 million net-of-tax) primarily consisting of regulatory charges to reflect the effects of the agreement in principle.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Filings with the MPSC (Entergy Mississippi)

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.

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 because the MPSC had not yet approved the proposed depreciation rates.

In June 2024, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a joint stipulation that confirmed the 2024 test year filing, with the exception of immaterial adjustments to certain operation and maintenance expenses. After performance adjustments, the formula rate plan reflected an earned return on rate base of 6.08% for calendar year 2024, which resulted in a total revenue increase of $64.6 million for 2024. The joint stipulation also recommended approval of a revised customer charge of $31.82 per month for residential customers and $53.10 per month for general service customers. Pursuant to the stipulation, Entergy Mississippi’s 2023 look-back filing reflected an earned return on rate base of 6.81%, resulting in an increase of $0.3 million in the formula rate plan revenues for 2023. Finally, the stipulation recommended approval of Entergy Mississippi’s proposed depreciation rates with those rates to be implemented upon request and approval at a later date. In June 2024 the MPSC approved the joint stipulation with rates effective in July 2024. The approval also included a reduction to the energy cost factor, resulting in a net bill decrease for a typical residential customer using 1,000 kWh per month. Also in June 2024, Entergy Mississippi recorded regulatory credits of $7.3 million to reflect the difference between interim rates placed in effect in April 2024 and the rates reflected in the joint stipulation.

Also, in May 2024, Entergy Mississippi received approval from the MPSC for formula rate plan revisions that were necessary for Entergy Mississippi to comply with recently passed state legislation. The legislation allows Entergy Mississippi to make interim rate adjustments to recover the non-fuel related annual ownership cost of certain facilities that directly or indirectly provide service to customers who own certain data processing center projects as specified in the legislation. Entergy Mississippi filed its interim facilities rate adjustment report in May 2024 to recover approximately $8.7 million of these costs over a six-month period with rates effective beginning in July 2024.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Filings with the City Council (Entergy New Orleans)

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 by the City Council in the 2018 rate case and approved again by the City Council in 2023. The formula would result in an increase in authorized electric revenues of $7.0 million and an increase in authorized gas revenues of $5.6 million. Following City Council review, the City Council’s advisors issued a report in July 2024 seeking a reduction in Entergy New Orleans’s requested formula rate plan revenues in an aggregate amount of approximately $1.6 million for electric and gas together due to alleged errors. The City Council’s advisors’ report began a 35-day period to resolve any disputes among the parties regarding the formula rate plan. 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.

Filings with the PUCT and Texas Cities (Entergy Texas)

Retail Rates

2022 Base Rate Case

As discussed in the Form 10-K, in August 2023 the PUCT issued an order severing issues related to electric vehicle charging infrastructure in the 2022 base rate case proceeding to a separate proceeding. In December 2023 the PUCT referred the separate proceeding to resolve the issues related to electric vehicle charging infrastructure to the State Office of Administrative Hearings. A hearing on the merits was held in April 2024. In June 2024 the ALJ with the State Office of Administrative Hearings issued a proposal for decision concluding that it is appropriate for a vertically integrated electric utility, and Entergy Texas specifically, to own vehicle-charging facilities or other transportation electrification and charging infrastructure and recommending that both of Entergy Texas’s proposed transportation electrification riders be approved. A PUCT decision is expected in third quarter 2024.

Distribution Cost Recovery Factor (DCRF) Rider

In June 2024, Entergy Texas filed with the PUCT a request to set a new DCRF rider. The proposed rider is designed to collect from Entergy Texas’s retail customers approximately $40.3 million annually based on its capital invested in distribution between January 1, 2022 and March 31, 2024. The PUCT adopted a procedural schedule in July 2024. A PUCT decision is expected in third quarter 2024.

Entergy Arkansas 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

Entergy Corporation and Subsidiaries

Notes to Financial Statements

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. Briefing to the United States Court of Appeals for the Eighth District concluded in 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.

MSS-4 Replacement Tariff – Net Operating Loss Carryforward Proceeding

In January 2021, pursuant to section 205 of the Federal Power Act, Entergy Services filed an amendment to the MSS-4 replacement tariff, a tariff governing the sales of energy and capacity between the Utility operating companies, in order to provide for the inclusion of specified accumulated deferred income taxes, including net operating loss carryforward accumulated deferred income taxes (NOLC ADIT), in the rate for sales of energy among the Utility operating companies on a prospective basis. In March 2021, the FERC accepted the filing, subject to refund and hearing procedures.

In October 2021 the LPSC filed a complaint with the FERC alleging that Entergy Services improperly excluded NOLC ADIT from MSS-4 replacement tariff rates in the period before March 20, 2021. The LPSC argued that sales from Entergy Louisiana to Entergy Texas and Entergy New Orleans were charged at rates lower than they otherwise should have been, and it accordingly seeks surcharges for the period prior to March 20, 2021. The FERC set the complaint for hearing procedures and subsequently the hearing for this complaint proceeding was consolidated with the hearing procedures for Entergy Services’ January 2021 NOLC ADIT filing.

Testimony was filed by parties in 2023, and the hearing before a FERC ALJ was concluded in February 2024. In June 2024, the FERC ALJ issued an initial decision addressing three major issues: (1) whether Entergy Services’ proposed prospective inclusion and allocation of NOLC ADIT in MSS-4 replacement tariff rates using a modified with-and-without methodology is just and reasonable; (2) whether Entergy Services correctly calculated excess and deficient accumulated deferred income taxes in accordance with the terms of a prior settlement; and (3) whether NOLC ADIT should have been included in MSS-4 replacement tariff rates prior to the effective date of the January 2021 MSS-4 replacement tariff filing.

With respect to issues (1) and (2), the presiding ALJ concluded that Entergy Services’ proposed methodology for allocating and including NOLC ADIT in MSS-4 replacement tariff rates was just and reasonable and that Entergy Services correctly performed the excess and deficient accumulated deferred income taxes calculations. With respect to issue (3), however, the presiding ALJ agreed with the LPSC that NOLC ADIT should have been included in MSS-4 replacement tariff rates since September 1, 2016, and as a result, the presiding ALJ ordered that Entergy Louisiana and Entergy Arkansas recalculate bills for the period of September 1, 2016 through November 11, 2023 with surcharges expected to be due to those operating companies from the purchasing operating companies, Entergy New Orleans, Entergy Texas, and Entergy Louisiana (for some Entergy Arkansas sales). The presiding ALJ also ordered Entergy Services to pay the interest owed to Entergy Louisiana on these surcharges.

The surcharge methodology that the presiding ALJ recommended in connection with issue (3) was not supported by any participant in the hearing. As part of their exceptions to the initial decision, all parties to the proceeding opposed the use of the ALJ’s methodology, except for the FERC trial staff, which took no position. During the hearing, the LPSC and the FERC trial staff advocated that the alleged tariff violation should be remedied by the application of Entergy Services’ January 2021 proposed methodology. All other parties, including the

Entergy Corporation and Subsidiaries

Notes to Financial Statements

PUCT, the City Council, and Entergy Services, opposed any surcharges for the period prior to the March 20, 2021 effective date of the January 2021 filing.

Entergy Services disputes the presiding ALJ's rulings on issue (3) and filed exceptions to these rulings in July 2024. The ALJ's initial decision is not binding on the FERC and is an interim step in the hearing process. No refunds will be owed in connection with this proceeding unless and until the FERC requires them in a final order.

Complaints Against System Energy

See Note 2 to the financial statements in the Form 10-K for information regarding pending complaints against System Energy. 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), including challenges with respect to System Energy’s authorized return on equity and capital structure, renewal of its sale-leaseback arrangement, treatment of uncertain tax positions, a broader investigation of rates under the Unit Power Sales Agreement, and two prudence complaints, one challenging the extended power uprate completed at Grand Gulf in 2012 and the operation and management of Grand Gulf, particularly in the 2016-2020 time period, and the second challenging the operation and management of Grand Gulf in the 2021-2022 time period. Settlements that resolve all significant aspects of these complaints have been reached with the MPSC and the APSC and approved by the FERC. A settlement has been reached with the City Council and is pending FERC approval, as described in “System Energy Settlement with the City Council” below. An agreement in principle has been reached with the LPSC staff, as described in “System Energy Settlement with the LPSC” below. If the settlement with the City Council is approved by the FERC and the settlement with the LPSC staff is approved by the LPSC and the FERC, it would resolve all significant aspects of these pending complaints. The following are updates to the discussion in the Form 10-K.

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 $25.3 million, which includes interest through June 30, 2024, and the estimated resulting annual rate reduction would be approximately $15 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

Entergy Corporation and Subsidiaries

Notes to Financial Statements

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.

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 initiated a sixty-day period in which aggrieved parties could 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.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

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 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. In June 2024 counsel for the FERC filed the respondent’s brief, arguing that the FERC’s August 2023 rehearing order concerning the sale-leaseback and depreciation rate remedy issues should be affirmed and arguing that the dispute over the uncertain tax position issue is not yet ripe. In July 2024, System Energy and the LPSC each filed separate reply briefs.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

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.

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

Entergy Corporation and Subsidiaries

Notes to Financial Statements

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 $69.9 million plus $97.8 million of interest through June 30, 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 LPSC’s mandamus request 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. In July 2024 the Fifth Circuit held oral argument on the petition. During oral argument, the FERC’s counsel represented that the FERC intends to issue an order in the return on equity and capital structure proceeding by the end of the year. Later in July 2024 the Fifth Circuit issued an order denying the LPSC’s petition.

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” 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 2023.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

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 remaining 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 paid the remaining black box refund of $92 million to Entergy Arkansas in May 2024.

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 in “Grand Gulf Prudence Complaint” in the Form 10-K, filed by the LPSC, the APSC, and the City Council at the FERC in October 2023. In May 2024, System Energy, Entergy New Orleans, additional named Entergy parties, and the City Council filed the settlement agreement and supporting materials with the FERC. 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 the 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’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.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

System Energy Settlement with the LPSC

In July 2024, System Energy and the LPSC staff reached a settlement in principle to globally resolve all of the LPSC’s actual and potential claims in multiple docketed proceedings pending before the FERC (including all docketed proceedings resolved by the MPSC, the APSC, and the City Council settlements) 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” in the Form 10-K, filed by the LPSC, the APSC, and the City Council at the FERC in October 2023. The settling parties intend to file the settlement for approval by the FERC following the LPSC’s approval of the settlement.

The terms of the settlement with the LPSC staff 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, between System Energy and the APSC in November 2023, and between System Energy and the City Council in April 2024. The settlement in principle provides for Entergy Louisiana to receive a black box refund of $95 million from System Energy, inclusive of approximately $15 million already received by Entergy Louisiana from System Energy. In June 2024 the remaining $80 million black box refund to Entergy Louisiana 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 $95 million described above, beginning with the September 2024 service month, the settlement provides for Entergy Louisiana’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.

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. System Energy’s remaining regulatory liability related to complaints against System Energy as of December 31, 2023 was $178 million. As discussed above in “System Energy 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. As discussed above in “System Energy Settlement with the LPSC,” in second quarter 2024 the $80 million black box refund to Entergy Louisiana was reclassified from the regulatory liability to accounts payable - associated companies on System Energy’s balance sheet.

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.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Pension Costs Amendment Proceeding

As discussed in the Form 10-K, in October 2021, System Energy submitted to the FERC proposed amendments to the Unit Power Sales Agreement to include in the rate base the prepaid and accrued pension costs associated with System Energy’s qualified pension plans. Based on data ending in 2020, the increased annual revenue requirement associated with the filing is approximately $8.9 million. In March 2022 the FERC accepted System Energy’s proposed amendments with an effective date of December 1, 2021, subject to refund pending the outcome of the settlement and/or hearing procedures. In August 2023 the FERC chief ALJ terminated settlement procedures and designated a presiding ALJ to oversee hearing procedures. In October 2023, System Energy filed direct testimony in support of its proposed amendments. Under the procedural schedule, testimony was filed through April 2024, and the hearing occurred from late May through early June 2024. The presiding ALJ’s initial decision is expected in September 2024.

Storm Cost Recovery Filings with Retail Regulators

See Note 2 to the financial statements in the Form 10-K for discussion regarding storm cost recovery filings. The following is an update to that discussion.

Entergy Mississippi

As discussed in the Form 10-K, Entergy Mississippi had 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 exceeded $15 million, the collection of the storm damage provision ceased until such time that the accumulated storm damage provision became 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.

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 Mississippi Public Utilities Staff reviewed the storm-related costs submitted by Entergy Mississippi and found them prudent. In June 2024 the MPSC considered and unanimously granted the relief sought by Entergy Mississippi. The new combined storm damage mitigation and restoration rider became effective with the July 2024 billing cycle. Additionally, Entergy Mississippi made a compliance filing to cease billing under the existing vegetation management rider schedule as of the same billing cycle.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

NOTE 3. EQUITY (Entergy Corporation and Entergy Louisiana)

Common Stock

Earnings per Share

The following tables present Entergy’s basic and diluted earnings per share calculations for the three and six months ended June 30, 2024 and 2023, included on the consolidated income statements:


	For the Three Months Ended June 30,
	2024		2023
	(Dollars In Thousands, Except Per Share Data; Shares in Millions)
		$/share		$/share
Consolidated net income	$51,732		$392,014
Less: Preferred dividend requirements of subsidiaries and noncontrolling interests	2,810		770
Net income attributable to Entergy Corporation	$48,922		$391,244
Basic shares and earnings per average common share	213.6	$0.23	211.4	$1.85
Average dilutive effect of:
Stock options	0.3	—	0.3	—
Other equity plans	0.5	—	0.5	(0.01)

Diluted shares and earnings per average common shares	214.4	$0.23	212.2	$1.84


	For the Six Months Ended June 30,
	2024		2023
	(Dollars In Thousands, Except Per Share Data; Shares in Millions)
		$/share		$/share
Consolidated net income	$128,268		$704,312
Less: Preferred dividend requirements of subsidiaries and noncontrolling interests	4,065		2,133
Net income attributable to Entergy Corporation	$124,203		$702,179
Basic shares and earnings per average common share	213.4	$0.58	211.4	$3.32
Average dilutive effect of:
Stock options	0.3	—	0.3	—
Other equity plans	0.5	—	0.5	(0.01)

Diluted shares and earnings per average common shares	214.2	$0.58	212.2	$3.31

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was 1,448,982 options for the three months ended June 30, 2024 and 1,315,567 options for the three months ended June 30, 2023. The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was 1,471,220 options for the six months ended June 30, 2024 and 1,248,743 options for the six months ended June 30, 2023.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy’s stock options and other equity compensation plans are discussed in Note 5 to the financial statements herein and in Note 12 to the financial statements in the Form 10-K.

Dividends declared per common share were $1.13 for the three months ended June 30, 2024 and $1.07 for the three months ended June 30, 2023. Dividends declared per common share were $2.26 for the six months ended June 30, 2024 and $2.14 for the six months ended June 30, 2023.

Equity Distribution Program

See Note 7 to the financial statements in the Form 10-K for discussion of Entergy Corporation’s at the market equity distribution program. The following are updates to that discussion.

In May 2024, Entergy Corporation entered into an amendment to the equity distribution sales agreement for its at the market equity distribution program wherein it increased by an additional $1 billion the aggregate gross sales price authorized under the at the market equity distribution program from $2 billion to $3 billion and added additional agents, forward purchasers, and forward sellers. The aggregate number of shares of common stock sold under this sales agreement and under any forward sale agreement may not exceed an aggregate gross sales price of $3 billion. As of June 30, 2024, an aggregate gross sales price of approximately $2 billion has been sold under the at the market equity distribution program.

During the six months ended June 30, 2024 and 2023, there were no shares of common stock issued under the at the market equity distribution program.

In March 2024, Entergy Corporation entered into two separate forward sale agreements for 284,922 shares and 1,160,415 shares of common stock, respectively. No amounts have been or will be recorded on Entergy’s balance sheet with respect to the equity offerings until settlements of the equity forward sale agreements occur. The forward sale agreements require Entergy Corporation to, at its election prior to May 30, 2025, either (i) physically settle the transactions by issuing the total of 284,922 shares and 1,160,415 shares, respectively, of its common stock to the forward counterparty in exchange for net proceeds at the then-applicable forward sale price specified by the applicable agreement (initially approximately $101.92 and $101.74 per share, respectively) or (ii) net settle the applicable transaction in whole or in part through the delivery or receipt of cash or shares. Each forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other fixed amounts specified in the applicable agreement. In connection with the forward sale agreements, the forward seller, or its affiliates, borrowed from third parties and sold 284,922 shares and 1,160,415 shares, respectively, of Entergy Corporation’s common stock. The gross sales price of these shares totaled approximately $29.3 million and $119.2 million, respectively. In connection with the sales of these shares, Entergy Corporation paid the forward seller fees of approximately $0.3 million and $1.2 million, respectively, which have not been deducted from the gross sales price. Entergy Corporation did not receive any proceeds from such sales of borrowed shares.

In May 2024, Entergy Corporation entered into two separate forward sale agreements for 1,278,416 shares and 1,233,235 shares of common stock, respectively. No amounts have been or will be recorded on Entergy’s balance sheet with respect to the equity offerings until settlements of the equity forward sale agreements occur. The forward sale agreements require Entergy Corporation to, at its election prior to July 31, 2025, either (i) physically settle the transactions by issuing the total of 1,278,416 shares and 1,233,235 shares, respectively, of its common stock to the forward counterparty in exchange for net proceeds at the then-applicable forward sale price specified by the applicable agreement (initially approximately $110.32 and $107.93 per share, respectively) or (ii) net settle the applicable transaction in whole or in part through the delivery or receipt of cash or shares. Each forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other fixed amounts specified in the applicable agreement. In connection with the forward sale agreements, the forward seller, or its affiliates, borrowed from third parties and sold 1,278,416 shares and 1,233,235 shares, respectively, of Entergy Corporation’s common stock. The gross sales price of these shares totaled approximately $142.4 million and $134.4 million, respectively. In connection with the sales of these shares, Entergy Corporation paid the forward

Entergy Corporation and Subsidiaries

Notes to Financial Statements

seller fees of approximately $1.4 million and $1.3 million, respectively, which have not been deducted from the gross sales price. Entergy Corporation did not receive any proceeds from such sales of borrowed shares.

In June 2024, Entergy Corporation entered into a forward sale agreement for 1,070,003 shares of common stock. No amounts have been or will be recorded on Entergy’s balance sheet with respect to the equity offering until settlement of the equity forward sale agreement occurs. The forward sale agreement requires Entergy Corporation to, at its election prior to July 31, 2025, either (i) physically settle the transaction by issuing the total of 1,070,003 shares of its common stock to the forward counterparty in exchange for net proceeds at the then-applicable forward sale price specified by the agreement (initially approximately $106.12 per share) or (ii) net settle the transaction in whole or in part through the delivery or receipt of cash or shares. The forward sale price is subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other fixed amounts specified in the agreement. In connection with the forward sale agreement, the forward seller, or its affiliates, borrowed from third parties and sold 1,070,003 shares of Entergy Corporation’s common stock. The gross sales price of these shares totaled approximately $114.5 million. In connection with the sale of these shares, Entergy Corporation paid the forward seller fees of approximately $1.1 million which have not been deducted from the gross sales price. Entergy Corporation did not receive any proceeds from such sales of borrowed shares.

Until settlement of the forward sale agreements occurs, earnings per share dilution resulting from the agreements, if any, is determined under the treasury stock method. Share dilution occurs when the average market price of Entergy Corporation’s common stock is higher than the average forward sales price. For the three months ended June 30, 2024 and 2023, 1,094,239 shares and 156,101 shares, respectively, under current and then-outstanding forward sale agreements were not included in the calculation of diluted earnings per share because their effect would have been antidilutive. For the six months ended June 30, 2024 and 2023, 1,502,247 and 78,050 shares, respectively, under current and then-outstanding forward sale agreements were not included in the calculation of diluted earnings per share because their effect would have been antidilutive.

Treasury Stock

During the six months ended June 30, 2024, Entergy Corporation reissued 10,757 shares of its previously repurchased common stock to satisfy stock option exercises, vesting of shares of restricted stock, and other stock-based awards. Entergy Corporation did not repurchase any of its common stock during the six months ended June 30, 2024.

Retained Earnings

On July 26, 2024, Entergy Corporation’s Board of Directors declared a common stock dividend of $1.13 per share, payable on September 3, 2024 to holders of record as of August 13, 2024.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Comprehensive Income

Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy and Entergy Louisiana. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended June 30, 2024 and 2023:


	Pension and Other Postretirement Benefit Plans
	2024	2023
	(In Thousands)
Beginning balance, April 1,	($166,128)	($189,727)

Amounts reclassified from accumulated other comprehensive income (loss)	246,489	(3,292)
Net other comprehensive income (loss) for the period	246,489	(3,292)

Ending balance, June 30,	$80,361	($193,019)

The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the six months ended June 30, 2024 and 2023:


	Pension and Other Postretirement Benefit Plans
	2024	2023
	(In Thousands)
Beginning balance, January 1,	($162,460)	($191,754)

Amounts reclassified from accumulated other comprehensive income (loss)	242,821	(1,265)
Net other comprehensive income (loss) for the period	242,821	(1,265)

Ending balance, June 30,	$80,361	($193,019)

The following table presents changes in accumulated other comprehensive income for Entergy Louisiana for the three months ended June 30, 2024 and 2023:


	Pension and Other Postretirement Benefit Plans
	2024	2023
	(In Thousands)
Beginning balance, April 1,	$52,774	$54,584

Amounts reclassified from accumulated other comprehensive income	(2,023)	(1,773)
Net other comprehensive loss for the period	(2,023)	(1,773)

Ending balance, June 30,	$50,751	$52,811

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The following table presents changes in accumulated other comprehensive income for Entergy Louisiana for the six months ended June 30, 2024 and 2023:


	Pension and Other Postretirement Benefit Plans
	2024	2023
	(In Thousands)
Beginning balance, January 1,	$54,798	$55,370

Amounts reclassified from accumulated other comprehensive income	(4,047)	(2,559)
Net other comprehensive loss for the period	(4,047)	(2,559)

Ending balance, June 30,	$50,751	$52,811

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) for Entergy for the three months ended June 30, 2024 and 2023 are as follows:


	Amounts reclassified from AOCI		Income Statement Location
	2024	2023
	(In Thousands)
Pension and other postretirement benefit plans
Amortization of prior service credit	$3,473	$3,398	(a)
Amortization of net gain	1,641	1,633	(a)
Settlement loss	(316,974)	(674)	(a)
Total amortization and settlement loss	(311,860)	4,357
Income taxes	65,371	(1,065)	Income taxes
Total amortization and settlement loss (net of tax)	($246,489)	$3,292

Total reclassifications for the period (net of tax)	($246,489)	$3,292

(a)These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension and other postretirement cost. See Note 6 to the financial statements herein for additional details.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) for Entergy for the six months ended June 30, 2024 and 2023 are as follows:


	Amounts reclassified from AOCI		Income Statement Location
	2024	2023
	(In Thousands)
Pension and other postretirement benefit plans
Amortization of prior service credit	$6,946	$6,795	(a)
Amortization of net gain	3,037	3,295	(a)
Settlement loss	(316,974)	(8,490)	(a)
Total amortization and settlement loss	(306,991)	1,600
Income taxes	64,170	(335)	Income taxes
Total amortization and settlement loss (net of tax)	($242,821)	$1,265

Total reclassifications for the period (net of tax)	($242,821)	$1,265

Total reclassifications out of accumulated other comprehensive income (AOCI) for Entergy Louisiana for the three months ended June 30, 2024 and 2023 are as follows:


	Amounts reclassified from AOCI		Income Statement Location
	2024	2023
	(In Thousands)
Pension and other postretirement benefit plans
Amortization of prior service credit	$1,136	$951	(a)
Amortization of net gain	1,632	1,564	(a)
Settlement loss	—	(89)	(a)
Total amortization and settlement loss	2,768	2,426
Income taxes	(745)	(653)	Income taxes
Total amortization and settlement loss (net of tax)	2,023	1,773

Total reclassifications for the period (net of tax)	$2,023	$1,773

(a)These accumulated other comprehensive income components are included in the computation of net periodic pension and other postretirement cost. See Note 6 to the financial statements herein for additional details.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Total reclassifications out of accumulated other comprehensive income (AOCI) for Entergy Louisiana for the six months ended June 30, 2024 and 2023 are as follows:


	Amounts reclassified from AOCI		Income Statement Location
	2024	2023
	(In Thousands)
Pension and other postretirement benefit plans
Amortization of prior service credit	$2,272	$1,902	(a)
Amortization of net gain	3,266	3,129	(a)
Settlement loss	—	(1,529)	(a)
Total amortization and settlement loss	5,538	3,502
Income taxes	(1,491)	(943)	Income taxes
Total amortization and settlement loss (net of tax)	4,047	2,559

Total reclassifications for the period (net of tax)	$4,047	$2,559

NOTE 4. REVOLVING CREDIT FACILITIES, LINES OF CREDIT, SHORT-TERM BORROWINGS, AND LONG-TERM DEBT (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)


Capacity	Borrowings	Letters of Credit	Capacity Available
(In Millions)
$3,000	$—	$4	$2,996

Entergy Corporation’s credit facility includes a covenant requiring Entergy to maintain a consolidated debt ratio, as defined, of 65% or less of its total capitalization. Entergy is in compliance with this covenant. If Entergy fails to meet this ratio, or if Entergy Corporation or one of the Registrant Subsidiaries (except Entergy New Orleans and System Energy) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the Entergy Corporation credit facility’s maturity date may occur.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each had credit facilities available as of June 30, 2024 as follows:


Company	Expiration Date	Amount of Facility	Interest Rate (a)	Amount Drawn as of June 30, 2024	Letters of Credit Outstanding as of June 30, 2024
Entergy Arkansas	April 2026	$25 million (b)	7.29%	$—	$—
Entergy Arkansas	June 2029	$300 million (c)	6.57%	$—	$—
Entergy Louisiana	June 2029	$400 million (c)	6.69%	$—	$—
Entergy Mississippi	June 2029	$300 million (c)	6.57%	$—	$—
Entergy New Orleans	June 2027	$25 million (c)	7.07%	$—	$—
Entergy Texas	June 2029	$300 million (c)	6.69%	$—	$1.1 million

(a)The interest rate is the estimated interest rate as of June 30, 2024 that would have been applied to outstanding borrowings under the facility.

(b)Borrowings under this Entergy Arkansas credit facility may be secured by a security interest in its accounts receivable at Entergy Arkansas’s option.

(c)The credit facility includes fronting commitments for the issuance of letters of credit against a portion of the borrowing capacity of the facility as follows: $5 million for Entergy Arkansas; $15 million for Entergy Louisiana; $5 million for Entergy Mississippi; $10 million for Entergy New Orleans; and $30 million for Entergy Texas.

The commitment fees on the credit facilities range from 0.075% to 0.375% of the undrawn commitment amount for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy Texas, and of the entire facility amount for Entergy New Orleans. Each of the credit facilities requires the Registrant Subsidiary borrower to maintain a debt ratio, as defined, of 65% or less of its total capitalization. Each Registrant Subsidiary is in compliance with this covenant.

In addition, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each has an uncommitted standby letter of credit facility as a means to post collateral to support its obligations to MISO and for other purposes. The following is a summary of the uncommitted standby letter of credit facilities as of June 30, 2024:


Company	Amount of Uncommitted Facility	Letter of Credit Fee	Letters of Credit Issued as of June 30, 2024 (a) (b)
Entergy Arkansas	$25 million	0.78%	$12.4 million
Entergy Louisiana	$125 million	0.78%	$20.7 million
Entergy Mississippi	$65 million	0.78%	$41.1 million
Entergy New Orleans	$15 million	1.625%	$0.5 million
Entergy Texas	$80 million	1.250%	$79.7 million

(a)As of June 30, 2024, letters of credit posted with MISO covered financial transmission rights exposure of $1.0 million for Entergy Arkansas, $0.7 million for Entergy Louisiana, $0.6 million for Entergy Mississippi, and $0.4 million for Entergy Texas. See Note 8 to the financial statements herein for discussion of financial transmission rights.

(b)As of June 30, 2024, the letters of credit issued for Entergy Mississippi include $30.9 million in MISO letters of credit and $10.2 million in non-MISO letters of credit outstanding under this facility.

The short-term borrowings of the Registrant Subsidiaries are limited to amounts authorized by the FERC. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas have FERC-

Entergy Corporation and Subsidiaries

Notes to Financial Statements

authorized short-term borrowing limits effective through April 2025. The FERC-authorized short-term borrowing limit for System Energy is effective through March 2025. In addition to borrowings from commercial banks, these companies may also borrow from the Entergy system money pool and from other internal short-term borrowing arrangements. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and the other internal borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings. Borrowings from internal and external short-term borrowings combined may not exceed the FERC-authorized limits. The following are the FERC-authorized limits for short-term borrowings and the outstanding short-term borrowings as of June 30, 2024 (aggregating both internal and external short-term borrowings) for the Registrant Subsidiaries:


	Authorized	Borrowings
	(In Millions)
Entergy Arkansas	$250	$—
Entergy Louisiana	$450	$—
Entergy Mississippi	$200	$40
Entergy New Orleans	$150	$—
Entergy Texas	$200	$—
System Energy	$200	$—

Vermont Yankee Credit Facility (Entergy Corporation)

In January 2019, Entergy Nuclear Vermont Yankee was transferred to NorthStar and its credit facility was assumed by Entergy Assets Management Operations, LLC (formerly Vermont Yankee Asset Retirement, LLC), Entergy Nuclear Vermont Yankee’s parent company that remains an Entergy subsidiary after the transfer. The credit facility has a borrowing capacity of $139 million and expires in December 2024. The commitment fee is currently 0.20% of the undrawn commitment amount. As of June 30, 2024, $139 million in cash borrowings were outstanding under the credit facility. The weighted-average interest rate for the six months ended June 30, 2024 was 6.95% on the drawn portion of the facility.

Variable Interest Entities (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)

See Note 17 to the financial statements in the Form 10-K for a discussion of the consolidation of the nuclear fuel company variable interest entities (VIEs). To finance the acquisition and ownership of nuclear fuel, the nuclear fuel company VIEs have credit facilities and three of the four VIEs also issue commercial paper, details of which follow as of June 30, 2024:


Company	Expiration Date	Amount of Facility	Weighted- Average Interest Rate on Borrowings (a)	Amount Outstanding as of June 30, 2024
		(Dollars in Millions)
Entergy Arkansas VIE	June 2027	$80	6.44%	$—
Entergy Louisiana River Bend VIE	June 2027	$105	6.43%	$27.9
Entergy Louisiana Waterford VIE	June 2027	$105	6.43%	$26.5
System Energy VIE	June 2027	$120	6.43%	$104.1

(a)Includes letter of credit fees and bank fronting fees on commercial paper issuances by the nuclear fuel company VIEs for Entergy Arkansas, Entergy Louisiana, and System Energy. The nuclear fuel company VIE for Entergy Louisiana River Bend does not issue commercial paper, but borrows directly on its bank credit facility.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The commitment fees on the credit facilities are 0.100% of the undrawn commitment amount for the Entergy Arkansas, Entergy Louisiana, and System Energy VIEs. Each credit facility requires the respective lessee of nuclear fuel (Entergy Arkansas, Entergy Louisiana, or Entergy Corporation as guarantor for System Energy) to maintain a consolidated debt ratio, as defined, of 70% or less of its total capitalization. Each lessee and guarantor is in compliance with this covenant.

The nuclear fuel company VIEs had notes payable that were included in debt on the respective balance sheets as of June 30, 2024 as follows:


Company	Description	Amount
Entergy Arkansas VIE	1.84% Series N due July 2026	$90 million
Entergy Arkansas VIE	5.54% Series O due May 2029	$70 million
Entergy Louisiana River Bend VIE	2.51% Series V due June 2027	$70 million
Entergy Louisiana Waterford VIE	5.94% Series J due September 2026	$70 million
System Energy VIE	2.05% Series K due September 2027	$90 million

In accordance with regulatory treatment, interest on the nuclear fuel company VIEs’ credit facilities, commercial paper, and long-term notes payable is reported in fuel expense.

As of June 30, 2024, Entergy Arkansas and Entergy Louisiana each has obtained financing authorization from the FERC that extends through April 2025 for issuances by its nuclear fuel company VIEs. System Energy has obtained financing authorization from the FERC that extends through March 2025 for issuances by its nuclear fuel company VIE.

Debt Issuances and Retirements

(Entergy Corporation)

In May 2024, Entergy Corporation issued $1.2 billion of junior subordinated debentures due December 2054. Entergy Corporation will pay interest at an annual rate of 7.125% through November 2029. Commencing on December 1, 2029, the annual rate will equal the five-year treasury rate as of the most recent reset interest determination date plus 2.67%. Entergy Corporation used the proceeds to repay a portion of outstanding commercial paper and for general corporate purposes.

(Entergy Arkansas)

In May 2024, Entergy Arkansas issued $400 million of 5.45% Series mortgage bonds due June 2034 and $400 million of 5.75% Series mortgage bonds due June 2054. Entergy Arkansas used a portion of the proceeds, together with other funds, to repay, at maturity, its $375 million of 3.70% Series mortgage bonds due June 2024 and to repay borrowings from the Entergy system money pool. Entergy Arkansas expects to use the remaining proceeds, together with other funds, to repay a portion of the purchase price of each of Driver Solar, Walnut Bend Solar, and/or West Memphis Solar, and for general corporate purposes.

(Entergy Louisiana)

In March 2024, Entergy Louisiana issued $500 million of 5.35% Series mortgage bonds due March 2034 and $700 million of 5.70% Series mortgage bonds due March 2054. Entergy Louisiana used a portion of the proceeds, together with other funds, to repay in March 2024 debt outstanding under its long-term revolving credit facility and to repay in April 2024, prior to maturity, its $400 million of 5.40% Series mortgage bonds due November 2024. Entergy Louisiana expects to use the remaining proceeds, together with other funds, to repay, at or prior to maturity, its $1 billion of 0.95% Series mortgage bonds due October 2024, for capital expenditures, and for general corporate purposes.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

(Entergy Mississippi)

In May 2024, Entergy Mississippi issued $300 million of 5.85% Series mortgage bonds due June 2054. Entergy Mississippi used the proceeds, together with other funds, to repay in June 2024, prior to maturity, its $100 million of 3.75% Series mortgage bonds due July 2024, to repay debt incurred under its long-term revolving credit facility, to repay borrowings from the Entergy system money pool, and for general corporate purposes.

(Entergy New Orleans)

In April 2024, Entergy New Orleans entered into a bond purchase agreement related to the sale of $150 million of mortgage bonds to be issued in May 2024. In May 2024, Entergy New Orleans issued (1) $35 million of 6.25% Series mortgage bonds due June 2029, (2) $65 million of 6.41% Series mortgage bonds due June 2031, and (3) $50 million of 6.54% Series mortgage bonds due June 2034. Entergy New Orleans used the proceeds, together with other funds, to repay, at maturity, its $85 million unsecured term loan due June 2024 and for general corporate purposes.

Fair Value

The book value and the fair value of long-term debt for Entergy and the Registrant Subsidiaries as of June 30, 2024 were as follows:


	Book Value of Long-Term Debt	Fair Value of Long-Term Debt (a)
	(In Thousands)
Entergy	$27,818,164	$24,689,579
Entergy Arkansas	$5,094,160	$4,470,941
Entergy Louisiana	$10,188,393	$8,964,781
Entergy Mississippi	$2,426,614	$2,093,565
Entergy New Orleans	$736,476	$695,029
Entergy Texas	$3,216,909	$2,823,011
System Energy	$822,762	$782,228

(a)Fair values were classified as Level 2 in the fair value hierarchy discussed in Note 8 to the financial statements herein.

The book value and the fair value of long-term debt for Entergy and the Registrant Subsidiaries as of December 31, 2023 were as follows:


	Book Value of Long-Term Debt	Fair Value of Long-Term Debt (a)
	(In Thousands)
Entergy	$25,107,896	$22,489,174
Entergy Arkansas	$4,673,080	$4,166,941
Entergy Louisiana	$9,420,689	$8,414,512
Entergy Mississippi	$2,229,510	$1,969,334
Entergy New Orleans	$677,450	$602,716
Entergy Texas	$3,225,092	$2,936,130
System Energy	$738,459	$696,168

Entergy Corporation and Subsidiaries

Notes to Financial Statements

(a)Fair values were classified as Level 2 in the fair value hierarchy discussed in Note 8 to the financial statements herein.

NOTE 5. STOCK-BASED COMPENSATION (Entergy Corporation)

Entergy grants stock and stock-based awards, which are described more fully in Note 12 to the financial statements in the Form 10-K. Awards under Entergy’s plans generally vest over three years.

Stock Options

In January 2024 the Board approved and Entergy granted long-term incentive awards in the form of options on 352,199 shares of its common stock under the 2019 Omnibus Incentive Plan with a fair value of $18.61 per option. As of June 30, 2024, there were options on 2,599,829 shares of common stock outstanding with a weighted-average exercise price of $101.84. The intrinsic value, which has no effect on net income, of the outstanding stock options is calculated by the positive difference between the weighted-average exercise price of the stock options granted and Entergy Corporation’s common stock price as of June 30, 2024. The aggregate intrinsic value of the stock options outstanding as of June 30, 2024 was $25.7 million.

The following table includes financial information for stock options for the three months ended June 30, 2024 and 2023:


	2024	2023
	(In Millions)
Compensation expense included in Entergy’s consolidated net income	$1.1	$1.1
Tax benefit recognized in Entergy’s consolidated net income	$0.3	$0.3
Compensation cost capitalized as part of fixed assets and materials and supplies	$0.5	$0.6

The following table includes financial information for stock options for the six months ended June 30, 2024 and 2023:


	2024	2023
	(In Millions)
Compensation expense included in Entergy’s consolidated net income	$2.2	$2.1
Tax benefit recognized in Entergy’s consolidated net income	$0.6	$0.6
Compensation cost capitalized as part of fixed assets and materials and supplies	$1.0	$1.1

Other Equity Awards

In January 2024 the Board approved and Entergy granted long-term incentive awards in the form of 409,947 restricted stock awards and 158,176 performance units under the 2019 Omnibus Incentive Plan. The restricted stock awards were made effective on January 25, 2024 and were valued at $99.08 per share, which was the closing price of Entergy Corporation’s common stock on that date. Shares of restricted stock have the same dividend and voting rights as other common stock, are considered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the three-year vesting period. One-third of the restricted stock awards and accrued dividends will vest upon each anniversary of the grant date.

The performance units represent the value of, and are settled with, one share of Entergy Corporation common stock at the end of the three-year performance period, plus dividends accrued during the performance

Entergy Corporation and Subsidiaries

Notes to Financial Statements

period on the number of performance units earned. To emphasize the importance of environmental stewardship, specifically of carbon-free generation and resilience, an environmental achievement measure was selected as one of the performance measures for the 2024-2026 performance period. Performance will be based eighty percent on relative total shareholder return and twenty percent on the environmental achievement measure. The performance units were granted on January 25, 2024 and eighty percent were valued at $124.65 per share based on various factors, primarily market conditions; and twenty percent were valued at $99.08 per share, the closing price of Entergy Corporation’s common stock on that date. Performance units have the same dividend and voting rights as other common stock and are considered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the three-year vesting period, and compensation cost for the portion of the award based on the selected environmental achievement measure will be adjusted based on the number of units that ultimately vest. See Note 12 to the financial statements in the Form 10-K for a description of the Long-Term Performance Unit Program.

The following table includes financial information for other outstanding equity awards for the three months ended June 30, 2024 and 2023:


	2024	2023
	(In Millions)
Compensation expense included in Entergy’s consolidated net income	$9.8	$10.1
Tax benefit recognized in Entergy’s consolidated net income	$2.5	$2.6
Compensation cost capitalized as part of fixed assets and materials and supplies	$4.6	$4.4

The following table includes financial information for other outstanding equity awards for the six months ended June 30, 2024 and 2023:


	2024	2023
	(In Millions)
Compensation expense included in Entergy’s consolidated net income	$19.7	$17.8
Tax benefit recognized in Entergy’s consolidated net income	$5.0	$4.6
Compensation cost capitalized as part of fixed assets and materials and supplies	$9.1	$7.6

NOTE 6. RETIREMENT AND OTHER POSTRETIREMENT BENEFITS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Components of Qualified Net Pension Cost

Entergy’s qualified pension costs, including amounts capitalized, for the second quarters of 2024 and 2023, included the following components:



	2024	2023
	(In Thousands)
Service cost - benefits earned during the period	$23,370	$25,366
Interest cost on projected benefit obligation	65,961	74,033
Expected return on assets	(89,506)	(95,752)

Recognized net loss	14,854	21,307
Settlement charges	325,253	7,246
Net pension costs	$339,932	$32,200

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy’s qualified pension costs, including amounts capitalized, for the six months ended June 30, 2024 and 2023, included the following components:


	2024	2023
	(In Thousands)
Service cost - benefits earned during the period	$46,746	$51,044
Interest cost on projected benefit obligation	136,587	149,734
Expected return on assets	(185,486)	(193,885)

Recognized net loss	29,974	43,654
Settlement charges	325,253	145,674

Net pension cost	$353,074	$196,221

The Registrant Subsidiaries’ qualified pension costs, including amounts capitalized, for their current and former employees for the second quarters of 2024 and 2023, included the following components:



2024	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Service cost - benefits earned during the period	$4,100	$5,551	$1,284	$440	$962	$1,383
Interest cost on projected benefit obligation	13,217	13,961	3,521	1,569	2,831	3,386
Expected return on assets	(18,155)	(19,447)	(5,113)	(2,203)	(4,077)	(4,633)

Recognized net loss	5,746	2,602	1,140	470	393	1,162
Settlement charges	—	—	—	—	—	611
Net pension cost	$4,908	$2,667	$832	$276	$109	$1,909



2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Service cost - benefits earned during the period	$4,661	$6,199	$1,456	$487	$1,090	$1,445
Interest cost on projected benefit obligation	13,917	14,944	3,824	1,669	3,162	3,435
Expected return on assets	(17,878)	(18,766)	(4,635)	(2,310)	(4,023)	(4,501)

Recognized net loss	5,763	4,992	1,627	484	1,059	1,274
Settlement charges	1,784	2,232	88	7	592	490
Net pension cost	$8,247	$9,601	$2,360	$337	$1,880	$2,143

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The Registrant Subsidiaries’ qualified pension costs, including amounts capitalized, for their current and former employees for the six months ended June 30, 2024 and 2023, included the following components:


2024	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Service cost - benefits earned during the period	$8,199	$11,102	$2,568	$880	$1,923	$2,767
Interest cost on projected benefit obligation	26,434	27,922	7,042	3,138	5,662	6,777
Expected return on assets	(36,310)	(38,894)	(10,226)	(4,407)	(8,154)	(9,281)

Recognized net loss	11,492	5,204	2,280	940	786	2,327
Settlement charges	—	—	—	—	—	611
Net pension cost	$9,815	$5,334	$1,664	$551	$217	$3,201


2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Service cost - benefits earned during the period	$9,410	$12,479	$2,938	$978	$2,197	$2,912
Interest cost on projected benefit obligation	28,197	30,323	7,754	3,384	6,404	6,963
Expected return on assets	(35,954)	(37,999)	(9,519)	(4,577)	(8,175)	(9,039)


Recognized net loss	12,732	9,956	3,392	997	2,049	2,735
Settlement charges	23,958	38,230	11,743	1,700	10,270	5,290
Net pension cost	$38,343	$52,989	$16,308	$2,482	$12,745	$8,861

Non-Qualified Net Pension Cost

Entergy recognized $2.7 million and $8.8 million in pension cost for its non-qualified pension plans for the second quarters of 2024 and 2023, respectively. For the second quarter of 2024, there were no settlement charges related to the payment of lump sum benefits out of the plan. Included in the pension cost for non-qualified pension plans for the second quarter of 2023 were settlement charges of $4.6 million related to the payment of lump sum benefits out of the plans. Entergy recognized $5.4 million and $18 million in pension cost for its non-qualified pension plans for the six months ended June 30, 2024 and 2023, respectively. For the six months ended June 30, 2024, there were no settlement charges related to the payment of lump sum benefits out of the plan. Included in the pension cost non-qualified pension plans for the six months ended June 30, 2023 were settlement charges of $9.3 million related to the payment of lump sum benefits out of the plans.

The Registrant Subsidiaries recognized the following pension cost for their current and former employees for their non-qualified pension plans for the second quarters of 2024 and 2023:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2024	$68	$51	$83	$31	$62
2023	$63	$25	$87	$33	$63

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The Registrant Subsidiaries recognized the following pension cost for their current and former employees for their non-qualified pension plans for the six months ended June 30, 2024 and 2023:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
2024	$136	$102	$166	$61	$124
2023	$513	$52	$639	$66	$126

For the second quarters of 2024 and 2023, there were no settlement charges for the Registrant Subsidiaries related to the payment of lump sum benefits out of the plan. For the six months ended June 30, 2024, there were no settlement charges for the Registrant Subsidiaries related to the payment of lump sum benefits out of the plan. For the six months ended June 30, 2023, there were settlement charges of $379 thousand and $453 thousand for Entergy Arkansas and Entergy Mississippi, respectively, included in the non-qualified pension costs above related to the payment of lump sum benefits out of the plan.

Components of Net Other Postretirement Benefits Cost (Income)

Entergy’s other postretirement benefits income, including amounts capitalized, for the second quarters of 2024 and 2023, included the following components:



	2024	2023
	(In Thousands)
Service cost - benefits earned during the period	$3,126	$3,664
Interest cost on accumulated postretirement benefit obligation (APBO)	9,852	10,568
Expected return on assets	(10,569)	(9,183)

Amortization of prior service credit	(5,720)	(5,640)
Recognized net gain	(2,761)	(2,862)
Net other postretirement benefits income	($6,072)	($3,453)

Entergy’s other postretirement benefits income, including amounts capitalized, for the six months ended June 30, 2024 and 2023, included the following components:


	2024	2023
	(In Thousands)
Service cost - benefits earned during the period	$6,252	$7,328
Interest cost on accumulated postretirement benefit obligation (APBO)	19,704	21,136
Expected return on assets	(21,138)	(18,366)

Amortization of prior service credit	(11,440)	(11,280)
Recognized net gain	(5,522)	(5,724)
Net other postretirement benefits income	($12,144)	($6,906)

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The Registrant Subsidiaries’ other postretirement benefits cost (income), including amounts capitalized, for their current and former employees for the second quarters of 2024 and 2023, included the following components:



2024	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Service cost - benefits earned during the period	$642	$700	$184	$51	$168	$175
Interest cost on APBO	1,833	1,999	486	253	603	398
Expected return on assets	(4,384)	—	(1,372)	(1,479)	(2,539)	(728)

Amortization of prior service cost (credit)	524	(1,136)	(239)	(229)	(1,093)	(73)
Recognized net (gain) loss	—	(1,738)	15	19	148	—
Net other postretirement benefits income	($1,385)	($175)	($926)	($1,385)	($2,713)	($228)



2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Service cost - benefits earned during the period	$741	$845	$220	$59	$202	$189
Interest cost on APBO	2,001	2,233	543	290	649	432
Expected return on assets	(3,778)	—	(1,179)	(1,316)	(2,194)	(634)


Amortization of prior service cost (credit)	524	(951)	(239)	(229)	(1,093)	(73)
Recognized net (gain) loss	43	(1,764)	21	117	229	—
Net other postretirement benefits (income) cost	($469)	$363	($634)	($1,079)	($2,207)	($86)

The Registrant Subsidiaries’ other postretirement benefits cost (income), including amounts capitalized, for their current and former employees for the six months ended June 30, 2024 and 2023, included the following components:


2024	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Service cost - benefits earned during the period	$1,284	$1,400	$368	$102	$336	$350
Interest cost on APBO	3,666	3,998	972	506	1,206	796
Expected return on assets	(8,768)	—	(2,744)	(2,958)	(5,078)	(1,456)
Amortization of prior service cost (credit)	1,048	(2,272)	(478)	(458)	(2,186)	(146)
Recognized net (gain) loss	—	(3,476)	30	38	296	—
Net other postretirement benefits income	($2,770)	($350)	($1,852)	($2,770)	($5,426)	($456)

Entergy Corporation and Subsidiaries

Notes to Financial Statements


2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Service cost - benefits earned during the period	$1,482	$1,690	$440	$118	$404	$378
Interest cost on APBO	4,002	4,466	1,086	580	1,298	864
Expected return on assets	(7,556)	—	(2,358)	(2,632)	(4,388)	(1,268)


Amortization of prior service cost (credit)	1,048	(1,902)	(478)	(458)	(2,186)	(146)
Recognized net (gain) loss	86	(3,528)	42	234	458	—
Net other postretirement benefits (income) cost	($938)	$726	($1,268)	($2,158)	($4,414)	($172)

Reclassification out of Accumulated Other Comprehensive Income (Loss)

Entergy and Entergy Louisiana reclassified the following costs out of accumulated other comprehensive income (loss) (before taxes and including amounts capitalized) for the second quarters of 2024 and 2023:



2024	Qualified Pension Costs	Other Postretirement Costs	Non-Qualified Pension Costs	Total
	(In Thousands)
Entergy
Amortization of prior service credit (cost)	$—	$3,513	($40)	$3,473
Amortization of net gain (loss)	(894)	2,615	(80)	1,641

Settlement loss	(316,974)	—	—	(316,974)
	($317,868)	$6,128	($120)	($311,860)
Entergy Louisiana
Amortization of prior service credit	$—	$1,136	$—	$1,136
Amortization of net gain (loss)	(104)	1,738	(2)	1,632

	($104)	$2,874	($2)	$2,768



2023	Qualified Pension Costs	Other Postretirement Costs	Non-Qualified Pension Costs	Total
	(In Thousands)
Entergy
Amortization of prior service credit (cost)	$—	$3,510	($112)	$3,398
Amortization of net gain (loss)	(1,104)	2,897	(160)	1,633

Settlement loss	(310)	—	(364)	(674)
	($1,414)	$6,407	($636)	$4,357
Entergy Louisiana
Amortization of prior service credit	$—	$951	$—	$951
Amortization of net gain (loss)	(200)	1,764	—	1,564
Settlement loss	(89)	—	—	(89)
	($289)	$2,715	$—	$2,426

Entergy Corporation and Subsidiaries

Notes to Financial Statements


2024	Qualified Pension Costs	Other Postretirement Costs	Non-Qualified Pension Costs	Total
	(In Thousands)
Entergy
Amortization of prior service credit (cost)	$—	$7,026	($80)	$6,946
Amortization of net gain (loss)	(2,033)	5,230	(160)	3,037

Settlement loss	(316,974)	—	—	(316,974)
	($319,007)	$12,256	($240)	($306,991)
Entergy Louisiana
Amortization of prior service credit	$—	$2,272	$—	$2,272
Amortization of net gain (loss)	(208)	3,476	(2)	3,266

	($208)	$5,748	($2)	$5,538


2023	Qualified Pension Costs	Other Postretirement Costs	Non-Qualified Pension Costs	Total
	(In Thousands)
Entergy
Amortization of prior service credit (cost)	$—	$7,020	($225)	$6,795
Amortization of net gain (loss)	(2,144)	5,796	(357)	3,295

Settlement loss	(6,957)	—	(1,533)	(8,490)
	($9,101)	$12,816	($2,115)	$1,600
Entergy Louisiana
Amortization of prior service credit	$—	$1,902	$—	$1,902
Amortization of net gain (loss)	(398)	3,528	(1)	3,129
Settlement loss	(1,529)	—	—	(1,529)
	($1,927)	$5,430	($1)	$3,502

Accounting for Pension and Other Postretirement Benefits

In accordance with accounting standards, the other components of net benefit cost are required to be presented in the income statement separately from the service cost component and outside a subtotal of income from operations and are presented by Entergy in miscellaneous - net in other income.

Qualified Pension Settlement Costs

In May 2024, Entergy Corporation entered into a commitment agreement by and between Entergy Corporation, Newport Trust Company, LLC, as independent fiduciary of Entergy Corporation Retirement Plan II for Non-Bargaining Employees, Entergy Corporation Retirement Plan II for Bargaining Employees, Entergy Corporation Retirement Plan III, and Entergy Corporation Retirement Plan IV for Bargaining Employees (the Pension Plans), and the Metropolitan Life Insurance Company (MetLife), under which the Pension Plans purchased a nonparticipating single premium group annuity contract from MetLife to settle approximately $1.157 billion of benefit liabilities of the Pension Plans.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The group annuity contract primarily covers a population that includes approximately 3,400 non-utility business retirees, joint annuitants, beneficiaries, and alternate payees who commenced benefit payments from the Pension Plans on or before March 1, 2024 (Transferred Participants). MetLife irrevocably guarantees and assumes the sole obligation to make future monthly pension benefit payments to the Transferred Participants as provided under its group annuity contract, with direct payments beginning September 1, 2024. The aggregate amount of each Transferred Participant’s payment under the group annuity contract will be equal to the amount of each individual’s payment under the Pension Plans.

The purchase of the group annuity contract was funded directly by assets of the Pension Plans. The transferred pension liability required no additional funding prior to transfer, as the liability was fully funded. As a result of the transaction, Entergy recognized a one-time non-cash pension settlement charge in the second quarter of 2024 of $325 million, of which $8 million was recorded at Utility, as described below, and $317 million was recorded at Parent & Other. The $317 million settlement charge at Parent & Other is reflected in Miscellaneous - net in Other income (deductions) on the consolidated income statements.

For the six months ended June 30, 2023, lump sum benefit payments from the Entergy Corporation Retirement Plan for Bargaining Employees and the Entergy Corporation Retirement Plan for Non-Bargaining Employees exceeded the sum of the Plans’ 2023 service and interest cost, resulting in settlement costs. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy each participate in one or both of the Entergy Corporation Retirement Plan for Bargaining Employees and the Entergy Corporation Retirement Plan for Non-Bargaining Employees and incurred settlement costs.

In accordance with accounting standards, settlement accounting requires immediate recognition of the portion of previously unrecognized losses associated with the settled portion of the plan’s pension liability. Similar to other pension costs, the settlement costs were included with employee labor costs and charged to expense and capital in the same manner that labor costs were charged. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans each received regulatory approval to defer the expense portion of the settlement costs, with future amortization of the deferred settlement expense over the period in which the expense otherwise would be recorded had the immediate recognition not occurred.

In September 2020, Entergy Texas elected to establish a reserve, in accordance with PUCT regulations, to track the surplus or deficit in the annual amount of actuarially determined pension and other postretirement benefits chargeable to Entergy Texas’s expense. The reserve amounts recorded are evaluated in each rate case filed by Entergy Texas and an amortization period is determined at that time.

See Note 11 to the financial statements in the Form 10-K for further discussion of pension and other postretirement benefits costs.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Employer Contributions

Based on current assumptions, Entergy expects to contribute $270 million to its qualified pension plans in 2024. As of June 30, 2024, Entergy had contributed $111.4 million to its pension plans. Based on current assumptions, the Registrant Subsidiaries expect to contribute the following to qualified pension plans for their current and former employees in 2024:


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Expected 2024 pension contributions	$55,112	$48,401	$14,980	$4,931	$8,272	$16,650
Pension contributions made through June 2024	$22,784	$19,862	$7,240	$1,499	$3,037	$6,666
Remaining estimated pension contributions to be made in 2024	$32,328	$28,539	$7,740	$3,432	$5,235	$9,984

NOTE 7. BUSINESS SEGMENT INFORMATION (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Entergy has a single reportable segment, Utility, which includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas, Mississippi, Texas, and Louisiana, including the City of New Orleans; and operation of a small natural gas distribution business in portions of Louisiana. The Utility segment reflects management’s primary basis of organization with a predominant focus on its utility operations in the Gulf South. Parent & Other includes the parent company, Entergy Corporation, and other business activity, including Entergy’s non-utility operations business which owns interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers and also provides decommissioning services to nuclear power plants owned by non-affiliated entities in the United States.

Entergy’s segment financial information for the second quarters of 2024 and 2023 was as follows:


	Utility	Parent & Other	Eliminations	Consolidated
	(In Thousands)
2024
Operating revenues	$2,941,404	$12,227	($11)	$2,953,620
Income taxes	$113,017	($79,383)	$—	$33,634
Consolidated net income (loss)	$443,319	($312,702)	($78,885)	$51,732
2023
Operating revenues	$2,818,747	$27,287	($8)	$2,846,026
Income taxes	$144,489	($9,693)	$—	$134,796
Consolidated net income (loss)	$514,498	($40,559)	($81,925)	$392,014

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy’s segment financial information for the six months ended June 30, 2024 and 2023 was as follows:


	Utility	Parent & Other	Eliminations	Consolidated
	(In Thousands)
2024
Operating revenues	$5,713,577	$34,703	($32)	$5,748,248
Income taxes	$147,565	($92,938)	$—	$54,627
Consolidated net income (loss)	$639,299	($352,585)	($158,446)	$128,268
Total assets as of June 30, 2024	$66,945,968	$925,848	($5,105,519)	$62,766,297
2023
Operating revenues	$5,766,738	$60,358	($11)	$5,827,085
Income taxes	$78,363	($22,542)	$—	$55,821
Consolidated net income (loss)	$912,664	($70,953)	($137,399)	$704,312
Total assets as of December 31, 2023	$63,887,038	$836,598	($5,020,240)	$59,703,396

Eliminations are primarily intersegment activity. All of Entergy’s goodwill is related to the Utility segment.

Registrant Subsidiaries

Each of the Registrant Subsidiaries has one reportable segment, which is an integrated utility business, except for System Energy, which is an electricity generation business. Each of the Registrant Subsidiaries’ operations are managed on an integrated basis by that company because of the substantial effect of cost-based rates and regulatory oversight on the business process, cost structures, and operating results. Management allocates resources and assesses financial performance on a consolidated basis.

NOTE 8. RISK MANAGEMENT AND FAIR VALUES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Market Risk

In the normal course of business, Entergy is exposed to a number of market risks. Market risk is the potential loss that Entergy may incur as a result of changes in the market or fair value of a particular commodity or instrument. All financial and commodity-related instruments, including derivatives, are subject to market risk including commodity price risk, equity price, and interest rate risk. Entergy uses derivatives primarily to mitigate commodity price risk, particularly power price and fuel price risk.

The Utility has limited exposure to the effects of market risk because it operates primarily under cost-based rate regulation. To the extent approved by their retail regulators, the Utility operating companies use commodity and financial instruments to hedge the exposure to price volatility inherent in their purchased power, fuel, and gas purchased for resale costs, that are recovered from customers.

Entergy’s exposure to market risk is determined by a number of factors, including the size, term, composition, and diversification of positions held, as well as market volatility and liquidity. For instruments such as options, the time period during which the option may be exercised and the relationship between the current market price of the underlying instrument and the option’s contractual strike or exercise price also affects the level of market risk. A significant factor influencing the overall level of market risk to which Entergy is exposed is its use of hedging techniques to mitigate such risk. Hedging instruments and volumes are chosen based on ability to mitigate risk associated with future energy and capacity prices; however, other considerations are factored into hedge product and volume decisions including corporate liquidity, corporate credit ratings, counterparty credit risk,

Entergy Corporation and Subsidiaries

Notes to Financial Statements

hedging costs, firm settlement risk, and product availability in the marketplace. Entergy manages market risk by actively monitoring compliance with stated risk management policies as well as monitoring the effectiveness of its hedging policies and strategies. Entergy’s risk management policies limit the amount of total net exposure and rolling net exposure during the stated periods. These policies, including related risk limits, are regularly assessed to ensure their appropriateness given Entergy’s objectives.

Derivatives

Entergy designates a significant portion of its derivative instruments as normal purchase/normal sale transactions due to their physical settlement provisions, including power purchase and sales agreements, fuel purchase agreements, and capacity contracts. Certain derivative instruments do not qualify for designation as normal purchase/normal sale transactions due to their financial settlement provisions. See further discussion below regarding the accounting for these derivative instruments.

Entergy manages fuel price volatility for its Louisiana jurisdictions (Entergy Louisiana and Entergy New Orleans) and Entergy Mississippi through the purchase of natural gas swaps and options that financially settle against either the average Henry Hub Gas Daily prices or the NYMEX Henry Hub. These swaps and options are marked-to-market through fuel expense with offsetting regulatory assets or liabilities. All benefits or costs of the program are recorded in fuel costs. The notional volumes of these swaps are based on a portion of projected annual exposure to gas price volatility for electric generation at Entergy Louisiana and Entergy Mississippi and projected winter purchases for gas distribution at Entergy New Orleans. The maximum length of time over which Entergy has executed natural gas swaps and options as of June 30, 2024 is 9 months for Entergy Mississippi. The total volume of natural gas swaps and options outstanding as of June 30, 2024 is 10,988,500 MMBtu for Entergy and Entergy Mississippi. As of June 30, 2024, Entergy Louisiana and Entergy New Orleans had no outstanding natural gas swaps or options. Credit support for these natural gas swaps and options is covered by master agreements that do not require Entergy to provide collateral based on mark-to-market value, but do carry adequate assurance language that may lead to requests for collateral.

During the second quarter 2024, Entergy participated in the annual financial transmission rights auction process for the MISO planning year of June 1, 2024 through May 31, 2025. Financial transmission rights are derivative instruments that represent economic hedges of future congestion charges that will be incurred in serving Entergy’s customer load. They are not designated as hedging instruments. Entergy initially records financial transmission rights at their estimated fair value and subsequently adjusts the carrying value to their estimated fair value at the end of each accounting period prior to settlement. Unrealized gains or losses on financial transmission rights held by the non-utility operations are included in operating revenues. The Utility operating companies recognize regulatory liabilities or assets for unrealized gains or losses on financial transmission rights. The total volume of financial transmission rights outstanding as of June 30, 2024 is 133,533 GWh for Entergy, including 31,900 GWh for Entergy Arkansas, 57,200 GWh for Entergy Louisiana, 19,179 GWh for Entergy Mississippi, 5,469 GWh for Entergy New Orleans, and 19,448 GWh for Entergy Texas. Credit support for financial transmission rights held by the Utility operating companies is covered by cash and/or letters of credit issued by each Utility operating company as required by MISO. Credit support for financial transmission rights held by Entergy’s non-utility operations business is covered by cash. No cash or letters of credit were required to be posted for financial transmission rights exposure for the non-utility operations business as of June 30, 2024 and December 31, 2023. Letters of credit posted with MISO covered the financial transmission rights exposure for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy Texas as of June 30, 2024 and for Entergy Mississippi, Entergy New Orleans, and Entergy Texas as of December 31, 2023.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The fair values of Entergy’s derivative instruments not designated as hedging instruments on the consolidated balance sheets as of June 30, 2024 and December 31, 2023 are shown in the table below. Certain investments, including those not designated as hedging instruments, are subject to master netting agreements and are presented in the balance sheet on a net basis in accordance with accounting guidance for derivatives and hedging.


Instrument	Balance Sheet Location	Gross Fair Value (a)	Offsetting Position (b)	Net Fair Value (c) (d)
		(In Millions)
2024
Assets:
Financial transmission rights	Prepayments and other	$49	$—	$49

Liabilities:
Natural gas swaps and options	Other current liabilities	$2	$—	$2


2023
Assets:
Financial transmission rights	Prepayments and other	$21	$—	$21

Liabilities:
Natural gas swaps and options	Other current liabilities	$11	$—	$11

(a)Represents the gross amounts of recognized assets/liabilities

(b)Represents the netting of fair value balances with the same counterparty

(c)Represents the net amounts of assets/liabilities presented on the Entergy Corporation and Subsidiaries’ Consolidated Balance Sheets

(d)Excludes letters of credit in the amount of $3 million posted as of June 30, 2024 and $2 million posted as of December 31, 2023

The effects of Entergy’s derivative instruments not designated as hedging instruments on the consolidated income statements for the three months ended June 30, 2024 and 2023 are as follows:


Instrument	Income Statement location		Amount of gain (loss) recorded in the income statement
			(In Millions)
2024
Natural gas swaps and options	Fuel, fuel-related expenses, and gas purchased for resale	(a)	$3
Financial transmission rights	Purchased power expense	(b)	$47


2023
Natural gas swaps and options	Fuel, fuel-related expenses, and gas purchased for resale	(a)	($1)
Financial transmission rights	Purchased power expense	(b)	$32

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The effects of Entergy’s derivative instruments not designated as hedging instruments on the consolidated income statements for the six months ended June 30, 2024 and 2023 are as follows:


Instrument	Income Statement location		Amount of gain (loss) recorded in the income statement
			(In Millions)
2024
Natural gas swaps and options	Fuel, fuel-related expenses, and gas purchased for resale	(a)	($3)
Financial transmission rights	Purchased power expense	(b)	$100


2023
Natural gas swaps and options	Fuel, fuel-related expenses, and gas purchased for resale	(a)	($38)
Financial transmission rights	Purchased power expense	(b)	$48

(a)Due to regulatory treatment, the natural gas swaps and options are marked-to-market through fuel, fuel-related expenses, and gas purchased for resale and then such amounts are simultaneously reversed and recorded as an offsetting regulatory asset or liability. The gains or losses recorded as fuel expenses when the swaps and options are settled are recovered or refunded through fuel cost recovery mechanisms.

(b)Due to regulatory treatment, the changes in the estimated fair value of financial transmission rights for the Utility operating companies are recorded through purchased power expense and then such amounts are simultaneously reversed and recorded as an offsetting regulatory asset or liability. The gains or losses recorded as purchased power expense when the financial transmission rights for the Utility operating companies are settled are recovered or refunded through fuel cost recovery mechanisms.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The fair values of derivative instruments not designated as hedging instruments on the Registrant Subsidiaries’ balance sheets as of June 30, 2024 and December 31, 2023 are shown in the tables below. Certain investments, including those not designated as hedging instruments, are subject to master netting agreements and are presented in the balance sheet on a net basis in accordance with accounting guidance for derivatives and hedging.


Instrument	Balance Sheet Location	Gross Fair Value (a)	Offsetting Position (b)	Net Fair Value (c) (d)	Registrant
		(In Millions)
2024
Assets:





Financial transmission rights	Prepayments and other	$16.1	$—	$16.1	Entergy Arkansas
Financial transmission rights	Prepayments and other	$19.9	($0.1)	$19.8	Entergy Louisiana
Financial transmission rights	Prepayments and other	$3.6	$—	$3.6	Entergy Mississippi
Financial transmission rights	Prepayments and other	$2.6	$—	$2.6	Entergy New Orleans
Financial transmission rights	Prepayments and other	$6.6	$—	$6.6	Entergy Texas

Liabilities:


Natural gas swaps	Other current liabilities	$1.5	$—	$1.5	Entergy Mississippi




2023
Assets:





Financial transmission rights	Prepayments and other	$6.0	$—	$6.0	Entergy Arkansas
Financial transmission rights	Prepayments and other	$9.8	$—	$9.8	Entergy Louisiana
Financial transmission rights	Prepayments and other	$1.4	$—	$1.4	Entergy Mississippi
Financial transmission rights	Prepayments and other	$1.1	$—	$1.1	Entergy New Orleans
Financial transmission rights	Prepayments and other	$2.7	($0.3)	$2.4	Entergy Texas

Liabilities:


Natural gas swaps and options	Other current liabilities	$0.4	$—	$0.4	Entergy Louisiana

Natural gas swaps	Other current liabilities	$10.1	$—	$10.1	Entergy Mississippi
Natural gas swaps	Other current liabilities	$0.6	$—	$0.6	Entergy New Orleans

(a)Represents the gross amounts of recognized assets/liabilities

(b)Represents the netting of fair value balances with the same counterparty

(c)Represents the net amounts of assets/liabilities presented on the Registrant Subsidiaries’ balance sheets

(d)As of June 30, 2024, letters of credit posted with MISO covered financial transmission rights exposure of $1.0 million for Entergy Arkansas, $0.7 million for Entergy Louisiana, $0.6 million for Entergy Mississippi,

Entergy Corporation and Subsidiaries

Notes to Financial Statements

and $0.4 million for Entergy Texas. As of December 31, 2023, letters of credit posted with MISO covered financial transmission rights exposure of $1.2 million for Entergy Arkansas, $0.5 million for Entergy Louisiana, $0.3 million for Entergy Mississippi, and $0.1 million for Entergy Texas.

The effects of derivative instruments not designated as hedging instruments on the Registrant Subsidiaries’ income statements for the three months ended June 30, 2024 and 2023 are as follows:


Instrument	Income Statement Location	Amount of gain (loss) recorded in the income statement		Registrant
		(In Millions)
2024

Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($3.0)	(a)	Entergy Mississippi


Financial transmission rights	Purchased power expense	$12.0	(b)	Entergy Arkansas
Financial transmission rights	Purchased power expense	$25.0	(b)	Entergy Louisiana
Financial transmission rights	Purchased power expense	$2.1	(b)	Entergy Mississippi
Financial transmission rights	Purchased power expense	$3.3	(b)	Entergy New Orleans
Financial transmission rights	Purchased power expense	$4.6	(b)	Entergy Texas

2023
Natural gas swaps and options	Fuel, fuel-related expenses, and gas purchased for resale	$0.8	(a)	Entergy Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($1.2)	(a)	Entergy Mississippi
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	$0.1	(a)	Entergy New Orleans

Financial transmission rights	Purchased power expense	$4.1	(b)	Entergy Arkansas
Financial transmission rights	Purchased power expense	$19.5	(b)	Entergy Louisiana
Financial transmission rights	Purchased power expense	$3.0	(b)	Entergy Mississippi
Financial transmission rights	Purchased power expense	$1.5	(b)	Entergy New Orleans
Financial transmission rights	Purchased power expense	$3.5	(b)	Entergy Texas

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The effects of derivative instruments not designated as hedging instruments on the Registrant Subsidiaries’ income statements for the six months ended June 30, 2024 and 2023 are as follows:


Instrument	Income Statement Location	Amount of gain (loss) recorded in the income statement		Registrant
		(In Millions)
2024

Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	$2.3	(a)	Entergy Mississippi
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	$0.5	(a)	Entergy New Orleans

Financial transmission rights	Purchased power expense	$38.9	(b)	Entergy Arkansas
Financial transmission rights	Purchased power expense	$41.2	(b)	Entergy Louisiana
Financial transmission rights	Purchased power expense	$3.1	(b)	Entergy Mississippi
Financial transmission rights	Purchased power expense	$4.4	(b)	Entergy New Orleans
Financial transmission rights	Purchased power expense	$12.1	(b)	Entergy Texas

2023
Natural gas swaps and options	Fuel, fuel-related expenses, and gas purchased for resale	($5.7)	(a)	Entergy Louisiana
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	$29.8	(a)	Entergy Mississippi
Natural gas swaps	Fuel, fuel-related expenses, and gas purchased for resale	($2.1)	(a)	Entergy New Orleans

Financial transmission rights	Purchased power expense	$8.0	(b)	Entergy Arkansas
Financial transmission rights	Purchased power expense	$28.3	(b)	Entergy Louisiana
Financial transmission rights	Purchased power expense	$4.5	(b)	Entergy Mississippi
Financial transmission rights	Purchased power expense	$2.4	(b)	Entergy New Orleans
Financial transmission rights	Purchased power expense	$4.2	(b)	Entergy Texas

Fair Values

The estimated fair values of Entergy’s financial instruments and derivatives are determined using historical prices, bid prices, market quotes, and financial modeling. Considerable judgment is required in developing the estimates of fair value. Therefore, estimates are not necessarily indicative of the amounts that Entergy could realize in a current market exchange. Gains or losses realized on financial instruments are reflected in future rates and therefore do not affect net income. Entergy considers the carrying amounts of most financial instruments classified

Entergy Corporation and Subsidiaries

Notes to Financial Statements

as current assets and liabilities to be a reasonable estimate of their fair value because of the short maturity of these instruments.

Accounting standards define fair value as an exit price, or the price that would be received to sell an asset or the amount that would be paid to transfer a liability in an orderly transaction between knowledgeable market participants at the date of measurement. Entergy and the Registrant Subsidiaries use assumptions or market input data that market participants would use in pricing assets or liabilities at fair value. The inputs can be readily observable, corroborated by market data, or generally unobservable. Entergy and the Registrant Subsidiaries endeavor to use the best available information to determine fair value.

Accounting standards establish a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy establishes the highest priority for unadjusted market quotes in an active market for the identical asset or liability and the lowest priority for unobservable inputs.

The three levels of the fair value hierarchy are:

Level 1 - Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of individually owned common stocks, cash equivalents (temporary cash investments, securitization recovery trust account, and escrow accounts), debt instruments, and gas swaps traded on exchanges with active markets. Cash equivalents includes all unrestricted highly liquid debt instruments with an original or remaining maturity of three months or less at the date of purchase.
Level 2 - Level 2 inputs are inputs other than quoted prices included in Level 1 that are, either directly or indirectly, observable for the asset or liability at the measurement date. Assets are valued based on prices derived by independent third parties that use inputs such as benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. Prices are reviewed and can be challenged with the independent parties and/or overridden by Entergy if it is believed such would be more reflective of fair value. Level 2 inputs include the following:

–quoted prices for similar assets or liabilities in active markets;

–quoted prices for identical assets or liabilities in inactive markets;

–inputs other than quoted prices that are observable for the asset or liability; or

–inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 2 consists primarily of individually-owned debt instruments and gas swaps and options valued using observable inputs.

Level 3 - Level 3 inputs are pricing inputs that are generally less observable or unobservable from objective sources. These inputs are used with internally developed methodologies to produce management’s best estimate of fair value for the asset or liability. Level 3 consists primarily of financial transmission rights.

The values of financial transmission rights are based on unobservable inputs, including estimates of congestion costs in MISO between applicable generation and load pricing nodes based on the 50th percentile of historical prices. They are classified as Level 3 assets and liabilities. The valuations of these assets and liabilities are performed by the Office of Corporate Risk Oversight. The values are calculated internally and verified against the data published by MISO. Entergy’s Accounting group reviews these valuations for reasonableness, with the assistance of others within the organization with knowledge of the various inputs and assumptions used in the

Entergy Corporation and Subsidiaries

Notes to Financial Statements

valuation. The Office of Corporate Risk Oversight reports to the Vice President and Treasurer. The Accounting group reports to the Chief Accounting Officer.

The following tables set forth, by level within the fair value hierarchy, Entergy’s assets and liabilities that are accounted for at fair value on a recurring basis as of June 30, 2024 and December 31, 2023. The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect placement within the fair value hierarchy levels.


2024	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$1,272	$—	$—	$1,272

Decommissioning trust funds (a):

Equity securities	54	—	—	54
Debt securities	721	1,201	—	1,922
Common trusts (b)				3,289

Securitization recovery trust account	4	—	—	4
Storm reserve escrow accounts	333	—	—	333

Financial transmission rights	—	—	49	49
	$2,384	$1,201	$49	$6,923

Liabilities:

Gas hedge contracts	$2	$—	$—	$2


2023	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$61	$—	$—	$61
Decommissioning trust funds (a):
Equity securities	24	—	—	24
Debt securities	611	1,159	—	1,770
Common trusts (b)				3,070

Securitization recovery trust account	8	—	—	8
Storm reserve escrow accounts	323	—	—	323

Financial transmission rights	—	—	21	21
	$1,027	$1,159	$21	$5,277
Liabilities:

Gas hedge contracts	$11	$—	$—	$11

(a)The decommissioning trust funds hold equity and fixed income securities. Equity securities are invested to approximate the returns of major market indices. Fixed income securities are held in various governmental and corporate securities. See Note 9 to the financial statements herein for additional information on the investment portfolios.

(b)Common trust funds are not publicly quoted and are valued by the fund administrators using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value table. The fund administrator of these investments allows daily trading at the net asset value and trades settle at a later date.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The following table sets forth a reconciliation of changes in the net assets for the fair value of financial transmission rights classified as Level 3 in the fair value hierarchy for the three months ended June 30, 2024 and 2023:


	2024	2023
	(In Millions)
Balance as of April 1,	$9	$7
Total gains (losses) for the period


Included as a regulatory liability/asset	34	23
Issuances of financial transmission rights	53	42

Settlements	(47)	(32)
Balance as of June 30,	$49	$40


	2024	2023
	(In Millions)
Balance as of January 1,	$21	$19
Total gains (losses) for the period


Included as a regulatory liability/asset	75	27
Issuances of financial transmission rights	53	42

Settlements	(100)	(48)
Balance as of June 30,	$49	$40

The fair values of the Level 3 financial transmission rights are based on unobservable inputs calculated internally and verified against historical pricing data published by MISO.

The following tables set forth, by level within the fair value hierarchy, the Registrant Subsidiaries’ assets and liabilities that are accounted for at fair value on a recurring basis as of June 30, 2024 and December 31, 2023. The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect placement within the fair value hierarchy levels.

Entergy Arkansas


2024	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$772.2	$—	$—	$772.2
Decommissioning trust funds (a):
Equity securities	33.1	—	—	33.1
Debt securities	165.1	389.3	—	554.4
Common trusts (b)				935.0


Financial transmission rights	—	—	16.1	16.1
	$970.4	$389.3	$16.1	$2,310.8

Entergy Corporation and Subsidiaries

Notes to Financial Statements


2023	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$3.1	$—	$—	$3.1
Decommissioning trust funds (a):
Equity securities	6.4	—	—	6.4
Debt securities	129.9	367.0	—	496.9
Common trusts (b)				910.7


Financial transmission rights	—	—	6.0	6.0
	$139.4	$367.0	$6.0	$1,423.1

Entergy Louisiana


2024	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$185.3	$—	$—	$185.3

Decommissioning trust funds (a):

Equity securities	18.6	—	—	18.6
Debt securities	293.7	518.9	—	812.6
Common trusts (b)				1,461.0
Storm reserve escrow account	250.4	—	—	250.4


Financial transmission rights	—	—	19.8	19.8
	$748.0	$518.9	$19.8	$2,747.7


2023	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$0.5	$—	$—	$0.5
Decommissioning trust funds (a):
Equity securities	14.6	—	—	14.6
Debt securities	271.7	516.4	—	788.1
Common trusts (b)				1,304.7
Storm reserve escrow account	243.8	—	—	243.8


Financial transmission rights	—	—	9.8	9.8
	$530.6	$516.4	$9.8	$2,361.5

Liabilities:
Gas hedge contracts	$0.4	$—	$—	$0.4

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy Mississippi


2024	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$3.1	$—	$—	$3.1
Storm reserve escrow account	0.8	—	—	0.8

Financial transmission rights	—	—	3.6	3.6
	$3.9	$—	$3.6	$7.5

Liabilities:
Gas hedge contracts	$1.5	$—	$—	$1.5


2023	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$6.6	$—	$—	$6.6
Storm reserve escrow account	0.7	—	—	0.7

Financial transmission rights	—	—	1.4	1.4
	$7.3	$—	$1.4	$8.7

Liabilities:
Gas hedge contracts	$10.1	$—	$—	$10.1

Entergy New Orleans


2024	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$6.5	$—	$—	$6.5
Securitization recovery trust account	1.3	—	—	1.3
Storm reserve escrow account	81.7	—	—	81.7

Financial transmission rights	—	—	2.6	2.6
	$89.5	$—	$2.6	$92.1


2023	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:

Securitization recovery trust account	$2.4	$—	$—	$2.4
Storm reserve escrow account	78.7	—	—	78.7

Financial transmission rights	—	—	1.1	1.1
	$81.1	$—	$1.1	$82.2

Liabilities:
Gas hedge contracts	$0.6	$—	$—	$0.6

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy Texas


2024	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$124.9	$—	$—	$124.9
Securitization recovery trust account	2.3	—	—	2.3
Financial transmission rights	—	—	6.6	6.6
	$127.2	$—	$6.6	$133.8


2023	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$20.5	$—	$—	$20.5
Securitization recovery trust account	5.2	—	—	5.2
Financial transmission rights	—	—	2.4	2.4
	$25.7	$—	$2.4	$28.1

System Energy


2024	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$30.8	$—	$—	$30.8
Decommissioning trust funds (a):
Equity securities	2.0	—	—	2.0
Debt securities	262.3	292.3	—	554.6
Common trusts (b)				893.7
	$295.1	$292.3	$—	$1,481.1


2023	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:

Decommissioning trust funds (a):
Equity securities	$2.7	$—	$—	$2.7
Debt securities	209.5	275.7	—	485.2
Common trusts (b)				854.4
	$212.2	$275.7	$—	$1,342.3

Entergy Corporation and Subsidiaries

Notes to Financial Statements


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Millions)
Balance as of April 1,	$2.8	$4.1	$0.6	$0.5	$1.2
Issuances of financial transmission rights	17.6	21.6	3.9	2.8	7.3
Gains (losses) included as a regulatory liability/asset	7.7	19.1	1.2	2.6	2.7
Settlements	(12.0)	(25.0)	(2.1)	(3.3)	(4.6)
Balance as of June 30,	$16.1	$19.8	$3.6	$2.6	$6.6

The following table sets forth a reconciliation of changes in the net assets (liabilities) for the fair value of financial transmission rights classified as Level 3 in the fair value hierarchy for the three months ended June 30, 2023.


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Millions)
Balance as of April 1,	$4.0	$2.5	$0.2	$0.3	($0.1)
Issuances of financial transmission rights	20.6	18.1	1.4	1.4	0.2
Gains (losses) included as a regulatory liability/asset	(0.9)	15.6	2.6	1.3	4.6
Settlements	(4.1)	(19.5)	(3.0)	(1.5)	(3.5)
Balance as of June 30,	$19.6	$16.7	$1.2	$1.5	$1.2


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Millions)
Balance as of January 1,	$6.0	$9.8	$1.4	$1.1	$2.4
Issuances of financial transmission rights	17.6	21.6	3.9	2.8	7.3
Gains (losses) included as a regulatory liability/asset	31.4	29.6	1.4	3.1	9.0
Settlements	(38.9)	(41.2)	(3.1)	(4.4)	(12.1)
Balance as of June 30,	$16.1	$19.8	$3.6	$2.6	$6.6

Entergy Corporation and Subsidiaries

Notes to Financial Statements


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Millions)
Balance as of January 1,	$10.3	$7.3	$0.6	$0.8	$0.1
Issuances of financial transmission rights	20.6	18.1	1.4	1.4	0.2
Gains (losses) included as a regulatory liability/asset	(3.3)	19.6	3.7	1.7	5.1
Settlements	(8.0)	(28.3)	(4.5)	(2.4)	(4.2)
Balance as of June 30,	$19.6	$16.7	$1.2	$1.5	$1.2

NOTE 9. DECOMMISSIONING TRUST FUNDS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)

The NRC requires certain of the Utility operating companies and System Energy to maintain nuclear decommissioning trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, and Grand Gulf. Entergy’s nuclear decommissioning trust funds invest in equity securities, fixed-rate debt securities, and cash and cash equivalents.

Entergy records decommissioning trust funds on the balance sheet at their fair value. Because of the ability of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, for unrealized gains/(losses) on investment securities, the Registrant Subsidiaries record an offsetting amount in other regulatory liabilities/assets. For the 30% interest in River Bend formerly owned by Cajun, Entergy Louisiana records an offsetting amount in other deferred credits for the unrealized trust earnings not currently expected to be needed to decommission the plant. Generally, Entergy records gains and losses on its debt and equity securities using the specific identification method to determine the cost basis of its securities.

The unrealized gains/(losses) recognized during the three and six months ended June 30, 2024 on equity securities still held as of June 30, 2024 were $78 million and $366 million, respectively. The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index. A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000 Index. The debt securities are generally held in individual government and credit issuances.

The available-for-sale securities held as of June 30, 2024 and December 31, 2023 are summarized as follows:


	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2024
Debt Securities	$1,922	$10	$139

2023
Debt Securities	$1,770	$19	$134

Entergy Corporation and Subsidiaries

Notes to Financial Statements

As of June 30, 2024 and December 31, 2023, there were no deferred taxes on unrealized gains/(losses). The amortized cost of available-for-sale debt securities was $2,051 million as of June 30, 2024 and $1,885 million as of December 31, 2023. As of June 30, 2024, available-for-sale debt securities had an average coupon rate of approximately 3.63%, an average duration of approximately 6.14 years, and an average maturity of approximately 10.44 years.

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities had been in a continuous loss position, were as follows as of June 30, 2024 and December 31, 2023:


	June 30, 2024		December 31, 2023
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)
Less than 12 months	$453	$5	$134	$6
More than 12 months	949	134	999	128
Total	$1,402	$139	$1,133	$134

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of June 30, 2024 and December 31, 2023 were as follows:


	2024	2023
	(In Millions)
Less than 1 year	$76	$82
1 year - 5 years	568	517
5 years - 10 years	575	504
10 years - 15 years	120	121
15 years - 20 years	186	179
20 years+	397	367
Total	$1,922	$1,770

During the three months ended June 30, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $161 million and $136 million, respectively. During the three months ended June 30, 2024 and 2023, there were no gross gains and gross losses of $14 million and $8 million, respectively, related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

During the six months ended June 30, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $330 million and $260 million, respectively. During the six months ended June 30, 2024 and 2023, there were gross gains of $1 million in each period and gross losses of $20 million and $17 million, respectively, related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy Arkansas

Entergy Arkansas holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. The available-for-sale securities held as of June 30, 2024 and December 31, 2023 are summarized as follows:


	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2024
Debt Securities	$554.4	$1.9	$59.0

2023
Debt Securities	$496.9	$2.4	$53.6

The amortized cost of available-for-sale debt securities was $611.5 million as of June 30, 2024 and $548.1 million as of December 31, 2023. As of June 30, 2024, the available-for-sale debt securities had an average coupon rate of approximately 2.92%, an average duration of approximately 5.80 years, and an average maturity of approximately 7.51 years.

The unrealized gains/(losses) recognized during the three and six months ended June 30, 2024 on equity securities still held as of June 30, 2024 were $21.7 million and $105.7 million, respectively. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index. A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.


	June 30, 2024		December 31, 2023
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)
Less than 12 months	$70.8	$1.1	$22.5	$0.4
More than 12 months	388.7	57.9	403.4	53.2
Total	$459.5	$59.0	$425.9	$53.6

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of June 30, 2024 and December 31, 2023 were as follows:


	2024	2023
	(In Millions)
Less than 1 year	$43.5	$45.3
1 year - 5 years	156.3	132.2
5 years - 10 years	234.8	205.7
10 years - 15 years	31.7	39.9
15 years - 20 years	59.8	49.6
20 years+	28.3	24.2
Total	$554.4	$496.9

During the three months ended June 30, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $5.5 million and $0.9 million, respectively. During the three months ended June 30, 2024, there were gross gains of $0.1 million and gross losses of $0.4 million related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings. During the three months ended June 30, 2023, there were no gross gains and gross losses of $0.1 million related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

During the six months ended June 30, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $17.9 million and $16.6 million, respectively. During the six months ended June 30, 2024, there were gross gains of $0.1 million and gross losses of $0.9 million related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings. During the six months ended June 30, 2023, there were no gross gains and gross losses of $1.7 million related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

Entergy Louisiana

Entergy Louisiana holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. The available-for-sale securities held as of June 30, 2024 and December 31, 2023 are summarized as follows:


	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2024
Debt Securities	$812.6	$4.6	$39.8

2023
Debt Securities	$788.1	$11.7	$37.4

The amortized cost of available-for-sale debt securities was $847.8 million as of June 30, 2024 and $813.9 million as of December 31, 2023. As of June 30, 2024, the available-for-sale debt securities had an average coupon rate of approximately 4.03%, an average duration of approximately 6.36 years, and an average maturity of approximately 12.79 years.

The unrealized gains/(losses) recognized during the three and six months ended June 30, 2024 on equity securities still held as of June 30, 2024 were $42.3 million and $166.6 million, respectively. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index. A

Entergy Corporation and Subsidiaries

Notes to Financial Statements

relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.


	June 30, 2024		December 31, 2023
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)
Less than 12 months	$275.6	$2.7	$69.8	$0.9
More than 12 months	340.4	37.1	356.1	36.5
Total	$616.0	$39.8	$425.9	$37.4

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of June 30, 2024 and December 31, 2023 were as follows:


	2024	2023
	(In Millions)
Less than 1 year	$27.3	$31.4
1 year - 5 years	189.2	181.6
5 years - 10 years	186.9	170.0
10 years - 15 years	79.8	70.2
15 years - 20 years	84.7	90.2
20 years+	244.7	244.7
Total	$812.6	$788.1

During the three months ended June 30, 2024 and 2023, proceeds from the dispositions of available-for-sale securities amounted to $62.5 million and $65.2 million, respectively. During the three months ended June 30, 2024 and 2023, there were gross gains of $0.1 million in each period and gross losses of $4.8 million and $4 million, respectively, related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

During the six months ended June 30, 2024 and 2023, proceeds from the dispositions of available-for-sale securities amounted to $110.9 million and $132.6 million, respectively. During the six months ended June 30, 2024 and 2023, there were gross gains of $0.2 million and $0.5 million, respectively, and gross losses of $7.7 million and $9 million, respectively, related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

System Energy

System Energy holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. The available-for-sale securities held as of June 30, 2024 and December 31, 2023 are summarized as follows:


	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2024
Debt Securities	$554.6	$3.2	$40.2

2023
Debt Securities	$485.2	$4.5	$42.5

The amortized cost of available-for-sale debt securities was $591.6 million as of June 30, 2024 and $523.2 million as of December 31, 2023. As of June 30, 2024, the available-for-sale debt securities had an average coupon rate of approximately 3.78%, an average duration of approximately 6.18 years, and an average maturity of approximately 10.03 years.

The unrealized gains/(losses) recognized during the three and six months ended June 30, 2024 on equity securities still held as of June 30, 2024 were $14.3 million and $93.3 million, respectively. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index. A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.


		June 30, 2024		December 31, 2023
		Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)
Less than 12 months		$106.8	$1.6	$42.1	$4.5
More than 12 months		219.8	38.6	239.1	38.0
Total		$326.6	$40.2	$281.2	$42.5

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of June 30, 2024 and December 31, 2023 were as follows:


	2024	2023
	(In Millions)
Less than 1 year	$5.4	$5.3
1 year - 5 years	222.1	203.4
5 years - 10 years	153.5	128.6
10 years - 15 years	8.1	10.7
15 years - 20 years	41.0	38.8
20 years+	124.5	98.4
Total	$554.6	$485.2

During the three months ended June 30, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $93.5 million and $69.9 million, respectively. During the three months ended June 30, 2024 and 2023, there were no gross gains and gross losses of $8.4 million and $4.1 million, respectively, related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

During the six months ended June 30, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $201.5 million and $111.2 million, respectively. During the six months ended June 30, 2024, there were gross gains of $0.2 million and gross losses of $11.9 million related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings. During the three months ended June 30, 2023, there were no gross gains and gross losses of $6.3 million related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

NOTE 10. INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

See “Income Tax Audits” and “Other Tax Matters” in Note 3 to the financial statements in the Form 10-K for a discussion of income tax audits, the Tax Cuts and Jobs Act, and other income tax matters involving Entergy. The following are updates to that discussion.

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. In May 2024 the City Council approved the settlement.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Arkansas Corporate Income Tax Rate Change

In June 2024, Arkansas Act 1 of the Second Extraordinary Session reduced the Arkansas corporate income tax rate from 4.8% to 4.3%, which is retroactively effective as of January 1, 2024. As a result of the rate reduction, Entergy Arkansas accrued a regulatory liability for income taxes of approximately $31 million in the second quarter of 2024. The regulatory liability includes a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and is expected to be included in future rate mechanisms.

NOTE 11. VARIABLE INTEREST ENTITIES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

See Note 17 to the financial statements in the Form 10-K for a discussion of variable interest entities (VIEs). See Note 4 to the financial statements herein for details of the nuclear fuel companies’ credit facilities, commercial paper borrowings, and long-term debt. See Note 6 to the financial statements in the Form 10-K for discussion of noncontrolling interests.

Restoration Law Trust I (the storm trust I), a trust consolidated by Entergy Louisiana, is a VIE and Entergy Louisiana is the primary beneficiary. As of June 30, 2024 and December 31, 2023, the primary asset held by the storm trust I was $2.9 billion and $3 billion, respectively, of outstanding Entergy Finance Company preferred membership interests, which is reflected as an investment in affiliate preferred membership interests on the consolidated balance sheets of Entergy Louisiana. The LURC’s 1% beneficial interest in the storm trust I is recorded as noncontrolling interest on the consolidated balance sheets of Entergy and Entergy Louisiana, with balances of $30.6 million as of June 30, 2024 and $30.5 million as of December 31, 2023.

Restoration Law Trust II (the storm trust II), a trust consolidated by Entergy Louisiana, is a VIE and Entergy Louisiana is the primary beneficiary. As of June 30, 2024 and December 31, 2023, the primary asset held by the storm trust II was $1.5 billion of outstanding Entergy Finance Company preferred membership interests, which is reflected as an investment in affiliate preferred membership interests on the consolidated balance sheets of Entergy Louisiana. The LURC’s 1% beneficial interest in the storm trust II is recorded as noncontrolling interest on the consolidated balance sheets of Entergy and Entergy Louisiana, with balances of $14.9 million as of June 30, 2024 and $14.6 million as of December 31, 2023.

System Energy is considered to hold a variable interest in the lessor from which it leases an undivided interest in the Grand Gulf nuclear plant. System Energy is the lessee under this arrangement, which is described in more detail in Note 5 to the financial statements in the Form 10-K. System Energy made payments under this arrangement, including interest, of $8.6 million in each of the six months ended June 30, 2024 and the six months ended June 30, 2023.

AR Searcy Partnership, LLC is a tax equity partnership that qualifies as a VIE, which Entergy Arkansas is required to consolidate as it is the primary beneficiary. As of June 30, 2024, AR Searcy Partnership, LLC recorded assets equal to $132.5 million, primarily consisting of property, plant, and equipment, and the carrying value of Entergy Arkansas’s ownership interest in the partnership was approximately $112.9 million. As of December 31, 2023, AR Searcy Partnership, LLC recorded assets equal to $134 million, primarily consisting of property, plant, and equipment, and the carrying value of Entergy Arkansas’s ownership interest in the partnership was approximately $111.2 million. The tax equity investor’s ownership interest is recorded as noncontrolling interest on the consolidated balance sheets of Entergy and Entergy Arkansas.

MS Sunflower Partnership, LLC is a tax equity partnership that qualifies as a VIE, which Entergy Mississippi is required to consolidate as it is the primary beneficiary. As of June 30, 2024, MS Sunflower Partnership, LLC recorded assets equal to $167.7 million, primarily consisting of property, plant, and equipment, and the carrying value of Entergy Mississippi’s ownership interest in the partnership was approximately

Entergy Corporation and Subsidiaries

Notes to Financial Statements

$131.1 million. As of December 31, 2023, MS Sunflower Partnership, LLC recorded assets equal to $163.2 million, primarily consisting of property, plant, and equipment, and the carrying value of Entergy Mississippi’s ownership interest in the partnership was approximately $128.4 million. The tax equity investor’s ownership interest is recorded as noncontrolling interest on the consolidated balance sheets of Entergy and Entergy Mississippi.

NOTE 12. REVENUE (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Operating Revenues

See Note 19 to the financial statements in the Form 10-K for a discussion of revenue recognition. Entergy’s total revenues for the three months ended June 30, 2024 and 2023 were as follows:


	2024	2023
	(In Thousands)
Utility:
Residential	$1,009,836	$951,424
Commercial	713,282	692,788
Industrial	792,721	750,177
Governmental	65,861	63,816
Total billed retail	2,581,700	2,458,205

Sales for resale (a)	54,579	68,262
Other electric revenues (b)	257,813	247,331
Revenues from contracts with customers	2,894,092	2,773,798
Other Utility revenues (c)	11,955	11,446
Electric revenues	2,906,047	2,785,244

Natural gas revenues	35,357	33,503

Other revenues (d)	12,216	27,279

Total operating revenues	$2,953,620	$2,846,026

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy’s total revenues for the six months ended June 30, 2024 and 2023 were as follows:


	2024	2023
	(In Thousands)
Utility:
Residential	$2,080,177	$1,992,883
Commercial	1,405,133	1,407,089
Industrial	1,541,679	1,613,899
Governmental	131,172	131,153
Total billed retail	5,158,161	5,145,024

Sales for resale (a)	133,583	176,209
Other electric revenues (b)	293,847	291,788
Revenues from contracts with customers	5,585,591	5,613,021
Other Utility revenues (c)	26,962	55,633
Electric revenues	5,612,553	5,668,654

Natural gas revenues	101,024	98,084

Other revenues (d)	34,671	60,347

Total operating revenues	$5,748,248	$5,827,085

The Utility operating companies’ total revenues for the three months ended June 30, 2024 and 2023 were as follows:


2024	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Residential	$204,822	$353,975	$163,049	$71,842	$216,148
Commercial	132,950	265,869	142,173	57,360	114,930
Industrial	138,786	458,420	49,180	7,602	138,733
Governmental	4,433	21,223	14,061	19,167	6,977
Total billed retail	480,991	1,099,487	368,463	155,971	476,788
Sales for resale (a)	43,842	80,823	21,260	8,575	3,015
Other electric revenues (b)	81,733	74,670	50,718	12,811	39,224
Revenues from contracts with customers	606,566	1,254,980	440,441	177,357	519,027
Other revenues (c)	2,232	6,464	2,453	1,307	50
Electric revenues	608,798	1,261,444	442,894	178,664	519,077
Natural gas revenues	—	14,680	—	20,677	—
Total operating revenues	$608,798	$1,276,124	$442,894	$199,341	$519,077

Entergy Corporation and Subsidiaries

Notes to Financial Statements


2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Residential	$204,808	$334,246	$163,001	$68,535	$180,834
Commercial	136,591	253,365	142,997	56,095	103,740
Industrial	153,817	407,045	54,738	7,562	127,015
Governmental	4,945	19,407	14,971	17,896	6,597
Total billed retail	500,161	1,014,063	375,707	150,088	418,186
Sales for resale (a)	48,266	80,248	26,073	11,075	1,986
Other electric revenues (b)	65,807	91,372	40,966	5,667	44,861
Revenues from contracts with customers	614,234	1,185,683	442,746	166,830	465,033
Other revenues (c)	2,113	6,226	2,384	1,386	(603)
Electric revenues	616,347	1,191,909	445,130	168,216	464,430
Natural gas revenues	—	13,703	—	19,800	—
Total operating revenues	$616,347	$1,205,612	$445,130	$188,016	$464,430

The Utility operating companies’ total revenues for the six months ended June 30, 2024 and 2023 were as follows:


2024	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Residential	$480,574	$699,003	$341,666	$139,520	$419,414
Commercial	274,258	522,565	274,491	110,585	223,234
Industrial	288,193	880,017	95,607	14,580	263,282
Governmental	9,133	43,044	27,390	37,521	14,084
Total billed retail	1,052,158	2,144,629	739,154	302,206	920,014
Sales for resale (a)	82,807	163,551	69,193	21,075	4,922
Other electric revenues (b)	91,074	112,615	44,516	9,592	38,736
Revenues from contracts with customers	1,226,039	2,420,795	852,863	332,873	963,672
Other revenues (c)	4,804	13,442	4,887	2,732	(104)
Electric revenues	1,230,843	2,434,237	857,750	335,605	963,568
Natural gas revenues	—	44,327	—	56,697	—
Total operating revenues	$1,230,843	$2,478,564	$857,750	$392,302	$963,568

Entergy Corporation and Subsidiaries

Notes to Financial Statements


2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)
Residential	$444,307	$694,892	$332,390	$132,101	$389,193
Commercial	261,927	531,543	276,673	110,164	226,782
Industrial	285,053	916,949	106,153	14,975	290,769
Governmental	9,605	42,481	28,854	35,694	14,519
Total billed retail	1,000,892	2,185,865	744,070	292,934	921,263
Sales for resale (a)	114,283	163,484	64,816	35,985	4,431
Other electric revenues (b)	79,524	117,939	43,840	6,084	47,085
Revenues from contracts with customers	1,194,699	2,467,288	852,726	335,003	972,779
Other revenues (c)	4,397	44,373	4,832	2,908	(843)
Electric revenues	1,199,096	2,511,661	857,558	337,911	971,936
Natural gas revenues	—	39,159	—	58,925	—
Total operating revenues	$1,199,096	$2,550,820	$857,558	$396,836	$971,936

(a)Sales for resale includes day-ahead sales of energy in a market administered by an ISO. These sales represent financially binding commitments for the sale of physical energy the next day. These sales are adjusted to actual power generated and delivered in the real time market. Given the short duration of these transactions, Entergy does not consider them to be derivatives subject to fair value adjustments and includes them as part of customer revenues.

(b)Other electric revenues consist primarily of transmission and ancillary services provided to participants of an ISO-administered market and unbilled revenue.

(c)Other Utility revenues include the equity component of carrying costs related to securitization, occasional sales of inventory, alternative revenue programs, provisions for revenue subject to refund, and late fees.

(d)Other revenues include the sale of electric power and capacity to wholesale customers, day-ahead sales of energy in a market administered by an ISO, and operation and management services fees.

Allowance for doubtful accounts

The allowance for doubtful accounts reflects Entergy’s best estimate of expected losses on its accounts receivable balances. Due to the essential nature of utility services, Entergy has historically experienced a low rate of default on its accounts receivables. The following tables set forth a reconciliation of changes in the allowance for doubtful accounts for the six months ended June 30, 2024 and 2023.


	Entergy	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Millions)
Balance as of December 31, 2023	$25.9	$7.2	$6.1	$3.3	$7.8	$1.5
Provisions	15.3	2.6	6.2	2.2	1.4	2.9
Write-offs	(46.0)	(10.7)	(15.6)	(7.4)	(7.1)	(5.2)
Recoveries	21.4	5.2	6.7	4.1	3.7	1.7
Balance as of June 30, 2024	$16.6	$4.3	$3.4	$2.2	$5.8	$0.9

Entergy Corporation and Subsidiaries

Notes to Financial Statements


	Entergy	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Millions)
Balance as of December 31, 2022	$30.9	$6.5	$7.6	$2.5	$11.9	$2.4
Provisions	15.5	3.2	7.0	2.1	0.7	2.5
Write-offs	(51.5)	(13.2)	(21.4)	(3.7)	(6.5)	(6.7)
Recoveries	26.9	8.7	11.7	1.5	1.5	3.5
Balance as of June 30, 2023	$21.8	$5.2	$4.9	$2.4	$7.6	$1.7

The allowance is calculated as the historical rate of customer write-offs multiplied by the current accounts receivable balance, taking into account the length of time the receivable balances have been outstanding. The rate of customer write-offs has historically experienced minimal variation, although general economic conditions can affect the rate of customer write-offs. Management monitors the current condition of individual customer accounts to manage collections and ensure bad debt expense is recorded in a timely manner.

NOTE 13. ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

See Note 9 to the financial statements in the Form 10-K for a discussion of asset retirement obligations. The following are updates to that discussion.

Nuclear Plant Decommissioning

In first quarter 2024, Entergy Arkansas recorded a revision to its estimated decommissioning cost liabilities for ANO 1 and 2 as a result of a revised decommissioning cost study. The revised estimates resulted in a $14.4 million decrease in its decommissioning cost liabilities, along with corresponding decreases in the related asset retirement cost assets that will be depreciated over the remaining useful lives of the units.

In second quarter 2024, revisions were recorded to the estimated decommissioning cost liabilities for White Bluff and Independence as a result of the EPA rule that was finalized in May 2024 establishing management standards for legacy coal combustion residuals (CCR) surface impoundments (i.e., inactive surface impoundments at inactive power plants) and establishing a new class of units referred to as CCR management units (CCRMUs) (i.e., non-containerized CCR located at a regulated CCR facility). Entergy does not have any legacy impoundments; however, the definition of CCR management units includes on-site areas where CCR was beneficially used. This is contrary to the previous CCR rule which exempted beneficial uses that met certain criteria. Under this expanded rule, all facilities must identify and delineate any CCRMU greater than one ton and submit a facility evaluation report by February 2026. Any potential requirements for corrective action or operational changes under the various CCR rules continue to be assessed. Given the complexity and recency of the EPA guidance, Entergy is still evaluating the level of work that will ultimately be required to comply with the rule. Based on initial estimates of multiple possible remediation scenarios, Entergy Arkansas and Entergy Mississippi recorded increases of $31 million and $9 million, respectively, in their decommissioning cost liabilities, along with corresponding increases in the related asset retirement cost assets that will be depreciated over the remaining useful lives of the units. Entergy will continue to update the asset retirement obligation as the requirements of the revised CCR rule are clarified.

Entergy Corporation and Subsidiaries

Notes to Financial Statements

NOTE 14. ACQUISITIONS (Entergy Corporation and Entergy Arkansas)

Acquisitions

Walnut Bend Solar

In June 2020, Entergy Arkansas signed an agreement for the purchase of an approximately 100 MW to-be-constructed solar photovoltaic energy facility, Walnut Bend Solar facility, to be sited on approximately 1,000 acres in Lee County, Arkansas. Acquisition of the Walnut Bend Solar facility was initially approved by the APSC in July 2021. The agreement was amended by the parties in February 2023 and the revised agreement was approved by the APSC in July 2023. In February 2024, Entergy Arkansas made an initial payment of approximately $170 million to acquire the facility. The project will achieve commercial operation once testing is completed and the project has achieved substantial completion. Entergy Arkansas currently expects the project to achieve commercial operation in 2024, at which time a substantial completion payment of approximately $20 million is expected.

In the opinion of the management of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy, the accompanying unaudited financial statements contain all adjustments (consisting primarily of normal recurring accruals and reclassification of previously reported amounts to conform to current classifications) necessary for a fair statement of the results for the interim periods presented. Entergy’s business is subject to seasonal fluctuations, however, with peak periods occurring typically during the first and third quarters. The results for the interim periods presented should not be used as a basis for estimating results of operations for a full year.

Next: Item 3. Quantitative and Qualitative Disclosures About Market Risk