Item 4. Controls and Procedures

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Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of June 30, 2025, evaluations were performed under the supervision and with the participation of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy (each individually a “Registrant” and collectively the “Registrants”) management, including their respective Principal Executive Officers (PEO) and Principal Financial Officers (PFO). The evaluations assessed the effectiveness of the Registrants’ disclosure controls and procedures. Based on the evaluations, each PEO and PFO has concluded that, as to the Registrant or Registrants for which they serve as PEO or PFO, the Registrant’s or Registrants’ disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms; and that the Registrant’s or Registrants’ disclosure controls and procedures are also effective in reasonably assuring that such information is accumulated and communicated to the Registrant’s or Registrants’ management, including their respective PEOs and PFOs, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

Under the supervision and with the participation of each Registrant’s management, including its respective PEO and PFO, each Registrant evaluated changes in internal control over financial reporting that occurred during the quarter ended June 30, 2025 and found no change that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

ENTERGY ARKANSAS, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Second Quarter 2025 Compared to Second Quarter 2024

Net income increased $3.8 million primarily due to higher volume/weather and higher retail electric price, partially offset by higher depreciation and amortization expenses, higher other operation and maintenance expenses, and higher interest expense.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Net income increased $122.6 million primarily due to a $131.8 million ($99.1 million net-of-tax) charge to reflect the write-off of a previously recorded regulatory asset as a result of an adverse decision in the opportunity sales proceeding in March 2024, higher volume/weather, and higher retail electric price, partially offset by higher depreciation and amortization expenses and higher interest expense. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the opportunity sales proceeding.

Operating Revenues

Second Quarter 2025 Compared to Second Quarter 2024

Following is an analysis of the change in operating revenues comparing the second quarter 2025 to the second quarter 2024:


			Amount
			(In Millions)
2024 operating revenues			$608.8
Fuel, rider, and other revenues that do not significantly affect net income			61.6

Volume/weather			14.1
Retail electric price			13.2
2025 operating revenues			$697.7

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

The volume/weather variance is primarily due to an increase in industrial usage and an increase in weather-adjusted residential usage, partially offset by the effect of less favorable weather on residential sales. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the primary metals and technology industries, and an increase in demand from small industrial customers. The increase in weather-adjusted residential usage is primarily due to an increase in customers.

The retail electric price variance is primarily due to an increase in formula rate plan rates effective January 2025. See Note 2 to the financial statements in the Form 10-K for discussion of the 2024 formula rate plan filing.

Entergy Arkansas, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Arkansas for the three months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	1,674	1,855	(10)
Commercial	1,393	1,419	(2)
Industrial	3,064	2,443	25
Governmental	49	50	(2)
Total retail	6,180	5,767	7
Sales for resale:
Associated companies	559	522	7
Non-associated companies	1,893	982	93
Total	8,632	7,271	19

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

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Following is an analysis of the change in operating revenues comparing the six months ended June 30, 2025 to the six months ended June 30, 2024:


			Amount
			(In Millions)
2024 operating revenues			$1,230.8
Fuel, rider, and other revenues that do not significantly affect net income			1.3

Volume/weather			49.4
Retail electric price			29.7
2025 operating revenues			$1,311.2

The volume/weather variance is primarily due to an increase in industrial usage and the effect of more favorable weather on residential sales. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the primary metals and technology industries, and an increase in demand from small industrial customers.

Entergy Arkansas, LLC and Subsidiaries

Management's Financial Discussion and Analysis

Total electric energy sales for Entergy Arkansas for the six months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	3,885	3,821	2
Commercial	2,653	2,699	(2)
Industrial	5,606	4,711	19
Governmental	88	95	(7)
Total retail	12,232	11,326	8
Sales for resale:
Associated companies	1,096	984	11
Non-associated companies	2,456	1,949	26
Total	15,784	14,259	11

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

Other Income Statement Variances

Second Quarter 2025 Compared to Second Quarter 2024

Other operation and maintenance expenses increased primarily due to an increase of $7.1 million in non-nuclear generation expenses primarily due to a higher scope of work performed during plant outages in 2025 as compared to 2024.

Depreciation and amortization expenses increased primarily due to additions to plant in service, including the Walnut Bend Solar facility, which was placed in service in September 2024, and the West Memphis Solar facility and the Driver Solar facility, which were placed in service in December 2024.

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

Other income increased primarily due to changes in decommissioning trust fund activity.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Fuel, fuel-related expenses, and gas purchased for resale includes a credit of $9 million, recorded in first quarter 2024, for costs related to net metering. The costs were incurred in 2023 and included within Entergy Arkansas’s annual redetermination of its energy cost recovery rider filed in March 2024 due to a change in law in the state of Arkansas. See Note 2 to the financial statements in the Form 10-K for discussion of the March 2024 energy cost recovery rider filing.

Other operation and maintenance expenses decreased slightly primarily due to:

contract costs of $5.8 million in 2024 related to operational performance, customer service, and organizational health initiatives;
a decrease of $4.7 million in power delivery expenses primarily due to a lower scope of work performed in 2025 as compared to 2024; and

Entergy Arkansas, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

a decrease of $4.9 million in nuclear generation expenses primarily due to a lower scope of work performed in 2025 as compared to 2024.

The decrease was substantially offset by an increase of $12 million in non-nuclear generation expenses primarily due to a higher scope of work performed during plant outages in 2025 as compared to 2024.

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

Other income decreased primarily due to changes in decommissioning trust fund activity, including portfolio rebalancing of decommissioning trust funds in 2024.

Interest expense increased primarily due to the issuances of $400 million of 5.75% Series mortgage bonds and $400 million of 5.45% Series mortgage bonds, each in May 2024. The increase was partially offset by the repayment of $375 million of 3.70% Series mortgage bonds in June 2024.

Income Taxes

The effective income tax rates were 20.6% for the second quarter 2025 and 20.8% for the six months ended June 30, 2025. The differences in the effective income tax rates for the second quarter 2025 and the six months ended June 30, 2025 versus the federal statutory rate of 21% were primarily due to the amortization of excess accumulated deferred income taxes as a result of tax rate changes and certain book and tax differences related to utility plant items, partially offset by the accrual for state income taxes.

The effective income tax rate was 25.2% 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 and the 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 25.4% 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 amortization of accumulated deferred income taxes as a result of tax rate changes and the accrual for state income taxes, 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.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” herein and in the Form 10-K for discussion of income tax legislation and regulation. See Note 10 to the financial statements herein for discussion of the nuclear production tax credits recorded in second quarter 2025.

Entergy Arkansas, LLC and Subsidiaries

Management's Financial Discussion and Analysis

Liquidity and Capital Resources

Cash Flow

Cash flows for the six months ended June 30, 2025 and 2024 were as follows:


	2025	2024
	(In Thousands)
Cash and cash equivalents at beginning of period	$4,747	$3,632

Net cash provided by (used in):
Operating activities	437,887	524,708
Investing activities	(493,179)	(721,529)
Financing activities	277,533	979,521
Net increase in cash and cash equivalents	222,241	782,700

Cash and cash equivalents at end of period	$226,988	$786,332

Operating Activities

Net cash flow provided by operating activities decreased $86.8 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

the receipt of $92 million in settlement proceeds in May 2024 as a result of the System Energy settlement with the APSC. See Note 2 to the financial statements in the Form 10-K for a discussion of the System Energy settlement agreement with the APSC;
higher fuel and purchased power payments. See Note 2 to the financial statements herein and in the Form 10-K for a discussion of fuel and purchased power cost recovery; and
the timing of payments to vendors.

The decrease was partially offset by higher collections from customers and a decrease of $14.6 million in spending on nuclear refueling outages in 2025 as compared to 2024.

Investing Activities

Net cash flow used in investing activities decreased $228.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

the initial payment of approximately $169.7 million in February 2024 for the purchase of the Walnut Bend Solar facility. See Note 14 to the financial statements in the Form 10-K for discussion of the Walnut Bend Solar facility purchase;
money pool activity;
a decrease of $27.7 million in information technology capital expenditures primarily due to decreased spending on technology upgrade projects in 2025; and
a decrease of $26.9 million in transmission construction expenditures primarily due to decreased spending on various transmission projects in 2025.

The decrease was partially offset by an increase of $50.8 million in non-nuclear generation construction expenditures primarily due to higher spending on the Lake Catherine Unit 5 project and an increase of $36.3 million in distribution construction expenditures primarily due to higher capital expenditures for storm restoration in 2025.

Entergy Arkansas, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Increases in Entergy Arkansas’s receivable from the money pool are a use of cash flow, and Entergy Arkansas’s receivable from the money pool increased $49 million for the six months ended June 30, 2025 compared to increasing by $130.6 million for the six months ended June 30, 2024. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Financing Activities

Net cash flow provided by financing activities decreased $702 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

the issuances of $400 million of 5.45% Series mortgage bonds and $400 million of 5.75% Series mortgage bonds, each in May 2024;
capital contributions of approximately $695 million received from Entergy Corporation in 2024 to partially finance the acquisitions of the Walnut Bend Solar facility, the West Memphis Solar facility, and the Driver Solar facility;
the issuance of $70 million of 5.54% Series O notes by the Entergy Arkansas nuclear fuel company variable interest entity in March 2024; and
a decrease of $32.5 million in advance payments from customers for construction related to transmission, distribution, and generator interconnection agreements.

The decrease was partially offset by:

the repayment, at maturity, of $375 million of 3.70% Series mortgage bonds in June 2024;
the issuance of $300 million of 5.45% Series mortgage bonds in May 2025;
money pool activity; and
net long-term borrowings of $10.7 million in 2025 compared to net repayments of $70.2 million in 2024 on the nuclear fuel company variable interest entity’s credit facility.

Decreases in Entergy Arkansas’s payable to the money pool are a use of cash flow, and Entergy Arkansas’s payable to the money pool decreased $15.2 million for the six months ended June 30, 2025 compared to decreasing by $145.4 million for the six months ended June 30, 2024.

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

Capital Structure

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


	June 30, 2025		December 31, 2024
Debt to capital	54.1	%	53.6	%
Effect of subtracting cash	(1.1	%)	—	%
Net debt to net capital (non-GAAP)	53.0	%	53.6	%

Entergy Arkansas, LLC and Subsidiaries

Management's Financial Discussion and Analysis

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

Uses and Sources of Capital

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

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


	2025	2026	2027
	(In Millions)
Planned construction and capital investment:
Generation	$565	$1,270	$1,480
Transmission	85	85	110
Distribution	320	295	320
Utility Support	105	50	40
Total	$1,075	$1,700	$1,950

The updated capital plan for 2025-2027 reflects incremental capital investments for potential generation projects. In addition to routine capital spending to maintain operations, the capital plan includes investments in generation projects to modernize, decarbonize, expand, and diversify Entergy Arkansas’s portfolio, as well as to support customer growth, including Lake Catherine Unit 5 and Jefferson Power Station; investments in ANO 1 and 2; distribution and Utility support spending to improve reliability, resilience, and customer experience; transmission spending to improve reliability and resilience while also supporting renewables expansion; and other investments.

Recent announcements of changes to international trade policy and tariffs and further similar changes may impact Entergy Arkansas’s business, operations, results of operations, and liquidity and capital resources. Potential impacts may include increases in costs associated with Entergy Arkansas’s capital investments or operation and maintenance expenses; operational impacts, such as supply chain, manufacturing, or raw materials sourcing disruptions which may affect Entergy Arkansas’s ability to make planned capital investments as and when expected and needed; legal uncertainties, such as potential legal or other challenges to presidential tariff authority; or broader economic risks, including shifting customer demand, impacts on customer investment decisions, and volatile or uncertain credit and capital markets, which may affect Entergy Arkansas’s ability to access needed capital. The nature and extent of any such effects will depend on, among other things, the specifics of the changes that are ultimately implemented both domestically and internationally, the responses of vendors, suppliers, and other counterparties to those changes, indirect effects on the price and availability of non-tariffed goods, and the effectiveness of mitigation measures.

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


June 30, 2025	December 31, 2024	June 30, 2024	December 31, 2023
(In Thousands)
$49,019	($15,190)	$130,602	($145,385)

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

Entergy Arkansas, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy Arkansas has a credit facility in the amount of $300 million scheduled to expire in June 2030. Entergy Arkansas also has a $25 million credit facility scheduled to expire in April 2026. The $300 million credit facility includes fronting commitments for the issuance of letters of credit against $5 million of the borrowing capacity of the facility. As of June 30, 2025, there were no cash borrowings under either credit facility and no letters of credit outstanding under the $300 million credit facility. In addition, Entergy Arkansas is a party to two uncommitted letter of credit facilities as a means to post collateral to support its obligations to MISO. As of June 30, 2025, $23.6 million in letters of credit were outstanding under one of Entergy Arkansas’s uncommitted letter of credit facilities. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

The Entergy Arkansas nuclear fuel company variable interest entity has a credit facility in the amount of $80 million scheduled to expire in June 2027. As of June 30, 2025, there were $33.2 million in loans outstanding under the credit facility for the Entergy Arkansas nuclear fuel company variable interest entity. See Note 4 to the financial statements herein for discussion of the nuclear fuel company variable interest entity credit facility.

Lake Catherine Unit 5

As discussed in the Form 10-K, in November 2024, Entergy Arkansas filed an application with the APSC seeking a certificate of environmental compatibility and public need for the construction and operation of Lake Catherine Unit 5, a 446 MW hydrogen-capable simple-cycle natural gas combustion turbine facility to be located at the existing Lake Catherine facility site in Hot Spring County, Arkansas. In December 2024 other parties, including the APSC general staff, filed testimony opposing the resource, although the APSC general staff recognized the capacity need for the resource. Entergy Arkansas filed testimony in January 2025 further supporting its application, and in February 2025 the opposing parties filed responsive rebuttal testimony continuing to dispute the estimated costs and to dispute that Entergy Arkansas performed a market solicitation sufficient to demonstrate that this resource is the most reasonable option for customers. Also in February 2025, Entergy Arkansas filed surrebuttal testimony responding to the opposing parties’ testimony. A hearing was held in March 2025, and in April 2025 the APSC issued an order approving certification of the facility. The order also provided a presumption of prudence finding with respect to a benchmark project cost. In May 2025, Entergy Arkansas filed a motion for clarification concerning the appropriate calculation of the benchmark. Entergy Arkansas will have the opportunity to later present all actual costs to the APSC for review and a prudence determination, including costs incremental to the benchmark. The facility is expected to be in service by the end of 2028.

Jefferson Power Station

Entergy Arkansas expects to file an application with the APSC in third quarter 2025 seeking a certificate of environmental compatibility and public need for the construction and operation of Jefferson Power Station, an approximately 754 MW natural gas-fired combined cycle combustion turbine facility. Subject to receipt of required regulatory approval and other conditions, the facility is expected to be in service by the end of 2029.

State and Local Rate Regulation and Fuel-Cost Recovery

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

Retail Rates

2025 Formula Rate Plan Filing

In July 2025, Entergy Arkansas filed with the APSC its 2025 formula rate plan filing to set its formula rate for the 2026 calendar year.  The filing contained an evaluation of Entergy Arkansas’s earnings for the 2026

Entergy Arkansas, LLC and Subsidiaries

Management's Financial Discussion and Analysis

projected year and a netting adjustment for the 2024 historical year.  The filing showed that Entergy Arkansas’s earned rate of return on common equity for the 2026 projected year was 8.45% resulting in a revenue deficiency of $68.9 million.  The earned rate of return on common equity for the 2024 historical year was 7.71% resulting in a $48.8 million netting adjustment.  The total proposed revenue change for the 2026 projected year and 2024 historical year netting adjustment is $117.7 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 $92.3 million. Entergy Arkansas proposed a procedural schedule that includes a hearing in November 2025 and requests an APSC order in December 2025.

Grand Gulf Credit Rider

As discussed in the Form 10-K, 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” in Note 2 to the financial statements in the Form 10-K for discussion of the System Energy settlement with the APSC. In July 2024 the APSC approved the tariff, under which Entergy Arkansas would refund to retail customers a total of $100.6 million. Entergy Arkansas refunded $92.3 million of the total through one-time bill credits under the Grand Gulf credit rider during the August 2024 billing cycle. In March 2025, Entergy Arkansas included the remaining balance as a credit to retail customers in its energy cost recovery rider rate redetermination filing. See further discussion within “Energy Cost Recovery Rider” below. In April 2025 the APSC approved Entergy Arkansas’s proposal to include the remaining balance in its energy cost recovery rider effective with the first billing cycle of April 2025 and the withdrawal of the Grand Gulf credit rider after all credits had been issued. Credits to retail customers were completed in second quarter 2025, and the Grand Gulf credit rider was subsequently withdrawn.

Energy Cost Recovery Rider

In March 2025, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider, which reflected an increase in the rate from $0.00882 per kWh to $0.01333 per kWh. The annual redetermination included a credit related to the remaining balance due to retail customers from the System Energy settlement with the APSC, plus carrying charges and interest. See “Retail Rates - Grand Gulf Credit Rider” above for further discussion. The primary reason for the rate increase is an adjustment to account for projected increases in natural gas prices in 2025. This adjustment is expected to reduce the rate change that will be reflected in its 2026 energy cost rate redetermination. The redetermined rate of $0.01333 per kWh became effective with the first billing cycle in April 2025 through the normal operation of the tariff.

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.

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 Circuit and the court granted the motion to expedite. 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

Entergy Arkansas, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

proceeding and recorded a $131.8 million ($99.1 million net-of-tax) charge to earnings in first quarter 2024. In December 2024 the United States Court of Appeals for the Eighth Circuit affirmed the decision of the U.S. District Court for the Eastern District of Arkansas, and Entergy Arkansas filed a petition for rehearing en banc. In January 2025 the United States Court of Appeals for the Eighth Circuit denied Entergy Arkansas’s petition. In April 2025, Entergy Arkansas filed a petition for certiorari with the United States Supreme Court. In June 2025 the United States Supreme Court denied Entergy Arkansas’s petition for certiorari.

Generating Arkansas Jobs Act of 2025

In March 2025 the State of Arkansas passed the Generating Arkansas Jobs Act of 2025, now Act 373 (Act 373), that authorizes the recovery of financing costs during construction of generation and transmission investments through a rider separate from the formula rate plan. Act 373 also permits cost recovery of those investments when completed and in service, either through the next general rate case proceeding or under the formula rate plan. Act 373 streamlines and simplifies the regulatory approval process and provides increased timeliness and certainty of cost recovery.

In July 2025, Entergy Arkansas submitted a tariff filing with the APSC requesting approval of a strategic investment recovery rider, consistent with the provisions of Act 373. Entergy Arkansas requested the APSC issue an order approving the rider by October 2025. A procedural schedule has been established with a hearing in September 2025.

Federal Regulation

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

Nuclear Matters

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

Environmental Risks

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

Critical Accounting Estimates

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

New Accounting Pronouncements

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


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Three Months Ended		Six Months Ended
	2025	2024	2025	2024
	(In Thousands)		(In Thousands)
OPERATING REVENUES
Electric	$697,687	$608,798	$1,311,198	$1,230,843

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	113,093	52,756	160,652	159,195
Purchased power	58,964	55,602	123,911	107,922
Nuclear refueling outage expenses	10,668	14,101	21,249	28,189
Other operation and maintenance	180,510	174,835	352,028	352,876
Asset write-offs	—	—	—	131,775
Decommissioning	24,988	22,832	49,610	45,479
Taxes other than income taxes	35,430	34,390	71,411	70,614
Depreciation and amortization	117,121	103,966	230,389	206,957
Other regulatory charges (credits) - net	(7,763)	(20,934)	(12,880)	27,685
TOTAL	533,011	437,548	996,370	1,130,692

OPERATING INCOME	164,676	171,250	314,828	100,151

OTHER INCOME
Allowance for equity funds used during construction	5,355	5,862	9,617	11,394
Interest and investment income	14,801	5,181	28,380	77,941
Miscellaneous - net	(3,547)	(2,799)	(6,325)	(6,380)
TOTAL	16,609	8,244	31,672	82,955

INTEREST EXPENSE
Interest expense	59,057	54,879	116,800	104,144
Allowance for borrowed funds used during construction	(2,642)	(2,864)	(4,695)	(5,563)
TOTAL	56,415	52,015	112,105	98,581

INCOME BEFORE INCOME TAXES	124,870	127,479	234,395	84,525

Income taxes	25,677	32,120	48,679	21,446

NET INCOME	99,193	95,359	185,716	63,079

Net loss attributable to noncontrolling interest	(889)	(825)	(2,080)	(2,643)

EARNINGS APPLICABLE TO MEMBER'S EQUITY	$100,082	$96,184	$187,796	$65,722

See Notes to Financial Statements.


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)
	2025	2024
	(In Thousands)
OPERATING ACTIVITIES
Net income	$185,716	$63,079
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	324,540	287,564
Deferred income taxes, investment tax credits, and non-current taxes accrued	65,494	41,130
Asset write-offs	—	131,775
Changes in assets and liabilities:
Receivables	(63,276)	67,067
Fuel inventory	(14,868)	10,890
Accounts payable	43,551	26,093
Taxes accrued	(19,741)	(15,496)
Interest accrued	69	4,647
Deferred fuel costs	(33,234)	2,317
Other working capital accounts	(25,426)	(13,243)
Provisions for estimated losses	(2,436)	5,725
Other regulatory assets	(4,658)	179,719
Other regulatory liabilities	65,970	71,529
Pension and other postretirement funded status	(20,651)	(27,588)
Other assets and liabilities	(63,163)	(310,500)
Net cash flow provided by operating activities	437,887	524,708
INVESTING ACTIVITIES
Construction expenditures	(400,384)	(394,973)
Allowance for equity funds used during construction	9,617	11,394
Payment for purchase of plant	(1,608)	(169,694)
Nuclear fuel purchases	(73,283)	(65,010)
Proceeds from sale of nuclear fuel	40,601	33,213
Proceeds from nuclear decommissioning trust fund sales	51,462	412,931
Investment in nuclear decommissioning trust funds	(70,616)	(418,818)
Changes in money pool receivable - net	(49,019)	(130,602)



Decrease in other investments	51	30
Net cash flow used in investing activities	(493,179)	(721,529)
FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	350,312	970,030
Retirement of long-term debt	(40,311)	(555,411)


Capital contributions from parent	—	695,000
Changes in money pool payable - net	(15,190)	(145,385)

Other	(17,278)	15,287
Net cash flow provided by financing activities	277,533	979,521

Net increase in cash and cash equivalents	222,241	782,700
Cash and cash equivalents at beginning of period	4,747	3,632
Cash and cash equivalents at end of period	$226,988	$786,332

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$115,404	$49,597
Income taxes	$—	$1,569
Noncash investing activities:
Accrued construction expenditures	$77,169	$36,355

See Notes to Financial Statements.


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$44,574	$1,306
Temporary cash investments	182,414	3,441
Total cash and cash equivalents	226,988	4,747
Accounts receivable:
Customer	156,578	139,234
Allowance for doubtful accounts	(6,356)	(4,672)
Associated companies	82,913	35,412
Other	97,188	70,927
Accrued unbilled revenues	148,697	125,824
Total accounts receivable	479,020	366,725

Fuel inventory - at average cost	64,805	49,937
Materials and supplies	426,029	384,238
Deferred nuclear refueling outage costs	27,408	48,879
Prepayments and other	55,249	41,404
TOTAL	1,279,499	895,930

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds	1,686,652	1,604,428
Other	795	797
TOTAL	1,687,447	1,605,225

UTILITY PLANT
Electric	16,502,576	16,371,182
Construction work in progress	576,593	320,447
Nuclear fuel	229,701	257,533
TOTAL UTILITY PLANT	17,308,870	16,949,162
Less - accumulated depreciation and amortization	6,452,925	6,275,150
UTILITY PLANT - NET	10,855,945	10,674,012

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets	1,704,768	1,700,110
Other	212,976	198,706
TOTAL	1,917,744	1,898,816

TOTAL ASSETS	$15,740,635	$15,073,983

See Notes to Financial Statements.


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$600,000	$—
Accounts payable:
Associated companies	49,653	85,137
Other	310,648	210,040
Customer deposits	132,692	129,267
Taxes accrued	73,474	93,215
Interest accrued	38,446	38,377
Deferred fuel costs	11,924	45,158
Other	64,932	55,313
TOTAL	1,281,769	656,507

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	1,550,533	1,489,169
Accumulated deferred investment tax credits	25,469	26,069
Regulatory liability for income taxes - net	425,296	417,561
Other regulatory liabilities	889,400	831,165
Decommissioning	1,741,194	1,691,583
Accumulated provisions	74,043	76,479

Long-term debt	4,838,033	5,122,494
Other	265,633	298,951
TOTAL	9,809,601	9,953,471

Commitments and Contingencies

EQUITY
Member's equity	4,636,633	4,448,837
Noncontrolling interest	12,632	15,168
TOTAL	4,649,265	4,464,005

TOTAL LIABILITIES AND EQUITY	$15,740,635	$15,073,983

See Notes to Financial Statements.


ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Noncontrolling Interest	Member's Equity	Total
	(In Thousands)

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

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

Capital contribution from parent	—	275,000	275,000


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

Net income (loss)	(825)	96,184	95,359

Capital contribution from parent	—	420,000	420,000

Distributions to noncontrolling interest	(31)	—	(31)
Balance at June 30, 2024	$18,675	$4,499,793	$4,518,468









Balance at December 31, 2024	$15,168	$4,448,837	$4,464,005

Net income (loss)	(1,191)	87,714	86,523





Distributions to noncontrolling interest	(181)	—	(181)
Balance at March 31, 2025	13,796	4,536,551	4,550,347

Net income (loss)	(889)	100,082	99,193

Distributions to noncontrolling interest	(275)	—	(275)
Balance at June 30, 2025	$12,632	$4,636,633	$4,649,265








See Notes to Financial Statements.

ENTERGY LOUISIANA, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Second Quarter 2025 Compared to Second Quarter 2024

Net income increased $169.1 million primarily due to expenses of $151.5 million ($110.7 million net-of-tax), recorded 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. Also contributing to the increase was higher other income. The increase was partially offset by higher depreciation and amortization expenses and higher interest expense. See Note 2 to the financial statements in the Form 10-K for discussion of the agreement in principle and the subsequently filed global stipulated settlement agreement.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Net income increased $240.5 million primarily due to expenses of $151.5 million ($110.7 million net-of-tax), recorded 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. Also contributing to the increase were higher other income, higher volume/weather, and higher retail electric price. The increase was partially offset by higher depreciation and amortization expenses and higher interest expense. See Note 2 to the financial statements in the Form 10-K for discussion of the agreement in principle and the subsequently filed global stipulated settlement agreement.

Operating Revenues

Second Quarter 2025 Compared to Second Quarter 2024

Following is an analysis of the change in operating revenues comparing the second quarter 2025 to the second quarter 2024:


			Amount
			(In Millions)
2024 operating revenues			$1,276.1
Fuel, rider, and other revenues that do not significantly affect net income			221.8
Retail electric price			11.6
Volume/weather			0.6
2025 operating revenues			$1,510.1

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

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

The retail electric price variance is primarily due to an increase in formula rate plan revenues, including an increase in the distribution recovery mechanism, effective September 2024. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the 2023 formula rate plan proceeding.

The volume/weather variance is insignificant and primarily due to an increase in weather-adjusted residential usage and an increase in commercial and industrial usage, substantially offset by the effect of less favorable weather on residential sales. The increase in weather-adjusted residential usage and the increase in commercial usage are primarily due to an increase in customers. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the chlor-alkali and industrial gases industries. The increased usage from these industrial customers has a relatively smaller effect on operating revenues because a larger portion of the revenues from these customers comes from fixed charges.

Total electric energy sales for Entergy Louisiana for the three months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	3,583	3,913	(8)
Commercial	2,886	2,881	—
Industrial	9,183	8,414	9
Governmental	203	209	(3)
Total retail	15,855	15,417	3
Sales for resale:
Associated companies	1,533	1,482	3
Non-associated companies	167	395	(58)
Total	17,555	17,294	2

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

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Following is an analysis of the change in operating revenues comparing the six months ended June 30, 2025 to the six months ended June 30, 2024:


			Amount
			(In Millions)
2024 operating revenues			$2,478.6
Fuel, rider, and other revenues that do not significantly affect net income			262.0
Retail electric price			37.1
Volume/weather			33.9
2025 operating revenues			$2,811.6

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

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

increase in weather-adjusted residential usage and the increase in commercial usage are primarily due to an increase in customers. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the chlor-alkali, petroleum refining, and industrial gases industries.

Total electric energy sales for Entergy Louisiana for the six months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	6,753	6,728	—
Commercial	5,318	5,335	—
Industrial	17,716	16,175	10
Governmental	398	408	(2)
Total retail	30,185	28,646	5
Sales for resale:
Associated companies	2,981	2,740	9
Non-associated companies	395	777	(49)
Total	33,561	32,163	4

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

Other Income Statement Variances

Second Quarter 2025 Compared to Second Quarter 2024

Other operation and maintenance expenses increased slightly primarily due to:

an increase of $6.9 million in non-nuclear generation expenses primarily due to a higher scope of work performed during plant outages in 2025 as compared to 2024;
an increase of $3.3 million in power delivery expenses primarily due to higher vegetation maintenance costs; and
several individually insignificant items.

The increase was substantially offset by:

a decrease of $10.1 million in nuclear generation expenses primarily due to a lower scope of work performed in 2025 as compared to 2024;
contract costs of $4.4 million, in second quarter 2024, related to operational performance, customer service, and organizational health initiatives; and
a decrease of $4.4 million in energy efficiency expenses primarily due to the timing of recovery from customers, partially offset by higher energy efficiency costs.

Depreciation and amortization expenses increased primarily due to additions to plant in service and an increase in nuclear depreciation rates effective September 2024 in accordance with the global stipulated settlement agreement approved by the LPSC in August 2024. See Note 2 to the financial statements in the Form 10-K for discussion of the global stipulated settlement agreement.

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Other regulatory charges (credits) - net includes regulatory charges of $150.2 million, recorded 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 in the Form 10-K for discussion of the agreement in principle and the subsequently filed global stipulated settlement agreement. In addition, Entergy Louisiana records a regulatory charge or credit for the difference between asset retirement obligation-related expenses and nuclear decommissioning trust earnings plus asset retirement obligation-related costs collected in revenue.

Other income increased primarily due to:

a $17.1 million true-up of Entergy Louisiana's MISO cost recovery mechanism over-recovery balance to the 2024 formula rate plan filing, which was filed with the LPSC in May 2025. See Note 2 to the financial statements herein for discussion of the 2024 formula rate plan filing;
an increase in the allowance for equity funds used during construction due to higher construction work in progress in 2025, including the projects for new generation resources in north Louisiana;
an increase of $6.9 million in the amortization of tax gross ups on customer advances for construction; and
an increase of $5.4 million in interest earned on money pool investments.

The increase was partially offset by a decrease of $4.3 million in affiliated dividend income from affiliated preferred membership interests related to storm cost securitization.

Interest expense increased primarily due to the issuance of $700 million of 5.15% Series mortgage bonds in August 2024, the issuance of $750 million of 5.80% Series mortgage bonds in January 2025, and carrying costs of $7.3 million in 2025 on customer advances for construction. The increase was partially offset by an increase in the allowance for borrowed funds used during construction due to higher construction work in progress in 2025.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Other operation and maintenance expenses decreased primarily due to:

a decrease of $10.3 million in nuclear generation expenses primarily due to a lower scope of work performed, including during plant outages, in 2025 as compared to 2024;
contract costs of $8.8 million in 2024 related to operational performance, customer service, and organizational health initiatives; and
a decrease of $4.4 million in energy efficiency expenses primarily due to the timing of recovery from customers, partially offset by higher energy efficiency costs.

The decrease was partially offset by:

an increase of $5.1 million in loss provisions;
an increase of $4.5 million in non-nuclear power generation expenses primarily due to a higher scope of work performed during plant outages in 2025 as compared to 2024;
an increase of $4.3 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
several individually insignificant items.

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

agreement approved by the LPSC in August 2024. See Note 2 to the financial statements in the Form 10-K for discussion of the global stipulated settlement agreement.

Other regulatory charges (credits) - net includes regulatory charges of $150.2 million, recorded 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. In addition, Entergy Louisiana records a regulatory charge or credit for the difference between asset retirement obligation-related expenses and nuclear decommissioning trust earnings plus asset retirement obligation-related costs collected in revenue. See Note 2 to the financial statements in the Form 10-K for discussion of the agreement in principle and the subsequently filed global stipulated settlement agreement.

Other income increased primarily due to:

an increase in the allowance for equity funds used during construction due to higher construction work in progress in 2025, including the projects for new generation resources in north Louisiana;
a $17.1 million true-up of Entergy Louisiana's MISO cost recovery mechanism over-recovery balance to the 2024 formula rate plan filing, which was filed with the LPSC in May 2025. See Note 2 to the financial statements herein for discussion of the 2024 formula rate plan filing;
an increase of $14.2 million in interest earned on money pool investments; and
an increase of $13.4 million in the amortization of tax gross ups on customer advances for construction.

The increase was offset by changes in decommissioning trust fund activity, including portfolio rebalancing of the River Bend decommissioning trust fund in 2024, and a decrease of $8.7 million in affiliated dividend income from affiliated preferred membership interests related to storm cost securitization.

Interest expense increased primarily due to the issuance of $700 million of 5.15% Series mortgage bonds in August 2024, the issuance of $750 million of 5.80% Series mortgage bonds in January 2025, and carrying costs of $12.1 million in 2025 on customer advances for construction. The increase was partially offset by an increase in the allowance for borrowed funds used during construction due to higher construction work in progress in 2025.

Income Taxes

The effective income tax rates were 19.5% for the second quarter 2025 and 18.6% for the six months ended June 30, 2025. The differences in the effective income tax rates for the second quarter 2025 and the six months ended June 30, 2025 versus the federal statutory rate of 21% were primarily due to the book and tax differences related to the non-taxable income distributions earned on preferred membership interests, book and tax differences related to the allowance for equity funds used during construction, and certain book and tax differences related to utility plant items, partially offset by the accrual for state income taxes.

The effective income tax rate was 13.7% for the second quarter 2024 and 16% for the six months ended June 30, 2024. The differences in the effective income tax rates for the second quarter 2024 and for the six months ended June 30, 2024 versus the federal statutory rate of 21% were primarily due to the book and tax differences related to the non-taxable income distributions earned on preferred membership interests and certain book and tax differences related to utility plant items, partially offset by the accrual for state income taxes and the amortization of state accumulated deferred income taxes as a result of tax rate changes.

Income Tax Legislation and Regulation

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Sale of Natural Gas Distribution Business

See Note 13 to the financial statements herein and the “Held For Sale - Natural Gas Distribution Businesses” section in Note 14 to the financial statements in the Form 10-K discussion of the sale of Entergy Louisiana’s gas distribution business on July 1, 2025.

Liquidity and Capital Resources

Cash Flow

Cash flows for the six months ended June 30, 2025 and 2024 were as follows:


	2025	2024
	(In Thousands)
Cash and cash equivalents at beginning of period	$327,102	$2,772

Net cash provided by (used in):
Operating activities	978,699	808,398
Investing activities	(1,467,670)	(639,095)
Financing activities	461,319	13,706
Net increase (decrease) in cash and cash equivalents	(27,652)	183,009

Cash and cash equivalents at end of period	$299,450	$185,781

Operating Activities

Net cash flow provided by operating activities increased $170.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to the receipt of $204.7 million in advance payments related to customer agreements in 2025, which are recorded as current liabilities and included within changes in other working capital accounts, and higher collections from customers. The increase was partially offset by:

higher fuel and purchased power payments and the timing of recovery of fuel and purchased power costs. See Note 2 to the financial statements herein and in the Form 10-K for a discussion of fuel and purchased power cost recovery;
an increase of $45.4 million in interest paid; and
an increase of $19 million in spending on nuclear refueling outages in 2025 as compared to 2024.

Investing Activities

Net cash flow used in investing activities increased $828.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

an increase of $347.7 million in non-nuclear generation construction expenditures primarily due to higher spending on new generation resources in north Louisiana and the Sterlington solar project;
an increase of $183.9 million in distribution construction expenditures primarily due to increased investment in the resilience of the distribution system;
an increase of $135.7 million in transmission construction expenditures primarily due to higher capital expenditures as a result of increased development in Entergy Louisiana’s service area, higher spending on the Commodore transmission projects, and increased spending on various other transmission projects in 2025;

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

an increase in cash used of $98.9 million as a result of fluctuations in nuclear fuel activity due to variations from year to year in the timing and pricing of fuel reload requirements, materials and services deliveries, and the timing of cash payments during the nuclear fuel cycle;
an increase of $94.5 million in nuclear construction expenditures primarily due to increased spending on various nuclear projects in 2025; and
money pool activity.

The increase was partially offset by the receipt of $33.5 million from the storm reserve escrow account in 2025 and a decrease of $22.8 million in information technology capital expenditures primarily due to decreased spending on technology upgrade projects in 2025. See Note 2 to the financial statements herein for a discussion of the storm reserve funds.

Increases in Entergy Louisiana’s receivable from the money pool are a use of cash flow, and Entergy Louisiana’s receivable from the money pool increased $48.5 million for the six months ended June 30, 2025 compared to increasing by $31.4 million for the six months ended June 30, 2024. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Financing Activities

Net cash flow provided by financing activities increased $447.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

the issuance of $750 million of 5.80% Series mortgage bonds in January 2025;
the repayment, prior to maturity, of $400 million of 5.40% Series mortgage bonds in April 2024;
an increase of $357.3 million in net customer advances for construction related to transmission, distribution, and generator interconnection agreements;
a decrease of $169.1 million in common equity distributions paid in 2025 in order to maintain Entergy Louisiana’s capital structure;
money pool activity; and
net long-term borrowings of $92.9 million in 2025 compared to net repayments of $27.1 million in 2024 on the nuclear fuel company variable interest entities’ credit facilities.

The increase was partially offset by:

the issuances of $500 million of 5.35% Series mortgage bonds and $700 million of 5.70% Series mortgage bonds, each in March 2024;
the repayment, prior to maturity, of $190 million of 3.78% Series mortgage bonds in March 2025; and
the repayment, prior to maturity, of $110 million of 3.78% Series mortgage bonds in March 2025.

Decreases in Entergy Louisiana’s payable to the money pool are a use of cash flow, and Entergy Louisiana’s payable to the money pool decreased $156.2 million for the six months ended June 30, 2024.

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

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Capital Structure

Entergy Louisiana’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy Louisiana is primarily due to the net issuance of long-term debt in 2025.


	June 30, 2025		December 31, 2024
Debt to capital	47.2	%	46.0	%


Effect of subtracting cash	(0.7	%)	(0.8	%)
Net debt to net capital (non-GAAP)	46.5	%	45.2	%

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

Uses and Sources of Capital

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

Recent announcements of changes to international trade policy and tariffs and further similar changes may impact Entergy Louisiana’s business, operations, results of operations, and liquidity and capital resources. Potential impacts may include increases in costs associated with Entergy Louisiana’s capital investments or operation and maintenance expenses; operational impacts, such as supply chain, manufacturing, or raw materials sourcing disruptions which may affect Entergy Louisiana’s ability to make planned capital investments as and when expected and needed; legal uncertainties, such as potential legal or other challenges to presidential tariff authority; or broader economic risks, including shifting customer demand, impacts on customer investment decisions, and volatile or uncertain credit and capital markets, which may affect Entergy Louisiana’s ability to access needed capital. The nature and extent of any such effects will depend on, among other things, the specifics of the changes that are ultimately implemented both domestically and internationally, the responses of vendors, suppliers, and other counterparties to those changes, indirect effects on the price and availability of non-tariffed goods, and the effectiveness of mitigation measures.

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


June 30, 2025	December 31, 2024	June 30, 2024	December 31, 2023
(In Thousands)
$81,208	$32,668	$31,361	($156,166)

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

Entergy Louisiana has a credit facility in the amount of $400 million scheduled to expire in June 2030. The credit facility includes fronting commitments for the issuance of letters of credit against $15 million of the borrowing capacity of the facility. As of June 30, 2025, there were no cash borrowings and no letters of credit

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

outstanding under the credit facility. In addition, Entergy Louisiana is a party to two uncommitted letter of credit facilities as a means to post collateral to support its obligations to MISO. As of June 30, 2025, $74.3 million in letters of credit were outstanding under one of Entergy Louisiana’s uncommitted letter of credit facilities. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

The Entergy Louisiana nuclear fuel company variable interest entities have two separate credit facilities, each in the amount of $105 million and scheduled to expire in June 2027. As of June 30, 2025, $69.5 million in loans were outstanding under the credit facility for the Entergy Louisiana River Bend nuclear fuel company variable interest entity and $61 million in loans were outstanding under the credit facility for the Entergy Louisiana Waterford nuclear fuel company variable interest entity. See Note 4 to the financial statements herein for additional discussion of the nuclear fuel company variable interest entity credit facilities.

2021 Solar Certification and the Geaux Green Option

As discussed in the Form 10-K, in November 2021, Entergy Louisiana filed an application with the LPSC seeking certification of and approval for the addition of four new solar photovoltaic resources with a combined nameplate capacity of 475 megawatts (the 2021 Solar Portfolio) and the implementation of a new green tariff, the Geaux Green Option (Rider GGO). The 2021 Solar Portfolio consists of four resources which include (i) the Vacherie Facility, a 150 megawatt resource in St. James Parish; (ii) the Sunlight Road Facility, a 50 megawatt resource in Washington Parish; (iii) the St. Jacques Facility, a 150 megawatt resource in St. James Parish; and (iv) the Elizabeth Facility, a 125 megawatt resource in Allen Parish. The St. Jacques Facility would be acquired through a build-own-transfer agreement; the remaining resources involve power purchase agreements. The Sunlight Road Facility and the Elizabeth Facility each achieved commercial operation in 2024, and the Vacherie Facility and the St. Jacques Facility originally had estimated in service dates in 2025.

In August 2022 the parties reached a settlement certifying the 2021 Solar Portfolio and approving implementation of Rider GGO. In September 2022 the LPSC approved the settlement. Following the LPSC approval, the St. James Parish council issued a moratorium on new land use permits for solar facilities until the later of March 2023 or the completion of an environmental and economic impact study. In November 2023, St. James Parish lifted the moratorium and adopted an ordinance modifying the parish’s land use plan to establish solar as an approved land use and defining corresponding solar regulations. In March 2024 the project developer submitted a solar energy facility farm permit application to the St. James Parish planning commission to request approval for the Vacherie and St. Jacques Facilities. In June 2024 the St. James Parish council denied the application and following this denial, the project developer and one of the project’s ground lessors filed separate lawsuits seeking to overturn the council’s decision. The council’s decision was subsequently affirmed by the Louisiana 23rd Judicial District Court. Entergy Louisiana is no longer pursuing the addition of resources through an acquisition of the St. Jacques Facility or through a power purchase agreement with the Vacherie Facility.

Additional Generation and Transmission Resources

As discussed in the Form 10-K, in October 2024, Entergy Louisiana filed an application with the LPSC seeking approval of a variety of generation and transmission resources proposed in connection with establishing service to a new data center to be developed by a subsidiary of Meta Platforms, Inc. in north Louisiana, for which an electric service agreement has been executed. The filing requests LPSC certification of three new combined cycle combustion turbine generation resources totaling 2,262 MW, each of which will be enabled for future carbon capture and storage, a new 500 kV transmission line, and 500 kV substation upgrades. The application also requests approval to implement a corporate sustainability rider applicable to the new customer. The corporate sustainability rider contemplates the new customer contributing to the costs of the future addition of 1,500 MW of new solar and energy storage resources, agreements involving carbon capture and storage at Entergy Louisiana’s existing Lake Charles Power Station, and potential future wind and nuclear resources. Entergy Louisiana anticipates funding the incremental cost to serve the customer through direct financial contributions from the customer and the revenues it expects to earn under the electric service agreement. The electric service agreement also contains provisions for

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

termination payments that will help ensure that there is no harm to Entergy Louisiana and its customers in the event of early termination. A directive was issued at the LPSC’s November 2024 meeting for the matter to be decided by October 2025. In February 2025 intervenors filed a motion asking the LPSC to deny Entergy Louisiana’s requested exemption from the LPSC’s order addressing competitive solicitation procedures and further asking the LPSC to dismiss the application. The ALJ issued an order denying the motion to dismiss the application and deferring the LPSC’s consideration of the motion regarding the competitive solicitation procedures until the hearing. In March 2025 the same intervenors filed a motion requesting the LPSC to require the customer and its parent company to be joined as parties to the proceeding or dismiss the application. In April 2025 the ALJ issued an order denying the March 2025 motion, and the moving parties filed a motion asking the LPSC to review and reverse the ALJ’s decision.

In February 2025, Entergy Louisiana filed supplemental testimony with the LPSC stating that the third combined cycle combustion turbine resource presented in the October 2024 application would be sited at Entergy Louisiana’s Waterford site in Killona, Louisiana, alongside existing Entergy Louisiana generation resources. The testimony also notes that Entergy Louisiana is negotiating with the customer in response to the customer’s request to increase the load associated with its project in north Louisiana. The testimony indicates further that the additional load can be served without additional generation capacity beyond what was presented in the October 2024 application, but that additional transmission facilities, which will be funded directly by the customer, are needed to serve this additional load.

In April 2025 and May 2025 the LPSC staff and certain intervenors each filed their direct testimony and cross-answering testimony, respectively. The LPSC staff’s testimony discussed the significant projected benefits associated with the data center project; however, both the LPSC staff and such intervenors also identified purported risks associated with constructing the requested resources based on the terms and conditions under which the customer would be taking service. Both the LPSC staff and such intervenors also recommended that the LPSC impose certain conditions on its approval which, if adopted, would support approval of Entergy Louisiana’s application. The LPSC staff’s recommendations included a condition that would require, under specified circumstances, certain sharing of net revenues from service to the project with Entergy Louisiana’s other customers. The LPSC staff also recommended that the LPSC deny approval of the corporate sustainability rider terms providing for the customer to supply funding toward the cost of installing carbon capture and storage infrastructure at Entergy Louisiana’s Lake Charles Power Station. The Louisiana Energy Users Group and other intervenors recommended that the LPSC require various changes to the terms of the electric service agreement with the customer that would shift additional risk and cost to the customer rather than Entergy Louisiana’s broader customer base. Certain intervenors also challenged approval on the basis that Entergy Louisiana did not conduct a request for proposals to procure the proposed generation resources to serve the customer’s project; these intervenors also advocated that Entergy Louisiana be required to procure more renewable generation and evaluate transmission alternatives rather than proceeding with development of all of the proposed new generation resources. In May 2025, Entergy Louisiana filed its rebuttal testimony responding to the direct and cross-answering testimony of the LPSC staff and intervenors. The rebuttal testimony expressed support for or no opposition to the LPSC’s adoption of certain of the proposed recommendations and identified why other proposed recommendations should not be adopted. In addition, the rebuttal testimony stated that the negotiations related to the increase in the load amount for the customer’s project had concluded and that a rider to the electric service agreement reflecting this increase had been executed. In advance of the July 2025 hearing, Entergy Louisiana reached a settlement agreement with the LPSC staff and three separate intervenors. The hearing concluded and the matter is currently under consideration by the ALJ.

Transmission Projects

As discussed in the Form 10-K, in March 2024, Entergy Louisiana filed an application with the LPSC seeking an exemption determination, or alternatively, a certificate of public convenience and necessity, for a transmission project that includes a new 500 kV/230 kV Commodore substation and an approximately 60-mile 230 kV line connecting the new Commodore substation to the Waterford substation. In February 2025, Entergy

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Louisiana and the LPSC staff jointly filed, for consideration by the LPSC, an uncontested stipulated settlement agreement resolving all issues in the proceeding. The LPSC approved the uncontested stipulated settlement agreement in March 2025 and thereby granted certification of the project.

As discussed in the Form 10-K, in December 2024, Entergy Louisiana filed an application with the LPSC seeking a certificate of public convenience and necessity for a 500 kV transmission project that includes the construction of a new 84-mile Commodore to Churchill 500 kV transmission line, the expansion of the Waterford 500 kV substation, the construction of a new Churchill 500 kV substation and improvements to the Churchill 230 kV substation, and the conversion of the existing 230 kV Waterford to Churchill transmission line to 500 kV, forming a 500 kV loop into the Downstream of Gypsy load pocket. In April 2025 the LPSC staff and the Louisiana Energy Users Group, an intervenor, filed direct testimony. The LPSC staff’s testimony recommends LPSC approval of the project. The Louisiana Energy Users Group’s testimony opines that Entergy Louisiana has shown that there is a need for additional transmission investment in the West Bank area of Amite South but recommends that the LPSC withhold approval pending further analysis, including analysis of potential lower cost alternatives to the proposed project, and also pending Entergy Louisiana demonstrating that it has contributions in aid of construction or minimum bill revenues from the customers whose block load additions would be enabled by the proposed transmission project in amounts sufficient to substantially, if not fully, cover the revenue requirement of the proposed project. In June 2025, Entergy Louisiana filed rebuttal testimony. The hearing is set for August 2025, and an LPSC decision is expected in fourth quarter 2025.

State and Local Rate Regulation and Fuel-Cost Recovery

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

Retail Rates

2023 Formula Rate Plan Filing

As discussed in the Form 10-K, in August 2024, pursuant to the global stipulated settlement agreement approved by the LPSC also in August 2024, Entergy Louisiana filed its formula rate plan evaluation report for its 2023 calendar year operations. Consistent with the global stipulated settlement agreement, the filing reflected a 9.7% allowed return on common equity with a bandwidth of 40 basis points above and below the midpoint. For the 2023 test year, however, the bandwidth provisions of the formula rate plan were temporarily suspended and, pursuant to the terms of the global stipulated settlement agreement, Entergy Louisiana implemented the September 2024 formula rate plan rate adjustments effective with the first billing cycle of September 2024. In January 2025, Entergy Louisiana and the LPSC filed a joint report indicating that no disputed issues remained in the proceeding and requesting that the LPSC issue an order accepting Entergy Louisiana’s evaluation report and, ultimately, resolving this matter. In March 2025 the LPSC issued an order accepting the evaluation report.

In December 2024, pursuant to the terms of the global stipulated settlement agreement, Entergy Louisiana filed an interim rate adjustment for the 2023 test year reflecting the return of $25.1 million of refunds from the System Energy settlement with the LPSC to customers from January through August 2025. In February 2025, pursuant to the terms of the global stipulated settlement agreement, Entergy Louisiana filed a second interim rate adjustment for the 2023 test year reflecting the divestiture of Entergy Louisiana’s share of Grand Gulf capacity and energy, which was effective as of January 1, 2025. The second interim rate adjustment also reflected a revenue increase of $17.8 million for the recovery of Hurricane Francine costs as approved by the LPSC (on an interim basis). The second interim rate adjustment was implemented with the first billing cycle of March 2025. See further discussion of the Hurricane Francine proceeding in Note 2 to the financial statements herein. See Note 8 to the financial statements in the Form 10-K for discussion of Entergy Louisiana’s divestiture from the Unit Power Sales Agreement.

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

2024 Formula Rate Plan Filing

In May 2025, Entergy Louisiana filed its formula rate plan evaluation report for its 2024 calendar year operations. Consistent with the global stipulated settlement agreement approved by the LPSC in August 2024, the filing reflected a 9.7% allowed return on common equity with a bandwidth of 40 basis points above and below the midpoint. For the test year 2024, however, any earnings above the allowed return on common equity are to be returned to customers through a credit, pursuant to the terms of the global stipulated settlement agreement. The 2024 test year evaluation produced an earned return on common equity of 9.98%, which is within the approved formula rate plan bandwidth, but above the allowed return on common equity, resulting in a customer credit of $31.9 million to be returned to customers during September and October 2025.

Other changes in formula rate plan revenue are driven by higher nuclear depreciation rates, additions to transmission and distribution plant in service reflected through the transmission recovery mechanism and distribution recovery mechanism, and the expiration of customer credits related to the LPSC’s order, offset by increased customer credits resulting from an increase in net MISO revenues reflected through the MISO cost recovery mechanism and the reduction in the Louisiana corporate income tax rate effective January 1, 2025, reflected through the tax adjustment mechanism, as discussed below. Excluding the customer credit for earnings above the authorized return on common equity discussed above, the net result of these changes on an annualized basis is a $2 million increase in formula rate plan revenue.

As noted above, the 2024 evaluation report included the effects of the change in Louisiana state tax law that reduced the corporate income tax rate to a flat 5.5% (from the then-current highest marginal rate of 7.5%) effective January 1, 2025. As such, the 2024 evaluation report reflected the calculation of current and deferred income tax expenses as well as the revaluation of accumulated deferred income taxes based on the income tax laws currently in effect. The 2024 evaluation report proposes that the rate effects associated with the revaluation of accumulated deferred income taxes, including the collection of any net accumulated deferred income tax deficiency and any related effects on rate base, should be reflected in the tax adjustment mechanism consistent with the treatment of similar Tax Cuts and Jobs Act and prior state tax change-related impacts. The effects of the change in tax law on Entergy Louisiana’s authorized return on rate base are also reflected in the 2024 evaluation report consistent with the treatment cited above, including a credit in the extraordinary cost change mechanism for the prospective change in Entergy Louisiana’s authorized return and a credit within the tax adjustment mechanism for over-collection of income tax expense through August 2025.

Fuel and purchased power cost recovery

As discussed in the Form 10-K, in January 2023 the LPSC staff provided notice of an audit of Entergy Louisiana’s purchased gas adjustment clause filings. The audit includes a review of the reasonableness of charges flowed through Entergy Louisiana’s purchased gas adjustment clause for the period from 2021 through 2022. In April 2025 the LPSC staff issued its audit report (for Entergy Louisiana’s gas operations), which included several prospective recommendations but no financial disallowances. The LPSC accepted the report in June 2025.

COVID-19 Orders

As discussed in the Form 10-K, in April 2020 the LPSC issued an order authorizing utilities to record as a regulatory asset expenses incurred from the suspension of disconnections and collection of late fees imposed by LPSC orders associated with the COVID-19 pandemic. In April 2023, Entergy Louisiana filed an application proposing to utilize approximately $1.6 billion in certain low interest debt to generate earnings to apply toward the reduction of the COVID-19 regulatory asset, as well as to conduct additional outside right-of-way vegetation management activities and fund the minor storm reserve account. In that filing, Entergy Louisiana proposed to delay repayment of certain shorter-term first mortgage bonds that were issued to finance storm restoration costs until the costs could be securitized, and to invest the funds that otherwise would be used to repay those bonds in the

Entergy Louisiana, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

money pool to take advantage of the spread between prevailing interest rates on investments in the money pool and the interest rates on the bonds. The LPSC approved Entergy Louisiana’s requested relief in June 2023. In November 2024, Entergy Louisiana submitted a filing to the LPSC requesting that the LPSC review Entergy Louisiana’s computation of the COVID-19 regulatory asset as well as Entergy Louisiana’s proposal to offset the regulatory asset against the net interest earned on the short-term debt funds, resulting in no increased costs to customers. At the time of the filing, Entergy Louisiana had a regulatory asset of $47.8 million for costs associated with the COVID-19 pandemic. As of June 30, 2025, Entergy Louisiana had a regulatory liability of $48.9 million for the deferred earnings related to the approximately $1.6 billion in low interest debt, which had been fully repaid by August 2024. In granting Entergy Louisiana’s requested relief in June 2023, the LPSC ordered that any amount of earnings exceeding the amount of the COVID-19 regulatory asset be transferred to Entergy Louisiana’s storm reserve escrow account. In May 2025 the LPSC staff filed direct testimony finding that Entergy Louisiana had complied with the relevant orders and recommending approval of the requested treatment. In June 2025, Entergy Louisiana and the LPSC staff filed a joint motion requesting a hearing for the admission of an uncontested stipulated settlement agreement in the matter. A settlement hearing took place in July 2025 and Entergy Louisiana expects the settlement to be considered at an upcoming meeting of the LPSC. The settlement terms provide for LPSC approval of Entergy Louisiana’s calculation of the COVID-19 regulatory assets and Entergy Louisiana’s proposal to offset the regulatory asset as described above and as proposed in Entergy Louisiana’s November 2024 filing.

Storm Cost Recovery

In March 2025, Entergy Louisiana filed an application asking that the LPSC issue an order establishing a presumption, in future proceedings involving Entergy Louisiana’s petition for a financing order allowing securitization of storm costs, that the LPSC will enter a decision on the request for a financing order within 120 days from the date of the filing of the petition, while preserving the LPSC’s jurisdiction to complete its full prudence review. The filing was rejected on procedural grounds. In June 2025 the LPSC approved a directive providing, among other things, that any utility seeking securitization for storm costs this year must file a proposed financing order with its application and that the LPSC staff must use best efforts to deliver the financing order to the LPSC for consideration at the next available Business and Executive meeting after the application is filed.

Industrial and Commercial Customers

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

Federal Regulation

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

Nuclear Matters

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

NRC Reactor Oversight Process

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 Louisiana, LLC 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. River Bend is currently in Column 1, and Waterford 3 is currently in Column 2.

In June 2025 the NRC placed Waterford 3 in Column 2, effective second quarter 2025, based on the failure to properly develop and implement adequate maintenance instructions for the fuel linkage connection to the mechanical governor for an emergency diesel generator. Waterford 3 will remain in Column 2 until a supplemental inspection is satisfactorily completed.

Environmental Risks

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

Critical Accounting Estimates

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

New Accounting Pronouncements


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Three Months Ended		Six Months Ended
	2025	2024	2025	2024
	(In Thousands)		(In Thousands)
OPERATING REVENUES
Electric	$1,495,504	$1,261,444	$2,767,450	$2,434,237
Natural gas	14,559	14,680	44,160	44,327
TOTAL	1,510,063	1,276,124	2,811,610	2,478,564

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	326,256	246,571	540,108	486,658
Purchased power	297,179	166,868	558,967	367,148
Nuclear refueling outage expenses	14,809	20,041	33,180	37,554
Other operation and maintenance	275,187	275,168	533,224	536,147
Decommissioning	19,608	20,061	39,025	39,725
Taxes other than income taxes	68,010	70,629	134,231	140,468
Depreciation and amortization	201,842	190,861	399,464	380,405
Other regulatory charges (credits) - net	(61,915)	120,298	(109,148)	111,944
TOTAL	1,140,976	1,110,497	2,129,051	2,100,049

OPERATING INCOME	369,087	165,627	682,559	378,515

OTHER INCOME
Allowance for equity funds used during construction	18,470	7,522	33,676	14,807
Interest and investment income	53,599	15,229	54,687	78,192
Interest and investment income - affiliated	75,195	80,075	151,766	160,479
Miscellaneous - net	(33,797)	(20,646)	(16,726)	(67,821)
TOTAL	113,467	82,180	223,403	185,657

INTEREST EXPENSE
Interest expense	116,524	98,536	237,858	195,731
Allowance for borrowed funds used during construction	(6,691)	(2,593)	(12,876)	(5,070)
TOTAL	109,833	95,943	224,982	190,661

INCOME BEFORE INCOME TAXES	372,721	151,864	680,980	373,511

Income taxes	72,541	20,750	126,603	59,674

NET INCOME	300,180	131,114	554,377	313,837

Net income attributable to noncontrolling interests	745	788	1,497	1,583

EARNINGS APPLICABLE TO MEMBER'S EQUITY	$299,435	$130,326	$552,880	$312,254

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Three Months Ended		Six Months Ended
	2025	2024	2025	2024
	(In Thousands)		(In Thousands)

Net Income	$300,180	$131,114	$554,377	$313,837

Other comprehensive loss
Pension and other postretirement adjustment (net of tax benefit of $723, $745, $2,607, and $1,491)	(2,132)	(2,023)	(3,103)	(4,047)
Other comprehensive loss	(2,132)	(2,023)	(3,103)	(4,047)

Comprehensive Income	298,048	129,091	551,274	309,790
Net income attributable to noncontrolling interests	745	788	1,497	1,583
Comprehensive Income Applicable to Member’s Equity	$297,303	$128,303	$549,777	$308,207

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)
	2025	2024
	(In Thousands)
OPERATING ACTIVITIES
Net income	$554,377	$313,837
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	474,334	453,888
Deferred income taxes, investment tax credits, and non-current taxes accrued	225,635	146,540
Changes in working capital:
Receivables	(122,848)	(161,001)
Fuel inventory	8,300	6,890
Accounts payable	9,253	(1,443)
Taxes accrued	(790)	27,677
Interest accrued	10,430	14,163
Deferred fuel costs	(92,390)	11,364
Other working capital accounts	77,581	(190,407)
Changes in provisions for estimated losses	(23,918)	9,519
Changes in other regulatory assets	48,355	(9,005)
Changes in other regulatory liabilities	(70,161)	286,036
Changes in pension and other postretirement funded status	(18,124)	(22,548)
Other	(101,335)	(77,112)
Net cash flow provided by operating activities	978,699	808,398
INVESTING ACTIVITIES
Construction expenditures	(1,450,693)	(685,206)
Allowance for equity funds used during construction	26,560	14,807

Proceeds from sale of assets	366	—
Nuclear fuel purchases	(130,279)	(52,992)
Proceeds from sale of nuclear fuel	17,240	38,822
Payments to storm reserve escrow account	(5,144)	(6,553)
Receipt from storm reserve escrow account	33,456	—

Redemption of preferred membership interests of affiliate	118,805	113,942

Proceeds from nuclear decommissioning trust fund sales	291,901	333,149
Investment in nuclear decommissioning trust funds	(321,342)	(363,736)
Changes in money pool receivable - net	(48,540)	(31,361)

Decrease in other investments	—	33

Net cash flow used in investing activities	(1,467,670)	(639,095)
FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	1,465,747	1,825,954
Retirement of long-term debt	(936,318)	(1,061,918)




Change in money pool payable - net	—	(156,166)

Customer advances received for construction	548,476	113,712
Customer advances used for construction	(117,339)	(39,888)

Common equity distributions paid	(495,000)	(664,100)
Other	(4,247)	(3,888)
Net cash flow provided by financing activities	461,319	13,706

Net increase (decrease) in cash and cash equivalents	(27,652)	183,009
Cash and cash equivalents at beginning of period	327,102	2,772
Cash and cash equivalents at end of period	$299,450	$185,781

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$222,889	$177,455
Income taxes	$—	$58
Noncash investing activities:
Accrued construction expenditures	$258,408	$81,177

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$1,186	$327
Temporary cash investments	298,264	326,775
Total cash and cash equivalents	299,450	327,102
Accounts receivable:
Customer	369,748	294,089
Allowance for doubtful accounts	(6,246)	(3,036)
Associated companies	163,851	103,055
Other	67,705	39,056
Accrued unbilled revenues	222,520	213,026
Total accounts receivable	817,578	646,190
Deferred fuel costs	84,372	—
Fuel inventory - at average cost	41,622	49,515
Materials and supplies	718,589	782,459
Deferred nuclear refueling outage costs	63,821	31,121

Current assets held for sale	4,845	2,474
Prepayments and other	273,298	84,236
TOTAL	2,303,575	1,923,097

OTHER PROPERTY AND INVESTMENTS
Investment in affiliate preferred membership interests	4,138,191	4,256,997
Decommissioning trust funds	2,540,476	2,429,088
Non-utility property - at cost (less accumulated depreciation)	455,274	410,611
Storm reserve escrow account	228,406	256,718
Other	9,969	9,749
TOTAL	7,372,316	7,363,163

UTILITY PLANT
Electric	29,556,060	28,736,547
Natural gas	34,460	33,775
Construction work in progress	1,350,603	761,090
Nuclear fuel	339,822	288,084
TOTAL UTILITY PLANT	31,280,945	29,819,496
Less - accumulated depreciation and amortization	11,019,307	10,794,817
UTILITY PLANT - NET	20,261,638	19,024,679

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets	1,591,621	1,637,967
Deferred fuel costs	168,122	168,122
Non-current assets held for sale	178,746	173,669
Other	76,624	57,853
TOTAL	2,015,113	2,037,611

TOTAL ASSETS	$31,952,642	$30,348,550

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$250,000	$300,000
Accounts payable:
Associated companies	83,160	108,688
Other	688,784	533,087
Customer deposits	173,957	169,544
Taxes accrued	28,225	29,002
Interest accrued	130,616	120,186
Deferred fuel costs	—	5,421
Customer advances	352,052	151,662
Other	119,510	96,426
TOTAL	1,826,304	1,514,016

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	2,726,823	2,477,954
Accumulated deferred investment tax credits	86,428	88,679
Regulatory liability for income taxes - net	339,104	355,432
Other regulatory liabilities	1,640,771	1,692,547
Decommissioning	1,884,745	1,842,855
Accumulated provisions	255,705	279,623
Pension and other postretirement liabilities	149,085	160,577
Long-term debt	10,149,823	9,566,453
Customer advances for construction	722,979	291,842
Other	516,438	479,178
TOTAL	18,471,901	17,235,140

Commitments and Contingencies

EQUITY
Member’s equity	11,560,886	11,503,030
Accumulated other comprehensive income	50,555	53,658
Noncontrolling interests	42,996	42,706
TOTAL	11,654,437	11,599,394

TOTAL LIABILITIES AND EQUITY	$31,952,642	$30,348,550

See Notes to Financial Statements.


ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)

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

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

Net income	795	181,928	—	182,723
Other comprehensive loss	—	—	(2,024)	(2,024)
Non-cash contribution from parent	—	976	—	976
Common equity distributions	—	(97,500)	—	(97,500)
Distributions to LURC	(858)	—	—	(858)
Other	—	(43)	—	(43)
Balance at March 31, 2024	45,044	11,558,975	52,774	11,656,793

Net income	788	130,326	—	131,114
Other comprehensive loss	—	—	(2,023)	(2,023)
Common equity distributions	—	(566,600)	—	(566,600)
Distributions to LURC	(299)	—	—	(299)
Other	—	(40)	—	(40)
Balance at June 30, 2024	$45,533	$11,122,661	$50,751	$11,218,945








Balance at December 31, 2024	$42,706	$11,503,030	$53,658	$11,599,394

Net income	752	253,445	—	254,197
Other comprehensive loss	—	—	(971)	(971)
Common equity distributions	—	(36,250)	—	(36,250)
Distributions to LURC	(888)	—	—	(888)
Other	—	(12)	—	(12)
Balance at March 31, 2025	42,570	11,720,213	52,687	11,815,470

Net income	745	299,435	—	300,180
Other comprehensive loss	—	—	(2,132)	(2,132)
Common equity distributions	—	(458,750)	—	(458,750)
Distributions to LURC	(319)	—	—	(319)
Other	—	(12)	—	(12)
Balance at June 30, 2025	$42,996	$11,560,886	$50,555	$11,654,437







See Notes to Financial Statements.

ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Second Quarter 2025 Compared to Second Quarter 2024

Net income increased $4.7 million primarily due to higher retail electric price and higher other income, partially offset by higher other operation and maintenance expenses and higher interest expense.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Net income increased $24.1 million primarily due to higher retail electric price, higher other income, and higher volume/weather. The increase was partially offset by higher other operation and maintenance expenses, a regulatory charge, recorded in the first quarter 2025, to reflect an adjustment to the grid modernization over/under recovery deferral balance, and higher interest expense.

Operating Revenues

Second Quarter 2025 Compared to Second Quarter 2024

Following is an analysis of the change in operating revenues comparing the second quarter 2025 to the second quarter 2024:


			Amount
			(In Millions)
2024 operating revenues			$442.9
Fuel, rider, and other revenues that do not significantly affect net income			35.2
Retail electric price			14.1
Volume/weather			(0.3)
2025 operating revenues			$491.9

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

The retail electric price variance is primarily due to an increase in formula rate plan rates effective July 2024 and an increase in the interim facilities rate adjustment revenues effective January 2025. See Note 2 to the financial statements in the Form 10-K for discussion of the 2024 formula rate plan filing, and see Note 2 to the financial statements herein for discussion of the interim facilities rate adjustment.

The volume/weather variance for second quarter 2025 as compared to second quarter 2024 is insignificant.

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Mississippi for the three months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	1,308	1,397	(6)
Commercial	1,172	1,172	—
Industrial	646	596	8
Governmental	101	101	—
Total retail	3,227	3,266	(1)
Sales for resale:
Non-associated companies	1,725	970	78
Total	4,952	4,236	17

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

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Following is an analysis of the change in operating revenues comparing the six months ended June 30, 2025 to the six months ended June 30, 2024:


			Amount
			(In Millions)
2024 operating revenues			$857.8
Fuel, rider, and other revenues that do not significantly affect net income			0.7
Retail electric price			38.3
Volume/weather			18.8
2025 operating revenues			$915.6

The retail electric price variance is primarily due to increases in formula rate plan rates effective April 2024 and July 2024 and an increase in the interim facilities rate adjustment revenues effective January 2025. See Note 2 to the financial statements in the Form 10-K for discussion of the 2024 formula rate plan filing, and see Note 2 to the financial statements herein for discussion of the interim facilities rate adjustment.

The volume/weather variance is primarily due to an increase in industrial usage and the effect of more favorable weather on residential sales. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the technology and primary metals industries, and an increase in demand from small industrial customers.

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Mississippi for the six months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	2,619	2,584	1
Commercial	2,174	2,135	2
Industrial	1,172	1,090	8
Governmental	189	188	1
Total retail	6,154	5,997	3
Sales for resale:
Non-associated companies	2,419	2,958	(18)
Total	8,573	8,955	(4)

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

Other Income Statement Variances

Second Quarter 2025 Compared to Second Quarter 2024

Other operation and maintenance expenses increased primarily due to an increase of $8.2 million in power delivery expenses primarily due to higher vegetation maintenance costs and an increase of $5.7 million in storm damage provisions. See Note 2 to the financial statements in the Form 10-K for discussion of the storm damage mitigation and restoration rider.

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

Other regulatory charges (credits) - net includes regulatory credits of $7.3 million, recorded in second quarter 2024, to reflect the effects of the joint stipulation reached in the 2024 formula rate plan filing proceeding. See Note 2 to the financial statements in the Form 10-K for discussion of the 2024 formula rate plan filing.

Other income increased primarily due to an increase of $4.4 million in interest earned on money pool investments and an increase in the allowance for equity funds used during construction due to higher construction in progress in 2025.

Interest expense increased primarily due to the issuance of $600 million of 5.80% Series mortgage bonds in March 2025.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Other operation and maintenance expenses increased primarily due to an increase of $11.7 million in power delivery expenses primarily due to higher vegetation maintenance costs and an increase of $9.8 million in storm damage provisions. See Note 2 to the financial statements in the Form 10-K for discussion of the storm damage mitigation and restoration rider.

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

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Other regulatory charges (credits) – net includes:

a regulatory charge of $21 million, recorded in first quarter 2025, to reflect an adjustment to the grid modernization over/under recovery deferral balance; and
regulatory credits of $7.3 million, recorded in second quarter 2024, to reflect the effects of the joint stipulation reached in the 2024 formula rate plan filing proceeding. See Note 2 to the financial statements in the Form 10-K for discussion of the 2024 formula rate plan filing.

Other income increased primarily due to an increase of $7.6 million in the amortization of tax gross ups on customer advances for construction, an increase of $6.3 million in interest earned on money pool investments, and an increase in the allowance for equity funds used during construction due to higher construction in progress in 2025.

Interest expense increased primarily due to the issuance of $600 million of 5.80% Series mortgage bonds in March 2025, the issuance of $300 million of 5.85% Series mortgage bonds in May 2024, and carrying costs of $9 million in 2025 on customer advances for construction.

Income Taxes

The effective income tax rates were 23.7% for the second quarter 2025 and 23.8% for the six months ended June 30, 2025. The differences in the effective income tax rates for the second quarter 2025 and the six months ended June 30, 2025 versus the federal statutory rate of 21% were primarily due to the accrual for state income taxes, partially offset by certain book and tax differences related to utility plant items.

The effective income tax rates were 24.1% for the second quarter 2024 and 23.6% for the six months ended June 30, 2024. The differences in the effective income tax rates for the second quarter 2024 and the six months ended June 30, 2024 versus the federal statutory rate of 21% were primarily due to the accrual for state income taxes, partially offset by certain book and tax differences related to utility plant items.

Income Tax Legislation and Regulation

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

Liquidity and Capital Resources

Cash Flow

Cash flows for the six months ended June 30, 2025 and 2024 were as follows:


	2025	2024
	(In Thousands)
Cash and cash equivalents at beginning of period	$155,693	$6,630

Net cash provided by (used in):
Operating activities	287,013	185,304
Investing activities	(791,448)	(314,145)
Financing activities	750,108	125,324
Net increase (decrease) in cash and cash equivalents	245,673	(3,517)

Cash and cash equivalents at end of period	$401,366	$3,113

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Operating Activities

Net cash flow provided by operating activities increased $101.7 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to the receipt of $108.4 million in advance payments related to customer agreements in 2025, which are recorded as current liabilities and included within changes in other working capital accounts, and higher collections from customers, including $25 million of deferred revenue in 2025. The increase was partially offset by the timing of payments to vendors and higher fuel and purchased power payments. See Note 2 to the financial statements in the Form 10-K for a discussion of fuel and purchased power cost recovery.

Investing Activities

Net cash flow used in investing activities increased $477.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

an increase of $394.8 million in non-nuclear generation construction expenditures primarily due to higher spending on the Delta Blues Advanced Power Station project, the Penton Solar project, the Delta Solar project, and other non-nuclear generation projects;
money pool activity; and
an increase of $29.1 million in distribution construction expenditures primarily due to increased investment in the resilience of the distribution system.

The increase was partially offset by a decrease of $21.2 million in transmission construction expenditures primarily due to decreased spending on various transmission projects in 2025 and a decrease of $16.3 million in information technology capital expenditures primarily due to decreased spending on technology upgrade projects in 2025.

Increases in Entergy Mississippi’s receivable from the money pool are a use of cash flow, and Entergy Mississippi’s receivable from the money pool increased $93.5 million for the six months ended June 30, 2025. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Financing Activities

Net cash flow provided by financing activities increased $624.8 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

the issuance of $600 million of 5.80% Series mortgage bonds in March 2025;
an increase of $110.1 million in net customer advances for construction related to transmission, distribution, and generator interconnection agreements;
the repayment, prior to maturity, of $100 million of 3.75% Series mortgage bonds in June 2024;
a capital contribution of $62.5 million received from Entergy Corporation in February 2025 in order to maintain Entergy Mississippi’s capital structure;
money pool activity; and
$22.3 million in common equity distributions paid in 2024 in order to maintain Entergy Mississippi’s capital structure.

The increase was partially offset by the issuance of $300 million of 5.85% Series mortgage bonds in May 2024.

Decreases in Entergy Mississippi’s payable to the money pool are a use of cash flow, and Entergy Mississippi’s payable to the money pool decreased by $33.4 million for the six months ended June 30, 2024.

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

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

Capital Structure

Entergy Mississippi’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy Mississippi is primarily due to net issuance of long-term debt in 2025.


	June 30, 2025		December 31, 2024
Debt to capital	53.9	%	50.4	%
Effect of subtracting cash	(3.5	%)	(1.6	%)
Net debt to net capital (non-GAAP)	50.4	%	48.8	%

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

Uses and Sources of Capital

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

Recent announcements of changes to international trade policy and tariffs and further similar changes may impact Entergy Mississippi’s business, operations, results of operations, and liquidity and capital resources. Potential impacts may include increases in costs associated with Entergy Mississippi’s capital investments or operation and maintenance expenses; operational impacts, such as supply chain, manufacturing, or raw materials sourcing disruptions which may affect Entergy Mississippi’s ability to make planned capital investments as and when expected and needed; legal uncertainties, such as potential legal or other challenges to presidential tariff authority; or broader economic risks, including shifting customer demand, impacts on customer investment decisions, and volatile or uncertain credit and capital markets, which may affect Entergy Mississippi’s ability to access needed capital. The nature and extent of any such effects will depend on, among other things, the specifics of the changes that are ultimately implemented both domestically and internationally, the responses of vendors, suppliers, and other counterparties to those changes, indirect effects on the price and availability of non-tariffed goods, and the effectiveness of mitigation measures.

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


June 30, 2025	December 31, 2024	June 30, 2024	December 31, 2023
(In Thousands)
$108,677	$15,218	($40,355)	($73,769)

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

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy Mississippi has a credit facility in the amount of $300 million scheduled to expire in June 2030. The credit facility includes fronting commitments for the issuance of letters of credit against $5 million of the borrowing capacity of the facility. As of June 30, 2025, there were no cash borrowings and no letters of credit outstanding under the credit facility. In addition, Entergy Mississippi is a party to two uncommitted letter of credit facilities as a means to post collateral to support its obligations to MISO and for other purposes. As of June 30, 2025, $46.0 million in MISO letters of credit and $1.3 million in non-MISO letters of credit were outstanding under one of Entergy Mississippi’s uncommitted letter of credit facilities. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

New Advanced Power Station

Entergy Mississippi plans to construct, own, and operate a 754 MW combined cycle combustion turbine facility to be located in the City of Ridgeland, Madison County, Mississippi. The facility will be powered primarily by natural gas, and it will also be enabled for future carbon capture and storage and for hydrogen co-firing optionality. The project is expected to cost in excess of $1 billion. The facility is expected to be in service in 2029.

State and Local Rate Regulation and Fuel-Cost Recovery

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

Retail Rates

2025 Formula Rate Plan Filing

In February 2025, Entergy Mississippi submitted its formula rate plan 2025 test year filing and 2024 look-back filing showing Entergy Mississippi’s earned return on rate base for the historical 2024 calendar year to be within the formula rate plan bandwidth and projected earned return for the 2025 calendar year also to be within the formula rate plan bandwidth. The 2025 test year filing showed an earned return on rate base of 7.64% and reflected no change in formula rate plan revenues. The 2024 look-back filing compared actual 2024 results to the approved benchmark return on rate base and reflected no change in formula rate plan revenues, although Entergy Mississippi proposed to adjust interim rates by $135 thousand to reflect two outside-the-bandwidth changes: (1) the completion of Entergy Mississippi’s return to customers of credits under its restructuring credit rider; and (2) a true-up of demand side management costs.

In June 2025, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a joint stipulation that confirmed the 2025 test year filing, with the exception of immaterial adjustments to certain operation and maintenance expenses. The formula rate plan reflected an earned return on rate base of 7.68% for calendar year 2025, resulting in no change in formula rate plan revenues for 2025. Pursuant to the stipulation, Entergy Mississippi’s 2024 look-back filing reflected an earned return on rate base of 7.55%, which also resulted in no change in formula rate plan revenues for 2024. In addition, the stipulation included the recovery of the two outside-the-bandwidth changes discussed above as well as the ratemaking treatment of customer contributions (deferred revenue and prepaid contributions in aid of construction). In June 2025 the MPSC approved the joint stipulation with rates effective in July 2025.

Interim Facilities Rate Adjustments

In May 2024, Entergy Mississippi received approval from the MPSC for formula rate plan revisions that were necessary for Entergy Mississippi to comply with state legislation passed in January 2024. 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

Entergy Mississippi, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

projects as specified in the legislation. Entergy Mississippi filed the first of its annual interim facilities rate adjustment reports 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 Mississippi filed its second interim facilities rate adjustment report in November 2024 to recover approximately $46.7 million of these costs over a 12-month period with rates effective beginning in January 2025. In February 2025, Entergy Mississippi filed a true-up interim facilities rate adjustment report to the initial annual interim facilities rate adjustment report filed in May 2024, reflecting the recovery of an additional approximately $1.0 million of costs over a 12-month period with rates effective with the first billing cycle of April 2025.

Federal Regulation

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

Nuclear Matters

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

Environmental Risks

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

Critical Accounting Estimates

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

New Accounting Pronouncements


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Three Months Ended		Six Months Ended
	2025	2024	2025	2024
	(In Thousands)		(In Thousands)
OPERATING REVENUES
Electric	$491,875	$442,894	$915,584	$857,750

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	53,061	63,978	79,112	181,827
Purchased power	90,660	66,848	178,171	134,502
Other operation and maintenance	85,066	67,700	163,866	138,906
Taxes other than income taxes	43,800	37,496	87,310	75,806
Depreciation and amortization	68,478	67,130	136,462	133,048
Other regulatory charges (credits) - net	16,767	9,873	52,354	3,382
TOTAL	357,832	313,025	697,275	667,471

OPERATING INCOME	134,043	129,869	218,309	190,279

OTHER INCOME
Allowance for equity funds used during construction	5,142	3,094	10,412	5,012
Interest and investment income	6,553	948	8,870	1,141
Miscellaneous - net	(777)	(1,771)	3,317	(3,393)
TOTAL	10,918	2,271	22,599	2,760

INTEREST EXPENSE
Interest expense	36,540	28,499	72,720	54,896
Allowance for borrowed funds used during construction	(1,966)	(1,204)	(3,982)	(1,951)
TOTAL	34,574	27,295	68,738	52,945

INCOME BEFORE INCOME TAXES	110,387	104,845	172,170	140,094

Income taxes	26,115	25,280	41,032	33,097

NET INCOME	84,272	79,565	131,138	106,997

Net loss attributable to noncontrolling interest	(412)	(1,733)	(2,891)	(4,035)

EARNINGS APPLICABLE TO MEMBER'S EQUITY	$84,684	$81,298	$134,029	$111,032

See Notes to Financial Statements.

(Page left blank intentionally)


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)
	2025	2024
	(In Thousands)
OPERATING ACTIVITIES
Net income	$131,138	$106,997
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization	136,462	133,048
Deferred income taxes, investment tax credits, and non-current taxes accrued	(19,714)	24,931
Changes in assets and liabilities:
Receivables	(41,738)	(26,254)
Fuel inventory	(4,855)	(2,331)
Accounts payable	(9,305)	475
Taxes accrued	(3,929)	(48,627)
Interest accrued	9,125	(1,845)
Deferred fuel costs	(64,303)	41,104
Other working capital accounts	85,185	(18,367)
Provisions for estimated losses	(3,962)	(11,575)
Other regulatory assets	52,132	5,325
Other regulatory liabilities	(1,066)	(3,415)
Pension and other postretirement funded status	(6,261)	(8,968)
Other assets and liabilities	28,104	(5,194)
Net cash flow provided by operating activities	287,013	185,304

INVESTING ACTIVITIES
Construction expenditures	(703,400)	(319,053)
Allowance for equity funds used during construction	5,365	5,012

Change in money pool receivable - net	(93,459)	—


Increase (decrease) in other investments	46	(104)
Net cash flow used in investing activities	(791,448)	(314,145)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	592,679	396,105
Retirement of long-term debt	—	(200,000)
Capital contribution from parent	62,500	—

Change in money pool payable - net	—	(33,414)
Customer advances received for construction	155,594	4,290
Customer advances used for construction	(59,271)	(18,080)
Common equity distributions paid	—	(22,300)
Other	(1,394)	(1,277)
Net cash flow provided by financing activities	750,108	125,324

Net increase (decrease) in cash and cash equivalents	245,673	(3,517)
Cash and cash equivalents at beginning of period	155,693	6,630
Cash and cash equivalents at end of period	$401,366	$3,113

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$62,373	$55,538
Income taxes	$—	$2,356
Noncash investing activities:
Accrued construction expenditures	$78,363	$22,334

See Notes to Financial Statements.


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$30	$184
Temporary cash investments	401,336	155,509
Total cash and cash equivalents	401,366	155,693
Accounts receivable:
Customer	117,421	97,609
Allowance for doubtful accounts	(2,733)	(2,172)
Associated companies	123,710	23,909
Other	28,622	25,148
Accrued unbilled revenues	88,411	75,740
Total accounts receivable	355,431	220,234

Fuel inventory - at average cost	19,818	14,963
Materials and supplies	115,092	113,256
Prepayments and other	41,422	19,764
TOTAL	933,129	523,910

OTHER PROPERTY AND INVESTMENTS
Non-utility property - at cost (less accumulated depreciation)	4,474	4,482

Other	834	880
TOTAL	5,308	5,362

UTILITY PLANT
Electric	8,053,037	7,860,409
Construction work in progress	869,314	487,273
TOTAL UTILITY PLANT	8,922,351	8,347,682
Less - accumulated depreciation and amortization	2,592,512	2,511,091
UTILITY PLANT - NET	6,329,839	5,836,591

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets	473,715	525,847
Other	108,543	97,260
TOTAL	582,258	623,107

TOTAL ASSETS	$7,850,534	$6,988,970

See Notes to Financial Statements.


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT LIABILITIES

Accounts payable:
Associated companies	$50,498	$58,087
Other	213,938	283,755
Customer deposits	97,049	94,009
Taxes accrued	175,095	179,024
Interest accrued	29,792	20,667
Deferred fuel costs	62,013	126,316
Customer advances	103,402	—
Other	22,571	20,720
TOTAL	754,358	782,578

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	857,418	870,116
Accumulated deferred investment tax credits	13,234	13,446
Regulatory liability for income taxes - net	175,747	180,851
Other regulatory liabilities	63,582	59,544
Asset retirement cost liabilities	25,814	25,110
Accumulated provisions	43,238	47,200

Long-term debt	3,020,687	2,427,073
Customer advances for construction	208,941	112,618
Other	84,889	61,446
TOTAL	4,493,550	3,797,404

Commitments and Contingencies

EQUITY
Member's equity	2,597,315	2,400,786
Noncontrolling interest	5,311	8,202
TOTAL	2,602,626	2,408,988

TOTAL LIABILITIES AND EQUITY	$7,850,534	$6,988,970

See Notes to Financial Statements.


ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Noncontrolling Interest	Member's Equity	Total
		(In Thousands)

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

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

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

Net income (loss)	(1,733)	81,298	79,565
Common equity distributions	—	(22,300)	(22,300)

Balance at June 30, 2024	$14,718	$2,278,193	$2,292,911





Balance at December 31, 2024	$8,202	$2,400,786	$2,408,988

Net income (loss)	(2,479)	49,345	46,866

Capital contribution from parent	—	62,500	62,500
Balance at March 31, 2025	5,723	2,512,631	2,518,354

Net income (loss)	(412)	84,684	84,272


Balance at June 30, 2025	$5,311	$2,597,315	$2,602,626

See Notes to Financial Statements.

ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Second Quarter 2025 Compared to Second Quarter 2024

Net income decreased $3.1 million primarily due to higher other operation and maintenance expenses and higher interest expense.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Entergy New Orleans had net income of $30.1 million for the six months ended June 30, 2025 compared to a net loss of $27.8 million for the six months ended June 30, 2024 primarily due to a $78.5 million ($57.4 million net-of-tax) regulatory charge, recorded in first quarter 2024, primarily to reflect a settlement in principle between Entergy New Orleans and the City Council in April 2024 for additional sharing with customers of income tax benefits from the resolution of the 2016-2018 IRS audit. Also contributing to the net income variance were higher volume/weather, higher retail electric price, and lower other operation and maintenance expenses, partially offset by higher interest expense and higher depreciation and amortization expenses. See Note 3 to the financial statements in the Form 10-K for discussion of the April 2024 settlement in principle and discussion of the resolution of the 2016-2018 IRS audit.

Operating Revenues

Second Quarter 2025 Compared to Second Quarter 2024

Following is an analysis of the change in operating revenues comparing the second quarter 2025 to the second quarter 2024:


			Amount
			(In Millions)
2024 operating revenues			$199.3
Fuel, rider, and other revenues that do not significantly affect net income			9.8
Retail electric price			1.8
Volume/weather			(0.9)
2025 operating revenues			$210.0

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

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

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

The volume/weather variance is primarily due to a decrease in industrial usage and the effect of less favorable weather on residential sales, partially offset by an increase in weather-adjusted residential usage. The decrease in industrial usage is primarily due to a decrease in demand from large industrial customers, primarily in the industrial gases industry.

Total electric energy sales for Entergy New Orleans for the three months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	593	614	(3)
Commercial	534	531	1
Industrial	106	115	(8)
Governmental	198	198	—
Total retail	1,431	1,458	(2)
Sales for resale:
Non-associated companies	255	476	(46)
Total	1,686	1,934	(13)

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

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Following is an analysis of the change in operating revenues comparing the six months ended June 30, 2025 to the six months ended June 30, 2024:


			Amount
			(In Millions)
2024 operating revenues			$392.3
Fuel, rider, and other revenues that do not significantly affect net income			(8.2)
Retail electric price			3.4
Volume/weather			3.6
2025 operating revenues			$391.1

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

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy New Orleans for the six months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	1,126	1,094	3
Commercial	972	974	—
Industrial	177	200	(12)
Governmental	372	375	(1)
Total retail	2,647	2,643	—
Sales for resale:
Non-associated companies	352	981	(64)
Total	2,999	3,624	(17)

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

Other Income Statement Variances

Second Quarter 2025 Compared to Second Quarter 2024

Other operation and maintenance expenses increased primarily due to an increase of $1.0 million in loss provisions and an increase of $1.0 million in energy efficiency expenses primarily due to higher energy efficiency costs. The increase was partially offset by contract costs of $0.8 million, in second quarter 2024, related to operational performance, customer service, and organizational health initiatives.

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

Other income (deductions) decreased primarily due to the deferral of certain other postretirement benefit expense credits, effective September 2024, in accordance with the terms of the 2024 formula rate plan filing. See Note 2 to the financial statements in the Form 10-K for discussion of the 2024 formula rate plan filing and Note 11 to the financial statements in the Form 10-K for discussion of the other postretirement benefits accounting treatment.

Interest expense increased primarily due to an increase of $3.3 million in carrying costs on regulatory liability balances.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Other operation and maintenance expenses decreased primarily due to $1.8 million in costs recognized in 2024 related to credits provided to customers as part of the rate mitigation plan approved in the settlement of the 2023 formula rate plan filing and contract costs of $1.7 million in 2024 related to operational performance, customer service, and organizational health initiatives. The decrease was partially offset by an increase of $1.8 million in energy efficiency expenses primarily due to higher energy efficiency costs, partially offset by the timing of recovery from customers. See Note 2 to the financial statements in the Form 10-K for discussion of the formula rate plan filing.

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

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

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

Interest expense increased primarily due to an increase of $6.6 million in carrying costs on regulatory liability balances.

Income Taxes

The effective income tax rates were 24.1% for the second quarter 2025 and 23.9% for the six months ended June 30, 2025. The differences in the effective income tax rates for the second quarter 2025 and the six months ended June 30, 2025 versus the federal statutory rate of 21% were primarily due to the accrual for state income taxes, partially offset by certain book and tax differences related to utility plant items.

The effective income tax rates were 26.2% for the second quarter 2024 and 29.8% for the six months ended June 30, 2024. The differences in the effective income tax rates for the second quarter 2024 and the six months ended June 30, 2024 versus the federal statutory rate of 21% were primarily due to the accrual for state income taxes.

Income Tax Legislation and Regulation

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

Sale of Natural Gas Distribution Business

See Note 13 to the financial statements herein and the “Held For Sale - Natural Gas Distribution Businesses” section in Note 14 to the financial statements in the Form 10-K for discussion of the sale of Entergy New Orleans’s gas distribution business on July 1, 2025.

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Liquidity and Capital Resources

Cash Flow

Cash flows for the six months ended June 30, 2025 and 2024 were as follows:


	2025	2024
	(In Thousands)
Cash and cash equivalents at beginning of period	$31,777	$26

Net cash provided by (used in):
Operating activities	23,652	45,416
Investing activities	(77,385)	(74,449)
Financing activities	21,982	35,565
Net increase (decrease) in cash and cash equivalents	(31,751)	6,532

Cash and cash equivalents at end of period	$26	$6,558

Operating Activities

Net cash flow provided by operating activities decreased $21.8 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to the timing of payments to vendors and higher fuel and purchased power payments in 2025 as compared to 2024. The decrease was partially offset by higher collections from customers. See Note 2 to the financial statements in the Form 10-K for a discussion of fuel and purchased power cost recovery.

Investing Activities

Net cash flow used in investing activities increased $2.9 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to an increase of $17.9 million in non-nuclear generation construction expenditures primarily due to a higher scope of work performed during plant outages in 2025 as compared to 2024, partially offset by the receipt of $10.3 million from the storm reserve escrow account in 2025. See “Uses and Sources of Capital - Hurricane Francine” below for discussion of the Hurricane Francine proceeding.

Financing Activities

Net cash flow provided by financing activities decreased $13.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to the issuances of $65 million of 6.41% Series mortgage bonds, $50 million of 6.54% Series mortgage bonds, and $35 million of 6.25% Series mortgage bonds, each in May 2024, and the repayment, at maturity, of $78 million of 3.00% Series mortgage bonds in March 2025. The decrease was partially offset by the repayment, at maturity, of an $85 million unsecured term loan in June 2024, proceeds received in March 2025 from an $80 million unsecured term loan (subsequently repaid in July 2025), and money pool activity.

Increases in Entergy New Orleans’s payable to the money pool are a source of cash flow, and Entergy New Orleans’s payable to the money pool increased $20.9 million for the six months ended June 30, 2025 compared to decreasing by $21.7 million for the six months ended June 30, 2024. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

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

Capital Structure

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


	June 30, 2025		December 31, 2024
Debt to capital	50.5	%	51.5	%
Effect of subtracting cash	—	%	(1.1	%)
Net debt to net capital (non-GAAP)	50.5	%	50.4	%

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

Uses and Sources of Capital

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

Recent announcements of changes to international trade policy and tariffs and further similar changes may impact Entergy New Orleans’s business, operations, results of operations, and liquidity and capital resources. Potential impacts may include increases in costs associated with Entergy New Orleans’s capital investments or operation and maintenance expenses; operational impacts, such as supply chain, manufacturing, or raw materials sourcing disruptions which may affect Entergy New Orleans’s ability to make planned capital investments as and when expected and needed; legal uncertainties, such as potential legal or other challenges to presidential tariff authority; or broader economic risks, including shifting customer demand, impacts on customer investment decisions, and volatile or uncertain credit and capital markets, which may affect Entergy New Orleans’s ability to access needed capital. The nature and extent of any such effects will depend on, among other things, the specifics of the changes that are ultimately implemented both domestically and internationally, the responses of vendors, suppliers, and other counterparties to those changes, indirect effects on the price and availability of non-tariffed goods, and the effectiveness of mitigation measures.

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


June 30, 2025	December 31, 2024	June 30, 2024	December 31, 2023
(In Thousands)
($20,884)	$3,146	$1,110	($21,651)

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

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Entergy New Orleans has a credit facility in the amount of $25 million scheduled to expire in June 2027. The credit facility includes fronting commitments for the issuance of letters of credit against $10 million of the borrowing capacity of the facility. As of June 30, 2025, there were no cash borrowings and no letters of credit outstanding under the credit facility. In addition, Entergy New Orleans is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of June 30, 2025, a $0.5 million letter of credit was outstanding under Entergy New Orleans’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

Hurricane Francine

In September 2024, Hurricane Francine caused damage to the areas served by Entergy New Orleans. The storm resulted in widespread power outages, primarily due to damage to distribution infrastructure as a result of strong winds and heavy rain, and the loss of sales during the power outages. In December 2024, in accordance with the terms of its storm recovery reserve escrow agreement, Entergy New Orleans transmitted to the City Council a notice of intent to withdraw up to $20 million in estimated storm costs resulting from Hurricane Francine from its storm recovery reserve escrow account, subject to the City Council’s certification of those costs. In January 2025, the City Council authorized the withdrawal, and in February 2025, Entergy New Orleans withdrew $10.3 million from its storm recovery reserve escrow account.

State and Local Rate Regulation

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

Retail Rates

2025 Formula Rate Plan Filing

In April 2025, Entergy New Orleans submitted to the City Council its formula rate plan 2024 test year filing. The 2024 evaluation report produced an electric earned return on equity of 10.98% compared to the authorized return on equity of 9.35%. Without adjustments, this would result in a decrease in electric rates of $13.8 million. The decrease in electric rates is driven by the realignment of regulatory liabilities into the formula from a separate rate mechanism, partially offset by the cost of known and measurable electric capital additions. The filing also commences the previously authorized recovery of certain regulatory costs and requests a revenue-neutral recovery to offset a proposed reduction in bill payment late fees. Taking into account these proposed adjustments, the filing presents a decrease in authorized electric revenues of $8.6 million. The City Council’s advisors issued their report in July 2025 seeking a reduction in Entergy New Orleans’s requested electric formula rate plan revenues of approximately $7.2 million due to certain proposed cost realignments and disallowances, of which $4.1 million is associated with Entergy New Orleans’s proposed implementation, on a revenue neutral basis, of a proposed reduction in customer late fees. The City Council’s advisors also proposed rate mitigation in the amount of $4.4 million through offsets to the formula rate plan funded by certain regulatory liabilities. The City Council’s advisors’ report began a 35-day period to resolve any disputes among the parties regarding the formula rate plan. For any disputed rate adjustments, the City Council would set a procedural schedule to resolve. Resulting rates will be effective with the first billing cycle of September 2025 pursuant to the formula rate plan tariff.

Federal Regulation

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

Entergy New Orleans, LLC and Subsidiaries

Management’s Financial Discussion and Analysis

Nuclear Matters

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

Environmental Risks

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

Critical Accounting Estimates

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

New Accounting Pronouncements


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Three Months Ended		Six Months Ended
	2025	2024	2025	2024
	(In Thousands)		(In Thousands)
OPERATING REVENUES
Electric	$183,781	$178,664	$322,706	$335,605
Natural gas	26,219	20,677	68,349	56,697
TOTAL	210,000	199,341	391,055	392,302

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	26,546	18,314	38,909	49,139
Purchased power	69,126	64,318	136,867	124,700
Other operation and maintenance	44,269	41,720	82,927	85,052
Taxes other than income taxes	14,979	14,187	29,872	29,609
Depreciation and amortization	22,358	21,130	44,203	42,044
Other regulatory charges (credits) - net	(3,160)	1,659	(6,590)	83,179
TOTAL	174,118	161,328	326,188	413,723

OPERATING INCOME (LOSS)	35,882	38,013	64,867	(21,421)

OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction	494	511	800	889
Interest and investment income	168	316	602	457
Miscellaneous - net	(794)	381	(1,373)	352
TOTAL	(132)	1,208	29	1,698

INTEREST EXPENSE
Interest expense	12,236	10,810	25,711	20,336
Allowance for borrowed funds used during construction	(272)	(214)	(439)	(371)
TOTAL	11,964	10,596	25,272	19,965

INCOME (LOSS) BEFORE INCOME TAXES	23,786	28,625	39,624	(39,688)

Income taxes	5,744	7,492	9,483	(11,841)

NET INCOME (LOSS)	$18,042	$21,133	$30,141	($27,847)

See Notes to Financial Statements.

(Page left blank intentionally)


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)
	2025	2024
	(In Thousands)
OPERATING ACTIVITIES
Net income (loss)	$30,141	($27,847)
Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:
Depreciation and amortization	44,203	42,044
Deferred income taxes, investment tax credits, and non-current taxes accrued	(9,350)	(19,560)
Changes in assets and liabilities:
Receivables	(22,585)	(111,913)
Fuel inventory	(1,188)	544
Accounts payable	(5,661)	(10,311)
Prepaid taxes and taxes accrued	19,556	7,345
Interest accrued	(2,629)	(1,220)
Deferred fuel costs	(4,203)	(51)
Other working capital accounts	(8,825)	(8,120)
Provisions for estimated losses	(10,772)	2,473
Other regulatory assets	10,338	11,073
Other regulatory liabilities	(13,791)	167,529
Pension and other postretirement funded status	(4,804)	(3,876)
Other assets and liabilities	3,222	(2,694)
Net cash flow provided by operating activities	23,652	45,416

INVESTING ACTIVITIES
Construction expenditures	(91,611)	(72,409)
Allowance for equity funds used during construction	800	889
Changes in money pool receivable - net	3,146	(1,110)
Receipt from storm reserve escrow account	10,333	—
Payments to storm reserve escrow account	(1,664)	(2,939)
Changes in securitization account	1,611	1,120

Net cash flow used in investing activities	(77,385)	(74,449)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	79,717	149,075
Retirement of long-term debt	(78,000)	(91,245)

Changes in money pool payable - net	20,884	(21,651)

Other	(619)	(614)
Net cash flow provided by financing activities	21,982	35,565

Net increase (decrease) in cash and cash equivalents	(31,751)	6,532
Cash and cash equivalents at beginning of period	31,777	26
Cash and cash equivalents at end of period	$26	$6,558

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$27,816	$20,159
Income taxes	$—	$2,598
Noncash investing activities:
Accrued construction expenditures	$5,059	$4,263

See Notes to Financial Statements.


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$26	$374
Temporary cash investments	—	31,403
Total cash and cash equivalents	26	31,777
Securitization recovery trust account	—	1,611
Accounts receivable:
Customer	79,709	65,731
Allowance for doubtful accounts	(3,395)	(6,735)
Associated companies	4,959	5,844
Other	5,772	9,467
Accrued unbilled revenues	39,997	33,296
Total accounts receivable	127,042	107,603
Deferred fuel costs	5,599	—
Fuel inventory - at average cost	766	320
Materials and supplies	29,226	25,516

Current assets held for sale	14,757	13,100
Prepayments and other	19,169	12,128
TOTAL	196,585	192,055

OTHER PROPERTY AND INVESTMENTS

Storm reserve escrow account	75,073	83,742
Other	832	832
TOTAL	75,905	84,574

UTILITY PLANT
Electric	2,193,823	2,160,165
Natural gas	43,723	43,279
Construction work in progress	43,456	18,269
TOTAL UTILITY PLANT	2,281,002	2,221,713
Less - accumulated depreciation and amortization	785,518	768,305
UTILITY PLANT - NET	1,495,484	1,453,408

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets	122,938	133,261
Deferred fuel costs	4,080	4,080
Non-current assets held for sale	289,126	284,738
Other	74,779	71,037
TOTAL	490,923	493,116

TOTAL ASSETS	$2,258,897	$2,223,153

See Notes to Financial Statements.


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$165,000	$78,000
Payable due to associated company	1,140	1,140
Accounts payable:
Associated companies	63,780	45,479
Other	40,216	43,750
Customer deposits	33,070	28,834
Taxes accrued	28,342	8,786
Interest accrued	6,042	8,671
Deferred fuel costs	—	980

Other	18,165	14,427
TOTAL	355,755	230,067

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	192,918	201,541
Accumulated deferred investment tax credits	15,566	15,617
Regulatory liability for income taxes - net	16,506	15,000
Other regulatory liabilities	245,127	260,312

Accumulated provisions	79,521	90,293

Long-term debt	565,556	650,463
Long-term payable due to associated company	5,864	5,864
Other	54,342	56,395
TOTAL	1,175,400	1,295,485

Commitments and Contingencies

EQUITY
Member's equity	727,742	697,601
TOTAL	727,742	697,601

TOTAL LIABILITIES AND EQUITY	$2,258,897	$2,223,153

See Notes to Financial Statements.


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)

			Member's Equity
			(In Thousands)

Balance at December 31, 2023			$806,754

Net loss			(48,980)

Balance at March 31, 2024			757,774

Net income			21,133

Balance at June 30, 2024			$778,907





Balance at December 31, 2024			$697,601

Net income			12,099

Balance at March 31, 2025			709,700

Net income			18,042

Balance at June 30, 2025			$727,742





See Notes to Financial Statements.

ENTERGY TEXAS, INC. AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

Second Quarter 2025 Compared to Second Quarter 2024

Net income decreased $8.7 million primarily due to higher purchased power costs related to the procurement of capacity through MISO’s annual planning resource auction, partially offset by higher retail electric price and higher other income.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Net income increased $21.4 million primarily due to higher retail electric price, higher volume/weather, and higher other income, partially offset by higher purchased power costs related to the procurement of capacity through MISO’s annual planning resource auction, higher taxes other than income taxes, and higher interest expense.

Operating Revenues

Second Quarter 2025 Compared to Second Quarter 2024

Following is an analysis of the change in operating revenues comparing the second quarter 2025 to the second quarter 2024:


			Amount
			(In Millions)
2024 operating revenues			$519.1
Fuel, rider, and other revenues that do not significantly affect net income			(11.7)
Retail electric price			19.8
Volume/weather			4.4
2025 operating revenues			$531.6

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

The retail electric price variance is primarily due to the implementation of the distribution cost recovery factor rider effective with the first billing cycle in October 2024 and an increase in the distribution cost recovery factor rider effective in late December 2024. See Note 2 to the financial statements in the Form 10-K for discussion of the distribution cost recovery factor rider filings.

The volume/weather variance is primarily due to an increase in industrial and commercial usage. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the primary metals, wood products, petroleum refining, and transportation industries, and an increase in demand from small industrial customers, partially offset by a decrease in demand from co-generation customers. The increase in commercial usage is primarily due to an increase in customers.

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Texas for the three months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	1,741	1,778	(2)
Commercial	1,280	1,234	4
Industrial	2,621	2,404	9
Governmental	65	68	(4)
Total retail	5,707	5,484	4
Sales for resale:
Non-associated companies	93	229	(59)
Total	5,800	5,713	2

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

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Following is an analysis of the change in operating revenues comparing the six months ended June 30, 2025 to the six months ended June 30, 2024:


			Amount
			(In Millions)
2024 operating revenues			$963.6
Fuel, rider, and other revenues that do not significantly affect net income			(47.3)
Retail electric price			31.3
Volume/weather			26.0
2025 operating revenues			$973.6

The volume/weather variance is primarily due to the effect of more favorable weather on residential sales, an increase in weather-adjusted residential usage, and an increase in commercial and industrial usage. The increase in weather-adjusted residential usage and the increase in commercial usage are primarily due to an increase in customers. The increase in industrial usage is primarily due to an increase in demand from large industrial customers, primarily in the wood products, petrochemicals, petroleum refining, and transportation industries, and an increase in demand from co-generation customers.

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy Texas for the six months ended June 30, 2025 and 2024 are as follows:


	2025	2024	% Change
	(GWh)
Residential	3,300	3,089	7
Commercial	2,389	2,317	3
Industrial	4,781	4,458	7
Governmental	128	131	(2)
Total retail	10,598	9,995	6
Sales for resale:
Non-associated companies	144	346	(58)
Total	10,742	10,341	4

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

Other Income Statement Variances

Second Quarter 2025 Compared to Second Quarter 2024

Purchased power includes an increase in second quarter 2025 of $20 million in costs related to the procurement of capacity through MISO’s annual planning resource auction, including the effect of a significant increase in MISO’s seasonal auction clearing price, due to the implementation of a reliability-based demand curve, for capacity transactions during the summer months. Although Entergy Texas does not have the ability to recover its MISO capacity costs incurred to date beyond the level included in base rates, in June 2025, Texas legislation established a capacity cost recovery rider mechanism that would allow for the recovery of costs related to the procurement of capacity through MISO’s annual planning resource auction outside of base rates, through a rider that is updated annually. Entergy Texas plans to file for such a rider to recover future capacity procurement costs at the earliest opportunity in 2026.

Depreciation and amortization expenses decreased primarily due to the recognition of $13.8 million in depreciation expense in second quarter 2024 for the 2022 base rate case relate back period, effective over six months beginning January 2024. The recognition of depreciation expense for the relate back period was effective over the same period as collections from the relate back surcharge rider and resulted in no effect on net income. See Note 2 to the financial statements in the Form 10-K for discussion of the 2022 base rate case. The decrease was partially offset by additions to plant in service.

Other income increased primarily due to an increase in the allowance for equity funds used during construction due to higher construction work in progress in 2025, including the Orange County Advanced Power Station project and the Legend Power Station project.

Interest expense increased primarily due to the issuance of $500 million of 5.25% Series mortgage bonds in February 2025 and the issuance of $350 million of 5.55% Series mortgage bonds in August 2024, partially offset by an increase in the allowance for borrowed funds used during construction due to higher construction work in progress in 2025, including the Orange County Advanced Power Station project and the Legend Power Station project.

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Purchased power includes an increase in 2025 of $21 million in costs related to the procurement of capacity through MISO’s annual planning resource auction, including the effect of a significant increase in MISO’s seasonal auction clearing price, due to the implementation of a reliability-based demand curve, for capacity transactions during the summer months. Although Entergy Texas does not have the ability to recover its MISO capacity costs incurred to date beyond the level included in base rates, in June 2025, Texas legislation established a capacity cost recovery rider mechanism that would allow for the recovery of costs related to the procurement of capacity through MISO’s annual planning resource auction outside of base rates, through a rider that is updated annually. Entergy Texas plans to file for such a rider to recover future capacity procurement costs at the earliest opportunity in 2026.

Taxes other than income taxes increased primarily due to an increase in local franchise taxes as a result of higher retail revenues in 2025 as compared to 2024.

Depreciation and amortization expenses decreased primarily due to the recognition of $27.6 million in depreciation expense in 2024 for the 2022 base rate case relate back period, effective over six months beginning January 2024. The recognition of depreciation expense for the relate back period was effective over the same period as collections from the relate back surcharge rider and resulted in no effect on net income. See Note 2 to the financial statements in the Form 10-K for discussion of the 2022 base rate case. The decrease was partially offset by additions to plant in service.

Interest expense increased primarily due to the issuance of $350 million of 5.55% Series mortgage bonds in August 2024 and the issuance of $500 million of 5.25% Series mortgage bonds in February 2025, partially offset by an increase in the allowance for borrowed funds used during construction due to higher construction work in progress in 2025, including the Orange County Advanced Power Station project and the Legend Power Station project.

Income Taxes

The effective income tax rates were 16.7% for the second quarter 2025 and 16.2% for the six months ended June 30, 2025. The differences in the effective income tax rates for the second quarter 2025 and the six months ended June 30, 2025 versus the federal statutory rate of 21% were primarily due to book and tax differences related to the allowance for equity funds used during construction.

The effective income tax rates were 18.4% for the second quarter 2024 and 18.6% for the six months ended June 30, 2024. The differences in the effective income tax rates for the second quarter 2024 and the six months ended June 30, 2024 versus the federal statutory rate of 21% were primarily due to book and tax differences related to the allowance for equity funds used during construction and certain book and tax differences related to utility plant items.

Income Tax Legislation and Regulation

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

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Liquidity and Capital Resources

Cash Flow

Cash flows for the six months ended June 30, 2025 and 2024 were as follows:


	2025	2024
	(In Thousands)
Cash and cash equivalents at beginning of period	$184,997	$21,986

Net cash provided by (used in):
Operating activities	242,336	292,420
Investing activities	(879,311)	(215,942)
Financing activities	469,721	26,442
Net increase (decrease) in cash and cash equivalents	(167,254)	102,920

Cash and cash equivalents at end of period	$17,743	$124,906

Operating Activities

Net cash flow provided by operating activities decreased $50.1 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

the timing of recovery of fuel and purchased power costs and higher fuel and purchased power payments. See Note 2 to the financial statements in the Form 10-K for a discussion of fuel and purchased power cost recovery;
an increase of $12.9 million in interest paid;
an increase of $10.3 million in storm spending; and
lower collections from customers.

Investing Activities

Net cash flow used in investing activities increased $663.4 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to:

money pool activity;
an increase of $386.2 million in non-nuclear generation construction expenditures primarily due to higher spending on the Legend Power Station project, the Orange County Advanced Power Station project, and the Lone Star Power Station project;
an increase of $30.1 million in transmission construction expenditures primarily due to increased spending on various transmission projects in 2025 and higher capital expenditures as a result of increased development in Entergy Texas’s service area; and
an increase of $16 million in distribution construction expenditures primarily due to higher capital expenditures as a result of increased development in Entergy Texas’s service territory, partially offset by lower capital expenditures for storm restoration in 2025.

The increase was partially offset by a decrease of $17.3 million in information technology capital expenditures primarily due to decreased spending on technology upgrade projects in 2025 and cash collateral of $12.7 million posted in 2024 to support Entergy Texas’s obligation to MISO.

Decreases in Entergy Texas’s receivable from the money pool are a source of cash flow, and Entergy Texas’s receivable from the money pool decreased $13.7 million for the six months ended June 30, 2025 compared

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

to decreasing by $296.7 million for the six months ended June 30, 2024. The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and other borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings.

Financing Activities

Net cash flow provided by financing activities increased $443.3 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to the issuance of $500 million of 5.25% Series mortgage bonds in February 2025, partially offset by a decrease of $63.6 million in advance payments from customers for construction related to transmission, distribution, and generator interconnection agreements. See Note 4 to the financial statements herein and Note 5 to the financial statements in the Form 10-K for more details on long-term debt.

Capital Structure

Entergy Texas’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy Texas is primarily due to the net issuance of long-term debt in 2025.


	June 30, 2025		December 31, 2024
Debt to capital	53.7	%	51.6	%
Effect of excluding securitization bonds	(1.4	%)	(1.7	%)
Debt to capital, excluding securitization bonds (non-GAAP) (a)	52.3	%	49.9	%
Effect of subtracting cash	(0.2	%)	(1.5	%)
Net debt to net capital, excluding securitization bonds (non-GAAP) (a)	52.1	%	48.4	%

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

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

Uses and Sources of Capital

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

Recent announcements of changes to international trade policy and tariffs and further similar changes may impact Entergy Texas’s business, operations, results of operations, and liquidity and capital resources. Potential impacts may include increases in costs associated with Entergy Texas’s capital investments or operation and maintenance expenses; operational impacts, such as supply chain, manufacturing, or raw materials sourcing disruptions which may affect Entergy Texas’s ability to make planned capital investments as and when expected

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

and needed; legal uncertainties, such as potential legal or other challenges to presidential tariff authority; or broader economic risks, including shifting customer demand, impacts on customer investment decisions, and volatile or uncertain credit and capital markets, which may affect Entergy Texas’s ability to access needed capital. The nature and extent of any such effects will depend on, among other things, the specifics of the changes that are ultimately implemented both domestically and internationally, the responses of vendors, suppliers, and other counterparties to those changes, indirect effects on the price and availability of non-tariffed goods, and the effectiveness of mitigation measures.

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


June 30, 2025	December 31, 2024	June 30, 2024	December 31, 2023
(In Thousands)
$4,835	$18,504	$21,212	$317,882

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

Entergy Texas has a credit facility in the amount of $300 million scheduled to expire in June 2030. The credit facility includes fronting commitments for the issuance of letters of credit against $25 million of the borrowing capacity of the facility. As of June 30, 2025, there were no cash borrowings and $1.1 million in letters of credit outstanding under the credit facility. In addition, Entergy Texas is a party to two uncommitted letter of credit facilities as a means to post collateral to support its obligations to MISO. As of June 30, 2025, $54.0 million in letters of credit were outstanding under one of Entergy Texas’s uncommitted letter of credit facilities. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

Legend Power Station and Lone Star Power Station

As discussed in the Form 10-K, 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 for future carbon capture and storage and for 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, originally expected to be located in Liberty County, Texas. In March 2025, Entergy Texas filed testimony explaining that Entergy Texas planned to move forward with building the Lone Star Power Station on a more cost-effective alternative site in San Jacinto County, Texas. A hearing on the merits was held in April 2025. Also in April 2025, Entergy Texas, intervenors, and the PUCT staff filed initial briefs. In its initial brief, the PUCT staff recommends denial of Entergy Texas’s application or, in the alternative, approval subject to conditions that include a prudence review by an external consultant if actual project costs exceed estimated costs by more than 10%, transmission cost reporting, and weatherization of both the Legend Power Station and the Lone Star Power Station. Certain intervenors requested that the PUCT impose various conditions upon the approval of the resources, including, among others, cost recovery limitations, a direction that Entergy Texas initiate a competitive tariff proceeding to facilitate industrial sleeving, a requirement for additional regulatory approvals related to hydrogen or carbon capture and storage implementation, limits on the recovery of supplemental filing costs, and calculation of AFUDC based on an adjusted weighted average cost of capital. Reply briefs were filed in May 2025. In June 2025 the ALJs with the State Office of Administrative Hearings issued a proposal for decision, in which they recommended rejection of Entergy Texas’s application to construct the Legend Power Station and the Lone Star Power Station based upon their finding that Entergy Texas did not demonstrate the resources to be cost-effective alternatives to address the uncontested need for additional generation. In the alternative, the ALJs recommended that if the PUCT approves the resources, that conditions be imposed, including a deferral of the finding that the resources were prudently selected until Entergy Texas’s next rate case, a prudence review by an external consultant if actual project costs exceed estimated costs by more than 10%, weatherization requirements, and a requirement that Entergy Texas obtain additional regulatory approvals prior to implementing hydrogen co-firing or carbon

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

capture and storage. The ALJs’ proposal for decision is an interim step in the certification process, and it is not binding upon the PUCT. Entergy Texas filed exceptions in July 2025. A PUCT decision is expected in third quarter 2025. Subject to receipt of required regulatory approval and other conditions, both facilities are expected to be in service by mid-2028.

Segno Solar and Votaw Solar

As discussed in the Form 10-K, 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. In July 2025, Entergy Texas filed, and the ALJs with the State Office of Administrative Hearings granted, an unopposed motion to abate this proceeding to give the parties to the proceeding additional time for settlement discussions.

Southeast Texas Area Reliability Project (SETEX)

In February 2025, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s certificate of convenience and necessity to construct, own, and operate a new single-circuit 500 kV transmission line and associated stations and 138/230 kV facilities. The transmission line is expected to be approximately 131 to 160 miles in length and the estimated cost of the project ranges from $1.3 billion to $1.5 billion, depending upon the route ultimately approved by the PUCT. Also in February 2025 the PUCT referred the proceeding to the State Office of Administrative Hearings. A hearing on the merits was held in May 2025. In July 2025 the ALJs with the State Office of Administrative Hearings issued a proposal for decision recommending the PUCT approve Entergy Texas’s application to construct SETEX and recommending the PUCT’s approval include selection of a specific route with an estimated cost of $1.4 billion. A PUCT decision is expected in third quarter 2025. Subject to receipt of required regulatory approval and other conditions, construction of the project is expected to be completed by the end of 2029.

Legend to Sandling 230kV Transmission Line

In April 2025, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s certificate of convenience and necessity to construct, own, and operate a new single-circuit 230 kV transmission line. The transmission line is expected to be approximately 9 to 10 miles in length and the estimated cost of the project ranges from $87.4 million to $88.6 million, depending on the route ultimately approved by the PUCT. Also in April 2025 the PUCT referred the proceeding to the State Office of Administrative Hearings. In July 2025, Entergy Texas filed an unopposed settlement agreement resolving all issues in the proceeding and a joint motion, which the ALJ with the State Office of Administrative Hearings granted, on behalf of the parties to the proceeding to cancel the remaining procedural schedule, to admit evidence, and to remand the proceeding to the PUCT to consider the unopposed settlement agreement. A PUCT decision is expected in fourth quarter 2025. Subject to receipt of required regulatory approval and other conditions, construction of the project is expected to be completed by second quarter 2027.

Cypress to Legend 500 kV Transmission Line

In May 2025, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s certificate of convenience and necessity to construct, own, and operate a new single-circuit 500 kV transmission line. The transmission line is expected to be approximately 40 to 49 miles in length and the estimated cost of the project ranges from $392.7 million to $436.2 million, depending on the route ultimately approved by the PUCT. In June 2025 the PUCT referred the proceeding to the State Office of Administrative Hearings and the ALJs with the State Office of Administrative Hearings adopted a procedural schedule with a hearing on the merits to be held in

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

mid-August 2025. A PUCT decision is expected in fourth quarter 2025. Subject to receipt of required regulatory approval and other conditions, construction of the project is expected to be completed by the end of 2028.

State and Local Rate Regulation and Fuel-Cost Recovery

Retail Rates

Distribution Cost Recovery Factor (DCRF) Rider

In April 2025, Entergy Texas filed with the PUCT a request to amend its DCRF rider. The amended rider was designed to collect from Entergy Texas’s retail customers approximately $77.8 million annually, or $29.3 million in incremental annual revenues beyond Entergy Texas’s then-effective DCRF rider based on its capital invested in distribution between July 1, 2024 and December 31, 2024, including distribution-related restoration costs associated with Hurricane Beryl. In June 2025 the PUCT approved the DCRF rider, consistent with Entergy Texas’s as-filed request, and rates became effective on June 25, 2025.

Transmission Cost Recovery Factor (TCRF) Rider

As discussed in the Form 10-K, in October 2024, Entergy Texas filed with the PUCT a request to amend its TCRF rider, which was previously reset to zero in June 2023 as a result of the 2022 base rate case. The amended rider was designed to collect from Entergy Texas’s retail customers approximately $9.7 million annually based on its capital invested in transmission between January 1, 2022 and June 30, 2024 and changes in other transmission charges. In April 2025 the PUCT approved the TCRF rider, consistent with Entergy Texas’s as-filed request, and rates became effective for usage on and after April 7, 2025.

Fuel and purchased power cost recovery

As discussed in the Form 10-K, in September 2024, Entergy Texas filed an application with the PUCT to reconcile its fuel and purchased power costs for the period from April 2022 through March 2024. During the reconciliation period, Entergy Texas incurred approximately $1.6 billion in eligible fuel and purchased power expenses to generate and purchase electricity to serve its customers, net of certain revenues credited to such expenses and other adjustments. Entergy Texas’s cumulative under-recovery balance for the reconciliation period was approximately $30 million, including interest, which Entergy Texas requested authority to carry over as part of the cumulative fuel balance for the subsequent reconciliation period beginning April 2024. In November 2024 the PUCT referred the proceeding to the State Office of Administrative Hearings. In March 2025, Texas Industrial Energy Consumers, an intervenor, filed testimony regarding the recovery of capacity costs for a certain power purchase agreement, arguing the capacity costs should be imputed and treated as non-reconcilable fuel expense, recovered in Entergy Texas’s base rates. In April 2025 the PUCT staff filed testimony and later in April 2025, Entergy Texas filed rebuttal testimony. In May 2025, Entergy Texas filed, and the ALJ with the State Office of Administrative Hearings granted, a request for a paper hearing and to cancel the oral hearing on the merits previously scheduled for later in May 2025. In June 2025, Entergy Texas filed, and the ALJ with the State Office of Administrative Hearings granted, a joint motion to abate the proceeding to give the parties to the proceeding additional time to finalize a settlement.

Federal Regulation

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

Entergy Texas, Inc. and Subsidiaries

Management’s Financial Discussion and Analysis

Nuclear Matters

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

Industrial and Commercial Customers

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

Environmental Risks

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

Critical Accounting Estimates

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

New Accounting Pronouncements


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Three Months Ended		Six Months Ended
	2025	2024	2025	2024
	(In Thousands)		(In Thousands)
OPERATING REVENUES
Electric	$531,641	$519,077	$973,580	$963,568

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	96,736	115,520	121,128	211,657
Purchased power	124,880	88,713	257,498	183,056
Other operation and maintenance	83,818	83,176	158,273	161,136
Taxes other than income taxes	29,792	22,979	60,419	47,546
Depreciation and amortization	80,830	90,824	161,510	180,329
Other regulatory charges (credits) - net	2,587	(12,477)	5,844	(13,452)
TOTAL	418,643	388,735	764,672	770,272

OPERATING INCOME	112,998	130,342	208,908	193,296

OTHER INCOME
Allowance for equity funds used during construction	19,963	10,834	37,335	20,082
Interest and investment income	1,975	2,791	4,734	6,695
Miscellaneous - net	(2,477)	(3,186)	(3,631)	(5,498)
TOTAL	19,461	10,439	38,438	21,279

INTEREST EXPENSE
Interest expense	43,147	34,483	86,219	66,449
Allowance for borrowed funds used during construction	(8,502)	(4,219)	(15,887)	(7,821)
TOTAL	34,645	30,264	70,332	58,628

INCOME BEFORE INCOME TAXES	97,814	110,517	177,014	155,947

Income taxes	16,318	20,295	28,662	28,981

NET INCOME	81,496	90,222	148,352	126,966

Preferred dividend requirements	518	518	1,036	1,036

EARNINGS APPLICABLE TO COMMON STOCK	$80,978	$89,704	$147,316	$125,930

See Notes to Financial Statements.

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ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)
	2025	2024
	(In Thousands)
OPERATING ACTIVITIES
Net income	$148,352	$126,966
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization	161,510	180,329
Deferred income taxes, investment tax credits, and non-current taxes accrued	21,466	21,112
Changes in assets and liabilities:
Receivables	(36,849)	(64,108)
Fuel inventory	9,817	1,877
Accounts payable	37,267	13,853
Taxes accrued	(20,591)	(21,155)
Interest accrued	5,971	(561)
Deferred fuel costs	(69,075)	80,220
Other working capital accounts	(6,447)	(9,386)
Provisions for estimated losses	1,201	(1,384)
Other regulatory assets	60,125	40,197
Other regulatory liabilities	(13,317)	(26,028)
Pension and other postretirement funded status	(7,131)	(8,190)
Other assets and liabilities	(49,963)	(41,322)
Net cash flow provided by operating activities	242,336	292,420

INVESTING ACTIVITIES
Construction expenditures	(932,013)	(522,890)
Allowance for equity funds used during construction	37,335	20,082

Changes in money pool receivable - net	13,669	296,670
Changes in securitization account	1,698	2,856
Increase in other investments	—	(12,660)

Net cash flow used in investing activities	(879,311)	(215,942)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	493,772	—
Retirement of long-term debt	(9,359)	(9,104)




Preferred stock dividends paid	(1,036)	(1,036)
Other	(13,656)	36,582
Net cash flow provided by financing activities	469,721	26,442

Net increase (decrease) in cash and cash equivalents	(167,254)	102,920
Cash and cash equivalents at beginning of period	184,997	21,986
Cash and cash equivalents at end of period	$17,743	$124,906

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$78,477	$65,529
Income taxes	$2,077	$5,862
Noncash investing activities:
Accrued construction expenditures	$127,069	$343,525

See Notes to Financial Statements.


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$25	$291
Temporary cash investments	17,718	184,706
Total cash and cash equivalents	17,743	184,997
Securitization recovery trust account	1,005	2,703
Accounts receivable:
Customer	115,923	84,842
Allowance for doubtful accounts	(4,280)	(1,304)
Associated companies	14,479	26,564
Other	29,000	43,773
Accrued unbilled revenues	95,993	74,060
Total accounts receivable	251,115	227,935
Deferred fuel costs	9,804	—
Fuel inventory - at average cost	36,153	45,970
Materials and supplies	166,111	157,241

Prepayments and other	31,144	34,803
TOTAL	513,075	653,649

OTHER PROPERTY AND INVESTMENTS
Investments in affiliates - at equity	84	107
Other	16,076	15,878
TOTAL	16,160	15,985

UTILITY PLANT
Electric	8,955,667	8,628,625
Construction work in progress	1,995,414	1,513,170
TOTAL UTILITY PLANT	10,951,081	10,141,795
Less - accumulated depreciation and amortization	2,661,738	2,548,961
UTILITY PLANT - NET	8,289,343	7,592,834

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $226,006 as of June 30, 2025 and $234,112 as of December 31, 2024)	489,583	549,708
Other	177,552	157,904
TOTAL	667,135	707,612

TOTAL ASSETS	$9,485,713	$8,970,080

See Notes to Financial Statements.


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT LIABILITIES

Accounts payable:
Associated companies	$53,562	$65,335
Other	592,907	361,404
Customer deposits	40,490	40,782
Taxes accrued	55,883	76,474
Interest accrued	44,674	38,703
Deferred fuel costs	—	59,271
Other	19,820	20,836
TOTAL	807,336	662,805

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	905,093	868,849
Accumulated deferred investment tax credits	6,841	7,215
Regulatory liability for income taxes - net	81,364	93,766
Other regulatory liabilities	17,790	18,705
Asset retirement cost liabilities	14,695	17,688
Accumulated provisions	11,186	9,985
Long-term debt (includes securitization bonds of $230,445 as of June 30, 2025 and $239,622 as of December 31, 2024)	4,038,417	3,552,443
Other	114,463	397,412
TOTAL	5,189,849	4,966,063

Commitments and Contingencies

EQUITY
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 46,525,000 shares in 2025 and 2024	49,452	49,452
Paid-in capital	1,200,125	1,200,125
Retained earnings	2,200,201	2,052,885
Total common shareholder's equity	3,449,778	3,302,462
Preferred stock without sinking fund	38,750	38,750
TOTAL	3,488,528	3,341,212

TOTAL LIABILITIES AND EQUITY	$9,485,713	$8,970,080

See Notes to Financial Statements.


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)

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

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

Net income	—	—	—	36,744	36,744

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

Net income	—	—	—	90,222	90,222

Preferred stock dividends	—	—	—	(518)	(518)

Balance at June 30, 2024	$38,750	$49,452	$1,200,125	$1,956,265	$3,244,592








Balance at December 31, 2024	$38,750	$49,452	$1,200,125	$2,052,885	$3,341,212

Net income	—	—	—	66,856	66,856


Preferred stock dividends	—	—	—	(518)	(518)
Balance at March 31, 2025	38,750	49,452	1,200,125	2,119,223	3,407,550

Net income	—	—	—	81,496	81,496

Preferred stock dividends	—	—	—	(518)	(518)

Balance at June 30, 2025	$38,750	$49,452	$1,200,125	$2,200,201	$3,488,528






See Notes to Financial Statements.

SYSTEM ENERGY RESOURCES, INC.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

System Energy’s principal asset consists of an ownership interest and a leasehold interest in Grand Gulf. The capacity and energy from its 90% interest is sold under the Unit Power Sales Agreement to its only four customers, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90% interest in Grand Gulf pursuant to the Unit Power Sales Agreement. Payments under the Unit Power Sales Agreement are System Energy’s only source of operating revenues. See “Complaints Against System Energy - System Energy Settlement with the LPSC” in Note 2 to the financial statements herein for additional information regarding filings made with the FERC in May 2025 related to the Unit Power Sales Agreement. Also, as discussed in “Complaints Against System Energy**”** in Note 2 to the financial statements in the Form 10-K, System Energy and the Unit Power Sales Agreement have been the subject of several litigation proceedings at the FERC. Settlements that resolve all significant aspects of these complaints have been reached with the MPSC, the APSC, the City Council, and the LPSC, and these settlements have been approved by the FERC.

Results of Operations

Net Income

Second Quarter 2025 Compared to Second Quarter 2024

Net income decreased $3.5 million primarily due a lower rate of return on rate base, including the effects of lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy New Orleans effective with the June 2024 service month per the settlement agreement with the City Council and the lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy Louisiana effective with the September 2024 service month per the settlement with the LPSC, and lower operating revenues resulting from changes in rate base. See Note 2 to the financial statements in the Form 10-K for discussion of the settlements with the City Council and the LPSC.

Six Months Ended June 30, 2025 Compared to Six Months Ended June 30, 2024

Net income decreased $11.3 million primarily due a lower rate of return on rate base, including the effects of lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy New Orleans effective with the June 2024 service month per the settlement agreement with the City Council and the lower authorized rate of return on equity and capital structure limitations reflected in monthly bills issued to Entergy Louisiana effective with the September 2024 service month per the settlement with the LPSC. The decrease was partially offset by higher operating revenues resulting from changes in rate base. See Note 2 to the financial statements in the Form 10-K for discussion of the settlements with the City Council and the LPSC.

Income Taxes

The effective income tax rates were 19.4% for the second quarter 2025 and 20.3% for the six months ended June 30, 2025. The differences in the effective income tax rates for the second quarter 2025 and the six months ended June 30, 2025 versus the federal statutory rate of 21% were primarily due to 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, partially offset by the accrual for state income taxes.

The effective income tax rates were 23.2% for the second quarter 2024 and 21.7% for the six months ended June 30, 2024. The differences in the effective income tax rates for the second quarter 2024 and the six months

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

ended June 30, 2024 versus the federal statutory rate of 21% were primarily due to the accrual for state income taxes, partially offset by book and tax differences related to the allowance for equity funds used during construction.

Income Tax Legislation and Regulation

Liquidity and Capital Resources

Cash Flow

Cash flows for the six months ended June 30, 2025 and 2024 were as follows:


	2025	2024
	(In Thousands)
Cash and cash equivalents at beginning of period	$28,908	$60

Net cash provided by (used in):
Operating activities	131,501	27,420
Investing activities	(55,988)	(216,666)
Financing activities	(72,632)	220,264
Net increase in cash and cash equivalents	2,881	31,018

Cash and cash equivalents at end of period	$31,789	$31,078

Operating Activities

Net cash flow provided by operating activities increased $104.1 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to the refund of $92 million made in May 2024 to Entergy Arkansas as a result of the settlement with the APSC and a decrease of $20.4 million in spending on nuclear refueling outage costs in 2025 as compared to 2024. See Note 2 to the financial statements in the Form 10-K for discussion of the settlement with the APSC.

Investing Activities

Net cash flow used in investing activities decreased $160.7 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024 primarily due to net proceeds of $16.6 million in 2025 compared to net purchases of $115.5 million in 2024 as a result of fluctuations in nuclear fuel activity due to variations from year to year in the timing and pricing of fuel reload requirements, material and services deliveries, and the timing of cash payments during the nuclear fuel cycle and a decrease of $31.8 million in nuclear construction expenditures primarily due to higher spending in 2024 on Grand Gulf outage projects and upgrades.

Financing Activities

System Energy’s financing activities used $72.6 million of cash for the six months ended June 30, 2025 compared to providing $220.3 million of cash for the six months ended June 30, 2024 primarily due to the following activity:

the repayment, prior to maturity, of $200 million of 2.14% Series mortgage bonds in June 2025;
a capital contribution of $150 million received from Entergy Corporation in January 2024 in order to

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

maintain System Energy’s capital structure;

net repayments of $28.4 million in 2025 compared to net long-term borrowings of $82.6 million in 2024 on the nuclear fuel company variable interest entity’s credit facility;
$75 million in common stock dividends and distributions paid in 2025. No common stock dividends or distributions were paid in 2024 in anticipation of the settlements with the APSC, the LPSC, and the City Council; and
the issuance of $240 million of 5.30% Series mortgage bonds in May 2025.

Capital Structure

System Energy’s debt to capital ratio is shown in the following table.


	June 30, 2025		December 31, 2024
Debt to capital	53.7	%	52.9	%
Effect of subtracting cash	(0.7	%)	(0.7	%)
Net debt to net capital (non-GAAP)	53.0	%	52.2	%

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

Uses and Sources of Capital

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

Recent announcements of changes to international trade policy and tariffs and further similar changes may impact System Energy’s business, operations, results of operations, and liquidity and capital resources. Potential impacts may include increases in costs associated with System Energy’s capital investments or operation and maintenance expenses; operational impacts, such as supply chain, manufacturing, or raw materials sourcing disruptions which may affect System Energy’s ability to make planned capital investments as and when expected and needed; legal uncertainties, such as potential legal or other challenges to presidential tariff authority; or broader economic risks, including shifting customer demand, impacts on customer investment decisions, and volatile or uncertain credit and capital markets, which may affect System Energy’s ability to access needed capital. The nature and extent of any such effects will depend on, among other things, the specifics of the changes that are ultimately implemented both domestically and internationally, the responses of vendors, suppliers, and other counterparties to those changes, indirect effects on the price and availability of non-tariffed goods, and the effectiveness of mitigation measures.

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

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


June 30, 2025	December 31, 2024	June 30, 2024	December 31, 2023
(In Thousands)
$8,661	$2,851	$5,238	($12,246)

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

The System Energy nuclear fuel company variable interest entity has a credit facility in the amount of $120 million scheduled to expire in June 2027. As of June 30, 2025, $44.3 million in loans were outstanding under the System Energy nuclear fuel company variable interest entity credit facility. See Note 4 to the financial statements herein for additional discussion of the variable interest entity credit facility.

Federal Regulation

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

Complaints Against System Energy

See Note 2 to the financial statements in the Form 10-K for information regarding pending complaints against System Energy and the settlements approved by the FERC that resolved all significant aspects of these complaints. The following are updates to that discussion.

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

As discussed in the Form 10-K, in February 2023, System Energy submitted a tariff compliance filing with the FERC to clarify that, consistent with the releases provided in the June 2022 MPSC settlement, Entergy Mississippi would continue to be charged for its allocation of the sale-leaseback renewal costs under the Unit Power Sales Agreement. In March 2023 the MPSC filed a protest to System Energy’s tariff compliance filing. The MPSC argued that the settlement did not specifically address post-settlement sale-leaseback renewal costs and that the sale-leaseback renewal costs may not be recovered under the Unit Power Sales Agreement. In February 2025, System Energy and the MPSC resolved their dispute concerning the sale-leaseback renewal costs. As a result, the MPSC withdrew its protest at the FERC on System Energy’s tariff compliance filing. Entergy Mississippi will continue to pay the allocated sale-leaseback renewal costs of approximately $5.7 million annually and there are no refunds due for prior periods. In March 2025, System Energy filed a status report with the FERC explaining that the dispute is resolved. In April 2025 the FERC accepted System Energy’s tariff compliance filing.

System Energy Settlement with the LPSC

As discussed in the Form 10-K, in 2024, System Energy reached a settlement with the LPSC 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 associated with System Energy’s past implementation of the Unit Power Sales Agreement. In compliance with the settlement, in May 2025, System Energy, Entergy Louisiana, and Entergy Mississippi submitted the following filings with the FERC: (1) a Federal Power Act Section 203 application seeking approval for the permanent divestiture by Entergy Louisiana to Entergy Mississippi of its rights to capacity and energy from Grand Gulf; and (2) a Federal Power Act Section 205 application seeking approval to modify the entitlement percentages of the remaining purchasers under the Unit Power Sales Agreement in connection with the foregoing divestiture. In July 2025, the FERC issued an order accepting the Federal Power Act Section 205 application to remove Entergy

System Energy Resources, Inc.

Management’s Financial Discussion and Analysis

Louisiana as a party to the Unit Power Sales Agreement. As a result of the order, the Unit Power Sales Agreement entitlement percentages of the remaining purchasers will be permanently modified to exclude Entergy Louisiana, to be effective beginning October 2025. The FERC also issued an order dismissing the Federal Power Act Section 203 application based on lack of jurisdiction.

Nuclear Matters

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

Environmental Risks

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

Critical Accounting Estimates

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

New Accounting Pronouncements


SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Three and Six Months Ended June 30, 2025 and 2024
(Unaudited)

	Three Months Ended		Six Months Ended
	2025	2024	2025	2024
	(In Thousands)		(In Thousands)
OPERATING REVENUES
Electric	$143,858	$145,934	$285,669	$298,554

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	16,122	17,120	30,938	30,237
Nuclear refueling outage expenses	4,135	4,136	8,225	10,797
Other operation and maintenance	47,016	45,746	90,495	97,169
Decommissioning	11,257	10,815	22,401	21,522
Taxes other than income taxes	6,555	6,892	13,359	14,101
Depreciation and amortization	31,063	30,443	61,827	60,121
Other regulatory charges (credits) - net	(2,473)	27,188	(2,380)	22,215
TOTAL	113,675	142,340	224,865	256,162

OPERATING INCOME	30,183	3,594	60,804	42,392

OTHER INCOME
Allowance for equity funds used during construction	1,881	1,451	3,484	3,885
Interest and investment income	10,672	38,967	23,111	46,940
Miscellaneous - net	56	(165)	293	72
TOTAL	12,609	40,253	26,888	50,897

INTEREST EXPENSE
Interest expense	17,270	12,072	33,292	23,243
Allowance for borrowed funds used during construction	(922)	(594)	(1,709)	(1,453)
TOTAL	16,348	11,478	31,583	21,790

INCOME BEFORE INCOME TAXES	26,444	32,369	56,109	71,499

Income taxes	5,119	7,521	11,395	15,533

NET INCOME	$21,325	$24,848	$44,714	$55,966

See Notes to Financial Statements.


SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)
	2025	2024
	(In Thousands)
OPERATING ACTIVITIES
Net income	$44,714	$55,966
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	111,023	106,652
Deferred income taxes, investment tax credits, and non-current taxes accrued	11,063	28,258
Changes in assets and liabilities:
Receivables	722	(9,335)
Accounts payable	(18,674)	74,527
Taxes accrued	(10,605)	(19,301)
Interest accrued	(99)	(620)
Other working capital accounts	344	(27,233)
Other regulatory assets	1,716	21,178
Other regulatory liabilities	52,405	(115,256)
Pension and other postretirement funded status	(6,875)	(6,952)
Other assets and liabilities	(54,233)	(80,464)
Net cash flow provided by operating activities	131,501	27,420

INVESTING ACTIVITIES
Construction expenditures	(51,746)	(87,410)
Allowance for equity funds used during construction	3,484	3,885
Nuclear fuel purchases	(26,957)	(115,544)
Proceeds from sale of nuclear fuel	43,555	21
Decrease in other investments	—	23
Proceeds from nuclear decommissioning trust fund sales	369,739	455,082
Investment in nuclear decommissioning trust funds	(388,253)	(467,485)
Changes in money pool receivable - net	(5,810)	(5,238)

Net cash flow used in investing activities	(55,988)	(216,666)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	538,108	544,736
Retirement of long-term debt	(535,740)	(462,226)
Capital contribution from parent	—	150,000

Change in money pool payable - net	—	(12,246)
Common stock dividends and distributions paid	(75,000)	—

Net cash flow provided by (used in) financing activities	(72,632)	220,264

Net increase in cash and cash equivalents	2,881	31,018
Cash and cash equivalents at beginning of period	28,908	60
Cash and cash equivalents at end of period	$31,789	$31,078

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized	$33,146	$25,231
Income taxes	$—	($2,326)
Noncash investing activities:
Accrued construction expenditures	$8,448	$24,234

See Notes to Financial Statements.


SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
ASSETS
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$46	$448
Temporary cash investments	31,743	28,460
Total cash and cash equivalents	31,789	28,908
Accounts receivable:
Associated companies	53,823	48,134
Other	4,824	5,425
Total accounts receivable	58,647	53,559

Materials and supplies	168,078	163,814
Deferred nuclear refueling outage costs	11,844	19,884


Prepayments and other	10,929	5,768
TOTAL	281,287	271,933

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds	1,606,304	1,529,059
TOTAL	1,606,304	1,529,059

UTILITY PLANT
Electric	5,677,856	5,668,253

Construction work in progress	125,685	85,127
Nuclear fuel	157,883	220,044
TOTAL UTILITY PLANT	5,961,424	5,973,424
Less - accumulated depreciation and amortization	3,635,827	3,578,709
UTILITY PLANT - NET	2,325,597	2,394,715

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets	424,778	426,494

Other	22,771	20,273
TOTAL	447,549	446,767

TOTAL ASSETS	$4,660,737	$4,642,474

See Notes to Financial Statements.


SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
LIABILITIES AND EQUITY
June 30, 2025 and December 31, 2024
(Unaudited)
	2025	2024
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$112	$200,090

Accounts payable:
Associated companies	8,055	18,477
Other	24,896	45,017
Taxes accrued	5,247	15,852

Interest accrued	13,243	13,342


Other	4,475	4,473
TOTAL	56,028	297,251

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	467,250	451,830
Accumulated deferred investment tax credits	42,244	42,984
Regulatory liability for income taxes - net	102,570	105,467
Other regulatory liabilities	802,492	747,190
Decommissioning	1,150,113	1,127,712
Pension and other postretirement liabilities	4,001	8,353
Long-term debt	1,094,284	889,646
Other	2	2
TOTAL	3,662,956	3,373,184

Commitments and Contingencies

COMMON EQUITY
Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 2025 and 2024	908,944	958,944
Retained earnings	32,809	13,095
TOTAL	941,753	972,039

TOTAL LIABILITIES AND EQUITY	$4,660,737	$4,642,474

See Notes to Financial Statements.


SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CHANGES IN COMMON EQUITY
For the Six Months Ended June 30, 2025 and 2024
(Unaudited)

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

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

Net income	—	31,118	31,118
Capital contribution from parent	150,000	—	150,000
Balance at March 31, 2024	1,066,850	2,807	1,069,657

Net income	—	24,848	24,848

Balance at June 30, 2024	$1,066,850	$27,655	$1,094,505






Balance at December 31, 2024	$958,944	$13,095	$972,039

Net income	—	23,389	23,389

Common stock dividends and distributions	(20,000)	(15,000)	(35,000)
Balance at March 31, 2025	938,944	21,484	960,428

Net income	—	21,325	21,325
Common stock dividends and distributions	(30,000)	(10,000)	(40,000)
Balance at June 30, 2025	$908,944	$32,809	$941,753





See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES

PART II. OTHER INFORMATION

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