Entergy 10-Q 2025-09-30

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended September 30, 2025

OR

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

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

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

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

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

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

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

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See the “Market and Credit Risk Sensitive Instruments” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis.

Disclosure Controls and Procedures

As of September 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 September 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

Third Quarter 2025 Compared to Third Quarter 2024

Net income increased $6 million primarily due to higher volume/weather and higher retail electric price, partially offset by an $18.3 million reduction in income tax expense in third quarter 2024 as a result of the resolution of an Arkansas state income tax audit, higher taxes other than income taxes, higher depreciation and amortization expenses, and higher other operation and maintenance expenses. See Note 3 to the financial statements in the Form 10-K for discussion of the resolution of the Arkansas state income tax audit.

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

Net income increased $128.6 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, an $18.3 million reduction in income tax expense in third quarter 2024 as a result of the resolution of an Arkansas state income tax audit, higher interest expense, higher taxes other than income taxes, and higher other operation and maintenance expenses. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the opportunity sales proceeding. See Note 3 to the financial statements in the Form 10-K for discussion of the resolution of the Arkansas state income tax audit.

Operating Revenues

Third Quarter 2025 Compared to Third Quarter 2024

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

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

The retail one-time bill credit variance represents the disbursement of settlement proceeds in the form of a one-time bill credit provided to Entergy Arkansas’s retail customers during the August 2024 billing cycle through

Entergy Arkansas, LLC and Subsidiaries

Management's Financial Discussion and Analysis

the Grand Gulf credit rider as a result of the System Energy settlement with the APSC. There is no effect on net income because Entergy Arkansas previously recorded a regulatory liability for the effects of the System Energy settlement with the APSC. See Note 2 to the financial statements in the Form 10-K for discussion of the System Energy settlement with the APSC and see Note 2 to the financial statements herein and in the Form 10-K for discussion of the Grand Gulf credit rider.

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.

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

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

Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024

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

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See “PART I, Item 1, Litigation” in the Form 10-K for a discussion of legal, administrative, and other regulatory proceedings affecting Entergy. Also see Notes 1 and 2 to the financial statements herein and “Item 5, Other Information, Environmental Regulation” below for updates regarding environmental proceedings and regulation. The following is an update to that discussion.

Dorrell, et al. v. Constellation Energy, et al. Antitrust Class Action Litigation

On July 11, 2025, an antitrust class action lawsuit was filed in the United States District Court for the District of Maryland on behalf of a putative class against Entergy Corporation, 26 other entities alleged to own and/or operate commercial nuclear power plants in the United States (together with Entergy Corporation, the “nuclear defendants”), and two consulting companies. The class action complaint purports to be brought on behalf of all persons employed in nuclear power generation by the nuclear defendants and their subsidiaries and related entities in the United States from May 1, 2003 to the present. The plaintiffs primarily allege that the nuclear defendants, together with the consulting company defendants, violated Section 1 of the Sherman Act, 15 U.S. Code Chapter 1 by conspiring to suppress compensation and exchange collective bargaining agreement and wage information through a trade group, a consulting firm, and through direct communications, including attendance at conferences, from May 2003 to the present. The plaintiffs are seeking unspecified monetary damages, including treble damages, interest, injunctive relief, attorney’s fees, and costs. Entergy Corporation is evaluating the complaint.

There have been no material changes to the risk factors discussed in "Part I, Item 1A. RISK FACTORS" in the Form 10-K.

Issuer Purchases of Equity Securities (1)

In accordance with Entergy’s stock-based compensation plans, Entergy periodically grants stock options to key employees, which may be exercised to obtain shares of Entergy’s common stock. According to the plans, these shares can be newly issued shares, treasury stock, or shares purchased on the open market. Entergy’s management has been authorized by the Board to repurchase on the open market shares up to an amount sufficient to fund the exercise of grants under the plans. In addition to this authority, the Board has authorized share repurchase programs to enable opportunistic purchases in response to market conditions. In October 2010 the Board granted authority for a $500 million share repurchase program. The amount of share repurchases under these programs may vary as a result of material changes in business results or capital spending or new investment opportunities. In addition, in the first quarter 2025, Entergy withheld 61,042 shares of its common stock at $78.79 per share, 1,300 shares of its

common stock at $81.31 per share, 213,368 shares of its common stock at $81.99 per share, 171,525 shares of its common stock at $82.52 per share, and 1,118 shares of its common stock at $82.82 per share to pay income taxes due upon vesting of restricted stock granted and payout of performance units as part of its long-term incentive program.

(1)See Note 12 to the financial statements in the Form 10-K for additional discussion of the stock-based compensation plans.

(2)Maximum amount of shares that may yet be repurchased relates only to the $500 million share repurchase program plan and does not include an estimate of the amount of shares that may be purchased to fund the exercise of grants under the stock-based compensation plans.

U.S. Securities and Exchange Commission Investigation

The Staff of the Division of Enforcement of the U.S. Securities and Exchange Commission conducted an investigation regarding Entergy’s processes and controls relating to its accounting for materials and supplies inventory. In December 2024, Entergy reached a settlement with the SEC to resolve the previously disclosed SEC investigation into Entergy’s internal controls and books and records concerning potential surplus materials and supplies inventory. Under the settlement terms, in which Entergy neither admitted nor denied the SEC’s allegations, Entergy consented to the entry of an injunction, paid a $12 million civil penalty, which was accrued in 2024 and paid in January 2025, and agreed to engage a consultant to conduct an assessment and make recommendations concerning Entergy’s internal controls related to the accounting for surplus materials and supplies. In September 2025 the independent consultant completed its assessment and submitted a report to Entergy and the SEC. Entergy is in the process of implementing the independent consultant’s recommendations.

Rule 10b5-1 Trading Arrangements

No director or officer of Entergy or any of the Registrant Subsidiaries adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” during the three months ended September 30, 2025.

Regulation of the Nuclear Power Industry

The following are updates to the “Regulation of the Nuclear Power Industry” section of Part I, Item 1 of the Form 10-K.

Nuclear Waste Policy Act of 1982

Nuclear Plant Decommissioning

In March 2025 filings with the NRC were made that reported the decommissioning funding for all of Entergy’s subsidiaries’ nuclear plants. Those reports showed that decommissioning funding for each of the nuclear plants met the NRC’s financial assurance requirements.

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 Column 1, “regulatory response column,” or Column 2, “degraded cornerstone column,” or Column 3, “multiple/repetitive degraded cornerstone column,” or Column 4, and “unacceptable performance,” or Column 5. Plants in

Column 1 are subject to normal NRC inspection activities. Plants in Column 2, Column 3, or Column 4 are subject to progressively increasing levels of inspection by the NRC with, in general, progressively increasing levels of associated costs. Continued plant operation is not permitted for plants in Column 5. All of the nuclear generating plants owned and operated by Entergy’s Utility business are currently in Column 1, except Waterford 3, which is 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. In September 2025, Waterford 3 successfully completed the supplemental inspection related to the issue. Waterford 3 will return to Column 1, effective third quarter 2025, pending receipt of the NRC’s formal inspection report.

Environmental Regulation

The following are updates to the “Environmental Regulation” section of Part I, Item 1 of the Form 10-K.

In March 2025 the EPA announced a series of deregulatory actions, including reconsideration of the particulate matter National Ambient Air Quality Standards (NAAQS), reconsideration of the Mercury and Air Toxics Standard (MATS) rule, reconsideration of greenhouse gas emissions rules, evaluation of whether to extend the compliance deadlines under the 2024 coal combustion residuals rule, and reconsideration of the effluent limitations guidelines. Entergy continues to monitor the EPA’s reconsideration efforts.

National Ambient Air Quality Standards

See the Form 10-K for discussion of the NAAQS set by the EPA in accordance with the Clean Air Act. The following are updates to that discussion.

Hazardous Air Pollutants

As discussed in the Form 10-K, the EPA released the final MATS rule in December 2011, which had a compliance date, with a widely granted one-year extension, of April 2016. The required controls have been installed and are operational at all affected Entergy units. In May 2024 the EPA issued a final rule revising portions of the MATS rule, including a reduction to the emission limit for filterable particulate matter. The revised standard will become effective July 2027 and could require additional capital investment and/or additional other operation and maintenance costs at Entergy’s coal-fired generating units. In March 2025, as part of its deregulatory agenda, the EPA announced that it was reconsidering the May 2024 MATS rule and that sources interested in a presidential exemption (two years, with additional exemptions available) should provide a recommendation to the EPA by March 31, 2025. Clean Air Act Section 112(i)(4) grants the President authority to issue an exemption if he determines that “the technology to implement such standard is not available and that it is in the national security interests of the United States to do so.” Entergy requested and received presidential exemptions for emissions of filterable particulate matter from Nelson Unit 6 and White Bluff Unit 1. The exemption lasts for a period of two years beyond the rule’s compliance date, i.e., from July 8, 2027 through July 8, 2029. Additionally, in June 2025, the EPA proposed to repeal certain aspects of the May 2024 MATS rule including the revised emission limit for filterable particulate matter for which the presidential exemption was granted. Comments on the proposed rule were due August 2025, and the EPA is expected to finalize the rule by the end of 2025.

Good Neighbor Plan/Cross-State Air Pollution Rule

As discussed in the Form 10-K, in June 2023 the EPA published its final Federal Implementation Plan (FIP), known as the Good Neighbor Plan, to address interstate transport for the 2015 ozone NAAQS which would increase the stringency of the Cross-State Air Pollution Rule (CSAPR) program in all four of the states where the Utility operating companies operate. The FIP would significantly reduce ozone season nitrogen oxides (NOx) emission allowance budgets and allocations for electric generating units. Prior to issuance of the FIP, in February

2023 the EPA issued related State Implementation Plan (SIP) disapprovals for many states, including the four states in which the Utility operating companies operate, and these SIP disapprovals are the subject of many legal challenges, including a petition for review filed by Entergy Louisiana challenging the disapproval of Louisiana’s SIP. Judicial stays of the SIP disapprovals were granted in all four states in which the Utility operating companies operate. In March 2025 the United States Fifth Circuit Court of Appeals concluded that the EPA properly disapproved Texas’s and Louisiana’s SIPs but found that the EPA’s disapproval was unreasonable for Mississippi’s SIP. The United States Eighth Circuit Court of Appeals has not issued a merits decision yet in the Arkansas SIP disapproval litigation. The FIP is also subject to numerous legal challenges in various federal circuit courts of appeals, and in June 2024 the United States Supreme Court issued an order, in challenges filed in the D.C. Circuit, staying enforcement of the FIP pending the D.C. Circuit’s review of the rule. Following the United States Supreme Court stay, the EPA also stayed the FIP. In March 2025 the EPA asked the D.C. Circuit for a voluntary remand to reconsider the FIP. In its declaration, the EPA states that it plans to reconsider, among other things, what states are subject to the FIP. In April 2025 the D.C. Circuit held the cases in abeyance pending further order of the court. The EPA anticipates a new rule by fall 2026. Entergy is monitoring this litigation, any subsequent rulemaking, and assessing its compliance options in the event that the FIP becomes effective.

Greenhouse Gas Emissions

As discussed in the Form 10-K, in May 2024 the EPA finalized rules regulating greenhouse gas emissions from new combustion turbine electric generating units (EGUs) under Section 111(b) of the Clean Air Act and from certain existing coal- and gas-fired EGUs under Section 111(d) of the Clean Air Act. For new gas combustion turbine EGUs, the final rule includes three subcategories of emission standards based on the unit’s annual capacity factor. Base load (>40% annual capacity factor) EGUs are subject to a Phase 1 output-based CO2 efficiency standard followed by a more stringent Phase 2 CO2 standard which will apply beginning January 1, 2032. The Phase 2 standard was established based on an EPA determination that carbon capture and sequestration represents the best system of emission reduction for new base load combustion turbine EGUs.

In June 2025 the EPA released a rule proposing to repeal the May 2024 rule in its entirety, or alternatively, to repeal (1) the Phase 2 standard requiring carbon capture and sequestration for new combustion turbines because it is not an adequately demonstrated technology and (2) the standards for existing coal and gas units. Thus, under the proposed alternative proposal, the only standards that would remain are the Phase 1 standards for new gas combustion turbines. Comments on this proposed repeal were due August 2025, and the EPA is expected to finalize the rule by the end of 2025. Entergy continues to monitor the status of the EPA’s efforts to repeal the May 2024 rule.

Entergy continues to support national legislation that would most efficiently reduce economy-wide greenhouse gas emissions and increase planning certainty for electric utilities. By virtue of its proportionally large investment in low-emitting generation technologies, Entergy has a low overall carbon dioxide emission “intensity,” or rate of carbon dioxide emitted per megawatt-hour of electricity generated. In anticipation of the imposition of carbon dioxide emission limits on the electric industry, Entergy initiated actions designed to reduce its exposure to potential new governmental requirements related to carbon dioxide emissions. In 2019 Entergy announced a 2030 carbon dioxide emission rate goal focused on a 50% reduction from Entergy’s base year - 2000. In September 2020, Entergy announced a commitment to achieve net-zero greenhouse gas emissions by 2050 inclusive of all businesses, all applicable gases, and all emission scopes. In 2022, Entergy enhanced its commitment to include an interim goal of 50% carbon-free energy generating capacity by 2030 and expanded its interim emission rate goal to include all purchased power. Due to stronger than initially expected sales growth, necessitating the development of new generation capacity that is not carbon-free, and changes to the tax credits applicable to carbon-free generation, Entergy believes that (1) achievement of the carbon intensity goal may be delayed beyond 2030 and (2) achievement of the carbon-free energy generating capacity goal will not be achieved by 2030. As Entergy has communicated in various forums, its clean energy and carbon-reducing generation initiatives will be customer-led. Also, Entergy recognizes and has communicated that carbon capture and storage is a technology that Entergy is well positioned to deploy in the future. Entergy plans to pursue carbon capture and storage on new combined cycle generation when feasible and supported by customer demand. Carbon capture and storage, while offering the

potential to meet customers’ long-term clean energy demands, is not carbon-free nor will it be deployed in the immediate term. See "Part I, Item 1A. RISK FACTORS" in the Form 10-K for discussion of the risks associated with achieving these climate goals. Entergy’s comprehensive, third party verified greenhouse gas inventory and progress against its voluntary goals are published on its website.

Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Entergy Corporation agrees to furnish to the Commission upon request any instrument with respect to long-term debt that is not registered or listed herein as an Exhibit because the total amount of securities authorized under such agreement does not exceed ten percent of the total assets of Entergy Corporation and its subsidiaries on a consolidated basis.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature for each undersigned company shall be deemed to relate only to matters having reference to such company or its subsidiaries.

Date: October 31, 2025