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__________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q
(Mark One)
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________

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

Commission
File Number
Registrant, State of Incorporation or Organization, Address of Principal Executive Offices, Telephone Number, and IRS Employer Identification No.
1-11299 ENTERGY CORPORATION 1-35747 ENTERGY NEW ORLEANS, LLC
(a Delaware corporation)
639 Loyola Avenue
New Orleans , Louisiana 70113
Telephone ( 504 ) 576-4000
(a Texas limited liability company)
1600 Perdido Street
New Orleans , Louisiana 70112
Telephone ( 504 ) 670-3702
72-1229752 82-2212934
1-10764 ENTERGY ARKANSAS, LLC 1-34360 ENTERGY TEXAS, INC.
(a Texas limited liability company)
425 West Capitol Avenue
Little Rock , Arkansas 72201
Telephone ( 501 ) 377-4000
(a Texas corporation)
2107 Research Forest Drive
The Woodlands , Texas 77380
Telephone ( 409 ) 981-2000
83-1918668 61-1435798
1-32718 ENTERGY LOUISIANA, LLC 1-09067 SYSTEM ENERGY RESOURCES, INC.
(a Texas limited liability company)
4809 Jefferson Highway
Jefferson , Louisiana 70121
Telephone ( 504 ) 576-4000
(an Arkansas corporation)
1340 Echelon Parkway
Jackson , Mississippi 39213
Telephone ( 601 ) 368-5000
47-4469646 72-0752777
1-31508 ENTERGY MISSISSIPPI, LLC
(a Texas limited liability company)
308 East Pearl Street
Jackson , Mississippi 39201
Telephone ( 601 ) 368-5000
83-1950019
__________________________________________________________________________________________


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Securities registered pursuant to Section 12(b) of the Act:
Registrant Title of Class Trading
Symbol		 Name of Each Exchange
on Which Registered
Entergy Corporation
Common Stock, $0.01 Par Value
ETR
New York Stock Exchange
Common Stock, $0.01 Par Value
ETR
NYSE Chicago, Inc.
 
 
 
Entergy Arkansas, LLC
Mortgage Bonds, 4.875% Series due September 2066
EAI
New York Stock Exchange
 
 
 
Entergy Louisiana, LLC
Mortgage Bonds, 4.875% Series due September 2066
ELC
New York Stock Exchange
 
 
 
Entergy Mississippi, LLC
Mortgage Bonds, 4.90% Series due October 2066
EMP
New York Stock Exchange
 
 
 
Entergy New Orleans, LLC
Mortgage Bonds, 5.0% Series due December 2052
ENJ
New York Stock Exchange
Mortgage Bonds, 5.50% Series due April 2066
ENO
New York Stock Exchange
 
 
 
Entergy Texas, Inc.
5.375% Series A Preferred Stock, Cumulative, No Par Value (Liquidation Value $25 Per Share)
ETI/PR
New York Stock Exchange

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

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

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated
filer		 Non-accelerated filer Smaller
reporting
company		 Emerging
growth
company
Entergy Corporation ü
Entergy Arkansas, LLC ü
Entergy Louisiana, LLC ü
Entergy Mississippi, LLC ü
Entergy New Orleans, LLC ü
Entergy Texas, Inc. ü
System Energy Resources, Inc. ü

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

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

Common Stock Outstanding Outstanding at April 30, 2024
Entergy Corporation ($0.01 par value) 213,536,936

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


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TABLE OF CONTENTS
Page Number
iii
vii
Part I. Financial Information
Entergy Corporation and Subsidiaries
1
12
13
14
16
18
Notes to Financial Statements
19
20
29
32
37
38
42
43
54
59
60
61
Note 13. Asset Retirement Obligations
63
64
65
65
Entergy Arkansas, LLC and Subsidiaries
66
Consolidated Statements of Operations
73
75
76
78
Entergy Louisiana, LLC and Subsidiaries
79
88
89
91
92
94
i
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deletedeletedeletedelete
Page Number
Entergy Mississippi, LLC and Subsidiaries
95
101
103
104
106
Entergy New Orleans, LLC and Subsidiaries
107
Consolidated Statements of Operations
114
115
116
118
Entergy Texas, Inc. and Subsidiaries
119
125
127
128
130
System Energy Resources, Inc.
131
141
143
144
146
Part II. Other Information
147
147
147
148
149
151
ii
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FORWARD-LOOKING INFORMATION

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

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

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

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

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

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

Certain abbreviations or acronyms used in the text and notes are defined below:
Abbreviation or Acronym Term
ALJ
Administrative Law Judge
ANO 1 and 2
Units 1 and 2 of Arkansas Nuclear One (nuclear), owned by Entergy Arkansas
APSC
Arkansas Public Service Commission
ASU
Accounting Standards Update issued by the FASB
Board
Board of Directors of Entergy Corporation
Cajun
Cajun Electric Power Cooperative, Inc.
capacity factor
Actual plant output divided by maximum potential plant output for the period
City Council
Council of the City of New Orleans, Louisiana
COVID-19
The novel coronavirus disease declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention in March 2020
DOE
United States Department of Energy
Entergy
Entergy Corporation and its direct and indirect subsidiaries
Entergy Corporation
Entergy Corporation, a Delaware corporation
Entergy Gulf States, Inc.
Predecessor company for financial reporting purposes to Entergy Gulf States Louisiana that included the assets and business operations of both Entergy Gulf States Louisiana and Entergy Texas
Entergy Gulf States Louisiana
Entergy Gulf States Louisiana, L.L.C., a Louisiana limited liability company formally created as part of the jurisdictional separation of Entergy Gulf States, Inc. and the successor company to Entergy Gulf States, Inc. for financial reporting purposes.  The term is also used to refer to the Louisiana jurisdictional business of Entergy Gulf States, Inc., as the context requires. Effective October 1, 2015, the business of Entergy Gulf States Louisiana was combined with Entergy Louisiana.
Entergy Louisiana
Entergy Louisiana, LLC, a Texas limited liability company formally created as part of the combination of Entergy Gulf States Louisiana and the company formerly known as Entergy Louisiana, LLC (Old Entergy Louisiana) into a single public utility company and the successor to Old Entergy Louisiana for financial reporting purposes
Entergy Texas
Entergy Texas, Inc., a Texas corporation formally created as part of the jurisdictional separation of Entergy Gulf States, Inc.  The term is also used to refer to the Texas jurisdictional business of Entergy Gulf States, Inc., as the context requires.
Entergy Wholesale Commodities
Prior to January 1, 2023, one of Entergy’s reportable business segments consisting of non-utility business activities primarily comprised of the ownership, operation, and decommissioning of nuclear power plants, the ownership of interests in non-nuclear power plants, and the sale of the electric power produced by its operating power plants to wholesale customers
EPA
United States Environmental Protection Agency
FASB
Financial Accounting Standards Board
FERC
Federal Energy Regulatory Commission
Form 10-K
Annual Report on Form 10-K for the calendar year ended December 31, 2023, filed with the SEC by Entergy Corporation and its Registrant Subsidiaries
GAAP
Generally Accepted Accounting Principles
Grand Gulf
Unit No. 1 of Grand Gulf Nuclear Station (nuclear), 90% owned or leased by System Energy
GWh
Gigawatt-hour(s), which equals one million kilowatt-hours
Indian Point 2
Unit 2 of Indian Point Energy Center (nuclear), previously owned as part of Entergy’s non-utility business, which ceased power production in April 2020 and was sold in May 2021
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DEFINITIONS (Continued)
Abbreviation or Acronym Term
Indian Point 3
Unit 3 of Indian Point Energy Center (nuclear), previously owned as part of Entergy’s non-utility business, which ceased power production in April 2021 and was sold in May 2021
IRS
Internal Revenue Service
ISO
Independent System Operator
kW
Kilowatt, which equals one thousand watts
kWh
Kilowatt-hour(s)
LPSC
Louisiana Public Service Commission
LURC
Louisiana Utilities Restoration Corporation
MISO
Midcontinent Independent System Operator, Inc., a regional transmission organization
MMBtu
One million British Thermal Units
MPSC
Mississippi Public Service Commission
MW
Megawatt(s), which equals one thousand kilowatts
MWh
Megawatt-hour(s)
Net debt to net capital ratio
Gross debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents, which is a non-GAAP measure
NRC
Nuclear Regulatory Commission
Palisades
Palisades Nuclear Plant (nuclear), previously owned as part of Entergy’s non-utility business, which ceased power production in May 2022 and was sold in June 2022
Parent & Other
The portions of Entergy not included in the Utility segment, primarily consisting of the activities of the parent company, Entergy Corporation, and other business activity, including Entergy’s non-utility operations business which owns interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers and also provides decommissioning services to nuclear power plants owned by non-affiliated entities in the United States
PPA
Purchased power agreement or power purchase agreement
PUCT
Public Utility Commission of Texas
Registrant Subsidiaries
Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, Entergy Texas, Inc., and System Energy Resources, Inc.
River Bend
River Bend Station (nuclear), owned by Entergy Louisiana
SEC
Securities and Exchange Commission
System Agreement
Agreement, effective January 1, 1983, as modified, among the Utility operating companies relating to the sharing of generating capacity and other power resources. The agreement terminated effective August 2016.
System Energy
System Energy Resources, Inc.
Unit Power Sales Agreement
Agreement, dated as of June 10, 1982, as amended and approved by the FERC, among Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy, relating to the sale of capacity and energy from System Energy’s share of Grand Gulf
Utility
Entergy’s reportable segment that generates, transmits, distributes, and sells electric power, with a small amount of natural gas distribution in portions of Louisiana
Utility operating companies
Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas
Vermont Yankee
Vermont Yankee Nuclear Power Station (nuclear), previously owned as part of Entergy’s non-utility business, which ceased power production in December 2014 and was disposed of in January 2019
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DEFINITIONS (Concluded)
Abbreviation or Acronym Term
Waterford 3
Unit No. 3 (nuclear) of the Waterford Steam Electric Station, owned by Entergy Louisiana
weather-adjusted usage
Electric usage excluding the effects of deviations from normal weather
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ENTERGY CORPORATION AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

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

See Note 7 to the financial statements herein for discussion of and financial information regarding Entergy’s business segment.

Results of Operations

First Quarter 2024 Compared to First Quarter 2023

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

Utility
Parent &
Other (a)

Entergy
(In Thousands)
2023 Net Income (Loss) Attributable to Entergy Corporation $397,302  ($86,367) $310,935 
Operating revenues (175,819) (10,612) (186,431)
Fuel, fuel-related expenses, and gas purchased for resale (284,046) 2,279  (281,767)
Purchased power 226  (10,372) (10,146)
Other regulatory charges (credits) - net 85,673  —  85,673 
Other operation and maintenance 60,922  (5,417) 55,505 
Asset write-offs, impairments, and related charges 131,775  —  131,775 
Taxes other than income taxes 7,371  (379) 6,992 
Depreciation and amortization 45,745  —  45,745 
Other income (deductions) 135,803  (26,008) 109,795 
Interest expense 9,913  11,549  21,462 
Other expenses 3,918  1  3,919 
Income taxes 100,674  (705) 99,969 
Preferred dividend requirements of subsidiaries and noncontrolling interests (109) —  (109)
2024 Net Income (Loss) Attributable to Entergy Corporation $195,224  ($119,943) $75,281 

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

First quarter 2024 results of operations include: (1) a $132 million ($97 million net-of-tax) charge, recorded at Utility, to reflect the write-off of a previously recorded regulatory asset as a result of an adverse decision in the Entergy Arkansas opportunity sales proceeding in March 2024; and (2) a $78 million ($57 million net-of-tax) regulatory charge, recorded at Utility in first quarter 2024, primarily to reflect a settlement in principle between Entergy New Orleans and the City Council in April 2024 for additional sharing with customers of income tax benefits from the resolution of the 2016-2018 IRS audit. See Note 2 to the financial statements herein and in the Form 10-K for discussion of the Entergy Arkansas opportunity sales proceeding. See Note 10 to the financial

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statements herein for discussion of the April 2024 settlement in principle and Note 3 to the financial statements in the Form 10-K for discussion of the resolution of the 2016-2018 IRS audit.

First quarter 2023 results of operations include a $129 million reduction in income tax expense as a result of the Hurricane Ida securitization in March 2023, which also resulted in a $103 million ($76 million net-of-tax) regulatory charge, recorded at Utility, to reflect Entergy Louisiana’s obligation to provide credits to its customers as described in an LPSC ancillary order issued as part of the securitization regulatory proceeding. See Notes 2 and 3 to the financial statements in the Form 10-K for discussion of the Entergy Louisiana March 2023 storm cost securitization.

Operating Revenues

Utility

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:
Amount
(In Millions)
2023 operating revenues $2,948 
Fuel, rider, and other revenues that do not significantly affect net income (223)
Storm restoration carrying costs (31)
Volume/weather 19 
Retail electric price 59 
2024 operating revenues $2,772 

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

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

The 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 cogeneration customers.

The retail electric price variance is primarily due to:

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

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


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Total electric energy sales for Utility for the three months ended March 31, 2024 and 2023 are as follows:
2024 2023 % Change
(GWh)
Residential 7,758  7,276  7 
Commercial 6,223  6,248  — 
Industrial 12,661  12,740  (1)
Governmental 572  577  (1)
Total retail 27,214  26,841  1 
Sales for resale 3,958  4,502  (12)
Total 31,172  31,343  (1)

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

Other Income Statement Items

Utility

Other operation and maintenance expenses increased from $620 million for the first quarter 2023 to $681 million for the first quarter 2024 primarily due to:

•an increase of $10 million in compensation and benefits costs primarily due to higher healthcare claims activity in 2024;
•the effects of recording a final judgment in first quarter 2023 to resolve claims in the ANO damages case against the DOE related to spent nuclear fuel storage costs. The damages awarded included the reimbursement of approximately $10 million of spent nuclear fuel storage costs previously recorded as other operation and maintenance expenses. See Note 8 to the financial statements in the Form 10-K for discussion of the spent nuclear fuel litigation;
•an increase of $9 million in power delivery expenses primarily due to higher vegetation maintenance costs due to timing and higher readiness and response costs;
•an increase of $9 million in contract costs related to operational performance, customer service, and organizational health initiatives;
•an increase of $7 million in non-nuclear generation expenses primarily due to a higher scope of work, including during plant outages, performed in 2024 as compared to 2023; and
•several individually insignificant items.

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

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

Depreciation and amortization expenses increased primarily due to:

•additions to plant in service;
•the recognition of $14 million in depreciation expense in first quarter 2024 at Entergy Texas for the 2022 base rate case relate back period, effective over six months beginning January 2024. The recognition of

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depreciation expense for the relate back period is effective over the same period as collections from the relate back surcharge rider and results in no effect on net income; and
•an increase in depreciation rates at Entergy Texas, effective June 2023.

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

Other regulatory charges (credits) - net includes:

•a regulatory charge of $103 million, recorded by Entergy Louisiana in first quarter 2023, to reflect its obligation to provide credits to its customers as described in an LPSC ancillary order issued in the Hurricane Ida securitization regulatory proceeding. See Note 2 to the financial statements in the Form 10-K for discussion of the Entergy Louisiana March 2023 storm cost securitization; and
•a regulatory charge of $78 million, recorded by Entergy New Orleans in first quarter 2024, primarily to reflect a settlement in principle between Entergy New Orleans and the City Council in April 2024 for additional sharing with customers of income tax benefits from the resolution of the 2016-2018 IRS audit. See Note 10 to the financial statements herein for discussion of the April 2024 settlement in principle and Note 3 to the financial statements in the Form 10-K for discussion of the resolution of the 2016-2018 IRS audit.

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

Other income increased primarily due to:

•changes in decommissioning trust fund activity, including portfolio rebalancing of decommissioning trust funds in first quarter 2024;
•an increase of $24 million in intercompany dividend income from affiliated preferred membership interests related to storm cost securitizations. The intercompany dividend income on the affiliate preferred membership interests is eliminated for consolidation purposes and has no effect on net income since the investment is in another Entergy subsidiary;
•a decrease of $17 million in net periodic pension non-service costs as a result of pension settlement charges recorded in first quarter 2023 and a reduction in the amortization of deferred pension losses as a result of an amendment to a qualified pension plan spinning-off predominantly inactive participants into a new qualified plan, extending the amortization period for deferred losses. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K, Note 6 to the financial statements herein, and Note 11 to the financial statements in the Form 10-K for further discussion of pension and other postretirement benefits costs; and
•a $15 million charge, recorded by Entergy Louisiana in first quarter 2023, for the LURC’s 1% beneficial interest in the storm trust II established as part of the March 2023 storm cost securitization. See Note 2 to the financial statements in the Form 10-K for discussion of the Entergy Louisiana March 2023 storm cost securitization.

Interest expense increased primarily due to the issuance by Entergy Texas of $350 million of 5.80% Series mortgage bonds in August 2023.


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Parent and Other

Other income decreased primarily due to the elimination for consolidation purposes of intercompany dividend income of $24 million from affiliated preferred membership interests, as discussed above.

Interest expense increased primarily due to higher commercial paper balances. See Note 4 to the financial statements herein for discussion of Entergy’s commercial paper program.

Income Taxes

The effective income tax rate was 21.5% for the first quarter 2024. The difference in the effective income tax rate for the first quarter 2024 versus the federal statutory rate of 21% was primarily due to the amortization of state accumulated deferred income taxes as a result of tax rate changes, a provision for uncertain tax positions, 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.

The effective income tax rate was (33.8%) for the first quarter 2023. The difference in the effective income tax rate for the first quarter 2023 versus the federal statutory rate of 21% was primarily due to the reduction in income tax expense as a result of the securitization of Hurricane Ida storm costs pursuant to Louisiana Act 55, as supplemented by Act 293 of the Louisiana Legislature’s Regular Session of 2021. See Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the Entergy Louisiana March 2023 storm cost securitization under Act 293.

Income Tax Legislation and Regulation

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation and Regulation” in the Form 10-K for discussion of income tax legislation and regulation. The following is an update to that discussion.

Entergy Arkansas, Entergy Louisiana, and System Energy have the potential to generate zero-emission nuclear power production tax credits for electricity generated by their respective nuclear power facilities. Based on guidance provided by the United States Treasury Department and the IRS, the production tax credits will be calculated by multiplying the kWh of qualifying electricity by $0.003, with the value of the credits decreasing ratably, or phasing out, once the annual gross receipts from the sale of nuclear power exceed a certain threshold. If certain prevailing wage requirements are satisfied, the calculation of the credit, as described in the preceding sentence, is multiplied by a factor of five. Additional guidance is needed from the United States Treasury Department and/or the IRS to determine how the value of these credits will be calculated for power generated from nuclear facilities of rate-regulated utilities. Due to the uncertainty of value, if any, of credits Entergy Arkansas, Entergy Louisiana, or System Energy may receive, no credits have been recognized for the nuclear power produced during first quarter 2024. If credits are recognized in future periods, the value of such credits is expected to be shared with customers. As such, recognition of production tax credits is not expected to have a material effect on the results of operations of Entergy, Entergy Arkansas, Entergy Louisiana, or System Energy.

Entergy Wholesale Commodities Exit from the Merchant Power Business

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


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Planned Sale of Gas Distribution Businesses

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

Liquidity and Capital Resources

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

Capital Structure and Resources

Entergy’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio is primarily due to the net issuance of debt in 2024.
March 31,
2024		 December 31,
2023
Debt to capital 65.8  % 63.8  %
Effect of excluding securitization bonds (0.2  %) (0.3  %)
Debt to capital, excluding securitization bonds (non-GAAP) (a) 65.6  % 63.5  %
Effect of subtracting cash (1.1  %) (0.1  %)
Net debt to net capital, excluding securitization bonds (non-GAAP) (a) 64.5  % 63.4  %

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

As of March 31, 2024, 20.8% of the debt outstanding is at the parent company, Entergy Corporation, and 78.7% is at the Utility. The remaining 0.5% of the debt outstanding relates to the Vermont Yankee credit facility, as discussed in Note 4 to the financial statements herein. Net debt consists of debt less cash and cash equivalents.  Debt consists of notes payable and commercial paper, finance lease obligations, and long-term debt, including the currently maturing portion.  Capital consists of debt, equity, and subsidiaries’ preferred stock without sinking fund.  Net capital consists of capital less cash and cash equivalents.  The debt to capital ratio excluding securitization bonds and net debt to net capital ratio excluding securitization bonds are non-GAAP measures. Entergy uses the debt to capital ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy’s financial condition because the securitization bonds are non-recourse to Entergy, as more fully described in Note 5 to the financial statements in the Form 10-K.  Entergy also uses the net debt to net capital ratio excluding securitization bonds in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy’s financial condition because net debt indicates Entergy’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.


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Entergy Corporation and Subsidiaries
Management’s Financial Discussion and Analysis
Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in June 2028.  The facility includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the credit facility.  The commitment fee is currently 0.225% of the undrawn commitment amount.  Commitment fees and interest rates on loans under the credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation.  As there were no borrowings under the facility for the three months ended March 31, 2024, the estimated interest rate as of March 31, 2024 that would have been applied to outstanding borrowings under the facility was 6.93%. The following is a summary of the amounts outstanding and capacity available under the credit facility as of March 31, 2024:
Capacity Borrowings Letters
of Credit		 Capacity
Available
(In Millions)
$3,500 $— $4 $3,496
Entergy Corporation’s credit facility includes a covenant requiring Entergy to maintain a consolidated debt ratio, as defined, of 65% or less of its total capitalization.  The calculation of this debt ratio under Entergy Corporation’s credit facility is different than the calculation of the debt to capital ratio above.  Entergy is currently in compliance with the covenant and expects to remain in compliance with this covenant.  If Entergy fails to meet this ratio, or if Entergy Corporation or one of the Registrant Subsidiaries (except Entergy New Orleans and System Energy) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the Entergy Corporation credit facility’s maturity date may occur.  See Note 4 to the financial statements herein for additional discussion of the Entergy Corporation credit facility and discussion of the Registrant Subsidiaries’ credit facilities.

Entergy Corporation has a commercial paper program with a Board-approved program limit of up to $2 billion. As of March 31, 2024, Entergy Corporation had $1,913.5 million of commercial paper outstanding. The weighted-average interest rate for the three months ended March 31, 2024 was 5.69%.

Equity Issuances and Equity Distribution Program

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

Capital Expenditure Plans and Other Uses of Capital

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

Renewables

Alternative RFP and Certification

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

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procedural schedule was established in May 2023 with a hearing scheduled for March 2024. In March 2024 the hearing in this matter was rescheduled to June 2024.

Other Generation

Bayou Power Station

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

System Resilience and Storm Hardening

Entergy Louisiana

As discussed in the Form 10-K, in December 2022, Entergy Louisiana filed an application with the LPSC seeking a public interest finding regarding Phase I of Entergy Louisiana’s Future Ready resilience plan and approval of a rider mechanism to recover the program’s costs. Phase I in the December 2022 application reflected the first five years of a ten-year resilience plan and included investment of approximately $5 billion, including hardening investment, transmission dead-end structures, enhanced vegetation management, and telecommunications improvement. The LPSC staff and certain intervenors filed direct testimony in August, September, and October 2023. The LPSC staff filed cross-answering testimony in October 2023. The testimony largely supports implementation of some level of accelerated investment in resilience, but raises various issues related to the magnitude of the investment, the cost recovery mechanism applicable to the investment, and the ratemaking for the investment. In April 2024 the LPSC approved a framework which includes an initial five-year resilience plan providing for an investment of approximately $1.9 billion and a rider to recover the associated costs. The plan is subject to specified reporting requirements and includes a performance review of the hardened assets. Entergy Louisiana is permitted to make future filings for additional investments.

Entergy New Orleans

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

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funded by the DOE’s Grid Resilience and Innovation Partnerships program. The filing requests an expedited technical conference in May 2024, which request is pending.

Dividends

Declarations of dividends on Entergy’s common stock are made at the discretion of the Board.  Among other things, the Board evaluates the level of Entergy’s common stock dividends based upon earnings per share from the Utility segment and the Parent and Other portion of the business, financial strength, and future investment opportunities.  At its April 2024 meeting, the Board declared a dividend of $1.13 per share, which is the same quarterly dividend per share that Entergy has paid since the third quarter 2023.

Cash Flow Activity

As shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the three months ended March 31, 2024 and 2023 were as follows:
2024 2023
(In Millions)
Cash and cash equivalents at beginning of period $133  $224 
Net cash provided by (used in):    
Operating activities 521  960 
Investing activities (1,288) (1,283)
Financing activities 1,929  2,070 
Net increase in cash and cash equivalents 1,162  1,747 
Cash and cash equivalents at end of period $1,295  $1,971 

Operating Activities

Net cash flow provided by operating activities decreased $439 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to lower collections from Utility customers, including the effect of higher deferred fuel collections in 2023, and timing of payments to vendors.

Investing Activities

Net cash flow used in investing activities increased $5 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to the initial payment of approximately $170 million in February 2024 for the purchase of the Walnut Bend Solar facility by Entergy Arkansas. The increase was partially offset by:

•a decrease of $79 million in distribution construction expenditures primarily due to lower capital expenditures for storm restoration in 2024 and a lower scope of work on projects in 2024 as compared to 2023; and
•a decrease of $70 million in nuclear construction expenditures primarily due to decreased spending on various nuclear projects in 2024.

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


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Financing Activities

Net cash flow provided by financing activities decreased $141 million for the three months ended March 31, 2024 compared to the three months ended March 31, 2023 primarily due to proceeds from securitization of $1.5 billion received by the storm trust II at Entergy Louisiana in 2023, partially offset by:

•an increase of $737 million in net issuances of commercial paper in 2024 compared to 2023; and
•long-term debt activity providing approximately $1,371 million of cash in 2024 compared to providing approximately $780 million of cash in 2023.

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

Rate, Cost-recovery, and Other Regulation

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

State and Local Rate Regulation and Fuel-Cost Recovery

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

Federal Regulation

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

Market and Credit Risk Sensitive Instruments

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

Some of the agreements to sell the power produced by the non-utility operations business contain provisions that require an Entergy subsidiary to provide credit support to secure its obligations under the agreements. The primary form of credit support to satisfy these requirements is an Entergy Corporation guarantee.  Cash and letters of credit are also acceptable forms of credit support. At March 31, 2024, based on power prices at that time, Entergy had liquidity exposure of $3 million under the guarantees in place supporting its non-utility operations business transactions and $8 million of posted cash collateral.

Nuclear Matters

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

NRC Reactor Oversight Process

As discussed in the Form 10-K, the NRC’s Reactor Oversight Process is a program to collect information about plant performance, assess the information for its safety significance, and provide for appropriate licensee and

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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.

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

Critical Accounting Estimates

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

New Accounting Pronouncements

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

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

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CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands, Except Share Data)
OPERATING REVENUES
Electric $ 2,706,506   $ 2,883,411  
Natural gas 65,667   64,581  
Other 22,455   33,067  
TOTAL 2,794,628   2,981,059  
OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 616,617   898,384  
Purchased power 228,142   238,288  
Nuclear refueling outage expenses 38,263   37,233  
Other operation and maintenance 687,031   631,526  
Asset write-offs, impairments, and related charges 131,775   —  
Decommissioning 53,382   50,493  
Taxes other than income taxes 192,429   185,437  
Depreciation and amortization 499,661   453,916  
Other regulatory charges (credits) - net 109,346   23,673  
TOTAL 2,556,646   2,518,950  
OPERATING INCOME 237,982   462,109  
OTHER INCOME
Allowance for equity funds used during construction 26,794   23,146  
Interest and investment income 150,697   48,259  
Miscellaneous - net ( 50,743 ) ( 54,452 )
TOTAL 126,748   16,953  
INTEREST EXPENSE
Interest expense 277,743   255,329  
Allowance for borrowed funds used during construction ( 10,543 ) ( 9,591 )
TOTAL 267,200   245,738  
INCOME BEFORE INCOME TAXES 97,530   233,324  
Income taxes 20,994   ( 78,975 )
CONSOLIDATED NET INCOME 76,536   312,299  
Preferred dividend requirements of subsidiaries and noncontrolling interests 1,255   1,364  
NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION $ 75,281   $ 310,935  
Earnings per average common share:
Basic $ 0.35   $ 1.47  
Diluted $ 0.35   $ 1.47  
Basic average number of common shares outstanding 213,143,719   211,350,705  
Diluted average number of common shares outstanding 213,873,128   212,146,507  
See Notes to Financial Statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
Net Income $ 76,536   $ 312,299  
Other comprehensive income (loss)
Pension and other postretirement adjustment (net of tax expense (benefit) of ($ 1,202 ) and $ 731 )
( 3,668 ) 2,027  
Other comprehensive income (loss) ( 3,668 ) 2,027  
Comprehensive Income 72,868   314,326  
Preferred dividend requirements of subsidiaries and noncontrolling interests 1,255   1,364  
Comprehensive Income Attributable to Entergy Corporation $ 71,613   $ 312,962  
See Notes to Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING ACTIVITIES
Consolidated net income $ 76,536   $ 312,299  
Adjustments to reconcile consolidated net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization 600,412   553,224  
Deferred income taxes, investment tax credits, and non-current taxes accrued ( 20,656 ) ( 98,244 )
Asset write-offs, impairments, and related charges 131,775   —  
Changes in working capital:
Receivables 107,921   272,533  
Fuel inventory 5,387   ( 29,484 )
Accounts payable ( 287,418 ) ( 339,963 )
Taxes accrued ( 64,085 ) ( 66,717 )
Interest accrued 29,615   30,627  
Deferred fuel costs 92,685   442,598  
Other working capital accounts ( 73,315 ) ( 67,971 )
Changes in provisions for estimated losses 9,283   25  
Changes in regulatory assets
237,098   542,694  
Changes in other regulatory liabilities 205,587   136,685  
Effect of securitization on regulatory asset —   ( 491,150 )
Changes in pension and other postretirement funded status ( 76,343 ) ( 64,088 )
Other ( 453,390 ) ( 173,525 )
Net cash flow provided by operating activities
521,092   959,543  
INVESTING ACTIVITIES
Construction/capital expenditures ( 961,152 ) ( 1,175,657 )
Allowance for equity funds used during construction 26,794   23,146  
Nuclear fuel purchases ( 133,315 ) ( 90,809 )
Payment for purchase of plant and assets ( 172,614 ) —  
Changes in securitization account ( 8,934 ) ( 3,904 )
Payments to storm reserve escrow accounts ( 5,269 ) ( 4,196 )
Increase in other investments ( 1,562 ) ( 3,462 )
Proceeds from nuclear decommissioning trust fund sales 489,417   204,128  
Investment in nuclear decommissioning trust funds ( 521,237 ) ( 232,837 )
Net cash flow used in investing activities ( 1,287,872 ) ( 1,283,591 )
See Notes to Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt 2,206,338   1,614,522  
Treasury stock 6,759   4,017  
Retirement of long-term debt ( 835,740 ) ( 834,530 )
Changes in commercial paper - net 775,333   37,995  
Proceeds received by storm trust related to securitization —   1,457,676  
Other 21,940   21,490  
Dividends paid:
Common stock ( 240,959 ) ( 226,194 )
Preferred stock ( 4,580 ) ( 4,580 )
Net cash flow provided by financing activities 1,929,091   2,070,396  
Net increase in cash and cash equivalents 1,162,311   1,746,348  
Cash and cash equivalents at beginning of period 132,548   224,164  
Cash and cash equivalents at end of period $ 1,294,859   $ 1,970,512  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $ 237,931   $ 215,082  
Income taxes ($ 316 ) ($ 5,352 )
  Noncash investing activities:
     Accrued construction expenditures $ 509,046   $ 428,459  
See Notes to Financial Statements.

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CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $ 64,949   $ 71,609  
Temporary cash investments 1,229,910   60,939  
Total cash and cash equivalents 1,294,859   132,548  
Accounts receivable:
Customer 670,812   699,411  
Allowance for doubtful accounts ( 21,889 ) ( 25,905 )
Other 209,929   225,334  
Accrued unbilled revenues 426,682   494,615  
Total accounts receivable 1,285,534   1,393,455  
Deferred fuel costs 123,796   169,967  
Fuel inventory - at average cost 187,412   192,799  
Materials and supplies - at average cost 1,495,201   1,418,969  
Deferred nuclear refueling outage costs 139,801   140,115  
Prepayments and other 231,163   213,016  
TOTAL 4,757,766   3,660,869  
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 5,165,779   4,863,710  
Non-utility property - at cost (less accumulated depreciation) 417,730   418,546  
Storm reserve escrow accounts 328,475   323,206  
Other 70,281   69,494  
TOTAL 5,982,265   5,674,956  
PROPERTY, PLANT, AND EQUIPMENT
Electric 67,626,345   66,850,474  
Natural gas 724,113   717,503  
Construction work in progress 2,281,938   2,109,703  
Nuclear fuel 707,034   707,852  
TOTAL PROPERTY, PLANT, AND EQUIPMENT 71,339,430   70,385,532  
Less - accumulated depreciation and amortization 26,837,531   26,551,203  
PROPERTY, PLANT, AND EQUIPMENT - NET 44,501,899   43,834,329  
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $ 244,804 as of March 31, 2024 and $ 250,830 as of December 31, 2023)
5,432,306   5,669,404  
Deferred fuel costs 172,201   172,201  
Goodwill 374,099   374,099  
Accumulated deferred income taxes 13,622   16,367  
Other 395,698   301,171  
TOTAL 6,387,926   6,533,242  
TOTAL ASSETS $ 61,629,856   $ 59,703,396  
See Notes to Financial Statements.

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CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $ 2,177,072   $ 2,099,057  
Notes payable and commercial paper 1,913,504   1,138,171  
Accounts payable 1,187,454   1,566,745  
Customer deposits 455,707   446,146  
Taxes accrued 370,128   434,213  
Interest accrued 243,812   214,197  
Deferred fuel costs 265,442   218,927  
Pension and other postretirement liabilities 57,390   59,508  
Other 214,018   219,528  
TOTAL 6,884,527   6,396,492  
NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 4,236,410   4,245,982  
Accumulated deferred investment tax credits 201,910   205,973  
Regulatory liability for income taxes - net 1,021,395   1,033,242  
Other regulatory liabilities 3,334,360   3,116,926  
Decommissioning and asset retirement cost liabilities 4,575,811   4,505,782  
Accumulated provisions 471,853   462,570  
Pension and other postretirement liabilities 574,188   648,413  
Long-term debt (includes securitization bonds of $ 263,159 as of March 31, 2024 and $ 263,007 as of December 31, 2023)
24,309,439   23,008,839  
Other 1,226,187   1,116,661  
TOTAL 39,951,553   38,344,388  
Commitments and Contingencies
Subsidiaries’ preferred stock without sinking fund
219,410   219,410  
EQUITY
Preferred stock, no par value, authorized 1,000,000 shares in 2024 and 2023; issued shares in 2024 and 2023 - none
—   —  
Common stock, $ 0.01 par value, authorized 499,000,000 shares in 2024 and 2023; issued 280,975,348 shares in 2024 and 2023
2,810   2,810  
Paid-in capital 7,769,569   7,795,411  
Retained earnings 11,774,706   11,940,384  
Accumulated other comprehensive loss ( 166,128 ) ( 162,460 )
Less - treasury stock, at cost ( 67,701,927 shares in 2024 and 68,126,778 shares in 2023)
4,922,617   4,953,498  
Total shareholders’ equity
14,458,340   14,622,647  
Subsidiaries’ preferred stock without sinking fund and noncontrolling interests
116,026   120,459  
TOTAL 14,574,366   14,743,106  
TOTAL LIABILITIES AND EQUITY $ 61,629,856   $ 59,703,396  
See Notes to Financial Statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
Shareholders’ Equity
Subsidiaries’ Preferred Stock and Noncontrolling Interests Common
Stock		 Treasury
Stock		 Paid-in
Capital		 Retained Earnings Accumulated Other Comprehensive Loss Total
(In Thousands)
Balance at December 31, 2022 $ 97,907   $ 2,797   ($ 4,978,994 ) $ 7,632,895   $ 10,502,041   ($ 191,754 ) $ 13,064,892  
Consolidated net income (a) 1,364   —   —   —   310,935   —   312,299  
Other comprehensive income —   —   —   —   —   2,027   2,027  
Common stock issuances related to stock plans —   —   19,599   ( 15,118 ) —   —   4,481  
Common stock dividends declared —   —   —   —   ( 226,194 ) —   ( 226,194 )
Beneficial interest in storm trust 14,577   —   —   —   —   —   14,577  
Distributions to noncontrolling interests ( 574 ) —   —   —   —   —   ( 574 )
Preferred dividend requirements of subsidiaries (a) ( 4,580 ) —   —   —   —   —   ( 4,580 )
Balance at March 31, 2023 $ 108,694   $ 2,797   ($ 4,959,395 ) $ 7,617,777   $ 10,586,782   ($ 189,727 ) $ 13,166,928  
Balance at December 31, 2023 $ 120,459   $ 2,810   ($ 4,953,498 ) $ 7,795,411   $ 11,940,384   ($ 162,460 ) $ 14,743,106  
Consolidated net income (a) 1,255   —   —   —   75,281   —   76,536  
Other comprehensive loss —   —   —   —   —   ( 3,668 ) ( 3,668 )
Common stock issuances related to stock plans —   —   30,881   ( 25,842 ) —   —   5,039  
Common stock dividends declared —   —   —   —   ( 240,959 ) —   ( 240,959 )
Distributions to noncontrolling interests ( 1,108 ) —   —   —   —   —   ( 1,108 )
Preferred dividend requirements of subsidiaries (a) ( 4,580 ) —   —   —   —   —   ( 4,580 )
Balance at March 31, 2024 $ 116,026   $ 2,810   ($ 4,922,617 ) $ 7,769,569   $ 11,774,706   ($ 166,128 ) $ 14,574,366  
See Notes to Financial Statements.
(a) Consolidated net income and preferred dividend requirements of subsidiaries for first quarter 2024 and first quarter 2023 each includes $ 4 million of preferred dividends on subsidiaries’ preferred stock without sinking fund that is not presented as equity.

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NOTES TO FINANCIAL STATEMENTS
(Unaudited)

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

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

Vidalia Purchased Power Agreement

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

Spent Nuclear Fuel Litigation

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

Nuclear Insurance

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

Non-Nuclear Property Insurance

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

Employment and Labor-related Proceedings

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

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

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

Grand Gulf - Related Agreements

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


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Nelson Industrial Steam Company (Entergy Louisiana)

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


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

Regulatory Assets and Regulatory Liabilities

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

Fuel and purchased power cost recovery

Entergy Arkansas

Energy Cost Recovery Rider

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

Retail Rate Proceedings

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

Filings with the LPSC (Entergy Louisiana)

Retail Rates - Electric

2023 Entergy Louisiana Rate Case and Formula Rate Plan Extension Request

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

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formula rate plan with credit supportive mechanisms needed to facilitate investment in the distribution, transmission, and generation functions.

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

Filings with the MPSC (Entergy Mississippi)

Retail Rates

2024 Formula Rate Plan Filing

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

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

Filings with the City Council (Entergy New Orleans)

Retail Rates

2024 Formula Rate Plan Filing

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

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2024 pursuant to the formula rate plan tariff. For any disputed rate adjustments, however, the City Council would set a procedural schedule that would extend the process for City Council approval of disputed rate adjustments.

Entergy Arkansas Opportunity Sales Proceeding

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

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

Complaints Against System Energy

See Note 2 to the financial statements in the Form 10-K for information regarding pending complaints against System Energy. System Energy and the Unit Power Sales Agreement are currently the subject of several litigation proceedings at the FERC (or on appeal from the FERC to the United States Court of Appeals for the Fifth Circuit), including challenges with respect to System Energy’s authorized return on equity and capital structure, renewal of its sale-leaseback arrangement, treatment of uncertain tax positions, a broader investigation of rates under the Unit Power Sales Agreement, and two prudence complaints, one challenging the extended power uprate completed at Grand Gulf in 2012 and the operation and management of Grand Gulf, particularly in the 2016-2020 time period, and the second challenging the operation and management of Grand Gulf in the 2021-2022 time period. The settlements with the MPSC and the APSC and the settlement in principle with the City Council, described in “System Energy Settlement with the City Council” below, if approved by the FERC, substantially reduce the aggregate amount of exposure resulting from these claims. The following are updates to that discussion.

Return on Equity and Capital Structure Complaints

As discussed in the Form 10-K, in March 2021 the FERC ALJ issued an initial decision in the proceeding initiated by the LPSC, the MPSC, the APSC, and the City Council against System Energy regarding the return on equity component of the Unit Power Sales Agreement. With regard to System Energy’s authorized return on equity, the ALJ determined that the existing return on equity of 10.94 % is no longer just and reasonable, and that the replacement authorized return on equity, based on application of the FERC’s Opinion No. 569-A methodology, should be 9.32 %. The ALJ further determined that System Energy should pay refunds for a fifteen-month refund period (January 2017-April 2018) based on the difference between the current return on equity and the replacement authorized return on equity. The ALJ determined that the April 2018 complaint concerning the authorized return on equity should be dismissed, and that no refunds for a second fifteen-month refund period should be due. With regard to System Energy’s capital structure, the ALJ determined that System Energy’s actual equity ratio is

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excessive and that the just and reasonable equity ratio is 48.15 % equity, based on the average equity ratio of the proxy group used to evaluate the return on equity for the second complaint. The ALJ further determined that System Energy should pay refunds for a fifteen-month refund period (September 2018-December 2019) based on the difference between the actual equity ratio and the 48.15 % equity ratio. If the ALJ’s initial decision is upheld, the estimated refund for this proceeding is approximately $ 24.8  million, which includes interest through March 31, 2024, and the estimated resulting annual rate reduction would be approximately $ 14.1  million. As a result of the settlement agreements with the MPSC and the APSC, both the estimated refund and rate reduction exclude Entergy Mississippi's and Entergy Arkansas’s portions. See “System Energy Settlement with the MPSC” in the Form 10-K and see “System Energy Settlement with the APSC” below and in the Form 10-K for discussion of the settlements. The estimated refund will continue to accrue interest until a final FERC decision is issued.

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

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

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

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

In January 2023, System Energy filed a request for rehearing of the FERC’s determinations in the December 2022 order on sale-leaseback refund issues and future lease cost disallowances, the FERC’s prospective policy on uncertain tax positions, and the proper accounting of System Energy’s accumulated deferred income taxes adjustment for the Tax Cuts and Jobs Act of 2017; and a motion for confirmation of its interpretation of the

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December 2022 order’s remedy concerning the decommissioning tax position. In January 2023 the retail regulators filed a motion for confirmation of their interpretation of the refund requirement in the December 2022 FERC order and a provisional request for rehearing. In February 2023 the FERC issued a notice that the rehearing requests have been deemed denied by operation of law. The deemed denial of the rehearing request initiates a sixty-day period in which aggrieved parties may petition for federal appellate court review of the underlying FERC orders; however, the FERC may issue a substantive order on rehearing as long as it continues to have jurisdiction over the case. In March 2023, System Energy filed in the United States Court of Appeals for the Fifth Circuit a petition for review of the December 2022 order. In March 2023, System Energy also filed an unopposed motion to stay the proceeding in the Fifth Circuit pending the FERC’s disposition of the pending motions, and the court granted the motion to stay.

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

In the rehearing order, the FERC directs System Energy to recalculate refunds for two issues: (1) refunds of rental expenses related to the renewal of the sale-leaseback arrangements and (2) refunds for the net effect of correcting the depreciation inputs for capital additions associated with the sale-leaseback. With regard to the sale-leaseback renewal rental expenses, the rehearing order allows System Energy to recover an implied return of and on the depreciated cost of the portion of the plant subject to the sale-leaseback as of the expiration of the initial lease term. With regard to the depreciation input issue, the rehearing order allows System Energy to offset refunds so that System Energy may collect interest on the rate base recalculations that were part of the overall depreciation rate recalculations. The rehearing order further directs System Energy to submit within 60 days of the date of the rehearing order an additional compliance filing to revise the total refunds for these two issues. As discussed above, System Energy’s January 2023 compliance filing calculated $ 103.5  million in total refunds, and the refunds were paid in January 2023. In October 2023, System Energy filed its compliance report with the FERC as directed in the August 2023 rehearing order. The October 2023 compliance report reflected recalculated refunds totaling $ 35.7  million for the two issues resulting in $ 67.8  million in refunds that could be recouped by System Energy. As discussed below in “System Energy Settlement with the APSC,” System Energy reached a settlement in principle with the APSC to resolve several pending cases under the FERC’s jurisdiction, including this one, pursuant to which it has agreed not to recoup the $ 27.3  million calculated for Entergy Arkansas in the compliance filing. Consistent with the compliance filing, in October 2023, Entergy Louisiana and Entergy New Orleans paid recoupment amounts of $ 18.2  million and $ 22.3  million, respectively, to System Energy.

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

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

In September 2023 the LPSC filed with the FERC a request for rehearing and clarification of the rehearing order. The LPSC requests that the FERC reverse its determination in the rehearing order that System Energy may collect an implied return of and on the depreciated cost of the portion of the plant subject to the sale-leaseback, as of the expiration of the initial lease term, as well as its determination in the rehearing order that System Energy may offset the refunds for the depreciation rate input issue and collect interest on the rate base recalculations that were part of the overall depreciation rate recalculations. In addition, the LPSC requests that the FERC either confirm the LPSC’s interpretation of the refund associated with the decommissioning uncertain tax positions or explain why it is

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not doing so. In October 2023 the FERC issued a notice that the rehearing request has been deemed denied by operation of law. In November 2023 the FERC issued a further notice stating that it would not issue any further order addressing the rehearing request. Also in November 2023 the LPSC filed with the United States Court of Appeals for the Fifth Circuit a petition for review of the FERC’s August 2023 rehearing order and denials of the September 2023 rehearing request.

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

LPSC Additional Complaints

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

Unit Power Sales Agreement Complaint

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

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

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

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

In November 2022, System Energy filed a partial settlement agreement with the APSC, the City Council, and the LPSC that resolved the following issues raised in the Unit Power Sales Agreement complaint: advance collection of lease payments, aircraft costs, executive incentive compensation, money pool borrowings, advertising expenses, deferred nuclear refueling outage costs, industry association dues, and termination of the capital funds agreement. The settlement provided that System Energy would provide a black-box refund of $ 18  million (inclusive of interest), plus additional refund amounts with interest to be calculated for certain issues to be distributed to Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans as the Utility operating companies other than Entergy Mississippi purchasing under the Unit Power Sales Agreement. The settlement further provided

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that if the APSC, the City Council, or the LPSC agrees to the global settlement System Energy entered into with the MPSC (see “System Energy Settlement with the MPSC” in the Form 10-K for discussion of the settlement), and such global settlement includes a black-box refund amount, then the black-box refund for this settlement agreement shall not be incremental or in addition to the global black-box refund amount. The settlement agreement addressed other matters as well, including adjustments to rate base beginning in October 2022, exclusion of certain other costs, and inclusion of money pool borrowings, if any, in short-term debt within the cost of capital calculation used in the Unit Power Sales Agreement. In April 2023 the FERC approved the settlement agreement. The refund provided for in the settlement agreement was included in the May 2023 service month bills under the Unit Power Sales Agreement.

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

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

LPSC Petition for a Writ of Mandamus

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

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

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System Energy Settlement with the APSC

As discussed in the Form 10-K, in October 2023, System Energy, Entergy Arkansas, and additional named Entergy parties involved in multiple docketed proceedings pending before the FERC reached a settlement in principle with the APSC to globally resolve all of their actual and potential claims in those dockets and with System Energy’s past implementation of the Unit Power Sales Agreement. The settlement also covers the amended and supplemental complaint, discussed in “Grand Gulf Prudence Complaint” above and in the Form 10-K, filed by the LPSC, the APSC, and the City Council at the FERC in October 2023. System Energy, Entergy Arkansas, additional Entergy parties, and the APSC filed the settlement agreement and supporting materials with the FERC in November 2023. The Unit Power Sales Agreement is a FERC-jurisdictional formula rate tariff for sales of energy and capacity from System Energy’s owned and leased share of Grand Gulf to Entergy Mississippi, Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans. System Energy previously settled with the MPSC with respect to these complaints before the FERC.

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

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

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

System Energy Settlement with the City Council

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

The terms of the settlement with the City Council align with the $ 588  million global black box settlement amount reflected in the prior settlements reached between System Energy and the MPSC in June 2022 and between System Energy and the APSC in November 2023. The settlement provides for Entergy New Orleans to receive a

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black box refund of $ 116  million from System Energy, inclusive of approximately $ 18  million already received by Entergy New Orleans from System Energy. In November 2022 the FERC approved the System Energy settlement with the MPSC, and in March 2024 the FERC approved the System Energy settlement with the APSC. In both settlements, the FERC stated that the settlements “appear to be fair and reasonable and in the public interest.” In March 2024 the $ 98  million black box refund to Entergy New Orleans was reclassified from long-term other regulatory liabilities to accounts payable - associated companies on System Entergy’s balance sheet.

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

System Energy Regulatory Liability for Pending Complaints

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

Unit Power Sales Agreement

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

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

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

Storm Cost Recovery Filings with Retail Regulators

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

Entergy Mississippi

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

In December 2023, Entergy Mississippi filed a Notice of Storm Escrow Disbursement and Request for Interim Relief notifying the MPSC that Entergy Mississippi had requested disbursement of approximately $ 34.5  million of storm escrow funds from its restricted storm escrow account. The filing also requested authorization from the MPSC, on a temporary basis, that the $ 34.5  million of storm escrow funds be credited to

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Entergy Mississippi’s storm damage provision, pending the MPSC’s review of Entergy Mississippi’s storm-related costs, and that Entergy Mississippi continue to bill its monthly storm damage provision without suspension in the event the storm damage provision balance exceeds $ 15  million, in anticipation of a subsequent filing by Entergy Mississippi in this proceeding. The storm damage reserve exceeded $ 15  million upon receipt of the storm escrow funds. Because the MPSC had not entered an order on Entergy Mississippi’s filing on the requested relief to continue billing this provision, Entergy Mississippi suspended billing the monthly storm damage provision effective with February 2024 bills.

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


NOTE 3.   EQUITY (Entergy Corporation and Entergy Louisiana)

Common Stock

Earnings per Share
The following table presents Entergy’s basic and diluted earnings per share calculations included on the consolidated income statements:
For the Three Months Ended March 31,
2024 2023
(Dollars In Thousands, Except Per Share Data; Shares in Millions)
$/share $/share
Consolidated net income $ 76,536   $ 312,299  
Less: Preferred dividend requirements of subsidiaries and noncontrolling interests 1,255   1,364  
Net income attributable to Entergy Corporation $ 75,281   $ 310,935  
Basic shares and earnings per average common share 213.1   $ 0.35   211.4   $ 1.47  
Average dilutive effect of:
Stock options 0.3   —   0.3   —  
Other equity plans 0.5   —   0.4   —  
Equity forwards —   —   —   —  
Diluted shares and earnings per average common shares 213.9   $ 0.35   212.1   $ 1.47  

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was 1,141,259 options for the three months ended March 31, 2024 and 1,181,919 options for the three months ended March 31, 2023.

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

Dividends declared per common share were $ 1.13 for the three months ended March 31, 2024 and $ 1.07 for the three months ended March 31, 2023.

Equity Distribution Program

In January 2021, Entergy Corporation entered into an equity distribution sales agreement with several counterparties establishing an at the market equity distribution program, pursuant to which Entergy Corporation may offer and sell from time to time shares of its common stock. The sales agreement provides that, in addition to the issuance and sale of shares of Entergy Corporation common stock, Entergy Corporation may enter into forward sale agreements for the sale of its common stock. The aggregate number of shares of common stock sold under this sales agreement and under any forward sale agreement may not exceed an aggregate gross sales price of $ 2  billion. As of March 31, 2024, an aggregate gross sales price of approximately $ 1.6  billion has been sold under the at the market equity distribution program.

During the three months ended March 31, 2024 and 2023, there were no shares of common stock issued under the at the market equity distribution program.

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

Until settlement of the forward sale agreements, earnings per share dilution resulting from the agreements, if any, will be determined under the treasury stock method. Share dilution occurs when the average market price of Entergy Corporation’s common stock is higher than the average forward sales price. For the three months ended March 31, 2024, 1,910,255 shares under the forward sale agreements were not included in the calculation of diluted earnings per share because their effect would have been antidilutive.

Treasury Stock

During the three months ended March 31, 2024, Entergy Corporation reissued 30,437 shares of its previously repurchased common stock to satisfy stock option exercises, vesting of shares of restricted stock, and other stock-based awards.  Entergy Corporation did not repurchase any of its common stock during the three months ended March 31, 2024.


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Retained Earnings

On April 8, 2024, Entergy Corporation’s Board of Directors declared a common stock dividend of $ 1.13 per share, payable on June 3, 2024 to holders of record as of May 2, 2024.

Comprehensive Income

Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy and Entergy Louisiana. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2024 and 2023:
Pension and Other Postretirement Benefit Plans
2024 2023
(In Thousands)
Beginning balance, January 1, ($ 162,460 ) ($ 191,754 )
Amounts reclassified from accumulated other comprehensive income (loss) ( 3,668 ) 2,027  
Net other comprehensive income (loss) for the period ( 3,668 ) 2,027  
Ending balance, March 31, ($ 166,128 ) ($ 189,727 )

The following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the three months ended March 31, 2024 and 2023:
Pension and Other Postretirement Benefit Plans
2024 2023
(In Thousands)
Beginning balance, January 1, $ 54,798   $ 55,370  
Amounts reclassified from accumulated other comprehensive income (loss) ( 2,024 ) ( 786 )
Net other comprehensive income (loss) for the period ( 2,024 ) ( 786 )
Ending balance, March 31, $ 52,774   $ 54,584  


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Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) for Entergy for the three months ended March 31, 2024 and 2023 are as follows:
Amounts reclassified
from AOCI		 Income Statement Location
2024 2023
(In Thousands)
Pension and other postretirement benefit plans
   Amortization of prior-service credit $ 3,473   $ 3,397   (a)
   Amortization of net gain 1,397   1,661   (a)
   Settlement loss —   ( 7,816 ) (a)
Total amortization and settlement loss 4,870   ( 2,758 )
Income taxes ( 1,202 ) 731   Income taxes
Total amortization and settlement loss (net of tax) $ 3,668   ($ 2,027 )
Total reclassifications for the period (net of tax) $ 3,668   ($ 2,027 )

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

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) for Entergy Louisiana for the three months ended March 31, 2024 and 2023 are as follows:
Amounts reclassified
from AOCI		 Income Statement Location
2024 2023
(In Thousands)
Pension and other postretirement benefit plans
   Amortization of prior-service credit $ 1,136   $ 951   (a)
   Amortization of gain 1,634   1,565   (a)
   Settlement loss —   ( 1,440 ) (a)
Total amortization and settlement loss 2,770   1,076  
Income taxes ( 746 ) ( 290 ) Income taxes
Total amortization and settlement loss (net of tax) 2,024   786  
Total reclassifications for the period (net of tax) $ 2,024   $ 786  

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


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

Entergy Corporation has in place a credit facility that has a borrowing capacity of $ 3.5 billion and expires in June 2028. The facility includes fronting commitments for the issuance of letters of credit against $ 20 million of the

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total borrowing capacity of the credit facility. The commitment fee is currently 0.225 % of the undrawn commitment amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation.  As there were no borrowings under the facility for the three months ended March 31, 2024, the estimated interest rate as of March 31, 2024 that would have been applied to outstanding borrowings under the facility was 6.93 %. The following is a summary of the amounts outstanding and capacity available under the credit facility as of March 31, 2024.
Capacity Borrowings Letters
of Credit		 Capacity
Available
(In Millions)
$ 3,500 $ — $ 4 $ 3,496

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

Entergy Corporation has a commercial paper program with a Board-approved program limit of $ 2  billion.  As of March 31, 2024, Entergy Corporation had $ 1,913.5 million of commercial paper outstanding. The weighted-average interest rate for the three months ended March 31, 2024 was 5.69 %.

Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each had credit facilities available as of March 31, 2024 as follows:
Company Expiration
Date		 Amount of
Facility		 Interest Rate
(a)		 Amount Drawn
as of
March 31, 2024		 Letters of Credit
Outstanding as of
March 31, 2024
Entergy Arkansas April 2024 (d) $ 25 million (b) 7.27 % $ — $ —
Entergy Arkansas June 2028 $ 150 million (c) 6.55 % $ — $ —
Entergy Louisiana June 2028 $ 350 million (c) 6.68 % $ — $ —
Entergy Mississippi July 2025 $ 150 million 6.55 % $ 100 million $ —
Entergy New Orleans June 2024 $ 25 million (c) 7.05 % $ — $ —
Entergy Texas June 2028 $ 150 million (c) 6.68 % $ — $ 1.1 million

(a)The interest rate is the estimated interest rate as of March 31, 2024 that would have been applied to outstanding borrowings under the facility.
(b)Borrowings under this Entergy Arkansas credit facility may be secured by a security interest in its accounts receivable at Entergy Arkansas’s option.
(c)The credit facility includes fronting commitments for the issuance of letters of credit against a portion of the borrowing capacity of the facility as follows: $ 5 million for Entergy Arkansas; $ 15 million for Entergy Louisiana; $ 10 million for Entergy New Orleans; and $ 30 million for Entergy Texas.
(d)In April 2024, Entergy Arkansas renewed and extended the expiration of the credit facility to April 2026.

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

In addition, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each has an uncommitted standby letter of credit facility as a means to post collateral to support its

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obligations to MISO and for other purposes. The following is a summary of the uncommitted standby letter of credit facilities as of March 31, 2024:
Company Amount of
Uncommitted Facility		 Letter of Credit Fee Letters of Credit
Issued as of
March 31, 2024
(a) (b)
Entergy Arkansas $ 25 million 0.78 % $ 2.1 million
Entergy Louisiana $ 125 million 0.78 % $ 11.8 million
Entergy Mississippi $ 65 million 0.78 % $ 27.6 million
Entergy New Orleans $ 15 million 1.625 % $ 0.5 million
Entergy Texas $ 80 million 1.250 % $ 76.5 million

(a)As of March 31, 2024, letters of credit posted with MISO covered financial transmission rights exposure of $ 0.6  million for Entergy Arkansas, $ 0.5  million for Entergy Louisiana, $ 0.5  million for Entergy Mississippi, and $ 0.2  million for Entergy Texas. See Note 8 to the financial statements herein for discussion of financial transmission rights.
(b)As of March 31, 2024, the letters of credit issued for Entergy Mississippi include $ 17.4  million in MISO letters of credit and $ 10.2  million in non-MISO letters of credit outstanding under this facility.

The short-term borrowings of the Registrant Subsidiaries are limited to amounts authorized by the FERC. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas have FERC-authorized short-term borrowing limits effective through April 2025. The FERC-authorized short-term borrowing limit for System Energy is effective through March 2025. In addition to borrowings from commercial banks, these companies may also borrow from the Entergy system money pool and from other internal short-term borrowing arrangements.  The money pool is an intercompany cash management program that makes possible intercompany borrowing and lending arrangements, and the money pool and the other internal borrowing arrangements are designed to reduce the Registrant Subsidiaries’ dependence on external short-term borrowings. Borrowings from internal and external short-term borrowings combined may not exceed the FERC-authorized limits. The following are the FERC-authorized limits for short-term borrowings and the outstanding short-term borrowings as of March 31, 2024 (aggregating both internal and external short-term borrowings) for the Registrant Subsidiaries:
  Authorized Borrowings
  (In Millions)
Entergy Arkansas $ 250 $ —
Entergy Louisiana $ 450 $ —
Entergy Mississippi $ 200 $ 56
Entergy New Orleans $ 150 $ 50
Entergy Texas $ 200 $ —
System Energy $ 200 $ —

Vermont Yankee Credit Facility (Entergy Corporation)

In January 2019, Entergy Nuclear Vermont Yankee was transferred to NorthStar and its credit facility was assumed by Entergy Assets Management Operations, LLC (formerly Vermont Yankee Asset Retirement, LLC), Entergy Nuclear Vermont Yankee’s parent company that remains an Entergy subsidiary after the transfer. The credit facility has a borrowing capacity of $ 139  million and expires in December 2024. The commitment fee is currently 0.20 % of the undrawn commitment amount.  As of March 31, 2024, $ 139  million in cash borrowings were outstanding under the credit facility.  The weighted-average interest rate for the three months ended March 31, 2024 was 6.97 % on the drawn portion of the facility.


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

See Note 17 to the financial statements in the Form 10-K for a discussion of the consolidation of the nuclear fuel company variable interest entities (VIEs).   To finance the acquisition and ownership of nuclear fuel, the nuclear fuel company VIEs have credit facilities and three of the four VIEs also issue commercial paper, details of which follow as of March 31, 2024:
Company Expiration
Date 		Amount
of
Facility		 Weighted-
 Average Interest
 Rate on
 Borrowings (a)		 Amount
Outstanding as of
March 31, 2024
(Dollars in Millions)
Entergy Arkansas VIE June 2025 $ 80 6.44 % $ —
Entergy Louisiana River Bend VIE June 2025 $ 105 6.44 % $ 38.9
Entergy Louisiana Waterford VIE June 2025 $ 105 6.44 % $ 31.2
System Energy VIE June 2025 $ 120 6.43 % $ 113.2

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

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

The nuclear fuel company VIEs had notes payable that were included in debt on the respective balance sheets as of March 31, 2024 as follows:
Company Description Amount
Entergy Arkansas VIE
1.84 % Series N due July 2026
$ 90 million
Entergy Arkansas VIE
5.54 % Series O due May 2029
$ 70 million
Entergy Louisiana River Bend VIE
2.51 % Series V due June 2027
$ 70 million
Entergy Louisiana Waterford VIE
5.94 % Series J due September 2026
$ 70 million
System Energy VIE
2.05 % Series K due September 2027
$ 90 million

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

As of March 31, 2024, Entergy Arkansas and Entergy Louisiana each has obtained financing authorization from the FERC that extends through April 2025 for issuances by its nuclear fuel company VIEs. System Energy has obtained financing authorization from the FERC that extends through March 2025 for issuances by its nuclear fuel company VIE.

Debt Issuances and Retirements

(Entergy Louisiana)

In March 2024, Entergy Louisiana issued $ 500  million of 5.35 % Series mortgage bonds due March 2034 and $ 700  million of 5.70 % Series mortgage bonds due March 2054. Entergy Louisiana used a portion of the

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proceeds, together with other funds, to repay in March 2024 debt outstanding under its $ 350  million long-term revolving credit facility and to repay in April 2024, prior to maturity, its $ 400  million of 5.40 % Series mortgage bonds due November 2024. Entergy Louisiana expects to use the remaining proceeds, together with other funds, to repay, at or prior to maturity, its $ 1  billion of 0.95 % Series mortgage bonds due October 2024, for capital expenditures, and for general corporate purposes.

(Entergy New Orleans)

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

Fair Value

The book value and the fair value of long-term debt for Entergy and the Registrant Subsidiaries as of March 31, 2024 were as follows:
Book Value
of Long-Term Debt		 Fair Value
of Long-Term Debt (a)
(In Thousands)
Entergy $ 26,486,511   $ 23,696,386  
Entergy Arkansas $ 4,675,636   $ 4,111,424  
Entergy Louisiana $ 10,602,315   $ 9,552,049  
Entergy Mississippi $ 2,329,695   $ 2,036,859  
Entergy New Orleans $ 677,554   $ 644,862  
Entergy Texas $ 3,225,444   $ 2,873,952  
System Energy $ 830,998   $ 797,623  

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

The book value and the fair value of long-term debt for Entergy and the Registrant Subsidiaries as of December 31, 2023 were as follows:
Book Value
of Long-Term Debt		 Fair Value
of Long-Term Debt (a)
(In Thousands)
Entergy $ 25,107,896   $ 22,489,174  
Entergy Arkansas $ 4,673,080   $ 4,166,941  
Entergy Louisiana $ 9,420,689   $ 8,414,512  
Entergy Mississippi $ 2,229,510   $ 1,969,334  
Entergy New Orleans $ 677,450   $ 602,716  
Entergy Texas $ 3,225,092   $ 2,936,130  
System Energy $ 738,459   $ 696,168  


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


NOTE 5.   STOCK-BASED COMPENSATION (Entergy Corporation)

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

Stock Options

In January 2024 the Board approved and Entergy granted long-term incentive awards in the form of options on 352,199 shares of its common stock under the 2019 Omnibus Incentive Plan with a fair value of $ 18.61 per option.  As of March 31, 2024, there were options on 3,155,183 shares of common stock outstanding with a weighted-average exercise price of $ 97.98 .  The intrinsic value, which has no effect on net income, of the outstanding stock options is calculated by the positive difference between the weighted-average exercise price of the stock options granted and Entergy Corporation’s common stock price as of March 31, 2024.  The aggregate intrinsic value of the stock options outstanding as of March 31, 2024 was $ 38.8  million.

The following table includes financial information for stock options for the three months ended March 31, 2024 and 2023:
2024 2023
(In Millions)
Compensation expense included in Entergy’s consolidated net income $ 1.1   $ 1.1  
Tax benefit recognized in Entergy’s consolidated net income $ 0.3   $ 0.3  
Compensation cost capitalized as part of fixed assets and materials and supplies $ 0.5   $ 0.5  

Other Equity Awards

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

The performance units represent the value of, and are settled with, one share of Entergy Corporation common stock at the end of the three-year performance period, plus dividends accrued during the performance period on the number of performance units earned. To emphasize the importance of environmental stewardship, specifically of carbon-free generation and resilience, an environmental achievement measure was selected as one of the performance measures for the 2024-2026 performance period. Performance will be based eighty percent on relative total shareholder return and twenty percent on the environmental achievement measure.  The performance units were granted on January 25, 2024 and eighty percent were valued at $ 124.65 per share based on various factors, primarily market conditions; and twenty percent were valued at $ 99.08 per share, the closing price of Entergy Corporation’s common stock on that date.  Performance units have the same dividend and voting rights as other common stock and are considered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the three-year vesting period, and compensation cost for the portion of the award based on the selected

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environmental achievement measure will be adjusted based on the number of units that ultimately vest. See Note 12 to the financial statements in the Form 10-K for a description of the Long-Term Performance Unit Program.

The following table includes financial information for other outstanding equity awards for the three months ended March 31, 2024 and 2023:
2024 2023
(In Millions)
Compensation expense included in Entergy’s consolidated net income $ 9.9   $ 7.7  
Tax benefit recognized in Entergy’s consolidated net income $ 2.5   $ 2.0  
Compensation cost capitalized as part of fixed assets and materials and supplies $ 4.5   $ 3.2  


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

Components of Qualified Net Pension Cost
Entergy’s qualified pension costs, including amounts capitalized, for the three months ended March 31, 2024 and 2023, included the following components:
2024 2023
(In Thousands)
Service cost - benefits earned during the period $ 23,376   $ 25,678  
Interest cost on projected benefit obligation 70,626   75,701  
Expected return on assets ( 95,980 ) ( 98,133 )
Recognized net loss 15,120   22,347  
Settlement charges —   138,427  
Net pension cost $ 13,142   $ 164,020  
The Registrant Subsidiaries’ qualified pension costs, including amounts capitalized, for their current and former employees for the three months ended March 31, 2024 and 2023, included the following components:
2024 Entergy
Arkansas		 Entergy
Louisiana		 Entergy
 Mississippi		 Entergy
New Orleans		 Entergy
Texas		 System
Energy
(In Thousands)
Service cost - benefits earned during the period $ 4,099   $ 5,551   $ 1,284   $ 440   $ 961   $ 1,384  
Interest cost on projected benefit obligation 13,217   13,961   3,521   1,569   2,831   3,391  
Expected return on assets ( 18,155 ) ( 19,447 ) ( 5,113 ) ( 2,204 ) ( 4,077 ) ( 4,648 )
Recognized net loss 5,746   2,602   1,140   470   393   1,165  
Net pension cost $ 4,907   $ 2,667   $ 832   $ 275   $ 108   $ 1,292  


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Notes to Financial Statements
2023 Entergy
Arkansas		 Entergy
Louisiana		 Entergy
 Mississippi		 Entergy
New Orleans		 Entergy
Texas		 System
Energy
(In Thousands)
Service cost - benefits earned during the period $ 4,749   $ 6,280   $ 1,482   $ 491   $ 1,107   $ 1,467  
Interest cost on projected benefit obligation 14,280   15,379   3,930   1,715   3,242   3,528  
Expected return on assets ( 18,076 ) ( 19,233 ) ( 4,884 ) ( 2,267 ) ( 4,152 ) ( 4,538 )
Recognized net loss 6,969   4,964   1,765   513   990   1,461  
Settlement charges 22,174   35,999   11,655   1,693   9,678   4,799  
Net pension cost $ 30,096   $ 43,389   $ 13,948   $ 2,145   $ 10,865   $ 6,717  

Non-Qualified Net Pension Cost

Entergy recognized $ 2.7  million and $ 9.2  million in pension cost for its non-qualified pension plans for the three months ended March 31, 2024 and 2023, respectively. For the three months ended March 31, 2024, there were no settlement charges related to the payment of lump sum benefits out of the plan. Included in the pension cost for non-qualified pension plans for the three months ended March 31, 2023 were settlement charges of $ 4.8  million related to the payment of lump sum benefits out of the plans.
The Registrant Subsidiaries recognized the following pension cost for their current and former employees for their non-qualified pension plans for the three months ended March 31, 2024 and 2023:
Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New Orleans		 Entergy
Texas
(In Thousands)
2024 $ 68   $ 51   $ 83   $ 31   $ 62  
2023 $ 450   $ 27   $ 552   $ 33   $ 63  

For the three months ended March 31, 2024, there were no settlement charges for the Registrant Subsidiaries related to the payment of lump sum benefits out of the plan. Included in the non-qualified pension costs above for the three months ended March 31, 2023 were settlement charges of $ 379  thousand and $ 453  thousand for Entergy Arkansas and Entergy Mississippi, respectively, related to the payment of lump sum benefits out of the plan.

Components of Net Other Postretirement Benefits Cost (Income)
Entergy’s other postretirement benefits income, including amounts capitalized, for the three months ended March 31, 2024 and 2023, included the following components:
  2024 2023
  (In Thousands)
Service cost - benefits earned during the period $ 3,126   $ 3,664  
Interest cost on accumulated postretirement benefit obligation (APBO) 9,852   10,568  
Expected return on assets ( 10,569 ) ( 9,183 )
Amortization of prior service credit ( 5,720 ) ( 5,640 )
Recognized net gain ( 2,761 ) ( 2,862 )
Net other postretirement benefits income ($ 6,072 ) ($ 3,453 )

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The Registrant Subsidiaries’ other postretirement benefits cost (income), including amounts capitalized, for their current and former employees for the three months ended March 31, 2024 and 2023, included the following components:
2024 Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New Orleans		 Entergy
Texas		 System
Energy
(In Thousands)
Service cost - benefits earned during the period $ 642   $ 700   $ 184   $ 51   $ 168   $ 175  
Interest cost on APBO 1,833   1,999   486   253   603   398  
Expected return on assets ( 4,384 ) —   ( 1,372 ) ( 1,479 ) ( 2,539 ) ( 728 )
Amortization of prior service cost/(credit) 524   ( 1,136 ) ( 239 ) ( 229 ) ( 1,093 ) ( 73 )
Recognized net (gain)/loss —   ( 1,738 ) 15   19   148   —  
Net other postretirement benefits income ($ 1,385 ) ($ 175 ) ($ 926 ) ($ 1,385 ) ($ 2,713 ) ($ 228 )

2023 Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New Orleans		 Entergy
Texas		 System
Energy
(In Thousands)
Service cost - benefits earned during the period $ 741   $ 845   $ 220   $ 59   $ 202   $ 189  
Interest cost on APBO 2,001   2,233   543   290   649   432  
Expected return on assets ( 3,778 ) —   ( 1,179 ) ( 1,316 ) ( 2,194 ) ( 634 )
Amortization of prior service cost/(credit) 524   ( 951 ) ( 239 ) ( 229 ) ( 1,093 ) ( 73 )
Recognized net (gain)/loss 43   ( 1,764 ) 21   117   229   —  
Net other postretirement benefits (income)/cost ($ 469 ) $ 363   ($ 634 ) ($ 1,079 ) ($ 2,207 ) ($ 86 )

Reclassification out of Accumulated Other Comprehensive Income (Loss)
Entergy and Entergy Louisiana reclassified the following costs out of accumulated other comprehensive income (loss) (before taxes and including amounts capitalized) for the three months ended March 31, 2024 and 2023:
2024 Qualified
Pension
Costs		 Other
Postretirement
Costs		 Non-Qualified
Pension Costs		 Total
(In Thousands)
Entergy
Amortization of prior service (cost) credit $ —   $ 3,513   ($ 40 ) $ 3,473  
Amortization of net gain (loss) ( 1,138 ) 2,615   ( 80 ) 1,397  
($ 1,138 ) $ 6,128   ($ 120 ) $ 4,870  
Entergy Louisiana
Amortization of prior service credit $ —   $ 1,136   $ —   $ 1,136  
Amortization of net gain (loss) ( 104 ) 1,738   —   1,634  
($ 104 ) $ 2,874   $ —   $ 2,770  


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2023 Qualified
Pension
Costs		 Other
Postretirement
Costs		 Non-Qualified
Pension Costs		 Total
(In Thousands)
Entergy
Amortization of prior service (cost) credit $ —   $ 3,510   ($ 113 ) $ 3,397  
Amortization of net gain (loss) ( 1,040 ) 2,898   ( 197 ) 1,661  
Settlement loss ( 6,647 ) —   ( 1,169 ) ( 7,816 )
($ 7,687 ) $ 6,408   ($ 1,479 ) ($ 2,758 )
Entergy Louisiana
Amortization of prior service credit $ —   $ 951   $ —   $ 951  
Amortization of net gain (loss) ( 199 ) 1,764   —   1,565  
Settlement loss ( 1,440 ) —   —   ( 1,440 )
($ 1,639 ) $ 2,715   $ —   $ 1,076  

Accounting for Pension and Other Postretirement Benefits

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

Qualified Pension Settlement Costs

First quarter 2023 lump sum benefit payments from the Entergy Corporation Retirement Plan for Bargaining Employees and the Entergy Corporation Retirement Plan for Non-Bargaining Employees exceeded the sum of the Plans’ 2023 service and interest cost, resulting in settlement costs. In accordance with accounting standards, settlement accounting requires immediate recognition of the portion of previously unrecognized losses associated with the settled portion of the plan’s pension liability. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy each participate in one or both of the Entergy Corporation Retirement Plan for Bargaining Employees and the Entergy Corporation Retirement Plan for Non-Bargaining Employees and incurred settlement costs. Similar to other pension costs, the settlement costs were included with employee labor costs and charged to expense and capital in the same manner that labor costs were charged. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans each received regulatory approval to defer the expense portion of the settlement costs, with future amortization of the deferred settlement expense over the period in which the expense otherwise would be recorded had the immediate recognition not occurred. In September 2020, Entergy Texas elected to establish a reserve, in accordance with PUCT regulations, to track the surplus or deficit in the annual amount of actuarially determined pension and other postretirement benefits chargeable to Entergy Texas’s expense. The reserve amounts recorded are evaluated in each rate case filed by Entergy Texas and an amortization period is determined at that time.


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Employer Contributions

Based on current assumptions, Entergy expects to contribute $ 270  million to its qualified pension plans in 2024.  As of March 31, 2024, Entergy had contributed $ 58  million to its pension plans.   Based on current assumptions, the Registrant Subsidiaries expect to contribute the following to qualified pension plans for their current and former employees in 2024:
Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New Orleans		 Entergy
Texas		 System
Energy
(In Thousands)
Expected 2024 pension contributions $ 55,112   $ 48,401   $ 14,980   $ 4,931   $ 8,272   $ 16,650  
Pension contributions made through March 2024 $ 12,008   $ 10,349   $ 4,660   $ 355   $ 1,292   $ 3,338  
Remaining estimated pension contributions to be made in 2024 $ 43,104   $ 38,052   $ 10,320   $ 4,576   $ 6,980   $ 13,312  


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

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

Entergy’s segment financial information for the first quarters of 2024 and 2023 was as follows:
Utility Parent & Other Eliminations Consolidated
(In Thousands)
2024
Operating revenues $ 2,772,173   $ 22,476   ($ 21 ) $ 2,794,628  
Income taxes $ 34,548   ($ 13,554 ) $ —   $ 20,994  
Consolidated net income (loss) $ 195,980   ($ 39,883 ) ($ 79,561 ) $ 76,536  
Total assets as of March 31, 2024 $ 65,760,486   $ 892,773   ($ 5,023,403 ) $ 61,629,856  
2023
Operating revenues $ 2,947,992   $ 33,070   ($ 3 ) $ 2,981,059  
Income taxes ($ 66,126 ) ($ 12,849 ) $ —   ($ 78,975 )
Consolidated net income (loss) $ 398,167   ($ 30,394 ) ($ 55,474 ) $ 312,299  
Total assets as of December 31, 2023 $ 63,887,038   $ 836,598   ($ 5,020,240 ) $ 59,703,396  

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


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Registrant Subsidiaries

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


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

Market Risk

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

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

Entergy’s exposure to market risk is determined by a number of factors, including the size, term, composition, and diversification of positions held, as well as market volatility and liquidity.  For instruments such as options, the time period during which the option may be exercised and the relationship between the current market price of the underlying instrument and the option’s contractual strike or exercise price also affects the level of market risk.  A significant factor influencing the overall level of market risk to which Entergy is exposed is its use of hedging techniques to mitigate such risk.  Hedging instruments and volumes are chosen based on ability to mitigate risk associated with future energy and capacity prices; however, other considerations are factored into hedge product and volume decisions including corporate liquidity, corporate credit ratings, counterparty credit risk, hedging costs, firm settlement risk, and product availability in the marketplace.  Entergy manages market risk by actively monitoring compliance with stated risk management policies as well as monitoring the effectiveness of its hedging policies and strategies.  Entergy’s risk management policies limit the amount of total net exposure and rolling net exposure during the stated periods.  These policies, including related risk limits, are regularly assessed to ensure their appropriateness given Entergy’s objectives.

Derivatives

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

Entergy manages fuel price volatility for its Louisiana jurisdictions (Entergy Louisiana and Entergy New Orleans) and Entergy Mississippi through the purchase of natural gas swaps and options that financially settle against either the average Henry Hub Gas Daily prices or the NYMEX Henry Hub. These swaps and options are marked-to-market through fuel expense with offsetting regulatory assets or liabilities. All benefits or costs of the program are recorded in fuel costs. The notional volumes of these swaps are based on a portion of projected annual

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exposure to gas price volatility for electric generation at Entergy Louisiana and Entergy Mississippi and projected winter purchases for gas distribution at Entergy New Orleans. The maximum length of time over which Entergy has executed natural gas swaps and options as of March 31, 2024 is 7 months for Entergy Mississippi. The total volume of natural gas swaps and options outstanding as of March 31, 2024 is 15,113,600 MMBtu for Entergy and Entergy Mississippi. As of March 31, 2024, Entergy Louisiana and Entergy New Orleans had no outstanding natural gas swaps or options. Credit support for these natural gas swaps and options is covered by master agreements that do not require Entergy to provide collateral based on mark-to-market value, but do carry adequate assurance language that may lead to requests for collateral.

During the second quarter 2023, Entergy participated in the annual financial transmission rights auction process for the MISO planning year of June 1, 2023 through May 31, 2024. Financial transmission rights are derivative instruments that represent economic hedges of future congestion charges that will be incurred in serving Entergy’s customer load. They are not designated as hedging instruments. Entergy initially records financial transmission rights at their estimated fair value and subsequently adjusts the carrying value to their estimated fair value at the end of each accounting period prior to settlement. Unrealized gains or losses on financial transmission rights held by the non-utility operations are included in operating revenues. The Utility operating companies recognize regulatory liabilities or assets for unrealized gains or losses on financial transmission rights. The total volume of financial transmission rights outstanding as of March 31, 2024 is 25,095 GWh for Entergy, including 6,056 GWh for Entergy Arkansas, 10,928 GWh for Entergy Louisiana, 3,294 GWh for Entergy Mississippi, 1,002 GWh for Entergy New Orleans, and 3,772 GWh for Entergy Texas. Credit support for financial transmission rights held by the Utility operating companies is covered by cash and/or letters of credit issued by each Utility operating company as required by MISO. Credit support for financial transmission rights held by the non-utility operations business is covered by cash. No cash or letters of credit were required to be posted for financial transmission rights exposure for the non-utility operations business as of March 31, 2024 and December 31, 2023. Letters of credit posted with MISO covered the financial transmission rights exposure for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy Texas as of March 31, 2024 and for Entergy Mississippi, Entergy New Orleans, and Entergy Texas as of December 31, 2023.

The fair values of Entergy’s derivative instruments not designated as hedging instruments on the consolidated balance sheets as of March 31, 2024 and December 31, 2023 are shown in the table below.  Certain investments, including those not designated as hedging instruments, are subject to master netting agreements and are presented in the balance sheet on a net basis in accordance with accounting guidance for derivatives and hedging.
Instrument Balance Sheet Location Gross Fair Value (a) Offsetting Position (b) Net Fair Value (c) (d)
(In Millions)
2024
Assets:
Financial transmission rights Prepayments and other $ 9 $ — $9
Liabilities:
Natural gas swaps and options Other current liabilities $ 6 $ — $6
2023
Assets:      
Financial transmission rights Prepayments and other $ 21 $ — $21
Liabilities:      
Natural gas swaps and options Other current liabilities $ 11 $ — $11

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(a)Represents the gross amounts of recognized assets/liabilities
(b)Represents the netting of fair value balances with the same counterparty
(c)Represents the net amounts of assets/liabilities presented on the Entergy Corporation and Subsidiaries’ Consolidated Balance Sheets
(d)Excludes letters of credit in the amount of $ 2  million posted as of March 31, 2024 and December 31, 2023
The effects of Entergy’s derivative instruments not designated as hedging instruments on the consolidated income statements for the three months ended March 31, 2024 and 2023 are as follows:
Instrument Income Statement
location		 Amount of gain (loss)
recorded in the income statement
(In Millions)
2024
Natural gas swaps and options Fuel, fuel-related expenses, and gas purchased for resale (a) ($6)
Financial transmission rights Purchased power expense (b) $53
2023
Natural gas swaps and options Fuel, fuel-related expenses, and gas purchased for resale (a) ($37)
Financial transmission rights Purchased power expense (b) $16

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


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The fair values of derivative instruments not designated as hedging instruments on the Registrant Subsidiaries’ balance sheets as of March 31, 2024 and December 31, 2023 are shown in the tables below. Certain investments, including those not designated as hedging instruments, are subject to master netting agreements and are presented in the balance sheet on a net basis in accordance with accounting guidance for derivatives and hedging.
Instrument Balance Sheet Location Gross Fair Value (a) Offsetting Position (b) Net Fair Value (c) (d) Registrant
(In Millions)
2024
Assets:
Financial transmission rights Prepayments and other $ 2.8 $ — $2.8 Entergy Arkansas
Financial transmission rights Prepayments and other $ 4.1 $ — $4.1 Entergy Louisiana
Financial transmission rights Prepayments and other $ 0.6 $ — $0.6 Entergy Mississippi
Financial transmission rights Prepayments and other $ 0.5 $ — $0.5 Entergy New Orleans
Financial transmission rights Prepayments and other $ 1.2 $ — $1.2 Entergy Texas
Liabilities:
Natural gas swaps Other current liabilities $ 6.5 $ — $6.5 Entergy Mississippi

Instrument Balance Sheet Location Gross Fair Value (a) Offsetting Position (b) Net Fair Value (c) (d) Registrant
(In Millions)
2023
Assets:
Financial transmission rights Prepayments and other $ 6.0 $ — $6.0 Entergy Arkansas
Financial transmission rights Prepayments and other $ 9.8 $ — $9.8 Entergy Louisiana
Financial transmission rights Prepayments and other $ 1.4 $ — $1.4 Entergy Mississippi
Financial transmission rights Prepayments and other $ 1.1 $ — $1.1 Entergy New Orleans
Financial transmission rights Prepayments and other $ 2.7 ($ 0.3 ) $2.4 Entergy Texas
Liabilities:
Natural gas swaps and options Other current liabilities $ 0.4 $ — $0.4 Entergy Louisiana
Natural gas swaps Other current liabilities $ 10.1 $ — $10.1 Entergy Mississippi
Natural gas swaps Other current liabilities $ 0.6 $ — $0.6 Entergy New Orleans

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

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(b)Represents the netting of fair value balances with the same counterparty
(c)Represents the net amounts of assets/liabilities presented on the Registrant Subsidiaries’ balance sheets
(d)As of March 31, 2024, letters of credit posted with MISO covered financial transmission rights exposure of $ 0.6  million for Entergy Arkansas, $ 0.5  million for Entergy Louisiana, $ 0.5  million for Entergy Mississippi, and $ 0.2  million for Entergy Texas. As of December 31, 2023, letters of credit posted with MISO covered financial transmission rights exposure of $ 1.2  million for Entergy Arkansas, $ 0.5  million for Entergy Louisiana, $ 0.3  million for Entergy Mississippi, and $ 0.1  million for Entergy Texas.
The effects of derivative instruments not designated as hedging instruments on the Registrant Subsidiaries’ income statements for the three months ended March 31, 2024 and 2023 are as follows:
Instrument Income Statement Location Amount of gain
(loss) recorded
in the income statement		 Registrant
(In Millions)
2024
Natural gas swaps Fuel, fuel-related expenses, and gas purchased for resale $5.2 (a) Entergy Mississippi
Natural gas swaps Fuel, fuel-related expenses, and gas purchased for resale $0.5 (a) Entergy New Orleans
Financial transmission rights Purchased power expense $26.9 (b) Entergy Arkansas
Financial transmission rights Purchased power expense $16.2 (b) Entergy Louisiana
Financial transmission rights Purchased power expense $1.1 (b) Entergy Mississippi
Financial transmission rights Purchased power expense $1.1 (b) Entergy New Orleans
Financial transmission rights Purchased power expense $7.5 (b) Entergy Texas
2023
Natural gas swaps and options Fuel, fuel-related expenses, and gas purchased for resale ($6.6) (a) Entergy Louisiana
Natural gas swaps Fuel, fuel-related expenses, and gas purchased for resale ($28.6) (a) Entergy Mississippi
Natural gas swaps Fuel, fuel-related expenses, and gas purchased for resale ($2.2) (a) Entergy New Orleans
Financial transmission rights Purchased power expense $3.9 (b) Entergy Arkansas
Financial transmission rights Purchased power expense $8.8 (b) Entergy Louisiana
Financial transmission rights Purchased power expense $1.5 (b) Entergy Mississippi
Financial transmission rights Purchased power expense $0.9 (b) Entergy New Orleans
Financial transmission rights Purchased power expense $0.7 (b) Entergy Texas

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

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Fair Values

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

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

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

The three levels of the fair value hierarchy are:

•Level 1 - Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.  Level 1 primarily consists of individually owned common stocks, cash equivalents (temporary cash investments, securitization recovery trust account, and escrow accounts), debt instruments, and gas swaps traded on exchanges with active markets.  Cash equivalents includes all unrestricted highly liquid debt instruments with an original or remaining maturity of three months or less at the date of purchase.

•Level 2 - Level 2 inputs are inputs other than quoted prices included in Level 1 that are, either directly or indirectly, observable for the asset or liability at the measurement date.  Assets are valued based on prices derived by independent third parties that use inputs such as benchmark yields, reported trades, broker/dealer quotes, and issuer spreads.  Prices are reviewed and can be challenged with the independent parties and/or overridden by Entergy if it is believed such would be more reflective of fair value.  Level 2 inputs include the following:

–quoted prices for similar assets or liabilities in active markets;
–quoted prices for identical assets or liabilities in inactive markets;
–inputs other than quoted prices that are observable for the asset or liability; or
–inputs that are derived principally from or corroborated by observable market data by correlation or other means.

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

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

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

The following tables set forth, by level within the fair value hierarchy, Entergy’s assets and liabilities that are accounted for at fair value on a recurring basis as of March 31, 2024 and December 31, 2023.  The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect placement within the fair value hierarchy levels.
2024 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $ 1,230   $ —   $ —   $ 1,230  
Decommissioning trust funds (a):
Equity securities 135   —   —   135  
Debt securities 613   1,148   —   1,761  
Common trusts (b) 3,270  
Securitization recovery trust account 17   —   —   17  
Storm reserve escrow accounts 328   —   —   328  
Financial transmission rights —   —   9   9  
$ 2,323   $ 1,148   $ 9   $ 6,750  
Liabilities:
Gas hedge contracts $ 6   $ —   $ —   $ 6  

2023 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:        
Temporary cash investments $ 61   $ —   $ —   $ 61  
Decommissioning trust funds (a):        
Equity securities 24   —   —   24  
Debt securities 611   1,159   —   1,770  
Common trusts (b) 3,070  
Securitization recovery trust account 8   —   —   8  
Storm reserve escrow accounts 323   —   —   323  
Financial transmission rights —   —   21   21  
  $ 1,027   $ 1,159   $ 21   $ 5,277  
Liabilities:        
Gas hedge contracts $ 11   $ —   $ —   $ 11  

(a)The decommissioning trust funds hold equity and fixed income securities. Equity securities are invested to approximate the returns of major market indices.  Fixed income securities are held in various governmental

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and corporate securities.  See Note 9 to the financial statements herein for additional information on the investment portfolios.
(b)Common trust funds are not publicly quoted and are valued by the fund administrators using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value table. The fund administrator of these investments allows daily trading at the net asset value and trades settle at a later date.
The following table sets forth a reconciliation of changes in the net assets for the fair value of financial transmission rights classified as Level 3 in the fair value hierarchy for the three months ended March 31, 2024 and 2023:
2024 2023
(In Millions)
Balance as of January 1, $ 21   $ 19  
Total gains (losses) for the period
Included as a regulatory liability/asset 41   4  
Settlements ( 53 ) ( 16 )
Balance as of March 31, $ 9   $ 7  

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

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

Entergy Arkansas

2024 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $ 32.9   $ —   $ —   $ 32.9  
Decommissioning trust funds (a):
Equity securities 88.1   —   —   88.1  
Debt securities 137.7   361.1   —   498.8  
Common trusts (b) 915.0  
Financial transmission rights —   —   2.8   2.8  
$ 258.7   $ 361.1   $ 2.8   $ 1,537.6  


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2023 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $ 3.1   $ —   $ —   $ 3.1  
Decommissioning trust funds (a):
Equity securities 6.4   —   —   6.4  
Debt securities 129.9   367.0   —   496.9  
Common trusts (b) 910.7  
Financial transmission rights —   —   6.0   6.0  
$ 139.4   $ 367.0   $ 6.0   $ 1,423.1  

Entergy Louisiana

2024 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $ 772.8   $ —   $ —   $ 772.8  
Decommissioning trust funds (a):
Equity securities 43.0   —   —   43.0  
Debt securities 269.4   511.0   —   780.4  
Common trusts (b) 1,416.2  
Storm reserve escrow account 247.1   —   —   247.1  
Financial transmission rights —   —   4.1   4.1  
$ 1,332.3   $ 511.0   $ 4.1   $ 3,263.6  

2023 Level 1 Level 2 Level 3 Total
  (In Millions)
Assets:        
Temporary cash investments $ 0.5   $ —   $ —   $ 0.5  
Decommissioning trust funds (a):        
Equity securities 14.6   —   —   14.6  
Debt securities 271.7   516.4   —   788.1  
Common trusts (b) 1,304.7  
Storm reserve escrow account 243.8   —   —   243.8  
Financial transmission rights —   —   9.8   9.8  
  $ 530.6   $ 516.4   $ 9.8   $ 2,361.5  
Liabilities:
Gas hedge contracts $ 0.4   $ —   $ —   $ 0.4  


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Entergy Mississippi

2024 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $ 2.1   $ —   $ —   $ 2.1  
Storm reserve escrow account 0.7   —   —   0.7  
Financial transmission rights —   —   0.6   0.6  
$ 2.8   $ —   $ 0.6   $ 3.4  
Liabilities:
Gas hedge contracts $ 6.5   $ —   $ —   $ 6.5  

2023 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $ 6.6   $ —   $ —   $ 6.6  
Storm reserve escrow account 0.7   —   —   0.7  
Financial transmission rights —   —   1.4   1.4  
  $ 7.3   $ —   $ 1.4   $ 8.7  
Liabilities:
Gas hedge contracts $ 10.1   $ —   $ —   $ 10.1  

Entergy New Orleans

2024 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Securitization recovery trust account $ 5.4   $ —   $ —   $ 5.4  
Storm reserve escrow account 80.6   —   —   80.6  
Financial transmission rights —   —   0.5   0.5  
$ 86.0   $ —   $ 0.5   $ 86.5  

2023 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Securitization recovery trust account $ 2.4   $ —   $ —   $ 2.4  
Storm reserve escrow account 78.7   —   —   78.7  
Financial transmission rights —   —   1.1   1.1  
$ 81.1   $ —   $ 1.1   $ 82.2  
Liabilities:
Gas hedge contracts $ 0.6   $ —   $ —   $ 0.6  


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Entergy Texas

2024 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $ 177.9   $ —   $ —   $ 177.9  
Securitization recovery trust account 11.2   —   —   11.2  
Financial transmission rights —   —   1.2   1.2  
$ 189.1   $ —   $ 1.2   $ 190.3  

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

System Energy

2024 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments $ 111.4   $ —   $ —   $ 111.4  
Decommissioning trust funds (a):
Equity securities 3.7   —   —   3.7  
Debt securities 205.8   275.7   —   481.5  
Common trusts (b) 939.0  
$ 320.9   $ 275.7   $ —   $ 1,535.6  

2023 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Decommissioning trust funds (a):
Equity securities $ 2.7   $ —   $ —   $ 2.7  
Debt securities 209.5   275.7   —   485.2  
Common trusts (b) 854.4  
$ 212.2   $ 275.7   $ —   $ 1,342.3  

(a)The decommissioning trust funds hold equity and fixed income securities. Equity securities are invested to approximate the returns of major market indices.  Fixed income securities are held in various governmental and corporate securities.  See Note 9 to the financial statements herein for additional information on the investment portfolios.
(b)Common trust funds are not publicly quoted and are valued by the fund administrators using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair value table. The fund administrator of these investments allows daily trading at the net asset value and trades settle at a later date.

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The following table sets forth a reconciliation of changes in the net assets for the fair value of derivatives classified as Level 3 in the fair value hierarchy for the three months ended March 31, 2024.
Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New
Orleans		 Entergy
Texas
  (In Millions)
Balance as of January 1, $ 6.0   $ 9.8   $ 1.4   $ 1.1   $ 2.4  
Gains (losses) included as a regulatory liability/asset 23.7   10.5   0.3   0.5   6.3  
Settlements ( 26.9 ) ( 16.2 ) ( 1.1 ) ( 1.1 ) ( 7.5 )
Balance as of March 31, $ 2.8   $ 4.1   $ 0.6   $ 0.5   $ 1.2  

The following table sets forth a reconciliation of changes in the net assets (liabilities) for the fair value of derivatives classified as Level 3 in the fair value hierarchy for the three months ended March 31, 2023.
Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New
Orleans		 Entergy
Texas
  (In Millions)
Balance as of January 1, $ 10.3   $ 7.3   $ 0.6   $ 0.8   $ 0.1  
Gains (losses) included as a regulatory liability/asset ( 2.4 ) 4.0   1.1   0.4   0.5  
Settlements ( 3.9 ) ( 8.8 ) ( 1.5 ) ( 0.9 ) ( 0.7 )
Balance as of March 31, $ 4.0   $ 2.5   $ 0.2   $ 0.3   ($ 0.1 )


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

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

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

The unrealized gains/(losses) recognized during the three months ended March 31, 2024 on equity securities still held as of March 31, 2024 were $ 287 million. The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000 Index. The debt securities are generally held in individual government and credit issuances.


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The available-for-sale securities held as of March 31, 2024 and December 31, 2023 are summarized as follows:
Fair
Value		 Total
Unrealized
Gains		 Total
Unrealized
Losses
(In Millions)
2024
Debt Securities $ 1,761   $ 10   $ 142  
2023
Debt Securities $ 1,770   $ 19   $ 134  

As of March 31, 2024 and December 31, 2023, there were no deferred taxes on unrealized gains/(losses). The amortized cost of available-for-sale debt securities was $ 1,893 million as of March 31, 2024 and $ 1,885 million as of December 31, 2023.  As of March 31, 2024, available-for-sale debt securities had an average coupon rate of approximately 3.51 %, an average duration of approximately 6.28 years, and an average maturity of approximately 10.63 years.

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities had been in a continuous loss position, were as follows as of March 31, 2024 and December 31, 2023:
March 31, 2024 December 31, 2023
Fair
Value		 Gross
Unrealized
Losses		 Fair
Value		 Gross
Unrealized
Losses
(In Millions)
Less than 12 months $ 335   $ 5   $ 134   $ 6  
More than 12 months 995   137   999   128  
Total $ 1,330   $ 142   $ 1,133   $ 134  

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2024 and December 31, 2023 are as follows:
2024 2023
(In Millions)
Less than 1 year $ 71   $ 82  
1 year - 5 years 503   517  
5 years - 10 years 526   504  
10 years - 15 years 132   121  
15 years - 20 years 168   179  
20 years+ 361   367  
Total $ 1,761   $ 1,770  

During the three months ended March 31, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $ 169 million and $ 124 million, respectively.  During the three months ended March 31, 2024 and 2023, there were no gross gains and gross losses of $ 7 million and $ 9 million, respectively, related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.


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Entergy Arkansas

Entergy Arkansas holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts.   The available-for-sale securities held as of March 31, 2024 and December 31, 2023 are summarized as follows:
Fair
Value		 Total
Unrealized
Gains		 Total
Unrealized
Losses
(In Millions)
2024
Debt Securities $ 498.8   $ 1.4   $ 57.5  
2023
Debt Securities $ 496.9   $ 2.4   $ 53.6  

The amortized cost of available-for-sale debt securities was $ 555 million as of March 31, 2024 and $ 548.1 million as of December 31, 2023.  As of March 31, 2024, the available-for-sale debt securities had an average coupon rate of approximately 2.83 %, an average duration of approximately 6.12 years, and an average maturity of approximately 7.84 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2024 on equity securities still held as of March 31, 2024 were $ 84.1 million. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities had been in a continuous loss position, were as follows as of March 31, 2024 and December 31, 2023:
March 31, 2024 December 31, 2023
Fair
Value		 Gross
Unrealized
Losses		 Fair
Value		 Gross
Unrealized
Losses
(In Millions)
Less than 12 months $ 50.1   $ 0.8   $ 22.5   $ 0.4  
More than 12 months 392.5   56.7   403.4   53.2  
Total $ 442.6   $ 57.5   $ 425.9   $ 53.6  

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2024 and December 31, 2023 are as follows:
  2024 2023
  (In Millions)
Less than 1 year $ 39.7   $ 45.3  
1 year - 5 years 133.9   132.2  
5 years - 10 years 206.8   205.7  
10 years - 15 years 40.1   39.9  
15 years - 20 years 53.9   49.6  
20 years+ 24.4   24.2  
Total $ 498.8   $ 496.9  

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During the three months ended March 31, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $ 12.4 million and $ 15.7 million, respectively.  During the three months ended March 31, 2024 and 2023, there were no gross gains and gross losses of $ 0.4 million and $ 1.6 million, respectively, related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

Entergy Louisiana

Entergy Louisiana holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts.   The available-for-sale securities held as of March 31, 2024 and December 31, 2023 are summarized as follows:
Fair
Value		 Total
Unrealized
Gains		 Total
Unrealized
Losses
(In Millions)
2024
Debt Securities $ 780.4   $ 5.9   $ 40.3  
2023
Debt Securities $ 788.1   $ 11.7   $ 37.4  

The amortized cost of available-for-sale debt securities was $ 814.8 million as of March 31, 2024 and $ 813.9 million as of December 31, 2023.  As of March 31, 2024, the available-for-sale debt securities had an average coupon rate of approximately 3.84 %, an average duration of approximately 6.30 years, and an average maturity of approximately 12.59 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2024 on equity securities still held as of March 31, 2024 were $ 124.3 million. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities had been in a continuous loss position, were as follows as of March 31, 2024 and December 31, 2023:
March 31, 2024 December 31, 2023
Fair
Value		 Gross
Unrealized
Losses		 Fair
Value		 Gross
Unrealized
Losses
(In Millions)
Less than 12 months $ 158.3   $ 2.6   $ 69.8   $ 0.9  
More than 12 months 360.6   37.7   356.1   36.5  
Total $ 518.9   $ 40.3   $ 425.9   $ 37.4  


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The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2024 and December 31, 2023 are as follows:
2024 2023
(In Millions)
Less than 1 year $ 26.8   $ 31.4  
1 year - 5 years 172.7   181.6  
5 years - 10 years 181.7   170.0  
10 years - 15 years 80.8   70.2  
15 years - 20 years 76.0   90.2  
20 years+ 242.4   244.7  
Total $ 780.4   $ 788.1  

During the three months ended March 31, 2024 and 2023, proceeds from the dispositions of available-for-sale securities amounted to $ 48.4 million and $ 67.4 million, respectively.  During the three months ended March 31, 2024 and 2023, there were gross gains of $ 0.2 million and $ 0.4 million, respectively, and gross losses of $ 2.9 million and $ 4.9 million, respectively, related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.

System Energy

System Energy holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts.   The available-for-sale securities held as of March 31, 2024 and December 31, 2023 are summarized as follows:
Fair
Value		 Total
Unrealized
Gains		 Total
Unrealized
Losses
(In Millions)
2024
Debt Securities $ 481.5   $ 2.7   $ 44.6  
2023
Debt Securities $ 485.2   $ 4.5   $ 42.5  

The amortized cost of available-for-sale debt securities was $ 523.4 million as of March 31, 2024 and $ 523.2 million as of December 31, 2023.  As of March 31, 2024, the available-for-sale debt securities had an average coupon rate of approximately 3.65 %, an average duration of approximately 6.41 years, and an average maturity of approximately 10.21 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2024 on equity securities still held as of March 31, 2024 were $ 79.1 million. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index.  A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.


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The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities had been in a continuous loss position, were as follows as of March 31, 2024 and December 31, 2023:
March 31, 2024 December 31, 2023
Fair
Value		 Gross
Unrealized
Losses		 Fair
Value		 Gross
Unrealized
Losses
(In Millions)
Less than 12 months $ 126.4   $ 1.8   $ 42.1   $ 4.5  
More than 12 months 242.0   42.8   239.1   38.0  
Total $ 368.4   $ 44.6   $ 281.2   $ 42.5  

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2024 and December 31, 2023 are as follows:
2024 2023
(In Millions)
Less than 1 year $ 4.1   $ 5.3  
1 year - 5 years 196.6   203.4  
5 years - 10 years 137.1   128.6  
10 years - 15 years 11.5   10.7  
15 years - 20 years 37.9   38.8  
20 years+ 94.3   98.4  
Total $ 481.5   $ 485.2  

During the three months ended March 31, 2024 and 2023, proceeds from the dispositions of available-for-sale debt securities amounted to $ 108 million and $ 41.3 million, respectively.  During the three months ended March 31, 2024, there were gross gains of $ 0.2 million and gross losses of $ 3.5 million related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings. During the three months ended March 31, 2023, there were no gross gains and gross losses of $ 2.3 million related to available-for-sale debt securities reclassified out of other regulatory liabilities/assets into earnings.


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

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

Income Tax Audits

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

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regulatory charge ($ 57  million net-of-tax). The settlement in principle requires that the regulatory liability be amortized over 25 years with the unamortized balance included in rate base and the amortization treated as a reduction to Entergy New Orleans’s retail revenue requirement.


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

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

Restoration Law Trust I (the storm trust I), a trust consolidated by Entergy Louisiana, is a VIE and Entergy Louisiana is the primary beneficiary. As of March 31, 2024 and December 31, 2023, the primary asset held by the storm trust I was $ 2.9  billion and $ 3  billion, respectively, of outstanding Entergy Finance Company preferred membership interests, which is reflected as an investment in affiliate preferred membership interests on the consolidated balance sheets of Entergy Louisiana. The LURC’s 1 % beneficial interest in the storm trust I is recorded as noncontrolling interest on the consolidated balance sheets of Entergy and Entergy Louisiana, with balances of $ 30.1  million as of March 31, 2024 and $ 30.5  million as of December 31, 2023.

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

System Energy is considered to hold a variable interest in the lessor from which it leases an undivided interest in the Grand Gulf nuclear plant. System Energy is the lessee under this arrangement, which is described in more detail in Note 5 to the financial statements in the Form 10-K. System Energy made payments under this arrangement, including interest, of $ 8.6  million in each of the three months ended March 31, 2024 and the three months ended March 31, 2023.

AR Searcy Partnership, LLC is a tax equity partnership that qualifies as a VIE, which Entergy Arkansas is required to consolidate as it is the primary beneficiary. As of March 31, 2024, AR Searcy Partnership, LLC recorded assets equal to $ 133.1  million, primarily consisting of property, plant, and equipment, and the carrying value of Entergy Arkansas’s ownership interest in the partnership was approximately $ 111.9  million. As of December 31, 2023, AR Searcy Partnership, LLC recorded assets equal to $ 134  million, primarily consisting of property, plant, and equipment, and the carrying value of Entergy Arkansas’s ownership interest in the partnership was approximately $ 111.2  million. The tax equity investor’s ownership interest is recorded as noncontrolling interest on the consolidated balance sheets of Entergy and Entergy Arkansas.

MS Sunflower Partnership, LLC is a tax equity partnership that qualifies as a VIE, which Entergy Mississippi is required to consolidate as it is the primary beneficiary. As of March 31, 2024, MS Sunflower Partnership, LLC recorded assets equal to $ 165.9  million, primarily consisting of property, plant, and equipment, and the carrying value of Entergy Mississippi’s ownership interest in the partnership was approximately $ 130.3  million. As of December 31, 2023, MS Sunflower Partnership, LLC recorded assets equal to $ 163.2  million, primarily consisting of property, plant, and equipment, and the carrying value of Entergy Mississippi’s ownership interest in the partnership was approximately $ 128.4  million. The tax equity investor’s

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ownership interest is recorded as noncontrolling interest on the consolidated balance sheets of Entergy and Entergy Mississippi.


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

Operating Revenues

See Note 19 to the financial statements in the Form 10-K for a discussion of revenue recognition.   Entergy’s total revenues for the three months ended March 31, 2024 and 2023 were as follows:
2024 2023
(In Thousands)
Utility:
Residential $ 1,070,341   $ 1,041,460  
Commercial 691,851   714,300  
Industrial 748,957   863,723  
Governmental 65,310   67,337  
Total billed retail 2,576,459   2,686,820  
Sales for resale (a) 79,003   107,947  
Other electric revenues (b) 36,035   44,457  
Revenues from contracts with customers 2,691,497   2,839,224  
Other Utility revenues (c) 15,009   44,187  
Electric revenues 2,706,506   2,883,411  
Natural gas revenues 65,667   64,581  
Other revenues (d) 22,455   33,067  
Total operating revenues $ 2,794,628   $ 2,981,059  

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The Utility operating companies’ total revenues for the three months ended March 31, 2024 and 2023 were as follows:
2024 Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New
Orleans		 Entergy
Texas
(In Thousands)
Residential $ 275,753   $ 345,027   $ 178,617   $ 67,677   $ 203,267  
Commercial 141,307   256,696   132,318   53,226   108,304  
Industrial 149,407   421,597   46,427   6,977   124,549  
Governmental 4,698   21,821   13,330   18,354   7,107  
Total billed retail 571,165   1,045,141   370,692   146,234   443,227  
Sales for resale (a) 38,965   82,728   47,932   12,500   1,907  
Other electric revenues (b) 9,342   37,945   ( 6,202 ) ( 3,219 ) ( 488 )
Revenues from contracts with customers 619,472   1,165,814   412,422   155,515   444,646  
Other revenues (c) 2,573   6,979   2,434   1,426   ( 155 )
Electric revenues 622,045   1,172,793   414,856   156,941   444,491  
Natural gas revenues —   29,647   —   36,020   —  
Total operating revenues $ 622,045   $ 1,202,440   $ 414,856   $ 192,961   $ 444,491  

2023 Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New
Orleans		 Entergy
Texas
(In Thousands)
Residential $ 239,499   $ 360,647   $ 169,389   $ 63,566   $ 208,359  
Commercial 125,336   278,178   133,676   54,069   123,041  
Industrial 131,237   509,904   51,415   7,413   163,754  
Governmental 4,660   23,074   13,883   17,798   7,922  
Total billed retail 500,732   1,171,803   368,363   142,846   503,076  
Sales for resale (a) 66,018   83,237   38,743   24,910   2,445  
Other electric revenues (b) 13,718   26,567   2,874   417   2,224  
Revenues from contracts with customers 580,468   1,281,607   409,980   168,173   507,745  
Other revenues (c) 2,281   38,145   2,448   1,522   ( 239 )
Electric revenues 582,749   1,319,752   412,428   169,695   507,506  
Natural gas revenues —   25,456   —   39,125   —  
Total operating revenues $ 582,749   $ 1,345,208   $ 412,428   $ 208,820   $ 507,506  

(a)Sales for resale includes day-ahead sales of energy in a market administered by an ISO. These sales represent financially binding commitments for the sale of physical energy the next day. These sales are adjusted to actual power generated and delivered in the real time market. Given the short duration of these transactions, Entergy does not consider them to be derivatives subject to fair value adjustments and includes them as part of customer revenues.
(b)Other electric revenues consist primarily of transmission and ancillary services provided to participants of an ISO-administered market and unbilled revenue.
(c)Other Utility revenues include the equity component of carrying costs related to securitization, occasional sales of inventory, alternative revenue programs, provisions for revenue subject to refund, and late fees.

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

Allowance for doubtful accounts

The allowance for doubtful accounts reflects Entergy’s best estimate of expected losses on its accounts receivable balances. Due to the essential nature of utility services, Entergy has historically experienced a low rate of default on its accounts receivables. The following tables set forth a reconciliation of changes in the allowance for doubtful accounts for the three months ended March 31, 2024 and 2023.
Entergy Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New
Orleans		 Entergy
Texas
  (In Millions)
Balance as of December 31, 2023 $ 25.9   $ 7.2   $ 6.1   $ 3.3   $ 7.8   $ 1.5  
Provisions 9.3   2.9   2.3   1.5   0.7   1.9  
Write-offs ( 28.5 ) ( 6.6 ) ( 8.4 ) ( 5.0 ) ( 5.0 ) ( 3.5 )
Recoveries 15.2   3.0   4.6   3.3   3.1   1.2  
Balance as of March 31, 2024 $ 21.9   $ 6.5   $ 4.6   $ 3.1   $ 6.6   $ 1.1  
Entergy Entergy
Arkansas		 Entergy
Louisiana		 Entergy
Mississippi		 Entergy
New
Orleans		 Entergy
Texas
  (In Millions)
Balance as of December 31, 2022 $ 30.9   $ 6.5   $ 7.6   $ 2.5   $ 11.9   $ 2.4  
Provisions 6.1   1.3   4.0   0.7   ( 1.1 ) 1.2  
Write-offs ( 34.4 ) ( 9.4 ) ( 15.1 ) ( 1.7 ) ( 3.4 ) ( 4.8 )
Recoveries 20.7   6.9   9.2   0.7   0.9   3.0  
Balance as of March 31, 2023 $ 23.3   $ 5.3   $ 5.7   $ 2.2   $ 8.3   $ 1.8  

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


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

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

Nuclear Plant Decommissioning

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



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NOTE 14.   ACQUISITIONS (Entergy Corporation and Entergy Arkansas)

Acquisitions

Walnut Bend Solar

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

________________

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



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Part I, Item 3. Quantitative and Qualitative Disclosures About Market Risk

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

Part I, Item 4. Controls and Procedures

Disclosure Controls and Procedures

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

Changes in Internal Control over Financial Reporting

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

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ENTERGY ARKANSAS, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

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

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:
Amount
(In Millions)
2023 operating revenues $582.7 
Fuel, rider, and other revenues that do not significantly affect net income 14.1 
Retail electric price 15.1 
Volume/weather 10.1 
2024 operating revenues $622.0 

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

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

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

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Total electric energy sales for Entergy Arkansas for the three months ended March 31, 2024 and 2023 are as follows:
2024 2023 % Change
(GWh)
Residential 1,966  1,802  9 
Commercial 1,280  1,239  3 
Industrial 2,268  2,050  11 
Governmental 46  46  — 
  Total retail 5,560  5,137  8 
Sales for resale:
  Associated companies 462  564  (18)
  Non-associated companies 966  1,568  (38)
Total 6,988  7,269  (4)

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

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

Other operation and maintenance expenses increased primarily due to:

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

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

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


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

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

Income Taxes

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

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

Income Tax Legislation and Regulation

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

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:
  2024 2023
  (In Thousands)
Cash and cash equivalents at beginning of period $3,632  $5,278 
Net cash provided by (used in):
Operating activities 287,251  274,037 
Investing activities (371,389) (306,032)
Financing activities 126,073  186,302 
Net increase in cash and cash equivalents 41,935  154,307 
Cash and cash equivalents at end of period $45,567  $159,585 

Operating Activities

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

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

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

Investing Activities

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

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

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

Financing Activities

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

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

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

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

Capital Structure

Entergy Arkansas’s debt to capital ratio is shown in the following table. The decrease in the debt to capital ratio for Entergy Arkansas is primarily due to the capital contribution of $275 million received from Entergy Corporation in 2024.
March 31, 2024 December 31, 2023
Debt to capital 54.0  % 55.5  %
Effect of subtracting cash (0.3  %) —  %
Net debt to net capital (non-GAAP) 53.7  % 55.5  %

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

Uses and Sources of Capital

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

Entergy Arkansas’s receivables from or (payables to) the money pool were as follows:
March 31,
2024		 December 31, 2023 March 31,
2023		 December 31, 2022
(In Thousands)
$8,505 ($145,385) $11,035 ($180,795)

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

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

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

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

State and Local Rate Regulation and Fuel-Cost Recovery

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

Fuel and purchased power cost recovery

Energy Cost Recovery Rider

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

Opportunity Sales Proceeding

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

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

Federal Regulation

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


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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.

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ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING REVENUES
Electric $ 622,045   $ 582,749  
OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 106,439   113,509  
Purchased power 52,320   64,751  
Nuclear refueling outage expenses 14,088   15,341  
Other operation and maintenance 178,041   156,819  
Asset write-offs
131,775   —  
Decommissioning 22,647   21,350  
Taxes other than income taxes 36,224   32,351  
Depreciation and amortization 102,991   96,441  
Other regulatory charges (credits) - net 48,619   ( 20,844 )
TOTAL 693,144   479,718  
OPERATING INCOME (LOSS) ( 71,099 ) 103,031  
OTHER INCOME
Allowance for equity funds used during construction 5,532   4,843  
Interest and investment income 72,760   7,479  
Miscellaneous - net ( 3,581 ) ( 2,100 )
TOTAL 74,711   10,222  
INTEREST EXPENSE
Interest expense 49,265   45,367  
Allowance for borrowed funds used during construction ( 2,699 ) ( 1,945 )
TOTAL 46,566   43,422  
INCOME (LOSS) BEFORE INCOME TAXES ( 42,954 ) 69,831  
Income taxes ( 10,674 ) 10,434  
NET INCOME (LOSS) ( 32,280 ) 59,397  
Net loss attributable to noncontrolling interest ( 1,818 ) ( 1,629 )
EARNINGS (LOSS) APPLICABLE TO MEMBER'S EQUITY ($ 30,462 ) $ 61,026  
See Notes to Financial Statements.

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ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING ACTIVITIES
Net income (loss) ($ 32,280 ) $ 59,397  
Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization 144,309   134,779  
Deferred income taxes, investment tax credits, and non-current taxes accrued 8,754   15,495  
Asset write-offs 131,775   —  
Changes in assets and liabilities:
Receivables 27,640   57,003  
Fuel inventory ( 289 ) ( 15,255 )
Accounts payable ( 36,137 ) ( 58,227 )
Taxes accrued 4,735   10,647  
Interest accrued 16,868   35,905  
Deferred fuel costs 18,179   87,581  
Other working capital accounts 13,059   ( 3,948 )
Provisions for estimated losses 4,387   ( 6,600 )
Other regulatory assets 197,825   ( 27,001 )
Other regulatory liabilities 21,357   45,201  
Pension and other postretirement funded status ( 15,541 ) ( 7,998 )
Other assets and liabilities ( 217,390 ) ( 52,942 )
Net cash flow provided by operating activities 287,251   274,037  
INVESTING ACTIVITIES
Construction expenditures ( 180,227 ) ( 255,248 )
Allowance for equity funds used during construction 5,532   4,843  
Payment for purchase of plant ( 169,694 ) —  
Nuclear fuel purchases ( 44,445 ) ( 55,974 )
Proceeds from sale of nuclear fuel 33,213   17,549  
Proceeds from nuclear decommissioning trust fund sales 204,049   32,798  
Investment in nuclear decommissioning trust funds ( 211,342 ) ( 38,948 )
Changes in money pool receivable - net ( 8,505 ) ( 11,035 )
Decrease (increase) in other investments 30   ( 17 )
Net cash flow used in investing activities ( 371,389 ) ( 306,032 )
FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 179,937   514,206  
Retirement of long-term debt ( 180,405 ) ( 62,505 )
Capital contribution from parent 275,000   —  
Changes in money pool payable - net ( 145,385 ) ( 180,795 )
Common equity distributions paid —   ( 80,000 )
Other ( 3,074 ) ( 4,604 )
Net cash flow provided by financing activities 126,073   186,302  
Net increase in cash and cash equivalents 41,935   154,307  
Cash and cash equivalents at beginning of period 3,632   5,278  
Cash and cash equivalents at end of period $ 45,567   $ 159,585  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:  
Cash paid during the period for:
Interest - net of amount capitalized $ 31,793   $ 8,823  
Noncash investing activities:
Accrued construction expenditures $ 35,791   $ 64,396  
See Notes to Financial Statements.

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ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $ 12,713   $ 520  
Temporary cash investments 32,854   3,112  
Total cash and cash equivalents 45,567   3,632  
Accounts receivable:
Customer 159,501   157,520  
Allowance for doubtful accounts ( 6,522 ) ( 7,182 )
Associated companies 132,614   124,672  
Other 85,474   89,532  
Accrued unbilled revenues 91,459   117,119  
Total accounts receivable 462,526   481,661  
Fuel inventory - at average cost 57,784   57,495  
Materials and supplies - at average cost 374,295   358,302  
Deferred nuclear refueling outage costs 24,996   35,463  
Prepayments and other 24,412   40,866  
TOTAL 989,580   977,419  
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 1,501,909   1,414,009  
Other 800   801  
TOTAL 1,502,709   1,414,810  
UTILITY PLANT
Electric 14,971,311   14,821,814  
Construction work in progress 488,814   340,601  
Nuclear fuel 184,962   213,722  
TOTAL UTILITY PLANT 15,645,087   15,376,137  
Less - accumulated depreciation and amortization 6,066,097   6,002,203  
UTILITY PLANT - NET 9,578,990   9,373,934  
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets 1,687,536   1,885,361  
Other 147,166   21,334  
TOTAL 1,834,702   1,906,695  
TOTAL ASSETS $ 13,905,981   $ 13,672,858  
See Notes to Financial Statements.

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ENTERGY ARKANSAS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $ 375,000   $ 375,000  
Accounts payable:
Associated companies 50,607   225,344  
Other 195,003   215,502  
Customer deposits 118,498   113,186  
Taxes accrued 109,886   105,151  
Interest accrued 52,238   35,370  
Deferred fuel costs 106,461   88,282  
Other 52,388   55,683  
TOTAL 1,060,081   1,213,518  
NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 1,440,879   1,437,053  
Accumulated deferred investment tax credits 26,970   27,270  
Regulatory liability for income taxes - net 390,470   392,496  
Other regulatory liabilities 782,564   759,181  
Decommissioning 1,568,620   1,560,057  
Accumulated provisions 63,346   58,959  
Pension and other postretirement liabilities 114,843   8,901  
Long-term debt 4,300,636   4,298,080  
Other 154,432   156,673  
TOTAL 8,842,760   8,698,670  
Commitments and Contingencies
EQUITY
Member's equity 3,983,609   3,739,071  
Noncontrolling interest 19,531   21,599  
TOTAL 4,003,140   3,760,670  
TOTAL LIABILITIES AND EQUITY $ 13,905,981   $ 13,672,858  
See Notes to Financial Statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
Noncontrolling Interest Member's Equity Total
(In Thousands)
Balance at December 31, 2022 $ 27,825   $ 3,753,990   $ 3,781,815  
Net income (loss) ( 1,629 ) 61,026   59,397  
Common equity distributions —   ( 80,000 ) ( 80,000 )
Distributions to noncontrolling interest ( 104 ) —   ( 104 )
Balance at March 31, 2023 $ 26,092   $ 3,735,016   $ 3,761,108  
Balance at December 31, 2023 $ 21,599   $ 3,739,071   $ 3,760,670  
Net loss ( 1,818 ) ( 30,462 ) ( 32,280 )
Capital contribution from parent —   275,000   275,000  
Distributions to noncontrolling interest ( 250 ) —   ( 250 )
Balance at March 31, 2024 $ 19,531   $ 3,983,609   $ 4,003,140  
See Notes to Financial Statements.

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ENTERGY LOUISIANA, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

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

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:
Amount
(In Millions)
2023 operating revenues $1,345.2 
Fuel, rider, and other revenues that do not significantly affect net income (138.8)
Storm restoration carrying costs (30.6)
Retail electric price 11.3 
Volume/weather 15.3 
2024 operating revenues $1,202.4 

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

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

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

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


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Total electric energy sales for Entergy Louisiana for the three months ended March 31, 2024 and 2023 are as follows:
2024 2023 % Change
(GWh)
Residential 2,815  2,685  5 
Commercial 2,455  2,447  — 
Industrial 7,761  7,832  (1)
Governmental 199  194  3 
  Total retail 13,230  13,158  1 
Sales for resale:
  Associated companies 1,258  1,677  (25)
  Non-associated companies 382  224  71 
Total 14,870  15,059  (1)

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

Other Income Statement Variances

Other operation and maintenance expenses increased primarily due to:

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

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

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

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

Other income increased primarily due to:

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


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

Income Taxes

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

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

Income Tax Legislation and Regulation

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

Planned Sale of Gas Distribution Business

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

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:
2024 2023
(In Thousands)
Cash and cash equivalents at beginning of period $2,772  $56,613 
Net cash provided by (used in):
    Operating activities 304,836  539,761 
    Investing activities (483,943) (2,038,403)
    Financing activities 949,534  2,521,881 
Net increase in cash and cash equivalents 770,427  1,023,239 
Cash and cash equivalents at end of period $773,199  $1,079,852 


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Operating Activities

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

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

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

Investing Activities

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

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

The decrease was partially offset by money pool activity.

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

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

Financing Activities

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

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

The decrease was partially offset by:

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

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

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

Capital Structure

Entergy Louisiana’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy Louisiana is primarily due to the issuances of long-term debt in 2024.
March 31,
 2024		 December 31,
2023
Debt to capital 47.7  % 44.9  %
Effect of subtracting cash (1.9  %) 0.0  %
Net debt to net capital (non-GAAP) 45.8  % 44.9  %

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


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Uses and Sources of Capital

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

Entergy Louisiana’s receivables from or (payables to) the money pool were as follows:
March 31,
 2024		 December 31,
2023		 March 31,
 2023		 December 31,
2022
(In Thousands)
$218,098 ($156,166) $77,354 ($226,114)

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

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

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

Alternative RFP and Certification

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

System Resilience and Storm Hardening

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

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

Bayou Power Station

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

Nelson Industrial Steam Company

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

State and Local Rate Regulation and Fuel-Cost Recovery

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

Retail Rates

2023 Entergy Louisiana Rate Case and Formula Rate Plan Extension Request

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

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


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Industrial and Commercial Customers

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

Federal Regulation

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

Nuclear Matters

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

NRC Reactor Oversight Process

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

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

Environmental Risks

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

Critical Accounting Estimates

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


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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.

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CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING REVENUES
Electric $ 1,172,793   $ 1,319,752  
Natural gas 29,647   25,456  
TOTAL 1,202,440   1,345,208  
OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 240,087   375,270  
Purchased power 200,280   194,934  
Nuclear refueling outage expenses 17,513   15,273  
Other operation and maintenance 260,979   246,371  
Decommissioning 19,664   18,586  
Taxes other than income taxes 69,839   63,955  
Depreciation and amortization 189,544   176,095  
Other regulatory charges (credits) - net ( 8,354 ) 73,996  
TOTAL 989,552   1,164,480  
OPERATING INCOME 212,888   180,728  
OTHER INCOME
Allowance for equity funds used during construction 7,285   9,061  
Interest and investment income 62,963   28,843  
Interest and investment income - affiliated 80,404   55,426  
Miscellaneous - net ( 47,175 ) ( 48,085 )
TOTAL 103,477   45,245  
INTEREST EXPENSE
Interest expense 97,195   97,171  
Allowance for borrowed funds used during construction ( 2,477 ) ( 4,393 )
TOTAL 94,718   92,778  
INCOME BEFORE INCOME TAXES 221,647   133,195  
Income taxes 38,924   ( 110,829 )
NET INCOME 182,723   244,024  
Net income attributable to noncontrolling interests 795   554  
EARNINGS APPLICABLE TO MEMBER'S EQUITY $ 181,928   $ 243,470  
See Notes to Financial Statements.


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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
Net Income $ 182,723   $ 244,024  
Other comprehensive loss
Pension and other postretirement adjustment (net of tax benefit of $ 746 and $ 290 )
( 2,024 ) ( 786 )
Other comprehensive loss ( 2,024 ) ( 786 )
Comprehensive Income 180,699   243,238  
Net income attributable to noncontrolling interests 795   554  
Comprehensive Income Applicable to Member’s Equity $ 179,904   $ 242,684  
See Notes to Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING ACTIVITIES
Net income $ 182,723   $ 244,024  
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization 226,874   210,138  
Deferred income taxes, investment tax credits, and non-current taxes accrued 126,334   ( 70,518 )
Changes in working capital:
Receivables 39,860   119,726  
Fuel inventory 4,236   ( 4,489 )
Accounts payable ( 109,430 ) ( 127,171 )
Taxes accrued ( 26,684 ) 11,627  
Interest accrued ( 9,995 ) ( 12,730 )
Deferred fuel costs 6,940   173,809  
Other working capital accounts ( 101,798 ) ( 99,650 )
Changes in provisions for estimated losses 5,497   2,050  
Changes in other regulatory assets 11,834   492,055  
Changes in other regulatory liabilities 51,414   155,296  
Effect of securitization on regulatory asset —   ( 491,150 )
Changes in pension and other postretirement funded status ( 12,466 ) ( 3,556 )
Other ( 90,503 ) ( 59,700 )
Net cash flow provided by operating activities 304,836   539,761  
INVESTING ACTIVITIES
Construction expenditures ( 327,980 ) ( 484,581 )
Allowance for equity funds used during construction 7,285   9,061  
Nuclear fuel purchases ( 48,914 ) ( 72,003 )
Proceeds from sale of nuclear fuel 38,790   16,637  
Payments to storm reserve escrow account ( 3,299 ) ( 3,037 )
Purchase of preferred membership interests of affiliate —   ( 1,457,676 )
Redemption of preferred membership interests of affiliate 85,027   46,643  
Proceeds from nuclear decommissioning trust fund sales 149,334   111,263  
Investment in nuclear decommissioning trust funds ( 166,123 ) ( 127,338 )
Changes in money pool receivable - net ( 218,098 ) ( 77,354 )
Decrease (increase) in other investments 35   ( 18 )
Net cash flow used in investing activities ( 483,943 ) ( 2,038,403 )
FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 1,693,150   526,764  
Retirement of long-term debt ( 513,009 ) ( 540,008 )
Proceeds received by storm trust related to securitization —   1,457,676  
Capital contribution from parent —   1,457,676  
Changes in money pool payable - net ( 156,166 ) ( 226,114 )
Common equity distributions paid ( 97,500 ) ( 160,250 )
Other 23,059   6,137  
Net cash flow provided by financing activities 949,534   2,521,881  
Net increase in cash and cash equivalents 770,427   1,023,239  
Cash and cash equivalents at beginning of period 2,772   56,613  
Cash and cash equivalents at end of period $ 773,199   $ 1,079,852  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $ 105,176   $ 107,408  
Income taxes $ —   ($ 6,037 )
Non-cash investing activities:
Accrued construction expenditures $ 84,035   $ 119,635  
See Notes to Financial Statements.

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ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $ 407   $ 2,255  
Temporary cash investments 772,792   517  
Total cash and cash equivalents 773,199   2,772  
Accounts receivable:
Customer 253,020   264,776  
Allowance for doubtful accounts ( 4,639 ) ( 6,156 )
Associated companies 285,374   82,292  
Other 64,545   74,685  
Accrued unbilled revenues 197,708   202,173  
Total accounts receivable 796,008   617,770  
Deferred fuel costs 17,860   24,800  
Fuel inventory - at average cost 53,582   57,818  
Materials and supplies - at average cost 681,893   652,180  
Deferred nuclear refueling outage costs 86,339   96,047  
Prepayments and other 152,695   71,613  
TOTAL 2,561,576   1,523,000  
OTHER PROPERTY AND INVESTMENTS
Investment in affiliate preferred membership interests 4,411,218   4,496,245  
Decommissioning trust funds 2,239,614   2,107,384  
Non-utility property - at cost (less accumulated depreciation) 403,281   404,043  
Storm reserve escrow account 247,118   243,819  
Other 9,448   9,367  
TOTAL 7,310,679   7,260,858  
UTILITY PLANT
Electric 28,168,201   27,800,467  
Natural gas 319,273   315,658  
Construction work in progress 439,770   592,803  
Nuclear fuel 288,150   333,472  
TOTAL UTILITY PLANT 29,215,394   29,042,400  
Less - accumulated depreciation and amortization 10,668,272   10,570,707  
UTILITY PLANT - NET 18,547,122   18,471,693  
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets 1,637,018   1,648,852  
Deferred fuel costs 168,122   168,122  
Other 51,577   36,945  
TOTAL 1,856,717   1,853,919  
TOTAL ASSETS $ 30,276,094   $ 29,109,470  
See Notes to Financial Statements.

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ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $ 1,400,000   $ 1,400,000  
Accounts payable:
Associated companies 81,390   283,016  
Other 348,340   467,414  
Customer deposits 170,276   167,905  
Taxes accrued 39,779   66,463  
Interest accrued 81,661   91,656  
Other 81,512   87,468  
TOTAL 2,202,958   2,563,922  
NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 2,504,203   2,391,442  
Accumulated deferred investment tax credits 92,101   93,242  
Regulatory liability for income taxes - net 194,251   193,754  
Other regulatory liabilities 1,458,606   1,407,689  
Decommissioning 1,871,637   1,836,240  
Accumulated provisions 269,366   263,869  
Pension and other postretirement liabilities 259,631   271,928  
Long-term debt 9,202,315   8,020,689  
Other 564,233   493,176  
TOTAL 16,416,343   14,972,029  
Commitments and Contingencies
EQUITY
Member’s equity
11,558,975   11,473,614  
Accumulated other comprehensive income 52,774   54,798  
Noncontrolling interests 45,044   45,107  
TOTAL 11,656,793   11,573,519  
TOTAL LIABILITIES AND EQUITY $ 30,276,094   $ 29,109,470  
See Notes to Financial Statements.

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ENTERGY LOUISIANA, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
Noncontrolling Interests Member’s
Equity		 Accumulated
Other
Comprehensive
Income		 Total
(In Thousands)
Balance at December 31, 2022 $ 31,735   $ 9,406,343   $ 55,370   $ 9,493,448  
Net income 554   243,470   —   244,024  
Other comprehensive loss —   —   ( 786 ) ( 786 )
Capital contribution from parent —   1,457,676   —   1,457,676  
Common equity distributions —   ( 160,250 ) —   ( 160,250 )
Beneficial interest in storm trust 14,577   —   —   14,577  
Distribution to LURC ( 470 ) —   —   ( 470 )
Other —   ( 28 ) —   ( 28 )
Balance at March 31, 2023 $ 46,396   $ 10,947,211   $ 54,584   $ 11,048,191  
Balance at December 31, 2023 $ 45,107   $ 11,473,614   $ 54,798   $ 11,573,519  
Net income 795   181,928   —   182,723  
Other comprehensive loss —   —   ( 2,024 ) ( 2,024 )
Non-cash contribution from parent —   976   —   976  
Common equity distributions —   ( 97,500 ) —   ( 97,500 )
Distributions to LURC ( 858 ) —   —   ( 858 )
Other —   ( 43 ) —   ( 43 )
Balance at March 31, 2024 $ 45,044   $ 11,558,975   $ 52,774   $ 11,656,793  
See Notes to Financial Statements.

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ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

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

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:
Amount
(In Millions)
2023 operating revenues $412.4 
Fuel, rider, and other revenues that do not significantly affect net income (2.1)
Retail electric price 8.8 
Volume/weather (4.2)
2024 operating revenues $414.9 

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

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

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


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Entergy Mississippi, LLC and Subsidiaries
Management’s Financial Discussion and Analysis
Total electric energy sales for Entergy Mississippi for the three months ended March 31, 2024 and 2023 are as follows:
2024 2023 % Change
(GWh)
Residential 1,186  1,089  9 
Commercial 963  1,015  (5)
Industrial 494  567  (13)
Governmental 87  92  (5)
  Total retail 2,730  2,763  (1)
Sales for resale:
  Non-associated companies 1,988  1,564  27 
Total 4,718  4,327  9 

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

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

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

Income Taxes

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

Income Tax Legislation and Regulation

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


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Entergy Mississippi, LLC and Subsidiaries
Management’s Financial Discussion and Analysis
Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:
2024 2023
(In Thousands)
Cash and cash equivalents at beginning of period $6,630  $16,979 
Net cash provided by (used in):
Operating activities 34,401  36,861 
Investing activities (112,436) (111,842)
Financing activities 73,530  94,154 
Net increase (decrease) in cash and cash equivalents (4,505) 19,173 
Cash and cash equivalents at end of period $2,125  $36,152 

Operating Activities

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

Investing Activities

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

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

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

Financing Activities

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


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

Capital Structure

Entergy Mississippi’s debt to capital ratio is shown in the following table.
March 31, 2024 December 31, 2023
Debt to capital 51.3  % 50.5  %
Effect of subtracting cash (0.1  %) (0.1  %)
Net debt to net capital (non-GAAP) 51.2  % 50.4  %

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

Uses and Sources of Capital

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

Entergy Mississippi’s receivables from or (payables to) the money pool were as follows:
March 31, 2024 December 31, 2023 March 31, 2023 December 31, 2022
(In Thousands)
($56,220) ($73,769) $1,498 $26,879

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

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


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Entergy Mississippi, LLC and Subsidiaries
Management’s Financial Discussion and Analysis
State and Local Rate Regulation and Fuel-Cost Recovery

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

Retail Rates

2024 Formula Rate Plan Filing

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

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

Storm Cost Recovery Filings with Retail Regulators

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

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


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

Federal Regulation

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

Nuclear Matters

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

Environmental Risks

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

Critical Accounting Estimates

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

New Accounting Pronouncements

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.

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ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING REVENUES
Electric $ 414,856   $ 412,428  
OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 117,850   161,285  
Purchased power 67,655   63,814  
Other operation and maintenance 71,206   69,818  
Taxes other than income taxes 38,310   35,734  
Depreciation and amortization 65,917   64,029  
Other regulatory charges (credits) - net ( 6,491 ) ( 32,843 )
TOTAL 354,447   361,837  
OPERATING INCOME 60,409   50,591  
OTHER INCOME
Allowance for equity funds used during construction 1,918   1,884  
Interest and investment income 193   464  
Miscellaneous - net ( 1,621 ) ( 2,083 )
TOTAL 490   265  
INTEREST EXPENSE
Interest expense 26,397   23,944  
Allowance for borrowed funds used during construction ( 747 ) ( 783 )
TOTAL 25,650   23,161  
INCOME BEFORE INCOME TAXES 35,249   27,695  
Income taxes 7,817   6,755  
NET INCOME 27,432   20,940  
Net loss attributable to noncontrolling interest ( 2,302 ) ( 2,141 )
EARNINGS APPLICABLE TO MEMBER'S EQUITY $ 29,734   $ 23,081  
See Notes to Financial Statements.

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ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING ACTIVITIES
Net income $ 27,432   $ 20,940  
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization 65,917   64,029  
Deferred income taxes, investment tax credits, and non-current taxes accrued ( 9,162 ) 8,142  
Changes in assets and liabilities:
Receivables 36,151   36,802  
Fuel inventory ( 1,012 ) ( 3,014 )
Accounts payable ( 15,691 ) ( 33,508 )
Taxes accrued ( 75,046 ) ( 80,166 )
Interest accrued 5,960   11,078  
Deferred fuel costs 28,337   67,005  
Other working capital accounts ( 6,853 ) ( 9,515 )
Provisions for estimated losses ( 977 ) 1,900  
Other regulatory assets ( 3,166 ) 1,020  
Other regulatory liabilities ( 2,701 ) ( 44,487 )
Pension and other postretirement funded status
( 6,014 ) ( 4,062 )
Other assets and liabilities ( 8,774 ) 697  
Net cash flow provided by operating activities 34,401   36,861  
INVESTING ACTIVITIES
Construction expenditures ( 114,260 ) ( 138,760 )
Allowance for equity funds used during construction 1,918   1,884  
Changes in money pool receivable - net —   25,381  
Increase in other investments ( 94 ) ( 347 )
Net cash flow used in investing activities ( 112,436 ) ( 111,842 )
FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 99,860   99,916  
Changes in money pool payable - net ( 17,549 ) —  
Common equity distributions paid —   ( 12,500 )
Other ( 8,781 ) 6,738  
Net cash flow provided by financing activities 73,530   94,154  
Net increase (decrease) in cash and cash equivalents ( 4,505 ) 19,173  
Cash and cash equivalents at beginning of period 6,630   16,979  
Cash and cash equivalents at end of period $ 2,125   $ 36,152  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $ 19,838   $ 12,211  
Income taxes $ 2,353   $ —  
Noncash investing activities:
Accrued construction expenditures $ 43,943   $ 57,649  
See Notes to Financial Statements.

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ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
  2024 2023
  (In Thousands)
CURRENT ASSETS    
Cash and cash equivalents:    
Cash $ 28   $ 30  
Temporary cash investments 2,097   6,600  
Total cash and cash equivalents 2,125   6,630  
Accounts receivable:    
Customer 107,254   121,389  
Allowance for doubtful accounts ( 3,064 ) ( 3,312 )
Associated companies 4,127   4,997  
Other 17,246   17,697  
Accrued unbilled revenues 50,522   71,465  
Total accounts receivable 176,085   212,236  
Fuel inventory - at average cost 17,208   16,196  
Materials and supplies - at average cost 101,096   95,526  
Prepayments and other 11,054   12,740  
TOTAL 307,568   343,328  
OTHER PROPERTY AND INVESTMENTS    
Non-utility property - at cost (less accumulated depreciation) 4,493   4,497  
Storm reserve escrow account 749   656  
TOTAL 5,242   5,153  
UTILITY PLANT    
Electric 7,526,466   7,455,145  
Construction work in progress 201,824   139,635  
TOTAL UTILITY PLANT 7,728,290   7,594,780  
Less - accumulated depreciation and amortization 2,386,782   2,346,327  
UTILITY PLANT - NET 5,341,508   5,248,453  
DEFERRED DEBITS AND OTHER ASSETS    
Regulatory assets:    
Other regulatory assets 582,242   579,076  
Other 75,918   51,996  
TOTAL 658,160   631,072  
TOTAL ASSETS $ 6,312,478   $ 6,228,006  
See Notes to Financial Statements.    

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ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
  2024 2023
  (In Thousands)
CURRENT LIABILITIES    
Currently maturing long-term debt $ 100,000   $ 100,000  
Accounts payable:    
Associated companies 101,428   133,571  
Other 119,163   92,659  
Customer deposits 93,532   92,637  
Taxes accrued 40,088   115,134  
Interest accrued 27,497   21,537  
Deferred fuel costs 158,982   130,645  
Other 22,725   26,463  
TOTAL 663,415   712,646  
NON-CURRENT LIABILITIES    
Accumulated deferred income taxes and taxes accrued 811,729   821,744  
Accumulated deferred investment tax credits 13,479   13,811  
Regulatory liability for income taxes - net 186,057   188,714  
Other regulatory liabilities 33,652   33,696  
Asset retirement cost liabilities 19,644   8,229  
Accumulated provisions 38,504   39,481  
Long-term debt 2,229,695   2,129,510  
Other 80,657   71,961  
TOTAL 3,413,417   3,307,146  
Commitments and Contingencies    
EQUITY    
Member's equity 2,219,195   2,189,461  
Noncontrolling interest 16,451   18,753  
TOTAL 2,235,646   2,208,214  
TOTAL LIABILITIES AND EQUITY $ 6,312,478   $ 6,228,006  
See Notes to Financial Statements.    

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ENTERGY MISSISSIPPI, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
  Noncontrolling Interest Member's Equity Total
  (In Thousands)
Balance at December 31, 2022 $ 3,347   $ 2,037,190   $ 2,040,537  
Net income (loss) ( 2,141 ) 23,081   20,940  
Common equity distributions —   ( 12,500 ) ( 12,500 )
Balance at March 31, 2023 $ 1,206   $ 2,047,771   $ 2,048,977  
Balance at December 31, 2023 $ 18,753   $ 2,189,461   $ 2,208,214  
Net income (loss) ( 2,302 ) 29,734   27,432  
Balance at March 31, 2024 $ 16,451   $ 2,219,195   $ 2,235,646  
See Notes to Financial Statements.

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MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

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

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:
Amount
(In Millions)
2023 operating revenues $208.8 
Fuel, rider, and other revenues that do not significantly affect net income (14.2)
Volume/weather (3.1)
Retail electric price 1.5 
2024 operating revenues $193.0 

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

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

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


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Management’s Financial Discussion and Analysis

Total electric energy sales for Entergy New Orleans for the three months ended March 31, 2024 and 2023 are as follows:
2024 2023 % Change
(GWh)
Residential 480  453  6 
Commercial 443  487  (9)
Industrial 85  99  (14)
Governmental 177  182  (3)
  Total retail 1,185  1,221  (3)
Sales for resale:
  Non-associated companies 505  1,043  (52)
Total 1,690  2,264  (25)

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

Other Income Statement Variances

Other operation and maintenance expenses increased primarily due to:

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

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

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

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

Income Taxes

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


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

Income Tax Legislation and Regulation

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

Planned Sale of Gas Distribution Business

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

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:
2024 2023
(In Thousands)
Cash and cash equivalents at beginning of period $26  $4,464 
Net cash provided by (used in):
Operating activities 9,139  71,578 
Investing activities (36,893) 85,156 
Financing activities 27,754  14,688 
Net increase in cash and cash equivalents —  171,422 
Cash and cash equivalents at end of period $26  $175,886 

Operating Activities

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


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Management’s Financial Discussion and Analysis

Investing Activities

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

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

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

Financing Activities

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

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

Capital Structure

Entergy New Orleans’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy New Orleans is primarily due to net loss in 2024.
March 31,
2024		 December 31,
2023
Debt to capital 47.4  % 45.8  %
Effect of excluding securitization bonds (0.2  %) (0.2  %)
Debt to capital, excluding securitization bonds (non-GAAP) (a) 47.2  % 45.6  %
Effect of subtracting cash —  % —  %
Net debt to net capital, excluding securitization bonds (non-GAAP) (a) 47.2  % 45.6  %

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

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

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

Uses and Sources of Capital

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

Entergy New Orleans’s receivables from or (payables to) the money pool were as follows:
March 31,
2024		 December 31,
2023		 March 31,
2023		 December 31,
2022
(In Thousands)
($49,776) ($21,651) $12,584 $147,254

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

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

System Resilience and Storm Hardening

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


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Management’s Financial Discussion and Analysis

State and Local Rate Regulation

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

Retail Rates

2024 Formula Rate Plan Filing

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

Renewable Portfolio Standard Rulemaking

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

Income Tax Audits

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

Federal Regulation

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

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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

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.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING REVENUES
Electric $ 156,941   $ 169,695  
Natural gas 36,020   39,125  
TOTAL 192,961   208,820  
OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 30,825   52,024  
Purchased power 60,382   66,620  
Other operation and maintenance 43,332   33,227  
Taxes other than income taxes 15,422   16,424  
Depreciation and amortization 20,914   19,575  
Other regulatory charges (credits) - net 81,520   ( 1,101 )
TOTAL 252,395   186,769  
OPERATING INCOME (LOSS)
( 59,434 ) 22,051  
OTHER INCOME
Allowance for equity funds used during construction 378   450  
Interest and investment income 141   2,051  
Miscellaneous - net ( 29 ) ( 227 )
TOTAL 490   2,274  
INTEREST EXPENSE
Interest expense 9,526   9,619  
Allowance for borrowed funds used during construction ( 157 ) ( 219 )
TOTAL 9,369   9,400  
INCOME (LOSS) BEFORE INCOME TAXES
( 68,313 ) 14,925  
Income taxes ( 19,333 ) 4,783  
NET INCOME (LOSS)
($ 48,980 ) $ 10,142  
See Notes to Financial Statements.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING ACTIVITIES
Net income (loss)
($ 48,980 ) $ 10,142  
Adjustments to reconcile net income (loss) to net cash flow provided by operating activities:
Depreciation and amortization 20,914   19,575  
Deferred income taxes, investment tax credits, and non-current taxes accrued ( 25,534 ) 5,147  
Changes in assets and liabilities:
Receivables ( 89,009 ) 26,040  
Fuel inventory 638   2,920  
Accounts payable ( 19,282 ) ( 14,313 )
Prepaid taxes and taxes accrued 8,632   1,687  
Interest accrued 1,132   ( 361 )
Deferred fuel costs 369   6,965  
Other working capital accounts ( 10,924 ) ( 12,303 )
Provisions for estimated losses 1,758   1,645  
Other regulatory assets 9,257   2,267  
Other regulatory liabilities 166,532   31,170  
Pension and other postretirement funded status ( 1,896 ) ( 1,113 )
Other assets and liabilities ( 4,468 ) ( 7,890 )
Net cash flow provided by operating activities 9,139   71,578  
INVESTING ACTIVITIES
Construction expenditures ( 32,418 ) ( 46,098 )
Allowance for equity funds used during construction 378   450  
Change in money pool receivable - net —   134,670  
Payments to storm reserve escrow account ( 1,877 ) ( 811 )
Changes in securitization account ( 2,976 ) ( 3,055 )
Net cash flow provided by (used in) investing activities ( 36,893 ) 85,156  
FINANCING ACTIVITIES
Contribution from customer for construction —   15,000  
Change in money pool payable - net 28,125   —  
Other ( 371 ) ( 312 )
Net cash flow provided by financing activities 27,754   14,688  
Net increase in cash and cash equivalents —   171,422  
Cash and cash equivalents at beginning of period 26   4,464  
Cash and cash equivalents at end of period $ 26   $ 175,886  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $ 8,047   $ 9,630  
Noncash investing activities:
Accrued construction expenditures $ 4,941   $ 5,707  
See Notes to Financial Statements.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents $ 26   $ 26  
Securitization recovery trust account 5,402   2,426  
Accounts receivable:  
Customer 64,955   67,258  
Allowance for doubtful accounts ( 6,564 ) ( 7,770 )
Associated companies 99,303   1,657  
Other 4,484   5,270  
Accrued unbilled revenues 24,333   31,087  
Total accounts receivable 186,511   97,502  
Deferred fuel costs 5,779   6,148  
Fuel inventory - at average cost 2,660   3,298  
Materials and supplies - at average cost 30,479   30,019  
Prepaid taxes —   1,574  
Prepayments and other 21,476   11,482  
TOTAL 252,333   152,475  
OTHER PROPERTY AND INVESTMENTS
Non-utility property - at cost (less accumulated depreciation) 832   832  
Storm reserve escrow account 80,609   78,731  
TOTAL 81,441   79,563  
UTILITY PLANT
Electric 2,060,223   2,046,928  
Natural gas 404,839   401,846  
Construction work in progress 30,622   25,424  
TOTAL UTILITY PLANT 2,495,684   2,474,198  
Less - accumulated depreciation and amortization 866,798   858,672  
UTILITY PLANT - NET 1,628,886   1,615,526  
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $ — as of March 31, 2024 and $ 506 as of December 31, 2023)
173,110   182,367  
Deferred fuel costs 4,080   4,080  
Other 84,305   63,964  
TOTAL 261,495   250,411  
TOTAL ASSETS $ 2,224,155   $ 2,097,975  
See Notes to Financial Statements.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $ 163,000   $ 85,000  
Payable due to associated company 1,275   1,275  
Accounts payable:
Associated companies 91,598   76,736  
Other 31,667   39,813  
Customer deposits 32,705   32,420  
Taxes accrued 7,058   —  
Interest accrued 9,666   8,534  
Other 8,565   8,953  
TOTAL 345,534   252,731  
NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 169,742   195,615  
Accumulated deferred investment tax credits 15,699   16,457  
Regulatory liability for income taxes - net 35,154   36,061  
Other regulatory liabilities 257,873   90,434  
Accumulated provisions 89,882   88,124  
Long-term debt (includes securitization bonds of $ 5,476 as of March 31, 2024 and $ 5,415 as of December 31, 2023)
506,275   584,171  
Long-term payable due to associated company 7,004   7,004  
Other 39,218   20,624  
TOTAL 1,120,847   1,038,490  
Commitments and Contingencies
EQUITY
Member's equity 757,774   806,754  
TOTAL 757,774   806,754  
TOTAL LIABILITIES AND EQUITY $ 2,224,155   $ 2,097,975  
See Notes to Financial Statements.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
  Member's Equity
  (In Thousands)
Balance at December 31, 2022 $ 702,816  
Net income 10,142  
Balance at March 31, 2023 $ 712,958  
Balance at December 31, 2023 $ 806,754  
Net loss
( 48,980 )
Balance at March 31, 2024 $ 757,774  
See Notes to Financial Statements.  

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ENTERGY TEXAS, INC. AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

Results of Operations

Net Income

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

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter 2024 to the first quarter 2023:
Amount
(In Millions)
2023 operating revenues $507.5 
Fuel, rider, and other revenues that do not significantly affect net income (73.3)
Volume/weather 0.7 
Retail electric price 9.6 
2024 operating revenues $444.5 

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

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

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


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Entergy Texas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis
Total electric energy sales for Entergy Texas for the three months ended March 31, 2024 and 2023 are as follows:
2024
2023
% Change
(GWh)
Residential 1,311  1,247  5 
Commercial 1,083  1,061  2 
Industrial 2,053  2,193  (6)
Governmental 63  63  — 
  Total retail 4,510  4,564  (1)
Sales for resale:
  Non-associated companies 117  104  13 
Total 4,627  4,668  (1)

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

Other Income Statement Variances

Other operation and maintenance expenses increased primarily due to:

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

Depreciation and amortization expenses increased primarily due to:

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

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

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

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


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Management’s Financial Discussion and Analysis
Income Taxes

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

Income Tax Legislation and Regulation

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

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:
2024 2023
(In Thousands)
Cash and cash equivalents at beginning of period $21,986  $3,497 
Net cash provided by (used in):
Operating activities 110,907  198,102 
Investing activities 34,303  (108,019)
Financing activities 10,740  (1,416)
Net increase in cash and cash equivalents 155,950  88,667 
Cash and cash equivalents at end of period $177,936  $92,164 

Operating Activities

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

Investing Activities

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

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

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

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

Financing Activities

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

Capital Structure

Entergy Texas’s debt to capital ratio is shown in the following table.
March 31, 2024 December 31, 2023
Debt to capital 50.6  % 50.9  %
Effect of excluding securitization bonds (2.1  %) (2.1  %)
Debt to capital, excluding securitization bonds (non-GAAP) (a) 48.5  % 48.8  %
Effect of subtracting cash (1.5  %) (0.2  %)
Net debt to net capital, excluding securitization bonds (non-GAAP) (a) 47.0  % 48.6  %

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

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

Uses and Sources of Capital

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


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Entergy Texas’s receivables from the money pool were as follows:
March 31, 2024 December 31, 2023 March 31, 2023 December 31, 2022
(In Thousands)
$50,244 $317,882 $6,536 $99,468

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

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

State and Local Rate Regulation and Fuel-Cost Recovery

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.

Federal Regulation

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

Nuclear Matters

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

Industrial and Commercial Customers

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

Environmental Risks

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

Critical Accounting Estimates

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


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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.

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ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING REVENUES
Electric $ 444,491   $ 507,506  
OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 96,137   167,530  
Purchased power 94,343   107,758  
Other operation and maintenance 77,960   64,430  
Taxes other than income taxes 24,567   27,996  
Depreciation and amortization 89,505   59,391  
Other regulatory charges (credits) - net ( 975 ) 10,924  
TOTAL 381,537   438,029  
OPERATING INCOME 62,954   69,477  
OTHER INCOME
Allowance for equity funds used during construction 9,248   5,089  
Interest and investment income 3,904   1,417  
Miscellaneous - net ( 2,312 ) 439  
TOTAL 10,840   6,945  
INTEREST EXPENSE
Interest expense 31,966   26,962  
Allowance for borrowed funds used during construction ( 3,602 ) ( 1,896 )
TOTAL 28,364   25,066  
INCOME BEFORE INCOME TAXES 45,430   51,356  
Income taxes 8,686   9,683  
NET INCOME 36,744   41,673  
Preferred dividend requirements 518   518  
EARNINGS APPLICABLE TO COMMON STOCK $ 36,226   $ 41,155  
See Notes to Financial Statements.

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ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING ACTIVITIES
Net income $ 36,744   $ 41,673  
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization 89,505   59,391  
Deferred income taxes, investment tax credits, and non-current taxes accrued 1,438   ( 6,536 )
Changes in assets and liabilities:
Receivables 13,059   63,210  
Fuel inventory 1,009   ( 8,445 )
Accounts payable ( 17,830 ) ( 44,804 )
Taxes accrued ( 28,917 ) ( 21,586 )
Interest accrued 5,287   ( 12,656 )
Deferred fuel costs 38,863   107,238  
Other working capital accounts ( 11,186 ) 9,245  
Provisions for estimated losses ( 1,358 ) 522  
Other regulatory assets 24,181   21,535  
Other regulatory liabilities ( 7,959 ) ( 3,283 )
Pension and other postretirement funded status ( 4,648 ) ( 1,960 )
Other assets and liabilities ( 27,281 ) ( 5,442 )
Net cash flow provided by operating activities 110,907   198,102  
INVESTING ACTIVITIES
Construction expenditures ( 235,625 ) ( 205,191 )
Allowance for equity funds used during construction 9,248   5,089  
Changes in money pool receivable - net 267,638   92,932  
Changes in securitization account ( 5,958 ) ( 849 )
Increase in other investments ( 1,000 ) —  
Net cash flow provided by (used in) investing activities 34,303   ( 108,019 )
FINANCING ACTIVITIES
Preferred stock dividends paid ( 518 ) ( 518 )
Other 11,258   ( 898 )
Net cash flow provided by (used in) financing activities 10,740   ( 1,416 )
Net increase in cash and cash equivalents 155,950   88,667  
Cash and cash equivalents at beginning of period 21,986   3,497  
Cash and cash equivalents at end of period $ 177,936   $ 92,164  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized $ 25,940   $ 38,923  
Income taxes $ 2,447   $ —  
Noncash investing activities:
Accrued construction expenditures $ 276,548   $ 104,805  
See Notes to Financial Statements.

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ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $ 26   $ 1,497  
Temporary cash investments 177,910   20,489  
Total cash and cash equivalents 177,936   21,986  
Securitization recovery trust account 11,153   5,195  
Accounts receivable:
Customer 86,081   88,468  
Allowance for doubtful accounts ( 1,100 ) ( 1,484 )
Associated companies 56,939   329,941  
Other 28,833   24,416  
Accrued unbilled revenues 62,662   72,771  
Total accounts receivable 233,415   514,112  
Deferred fuel costs 100,156   139,019  
Fuel inventory - at average cost 49,838   50,847  
Materials and supplies - at average cost 144,081   123,020  
Prepayments and other 31,522   35,232  
TOTAL 748,101   889,411  
OTHER PROPERTY AND INVESTMENTS
Investments in affiliates - at equity 170   214  
Non-utility property - at cost (less accumulated depreciation) 376   376  
Other 15,117   15,068  
TOTAL 15,663   15,658  
UTILITY PLANT
Electric 8,003,032   7,931,340  
Construction work in progress 1,022,362   857,707  
TOTAL UTILITY PLANT 9,025,394   8,789,047  
Less - accumulated depreciation and amortization 2,414,265   2,363,919  
UTILITY PLANT - NET 6,611,129   6,425,128  
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $ 246,746 as of March 31, 2024 and $ 250,324 as of December 31, 2023)
572,425   596,606  
Other 158,880   129,769  
TOTAL 731,305   726,375  
TOTAL ASSETS $ 8,106,198   $ 8,056,572  
See Notes to Financial Statements.    

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ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT LIABILITIES
Accounts payable:
Associated companies $ 55,706   $ 74,423  
Other 173,694   195,703  
Customer deposits 40,695   39,999  
Taxes accrued 49,970   78,887  
Interest accrued 36,572   31,285  
Other 20,985   16,237  
TOTAL 377,622   436,534  
NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 818,667   814,905  
Accumulated deferred investment tax credits 7,776   7,963  
Regulatory liability for income taxes - net 108,234   114,759  
Other regulatory liabilities 41,579   43,013  
Asset retirement cost liabilities 15,598   11,743  
Accumulated provisions 8,122   9,480  
Long-term debt (includes securitization bonds of $ 257,683 as of March 31, 2024 and $ 257,592 as of December 31, 2023)
3,225,444   3,225,092  
Other 348,268   274,421  
TOTAL 4,573,688   4,501,376  
Commitments and Contingencies
EQUITY
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 46,525,000 shares in 2024 and 2023
49,452   49,452  
Paid-in capital 1,200,125   1,200,125  
Retained earnings 1,866,561   1,830,335  
Total common shareholder's equity 3,116,138   3,079,912  
Preferred stock without sinking fund 38,750   38,750  
TOTAL 3,154,888   3,118,662  
TOTAL LIABILITIES AND EQUITY $ 8,106,198   $ 8,056,572  
See Notes to Financial Statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
Common Equity
Preferred Stock Common
Stock		 Paid-in
Capital		 Retained
Earnings		 Total
(In Thousands)
Balance at December 31, 2022 $ 38,750   $ 49,452   $ 1,050,125   $ 1,541,134   $ 2,679,461  
Net income —   —   —   41,673   41,673  
Preferred stock dividends —   —   —   ( 518 ) ( 518 )
Balance at March 31, 2023 $ 38,750   $ 49,452   $ 1,050,125   $ 1,582,289   $ 2,720,616  
Balance at December 31, 2023 $ 38,750   $ 49,452   $ 1,200,125   $ 1,830,335   $ 3,118,662  
Net income —   —   —   36,744   36,744  
Preferred stock dividends —   —   —   ( 518 ) ( 518 )
Balance at March 31, 2024 $ 38,750   $ 49,452   $ 1,200,125   $ 1,866,561   $ 3,154,888  
See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

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

Results of Operations

Net Income

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

Income Taxes

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

Income Tax Legislation and Regulation

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


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Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, 2024 and 2023 were as follows:
2024 2023
(In Thousands)
Cash and cash equivalents at beginning of period $60  $2,940 
Net cash provided by (used in):
Operating activities 70,339  (32,839)
Investing activities (188,259) 48,231 
Financing activities 229,361  241,671 
Net increase in cash and cash equivalents 111,441  257,063 
Cash and cash equivalents at end of period $111,501  $260,003 

Operating Activities

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

Investing Activities

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

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

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


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Financing Activities

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

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

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

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

Capital Structure

System Energy’s debt to capital ratio is shown in the following table. The decrease in the debt to capital ratio is primarily due to the capital contribution of $150 million received from Entergy Corporation in 2024, partially offset by the net issuance of long-term debt in 2024.
  March 31,
2024		 December 31,
2023
Debt to capital 43.7  % 45.4  %
Effect of subtracting cash (3.5  %) —  %
Net debt to net capital (non-GAAP) 40.2  % 45.4  %

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

Uses and Sources of Capital

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

System Energy’s receivables from or (payables to) the money pool were as follows:
March 31,
2024		 December 31,
2023		 March 31,
2023		 December 31,
2022
(In Thousands)
$31,456 ($12,246) $18,590 $94,981


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

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

Federal Regulation

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

Complaints Against System Energy

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

Return on Equity and Capital Structure Complaints

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

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


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

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

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

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

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

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

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

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

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

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

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


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LPSC Additional Complaints

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

Unit Power Sales Agreement Complaint

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

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

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

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

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


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

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

LPSC Petition for a Writ of Mandamus

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

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

System Energy Settlement with the APSC

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

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2023. The Unit Power Sales Agreement is a FERC-jurisdictional formula rate tariff for sales of energy and capacity from System Energy’s owned and leased share of Grand Gulf to Entergy Mississippi, Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans. System Energy previously settled with the MPSC with respect to these complaints before the FERC.

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

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

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

System Energy Settlement with the City Council

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

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

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

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System Energy Regulatory Liability for Pending Complaints

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

Unit Power Sales Agreement

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

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

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

Nuclear Matters

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

Environmental Risks

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

Critical Accounting Estimates

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

New Accounting Pronouncements

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.

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SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING REVENUES
Electric $ 152,620   $ 171,572  
OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 13,117   18,847  
Nuclear refueling outage expenses 6,661   6,619  
Other operation and maintenance 51,423   50,200  
Decommissioning 10,707   10,287  
Taxes other than income taxes 7,209   7,282  
Depreciation and amortization 29,678   37,137  
Other regulatory charges (credits) - net ( 4,973 ) ( 6,459 )
TOTAL 113,822   123,913  
OPERATING INCOME 38,798   47,659  
OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 2,434   1,818  
Interest and investment income 7,973   5,764  
Miscellaneous - net 237   ( 9,078 )
TOTAL 10,644   ( 1,496 )
INTEREST EXPENSE
Interest expense 11,171   10,491  
Allowance for borrowed funds used during construction ( 859 ) ( 355 )
TOTAL 10,312   10,136  
INCOME BEFORE INCOME TAXES 39,130   36,027  
Income taxes 8,012   8,482  
NET INCOME $ 31,118   $ 27,545  
See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
2024 2023
(In Thousands)
OPERATING ACTIVITIES
Net income $ 31,118   $ 27,545  
Adjustments to reconcile net income to net cash flow provided by (used in) operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization 51,714   63,793  
Deferred income taxes, investment tax credits, and non-current taxes accrued 11,452   10,801  
Changes in assets and liabilities:
Receivables 8,832   ( 8,198 )
Accounts payable 116,460   ( 21,866 )
Prepaid taxes and taxes accrued ( 14,091 ) ( 15,836 )
Interest accrued 883   ( 58 )
Other working capital accounts ( 25,431 ) 2,837  
Other regulatory assets ( 5,358 ) ( 3,247 )
Other regulatory liabilities ( 23,057 ) ( 47,212 )
Pension and other postretirement funded status
( 3,806 ) ( 1,652 )
Other assets and liabilities ( 78,377 ) ( 39,746 )
Net cash flow provided by (used in) operating activities 70,339   ( 32,839 )
INVESTING ACTIVITIES
Construction expenditures ( 39,563 ) ( 26,472 )
Allowance for equity funds used during construction 2,434   1,818  
Nuclear fuel purchases ( 111,959 ) ( 21,994 )
Proceeds from sale of nuclear fuel —   24,976  
Decrease (increase) in other investments 23   ( 4 )
Proceeds from nuclear decommissioning trust fund sales 136,035   60,067  
Investment in nuclear decommissioning trust funds ( 143,773 ) ( 66,551 )
Changes in money pool receivable - net ( 31,456 ) 76,391  
Net cash flow provided by (used in) investing activities ( 188,259 ) 48,231  
FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 233,933   473,687  
Retirement of long-term debt ( 142,326 ) ( 232,016 )
Capital contribution from parent 150,000   —  
Change in money pool payable - net ( 12,246 ) —  
Net cash flow provided by financing activities 229,361   241,671  
Net increase in cash and cash equivalents 111,441   257,063  
Cash and cash equivalents at beginning of period 60   2,940  
Cash and cash equivalents at end of period $ 111,501   $ 260,003  
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized $ 10,357   $ 11,304  
Income taxes ($ 2,326 ) $ —  
Noncash investing activities:
Accrued construction expenditures $ 48,856   $ 36,604  
See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
ASSETS
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash $ 117   $ 60  
Temporary cash investments 111,384   —  
Total cash and cash equivalents 111,501   60  
Accounts receivable:
Associated companies 74,348   54,544  
Other 9,681   6,861  
Total accounts receivable 84,029   61,405  
Materials and supplies - at average cost 158,916   155,565  
Deferred nuclear refueling outage costs 28,466   8,603  
Prepayments and other 8,696   3,373  
TOTAL 391,608   229,006  
OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 1,424,256   1,342,317  
TOTAL 1,424,256   1,342,317  
UTILITY PLANT
Electric 5,590,516   5,495,728  
Construction work in progress 77,429   130,866  
Nuclear fuel 233,919   160,655  
TOTAL UTILITY PLANT 5,901,864   5,787,249  
Less - accumulated depreciation and amortization 3,502,472   3,493,299  
UTILITY PLANT - NET 2,399,392   2,293,950  
DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets 451,718   446,360  
Other 12,966   730  
TOTAL 464,684   447,090  
TOTAL ASSETS $ 4,679,940   $ 4,312,363  
See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2024 and December 31, 2023
(Unaudited)
2024 2023
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt $ 72   $ 57  
Accounts payable:
Associated companies 209,617   118,523  
Other 85,273   73,580  
Taxes accrued 13,310   27,401  
Interest accrued 13,837   12,954  
Other 4,353   4,354  
TOTAL 326,462   236,869  
NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 417,081   405,744  
Accumulated deferred investment tax credits 45,648   46,960  
Regulatory liability for income taxes - net 107,229   107,458  
Other regulatory liabilities 760,084   782,912  
Decommissioning 1,094,941   1,084,234  
Pension and other postretirement liabilities 27,904   19,491  
Long-term debt 830,926   738,402  
Other 8   1,754  
TOTAL 3,283,821   3,186,955  
Commitments and Contingencies
COMMON EQUITY
Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 2024 and 2023
1,066,850   916,850  
Retained earnings (accumulated deficit) 2,807   ( 28,311 )
TOTAL 1,069,657   888,539  
TOTAL LIABILITIES AND EQUITY $ 4,679,940   $ 4,312,363  
See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CHANGES IN COMMON EQUITY
For the Three Months Ended March 31, 2024 and 2023
(Unaudited)
Common
Stock
Retained Earnings
(Accumulated Deficit)
Total
(In Thousands)
Balance at December 31, 2022 $ 1,086,850   ($ 137,083 ) $ 949,767  
Net income —   27,545   27,545  
Balance at March 31, 2023 $ 1,086,850   ($ 109,538 ) $ 977,312  
Balance at December 31, 2023 $ 916,850   ($ 28,311 ) $ 888,539  
Net income —   31,118   31,118  
Capital contribution from parent 150,000   —   150,000  
Balance at March 31, 2024 $ 1,066,850   $ 2,807   $ 1,069,657  
See Notes to Financial Statements.


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ENTERGY CORPORATION AND SUBSIDIARIES
PART II. OTHER INFORMATION

Item 1.  Legal Proceedings

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.

Item 1A.  Risk Factors

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

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchases of Equity Securities (1)
Period Total Number of
Shares Purchased		 Average Price Paid
per Share		 Total Number of
Shares Purchased
as Part of a
Publicly
Announced Plan		 Maximum $
Amount
of Shares that May
Yet be Purchased
Under a Plan (2)
1/01/2024-1/31/2024 —  $—  —  $350,052,918 
2/01/2024-2/29/2024 —  $—  —  $350,052,918 
3/01/2024-3/31/2024 —  $—  —  $350,052,918 
Total —  $—  —   

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 2024, Entergy withheld 101,960 shares of its common stock at $99.31 per share, 75,018 shares of its common stock at $98.86 per share, 1,731 shares of its common stock at $103.94 per share, 316 shares of its common stock at $102.64 per share, 232 shares of its common stock at $102.77 per share, 41 shares of its common stock at $100.15 per share, and 6 shares of its common stock at $104.68 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.


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Item 5.  Other Information

U.S. Securities and Exchange Commission Investigation

The Staff of the Division of Enforcement of the U.S. Securities and Exchange Commission has been conducting an investigation regarding Entergy’s processes and controls relating to its accounting for materials and supplies inventory. Entergy is cooperating with the SEC staff’s investigation and has engaged in discussions with the staff regarding a possible resolution of the investigation. There can be no assurance regarding the timing or terms of any potential resolution, by settlement or otherwise, and any potential impact of a resolution cannot be predicted. Management does not believe, however, that any resolution will have a material impact on Entergy’s business, financial condition, or results of operations.

Rule 10b5-1 Trading Agreements

During the three months ended March 31, 2024, 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” as each term is defined in Item 408(a) of Regulation S-K, except as follows:

On March 6, 2024 , Haley Fisackerly , Chairman of the Board, President, and Chief Executive Officer of Entergy Mississippi , adopted a Rule 10b5-1 trading arrangement that is intended to satisfy the affirmative defense of Rule 10b5-1(c) for the sale of up to 1,000 shares of Entergy’s common stock. The first date that sale of any shares permitted to be sold under the trading arrangement can occur is June 5, 2024. Subsequent sales under the trading arrangement may occur on a regular basis until December 31, 2024.

Regulation of the Nuclear Power Industry

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

NRC Reactor Oversight Process

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

Environmental Regulation

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

National Ambient Air Quality Standards

See the Form 10-K for discussion of the National Ambient Air Quality Standards (NAAQS) set by the EPA in accordance with the Clean Air Act. The following is an update to that discussion.

Revised Fine Particulate (PM2.5) NAAQS

In March 2024, EPA issued a final rule which revised the primary annual NAAQS for fine particulate matter, also known as PM2.5, from 12 ug/m3 to 9 ug/m3. This new standard is effective May 2024 and initial attainment/nonattainment designations for areas with available information are due within two years, by May 2026.

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For any areas designated as nonattainment for this revised standard, State Implementation Plans (SIPs) to address nonattainment requirements will be due within 18 months of the effective date of any initial nonattainment designations. Within Entergy’s utility service territory, current regulatory agency air monitor data for Harris County, Texas and Hinds County, Mississippi reflect annual average PM2.5 concentrations in excess of this new standard and monitors for several other areas reflect concentrations between 8-9 ug/m3. Entergy will continue to work with state environmental agencies on appropriate methods for assessing attainment and nonattainment with the this revised fine particulate NAAQS.


Item 6.  Exhibits
4(a) -
4(b) -
4(c) -
4(d) -
*31(a) -
*31(b) -
*31(c) -
*31(d) -
*31(e) -
*31(f) -
*31(g) -
*31(h) -
*31(i) -
*31(j) -
*31(k) -
*31(l) -
*31(m) -
*31(n) -
**32(a) -
**32(b) -
**32(c) -
**32(d) -
**32(e) -
**32(f) -
**32(g) -

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**32(h) -
**32(i) -
**32(j) -
**32(k) -
**32(l) -
**32(m) -
**32(n) -
*101 INS -
Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
*101 SCH -
Inline XBRL Schema Document.
*101 PRE -
Inline XBRL Presentation Linkbase Document.
*101 LAB -
Inline XBRL Label Linkbase Document.
*101 CAL -
Inline XBRL Calculation Linkbase Document.
*101 DEF -
Inline XBRL Definition Linkbase Document.
*104 -
Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibits 101).
___________________________
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.
* Filed herewith.
** Furnished, not filed, herewith.

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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.
ENTERGY CORPORATION
ENTERGY ARKANSAS, LLC
ENTERGY LOUISIANA, LLC
ENTERGY MISSISSIPPI, LLC
ENTERGY NEW ORLEANS, LLC
ENTERGY TEXAS, INC.
SYSTEM ENERGY RESOURCES, INC.
/s/ Reginald T. Jackson
Reginald T. Jackson
Senior Vice President and Chief Accounting Officer
(For each Registrant and for each as
Principal Accounting Officer)

Date:    May 2, 2024


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