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, 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,” “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, these registrants undertake 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 those factors discussed or incorporated by reference in (a) Item 1A. Risk Factors in the Form 10-K, (b) 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):

Entergy operates primarily through two business segments: Utility and Entergy Wholesale Commodities.

Following are income statement variances for Utility, Entergy Wholesale Commodities, Parent & Other, and Entergy comparing the firstthird quarter 2018 to the firstthird quarter 2017 showing how much the line item increased or (decreased) in comparison to the prior period:

Refer to “ENTERGY CORPORATION AND SUBSIDIARIES - SELECTED OPERATING RESULTS” for further information with respect to operating statistics.

Following is an analysis of the change in net revenue comparing the third quarter 2018 resultsto the third quarter 2017:

The return of operations includesunprotected excess accumulated deferred income taxes to customers resulted from activity in the third quarter 2018 at Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy in response to the enactment of the Tax Cuts and Jobs Act.  There is no effect on net income as the reductions in net revenue were offset by reductions in income tax expense.  Entergy Texas’s proposal for the return of its unprotected excess accumulated deferred income taxes is pending before the PUCT in an unopposed settlement in its base rate case proceeding.  See Note 2 to the financial statements herein and in the Form 10-K for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act. 

Results of operations for the nine months ended September 30, 2018 include impairment charges of $297 million ($235 million net-of-tax) due to costs being charged directly to expense as a result of the impaired value of the Entergy Wholesale Commodities nuclear plants’ long-lived assets due to the significantly reduced remaining estimated operating lives associated with management’s strategy to reduce the size of the Entergy Wholesale Commodities’ merchant fleet.fleet, a $107 million reduction of income tax expense, recognized by Entergy Wholesale Commodities, as a

Following is an analysis of the change in net revenue comparing the first quarternine months ended September 30, 2018 to the first quarternine months ended September 30, 2017:

The volume/weather variance is primarily due to an increase of 2,2464,576 GWh, or 9%5%, in billed electricity usage, including the effect of more favorable weather on residential and commercial sales and an increase in industrial usage. The increase in industrial usage is primarily due to an increase in demand for existing customers in the petroleum refining industrydriven by small industrials sales, as well as continued growth from new and a new customer in the primary metals industry.

As shown in the table above, net revenue for Entergy Wholesale Commodities decreased by $112$141 million in the first quarternine months ended September 30, 2018 2018 as compared to the first quarternine months ended September 30, 2017 primarily due to:

Following are key performance measures for Entergy Wholesale Commodities for the first quarternine months ended September 30, 2018 2018 and 2017:

Taxes other than income taxes increased primarily due to increases in ad valorem taxes local franchise taxes, and payroll taxes. Ad valorem taxes increased primarily due to higher assessments. Local franchise taxes increased primarily due to higher revenues in first quarter 2018 as compared to first quarter 2017.

Other income increased primarily due to changes in decommissioning trust fund investment activity, including portfolio rebalancing of certain of the decommissioning trust funds in the third quarter 2018 and an increase in the allowance for equity funds used during construction due to higher construction work in progress in 2018, which included the St. Charles Power Station project, and changes in decommissioning trust fund investment activity, including portfolio rebalancing of certain of the decommissioning trust funds.project.

The gain on sale of assets resulted from the sale in March 2017 of the 838 MW FitzPatrick plant to Exelon. Entergy sold the FitzPatrick plant for approximately $110 million, which included a $10 million non-refundable signing fee paid in August 2016, in addition to the assumption by Exelon of certain liabilities related to the FitzPatrick plant, resulting in a pre-tax gain of $16 million on the sale. See Note 14 to the financial statements in the Form 10-K for discussion of the sale of FitzPatrick.

    

Other income decreasedincreased primarily due to losseshigher realized gains on the decommissioning trust fund investments in first quarterthe nine months ended September 30, 2018 including unrealized losses on equity investments that were previously recorded to other comprehensive income for periods prior to 2018. See Note 9as compared to the financial statements herein for discussionnine months ended September 30, 2017, including the effect of the implementationportfolio rebalancing in 2018.

Other expenses decreased primarily due to the absence of decommissioning expense from the FitzPatrick plant after it was sold to Exelon in March 2017.2017 and a reduction in deferred refueling outage amortization costs related to the impairments of the Indian Point 3, Indian Point 2, and Palisades plants and related assets. See Note 14 to the financial statements in the Form 10-K for discussion of the sale of FitzPatrick.FitzPatrick and impairments and related charges.

The effective income tax rate was 24.3%(128.4%) for the first quarternine months ended September 30, 2018. The difference in the effective income tax rate for the first quarternine months ended September 30, 2018 versus the federal statutory rate of 21% was primarily due to stateamortization of excess accumulated deferred income taxes, a write-offrestructuring of the investment holdings in one of the Entergy Wholesale Commodities’ nuclear plant decommissioning trusts for which additional tax basis is now recoverable, and an IRS audit settlement for the 2012-2013 tax returns. See Notes 2 and 10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a stock-based compensation deferred tax asset,discussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act. See Note 10 to the financial statements herein for a discussion of the IRS audit settlement and the provision for uncertain tax positions, partially offset by certain book and tax differences related to utility plant items and book and tax differences related to the allowance for equity funds used during construction.restructuring.

The effective income tax rate was 8.3%(10.8%) for the first quarternine months ended September 30, 2017. The difference in the effective income tax rate for the first quarternine months ended September 30, 2017 versus the federal statutory rate of 35% was primarily due to a change in the tax classification of legal entities that own Entergy Wholesale Commodities nuclear power plants, which resulted in both permanent and temporary differences under the income tax accounting standards and the re-determined tax basis of the FitzPatrick plant as a result of theits sale to Exelon inon March 31, 2017, and book and tax differences related to the allowance for equity funds used during construction, partially offset by a write-off of a stock-based compensation deferred tax asset, state income taxes, certain book and tax differences related to utility plant items, and the provision for uncertain tax positions.taxes. See Note 3 to the financial statements in the Form 10-K for further discussion of the change in tax classification and the tax benefit associated with the sale of FitzPatrick and the write-off of the stock-based compensation deferred tax asset.FitzPatrick.

Income Tax Legislation

See Note 2 to the financial statements herein and in the Form 10-K for discussion of proceedings commenced or other responses by Entergy’s regulators to the Tax Cuts and Jobs Act.

Entergy Wholesale Commodities Exit from the Merchant Power Business

As discussed in the Form 10-K, in December 2014 the Vermont Yankee plant ceased power production and entered its decommissioning phase, and in November 2016, Entergy entered into an agreement to sell 100% of the membership interests in Entergy Nuclear Vermont Yankee, LLC to a subsidiary of NorthStar. In March 2018, Entergy and NorthStar entered into a settlement agreement and a Memorandum of Understanding with State of Vermont agencies and other interested parties that set forth the terms on which the agencies and parties support the Vermont Public Utility

Entergy expects to incur employee retention and severance expenses associated with management’s strategy to reduce the size of the Entergy Wholesale Commodities’ merchant fleet of approximately $165$155 million in 2018, of which $26$103 million has been incurred as of March 31,September 30, 2018, and a total of approximately $205$215 million from 2019 through mid-2022. In addition, Entergy Wholesale Commodities incurred impairment charges related to nuclear fuel spending, nuclear refueling outage spending, and expenditures for capital assets of $73$155 million for the three months ended March 31,September 30, 2018 and $297 million for the nine months ended September 30, 2018. These costs were charged to expense as incurred as a result of the impaired value of certain of the Entergy Wholesale Commodities nuclear plants’ long-lived assets due to the significantly reduced remaining estimated operating lives associated with management’s strategy to reduce the size of the Entergy Wholesale Commodities’ merchant fleet. Entergy expects to continue to incur costs associated with nuclear fuel-related spending and expenditures for capital assets and, except for Palisades, expects to continue to charge these costs to expense as incurred because Entergy expects the value of the plants to continue to be impaired.

In April 2018 the NRC issued a supplement to the final supplemental environmental impact statement.statement, and in August 2018 the NRC issued a supplemental safety evaluation report. The supplement updatessupplements update the environmental record and safety record related to the Indian Point license renewal. TheIn September 2018 the NRC is expected to issue its decisionissued renewed operating licenses for Indian Point 2 through April 2024 and for Indian Point 3 through April 2025.

As discussed in the Form 10-K, in January 2017, Entergy reached a settlement with New York State, several State agencies, and Riverkeeper, Inc. under which Indian Point 2 and Indian Point 3 license renewal proceedingswill cease commercial operation by April 30, 2020 and April 30, 2021, respectively. Operations may be extended up to four additional years for each unit by mutual agreement of Entergy and New York State based on an exigent reliability need for Indian Point generation. In accordance with the FERC-approved tariff of the New York Independent System Operator (NYISO), Entergy submitted to the NYISO a notice of generator deactivation based on the dates in fourth quarter 2018.the settlement. In December 2017 the NYISO issued a report stating there will not be a system reliability need following the deactivation of Indian Point. In April 2018 the NYISO issued a determination that the retirement of Indian Point was economically justified and, therefore, did not raise competition concerns.

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 expenditure plans and other uses of capital, and sources of capital.  Following are updates to that discussion.

Entergy’s capitalizationdebt to capital ratio is balanced between equity and debt, as shown in the following table. The increase in the debt to capital ratio for Entergy as of March 31,September 30, 2018 is primarily due to the net issuance of debt in 2018.

    

Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in August 2022.September 2023.  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.  The weighted average interest rate for the threenine months ended March 31,September 30, 2018 was 3.31%3.46% on the drawn portion of the facility. Following is a summary of the borrowings outstanding and capacity available under the facility as of March 31,September 30, 2018:

Entergy Nuclear Vermont Yankee has a credit facility guaranteed by Entergy Corporation with a borrowing capacity of $145 million that expires in November 2020. As of March 31,September 30, 2018, $118$132 million in cash borrowings were outstanding under the credit facility. The weighted average interest rate for the threenine months ended March 31,September

Entergy Corporation has a commercial paper program with a Board-approved program limit of up to $2 billion. As of March 31,September 30, 2018, Entergy Corporation had $655approximately $1,947 million of commercial paper outstanding. The weighted-average interest rate for the threenine months ended March 31,September 30, 2018 was 1.88%2.42%.

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 planned construction and other capital investments by operating segment for 2018 through 2020. Following are updates to the discussion.

As discussed in the Form 10-K, in April 2017, Entergy Louisiana signed an agreement with a subsidiary of Calpine Corporation for the construction and purchase of a peaking plant. In May 2017, Entergy Louisiana filed an application with the LPSC seeking certification of the plant. A procedural schedule has been established, with the deadlines extended and the hearing continued from June 2018 to August 2018 in order to allow the parties an opportunity to reach settlement. In April 2018 the parties filed an unopposed joint motion for consideration of proposed stipulation by the LPSC seeking approval of the signedreached a settlement agreement at the May 16, 2018 LPSC Business and Executive Session. The settlement recommendsrecommending certification and cost recovery through the additional capacity mechanism of the formula rate plan, consistent with prior LPSC precedent with respect to the certification and recovery of plants previously acquired by Entergy Louisiana. The LPSC issued an order approving the settlement in May 2018.

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 operating segment and the Parent and Other portion of the business, financial strength, and future investment opportunities.  At its AprilOctober 2018 meeting, the Board declared a dividend of $0.89$0.91 per share, which isan increase from the sameprevious $0.89 quarterly

As shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the threenine months ended March 31,September 30, 2018 and 2017 were as follows:

Net cash flow provided by operating activities increased by $28$147 million for the threenine months ended March 31,September 30, 2018 compared to the threenine months ended March 31,September 30, 2017 primarily due to:

Net cash flow used in investing activities increased $162$172 million for the threenine months ended March 31,September 30, 2018 compared to the threenine months ended March 31,September 30, 2017 primarily due to:

Net cash flow provided by financing activities increased $663$874 million for the threenine months ended March 31,September 30, 2018 compared to the threenine months ended March 31,September 30, 2017 primarily due to long-term debt activity providing approximately $1,772$1,422 million of cash in 2018 compared to using approximately $575 million of cash$309 thousand in 2017. Included in the long-term debt activity is $915 million in 2018 forBorrowings and repayments of borrowings on the Entergy CorporationEntergy’s long-term credit facility and $475 millionare included in 2017 for the repayment of borrowings on the Entergy Corporation long-term credit facility.debt activity. The increase was partially offset by Entergy’sa decrease of $448 million in net repayments of $812 millionissuances of commercial paper in 2018 compared

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.

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

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

As a wholesale generator, Entergy Wholesale Commodities’ core business is selling energy, measured in MWh, to its customers.  Entergy Wholesale Commodities enters into forward contracts with its customers and also sells energy in the day ahead or spot markets.  Entergy Wholesale Commodities also sells unforced capacity, which allows load-serving entities to meet specified reserve and related requirements placed on them by the ISOs in their respective areas.  Entergy Wholesale Commodities’ forward physical power contracts consist of contracts to sell energy only, contracts to sell capacity only, and bundled contracts in which it sells both capacity and energy.  While the terminology and payment mechanics vary in these contracts, each of these types of contracts requires Entergy Wholesale Commodities to deliver MWh of energy, make capacity available, or both.  In addition to its forward physical power contracts, Entergy Wholesale Commodities may also usesuse a combination of financial contracts, including swaps, collars, and options, to manage forward commodity price risk.  Certain hedge volumes have price downside and upside relative to market price movement.  The contracted minimum, expected value, and sensitivities are provided in the table below to show potential variations.  The sensitivities may not reflect the total maximum upside potential from higher market prices.  The information contained in the following table represents projections at a point in time and will vary over time based on numerous factors, such as future market prices, contracting activities, and generation.  Following is a summary of Entergy Wholesale Commodities’ current forward capacity and generation contracts as well as total revenue projections based on market prices as of March 31,September 30, 2018 (2018 represents the remainder of the year):

Some of the agreements to sell the power produced by Entergy Wholesale Commodities’ power plants contain provisions that require an Entergy subsidiary to provide credit support to secure its obligations under the agreements.  The Entergy subsidiary is required to provide credit support based upon the difference between the current market prices and contracted power prices in the regions where Entergy Wholesale Commodities sells power.  The primary form of credit support to satisfy these requirements is an Entergy Corporation guaranty.  Cash and letters of credit are also acceptable forms of credit support.  At March 31,September 30, 2018, based on power prices at that time, Entergy had liquidity exposure of $126$131 million under the guarantees in place supporting Entergy Wholesale Commodities transactions and $8$42 million of posted cash collateral.  In the event of a decrease in Entergy Corporation’s credit rating to below investment grade, based on power prices as of March 31,September 30, 2018, Entergy would have been required to provide approximately $64$78 million of additional cash or letters of credit under some of the agreements. As of March 31,September 30, 2018, the liquidity exposure associated with Entergy Wholesale Commodities assurance requirements, including return of previously posted collateral from counterparties, would increase by $319$307 million for a $1 per MMBtu increase in gas prices in both the short- and long-term markets.

As of March 31,September 30, 2018, substantially all of the credit exposure associated with the planned energy output under contract for Entergy Wholesale Commodities nuclear plants through 2022 is with counterparties or their guarantors that have public investment grade credit ratings.

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

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, unbilled revenue, impairment of long-lived assets and trust fund

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