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 thirdsecond quarter 20182019 to the thirdsecond quarter 20172018 showing how much the line item increased or (decreased) in comparison to the prior period:

Following is an analysis of the change in net revenueoperating revenues comparing the ninesix months ended SeptemberJune 30, 20182019 to the ninesix months ended SeptemberJune 30, 2017:2018:

The return of unprotected excess accumulated deferred income taxes to customers resulted from activity in 2018 at Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energythe Utility operating companies in response to the enactment of the Tax Cuts and Jobs Act. The return of unprotected excess accumulated deferred income taxes began in second quarter 2018. In the six months ended June 30, 2019, $121 million was returned to customers through reductions in operating revenues as compared to $151 million in the six months ended June 30, 2018. There is no effect on net income as the reductions in net revenueoperating revenues 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.     

The Grand Gulf recoveryretail electric price variance is primarily due to:

Depreciation and amortization expenses increased primarily due to additions to plant in service, including the St. Charles Power Station, partially offset by updated depreciation rates used in calculating Grand Gulf plant depreciation and amortization expenses under the Unit Power Sales Agreement settlement.as part of a settlement approved by the FERC in August 2018. See Note 32 to the financial statements in the Form 10-K for afurther discussion of the Tax Cut and Jobs Act.Unit Power Sales Agreement.

The retail electric price variance is primarily due toOther regulatory charges (credits) include the following significant activity:

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 2018,2019, which included the St.Lake Charles Power Station, project.Montgomery County Power Station, and New Orleans Power Station projects and changes in decommissioning trust fund activity.

The effective income tax rate was (128.4%)8.1% for the ninesix months ended SeptemberJune 30, 2018.2019. The difference in the effective income tax rate for the ninesix months ended SeptemberJune 30, 20182019 versus the federal statutory rate of 21% was primarily due to amortization of excess accumulated deferred income taxes, a restructuringpartially offset by the tax effects of the investment holdings in onedisposition 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.Vermont Yankee. See Notes 2 andNote 10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a 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 andtax effects of the restructuring.Vermont Yankee disposition.

The effective income tax rate was (10.8%(160%) for the ninesix months ended SeptemberJune 30, 2017.2018. The difference in the effective income tax rate for the ninesix months ended SeptemberJune 30, 20172018 versus the federal statutory rate of 35%21% was primarily due to a changeamortization of excess accumulated deferred income taxes and an IRS audit settlement for the 2012-2013 tax returns. See Note 10 to the financial statements herein and Notes 2 and 3 to the financial statements 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 basisForm 10-K for a discussion of the FitzPatrick plant as a result of its sale on March 31, 2017, partially offset by state income taxes.effects and regulatory activity regarding the Tax Cuts and Jobs Act. See Note 3 to the financial statements in the Form 10-K for furthera discussion of the change in tax classification and the tax benefit associated with the sale of FitzPatrick.IRS audit settlement.

As discussed in more detail in Note 16 to the financial statements herein, in January 2019, Entergy transferred 100% of $145 million to pay for dry fuel storage costs. This credit facility is guaranteed by Entergy Corporation. At or before closing, a subsidiary of Entergy will assume the obligations under the existing credit facility or enter into a new credit facility, and Entergy will guarantee the credit facility. At the closing of the sale transaction, NorthStar will pay $1,000 for the membership interests in Entergy Nuclear Vermont Yankee, LLC, the owner of the Vermont Yankee plant, to a subsidiary of NorthStar.

As consideration for the transfer to Holtec of its interest in Indian Point, Entergy will receive nominal cash consideration. The Indian Point transaction is expected to result in a loss based on the difference between Entergy’s adjusted net investment in the subsidiaries at closing and the sale price net of any agreed adjustments. As of June 30, 2019, Entergy’s adjusted net investment in the Indian Point units was $265 million. The primary variables in the ultimate loss that Entergy will incur are the values of the nuclear decommissioning trusts and the asset retirement obligations at closing, financial results from the plant until the closing, and any changes in Entergy’s investment in Entergy Nuclear Vermont Yankee before closing.

Entergy expects to incur employee retention and severance expenses associated with management’s strategy to reduce the size ofexit the Entergy Wholesale Commodities’ merchant fleetpower business of approximately $155$120 million in 2018,2019, of which $103$56 million has been incurred as of SeptemberJune 30, 2018,2019, and a total of approximately $215$120 million from 20192020 through mid-2022.2022. In addition, Entergy Wholesale Commodities incurred impairment charges related to nuclear fuel spending, nuclear refueling outage spending, and expenditures for capital assets of $155$16 million for the three months ended SeptemberJune 30, 20182019 and $297$90 million for the ninesix months ended SeptemberJune 30, 2018.2019. 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

Entergy’s debt to capital ratio is shown in the following table. The increasedecrease in the debt to capital ratio for Entergy as of SeptemberJune 30, 20182019 is primarily due to the net issuancesettlement of debtthe remaining equity forwards in 2018.2019. See Note 3 to the financial statements herein for a discussion of the equity forward sale agreements.

Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in 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 ninesix months ended SeptemberJune 30, 20182019 was 3.46%4.05% on the drawn portion of the facility. Following is a summary of the borrowings outstanding and capacity available under the facility as of SeptemberJune 30, 2018:2019:

Entergy Corporation has a commercial paper program with a Board-approved program limit of up to $2 billion. As of SeptemberJune 30, 2018,2019, Entergy Corporation had approximately $1,947$1,635 million of commercial paper outstanding. The weighted-average interest rate for the ninesix months ended SeptemberJune 30, 20182019 was 2.42%2.97%.

In January 2019, Entergy Nuclear Vermont Yankee was transferred to NorthStar and its credit facility was assumed by Vermont Yankee Asset Retirement Management, 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 November 2020. As of June 2018, Entergy marketed an equity offering of 15.330, 2019, $139 million shares of common stock. In lieu of issuing equity atin cash borrowings were outstanding under the timecredit facility.  The weighted average interest rate for the six months ended June 30, 2019 was 4.19% on the drawn portion of the offering, Entergy entered into forward sale agreements with several counterparties. Settlement of the forward sale agreements is expected to occur on or prior to June 7, 2019.facility. See Note 314 to the financial statements in the Form 10-K and Note 16 to the financial statements herein for discussion of the equity forwards.transfer of Entergy Nuclear Vermont Yankee to NorthStar.

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. In April 2018 the parties reached a settlement recommending 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 in December 2016 approving certification that the settlementpublic necessity and convenience would be served by the construction of the St. Charles Power Station. Commercial operation commenced in May 2018.2019.

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 October 2018July 2019 meeting, the Board declared a dividend of $0.91 per share, an increase fromwhich is the previous $0.89same quarterly dividend per share that Entergy has paid since the fourththird quarter 2017.2018.

As shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the ninesix months ended SeptemberJune 30, 20182019 and 20172018 were as follows:

Net cash flow provided by operating activities increased by $147decreased $27 million for the ninesix months ended SeptemberJune 30, 20182019 compared to the ninesix months ended SeptemberJune 30, 20172018 primarily due to:

Net cash flow used in investing activities increased $96 million for the spent nuclear fuel litigation.six months ended June 30, 2019 compared to the six months ended June 30, 2018 primarily due to an increase of $210 million in construction expenditures, primarily in the Utility business, as discussed below, partially offset by:

Net cash flow provided by financing activities increased $874$246 million for the ninesix months ended SeptemberJune 30, 20182019 compared to the ninesix months ended SeptemberJune 30, 20172018 primarily due to:

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 use 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 SeptemberJune 30, 2018 (20182019 (2019 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.guarantee.  Cash and letters of credit are also acceptable forms of credit support. At SeptemberJune 30, 2018,2019, based on power prices at that time, Entergy had liquidity exposure of $131$75 million under the guarantees in place supporting Entergy Wholesale Commodities transactions and $42$21 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 SeptemberJune 30, 2018,2019, Entergy would have been required to provide approximately $78$30 million of additional cash or letters of credit under some of the agreements. As of SeptemberJune 30, 2018,2019, the liquidity exposure associated with Entergy Wholesale Commodities assurance requirements, including return of previously posted collateral from counterparties, would increase by $307$169 million for a $1 per MMBtu increase in gas prices in both the short- and long-term markets.

As of SeptemberJune 30, 2018,2019, 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 Note 1 to the financial statements in the Form 10-K for discussion of new accounting pronouncements. The following are updates to that discussion.