~~0000065984 etr:EntergyTexasMember etr:CommercialMember us-gaap:ElectricityMember 2019-01-01 2019-03-31~~

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

~~FORM~~ ~~10-Q~~

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, ~~2020~~2021



☐			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) 670-3700
	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) 10055 Grogans Mill Road 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

~~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, 4.90% Series due December 2052~~	~~EAB~~	~~New York Stock Exchange~~
	~~Mortgage Bonds, 4.75% Series due June 2063~~	~~EAE~~	~~New York Stock Exchange~~
	Mortgage Bonds, 4.875% Series due September 2066			EAI			New York Stock Exchange

Entergy Louisiana, LLC			~~Mortgage Bonds, 5.25% Series due July 2052~~	~~ELJ~~	~~New York Stock Exchange~~
	~~Mortgage Bonds, 4.70% Series due June 2063~~	~~ELU~~	~~New York Stock Exchange~~
	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.			~~Mortgage Bonds, 5.625% Series due June 2064~~	~~EZT~~	~~New York Stock Exchange~~
	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 Securities Exchange Act of 1934.

Large accelerated filer

Accelerated

filer

Non-accelerated filer

Smaller

reporting

company

Emerging

growth

company

Entergy Corporation

Entergy Arkansas, LLC

Entergy Louisiana, LLC

Entergy Mississippi, LLC

Entergy New Orleans, LLC

Entergy Texas, Inc.

System Energy Resources, Inc.

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, ~~2020~~2021
Entergy Corporation	($0.01 par value)	~~200,161,934~~200,659,948

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 reports herein 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~~10-K for the calendar year ended December 31, ~~2019,~~2020, filed by the individual registrants with the SEC, and should be read in conjunction therewith.

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TABLE OF CONTENTS


		Page Number

		~~Page Number~~

Forward-looking ~~information~~Information	iii
Definitions		vi

Part I. Financial Information

Entergy Corporation and Subsidiaries
Management’s Financial Discussion and Analysis		1
Consolidated Income Statements		16
Consolidated Statements of Comprehensive Income		17
Consolidated Statements of Cash Flows		18
Consolidated Balance Sheets		20
Consolidated Statements of Changes in Equity		22
~~Selected Operating Results~~		23
Notes to Financial Statements
Note 1. Commitments and Contingencies		2423
Note 2. Rate and Regulatory Matters		2524
Note 3. Equity		3033
Note 4. Revolving Credit Facilities, Lines of Credit, Short-term Borrowings, and Long-term Debt		3336
Note 5. Stock-based Compensation		3741
Note 6. Retirement and Other Postretirement Benefits		3942
Note 7. Business Segment Information		4246
Note 8. Risk Management and Fair Values		4447
Note 9. Decommissioning Trust Funds		6165
Note 10. Income Taxes		6770
Note 11. Property, Plant, and Equipment		6871
Note 12. Variable Interest Entities		6871
Note 13. Revenue		6972
Item 3. Quantitative and Qualitative Disclosures About Market Risk		7275
Item 4. Controls and Procedures		7275
Entergy Arkansas, LLC and Subsidiaries
Management’s Financial Discussion and Analysis		7376
Consolidated Income Statements		8083
Consolidated Statements of Cash Flows		8185
Consolidated Balance Sheets		8286
Consolidated Statements of Changes in Member’s Equity		8488
~~Selected Operating Results~~		85
Entergy Louisiana, LLC and Subsidiaries
Management’s Financial Discussion and Analysis		8689
Consolidated Income Statements		9399

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		Page Number

		~~Page Number~~

Consolidated Statements of Comprehensive Income	94100
Consolidated Statements of Cash Flows		95101
Consolidated Balance Sheets		96102
Consolidated Statements of Changes in Equity		98104
~~Selected Operating Results~~		99
Entergy Mississippi, LLC
Management’s Financial Discussion and Analysis		~~100~~105
Income Statements		~~106~~111
Statements of Cash Flows		~~107~~113
Balance Sheets		~~108~~114
Statements of Changes in Member’s Equity		~~110~~116
~~Selected Operating Results~~		~~111~~
Entergy New Orleans, LLC and Subsidiaries
Management’s Financial Discussion and Analysis		~~112~~117
Consolidated Income Statements		~~119~~123
Consolidated Statements of Cash Flows		~~121~~125
Consolidated Balance Sheets		~~122~~126
Consolidated Statements of Changes in Member’s Equity		~~124~~128
~~Selected Operating Results~~		~~125~~
Entergy Texas, Inc. and Subsidiaries
Management’s Financial Discussion and Analysis		~~126~~129
Consolidated Income Statements		~~132~~137
Consolidated Statements of Cash Flows		~~133~~139
Consolidated Balance Sheets		~~134~~140
Consolidated Statements of Changes in Equity		~~136~~142
~~Selected Operating Results~~		~~137~~
System Energy Resources, Inc.
Management’s Financial Discussion and Analysis		~~138~~143
Income Statements		~~144~~149
Statements of Cash Flows		~~145~~151
Balance Sheets		~~146~~152
Statements of Changes in Common Equity		~~148~~154

Part II. Other Information

Item 1. Legal Proceedings		~~149~~155
Item 1A. Risk Factors		~~149~~155
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		~~150~~155
Item 5. Other Information		~~150~~156
Item 6. Exhibits		~~151~~158
Signature		~~154~~161

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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,” “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 and in this report, (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):

•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;~~costs, as well as delays in cost recovery resulting from these proceedings;

•continuing long-term risks and uncertainties associated with the termination of the System Agreement in 2016, including the potential absence of federal authority to resolve certain issues among the Utility operating companies and their retail regulators;

•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 and market and system conditions in the MISO markets, the allocation of MISO system transmission upgrade costs, 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 nuclear generating facilities and nuclear materials and fuel, including with respect to the planned or actual shutdown and sale of each of the nuclear generating facilities owned or operated by Entergy Wholesale Commodities, and the effects of new or existing safety or environmental concerns regarding nuclear power plants and nuclear 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, emerging operating and industry issues, and the commitment of substantial human and capital resources required for the safe and reliable operation and maintenance of Entergy’s nuclear generating facilities;

iii

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FORWARD-LOOKING INFORMATION (Continued)

•Entergy’s ability to develop and execute on a point of view regarding future prices of electricity, natural gas, and other energy-related commodities;

~~iii~~

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~~FORWARD-LOOKING INFORMATION (Continued)~~

prices for power generated by Entergy’s merchant generating facilities and the ability to hedge, meet credit support requirements for hedges, sell power forward or otherwise reduce the market price risk associated with those facilities, including the Entergy Wholesale Commodities nuclear plants, especially in light of the planned shutdown and sale of each of these nuclear plants;

•the prices and availability of fuel and power Entergy must purchase for its Utility customers, 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, requirements for waste management and disposal and for the remediation of contaminated sites, wetlands protection and permitting, 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;

•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 (including from Hurricane Laura, Hurricane Delta, and Hurricane Zeta), ice storms, or other weather events and the recovery of costs associated with restoration, including accessing funded storm reserves, federal and local cost recovery mechanisms, securitization, and insurance, as well as any related unplanned outages;

•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, a utility industry mutual insurance company, and industry self-insurance programs;

•effects of climate change, including the potential for increases in extreme weather events and sea levels or coastal land and wetland loss;

•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 completion of projects timely and within budget and to obtain the anticipated performance or other benefits, and its operation and maintenance costs;

•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 the northern United States and events and circumstances that could influence economic conditions in those areas, including power prices, and the risk that anticipated load growth may not materialize;

•changes to federal income tax ~~reform,~~laws and regulations, including continued impact of the Tax Cuts and Jobs Act and its intended and unintended consequences on financial results and future cash flows;

•the effects of Entergy’s strategies to reduce tax payments;

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FORWARD-LOOKING INFORMATION (Concluded)

•changes in the financial markets and regulatory requirements for the issuance of securities, particularly as they affect access to capital and Entergy’s ability to refinance existing securities, execute share repurchase programs, 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;

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~~FORWARD-LOOKING INFORMATION (Concluded)~~

the effects of litigation and government investigations or proceedings;

•changes in technology, including (i) Entergy’s ability to implement new or emerging technologies, (ii) 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 of the foregoing, and (iii) 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 reduce its carbon emission rate and aggregate carbon emissions, including its commitment to achieve net-zero carbon emissions by 2050, and the potential impact on its business of attempting to achieve such objectives;

•the effects, including increased security costs, of threatened or actual terrorism, cyber-attacks or data security breaches, 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;

•the effects of a global event or pandemic, such as the COVID-19 global pandemic, including economic and societal 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; 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, ~~our~~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;

•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;

•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 benefit plans;

•future wage and employee benefit 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 decision to cease merchant power generation at all Entergy Wholesale Commodities nuclear power plants by mid-2022, including the implementation of the planned shutdowns and sales of Indian Point 2, Indian Point 3, and Palisades;

•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;

•the potential for the factors listed herein to lead to the impairment of long-lived assets; and

•Entergy and its subsidiaries’ ability to successfully execute on their business strategies, including their ability to complete strategic transactions that Entergy 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
D.C. Circuit			U.S. Court of Appeals for the District of Columbia Circuit
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			Entergy’s non-utility business segment 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, ~~2019~~2020 filed with the SEC by Entergy Corporation and its Registrant Subsidiaries
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
Independence			Independence Steam Electric Station (coal), owned 16% by Entergy Arkansas, 25% by Entergy Mississippi, and 7% by Entergy Power, LLC

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DEFINITIONS (Continued)



Abbreviation or Acronym			Term

Indian Point 2			Unit 2 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment, which ceased power production in April 2020
Indian Point 3			Unit 3 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment, which ceased power production in April 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
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)
Nelson Unit 6			Unit No. 6 (coal) of the Nelson Steam Electric Generating Station, 70% of which is co-owned by Entergy Louisiana (57.5%) and Entergy Texas (42.5%) and 10.9% of which is owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Net debt to net capital ratio			Gross debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents
Net MW in operation			Installed capacity owned and operated
NRC			Nuclear Regulatory Commission
Palisades			Palisades Nuclear Plant (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Parent & Other			The portions of Entergy not included in the Utility or Entergy Wholesale Commodities segments, primarily consisting of the activities of the parent company, Entergy Corporation
Pilgrim			Pilgrim Nuclear Power Station (nuclear), previously owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment, which ceased power production in May 2019 and was sold in August 2019
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.
TWh			Terawatt-hour(s), which equals one billion kilowatt-hours

vii

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DEFINITIONS (Concluded)


Abbreviation or Acronym			Term

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

~~vii~~

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~~DEFINITIONS (Concluded)~~



~~Abbreviation or Acronym~~	~~Term~~

Utility		Entergy’s business segment that generates, transmits, distributes, and sells electric power, with a small amount of natural gas distribution
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 by an Entergy subsidiary in the Entergy Wholesale Commodities business segment, which ceased power production in December 2014 and was disposed of in January 2019
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
White Bluff		White Bluff Steam Electric Generating Station, 57% owned by Entergy Arkansas

viii

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Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

Market and Credit Risk Sensitive Instruments

Commodity Price Risk

Power Generation

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. 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, ~~2020 (2020~~2021 (2021 represents the remainder of the year):

Entergy Wholesale Commodities Nuclear Portfolio


	2021	2022
Energy
Percent of planned generation under contract (a):
Unit-contingent (b)	98%	99%
Planned generation (TWh) (c) (d)	5.8	2.8
Average revenue per MWh on contracted volumes:
Expected based on market prices as of March 31, 2021	$56.4	$47.1

Capacity
Percent of capacity sold forward (e):
Bundled capacity and energy contracts (f)	86%	98%
Capacity contracts (g)	13%	—%
Total	99%	98%
Planned net MW in operation (average) (d)	1,158	338
Average revenue under contract per kW per month (applies to capacity contracts only)	$0.1	$—

Total Energy and Capacity Revenues (h)
Expected sold and market total revenue per MWh	$55.8	$46.8
Sensitivity: -/+ $10 per MWh market price change	$55.7-$56.0	$46.7-$47.0

2020 2021 2022
Energy
Percent of planned generation under contract (a):
Unit-contingent (b) 97% 94% 99%
Planned generation (TWh) (c) (d) 11.6 9.6 2.8
Average revenue per MWh on contracted volumes:
Expected based on market prices as of March 31, 2020 $38.1 $55.8 $47.1

Capacity
Percent of capacity sold forward (e):
Bundled capacity and energy contracts (f) 40% 68% 97%
Capacity contracts (g) 45% —% —%
Total 85% 68% 97%
Planned net MW in operation (average) (d) 2,195 1,158 338
Average revenue under contract per kW per month (applies to capacity contracts only) $3.1 $— $—

Total Energy and Capacity Revenues (h)
Expected sold and market total revenue per MWh $42.2 $54.1 $46.8
Sensitivity: -/+ $10 per MWh market price change $42.0-$42.3 $53.5-$54.6 $46.7-$47.0

(a)Percent of planned generation output sold under contracts.


~~(a)~~	Percent of planned generation output sold or purchased forward under contracts, forward physical contracts, forward financial contracts, or options that mitigate price uncertainty. Positions that are not classified as hedges are netted in the planned generation under contract.

(b)Transaction under which power is supplied from a specific generation asset; if the asset is not operating, the seller is generally not liable to the buyer for any damages. Certain unit-contingent sales include a guarantee

Table of Contents

Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

of availability. Availability guarantees provide for the payment to the power purchaser of contract damages, if incurred, in the event the seller fails to deliver power as a result of the failure of the specified generation unit to generate power at or above a specified availability threshold. All of Entergy’s outstanding guarantees of availability provide for dollar limits on Entergy’s maximum liability under such guarantees.

~~(b)~~

Transaction under which power is supplied from a specific generation asset; if the asset is not operating, the seller is generally not liable to the buyer for any damages. Certain unit-contingent sales include a guarantee of availability. Availability guarantees provide for the payment to the power purchaser of contract damages, if incurred, in the event the seller fails to deliver power as a result of the failure of the specified generation unit to generate power at or above a specified availability threshold. All of Entergy’s outstanding guarantees of availability provide for dollar limits on Entergy’s maximum liability under such guarantees.


~~(c)~~	(c)Amount of output expected to be generated by ~~Entergy Wholesale Commodities nuclear resources considering plant operating characteristics and outage schedules.~~


~~(d)~~	Assumes the shutdown of Indian Point 2 on April 30, 2020, planned shutdown of Indian Point 3 on April 30, 2021, and planned shutdown of Palisades on May 31, 2022. For a discussion regarding the planned shutdown of the Indian Point 2, Indian Point 3, and Palisades plants, see “~~Entergy Wholesale Commodities Exit from the Merchant Power Business” above.~~


~~(e)~~	~~Percent of planned qualified capacity sold to mitigate price uncertainty under physical or financial transactions.~~


~~(f)~~	~~A contract for the sale of installed capacity and related energy, priced per megawatt-hour sold.~~


~~(g)~~	~~A contract for the sale of an installed capacity product in a regional market.~~


~~(h)~~	Includes assumptions on converting a portion of the portfolio to contracted with fixed price and excludes non-cash revenue from the amortization of the Palisades below-market purchased power agreement, mark-to-market activity, and service revenues.

~~Entergy estimates that a positive $10 per MWh change in the annual average energy price in the markets in which the~~ Entergy Wholesale Commodities nuclear ~~business sells power, based~~resources considering plant operating characteristics.

(d)Assumes the shutdown of Indian Point 3 on ~~March~~April 30, 2021 and planned shutdown of Palisades on May 31, ~~2020 market conditions,~~2022. For a discussion regarding the shutdown of the Indian Point 3 plant and planned ~~generation volumes, and hedged positions, would have a corresponding effect on pre-tax income~~shutdown of ~~$2 million~~the Palisades plant, see “Entergy Wholesale Commodities Exit from the Merchant Power Business” above.

(e)Percent of planned qualified capacity sold to mitigate price uncertainty under physical or financial transactions.

(f)A contract for the ~~remainder~~sale of ~~2020. As of March 31, 2019, a positive $10~~installed capacity and related energy, priced per ~~MW change would have had a corresponding effect on pre-tax income of $4 million~~megawatt-hour sold.

(g)A contract for the ~~remainder~~sale of ~~2019. A negative $10 per MWh change~~an installed capacity product in ~~the annual average energy price in the markets based on March 31, 2020 market conditions, planned generation volumes, and hedged positions, would have~~ a corresponding effect on pre-tax income of ($2) million for the remainder of 2020. As of March 31, 2019, a negative $10 per MW change would have had a corresponding effect on pre-tax income of ($4) million for the remainder of 2019.regional market.

(h)Excludes non-cash revenue from the amortization of the Palisades below-market purchased power agreement, mark-to-market activity, and service revenues.

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 guarantee. Cash and letters of credit are also acceptable forms of credit support. At March 31, ~~2020,~~2021, based on power prices at that time, Entergy had liquidity exposure of ~~$77~~$51 million under the guarantees in place supporting Entergy Wholesale Commodities transactions and ~~$14~~$7 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, ~~2020,~~2021, Entergy would have been required to provide approximately $30 million of additional cash or letters of credit under some of the agreements. As of March 31, 2020, the liquidity exposure associated with Entergy Wholesale Commodities assurance requirements, including return of previously posted collateral from counterparties, would increase by ~~$66~~$7 million for a $1 per MMBtu increase in gas prices in both the short- and long-term markets.

As of March 31, ~~2020,~~2021, 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.

Nuclear Matters

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

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, and “multiple/repetitive degraded cornerstone column,” or Column 4. 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. Nuclear generating plants owned and operated by Entergy’s Utility and Entergy Wholesale Commodities businesses are currently in Column 1, except for Grand Gulf, which is in Column 3.

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Entergy Corporation and Subsidiaries

Management's Financial Discussion and Analysis

In March 2021 the NRC placed Grand Gulf in Column 3 based on the incidence of five unplanned plant scrams during calendar year 2020, some of which were related to upgrades made to the plant’s turbine control system during the spring 2020 refueling outage. The NRC plans to conduct a supplemental inspection of Grand Gulf in accordance with its inspection procedures for nuclear plants in Column 3.

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, impairment of long-lived assets, ~~and trust fund investments,~~ taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies. ~~Following is an update to the discussion in the Form 10-K. Following are updates to that discussion.~~

~~Qualified Pension and Other Postretirement Benefits~~

As discussed in the Form 10-K, Entergy sponsors qualified, defined benefit pension plans that cover substantially all employees, including cash balance plans and final average pay plans. Entergy’s reported costs of providing these benefits, as described in Note 11 to the financial statements in the Form 10-K, are affected by numerous factors. Key actuarial assumptions utilized in determining qualified pension and other postretirement health care and life insurance costs include the expected long-term rate of return on plan assets. For 2020, Entergy assumed a long-term rate of return on its qualified pension plan assets of 7.00%. Through March 31, 2020, due to the decline in the equity markets associated with the COVID-19 pandemic, Entergy experienced a 12% loss on its qualified pension plan assets, which have declined in fair value from $6.3 billion at December 31, 2019 to $5.4 billion at March 31, 2020.

As described more fully in the Form 10-K, in accordance with pension accounting standards, Entergy utilizes a number of accounting mechanisms that reduce the volatility of reported pension costs. Differences between actuarial assumptions and actual plan results are deferred and are amortized into expense when the accumulated differences exceed 10% of the greater of the projected benefit obligation or the market-related value of plan assets. The excess is amortized over the average remaining service period of active employees.

Minimum required funding calculations as determined under Pension Protection Act guidance are performed annually as of January 1 of each year and are based on measurements of the assets and funding liabilities as measured at that date, and Entergy’s expected contributions for 2020 are reported in Note 6 to the financial statements herein. Any excess of the funding liability over the calculated fair market value of assets results in a funding shortfall that, under the Pension Protection Act, must be funded over a seven-year rolling period. The Pension Protection Act also imposes certain plan limitations if the funded percentage, which is based on calculated fair market values of assets divided by funding liabilities, does not meet certain thresholds. For funding purposes, asset gains and losses are smoothed in to the calculated fair market value of assets. The funding liability is based upon a weighted average 24-month corporate bond rate published by the U.S. Treasury which is generally subject to a corridor of the 25-year average of prior segment rates. Periodic changes in asset returns and interest rates can affect funding shortfalls and future cash contributions.

As described in Note 6 to the financial statements herein, in March 2020, Entergy announced changes to its other postretirement benefits. As a result, Entergy now expects 2020 other postretirement health care and life insurance benefit income, including amounts capitalized, of $17.2 million.

New Accounting Pronouncements

See Note 1 to the financial statements in the Form 10-K for discussion of new accounting pronouncements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

2020 2019
(In Thousands, Except Share Data)
OPERATING REVENUES
Electric
$2,050,638

$2,121,024
Natural gas 43,976
54,948
Competitive businesses 332,565
433,612
TOTAL 2,427,179
2,609,584

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 397,403
478,330
Purchased power 216,614
339,507
Nuclear refueling outage expenses 50,218
50,441
Other operation and maintenance 702,084
783,051
Asset write-offs, impairments, and related charges 5,095
73,979
Decommissioning 93,684
102,119
Taxes other than income taxes 170,294
158,575
Depreciation and amortization 399,710
357,274
Other regulatory credits (7,679 ) (16,946 )
TOTAL 2,027,423
2,326,330

OPERATING INCOME 399,756
283,254

OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction 35,953
38,216
Interest and investment income (loss) (216,853 ) 228,149
Miscellaneous - net 23,389
(64,658 )
TOTAL (157,511 ) 201,707

INTEREST EXPENSE
Interest expense 205,589
200,993
Allowance for borrowed funds used during construction (15,444 ) (17,449 )
TOTAL 190,145
183,544

INCOME BEFORE INCOME TAXES 52,100
301,417

Income taxes (71,194 ) 42,771

CONSOLIDATED NET INCOME 123,294
258,646

Preferred dividend requirements of subsidiaries 4,580
4,109

NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION
$118,714

$254,537

Earnings per average common share:
Basic
$0.59

$1.34
Diluted
$0.59

$1.32

Basic average number of common shares outstanding 199,790,016
189,575,187
Diluted average number of common shares outstanding 200,901,349
192,234,191

See Notes to Financial Statements.

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ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)


	2021	2020
	(In Thousands, Except Share Data)
OPERATING REVENUES
Electric	$2,538,420	$2,050,638
Natural gas	58,168	43,976
Competitive businesses	248,250	332,565
TOTAL	2,844,838	2,427,179

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	501,167	397,403
Purchased power	379,734	216,614
Nuclear refueling outage expenses	43,739	50,218
Other operation and maintenance	706,786	702,084
Asset write-offs, impairments, and related charges	3,273	5,095
Decommissioning	98,642	93,684
Taxes other than income taxes	156,702	170,294
Depreciation and amortization	414,519	399,710
Other regulatory charges (credits) - net	32,279	(7,679)
TOTAL	2,336,841	2,027,423

OPERATING INCOME	507,997	399,756

OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction	14,577	35,953
Interest and investment income (loss)	143,315	(216,853)
Miscellaneous - net	(60,929)	23,389
TOTAL	96,963	(157,511)

INTEREST EXPENSE
Interest expense	205,886	205,589
Allowance for borrowed funds used during construction	(6,013)	(15,444)
TOTAL	199,873	190,145

INCOME BEFORE INCOME TAXES	405,087	52,100

Income taxes	65,942	(71,194)

CONSOLIDATED NET INCOME	339,145	123,294

Preferred dividend requirements of subsidiaries	4,580	4,580

NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION	$334,565	$118,714

Earnings per average common share:
Basic	$1.67	$0.59
Diluted	$1.66	$0.59

Basic average number of common shares outstanding	200,525,549	199,790,016
Diluted average number of common shares outstanding	201,059,665	200,901,349

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

2020 2019
(In Thousands)

Net Income
$123,294

$258,646

Other comprehensive income
Cash flow hedges net unrealized loss (net of tax benefit of $5,777 and $5,352) (21,710 ) (12,426 )
Pension and other postretirement liabilities (net of tax expense of $15,076 and $3,249) 53,899
11,550
Net unrealized investment gain (net of tax expense of $8,743 and $8,073) 15,744
13,703
Other comprehensive income 47,933
12,827

Comprehensive Income 171,227
271,473
Preferred dividend requirements of subsidiaries 4,580
4,109
Comprehensive Income Attributable to Entergy Corporation
$166,647

$267,364

See Notes to Financial Statements.

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ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)


	2021	2020

	(In Thousands)

Net Income	$339,145	$123,294

Other comprehensive income (loss)
Cash flow hedges net unrealized loss (net of tax benefit of $7,869 and $5,777)	(29,580)	(21,710)
Pension and other postretirement liabilities (net of tax expense of $6,314 and $15,076)	22,967	53,899
Net unrealized investment gain (loss) (net of tax expense (benefit) of ($25,581) and $8,743)	(44,687)	15,744
Other comprehensive income (loss)	(51,300)	47,933

Comprehensive Income	287,845	171,227
Preferred dividend requirements of subsidiaries	4,580	4,580
Comprehensive Income Attributable to Entergy Corporation	$283,265	$166,647

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)
2020 2019
(In Thousands)
OPERATING ACTIVITIES
Consolidated net income
$123,294

$258,646
Adjustments to reconcile consolidated net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization 568,596
530,224
Deferred income taxes, investment tax credits, and non-current taxes accrued (31,405 ) 104,884
Asset write-offs, impairments, and related charges 4,962
25,462
Changes in working capital:
Receivables 70,357
39,697
Fuel inventory (15,389 ) (4,401 )
Accounts payable (127,727 ) (63,613 )
Taxes accrued (44,241 ) (44,083 )
Interest accrued (4,791 ) (20,546 )
Deferred fuel costs 30,560
20,201
Other working capital accounts (21,758 ) (42,016 )
Changes in provisions for estimated losses (35,829 ) 13,720
Changes in other regulatory assets 99,275
(162,192 )
Changes in other regulatory liabilities (450,905 ) 130,924
Changes in pension and other postretirement liabilities (113,071 ) (7,713 )
Other 607,132
(278,005 )
Net cash flow provided by operating activities 659,060
501,189

INVESTING ACTIVITIES
Construction/capital expenditures (1,043,608 ) (951,629 )
Allowance for equity funds used during construction 35,953
38,322
Nuclear fuel purchases (85,334 ) (38,445 )
Payment for purchase of plant (24,633 ) —
Changes in securitization account (70 ) (1,084 )
Payments to storm reserve escrow account (1,557 ) (2,285 )
Receipts from storm reserve escrow account 40,589
—
Decrease in other investments 2,265
39,045
Litigation proceeds for reimbursement of spent nuclear fuel storage costs 62,162
—
Proceeds from nuclear decommissioning trust fund sales 687,487
1,307,547
Investment in nuclear decommissioning trust funds (718,741 ) (1,342,429 )
Net cash flow used in investing activities (1,045,487 ) (950,958 )

See Notes to Financial Statements.

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ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
	2021	2020
	(In Thousands)
OPERATING ACTIVITIES
Consolidated net income	$339,145	$123,294
Adjustments to reconcile consolidated net income to net cash flow provided by (used in) operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	580,571	568,596
Deferred income taxes, investment tax credits, and non-current taxes accrued	240,431	(31,405)
Asset write-offs, impairments, and related charges	3,278	4,962

Changes in working capital:
Receivables	(52,690)	70,357
Fuel inventory	26,878	(15,389)
Accounts payable	(175,651)	(127,727)
Taxes accrued	(231,182)	(44,241)
Interest accrued	(3,778)	(4,791)
Deferred fuel costs	(353,099)	30,560
Other working capital accounts	(43,582)	(21,758)
Changes in provisions for estimated losses	(60,923)	(35,829)
Changes in other regulatory assets	89,910	99,275
Changes in other regulatory liabilities	(14,464)	(450,905)
Changes in pension and other postretirement liabilities	(166,733)	(113,071)
Other	(227,676)	607,132
Net cash flow provided by (used in) operating activities	(49,565)	659,060

INVESTING ACTIVITIES
Construction/capital expenditures	(1,552,103)	(1,043,608)
Allowance for equity funds used during construction	14,577	35,953
Nuclear fuel purchases	(47,916)	(85,334)
Payment for purchase of assets	0	(24,633)


Changes in securitization account	(1,304)	(70)
Payments to storm reserve escrow account	(10)	(1,557)
Receipts from storm reserve escrow account	44,205	40,589
Decrease in other investments	12,521	2,265
Litigation proceeds for reimbursement of spent nuclear fuel storage costs	15,735	62,162
Proceeds from nuclear decommissioning trust fund sales	3,225,510	687,487
Investment in nuclear decommissioning trust funds	(3,224,487)	(718,741)
Net cash flow used in investing activities	(1,513,272)	(1,045,487)

See Notes to Financial Statements.

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ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)
2020 2019
(In Thousands)
FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt 3,195,345
3,444,230
Treasury stock 39,964
35,577
Retirement of long-term debt (1,614,578 ) (2,298,855 )
Repurchase of preferred membership units —
(50,000 )
Changes in credit borrowings and commercial paper - net (4,911 ) (17 )
Other (756 ) (1,945 )
Dividends paid:
Common stock (185,763 ) (172,591 )
Preferred stock (4,763 ) (4,109 )
Net cash flow provided by financing activities 1,424,538
952,290

Net increase in cash and cash equivalents 1,038,111
502,521

Cash and cash equivalents at beginning of period 425,722
480,975

Cash and cash equivalents at end of period
$1,463,833

$983,496

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized
$203,466

$214,935
Income taxes
($23,063 )
($13,844 )

See Notes to Financial Statements.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
	2021	2020
	(In Thousands)
FINANCING ACTIVITIES
Proceeds from the issuance of:
Long-term debt	3,676,242	3,195,345

Treasury stock	979	39,964

Retirement of long-term debt	(1,346,172)	(1,614,578)


Changes in credit borrowings and commercial paper - net	(599,860)	(4,911)
Other	10,380	(756)
Dividends paid:
Common stock	(190,595)	(185,763)
Preferred stock	(4,580)	(4,763)
Net cash flow provided by financing activities	1,546,394	1,424,538



Net increase (decrease) in cash and cash equivalents	(16,443)	1,038,111

Cash and cash equivalents at beginning of period	1,759,099	425,722

Cash and cash equivalents at end of period	$1,742,656	$1,463,833

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized	$202,451	$203,466
Income taxes	$9,015	($23,063)

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2020 and December 31, 2019
(Unaudited)
2020 2019
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash
$283,491

$34,242
Temporary cash investments 1,180,342
391,480
Total cash and cash equivalents 1,463,833
425,722
Accounts receivable:
Customer 602,278
595,509
Allowance for doubtful accounts (8,521 ) (7,404 )
Other 112,368
219,870
Accrued unbilled revenues 369,948
400,617
Total accounts receivable 1,076,073
1,208,592
Fuel inventory - at average cost 160,865
145,476
Materials and supplies - at average cost 837,855
824,989
Deferred nuclear refueling outage costs 167,124
157,568
Prepayments and other 268,201
283,645
TOTAL 3,973,951
3,045,992

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 5,778,285
6,404,030
Non-utility property - at cost (less accumulated depreciation) 335,314
332,864
Other 460,569
496,452
TOTAL 6,574,168
7,233,346

PROPERTY, PLANT, AND EQUIPMENT
Electric 55,524,303
54,271,467
Natural gas 553,323
547,110
Construction work in progress 2,469,130
2,823,291
Nuclear fuel 657,216
677,181
TOTAL PROPERTY, PLANT, AND EQUIPMENT 59,203,972
58,319,049
Less - accumulated depreciation and amortization 23,422,851
23,136,356
PROPERTY, PLANT, AND EQUIPMENT - NET 35,781,121
35,182,693

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $212,163 as of March 31, 2020 and $239,219 as of December 31, 2019) 5,192,780
5,292,055
Deferred fuel costs 240,024
239,892
Goodwill 377,172
377,172
Accumulated deferred income taxes 76,680
64,461
Other 339,133
288,301
TOTAL 6,225,789
6,261,881

TOTAL ASSETS
$52,555,029

$51,723,912

See Notes to Financial Statements.

Table of Contents


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2021 and December 31, 2020
(Unaudited)
	2021	2020
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$67,574	$128,851
Temporary cash investments	1,675,082	1,630,248
Total cash and cash equivalents	1,742,656	1,759,099
Accounts receivable:
Customer	883,352	833,478
Allowance for doubtful accounts	(119,027)	(117,794)
Other	158,838	135,208
Accrued unbilled revenues	415,253	434,835
Total accounts receivable	1,338,416	1,285,727
Deferred fuel costs	226,619	4,380
Fuel inventory - at average cost	146,056	172,934
Materials and supplies - at average cost	972,771	962,185
Deferred nuclear refueling outage costs	182,721	179,150
Prepayments and other	179,315	196,424
TOTAL	4,788,554	4,559,899

OTHER PROPERTY AND INVESTMENTS

Decommissioning trust funds	7,339,088	7,253,215
Non-utility property - at cost (less accumulated depreciation)	355,819	343,328
Other	169,094	214,222
TOTAL	7,864,001	7,810,765

PROPERTY, PLANT, AND EQUIPMENT
Electric	60,901,229	59,696,443

Natural gas	621,682	610,768
Construction work in progress	1,311,997	2,012,030
Nuclear fuel	591,124	601,281
TOTAL PROPERTY, PLANT, AND EQUIPMENT	63,426,032	62,920,522
Less - accumulated depreciation and amortization	24,403,999	24,067,745
PROPERTY, PLANT, AND EQUIPMENT - NET	39,022,033	38,852,777

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets (includes securitization property of $92,585 as of March 31, 2021 and $119,238 as of December 31, 2020)	5,986,639	6,076,549
Deferred fuel costs	240,555	240,422
Goodwill	377,172	377,172
Accumulated deferred income taxes	56,068	76,289
Other	332,606	245,339
TOTAL	6,993,040	7,015,771

TOTAL ASSETS	$58,667,628	$58,239,212

See Notes to Financial Statements.

Table of Contents

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2020 and December 31, 2019
(Unaudited)
2020 2019
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt
$1,230,015

$795,012
Notes payable and commercial paper 1,941,816
1,946,727
Accounts payable 1,502,392
1,499,861
Customer deposits 408,803
409,171
Taxes accrued 189,214
233,455
Interest accrued 189,338
194,129
Deferred fuel costs 228,379
197,687
Pension and other postretirement liabilities 62,129
66,184
Current portion of unprotected excess accumulated deferred income taxes 64,339
76,457
Other 201,514
201,780
TOTAL 6,017,939
5,620,463

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 4,384,494
4,401,190
Accumulated deferred investment tax credits 205,041
207,113
Regulatory liability for income taxes-net 1,600,189
1,633,159
Other regulatory liabilities 1,555,188
1,961,005
Decommissioning and asset retirement cost liabilities 6,250,951
6,159,212
Accumulated provisions 498,199
534,028
Pension and other postretirement liabilities 2,689,249
2,798,265
Long-term debt (includes securitization bonds of $271,391 as of March 31, 2020 and $297,981 as of December 31, 2019) 18,228,528
17,078,643
Other 646,899
852,749
TOTAL 36,058,738
35,625,364

Commitments and Contingencies

Subsidiaries' preferred stock without sinking fund 219,385
219,410

EQUITY
Common stock, $.01 par value, authorized 500,000,000 shares; issued 270,035,180 shares in 2020 and 2019 2,700
2,700
Paid-in capital 6,510,683
6,564,436
Retained earnings 9,190,141
9,257,609
Accumulated other comprehensive loss (398,987 ) (446,920 )
Less - treasury stock, at cost (69,874,430 shares in 2020 and 70,886,400 shares in 2019) 5,080,570
5,154,150
Total common shareholders' equity 10,223,967
10,223,675
Subsidiaries' preferred stock without sinking fund 35,000
35,000
TOTAL 10,258,967
10,258,675

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY
$52,555,029

$51,723,912

See Notes to Financial Statements.


ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2021 and December 31, 2020
(Unaudited)
	2021	2020
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$629,019	$1,164,015
Notes payable and commercial paper	1,027,629	1,627,489
Accounts payable	1,697,206	2,739,437
Customer deposits	391,032	401,512
Taxes accrued	209,829	441,011
Interest accrued	198,013	201,791
Deferred fuel costs	22,386	153,113

Pension and other postretirement liabilities	63,752	61,815
Current portion of unprotected excess accumulated deferred income taxes	65,056	63,683
Other	207,984	206,640
TOTAL	4,511,906	7,060,506

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	4,568,106	4,361,772
Accumulated deferred investment tax credits	217,888	212,494

Regulatory liability for income taxes-net	1,465,852	1,521,757
Other regulatory liabilities	2,363,919	2,323,851
Decommissioning and asset retirement cost liabilities	6,528,450	6,469,452
Accumulated provisions	181,912	242,835
Pension and other postretirement liabilities	2,684,343	2,853,013
Long-term debt (includes securitization bonds of $146,881 as of March 31, 2021 and $174,635 as of December 31, 2020)	24,075,456	21,205,761
Other	798,210	807,219
TOTAL	42,884,136	39,998,154

Commitments and Contingencies

Subsidiaries' preferred stock without sinking fund	219,410	219,410

EQUITY
Common stock, $.01 par value, authorized 500,000,000 shares; issued 270,035,180 shares in 2021 and 2020	2,700	2,700
Paid-in capital	6,520,052	6,549,923
Retained earnings	10,041,152	9,897,182
Accumulated other comprehensive loss	(500,507)	(449,207)
Less - treasury stock, at cost (69,402,016 shares in 2021 and 69,790,346 shares in 2020)	5,046,221	5,074,456
Total common shareholders' equity	11,017,176	10,926,142
Subsidiaries' preferred stock without sinking fund	35,000	35,000
TOTAL	11,052,176	10,961,142

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$58,667,628	$58,239,212

See Notes to Financial Statements.

ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

Common Shareholders’ Equity

Subsidiaries’ Preferred Stock
Common
Stock

Treasury
Stock

Paid-in
Capital
Retained Earnings Accumulated Other Comprehensive Loss Total
(In Thousands)
Balance at December 31, 2018
$—

$2,616

($5,273,719 )
$5,951,431

$8,721,150

($557,173 )
$8,844,305
Implementation of accounting standards —
—
—
—
6,806
(6,806 ) —
Balance at January 1, 2019 —
2,616
(5,273,719 ) 5,951,431
8,727,956
(563,979 ) 8,844,305

Consolidated net income 4,109
—
—
—
254,537
—
258,646
Other comprehensive income —
—
—
—
—
12,827
12,827
Common stock issuances related to stock plans —
—
62,537
(31,248 ) —
—
31,289
Common stock dividends declared —
—
—
—
(172,591 ) —
(172,591 )
Preferred dividend requirements of subsidiaries (a) (4,109 ) —
—
—
—
—
(4,109 )
Balance at March 31, 2019
$—

$2,616

($5,211,182 )
$5,920,183

$8,809,902

($551,152 )
$8,970,367

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ENTERGY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)

		Common Shareholders’ Equity
	Subsidiaries’ Preferred Stock	Common Stock	Treasury Stock	Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Total
	(In Thousands)
Balance at December 31, 2019	$35,000	$2,700	($5,154,150)	$6,564,436	$9,257,609	($446,920)	$10,258,675
Implementation of accounting standards	0	0	0	0	(419)	0	(419)
Balance at January 1, 2020	35,000	2,700	(5,154,150)	6,564,436	9,257,190	(446,920)	10,258,256

Consolidated net income (a)	4,580	0	0	0	118,714	0	123,294
Other comprehensive income	0	0	0	0	0	47,933	47,933
Common stock issuances related to stock plans	0	0	73,580	(53,753)	0	0	19,827
Common stock dividends declared	0	0	0	0	(185,763)	0	(185,763)
Preferred dividend requirements of subsidiaries (a)	(4,580)	0	0	0	0	0	(4,580)
Balance at March 31, 2020	$35,000	$2,700	($5,080,570)	$6,510,683	$9,190,141	($398,987)	$10,258,967










Balance at December 31, 2020	$35,000	$2,700	($5,074,456)	$6,549,923	$9,897,182	($449,207)	$10,961,142



Consolidated net income (a)	4,580	0	0	0	334,565	0	339,145
Other comprehensive loss	0	0	0	0	0	(51,300)	(51,300)
Common stock issuances related to stock plans	0	0	28,235	(29,871)	0	0	(1,636)
Common stock dividends declared	0	0	0	0	(190,595)	0	(190,595)
Preferred dividend requirements of subsidiaries (a)	(4,580)	0	0	0	0	0	(4,580)
Balance at March 31, 2021	$35,000	$2,700	($5,046,221)	$6,520,052	$10,041,152	($500,507)	$11,052,176




















(a) Consolidated net income and preferred dividend requirements of subsidiaries for first quarter 2021 and first quarter 2020 each includes $4.1 million of preferred dividends on subsidiaries’ preferred stock without sinking fund that is not presented as equity.

Balance at December 31, 2019
$35,000

$2,700

($5,154,150 )
$6,564,436

$9,257,609

($446,920 )
$10,258,675
Implementation of accounting standards —
—
—
—
(419 ) —
(419 )
Balance at January 1, 2020 35,000
2,700
(5,154,150 ) 6,564,436
9,257,190
(446,920 ) 10,258,256

Consolidated net income 4,580
—
—
—
118,714
—
123,294
Other comprehensive income —
—
—
—
—
47,933
47,933
Common stock issuances related to stock plans —
—
73,580
(53,753 ) —
—
19,827
Common stock dividends declared —
—
—
—
(185,763 ) —
(185,763 )
Preferred dividend requirements of subsidiaries (a) (4,580 ) —
—
—
—
—
(4,580 )
Balance at March 31, 2020
$35,000

$2,700

($5,080,570 )
$6,510,683

$9,190,141

($398,987 )
$10,258,967

See Notes to Financial Statements.

(a) Consolidated net income and preferred dividend requirements of subsidiaries include $4.1 million for 2020 and 2019 of preferred dividends on subsidiaries’ preferred stock without sinking fund that is not presented as equity.

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ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

Nine Months Ended Increase/

2020 2019 (Decrease) %

(Dollars in Millions)
Utility electric operating revenues:
Residential
$798

$803

($5 ) (1 )
Commercial 539
554
(15 ) (3 )
Industrial 557
601
(44 ) (7 )
Governmental 53
53
—
—
Total billed retail 1,947
2,011
(64 ) (3 )
Sales for resale 54
84
(30 ) (36 )
Other 50
26
24
92
Total
$2,051

$2,121

($70 ) (3 )

Utility billed electric energy sales (GWh):
Residential 8,126
8,471
(345 ) (4 )
Commercial 6,244
6,423
(179 ) (3 )
Industrial 11,815
11,683
132
1
Governmental 595
601
(6 ) (1 )
Total retail 26,780
27,178
(398 ) (1 )
Sales for resale 3,117
3,814
(697 ) (18 )
Total 29,897
30,992
(1,095 ) (4 )

Entergy Wholesale Commodities:
Operating revenues
$333

$434

($101 ) (23 )
Billed electric energy sales (GWh) 6,757
7,203
(446 ) (6 )

ENTERGY CORPORATION AND SUBSIDIARIES

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 commissions, 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.

ANO Damage, Outage, and NRC Reviews

See Note 8 to the financial statements in the Form 10-K for a discussion of the ANO stator incident, subsequent NRC reviews, and the deferral of replacement power costs.

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.

In January 2021 the U.S. Court of Federal Claims issued a final judgment in the amount of $23.1 million in favor of Entergy Nuclear Palisades and against the DOE in the second round Palisades damages case. Entergy received payment from the U.S. Treasury in February 2021. The effects of recording the judgment were reductions to plant, other operation and maintenance expense, and taxes other than income taxes. The Palisades damages awarded included $15.7 million related to costs previously capitalized, $7.1 million related to costs previously recorded as other operation and maintenance expenses, and $0.3 million related to costs previously recorded as taxes other than income taxes. Of the $15.7 million previously capitalized, Entergy recorded $9.1 million as a reduction to previously-recorded depreciation expense.

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.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

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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~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

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.

~~Regulatory activity regarding the Tax Cuts and Jobs Act~~

~~System Energy~~

In a filing made with the FERC in March 2018, Entergy proposed revisions to the Unit Power Sales Agreement, among other agreements, to reflect the effects of the Tax Act. In the filing System Energy proposed to return all of its unprotected excess accumulated deferred income taxes to its customers by the end of 2018. In May 2018 the FERC accepted System Energy’s proposed tax revisions with an effective date of June 1, 2018, subject to refund and the outcome of settlement and hearing procedures. Settlement discussions were terminated in April 2019, and the hearing was held in March 2020. The retail regulators of the Utility operating companies that are parties to the Unit Power Sales Agreement are challenging the treatment and amount of excess tax liabilities associated with uncertain tax positions related to nuclear decommissioning. The initial decision is due in July 2020.

Fuel and purchased power cost recovery

Entergy Arkansas

Energy Cost Recovery Rider

In March ~~2020,~~2021, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider, which reflected a decrease from ~~$0.01462~~$0.01052 per kWh to ~~$0.01052~~$0.00959 per kWh. The redetermined rate calculation also included an adjustment to account for a portion of the increased fuel costs resulting from the February 2021 winter storms. The redetermined rate became effective with the first billing cycle in April ~~2020~~2021 through the normal operation of the tariff.

Entergy Louisiana

In February 2021, Entergy Louisiana incurred extraordinary fuel costs associated with the February 2021 winter storms.To mitigate the effect of these costs on customer bills, in March 2021 Entergy Louisiana requested and the LPSC approved the deferral and recovery of $166 million in incremental fuel costs over 5 months beginning in April 2021. The incremental fuel costs remain subject to review for reasonableness and eligibility for recovery through the fuel adjustment clause mechanism. At its April 2021 meeting, the LPSC authorized its staff to review the prudence of the February 2021 fuel costs incurred by all LPSC jurisdictional utilities.

In March ~~2020~~2021 the LPSC staff provided notice of an audit of Entergy Louisiana’s ~~fuel~~purchased gas adjustment clause ~~filings.~~ filings covering the period January 2018 through December 2020.The audit includes a review of the reasonableness of charges flowed through Entergy Louisiana’s ~~fuel~~purchased gas adjustment clause for ~~the period from 2016 through 2019. Discovery~~that period.No audit report has ~~not yet commenced.~~been filed.

~~Entergy Texas~~

In September 2019, Entergy Texas filed an application to reconcile its fuel and purchased power costs for the period from April 2016 through March 2019. During the reconciliation period, Entergy Texas incurred approximately $1.6 billion in Texas jurisdictional eligible fuel and purchased power expenses, net of certain revenues credited to such expenses and other adjustments. Entergy Texas estimated an under-recovery balance of approximately $25.8 million, including interest, which Entergy Texas requested authority to carry over as the beginning balance for the subsequent reconciliation period beginning April 2019. In March 2020 an intervenor filed testimony proposing that the PUCT disallow: (1) $2 million in replacement power costs associated with generation outages during the reconciliation period; and (2) $24.4 million associated with the operation of the Spindletop natural gas storage facility during the reconciliation period. In April 2020, Entergy Texas filed rebuttal testimony refuting all points raised by the intervenor. A hearing on the merits is currently set for May 2020.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy Texas

In February 2021, Entergy Texas filed an application to implement a fuel refund for a cumulative over-recovery of approximately $75 million that is primarily attributable to settlements received by Entergy Texas from MISO related to Hurricane Laura. Entergy Texas planned to issue the refund over the period of March through August 2021. On February 22, 2021, Entergy Texas filed a motion to abate its fuel refund proceeding to assess how the February 2021 winter storm impacted Entergy Texas’s fuel over-recovery position. In March 2021, Entergy Texas withdrew its application to implement the fuel refund. Entergy Texas is continuing to evaluate its fuel balance and will file a subsequent refund or surcharge application consistent with the requirements of the PUCT’s rules.

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 APSC (Entergy Arkansas)

Retail Rates

2020 Formula Rate Plan Filing

As discussed in the Form 10-K, in December 2020, Entergy Arkansas filed a petition for rehearing of the APSC’s decision in the 2020 formula rate plan proceeding regarding the 2019 netting adjustment, and in January 2021 the APSC granted further consideration of Entergy Arkansas’s petition. Based on the progress of the proceeding to date, in December 2020, Entergy Arkansas recorded a regulatory liability of $43.5 million to reflect the netting adjustment for 2019, as included in the APSC’s December 2020 order, which would be returned to customers in 2021. Entergy Arkansas also requested an extension of the formula rate plan rider for a second five-year term. In March 2021 the Arkansas Governor signed HB1662 into law (Act 404). Act 404 clarified aspects of the original formula rate plan legislation enacted in 2015, including with respect to the extension of a formula rate plan, the methodology for the netting adjustment, and debt and equity levels; it also reaffirmed the customer protections of the original formula rate plan legislation, including the cap on annual formula rate plan rate changes. Pursuant to Act 404, Entergy Arkansas’s formula rate plan rider is extended for a second five-year term. Entergy Arkansas filed a compliance tariff in its formula rate plan docket in April 2021 to effectuate the netting provisions of Act 404, which reflected a net change in required formula rate plan rider revenue of $39.8 million, effective with the first billing cycle of May 2021. In April 2021 the APSC issued an order approving the compliance tariff and recognizing the formula rate plan extension. Also in April 2021, Entergy Arkansas filed for approval of modifications to the formula rate plan tariff incorporating the provisions in Act 404, and the APSC approved the tariff modifications in April 2021. Given the APSC general staff’s support for the expedited approval of these filings by the APSC, Entergy Arkansas supported an amendment to Act 404 to achieve a reduced return on equity from 9.75% to 9.65% to apply for years applicable to the extension term; that amendment was signed by the Arkansas Governor in April 2021 and is now Act 894. Based on the APSC’s order issued in April 2021, in the first quarter 2021 Entergy Arkansas reversed the remaining regulatory liability for the netting adjustment for 2019.

COVID-19 Orders

See the Form 10-K for discussion of APSC orders issued in light of the COVID-19 pandemic. In March 2021 the APSC issued an order confirming the lifting of the moratorium on service disconnects effective in May 2021. As of March 31, 2021, Entergy Arkansas recorded a regulatory asset of $11.4 million for costs associated with the COVID-19 pandemic.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

Filings with the LPSC (Entergy Louisiana)

Retail Rates - Electric

~~2018~~2017 Formula Rate Plan Filing

~~Commercial operation at Lake Charles Power Station commenced~~As discussed in ~~March 2020. In March 2020,~~the Form 10-K, in May 2019, Entergy Louisiana filed an update to its ~~2018~~2017 formula rate plan evaluation report to include the estimated first-year revenue requirement of ~~$108~~$109.5 million associated with the ~~Lake~~J. Wayne Leonard Power Station (formerly St. Charles Power ~~Station.~~Station). In February 2021, LPSC staff filed testimony that substantially all the costs to construct J. Wayne Leonard Power Station were prudently incurred and eligible for recovery from customers.LPSC staff further recommended that the LPSC consider monitoring the remaining $3.1 million that was estimated to be incurred for completion of the project in the event the final costs exceed the estimated amounts.Settlement discussions are in progress.

Request for Extension and Modification of Formula Rate Plan

As discussed in the Form 10-K, in May 2020, Entergy Louisiana filed with the LPSC its application for authority to extend its formula rate plan. The ~~resulting interim adjustment~~parties reached a settlement in April 2021 regarding Entergy Louisiana’s proposed FRP extension. Entergy Louisiana and the LPSC staff filed a joint motion asking the LPSC to ~~rates became effective~~consider and approve the uncontested settlement at the May 2021 LPSC meeting. Key terms of the settlement include: a three year term (test years 2020, 2021, and 2022) covering a rate-effective period of September 2021 through August 2024; a 9.50% return on equity, with a smaller, 50 basis point deadband above and below (9.0%-10.0%); elimination of sharing if earnings are outside the deadband; a $63 million rate increase for test year 2020 (exclusive of riders); continuation of existing riders (transmission, additional capacity, etc.); addition of a distribution recovery mechanism permitting $225 million per year of distribution investment above a baseline level to be recovered dollar for dollar; modification of the tax mechanism to allow timely rate changes in the event the federal corporate income tax rate is changed from 21%; a cumulative rate increase limit of $70 million (exclusive of riders) for test years 2021 and 2022; and deferral of up to $7 million per year in 2021 and 2022 of expenditures on vegetation management for outside of right of way hazard trees.

COVID-19 Orders

As discussed in the Form 10-K, in April 2020 the LPSC issued an order authorizing utilities to record as a regulatory asset expenses incurred from the suspension of disconnections and collection of late fees imposed by LPSC orders associated with the COVID-19 pandemic. In addition, utilities may seek future recovery, subject to LPSC review and approval, of losses and expenses incurred due to compliance with the LPSC’s COVID-19 orders. The suspension of late fees and disconnects for non-payment was extended until the first billing cycle after July 16, 2020.In January 2021, Entergy Louisiana resumed disconnections for customers in all customer classes with past-due balances that have not made payment arrangements. Utilities seeking to recover the regulatory asset must formally petition the LPSC to do so, identifying the direct and indirect costs for which recovery is sought. Any such request is subject to LPSC review and approval. As of ~~April 2020.~~March 31, 2021, Entergy Louisiana recorded a regulatory asset of $47.8 million for costs associated with the COVID-19 pandemic.

Filings with the MPSC (Entergy Mississippi)

2021 Formula Rate Plan Filing

In March ~~2020,~~2021, Entergy Mississippi submitted its formula rate plan ~~2020~~2021 test year filing and ~~2019~~2020 look-back filing showing Entergy Mississippi’s earned return for the historical ~~2019~~2020 calendar year to be below the formula rate plan bandwidth and projected earned return for the ~~2020~~2021 calendar year to be below the formula rate plan bandwidth. The 2020 test year filing shows a ~~$24.6~~$95.4 million rate increase is necessary to reset Entergy Mississippi’s earned return on common equity to the specified point of adjustment of ~~6.51%~~6.69% return on rate base,

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

within the formula rate plan bandwidth. The ~~2019~~change in formula rate plan revenues, however, is capped at 4% of retail revenues, which equates to a revenue change of $44.3 million. The 2021 evaluation report also includes $3.9 million in demand side management costs for which the MPSC approved realignment of recovery from the energy efficiency rider to the formula rate plan. These costs are not subject to the 4% cap and result in a total change in formula rate plan revenues of $48.2 million. The 2020 look-back filing compares actual ~~2019~~2020 results to the approved benchmark return on rate base and reflects the need for a ~~$7.3~~$16.8 million interim increase in formula rate plan revenues. In addition, the 2020 look-back filing includes an interim capacity adjustment true-up for the Choctaw Generating Station, which increases the look-back interim rate adjustment by $1.7 million. These interim rate adjustments total $18.5 million. In accordance with the ~~MPSC-approved revisions to~~provisions of the formula rate plan, Entergy Mississippi implemented a ~~$24.3~~$22.1 million interim rate increase, reflecting a cap equal to 2% of ~~2019~~2020 retail revenues, effective with the April ~~2020~~2021 billing cycle, subject to refund, pending a final MPSC order. The $3.9 million of demand side management costs and the Choctaw Generating Station true-up of $1.7 million, which are not subject to the 2% cap of 2020 retail revenues, were included in the April 2021 rate adjustments. A final order is expected in the second quarter ~~2020,~~2021, with the resulting final rates, including amounts above the 2% cap of ~~2019~~2020 retail revenues, effective July ~~2020.~~2021.

COVID-19 Orders

As discussed in the Form 10-K, in April 2020 the MPSC issued an order authorizing utilities to defer incremental costs and expenses associated with COVID-19 compliance and to seek future recovery through rates of the prudently incurred incremental costs and expenses. In December 2020, Entergy Mississippi resumed disconnections for commercial, industrial, and governmental customers with past-due balances that have not made payment arrangements. In January 2021, Entergy Mississippi resumed disconnecting service for residential customers with past-due balances that have not made payment arrangements. As of March 31, 2021, Entergy Mississippi recorded a regulatory asset of $16.3 million for costs associated with the COVID-19 pandemic.

Filings with the City Council (Entergy New Orleans)

~~Energy Efficiency~~COVID-19 Orders

As discussed in the Form 10-K, in December 2019, Entergy New Orleans filed an application with the City Council seeking approval of an implementation plan for the Energy Smart energy efficiency program from April 2020 through December 2022. Entergy New Orleans proposed to recover the costs of the program through mechanisms previously approved by the City Council or through the energy efficiency cost recovery rider, which was approved in the 2018 combined rate case resolution. In FebruaryJune 2020 the City Council ~~approved~~established the City Council Cares Program and directed Entergy New ~~Orleans’s application.~~Orleans to use the approximately $7 million refund received from the Entergy Arkansas opportunity sales FERC proceeding, currently being held in escrow, and approximately $15 million of non-securitized storm reserves to fund this program, which was intended to provide temporary bill relief to customers who became unemployed during the COVID-19 pandemic. The program became effective July 1, 2020 and offered qualifying residential customers bill credits of $100 per month for up to four months, for a maximum of $400 in residential customer bill credits. As of March 31, 2021 the program expired and credits of $4.3 million have been applied to customer bills under the City Council Cares Program.

~~2018 Base Rate Case Filing~~

~~See~~Additionally, as discussed in the Form 10-K, ~~for discussion of the electric and gas base rate case filed~~ in ~~September 2018. In response to~~February 2021 the City ~~Council’s November 2019~~Council adopted a resolution insuspending residential customer disconnections for non-payment of utility bills and suspending the ~~rate case,~~assessment and accumulation of late fees on residential customers with past-due balances through May 15, 2021. As of March 31, 2021, Entergy New Orleans ~~made~~recorded a ~~compliance filing in December 2019 and also filed timely a petition~~regulatory asset of $14.8 million for appeal and judicial review and for stay of or injunctive relief alleging that the resolution is unlawful in failing to produce just and reasonable rates. A hearing on the requested injunction was scheduled in Civil District Court for February 2020, but by joint motion of the City Council and Entergy New Orleans, the Civil District Court issued an order for a limited remand to the City Council to consider a potential agreement in principle/stipulation at its February 20, 2020 meeting. On February 17, 2020, Entergy New Orleans filed

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

costs associated with the City Council an agreement in principle between Entergy New Orleans and the City Council’s advisors. On February 20, 2020, the City Council voted to approve the proposed agreement in principle and issued a resolution modifying the required treatment of certain accumulated deferred income taxes. As a result of the agreement in principle, the total annual revenue requirement reduction will be approximately $45 million ($42 million electric, including $29 million in rider reductions; and $3 million gas). As a result, Entergy New Orleans fully implemented the new rates in April 2020. The merits of the appeal will be subject to a separate procedural schedule issued by the Civil District Court.COVID-19 pandemic.

~~2020 Formula Rate Plan Filing~~

In April 2020, Entergy New Orleans filed a motion with the City Council to delay its formula rate plan filing until June 2020. In May 2020 the City Council issued an order extending the filing deadline for Entergy New Orleans’s formula rate plan filing to June 29, 2020.

Filings with the PUCT and Texas Cities (Entergy Texas)

Distribution Cost Recovery Factor (DCRF) Rider

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

DCRF rider ~~from Entergy Texas’s retail customers~~ based on its capital invested in distribution between January 1, ~~2019~~2020 and ~~December~~August 31, ~~2019.~~2020. In February 2021 the administrative law judge with the State Office of Administrative Hearings approved Entergy Texas’s agreed motion for interim rates, which went into effect in March 2021. In March 2021 the parties filed an unopposed settlement recommending that Entergy Texas be allowed to collect its full requested DCRF revenue requirement and resolving all issues in the proceeding. This case has been remanded to the PUCT for consideration of a final order at a future open meeting.

Transmission Cost Recovery Factor (TCRF) Rider

As discussed in the Form 10-K, in ~~August 2019,~~October 2020, Entergy Texas filed with the PUCT a request to amend its TCRF rider. The ~~new TCRF~~proposed rider is designed to collect ~~approximately $19.4 million annually~~ from Entergy Texas’s retail customers approximately $51 million annually, or $31.6 million in incremental annual revenues beyond Entergy Texas’s currently effective TCRF rider based on its capital invested in transmission between ~~January~~July 1, ~~2018~~2019 and ~~June 30, 2019.~~August 31, 2020. A procedural schedule was established with a hearing scheduled in March 2021. In ~~January 2020~~February 2021, Entergy Texas filed an agreed motion to abate the ~~PUCT issued an order approving~~procedural schedule, noting that the parties had reached a settlement in principle, and the administrative law judge granted the motion to abate. In March 2021 the parties filed an unopposed settlement ~~providing for recovery of the requested revenue requirement.~~recommending that Entergy Texas ~~implemented~~be allowed to collect its full requested TCRF revenue requirement with interim rates effective March 2021 and resolving all issues in the ~~amended rider beginning with bills covering usage on~~proceeding. In March 2021 the administrative law judge granted the motion for interim rates, admitted evidence, and ~~after January 23, 2020.~~

~~System Agreement Cost Equalization Proceedings~~

~~Rough Production Cost Equalization Rates~~

~~Consolidated 2011, 2012, 2013, and 2014 Rate Filing Proceedings~~

remanded this case to the PUCT for consideration of a final order at a future open meeting.

COVID-19 Orders

As discussed in the Form 10-K, in ~~April 2018~~March 2020 the ~~LPSC requested rehearing~~PUCT authorized electric utilities to record as a regulatory asset expenses resulting from the effects of the ~~FERC’s~~COVID-19 pandemic. In future proceedings the PUCT will consider whether each utility's request for recovery of these regulatory assets is reasonable and necessary, the appropriate period of recovery, and any amount of carrying costs thereon. In March ~~2018 order affirming~~2020 the ~~ALJ’s initial decision~~PUCT ordered a moratorium on disconnections for nonpayment for all customer classes, but, in April 2020, revised the disconnect moratorium to apply only to residential customers. The PUCT allowed the moratorium to expire on June 13, 2020, but on July 17, 2020, the PUCT re-established the disconnect moratorium for residential customers until August 31, 2020. In January 2021, Entergy Texas resumed disconnections for customers with past-due balances that have not made payment arrangements. As of March 31, 2021, Entergy Texas recorded a regulatory asset of $10.7 million for costs associated with the COVID-19 pandemic.

Generation Cost Recovery Rider

As discussed in the ~~consolidated proceedings.~~Form 10-K, in October 2020, Entergy Texas filed an application to establish a generation cost recovery rider with an initial annual revenue requirement of approximately $91 million to begin recovering a return of and on its capital investment in ~~May 2018~~ the ~~bandwidth true-up payments~~Montgomery County Power Station through August 31, 2020. In December 2020, Entergy Texas filed an unopposed settlement supporting a generation cost recovery rider with an annual revenue requirement of approximately $86 million. On January 14, 2021, the PUCT approved the generation cost recovery rider settlement rates on an interim basis and ~~receipts for~~abated the ~~2011-2014 rate filings and the payments were made~~proceeding. In March 2021, Entergy Texas filed to update its generation cost recovery rider to include investment in ~~May 2018.~~Montgomery County Power Station after August 31, 2020. In April ~~2020~~2021 the ~~FERC~~ALJ issued an order ~~partially granting~~unabating the ~~LPSC’s rehearing request.~~ proceeding to consider Entergy Texas’s updated application and establishing a procedural schedule that will result in administrative approval of Entergy Texas’s application in June 2021 if it is unopposed by parties to the proceeding.

In ~~the order the FERC reversed~~December 2020, Entergy Texas also filed an application to amend its ~~prior finding and determined that the tax gain portion~~generation cost recovery rider to reflect its acquisition of the ~~Waterford 3 financing accumulated deferred income tax should be included~~Hardin County Peaking Facility, which is expected to close in June 2021. The initial generation cost recovery rider rates proposed in the ~~bandwidth calculation. The order requires~~application represent no change from the generation cost recovery rider rates to be established in Entergy ~~Services~~Texas’s previous generation cost recovery rider proceeding. Once Entergy Texas has acquired the Hardin County Peaking Facility, its investment in the facility will be reflected in an updated filing to ~~redetermine bandwidth true-up payments~~Entergy Texas’s application, which will be made within 60 days of the acquisition’s closing.

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Entergy Corporation and ~~receipts for the 2010-2012 test years.~~Subsidiaries

Notes to Financial Statements

Entergy Arkansas Opportunity Sales Proceeding

As discussed in the Form 10-K, the FERC’s opportunity sales orders have been appealed to the D.C. Circuit by Entergy, the LPSC, and the APSC. In February 2020 all of the appeals were consolidated and in April 2020 the D.C. Circuit established a briefing schedule. Briefing will occur in May 2020 through September 2020.

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

~~Also as~~As discussed in the Form 10-K, in May 2019, Entergy Arkansas filed an application and supporting testimony with the APSC requesting approval of a special rider tariff to recover ~~the costs of its opportunity sales payments~~ from its retail customers ~~over a 24-month period. In January 2020~~ the ~~Attorney General and Arkansas Electric Energy Consumers, Inc. filed testimony opposing the recovery by Entergy Arkansas~~costs of the opportunity sales ~~payment but also claiming~~payments made to the other Utility operating companies, and in July 2020 the APSC issued a decision finding that ~~certain components of~~Entergy Arkansas’s application is not in the ~~payment should be segregated and refunded to customers.~~public interest. In ~~March~~September 2020, Entergy Arkansas filed ~~rebuttal testimony. Also~~a complaint in ~~March 2020,~~the U.S. District Court for the Eastern District of Arkansas challenging the APSC’s order denying Entergy ~~Arkansas,~~Arkansas’s request to recover the ~~APSC staff,~~costs of these payments. The court held a hearing in February 2021 regarding issues addressed in the pre-trial conference report, and the ~~Arkansas Electric Energy Consumers, Inc. filed a joint motion asking~~parties await further instructions from the APSC to issue a final decision based on the record in the proceeding and cancel the April 2020 evidentiary hearing. The Arkansas Attorney General did not oppose the request, which was granted by the APSC in March 2020. A final decision is expected in July 2020.court.

Complaints Against System Energy

Return on Equity and Capital Structure Complaints

As discussed in the Form 10-K, in ~~November 2019, in a proceeding that did not involve Entergy,~~May 2020 the FERC issued an order ~~addressing~~on rehearing of Opinion No. 569 (Opinion No. 569-A). In June 2020 the ~~methodology for determining the return on equity applicable to transmission owners in MISO. Thereafter, the participants~~procedural schedule in the System Energy proceeding ~~agreed to amend the procedural schedule~~was further revised in order to allow parties to address the ~~participants~~Opinion No. 569-A methodology. The parties and FERC trial staff filed final rounds of testimony in August 2020. The hearing before a FERC ALJ occurred in late-September through early-October 2020, post-hearing briefing took place in November and December 2020.

In March 2021 the FERC ALJ issued an initial decision. With regard to ~~file supplemental testimony addressing~~System Energy’s authorized return on equity, the ~~order~~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 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 $59 million, which includes interest through March 31, 2021, and the estimated resulting annual rate reduction would be approximately $46 million. The estimated refund will continue to accrue interest until a final FERC decision is issued. Based on the course of the proceeding to date, System Energy has recorded a provision of $36 million, including interest, as of March 31, 2021.

The ALJ initial decision is an interim step in the ~~MISO transmission owner proceeding (Opinion No. 569)~~FERC litigation process, and an ALJ’s determinations made in an initial decision are not controlling on the FERC.

In ~~February 2020~~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, MPSC, ~~and APSC,~~City Council, and the FERC trial staff filed ~~supplemental testimony addressing Opinion No. 569 and how it would affect the return~~briefs on equity evaluation for the two complaint periods concerning System Energy. For the first refund period, based on their respective interpretations and applications of the Opinion No. 569 methodology, the LPSC argues for an authorized return on equity for System Energy of 8.44%; the MPSC and APSC argue for an authorized return on equity of 8.41%; andexceptions. Reply briefs opposing exceptions are due in May 2021. Refunds, if any, that might be required will only become due after the FERC trial staff argues for an authorized return on equity of 9.22%. For the second refund period and on a prospective basis, based on their respective interpretations and applications of the Opinion No. 569 methodology, the LPSC argues for an authorized return on equity for System Energy of 7.89%; the MPSC and APSC argue that an authorized return on equity of 8.01% may be appropriate; and the FERC trial staff argues for an authorized return on equity of 8.66%.

In April 2020, System Energy filed supplemental answering testimony addressing Opinion No. 569. System Energy argues that the Opinion No. 569 methodology is conceptually and analytically defective for purposes of establishing just and reasonable authorized return on equity determinations and proposes an alternative approach. Asissues its primary recommendation, System Energy continues to support the return on equity determinations in its March 2019 testimony for the first refund period and its June 2019 testimony for the second refund period. Under the Opinion No. 569 methodology, System Energy calculates a “presumptively just and reasonable range” for the authorized return on equity for the first refund period of 8.57% to 9.52%, and for the second refund period of 8.28% to 9.11%. System Energy argues that these ranges are not just and reasonable results. Under its proposed alternative methodology, System Energy calculates an authorized return on equity of 10.26% for the first refund period, which also falls within the presumptively just and reasonable range calculated for the second refund period and prospectively.

~~The schedule was further revised in March 2020, and rebuttal testimony addressing Opinion No. 569 is due in June 2020; the hearing in the System Energy proceeding will commence in August 2020; and~~order reviewing the initial ~~decision will be due in December 2020.~~decision.

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

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

Council filed direct testimony. The LPSC testimony sought refunds that include the renewal lease payments (approximately $17.2 million per year since July 2015), rate base reductions for accumulated deferred income taxes associated with uncertain tax positions, and the cost of capital additions associated with the sale-leaseback interest, as well as interest on those amounts.

In June 2019 System Energy filed answering testimony arguing that the FERC should reject all claims for refunds. Among other things, System Energy argued that claims for refunds of the costs of lease renewal payments and capital additions should be rejected because those costs were recovered consistent with the Unit Power Sales Agreement formula rate, System Energy was not over or double recovering any costs, and customers will save costs over the initial and renewal terms of the leases. System Energy argued that claims for refunds associated with liabilities arising from uncertain tax positions should be rejected because the liabilities do not provide cost-free capital, the repayment timing of the liabilities is uncertain, and the outcome of the underlying tax positions is uncertain. System Energy’s testimony also challenged the refund calculations supplied by the other parties.

In August 2019 the FERC trial staff filed direct and answering testimony seeking refunds for rate base reductions for the liabilities associated with uncertain tax positions. The FERC trial staff also argued that System Energy recovered $32 million more than it should have in depreciation expense for capital additions. In September 2019, System Energy filed cross-answering testimony disputing the FERC trial staff’s arguments for refunds, stating that the FERC trial staff’s position regarding depreciation rates for capital additions is not unreasonable, but explaining that any change in depreciation expense is only one element of a Unit Power Sales Agreement re-billing calculation. Adjustments to depreciation expense in any re-billing under the Unit Power Sales Agreement formula rate will also involve changes to accumulated depreciation, accumulated deferred income taxes, and other formula elements as needed. In October 2019 the LPSC filed rebuttal testimony increasing the amount of refunds sought for the liabilities associated with uncertain tax positions. The LPSC now seeks approximately $512 million, plus interest, which is approximately $170 million through March 31, 2020. The FERC trial staff also filed rebuttal testimony in which it seeks refunds of a similar amount as the LPSC for the liabilities associated with uncertain tax positions. The LPSC testimony also argued that adjustments to depreciation rates should affect rate base on a prospective basis only.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

System Energy is recovering an unjust acquisition premium through the lease renewal payments, and that System Energy’s recovery from customers through rates should be limited to the cost of service based on the remaining net book value of the leased assets, which is approximately $70 million. The ALJ found that the remedy for this issue should be the refund of lease payments (approximately $17.2 million per year since July 2015) with interest determined at the FERC quarterly interest rate, which would be offset by the addition of the net book value of the leased assets in the cost of service. The ALJ did not calculate a value for the refund expected as a result of this remedy. In addition, System Energy would no longer recover the lease payments in rates prospectively. Second, with regard to the liabilities associated with uncertain tax positions, the ALJ determined that the liabilities are accumulated deferred income taxes and that System Energy’s rate base should have been reduced for those liabilities. If the ALJ’s initial decision is upheld, the estimated refund for this issue through March 31, ~~2020,~~2021, is approximately ~~$397~~$422 million, plus interest, which is approximately ~~$96~~$115 million through March 31, ~~2020.~~2021. The ALJ also found that System Energy should include liabilities associated with uncertain tax positions as a rate base reduction going forward. Third, with regard to the depreciation expense adjustments, the ALJ found that System Energy should correct for the error in re-billings retroactively and prospectively, but that System Energy should not be permitted to recover interest on any retroactive return on enhanced rate base resulting from such corrections. If the initial decision is affirmed on this issue, System Energy estimates refunds of approximately ~~$18~~$19 million, which includes interest through March 31, ~~2020.~~2021.

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~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

~~exceptions are scheduled for September 2020.~~ The case is pending before the FERC, which will ~~then~~ review the case and issue an order on the proceeding, and the FERC may accept, reject, or modify the ALJ’s initial decision in whole or in part.Refunds, if any, that might be required will only become due after the FERC issues its order reviewing the initial decision.

Also as discussed in the Form 10-K, in November 2020 the IRS issued a Revenue Agent’s Report (RAR) for the 2014/2015 tax year and in December 2020 Entergy executed it. The RAR contained an adjustment to System Energy’s uncertain nuclear decommissioning tax position. As a result of the RAR, in December 2020, System Energy filed amendments to its new Federal Power Act section 205 filings to establish an ongoing rate base credit for the accumulated deferred income taxes resulting from the decommissioning uncertain tax position and to credit excess accumulated deferred income taxes arising from the successful portion of the decommissioning uncertain tax position. The amendments both propose the inclusion of the RAR as support for the filings. In December 2020 the LPSC, APSC, and City Council filed a protest in response to the amendments, reiterating their prior objections to the filings. In February 2021 the FERC issued an order accepting System Energy’s Federal Power Act section 205 filings subject to refund, setting them for hearing, and holding the hearing in abeyance.

In December 2020, System Energy filed a new Federal Power Act section 205 filing to provide a one-time, historical credit to customers of $25.2 million for the accumulated deferred income taxes that would have been created by the decommissioning uncertain tax position if the IRS’s decision had been known in 2016. In January 2021 the LPSC, APSC, MPSC, and City Council filed a protest to the filing. In February 2021, the FERC issued an order accepting System Energy’s Federal Power Act section 205 filing subject to refund, setting it for hearing, and holding the hearing in abeyance. The one-time credit was made during the first quarter 2021.

LPSC Authorization of Additional Complaints

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

respondents imprudently operated Grand Gulf during the period 2016-2020, and it seeks refunds of at least $360 million in alleged replacement energy costs, in addition to other costs, including those that can only be identified upon further investigation. Second, it alleges that the performance and/or management of the 2012 extended power uprate of Grand Gulf was imprudent, and it seeks refunds of all costs of the 2012 uprate that are determined to result from imprudent planning or management of the project. In addition to the requested refunds, the complaint asks that the FERC modify the Unit Power Sales Agreement to provide for full cost recovery only if certain performance indicators are met and to require pre-authorization of capital improvement projects in excess of $125 million before related costs may be passed through to customers in rates. In April 2021, System Energy and the other respondents filed their motion to dismiss and answer to the complaint. System Energy requested that the FERC dismiss the claims within the complaint. With respect to the claim concerning operations, System Energy argues that the complaint does not meet its legal burden because, among other reasons, it fails to allege any specific imprudent conduct. With respect to the claim concerning the uprate, System Energy argues that the complaint fails because, among other reasons, the complainants’ own conduct prevents them from raising a serious doubt as to the prudence of the uprate. System Energy also requests that the FERC dismiss other elements of the complaint, including the proposed modifications to the Unit Power Sales Agreement, because they are not warranted.

Storm Cost Recovery Filings with Retail Regulators

Entergy Louisiana

Hurricane Laura, Hurricane Delta, Hurricane Zeta, and Winter Storm Uri

In August 2020 and October 2020, Hurricane Laura, Hurricane Delta, and Hurricane Zeta caused significant damage to portions of Entergy Louisiana’s service area. The storms resulted in widespread outages, significant damage to distribution and transmission infrastructure, and the loss of sales during the outages. Additionally, as a result of Hurricane Laura’s extensive damage to the grid infrastructure serving the impacted area, large portions of the underlying transmission system required nearly a complete rebuild.

In October 2020, Entergy Louisiana filed an application at the LPSC seeking approval of certain ratemaking adjustments to facilitate issuance of shorter-term bonds to provide interim financing for restoration costs associated with Hurricane Laura, Hurricane Delta, and Hurricane Zeta. Subsequently, Entergy Louisiana and the LPSC staff filed a joint motion seeking approval to exclude from the derivation of Entergy Louisiana’s capital structure and cost rate of debt for ratemaking purposes, including the allowance for funds used during construction, shorter-term debt up to $1.1 billion issued by Entergy Louisiana to fund costs associated with Hurricane Laura, Hurricane Delta, and Hurricane Zeta costs on an interim basis. In November 2020 the LPSC issued an order approving the joint motion, and Entergy Louisiana issued $1.1 billion of 0.62% Series mortgage bonds due November 2023. Also in November 2020, Entergy Louisiana drew $257 million from its funded storm reserves.

In February 2021, two winter storms (collectively, Winter Storm Uri) brought freezing rain and ice to Louisiana. Ice accumulation sagged or downed trees, limbs and power lines, causing damage to Entergy Louisiana’s transmission and distribution systems. The additional weight of ice caused trees and limbs to fall into power lines and other electric equipment. When the ice melted, it affected vegetation and electrical equipment, causing incremental outages. As discussed above in “Fuel and purchased power recovery,” Entergy Louisiana is recovering the incremental fuel costs associated with Winter Storm Uri over a five-month period from April 2021 through August 2021.

In April 2021, Entergy Louisiana filed an application with the LPSC relating to Hurricane Laura, Hurricane Delta, Hurricane Zeta, and Winter Storm Uri restoration costs. Total restoration costs for the repair and/or replacement of Entergy Louisiana’s electric facilities damaged by the storms are currently estimated to be approximately $2.05 billion, including approximately $1.74 billion in capital costs and approximately $310 million in non-capital costs. Including carrying costs through January 2022, Entergy Louisiana is seeking an LPSC determination that $2.10 billion was prudently incurred and, therefore, is eligible for recovery from customers. Additionally, Entergy Louisiana is requesting that the LPSC determine that re-establishment of a storm escrow

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

account to the previously authorized amount of $290 million is appropriate. Entergy Louisiana intends to supplement this application with a request regarding the financing and recovery of the recoverable storm restoration costs.

Entergy New Orleans

Hurricane Zeta

In October 2020, Hurricane Zeta caused significant damage to Entergy New Orleans’s service area. The storm resulted in widespread power outages, significant damage to distribution and transmission infrastructure, and the loss of sales during the power outages. Total restoration costs for the repair and/or replacement of Entergy New Orleans’s electric facilities damaged by Hurricane Zeta are currently estimated to be approximately $36 million, including approximately $28 million in capital costs and approximately $8 million in non-capital costs. In March 2021, Entergy New Orleans withdrew $44 million from its funded storm reserves. Entergy New Orleans expects to initiate its storm cost recovery proceeding in May 2021.

Entergy Texas

Hurricane Laura, Hurricane Delta, and Winter Storm Uri

In August 2020 and October 2020, Hurricane Laura and Hurricane Delta caused extensive damage to Entergy Texas’s service area. In February 2021, Winter Storm Uri also caused damage to Entergy Texas’s service area. The storms resulted in widespread power outages, significant damage primarily to distribution and transmission infrastructure, and the loss of sales during the power outages. In April 2021, Entergy Texas filed an application with the PUCT requesting a determination that its system restoration costs associated with Hurricane Laura, Hurricane Delta, and Winter Storm Uri of approximately $250 million, including approximately $200 million in capital costs and approximately $50 million in non-capital costs were reasonable and necessary to enable Entergy Texas to restore electric service to its customers and Entergy Texas’s electric utility infrastructure. The filing currently includes only a portion of the Winter Storm Uri costs. Entergy Texas expects to initiate a proceeding later in 2021 to securitize the costs approved by the PUCT.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

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,
	2021			2020
	(In Millions, Except Per Share Data)
	Income	Shares	$/share	Income	Shares	$/share
Basic earnings per share
Net income attributable to Entergy Corporation	$334.6	200.5	$1.67	$118.7	199.8	$0.59
Average dilutive effect of:
Stock options		0.4	(0.01)		0.7	0
Other equity plans		0.2	0		0.4	0

Diluted earnings per share	$334.6	201.1	$1.66	$118.7	200.9	$0.59

For the Three Months Ended March 31,
2020 2019
(In Millions, Except Per Share Data)
Income Shares $/share Income Shares $/share
Basic earnings per share
Net income attributable to Entergy Corporation
$118.7
199.8

$0.59

$254.5
189.6

$1.34
Average dilutive effect of:
Stock options 0.7
—
0.4
—
Other equity plans 0.4
—
0.5
(0.01 )
Equity forwards —
—
1.7
(0.01 )
Diluted earnings per share
$118.7
200.9

$0.59

$254.5
192.2

$1.32

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 1.0 million for the three months ended March 31, 2021 and approximately 0.5 million for the three months ended March 31, ~~2020 and approximately 0.7 million for the three months ended March 31, 2019.~~2020.

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 $0.95 for the three months ended March 31, 2021 and $0.93 for the three months ended March 31, ~~2020 and $0.91 for the three months ended March 31, 2019.~~2020.

Treasury Stock

During the three months ended March 31, ~~2020,~~2021, Entergy Corporation issued ~~1,011,970~~388,330 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, ~~2020.~~2021.

Retained Earnings

On April ~~8, 2020,~~12, 2021, Entergy Corporation’s Board of Directors declared a common stock dividend of ~~$0.93~~$0.95 per share, payable on June 1, ~~2020,~~2021, to holders of record as of May ~~7, 2020.~~6, 2021.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

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, ~~2020~~2021 by component:


	Cash flow hedges net unrealized gain (loss)	Pension and other postretirement liabilities	Net unrealized investment gain (loss)	Total Accumulated Other Comprehensive Income (Loss)
	(In Thousands)
Beginning balance, January 1, 2021	$28,719	($534,576)	$56,650	($449,207)

Other comprehensive income (loss) before reclassifications	1,482	0	(45,301)	(43,819)
Amounts reclassified from accumulated other comprehensive income (loss)	(31,062)	22,967	614	(7,481)
Net other comprehensive income (loss) for the period	(29,580)	22,967	(44,687)	(51,300)

Ending balance, March 31, 2021	($861)	($511,609)	$11,963	($500,507)

Cash flow
hedges
net
unrealized
gain (loss)

Pension
and
other
postretirement
liabilities

Net
unrealized
investment
gain (loss)

Total
Accumulated
Other
Comprehensive
Income (Loss)
(In Thousands)
Beginning balance, December 31, 2019
$84,206

($557,072 )
$25,946

($446,920 )

Other comprehensive income (loss) before reclassifications 52,846
34,349
17,713
104,908
Amounts reclassified from accumulated other comprehensive income (loss) (74,556 ) 19,550
(1,969 ) (56,975 )
Net other comprehensive income (loss) for the period (21,710 ) 53,899
15,744
47,933

Ending balance, March 31, 2020
$62,496

($503,173 )
$41,690

($398,987 )

The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, ~~2019~~2020 by component:


	Cash flow hedges net unrealized gain (loss)	Pension and other postretirement liabilities	Net unrealized investment gain (loss)	Total Accumulated Other Comprehensive Income (Loss)
	(In Thousands)


Beginning balance, January 1, 2020	$84,206	($557,072)	$25,946	($446,920)

Other comprehensive income (loss) before reclassifications	52,846	34,349	17,713	104,908
Amounts reclassified from accumulated other comprehensive income (loss)	(74,556)	19,550	(1,969)	(56,975)
Net other comprehensive income (loss) for the period	(21,710)	53,899	15,744	47,933

Ending balance, March 31, 2020	$62,496	($503,173)	$41,690	($398,987)

Cash flow
hedges
net
unrealized
gain (loss)

Pension
and
other
postretirement
liabilities

Net
unrealized
investment
gain (loss)

Total
Accumulated
Other
Comprehensive
Income (Loss)
(In Thousands)
Ending balance, December 31, 2018
($23,135 )
($531,922 )
($2,116 )
($557,173 )
Implementation of accounting standards (7,685 ) —
879
(6,806 )
Beginning balance, January 1, 2019
($30,820 )
($531,922 )
($1,237 )
($563,979 )

Other comprehensive income (loss) before reclassifications 28,312
—
13,539
41,851
Amounts reclassified from accumulated other comprehensive income (loss) (40,738 ) 11,550
164
(29,024 )
Net other comprehensive income (loss) for the period (12,426 ) 11,550
13,703
12,827

Ending balance, March 31, 2019
($43,246 )
($520,372 )
$12,466

($551,152 )

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

The following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


	Pension and Other Postretirement Liabilities							Pension and Other Postretirement Liabilities
	2020			2019				2021	2020
	(In Thousands)							(In Thousands)
Beginning balance, January 1,		$4,562			($6,153	)	Beginning balance, January 1,	$4,327	$4,562

Other comprehensive income (loss) before reclassifications	10,050			—			Other comprehensive income (loss) before reclassifications	0	10,050
Amounts reclassified from accumulated other comprehensive income (loss)	(583		)	(969		)	Amounts reclassified from accumulated other comprehensive income (loss)	(407)	(583)
Net other comprehensive income (loss) for the period	9,467			(969		)	Net other comprehensive income (loss) for the period	(407)	9,467


Ending balance, March 31,		$14,029			($7,122	)	Ending balance, March 31,	$3,920	$14,029

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were as follows:


	Amounts reclassified from AOCI		Income Statement Location
	2021	2020
	(In Thousands)
Cash flow hedges net unrealized gain (loss)
Power contracts	$39,367	$94,423	Competitive business operating revenues
Interest rate swaps	(48)	(48)	Miscellaneous - net
Total realized gain (loss) on cash flow hedges	39,319	94,375
Income taxes	(8,257)	(19,819)	Income taxes
Total realized gain (loss) on cash flow hedges (net of tax)	$31,062	$74,556

Pension and other postretirement liabilities
Amortization of prior-service credit	$5,248	$3,719	(a)
Amortization of loss	(34,529)	(27,318)	(a)


Total amortization	(29,281)	(23,599)
Income taxes	6,314	4,049	Income taxes
Total amortization (net of tax)	($22,967)	($19,550)

Net unrealized investment gain (loss)
Realized gain (loss)	($972)	$3,116	Interest and investment income
Income taxes	358	(1,147)	Income taxes
Total realized investment gain (loss) (net of tax)	($614)	$1,969

Total reclassifications for the period (net of tax)	$7,481	$56,975

Amounts reclassified
from AOCI
Income Statement Location
2020 2019
(In Thousands)
Cash flow hedges net unrealized gain (loss)
   Power contracts
$94,423

$51,615
Competitive business operating revenues
   Interest rate swaps (48 ) (48 ) Miscellaneous - net
Total realized gain (loss) on cash flow hedges 94,375
51,567

Income taxes (19,819 ) (10,829 ) Income taxes
Total realized gain (loss) on cash flow hedges (net of tax)
$74,556

$40,738

Pension and other postretirement liabilities
   Amortization of prior-service credit
$3,719

$5,326
(a)
   Amortization of loss (27,318 ) (18,988 ) (a)
   Settlement loss —
(1,137 ) (a)
Total amortization (23,599 ) (14,799 )
Income taxes 4,049
3,249
Income taxes
Total amortization (net of tax)
($19,550 )
($11,550 )

Net unrealized investment gain (loss)
Realized gain (loss)
$3,116

($259 ) Interest and investment income
Income taxes (1,147 ) 95
Income taxes
Total realized investment gain (loss) (net of tax)
$1,969

($164 )

Total reclassifications for the period (net of tax)
$56,975

$29,024


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

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

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

details.

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy Louisiana for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were as follows:


	Amounts reclassified from AOCI		Income Statement Location
	2021	2020
	(In Thousands)
Pension and other postretirement liabilities
Amortization of prior-service credit	$1,230	$1,089	(a)
Amortization of loss	(679)	(301)	(a)

Total amortization	551	788
Income taxes	(144)	(205)	Income taxes
Total amortization (net of tax)	407	583

Total reclassifications for the period (net of tax)	$407	$583

Amounts reclassified
from AOCI Income Statement Location
2020 2019
(In Thousands)
Pension and other postretirement liabilities
Amortization of prior-service credit
$1,089

$1,838
(a)
Amortization of loss (301 ) (527 ) (a)
Total amortization 788
1,311

Income taxes (205 ) (342 ) Income taxes
Total amortization (net of tax) 583
969

Total reclassifications for the period (net of tax)
$583

$969

Instrument

~~Instrument~~

Income Statement
location

Amount of gain (loss)
recorded in the income statement

(In Millions)

~~2020~~2021

Natural gas swaps and options

Fuel, fuel-related expenses, and gas purchased for resale

(a)

~~($7)~~$7

Financial transmission rights

Purchased power expense

(b)

$13128

Electricity swaps and options (c)

Competitive business operating revenues

$—($2)

~~2019~~2020

Natural gas swaps

Fuel, fuel-related expenses, and gas purchased for resale

(a)

($1)7)

Financial transmission rights

Purchased power expense

(b)

$2113

Electricity swaps and options (c)

Competitive business operating revenues

$50

~~(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.


~~(c)~~	~~There were no gains (losses) recognized in accumulated other comprehensive income from electricity swaps and options.~~

(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.

~~Table of Contents~~(c)There were no gains (losses) recognized in accumulated other comprehensive income from electricity swaps and options.

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

The fair values of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their balance sheets as of March 31, ~~2020~~2021 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) Registrant
(In Millions)
Assets:
Natural gas swaps and options Prepayments and other $0.2 $— $0.2 Entergy Louisiana
Natural gas swaps and options Other deferred debits and other assets (non-current portion) $0.9 $— $0.9 Entergy Louisiana

Financial transmission rights Prepayments and other $1.1 $— $1.1 Entergy Arkansas
Financial transmission rights Prepayments and other $2.0 ($0.1) $1.9 Entergy Louisiana
Financial transmission rights Prepayments and other $0.3 $— $0.3 Entergy Mississippi
Financial transmission rights Prepayments and other $0.3 $— $0.3 Entergy Texas

Liabilities:
Natural gas swaps and options Other current liabilities $2.5 $— $2.5 Entergy Louisiana
Natural gas swaps and options Other non-current liabilities $2.3 $— $2.3 Entergy Louisiana
Natural gas swaps Other current liabilities $4.4 $— $4.4 Entergy Mississippi

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Entergy Corporation and Subsidiaries

Notes to Financial Statements


Instrument	Balance Sheet Location	Gross Fair Value (a)	Offsetting Position (b)	Net Fair Value (c) (d)	Registrant
		(In Millions)
Assets:
Natural gas swaps and options	Prepayments and other	$1.0	$0	$1.0	Entergy Louisiana
Natural gas swaps and options	Other deferred debits and other assets (non-current portion)	$0.4	$0	$0.4	Entergy Louisiana


Financial transmission rights	Prepayments and other	$1.5	($0.1)	$1.4	Entergy Arkansas
Financial transmission rights	Prepayments and other	$1.3	($0.1)	$1.2	Entergy Louisiana
Financial transmission rights	Prepayments and other	$0.3	$0	$0.3	Entergy Mississippi
Financial transmission rights	Prepayments and other	$0.1	$0	$0.1	Entergy New Orleans
Financial transmission rights	Prepayments and other	$0.5	$0	$0.5	Entergy Texas

Liabilities:

Natural gas swaps and options	Other non-current liabilities	$0.8	$0	$0.8	Entergy Louisiana
Natural gas swaps	Other current liabilities	$2.3	$0	$2.3	Entergy Mississippi

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

The fair values of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their balance sheets as of December 31, ~~2019~~2020 were as follows:


Instrument	Balance Sheet Location	Gross Fair Value (a)	Offsetting Position (b)	Net Fair Value (c) (d)	Registrant
		(In Millions)
Assets:
Natural gas swaps and options	Prepayments and other	$0.8	$0	$0.8	Entergy Louisiana
Natural gas swaps and options	Other deferred debits and other assets	$0.5	$0	$0.5	Entergy Louisiana


Financial transmission rights	Prepayments and other	$2.9	($0.2)	$2.7	Entergy Arkansas
Financial transmission rights	Prepayments and other	$4.3	($0.1)	$4.2	Entergy Louisiana
Financial transmission rights	Prepayments and other	$0.6	$0	$0.6	Entergy Mississippi
Financial transmission rights	Prepayments and other	$0.2	($0.1)	$0.1	Entergy New Orleans
Financial transmission rights	Prepayments and other	$1.6	$0	$1.6	Entergy Texas

Liabilities:


Natural gas swaps and options	Other current liabilities	$0.3	$0	$0.3	Entergy Louisiana
Natural gas swaps and options	Other non-current liabilities	$1.3	$0	$1.3	Entergy Louisiana
Natural gas swaps	Other current liabilities	$5.0	$0	$5.0	Entergy Mississippi
Natural gas swaps	Other current liabilities	$0.3	$0	$0.3	Entergy New Orleans

Instrument Balance Sheet Location Gross Fair Value (a) Offsetting Position (b) Net Fair Value (c) (d) Registrant
(In Millions)
Assets:
Natural gas swaps and options Other deferred debits and other assets $0.8 $— $0.8 Entergy Louisiana
Financial transmission rights Prepayments and other $3.4 ($0.1) $3.3 Entergy Arkansas
Financial transmission rights Prepayments and other $4.5 $— $4.5 Entergy Louisiana
Financial transmission rights Prepayments and other $0.8 $— $0.8 Entergy Mississippi
Financial transmission rights Prepayments and other $0.3 $— $0.3 Entergy New Orleans
Financial transmission rights Prepayments and other $1.0 ($0.1) $0.9 Entergy Texas

Liabilities:
Natural gas swaps and options Other current liabilities $2.4 $— $2.4 Entergy Louisiana
Natural gas swaps and options Other non-current liabilities $2.2 $— $2.2 Entergy Louisiana
Natural gas swaps Other current liabilities $2.3 $— $2.3 Entergy Mississippi
Natural gas swaps Other current liabilities $0.2 $— $0.2 Entergy New Orleans


~~(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 Registrant Subsidiaries’ balance sheets~~


~~(d)~~	As of March 31, 2020, letters of credit posted with MISO covered financial transmission rights exposure of $0.2 million for Entergy Mississippi. As of December 31, 2019, letters of credit posted with MISO covered financial transmission rights exposure of $0.2 million for Entergy Mississippi.

(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 Registrant Subsidiaries’ balance sheets

(d)As of March 31, 2021, letters of credit posted with MISO covered financial transmission rights exposure of $0.4 million for Entergy Arkansas, $0.2 million for Entergy Louisiana, $0.4 million for Entergy Mississippi, and $0.1 million for Entergy New Orleans. As of December 31, 2020, letters of credit posted with MISO covered financial transmission rights exposure of $0.3 million for Entergy Louisiana, $0.2 million for Entergy Mississippi, $0.2 million for Entergy New Orleans, and $0.5 million for Entergy Texas.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The effects of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their income statements for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were as follows:

Instrument

Income Statement Location

Amount of gain
(loss) recorded
in the income statement

Registrant

(In Millions)

2021

Natural gas swaps and options

Fuel, fuel-related expenses, and gas purchased for resale

$1.8

(a)

Entergy Louisiana

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

($0.1)

(a)

Entergy New Orleans

Financial transmission rights

Purchased power expense

$26.1

(b)

Entergy Arkansas

Financial transmission rights

Purchased power expense

$12.3

(b)

Entergy Louisiana

Financial transmission rights

Purchased power expense

$7.2

(b)

Entergy Mississippi

Financial transmission rights

Purchased power expense

$1.3

(b)

Entergy New Orleans

Financial transmission rights

Purchased power expense

$77.9

(b)

Entergy Texas

~~Instrument~~2020

~~Income Statement Location~~

Amount of gain
(loss) recorded
in the income statement

~~Registrant~~

~~(In Millions)~~

~~2020~~

Natural gas swaps and options

Fuel, fuel-related expenses, and gas purchased for resale

($1.3)

(a)

Entergy Louisiana

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

($0.4)

(a)

Entergy New Orleans

~~Financial transmission rights~~

~~Purchased power expense~~

~~$4.6~~

~~(b)~~

~~Entergy Arkansas~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~$5.3~~

~~(b)~~

~~Entergy Louisiana~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~($0.1)~~

~~(b)~~

~~Entergy Mississippi~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~$0.4~~

~~(b)~~

~~Entergy New Orleans~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~$2.4~~

~~(b)~~

~~Entergy Texas~~

~~2019~~

~~Natural gas swaps and options~~

~~Fuel, fuel-related expenses, and gas purchased for resale~~

~~$0.8~~

~~(a)~~

~~Entergy Louisiana~~

~~Natural gas swaps~~

~~Fuel, fuel-related expenses, and gas purchased for resale~~

~~($1.8)~~

~~(a)~~

~~Entergy Mississippi~~

~~Natural gas swaps~~

~~Fuel, fuel-related expenses, and gas purchased for resale~~

~~$0.2~~

~~(a)~~

~~Entergy New Orleans~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~$8.4~~

~~(b)~~

~~Entergy Arkansas~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~$8.8~~

~~(b)~~

~~Entergy Louisiana~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~$1.1~~

~~(b)~~

~~Entergy Mississippi~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~$1.9~~

~~(b)~~

~~Entergy New Orleans~~

~~Financial transmission rights~~

~~Purchased power expense~~

~~$0.3~~

~~(b)~~

~~Entergy Texas~~


~~(a)~~Financial transmission rights			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.

Purchased power expense

$4.6

(b)

Entergy Arkansas

~~(b)~~

~~Due to regulatory treatment, the changes in the estimated fair value of financial~~Financial transmission rights ~~for the Utility operating companies are recorded through purchased~~

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~~

$5.3

(b)

Entergy Louisiana

Financial transmission rights

Purchased power expense ~~when the financial~~

($0.1)

(b)

Entergy Mississippi

Financial transmission rights ~~for the Utility operating companies are settled are recovered or refunded through fuel cost recovery mechanisms.~~

Purchased power expense

$0.4

(b)

Entergy New Orleans

Financial transmission rights

Purchased power expense

$2.4

(b)

Entergy Texas

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

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 other than those instruments held by the Entergy Wholesale Commodities business 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.~~

–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 and derivative power contracts used as cash flow hedges of power sales at merchant power plants.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

The values for power contract assets or liabilities are based on both observable inputs including public market prices and interest rates, and unobservable inputs such as implied volatilities, unit contingent discounts, expected basis differences, and credit adjusted counterparty interest rates. 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 and the Entergy Wholesale Commodities Accounting group. The primary related functions of the Office of Corporate Risk Oversight include: gathering, validating and reporting market data, providing market risk analyses and valuations in support of Entergy Wholesale Commodities’ commercial transactions, developing and administering protocols for the management of market risks, and implementing and maintaining controls around changes to market data in the energy trading and risk management system. The Office of Corporate Risk Oversight is also responsible for managing the energy trading and risk management system, forecasting revenues, forward positions and analysis. The Entergy Wholesale Commodities Accounting group performs functions related to market and counterparty settlements, revenue reporting and analysis, and financial accounting. The Office of Corporate Risk Oversight reports to the Vice President and Treasurer while the Entergy Wholesale Commodities Accounting group reports to the Chief Accounting Officer.

The amounts reflected as the fair value of electricity swaps are based on the estimated amount that the contracts are in-the-money at the balance sheet date (treated as an asset) or out-of-the-money at the balance sheet date (treated as a liability) and would equal the estimated amount receivable to or payable by Entergy if the contracts were settled at that date. These derivative contracts include cash flow hedges that swap fixed for floating cash flows for sales of the output from the Entergy Wholesale Commodities business. The fair values are based on the mark-to-market comparison between the fixed contract prices and the floating prices determined each period from quoted forward power market prices. The differences between the fixed price in the swap contract and these market-related prices multiplied by the volume specified in the contract and discounted at the counterparties’ credit adjusted risk free rate are recorded as derivative contract assets or liabilities. For contracts that have unit contingent terms, a further discount is applied based on the historical relationship between contract and market prices for similar contract terms.

The amounts reflected as the fair values of electricity options are valued based on a Black Scholes model, and are calculated at the end of each month for accounting purposes. Inputs to the valuation include end of day forward market prices for the period when the transactions will settle, implied volatilities based on market volatilities provided by a third-party data aggregator, and U.S. Treasury rates for a risk-free return rate. As described further below, prices and implied volatilities are reviewed and can be adjusted if it is determined that there is a better representation of fair value.

On a daily basis, the Office of Corporate Risk Oversight calculates the mark-to-market for electricity swaps and options. The ~~Business Unit~~Office of Corporate Risk ~~Control group~~Oversight also validates forward market prices by comparing them to other sources of forward market prices or to settlement prices of actual market transactions. Significant differences are analyzed and potentially adjusted based on these other sources of forward market prices or settlement prices of actual market transactions. Implied volatilities used to value options are also validated using actual counterparty quotes for Entergy Wholesale Commodities transactions when available and compared with other sources of market implied volatilities. Moreover, on a quarterly basis, the Office of Corporate Risk Oversight confirms the mark-to-market calculations and prepares price scenarios and credit downgrade scenario analysis. The scenario analysis is communicated to senior management within Entergy and within Entergy Wholesale Commodities. Finally, for all proposed derivative transactions, an analysis is completed to assess the risk of adding the proposed derivative to Entergy Wholesale Commodities’ portfolio. In particular, the credit and liquidity effects are calculated for this analysis. This analysis is communicated to senior management within Entergy and Entergy Wholesale Commodities.

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

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

are performed by the Office of Corporate Risk Oversight. The values are calculated internally and verified against the data published by MISO. Entergy’s Entergy Wholesale Commodities Accounting group review these valuations for reasonableness, with the assistance of others within the organization with knowledge of the various inputs and assumptions used in the

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

valuation. The Office of Corporate Risk Oversight reports to the Vice President and Treasurer. The Entergy Wholesale Commodities 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 were accounted for at fair value on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019.~~2020. The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels.


2021	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$1,675	$0	$0	$1,675

Decommissioning trust funds (a):
Equity securities	807	0	0	807
Debt securities (b)	1,489	1,947	0	3,436
Common trusts (c)				3,102

Securitization recovery trust account	44	0	0	44
Escrow accounts	103	0	0	103
Gas hedge contracts	1	0	0	1
Financial transmission rights	0	0	4	4
	$4,119	$1,947	$4	$9,172

Liabilities:

Gas hedge contracts	$2	$1	$0	$3

2020 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$1,180

$—

$—

$1,180
Decommissioning trust funds (a):
Equity securities 745
—
—
745
Debt securities (b) 1,151
1,893
—
3,044
Common trusts (c) 1,992
Power contracts —
—
85
85
Securitization recovery trust account 47
—
—
47
Escrow accounts 420
—
—
420
Gas hedge contracts —
1
—
1
Financial transmission rights —
—
4
4

$3,543

$1,894

$89

$7,518

Liabilities:
Gas hedge contracts
$7

$2

$—

$9

2019 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$391

$—

$—

$391
Decommissioning trust funds (a):
Equity securities 905
—
—
905
Debt securities 1,139
1,824
—
2,963
Common trusts (c) 2,536
Power contracts —
—
118
118
Securitization recovery trust account 47
—
—
47
Escrow accounts 459
—
—
459
Gas hedge contracts —
1
—
1
Financial transmission rights —
—
10
10

$2,941

$1,825

$128

$7,430
Liabilities:
Gas hedge contracts
$5

$2

$—

$7


2020	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$1,630	$0	$0	$1,630
Decommissioning trust funds (a):
Equity securities	1,533	0	0	1,533
Debt securities (b)	919	1,698	0	2,617
Common trusts (c)				3,103
Power contracts	0	0	38	38
Securitization recovery trust account	42	0	0	42
Escrow accounts	148	0	0	148
Gas hedge contracts	1	1	0	2
Financial transmission rights	0	0	9	9
	$4,273	$1,699	$47	$9,122
Liabilities:

Gas hedge contracts	$6	$1	$0	$7


~~(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)~~	The decommissioning trust funds fair value presented herein does not include the recognition of a credit loss valuation allowance of $3 million on debt securities due to the adoption of ASU 2016-13. See Note 9 to the financial statements herein for additional information on the allowance for expected credit losses.

(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.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

(b)The decommissioning trust funds fair values presented herein do not include the recognition of a credit loss valuation allowance of $6.4 million as of March 31, 2021 and $0.1 million as of December 31, 2020 on debt securities due to the adoption of ASU 2016-13. See Note 9 to the financial statements herein for additional information on the allowance for expected credit losses.

(c)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.

~~(c)~~

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 (liabilities) for the fair value of derivatives classified as Level 3 in the fair value hierarchy for the three months ended March 31, ~~2020~~2021 and ~~2019:~~2020:


	2021		2020
	Power Contracts	Financial transmission rights	Power Contracts	Financial transmission rights
	(In Millions)
Balance as of January 1,	$38	$9	$118	$10
Total gains (losses) for the period (a)
Included in earnings	(2)	4	(18)	0
Included in other comprehensive income	2	0	67	0
Included as a regulatory liability/asset	0	119	0	7


Settlements	(38)	(128)	(82)	(13)
Balance as of March 31,	$0	$4	$85	$4

2020 2019
Power Contracts Financial transmission rights Power Contracts Financial transmission rights

(In Millions)
Balance as of January 1,
$118

$10

($31 )
$15
Total gains (losses) for the period (a)
Included in earnings (18 ) —
5
—
Included in other comprehensive income 67
—
26
—
Included as a regulatory liability/asset —
7
—
11
Settlements (82 ) (13 ) (46 ) (21 )
Balance as of March 31,
$85

$4

($46 )
$5

(a)


~~(a)~~	Change in unrealized gains or losses for the period included in earnings for derivatives held at the end ~~of the reporting period was $1 million for the three months ended March 31, 2020 and ($4.9) million for the three months ended March 31, 2019.~~

~~The~~ ~~following~~ ~~table sets forth a description~~ of the ~~types of transactions classified as Level 3 in~~reporting period was $0.7 million for the ~~fair value hierarchy and significant unobservable inputs to each which cause that classification as of~~three months ended March 31, ~~2020:~~2021 and $1 million for the three months ended March 31, 2020.

Transaction Type Fair Value
Significant
Unobservable Inputs

Range
from
Average
%

Effect on
Fair Value
(In Millions) (In Millions)
Power contracts - electricity swaps $85 Unit contingent discount +/- 4.75% $9

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 table sets forth an analysis of each of the types of unobservable inputs impacting the fair value of items classified as Level 3 within the fair value hierarchy, and the sensitivity to changes to those inputs:

Significant
Unobservable
Input

Transaction Type

Position

Change to Input

Effect on
Fair Value

Unit contingent discount

Electricity swaps

Sell

Increase (Decrease)

Decrease (Increase)

~~Significant~~

~~Unobservable~~

~~Input~~

~~Transaction Type~~

~~Position~~

~~Change to Input~~

~~Effect on~~

~~Fair Value~~

~~Unit contingent discount~~

~~Electricity swaps~~

~~Sell~~

~~Increase (Decrease)~~

~~Decrease (Increase)~~

The following table sets forth, by level within the fair value hierarchy, the Registrant Subsidiaries’ assets and liabilities that were accounted for at fair value on a recurring basis as of March 31, ~~2020~~2021 and December 31, ~~2019.~~2020. The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels.

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

Entergy Arkansas


2021	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$123.7	$0	$0	$123.7
Decommissioning trust funds (a):
Equity securities	53.3	0	0	53.3
Debt securities	89.9	336.0	0	425.9
Common trusts (b)				831.9


Financial transmission rights	0	0	1.4	1.4
	$266.9	$336.0	$1.4	$1,436.2

2020 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$136.9

$—

$—

$136.9
Decommissioning trust funds (a):
Equity securities 14.4
—
—
14.4
Debt securities 107.2
310.6
—
417.8
Common trusts (b) 541.8
Securitization recovery trust account 7.5
—
—
7.5
Financial transmission rights —
—
1.1
1.1

$266.0

$310.6

$1.1

$1,119.5

2019 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Decommissioning trust funds (a):
Equity securities
$0.6

$—

$—

$0.6
Debt securities 108.7
304.1
—
412.8
Common trusts (b) 687.9
Securitization recovery trust account 4.0
—
—
4.0
Financial transmission rights —
—
3.3
3.3

$113.3

$304.1

$3.3

$1,108.6


2020	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$168.0	$0	$0	$168.0
Decommissioning trust funds (a):
Equity securities	1.3	0	0	1.3
Debt securities	98.2	349.7	0	447.9
Common trusts (b)				824.7


Financial transmission rights	0	0	2.7	2.7
	$267.5	$349.7	$2.7	$1,444.6

Entergy Louisiana


2021	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$601.6	$0	$0	$601.6

Decommissioning trust funds (a):
Equity securities	68.8	0	0	68.8
Debt securities	218.9	413.9	0	632.8
Common trusts (b)				1,177.7

Securitization recovery trust account	8.8	0	0	8.8
Gas hedge contracts	1.0	0.4	0	1.4
Financial transmission rights	0	0	1.2	1.2
	$899.1	$414.3	$1.2	$2,492.3

Liabilities:
Gas hedge contracts	$0	$0.8	$0	$0.8

2020 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$465.2

$—

$—

$465.2
Decommissioning trust funds (a):
Equity securities 15.7
—
—
15.7
Debt securities 171.1
431.9
—
603.0
Common trusts (b) 759.2
Escrow accounts 256.4
—
—
256.4
Securitization recovery trust account 9.0
—
—
9.0
Gas hedge contracts 0.2
0.9
—
1.1
Financial transmission rights —
—
1.9
1.9

$917.6

$432.8

$1.9

$2,111.5

Liabilities:
Gas hedge contracts
$2.5

$2.3

$—

$4.8

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements


2020	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$726.7	$0	$0	$726.7
Decommissioning trust funds (a):
Equity securities	8.7	0	0	8.7
Debt securities	172.4	459.8	0	632.2
Common trusts (b)				1,153.1

Securitization recovery trust account	2.7	0	0	2.7
Gas hedge contracts	0.8	0.5	0	1.3
Financial transmission rights	0	0	4.2	4.2
	$911.3	$460.3	$4.2	$2,528.9

Liabilities:
Gas hedge contracts	$0.3	$1.3	$0	$1.6

2019 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$1.5

$—

$—

$1.5
Decommissioning trust funds (a):

Equity securities 4.3
—
—
4.3
Debt securities 180.8
420.7
—
601.5
Common trusts (b) 958.0
Escrow accounts 295.9
—
—
295.9
Securitization recovery trust account 3.7
—
—
3.7
Gas hedge contracts —
0.8
—
0.8
Financial transmission rights —
—
4.5
4.5

$486.2

$421.5

$4.5

$1,870.2

Liabilities:
Gas hedge contracts
$2.4

$2.2

$—

$4.6

Entergy Mississippi


2021	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$76.7	$0	$0	$76.7
Escrow accounts	64.6	0	0	64.6

Financial transmission rights	0	0	0.3	0.3
	$141.3	$0	$0.3	$141.6

Liabilities:
Gas hedge contracts	$2.3	$0	$0	$2.3

2020 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Escrow accounts
$80.3

$—

$—

$80.3
Financial transmission rights —
—
0.3
0.3

$80.3

$—

$0.3

$80.6

Liabilities:
Gas hedge contracts
$4.4

$—

$—

$4.4

2019 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$51.6

$—

$—

$51.6
Escrow accounts 80.2
—
—
80.2
Financial transmission rights —
—
0.8
0.8

$131.8

$—

$0.8

$132.6

Liabilities:
Gas hedge contracts
$2.3

$—

$—

$2.3


2020	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:

Escrow accounts	$64.6	$0	$0	$64.6

Financial transmission rights	0	0	0.6	0.6
	$64.6	$0	$0.6	$65.2

Liabilities:
Gas hedge contracts	$5.0	$0	$0	$5.0

Entergy New Orleans

2020 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$72.3

$—

$—

$72.3
Securitization recovery trust account 4.9
—
—
4.9
Escrow accounts 82.9
—
—
82.9

$160.1

$—

$—

$160.1


2021	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:

Securitization recovery trust account	$6.8	$0	$0	$6.8
Escrow accounts	38.8	0	0	38.8
Financial transmission rights	0	0	0.1	0.1
	$45.6	$0	$0.1	$45.7

Table of Contents

Entergy Corporation and Subsidiaries

Notes to Financial Statements

2019 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$6.0

$—

$—

$6.0
Securitization recovery trust account 2.0
—
—
2.0
Escrow accounts 82.6
—
—
82.6
Financial transmission rights —
—
0.3
0.3

$90.6

$—

$0.3

$90.9

Liabilities:
Gas hedge contracts
$0.2

$—

$—

$0.2


2020	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:

Securitization recovery trust account	$3.4	$0	$0	$3.4
Escrow accounts	83.0	0	0	83.0

Financial transmission rights	0	0	0.1	0.1
	$86.4	$0	$0.1	$86.5

Liabilities:
Gas hedge contracts	$0.3	$0	$0	$0.3

Entergy Texas


2021	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:

Securitization recovery trust account	$28.1	$0	$0	$28.1
Financial transmission rights	0	0	0.5	0.5
	$28.1	$0	$0.5	$28.6

2020 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:

Temporary cash investments
$159.7

$—

$—

$159.7
Securitization recovery trust account 26.1
—
—
26.1
Financial transmission rights —
—
0.3
0.3

$185.8

$—

$0.3

$186.1

2019 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:

Temporary cash investments
$12.9

$—

$—

$12.9
Securitization recovery trust account 37.7
—
—
37.7
Financial transmission rights —
—
0.9
0.9

$50.6

$—

$0.9

$51.5


2020	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$248.6	$0	$0	$248.6
Securitization recovery trust account	36.2	0	0	36.2
Financial transmission rights	0	0	1.6	1.6
	$284.8	$0	$1.6	$286.4

~~System Energy~~

2020 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$92.3

$—

$—

$92.3
Decommissioning trust funds (a):
Equity securities 4.9
—
—
4.9
Debt Securities 185.1
222.9
—
408.0
Common trusts (b) 515.5

$282.3

$222.9

$—

$1,020.7

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

2019 Level 1 Level 2 Level 3 Total
(In Millions)
Assets:
Temporary cash investments
$68.4

$—

$—

$68.4
Decommissioning trust funds (a):
Equity securities 13.3
—
—
13.3
Debt securities 176.3
209.9
—
386.2
Common trusts (b) 654.6

$258.0

$209.9

$—

$1,122.5


~~(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.

Entergy
Arkansas

Entergy
Louisiana

Entergy
Mississippi

Entergy
New
Orleans

Entergy
Texas
(In Millions)
Balance as of January 1,
$3.3

$4.5

$0.8

$0.3

$0.9
Gains (losses) included as a regulatory liability/asset 2.4
2.7
(0.6 ) 0.1
1.8
Settlements (4.6 ) (5.3 ) 0.1
(0.4 ) (2.4 )
Balance as of March 31,
$1.1

$1.9

$0.3

$—

$0.3

Entergy
Arkansas

Entergy
Louisiana

Entergy
Mississippi

Entergy
New
Orleans

Entergy
Texas
(In Millions)
Balance as of January 1,
$3.4

$8.3

$2.2

$1.3

($0.5 )
Gains (losses) included as a regulatory liability/asset 6.1
3.3
(0.4 ) 1.1
0.5
Settlements (8.4 ) (8.8 ) (1.1 ) (1.9 ) (0.3 )
Balance as of March 31,
$1.1

$2.8

$0.7

$0.5

($0.3 )

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

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

The NRC requires Entergy subsidiaries to maintain nuclear decommissioning trusts to fund the costs of decommissioning ANO 1, ANO 2, River Bend, Waterford 3, Grand Gulf, Indian Point 1, Indian Point 2, Indian Point 3, and Palisades. 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, the Registrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities 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. Decommissioning trust funds for the Entergy Wholesale Commodities nuclear plants do not meet the criteria for regulatory accounting treatment. Accordingly, unrealized gains/(losses) recorded on the equity securities in the trust funds are recognized in earnings. Unrealized gains recorded on the available-for-sale debt securities in the trust funds are recognized in the accumulated other comprehensive income component of shareholders’ equity. Unrealized losses (where cost exceeds fair market value) on the available-for-sale debt securities in the trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other than temporary and therefore recorded in earnings. A portion of Entergy’s decommissioning trust funds are held in a wholly-owned registered investment company, and unrealized gains and losses on both the equity and debt securities held in the registered investment company are recognized in earnings. 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, 2020 on equity securities still held as of March 31, 2020 were ($636) 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.

~~The available-for-sale securities held as of March 31, 2020 and December 31, 2019 are summarized as follows:~~

Fair
Value

Total
Unrealized
Gains

Total
Unrealized
Losses
(In Millions)
2020
Debt Securities (a)
$2,523

$158

$16

2019
Debt Securities (a)
$2,456

$96

$6


~~(a)~~	Debt securities presented herein do not include the $521 million and $507 million of debt securities held in the wholly-owned registered investment company as of March 31, 2020 and December 31, 2019, respectively, which are not accounted for as available-for-sale.

The unrealized gains/(losses) above are reported before deferred taxes of $22 million as of March 31, 2020 and $13 million as of December 31, 2019 for debt securities. The amortized cost of available-for-sale debt securities was $2,382 million as of March 31, 2020 and $2,366 million as of December 31, 2019. As of March 31, 2020, available-

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

~~for-sale debt securities had an average coupon rate of approximately 3.23%, an average duration of approximately 6.73 years, and an average maturity of approximately 10.47 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, 2020 and December 31, 2019:

March 31, 2020 December 31, 2019

Fair
Value

Gross
Unrealized
Losses

Fair
Value

Gross
Unrealized
Losses
(In Millions)
Less than 12 months
$411

$16

$404

$5
More than 12 months 5
—
38
1
Total
$416

$16

$442

$6

~~The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2020 and December 31, 2019 were as follows:~~

2020 2019
(In Millions)
Less than 1 year
$84

$128
1 year - 5 years 798
807
5 years - 10 years 686
666
10 years - 15 years 226
125
15 years - 20 years 129
126
20 years+ 600
604
Total
$2,523

$2,456

During the three months ended March 31, 2020 and 2019, proceeds from the dispositions of available-for-sale securities amounted to $400 million and $365 million, respectively. During the three months ended March 31, 2020 and 2019, gross gains of $14 million and $2 million, respectively, and gross losses of $3 million and $2 million, respectively, related to available-for-sale securities were reclassified out of other comprehensive income or other regulatory liabilities/assets into earnings.

The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of March 31, 2020 were $506 million for Indian Point 1, $644 million for Indian Point 2, $858 million for Indian Point 3, and $493 million for Palisades. The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2019 were $556 million for Indian Point 1, $701 million for Indian Point 2, $930 million for Indian Point 3, and $498 million for Palisades. The fair values of the decommissioning trust funds for the Registrant Subsidiaries’ nuclear plants are detailed below.

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

~~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, 2020 and December 31, 2019 are summarized as follows:

Fair
Value

Total
Unrealized
Gains

Total
Unrealized
Losses
(In Millions)
2020
Debt Securities
$417.8

$20.4

$1.4

2019
Debt Securities
$412.8

$9.9

$2.6

The amortized cost of available-for-sale debt securities was $398.9 million as of March 31, 2020 and $405.4 million as of December 31, 2019. As of March 31, 2020, available-for-sale debt securities had an average coupon rate of approximately 2.73%, an average duration of approximately 6.87 years, and an average maturity of approximately 8.36 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2020 on equity securities still held as of March 31, 2020 were ($147.1) 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.

March 31, 2020 December 31, 2019

Fair
Value

Gross
Unrealized
Losses

Fair
Value

Gross
Unrealized
Losses
(In Millions)
Less than 12 months
$60.2

$1.4

$104.8

$2.5
More than 12 months —
—
7.7
0.1
Total
$60.2

$1.4

$112.5

$2.6

~~The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2020 and December 31, 2019 were as follows:~~

2020 2019
(In Millions)
Less than 1 year
$34.4

$44.1
1 year - 5 years 108.2
109.1
5 years - 10 years 163.0
156.0
10 years - 15 years 43.8
31.3
15 years - 20 years 27.7
23.8
20 years+ 40.7
48.5
Total
$417.8

$412.8

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

~~During the three months ended~~March 31, 2020 and 2019, proceeds from the dispositions of available-for-sale securities amounted to $48.6 million and $10.9 million, respectively. During the three months ended March 31, 2020 and 2019, gross gains of $4.5 million and $0.02 million, respectively, and gross losses of $0.2 million and $0.1 million, respectively, related to available-for-sale securities were 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, 2020 and December 31, 2019 are summarized as follows:

Fair
Value

Total
Unrealized
Gains

Total
Unrealized
Losses
(In Millions)
2020
Debt Securities
$603.0

$38.5

$3.9

2019
Debt Securities
$601.5

$29.3

$0.8

The amortized cost of available-for-sale debt securities was $568.4 million as of March 31, 2020 and $573 million as of December 31, 2019. As of March 31, 2020, the available-for-sale debt securities had an average coupon rate of approximately 3.87%, an average duration of approximately 6.85 years, and an average maturity of approximately 13.38 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2020 on equity securities still held as of March 31, 2020 were ($200.8) 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.

March 31, 2020 December 31, 2019

Fair
Value

Gross
Unrealized
Losses

Fair
Value

Gross
Unrealized
Losses
(In Millions)
Less than 12 months
$95.2

$3.9

$71.2

$0.8
More than 12 months 0.8
—
7.9
—
Total
$96.0

$3.9

$79.1

$0.8

~~Table of Contents~~

~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

~~The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2020 and December 31, 2019 were as follows:~~

2020 2019
(In Millions)
Less than 1 year
$10.4

$40.7
1 year - 5 years 143.3
142.0
5 years - 10 years 133.8
132.4
10 years - 15 years 62.2
39.8
15 years - 20 years 54.6
49.2
20 years+ 198.7
197.4
Total
$603.0

$601.5

During the three months ended March 31, 2020 and 2019, proceeds from the dispositions of available-for-sale securities amounted to $67.4 million and $56.2 million, respectively. During the three months ended March 31, 2020 and 2019, gross gains of $2.9 million and $0.3 million, respectively, and gross losses of $0.6 million and $0.2 million, respectively, related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.

System Energy


2021	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$132.1	$0	$0	$132.1
Decommissioning trust funds (a):
Equity securities	60.6	0	0	60.6
Debt Securities	179.4	227.0	0	406.4
Common trusts (b)				782.8
	$372.1	$227.0	$0	$1,381.9

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Entergy Corporation and Subsidiaries

Notes to Financial Statements


2020	Level 1	Level 2	Level 3	Total
	(In Millions)
Assets:
Temporary cash investments	$216.4	$0	$0	$216.4
Decommissioning trust funds (a):
Equity securities	3.8	0	0	3.8
Debt securities	177.3	250.4	0	427.7
Common trusts (b)				784.4
	$397.5	$250.4	$0	$1,432.3

(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.


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Millions)
Balance as of January 1,	$2.7	$4.2	$0.6	$0.1	$1.6

Gains (losses) included as a regulatory liability/asset	24.8	9.3	6.9	1.2	76.8
Settlements	(26.1)	(12.3)	(7.2)	(1.2)	(77.9)
Balance as of March 31,	$1.4	$1.2	$0.3	$0.1	$0.5


	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Millions)
Balance as of January 1,	$3.3	$4.5	$0.8	$0.3	$0.9

Gains (losses) included as a regulatory liability/asset	2.4	2.7	(0.6)	0.1	1.8
Settlements	(4.6)	(5.3)	0.1	(0.4)	(2.4)
Balance as of March 31,	$1.1	$1.9	$0.3	$0	$0.3

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

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

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, the Registrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities 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. Decommissioning trust funds for the Entergy Wholesale Commodities nuclear plants do not meet the criteria for regulatory accounting treatment. Accordingly, unrealized gains/(losses) recorded on the equity securities in the trust funds are recognized in earnings. Unrealized gains recorded on the available-for-sale debt securities in the trust funds are recognized in the accumulated other comprehensive income component of shareholders’ equity. Unrealized losses (where cost exceeds fair market value) on the available-for-sale debt securities in the trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other than temporary and therefore recorded in earnings. A portion of Entergy’s decommissioning trust funds were held in a wholly-owned registered investment company, and unrealized gains and losses on both the equity and debt securities held in the registered investment company were recognized in earnings. 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, 2021 on equity securities still held as of March 31, 2021 were $200 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.

The available-for-sale securities held as of March 31, 2021 and December 31, 2020 are summarized as follows:


	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2021
Debt Securities	$3,436	$102	$43

2020
Debt Securities	$2,617	$197	$3

The unrealized gains/(losses) above are reported before deferred taxes of $5 million as of March 31, 2021 and $31 million as of December 31, 2020 for debt securities. The amortized cost of available-for-sale debt securities was $3,376 million as of March 31, 2021 and $2,423 million as of December 31, 2020. As of March 31, 2021, available-for-sale debt securities had an average coupon rate of approximately 2.59%, an average duration of approximately 5.98 years, and an average maturity of approximately 8.45 years.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements


	March 31, 2021		December 31, 2020
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)
Less than 12 months	$1,748	$43	$187	$3
More than 12 months	3	0	2	0
Total	$1,751	$43	$189	$3

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2021 and December 31, 2020 were as follows:


	2021	2020
	(In Millions)
Less than 1 year	$0	($4)
1 year - 5 years	1,027	672
5 years - 10 years	1,257	852
10 years - 15 years	492	377
15 years - 20 years	128	144
20 years+	532	576
Total	$3,436	$2,617

During the three months ended March 31, 2021 and 2020, proceeds from the dispositions of available-for-sale securities amounted to $524 million and $400 million, respectively. During the three months ended March 31, 2021 and 2020, gross gains of $11 million and $14 million, respectively, and gross losses of $11 million and $3 million, respectively, related to available-for-sale securities were reclassified out of other comprehensive income or other regulatory liabilities/assets into earnings.

The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of March 31, 2021 were $631 million for Indian Point 1, $760 million for Indian Point 2, $970 million for Indian Point 3, and $545 million for Palisades. The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2020 were $631 million for Indian Point 1, $794 million for Indian Point 2, $991 million for Indian Point 3, and $554 million for Palisades. The fair values of the decommissioning trust funds for the Registrant Subsidiaries’ nuclear plants are detailed below.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

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, ~~2020~~2021 and December 31, ~~2019~~2020 are summarized as follows:


	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2021
Debt Securities	$425.9	$13.2	$6.8

2020
Debt Securities	$447.9	$27.7	$0.3

Fair
Value

Total
Unrealized
Gains

Total
Unrealized
Losses
(In Millions)
2020
Debt Securities
$408.0

$26.9

$2.7

2019
Debt Securities
$386.2

$15.1

$0.3

The amortized cost of available-for-sale debt securities was ~~$383.8~~$419.5 million as of March 31, ~~2020~~2021 and ~~$371.4~~$420.4 million as of December 31, ~~2019.~~2020. As of March 31, ~~2020,~~2021, available-for-sale debt securities had an average coupon rate of approximately ~~2.91%~~2.42%, an average duration of approximately ~~7.03~~6.40 years, and an average maturity of approximately ~~10.70~~7.62 years.

The unrealized gains/(losses) recognized during the three months ended March 31, ~~2020~~2021 on equity securities still held as of March 31, ~~2020 were ($140)~~2021 was $45.2 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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~~Notes to Financial Statements~~


	March 31, 2021		December 31, 2020
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)
Less than 12 months	$139.1	$6.8	$29.9	$0.3
More than 12 months	0	0	0	0
Total	$139.1	$6.8	$29.9	$0.3

March 31, 2020 December 31, 2019

Fair
Value

Gross
Unrealized
Losses

Fair
Value

Gross
Unrealized
Losses
(In Millions)
Less than 12 months
$52.3

$2.7

$56.9

$0.3
More than 12 months —
—
0.3
—
Total
$52.3

$2.7

$57.2

$0.3

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, ~~2020~~2021 and December 31, ~~2019~~2020 were as follows:


	2021	2020
	(In Millions)
Less than 1 year	$0	$0
1 year - 5 years	84.7	113.1
5 years - 10 years	179.2	189.8
10 years - 15 years	100.8	81.4
15 years - 20 years	26.7	28.5
20 years+	34.5	35.1
Total	$425.9	$447.9

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

2020 2019
(In Millions)
Less than 1 year
$17.4

$8.5
1 year - 5 years 163.9
154.6
5 years - 10 years 96.0
92.3
10 years - 15 years 20.8
13.4
15 years - 20 years 6.7
14.4
20 years+ 103.2
103.0
Total
$408.0

$386.2

During the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, proceeds from the dispositions of available-for-sale securities amounted to ~~$92~~$13.8 million and ~~$42.1~~$48.6 million, respectively. During the three months ended March 31, ~~2020~~2021 and ~~2019,~~2020, gross gains of ~~$1.7~~$0.8 million and ~~$0.4~~$4.5 million, respectively, and gross losses of ~~$0.2~~$0.1 million and ~~$0.1~~$0.2 million, respectively, related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.

Entergy Louisiana


	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2021
Debt Securities	$632.8	$31.2	$4.6

2020
Debt Securities	$632.2	$51.3	$0.5

The amortized cost of available-for-sale debt securities was $606.3 million as of March 31, 2021 and $581.4 million as of December 31, 2020. As of March 31, 2021, the available-for-sale debt securities had an average coupon rate of approximately 3.25%, an average duration of approximately 6.59 years, and an average maturity of approximately 11.56 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2021 on equity securities still held as of March 31, 2021 was $64.9 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.


	March 31, 2021		December 31, 2020
	Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)
Less than 12 months	$171.7	$4.6	$36.4	$0.5
More than 12 months	2.3	0	0.8	0
Total	$174.0	$4.6	$37.2	$0.5

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2021 and December 31, 2020 were as follows:


	2021	2020
	(In Millions)
Less than 1 year	$0	$0
1 year - 5 years	89.3	117.0
5 years - 10 years	186.0	159.4
10 years - 15 years	113.7	101.2
15 years - 20 years	63.4	66.9
20 years+	180.4	187.7
Total	$632.8	$632.2

During the three months ended March 31, 2021 and 2020, proceeds from the dispositions of available-for-sale securities amounted to $108.4 million and $67.4 million, respectively. During the three months ended March 31, 2021 and 2020, gross gains of $3.3 million and $2.9 million, respectively, and gross losses of $3.2 million and $0.6 million, respectively, related to available-for-sale securities were 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, 2021 and December 31, 2020 are summarized as follows:


	Fair Value	Total Unrealized Gains	Total Unrealized Losses
	(In Millions)
2021
Debt Securities	$406.4	$14.3	$5.0

2020
Debt Securities	$427.7	$30.0	$0.8

The amortized cost of available-for-sale debt securities was $397 million as of March 31, 2021 and $398.4 million as of December 31, 2020. As of March 31, 2021, available-for-sale debt securities had an average coupon rate of approximately 2.36%, an average duration of approximately 6.31 years, and an average maturity of approximately 9.62 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2021 on equity securities still held as of March 31, 2021 was $43.1 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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Entergy Corporation and Subsidiaries

Notes to Financial Statements


		March 31, 2021		December 31, 2020
		Fair Value	Gross Unrealized Losses	Fair Value	Gross Unrealized Losses
	(In Millions)
Less than 12 months		$157.5	$5.0	$28.9	$0.8
More than 12 months		0	0	0	0
Total		$157.5	$5.0	$28.9	$0.8

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2021 and December 31, 2020 were as follows:


	2021	2020
	(In Millions)
Less than 1 year	$0	($1.1)
1 year - 5 years	136.2	134.7
5 years - 10 years	120.4	141.5
10 years - 15 years	35.1	31.5
15 years - 20 years	4.5	5.3
20 years+	110.2	115.8
Total	$406.4	$427.7

During the three months ended March 31, 2021 and 2020, proceeds from the dispositions of available-for-sale securities amounted to $74.1 million and $92 million, respectively. During the three months ended March 31, 2021 and 2020, gross gains of $1.2 million and $1.7 million, respectively, and gross losses of $1.6 million and $0.2 million, respectively, related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.

Allowance for expected credit losses

~~Entergy implemented ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, effective January 1, 2020. In accordance with the new standard,~~ Entergy estimates the expected credit losses for its ~~available for sale~~available-for-sale securities based on the current credit rating and remaining life of the securities. To the extent an individual security is determined to be uncollectible it is written off against this allowance. Entergy’s available-for-sale securities are held in trusts managed by third parties who operate in accordance with agreements that define investment guidelines and place restrictions on the purchases and sales of investments. Specifically, available-for-sale securities are subject to credit worthiness restrictions, with requirements for both the average credit rating of the portfolio and minimum credit ratings for individual debt securities. As of March 31, 2021 and December 31, 2020, Entergy’s allowance for expected credit losses related to available-for-sale securities ~~was $3 million.~~were $6.4 million and $0.1 million, respectively. Entergy did not record any impairments of available-for-sale debt securities for the three months ended March 31, 2021 and 2020.

~~Other-than-temporary impairments and unrealized gains and losses~~

Prior to the implementation of ASU 2016-13 on January 1, 2020, Entergy evaluated the available-for-sale debt securities in the Entergy Wholesale Commodities nuclear decommissioning trust funds with unrealized losses at the end of each period to determine whether an other-than-temporary impairment had occurred. The assessment of whether an investment in a debt security suffered an other-than-temporary impairment was based on whether Entergy had the

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~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

intent to sell or more likely than not would have been required to sell the debt security before recovery of its amortized costs. Further, if Entergy did not expect to recover the entire amortized cost basis of the debt security, an other-than-temporary impairment was considered to have occurred and it was measured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss). Entergy did not have any material other-than-temporary impairments relating to credit losses on debt securities for the three months ended March 31, 2019.

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 are updates to that discussion.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

Tax Cuts and Jobs Act

During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess accumulated deferred income taxes, associated with the effects of the Tax Cuts and Jobs Act, to their customers through rate riders and other means approved by their respective regulatory commissions. Return of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This manner of regulatory accounting ~~has a significant effect on~~affects the effective tax rate for the period as compared to the statutory tax rate. The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatory liability for income taxes as follows:


	Three Months Ended March 31,
	2021	2020
	(In Millions)
Entergy	$41	$30
Entergy Arkansas	$8	$13
Entergy Louisiana	$8	$8

Entergy New Orleans	$0	$3
Entergy Texas	$7	$6
System Entergy	$18	$0

Three Months
Ended March 31,
2020 2019
(In Millions)
Entergy
$30

$61
Entergy Arkansas
$13

$32
Entergy Louisiana
$8

$7
Entergy New Orleans
$3

$—
Entergy Texas
$6

$22

~~Other Tax Matters~~

In accordance with ASC 718, “Compensation - Stock Compensation,” Entergy and the Registrant Subsidiaries recognized excess tax deductions as a reduction of income tax expense in the first quarter 2020. Due to the vesting and exercise of certain Entergy stock-based awards, Entergy recorded a permanent tax reduction of approximately $24.7 million, including $4.8 million for Entergy Arkansas, $8.6 million for Entergy Louisiana, $2.7 million for Entergy Mississippi, $1.5 million for Entergy New Orleans, $2.7 million for Entergy Texas, and $1.3 million for System Energy.

In the first quarter 2020, Entergy and the IRS agreed upon and settled on the treatment of funds received by Entergy Louisiana in conjunction with the Act 55 financing of Hurricane Isaac storm costs, which resulted in a reduction of income tax expense of approximately $32 million. As a result of the settlement, the position was partially sustained and Entergy Louisiana recorded a reduction of income tax expense of approximately $58 million primarily due to the reversal of liabilities for uncertain tax positions in excess of the agreed-upon settlement. Entergy recorded an increase to income tax expense of $26 million primarily resulting from the reduction of the deferred tax asset, associated with utilization of the net operating loss as a result of the settlement. This adjustment recorded by Entergy also accounted for the tax rate change of the Tax Cuts and Jobs Act. As a result of the IRS settlement, Entergy Louisiana recorded a

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~~Entergy Corporation and Subsidiaries~~

~~Notes to Financial Statements~~

~~$29 million ($21 million net-of-tax) regulatory charge and a corresponding regulatory liability to reflect its obligation to customers pursuant to the LPSC Hurricane Isaac Act 55 financing order.~~

~~Coronavirus Aid, Relief, and Economic Security Act~~

In response to the economic impacts of the COVID-19 pandemic, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) into law on March 27, 2020. The CARES Act provisions that result in the most significant opportunities for tax relief to Entergy and the Registrant Subsidiaries are permitting a five year carryback of 2018-2020 net operating losses, removing the 80 percent limitation on the carryback of 2018-2020 net operating losses, increasing the limitation on interest expense deductibility for 2019 and 2020, accelerating available refunds for minimum tax credit carryforwards, modifying limitations on charitable contributions during 2020, and delaying the payment of employer payroll taxes. Based on current estimates, Entergy could defer approximately $64 million of 2020 payroll tax payments, which would be payable in two installments of $32 million on December 31, 2021 and December 31, 2022. Currently, these provisions do not have a significant effect on Entergy’s or the Registrant Subsidiaries’ balance sheets.

NOTE 11. PROPERTY, PLANT, AND EQUIPMENT (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Construction Expenditures in Accounts Payable

Construction expenditures included in accounts payable at March 31, ~~2020~~2021 were ~~$367~~$496.4 million for Entergy, ~~$57.5~~$39.6 million for Entergy Arkansas, ~~$106.7~~$330.4 million for Entergy Louisiana, ~~$24.2~~$24.1 million for Entergy Mississippi, ~~$8.1~~$4 million for Entergy New Orleans, ~~$78.2~~$44.6 million for Entergy Texas, and ~~$52.6~~$17.7 million for System Energy. Construction expenditures included in accounts payable at December 31, ~~2019~~2020 were ~~$406~~$745 million for Entergy, ~~$67.9~~$59.7 million for Entergy Arkansas, ~~$115.1~~$460.5 million for Entergy Louisiana, ~~$34.2~~$31.4 million for Entergy Mississippi, ~~$18.4~~$9.2 million for Entergy New Orleans, ~~$88.1~~$116.8 million for Entergy Texas, and ~~$23.2~~$17.7 million for System Energy.

NOTE 12. 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. See Note 4 to the financial statements herein for details of the nuclear fuel companies’ credit facilities, commercial paper borrowings, and long-term debt.

System Energy is considered to hold a variable interest in the lessor from which it leases an undivided interest representing approximately 11.5% of 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, ~~2020~~2021 and in the three months ended March 31, ~~2019.~~2020.

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

NOTE 13. 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, ~~2020~~2021 and ~~2019~~2020 were as follows:


	2021	2020

	(In Thousands)
Utility:
Residential	$966,855	$798,028
Commercial	572,676	538,940
Industrial	597,652	557,515
Governmental	56,798	52,582
Total billed retail	2,193,981	1,947,065

Sales for resale (a)	205,075	53,725
Other electric revenues (b)	80,261	50,166
Revenues from contracts with customers	2,479,317	2,050,956
Other revenues (c)	59,103	(318)
Total electric revenues	2,538,420	2,050,638

Natural gas	58,168	43,976

Entergy Wholesale Commodities:
Competitive businesses sales from contracts with customers (a)	232,113	216,002
Other revenues (c)	16,137	116,563
Total competitive businesses revenues	248,250	332,565

Total operating revenues	$2,844,838	$2,427,179

2020 2019
(In Thousands)
Utility:
Residential
$798,028

$802,539
Commercial 538,940
554,058
Industrial 557,515
601,000
Governmental 52,582
52,960
    Total billed retail 1,947,065
2,010,557

Sales for resale (a) 53,725
84,435
Other electric revenues (b) 50,166
15,470
    Revenues from contracts with customers 2,050,956
2,110,462
Other revenues (c) (318 ) 10,562
    Total electric revenues 2,050,638
2,121,024

Natural gas 43,976
54,948

Entergy Wholesale Commodities:
Competitive businesses sales from contracts with customers (a) 216,002
360,471
Other revenues (c) 116,563
73,141
    Total competitive businesses revenues 332,565
433,612

    Total operating revenues
$2,427,179

$2,609,584

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Entergy Corporation and Subsidiaries

Notes to Financial Statements

The Registrant Subsidiaries’ total revenues for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were as follows:


2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

Residential	$237,182	$335,760	$147,636	$66,427	$179,850
Commercial	106,416	224,649	97,936	47,799	95,876
Industrial	103,412	347,009	33,980	6,789	106,462
Governmental	4,256	18,616	10,543	16,380	7,003
Total billed retail	451,266	926,034	290,095	137,395	389,191
Sales for resale (a)	110,085	80,428	40,311	4,696	74,073
Other electric revenues (b)	19,583	43,910	3,950	(3,359)	17,529
Revenues from contracts with customers	580,934	1,050,372	334,356	138,732	480,793
Other revenues (c)	2,452	29,291	2,263	416	(573)
Total electric revenues	583,386	1,079,663	336,619	139,148	480,220
Natural gas	0	27,981	0	30,187	0
Total operating revenues	$583,386	$1,107,644	$336,619	$169,335	$480,220

2020
Entergy
Arkansas

Entergy
Louisiana

Entergy
Mississippi

Entergy
New
Orleans

Entergy
Texas
(In Thousands)

Residential
$219,688

$259,860

$127,102

$50,899

$140,480
Commercial 111,245
202,246
96,798
45,505
83,146
Industrial 101,088
322,342
36,390
7,347
90,348
Governmental 4,030
16,754
10,327
15,851
5,620
    Total billed retail 436,051

801,202

270,617

119,602

319,594
Sales for resale (a) 41,140
78,530
14,422
10,170
8,629
Other electric revenues (b) 1,596
32,008
6,443
763
10,702
Revenues from contracts with customers 478,787
911,740
291,482
130,535
338,925
Other revenues (c) 3,125
801
2,440
(7,104 ) 411
    Total electric revenues 481,912

912,541

293,922

123,431

339,336
Natural gas —
18,106
—
25,871
—
    Total operating revenues
$481,912

$930,647

$293,922

$149,302

$339,336

2019
Entergy
Arkansas

Entergy
Louisiana

Entergy
Mississippi

Entergy
New
Orleans

Entergy
Texas
(In Thousands)

Residential
$209,867

$264,065

$128,809

$52,076

$147,722
Commercial 124,578
206,779
97,914
45,741
79,046
Industrial 121,577
346,678
37,697
7,250
87,798
Governmental 4,899
16,891
10,036
15,901
5,233
    Total billed retail 460,921
834,413
274,456
120,968
319,799
Sales for resale (a) 79,584
83,955
4,814
10,224
16,775
Other electric revenues (b) 2,304
12,441
405
(1,706 ) 3,496
Revenues from contracts with customers 542,809
930,809
279,675
129,486
340,070
Other revenues (c) 3,003
5,884
2,569
1,397
404
    Total electric revenues 545,812
936,693
282,244
130,883
340,474
Natural gas —
22,637
—
32,311
—
    Total operating revenues
$545,812

$959,330

$282,244

$163,194

$340,474


2020	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas
	(In Thousands)

Residential	$219,688	$259,860	$127,102	$50,899	$140,480
Commercial	111,245	202,246	96,798	45,505	83,146
Industrial	101,088	322,342	36,390	7,347	90,348
Governmental	4,030	16,754	10,327	15,851	5,620
Total billed retail	436,051	801,202	270,617	119,602	319,594
Sales for resale (a)	41,140	78,530	14,422	10,170	8,629
Other electric revenues (b)	1,596	32,008	6,443	763	10,702
Revenues from contracts with customers	478,787	911,740	291,482	130,535	338,925
Other revenues (c)	3,125	801	2,440	(7,104)	411
Total electric revenues	481,912	912,541	293,922	123,431	339,336
Natural gas	0	18,106	0	25,871	0
Total operating revenues	$481,912	$930,647	$293,922	$149,302	$339,336

~~(a)~~

Sales for resale and competitive businesses sales include 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.

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2020 2019
(In Thousands)
Cash and cash equivalents at beginning of period
$6,017

$19,677

Cash flow provided by (used in):
Operating activities 17,318
16,522
Investing activities (68,691 ) (36,783 )
Financing activities 118,671
1,378
Net increase (decrease) in cash and cash equivalents 67,298
(18,883 )

Cash and cash equivalents at end of period
$73,315

$794

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Management's Financial Discussion and Analysis

~~Operating~~Financing Activities

Net cash flow provided by ~~operating~~financing activities ~~remained relatively unchanged, increasing by $0.8~~decreased $103.8 million for the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019 primarily due to the timing of recovery of fuel and purchased power costs, partially offset by an increase of $2.2 million in interest paid in 2020.~~

~~Investing Activities~~

~~Net cash flow used in investing activities increased $31.9 million for the three months ended March 31,~~ 2020 compared to the three months ended March 31, 2019 primarily due to money pool activity and an increase of $7.2 million in distribution construction expenditures primarily due to investment in the reliability and infrastructure of Entergy New Orleans’s distribution system, including increased spending on advanced metering infrastructure. The increase was partially offset by a decrease of $6.2 million in construction expenditures primarily due to lower spending on the New Orleans Power Station project in 2020 as compared to the same period in 2019.

Increases in Entergy New Orleans’s receivable from the money pool are a use of cash flow, and Entergy New Orleans’s receivable from the money pool increased $8 million for the three months ended March 31, 2020 compared to decreasing $22 million for the three months ended March 31, 2019. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

~~Financing Activities~~

~~Net cash flow provided by financing activities increased $117.3 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019~~ primarily due to the issuance of $78 million of 3.00% Series mortgage bonds and the issuance of $62 million of 3.75% Series mortgage bonds, each in March ~~2020,~~2020. The decrease was partially offset by ~~repayments of~~ $20 million in repayments on long-term credit borrowings in ~~2020.~~2020 and money pool activity.

Increases in Entergy New Orleans’s payable to the money pool are a source of cash flow, and Entergy New Orleans’s payable to the money pool increased $15 million for the three months ended March 31, 2021. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

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

Capital Structure

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


	March 31, 2021		December 31, 2020
Debt to capital	51.5	%	51.5	%
Effect of excluding securitization bonds	(1.7	%)	(1.6	%)
Debt to capital, excluding securitization bonds (a)	49.8	%	49.9	%
Effect of subtracting cash	(0.6	%)	—	%
Net debt to net capital, excluding securitization bonds (a)	49.2	%	49.9	%

(a)Calculation excludes the ~~debt~~securitization bonds, which are non-recourse to ~~capital ratio is primarily due to the issuance of $140 million of mortgage bonds in March 2020.~~Entergy New Orleans.

March 31,
2020

December 31,
2019
Debt to capital 57.3 % 53.1 %
Effect of excluding securitization bonds (1.9 %) (2.4 %)
Debt to capital, excluding securitization bonds (a) 55.4 % 50.7 %
Effect of subtracting cash (3.1 %) (0.3 %)
Net debt to net capital, excluding securitization bonds (a) 52.3 % 50.4 %


~~(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. 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. 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

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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. Following are updates to the information provided in the Form 10-K.

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~~Although the effect in the first quarter 2020 was minimal,~~ Entergy New Orleans, ~~expects negative changes during 2020 to its customer payment patterns~~LLC and ~~its cash flow activity due to the COVID-19 pandemic. See “The COVID-19 Pandemic” section of Entergy Corporation and~~ Subsidiaries ~~Management’s~~

Management's Financial Discussion and Analysis for discussion of the COVID-19 pandemic. Despite the effects of the pandemic on financial markets Entergy New Orleans issued $140 million of long-term mortgage bonds in March 2020. Additional discussion of Entergy New Orleans’s liquidity and capital resources follows.

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


March 31, 2021	December 31, 2020	March 31, 2020	December 31, 2019
(In Thousands)
($25,229)	($10,190)	$13,170	$5,191

March 31,
2020

December 31,
2019

March 31,
2019

December 31,
2018
(In Thousands)
$13,170 $5,191 ($1,877) $22,016

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 November 2021. 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, ~~2020,~~2021, there were no cash borrowings and ~~an $0.8 million letter~~no letters of credit outstanding under the 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, ~~2020,~~2021, a $1$2 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.

Entergy New Orleans has ~~$83~~$38.8 million in its storm reserve escrow account at March 31, ~~2020.~~2021.

~~New Orleans Power Station~~

As discussed in the Form 10-K, in June 2019, a state court judge in New Orleans affirmed the City Council’s approval of the New Orleans Power Station and dismissed the petition for judicial review of that decision that had been filed in April 2018. The petitioners have filed an appeal of that ruling. Also in June 2019, with regard to the lawsuit challenging the City Council’s decision on the basis of a violation of the open meetings law, the same state court judge in New Orleans ruled that there was a violation of the open meetings law at the February 2018 meeting of the City Council’s Utility Committee at which that Committee considered the New Orleans Power Station approval, and further ruled that, although there was no violation of the open meetings law at the March 2018 full City Council meeting at which the New Orleans Power Station was approved, both the approval of the Utility Committee and the approval of the full City Council were void. The City Council and Entergy New Orleans each filed a suspensive appeal of the open meetings law ruling. A suspensive appeal suspends the effect of the judgment in the open meetings law proceeding while the appeal is being taken. The petitioners sought in the state appellate court, and then at the Louisiana Supreme Court, to terminate the suspension of the effect of the judgment, but both courts declined to do so. Appellate briefing on the merits both in the open meetings law appeal and in the judicial review appeal occurred in November and December 2019 and oral argument in both cases was heard in January 2020. In February 2020 the state appellate court reversed the lower court’s ruling that the City Council’s approval of the New Orleans Power Station was void due to a violation of the open meetings law at the City Council’s Utility Committee meeting in February 2018. The

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state appellate court ruled that there was no violation of the open meetings law at the City Council meeting in March 2018 and that the lower court erred in voiding the City Council resolution approving the New Orleans Power Station. In March 2020, the appellees in that proceeding filed a writ application with the Louisiana Supreme Court seeking review of the appellate court’s decision and several New Orleans-based organizations filed an amicus brief in support of the appellees’ writ application. Briefs from Entergy New Orleans and the City Council in opposition to the writ application are due in May 2020. In April 2020 the state appellate court affirmed the district court’s judicial review decision that affirmed the City Council’s approval of the New Orleans Power Station as in the public interest. Construction of the plant is on schedule, with commercial operation expected in mid-2020.

~~Gas Infrastructure Rebuild Plan~~

As discussed in the Form 10-K, in September 2016, Entergy New Orleans submitted to the City Council a request for authorization for Entergy New Orleans to proceed with annual incremental capital funding of $12.5 million for its gas infrastructure rebuild plan, which would replace all of Entergy New Orleans’s low pressure cast iron, steel, and vintage plastic pipe over a ten-year period commencing in 2017. Entergy New Orleans also proposed that recovery of the investment to fund its gas infrastructure replacement plan be determined in connection with its next base rate case. As a result of the rate case, the City Council approved the planned gas rebuild expenditures through 2019, but rejected Entergy New Orleans’s proposed gas infrastructure rider. In April 2020, Entergy New Orleans submitted its gas infrastructure rebuild plan to the City Council, which maintained the previously proposed timeline and cost estimates, but included measures to spread out the cost impact to customers of the program.

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

~~Energy Efficiency~~COVID-19 Orders

As discussed in the Form 10-K, in December 2019, Entergy New Orleans filed an application with the City Council seeking approval of an implementation plan for the Energy Smart energy efficiency program from April 2020 through December 2022. Entergy New Orleans proposed to recover the costs of the program through mechanisms previously approved by the City Council or through the energy efficiency cost recovery rider, which was approved in the 2018 combined rate case resolution. In FebruaryJune 2020 the City Council ~~approved~~established the City Council Cares Program and directed Entergy New Orleans to use the approximately $7 million refund received from the Entergy Arkansas opportunity sales FERC proceeding, currently being held in escrow, and approximately $15 million of non-securitized storm reserves to fund this program, which was intended to provide temporary bill relief to customers who became unemployed during the COVID-19 pandemic. The program became effective July 1, 2020 and offered qualifying residential customers bill credits of $100 per month for up to four months, for a maximum of $400 in residential customer bill credits. As of March 31, 2021 the program expired and credits of $4.3 million have been applied to customer bills under the City Council Cares Program.

Additionally, as discussed in the Form 10-K, in February 2021 the City Council adopted a resolution suspending residential customer disconnections for non-payment of utility bills and suspending the assessment and accumulation of late fees on residential customers with past-due balances through May 15, 2021. As of March 31, 2021, Entergy New Orleans recorded a regulatory asset of $14.8 million for costs associated with the COVID-19 pandemic.

Hurricane Zeta

In October 2020, Hurricane Zeta caused significant damage to Entergy New Orleans’s ~~application.~~

~~2018 Base Rate Case Filing~~

~~See~~service area. The storm resulted in widespread power outages, significant damage to distribution and transmission infrastructure, and the ~~Form 10-K~~loss of sales during the power outages. Total restoration costs for ~~discussion~~the repair and/or replacement of ~~the electric and gas base rate case filed in September 2018. In response to the City Council’s November 2019 resolution in the rate case,~~ Entergy New Orleans made a compliance filing in December 2019 and also filed timely a petition for appeal and judicial review and for stay of or injunctive relief alleging that the resolution is unlawful in failingOrleans’s electric facilities damaged by Hurricane Zeta are currently estimated to produce just and reasonable rates. A hearing on the requested injunction was scheduled in Civil District Court for February 2020, but by joint motion of the City Council and Entergy New Orleans, the Civil District Court issued an order for a limited remand to the City Council to consider a potential agreement in principle/stipulation at its February 20, 2020 meeting. On February 17, 2020, Entergy New Orleans filed with the City Council an agreement in principle between Entergy New Orleans and the City Council’s advisors. On February 20, 2020, the City Council voted to approve the proposed agreement in principle and issued a resolution modifying the required treatment of certain accumulated deferred income taxes. As a result of the agreement in principle, the total annual revenue requirement reduction will be approximately ~~$45~~$36 million, ~~($42 million electric,~~ including ~~$29~~approximately $28 million in ~~rider reductions;~~capital costs and $3approximately $8 million ~~gas). As a result, Entergy New Orleans fully implemented the new rates~~

in non-capital costs. In March

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~~in April 2020. The merits of the appeal will be subject to a separate procedural schedule issued by the Civil District Court.~~

~~2020 Formula Rate Plan Filing~~

~~In April 2020,~~2021, Entergy New Orleans ~~filed a motion~~withdrew $44 million from its funded storm reserves. Entergy New Orleans expects to initiate its storm cost recovery proceeding in May 2021.

Load Shed Investigation

On February 16, 2021, due to high customer demand and limited generation, MISO issued an order requiring load-serving entities throughout its southern region to shed load to protect the integrity of the bulk electric system. Entergy New Orleans was required to shed load of at least 26 MW, but due to certain complications with its automated load shed program and certain load measurement issues, it inadvertently shed approximately 105 MW of load in its service area. The maximum time any customer was without power due to the load shed event was one hour and forty minutes. In late February 2021 the City Council ~~to delay~~ordered its ~~formula rate plan filing until June 2020. In May 2020 the City Council issued an order extending the filing deadline for Entergy New Orleans’s formula rate plan filing to June 29, 2020.~~

~~Renewable Portfolio Standard Rulemaking~~

As discussed in the Form 10-K, in March 2019 the City Council initiated a rulemaking proceeding to consider whether to establish a renewable portfolio standard. In March 2020 the City Council’s Utility Committee recommended a resolution for approval by the City Council that directed the City Council advisors to ~~work toward development of~~conduct an investigation into the load shed event and to issue a ~~rule for enacting a Renewable~~report, which was completed and ~~Clean Portfolio Standard.~~filed in April 2021. The ~~four components of the Renewable and Clean Portfolio Standard~~report recommended that the City Council ~~expressed~~open an additional docket to determine whether any of Entergy New Orleans’s actions were imprudent, and the City Council Utility Committee Chairperson has made statements in the media that the City Council may seek to impose a ~~desire to implement are: (1) a mandatory requirement that~~fine on Entergy New Orleans. Entergy New Orleans ~~achieve 100% net zero carbon emissions by 2040; (2) reliance on renewable energy credits purchased without~~would oppose any attempt to levy a fine under the associated energy for compliance with the standard being phased out over the ten-year period from 2040 to 2050; (3) no carbon-emitting resources in the portfolio of resources Entergy New Orleans uses to serve New Orleans by 2050; and (4) a mechanism to limit costs in any one plan year to no more than one percent of plan year total utility retail sales revenues. The City Council adopted the Utility Committee resolution in April 2020. The first technical meeting of the parties will occur in June 2020 followed by the City Council advisors’ publication of a draft rule in July 2020, which draft will be the subject of written comments and further technical meetings before final rules are proposed for consideration by the parties and the City Council.circumstances presented.

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 further 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, impairment of long-lived assets, ~~and trust fund investments,~~ taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies. ~~The following is an update to that discussion.~~

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~~Management's Financial Discussion and Analysis~~

~~Other Postretirement Benefits~~

As described in Note 6 to the financial statements herein, Entergy announced changes to its other postretirement benefits. As a result, Entergy New Orleans now expects 2020 other postretirement health care and life insurance benefit income, including amounts capitalized, of $4.9 million.

New Accounting Pronouncements

See “New Accounting Pronouncements” section of Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

2020 2019
(In Thousands)
OPERATING REVENUES
Electric
$123,431

$130,883
Natural gas 25,871
32,311
TOTAL 149,302
163,194

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 27,495
30,760
Purchased power 56,467
60,649
Other operation and maintenance 30,704
30,298
Taxes other than income taxes 13,206
13,542
Depreciation and amortization 15,075
14,164
Other regulatory credits - net (5,736 ) (2,355 )
TOTAL 137,211
147,058

OPERATING INCOME 12,091
16,136

OTHER INCOME
Allowance for equity funds used during construction 2,485
2,290
Interest and investment income 53
179
Miscellaneous - net (738 ) (1,506 )
TOTAL 1,800
963

INTEREST EXPENSE
Interest expense 6,640
5,936
Allowance for borrowed funds used during construction (1,195 ) (914 )
TOTAL 5,445
5,022

INCOME BEFORE INCOME TAXES 8,446
12,077

Income taxes (2,740 ) 3,054

NET INCOME
$11,186

$9,023

See Notes to Financial Statements.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)


		2021	2020
	(In Thousands)
OPERATING REVENUES
Electric		$139,148	$123,431
Natural gas		30,187	25,871
TOTAL		169,335	149,302

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale		19,012	27,495
Purchased power		68,670	56,467
Other operation and maintenance		38,178	30,704
Taxes other than income taxes		12,556	13,206
Depreciation and amortization		18,161	15,075
Other regulatory charges (credits) - net		3,130	(5,736)
TOTAL		159,707	137,211

OPERATING INCOME		9,628	12,091

OTHER INCOME (DEDUCTIONS)
Allowance for equity funds used during construction		258	2,485
Interest and investment income		9	53
Miscellaneous - net		(302)	(738)
TOTAL		(35)	1,800

INTEREST EXPENSE
Interest expense		7,029	6,640
Allowance for borrowed funds used during construction		(116)	(1,195)
TOTAL		6,913	5,445

INCOME BEFORE INCOME TAXES		2,680	8,446

Income taxes		909	(2,740)

NET INCOME		$1,771	$11,186

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, 2021 and 2020
(Unaudited)
	2021	2020
	(In Thousands)
OPERATING ACTIVITIES
Net income	$1,771	$11,186
Adjustments to reconcile net income to net cash flow provided by (used in) operating activities:
Depreciation and amortization	18,161	15,075
Deferred income taxes, investment tax credits, and non-current taxes accrued	4,572	1,339
Changes in assets and liabilities:
Receivables	(1,975)	4,039
Fuel inventory	2,234	(25)
Accounts payable	(27,777)	(5,291)
Taxes accrued	13	122
Interest accrued	(3,203)	(929)
Deferred fuel costs	(4,886)	3,702
Other working capital accounts	(11,103)	(10,795)
Provisions for estimated losses	(40,680)	923
Other regulatory assets	28,879	1,867
Other regulatory liabilities	8,728	(9,599)
Pension and other postretirement liabilities	(4,397)	(4,878)
Other assets and liabilities	15,549	10,582
Net cash flow provided by (used in) operating activities	(14,114)	17,318

INVESTING ACTIVITIES
Construction expenditures	(26,165)	(60,001)
Allowance for equity funds used during construction	258	2,485


Changes in money pool receivable - net	0	(7,979)
Receipts from storm reserve escrow account	44,200	0
Payments to storm reserve escrow account	(3)	(314)
Changes in securitization account	(3,415)	(2,882)

Net cash flow provided by (used in) investing activities	14,875	(68,691)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	0	139,116
Retirement of long-term debt	0	(20,000)



Change in money pool payable - net	15,039	0


Other	(214)	(445)
Net cash flow provided by financing activities	14,825	118,671

Net increase in cash and cash equivalents	15,586	67,298
Cash and cash equivalents at beginning of period	26	6,017
Cash and cash equivalents at end of period	$15,612	$73,315

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$9,921	$7,275


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, 2020 and 2019
(Unaudited)
2020 2019
(In Thousands)
OPERATING ACTIVITIES
Net income
$11,186

$9,023
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization 15,075
14,164
Deferred income taxes, investment tax credits, and non-current taxes accrued 1,339
9,743
Changes in assets and liabilities:
Receivables 4,039
(20 )
Fuel inventory (25 ) 1,529
Accounts payable (5,291 ) 8,298
Taxes accrued 122
(4,443 )
Interest accrued (929 ) 650
Deferred fuel costs 3,702
(71 )
Other working capital accounts (10,795 ) (15,144 )
Provisions for estimated losses 923
454
Other regulatory assets 1,867
(16,528 )
Other regulatory liabilities (9,599 ) (8,634 )
Pension and other postretirement liabilities (4,878 ) (1,706 )
Other assets and liabilities 10,582
19,207
Net cash flow provided by operating activities 17,318
16,522

INVESTING ACTIVITIES
Construction expenditures (60,001 ) (57,788 )
Allowance for equity funds used during construction 2,485
2,290
Changes in money pool receivable - net (7,979 ) 22,016
Payments to storm reserve escrow account (314 ) (451 )
Changes in securitization account (2,882 ) (2,850 )
Net cash flow used in investing activities (68,691 ) (36,783 )

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 139,116
—
Retirement of long-term debt (20,000 ) —
Change in money pool payable - net —
1,877
Other (445 ) (499 )
Net cash flow provided by financing activities 118,671
1,378

Net increase (decrease) in cash and cash equivalents 67,298
(18,883 )
Cash and cash equivalents at beginning of period 6,017
19,677
Cash and cash equivalents at end of period
$73,315

$794

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized
$7,275

$5,027

See Notes to Financial Statements.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2021 and December 31, 2020
(Unaudited)
	2021	2020
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$15,612	$26

Total cash and cash equivalents	15,612	26
Securitization recovery trust account	6,779	3,364
Accounts receivable:
Customer	82,902	70,694
Allowance for doubtful accounts	(19,365)	(17,430)
Associated companies	1,331	2,381
Other	5,060	4,248
Accrued unbilled revenues	23,009	31,069
Total accounts receivable	92,937	90,962
Deferred fuel costs	7,016	2,130
Fuel inventory - at average cost	0	1,978
Materials and supplies - at average cost	16,434	16,550
Prepayments and other	14,733	3,715
TOTAL	153,511	118,725

OTHER PROPERTY AND INVESTMENTS
Non-utility property at cost (less accumulated depreciation)	1,016	1,016
Storm reserve escrow account	38,841	83,038

TOTAL	39,857	84,054

UTILITY PLANT
Electric	1,806,961	1,821,638
Natural gas	352,817	348,024
Construction work in progress	26,927	12,460
TOTAL UTILITY PLANT	2,186,705	2,182,122
Less - accumulated depreciation and amortization	751,117	740,796
UTILITY PLANT - NET	1,435,588	1,441,326

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Deferred fuel costs	4,080	4,080
Other regulatory assets (includes securitization property of $32,859 as of March 31, 2021 and $35,559 as of December 31, 2020)	237,911	266,790
Other	29,864	23,931
TOTAL	271,855	294,801

TOTAL ASSETS	$1,900,811	$1,938,906

See Notes to Financial Statements.

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CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2020 and December 31, 2019
(Unaudited)
2020 2019
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents
Cash
$1,026

$26
Temporary cash investments 72,289
5,991
Total cash and cash equivalents 73,315
6,017
Securitization recovery trust account 4,871
1,989
Accounts receivable:
Customer 48,544
48,265
Allowance for doubtful accounts (3,387 ) (3,226 )
Associated companies 14,876
6,280
Other 4,982
7,378
Accrued unbilled revenues 23,075
25,453
Total accounts receivable 88,090
84,150
Fuel inventory - at average cost 1,945
1,920
Materials and supplies - at average cost 13,861
13,522
Prepayments and other 15,167
4,846
TOTAL 197,249
112,444

OTHER PROPERTY AND INVESTMENTS
Non-utility property at cost (less accumulated depreciation) 1,016
1,016
Storm reserve escrow account 82,919
82,605
TOTAL 83,935
83,621

UTILITY PLANT
Electric 1,475,260
1,467,215
Natural gas 313,544
311,432
Construction work in progress 226,714
201,829
TOTAL UTILITY PLANT 2,015,518
1,980,476
Less - accumulated depreciation and amortization 718,461
715,406
UTILITY PLANT - NET 1,297,057
1,265,070

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Deferred fuel costs 4,080
4,080
Other regulatory assets (includes securitization property of $46,980 as of March 31, 2020 and $49,542 as of December 31, 2019) 257,496
259,363
Other 16,063
10,720
TOTAL 277,639
274,163

TOTAL ASSETS
$1,855,880

$1,735,298

See Notes to Financial Statements.


ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2021 and December 31, 2020
(Unaudited)
	2021	2020
	(In Thousands)
CURRENT LIABILITIES

Payable due to associated company	$1,618	$1,618
Accounts payable:
Associated companies	66,122	54,234
Other	40,944	60,766
Customer deposits	27,315	27,912
Taxes accrued	4,713	4,700
Interest accrued	4,892	8,095

Current portion of unprotected excess accumulated deferred income taxes	3,327	3,296
Other	6,160	5,462
TOTAL	155,091	166,083

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	341,217	338,714
Accumulated deferred investment tax credits	16,081	16,095
Regulatory liability for income taxes - net	55,180	55,675
Asset retirement cost liabilities	3,833	3,768
Accumulated provisions	49,218	89,898

Long-term debt (includes securitization bonds of $41,352 as of March 31, 2021 and $41,291 as of December 31, 2020)	629,883	629,704
Long-term payable due to associated company	10,911	10,911
Other	30,709	21,141
TOTAL	1,137,032	1,165,906

Commitments and Contingencies

EQUITY
Member's equity	608,688	606,917
TOTAL	608,688	606,917

TOTAL LIABILITIES AND EQUITY	$1,900,811	$1,938,906

See Notes to Financial Statements.

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CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2020 and December 31, 2019
(Unaudited)
2020 2019
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt
$25,000

$25,000
Payable due to associated company 1,838
1,838
Accounts payable:
Associated companies 34,787
43,222
Other 36,811
43,963
Customer deposits 28,631
28,493
Taxes accrued 4,424
4,302
Interest accrued 5,987
6,916
Deferred fuel costs 8,620
4,918
Current portion of unprotected excess accumulated deferred income taxes 5,957
9,470
Other 15,494
15,827
TOTAL CURRENT LIABILITIES 167,549
183,949

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 357,097
354,536
Accumulated deferred investment tax credits 2,110
2,131
Regulatory liability for income taxes - net 49,419
49,090
Asset retirement cost liabilities 3,582
3,522
Accumulated provisions 89,465
88,542
Long-term debt (includes securitization bonds of $52,702 as of March 31, 2020 and $52,641 as of December 31, 2019) 640,821
521,539
Long-term payable due to associated company 12,529
12,529
Other 24,543
21,881
TOTAL NON-CURRENT LIABILITIES 1,179,566
1,053,770

Commitments and Contingencies

EQUITY
Member's equity 508,765
497,579
TOTAL 508,765
497,579

TOTAL LIABILITIES AND EQUITY
$1,855,880

$1,735,298

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, ~~2020~~2021 and ~~2019~~2020
(Unaudited)


			Member's Equity
			(In Thousands)

~~Balance at December 31, 2018~~				~~$444,950~~

~~Net income~~	~~9,023~~
~~Balance at March 31, 2019~~		~~$453,973~~


Balance at December 31, 2019	$497,579		~~$497,579~~

Net income			11,186

Balance at March 31, 2020			$508,765		~~$508,765~~










Balance at December 31, 2020			$606,917

Net income			1,771

Balance at March 31, 2021			$608,688









See Notes to Financial Statements.

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ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

Three Months Ended Increase/
2020 2019 (Decrease) %
(Dollars In Millions)
Electric Operating Revenues:

Residential
$51

$52

($1 ) (2 )
Commercial 45
46
(1 ) (2 )
Industrial 7
7
—
—
Governmental 16
16
—
—
Total billed retail 119
121
(2 ) (2 )
Sales for resale:

Non-associated companies 10
10
—
—
Other (6 ) —
(6 ) —
Total
$123

$131

($8 ) (6 )

Billed Electric Energy Sales (GWh):

Residential 501
511
(10 ) (2 )
Commercial 496
492
4
1
Industrial 102
97
5
5
Governmental 184
181
3
2
Total retail 1,283
1,281
2
—
Sales for resale:

Non-associated companies 601
528
73
14
Total 1,884
1,809
75
4

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ENTERGY TEXAS, INC. AND SUBSIDIARIES

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

The COVID-19 Pandemic

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - The COVID-19 Pandemic” ~~section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis~~in the Form 10-K for a discussion of the COVID-19 ~~pandemic.~~pandemic.

Hurricane Laura and Hurricane Delta

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Hurricane Laura and Hurricane Delta” in the Form 10-K for a discussion of Hurricane Laura and Hurricane Delta, which caused significant damage to portions of Entergy Texas’s service territory. See Note 2 to the financial statements herein for discussion of storm cost recovery filings made by Entergy Texas in April 2021.

Winter Storm Uri

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - February 2021 Winter Storms” in the Form 10-K for a discussion of the winter storms and extreme cold temperatures experienced in the United States, including Entergy Texas’s service area, in February 2021 (Winter Storm Uri). Fuel and purchased power costs for Entergy Texas were approximately $185 million in February 2021 compared to approximately $50 million in February 2020. See Note 2 to the financial statements herein for discussion of the storm cost recovery filing made by Entergy Texas in April 2021. See Note 2 to the financial statements herein and in the Form 10-K for discussion of fuel cost recovery at Entergy Texas.

Results of Operations

Net Income

Net income increased ~~$11.4~~$17.4 million primarily due to higher retail electric price and higher volume/~~weather,~~weather. The increase was partially offset by a higher effective tax rate, lower other income, and ~~a lower effective income tax rate, after excluding the effect of the return of unprotected excess accumulated deferred income taxes which is offset in operating revenues, partially offset by~~ higher depreciation and amortization expenses.

Operating Revenues

Following is an analysis of the change in operating revenues comparing the first quarter ~~2020~~2021 to the first quarter ~~2019:~~

2020:



		Amount
		(In Millions)
~~2019~~2020 operating revenues		$339.3	~~$340.5~~
Fuel, rider, and other revenues that do not significantly affect net income		~~(28.7~~105.9	)
~~Volume/weather~~		~~5.4~~
Retail electric price	~~5.5~~19.1
Volume/weather		17.3
Return of unprotected excess accumulated deferred income taxes to customers		~~16.6~~(1.4)
~~2020~~2021 operating revenues		$480.2	~~$339.3~~

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Management's Financial Discussion and Analysis

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 primarily due to an increase in usage during the unbilled sales period, partially offset by the effect of less favorable weather on billed residential sales.~~

The retail electric price variance is primarily due to the implementation of the generation cost recovery rider effective January 2021, an increase in the transmission cost recovery factor rider effective ~~January 2020, as approved by~~March 2021, and an increase in the ~~PUCT.~~distribution cost recovery factor rider effective March 2021. See Note 2 to the financial statements herein and in the Form 10-K for further discussion of the generation cost recovery rider and transmission and distribution cost recovery factor rider ~~filing.~~filings.

The volume/weather variance is primarily due to the effect of more favorable weather on residential sales.

The return of unprotected excess accumulated deferred income taxes to customers resulted from the return of unprotected excess accumulated deferred income taxes through a rider effective October 2018. In ~~2020, $5.7~~first quarter 2021, $7.1 million was returned to customers as compared to ~~$22.3~~$5.7 million in ~~2019.~~first quarter 2020. There is no effect on net income as the reduction in operating revenues is offset by a reduction in income tax expense. See Note 2 to the financial statements in the Form 10-K for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.

Billed electric energy sales for Entergy Texas for the three months ended March 31,2021 and 2020 are as follows:


	2021	2020	% Change
	(GWh)
Residential	1,539	1,326	16
Commercial	1,000	1,000	—
Industrial	1,928	1,897	2
Governmental	62	64	(3)
Total retail	4,529	4,287	6
Sales for resale:
Associated companies	296	244	21
Non-associated companies	341	85	301
Total	5,166	4,616	12

See Note 13 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 $1.3 million due to bad debt expense as a result of the COVID-19 pandemic;

•an increase of $1.3 million in non-nuclear generation expenses primarily due to higher expenses associated with the Montgomery County Power Station, which was placed in service in January 2021, and a higher scope of work performed in 2021 as compared to the same period in 2020; and

•several individually insignificant items.

Taxes other than income taxes increased primarily due to an increase in ad valorem taxes as a result of higher estimated ad valorem taxes associated with the Montgomery County Power Station.

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Management's Financial Discussion and Analysis

Although the effect in the first quarter 2020 was minimal, Entergy Texas expects a decline in sales volume during 2020 due to the COVID-19 pandemic, especially in the commercial and industrial customer classes. See “~~The COVID-19 Pandemic” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for discussion of the COVID-19 pandemic.~~

~~Other Income Statement Variances~~

Depreciation and amortization expenses increased primarily due to additions to plant in ~~service.~~service, including the Montgomery County Power Station, which was placed in service in January 2021.

Other income ~~increased~~decreased primarily due to ~~an increase~~a decrease in the allowance for equity funds used during construction due to higher construction work in progress in 2020, including the Montgomery County Power Station ~~project.~~project, as compared to the same period in 2021.

~~Income~~Interest expense increased primarily due to a decrease in the allowance for borrowed funds used during construction due to higher construction work in progress in 2020, including the Montgomery County Power Station project, as compared to the same period in 2021.

Income Taxes

The effective income tax rate was 9.1% for the first quarter 2021. The difference in the effective income tax rate for the first quarter 2021 versus the federal statutory rate of 21% was primarily due to the amortization of excess accumulated deferred income taxes and certain book and tax differences related to utility plant items. See Note 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.

The effective income tax rate was (14.8%) for the first quarter 2020. The difference in the effective income tax rate for the first quarter 2020 versus the federal statutory rate of 21% was primarily due to the amortization of excess accumulated deferred income taxes, permanent differences related to income tax deductions for stock-based compensation, 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.See Note 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 103 to the financial statements ~~herein~~in the Form 10-K for discussion of the income tax deductions for stock-based compensation.

~~The effective income tax rate was (554.5%)~~

Liquidity and Capital Resources

Cash Flow

Cash flows for the first quarter 2019. The difference in the effective income tax rate for the first quarter 2019 versus the federal statutory rate of 21% was primarily due to the amortization of excess accumulated deferred income taxes. See Note 10 to the financial statements hereinthree months ended March 31, 2021 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.~~2020 were as follows:

~~Income Tax Legislation~~


	2021	2020
	(In Thousands)
Cash and cash equivalents at beginning of period	$248,596	$12,929

Cash flow provided by (used in):
Operating activities	(28,864)	37,114
Investing activities	(223,696)	(232,650)
Financing activities	3,989	342,320
Net increase (decrease) in cash and cash equivalents	(248,571)	146,784

Cash and cash equivalents at end of period	$25	$159,713

~~See the “Income Tax Legislation~~” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis in the Form 10-K for discussion of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017. Note 3 to the financial statements in the Form 10-K contains additional discussion of the effect of the Tax Act on 2019, 2018, and 2017 results of operations and financial position, the provisions of the Tax Act, and the uncertainties associated with accounting for the Tax Act, and Note 10 to the financial statements herein contains updates to that discussion. Note 2 to the financial statements in the Form 10-K contains a discussion of the regulatory proceedings that have considered the effects of the Tax Act.

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Management's Financial Discussion and Analysis

Operating Activities

~~Liquidity and Capital Resources~~

~~Cash Flow~~

~~Cash flows~~Entergy Texas’s operating activities used $28.9 million of cash for the three months ended March 31, 2021 compared to providing $37.1 million of cash for the three months ended March 31, 2020 primarily due to increased fuel costs as a result of Winter Storm Uri and ~~2019 were as follows:~~an increase of approximately $25 million in storm spending in 2021, primarily due to Hurricane Laura and Hurricane Delta restoration efforts. See “Winter Storm Uri” above for discussion of the incremental fuel and purchased power costs incurred. See Note 2 to the financial statements herein and in the Form 10-K for a discussion of fuel and purchased power cost recovery. See “Hurricane Laura and Hurricane Delta” above for discussion of hurricane restoration efforts.

2020 2019
(In Thousands)
Cash and cash equivalents at beginning of period
$12,929

$56

Cash flow provided by (used in):
Operating activities 37,114
42,651
Investing activities (232,650 ) (163,922 )
Financing activities 342,320
143,444
Net increase in cash and cash equivalents 146,784
22,173

Cash and cash equivalents at end of period
$159,713

$22,229

~~Operating~~Investing Activities

Net cash flow ~~provided by operating~~used in investing activities decreased ~~$5.5~~$9.0 million for the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019~~2020 primarily due to a decrease of $42.9 million in non-nuclear generation construction expenditures, primarily due to higher spending in 2020 on the ~~timing of collection of receivables from customers.~~Montgomery County Power Station project, and money pool activity. The decrease was partially offset by a decrease in the return of unprotected excess accumulated deferred income taxes to customers. See Note 2 to the financial statements in the Form 10-K and Note 10 to the financial statements herein for a discussion of the effects and the regulatory activity regarding the Tax Cuts and Jobs Act.

~~Investing Activities~~

~~Net cash flow used in investing activities increased $68.7 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 primarily due to:~~

an increase of ~~$26.2~~$50.7 million in distribution construction expenditures primarily due to ~~investment~~storm spending in ~~the reliability~~2021. See “Hurricane Laura and ~~infrastructure~~Hurricane Delta” above for discussion of ~~Entergy Texas’s distribution system, including increased spending on advanced metering infrastructure;~~hurricane restoration efforts.

~~an increase of $25.4 million in construction expenditures related to the Port Arthur project and Montgomery County Power Station project; and~~

~~money pool activity.~~

~~Increases~~Decreases in Entergy Texas’s receivable from the money pool are a ~~use~~source of cash flow, and Entergy Texas’s receivable from the money pool ~~increased by~~decreased $4.6 million for the three months ended March 31, 2021 compared to increasing $17.9 million for the three months ended March 31, ~~2020 compared to increasing $3.6 million for the three months ended March 31, 2019.~~2020. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

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~~Management's Financial Discussion and Analysis~~

Financing Activities

Net cash flow provided by financing activities ~~increased $198.9~~decreased $338.3 million for the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, ~~2019~~2020 primarily due ~~to:~~

to a capital contribution of $175 million received from Entergy Corporation in March 2020 in anticipation of upcoming expenditures, including Montgomery County Power ~~Station;~~

~~the repayment, at maturity, of $500 million of 7.125% Series mortgage bonds in February 2019;~~

Station, and the issuance of $175 million of 3.55% Series mortgage bonds in ~~2020; and~~

~~money pool activity.~~

March 2020. The ~~increase~~decrease was partially offset by money pool activity.

Increases in Entergy Texas’s payable to the ~~issuance~~money pool are a source of ~~$300~~cash flow, and Entergy Texas’s payable to the money pool increased by $30.9 million ~~of 4.0% Series first mortgage bonds and $400 million of 4.5% Series first mortgage bonds in January 2019.~~ for the three months ended March 31, 2021.

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.

~~Decreases in Entergy Texas’s payable to the money pool are a use of cash flow, and Entergy Texas’s payable to the money pool decreased by $22.4 million for the three months ended March 31, 2019.~~

Capital Structure

Entergy Texas’s debt to capital ratio is shown in the following table. ~~The decrease in~~


	March 31, 2021		December 31, 2020
Debt to capital	52.8	%	53.7	%
Effect of excluding the securitization bonds	(0.9	%)	(1.3	%)
Debt to capital, excluding securitization bonds (a)	51.9	%	52.4	%
Effect of subtracting cash	—	%	(2.7	%)
Net debt to net capital, excluding securitization bonds (a)	51.9	%	49.7	%

(a)Calculation excludes the ~~debt~~securitization bonds, which are non-recourse to ~~capital ratio for~~ Entergy Texas.

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Entergy Texas, ~~is primarily due to the $175 million capital contribution from received in 2020.~~Inc. and Subsidiaries

Management's Financial Discussion and Analysis

March 31,
2020 December 31, 2019
Debt to capital 50.7 % 51.7 %
Effect of excluding the securitization bonds (2.3 %) (2.8 %)
Debt to capital, excluding securitization bonds (a) 48.4 % 48.9 %
Effect of subtracting cash (2.1 %) (0.2 %)
Net debt to net capital, excluding securitization bonds (a) 46.3 % 48.7 %


~~(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. 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. Following are updates to information provided in the Form 10-K.

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~~Entergy Texas, Inc. and Subsidiaries~~

~~Management's Financial Discussion and Analysis~~

Although the effect in the first quarter 2020 was minimal, Entergy Texas expects negative changes during 2020 to its customer payment patterns and its cash flow activity due to the COVID-19 pandemic. See “~~The COVID-19 Pandemic~~” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for discussion of the COVID-19 pandemic. Despite the effects of the pandemic on financial markets Entergy Texas issued $175 million of long-term mortgage bonds in March 2020. Additional discussion of Entergy Texas’s liquidity and capital resources follows.

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


March 31, 2021	December 31, 2020	March 31, 2020	December 31, 2019
(In Thousands)
($30,858)	$4,601	$29,092	$11,181

March 31,
2020
December 31,
2019

March 31,
2019

December 31,
2018
(In Thousands)
$29,092 $11,181 $3,571 ($22,389)

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 September 2024. 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, ~~2020,~~2021, there were no cash borrowings and $1.3 million of 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, ~~2020, a $10.4~~2021, $30.2 million ~~letter~~in letters of credit ~~was~~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.

Liberty County Solar Facility

In September 2020, Entergy Texas filed an application seeking PUCT approval to amend Entergy Texas’s certificate of convenience and necessity to acquire the 100 MW Liberty County Solar Facility and a determination that Entergy Texas’s acquisition of the facility through a tax equity partnership is in the public interest. In its preliminary order, the PUCT determined that, in considering Entergy Texas’s application, it would not specifically address whether Entergy Texas’s use of a tax equity partnership is in the public interest. In March 2021 intervenors and PUCT staff filed testimony, and Entergy Texas filed rebuttal testimony in April 2021. A hearing on the merits was held in April 2021. Post-hearing briefs and reply briefs are due in May 2021. Closing is expected to occur in 2023.

Hardin County Peaking Facility

In April 2020, Entergy Texas and East Texas Electric Cooperative, Inc. filed a joint report and application seeking PUCT approvals related to two transactions: (1) Entergy Texas’s acquisition of the Hardin County Peaking Facility from East Texas Electric Cooperative, Inc.; and (2) Entergy Texas’s sale of a 7.56% partial interest in the Montgomery County Power Station to East Texas Electric Cooperative, Inc. The two transactions, currently

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Management's Financial Discussion and Analysis

expected to close in June 2021, are interdependent. In October 2020, Entergy Texas filed an unopposed settlement agreement supporting approval of the transactions. Key provisions of the settlement include: Entergy Texas will propose to depreciate its investment in Hardin County Peaking Facility through the end of 2041; Entergy Texas’s recovery of its investment in Hardin County Peaking Facility will be capped at approximately $36 million; and Entergy Texas will not seek recovery of an acquisition adjustment, if any, or transaction costs for either transaction. The settlement was approved by the PUCT in April 2021.

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.

Distribution Cost Recovery Factor (DCRF) Rider

~~In March~~As discussed in the Form 10-K, in October 2020, Entergy Texas filed with the PUCT a request to amend its DCRF rider. The proposed rider is designed to collect from Entergy Texas’s retail customers approximately ~~$23.6~~$26.3 million annually, or ~~$20.4~~$6.8 million in incremental annual ~~DCRF revenue~~revenues beyond Entergy Texas’s currently effective DCRF rider ~~from Entergy Texas’s retail customers~~ based on its capital invested in distribution between January 1, ~~2019~~2020 and ~~December~~August 31, ~~2019.~~2020. In February 2021 the administrative law judge with the State Office of Administrative Hearings approved Entergy Texas’s agreed motion for interim rates, which went into effect in March 2021. In March 2021 the parties filed an unopposed settlement recommending that Entergy Texas be allowed to collect its full requested DCRF revenue requirement and resolving all issues in the proceeding. This case has been remanded to the PUCT for consideration of a final order at a future open meeting.

Transmission Cost Recovery Factor (TCRF) Rider

Fuel and purchased power recovery

In ~~September 2019,~~February 2021, Entergy Texas filed an application to ~~reconcile~~implement a fuel refund for a cumulative over-recovery of approximately $75 million that is primarily attributable to settlements received by Entergy Texas from MISO related to Hurricane Laura. Entergy Texas planned to issue the refund over the period of March through August 2021. On February 22, 2021, Entergy Texas filed a motion to abate its fuel ~~and purchased power costs for~~refund proceeding to assess how the ~~period from April 2016 through~~February 2021 winter storm impacted Entergy Texas’s fuel over-recovery position. In March ~~2019. During the reconciliation period,~~2021, Entergy Texas ~~incurred approximately $1.6 billion in Texas jurisdictional eligible~~withdrew its application to implement the fuel ~~and purchased power expenses, net of certain revenues credited to such expenses and other adjustments.~~refund. Entergy Texas ~~estimated an under-recovery~~is continuing to evaluate its fuel balance and will file a subsequent refund or surcharge application consistent with the requirements of ~~approximately $25.8 million,~~the PUCT’s rules.

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Management's Financial Discussion and Analysis

COVID-19 Orders

~~including interest, which Entergy Texas requested authority to carry over as~~

As discussed in the ~~beginning balance for the subsequent reconciliation period beginning April 2019. In March 2020 an intervenor filed testimony proposing that the PUCT disallow: (1) $2 million~~Form 10-K, in replacement power costs associated with generation outages during the reconciliation period; and (2) $24.4 million associated with the operation of the Spindletop natural gas storage facility during the reconciliation period. In April 2020, Entergy Texas filed rebuttal testimony refuting all points raised by the intervenor. A hearing on the merits is currently set for May 2020.

~~COVID-19 Order~~

In March 2020 the PUCT authorized electric utilities to record as a regulatory asset expenses resulting from the effects of ~~COVID-19.~~the COVID-19 pandemic. In future proceedings the PUCT will consider whether each utility's request for recovery of these regulatory assets is reasonable and necessary, the appropriate period of recovery, and any amount of carrying costs thereon. In March 2020 the PUCT ordered a moratorium on disconnections for nonpayment for all customer classes, but, in April 2020, revised the disconnect moratorium to apply only to residential customers. The PUCT allowed the moratorium to expire on June 13, 2020, but on July 17, 2020, the PUCT re-established the disconnect moratorium for residential customers until August 31, 2020. In January 2021, Entergy Texas resumed disconnections for customers with past-due balances that have not made payment arrangements. As of March 31, 2021, Entergy Texas recorded a regulatory asset of $10.7 million for costs associated with the COVID-19 pandemic.

Generation Cost Recovery Rider

As discussed in the Form 10-K, in October 2020, Entergy Texas filed an application to establish a generation cost recovery rider with an initial annual revenue requirement of approximately $91 million to begin recovering a return of and on its capital investment in the Montgomery County Power Station through August 31, 2020. In December 2020, Entergy Texas filed an unopposed settlement supporting a generation cost recovery rider with an annual revenue requirement of approximately $86 million. On January 14, 2021, the PUCT approved the generation cost recovery rider settlement rates on an interim basis and abated the proceeding. In March 2021, Entergy Texas filed to update its generation cost recovery rider to include investment in Montgomery County Power Station after August 31, 2020. In April 2021 the ALJ issued an order unabating the proceeding to consider Entergy Texas’s updated application and establishing a procedural schedule that will result in administrative approval of Entergy Texas’s application in June 2021 if it is unopposed by parties to the proceeding.

In December 2020, Entergy Texas also filed an application to amend its generation cost recovery rider to reflect its acquisition of the Hardin County Peaking Facility, which is expected to close in June 2021. The initial generation cost recovery rider rates proposed in the application represent no change from the generation cost recovery rider rates to be established in Entergy Texas’s previous generation cost recovery rider proceeding. Once Entergy Texas has acquired the Hardin County Peaking Facility, its investment in the facility will be reflected in an updated filing to Entergy Texas’s application, which will be made within 60 days of the acquisition’s closing.

Hurricane Laura, Hurricane Delta, and Winter Storm Uri

Federal Regulation

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

135

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Entergy Texas, Inc. and Subsidiaries

Management's Financial Discussion and Analysis

Nuclear Matters

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

~~Nuclear Matters~~

~~See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS -Nuclear Matters” in the Form 10-K for 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 utility regulatory accounting, impairment of long-lived assets, ~~and trust fund investments,~~ taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies. ~~The following is an update to that discussion.~~

~~Other Postretirement Benefits~~

As described in Note 6 to the financial statements herein, in March 2020, Entergy announced changes to its other postretirement benefits. As a result, Entergy Texas now expects 2020 other postretirement health care and life insurance benefit income, including amounts capitalized, of $8.9 million.

New Accounting Pronouncements

See “New Accounting Pronouncements” section of Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements.

136

Table of Contents


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)


	2021	2020
	(In Thousands)
OPERATING REVENUES
Electric	$480,220	$339,336

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	112,396	41,346

Purchased power	141,362	119,791
Other operation and maintenance	62,955	58,933

Taxes other than income taxes	21,875	19,272
Depreciation and amortization	50,936	42,566
Other regulatory charges (credits) - net	15,840	21,368
TOTAL	405,364	303,276

OPERATING INCOME	74,856	36,060

OTHER INCOME
Allowance for equity funds used during construction	2,445	10,641
Interest and investment income	224	429
Miscellaneous - net	(423)	(346)
TOTAL	2,246	10,724

INTEREST EXPENSE
Interest expense	23,038	22,858
Allowance for borrowed funds used during construction	(984)	(4,573)
TOTAL	22,054	18,285

INCOME BEFORE INCOME TAXES	55,048	28,499

Income taxes	4,990	(4,208)

NET INCOME	50,058	32,707

Preferred dividend requirements	470	470

EARNINGS APPLICABLE TO COMMON STOCK	$49,588	$32,237

See Notes to Financial Statements.

137

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED INCOME STATEMENTS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

2020 2019
(In Thousands)
OPERATING REVENUES
Electric
$339,336

$340,474

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 41,346
48,103
Purchased power 119,791
140,868
Other operation and maintenance 58,933
59,626
Taxes other than income taxes 19,272
18,640
Depreciation and amortization 42,566
37,037
Other regulatory charges - net 21,368
19,459
TOTAL 303,276
323,733

OPERATING INCOME 36,060
16,741

OTHER INCOME
Allowance for equity funds used during construction 10,641
5,081
Interest and investment income 429
1,682
Miscellaneous - net (346 ) (363 )
TOTAL 10,724
6,400

INTEREST EXPENSE
Interest expense 22,858
22,460
Allowance for borrowed funds used during construction (4,573 ) (2,580 )
TOTAL 18,285
19,880

INCOME BEFORE INCOME TAXES 28,499
3,261

Income taxes (4,208 ) (18,081 )

NET INCOME 32,707
21,342

Preferred dividend requirements 470
—

EARNINGS APPLICABLE TO COMMON STOCK
$32,237

$21,342

See Notes to Financial Statements.

(Page left blank intentionally)

138

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)
2020 2019
(In Thousands)
OPERATING ACTIVITIES
Net income
$32,707

$21,342
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation and amortization 42,566
37,037
Deferred income taxes, investment tax credits, and non-current taxes accrued 3,921
(10,123 )
Changes in assets and liabilities:
Receivables 1,221
65,394
Fuel inventory (1,127 ) (173 )
Accounts payable (35,288 ) (57,447 )
Taxes accrued (20,597 ) (9,465 )
Interest accrued (7,380 ) (4,638 )
Deferred fuel costs 8,138
8,331
Other working capital accounts 5,004
(913 )
Provisions for estimated losses 5
1,074
Other regulatory assets 34,309
1,358
Other regulatory liabilities (8,854 ) (24,365 )
Pension and other postretirement liabilities (9,086 ) (1,120 )
Other assets and liabilities (8,425 ) 16,359
Net cash flow provided by operating activities 37,114
42,651

INVESTING ACTIVITIES
Construction expenditures (236,984 ) (176,186 )
Allowance for equity funds used during construction 10,641
5,111
Changes in money pool receivable - net (17,911 ) (3,571 )
Changes in securitization account 11,604
10,724
Net cash flow used in investing activities (232,650 ) (163,922 )

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 194,631
692,633
Retirement of long-term debt (26,864 ) (525,841 )
Capital contribution from parent 175,000
—
Change in money pool payable - net —
(22,389 )
Dividends paid:
Preferred stock (653 ) —
Other 206
(959 )
Net cash flow provided by financing activities 342,320
143,444

Net increase in cash and cash equivalents 146,784
22,173
Cash and cash equivalents at beginning of period 12,929
56
Cash and cash equivalents at end of period
$159,713

$22,229

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized
$29,699

$26,002
Income taxes
($2,358 )
$—

See Notes to Financial Statements.

Table of Contents


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
	2021	2020
	(In Thousands)
OPERATING ACTIVITIES
Net income	$50,058	$32,707
Adjustments to reconcile net income to net cash flow provided by (used in) operating activities:
Depreciation and amortization	50,936	42,566
Deferred income taxes, investment tax credits, and non-current taxes accrued	(1,522)	3,921
Changes in assets and liabilities:
Receivables	(16,424)	1,221
Fuel inventory	3,509	(1,127)
Accounts payable	(42,511)	(35,288)
Taxes accrued	(5,123)	(20,597)
Interest accrued	(10,989)	(7,380)
Deferred fuel costs	(62,970)	8,138
Other working capital accounts	1,118	5,004
Provisions for estimated losses	(31)	5
Other regulatory assets	40,484	34,309
Other regulatory liabilities	(13,649)	(8,854)
Pension and other postretirement liabilities	(5,434)	(9,086)
Other assets and liabilities	(16,316)	(8,425)
Net cash flow provided by (used in) operating activities	(28,864)	37,114

INVESTING ACTIVITIES
Construction expenditures	(238,903)	(236,984)
Allowance for equity funds used during construction	2,445	10,641



Changes in money pool receivable - net	4,601	(17,911)
Changes in securitization account	8,161	11,604

Net cash flow used in investing activities	(223,696)	(232,650)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	0	194,631
Retirement of long-term debt	(27,951)	(26,864)
Capital contribution from parent	0	175,000

Change in money pool payable - net	30,858	0


Preferred stock dividends paid	(470)	(653)
Other	1,552	206
Net cash flow provided by financing activities	3,989	342,320

Net increase (decrease) in cash and cash equivalents	(248,571)	146,784
Cash and cash equivalents at beginning of period	248,596	12,929
Cash and cash equivalents at end of period	$25	$159,713

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest - net of amount capitalized	$33,394	$29,699
Income taxes	($836)	($2,358)

See Notes to Financial Statements.

139

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2020 and December 31, 2019
(Unaudited)
2020 2019
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash
$30

$25
Temporary cash investments 159,683
12,904
Total cash and cash equivalents 159,713
12,929
Securitization recovery trust account 26,116
37,720
Accounts receivable:
Customer 64,497
59,365
Allowance for doubtful accounts (613 ) (471 )
Associated companies 42,628
24,001
Other 7,177
17,050
Accrued unbilled revenues 52,994
50,048
Total accounts receivable 166,683
149,993
Fuel inventory - at average cost 48,720
47,593
Materials and supplies - at average cost 45,647
46,056
Prepayments and other 15,481
21,012
TOTAL 462,360
315,303

OTHER PROPERTY AND INVESTMENTS
Investments in affiliates - at equity 384
396
Non-utility property - at cost (less accumulated depreciation) 376
376
Other 20,299
20,077
TOTAL 21,059
20,849

UTILITY PLANT
Electric 5,274,289
5,199,027
Construction work in progress 897,690
760,354
TOTAL UTILITY PLANT 6,171,979
5,959,381
Less - accumulated depreciation and amortization 1,796,382
1,770,852
UTILITY PLANT - NET 4,375,597
4,188,529

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets (includes securitization property of $143,883 as of March 31, 2020 and $160,375 as of December 31, 2019) 478,339
512,648
Other 45,926
33,393
TOTAL 524,265
546,041

TOTAL ASSETS
$5,383,281

$5,070,722

See Notes to Financial Statements.

Table of Contents


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 2021 and December 31, 2020
(Unaudited)
	2021	2020
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$25	$26
Temporary cash investments	0	248,570
Total cash and cash equivalents	25	248,596
Securitization recovery trust account	28,072	36,233
Accounts receivable:
Customer	108,152	103,221
Allowance for doubtful accounts	(15,058)	(16,810)
Associated companies	14,385	18,892
Other	14,995	11,780
Accrued unbilled revenues	62,845	56,411
Total accounts receivable	185,319	173,494

Fuel inventory - at average cost	50,022	53,531
Materials and supplies - at average cost	60,011	56,227


Prepayments and other	12,493	20,165
TOTAL	335,942	588,246

OTHER PROPERTY AND INVESTMENTS
Investments in affiliates - at equity	336	349
Non-utility property - at cost (less accumulated depreciation)	376	376
Other	17,552	19,889
TOTAL	18,264	20,614

UTILITY PLANT
Electric	6,771,662	6,007,687
Construction work in progress	178,917	879,908
TOTAL UTILITY PLANT	6,950,579	6,887,595
Less - accumulated depreciation and amortization	1,898,407	1,864,494
UTILITY PLANT - NET	5,052,172	5,023,101

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets (includes securitization property of $60,618 as of March 31, 2021 and $78,590 as of December 31, 2020)	484,229	524,713

Other	78,654	70,397
TOTAL	562,883	595,110

TOTAL ASSETS	$5,969,261	$6,227,071

See Notes to Financial Statements.

140

Table of Contents

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2020 and December 31, 2019
(Unaudited)
2020 2019
(In Thousands)
CURRENT LIABILITIES
Accounts payable:
Associated companies
$44,446

$58,055
Other 156,817
188,460
Customer deposits 39,774
40,232
Taxes accrued 29,111
49,708
Interest accrued 11,612
18,992
Current portion of unprotected excess accumulated deferred income taxes 27,244
26,552
Deferred fuel costs 21,139
13,001
Other 10,223
10,521
TOTAL 340,366
405,521

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 594,102
585,413
Accumulated deferred investment tax credits 10,405
10,559
Regulatory liability for income taxes - net 215,551
225,980
Other regulatory liabilities 42,968
42,085
Asset retirement cost liabilities 7,736
7,631
Accumulated provisions 8,113
8,108
Long-term debt (includes securitization bonds of $178,555 as of March 31, 2020 and $205,349 as of December 31, 2019) 2,091,130
1,922,956
Other 66,266
63,062
TOTAL 3,036,271
2,865,794

Commitments and Contingencies

EQUITY
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 46,525,000 shares in 2020 and 2019 49,452
49,452
Paid-in capital 955,182
780,182
Retained earnings 967,010
934,773
Total common shareholder's equity 1,971,644
1,764,407
Preferred stock without sinking fund 35,000
35,000
TOTAL 2,006,644
1,799,407

TOTAL LIABILITIES AND EQUITY
$5,383,281

$5,070,722

See Notes to Financial Statements.


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2021 and December 31, 2020
(Unaudited)
	2021	2020
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$200,000	$200,000
Accounts payable:
Associated companies	81,613	55,944
Other	139,190	350,947
Customer deposits	33,831	36,282
Taxes accrued	47,315	52,438
Interest accrued	9,867	20,856
Current portion of unprotected excess accumulated deferred income taxes	30,591	29,249
Deferred fuel costs	22,386	85,356


Other	12,377	12,370
TOTAL	577,170	843,442

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	635,212	639,422
Accumulated deferred investment tax credits	9,788	9,942
Regulatory liability for income taxes - net	164,680	175,594
Other regulatory liabilities	28,220	32,297
Asset retirement cost liabilities	8,175	8,063
Accumulated provisions	8,351	8,382

Long-term debt (includes securitization bonds of $95,185 as of March 31, 2021 and $123,066 as of December 31, 2020)	2,265,827	2,293,708
Other	64,672	58,643
TOTAL	3,184,925	3,226,051

Commitments and Contingencies

EQUITY
Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 46,525,000 shares in 2021 and 2020	49,452	49,452
Paid-in capital	955,162	955,162
Retained earnings	1,167,552	1,117,964
Total common shareholder's equity	2,172,166	2,122,578
Preferred stock without sinking fund	35,000	35,000
TOTAL	2,207,166	2,157,578

TOTAL LIABILITIES AND EQUITY	$5,969,261	$6,227,071

See Notes to Financial Statements.

141

ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

Common Equity
Preferred Stock
Common
Stock

Paid-in
Capital

Retained
Earnings
Total
(In Thousands)

Balance at December 31, 2018
$—

$49,452

$596,994

$775,956

$1,422,402

Net income —
—
—
21,342
21,342
Balance at March 31, 2019
$—

$49,452

$596,994

$797,298

$1,443,744

Balance at December 31, 2019
$35,000

$49,452

$780,182

$934,773

$1,799,407

Net income —
—
—
32,707
32,707
Capital contribution from parent —
—
175,000
—
175,000
Preferred stock dividends —
—
—
(470 ) (470 )
Balance at March 31, 2020
$35,000

$49,452

$955,182

$967,010

$2,006,644

See Notes to Financial Statements.

Table of Contents


ENTERGY TEXAS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)

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

Balance at December 31, 2019	$35,000		$49,452		$780,182		$934,773		$1,799,407

Net income	0		0		0		32,707		32,707
Capital contribution from parent	0		0		175,000		0		175,000
Preferred stock dividends	0		0		0		(470)		(470)
Balance at March 31, 2020	$35,000		$49,452		$955,182		$967,010		$2,006,644











Balance at December 31, 2020	$35,000		$49,452		$955,162		$1,117,964		$2,157,578

Net income	0		0		0		50,058		50,058


Preferred stock dividends	0		0		0		(470)		(470)
Balance at March 31, 2021	$	35,000	$	49,452	$	955,162	$	1,167,552	$	2,207,166











See Notes to Financial Statements.

142

ENTERGY TEXAS, INC. AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

Three Months Ended Increase/
2020 2019 (Decrease) %
(Dollars In Millions)
Electric Operating Revenues:
Residential
$140

$148

($8 ) (5 )
Commercial 83
79
4
5
Industrial 90
88
2
2
Governmental 6
5
1
20
Total billed retail 319
320
(1 ) —
Sales for resale:
Associated companies 7
14
(7 ) (50 )
Non-associated companies 1
3
(2 ) (67 )
Other 12
3
9
300
Total
$339

$340

($1 ) —

Billed Electric Energy Sales (GWh):
Residential 1,326
1,360
(34 ) (3 )
Commercial 1,000
1,046
(46 ) (4 )
Industrial 1,897
1,831
66
4
Governmental 64
62
2
3
Total retail 4,287
4,299
(12 ) —
Sales for resale:
Associated companies 244
402
(158 ) (39 )
Non-associated companies 85
96
(11 ) (11 )
Total 4,616
4,797
(181 ) (4 )

Table of Contents

SYSTEM ENERGY RESOURCES, INC.

MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS

System Energy’s principal asset currently 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.

Results of Operations

Net Income

Net income ~~increased $4.9~~decreased $4.6 million primarily due to ~~provisions against revenue recorded in 2019 in connection with the complaint against System Energy’s return on equity. Also contributing to the increase was an increase~~a decrease in the allowance for equity funds used during construction resulting from higher spending onin 2020 including the scheduled 2020 Grand Gulf ~~outages~~refueling outage.

Income Taxes

The effective income tax rate was (79.5%) for the first quarter 2021. The difference in the effective income tax rate for the first quarter 2021 versus the federal statutory rate of 21% was primarily due to the amortization of excess accumulated deferred income taxes, certain book and ~~upgrades in 2020.~~tax differences related to utility plant items, the amortization of investment tax credits, and book and tax differences related to the allowance for equity funds used during construction, partially offset by state income taxes. See ~~Note~~Notes 2 and 10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for ~~further~~a discussion of the ~~return on equity complaint against System Energy.~~effects and regulatory activity regarding the Tax Cuts and Jobs Act.

~~Income Taxes~~

The effective income tax rate was 16% for the first quarter 2020. The difference in the effective income tax rate for the first quarter 2020 versus the federal statutory rate of 21% was primarily due to certain book and tax differences related to utility plant items, permanent differences related to income tax deductions for stock-based compensation, and book and tax differences related to the allowance for equity funds used during construction, partially offset by state income taxes. See Note 103 to the financial statements ~~herein~~in the Form 10-K for discussion of the income tax deductions for stock-based compensation.

The effective income tax rate was 20.6% for the first quarter 2019. The difference in the effective income tax rate for the first quarter 2019 versus the federal statutory rate of 21% was primarily due to certain book and tax differences related to utility plant items and book and tax differences related to the allowance for equity funds used during construction, partially offset by state income taxes and the provision for uncertain tax positions.

~~Income Tax Legislation~~

143

~~138~~

Table of Contents

System Energy Resources, Inc.

Management's Financial Discussion and Analysis

Liquidity and Capital Resources

Cash Flow

Cash flows for the three months ended March 31, ~~2020~~2021 and ~~2019~~2020 were as follows:


	2021	2020
	(In Thousands)
Cash and cash equivalents at beginning of period	$242,469	$68,534

Cash flow provided by (used in):
Operating activities	(29,242)	60,442
Investing activities	(23,437)	(79,532)
Financing activities	(57,563)	43,002
Net increase (decrease) in cash and cash equivalents	(110,242)	23,912

Cash and cash equivalents at end of period	$132,227	$92,446

2020 2019
(In Thousands)
Cash and cash equivalents at beginning of period
$68,534

$95,685

Cash flow provided by (used in):
Operating activities 60,442
57,717
Investing activities (79,532 ) 70,709
Financing activities 43,002
(65,810 )
Net increase in cash and cash equivalents 23,912
62,616

Cash and cash equivalents at end of period
$92,446

$158,301

Operating Activities

~~Net cash flow provided by~~System Energy’s operating activities ~~increased by $2.7~~used $29.2 million of cash for the three months ended March 31, ~~2020~~2021 compared to the three months ended March 31, 2019 primarily due to the timing of payments to vendors, partially offset by an increase in spending of $17.7 million on nuclear refueling outages in 2020 as compared to the same period in 2019.

~~Investing Activities~~

~~System Energy’s investing activities used $79.5~~providing $60.4 million of cash for the three months ended March 31, 2020 primarily due to income tax payments of $39.1 million in 2021 and timing of payments to vendors, partially offset by a decrease in spending of $18 million on nuclear refueling outages in 2021 as compared to ~~providing $70.7~~the same period in 2020. System Energy had income tax payments in 2021 as a result of the amended Mississippi tax returns filed based on federal adjustments related to the resolution of the 2014-2015 IRS audit, as well as a portion of the payments made in accordance with an intercompany income tax allocation agreement. See Note 3 to the financial statements in the Form 10-K for discussion of the 2014-2015 IRS audit.

Investing Activities

Net cash flow used in investing activities decreased $56.1 million ~~of cash~~ for the three months ended March 31, ~~2019~~2021 compared to the three months ended March 31, 2020 primarily due ~~to the following activity:~~to:

~~a decrease~~•an increase of ~~$77.8~~$67.4 million as a result of fluctuations in nuclear fuel activity because of variations from year to year in the timing and pricing of fuel reload requirements in the Utility business, material and services deliveries, and the timing of cash payments during the nuclear fuel cycle; and

~~money pool activity; and~~

~~an increase~~•a decrease of ~~$35.5~~$46.4 million in nuclear construction expenditures as a result of spending in 2020 on Grand Gulf outage projects and upgrades.

~~Decreases~~The decrease was partially offset by money pool activity.

Increases in System Energy’s receivable from the money pool are a ~~source~~use of cash flow and System Energy’s receivable from the money pool ~~decreased~~increased by $12.7 million for the three months ended March 31, 2021 compared to decreasing by $42.5 million for the three months ended March 31, ~~2020 compared to decreasing by $81.6 million for the three months ended March 31, 2019.~~2020. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

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Financing Activities

System Energy’s financing activities ~~provided~~used $57.6 million of cash for the three months ended March 31, 2021 compared to providing $43 million of cash for the three months ended March 31, 2020 ~~compared to using $65.8 million of cash for the three months ended March 31, 2019~~ primarily due to the ~~following activity:~~

~~net borrowings~~repayment in February 2021 of ~~$56.7~~$100 million of ~~long-term borrowings in 2020 compared to net repayments of $19.8 million of long-term borrowings in 2019 on~~3.42% Series J notes by the System Energy nuclear fuel company variable interest ~~entity’s credit facility; and~~entity.

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~~a decrease of $31.8 million in common stock dividends and distributions in 2020 in order to maintain System Energy’s capital structure.~~

Capital Structure

System Energy’s debt to capital ratio is shown in the following table. The ~~increase~~decrease in the debt to capital ratio is primarily due to ~~an increase in~~the net repayment of long-term debt ~~outstanding.~~in 2021.


	March 31, 2021		December 31, 2020
Debt to capital	41.5	%	42.7	%
Effect of subtracting cash	(4.5	%)	(8.5	%)
Net debt to net capital	37.0	%	34.2	%

March 31,
2020
December 31, 2019
Debt to capital 45.4 % 43.5 %
Effect of subtracting cash (4.1 %) (3.3 %)
Net debt to net capital 41.3 % 40.2 %

Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings and long-term debt, including the currently maturing portion. Capital consists of debt and common equity. Net capital consists of capital less cash and cash equivalents. System Energy uses the debt to capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating System Energy’s financial condition. 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. Following are updates to the information provided in the Form 10-K.

System Energy’s receivables from the money pool were as follows:


March 31, 2021	December 31, 2020	March 31, 2020	December 31, 2019
(In Thousands)
$16,682	$4,004	$16,819	$59,298

March 31,
2020

December 31,
2019

March 31,
2019

December 31,
2018
(In Thousands)
$16,819 $59,298 $25,487 $107,122

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 September ~~2021.~~2022. As of March 31, ~~2020, $88.3~~2021, $63.4 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.

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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.

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~~Management's Financial Discussion and Analysis~~

Complaints Against System Energy

Return on Equity and Capital Structure Complaints

The ALJ initial decision is an interim step in the ~~MISO transmission owner proceeding (Opinion No. 569).~~

FERC litigation process. In ~~February 2020~~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, MPSC, ~~and APSC,~~City Council, and the FERC trial staff filed ~~supplemental testimony addressing Opinion No. 569 and how it would affect the return~~briefs on equity evaluation for the two complaint periods concerning System Energy. For the first refund period, based on their respective interpretations and applications of the Opinion No. 569 methodology, the LPSC argues for an authorized return on equity for System Energy of 8.44%; the MPSC and APSC argue for an authorized return on equity of 8.41%; and the FERC trial staff argues for an authorized return on equity of 9.22%. For the second refund period and on a prospective basis, based on their respective interpretations and applications of the Opinion No. 569 methodology, the LPSC argues for an authorized return on equity for System Energy of 7.89%; the MPSC and APSC argue that an authorized return on equity of 8.01% may be appropriate; and the FERC trial staff argues for an authorized return on equity of 8.66%.

In April 2020, System Energy filed supplemental answering testimony addressing Opinion No. 569. System Energy argues that the Opinion No. 569 methodology is conceptually and analytically defective for purposes of establishing just and reasonable authorized return on equity determinations and proposes an alternative approach. As its primary recommendation, System Energy continues to support the return on equity determinations in its March 2019 testimony for the first refund period and its June 2019 testimony for the second refund period. Under the Opinion No. 569 methodology, System Energy calculates a “presumptively just and reasonable range” for the authorized return on equity for the first refund period of 8.57% to 9.52%, and for the second refund period of 8.28% to 9.11%. System Energy argues that these rangesexceptions. Reply briefs opposing exceptions are not just and reasonable results. Under its proposed alternative methodology, System Energy calculates an authorized return on equity of 10.26% for the first refund period, which also falls within the presumptively just and reasonable range calculated for the second refund period and prospectively.

~~The schedule was further revised in March 2020, and rebuttal testimony addressing Opinion No. 569 is~~ due in ~~June 2020; the hearing in the System Energy proceeding will commence in August 2020; and the initial decision will be due in December 2020.~~May 2021.

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. In February 2019 the presiding ALJ ruled that the hearing ordered by the FERC includes the issue of whether specific subcategories of accumulated deferred income tax should be included in, or excluded from, System Energy’s formula rate. In March 2019 the LPSC, MPSC, APSC, and City Council filed direct testimony. The LPSC testimony sought refunds that include the renewal lease payments (approximately $17.2 million per year since July 2015), rate base reductions for accumulated deferred income taxes associated with uncertain tax positions, and the cost of capital additions associated with the sale-leaseback interest, as well as interest on those amounts.

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arising from uncertain tax positions should be rejected because the liabilities do not provide cost-free capital, the repayment timing of the liabilities is uncertain, and the outcome of the underlying tax positions is uncertain. System Energy’s testimony also challenged the refund calculations supplied by the other parties.

A hearing was held before a FERC ALJ in November 2019. In April 2020 the ALJ issued the initial decision. Among other things, the ALJ determined that refunds were due on three main issues. First, with regard to the lease renewal payments, the ALJ determined that System Energy is recovering an unjust acquisition premium through the lease renewal payments, and that System Energy’s recovery from customers through rates should be limited to the cost of service based on the remaining net book value of the leased assets, which is approximately $70 million. The ALJ found that the remedy for this issue should be the refund of lease payments (approximately $17.2 million per year since July 2015) with interest determined at the FERC quarterly interest rate, which would be offset by the addition of the net book value of the leased assets in the cost of service. The ALJ did not calculate a value for the refund expected as a result of this

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remedy. In addition, System Energy would no longer recover the lease payments in rates prospectively. Second, with regard to the liabilities associated with uncertain tax positions, the ALJ determined that the liabilities are accumulated deferred income taxes and that System Energy’s rate base should have been reduced for those liabilities. If the ALJ’s initial decision is upheld, the estimated refund for this issue through March 31, ~~2020,~~2021, is approximately ~~$397~~$422 million, plus interest, which is approximately ~~$96~~$115 million through March 31, ~~2020.~~2021. The ALJ also found that System Energy should include liabilities associated with uncertain tax positions as a rate base reduction going forward. Third, with regard to the depreciation expense adjustments, the ALJ found that System Energy should correct for the error in re-billings retroactively and prospectively, but that System Energy should not be permitted to recover interest on any retroactive return on enhanced rate base resulting from such corrections. If the initial decision is affirmed on this issue, System Energy estimates refunds of approximately ~~$18~~$19 million, which includes interest through March 31, ~~2020.~~2021.

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. System Energy plans to file briefs on exceptions to the FERC, re-urging its positions and requesting the reversal of many of the findings in the ALJ’s initial decision, including the lease renewal and uncertain tax position issues. The ALJ in the initial decision acknowledges that these are issues of first impression before the FERC. ~~Briefs on exceptions from all parties are scheduled for June 2020, and briefs opposing exceptions are scheduled for September 2020.~~ The case is pending before the FERC, which will ~~then~~ review the case and issue an order on the proceeding, and the FERC may accept, reject, or modify the ALJ’s initial decision in whole or in part.Refunds, if any, that might be required will only become due after the FERC issues its order reviewing the initial decision.

LPSC Authorization of Additional Complaints

As discussed in the Form 10-K, in May 2020 the LPSC authorized its staff to file additional complaints at 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, and the first of the additional complaints was filed by the LPSC, the APSC, the MPSC and the City Council in September 2020. The second of the additional complaints was filed at the FERC in March 2021 by the LPSC, the APSC, and the City Council against System Energy, Entergy Services, Entergy Operations, and Entergy Corporation. The second complaint contains two primary allegations. First, it alleges that, based on the plant’s capacity factor and alleged safety performance, System Energy and the other respondents imprudently operated Grand Gulf during the period 2016-2020, and it seeks refunds of at least $360 million in alleged replacement energy costs, in addition to other costs, including those that can only be identified upon further investigation. Second, it alleges that the performance and/or management of the 2012 extended power uprate of Grand Gulf was imprudent, and it seeks refunds of all costs of the 2012 uprate that are determined to result from imprudent planning or management of the project. In addition to the requested refunds, the complaint asks that the FERC modify the Unit Power Sales Agreement to provide for full cost recovery only if certain performance

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indicators are met and to require pre-authorization of capital improvement projects in excess of $125 million before related costs may be passed through to customers in rates. In April 2021, System Energy and the other respondents filed their motion to dismiss and answer to the complaint. System Energy requested that the FERC dismiss the claims within the complaint. With respect to the claim concerning operations, System Energy argues that the complaint does not meet its legal burden because, among other reasons, it fails to allege any specific imprudent conduct. With respect to the claim concerning the uprate, System Energy argues that the complaint fails because, among other reasons, the complainants’ own conduct prevents them from raising a serious doubt as to the prudence of the uprate. System Energy also requests that the FERC dismiss other elements of the complaint, including the proposed modifications to the Unit Power Sales Agreement, because they are not warranted.

Nuclear Matters

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

NRC Reactor Oversight Process

~~142~~

~~Table~~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 ~~Contents~~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, and “multiple/repetitive degraded cornerstone column,” or Column 4. 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.

~~System Energy Resources, Inc.~~

~~Management's Financial Discussion and Analysis~~

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, impairment of long-lived assets, ~~and trust fund investments,~~ taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies. ~~The following is an update to that discussion.~~

~~Other Postretirement Benefits~~

As described in Note 6 to the financial statements herein, in March 2020, Entergy announced changes to its other postretirement benefits. As a result, System Energy now expects 2020 other postretirement health care and life insurance benefit income, including amounts capitalized, of $1.5 million.

New Accounting Pronouncements

See “New Accounting Pronouncements” section of Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements.

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SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)


		2021	2020
	(In Thousands)
OPERATING REVENUES
Electric		$117,746	$130,664

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale		16,859	13,143
Nuclear refueling outage expenses		6,718	8,272
Other operation and maintenance		41,960	40,471
Decommissioning		9,529	9,157
Taxes other than income taxes		6,825	7,973
Depreciation and amortization		28,194	26,899
Other regulatory charges (credits) - net		11,550	(10,560)
TOTAL		121,635	95,355

OPERATING INCOME (LOSS)		(3,889)	35,309

OTHER INCOME
Allowance for equity funds used during construction		1,111	3,584
Interest and investment income		27,442	5,338
Miscellaneous - net		(2,024)	(2,460)
TOTAL		26,529	6,462

INTEREST EXPENSE
Interest expense		9,535	8,540
Allowance for borrowed funds used during construction		(188)	(711)
TOTAL		9,347	7,829

INCOME BEFORE INCOME TAXES		13,293	33,942

Income taxes		(10,571)	5,429

NET INCOME		$23,864	$28,513

See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.
INCOME STATEMENTS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

2020 2019
(In Thousands)
OPERATING REVENUES
Electric
$130,664

$140,104

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale 13,143
21,561
Nuclear refueling outage expenses 8,272
8,186
Other operation and maintenance 40,471
45,282
Decommissioning 9,157
8,799
Taxes other than income taxes 7,973
7,539
Depreciation and amortization 26,899
26,574
Other regulatory credits - net (10,560 ) (9,205 )
TOTAL 95,355
108,736

OPERATING INCOME 35,309
31,368

OTHER INCOME
Allowance for equity funds used during construction 3,584
1,589
Interest and investment income 5,338
6,991
Miscellaneous - net (2,460 ) (1,228 )
TOTAL 6,462
7,352

INTEREST EXPENSE
Interest expense 8,540
9,397
Allowance for borrowed funds used during construction (711 ) (389 )
TOTAL 7,829
9,008

INCOME BEFORE INCOME TAXES 33,942
29,712

Income taxes 5,429
6,134

NET INCOME
$28,513

$23,578

See Notes to Financial Statements.

(Page left blank intentionally)

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SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)
2020 2019
(In Thousands)
OPERATING ACTIVITIES
Net income
$28,513

$23,578
Adjustments to reconcile net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization 47,041
53,731
Deferred income taxes, investment tax credits, and non-current taxes accrued (5,764 ) 4,975
Changes in assets and liabilities:
Receivables 22,292
(7,613 )
Accounts payable 15,049
(5,182 )
Prepaid taxes and taxes accrued (3,590 ) (13,575 )
Interest accrued (201 ) (3,150 )
Other working capital accounts (30,385 ) 3,635
Other regulatory assets (3,893 ) (3,730 )
Other regulatory liabilities (135,561 ) 70,486
Pension and other postretirement liabilities (2,587 ) 319
Other assets and liabilities 129,528
(65,757 )
Net cash flow provided by operating activities 60,442
57,717

INVESTING ACTIVITIES
Construction expenditures (60,551 ) (25,557 )
Allowance for equity funds used during construction 3,584
1,589
Nuclear fuel purchases (69,022 ) (3 )
Proceeds from the sale of nuclear fuel 9,503
18,280
Proceeds from nuclear decommissioning trust fund sales 132,661
56,988
Investment in nuclear decommissioning trust funds (138,186 ) (62,223 )
Changes in money pool receivable - net 42,479
81,635
Net cash flow provided by (used in) investing activities (79,532 ) 70,709

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt 243,559
529,493
Retirement of long-term debt (186,904 ) (549,803 )
Common stock dividends and distributions (13,653 ) (45,500 )
Net cash flow provided by (used in) financing activities 43,002
(65,810 )

Net increase in cash and cash equivalents 23,912
62,616
Cash and cash equivalents at beginning of period 68,534
95,685
Cash and cash equivalents at end of period
$92,446

$158,301

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized
$8,598

$12,461

See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)
	2021	2020
	(In Thousands)
OPERATING ACTIVITIES
Net income	$23,864	$28,513
Adjustments to reconcile net income to net cash flow provided by (used in) operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	53,433	47,041
Deferred income taxes, investment tax credits, and non-current taxes accrued	(10,197)	(5,764)
Changes in assets and liabilities:
Receivables	9,255	22,292
Accounts payable	(21,296)	15,049
Taxes accrued	(33,364)	(3,590)
Interest accrued	(1,088)	(201)
Other working capital accounts	2,347	(30,385)
Other regulatory assets	20,923	(3,893)
Other regulatory liabilities	(12,591)	(135,561)
Pension and other postretirement liabilities	(7,424)	(2,587)
Other assets and liabilities	(53,104)	129,528
Net cash flow provided by (used in) operating activities	(29,242)	60,442

INVESTING ACTIVITIES
Construction expenditures	(14,890)	(60,551)
Allowance for equity funds used during construction	1,111	3,584
Nuclear fuel purchases	(4,745)	(69,022)
Proceeds from the sale of nuclear fuel	12,626	9,503

Proceeds from nuclear decommissioning trust fund sales	211,481	132,661
Investment in nuclear decommissioning trust funds	(216,342)	(138,186)
Changes in money pool receivable - net	(12,678)	42,479

Net cash flow used in investing activities	(23,437)	(79,532)

FINANCING ACTIVITIES
Proceeds from the issuance of long-term debt	189,244	243,559
Retirement of long-term debt	(225,807)	(186,904)



Common stock dividends and distributions paid	(21,000)	(13,653)

Net cash flow provided by (used in) financing activities	(57,563)	43,002

Net increase (decrease) in cash and cash equivalents	(110,242)	23,912
Cash and cash equivalents at beginning of period	242,469	68,534
Cash and cash equivalents at end of period	$132,227	$92,446

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest - net of amount capitalized	$10,720	$8,598
Income taxes	$39,085	$0

See Notes to Financial Statements.

151

SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
ASSETS
March 31, 2020 and December 31, 2019
(Unaudited)
2020 2019
(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash
$124

$93
Temporary cash investments 92,322
68,441
Total cash and cash equivalents 92,446
68,534
Accounts receivable:
Associated companies 54,693
121,972
Other 10,055
7,547
Total accounts receivable 64,748
129,519
Materials and supplies - at average cost 111,251
108,766
Deferred nuclear refueling outage costs 41,878
14,493
Prepayments and other 6,562
6,045
TOTAL 316,885
327,357

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds 928,434
1,054,098
TOTAL 928,434
1,054,098

UTILITY PLANT
Electric 5,095,622
5,070,859
Construction work in progress 227,519
164,996
Nuclear fuel 197,955
149,574
TOTAL UTILITY PLANT 5,521,096
5,385,429
Less - accumulated depreciation and amortization 3,308,560
3,285,487
UTILITY PLANT - NET 2,212,536
2,099,942

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:
Other regulatory assets 493,976
490,083
Accumulated deferred income tax —
8,023
Other 3,170
3,192
TOTAL 497,146
501,298

TOTAL ASSETS
$3,955,001

$3,982,695

See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
ASSETS
March 31, 2021 and December 31, 2020
(Unaudited)
	2021	2020
	(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash	$78	$26,086
Temporary cash investments	132,149	216,383
Total cash and cash equivalents	132,227	242,469
Accounts receivable:
Associated companies	59,422	57,743
Other	4,294	2,550
Total accounts receivable	63,716	60,293

Materials and supplies - at average cost	126,444	123,006
Deferred nuclear refueling outage costs	27,932	34,459

Prepayments and other	7,605	6,864
TOTAL	357,924	467,091

OTHER PROPERTY AND INVESTMENTS
Decommissioning trust funds	1,249,846	1,215,868
TOTAL	1,249,846	1,215,868

UTILITY PLANT
Electric	5,310,445	5,309,458

Construction work in progress	73,360	59,831
Nuclear fuel	150,948	175,005
TOTAL UTILITY PLANT	5,534,753	5,544,294
Less - accumulated depreciation and amortization	3,381,583	3,355,367
UTILITY PLANT - NET	2,153,170	2,188,927

DEFERRED DEBITS AND OTHER ASSETS
Regulatory assets:

Other regulatory assets	518,040	538,963

Other	2,441	3,119
TOTAL	520,481	542,082

TOTAL ASSETS	$4,281,421	$4,413,968

See Notes to Financial Statements.

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SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2020 and December 31, 2019
(Unaudited)
2020 2019
(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt
$12

$10
Accounts payable:
Associated companies 9,683
14,619
Other 112,284
64,144
Taxes accrued 10,242
13,832
Interest accrued 11,792
11,993
Other 3,383
3,381
TOTAL 147,396
107,979

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued 812,055
821,963
Accumulated deferred investment tax credits 39,862
40,181
Regulatory liability for income taxes - net 139,529
142,845
Other regulatory liabilities 401,170
533,415
Decommissioning 940,886
931,729
Pension and other postretirement liabilities 107,229
109,816
Long-term debt 604,913
548,097
Other 35,033
34,602
TOTAL 3,080,677
3,162,648

Commitments and Contingencies

COMMON EQUITY
Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 2020 and 2019 601,850
601,850
Retained earnings 125,078
110,218
TOTAL 726,928
712,068

TOTAL LIABILITIES AND EQUITY
$3,955,001

$3,982,695

See Notes to Financial Statements.


SYSTEM ENERGY RESOURCES, INC.
BALANCE SHEETS
LIABILITIES AND EQUITY
March 31, 2021 and December 31, 2020
(Unaudited)
	2021	2020
	(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt	$19	$100,015

Accounts payable:
Associated companies	4,644	15,309
Other	36,849	41,313
Taxes accrued	49,613	82,977

Interest accrued	11,634	12,722

Other	4,247	4,248
TOTAL	107,006	256,584

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	340,689	359,835
Accumulated deferred investment tax credits	43,963	38,902
Regulatory liability for income taxes - net	134,350	151,829
Other regulatory liabilities	670,284	665,396
Decommissioning	978,439	968,910
Pension and other postretirement liabilities	117,988	125,412
Long-term debt	768,950	705,259
Other	36,342	61,295
TOTAL	3,091,005	3,076,838

Commitments and Contingencies

COMMON EQUITY
Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 2021 and 2020	951,850	951,850
Retained earnings	131,560	128,696
TOTAL	1,083,410	1,080,546

TOTAL LIABILITIES AND EQUITY	$4,281,421	$4,413,968

See Notes to Financial Statements.

153

SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CHANGES IN COMMON EQUITY
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

Common Equity

Common
Stock

Retained
Earnings
Total
(In Thousands)

Balance at December 31, 2018
$601,850

$135,348

$737,198

Net income —
23,578
23,578
Common stock dividends and distributions —
(45,500 ) (45,500 )
Balance at March 31, 2019
$601,850

$113,426

$715,276

Balance at December 31, 2019
$601,850

$110,218

$712,068

Net income —
28,513
28,513
Common stock dividends and distributions —
(13,653 ) (13,653 )
Balance at March 31, 2020
$601,850

$125,078

$726,928

See Notes to Financial Statements.

Table of Contents


SYSTEM ENERGY RESOURCES, INC.
STATEMENTS OF CHANGES IN COMMON EQUITY
For the Three Months Ended March 31, 2021 and 2020
(Unaudited)

	Common Equity
	Common Stock	Retained Earnings	Total
	(In Thousands)

Balance at December 31, 2019	$601,850	$110,218	$712,068

Net income	0	28,513	28,513
Common stock dividends and distributions	0	(13,653)	(13,653)
Balance at March 31, 2020	$601,850	$125,078	$726,928










Balance at December 31, 2020	$951,850	$128,696	$1,080,546

Net income	0	23,864	23,864
Common stock dividends and distributions	0	(21,000)	(21,000)
Balance at March 31, 2021	$951,850	$131,560	$1,083,410









See Notes to Financial Statements.

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Table of Contents

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

~~See~~There have been no material changes to the risk factors discussed in “~~Part~~PART I, Item ~~1A.~~1A, Risk Factors” in the Form 10-K, which could materially affect Entergy’s and its Registrant Subsidiaries’ business, financial condition, or future results. The information set forth in this report, including the risk factor presented below, updates and should be read in conjunction with the risk factors and information disclosed in the Form 10-K. ~~In addition, because Entergy cannot predict the ultimate impacts of COVID-19, the actual impacts may also exacerbate other risks discussed in “Item 1A. Risk Factors~~” in the Form 10-K, any of which could have a material effect on Entergy and its Registrant Subsidiaries. The situation remains fluid and while Entergy and its Utility operating companies have not incurred significant disruptions thus far from the COVID-19 global pandemic, the likelihood of an adverse impact could increase the longer the global pandemic persists.

~~(Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)~~

The impacts of the COVID-19 outbreak and responsive measures taken on Entergy’s and its Utility operating companies’ business, results of operations, and financial condition are highly uncertain and cannot be predicted.

In December 2019, a novel strain of coronavirus was reported to have surfaced in Wuhan, China. Since then, COVID-19 has spread throughout most countries in the world, including the United States. Public health officials in the United States have both recommended and mandated precautions to mitigate the spread of COVID-19, including prohibitions on congregating in heavily-populated areas, mandated closure of non-essential business, and shelter-in-place orders or similar measures, including throughout Entergy’s service areas. It is unclear how long these mitigation measures will remain in place, whether they will be reinstated in the future, and how they will impact the general economy, Entergy’s customers, and its operations.

Entergy and its Utility operating companies expect to experience a decline in commercial and industrial sales, the extent and duration of which management cannot predict. The Utility operating companies have temporarily suspended disconnecting customers for non-payment of bills and while they are working with regulators to ensure ultimate recovery for those and other COVID-19 related costs, such recovery cannot be guaranteed. Entergy and its Registrant Subsidiaries also could experience, among other challenges, supply chain, vendor, and contractor disruptions, delays in completion of capital or other construction projects, maintenance, and other operations activities, including prolonged outages, delays in regulatory proceedings, workforce availability, health or safety issues, increased cybersecurity risks as a result of many employees telecommuting, increased late or uncollectible customer payments, volatility in the credit or capital markets (and any related increased cost of capital or any inability to access the capital markets or draw on available credit facilities), or other adverse impacts on their ability to execute on business strategies and initiatives.

A sustained or further economic decline could adversely impact Entergy’s and the Utility operating companies’ liquidity and cash flows, including through declining sales, reduced revenues, delays in receipts of customer payments, or increased bad debt expense. In addition, if the pandemic continues to create disruptions or turmoil in the credit or financial markets, or adversely impacts Entergy’s credit metrics or ratings, such developments could adversely affect its ability to access capital on favorable terms and continue to meet its liquidity needs, or cause a decrease in the value of its defined benefit pension trust funds, as well as its nuclear decommissioning trust funds, all of which are highly uncertain and cannot be predicted.

The situation continues to rapidly evolve, and Entergy cannot predict the extent or duration of the outbreak, governmental responsive measures, or the extent of the effects or ultimate impacts on the global, national or local economy, the capital markets, or its customers, suppliers, operations, financial condition, results of operations, or cash flows.

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

Issuer Purchases of Equity Securities (a)



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 (b)

1/01/~~2020-1/~~2021-1/31/~~2020~~2021	—	$—	$—	—	—	$350,052,918	~~$350,052,918~~
2/01/~~2020-2/29/2020~~2021-2/28/2021	—	$—	$—	—	—	$350,052,918	~~$350,052,918~~
3/01/~~2020-3/~~2021-3/31/~~2020~~2021	—	$—	$—	—	—	$350,052,918	~~$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 ~~2020,~~2021, Entergy withheld ~~151,159~~81,434 shares of its common stock at ~~$126.31~~$95.12 per share, ~~79,153~~40,476 shares of its common stock at ~~$129.55~~$95.15 per share, ~~41,167~~36,804 shares of its common stock at ~~$131.52~~$94.75 per share, ~~2,269~~36,347 shares of its common stock at ~~$124.28~~$95.33 per share, ~~1,331~~1,188 shares of its common stock at ~~$123.74~~$91.16 per share, ~~1,088~~853 shares of its common stock at ~~$102.93~~$96.47 per share, ~~441~~719 shares of its common stock at ~~$132.19~~$98.01 per share, 71678 shares of its common stock at ~~$86.51~~$92.70 per share, 31584 shares of its common stock at ~~$115.90~~$94.69 per share, ~~and 19~~118 shares of its common stock at ~~$86.74~~$95 per share, and 10 shares of its common stock at $95.25 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.


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


~~(b)~~	Maximum amount of shares that may yet be repurchased relates only to the $500 million 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.

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

(b)Maximum amount of shares that may yet be repurchased relates only to the $500 million 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.

155

Table of Contents

Item 5. Other Information

Regulation of the Nuclear Power Industry

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

Nuclear Waste Policy Act of 1982

Nuclear Plant Decommissioning

In March ~~2020~~2021 filings with the NRC were made reporting on decommissioning funding for all of Entergy subsidiaries’ nuclear plants. Those reports showed that decommissioning funding for each of the nuclear plants met the NRC’s financial assurance requirements.

NRC Reactor Oversight Process

Environmental Regulation

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

~~Regional Haze~~Clean Air Act and Subsequent Amendments

See the Form 10-K for discussion of the Clean Air Act and Subsequent Amendments set by the EPA in accordance with the Clean Air Act. Following are updates to that discussion.

New Source Review

As discussed in the Form 10-K, in ~~Louisiana,~~January and February 2018, Entergy ~~has worked~~Arkansas, Entergy Mississippi, Entergy Power, and other co-owners received 60-day notice of intent to sue letters from the Sierra Club and the National Parks Conservation Association concerning allegations of violations of new source review and permitting provisions of the Clean Air Act at the Independence and White Bluff coal-burning units, respectively. In November 2018, following extensive negotiations, Entergy Arkansas, Entergy Mississippi, and Entergy Power entered a proposed settlement resolving those claims as well as other issues facing Entergy Arkansas’s fossil generation plants. The settlement, which formally resolves a complaint filed by the Sierra Club and the National Parks Conservation Association, was subject to approval by the U.S. District Court for the Eastern District of Arkansas. In March 2021 the District Court approved and entered the proposed settlement. For further information about the settlement, see “Regional Haze” discussed below.

National Ambient Air Quality Standards

See the Form 10-K for discussion of the National Ambient Air Quality Standards set by the EPA in accordance with the Clean Air Act. Following are updates to that discussion.

156

Table of Contents

Hazardous Air Pollutants

The EPA released the final Mercury and Air Toxics Standard (MATS) rule in December 2011, which had a compliance date, with a widely granted one-year extension, of April 2016. The required controls have been installed and are operational at all affected Entergy units. In May 2020 the EPA finalized a rule that finds that it is not “appropriate and necessary” to regulate hazardous air pollutants from electric steam generating units under the provisions of section 112(n) of the Clean Air Act. This is a reversal of the EPA’s previous finding requiring such regulation. The final appropriate and necessary finding does not revise the underlying MATS rule. Several lawsuits have been filed challenging the appropriate and necessary finding. In February 2021 the D.C. Circuit granted the EPA’s motion to hold the litigation in abeyance pending the agency’s review of the appropriate and necessary rule. The EPA must file status reports with the court every 120 days. Entergy will continue to monitor this situation.

Cross-State Air Pollution

As discussed in the Form 10-K, for 12 states, including Louisiana, ~~Department~~the EPA proposes additional emission reductions through proposed reductions in the number of ~~Environmental Quality (LDEQ)~~NOx emission allowances allocated to each state. Entergy, through its various trade associations, filed comments on the proposal. In March 2021 the EPA released the prepublication version of the final rule which further decreases the Louisiana ozone season emissions budget from that in the proposed rule. Entergy is currently analyzing the potential impact on its facilities in Louisiana. Preliminary analysis indicates that ozone season NOx allowances may become significantly more expensive in Louisiana, which could impact the cost of dispatching Entergy’s generating units located in Louisiana.

Regional Haze

As discussed in the Form 10-K, in January and February 2018, Entergy Arkansas, Entergy Mississippi, Entergy Power, and other co-owners received 60-day notice of intent to sue letters from the Sierra Club and the ~~EPA~~National Parks Conservation Association concerning allegations of violations of new source review and permitting provisions of the Clean Air Act at the Independence and White Bluff coal-burning units, respectively. In November 2018, following extensive negotiations, Entergy Arkansas, Entergy Mississippi, and Entergy Power entered a proposed settlement resolving those claims and reducing the risk that Entergy Arkansas, as operator of Independence and White Bluff, might be compelled under the Clean Air Act’s regional haze program to ~~revise~~install costly emissions control technologies. Consistent with the ~~Louisiana~~terms of the settlement and in many cases also the Part II state implementation plan (SIP) ~~for regional haze, which had been disapproved in part in 2012. The LDEQ submitted a revised SIP in February 2017. In May 2017~~, Entergy Arkansas, along with co-owners, will begin using only low-sulfur coal at Independence and White Bluff by mid-2021; cease to use coal at White Bluff and Independence by the ~~EPA proposed to approve a majority~~end of 2028 and 2030, respectively; cease operation of the ~~revisions. In September 2017~~remaining gas unit at Lake Catherine by the ~~EPA issued~~end of 2027; reserve the option to develop new generating sources at each plant site; and commit to install or propose to regulators at least 800 MWs of renewable generation by the end of 2027, with at least half installed or proposed by the end of 2022 (which includes two existing Entergy Arkansas projects) and with all qualifying co-owner projects counting toward satisfaction of the obligation. Under the settlement, the Sierra Club and the National Parks Conservation Association also waive certain potential existing claims under federal and state environmental law with respect to specified generating plants. The settlement, which formally resolves a ~~proposed SIP~~complaint filed by the Sierra Club and the National Parks Conservation Association, was subject to approval by the U.S. District Court for the ~~Nelson plant, requiring an emission limitation consistent with~~Eastern District of Arkansas. In November 2020 the use of low-sulfur coal, with a compliance date of January 22, 2021. The EPA issued final approval in December 2017. The EPA approval was appealed to the U.S. Court of Appeals for the Fifth Circuit. In October 2019 the Fifth Circuit affirmed EPA’s SIP approval. A petition for rehearing filed by plaintiffs wascourt denied motions by the ~~Fifth Circuit. Plaintiffs~~Arkansas Attorney General and the Arkansas Affordable Energy Coalition to intervene and to stay the proceedings. The proposed intervenors did not ~~petition for further review by~~appeal the ~~Supreme Court.~~

ruling. The District Court approved and entered the proposed settlement in March 2021.

The second planning period (2018-2028) for the regional haze program requires states to examine sources for impacts on visibility and to prepare SIPs by July 31, 2021. Entergy has received information collection requests from Arkansas and Louisiana requesting an evaluation of technical and economic feasibility of various NO_x and SO₂ control technologies for Independence, Nelson 6, and Ninemile. Responses ~~are due~~to the ~~second and third quarters~~information requests have been submitted to the respective state agencies.

157

Table of ~~2020.~~Contents

New and Existing Source Performance Standards for Greenhouse Gas Emissions

~~In July 2019~~As discussed in the ~~EPA released~~Form 10-K, in January 2021 the U.S. Court of Appeals for the D.C. Circuit vacated the Affordable Clean Energy Rule (ACE)~~, which applies only~~. The court held that ACE relied on an incorrect interpretation of the Clean Air Act that the statute expressly forecloses emission reduction approaches, such as emissions trading and generating shifting, that cannot be applied at and to ~~existing coal-fired electric generating units.~~the individual source. The court remanded ACE determines that heat rate improvements are the best system of emission reductions and lists six candidate technologies for consideration by states at each coal unit. The rule and associated rulemakings byto the EPA ~~replace~~for further consideration and also vacated the ~~Obama administration’s~~repeal of the Clean Power Plan. In March 2021 the D.C. Circuit issued a partial mandate vacating the ACE rule, but withheld the mandate vacating the repeal of the Clean Power Plan ~~rule. The ACE rule provides states discretion~~pending the EPA’s new rulemaking to regulate greenhouse gas emissions. Thus, the Clean Power Plan will not take effect during the rulemaking process and there currently is no regulation in ~~determining how the best system for emission reductions applies~~place with respect to individual units, including through the consideration of technical feasibility and the remaining useful life of the facility. Arkansas and Louisiana have issued information collection requests to Entergy facilities to help the states collect the information needed to determine the best system of emission reductions for each facility. Entergy will respond as required and will continue to monitor litigation challenging the rule. The EPA also has proposed a revision to the new source performance standard on greenhouse gas emissions ~~that primarily impacts new coal~~from electric generating units and ~~therefore, should~~states are not ~~impact Entergy.~~expected to take further action to develop and submit plans at this time.

Coal Combustion Residuals

As discussed in the Form 10-K, in late 2017, Entergy determined that certain in-ground wastewater treatment system recycle ponds at its White Bluff and Independence facilities require management under the new EPA regulations. Each site has commenced closure of its two recycle ponds (four ponds total), prior to the April 11, 2021 deadline under the finalized CCR rule for unlined recycle ponds.

Other Environmental Matters

Entergy Texas

As discussed in the Form 10-K, due to COVID-19 pandemic delays, the Texas Commission on Environmental Quality (TCEQ) extended the Affected Property Assessment Report (APAR) and Ecological Risk Assessment submittal dates to December 2020, which Entergy timely met. Following the TCEQ’s review of the APAR and Ecological Risk Assessment, the TCEQ issued a No Further Action determination for the site in March 2021.

Item 6. Exhibits


			4(a) -			Officer’s Certificate for Entergy Corporation relating to 1.90% Senior Notes due June 15, 2028 (4.02(a) to Form 8-K filed March 5, 2021 in 1-11299).

			~~4(a)~~4(b) -			Officer’s Certificate for Entergy Corporation relating to 2.40% Senior Notes due June 15, 20 3 1 (4.02(b) to Form 8-K filed March 5, 2021 in 1-11299).

			~~Ninety-second~~4(c) -			Eighty-fourth Supplemental Indenture, dated as of March 1, 202 1 , to Entergy Arkansas Mortgage and Deed of Trust, dated as of October 1, 1944 (4.49 to Form 8-K filed March 30 , 202 1 in 1-10764).

			4(d) -			Ninety-fifth Supplemental Indenture, dated as of March 1, ~~2020,~~2021, to Entergy Louisiana Mortgage and Deed of Trust, dated as of April 1, 1944 (4.53 to Form 8-K filed March ~~6, 2020~~10, 2021 in 1-32718).

			~~4(b)~~4(e) -			~~Ninety-second~~Ninety-fourth Supplemental Indenture, dated as of March 1, ~~2020,~~2021, to Entergy Louisiana Indenture of Mortgage, dated September 1, 1926 (4.52 to Form 8-K filed March ~~6, 2020~~10, 2021 in 1-32718).

			~~4(c)~~4(f) -			~~Twelfth~~Fifteenth Supplemental Indenture, dated as of March 1, ~~2020,~~2021, to Entergy Louisiana Mortgage and Deed of Trust, dated as of November 1, 2015 (4.51 to Form 8-K filed March ~~6, 2020~~10, 2021 in 1-32718).



			~~4(d)~~4(g) -			~~Officer’s Certificate No. 16-B-11,~~Sixteenth Supplemental Indenture, dated ~~March 3, 2020, supplemental~~as of April 1, 2021, to Entergy Louisiana Mortgage and Deed of Trust, dated as of November 1, 2015 ~~(4.50~~(4(b) to Form 8-K filed ~~March 6, 2020~~April 1, 2021 in 1-32718).

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			~~4(e)~~4(h) -			~~Twenty-third Supplemental Indenture,~~Officer’s Certificate No. 2 1 -B-1 5 , dated ~~as of~~ March 1, ~~2020,~~2021 , supplemental to ~~Entergy New Orleans~~ Mortgage and Deed of Trust of Entergy Louisiana, dated as of ~~May~~November 1, ~~1987 (4(a)~~2015 (4.50 (a) to Form 8-K filed March ~~26, 2020~~10,2021 in ~~1-35747)~~1-32718 ).

			4(i) -			Officer’s Certificate No. 2 1 -B-1 6 , dated March 1, 2021 , supplemental to Mortgage and Deed of Trust of Entergy Louisiana, dated as of November 1, 2015 (4.50 (b) to Form 8-K filed March 10, 2021 in 1-32718).

			4(j) -			Officer’s Certificate No. 2 2 -B-1 7 , dated April 1, 2021, supplemental to Mortgage and Deed of Trust of Entergy Louisiana, dated as of November 1, 2015 (4 (a) to Form 8-K filed April 1 , 2021 in 1-32718 ).

			4(k) -			Loan Agreement, dated as of April 1, 2021, between the Louisiana Local Government Environmental Facilities and Community Development Authority and Entergy Louisiana relating to Revenue Refunding Bonds (Entergy Louisiana, LLC Project) Series 2021A (4(c) to Form 8-K filed April 1, 2021 in 1-32718).

			4(l) -			Trust Indenture, dated as of April 1, 2021, between the Louisiana Local Government Environmental Facilities and Community Development Authority and The Bank of New York Mellon authorizing Revenue Refunding Bonds (Entergy Louisiana, LLC Project) Series 2021A (4(d) to Form 8-K filed April 1, 2021 in 1-32718).

			4(m) -			Loan Agreement, dated as of April 1, 2021, between the Louisiana Local Government Environmental Facilities and Community Development Authority and Entergy Louisiana relating to Revenue Refunding Bonds (Entergy Louisiana, LLC Project) Series 2021B (4(e) to Form 8-K filed April 1, 2021 in 1-32718).

			4(n) -			Trust Indenture, dated as of April 1, 2021, between the Louisiana Local Government Environmental Facilities and Community Development Authority and The Bank of New York Mellon authorizing Revenue Refunding Bonds (Entergy Louisiana, LLC Project) Series 2021B (4(f) to Form 8-K filed April 1, 2021 in 1-32718).

			*31(a) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Corporation.

			*31(b) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Corporation.

			*31(c) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Arkansas.

			*31(d) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Arkansas.

			*31(e) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Louisiana.

			*31(f) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Louisiana.

			*31(g) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Mississippi.

			*31(h) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Mississippi.

			*31(i) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy New Orleans.

			*31(j) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy New Orleans.

			*31(k) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Texas.

			*31(l) -			Rule 13a-14(a)/15d-14(a) Certification for Entergy Texas.

			*31(m) -			Rule 13a-14(a)/15d-14(a) Certification for System Energy.

			*31(n) -			Rule 13a-14(a)/15d-14(a) Certification for System Energy.

			**32(a) -			Section 1350 Certification for Entergy Corporation.

			**32(b) -			Section 1350 Certification for Entergy Corporation.

			**32(c) -			Section 1350 Certification for Entergy Arkansas.

			**32(d) -			Section 1350 Certification for Entergy Arkansas.

			**32(e) -			Section 1350 Certification for Entergy Louisiana.

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			**32(f) -			Section 1350 Certification for Entergy Louisiana.

			**32(g) -			Section 1350 Certification for Entergy Mississippi.

			**32(h) -			Section 1350 Certification for Entergy Mississippi.

			**32(i) -			Section 1350 Certification for Entergy New Orleans.

			**32(j) -			Section 1350 Certification for Entergy New Orleans.

			**32(k) -			Section 1350 Certification for Entergy Texas.

			**32(l) -			Section 1350 Certification for Entergy Texas.

			**32(m) -			Section 1350 Certification for System Energy.

			**32(n) -			Section 1350 Certification for System Energy.

			99(a) -			Equity Distribution Sales Agreement, dated January 11, 2021 by and among Entergy Corporation and BofA Securities, Inc., Citigroup Global Markets Inc., J.P. Morgan Securities LLC, Mizuho Securities USA LLC and Wells Fargo Securities, LLC, as sales agents and as forward sellers, and Bank of America, N.A., Citibank, N.A., JPMorgan Chase Bank, National Association, New York Branch, Mizuho Markets Americas LLC (with Mizuho Securities USA LLC acting as agent) and Wells Fargo Bank, National Association, as forward purchasers (1.01 to Form 8-K filed January 11, 2021 in 1-11299).

			99(b) -			Master Forward Confirmation, dated January 11, 2021, between Entergy Corporation and Bank of America, N.A. (99.01 to Form 8-K filed January 11, 2021 in 1-11299).

			99(c) -			Master Forward Confirmation, dated January 11, 2021, between Entergy Corporation and Citigroup Global Markets Inc. (99.02 to Form 8-K filed January 11, 2021 in 1-11299).

			99(d) -			Master Forward Confirmation, dated January 11, 2021, between Entergy Corporation and JPMorgan Chase Bank, National Association (99.03 to Form 8-K filed January 11, 2021 in 1-11299).

			99(e) -			Master Forward Confirmation, dated January 11, 2021, between Entergy Corporation and Mizuho Markets Americas LLC (with Mizuho Securities USA LLC acting as agent) (99.04 to Form 8-K filed January 11, 2021 in 1-11299).

			99(f) -			Master Forward Confirmation, dated January 11, 2021, between Entergy Corporation and Wells Fargo Bank, National Association (99.05 to Form 8-K filed January 11, 2021 in 1-11299).

			*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.

*	~~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.


~~ENTERGY CORPORATION~~ ~~ENTERGY ARKANSAS, LLC~~ ~~ENTERGY LOUISIANA, LLC~~ ~~ENTERGY MISSISSIPPI, LLC~~ ~~ENTERGY NEW ORLEANS, LLC~~ ~~ENTERGY TEXAS, INC.~~ ~~SYSTEM ENERGY RESOURCES, INC.~~


/s/ Kimberly A. Fontan
Kimberly A. Fontan Senior Vice President and Chief Accounting Officer (For each Registrant and for each as Principal Accounting Officer)

Date: May ~~11, 2020~~6, 2021

~~154~~

161



	Utility			Entergy Wholesale Commodities			Parent & Other (a)			Entergy
	(In Thousands)
2019 Net Income (Loss) Attributable to Entergy Corporation		$230,585			$96,532			($72,580	)		$254,537

Operating revenues	(81,353		)	(101,063		)	11			(182,405		)
Fuel, fuel-related expenses, and gas purchased for resale	(75,964		)	(4,963		)	—			(80,927		)
Purchased power	(117,810		)	(5,083		)	—			(122,893		)
Other regulatory charges (credits)	9,267			—			—			9,267
Other operation and maintenance	(19,649		)	(57,650		)	(3,668		)	(80,967		)
Asset write-offs, impairments, and related charges	—			(68,884		)	—			(68,884		)
Taxes other than income taxes	4,466			7,341			(88		)	11,719
Depreciation and amortization	45,485			(3,126		)	77			42,436
Other income (deductions)	(7,967		)	(352,243		)	992			(359,218		)
Interest expense	11,986			(3,746		)	(1,639		)	6,601
Other expenses	4,582			(13,240		)	—			(8,658		)
Income taxes	(41,385		)	(96,448		)	23,868			(113,965		)
Preferred dividend requirements of subsidiaries	471			—			—			471

2020 Net Income (Loss) Attributable to Entergy Corporation		$319,816			($110,975	)		($90,127	)		$118,714


	Utility	Entergy Wholesale Commodities	Parent & Other (a)	Entergy
	(In Thousands)
2020 Net Income (Loss) Attributable to Entergy Corporation	$319,816	($110,975)	($90,127)	$118,714

Operating revenues	501,987	(84,330)	2	417,659
Fuel, fuel-related expenses, and gas purchased for resale	102,680	1,094	(10)	103,764
Purchased power	155,967	7,143	10	163,120
Other regulatory charges (credits) - net	39,958	—	—	39,958
Other operation and maintenance	36,589	(32,049)	162	4,702
Asset write-offs, impairments, and related charges	—	(1,822)	—	(1,822)
Taxes other than income taxes	(255)	(13,641)	304	(13,592)
Depreciation and amortization	37,052	(22,148)	(95)	14,809

Other income (deductions)	30,046	218,171	6,257	254,474
Interest expense	13,847	(1,106)	(3,013)	9,728
Other expenses	(3,239)	1,718	—	(1,521)
Income taxes	112,683	46,100	(21,647)	137,136


2021 Net Income (Loss) Attributable to Entergy Corporation	$356,567	$37,577	($59,579)	$334,565


	2021	2020
Owned capacity (MW) (a)	2,246	3,274
GWh billed	4,413	6,757

Entergy Wholesale Commodities Nuclear Fleet
Capacity factor	99%	99%
GWh billed	3,988	6,259
Average energy price ($/MWh)	$51.86	$47.42
Average capacity price ($/kW-month)	$0.23	$1.07



	2020	2019
Owned capacity (MW) (a)	3,274	3,962
GWh billed	6,757	7,203

Entergy Wholesale Commodities Nuclear Fleet
Capacity factor	99%	85%
GWh billed	6,259	6,690
Average energy price ($/MWh)	$47.42	$51.43
Average capacity price ($/kW-month)	$1.07	$4.71
Refueling outage days:
Indian Point 3	—	21


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


~~(a)~~	~~The reduction~~The Entergy Wholesale Commodities nuclear power plants had no refueling outage days in ~~owned capacity is due to the shutdown of the 688 MW Pilgrim plant in May 2019, which was subsequently sold in August 2019.~~


	March 31, 2021		December 31, 2020
Debt to capital	69.6	%	68.3	%
Effect of excluding securitization bonds	(0.1	%)	(0.2	%)
Debt to capital, excluding securitization bonds (a)	69.5	%	68.1	%
Effect of subtracting cash	(1.5	%)	(1.7	%)
Net debt to net capital, excluding securitization bonds (a)	68.0	%	66.4	%



	March 31, 2020		December 31, 2019
Debt to capital	67.2	%	65.5	%
Effect of excluding securitization bonds	(0.3	%)	(0.4	%)
Debt to capital, excluding securitization bonds (a)	66.9	%	65.1	%
Effect of subtracting cash	(1.6	%)	(0.5	%)
Net debt to net capital, excluding securitization bonds (a)	65.3	%	64.6	%


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


•	~~an increase of $48 million in pension contributions in 2020 as compared to the same period in 2019. 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;~~



ENTERGY CORPORATION AND SUBSIDIARIES
SELECTED OPERATING RESULTS
For the Three Months Ended March 31, 2020 and 2019
(Unaudited)

	Nine Months Ended				Increase/
	2020		2019		(Decrease)			%
	(Dollars in Millions)
Utility electric operating revenues:
Residential		$798		$803		($5	)	(1	)
Commercial	539		554		(15		)	(3	)
Industrial	557		601		(44		)	(7	)
Governmental	53		53		—			—
Total billed retail	1,947		2,011		(64		)	(3	)
Sales for resale	54		84		(30		)	(36	)
Other	50		26		24			92
Total		$2,051		$2,121		($70	)	(3	)

Utility billed electric energy sales (GWh):
Residential	8,126		8,471		(345		)	(4	)
Commercial	6,244		6,423		(179		)	(3	)
Industrial	11,815		11,683		132			1
Governmental	595		601		(6		)	(1	)
Total retail	26,780		27,178		(398		)	(1	)
Sales for resale	3,117		3,814		(697		)	(18	)
Total	29,897		30,992		(1,095		)	(4	)

Entergy Wholesale Commodities:
Operating revenues		$333		$434		($101	)	(23	)
Billed electric energy sales (GWh)	6,757		7,203		(446		)	(6	)


Company	Expiration Date	Amount of Facility	Interest Rate (a)	Amount Drawn as of March 31, 2021	Letters of Credit Outstanding as of March 31, 2021
Entergy Arkansas	April 2022	$25 million (b)	2.75%	$0	$0
Entergy Arkansas	September 2024	$150 million (c)	1.21%	$0	$0
Entergy Louisiana	September 2024	$350 million (c)	1.21%	$0	$0
Entergy Mississippi	April 2022	$37.5 million (d)	1.58%	$0	$0
Entergy Mississippi	April 2022	$35 million (d)	1.58%	$0	$0
Entergy Mississippi	April 2022	$10 million (d)	1.58%	$0	$0
Entergy New Orleans	November 2021	$25 million (c)	1.36%	$0	$0
Entergy Texas	September 2024	$150 million (c)	1.58%	$0	$1.3 million



~~Company~~	~~Expiration~~ ~~Date~~	~~Amount of~~ ~~Facility~~	~~Interest Rate (a)~~	~~Amount Drawn~~ ~~as of~~ ~~March 31, 2020~~	~~Letters of Credit~~ ~~Outstanding as of~~ ~~March 31, 2020~~
~~Entergy Arkansas~~	~~April 2021~~	~~$20 million (b)~~	~~2.11%~~	$—	$—
~~Entergy Arkansas~~	~~September 2024~~	~~$150 million (c)~~	~~2.11%~~	$—	$—
~~Entergy Louisiana~~	~~September 2024~~	~~$350 million (c)~~	~~2.11%~~	$—	$—
~~Entergy Mississippi~~	~~April 2021~~	~~$37.5 million (d)~~	~~2.49%~~	$—	$—
~~Entergy Mississippi~~	~~April 2021~~	~~$35 million (d)~~	~~2.49%~~	$—	$—
~~Entergy Mississippi~~	~~April 2021~~	~~$10 million (d)~~	~~2.49%~~	$—	$—
~~Entergy New Orleans~~	~~November 2021~~	~~$25 million (c)~~	~~2.26%~~	$—	~~$0.8 million~~
~~Entergy Texas~~	~~September 2024~~	~~$150 million (c)~~	~~2.49%~~	$—	~~$1.3 million~~


~~(a)~~	~~The interest rate is the estimated interest rate as of March 31, 2020 that would have been applied to outstanding borrowings under the facility.~~


~~(b)~~	~~Borrowings under the 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)~~	~~Borrowings under the Entergy Mississippi credit facilities may be secured by a security interest in its accounts receivable at Entergy Mississippi’s option.~~


	Authorized	Borrowings
	(In Millions)
Entergy Arkansas	$250	$0
Entergy Louisiana	$450	$0
Entergy Mississippi	$175	$0
Entergy New Orleans	$150	$25
Entergy Texas	$200	$31
System Energy	$200	$0


Company	Expiration Date	Amount of Facility	Weighted Average Interest Rate on Borrowings (a)	Amount Outstanding as of March 31, 2021
		(Dollars in Millions)
Entergy Arkansas VIE	September 2022	$80	1.26%	$4.8
Entergy Louisiana River Bend VIE	September 2022	$105	1.24%	$70.5
Entergy Louisiana Waterford VIE	September 2022	$105	1.25%	$73.2
System Energy VIE	September 2022	$120	1.23%	$63.4


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


	Book Value of Long-Term Debt	Fair Value of Long-Term Debt (a)
	(In Thousands)
Entergy	$24,704,475	$25,716,967
Entergy Arkansas	$3,958,751	$4,126,514
Entergy Louisiana	$10,059,885	$10,681,713
Entergy Mississippi	$1,981,429	$2,084,891
Entergy New Orleans	$642,412	$584,475
Entergy Texas	$2,465,827	$2,545,973
System Energy	$768,969	$785,758


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


2021	Qualified Pension Costs	Other Postretirement Costs	Non-Qualified Pension Costs	Total
	(In Thousands)
Entergy
Amortization of prior service (cost) credit	$0	$5,288	($40)	$5,248
Amortization of net loss	(33,439)	(495)	(595)	(34,529)


	($33,439)	$4,793	($635)	($29,281)
Entergy Louisiana
Amortization of prior service credit	$0	$1,230	$0	$1,230
Amortization of net gain (loss)	(769)	91	(1)	(679)

	($769)	$1,321	($1)	$551


																Utility	Entergy Wholesale Commodities	All Other	Eliminations	Consolidated
	Utility			Entergy Wholesale Commodities			All Other			Eliminations			Entergy			(In Thousands)
	(In Thousands)
2021															2021
Operating revenues															Operating revenues	$2,596,616	$248,219	$23	($20)	$2,844,838
Income taxes															Income taxes	$59,734	$15,560	($9,352)	$0	$65,942
Consolidated net income (loss)															Consolidated net income (loss)	$360,600	$38,124	($27,680)	($31,899)	$339,145
Total assets as of March 31, 2021															Total assets as of March 31, 2021	$56,086,185	$3,793,754	$867,301	($2,079,612)	$58,667,628
2020															2020
Operating revenues	$2,094,629			$332,549			$11				($10	)	$2,427,179		Operating revenues	$2,094,629	$332,549	$11	($10)	$2,427,179
Income taxes	($52,949)			($30,540)				$12,295			$—		($71,194)		Income taxes	($52,949)	($30,540)	$12,295	$0	($71,194)
Consolidated net income (loss)	$323,849				($110,428	)		($58,228	)		($31,899	)	$123,294		Consolidated net income (loss)	$323,849	($110,428)	($58,228)	($31,899)	$123,294
Total assets as of March 31, 2020	$50,421,661			$3,921,539			$697,784				($2,485,955	)	$52,555,029
2019
Operating revenues	$2,175,982			$433,612				$—			($10	)	$2,609,584
Income taxes		($11,564	)		$65,908			($11,573	)		$—			$42,771
Consolidated net income (loss)	$234,147			$97,079				($40,682	)		($31,898	)	$258,646
Total assets as of December 31, 2019	$49,557,664			$4,154,961			$514,020				($2,502,733	)	$51,723,912
Total assets as of December 31, 2020															Total assets as of December 31, 2020	$55,940,153	$3,800,378	$552,632	($2,053,951)	$58,239,212


	2021			2020
	Employee retention and severance expenses and other benefits-related costs	Contracted economic development costs	Total	Employee retention and severance expenses and other benefits-related costs	Contracted economic development costs	Total
	(In Millions)
Balance as of January 1,	$145	$14	$159	$129	$14	$143
Restructuring costs accrued	13	0	13	21	0	21
Cash paid out	1	0	1	0	0	0
Balance as of March 31,	$157	$14	$171	$150	$14	$164



Instrument	Balance Sheet Location	Gross Fair Value (a)	Offsetting Position (b)	Net Fair Value (c) (d)	Business
		(In Millions)
Derivatives designated as hedging instruments
Assets:
Electricity swaps and options	Prepayments and other (current portion)	$81	$—	$81	Entergy Wholesale Commodities
Derivatives not designated as hedging instruments
Assets:
Electricity swaps and options	Prepayments and other (current portion)	$8	($4)	$4	Entergy Wholesale Commodities
Natural gas swaps and options	Other deferred debits and other assets (non-current portion)	$1	$—	$1	Utility
Financial transmission rights	Prepayments and other	$4	$—	$4	Utility and Entergy Wholesale Commodities
Liabilities:
Electricity swaps and options	Other current liabilities (current portion)	$3	($3)	$—	Entergy Wholesale Commodities
Natural gas swaps and options	Other current liabilities (current portion)	$7	$—	$7	Utility
Natural gas swaps and options	Other non-current liabilities (non-current portion)	$2	$—	$2	Utility


~~(d)~~	Excludes cash collateral in the amount of $9 million posted as of March 31, 2020 and $11 million posted and $1 million held as of December 31, 2019. Also excludes letters of credit in the amount of $95 million held as of March 31, 2020 and $98 million held as of December 31, 2019.



Instrument	Amount of gain (loss) recognized in other comprehensive income	Income Statement location	Amount of gain (loss) reclassified from accumulated other comprehensive income into income (a)
	(In Millions)		(In Millions)
2020
Electricity swaps and options	$67	Competitive businesses operating revenues	$94

2019
Electricity swaps and options	$26	Competitive businesses operating revenues	$52


~~(a)~~	~~Before taxes of $20 million and $11 million for the three months ended March 31, 2020 and 2019, respectively~~



Transaction Type	Fair Value	Significant Unobservable Inputs	Range from Average %		Effect on Fair Value
	(In Millions)				(In Millions)
Power contracts - electricity swaps	$85	Unit contingent discount	+/-	4.75%	$9


•	~~an increase of $9.7 million in pension contributions in 2020. 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.~~


	March 31, 2021		December 31, 2020
Debt to capital	54.1	%	54.8	%
Effect of subtracting cash	(0.8	%)	(1.2	%)
Net debt to net capital	53.3	%	53.6	%



ENTERGY MISSISSIPPI, LLC
STATEMENTS OF CHANGES IN MEMBER'S EQUITY
For the Three Months Ended March 31, ~~2020~~2021 and ~~2019~~2020
(Unaudited)


					Member's Equity
					(In Thousands)

~~Balance at December 31, 2018~~				~~$1,292,226~~

~~Net income~~	~~15,398~~
~~Balance at March 31, 2019~~		~~$1,307,624~~

Balance at December 31, 2019			$1,542,151		~~$1,542,151~~

Net income					22,526
Common equity distributions					~~(2,500~~(2,500)	)
Balance at March 31, 2020					$1,562,177	~~$1,562,177~~










Balance at December 31, 2020					$1,672,734

Net income					25,972

Balance at March 31, 2021					$1,698,706









See Notes to Financial Statements.

Borrowings

Letters
of Credit

Capacity
Available

(In Millions)