Entergy
Annual Report 2019

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Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington, D.C. 20549FORM 10-K(Mark One) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended December 31, 2019ORTRANSITION REPORT PURSUANT TO SECTION 13OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____________ to ____________CommissionFile NumberRegistrant, State of Incorporation or Organization,Address of Principal Executive Offices, TelephoneNumber, and IRS Employer Identification No. CommissionFile NumberRegistrant, State of Incorporation or Organization,Address of Principal Executive Offices, TelephoneNumber, and IRS Employer Identification No. 1-11299ENTERGY CORPORATION 1-35747ENTERGY NEW ORLEANS, LLC (a Delaware corporation)639 Loyola AvenueNew Orleans, Louisiana 70113Telephone (504) 576-4000 (a Texas limited liability company)1600 Perdido StreetNew Orleans, Louisiana 70112Telephone (504) 670-3700 72-1229752 82-2212934 1-10764ENTERGY ARKANSAS, LLC 1-34360ENTERGY TEXAS, INC. (a Texas limited liability company)425 West Capitol AvenueLittle Rock, Arkansas 72201Telephone (501) 377-4000 (a Texas corporation)10055 Grogans Mill RoadThe Woodlands, Texas 77380Telephone (409) 981-2000 83-1918668 61-1435798 1-32718ENTERGY LOUISIANA, LLC 1-09067SYSTEM ENERGY RESOURCES, INC. (a Texas limited liability company)4809 Jefferson HighwayJefferson, Louisiana 70121Telephone (504) 576-4000 (an Arkansas corporation)1340 Echelon ParkwayJackson, Mississippi 39213Telephone (601) 368-5000 47-4469646 72-0752777 1-31508ENTERGY MISSISSIPPI, LLC (a Texas limited liability company)308 East Pearl StreetJackson, Mississippi 39201Telephone (601) 368-5000 83-1950019 Table of Contents Table of ContentsSecurities registered pursuant to Section 12(b) of the Act:RegistrantTitle of ClassTradingSymbolName of Each Exchangeon Which Registered Entergy CorporationCommon Stock, $0.01 Par ValueETRNew York Stock Exchange Common Stock, $0.01 Par ValueETRNYSE Chicago, Inc. Entergy Arkansas, LLCMortgage Bonds, 4.90% Series due December2052EABNew York Stock Exchange Mortgage Bonds, 4.75% Series due June 2063EAENew York Stock Exchange Mortgage Bonds, 4.875% Series due September2066EAINew York Stock Exchange Entergy Louisiana, LLCMortgage Bonds, 5.25% Series due July 2052ELJNew York Stock Exchange Mortgage Bonds, 4.70% Series due June 2063ELUNew York Stock Exchange Mortgage Bonds, 4.875% Series due September2066ELCNew York Stock Exchange Entergy Mississippi, LLCMortgage Bonds, 4.90% Series due October 2066EMPNew York Stock Exchange Entergy New Orleans, LLCMortgage Bonds, 5.0% Series due December 2052ENJNew York Stock Exchange Mortgage Bonds, 5.50% Series due April 2066ENONew York Stock Exchange Entergy Texas, Inc.Mortgage Bonds, 5.625% Series due June 2064EZTNew York Stock Exchange 5.375% Series A Preferred Stock, Cumulative, NoPar Value (Liquidation Value $25 Per Share)ETI/PRNew York Stock ExchangeSecurities registered pursuant to Section 12(g) of the Act:RegistrantTitle of Class Entergy Texas, Inc.Common Stock, no par value Table of ContentsIndicate by check mark if the registrants are well-known seasoned issuers, as defined in Rule 405 of the Securities Act. Yes No Entergy Corporationü Entergy Arkansas, LLC üEntergy Louisiana, LLCü Entergy Mississippi, LLC üEntergy New Orleans, LLC üEntergy Texas, Inc. ü System Energy Resources, Inc. üIndicate by check mark if the registrants are not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes No Entergy Corporation üEntergy Arkansas, LLC üEntergy Louisiana, LLC üEntergy Mississippi, LLC üEntergy New Orleans, LLC üEntergy Texas, Inc. üSystem Energy Resources, Inc. üIndicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities ExchangeAct of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) havebeen subject to such filing requirements for the past 90 days. Yes þ No oIndicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant toRule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrants wererequired to submit such files). Yes þ No o Table of ContentsIndicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reportingcompany, 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. LargeAcceleratedFiler AcceleratedFiler Non-acceleratedFiler Smallerreportingcompany EmerginggrowthcompanyEntergy Corporationü Entergy Arkansas, LLC ü Entergy Louisiana, LLC ü Entergy Mississippi, LLC ü Entergy New Orleans, LLC ü Entergy Texas, Inc. ü System Energy Resources, Inc. ü If an emerging growth company, indicate by check mark if the registrants have elected not to use the extended transition period forcomplying 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 þCommon Stock Outstanding Outstanding at January 31, 2020Entergy Corporation($0.01 par value)199,726,738System Energy Resources, Inc. meets the requirements set forth in General Instruction I(1) of Form 10-K and is therefore filing this Form 10-K with reduced disclosure as allowed in General Instruction I(2). System Energy Resources, Inc. is reducing its disclosure by not includingPart III, Items 10 through 13 in its Form 10-K.The aggregate market value of Entergy Corporation Common Stock, $0.01 Par Value, held by non-affiliates as of the end of the secondquarter of 2019 was $20.5 billion based on the reported last sale price of $102.93 per share for such stock on the New York Stock Exchangeon June 28, 2019. Entergy Corporation is the sole holder of the common stock of Entergy Texas, Inc. and System Energy Resources,Inc. Entergy Corporation is the direct and indirect holder of the common membership interests of Entergy Utility Holding Company, LLC,which is the sole holder of the common membership interests of Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi,LLC, and Entergy New Orleans, LLC.DOCUMENTS INCORPORATED BY REFERENCEPortions of the Proxy Statement of Entergy Corporation to be filed in connection with its Annual Meeting of Stockholders, to be held May 8,2020, are incorporated by reference into Part III hereof. Table of Contents(Page left blank intentionally) Table of ContentsTABLE OF CONTENTS SEC Form 10-KReference NumberPageNumber Forward-looking information ivDefinitions viiEntergy Corporation and Subsidiaries Management’s Financial Discussion and AnalysisPart II. Item 7.1Report of Management 36Selected Financial Data - Five-Year ComparisonPart II. Item 6.37Report of Independent Registered Public Accounting Firm 38Consolidated Income Statements For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.42Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2019, 2018,and 2017Part II. Item 8.43Consolidated Statements of Cash Flows For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.44Consolidated Balance Sheets, December 31, 2019 and 2018Part II. Item 8.46Consolidated Statements of Changes in Equity for the Years Ended December 31, 2019, 2018, and2017Part II. Item 8.48Notes to Financial Statements Note 1. Summary of Significant Accounting PoliciesPart II. Item 8.49Note 2. Rate and Regulatory MattersPart II. Item 8.60Note 3. Income TaxesPart II. Item 8.103Note 4. Revolving Credit Facilities, Lines of Credit, and Short-term BorrowingsPart II. Item 8.121Note 5. Long-term DebtPart II. Item 8.125Note 6. Preferred EquityPart II. Item 8.135Note 7. Common EquityPart II. Item 8.137Note 8. Commitments and ContingenciesPart II. Item 8.142Note 9. Asset Retirement ObligationsPart II. Item 8.149Note 10. LeasesPart II. Item 8.154Note 11. Retirement, Other Postretirement Benefits, and Defined Contribution PlansPart II. Item 8.161Note 12. Stock-based CompensationPart II. Item 8.190Note 13. Business Segment InformationPart II. Item 8.194Note 14. Acquisitions, Dispositions, and Impairment of Long-lived AssetsPart II. Item 8.198Note 15. Risk Management and Fair ValuesPart II. Item 8.201Note 16. Decommissioning Trust FundsPart II. Item 8.219Note 17. Variable Interest EntitiesPart II. Item 8.226Note 18. Transactions with AffiliatesPart II. Item 8.228Note 19. RevenuePart II. Item 8.230Note 20. Quarterly Financial DataPart II. Item 8.234Entergy’s Business UtilityPart I. Item 1.237Entergy Wholesale CommoditiesPart I. Item 1.257Regulation of Entergy’s BusinessPart I. Item 1.260Litigation 274Employees 275Availability of SEC filings and other information on Entergy’s website 275Risk FactorsPart I. Item 1A.276Unresolved Staff CommentsPart I. Item 1B.Nonei Table of ContentsEntergy Arkansas, LLC and Subsidiaries Management’s Financial Discussion and AnalysisPart II. Item 7.299Report of Independent Registered Public Accounting Firm 316Consolidated Income Statements For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.317Consolidated Statements of Cash Flows For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.319Consolidated Balance Sheets, December 31, 2019 and 2018Part II. Item 8.320Consolidated Statements of Changes in Member’s Equity for the Years Ended December 31, 2019,2018, and 2017Part II. Item 8.322Selected Financial Data - Five-Year ComparisonPart II. Item 6.323Entergy Louisiana, LLC and Subsidiaries Management’s Financial Discussion and AnalysisPart II. Item 7.324Report of Independent Registered Public Accounting Firm 342Consolidated Income Statements For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.343Consolidated Statements of Comprehensive Income For the Years Ended December 31, 2019, 2018,and 2017Part II. Item 8.344Consolidated Statements of Cash Flows For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.345Consolidated Balance Sheets, December 31, 2019 and 2018Part II. Item 8.346Consolidated Statements of Changes in Equity for the Years Ended December 31, 2019, 2018, and2017Part II. Item 8.348Selected Financial Data - Five-Year ComparisonPart II. Item 6.349Entergy Mississippi, LLC Management’s Financial Discussion and AnalysisPart II. Item 7.350Report of Independent Registered Public Accounting Firm 362Income Statements For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.363Statements of Cash Flows For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.365Balance Sheets, December 31, 2019 and 2018Part II. Item 8.366Statements of Changes in Member’s Equity for the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.368Selected Financial Data - Five-Year ComparisonPart II. Item 6.369Entergy New Orleans, LLC and Subsidiaries Management’s Financial Discussion and AnalysisPart II. Item 7.370Report of Independent Registered Public Accounting Firm 385Consolidated Income Statements For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.386Consolidated Statements of Cash Flows For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.387Consolidated Balance Sheets, December 31, 2019 and 2018Part II. Item 8.388Consolidated Statements of Changes in Member’s Equity for the Years Ended December 31, 2019,2018, and 2017Part II. Item 8.390Selected Financial Data - Five-Year ComparisonPart II. Item 6.391Entergy Texas, Inc. and Subsidiaries Management’s Financial Discussion and AnalysisPart II. Item 7.392Report of Independent Registered Public Accounting Firm 404Consolidated Income Statements For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.405Consolidated Statements of Cash Flows For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.407Consolidated Balance Sheets, December 31, 2019 and 2018Part II. Item 8.408ii Table of ContentsConsolidated Statements of Changes in Equity for the Years Ended December 31, 2019, 2018, and2017Part II. Item 8.410Selected Financial Data - Five-Year ComparisonPart II. Item 6.411System Energy Resources, Inc. Management’s Financial Discussion and AnalysisPart II. Item 7.412Report of Independent Registered Public Accounting Firm 424Income Statements For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.425Statements of Cash Flows For the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.427Balance Sheets, December 31, 2019 and 2018Part II. Item 8.428Statements of Changes in Common Equity for the Years Ended December 31, 2019, 2018, and 2017Part II. Item 8.430Selected Financial Data - Five-Year ComparisonPart II. Item 6.431PropertiesPart I. Item 2.432Legal ProceedingsPart I. Item 3.432Mine Safety DisclosuresPart I. Item 4.432Information about Executive Officers of Entergy CorporationPart I. and Part III.Item 10.432Market for Registrants’ Common Equity and Related Stockholder MattersPart II. Item 5.434Selected Financial DataPart II. Item 6.435Management’s Discussion and Analysis of Financial Condition and Results of OperationsPart II. Item 7.435Quantitative and Qualitative Disclosures About Market RiskPart II. Item 7A.435Financial Statements and Supplementary DataPart II. Item 8.435Changes in and Disagreements with Accountants on Accounting and Financial DisclosurePart II. Item 9.435Controls and ProceduresPart II. Item 9A.435Attestation Report of Registered Public Accounting FirmPart II. Item 9A.437Directors, Executive Officers, and Corporate Governance of the RegistrantsPart III. Item 10.438Executive CompensationPart III. Item 11.443Security Ownership of Certain Beneficial Owners and ManagementPart III. Item 12.486Certain Relationships and Related Party Transactions and Director IndependencePart III. Item 13.490Principal Accountant Fees and ServicesPart III. Item 14.491Exhibits and Financial Statement SchedulesPart IV. Item 15.494Form 10-K SummaryPart IV. Item 16.494Exhibit Index 495Signatures 509Consents of Independent Registered Public Accounting Firm 516Report of Independent Registered Public Accounting Firm 517Index to Financial Statement Schedules S-1This combined Form 10-K is separately filed by Entergy Corporation and its six “Registrant Subsidiaries:” EntergyArkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, Entergy Texas, Inc., and SystemEnergy Resources, Inc. Information contained herein relating to any individual company is filed by such company on its ownbehalf. Each company makes representations only as to itself and makes no other representations whatsoever as to any othercompany.The report should be read in its entirety as it pertains to each respective reporting company. No one section of the reportdeals with all aspects of the subject matter. Separate Item 6, 7, and 8 sections are provided for each reporting company, except forthe Notes to the financial statements. The Notes to the financial statements for all of the reporting companies are combined. AllItems other than 6, 7, and 8 are combined for the reporting companies.iii Table of ContentsFORWARD-LOOKING INFORMATIONIn this combined report and from time to time, Entergy Corporation and the Registrant Subsidiaries each makes statements as aregistrant concerning its expectations, beliefs, plans, objectives, goals, strategies, and future events or performance. Such statements are“forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “may,” “will,”“could,” “project,” “believe,” “anticipate,” “intend,” “expect,” “estimate,” “continue,” “potential,” “plan,” “predict,” “forecast,” and othersimilar words or expressions are intended to identify forward-looking statements but are not the only means to identify thesestatements. 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 thiscombined 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 differmaterially from those expressed or implied in the forward-looking statements, including (a) those factors discussed or incorporated byreference in Item 1A. Risk Factors, (b) those factors discussed or incorporated by reference in Management’s Financial Discussion andAnalysis, 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, formula rate proceedings and related negotiations, including various performance-basedrate discussions, Entergy’s utility supply plan, and recovery of fuel and purchased power costs;•continuing long-term risks and uncertainties associated with the termination of the System Agreement in 2016, including thepotential 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 rulesand market and system conditions in the MISO markets, the allocation of MISO system transmission upgrade costs, the MISO-widebase rate of return on equity allowed or any MISO-related charges and credits required by the FERC, and the effect of planningdecisions 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 andother potential stranded costs, and the application of more stringent return on equity criteria, transmission reliability requirementsor 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, includingwith respect to the planned or actual shutdown and sale of each of the nuclear generating facilities owned or operated by EntergyWholesale Commodities, and the effects of new or existing safety or environmental concerns regarding nuclear power plants andnuclear fuel;•resolution of pending or future applications, and related regulatory proceedings and litigation, for license modifications or otherauthorizations 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’snuclear generating facilities;•increases in costs and capital expenditures that could result from changing regulatory requirements, emerging operating andindustry issues, and the commitment of substantial human and capital resources required for the safe and reliable operation andmaintenance of Entergy’s nuclear generating facilities;•Entergy’s ability to develop and execute on a point of view regarding future prices of electricity, natural gas, and other energy-related commodities;•prices for power generated by Entergy’s merchant generating facilities and the ability to hedge, meet credit support requirementsfor hedges, sell power forward or otherwise reduce the market price risk associated with those facilities, including the EntergyWholesale Commodities nuclear plants, especially in light of the planned shutdown and sale of each of these nuclear plants;iv Table of ContentsFORWARD-LOOKING INFORMATION (Continued)•the prices and availability of fuel and power Entergy must purchase for its Utility customers, and Entergy’s ability to meet creditsupport 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 andrisk management transactions to governmental regulation;•changes in environmental laws and regulations, agency positions or associated litigation, including requirements for reducedemissions of sulfur dioxide, nitrogen oxide, greenhouse gases, mercury, particulate matter and other regulated air emissions, heatand other regulated discharges to water, requirements for waste management and disposal and for the remediation of contaminatedsites, 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 habitatdesignations;•the effects of changes in federal, state, or local laws and regulations, and other governmental actions or policies, including changesin 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 ordecisions;•uncertainty regarding the establishment of interim or permanent sites for spent nuclear fuel and nuclear waste storage and disposaland 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 withefforts to remediate the effects of hurricanes, ice storms, or other weather events and the recovery of costs associated withrestoration, 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 retrospectiveassessments and/or retrospective insurance premiums as a result of Entergy’s participation in a secondary financial protectionsystem, 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 wetlandloss;•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 theanticipated 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 andevents and circumstances that could influence economic conditions in those areas, including power prices, and the risk thatanticipated load growth may not materialize;•federal income tax reform, including the Tax Cuts and Jobs Act and its intended and unintended consequences on financial resultsand future cash flows;•the effects of Entergy’s strategies to reduce tax payments, especially in light of federal income tax reform;•changes in the financial markets and regulatory requirements for the issuance of securities, particularly as they affect access tocapital and Entergy’s ability to refinance existing securities, execute share repurchase programs, and fund investments andacquisitions;•actions of rating agencies, including changes in the ratings of debt and preferred stock, changes in general corporate ratings, andchanges in the rating agencies’ ratings criteria;•changes in inflation and interest rates;•the effects of litigation and government investigations or proceedings;v Table of ContentsFORWARD-LOOKING INFORMATION (Concluded)•changes in technology, including (i) Entergy’s ability to implement new or emerging technologies, (ii) the impact of changesrelating 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 incentivizingdevelopment of the foregoing, and (iii) competition from other companies offering products and services to Entergy’s customersbased on new or emerging technologies or alternative sources of generation;•the effects, including increased security costs, of threatened or actual terrorism, cyber-attacks or data security breaches, natural orman-made electromagnetic pulses that affect transmission or generation infrastructure, accidents, and war or a catastrophic eventsuch as a nuclear accident or a natural gas pipeline explosion;•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 forEntergy’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’snuclear 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 tosatisfy 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 strategictransactions that Entergy may undertake.vi Table of ContentsDEFINITIONSCertain abbreviations or acronyms used in the text and notes are defined below:Abbreviation or AcronymTerm AFUDCAllowance for Funds Used During ConstructionALJAdministrative Law JudgeANO 1 and 2Units 1 and 2 of Arkansas Nuclear One (nuclear), owned by Entergy ArkansasAPSCArkansas Public Service CommissionASUAccounting Standards Update issued by the FASBBoardBoard of Directors of Entergy CorporationCajunCajun Electric Power Cooperative, Inc.capacity factorActual plant output divided by maximum potential plant output for the periodCity CouncilCouncil of the City of New Orleans, LouisianaD.C. CircuitU.S. Court of Appeals for the District of Columbia CircuitDOEUnited States Department of EnergyEntergyEntergy Corporation and its direct and indirect subsidiariesEntergy CorporationEntergy Corporation, a Delaware corporationEntergy Gulf States, Inc.Predecessor company for financial reporting purposes to Entergy Gulf States Louisiana that includedthe assets and business operations of both Entergy Gulf States Louisiana and Entergy TexasEntergy Gulf States LouisianaEntergy Gulf States Louisiana, L.L.C., a Louisiana limited liability company formally created as part ofthe jurisdictional separation of Entergy Gulf States, Inc. and the successor company to Entergy GulfStates, Inc. for financial reporting purposes. The term is also used to refer to the Louisianajurisdictional 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 LouisianaEntergy Louisiana, LLC, a Texas limited liability company formally created as part of the combinationof Entergy Gulf States Louisiana and the company formerly known as Entergy Louisiana, LLC (OldEntergy Louisiana) into a single public utility company and the successor to Old Entergy Louisianafor financial reporting purposes.Entergy TexasEntergy Texas, Inc., a Texas corporation formally created as part of the jurisdictional separation ofEntergy Gulf States, Inc. The term is also used to refer to the Texas jurisdictional business of EntergyGulf States, Inc., as the context requires.Entergy Wholesale CommoditiesEntergy’s non-utility business segment primarily comprised of the ownership, operation, anddecommissioning of nuclear power plants, the ownership of interests in non-nuclear power plants, andthe sale of the electric power produced by its operating power plants to wholesale customersEPAUnited States Environmental Protection AgencyERCOTElectric Reliability Council of TexasFASBFinancial Accounting Standards BoardFERCFederal Energy Regulatory CommissionFitzPatrickJames A. FitzPatrick Nuclear Power Plant (nuclear), previously owned by an Entergy subsidiary in theEntergy Wholesale Commodities business segment, which was sold in March 2017Grand GulfUnit No. 1 of Grand Gulf Nuclear Station (nuclear), 90% owned or leased by System EnergyGWhGigawatt-hour(s), which equals one million kilowatt-hoursIndependenceIndependence Steam Electric Station (coal), owned 16% by Entergy Arkansas, 25% by EntergyMississippi, and 7% by Entergy Power, LLCvii Table of ContentsDEFINITIONS (Continued)Abbreviation or AcronymTerm Indian Point 2Unit 2 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the EntergyWholesale Commodities business segmentIndian Point 3Unit 3 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the EntergyWholesale Commodities business segmentIRSInternal Revenue ServiceISOIndependent System OperatorkVKilovoltkWKilowatt, which equals one thousand wattskWhKilowatt-hour(s)LDEQLouisiana Department of Environmental QualityLPSCLouisiana Public Service CommissionMcf1,000 cubic feet of gasMISOMidcontinent Independent System Operator, Inc., a regional transmission organizationMMBtuOne million British Thermal UnitsMPSCMississippi Public Service CommissionMWMegawatt(s), which equals one thousand kilowattsMWhMegawatt-hour(s)Nelson Unit 6Unit No. 6 (coal) of the Nelson Steam Electric Generating Station, 70% of which is co-owned byEntergy Louisiana (57.5%) and Entergy Texas (42.5%) and 10.9% of which is owned by an Entergysubsidiary in the Entergy Wholesale Commodities business segmentNet debt to net capital ratioGross debt less cash and cash equivalents divided by total capitalization less cash and cash equivalentsNet MW in operationInstalled capacity owned and operatedNRCNuclear Regulatory CommissionNYPANew York Power AuthorityPalisadesPalisades Nuclear Plant (nuclear), owned by an Entergy subsidiary in the Entergy WholesaleCommodities business segmentParent & OtherThe portions of Entergy not included in the Utility or Entergy Wholesale Commodities segments,primarily consisting of the activities of the parent company, Entergy CorporationPilgrimPilgrim Nuclear Power Station (nuclear), previously owned by an Entergy subsidiary in the EntergyWholesale Commodities business segment, which ceased power production in May 2019 and wassold in August 2019PPAPurchased power agreement or power purchase agreementPRPPotentially responsible party (a person or entity that may be responsible for remediation ofenvironmental contamination)PUCTPublic Utility Commission of TexasRegistrant SubsidiariesEntergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans,LLC, Entergy Texas, Inc., and System Energy Resources, Inc.River BendRiver Bend Station (nuclear), owned by Entergy LouisianaRTORegional transmission organizationSECSecurities and Exchange Commissionviii Table of ContentsDEFINITIONS (Concluded)Abbreviation or AcronymTerm System AgreementAgreement, effective January 1, 1983, as modified, among the Utility operating companies relating tothe sharing of generating capacity and other power resources. The agreement terminated effectiveAugust 2016.System EnergySystem Energy Resources, Inc.TWhTerawatt-hour(s), which equals one billion kilowatt-hoursUnit Power Sales AgreementAgreement, dated as of June 10, 1982, as amended and approved by the FERC, among EntergyArkansas, 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 GulfUtilityEntergy’s business segment that generates, transmits, distributes, and sells electric power, with a smallamount of natural gas distributionUtility operating companiesEntergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy TexasVermont YankeeVermont Yankee Nuclear Power Station (nuclear), previously owned by an Entergy subsidiary in theEntergy Wholesale Commodities business segment, which ceased power production in December2014 and was disposed of in January 2019Waterford 3Unit No. 3 (nuclear) of the Waterford Steam Electric Station, owned by Entergy Louisianaweather-adjusted usageElectric usage excluding the effects of deviations from normal weatherWhite BluffWhite Bluff Steam Electric Generating Station, 57% owned by Entergy Arkansasix Table of Contents(Page left blank intentionally)x Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESMANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSISEntergy operates primarily through two business segments: Utility and Entergy Wholesale Commodities.•The Utility business segment includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas,Mississippi, Texas, and Louisiana, including the City of New Orleans; and operation of a small natural gas distribution business.•The Entergy Wholesale Commodities business segment includes the ownership, operation, and decommissioning of nuclear powerplants located in the northern United States and the sale of the electric power produced by its operating plants to wholesalecustomers. Entergy Wholesale Commodities also provides services to other nuclear power plant owners and owns interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers. See “Entergy WholesaleCommodities Exit from the Merchant Power Business” below for discussion of the operation and planned shutdown and sale ofeach of the Entergy Wholesale Commodities nuclear power plants.Following are the percentages of Entergy’s consolidated revenues generated by its operating segments and the percentage of totalassets held by them. Net income or loss generated by the operating segments is discussed in the sections that follow. % of Revenue % of Total AssetsSegment201920182017 201920182017Utility888785 969392Entergy Wholesale Commodities121315 81112Parent & Other (a)——— (4)(4)(4)See Note 13 to the financial statements for further financial information regarding Entergy’s business segments. (a)Parent & Other includes eliminations, which are primarily intersegment activity. 1 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisResults of Operations2019 Compared to 2018Following are income statement variances for Utility, Entergy Wholesale Commodities, Parent & Other, and Entergy comparing2019 to 2018 showing how much the line item increased or (decreased) in comparison to the prior period. Utility EntergyWholesaleCommodities Parent & Other(a) Entergy (In Thousands)2018 Consolidated Net Income (Loss)$1,495,061 ($340,641) ($291,865) $862,555 Operating revenues43,315 (174,186) 92 (130,779)Fuel, fuel-related expenses, and gas purchased for resale(139,200) 20,974 71 (118,155)Purchased power(409,276) (56,596) (67) (465,939)Other regulatory charges (credits)(327,269) — — (327,269)Other operation and maintenance61,199 (130,054) (5,161) (74,016)Asset write-offs, impairments, and related charges— (242,294) — (242,294)Taxes other than income taxes20,826 (17,870) (1,163) 1,793Depreciation and amortization110,580 (1,676) 1,670 110,574Other income13,488 382,359 (19,212) 376,635Interest expense36,476 (4,244) 2,845 35,077Other expenses20,703 42,692 — 63,395Income taxes752,182 107,730 7,089 867,0012019 Consolidated Net Income (Loss)$1,425,643 $148,870 ($316,269) $1,258,244(a)Parent & Other includes eliminations, which are primarily intersegment activity.Refer to “SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON OF ENTERGY CORPORATION ANDSUBSIDIARIES” which accompanies Entergy Corporation’s financial statements in this report for further information with respect tooperating statistics.Results of operations for 2019 include: 1) a loss of $190 million ($156 million net-of-tax) as a result of the sale of the Pilgrim plant inAugust 2019; 2) a $156 million reduction in income tax expense recognized by Entergy Wholesale Commodities as a result of an internalrestructuring; and 3) impairment charges of $100 million ($79 million net-of-tax) due to costs being charged directly to expense as incurredas a result of the impaired value of the Entergy Wholesale Commodities nuclear plants’ long-lived assets due to the significantly reducedremaining estimated operating lives associated with management’s strategy to exit the Entergy Wholesale Commodities’ merchant powerbusiness. See Note 3 to the financial statements for further discussion of the internal restructuring. See “MANAGEMENT’S FINANCIALDISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business” below for discussion ofmanagement’s strategy to shut down and sell all of the remaining plants in Entergy Wholesale Commodities’ merchant nuclear fleet and seeNote 14 to the financial statements for further discussion of the impairment and related charges and the sale of the Pilgrim plant.Results of operations for 2018 include: 1) impairment charges of $532 million ($421 million net-of-tax) due to costs being chargeddirectly to expense as incurred as a result of the impaired value of the Entergy Wholesale Commodities nuclear plants’ long-lived assets dueto the significantly reduced remaining estimated operating lives2 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysisassociated with management’s strategy to exit the Entergy Wholesale Commodities’ merchant power business; 2) a $170 million reduction ofincome tax expense and a regulatory liability of $40 million ($30 million net-of-tax) as a result of customer credits recognized by Utility, as aresult of an internal restructuring; 3) a $107 million reduction of income tax expense, recognized by Entergy Wholesale Commodities, as aresult of a restructuring of the investment holdings in one of its nuclear plant decommissioning trust funds; 4) a $52 million income taxbenefit, recognized by Entergy Louisiana, as a result of the settlement of the 2012-2013 IRS audit, associated with the Hurricane Katrina andHurricane Rita contingent sharing obligation associated with the Louisiana Act 55 financing; and 5) a $23 million reduction of income taxexpense, recognized by Entergy Wholesale Commodities, as a result of a state income tax audit. See “MANAGEMENT’S FINANCIALDISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business” below for a discussionof management’s strategy to shut down and sell all of the remaining plants in Entergy Wholesale Commodities’ merchant nuclear fleet andsee Note 14 to the financial statements for further discussion of the impairment and related charges. See Notes 2 and 3 to the financialstatements for further discussion of the internal restructuring and customer credits. See Note 3 to the financial statements for furtherdiscussion of the restructuring of the decommissioning trust fund investment holdings, the IRS audit settlement, and the state income taxaudit.Operating RevenuesUtilityFollowing is an analysis of the change in operating revenues comparing 2019 to 2018: Amount (In Millions)2018 operating revenues$9,541Fuel, rider, and other revenues that do notsignificantly affect net income(523)Return of unprotected excess accumulated deferredincome taxes to customers379Retail electric price260Volume/weather(73)2019 operating revenues$9,584The Utility operating companies’ results include revenues from rate mechanisms designed to recover fuel, purchased power, andother costs such that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, andother revenues that do not significantly affect net income” includes the revenue variance associated with these items.The return of unprotected excess accumulated deferred income taxes to customers resulted from activity at the Utility operatingcompanies in response to the enactment of the Tax Cuts and Jobs Act. The return of unprotected excess accumulated deferred income taxesbegan in second quarter 2018. In 2019, $262 million was returned to customers through reductions in operating revenues as compared to$641 million in 2018. There is no effect on net income as the reductions in operating revenues were offset by reductions in income taxexpense. See Note 2 to the financial statements for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.The retail electric price variance is primarily due to:•an increase in formula rate plan revenues effective September 2018 and an interim increase in formula rate plan revenues effectiveJune 2019 due to the inclusion of the first-year revenue requirement for the St. Charles Power Station, each at Entergy Louisiana, asapproved by the LPSC;•an increase in formula rate plan rates effective with the first billing cycle of January 2019 at Entergy Arkansas, as approved by theAPSC;3 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis•a base rate increase effective October 2018 at Entergy Texas, as approved by the PUCT; and•an increase in formula rate plan revenues effective with the first billing cycle of July 2019 and an accrual in the fourth quarter 2019for the interim capacity rate adjustment to the formula rate plan to recover non-fuel related costs of acquiring the Choctaw GeneratingStation, each at Entergy Mississippi, as approved by the MPSC.See Note 2 to the financial statements for further discussion of the regulatory proceedings discussed above.The volume/weather variance is primarily due to a decrease of 1,587 GWh, or 1%, in billed electricity usage, including the effect ofless favorable weather on residential and commercial sales.Entergy Wholesale CommoditiesOperating revenues for Entergy Wholesale Commodities decreased from $1,469 million for 2018 to $1,295 million for 2019primarily due to the shutdown of Pilgrim in May 2019 and lower capacity prices, partially offset by higher volume in the remaining EntergyWholesale Commodities merchant nuclear fleet resulting from fewer outage days.Following are key performance measures for Entergy Wholesale Commodities for 2019 and 2018: 2019 2018Owned capacity (MW) (a)3,274 3,962GWh billed28,088 29,875 Entergy Wholesale Commodities Nuclear Fleet Capacity factor93% 84%GWh billed25,928 27,617Average energy price ($/MWh)$39.10 $37.34Average capacity price ($/kW-month)$4.25 $6.80Refueling outage days: Indian Point 2— 33Indian Point 329 —Palisades— 61(a)The reduction in owned capacity is due to the shutdown of the 688 MW Pilgrim plant in May 2019.Other Income Statement ItemsUtilityOther operation and maintenance expenses increased from $2,501 million for 2018 to $2,563 million for 2019 primarily due to:•an increase of $34 million in information technology costs primarily due to higher costs related to applications and infrastructuresupport, enhanced cyber security, and upgrades and maintenance;•an increase of $32 million in spending on initiatives to explore new customer products and services;•an increase of $21 million in compensation and benefits costs primarily due to higher incentive-based compensation accruals in 2019as compared to prior year;•a $15 million gain in 2018 from the sale of Entergy Louisiana’s Willow Glen Power Station. See Note 14 to the financial statementsfor discussion of the sale of Willow Glen;•an increase of $12 million in distribution operations and asset management costs primarily due to higher advanced metering customereducation costs and higher contract costs for meter reading services; and4 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis•an $11 million write-off in 2019 of specific costs related to the potential construction of scrubbers at the White Bluff plant at EntergyArkansas.The increase was partially offset by:•a decrease of $30 million in nuclear generation expenses primarily due to a lower scope of work performed in 2019 as compared to2018;•the effects of recording in 2019 final judgments to resolve claims in the ANO damages case and the River Bend damages case bothagainst the DOE related to spent nuclear fuel storage costs. The damages awarded include the reimbursement of approximately $17million of spent nuclear fuel storage costs previously recorded as other operation and maintenance expense. See Note 8 to thefinancial statements for discussion of the spent nuclear fuel litigation;•a decrease of $11 million in energy efficiency costs due to the timing of recovery from customers; and•a decrease of $9 million as a result of the deferral in 2019 by Entergy New Orleans of 2018 costs related to its rate case and a systemconversion for Algiers customers as a result of the 2018 combined rate case resolution approved by the City Council. See Note 2 tothe financial statements for further discussion of the rate case resolution. Depreciation and amortization expenses increased primarily due to:•additions to plant in service, including the St. Charles Power Station;•a reduction of approximately $26 million in depreciation expense recorded in the third quarter 2018 as part of a settlement approvedby the FERC in the Unit Power Sales Agreement proceeding; and•new depreciation rates at Entergy Mississippi, as approved by the MPSC, and at Entergy Texas, as approved by the PUCT.The increase was partially offset by updated depreciation rates used in calculating Grand Gulf plant depreciation and amortization expensesunder the Unit Power Sales Agreement, as approved by the FERC. See Note 2 to the financial statements for further discussion of the UnitPower Sales Agreement proceeding.Other regulatory charges (credits) include the following significant activity:•a regulatory charge recorded in second quarter 2018 to reflect the return of unprotected excess accumulated deferred income taxesper an agreement approved by the MPSC in June 2018 that resulted in a reduction in net utility plant of $127 million. There was noeffect on net income as the regulatory charge was offset by a reduction in income tax expense in 2018;•regulatory charges of $73 million recorded in 2018 to reflect the effects of regulatory agreements to return the benefits of the lowerincome tax rate in 2018 to Entergy Louisiana customers; and•regulatory charges of $25 million recorded in 2018 to reflect the effects of a provision in the settlement reached in the 2018 rate caseproceeding to return the benefits of the lower federal income tax rate in 2018 to Entergy Texas customers.See Note 2 to the financial statements for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.Interest expense increased primarily due to the issuance in March 2019 of $525 million of 4.20% Series mortgage bonds by EntergyLouisiana and the issuance in March 2019 of $350 million of 4.20% Series mortgage bonds by Entergy Arkansas. See Note 5 to the financialstatements for a discussion of long-term debt.Entergy Wholesale CommoditiesFuel and purchased power expenses decreased from $192 million for 2018 to $157 million for 2019 primarily due to a larger exerciseof resupply options in 2018 provided for in purchase power agreements where Entergy Wholesale5 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisCommodities may elect to supply power from another source when plants are not running.Other operation and maintenance expenses decreased from $808 million for 2018 to $678 million for 2019 primarily due to:•a decrease of $75 million in nuclear generation expenditures primarily due to the absence of other operation and maintenanceexpenses from the Pilgrim plant, after it was shut down in May 2019 and subsequently sold. See Note 14 to the financial statementsfor further discussion of the sale of the Pilgrim plant; and•a decrease of $44 million in severance and retention expenses. Severance and retention expenses were incurred in 2019 and 2018 dueto management’s strategy to exit the Entergy Wholesale Commodities merchant power business. See “MANAGEMENT’SFINANCIAL DISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business”below for a discussion of management’s strategy to shut down and sell all of the remaining plants in Entergy WholesaleCommodities’ merchant nuclear fleet. See Note 13 to the financial statements for further discussion of severance and retentionexpenses resulting from management’s strategy to shut down and sell all of the remaining plants in Entergy Wholesale Commodities’merchant nuclear fleet.Asset write-offs, impairments, and related charges for 2019 include a loss of $190 million ($156 million net-of-tax) as a result of thesale of the Pilgrim plant in August 2019 and impairment charges of $100 million ($79 million net-of-tax) primarily related to nuclearrefueling outage spending and expenditures for capital assets. Asset write-offs, impairments, and related charges for 2018 include impairmentcharges of $532 million ($421 million net-of-tax) related to asset retirement obligation revisions, nuclear fuel spending, nuclear refuelingoutage spending, and expenditures for capital assets. These costs were charged to expense as incurred as a result of the impaired fair value ofthe Entergy Wholesale Commodities nuclear plants’ long-lived assets due to the significantly reduced remaining estimated operating livesassociated with management’s strategy to exit the Entergy Wholesale Commodities merchant power business. See “MANAGEMENT’SFINANCIAL DISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business” below fora discussion of management’s strategy to shut down and sell all of the remaining plants in Entergy Wholesale Commodities’ merchantnuclear fleet. See Note 9 to the financial statements for a discussion of asset retirement obligations. See Note 14 to the financial statementsfor a discussion of the impairment of long-lived assets and the sale of the Pilgrim plant.Other income increased primarily due to higher gains on decommissioning trust fund investments. See Notes 15 and 16 to thefinancial statements for a discussion of decommissioning trust fund investments.Other expenses increased primarily due to an increase in nuclear refueling outage expenses as a result of the amortization in 2019 ofcosts associated with a refueling outage at Palisades.Income TaxesSee Note 3 to the financial statements for a reconciliation of the federal statutory rate of 21% to the effective income tax rates, and foradditional discussion regarding income taxes.The effective income tax rate for 2019 was (15.6%). The difference in the effective income tax rate versus the federal statutory rate of21% was primarily due to amortization of excess accumulated deferred income taxes, certain book and tax differences related to utility plantitems, tax differences related to the allowance for equity funds used during construction, recognition of a deferred tax asset associated with apreviously unrecognized net operating loss carryover, a charitable tax deduction, and the effects of restructuring transactions within EntergyWholesale Commodities, partially offset by state income taxes and valuation allowances recorded against deferred tax assets associated withthe disposition of Vermont Yankee and the carryover of business interest expense. See Notes 2 and 3 to the financial statements for adiscussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act. See Note 3 to the financial statements for a discussionof the internal restructuring at Entergy Wholesale Commodities. See Note 14 to the financial statements for a discussion of the tax effects ofthe Vermont Yankee disposition.6 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisThe effective income tax rate for 2018 was 595%. The difference in the effective income tax rate versus the statutory rate of 21% wasprimarily due to amortization of excess accumulated deferred income taxes, the tax effects of a restructuring within the Utility, and arestructuring of the investment holdings in one of the Entergy Wholesale Commodities’ nuclear plant decommissioning trusts for whichadditional tax basis is now recoverable. See Notes 2 and 3 to the financial statements for a discussion of the effects and regulatory activityregarding the Tax Cuts and Jobs Act. See Note 3 to the financial statements for a discussion of the restructuring.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Results of Operations” in Entergy’s Annual Reporton Form 10-K for the year ended December 31, 2018 for discussion of results of operations for 2018 compared to 2017.Income Tax LegislationOn December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the Act). As a result of the Act, Entergy and theRegistrant Subsidiaries re-measured their deferred tax assets and liabilities in December 2017 to reflect the reduction in the federal corporateincome tax rate from 35% to 21% that was effective January 1, 2018. Note 3 to the financial statements contains additional discussion of theeffect of the Act on 2017, 2018, and 2019 results of operations and financial position, the provisions of the Act, and the uncertaintiesassociated with accounting for the Act, and Note 2 to the financial statements discusses the regulatory proceedings that have considered theeffects of the Act.Entergy’s operating cash flows have been and will be reduced by the Act, most significantly over the time that the RegistrantSubsidiaries are returning unprotected excess deferred income taxes to customers. Rate base is expected to increase over time as aconsequence of the Act as the excess deferred income taxes are returned to customers. Entergy financed its incremental cash requirements asa consequence of the Act through a combination of Registrant Subsidiary debt and Entergy Corporation debt and equity. In June 2018,Entergy Corporation marketed an equity offering of 15.3 million shares of common stock. In lieu of issuing equity at the time of the offering,Entergy entered into forward sale agreements with several counterparties. In December 2018, Entergy physically settled a portion of itsobligations under the forward sale agreements by delivering 6.8 million shares of its common stock in exchange for cash proceeds of $500million. In May 2019, Entergy physically settled its remaining obligations under the forward sale agreements by delivering 8.5 million sharesof common stock in exchange for cash proceeds of $608 million. See Note 7 to the financial statements for further discussion of the forwardsale agreements.Entergy Wholesale Commodities Exit from the Merchant Power BusinessEntergy Wholesale Commodities includes the ownership of the following nuclear reactors as of December 31, 2019: Location Market Capacity StatusIndian Point 2 Buchanan, NY NYISO 1,028 MW Planned shutdown in 2020Indian Point 3 Buchanan, NY NYISO 1,041 MW Planned shutdown in 2021Palisades Covert, MI MISO 811 MW Planned shutdown in 2022As discussed below, Entergy sold its FitzPatrick plant to Exelon in March 2017, transferred its Vermont Yankee plant to NorthStar inJanuary 2019, and sold its Pilgrim plant to Holtec in August 2019. The Palisades and Indian Point plants are under contract to be sold,subject to certain conditions, after they are shut down. Entergy also sold the Rhode Island State Energy Center, a natural gas-fired combinedcycle generating plant, in December 2015.7 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisThese plant sales and contracts to sell are the result of a strategy that Entergy has undertaken to manage and reduce the risk of theEntergy Wholesale Commodities business, which includes taking actions to exit the merchant power business. Management evaluated thechallenges for each of the plants based on a variety of factors such as their market for both energy and capacity, their size, their contractedpositions, and the amount of investment required to continue to operate and maintain the safety and integrity of the plants, including theestimated asset retirement costs. Changes to current assumptions regarding the operating life of a plant, the decommissioning timeline andprocess, or the length of time that Entergy will continue to own a plant could result in revisions to the asset retirement obligations and affectcompliance with certain NRC minimum financial assurance requirements for meeting obligations to decommission the plants. Increases inthe asset retirement obligations are likely to result in an increase in operating expense in the period of a revision. The possibility that a plantmay have an operating life shorter than previously assumed could result in the need for additional contributions to decommissioning trustfunds, or the posting of parent guarantees, letters of credit, or other surety mechanisms. Entergy Wholesale Commodities also includes the ownership of two non-operating nuclear facilities, Big Rock Point in Michigan andIndian Point 1 in New York that were acquired when Entergy purchased the Palisades and Indian Point 2 nuclear plants, respectively. Thesefacilities are in various stages of the decommissioning process. Big Rock Point is under contract to be sold with the Palisades plant andIndian Point 1 is under contract to be sold with the Indian Point 2 and Indian Point 3 plants. In addition, Entergy Wholesale Commoditiesprovides operations and management services, including decommissioning-related services, to nuclear power plants owned by non-affiliatedentities in the United States. A relatively minor portion of the Entergy Wholesale Commodities business is the ownership of interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers.Shutdown and Disposition of Vermont YankeeOn December 29, 2014, the Vermont Yankee plant ceased power production and entered its decommissioning phase. In November2016, Entergy entered into an agreement to transfer 100% of the membership interests in Entergy Nuclear Vermont Yankee, LLC to asubsidiary of NorthStar. Entergy Nuclear Vermont Yankee was the owner of the Vermont Yankee plant. The transaction included the transferof the nuclear decommissioning trust fund and the asset retirement obligation for the spent fuel management and decommissioning of theplant.In March 2018, Entergy and NorthStar entered into a settlement agreement and a Memorandum of Understanding with State ofVermont agencies and other interested parties that set forth the terms on which the agencies and parties supported the Vermont Public UtilityCommission’s approval of the transaction. The agreements provided additional financial assurance for decommissioning, spent fuelmanagement and site restoration, and detailed the site restoration standards. In October 2018 the NRC issued an order approving theapplication to transfer Vermont Yankee’s license to NorthStar for decommissioning. In December 2018 the Vermont Public UtilityCommission issued an order approving the transaction consistent with the Memorandum of Understanding’s terms. On January 11, 2019,Entergy and NorthStar closed the transaction.Entergy Nuclear Vermont Yankee had an outstanding credit facility that was used to pay for dry fuel storage costs. This credit facilitywas guaranteed by Entergy Corporation. A subsidiary of Entergy assumed the obligations under the credit facility. At the closing of the saletransaction, NorthStar caused Entergy Nuclear Vermont Yankee, renamed NorthStar Vermont Yankee, to issue a $139 million promissorynote to the Entergy subsidiary that assumed the credit facility obligations. The amount of the note includes the balance outstanding on thecredit facility, as well as borrowing fees and costs incurred by Entergy in connection with the credit facility.With the receipt of the NRC and Vermont Public Utility Commission approvals and the resolution among the parties of thesignificant conditions of the sale, Entergy concluded that as of December 31, 2018 Vermont Yankee was in held for sale status. Entergyaccordingly evaluated Vermont Yankee’s asset retirement obligation in light of the terms of the transaction and evaluated the remainingvalues of the Vermont Yankee assets. These evaluations resulted in an increase in the asset retirement obligation and $173 million of relatedasset impairment and other charges in the8 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysisfourth quarter 2018. See Note 9 to the financial statements for additional discussion of the asset retirement obligation. See Note 14 to thefinancial statements for discussion of the closing of the Vermont Yankee transaction.Sale of FitzPatrickIn October 2015, Entergy determined that it would close the FitzPatrick plant. The original expectation was to shut down theFitzPatrick plant at the end of its fuel cycle in January 2017.In August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust funds anddecommissioning liabilities for the Indian Point 3 and FitzPatrick plants to Entergy. When Entergy purchased Indian Point 3 and FitzPatrickin 2000 from NYPA, NYPA retained the decommissioning trust funds and the decommissioning liabilities. NYPA and Entergy subsidiariesexecuted decommissioning agreements, which specified their decommissioning obligations. NYPA had the right to require the Entergysubsidiaries to assume each of the decommissioning liabilities provided that it assigned the corresponding decommissioning trust, up to aspecified level, to the Entergy subsidiaries. Under the original agreements, if the decommissioning liabilities were retained by NYPA, theEntergy subsidiaries would perform the decommissioning of the plants at a price equal to the lesser of a pre-specified level or the amount inthe decommissioning trust funds. At the time of the acquisition of the plants Entergy recorded a contract asset that represented an estimate ofthe present value of the difference between the stipulated contract amount for decommissioning the plants less the decommissioning costsestimated in independent decommissioning cost studies. The asset was increased by monthly accretion based on the applicable discount ratenecessary to ultimately provide for the estimated future value of the decommissioning contract. The monthly accretion was recorded asinterest income. As a result of the agreement with NYPA, in the third quarter 2016, Entergy removed the contract asset from its balancesheet, and recorded receivables for the beneficial interests in the decommissioning trust funds and asset retirement obligations for thedecommissioning liabilities. The decommissioning trust funds for the Indian Point 3 and FitzPatrick plants were transferred to Entergy byNYPA in January 2017.In August 2016, Entergy entered into an agreement to sell the FitzPatrick plant to Exelon. NRC approval of the sale was received inMarch 2017. The transaction closed in March 2017 for a purchase price of $110 million, which included a $10 million non-refundablesigning fee paid in August 2016, in addition to the assumption by Exelon of certain liabilities related to the FitzPatrick plant, resulting in apre-tax gain on the sale of $16 million. At the transaction close, Exelon paid an additional $8 million for the proration of certain expensesprepaid by Entergy. See Note 14 to the financial statements for further discussion of the sale of FitzPatrick. As discussed in Note 3 to thefinancial statements, as a result of the sale of FitzPatrick, Entergy re-determined the plant’s tax basis, resulting in a $44 million income taxbenefit in the first quarter 2017.Shutdown and Sale of PilgrimIn October 2015, Entergy determined that it would close the Pilgrim plant. The decision came after management’s extensive analysisof the economics and operating life of the plant following the NRC’s decision in September 2015 to place the plant in its “multiple/repetitivedegraded cornerstone column” (Column 4) of its Reactor Oversight Process Action Matrix. In January 2019 the NRC found that the Pilgrimplant had completed the corrective actions required to address the concerns that led to the plant’s placement in Column 4 and haddemonstrated sustained improvement. Pilgrim ceased operations in May 2019. See Note 14 to the financial statements for discussion of theimpairment charges associated with the decision to cease operations earlier than expected.On July 30, 2018, Entergy entered into a purchase and sale agreement with Holtec International to sell to a Holtec subsidiary 100% ofthe equity interests in Entergy Nuclear Generation Company, LLC, the owner of Pilgrim, for $1,000 (subject to adjustments for net liabilitiesand other amounts). On August 22, 2019 the NRC approved the transfer of Pilgrim’s facility licenses to Holtec. At that time, hearingrequests filed by the Commonwealth of Massachusetts and Pilgrim Watch challenging Holtec’s financial qualifications and the sufficiency ofthe NRC’s review of the associated environmental impacts of the license transfer were pending with the NRC Commissioners. The NRCapproval order included a condition acknowledging the NRC’s longstanding authority to modify, condition, or rescind9 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysisthe license transfer order as a result of any hearing that may be conducted. On August 26, 2019, as permitted by the August 22 order,Entergy and Holtec closed the transaction. On September 3 and 4, 2019, Pilgrim Watch and Massachusetts each filed with the NRC motionsto stay the effectiveness of the August 22 order pending the resolution of the NRC hearing process. On December 17, 2019, the NRC deniedthe Pilgrim Watch and Massachusetts stay motions. The NRC has not yet ruled on the Pilgrim Watch and Massachusetts hearing requests. Inaddition, on September 25, 2019, Massachusetts filed a petition with the U.S. Court of Appeals for the District of Columbia Circuit, askingthe court to vacate the NRC’s August 22 license transfer approval order and related approvals. On November 6, 2019, the court grantedEntergy and Holtec intervenor status in the U.S. Court of Appeals proceeding. On November 22, 2019, Entergy and Holtec filed a motion todismiss Massachusetts’ petition; the NRC also filed a motion to dismiss on the same date. On January 17, 2020, the States of New York,Connecticut, Illinois, Iowa, Maryland, Michigan, Minnesota, New Jersey, New Mexico, Oregon, Pennsylvania, and Vermont filed a brief asamici curiae in support of Massachusetts’s petition. The court of appeals has not yet ruled on Massachusetts’ initial petition or on the NRCor Entergy/Holtec motions to dismiss. On January 22, 2020, Massachusetts filed a second petition with the D.C. Circuit asking the court toreview the NRC’s December 17 order denying its stay motion. On February 12, 2020, the court granted Entergy and Holtec intervenor statusin the proceeding on the second petition and consolidated the proceedings for Massachusetts’ two petitions. The sale of Entergy Nuclear Generation Company, LLC to Holtec included the transfer of the nuclear decommissioning trust andobligation for spent fuel management and plant decommissioning. The transaction resulted in a loss of $190 million ($156 million net-of-tax)in 2019. See Note 14 to the financial statements for discussion of the closing of the Pilgrim transaction.Planned Shutdown and Sale of Indian Point 2 and Indian Point 3In April 2007, Entergy submitted to the NRC a joint application to renew the operating licenses for Indian Point 2 and Indian Point 3for an additional 20 years. In January 2017, Entergy reached a settlement with New York State, several State agencies, and Riverkeeper, Inc.,under which Indian Point 2 and Indian Point 3 will cease commercial operation by April 30, 2020 and April 30, 2021, respectively, subject tocertain conditions, including New York State’s withdrawal of opposition to Indian Point’s license renewals and issuance of contested permitsand similar authorizations. Operations may be extended up to four additional years for each unit by mutual agreement of Entergy and NewYork State based on an exigent reliability need for Indian Point generation. In September 2018 the NRC issued renewed operating licensesfor Indian Point 2 through April 2024 and for Indian Point 3 through April 2025. See Note 14 to the financial statements for discussion of theimpairment charges associated with the decision to shut down the Indian Point plants.Other provisions of the settlement include termination of all then-existing investigations of Indian Point by the parties to theagreement, which include the New York State Department of Environmental Conservation, the New York State Department of State, theNew York State Department of Public Service, the New York State Department of Health, and the New York State Attorney General. Thesettlement recognizes the right of New York State agencies to pursue new investigations and enforcement actions with respect to newcircumstances or existing conditions that become materially exacerbated.Another provision of the settlement obligates Entergy to establish a $15 million fund for environmental projects and communitysupport. Apportionment and allocation of funds to beneficiaries are to be determined by mutual agreement of New York State and Entergy.The settlement recognizes New York State’s right to perform an annual inspection of Indian Point, with scope and timing to be determined bymutual agreement.In April 2019, Entergy entered into an agreement to sell, directly or indirectly, 100% of the equity interests in the subsidiaries thatown Indian Point 1, Indian Point 2, and Indian Point 3, after Indian Point 3 has been shut down and defueled, to a Holtec Internationalsubsidiary for decommissioning. The sale includes the transfer of the licenses, spent fuel, decommissioning liabilities, and nucleardecommissioning trusts for the three units.10 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisThe transaction is subject to closing conditions, including approval from the NRC. In November 2019, Entergy and Holtec submitteda license transfer application to the NRC. In January 2020 the NRC indicated that the application contained sufficient information for it toconduct its technical review and anticipated that it would complete its review in January 2021. Entergy and Holtec also submitted a petitionto the New York State Public Service Commission in November 2019 seeking an order from the New York Public Service Commissiondisclaiming jurisdiction or abstaining from review of the transaction or, alternatively, approving the transaction. Closing is also conditionedon obtaining from the New York State Department of Environmental Conservation an agreement related to Holtec’s decommissioning planas being consistent with applicable standards. The transaction closing is targeted for May 2021, following the defueling of Indian Point 3.As consideration for the transfer to Holtec of its interest in Indian Point, Entergy will receive nominal cash consideration. The IndianPoint transaction is expected to result in a loss based on the difference between Entergy’s adjusted net investment in the subsidiaries atclosing and the sale price net of any agreed adjustments. As of December 31, 2019, Entergy’s adjusted net investment in the Indian Pointunits was $240 million. The primary variables in the ultimate loss that Entergy will incur are the values of the nuclear decommissioningtrusts and the asset retirement obligations at closing, the financial results from plant operations until the closing, and the level of anyunrealized deferred tax balances at closing. The terms of the transaction include limitations on withdrawals from the nucleardecommissioning trusts to fund decommissioning activities and controls on how Entergy manages the investment of nucleardecommissioning trust assets between signing and closing; however, the agreement does not require a minimum level of funding in thenuclear decommissioning trusts as a condition to closing.Planned Shutdown and Sale of PalisadesMost of the Palisades output is sold under a power purchase agreement (PPA) with Consumers Energy, entered into when the plantwas acquired in 2007, that is scheduled to expire in 2022. The PPA prices currently exceed market prices and escalate each year, up to$61.50/MWh in 2022. In December 2016, Entergy reached an agreement with Consumers Energy to amend the existing PPA to terminateearly, on May 31, 2018. Pursuant to the agreement to amend the PPA, Consumers Energy would pay Entergy $172 million for the earlytermination of the PPA. The PPA amendment agreement was subject to regulatory approvals, including approval by the Michigan PublicService Commission. Separately, Entergy intended to shut down the Palisades nuclear power plant permanently on October 1, 2018, afterrefueling in the spring of 2017 and operating through the end of that fuel cycle.In September 2017 the Michigan Public Service Commission issued an order conditionally approving the PPA amendmenttransaction, but only granting Consumers Energy recovery of $136.6 million of the $172 million requested early termination payment. As aresult, Entergy and Consumers Energy agreed to terminate the PPA amendment agreement. Entergy continues to operate Palisades under thecurrent PPA with Consumers Energy, instead of shutting down in the fall of 2018 as previously planned. Entergy intends to shut down thePalisades nuclear power plant permanently no later than May 31, 2022. As a result of the increase in the expected operating life of the plant,the expected probability-weighted undiscounted net cash flows as of September 30, 2017 exceeded the carrying value of the plant and relatedassets. Accordingly, nuclear fuel spending, nuclear refueling outage spending, and expenditures for capital assets incurred at Palisades afterSeptember 30, 2017 are no longer charged to expense as incurred, but recorded as assets and depreciated or amortized, subject to the typicalperiodic impairment reviews prescribed in the accounting rules. See Note 9 to the financial statements for discussion of the associated assetretirement obligation revision, see Note 14 to the financial statements for discussion of the impairment charges associated with the decisionto cease operations at Palisades, and see Note 19 to the financial statements for discussion of the updated calculation of the PPA liabilityamortization.On July 30, 2018, Entergy entered into a purchase and sale agreement with Holtec International to sell to a Holtec subsidiary 100% ofthe equity interests in Entergy Nuclear Palisades, LLC, the owner of Palisades and the Big Rock Point Site. The sale of Entergy NuclearPalisades will include the transfer of the nuclear decommissioning trust and obligation for spent fuel management and plantdecommissioning. At the closing of the sale transaction, the Holtec11 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysissubsidiary will pay $1,000 (subject to adjustment for net liabilities and other amounts) for the equity interests in Entergy Nuclear Palisades.The Palisades transaction is subject to certain closing conditions, including: the permanent shutdown of Palisades and the transfer ofall nuclear fuel from the reactor vessel to the spent nuclear fuel pool; NRC regulatory approval for the transfer of the Palisades and Big RockPoint operating and independent spent fuel storage installation licenses; receipt of a favorable private letter ruling from the IRS; the marketvalue of the nuclear decommissioning trust for Palisades, less the hypothetical income tax on the aggregate unrealized gain of such fundassets at closing, equaling or exceeding a specified minimum amount; and, the Pilgrim transaction having closed.Subject to the above conditions, the Palisades transaction is expected to close by the end of 2022. As of December 31, 2019,Entergy’s adjusted net investment in Palisades was $60 million. The primary variables in the ultimate loss or gain that Entergy will incur onthe transaction are the values of the nuclear decommissioning trust and the asset retirement obligations at closing, the financial results fromplant operations until the closing, and the level of any unrealized deferred tax balances at closing.Costs Associated with Exit of the Entergy Wholesale Commodities BusinessEntergy incurred approximately $91 million in costs in 2019, $139 million in costs in 2018, and $113 million in costs in 2017associated with management’s strategy to exit the Entergy Wholesale Commodities merchant power business, primarily employee retentionand severance expenses and other benefits-related costs, and contracted economic development contributions. Entergy expects to incuremployee retention and severance expenses of approximately $75 million in 2020, and a total of approximately $55 million from 2021through 2022 associated with the exit from the merchant power business. See Note 13 to the financial statements for further discussion ofthese costs.Entergy Wholesale Commodities incurred $100 million in 2019, $532 million in 2018, and $538 million in 2017 of impairmentcharges related to nuclear fuel spending, nuclear refueling outage spending, expenditures for capital assets, and asset retirement obligationrevisions. These costs were charged to expense as incurred as a result of the impaired value of the Entergy Wholesale Commodities nuclearplants’ long-lived assets due to the significantly reduced remaining estimated operating lives associated with management’s strategy to exitthe Entergy Wholesale Commodities merchant power business. Entergy expects to continue to incur costs associated with nuclear fuel-relatedspending and expenditures for capital assets and, except for Palisades, expects to continue to charge these costs to expense as incurredbecause Entergy expects the value of the plants to continue to be impaired. See Note 14 to the financial statements for further discussion ofthese impairment charges.Liquidity and Capital ResourcesThis section discusses Entergy’s capital structure, capital spending plans and other uses of capital, sources of capital, and the cashflow activity presented in the cash flow statement.Capital StructureEntergy’s debt to capital ratio is shown in the following table. The decrease in the debt to capital ratio is primarily due to thesettlement of equity forwards in 2019, partially offset by the issuance of long-term debt in 2019. See Note 7 to the financial statements for adiscussion of the equity forward sale agreements and Note 5 to the financial statements for a discussion of long-term debt.12 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis December 31, 2019 December 31, 2018Debt to capital65.5% 66.7%Effect of excluding securitization bonds(0.4%) (0.6%)Debt to capital, excluding securitization bonds (a)65.1%66.1%Effect of subtracting cash(0.5%) (0.6%)Net debt to net capital, excluding securitization bonds (a)64.6%65.5%(a)Calculation excludes the Arkansas, Louisiana, New Orleans, and Texas securitization bonds, which are non-recourse to EntergyArkansas, Entergy Louisiana, Entergy New Orleans, and Entergy Texas, respectively.Net debt consists of debt less cash and cash equivalents. Debt consists of notes payable and commercial paper, finance lease obligations, andlong-term debt, including the currently maturing portion. Capital consists of debt, common shareholders’ equity, and subsidiaries’ preferredstock without sinking fund. Net capital consists of capital less cash and cash equivalents. Entergy uses the debt to capital ratios excludingsecuritization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors inevaluating Entergy’s financial condition because the securitization bonds are non-recourse to Entergy, as more fully described in Note 5 tothe financial statements. Entergy also uses the net debt to net capital ratio excluding securitization bonds in analyzing its financial conditionand believes it provides useful information to its investors and creditors in evaluating Entergy’s financial condition because net debtindicates Entergy’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.Long-term debt, including the currently maturing portion, makes up most of Entergy’s total debt outstanding. Following areEntergy’s long-term debt principal maturities and estimated interest payments as of December 31, 2019. To estimate future interest paymentsfor variable rate debt, Entergy used the rate as of December 31, 2019. The amounts below include payments on System Energy’s Grand Gulfsale-leaseback transaction, which are included in long-term debt on the balance sheet.Long-term debt maturities and estimatedinterest payments 2020 2021 2022 2023-2024 after 2024 (In Millions)Utility $1,100 $1,889 $1,034 $3,451 $18,836Entergy Wholesale Commodities 5 144 — — —Parent and Other 531 65 703 511 788Total $1,636 $2,098 $1,737 $3,962 $19,624Note 5 to the financial statements provides more detail concerning long-term debt outstanding.Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in September 2024. Thefacility includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the creditfacility. The commitment fee is currently 0.225% of the undrawn commitment amount. Commitment fees and interest rates on loans underthe credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation. The weighted average interest rate forthe year ended December 31, 2019 was 3.77% on the drawn portion of the facility.13 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisAs of December 31, 2019, amounts outstanding and capacity available under the $3.5 billion credit facility are:Capacity Borrowings Letters of Credit Capacity Available(In Millions)$3,500 $440 $6 $3,054A covenant in Entergy Corporation’s credit facility requires Entergy to maintain a consolidated debt ratio, as defined, of 65% or less of itstotal capitalization. The calculation of this debt ratio under Entergy Corporation’s credit facility is different than the calculation of the debtto capital ratio above. One such difference is that it excludes the effects, among other things, of certain impairments related to the EntergyWholesale Commodities nuclear generation assets. Entergy is currently in compliance with the covenant and expects to remain in compliancewith this covenant. If Entergy fails to meet this ratio, or if Entergy or one of the Utility operating companies (except Entergy New Orleans)defaults on other indebtedness or is in bankruptcy or insolvency proceedings, an acceleration of the Entergy Corporation credit facility’smaturity date may occur.Entergy Corporation has a commercial paper program with a Board-approved program limit of up to $2 billion. As of December 31,2019, Entergy Corporation had $1.947 billion of commercial paper outstanding. The weighted-average interest rate for the year endedDecember 31, 2019 was 2.71%.Finance lease obligations are a minimal part of Entergy’s overall capital structure. Following are Entergy’s payment obligationsunder those leases. 2020 2021 2022 2023-2024 after 2024 (In Millions)Finance lease payments$14 $12 $11 $19 $20Leases are discussed in Note 10 to the financial statements.Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each had credit facilitiesavailable as of December 31, 2019 as follows:Company Expiration Date Amount of Facility InterestRate (a) Amount Drawn as ofDecember 31, 2019 Letters of CreditOutstanding as ofDecember 31, 2019Entergy Arkansas April 2020 $20 million (b) 2.92% — —Entergy Arkansas September 2024 $150 million (c) 2.92% — —Entergy Louisiana September 2024 $350 million (c) 2.92% — —Entergy Mississippi May 2020 $10 million (d) 3.30% — —Entergy Mississippi May 2020 $35 million (d) 3.30% — —Entergy Mississippi May 2020 $37.5 million (d) 3.30% — —Entergy New Orleans November 2021 $25 million (c) 2.92% $20 million $0.8 millionEntergy Texas September 2024 $150 million (c) 3.30% — $1.3 million(a)The interest rate is the estimated interest rate as of December 31, 2019 that would have been applied to outstanding borrowings underthe facility.(b)Borrowings under this Entergy Arkansas credit facility may be secured by a security interest in its accounts receivable at EntergyArkansas’s option.14 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis(c)The credit facility includes fronting commitments for the issuance of letters of credit against a portion of the borrowing capacity ofthe 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 EntergyMississippi’s option. Each of the credit facilities requires the Registrant Subsidiary borrower to maintain a debt ratio, as defined, of 65% or less of its totalcapitalization. Each Registrant Subsidiary is in compliance with this covenant.In addition, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each entered intoone or more uncommitted standby letter of credit facilities as a means to post collateral to support its obligations to MISO. Following is asummary of the uncommitted standby letter of credit facilities as of December 31, 2019:Company Amount ofUncommitted Facility Letter of Credit Fee Letters of Credit Issued as ofDecember 31, 2019Entergy Arkansas $25 million 0.70% $1 millionEntergy Louisiana $125 million 0.70% $12.3 millionEntergy Mississippi $64 million 0.70% $1.8 million (a)Entergy New Orleans $15 million 1.00% $5.6 millionEntergy Texas $50 million 0.70% $12.1 million(a)As of December 31, 2019, letters of credit posted with MISO covered financial transmission right exposure of $0.2 million forEntergy Mississippi. See Note 15 to the financial statements for discussion of financial transmission rights.In January 2019, Entergy Nuclear Vermont Yankee was transferred to NorthStar and its credit facility was assumed by VermontYankee Asset Retirement Management, LLC, Entergy Nuclear Vermont Yankee’s parent company that remains an Entergy subsidiary afterthe transfer. The credit facility has a borrowing capacity of $139 million and expires in December 2021. As of December 31, 2019, $139million in cash borrowings were outstanding under the credit facility. The weighted average interest rate for the year ended December 31,2019 was 3.93% on the drawn portion of the facility. See Note 14 to the financial statements for discussion of the transfer of Entergy NuclearVermont Yankee to NorthStar. Operating Lease Obligations and Guarantees of Unconsolidated ObligationsEntergy has a minimal amount of operating lease obligations and guarantees in support of unconsolidated obligations. Entergy’sguarantees in support of unconsolidated obligations are not likely to have a material effect on Entergy’s financial condition, results ofoperations, or cash flows. Following are Entergy’s payment obligations as of December 31, 2019 on non-cancelable operating leases with aterm over one year: 2020 2021 2022 2023-2024 after 2024 (In Millions)Operating lease payments$62 $56 $48 $68 $29Leases are discussed in Note 10 to the financial statements.15 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisSummary of Contractual Obligations of Consolidated EntitiesContractual Obligations 2020 2021-2022 2023-2024 after 2024 Total (In Millions)Long-term debt (a) $1,636 $3,835 $3,962 $19,624 $29,057Finance lease payments (b) $14 $23 $19 $20 $76Operating leases (b) (c) $62 $104 $68 $29 $263Purchase obligations (d) $1,371 $2,228 $1,863 $4,326 $9,788(a)Includes estimated interest payments. Long-term debt is discussed in Note 5 to the financial statements.(b)Lease obligations are discussed in Note 10 to the financial statements.(c)Does not include power purchase agreements that are accounted for as leases that are included in purchase obligations.(d)Purchase obligations represent the minimum purchase obligation or cancellation charge for contractual obligations to purchase goodsor services. Almost all of the total are fuel and purchased power obligations.In addition to the contractual obligations stated above, Entergy currently expects to contribute approximately $216.3 million to its pensionplans and approximately $49.1 million to other postretirement plans in 2020, although the 2020 required pension contributions will be knownwith more certainty when the January 1, 2020 valuations are completed, which is expected by April 1, 2020. See “Critical AccountingEstimates - Qualified Pension and Other Postretirement Benefits” below for a discussion of qualified pension and other postretirementbenefits funding.Also in addition to the contractual obligations, Entergy has $1,542 million of unrecognized tax benefits and interest net of unused taxattributes for which the timing of payments beyond 12 months cannot be reasonably estimated due to uncertainties in the timing of effectivesettlement of tax positions. See Note 3 to the financial statements for additional information regarding unrecognized tax benefits.Capital Expenditure Plans and Other Uses of CapitalFollowing are the amounts of Entergy’s planned construction and other capital investments by operating segment for 2020 through2022.Planned construction and capital investments 2020 2021 2022 (In Millions)Utility: Generation $1,410 $1,475 $1,355Transmission 955 820 630Distribution 880 690 620Utility Support 865 925 1,025Total 4,110 3,910 3,630Entergy Wholesale Commodities 35 10 5Total $4,145 $3,920 $3,635Planned construction and capital investments refer to amounts Entergy plans to spend on routine capital projects that are necessary tosupport reliability of its service, equipment, or systems and to support normal customer growth. In addition to routine capital projects, theyalso refer to amounts Entergy plans to spend on non-routine capital investments for which Entergy is either contractually obligated, has Boardapproval, or otherwise expects to make to satisfy regulatory or legal requirements. Amounts include the following types of construction andcapital investments:•Investments, including the Lake Charles Power Station, Washington Parish Energy Center, Sunflower Solar16 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisFacility, New Orleans Power Station, Montgomery County Power Station, and Searcy Solar Facility, each discussed below, andpotential construction of additional generation.•Investments in Entergy’s Utility nuclear fleet.•Transmission spending to enhance reliability, reduce congestion, and enable economic growth.•Distribution spending to enhance reliability and improve service to customers, including investment to support advanced metering.•Entergy Wholesale Commodities investments such as component replacements, software and security, and dry cask storage.For the next several years, the Utility’s owned generating capacity is projected to be adequate to meet MISO reserve requirements; however,in the longer-term additional supply resources will be needed, and its supply plan initiative will continue to seek to transform its generationportfolio with new generation resources. Opportunities resulting from the supply plan initiative, including new projects or the exploration ofalternative financing sources, could result in increases or decreases in the capital expenditure estimates given above. Estimated capitalexpenditures are also subject to periodic review and modification and may vary based on the ongoing effects of business restructuring,regulatory constraints and requirements, environmental regulations, business opportunities, market volatility, economic trends, changes inproject plans, and the ability to access capital.Lake Charles Power StationIn November 2016, Entergy Louisiana filed an application with the LPSC seeking certification that the public convenience andnecessity would be served by the construction of the Lake Charles Power Station, a nominal 994 megawatt combined-cycle generating unit inWestlake, Louisiana, on land adjacent to the existing Nelson plant in Calcasieu Parish. The current estimated cost of the Lake Charles PowerStation is $872 million, including estimated costs of transmission interconnection and other related costs. In May 2017 the parties to theproceeding agreed to an uncontested stipulation finding that construction of the Lake Charles Power Station is in the public interest andauthorizing an in-service rate recovery plan. In July 2017 the LPSC issued an order unanimously approving the stipulation and approvedcertification of the unit. Construction is in progress and commercial operation is expected to occur by mid-2020.Washington Parish Energy Center In April 2017, Entergy Louisiana signed an agreement with a subsidiary of Calpine Corporation for the construction and purchaseof a peaking plant. Calpine will construct the plant, which will consist of two natural gas-fired combustion turbine units with a total nominalcapacity of approximately 361 MW. The plant, named the Washington Parish Energy Center, will be located in Bogalusa, Louisiana. Subjectto regulatory approvals, Entergy Louisiana will purchase the plant once it is complete for an estimated total investment of approximately$261 million, including transmission and other related costs. In May 2017, Entergy Louisiana filed an application with the LPSC seekingcertification of the plant. In April 2018 the parties reached a settlement recommending certification and cost recovery through the additionalcapacity mechanism of the formula rate plan, consistent with prior LPSC precedent with respect to the certification and recovery of plantspreviously acquired by Entergy Louisiana. The LPSC issued an order approving the settlement in May 2018. Construction is in progress andcommercial operation is expected to occur by the end of 2020.Sunflower Solar Facility In November 2018, Entergy Mississippi announced that it signed an agreement for the purchase of an approximately 100 MW to-be-constructed solar photovoltaic facility that will be sited on approximately 1,000 acres in Sunflower County, Mississippi. The estimatedbase purchase price is approximately $138.4 million. The estimated total investment, including the base purchase price and other relatedcosts, for Entergy Mississippi to acquire the Sunflower Solar Facility is approximately $153.2 million. The purchase is contingent upon,among other things, obtaining necessary approvals, including full cost recovery, from applicable federal and state regulatory and permitting17 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysisagencies. The project will be built by Sunflower County Solar Project, LLC, a sub-subsidiary of Recurrent Energy, LLC. EntergyMississippi will purchase the facility upon mechanical completion and after the other purchase contingencies have been met. In December2018, Entergy Mississippi filed a joint petition with Sunflower Solar Project at the MPSC for Sunflower Solar Project to construct and forEntergy Mississippi to acquire and thereafter own, operate, improve, and maintain the solar facility. Entergy Mississippi proposed revisionsto its formula rate plan that would provide for a mechanism, the interim capacity rate adjustment mechanism, in the formula rate plan torecover the non-fuel related costs of additional owned capacity acquired by Entergy Mississippi, including the annual ownership costs of theSunflower Solar Facility. In December 2019 the MPSC approved Entergy Mississippi’s proposed revisions to its formula rate plan toprovide for an interim capacity rate adjustment mechanism. The MPSC must approve recovery through the interim capacity rate adjustmentfor each new resource. In August 2019 consultants retained by the Mississippi Public Utilities Staff filed a report expressing concernsregarding the project economics and recommended that, should the MPSC wish to approve the project, Entergy Mississippi should berequired to guarantee the energy output of the unit. Entergy Mississippi and the Staff are engaged in settlement discussions to address theseconcerns. A hearing before the MPSC is targeted to occur by the second quarter of 2020. Closing is expected to occur by the end of 2021.New Orleans Power StationIn March 2018 the City Council adopted a resolution approving construction of the New Orleans Power Station, a 128 MW unitcomposed of natural gas-fired reciprocating engines, and a related cost recovery plan. The cost estimate for the plant, which will be located atthe site of the Michoud generating facility that was retired in May 2016, is $210 million. Entergy New Orleans had previously filed anapplication with the City Council seeking a public interest determination and authorization to construct a 226 MW advanced combustionturbine power station. In January 2017 several intervenors filed testimony opposing the construction of the New Orleans Power Station onvarious grounds. In July 2017, Entergy New Orleans submitted a supplemental and amending application to the City Council seekingapproval to construct either the originally proposed 226 MW advanced combustion turbine power station, or alternatively, the 128 MW powerstation. In addition, the application renewed the commitment to pursue up to 100 MW of renewable resources to serve New Orleans.In April 2018 intervenors opposing the construction of the New Orleans Power Station filed with the City Council a request forrehearing, which was subsequently denied, and a petition for judicial review of the City Council’s decision, and also filed a lawsuitchallenging the City Council’s approval based on Louisiana’s open meeting law. In May 2018 the City Council announced that it wouldinitiate an investigation into allegations that Entergy New Orleans, Entergy, or some other entity paid or participated in paying certainattendees and speakers in support of the New Orleans Power Station to attend or speak at certain meetings organized by the City Council. InOctober 2018 investigators for the City Council released their report, concluding that individuals were paid to attend or speak in support ofthe New Orleans Power Station and that Entergy New Orleans “knew or should have known that such conduct occurred or reasonably mightoccur.” The City Council issued a resolution requiring Entergy New Orleans to show cause why it should not be fined $5 million as a resultof the findings in the report. In November 2018, Entergy New Orleans submitted its response to the show cause resolution, disagreeing withcertain characterizations and omissions of fact in the report and asserting that the City Council could not legally impose the proposed fine. Simultaneous with the filing of its response to the show cause resolution, Entergy New Orleans sent a letter to the City Council re-assertingthat the City Council’s imposition of the proposed fine would be unlawful, but acknowledging that the actions of a subcontractor, which wasretained by an Entergy New Orleans contractor without the knowledge or contractually-required consent of Entergy New Orleans, werecontrary to Entergy’s values. In that letter, Entergy New Orleans offered to donate $5 million to the City Council to resolve the show causeproceeding. In January 2019, Entergy New Orleans submitted a new settlement proposal to the City Council. The proposal retains thecomponents of the first offer but adds to it a commitment to make reasonable efforts to limit the costs of the project to the $210 million costestimate with advanced notification of anticipated cost overruns, additional reporting requirements for cost and environmental items, and acommitment regarding reliability investment and to work with the New Orleans Sewerage and Water Board to provide a reliable source ofpower. In February 2019 the City Council approved a resolution approving the settlement proposal and allowing the construction of the NewOrleans Power Station to commence.18 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisAlso in February 2019 certain intervenors in the City Council proceeding on the New Orleans Power Station filed suit in Louisianastate court challenging the Louisiana Department of Environmental Quality’s issuance of the New Orleans Power Station’s air permit.Entergy New Orleans intervened in that lawsuit and, along with the Louisiana Department of Environmental Quality, filed exceptions seekingdismissal of the lawsuit. In June 2019 the state court judge sustained the exceptions and dismissed the plaintiffs’ petition with prejudice.Also in June 2019, a state court judge in New Orleans affirmed the City Council’s approval of the New Orleans Power Station anddismissed the petition for judicial review that had been filed in April 2018. The petitioners have filed an appeal of that ruling. Also in June2019, with regard to the lawsuit challenging the City Council’s decision on the basis of a violation of the open meetings law, the same statecourt judge in New Orleans ruled that there was a violation of the open meetings law at the February 2018 meeting of the City Council’sUtility Committee at which that Committee considered the New Orleans Power Station approval, and further ruled that, although there wasno 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 Orleanseach filed a suspensive appeal of the open meetings law ruling. A suspensive appeal suspends the effect of the judgment in the open meetingslaw 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 openmeetings law appeal and in the judicial review appeal occurred in November and December 2019 and oral argument in both cases was heardin January 2020. In February 2020 the state appellate court reversed the lower court’s ruling that the City Council’s approval of the NewOrleans Power Station was void due to a violation of the open meetings law at the City Council’s Utility Committee meeting in February2018. The state appellate court ruled that there was no violation of the open meetings law at the full City Council meeting in March 2018and that the lower court erred in voiding the City Council resolution approving the New Orleans Power Station. The appellate court’sdecision on the appeal of the judicial review decision that affirmed the City Council’s approval of the New Orleans Power Station as in thepublic interest is still pending. Construction of the plant is on schedule, with commercial operation expected in mid-2020.Montgomery County Power Station In October 2016, Entergy Texas filed an application with the PUCT seeking certification that the public convenience and necessitywould be served by the construction of the Montgomery County Power Station, a nominal 993 MW combined-cycle generating unit in Willis,Texas, on land adjacent to the existing Lewis Creek plant. The current estimated cost of the Montgomery County Power Station is $937million, including approximately $111 million of transmission interconnection and network upgrades and other related costs. Theindependent monitor, who oversaw the request for proposal process, filed testimony and a report affirming that the Montgomery CountyPower Station was selected through an objective and fair request for proposal process that showed no undue preference to any proposal. InJune 2017 parties to the proceeding filed an unopposed stipulation and settlement agreement. The stipulation contemplates that EntergyTexas’s level of cost-recovery for generation construction costs for Montgomery County Power Station is capped at $831 million, subject tocertain exclusions such as force majeure events. Transmission interconnection and network upgrades and other related costs are not subjectto the $831 million cap. In July 2017 the PUCT approved the stipulation. Subject to the timely receipt of other permits and approvals,commercial operation is estimated to occur by mid-2021.Searcy Solar FacilityIn March 2019, Entergy Arkansas announced that it signed an agreement for the purchase of an approximately 100 MW to-be-constructed solar energy facility that will be sited on approximately 800 acres in White County near Searcy, Arkansas. The purchase iscontingent upon, among other things, obtaining necessary approvals from applicable federal and state regulatory and permitting agencies. The project will be constructed by a subsidiary of NextEra Energy Resources. Entergy Arkansas will purchase the facility upon mechanicalcompletion and after the other purchase contingencies have been met. Closing is expected to occur by the end of 2021. In May 2019, EntergyArkansas filed19 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysisa petition with the APSC seeking a finding that the transaction is in the public interest and requesting all necessary approvals. In September2019 other parties filed testimony largely supporting the resource acquisition but disputing Entergy Arkansas’s proposed method of costrecovery. Entergy Arkansas filed its rebuttal testimony in October 2019. In February 2020, Entergy Arkansas, the Attorney General, and theAPSC general staff filed a partial settlement agreement asking the APSC to approve, based on the record in the proceeding, all issues exceptcertain issues that are submitted to the APSC for determination.Dividends and Stock RepurchasesDeclarations of dividends on Entergy’s common stock are made at the discretion of the Board. Among other things, the Boardevaluates the level of Entergy’s common stock dividends based upon earnings per share from the Utility operating segment and the Parentand Other portion of the business, financial strength, and future investment opportunities. At its January 2020 meeting, the Board declared adividend of $0.93 per share. Entergy paid $712 million in 2019, $648 million in 2018, and $629 million in 2017 in cash dividends on itscommon stock.In accordance with Entergy’s stock-based compensation plans, Entergy periodically grants stock options, restricted stock,performance units, and restricted stock unit awards 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’smanagement has been authorized by the Board to repurchase on the open market shares up to an amount sufficient to fund the exercise ofgrants under the plans.In addition to the authority to fund grant exercises, the Board has authorized share repurchase programs to enable opportunisticpurchases in response to market conditions. In October 2010 the Board granted authority for a $500 million share repurchase program. As ofDecember 31, 2019, $350 million of authority remains under the $500 million share repurchase program. The amount of repurchases mayvary as a result of material changes in business results or capital spending or new investment opportunities, or if limitations in the creditmarkets continue for a prolonged period.Sources of CapitalEntergy’s sources to meet its capital requirements and to fund potential investments include:•internally generated funds;•cash on hand ($426 million as of December 31, 2019);•debt and equity issuances in the capital markets;•bank financing under new or existing facilities or commercial paper; and•sales of assets.Circumstances such as weather patterns, fuel and purchased power price fluctuations, and unanticipated expenses, including unscheduledplant outages and storms, could affect the timing and level of internally generated funds in the future. Entergy Corporation expects to financeup to 10% of the amount of the Utility’s capital expenditure plans through equity issuances in the capital markets.Provisions within the organizational documents relating to preferred stock or membership interests of certain of EntergyCorporation’s subsidiaries could restrict the payment of cash dividends or other distributions on their common and preferred equity. All debtand preferred equity issuances by the Registrant Subsidiaries require prior regulatory approval and their debt issuances are also subject toissuance tests set forth in bond indentures and other agreements. Entergy believes that the Registrant Subsidiaries have sufficient capacityunder these tests to meet foreseeable capital needs.The FERC has jurisdiction over securities issuances by the Utility operating companies and System Energy. The City Council hasconcurrent jurisdiction over Entergy New Orleans’s securities issuances with maturities longer20 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysisthan one year. The APSC has concurrent jurisdiction over Entergy Arkansas’s issuances of securities secured by Arkansas property, includingfirst mortgage bond issuances. No regulatory approvals are necessary for Entergy Corporation to issue securities. The current FERC-authorized short-term borrowing limits and long-term borrowing limits for Entergy New Orleans are effective through October 2021. Thecurrent FERC-authorized short-term borrowing limits and long-term financing authorization for Entergy Arkansas, Entergy Louisiana,Entergy Mississippi, Entergy Texas, and System Energy are effective through November 2020. Entergy Arkansas has obtained first mortgagebond/secured financing authorization from the APSC that extends through December 2020. Entergy New Orleans also has obtained long-termfinancing authorization from the City Council that extends through October 2021. Entergy Arkansas, Entergy Louisiana, and System Energyeach have obtained long-term financing authorization from the FERC that extends through November 2020 for issuances by the nuclear fuelcompany variable interest entities. In addition to borrowings from commercial banks, the Registrant Subsidiaries may also borrow from theEntergy System money pool and from other internal short-term borrowing arrangements. The money pool and the other internal borrowingarrangements are inter-company borrowing arrangements designed to reduce Entergy’s subsidiaries’ dependence on external short-termborrowings. Borrowings from internal and external short-term borrowings combined may not exceed the FERC-authorized limits. See Notes4 and 5 to the financial statements for further discussion of Entergy’s borrowing limits, authorizations, and amounts outstanding.Cash Flow ActivityAs shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the years ended December 31, 2019, 2018, and 2017were as follows: 2019 2018 2017 (In Millions)Cash and cash equivalents at beginning of period$481 $781 $1,188 Net cash provided by (used in): Operating activities2,817 2,385 2,624Investing activities(4,510) (4,106) (3,841)Financing activities1,638 1,421 810Net decrease in cash and cash equivalents(55) (300) (407) Cash and cash equivalents at end of period$426 $481 $7812019 Compared to 2018Operating ActivitiesNet cash flow provided by operating activities increased by $432 million in 2019 primarily due to:•the decrease in the return of unprotected excess accumulated deferred income taxes to Utility customers. See Note 2 to the financialstatements for a discussion of the regulatory activity regarding the Tax Cuts and Jobs Act;•an increase due to the timing of recovery of fuel and purchased power costs in 2019 as compared to the prior year. See Note 2 to thefinancial statements for a discussion of fuel and purchased power cost recovery;•an increase of $109 million due to Vermont Yankee decommissioning spending in 2018, partially offset by Pilgrim decommissioningspending in 2019; and•a decrease of $87 million in spending on nuclear refueling outages in 2019 as compared to the prior year.21 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisThe increase was partially offset by:•an increase of $98 million in severance and retention payments in 2019 as compared to prior year. See “MANAGEMENT’SFINANCIAL DISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business”above for a discussion of management’s strategy to exit the Entergy Wholesale Commodities’ merchant power business; and•lower Entergy Wholesale Commodities revenues in 2019.Investing ActivitiesNet cash flow used in investing activities increased by $404 million in 2019 primarily due to:•an increase of $334 million in construction expenditures in the Utility business, as discussed below;•the purchase of the Choctaw Generating Station in October 2019 for approximately $305 million. See Note 14 to the financialstatements for further discussion of the Choctaw Generating Station purchase; and•a decrease of $57 million in proceeds received from the DOE in 2019 as compared to the prior year resulting from litigationregarding spent nuclear fuel storage costs that were previously capitalized. See Note 8 to the financial statements for discussion of thespent nuclear fuel litigation.The increase was partially offset by:•a decrease of $174 million in nuclear fuel purchases due to variations from year to year in the timing and pricing of fuel reloadrequirements, material and services deliveries, and the timing of cash payments during the nuclear fuel cycle; and•a decrease of $85 million primarily due to changes in collateral posted to provide credit support to secure its obligations underagreements to sell power produced by Entergy Wholesale Commodities’ power plants.The increase in construction expenditures in the Utility business is primarily due to:•an increase of $211 million in transmission construction expenditures due to a higher scope of work performed in 2019 on variousprojects;•an increase of $188 million primarily due to investment in the infrastructure of the distribution system, including increased spendingon advanced metering infrastructure; and•an increase of $91 million in storm spending in 2019.The increase in construction expenditures in the Utility business was partially offset by:•a decrease of $62 million in fossil-fueled generation construction expenditures primarily due to lower spending in 2019 on self-buildprojects in the Utility business and a lower scope of work performed in 2019 on various projects;•a decrease of $39 million in nuclear construction expenditures primarily due to lower spending in 2019 on various nuclear projects;and•a decrease of $33 million in information technology capital expenditures primarily due to lower spending in 2019 on criticalinfrastructure protection.Financing ActivitiesNet cash flow provided by financing activities increased by $217 million in 2019 primarily due to:•long-term debt activity providing approximately $1,685 million of cash in 2019 compared to providing approximately $1,070 millionin 2018;22 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis•net repayments of short-term borrowings of $111 million in 2018 by the nuclear fuel company variable interest entities; and•an increase of $108 million in proceeds from the issuance of common stock as a result of the settlement of equity forwards in 2019and 2018. See Note 7 to the financial statements for discussion of the equity forward sale agreements.The increase was partially offset by:•a decrease of $471 million in net issuances of commercial paper in 2019 compared to 2018;•an increase of $64 million in common stock dividends paid as a result of an increase in the shares outstanding and an increase in thedividend paid in 2019 compared to 2018; and•the issuance of $35 million aggregate liquidation value 5.375% Series A preferred stock in 2019 by Entergy Texas compared to theissuance of $73 million aggregate liquidation value 6.75% Series C preferred membership interests in 2018 by Entergy UtilityHolding Company.For the details of Entergy’s commercial paper program and the nuclear fuel company variable interest entities’ short-term borrowings, seeNote 4 to the financial statements. See Note 5 to the financial statements for details of long-term debt.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Cash FlowActivity” in Entergy’s Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of operating, investing, andfinancing cash flow activities for 2018 compared to 2017.Rate, Cost-recovery, and Other RegulationState and Local Rate Regulation and Fuel-Cost RecoveryThe rates that the Utility operating companies and System Energy charge for their services significantly influence Entergy’s financialposition, results of operations, and liquidity. These companies are regulated and the rates charged to their customers are determined inregulatory proceedings. Governmental agencies, including the APSC, the LPSC, the MPSC, the City Council, the PUCT, and the FERC, areprimarily responsible for approval of the rates charged to customers. Following is a summary of the Utility operating companies’ authorizedreturns on common equity:Company Authorized Return on Common Equity Entergy Arkansas 9.25% - 10.25%Entergy Louisiana 9.2% - 10.4% Electric; 9.45% - 10.45% GasEntergy Mississippi 9.33% - 11.35%Entergy New Orleans 8.85% - 9.85%Entergy Texas 9.65%The Utility operating companies’ base rate, fuel and purchased power cost recovery, and storm cost recovery proceedings are discussed inNote 2 to the financial statements.Federal RegulationThe FERC regulates wholesale sales of electricity rates and interstate transmission of electricity, including rates for System Energy’ssales of capacity and energy from Grand Gulf to Entergy Arkansas, Entergy Louisiana,23 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisEntergy Mississippi, and Entergy New Orleans pursuant to the Unit Power Sales Agreement. The current return on equity and capitalstructure of System Energy are currently the subject of complaints filed by certain of the operating companies’ retail regulators. The currentreturn on equity under the Unit Power Sales Agreement is 10.94%. Prior to each operating company’s termination of participation in theSystem Agreement (Entergy Arkansas in December 2013, Entergy Mississippi in November 2015, and Entergy Louisiana, Entergy NewOrleans, and Entergy Texas each in August 2016), the Utility operating companies engaged in the coordinated planning, construction, andoperation of generating and bulk transmission facilities under the terms of the System Agreement, which was a rate schedule approved by theFERC. Certain of the Utility operating companies’ retail regulators are pursuing litigation involving the System Agreement at the FERC andin federal courts. See Note 2 to the financial statements for discussion of the System Agreement proceedings, the complaints filed with theFERC challenging System Energy’s return on equity, and the amendments to the Unit Power Sales Agreement approved by the FERC in2018.Market and Credit Risk Sensitive InstrumentsMarket risk is the risk of changes in the value of commodity and financial instruments, or in future net income or cash flows, inresponse to changing market conditions. Entergy holds commodity and financial instruments that are exposed to the following significantmarket risks.•The commodity price risk associated with the sale of electricity by the Entergy Wholesale Commodities business.•The interest rate and equity price risk associated with Entergy’s investments in pension and other postretirement benefit trust funds.See Note 11 to the financial statements for details regarding Entergy’s pension and other postretirement benefit trust funds.•The interest rate and equity price risk associated with Entergy’s investments in nuclear plant decommissioning trust funds,particularly in the Entergy Wholesale Commodities business. See Note 16 to the financial statements for details regarding Entergy’sdecommissioning trust funds.•The interest rate risk associated with changes in interest rates as a result of Entergy’s outstanding indebtedness. Entergy manages itsinterest rate exposure by monitoring current interest rates and its debt outstanding in relation to total capitalization. See Notes 4 and 5to the financial statements for the details of Entergy’s debt outstanding.The Utility has limited exposure to the effects of market risk because it operates primarily under cost-based rate regulation. To the extentapproved by their retail regulators, the Utility operating companies use commodity and financial instruments to hedge the exposure to pricevolatility inherent in their purchased power, fuel, and gas purchased for resale costs that are recovered from customers.Entergy’s commodity and financial instruments are also exposed to credit risk. Credit risk is the risk of loss from nonperformance bysuppliers, customers, or financial counterparties to a contract or agreement. Entergy is also exposed to a potential demand on liquidity due tocredit support requirements within its supply or sales agreements.Commodity Price RiskPower GenerationAs a wholesale generator, Entergy Wholesale Commodities’ core business is selling energy, measured in MWh, to itscustomers. Entergy Wholesale Commodities enters into forward contracts with its customers and also sells energy in the day ahead or spotmarkets. Entergy Wholesale Commodities also sells unforced capacity, which allows load-serving entities to meet specified reserve andrelated requirements placed on them by the ISOs in their respective areas. Entergy Wholesale Commodities’ forward physical powercontracts consist of contracts to sell energy only, contracts to sell capacity only, and bundled contracts in which it sells both capacity andenergy. While the terminology and payment mechanics vary in these contracts, each of these types of contracts requires Entergy WholesaleCommodities to deliver MWh of energy, make capacity available, or both. In addition to its forward physical power24 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysiscontracts, Entergy Wholesale Commodities may also use a combination of financial contracts, including swaps, collars, and options, tomanage forward commodity price risk. The sensitivities may not reflect the total maximum upside potential from higher market prices. Theinformation contained in the following table represents projections at a point in time and will vary over time based on numerous factors, suchas future market prices, contracting activities, and generation. Following is a summary of Entergy Wholesale Commodities’ current forwardcapacity and generation contracts as well as total revenue projections based on market prices as of December 31, 2019.Entergy Wholesale Commodities Nuclear Portfolio 2020 2021 2022Energy Percent of planned generation under contract (a): Unit-contingent (b) 97% 92% 66%Planned generation (TWh) (c) (d) 17.8 9.6 2.8Average revenue per MWh on contracted volumes: Expected based on market prices as of December 31, 2019 $41.3 $56.6 $58.8 Capacity Percent of capacity sold forward (e): Bundled capacity and energy contracts (f) 37% 68% 97%Capacity contracts (g) 32% —% —%Total 69% 68% 97%Planned net MW in operation (average) (d) 2,195 1,158 338Average revenue under contract per kW per month (applies to capacitycontracts only) $2.8 $— $— Total Energy and Capacity Revenues (h) Expected sold and market total revenue per MWh $44.3 $54.3 $46.6Sensitivity: -/+ $10 per MWh market price change $44.1 -$44.5 $53.5 -$55.1 $43.2 -$50.1(a)Percent of planned generation output sold or purchased forward under contracts, forward physical contracts, forward financialcontracts, or options that mitigate price uncertainty. Positions that are not classified as hedges are netted in the planned generationunder contract.(b)Transaction under which power is supplied from a specific generation asset; if the asset is not operating, the seller is generally notliable to the buyer for any damages. Certain unit-contingent sales include a guarantee of availability. Availability guarantees providefor the payment to the power purchaser of contract damages, if incurred, in the event the seller fails to deliver power as a result of thefailure of the specified generation unit to generate power at or above a specified availability threshold. All of Entergy’s outstandingguarantees of availability provide for dollar limits on Entergy’s maximum liability under such guarantees.(c)Amount of output expected to be generated by Entergy Wholesale Commodities nuclear resources considering plant operatingcharacteristics and outage schedules.(d)Assumes the planned shutdown of Indian Point 2 on April 30, 2020, planned shutdown of Indian Point 3 on April 30, 2021, andplanned shutdown of Palisades on May 31, 2022. For a discussion regarding the planned shutdown of the Indian Point 2, Indian Point3, 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.25 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis(h)Includes assumptions on converting a portion of the portfolio to contracted with fixed price and excludes non-cash revenue from theamortization 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 EntergyWholesale Commodities nuclear business sells power, based on the respective year-end market conditions, planned generation volumes, andhedged positions, would have a corresponding effect on pre-tax income of $4 million in 2020 and would have had a corresponding effect onpre-tax income of $6 million in 2019. A negative $10 per MWh change in the annual average energy price in the markets based on therespective year-end market conditions, planned generation volumes, and hedged positions, would have a corresponding effect on pre-taxincome of ($4) million in 2020 and would have had a corresponding effect on pre-tax income of ($6) million in 2019.Some of the agreements to sell the power produced by Entergy Wholesale Commodities’ power plants contain provisions that requirean Entergy subsidiary to provide credit support to secure its obligations under the agreements. The Entergy subsidiary is required to providecredit support based upon the difference between the current market prices and contracted power prices in the regions where EntergyWholesale 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 December 31, 2019, based on power prices at that time, Entergy hadliquidity exposure of $78 million under the guarantees in place supporting Entergy Wholesale Commodities transactions and $19 million ofposted cash collateral. In the event of a decrease in Entergy Corporation’s credit rating to below investment grade, based on power prices asof December 31, 2019, Entergy would have been required to provide approximately $30 million of additional cash or letters of credit undersome of the agreements. As of December 31, 2019, the liquidity exposure associated with Entergy Wholesale Commodities assurancerequirements, including return of previously posted collateral from counterparties, would increase by $90 million for a $1 per MMBtuincrease in gas prices in both the short- and long-term markets.As of December 31, 2019, substantially all of the credit exposure associated with the planned energy output under contract forEntergy Wholesale Commodities nuclear plants through 2022 is with counterparties or their guarantors that have public investment gradecredit ratings.Nuclear MattersEntergy’s Utility and Entergy Wholesale Commodities businesses include the ownership and operation of nuclear generating plantsand are, therefore, subject to the risks related to such ownership and operation. These include risks related to: the use, storage, and handlingand disposal of high-level and low-level radioactive materials; the substantial financial requirements, both for capital investments andoperational needs, to position Entergy’s nuclear fleet to meet its operational goals, including the financial requirements to address emergingissues like stress corrosion cracking of certain materials within the plant systems and the Fukushima event; the implementation of plans toexit the Entergy Wholesale Commodities merchant power business by 2022 and the post-shutdown decommissioning of these plants;regulatory requirements and potential future regulatory changes, including changes affecting the regulations governing nuclear plantownership, operations, license renewal and amendments, and decommissioning; the performance and capacity factors of these nuclear plants;the availability of interim or permanent sites for the disposal of spent nuclear fuel and nuclear waste, including the fees charged for suchdisposal; the sufficiency of nuclear decommissioning trust fund assets and earnings to complete decommissioning of each site when required;and limitations on the amounts and types of insurance commercially available for losses in connection with nuclear plant operations andcatastrophic events such as a nuclear accident.NRC Reactor Oversight ProcessThe NRC’s Reactor Oversight Process is a program to collect information about plant performance, assess the information for itssafety significance, and provide for appropriate licensee and NRC response. The NRC evaluates plant performance by analyzing two distinctinputs: inspection findings resulting from the NRC’s inspection program26 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysisand performance indicators reported by the licensee. The evaluations result in the placement of each plant in one of the NRC’s ReactorOversight Process Action Matrix columns: “licensee response column,” or Column 1, “regulatory response column,” or Column 2, “degradedcornerstone column,” or Column 3, and “multiple/repetitive degraded cornerstone column,” or Column 4. Plants in Column 1 are subject tonormal NRC inspection activities. Plants in Column 2, Column 3, or Column 4 are subject to progressively increasing levels of inspection bythe NRC with, in general, progressively increasing levels of associated costs. Nuclear generating plants owned and operated by Entergy’sUtility and Entergy Wholesale Commodities businesses are currently in Column 1.Critical Accounting EstimatesThe preparation of Entergy’s financial statements in conformity with generally accepted accounting principles requires managementto apply appropriate accounting policies and to make estimates and judgments that can have a significant effect on reported financialposition, results of operations, and cash flows. Management has identified the following accounting estimates as critical because they arebased on assumptions and measurements that involve a high degree of uncertainty, and the potential for future changes in these assumptionsand measurements could produce estimates that would have a material effect on the presentation of Entergy’s financial position, results ofoperations, or cash flows.Nuclear Decommissioning CostsEntergy subsidiaries own nuclear generation facilities in both the Utility and Entergy Wholesale Commodities operating segments.Regulations require Entergy subsidiaries to decommission the nuclear power plants after each facility is taken out of service, and cash isdeposited in trust funds during the facilities’ operating lives in order to provide for this obligation. Entergy conducts periodicdecommissioning cost studies to estimate the costs that will be incurred to decommission the facilities. The following key assumptions have asignificant effect on these estimates. •Timing - In projecting decommissioning costs, two assumptions must be made to estimate the timing of plant decommissioning.First, the date of the plant’s retirement must be estimated for those plants that do not have an announced shutdown date. The estimatemay include assumptions regarding the possibility that the plant may have an operating life shorter than the operating licenseexpiration. Second, an assumption must be made regarding whether all decommissioning activity will proceed immediately uponplant retirement, or whether the plant will be placed in SAFSTOR status. SAFSTOR is decommissioning a facility by placing it in asafe, stable condition that is maintained until it is subsequently decontaminated and dismantled to levels that permit licensetermination, normally within 60 years from permanent cessation of operations. A change of assumption regarding either the period ofcontinued operation, the use of a SAFSTOR period, or whether Entergy will continue to hold the plant or the plant is held for sale canchange the present value of the asset retirement obligation.•Cost Escalation Factors - Entergy’s current decommissioning cost studies include an assumption that decommissioning costs willescalate over present cost levels by factors ranging from approximately 2% to 3% annually. A 50-basis point change in thisassumption could change the estimated present value of the decommissioning liabilities by approximately 6% to 18%. The timingassumption influences the significance of the effect of a change in the estimated inflation or cost escalation rate because the effectincreases with the length of time assumed before decommissioning activity ends.•Spent Fuel Disposal - Federal law requires the DOE to provide for the permanent storage of spent nuclear fuel, and legislation hasbeen passed by Congress to develop a repository at Yucca Mountain, Nevada. The DOE has not yet begun accepting spent nuclearfuel and is in non-compliance with federal law. The DOE continues to delay meeting its obligation and Entergy’s nuclear plantowners are continuing to pursue damage claims against the DOE for its failure to provide timely spent fuel storage. Until a federalsite is available, however, nuclear plant operators must provide for interim spent fuel storage on the nuclear plant site, which canrequire the construction and maintenance of dry cask storage sites or other facilities. The costs of developing and maintaining thesefacilities during the decommissioning period can have a significant effect (as much as an average of 20% to 30% of total estimateddecommissioning costs). Entergy’s decommissioning studies include27 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysiscost estimates for spent fuel storage. These estimates could change in the future, however, based on the expected timing of when theDOE begins to fulfill its obligation to receive and store spent nuclear fuel. See Note 8 to the financial statements for furtherdiscussion of Entergy’s spent nuclear fuel litigation.•Technology and Regulation - Over the past several years, more practical experience with the actual decommissioning of nuclearfacilities has been gained and that experience has been incorporated into Entergy’s current decommissioning cost estimates. Giventhe long duration of decommissioning projects, additional experience, including technological advancements in decommissioning,could be gained and affect current cost estimates. In addition, if regulations regarding nuclear decommissioning were to change, thiscould affect cost estimates.•Interest Rates - The estimated decommissioning costs that are the basis for the recorded decommissioning liability are discounted topresent value using a credit-adjusted risk-free rate. When the decommissioning liability is revised, increases in cash flows arediscounted using the current credit-adjusted risk-free rate. Decreases in estimated cash flows are discounted using the credit-adjustedrisk-free rate used previously in estimating the decommissioning liability that is being revised. Therefore, to the extent that a revisedcost study results in an increase in estimated cash flows, a change in interest rates from the time of the previous cost estimate willaffect the calculation of the present value of the revised decommissioning liability. Revisions of estimated decommissioning costs that decrease the liability also result in a decrease in the asset retirement cost asset.For the non-rate-regulated portions of Entergy’s business for which the plant’s value is impaired, these reductions will immediately reduceoperating expenses in the period of the revision if the reduction of the liability exceeds the amount of the undepreciated plant asset at the dateof the revision. Revisions of estimated decommissioning costs that increase the liability result in an increase in the asset retirement cost asset,which is then depreciated over the asset’s remaining economic life. For a plant in the non-rate-regulated portions of Entergy’s business forwhich the plant’s value is impaired, however, including a plant that is shutdown, or is nearing its shutdown date, the increase in the liabilityis likely to immediately increase operating expense in the period of the revision and not increase the asset retirement cost asset. See Note 14to the financial statements for further discussion of impairment of long-lived assets and Note 9 to the financial statements for furtherdiscussion of asset retirement obligations.Utility Regulatory AccountingEntergy’s Utility operating companies and System Energy are subject to retail regulation by their respective state and local regulatorsand to wholesale regulation by the FERC. Because these regulatory agencies set the rates the Utility operating companies and System Energyare allowed to charge customers based on allowable costs, including a reasonable return on equity, the Utility operating companies andSystem Energy apply accounting standards that require the financial statements to reflect the effects of rate regulation, including therecording of regulatory assets and liabilities. Regulatory assets represent incurred costs that have been deferred because they are probable offuture recovery from customers through regulated rates. Regulatory liabilities represent the excess recovery of costs that have been deferredbecause it is probable such amounts will be returned to customers through future regulated rates. See Note 2 to the financial statements for adiscussion of rate and regulatory matters, including details of Entergy’s and the Registrant Subsidiaries’ regulatory assets and regulatoryliabilities.For each regulatory jurisdiction in which they conduct business, the Utility operating companies and System Energy assess whetherthe regulatory assets and regulatory liabilities continue to meet the criteria for probable future recovery or settlement at each balance sheetdate and when regulatory events occur. This assessment includes consideration of recent rate orders, historical regulatory treatment forsimilar costs, and factors such as changes in applicable regulatory and political environments. If the assessments made by the Utilityoperating companies and System Energy are ultimately different than actual regulatory outcomes, it could materially affect the results ofoperations, financial position, and cash flows of Entergy or the Registrant Subsidiaries.Impairment of Long-lived Assets and Trust Fund InvestmentsEntergy has significant investments in long-lived assets in both of its operating segments, and Entergy evaluates28 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysisthese assets against the market economics and under the accounting rules for impairment when there are indications that an impairment mayexist. This evaluation involves a significant degree of estimation and uncertainty. In the Entergy Wholesale Commodities business, Entergy’sinvestments in merchant generation assets are subject to impairment if adverse market or regulatory conditions arise, particularly if it leads toa decision or an expectation that Entergy will operate or own a plant for a shorter period than previously expected; if there is a significantadverse change in the physical condition of a plant; or, if capital investment in a plant significantly exceeds previously-expected amounts.If an asset is considered held for use, and Entergy concludes that events and circumstances are present indicating that an impairmentanalysis should be performed under the accounting standards, the sum of the expected undiscounted future cash flows from the asset arecompared to the asset’s carrying value. The carrying value of the asset includes any capitalized asset retirement cost associated with thedecommissioning liability; therefore, changes in assumptions that affect the decommissioning liability can increase or decrease the carryingvalue of the asset subject to impairment. If the expected undiscounted future cash flows exceed the carrying value, no impairment isrecorded. If the expected undiscounted future cash flows are less than the carrying value and the carrying value exceeds the fair value,Entergy is required to record an impairment charge to write the asset down to its fair value. If an asset is considered held for sale, animpairment is required to be recognized if the fair value (less costs to sell) of the asset is less than its carrying value.The expected future cash flows are based on a number of key assumptions, including:•Future power and fuel prices - Electricity and gas prices can be very volatile. This volatility increases the imprecision inherent in thelong-term forecasts of commodity prices that are a key determinant of estimated future cash flows.•Market value of generation assets - Valuing assets held for sale requires estimating the current market value of generation assets.While market transactions provide evidence for this valuation, these transactions are relatively infrequent, the market for such assetsis volatile, and the value of individual assets is affected by factors unique to those assets.•Future operating costs - Entergy assumes relatively minor annual increases in operating costs. Technological or regulatory changesthat have a significant effect on operations could cause a significant change in these assumptions.•Timing and the life of the asset - Entergy assumes an expected life of the asset. A change in the timing assumption, whether due tomanagement decisions regarding operation of the plant, the regulatory process, or operational or other factors, could have asignificant effect on the expected future cash flows and result in a significant effect on operations.See Note 14 to the financial statements for a discussion of impairment conclusions related to the Entergy Wholesale Commoditiesnuclear plants.Entergy evaluates the available-for-sale debt securities in the Entergy Wholesale Commodities’ nuclear decommissioning trust fundswith unrealized losses at the end of each period to determine whether an other-than-temporary impairment has occurred. The assessment ofwhether an investment in a debt security has suffered an other-than-temporary impairment is based on whether Entergy has the intent to sellor more likely than not will be required to sell the debt security before recovery of its amortized costs. Further, if Entergy does not expect torecover the entire amortized cost basis of the debt security, an other-than-temporary-impairment is considered to have occurred and it ismeasured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss). Entergy’s trusts are managedby third parties who operate in accordance with agreements that define investment guidelines and place restrictions on the purchases andsales of investments. Effective January 1, 2018 with the adoption of ASU 2016-01, unrealized losses and gains on investments in equitysecurities held by Entergy Wholesale Commodities’ nuclear decommissioning trust funds are recorded in earnings as they occur. See Note16 to the financial statements for details on the decommissioning trust funds.29 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisTaxation and Uncertain Tax PositionsManagement exercises significant judgment in evaluating the potential tax effects of Entergy’s operations, transactions, and otherevents. Entergy accounts for uncertain income tax positions using a recognition model under a two-step approach with a more likely-than-notrecognition threshold and a measurement approach based on the largest amount of tax benefit that is greater than 50% likely of being realizedupon settlement. Management evaluates each tax position based on the technical merits and facts and circumstances of the position, assumingthe position will be examined by a taxing authority having full knowledge of all relevant information. Significant judgment is required todetermine whether available information supports the assertion that the recognition threshold has been met. Additionally, measurement ofunrecognized tax benefits to be recorded in the consolidated financial statements is based on the probability of different potential outcomes.Income tax expense and tax positions recorded could be significantly affected by events such as additional transactions contemplated orconsummated by Entergy as well as audits by taxing authorities of the tax positions taken in transactions. Management believes that thefinancial statement tax balances are accounted for and adjusted appropriately each quarter as necessary in accordance with applicableauthoritative guidance; however, the ultimate outcome of tax matters could result in favorable or unfavorable effects on the consolidatedfinancial statements. Entergy’s income taxes, including unrecognized tax benefits, open audits, and other significant tax matters are discussedin Note 3 to the financial statements.See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation” above and Note 3 to thefinancial statements for discussion of the effects of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017.Qualified Pension and Other Postretirement BenefitsEntergy sponsors qualified, defined benefit pension plans that cover substantially all employees, including cash balance plans andfinal average pay plans. Additionally, Entergy currently provides other postretirement health care and life insurance benefits for substantiallyall full-time employees whose most recent date of hire or rehire is before July 1, 2014 and who reach retirement age and meet certaineligibility requirements while still working for Entergy.Entergy’s reported costs of providing these benefits, as described in Note 11 to the financial statements, are affected by numerousfactors including the provisions of the plans, changing employee demographics, and various actuarial calculations, assumptions, andaccounting mechanisms. Because of the complexity of these calculations, the long-term nature of these obligations, and the importance of theassumptions utilized, Entergy’s estimate of these costs is a critical accounting estimate for the Utility and Entergy Wholesale Commoditiessegments.AssumptionsKey actuarial assumptions utilized in determining qualified pension and other postretirement health care and life insurance costsinclude discount rates, projected healthcare cost rates, expected long-term rate of return on plan assets, rate of increase in futurecompensation levels, retirement rates, expected timing and form of payments, and mortality rates.Annually, Entergy reviews and, when necessary, adjusts the assumptions for the pension and other postretirement plans. Every three-to-five years, a formal actuarial assumption experience study that compares assumptions to the actual experience of the pension and otherpostretirement health care and life insurance plans is conducted. The interest rate environment over the past few years and volatility in thefinancial equity markets have affected Entergy’s funding and reported costs for these benefits.30 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisDiscount ratesIn selecting an assumed discount rate to calculate benefit obligations, Entergy uses a yield curve based on high-quality corporate debtwith cash flows matching the expected plan benefit payments. In estimating the service cost and interest cost components of net periodicbenefit cost, Entergy discounts the expected cash flows by the applicable spot rates.Projected health care cost trend ratesEntergy’s health care cost trend is affected by both medical cost inflation, and with respect to capped costs under the plan, the effectsof general inflation. Entergy reviews actual recent cost trends and projected future trends in establishing its health care cost trend rates.Expected long-term rate of return on plan assetsIn determining its expected long-term rate of return on plan assets used in the calculation of benefit plan costs, Entergy reviews pastperformance, current and expected future asset allocations, and capital market assumptions of its investment consultant and some of itsinvestment managers. Entergy conducts periodic asset/liability studies in order to set its target asset allocations.In 2017, Entergy confirmed its liability-driven investment strategy for its pension assets, which recommended that the target assetallocation adjust dynamically over time, based on the funded status of the plan, to an ultimate allocation of 35% equity securities and 65%fixed income securities. The ultimate asset allocation is expected to be attained when the plan is 100% funded. The target pension assetallocation for 2019 was 58% equity and 42% fixed income securities.In 2017, Entergy implemented a new asset allocation strategy for its non-taxable and taxable other postretirement assets, based on thefunded status of each sub-account within each trust. The new strategy no longer focuses on targeting an overall asset allocation for each trust,but rather a target asset allocation for each sub-account within each trust that adjusts dynamically based on the funded status. The 2019weighted average target postretirement asset allocation is 45% equity and 55% fixed income securities. See Note 11 to the financialstatements for discussion of the current asset allocations for Entergy’s pension and other postretirement assets.31 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisCosts and SensitivitiesThe estimated 2020 and actual 2019 qualified pension and other postretirement costs and related underlying assumptions andsensitivities are shown below:Costs Estimated 2020 2019 (In millions)Qualified pension cost $339.5 $277.0 (a)Other postretirement income ($2.2) ($5.6) Assumptions 2020 2019Discount rates Qualified pension Service cost 3.42% 4.57%Interest cost 2.99% 4.15% Other postretirement Service cost 3.48% 4.62%Interest cost 2.79% 4.01% Expected long-term rates of return Qualified pension assets 7.00% 7.25%Other postretirement - non-taxable assets 6.25% - 7.00% 6.50% - 7.25%Other postretirement - taxable assets - after tax rate 5.25% 5.50% Weighted-average rate of increase in future compensation 3.98% - 4.40% 3.98% Assumed health care cost trend rates Pre-65 retirees 6.13% 6.59%Post-65 retirees 6.25% 7.15%Ultimate rate 4.75% 4.75%Year ultimate rate is reached and beyond Pre-65 retirees 2027 2027Post-65 retirees 2027 2026 (a)In 2019, qualified pension cost included settlement charges of $23.5 million.Actual asset returns have an effect on Entergy’s qualified pension and other postretirement costs. In 2019, Entergy’s actual average annualreturn on qualified pension assets was approximately 21% and for other postretirement assets was approximately 17%, as compared with the2019 expected long-term rates of return discussed above.32 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisThe following chart reflects the sensitivity of qualified pension cost and qualified pension projected benefit obligation to changes incertain actuarial assumptions (dollars in millions):Actuarial Assumption Change in Assumption Impact on 2020Qualified Pension Cost Impact on 2019Qualified ProjectedBenefit Obligation Increase/(Decrease)Discount rate (0.25%) $23 $237Rate of return on plan assets (0.25%) $15 $—Rate of increase in compensation 0.25% $8 $41The following chart reflects the sensitivity of postretirement benefit cost and accumulated postretirement benefit obligation tochanges in certain actuarial assumptions (dollars in millions):Actuarial Assumption Change in Assumption Impact on 2020Postretirement BenefitCost Impact on 2019AccumulatedPostretirement BenefitObligation Increase/(Decrease)Discount rate (0.25%) $2 $37Health care cost trend 0.25% $3 $26Each fluctuation above assumes that the other components of the calculation are held constant.Accounting MechanismsIn accordance with pension accounting standards, Entergy utilizes a number of accounting mechanisms that reduce the volatility ofreported pension costs. Differences between actuarial assumptions and actual plan results are deferred and are amortized into expense onlywhen the accumulated differences exceed 10% of the greater of the projected benefit obligation or the market-related value of plan assets. Ifnecessary, the excess is amortized over the average remaining service period of active employees. Additionally, accounting standards allowfor the deferral of prior service costs/credits arising from plan amendments that attribute an increase or decrease in benefits to employeeservice in prior periods. Prior service costs/credits are then amortized into expense over the average future working life of active employees.Certain decisions, including workforce reductions, plan amendments, and plant shutdowns may significantly reduce the expense amortizationperiod and result in immediate recognition of certain previously-deferred costs and gains/losses in the form of curtailment gains or losses.Similarly, payments made to settle benefit obligations, including lump sum benefit payments, can also result in accelerated recognition in theform of settlement losses or gains.Entergy calculates the expected return on pension and other postretirement benefit plan assets by multiplying the long-term expectedrate of return on assets by the market-related value (MRV) of plan assets. In general, Entergy determines the MRV of its pension plan assetsby calculating a value that uses a 20-quarter phase-in of the difference between actual and expected returns and for its other postretirementbenefit plan assets Entergy uses fair value.Accounting standards require an employer to recognize in its balance sheet the funded status of its benefit plans. See Note 11 to thefinancial statements for a further discussion of Entergy’s funded status.Employer ContributionsEntergy contributed $399.4 million to its qualified pension plans in 2019. Entergy estimates pension contributions will beapproximately $216.3 million in 2020; although the 2020 required pension contributions will be known with more certainty when the January1, 2020 valuations are completed, which is expected by April 1, 2020.33 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisMinimum required funding calculations as determined under Pension Protection Act guidance are performed annually as of January 1of each year and are based on measurements of the assets and funding liabilities as measured at that date. Any excess of the funding liabilityover the calculated fair market value of assets results in a funding shortfall that, under the Pension Protection Act, must be funded over aseven-year rolling period. The Pension Protection Act also imposes certain plan limitations if the funded percentage, which is based oncalculated fair market values of assets divided by funding liabilities, does not meet certain thresholds. For funding purposes, asset gains andlosses are smoothed in to the calculated fair market value of assets. The funding liability is based upon a weighted average 24-monthcorporate 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. Entergy contributed $46.6 million to its postretirement plans in 2019 and plans to contribute $49.1 million in 2020.Other ContingenciesAs a company with multi-state utility operations, Entergy is subject to a number of federal and state laws and regulations and otherfactors and conditions in the areas in which it operates, which potentially subjects it to environmental, litigation, and other risks. Entergyperiodically evaluates its exposure for such risks and records a provision for those matters which are considered probable and estimable inaccordance with generally accepted accounting principles.EnvironmentalEntergy must comply with environmental laws and regulations applicable to air emissions, water discharges, solid waste (includingcoal combustion residuals), hazardous waste, toxic substances, protected species, and other environmental matters. Under these various lawsand regulations, Entergy could incur substantial costs to comply or address any impacts to the environment. Entergy conducts studies todetermine the extent of any required remediation and has recorded liabilities based upon its evaluation of the likelihood of loss and expecteddollar amount for each issue. Additional sites or issues could be identified which require environmental remediation or corrective action forwhich Entergy could be liable. The amounts of environmental liabilities recorded can be significantly affected by the following externalevents or conditions.•Changes to existing federal, state, or local regulation by governmental authorities having jurisdiction over air quality, water quality,control of toxic substances and hazardous and solid wastes, and other environmental matters.•The identification of additional impacts, sites, issues, or the filing of other complaints in which Entergy may be asserted to be apotentially responsible party.•The resolution or progression of existing matters through the court system or resolution by the EPA or relevant state or localauthority.LitigationEntergy is regularly named as a defendant in a number of lawsuits involving employment, customers, and injuries and damagesissues, among other matters. Entergy periodically reviews the cases in which it has been named as defendant and assesses the likelihood ofloss in each case as probable, reasonably possible, or remote and records liabilities for cases that have a probable likelihood of loss and theloss can be estimated. Given the environment in which Entergy operates, and the unpredictable nature of many of the cases in which Entergyis named as a defendant, the ultimate outcome of the litigation to which Entergy is exposed has the potential to materially affect the results ofoperations, financial position, and cash flows of Entergy or the Registrant Subsidiaries.34 Table of ContentsEntergy Corporation and SubsidiariesManagement’s Financial Discussion and AnalysisNew Accounting Pronouncements See Note 1 to the financial statements for discussion of new accounting pronouncements.35 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESREPORT OF MANAGEMENTManagement of Entergy Corporation and its subsidiaries has prepared and is responsible for the financial statements and relatedfinancial information included in this document. To meet this responsibility, management establishes and maintains a system of internalcontrols over financial reporting designed to provide reasonable assurance regarding the preparation and fair presentation of financialstatements in accordance with generally accepted accounting principles. This system includes communication through written policies andprocedures, an employee Code of Entegrity, and an organizational structure that provides for appropriate division of responsibility andtraining of personnel. This system is also tested by a comprehensive internal audit program. Entergy management assesses the design and effectiveness of Entergy’s internal control over financial reporting on an annual basis.In making this assessment, management uses the criteria set forth by the Committee of Sponsoring Organizations of the TreadwayCommission (COSO) in Internal Control - Integrated Framework. The 2013 COSO Framework was utilized for management’s assessment.Management acknowledges, however, that all internal control systems, no matter how well designed, have inherent limitations and canprovide only reasonable assurance with respect to financial statement preparation and presentation.Entergy Corporation’s independent registered public accounting firm, Deloitte & Touche LLP, has issued an attestation report on theeffectiveness of Entergy Corporation’s internal control over financial reporting as of December 31, 2019.In addition, the Audit Committee of the Board of Directors, composed solely of independent Directors, meets with the independentauditors, internal auditors, management, and internal accountants periodically to discuss internal controls, and auditing and financialreporting matters. The Audit Committee appoints the independent auditors annually, seeks shareholder ratification of the appointment, andreviews with the independent auditors the scope and results of the audit effort. The Audit Committee also meets periodically with theindependent auditors and the chief internal auditor without management present, providing free access to the Audit Committee.Based on management’s assessment of internal controls using the 2013 COSO criteria, management believes that Entergy and eachof the Registrant Subsidiaries maintained effective internal control over financial reporting as of December 31, 2019. Management furtherbelieves that this assessment, combined with the policies and procedures noted above, provides reasonable assurance that Entergy’s and eachof the Registrant Subsidiaries’ financial statements are fairly and accurately presented in accordance with generally accepted accountingprinciples.LEO P. DENAULTChairman of the Board and Chief Executive Officer of EntergyCorporationANDREW S. MARSHExecutive Vice President and Chief Financial Officer of EntergyCorporation, Entergy Arkansas, LLC, Entergy Louisiana, LLC,Entergy Mississippi, LLC, Entergy New Orleans, LLC, EntergyTexas, Inc., and System Energy Resources, Inc. LAURA R. LANDREAUXChair of the Board, President, and Chief Executive Officer of EntergyArkansas, LLC PHILLIP R. MAY, JR.Chairman of the Board, President, and Chief Executive Officer ofEntergy Louisiana, LLCHALEY R. FISACKERLYChairman of the Board, President, and Chief Executive Officer ofEntergy Mississippi, LLC DAVID D. ELLISChairman of the Board, President, and Chief Executive Officer ofEntergy New Orleans, LLC SALLIE T. RAINERChair of the Board, President, and Chief Executive Officer of EntergyTexas, Inc. RODERICK K. WESTChairman of the Board, President, and Chief Executive Officer ofSystem Energy Resources, Inc.36 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESSELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 20192018201720162015 (In Thousands, Except Percentages and Per Share Amounts) Operating revenues$10,878,673$11,009,452 $11,074,481 $10,845,645$11,513,251Net income (loss)$1,258,244$862,555 $425,353 ($564,503)($156,734)Earnings (loss) per share: Basic$6.36$4.68 $2.29 ($3.26)($0.99)Diluted$6.30$4.63 $2.28 ($3.26)($0.99)Dividends declared per share$3.66$3.58 $3.50 $3.42$3.34Return on common equity13.02%10.08% 5.12% (6.73%)(1.83%)Book value per share, year-end$51.34$46.78 $44.28 $45.12$51.89Total assets$51,723,912$48,275,066 $46,707,149 $45,904,434$44,647,681Long-term obligations (a)$17,351,449$15,758,083 $14,535,077 $14,695,422$13,456,742(a) Includes long-term debt (excluding currently maturing debt), non-current finance lease obligations, and subsidiary preferred stock without sinking fund that isnot presented as equity on the balance sheet. 20192018201720162015 (Dollars In Millions) Utility electric operating revenues: Residential$3,532$3,566$3,355$3,288$3,518Commercial2,4762,4262,4802,3622,516Industrial2,5412,4992,5842,3272,462Governmental228226231217223Total billed retail8,7778,7178,6508,1948,719Sales for resale286300253236249Other367367376437341Total$9,430$9,384$9,279$8,867$9,309 Utility billed electric energy sales(GWh): Residential36,09437,10733,83435,11236,068Commercial28,75529,42628,74529,19729,348Industrial48,48348,38447,76945,73944,382Governmental2,5792,5812,5112,5472,514Total retail115,911117,498112,859112,595112,312Sales for resale13,21011,71511,55011,0549,274Total129,121129,213124,409123,649121,586 Entergy Wholesale Commodities: Operating revenues$1,295 $1,469 $1,657 $1,850 $2,062Billed electric energy sales (GWh)28,088 29,875 30,501 35,881 39,74537 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the Shareholders and Board of Directors ofEntergy Corporation and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Entergy Corporation and Subsidiaries (the “Corporation”) as ofDecember 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, cash flows, and changes in equity foreach of the three years in the period ended December 31, 2019, and the related notes (collectively, referred to as the “financial statements”).In our opinion, the financial statements present fairly, in all material respects, the financial position of the Corporation as of December 31,2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2019, inconformity with accounting principles generally accepted in the United States of America.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theCorporation’s internal control over financial reporting as of December 31, 2019, based on criteria established in Internal Control-IntegratedFramework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 21,2020, expressed an unqualified opinion on the Corporation’s internal control over financial reporting.Basis for OpinionThese financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on theCorporation’s financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to beindependent with respect to the Corporation in accordance with the US federal securities laws and the applicable rules and regulations of theSecurities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Ouraudits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud,and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amountsand disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates madeby management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonablebasis for our opinion.Critical Audit MattersThe critical audit matters communicated below are matters arising from the current period audit of the financial statements that werecommunicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to thefinancial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical auditmatters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the criticalaudit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.Impact of Rate Regulation on the Financial Statements-Entergy Corporation and Subsidiaries-Refer to Note 2 to the financial statementsCritical Audit Matter DescriptionThe Corporation is subject to rate regulation by the Arkansas Public Service Commission, Louisiana Public Service Commission, MississippiPublic Service Commission, City Council of New Orleans, Louisiana, and Public Utility38 Table of ContentsCommission of Texas (the “Commissions”), which have jurisdiction with respect to the rates of electric companies in Arkansas, Louisiana,Mississippi, Texas, and the City of New Orleans, and to wholesale rate regulation by the Federal Energy Regulatory Commission (FERC).Management has determined it meets the requirements under accounting principles generally accepted in the United States of America toprepare its financial statements applying the specialized rules to account for the effects of cost-based rate regulation. Accounting for theeconomics of rate regulation impacts multiple financial statement line items and disclosures, such as property, plant, and equipment;regulatory assets and liabilities; income taxes; operating revenues; operation and maintenance expense; and depreciation expense.The Corporation’s rates are subject to regulatory rate-setting processes and annual earnings oversight. Because the Commissions and theFERC set the rates, the Corporation is allowed to charge customers based on allowable costs, including a reasonable return on equity, and theCorporation applies accounting standards that require the financial statements to reflect the effects of rate regulation, including the recordingof regulatory assets and liabilities. The Corporation assesses whether the regulatory assets and regulatory liabilities continue to meet thecriteria for probable future recovery or settlement at each balance sheet date and when regulatory events occur. This assessment includesconsideration of recent rate orders, historical regulatory treatment for similar costs, and factors such as changes in applicable regulatory andpolitical environments. While the Corporation has indicated it expects to recover costs from customers through regulated rates, there is a riskthat the Commissions and the FERC will not approve: (1) full recovery of the costs of providing utility service or (2) full recovery of allamounts invested in the utility business and a reasonable return on that investment.We identified the impact of rate regulation as a critical audit matter due to the significant judgments made by management to support itsassertions about impacted account balances and disclosures and the high degree of subjectivity involved in assessing the impact of futureregulatory orders on the financial statements. Management judgments include assessing the likelihood of (1) recovery in future rates ofincurred costs, (2) a disallowance of all or a portion of the cost of plant under construction, and (3) a refund to customers. Auditingmanagement’s judgments regarding the outcome of future decisions by the Commissions and the FERC involved especially subjectivejudgment and specialized knowledge of accounting for rate regulation and the rate-setting process.How the Critical Audit Matter Was Addressed in the AuditOur audit procedures related to the uncertainty of future decisions by the Commissions and the FERC included the following, among others:•We tested the effectiveness of management’s controls over the evaluation of the likelihood of (1) the recovery in future rates of costsincurred as property, plant, and equipment and deferred as regulatory assets; and (2) a refund or a future reduction in rates that should bereported as regulatory liabilities. We also tested the effectiveness of management’s controls over the initial recognition of amounts asproperty, plant, and equipment; regulatory assets or liabilities; and the monitoring and evaluation of regulatory developments that mayaffect the likelihood of recovering costs in future rates or of a future reduction in rates.•We evaluated the Corporation’s disclosures related to the impacts of rate regulation, including the balances recorded and regulatorydevelopments.•We read relevant regulatory orders issued by the Commissions and the FERC for the Corporation and other public utilities, regulatorystatutes, interpretations, procedural memorandums, filings made by interveners, and other publicly available information to assess thelikelihood of recovery in future rates or of a future reduction in rates based on precedence of the Commissions’ and the FERC’s treatmentof similar costs under similar circumstances. We evaluated the external information and compared to management’s recorded regulatoryasset and liability balances for completeness.•For regulatory matters in process, we inspected the Corporation’s filings with the Commissions and the FERC, including the annualformula rate plan filings, base rate case filings, and open complaints filed with the FERC, and considered the filings with theCommissions and the FERC by intervenors that may impact the Corporation’s future rates, for any evidence that might contradictmanagement’s assertions.•We obtained an analysis from management and letters from internal and external legal counsel, as appropriate, regarding probability ofrecovery for regulatory assets or refund or future reduction in rates for regulatory liabilities39 Table of Contentsnot yet addressed in a regulatory order to assess management’s assertion that amounts are probable of recovery or a future reduction inrates.Uncertain Tax Positions-Entergy Corporation and Subsidiaries-Refer to Note 3 to the financial statementsCritical Audit Matter DescriptionThe Corporation accounts for uncertain income tax positions under a two-step approach with a more likely-than-not recognition thresholdand a measurement approach based on the largest amount of tax benefit that is greater than fifty percent likely of being realized uponsettlement. The Corporation has uncertain tax positions related to internal restructuring transactions, which require management to makesignificant judgments and assumptions related to the technical merits and facts and circumstances of each position, as well as the probabilityof different potential outcomes. Uncertain tax positions could be significantly affected by events such as additional transactions contemplatedor consummated by the Corporation as well as audits by taxing authorities of the tax positions. The net unrecognized tax benefit of$1.5 billion at December 31, 2019, includes uncertain tax positions related to internal restructuring transactions.Given the subjectivity of estimating the uncertain tax positions related to the technical merits applied to internal restructuring transactions,auditing the uncertain tax positions on the internal restructuring transactions involved especially subjective judgment.How the Critical Audit Matter Was Addressed in the AuditOur audit procedures related to the uncertain tax positions on internal restructuring transactions included the following, among others:•We tested the effectiveness of controls related to uncertain tax positions on internal restructuring transactions, including those over therecognition and measurement of the income tax benefits.•We evaluated the Corporation’s disclosures, and the balances recorded, related to uncertain tax positions on internal restructuringtransactions.•We evaluated the methods and assumptions used by management to estimate the uncertain tax positions on internal restructuringtransactions by testing the underlying data that served as the basis for the uncertain tax position on internal restructuring transactions.•With the assistance of our income tax specialists, we assessed the technical merits of the uncertain tax positions on internal restructuringtransactions and management’s key estimates and judgments made by:◦Assessing the technical merits of the uncertain tax positions by comparing to similar cases filed with the Internal Revenue Service◦Evaluating the reasonableness and consistency of the probabilities applied to the uncertain tax position on internal restructuringtransactions by comparing to probabilities used on similar internal restructuring transaction uncertain tax positions◦Considering the impact of changes or settlements in the tax environment on management’s methods and assumptions used to estimatethe uncertain tax positions on internal restructuring transactions.Nuclear Decommissioning Costs-Entergy Corporation and Subsidiaries-Refer to Note 9 to the financial statementsCritical Audit Matter DescriptionThe Corporation owns nuclear generation facilities in both the Utility and Entergy Wholesale Commodities operating segments whereregulation requires the Corporation to decommission its nuclear power plants after each facility is taken out of service. The Corporationperiodically conducts decommissioning cost studies, which requires management to make significant judgments and assumptions,specifically related to future dismantlement cost, site restoration, spent fuel management, and license termination. The liability for nucleardecommissioning was $6.2 billion at December 31, 2019.40 Table of ContentsAuditing management’s judgments regarding the costs for nuclear decommissioning, including estimates for future dismantlement, siterestoration, spent fuel management, and license termination, involved especially subjective judgment in evaluating the appropriateness of theestimates and assumptions.How the Critical Audit Matter Was Addressed in the AuditOur audit procedures related to the underlying costs for nuclear decommissioning included the following, among others:•We tested the effectiveness of controls over nuclear decommissioning, including those over the future dismantlement cost, siterestoration, spent fuel management, and license termination.•We evaluated the Corporation’s disclosures related to the nuclear decommissioning cost estimates, including the balances recorded andchanges in assumptions.•We evaluated management’s ability to accurately estimate the costs for nuclear decommissioning by comparing the cost estimates toactual settlements of similar asset retirement obligations at the Corporation.•We evaluated the methods and assumptions used by management to estimate the cost of nuclear decommissioning by:◦Testing the reasonableness of the underlying data that served as the basis for the estimate◦Comparing to management’s prior-year assumptions and testing significant changes in judgments or assumptions◦Comparing changes in cost estimates to other similar cost estimates recorded at the Corporation to confirm consistent assumptionsand methods applied across all of the Corporation’s nuclear decommissioning cost estimates.•With the assistance of our environmental specialists, we:◦Evaluated the methods used by management to estimate the underlying costs for nuclear decommissioning◦Developed a range of independent estimates for the cost of nuclear decommissioning based on peer industry data and compared tomanagement’s estimate◦Completed a search of environmental regulations to identify any regulatory changes that may affect the nuclear decommissioningcost estimates./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020We have served as the Corporation’s auditor since 2001.41 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESCONSOLIDATED INCOME STATEMENTS For the Years Ended December 31, 2019 2018 2017 (In Thousands, Except Share Data)OPERATING REVENUES Electric $9,429,978 $9,384,111 $9,278,895Natural gas 153,954 156,436 138,856Competitive businesses 1,294,741 1,468,905 1,656,730TOTAL 10,878,673 11,009,452 11,074,481 OPERATING EXPENSES Operation and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale 2,029,638 2,147,793 1,991,589Purchased power 1,192,860 1,658,799 1,427,950Nuclear refueling outage expenses 204,927 153,826 168,151Other operation and maintenance 3,272,381 3,346,397 3,306,694Asset write-offs, impairments, and related charges 290,027 532,321 538,372Decommissioning 400,802 388,508 405,685Taxes other than income taxes 643,745 641,952 617,556Depreciation and amortization 1,480,016 1,369,442 1,389,978Other regulatory charges (credits) - net (26,220) 301,049 (131,901)TOTAL 9,488,176 10,540,087 9,714,074 OPERATING INCOME 1,390,497 469,365 1,360,407 OTHER INCOME Allowance for equity funds used during construction 144,974 129,602 95,088Interest and investment income 547,912 63,864 288,197Miscellaneous - net (252,539) (129,754) (113,426)TOTAL 440,347 63,712 269,859 INTEREST EXPENSE Interest expense 807,382 768,322 707,212Allowance for borrowed funds used during construction (64,957) (60,974) (44,869)TOTAL 742,425 707,348 662,343 INCOME (LOSS) BEFORE INCOME TAXES 1,088,419 (174,271) 967,923 Income taxes (169,825) (1,036,826) 542,570 CONSOLIDATED NET INCOME 1,258,244 862,555 425,353 Preferred dividend requirements of subsidiaries 17,018 13,894 13,741 NET INCOME ATTRIBUTABLE TO ENTERGY CORPORATION $1,241,226 $848,661 $411,612 Earnings per average common share: Basic $6.36 $4.68 $2.29Diluted $6.30 $4.63 $2.28 Basic average number of common shares outstanding 195,195,858 181,409,597 179,671,797Diluted average number of common shares outstanding 196,999,284 183,378,513 180,535,893 See Notes to Financial Statements. 42 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31, 2019 2018 2017 (In Thousands) Net Income$1,258,244 $862,555 $425,353 Other comprehensive income (loss) Cash flow hedges net unrealized gain (loss) (net of tax expense (benefit) of $28,516, $5,830, and ($22,570))115,026 22,098 (41,470)Pension and other postretirement liabilities (net of tax expense (benefit) of ($6,539), $30,299, and ($4,057))(25,150) 90,143 (61,653)Net unrealized investment gains (losses) (net of tax expense of $14,023, $6,393, and $80,069)27,183 (28,771) 115,311Foreign currency translation (net of tax benefit of $-, $-, and $403)— — (748)Other comprehensive income117,059 83,470 11,440 Comprehensive Income1,375,303 946,025 436,793Preferred dividend requirements of subsidiaries17,018 13,894 13,741Comprehensive Income Attributable to Entergy Corporation$1,358,285 $932,131 $423,052 See Notes to Financial Statements. 43 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2019 2018 2017 (In Thousands) OPERATING ACTIVITIES Consolidated net income $1,258,244 $862,555 $425,353Adjustments to reconcile consolidated net income to net cash flow provided byoperating activities: Depreciation, amortization, and decommissioning, including nuclear fuel amortization 2,182,313 2,040,555 2,078,578Deferred income taxes, investment tax credits, and non-current taxes accrued 193,950 (256,848) 529,053Asset write-offs, impairments, and related charges 226,678 491,739 357,251Changes in working capital: Receivables (101,227) 98,546 (97,637)Fuel inventory (28,173) 45,839 (3,043)Accounts payable (71,898) 97,312 101,802Taxes accrued (20,784) 39,272 33,853Interest accrued 937 5,220 742Deferred fuel costs 172,146 (25,829) 56,290Other working capital accounts (3,108) (164,173) (4,331)Changes in provisions for estimated losses 19,914 35,706 (3,279)Changes in other regulatory assets (545,559) 189,193 595,504Changes in other regulatory liabilities (14,781) (803,323) 2,915,795Deferred tax rate change recognized as regulatory liability / asset — — (3,665,498)Changes in pensions and other postretirement liabilities 187,124 (304,941) (130,686)Other (639,149) 34,424 (566,247)Net cash flow provided by operating activities 2,816,627 2,385,247 2,623,500 INVESTING ACTIVITIES Construction/capital expenditures (4,197,667) (3,942,010) (3,607,532)Allowance for equity funds used during construction 144,862 130,195 96,000Nuclear fuel purchases (128,366) (302,584) (377,324)Payment for purchase of plant or assets (305,472) (26,623) (16,762)Proceeds from sale of assets 28,932 24,902 100,000Insurance proceeds received for property damages 7,040 18,270 26,157Changes in securitization account 3,298 (5,844) 1,323Payments to storm reserve escrow account (8,038) (6,551) (2,878)Receipts from storm reserve escrow account — — 11,323Decrease (increase) in other investments 30,319 (54,500) 1,078Litigation proceeds for reimbursement of spent nuclear fuel storage costs 2,369 59,643 25,493Proceeds from nuclear decommissioning trust fund sales 4,121,351 6,484,791 3,162,747Investment in nuclear decommissioning trust funds (4,208,870) (6,485,676) (3,260,674)Net cash flow used in investing activities (4,510,242) (4,105,987) (3,841,049) See Notes to Financial Statements. 44 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2019 2018 2017 (In Thousands) FINANCING ACTIVITIES Proceeds from the issuance of: Long-term debt 9,304,396 8,035,536 1,809,390Preferred stock of subsidiary 33,188 73,330 14,399Treasury stock 93,862 103,315 80,729Common stock 607,650 499,272 —Retirement of long-term debt (7,619,380) (6,965,738) (1,585,681)Repurchase / redemptions of preferred stock (50,000) (53,868) (20,599)Changes in credit borrowings and commercial paper - net 4,389 364,031 1,163,296Other (7,732) 26,453 (7,731)Dividends paid: Common stock (711,573) (647,704) (628,885)Preferred stock (16,438) (14,185) (13,940)Net cash flow provided by financing activities 1,638,362 1,420,442 810,978 Net decrease in cash and cash equivalents (55,253) (300,298) (406,571) Cash and cash equivalents at beginning of period 480,975 781,273 1,187,844 Cash and cash equivalents at end of period $425,722 $480,975 $781,273 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $778,209 $734,845 $678,371Income taxes ($40,435) $19,825 ($13,375) See Notes to Financial Statements. 45 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSASSETS December 31, 2019 2018 (In Thousands) CURRENT ASSETS Cash and cash equivalents: Cash $34,242 $56,690Temporary cash investments 391,480 424,285Total cash and cash equivalents 425,722 480,975Accounts receivable: Customer 595,509 558,494Allowance for doubtful accounts (7,404) (7,322)Other 219,870 167,722Accrued unbilled revenues 400,617 395,511Total accounts receivable 1,208,592 1,114,405Deferred fuel costs — 27,251Fuel inventory - at average cost 145,476 117,304Materials and supplies - at average cost 824,989 752,843Deferred nuclear refueling outage costs 157,568 230,960Prepayments and other 283,645 234,326TOTAL 3,045,992 2,958,064 OTHER PROPERTY AND INVESTMENTS Decommissioning trust funds 6,404,030 6,920,164Non-utility property - at cost (less accumulated depreciation) 332,864 304,382Other 496,452 437,265TOTAL 7,233,346 7,661,811 PROPERTY, PLANT, AND EQUIPMENT Electric 54,271,467 49,831,486Natural gas 547,110 496,150Construction work in progress 2,823,291 2,888,639Nuclear fuel 677,181 861,272TOTAL PROPERTY, PLANT, AND EQUIPMENT 58,319,049 54,077,547Less - accumulated depreciation and amortization 23,136,356 22,103,101PROPERTY, PLANT, AND EQUIPMENT - NET 35,182,693 31,974,446 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Other regulatory assets (includes securitization property of $239,219 as of December 31, 2019 and $360,790 as ofDecember 31, 2018) 5,292,055 4,746,496Deferred fuel costs 239,892 239,496Goodwill 377,172 377,172Accumulated deferred income taxes 64,461 54,593Other 288,301 262,988TOTAL 6,261,881 5,680,745 TOTAL ASSETS $51,723,912 $48,275,066 See Notes to Financial Statements. 46 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSLIABILITIES AND EQUITY December 31, 2019 2018 (In Thousands) CURRENT LIABILITIES Currently maturing long-term debt $795,012 $650,009Notes payable and commercial paper 1,946,727 1,942,339Accounts payable 1,499,861 1,496,058Customer deposits 409,171 411,505Taxes accrued 233,455 254,241Interest accrued 194,129 193,192Deferred fuel costs 197,687 52,396Pension and other postretirement liabilities 66,184 61,240Current portion of unprotected excess accumulated deferred income taxes 76,457 248,127Other 201,780 134,437TOTAL 5,620,463 5,443,544 NON-CURRENT LIABILITIES Accumulated deferred income taxes and taxes accrued 4,401,190 4,107,152Accumulated deferred investment tax credits 207,113 213,101Regulatory liability for income taxes-net 1,633,159 1,817,021Other regulatory liabilities 1,961,005 1,620,254Decommissioning and asset retirement cost liabilities 6,159,212 6,355,543Accumulated provisions 534,028 514,107Pension and other postretirement liabilities 2,798,265 2,616,085Long-term debt (includes securitization bonds of $297,981 as of December 31, 2019 and $423,858 as of December31, 2018) 17,078,643 15,518,303Other 852,749 1,006,249TOTAL 35,625,364 33,767,815 Commitments and Contingencies Subsidiaries’ preferred stock without sinking fund 219,410 219,402 EQUITY Common stock, $.01 par value, authorized 500,000,000 shares; issued 270,035,180 shares in 2019 and 261,587,009shares in 2018 2,700 2,616Paid-in capital 6,564,436 5,951,431Retained earnings 9,257,609 8,721,150Accumulated other comprehensive loss (446,920) (557,173)Less - treasury stock, at cost (70,886,400 shares in 2019 and 72,530,866 shares in 2018) 5,154,150 5,273,719Total common shareholders' equity 10,223,675 8,844,305Subsidiaries’ preferred stock without sinking fund 35,000 —TOTAL 10,258,675 8,844,305 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $51,723,912 $48,275,066 See Notes to Financial Statements. 47 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFor the Years Ended December 31, 2019, 2018, and 2017 Common Shareholders’ Equity Subsidiaries’Preferred Stock CommonStock Treasury Stock Paid-inCapital RetainedEarnings Accumulated OtherComprehensiveIncome (Loss) Total (In Thousands)Balance at December 31, 2016$— $2,548 ($5,498,584) $5,417,245 $8,195,571 ($34,971) $8,081,809Consolidated net income (a)13,741 — — — 411,612 — 425,353Other comprehensive income— — — — — 11,440 11,440Common stock issuances related tostock plans— — 100,947 16,188 — — 117,135Common stock dividends declared— — — — (628,885) — (628,885)Subsidiaries' capital stock redemptions— — — — (596) — (596)Preferred dividend requirements ofsubsidiaries (a)(13,741) — — — — — (13,741)Balance at December 31, 2017— 2,548 (5,397,637) 5,433,433 7,977,702 (23,531) 7,992,515Implementation of accountingstandards— — — — 576,257 (632,617) (56,360)Balance at January 1, 2018— 2,548 (5,397,637) 5,433,433 8,553,959 (656,148) 7,936,155 Consolidated net income (a)13,894 — — — 848,661 — 862,555Other comprehensive income— — — — — 83,470 83,470Settlement of equity forwards throughcommon stock issuance— 68 — 499,932 — — 500,000Common stock issuance costs— — — (728) — — (728)Common stock issuances related tostock plans— — 123,918 18,794 — — 142,712Common stock dividends declared— — — — (647,704) — (647,704)Subsidiaries' capital stock redemptions— — — — (1,723) — (1,723)Preferred dividend requirements ofsubsidiaries (a)(13,894) — — — — — (13,894)Reclassification pursuant to ASU 2018-02— — — — (32,043) 15,505 (16,538)Balance at December 31, 2018— 2,616 (5,273,719) 5,951,431 8,721,150 (557,173) 8,844,305Implementation of accountingstandards— — — — 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 (a)17,018 — — — 1,241,226 — 1,258,244Other comprehensive income— — — — — 117,059 117,059Settlement of equity forwards throughcommon stock issuance— 84 — 607,566 — — 607,650Common stock issuance costs— — — (7) — — (7)Common stock issuances related tostock plans— — 119,569 5,446 — — 125,015Common stock dividends declared— — — — (711,573) — (711,573)Subsidiary's preferred stock issuance35,000 — — — — — 35,000Preferred dividend requirements ofsubsidiaries (a)(17,018) — — — — — (17,018)Balance at December 31, 2019$35,000 $2,700 ($5,154,150) $6,564,436 $9,257,609 ($446,920) $10,258,675 See Notes to Financial Statements. (a) Consolidated net income and preferred dividend requirements of subsidiaries include $16.5 million for 2019, $13.9 million for 2018, and $13.7 million for 2017 ofpreferred dividends on subsidiaries’ preferred stock without sinking fund that is not presented as equity.48 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESNOTES TO FINANCIAL STATEMENTSNOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Entergy Corporation, Entergy Arkansas, EntergyLouisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy) The accompanying consolidated financial statements include the accounts of Entergy Corporation and its subsidiaries. As requiredby generally accepted accounting principles in the United States of America, all intercompany transactions have been eliminated in theconsolidated financial statements. Entergy’s Registrant Subsidiaries (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, EntergyNew Orleans, Entergy Texas, and System Energy) also include their separate financial statements in this Form 10-K. The RegistrantSubsidiaries and many other Entergy subsidiaries also maintain accounts in accordance with FERC and other regulatory guidelines. Use of Estimates in the Preparation of Financial StatementsIn conformity with generally accepted accounting principles in the United States of America, the preparation of EntergyCorporation’s consolidated financial statements and the separate financial statements of the Registrant Subsidiaries requires management tomake estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, and expenses, and the disclosure ofcontingent assets and liabilities. Adjustments to the reported amounts of assets and liabilities may be necessary in the future to the extent thatfuture estimates or actual results are different from the estimates used.Revenues and Fuel CostsSee Note 19 to the financial statements for a discussion of Entergy’s and the Registrant Subsidiaries’ revenues and fuel costs.Property, Plant, and EquipmentProperty, plant, and equipment is stated at original cost less regulatory disallowances and impairments. Depreciation is computed onthe straight-line basis at rates based on the applicable estimated service lives of the various classes of property. For the RegistrantSubsidiaries, the original cost of plant retired or removed, less salvage, is charged to accumulated depreciation. Normal maintenance, repairs,and minor replacement costs are charged to operating expenses. Certain combined-cycle gas turbine generating units are maintained underlong-term service agreements with third-party service providers. The costs under these agreements are split between operating expenses andcapital additions based upon the nature of the work performed. Substantially all of the Registrant Subsidiaries’ plant is subject to mortgageliens.Electric plant includes the portions of Grand Gulf and Waterford 3 that were sold and leased back in prior periods. For financialreporting purposes, these sale and leaseback arrangements are reflected as financing transactions. In March 2016, Entergy Louisianacompleted the first step in a two-step transaction to purchase the undivided interests in Waterford 3 that were previously being leased byacquiring a beneficial interest in the Waterford 3 leased assets. In February 2017 the leases were terminated and the leased assets transferredto Entergy Louisiana. See Note 10 to the financial statements for further discussion of Entergy Louisiana’s purchase of the Waterford 3leased assets.49 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNet property, plant, and equipment for Entergy (including property under lease and associated accumulated amortization) by businesssegment and functional category, as of December 31, 2019 and 2018, is shown below:2019 Entergy Utility EntergyWholesaleCommodities Parent &Other (In Millions)Production Nuclear $7,439 $7,369 $70 $—Other 5,253 5,139 114 —Transmission 7,383 7,383 — —Distribution 8,972 8,972 — —Other 2,636 2,620 8 8Construction work in progress 2,823 2,814 9 —Nuclear fuel 677 614 63 —Property, plant, and equipment - net $35,183 $34,911 $264 $82018 Entergy Utility EntergyWholesaleCommodities Parent &Other (In Millions)Production Nuclear $7,096 $6,964 $132 $—Other 4,171 4,069 102 —Transmission 6,592 6,590 2 —Distribution 8,343 8,343 — —Other 2,022 2,011 2 9Construction work in progress 2,889 2,815 74 —Nuclear fuel 861 754 107 —Property, plant, and equipment - net $31,974 $31,546 $419 $9Depreciation rates on average depreciable property for Entergy approximated 2.8% in 2019, 2.8% in 2018, and 3% in 2017. Includedin these rates are the depreciation rates on average depreciable Utility property of 2.6% in 2019, 2.6% in 2018, and 2.6% in 2017, and thedepreciation rates on average depreciable Entergy Wholesale Commodities property of 18.3% in 2019, 18.6% in 2018, and 22.3% in 2017.The depreciation rates for Entergy Wholesale Commodities reflect the significantly reduced remaining estimated operating lives associatedwith management’s strategy to shut down and sell all of the remaining plants in Entergy Wholesale Commodities’ merchant nuclear fleet.The decrease in the depreciation rate in 2018 for Entergy Wholesale Commodities is due to the decision in the third quarter 2017 to continueoperating Palisades until May 31, 2022.Entergy amortizes nuclear fuel using a units-of-production method. Nuclear fuel amortization is included in fuel expense in theincome statements. Because the values of their long-lived assets are impaired, and their remaining estimated operating lives significantlyreduced, the Entergy Wholesale Commodities nuclear plants, except for Palisades, charge nuclear fuel costs directly to expense whenincurred because their undiscounted cash flows are insufficient to recover the carrying amount of these capital additions.Non-utility property - at cost (less accumulated depreciation) for Entergy is reported net of accumulated depreciation of $184 millionas of December 31, 2019 and $177 million as of December 31, 2018.50 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsConstruction expenditures included in accounts payable is $406 million as of December 31, 2019 and $311 million as of December31, 2018.Net property, plant, and equipment for the Registrant Subsidiaries (including property under lease and associated accumulatedamortization) by company and functional category, as of December 31, 2019 and 2018, is shown below:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Millions)Production Nuclear $1,611 $4,042 $— $— $— $1,716Other 785 2,789 845 192 528 —Transmission 1,966 2,944 1,136 96 1,202 39Distribution 2,457 3,078 1,489 505 1,443 —Other 454 884 309 270 256 30Construction work inprogress 198 1,384 88 202 760 165Nuclear fuel 196 268 — — — 150Property, plant, andequipment - net $7,667 $15,389 $3,867 $1,265 $4,189 $2,1002018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Millions)Production Nuclear $1,494 $3,725 $— $— $— $1,745Other 820 2,029 509 196 515 —Transmission 1,792 2,571 1,046 78 1,063 40Distribution 2,329 2,882 1,342 471 1,319 —Other 311 699 242 233 193 39Construction work inprogress 244 1,865 128 147 325 70Nuclear fuel 221 298 — — — 235Property, plant, andequipment - net $7,211 $14,069 $3,267 $1,125 $3,415 $2,129Depreciation rates on average depreciable property for the Registrant Subsidiaries are shown below: EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy20192.5% 2.4% 3.2% 3.2% 3.0% 2.1%20182.5% 2.3% 3.2% 3.5% 2.7% 1.9%20172.5% 2.3% 3.1% 3.5% 2.6% 2.8%Non-utility property - at cost (less accumulated depreciation) for Entergy Louisiana is reported net of accumulated depreciation of$168.5 million as of December 31, 2019 and $161.2 million as of December 31, 2018. Non-utility property - at cost (less accumulateddepreciation) for Entergy Mississippi is reported net of accumulated depreciation of $0.5 million as of December 31, 2019 and $0.5 millionas of December 31, 2018. Non-utility property51 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements- at cost (less accumulated depreciation) for Entergy Texas is reported net of accumulated depreciation of $4.9 million as of December 31,2019 and $4.9 million as of December 31, 2018.As of December 31, 2019, construction expenditures included in accounts payable are $67.9 million for Entergy Arkansas, $115.1million for Entergy Louisiana, $34.2 million for Entergy Mississippi, $18.4 million for Entergy New Orleans, $88.1 million for EntergyTexas, and $23.2 million for System Energy. As of December 31, 2018, construction expenditures included in accounts payable are $35.7million for Entergy Arkansas, $104.6 million for Entergy Louisiana, $13.6 million for Entergy Mississippi, $5.8 million for Entergy NewOrleans, $55.6 million for Entergy Texas, and $26.3 million for System Energy.Jointly-Owned Generating StationsCertain Entergy subsidiaries jointly own electric generating facilities with affiliates or third parties. All parties are required to providetheir own financing. The investments, fuel expenses, and other operation and maintenance expenses associated with these generating stationsare recorded by the Entergy subsidiaries to the extent of their respective undivided ownership interests. As of December 31, 2019, thesubsidiaries’ investment and accumulated depreciation in each of these generating stations were as follows:52 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsGenerating Stations Fuel Type TotalMegawattCapability (a) Ownership Investment AccumulatedDepreciation (In Millions)Utility business: Entergy Arkansas - IndependenceUnit 1 Coal 826 31.50% $142 $104 IndependenceCommon Facilities Coal 15.75% $35 $29 White BluffUnits 1 and 2 Coal 1,638 57.00% $555 $380 Ouachita (b)Common Facilities Gas 66.67% $173 $153 Union (c)Units 1 and 2 CommonFacilities Gas 50.00% $0.4 $0.1 Union (c)Common Facilities Gas 25.00% $29 $6Entergy Louisiana - Roy S. NelsonUnit 6 Coal 525 40.25% $286 $207 Roy S. NelsonUnit 6 Common Facilities Coal 19.95% $20 $9 Big Cajun 2Unit 3 Coal 576 24.15% $151 $124 Big Cajun 2Unit 3 Common Facilities Coal 8.05% $5 $2 Ouachita (b)Common Facilities Gas 33.33% $90 $77 AcadiaCommon Facilities Gas 50.00% $20 $1 Union (c)Common Facilities Gas 50.00% $57 $6Entergy Mississippi - IndependenceUnits 1 and 2 and CommonFacilities Coal 1,668 25.00% $271 $163Entergy New Orleans - Union (c)Units 1 and 2 CommonFacilities Gas 50.00% $1 $0.1 Union (c)Common Facilities Gas 25.00% $29 $6Entergy Texas - Roy S. NelsonUnit 6 Coal 525 29.75% $204 $120 Roy S. NelsonUnit 6 Common Facilities Coal 14.75% $7 $3 Big Cajun 2Unit 3 Coal 576 17.85% $113 $80 Big Cajun 2Unit 3 Common Facilities Coal 5.95% $4 $1System Energy - Grand Gulf (d)Unit 1 Nuclear 1,393 90.00% $5,071 $3,285Entergy WholesaleCommodities: IndependenceUnit 2 Coal 842 14.37% $74 $53 IndependenceCommon Facilities Coal 7.18% $17 $13 Roy S. NelsonUnit 6 Coal 525 10.90% $115 $66 Roy S. NelsonUnit 6 Common Facilities Coal 5.40% $3 $153 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(a)“Total Megawatt Capability” is the dependable load carrying capability as demonstrated under actual operating conditions based onthe primary fuel (assuming no curtailments) that each station was designed to utilize.(b)Ouachita Units 1 and 2 are owned 100% by Entergy Arkansas and Ouachita Unit 3 is owned 100% by Entergy Louisiana. Theinvestment and accumulated depreciation numbers above are only for the common facilities and not for the generating units.(c)Union Unit 1 is owned 100% by Entergy New Orleans, Union Unit 2 is owned 100% by Entergy Arkansas, Union Units 3 and 4 areowned 100% by Entergy Louisiana. The investment and accumulated depreciation numbers above are only for the specified commonfacilities and not for the generating units.(d)Includes a leasehold interest held by System Energy. System Energy’s Grand Gulf lease obligations are discussed in Note 10 to thefinancial statements.Nuclear Refueling Outage CostsNuclear refueling outage costs are deferred during the outage and amortized over the estimated period to the next outage becausethese refueling outage expenses are incurred to prepare the units to operate for the next operating cycle without having to be taken off line.Because the value of their long-lived assets are impaired, and their remaining estimated operating lives significantly reduced, the EntergyWholesale Commodities nuclear plants, except for Palisades, charge nuclear refueling outage costs directly to expense when incurredbecause their undiscounted cash flows are insufficient to recover the carrying amount of these costs.Allowance for Funds Used During Construction (AFUDC)AFUDC represents the approximate net composite interest cost of borrowed funds and a reasonable return on the equity funds usedfor construction by the Registrant Subsidiaries. AFUDC increases both the plant balance and earnings and is realized in cash throughdepreciation provisions included in the rates charged to customers.Income TaxesEntergy Corporation and the majority of its subsidiaries file a United States consolidated federal income tax return. In September2019, Entergy Utility Holding Company, LLC and its regulated wholly owned subsidiaries including Entergy Arkansas, LLC, EntergyLouisiana, LLC, Entergy Mississippi, LLC, and Entergy New Orleans, LLC became eligible to and joined the Entergy Corporationconsolidated federal income tax group. These changes do not affect the accrual or allocation of income taxes for the Registrant Subsidiaries. Each tax-paying entity records income taxes as if it were a separate taxpayer and consolidating adjustments are allocated to the tax filingentities in accordance with Entergy’s intercompany income tax allocation agreements. Deferred income taxes are recorded for temporarydifferences between the book and tax basis of assets and liabilities, and for certain losses and credits available for carryforward.Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that someportion of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws andrates in the period in which the tax or rate was enacted. See the “Other Tax Matters - Tax Cuts and Jobs Act” section in Note 3 to thefinancial statements for discussion of the effects of the enactment of the Tax Cuts and Jobs Act in December 2017.The benefits of investment tax credits are deferred and amortized over the average useful life of the related property, as a reduction ofincome tax expense, for such credits associated with rate-regulated operations in accordance with ratemaking treatment.54 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEarnings (Loss) per ShareThe following table presents Entergy’s basic and diluted earnings per share calculation included on the consolidated statements ofoperations: For the Years Ended December 31, 2019 2018 2017 (In Millions, Except Per Share Data) $/share $/share $/shareNet income attributable to EntergyCorporation$1,241.2 $848.7 $411.6 Basic shares and earnings per averagecommon share195.2 $6.36 181.4 $4.68 179.7 $2.29Average dilutive effect of: Stock options0.6 (0.02) 0.3 (0.01) 0.2 —Other equity plans0.8 (0.03) 0.7 (0.02) 0.6 (0.01)Equity forwards0.4 (0.01) 1.0 (0.02) — —Diluted shares and earnings per averagecommon shares197.0 $6.30 183.4 $4.63 180.5 $2.28The calculation of diluted earnings per share excluded 173,290 options outstanding at December 31, 2019, 956,550 optionsoutstanding at December 31, 2018, and 2,927,512 options outstanding at December 31, 2017 because they were antidilutive.Stock-based Compensation PlansEntergy grants stock options, restricted stock, performance units, and restricted stock unit awards to key employees of the Entergysubsidiaries under its Equity Ownership Plans, which are shareholder-approved stock-based compensation plans. These plans are describedmore fully in Note 12 to the financial statements. The cost of the stock-based compensation is charged to income over the vestingperiod. Awards under Entergy’s plans generally vest over three years. Entergy accounts for forfeitures of stock-based compensation whenthey occur. Entergy recognizes all income tax effects related to share-based payments through the income statement.Accounting for the Effects of RegulationEntergy’s Utility operating companies and System Energy are rate-regulated enterprises whose rates meet three criteria specified inaccounting standards. The Utility operating companies and System Energy have rates that (i) are approved by a body (its regulator)empowered to set rates that bind customers; (ii) are cost-based; and (iii) can be charged to and collected from customers. These criteria mayalso be applied to separable portions of a utility’s business, such as the generation or transmission functions, or to specific classes ofcustomers. Because the Utility operating companies and System Energy meet these criteria, each of them capitalizes costs that wouldotherwise be charged to expense if the rate actions of its regulator make it probable that those costs will be recovered in future revenue. Suchcapitalized costs are reflected as regulatory assets in the accompanying financial statements. When an enterprise concludes that recovery of aregulatory asset is no longer probable, the regulatory asset must be removed from the entity’s balance sheet.An enterprise that ceases to meet the three criteria for all or part of its operations should report that event in its financialstatements. In general, the enterprise no longer meeting the criteria should eliminate from its balance sheet all regulatory assets andliabilities related to the applicable operations. Additionally, if it is determined that a regulated enterprise is no longer recovering all of itscosts, it is possible that an impairment may exist that could require further write-offs of plant assets.55 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Louisiana does not apply regulatory accounting standards to the Louisiana retail deregulated portion of River Bend, the 30%interest in River Bend formerly owned by Cajun, or its steam business, unless specific cost recovery is provided for in tariff rates. TheLouisiana retail deregulated portion of River Bend is operated under a deregulated asset plan representing a portion (approximately 15%) ofRiver Bend plant costs, generation, revenues, and expenses established under a 1992 LPSC order. The plan allows Entergy Louisiana to sellthe electricity from the deregulated assets to Louisiana retail customers at 4.6 cents per kWh or off-system at higher prices, with certainprovisions for sharing incremental revenue above 4.6 cents per kWh between customers and shareholders.Regulatory Asset or Liability for Income TaxesAccounting standards for income taxes provide that a regulatory asset or liability be recorded if it is probable that the currentlydeterminable future increase or decrease in regulatory income tax expense will be recovered from or returned to customers through futurerates. There are two main sources of Entergy’s regulatory asset or liability for income taxes. There is a regulatory asset related to theratemaking treatment of the tax effects of book depreciation for the equity component of AFUDC that has been capitalized to property, plant,and equipment but for which there is no corresponding tax basis. Equity-AFUDC is a component of property, plant, and equipment that isincluded in rate base when the plant is placed in service. There is a regulatory liability related to the adjustment of Entergy’s net deferredincome taxes that was required by the enactment in December 2017 of a change in the federal corporate income tax rate, which is discussed inNote 2 and 3 to the financial statements.Cash and Cash EquivalentsEntergy considers all unrestricted highly liquid debt instruments with an original maturity of three months or less at date of purchaseto be cash equivalents.Securitization Recovery Trust AccountsThe funds that Entergy Arkansas, Entergy Louisiana, Entergy New Orleans, and Entergy Texas hold in their securitization recoverytrust accounts are not classified as cash and cash equivalents or restricted cash and cash equivalents because of their nature, uses, andrestrictions. These funds are classified as part of other current assets and other investments, depending on the timeframe within which theRegistrant Subsidiary expects to use the funds.Allowance for Doubtful AccountsThe allowance for doubtful accounts reflects Entergy’s best estimate of losses on the accounts receivable balances. The allowance isbased on accounts receivable agings, historical experience, and other currently available evidence. Utility operating company customeraccounts receivable are written off consistent with approved regulatory requirements.InvestmentsEntergy records decommissioning trust funds on the balance sheet at their fair value. Effective January 1, 2018, with the adoption ofASU 2016-01, unrealized gains and losses on investments in equity securities held by the nuclear decommissioning trust funds are recordedin earnings as they occur rather than in other comprehensive income. Because of the ability of the Registrant Subsidiaries to recoverdecommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, the Registrant Subsidiarieshave 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 unrealizedtrust earnings not currently expected to be needed to decommission the plant. Decommissioning trust funds for the Entergy WholesaleCommodities nuclear plants do not meet the criteria for regulatory accounting treatment. Accordingly, unrealized gains/(losses) recorded onthe equity securities in the trust funds are recognized in56 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsearnings. Unrealized gains recorded on the available-for-sale debt securities in the trust funds are recognized in the accumulated othercomprehensive income component of shareholders’ equity. Unrealized losses (where cost exceeds fair market value) on the available-for-saledebt securities in the trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unlessthe unrealized loss is other than temporary and therefore recorded in earnings. A portion of Entergy’s decommissioning trust funds are heldin a wholly-owned registered investment company, and unrealized gains and losses on both the equity and debt securities held in theregistered investment company are recognized in earnings. The assessment of whether an investment in an available-for-sale debt securityhas suffered an other-than-temporary impairment is based on whether Entergy has the intent to sell or more likely than not will be requiredto sell the debt security before recovery of its amortized costs. Further, if Entergy does not expect to recover the entire amortized cost basisof the debt security, an other-than-temporary impairment is considered to have occurred and it is measured by the present value of cash flowsexpected to be collected less the amortized cost basis (credit loss). Entergy’s trusts are managed by third parties who operate in accordancewith agreements that define investment guidelines and place restrictions on the purchases and sales of investments. See Note 16 to thefinancial statements for details on the decommissioning trust funds.Equity Method InvestmentsEntergy owns investments that are accounted for under the equity method of accounting because Entergy’s ownership level results insignificant influence, but not control, over the investee and its operations. Entergy records its share of the investee’s comprehensive earningsand losses in income and as an increase or decrease to the investment account. Any cash distributions are charged against the investmentaccount. Entergy discontinues the recognition of losses on equity investments when its share of losses equals or exceeds its carrying amountfor an investee plus any advances made or commitments to provide additional financial support. Derivative Financial Instruments and Commodity DerivativesThe accounting standards for derivative instruments and hedging activities require that all derivatives be recognized at fair value onthe balance sheet, either as assets or liabilities, unless they meet various exceptions including the normal purchase/normal sale criteria. Thechanges in the fair value of recognized derivatives are recorded each period in current earnings or other comprehensive income, dependingon whether a derivative is designated as part of a hedge transaction and the type of hedge transaction. Due to regulatory treatment, anoffsetting regulatory asset or liability is recorded for changes in fair value of recognized derivatives for the Registrant Subsidiaries.Contracts for commodities that will be physically delivered in quantities expected to be used or sold in the ordinary course ofbusiness, including certain purchases and sales of power and fuel, meet the normal purchase, normal sales criteria and are not recognized onthe balance sheet. Revenues and expenses from these contracts are reported on a gross basis in the appropriate revenue and expensecategories as the commodities are received or delivered.For other contracts for commodities in which Entergy is hedging the variability of cash flows related to a variable-rate asset, liability,or forecasted transactions that qualify as cash flow hedges, the changes in the fair value of such derivative instruments are reported in othercomprehensive income. To qualify for hedge accounting, the relationship between the hedging instrument and the hedged item must bedocumented to include the risk management objective and strategy and, at inception and on an ongoing basis, the effectiveness of the hedgein offsetting the changes in the cash flows of the item being hedged. Gains or losses accumulated in other comprehensive income arereclassified to earnings in the periods when the underlying transactions actually occur. Prior to 2019, the ineffective portions of all hedgesare recognized in current-period earnings. Effective January 1, 2019 with the adoption of ASU 2017-12 there will no longer be separaterecognition of the ineffective portion of highly effective hedges. Changes in the fair value of derivative instruments that are not designated ascash flow hedges are recorded in current-period earnings on a mark-to-market basis.Entergy has determined that contracts to purchase uranium do not meet the definition of a derivative under the accounting standardsfor derivative instruments because they do not provide for net settlement and the uranium markets57 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsare not sufficiently liquid to conclude that forward contracts are readily convertible to cash. If the uranium markets do become sufficientlyliquid in the future and Entergy begins to account for uranium purchase contracts as derivative instruments, the fair value of these contractswould be accounted for consistent with Entergy’s other derivative instruments. See Note 15 to the financial statements for further details onEntergy’s derivative instruments and hedging activities.Fair ValuesThe estimated fair values of Entergy’s financial instruments and derivatives are determined using historical prices, bid prices, marketquotes, and financial modeling. Considerable judgment is required in developing the estimates of fair value. Therefore, estimates are notnecessarily indicative of the amounts that Entergy could realize in a current market exchange. Gains or losses realized on financialinstruments held by regulated businesses may be reflected in future rates and therefore do not affect net income. Entergy considers thecarrying amounts of most financial instruments classified as current assets and liabilities to be a reasonable estimate of their fair valuebecause of the short maturity of these instruments. See Note 15 to the financial statements for further discussion of fair value.Impairment of Long-lived AssetsEntergy periodically reviews long-lived assets held in all of its business segments whenever events or changes in circumstancesindicate that recoverability of these assets is uncertain. Generally, the determination of recoverability is based on the undiscounted net cashflows expected to result from such operations and assets. Projected net cash flows depend on the expected operating life of the assets, thefuture operating costs associated with the assets, the efficiency and availability of the assets and generating units, and the future market andprice for energy and capacity over the remaining life of the assets. Because the values of their long-lived assets are impaired, and theirremaining estimated operating lives significantly reduced, the Entergy Wholesale Commodities nuclear plants, except for Palisades, arecharging additional expenditures for capital assets directly to expense when incurred because their undiscounted cash flows are insufficient torecover the carrying amount of these capital additions. See Note 14 to the financial statements for further discussions of the impairments ofthe Entergy Wholesale Commodities nuclear plants.River Bend AFUDCThe River Bend AFUDC gross-up is a regulatory asset that represents the incremental difference imputed by the LPSC between theAFUDC actually recorded by Entergy Louisiana on a net-of-tax basis during the construction of River Bend and what the AFUDC wouldhave been on a pre-tax basis. The imputed amount was only calculated on that portion of River Bend that the LPSC allowed in rate base andis being amortized through August 2025.Reacquired DebtThe premiums and costs associated with reacquired debt of Entergy’s Utility operating companies and System Energy (except thatportion allocable to the deregulated operations of Entergy Louisiana) are included in regulatory assets and are being amortized over the life ofthe related new issuances, or over the life of the original debt issuance if the debt is not refinanced, in accordance with ratemaking treatment.Taxes Imposed on Revenue-Producing TransactionsGovernmental authorities assess taxes that are both imposed on and concurrent with a specific revenue-producing transactionbetween a seller and a customer, including, but not limited to, sales, use, value added, and some excise taxes. Entergy presents these taxes ona net basis, excluding them from revenues, unless required to report them differently by a regulatory authority.58 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNew Accounting PronouncementsIn June 2016 the FASB issued ASU No. 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losseson Financial Instruments.” The ASU requires entities to record a valuation allowance on financial instruments recorded at amortized cost orclassified as available-for-sale debt securities for the total credit losses expected over the life of the instrument. Increases and decreases in thevaluation allowance will be recognized immediately in earnings. Entergy adopted ASU 2016-13 in the first quarter 2020. Adoption of ASU2016-13 did not materially affect Entergy’s results of operations, financial position, or cash flows.In September 2018 the FASB issued ASU No. 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service.” The ASU requiresentities to capitalize implementation costs associated with cloud computing arrangements classified as hosting arrangements and amortizethose costs over the contract term. These costs are required to be capitalized in the same line as prepayments of the costs, and subsequentlyamortized in the same lines as the hosting service element of the arrangement. Entergy adopted ASU 2018-15 in the first quarter 2020. Entergy adopted ASU 2018-15 on a prospective basis, which will affect its statement of financial position by presenting implementation costsfor hosting arrangements as prepayments rather than utility plant, and will affect its results of operations by amortizing those costs asoperation and maintenance expense, rather than depreciation and amortization, over the contract term of the arrangement.59 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 2. RATE AND REGULATORY MATTERS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, EntergyMississippi, Entergy New Orleans, Entergy Texas, and System Energy) Regulatory Assets and Regulatory LiabilitiesRegulatory assets represent probable future revenues associated with costs that Entergy expects to recover from customers throughthe regulatory ratemaking process under which the Utility business operates. Regulatory liabilities represent probable future reductions inrevenues associated with amounts that Entergy expects to benefit customers through the regulatory ratemaking process under which theUtility business operates. In addition to the regulatory assets and liabilities that are specifically disclosed on the face of the balance sheets, thetables below provide detail of “Other regulatory assets” and “Other regulatory liabilities” that are included on Entergy’s and the RegistrantSubsidiaries’ balance sheets as of December 31, 2019 and 2018: Other Regulatory AssetsEntergy 2019 2018 (In Millions)Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other PostretirementBenefits, and Non-Qualified Pension Plans) (a)$2,942.4 $2,611.5Asset retirement obligation - recovery dependent upon timing of decommissioning of nuclear unitsor dismantlement of non-nuclear power plants (Note 9) (a)920.4 814.3Removal costs - recovered through depreciation rates (Note 9)421.0 375.8Storm damage costs, including hurricane costs - recovered through securitization and retail rates(Note 2 – Storm Cost Recovery Filings with Retail Regulators) (Note 5)372.8 452.7Retired electric and gas meters - recovered through retail rates as determined by retail regulators(Note 2 - Advanced Metering Infrastructure (AMI) Filings)205.6 —Opportunity Sales - recovery will be determined after final order in proceeding (Note 2 - EntergyArkansas Opportunity Sales Proceeding) (b)116.3 116.3Unamortized loss on reacquired debt - recovered over term of debt66.6 74.5Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana SecuritizationBonds - Little Gypsy)29.9 52.1Attorney General litigation costs (Note 2 - Mississippi Attorney General Complaint) (b)29.5 23.6New nuclear generation development costs (Note 2 - New Nuclear Generation DevelopmentCosts) (b)21.6 29.0Retail rate deferrals - recovered through rate riders as rates are redetermined by retail regulators15.7 39.0Other150.3 157.7Entergy Total$5,292.1 $4,746.560 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Arkansas 2019 2018 (In Millions)Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other PostretirementBenefits, and Non-Qualified Pension Plans) (a)$796.5 $747.2Asset retirement obligation - recovery dependent upon timing of decommissioning of nuclear unitsor dismantlement of non-nuclear power plants (Note 9) (a)433.0 381.7Removal costs - recovered through depreciation rates (Note 9)168.9 138.3Opportunity sales - recovery will be determined after final order in proceeding (Note 2 - EntergyArkansas Opportunity Sales Proceeding) (b)116.3 116.3Retired electric meters - recovered over 15-year period through March 2034 (Note 2 - AdvancedMetering Infrastructure (AMI) Filings)50.4 —Storm damage costs - recovered either through securitization or retail rates (Note 5 - EntergyArkansas Securitization Bonds)46.1 60.7Unamortized loss on reacquired debt - recovered over term of debt18.3 21.2ANO Fukushima and Flood Barrier costs - recovered through retail rates through February 2026(Note 2 - Retail Rate Proceedings) (b)10.9 12.6Retail rate deferrals - recovered through rate riders as rates are redetermined annually (b)2.3 20.5Other24.2 36.5Entergy Arkansas Total$1,666.9 $1,535.0Entergy Louisiana 2019 2018 (In Millions)Pension & postretirement costs (Note 11 – Qualified Pension Plans and Non-Qualified PensionPlans) (a)$787.7 $711.8Asset Retirement Obligation - recovery dependent upon timing of decommissioning of nuclear unitsor dismantlement of non-nuclear power plants (Note 9) (a)262.5 232.9Retired electric meters - recovered over a 22-year period through July 2041 (Note 2 - AdvancedMetering Infrastructure (AMI) Filings)101.1 —Storm damage costs - recovered through retail rates (Note 2 - Storm Cost Recovery Filings withRetail Regulators)45.7 17.9Little Gypsy costs – recovered through securitization (Note 5 – Entergy Louisiana SecuritizationBonds - Little Gypsy)27.6 49.8New nuclear generation development costs - recovery through formula rate plan December 2014through November 2022 (Note 2 - New Nuclear Generation Development Costs) (b)21.2 28.5Unamortized loss on reacquired debt - recovered over term of debt20.4 22.5Business combination external costs deferral - recovery through formula rate plan December 2015through November 2025 (b)10.8 12.4River Bend AFUDC - recovered through August 2025 (Note 1 – River Bend AFUDC)9.1 11.0Other29.1 18.3Entergy Louisiana Total$1,315.2 $1,105.161 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Mississippi 2019 2018 (In Millions)Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other PostretirementBenefits, and Non-Qualified Pension Plans) (a)$234.4 $215.9Removal costs - recovered through depreciation rates (Note 9)80.8 63.5Attorney General litigation costs (Note 2 - Mississippi Attorney General Complaint) (b)29.5 23.6Unamortized loss on reacquired debt - recovered over term of debt14.9 16.2Asset retirement obligation - recovery dependent upon timing of dismantlement of non-nuclearpower plants (Note 9) (a)7.8 7.2Retail rate deferrals - recovered through rate riders as rates are redetermined annually7.6 16.6Other3.0 —Entergy Mississippi Total$378.0 $343.0Entergy New Orleans 2019 2018 (In Millions)Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other PostretirementBenefits, and Non-Qualified Pension Plans) (a)$85.9 $96.2Storm damage costs, including hurricane costs - recovered through retail rates and securitization(Note 2 - Storm Cost Recovery Filings with Retail Regulators)59.6 70.4Removal costs - recovered through depreciation rates (Note 9)52.9 49.3Retired meters - recovered over a 12-year period through July 2031 (Note 2 - Advanced MeteringInfrastructure (AMI) Filings) (b)24.6 —Retired plant costs - recovered over a 20-year period through July 2039 (Note 2 - Retail RateProceedings)10.0 —Rate case costs - recovered over a 3-year period through July 2022 (Note 2 - Retail RateProceedings)7.0 —Asset retirement obligation - recovery dependent upon timing of dismantlement of non-nuclearpower plants (Note 9) (a)4.9 4.5Algiers customer migration costs - recovered over a 5-year period through July 2024 (Note 2 -Retail Rate Proceedings)4.9 —Unamortized loss on reacquired debt - recovered over term of debt2.3 2.6Other7.3 6.8Entergy New Orleans Total$259.4 $229.862 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Texas 2019 2018 (In Millions)Storm damage costs, including hurricane costs - recovered through securitization and retail rates(Note 5 - Entergy Texas Securitization Bonds)$221.4 $303.6Pension & postretirement costs (Note 11 – Qualified Pension Plans, Other PostretirementBenefits, and Non-Qualified Pension Plans) (a)167.7 171.8Removal costs - recovered through depreciation rates (Note 9)42.5 50.9Retired electric meters - recovered over 13-year period through February 2032 (Note 2 - AdvancedMetering Infrastructure (AMI) Filings)28.4 —Neches and Sabine costs - recovered over a 10-year period through September 2028 (Note 2 - RetailRate Proceedings)21.2 23.6Transition to competition costs - recovered over a 15-year period through February 202114.9 26.7Unamortized loss on reacquired debt - recovered over term of debt7.7 8.2Other8.8 13.2Entergy Texas Total$512.6 $598.0System Energy 2019 2018 (In Millions)Asset retirement obligation - recovery dependent upon timing of decommissioning (Note 9) (a)$210.9 $186.9Pension & postretirement costs (Note 11 – Qualified Pension Plans and Other PostretirementBenefits) (a)200.3 179.3Removal costs - recovered through depreciation rates (Note 9)75.9 76.4Unamortized loss on reacquired debt - recovered over term of debt3.0 3.8System Energy Total$490.1 $446.4(a)Does not earn a return on investment, but is offset by related liabilities.(b)Does not earn a return on investment.63 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsOther Regulatory LiabilitiesEntergy 2019 2018 (In Millions)Unrealized gains on nuclear decommissioning trust funds (Note 16) (a)$1,300.1 $815.9Vidalia purchased power agreement (Note 8) (b)127.3 139.7Louisiana Act 55 financing savings obligation (Note 2 - Storm Cost Recovery Filings with RetailRegulators) (b)97.1 111.1Retail rate rider over-recovery - refunded through rate riders as rates are redetermined annually62.3 84.6Grand Gulf sale-leaseback - (Note 5 - Grand Gulf Sale-Leaseback Transactions)55.6 55.6Future formula rate plan revenue reductions (Note 2 - Retail Rate Proceedings)51.1 44.4Entergy Arkansas’s accumulated accelerated Grand Gulf amortization - will be returned tocustomers when approved by the APSC and the FERC44.4 44.4Asset retirement obligation - return to customers dependent upon timing of decommissioning (Note9) (a)37.2 39.1Business combination guaranteed customer benefits - returned to customers through retail ratesand fuel rates December 2015 through November 202435.7 50.8Internal restructuring guaranteed customer credits (Note 2 - Retail Rate Proceedings)33.0 39.6Advanced metering system (AMS) surcharge - return to customers dependent upon AMS spend(Note 2 - Advanced Metering Infrastructure (AMI) Filings)25.3 16.5Excess decommissioning recovery for Willow Glen - (Note 14 - Dispositions)21.2 31.9Entergy Mississippi’s accumulated accelerated Grand Gulf amortization - amortized andcredited through the Unit Power Sales Agreement17.8 25.0Income tax rate change - returned to electric and gas customers through retail rates (Note 2 - RetailRate Proceedings)13.9 74.7Removal costs - returned to customers through depreciation rates (Note 9)2.4 18.8Other36.6 28.2Entergy Total$1,961.0 $1,620.3Entergy Arkansas 2019 2018 (In Millions)Unrealized gains on nuclear decommissioning trust funds (Note 16) (a)$460.3 $297.2Future formula rate plan revenue reductions (Note 2 - Retail Rate Proceedings)46.6 35.1Internal restructuring guaranteed customer credits (Note 2 - Retail Rate Proceedings)33.0 39.6Retail rate rider over-recovery - refunded through rate riders as rates are redetermined annually19.7 30.8Entergy Arkansas Total$559.6 $402.764 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Louisiana 2019 2018 (In Millions)Unrealized gains on nuclear decommissioning trust funds (Note 16) (a)$436.5 $274.1Vidalia purchased power agreement (Note 8) (b)127.3 139.7Louisiana Act 55 financing savings obligation (Note 2 - Storm Cost Recovery Filings with RetailRegulators) (b)97.1 111.1Asset Retirement Obligation - return to customers dependent upon timing of decommissioning(Note 9) (a)37.1 39.1Business combination guaranteed customer benefits - returned to customers through retail ratesand fuel rates December 2015 through November 202435.7 50.8Excess decommissioning recovery for Willow Glen - returned over one-year period through retailrates (Note 14 - Dispositions)21.2 31.9Removal costs - returned to customers through depreciation rates (Note 9)2.4 18.8Income tax rate change - returned to electric customers through retail rates September 2018 throughAugust 2019 (Note 2 - Retail Rate Proceedings)— 49.9Other36.8 33.4Entergy Louisiana Total$794.1 $748.8Entergy Mississippi 2019 2018 (In Millions)Retail rate deferrals - returned to customers through rate riders as rates are redetermined annually$14.6 $1.3Future formula rate plan revenue reductions (Note 2 - Retail Rate Proceedings)4.5 9.3Grand Gulf Over-Recovery - returned to customers through rate riders as rates are redeterminedannually2.4 22.6Other— 0.4Entergy Mississippi Total$21.5 $33.6Entergy Texas 2019 2018 (In Millions)Advanced metering system (AMS) surcharge - returned to customers dependent upon AMS spend(Note 2 - Advanced Metering Infrastructure (AMI) Filings)$25.3 $16.5Income tax rate change - refunded through a rate rider (Note 2 - Retail Rate Proceedings)10.4 23.1Transition to competition costs - returned to customers through rate riders when rates areredetermined periodically3.8 4.2Other2.6 4.1Entergy Texas Total$42.1 $47.965 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsSystem Energy 2019 2018 (In Millions)Unrealized gains on nuclear decommissioning trust funds (Note 16) (a)$403.3 $244.6Grand Gulf sale-leaseback - (Note 5 - Grand Gulf Sale-Leaseback Transactions)55.6 55.6Entergy Arkansas’s accumulated accelerated Grand Gulf amortization - will be returned tocustomers when approved by the APSC and the FERC44.4 44.4Entergy Mississippi’s accumulated accelerated Grand Gulf amortization - amortized andcredited through the Unit Power Sales Agreement17.8 25.0Other12.3 12.3System Energy Total$533.4 $381.9(a)Offset by related asset.(b)As a result of the enactment of the Tax Cuts and Jobs Act, in December 2017, and the lowering of the federal corporate income taxrate from 35% to 21% effective January 2018, the Vidalia purchased power agreement regulatory liability was reduced by $30.5million and the Louisiana Act 55 financing savings obligation regulatory liabilities were reduced by $25.0 million, withcorresponding increases to Other regulatory credits on the income statement. The effects of the Tax Cuts and Jobs Act are discussedfurther in Note 3 to the financial statements.Regulatory activity regarding the Tax Cuts and Jobs ActSee the “Other Tax Matters - Tax Cuts and Jobs Act” section in Note 3 to the financial statements for discussion of the effects ofthe December 2017 enactment of the Tax Cuts and Jobs Act, including its effects on Entergy’s and the Registrant Subsidiaries’ regulatoryasset/liability for income taxes.Entergy ArkansasConsistent with its previously stated intent to return unprotected excess accumulated deferred income taxes to customers asexpeditiously as possible, Entergy Arkansas initiated a tariff proceeding in February 2018 proposing to establish a tax adjustment rider toprovide retail customers with certain tax benefits of $467 million associated with the Tax Act. For the residential customer class,unprotected excess accumulated deferred income taxes were returned to customers over a 21-month period from April 2018 throughDecember 2019. For all other customer classes, unprotected excess accumulated deferred income taxes were returned to customers over anine-month period from April 2018 through December 2018. A true-up provision also was included in the rider, with any over- or under-returned unprotected excess accumulated deferred income taxes credited or billed to customers during the billing month of January 2020,with any residual amounts of over- or under-returned unprotected excess accumulated deferred income taxes to be flowed through EntergyArkansas’s energy cost recovery rider. In March 2018 the APSC approved the tax adjustment rider effective with the first billing cycle ofApril 2018.As discussed below, in July 2018, Entergy Arkansas made its formula rate plan filing to set its formula rate for the 2019 calendaryear. A hearing was held in May 2018 regarding the APSC’s inquiries into the effects of the Tax Act, including Entergy Arkansas’s proposalto utilize its formula rate plan rider for its customers to realize the remaining benefits of the Tax Act. Entergy Arkansas’s formula rate planrider included a netting adjustment that compared actual annual results to the allowed rate of return on common equity. In July 2018 theAPSC issued an order agreeing with Entergy Arkansas’s proposal to have the effects of the Tax Act on current income tax expense flowthrough Entergy Arkansas’s formula rate plan rider and with Entergy Arkansas’s treatment of protected and unprotected excess accumulateddeferred income taxes. The APSC also directed Entergy Arkansas to submit in the tax adjustment rider proceeding, discussed above, theadjustments to all other riders affected by the Tax Act and to include an amendment66 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsfor a true up mechanism where a rider affected by the Tax Act does not already contain a true-up mechanism. Pursuant to a 2018 settlementagreement in Entergy Arkansas’s formula rate plan proceeding, Entergy Arkansas also removed the net operating loss accumulated deferredincome tax asset caused by the Tax Act from Entergy Arkansas’s tax adjustment rider. Entergy Arkansas’s compliance tariff filings wereaccepted by the APSC in October 2018.Entergy LouisianaIn an electric formula rate plan settlement approved by the LPSC in April 2018 the parties agreed that Entergy Louisiana wouldreturn to customers one-half of its eligible unprotected excess deferred income taxes from May 2018 through December 2018 and return tocustomers the other half from January 2019 through August 2022. In addition, the settlement provided that in order to flow back tocustomers certain other tax benefits created by the Tax Act, Entergy Louisiana established a regulatory liability effective January 1, 2018 inthe amount of $9.1 million per month to reflect these tax benefits already included in retail rates until new base rates under the formula rateplan were established in September 2018, and this regulatory liability was returned to customers over the September 2018 through August2019 formula rate plan rate-effective period. The LPSC staff and intervenors in the settlement reserved the right to obtain data from EntergyLouisiana to confirm the determination of excess accumulated deferred income taxes resulting from the Tax Act and the analysis thereof aspart of the formula rate plan review proceeding for the 2017 test year filing which, as discussed below, Entergy Louisiana filed in June 2018.Entergy MississippiEntergy Mississippi filed its 2018 formula rate plan in March 2018 and included a proposal to return all of its unprotected excessaccumulated deferred income taxes to customers through rates or in exchange for other assets, or a combination of both, by the end of 2018.In June 2018 the MPSC approved a stipulation filed by Entergy Mississippi and the Mississippi Public Utilities Staff in EntergyMississippi’s formula rate plan filing that addressed Entergy Mississippi’s 2018 formula rate plan evaluation report and the ratemakingeffects of the Tax Act. The stipulation provided for incorporating the reduction of the statutory federal income tax rate through EntergyMississippi’s formula rate plan. The stipulation approved in June 2018 provided for the flow-back of protected excess accumulated deferredincome taxes over the remaining lives of the assets through the formula rate plan. The stipulation also provided for the offset of unprotectedexcess accumulated deferred income taxes of $127.2 million against net utility plant and $2.2 million against other regulatory assets, and thereturn to customers of the remaining balance of unprotected excess accumulated deferred income taxes as recovery of a portion of fuel oilinventory and customer bill credits over a three-month period from July 2018 through September 2018, with an insignificant true-upreflected in the November 2018 power management rider filing. Entergy Mississippi recorded the reduction against net utility plant and otherregulatory assets in June 2018. In third quarter 2018, Entergy Mississippi returned unprotected excess accumulated deferred income taxes of$25.8 million through customer bill credits and $5.8 million through the sale of fuel oil inventory.Entergy New OrleansAfter enactment of the Tax Act the City Council passed a resolution ordering Entergy New Orleans to, effective January 1, 2018,record deferred regulatory liabilities to account for the Tax Act’s effect on Entergy New Orleans’s revenue requirement and to make a filingby mid-March 2018 regarding the Tax Act’s effects on Entergy New Orleans’s operating income and rate base and potential mechanisms forcustomers to receive benefits of the Tax Act. The City Council’s resolution also directed Entergy New Orleans to request that EntergyServices file with the FERC for revisions of the Unit Power Sales Agreement and MSS-4 replacement tariffs to address the return of excessaccumulated deferred income taxes. Entergy submitted filings of this type to the FERC.In March 2018, Entergy New Orleans filed its response to the resolution stating that the Tax Act reduced income tax expense fromwhat was then reflected in rates by approximately $8.2 million annually for electric operations and by approximately $1.3 million annuallyfor gas operations. In the filing, Entergy New Orleans proposed to return to customers from June 2018 through August 2019 the benefits ofthe reduction in income tax expense and its unprotected excess accumulated deferred income taxes through a combination of bill credits andinvestments in energy efficiency67 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsprograms, grid modernization, and Smart City projects. Entergy New Orleans submitted supplemental information in April 2018 and May2018. Shortly thereafter, Entergy New Orleans and the City Council’s advisors reached an agreement in principle that provides for benefitsthat will be realized by Entergy New Orleans customers through bill credits that started in July 2018 and offsets to future investments inenergy efficiency programs, grid modernization, and Smart City projects, as well as additional benefits related to the filings made at theFERC. The agreement in principle was approved by the City Council in June 2018.Entergy TexasAfter enactment of the Tax Act the PUCT issued an order requiring most utilities, including Entergy Texas, beginning January 25,2018, to record a regulatory liability for the difference between revenues collected under existing rates and revenues that would have beencollected had existing rates been set using the new federal income tax rates and also for the balance of excess accumulated deferred incometaxes. Entergy Texas had previously provided information to the PUCT staff and stated that it expected the PUCT to address the lower taxexpense as part of Entergy Texas’s rate case expected to be filed in May 2018. Entergy Texas also stated that it would be inappropriate forthe PUCT to require a refund of the reduction in income tax expense in 2018 resulting from the Act on a retroactive basis and without acomprehensive review of Entergy Texas’s cost of service and earned return on equity.In May 2018, Entergy Texas filed its 2018 base rate case with the PUCT. Entergy Texas’s proposed rates and revenues reflected theinclusion of the federal income tax reductions due to the Tax Act. The PUCT issued an order in December 2018 establishing that 1) $25million be credited to customers through a rider to reflect the lower federal income tax rate applicable to Entergy Texas from January 2018through the date new rates were implemented, 2) $242.5 million of protected excess accumulated deferred income taxes be returned tocustomers through base rates under the average rate assumption method over the lives of the associated assets, and 3) $185.2 million ofunprotected excess accumulated deferred income taxes be returned to customers through a rider. The unprotected excess accumulateddeferred income taxes rider includes carrying charges and is in effect over a period of 12 months for larger customers and over a period offour years for other customers.System EnergyIn a filing made with the FERC in March 2018, Entergy proposed revisions to the Unit Power Sales Agreement, among otheragreements, to reflect the effects of the Tax Act. In the filing System Energy proposed to return all of its unprotected excess accumulateddeferred income taxes to its customers by the end of 2018. In May 2018 the FERC accepted System Energy’s proposed tax revisions with aneffective date of June 1, 2018, subject to refund and the outcome of settlement and hearing procedures. Settlement discussions terminated inApril 2019, and the hearing is scheduled for March 2020. The retail regulators of the Utility operating companies that are parties to the UnitPower Sales Agreement are challenging whether there are excess tax liabilities associated with uncertain tax positions related to nucleardecommissioning.Fuel and purchased power cost recoveryThe Utility operating companies are allowed to recover fuel and purchased power costs through fuel mechanisms included in electricand gas rates that are recorded as fuel cost recovery revenues. The difference between revenues collected and the current fuel and purchasedpower costs is generally recorded as “Deferred fuel costs” on the Utility operating companies’ financial statements. The table below showsthe amount of deferred fuel costs as of December 31, 2019 and 2018 that Entergy expects to recover (or return to customers) through fuelmechanisms, subject to subsequent regulatory review.68 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements 2019 2018 (In Millions)Entergy Arkansas (a)$14.0 $86.5Entergy Louisiana (b)$112.5 $136.7Entergy Mississippi($70.4) $8.0Entergy New Orleans (b)($0.8) $2.8Entergy Texas($13.0) ($19.7)(a)Includes $67.7 million in 2019 and $67.3 million in 2018 of fuel and purchased power costs whose recovery periods areindeterminate but are expected to be recovered over a period greater than twelve months.(b)Includes $168.1 million in both years for Entergy Louisiana and $4.1 million in both years for Entergy New Orleans of fuel,purchased power, and capacity costs, which do not currently earn a return on investment and whose recovery periods areindeterminate but are expected to be recovered over a period greater than twelve months.Entergy ArkansasProduction Cost Allocation RiderThe APSC approved a production cost allocation rider for recovery from customers of the retail portion of the costs allocated toEntergy Arkansas as a result of the System Agreement proceedings, which are discussed in the “System Agreement Cost EqualizationProceedings” section below. Energy Cost Recovery RiderEntergy Arkansas’s retail rates include an energy cost recovery rider to recover fuel and purchased energy costs in monthly customerbills. The rider utilizes the prior calendar-year energy costs and projected energy sales for the twelve-month period commencing on April 1of each year to develop an energy cost rate, which is redetermined annually and includes a true-up adjustment reflecting the over- or under-recovery, including carrying charges, of the energy costs for the prior calendar year. The energy cost recovery rider tariff also allows aninterim rate request depending upon the level of over- or under-recovery of fuel and purchased energy costs.In January 2014, Entergy Arkansas filed a motion with the APSC relating to its upcoming energy cost rate redetermination filing thatwas made in March 2014. In that motion, Entergy Arkansas requested that the APSC authorize Entergy Arkansas to exclude from theredetermination of its 2014 energy cost rate $65.9 million of incremental fuel and replacement energy costs incurred in 2013 as a result of theANO stator incident. Entergy Arkansas requested that the APSC authorize Entergy Arkansas to retain that amount in its deferred fuelbalance, with recovery to be reviewed in a later period after more information was available regarding various claims associated with theANO stator incident. In February 2014 the APSC approved Entergy Arkansas’s request to retain that amount in its deferred fuel balance. InJuly 2017, Entergy Arkansas filed for a change in rates pursuant to its formula rate plan rider. In that proceeding, the APSC approved asettlement agreement agreed upon by the parties, including a provision that requires Entergy Arkansas to initiate a regulatory proceeding forthe purpose of recovering funds currently withheld from rates and related to the stator incident, including the $65.9 million of deferred fueland purchased energy costs previously noted, subject to certain timelines and conditions set forth in the settlement agreement. See the “ANODamage, Outage, and NRC Reviews” section in Note 8 to the financial statements for further discussion of the ANO stator incident.In March 2017, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider,which reflected an increase in the rate from $0.01164 per kWh to $0.01547 per kWh. The APSC staff filed testimony in March 2017recommending that the redetermined rate be implemented with the first billing cycle of April 2017 under the normal operation of the tariff.Accordingly, the redetermined rate went into effect on69 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsMarch 31, 2017 pursuant to the tariff. In July 2017 the Arkansas Attorney General requested additional information to support certain of thecosts included in Entergy Arkansas’s 2017 energy cost rate redetermination.In March 2018, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider,which reflected an increase in the rate from $0.01547 per kWh to $0.01882 per kWh. The Arkansas Attorney General filed a response toEntergy Arkansas’s annual redetermination filing requesting that the APSC suspend the proposed tariff to investigate the amount of theredetermination or, alternatively, to allow recovery subject to refund. Among the reasons the Attorney General cited for suspension werequestions pertaining to how Entergy Arkansas forecasted sales and potential implications of the Tax Act. Entergy Arkansas replied to theAttorney General’s filing and stated that, to the extent there are questions pertaining to its load forecasting or the operation of the energy costrecovery rider, those issues exceed the scope of the instant rate redetermination. Entergy Arkansas also stated that potential effects of the TaxAct are appropriately considered in the APSC’s separate proceeding regarding potential implications of the tax law. The APSC general stafffiled a reply to the Attorney General’s filing and agreed that Entergy Arkansas’s filing complied with the terms of the energy cost recoveryrider. The redetermined rate became effective with the first billing cycle of April 2018. Subsequently in April 2018 the APSC issued an orderdeclining to suspend Entergy Arkansas’s energy cost recovery rider rate and declining to require further investigation at that time of theissues suggested by the Attorney General in the proceeding. Following a period of discovery, the Attorney General filed a supplementalresponse in October 2018 raising new issues with Entergy Arkansas’s March 2018 rate redetermination and asserting that $45.7 million ofthe increase should be collected subject to refund pending further investigation. Entergy Arkansas filed to dismiss the Attorney General’ssupplemental response, the APSC general staff filed a motion to strike the Attorney General’s filing, and the Attorney General filed asupplemental response disputing Entergy Arkansas and the APSC staff’s filing. Applicable APSC rules and processes authorize its generalstaff to initiate periodic audits of Entergy Arkansas’s energy cost recovery rider. In late-2018 the APSC general staff notified EntergyArkansas it has initiated an audit of the 2017 fuel costs. The time in which the audit will be complete is uncertain at this time.In March 2019, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider,which reflected a decrease from $0.01882 per kWh to $0.01462 per kWh and became effective with the first billing cycle in April 2019. InMarch 2019 the Arkansas Attorney General filed a response to Entergy Arkansas’s annual adjustment and included with its filing a motionfor investigation of alleged overcharges to customers in connection with the FERC’s October 2018 order in the opportunity sales proceeding.Entergy Arkansas filed its response to the Attorney General’s motion in April 2019 in which Entergy Arkansas stated its intent to initiate aproceeding to address recovery issues related to the October 2018 FERC order. In May 2019, Entergy Arkansas initiated the opportunitysales recovery proceeding, discussed below, and requested that the APSC establish that proceeding as the single designated proceeding inwhich interested parties may assert claims related to the appropriate retail rate treatment of the FERC October 2018 order and related FERCorders in the opportunity sales proceeding. In June 2019 the APSC granted Entergy Arkansas’s request and also denied the AttorneyGeneral’s motion in the energy cost recovery proceeding seeking an investigation into Entergy Arkansas’s annual energy cost recovery rideradjustment and referred the evaluation of such matters to the opportunity sales recovery proceeding.Entergy LouisianaEntergy Louisiana recovers electric fuel and purchased power costs for the billing month based upon the level of such costs incurredtwo months prior to the billing month. Entergy Louisiana’s purchased gas adjustments include estimates for the billing month adjusted by asurcharge or credit that arises from an annual reconciliation of fuel costs incurred with fuel cost revenues billed to customers, includingcarrying charges.In July 2014 the LPSC authorized its staff to initiate an audit of the fuel adjustment clause filings by Entergy Gulf States Louisiana,whose business was combined with Entergy Louisiana in 2015. The audit includes a review of the reasonableness of charges flowed throughEntergy Gulf States Louisiana’s fuel adjustment clause for the period from 2010 through 2013. In January 2019 the LPSC staff consultantissued its audit report. In its report, the LPSC staff consultant recommended that Entergy Louisiana refund approximately $900,000, plusinterest, to customers based70 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsupon the imputation of a claim of vendor fault in servicing its nuclear plant. Entergy Louisiana recorded a provision in the first quarter 2019for the potential outcome of the audit. In August 2019, Entergy Louisiana filed direct testimony challenging the basis for the LPSC staff’srecommended disallowance and providing an alternative calculation of replacement power costs should it be determined that a disallowanceis appropriate. Entergy Louisiana’s calculation would require no refund to customers.In July 2014 the LPSC authorized its staff to initiate an audit of Entergy Louisiana’s fuel adjustment clause filings. The auditincludes a review of the reasonableness of charges flowed by Entergy Louisiana through its fuel adjustment clause for the period from 2010through 2013. In January 2019 the LPSC staff issued its audit report recommending that Entergy Louisiana refund approximately $7.3million, plus interest, to customers based upon the imputation of a claim of vendor fault in servicing its nuclear plant. Entergy Louisianarecorded a provision in the first quarter 2019 for the potential outcome of the audit. In August 2019, Entergy Louisiana filed direct testimonychallenging the basis for the LPSC staff’s recommended disallowance and providing an alternative calculation of replacement power costsshould it be determined that a disallowance is appropriate. Entergy Louisiana’s calculation would require a refund to customers ofapproximately $4.3 million, plus interest, as compared to the LPSC staff’s recommendation of $7.3 million, plus interest. Responsivetestimony was filed by the LPSC staff and intervenors in September 2019; all parties either agreed with or did not oppose EntergyLouisiana’s alternative calculation of replacement power costs.In November 2019 the pending LPSC proceedings for the 2010-2013 Entergy Louisiana and Entergy Gulf States Louisiana auditswere consolidated to facilitate a settlement of both fuel audits. In December 2019 an unopposed settlement was reached that requires a refundto legacy Entergy Louisiana customers of approximately $2.3 million, including interest, and no refund to legacy Entergy Gulf StatesLouisiana customers. The LPSC approved the settlement in January 2020.In June 2016 the LPSC issued notice of audits of Entergy Louisiana’s fuel adjustment clause filings and purchased gas adjustmentclause filings for the period 2014 through 2015. In recognition of the business combination that occurred in 2015, the audit notice was issuedto Entergy Louisiana and also includes a review of charges to legacy Entergy Gulf States Louisiana customers prior to the businesscombination. The audits include a review of the reasonableness of charges flowed through Entergy Louisiana’s fuel adjustment clause for theperiod from 2014 through 2015 and charges flowed through Entergy Louisiana’s purchased gas adjustment clause for the period from 2012through 2015. Discovery commenced in March 2017. No report of audit has been issued.In May 2018 the LPSC staff provided notice of audits of Entergy Louisiana’s purchased gas adjustment clause filings. The auditincludes a review of the reasonableness of charges flowed through Entergy Louisiana’s purchased gas adjustment clause for the period from2016 through 2017. Discovery commenced in September 2018. No report of audit has been issued.Entergy MississippiEntergy Mississippi’s rate schedules include an energy cost recovery rider that is adjusted annually to reflect accumulated over- orunder-recoveries. Entergy Mississippi’s fuel cost recoveries are subject to annual audits conducted pursuant to the authority of the MPSC.In January 2017 the MPSC certified to the Mississippi Legislature the audit reports of its independent auditors for the fuel yearending September 30, 2016. In November 2017 the Mississippi Public Utilities Staff separately engaged a consultant to review theSeptember 2016 outage at the Grand Gulf Nuclear Station and to review ongoing operations at Grand Gulf. This engagement continues, andsubsequently, was expanded to include all outages at Grand Gulf that occurred through 2019.In November 2017, Entergy Mississippi filed its annual redetermination of the annual factor to be applied under the energy costrecovery rider. The calculation of the annual factor included an under-recovery of approximately71 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements$61.5 million as of September 30, 2017. In January 2018 the MPSC approved the proposed energy cost factors effective for February 2018bills.In November 2018, Entergy Mississippi filed its annual redetermination of the annual factor to be applied under the energy costrecovery rider. The calculation of the annual factor included an under-recovery of approximately $57 million as of September 30, 2018. InJanuary 2019 the MPSC approved the proposed energy cost factor effective for February 2019 bills.In November 2019, Entergy Mississippi filed its annual redetermination of the annual factor to be applied under the energy costrecovery rider. The calculation of the annual factor included an over-recovery of approximately $39.6 million as of September 30, 2019. InJanuary 2020 the MPSC approved the proposed energy cost factor effective for February 2020 bills.Mississippi Attorney General ComplaintThe Mississippi Attorney General filed a complaint in state court in December 2008 against Entergy Corporation, EntergyMississippi, Entergy Services, and Entergy Power alleging, among other things, violations of Mississippi statutes, fraud, and breach of goodfaith and fair dealing, and requesting an accounting and restitution. The complaint is wide ranging and relates to tariffs and procedures underwhich Entergy Mississippi purchases power not generated in Mississippi to meet electricity demand. Entergy believes the complaint isunfounded. In December 2008 the defendant Entergy companies removed the Attorney General’s lawsuit to U.S. District Court in Jackson,Mississippi. In June 2010 the MPSC authorized the deferral of certain legal expenses associated with this litigation until it is resolved. As ofDecember 31, 2019, Entergy Mississippi has a regulatory asset of $29.5 million for these deferred legal expenses. In April 2019 the DistrictCourt remanded the Attorney General’s lawsuit to the Hinds County Chancery Court. A hearing on procedural and dispositive motions washeld in August 2019. In December 2019 the Hinds County Chancery Court issued its ruling granting the motion for summary judgment filedby the Entergy defendants. The Chancery Court found it lacked subject matter jurisdiction, and that the claims fall under the purview of theFERC. In February 2020 the Chancery Court entered a final order dismissing all claims. The order was approved by counsel for the AttorneyGeneral, and dismisses with prejudice all claims and matters in dispute and states that the plaintiff will not seek an appeal or further relief andthat all matters in dispute have been resolved.Entergy New OrleansEntergy New Orleans’s electric rate schedules include a fuel adjustment tariff designed to reflect no more than targeted fuel andpurchased power costs, adjusted by a surcharge or credit for deferred fuel expense arising from the monthly reconciliation of actual fuel andpurchased power costs incurred with fuel cost revenues billed to customers, including carrying charges. Entergy New Orleans’s gas rate schedules include a purchased gas adjustment to reflect estimated gas costs for the billing month,adjusted by a surcharge or credit similar to that included in the electric fuel adjustment clause, including carrying charges.Entergy TexasEntergy Texas’s rate schedules include a fixed fuel factor to recover fuel and purchased power costs, including interest, not recoveredin base rates. Semi-annual revisions of the fixed fuel factor are made in March and September based on the market price of natural gas andchanges in fuel mix. The amounts collected under Entergy Texas’s fixed fuel factor and any interim surcharge or refund are subject to fuelreconciliation proceedings before the PUCT. A fuel reconciliation is required to be filed at least once every three years and outside of a baserate case filing. In July 2015 certain parties filed briefs in a PUCT proceeding asserting that Entergy Texas should refund to retail customers anadditional $10.9 million in bandwidth remedy payments Entergy Texas received related to calendar72 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsyear 2006 production costs. In October 2015 an ALJ issued a proposal for decision recommending that the additional bandwidth remedypayments be refunded to retail customers. In January 2016 the PUCT issued its order affirming the ALJ’s recommendation, and EntergyTexas filed a motion for rehearing of the PUCT’s decision, which the PUCT denied. In March 2016, Entergy Texas filed a complaint inFederal District Court for the Western District of Texas and a petition in the Travis County (State) District Court appealing the PUCT’sdecision. The pending appeals did not stay the PUCT’s decision. In April 2016, Entergy Texas filed with the PUCT an application to refundto customers approximately $56.2 million. The refund resulted from (i) $41.8 million of fuel cost recovery over-collections through February2016, (ii) the $10.9 million in bandwidth remedy payments, discussed above, that Entergy Texas received related to calendar year 2006production costs, and (iii) $3.5 million in bandwidth remedy payments that Entergy Texas received related to 2006-2008 production costs. InJune 2016, Entergy Texas filed an unopposed settlement agreement that added additional over-recovered fuel costs for the months of Marchand April 2016. The settlement resulted in a $68 million refund. The ALJ approved the refund on an interim basis and it was made to mostcustomers over a four-month period beginning with the first billing cycle of July 2016. In July 2016 the PUCT issued an order approving theinterim refund. The federal appeal of the PUCT’s January 2016 decision was heard in December 2016, and the Federal District Court grantedEntergy Texas’s requested relief. In January 2017 the PUCT and an intervenor filed petitions for appeal of the Federal District Court ruling tothe U.S. Court of Appeals for the Fifth Circuit. Oral argument was held before the Fifth Circuit in February 2018. In April 2018 the FifthCircuit reversed the decision of the Federal District Court, reinstating the original PUCT decision. In October 2018, Entergy Texas filednotice of nonsuit in its appeal to the Travis County District Court regarding the PUCT’s January 2016 decision.In July 2016, Entergy Texas filed an application to reconcile its fuel and purchased power costs for the period April 1, 2013 throughMarch 31, 2016. During the reconciliation period, Entergy Texas incurred approximately $1.77 billion in Texas jurisdictional eligible fueland purchased power expenses, net of certain revenues credited to such expenses and other adjustments. Entergy Texas estimated an over-recovery balance of approximately $19.3 million, including interest, which Entergy Texas requested authority to carry over as the beginningbalance for the subsequent reconciliation period beginning April 2016. Entergy Texas also noted, however, that the estimated $19.3 millionover collection was being refunded to customers as a portion of the interim fuel refund beginning with the first billing cycle of July 2016,discussed above. Entergy Texas also requested a prudence finding for each of the fuel-related contracts and arrangements entered into ormodified during the reconciliation period that have not been reviewed by the PUCT in a prior proceeding. In December 2016, Entergy Texasentered into a stipulation and settlement agreement resulting in a $6 million disallowance not associated with any particular issue raised and arefund of the over-recovery balance of $21 million as of November 30, 2016, to most customers beginning April 2017 through June 2017.This settlement was developed concurrently with the stipulation and settlement agreement in the 2016 transmission cost recovery factor rideramendment discussed below, and the terms and conditions in both settlements are interdependent. The fuel reconciliation settlement wasapproved by the PUCT in March 2017 and the refunds were made.In June 2017, Entergy Texas filed an application for a fuel refund of approximately $30.7 million for the months of December 2016through April 2017. For most customers, the refunds flowed through bills for the months of July 2017 through September 2017. The fuelrefund was approved by the PUCT in August 2017.In December 2017, Entergy Texas filed an application for a fuel refund of approximately $30.5 million for the months of May 2017through October 2017. Also in December 2017, the PUCT’s ALJ approved the refund on an interim basis. For most customers, the refundsflowed through bills from January 2018 through March 2018. The fuel refund was approved by the PUCT in March 2018. In September 2019, Entergy Texas filed an application to reconcile its fuel and purchased power costs for the period from April 2016through March 2019. During the reconciliation period, Entergy Texas incurred approximately $1.6 billion in Texas jurisdictional eligiblefuel and purchased power expenses, net of certain revenues credited to such expenses and other adjustments. Entergy Texas estimated anunder-recovery balance of approximately $25.8 million, including interest, which Entergy Texas requested authority to carry over as thebeginning balance for the subsequent reconciliation period beginning April 2019. The proceeding is currently pending.73 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsRetail Rate ProceedingsFilings with the APSC (Entergy Arkansas)Retail Rates2017 Formula Rate Plan FilingIn July 2017, Entergy Arkansas filed with the APSC its 2017 formula rate plan filing showing Entergy Arkansas’s projected earnedreturn on common equity for the twelve months ended December 31, 2018 test period to be below the formula rate plan bandwidth. Thefiling projected a $129.7 million revenue requirement increase to achieve Entergy Arkansas’s target earned return on common equity of9.75%. Entergy Arkansas’s formula rate plan is subject to a four percent annual revenue constraint and the projected annual revenuerequirement increase exceeded the four percent, resulting in a proposed increase for the 2017 formula rate plan of $70.9 million. In October2017, Entergy Arkansas filed with the APSC revised formula rate plan attachments that projected a $126.2 million revenue requirementincrease based on acceptance of certain adjustments and recommendations made by the APSC staff and other intervenors. The revisedformula rate plan filing included a proposed $71.1 million revenue requirement increase based on a revision to the four percent constraintcalculation. In October 2017, Entergy Arkansas and the parties to the proceeding filed a joint motion to approve a unanimous settlementagreement resolving all issues in the proceeding and providing for recovery of certain 2017 and 2018 nuclear costs. In December 2017 theAPSC approved the settlement agreement and the $71.1 million revenue requirement increase, as well as Entergy Arkansas’s formula rateplan compliance tariff, and the rates became effective with the first billing cycle of January 2018. 2018 Formula Rate Plan FilingIn July 2018, Entergy Arkansas filed with the APSC its 2018 formula rate plan filing to set its formula rate for the 2019 calendaryear. The filing showed Entergy Arkansas’s projected earned return on common equity for the twelve months ended December 31, 2019 testperiod to be below the formula rate plan bandwidth. Additionally, the filing included the first netting adjustment under the current formularate plan for the historical test year 2017, reflecting the change in formula rate plan revenues associated with actual 2017 results whencompared to the allowed rate of return on equity. The filing included a projected $73.4 million revenue deficiency for 2019 and a $95.6million revenue deficiency for the 2017 historical test year, for a total revenue requirement of $169 million for this filing. By operation of theformula rate plan, Entergy Arkansas’s recovery of the revenue requirement is subject to a four percent annual revenue constraint. BecauseEntergy Arkansas’s revenue requirement in this filing exceeded the constraint, the resulting increase was limited to four percent of totalrevenue, which originally was $65.4 million but was increased to $66.7 million based upon the APSC staff’s updated calculation of 2018revenue. In October 2018, Entergy Arkansas and the parties to the proceeding filed joint motions to approve a partial settlement agreement asto certain factual issues and agreed to brief contested legal issues. In November 2018 the APSC held a hearing and was briefed on a contestedlegal issue. In December 2018 the APSC issued a decision related to the initial legal brief, approved the partial settlement agreement and$66.7 million revenue requirement increase, as well as Entergy Arkansas’s formula rate plan, with updated rates going into effect for the firstbilling cycle of January 2019.2019 Formula Rate Plan FilingIn July 2019, Entergy Arkansas filed with the APSC its 2019 formula rate plan filing to set its formula rate for the 2020 calendaryear. The filing contained an evaluation of Entergy Arkansas’s earnings for the projected year 2020 and a netting adjustment for thehistorical year 2018. The total proposed formula rate plan rider revenue change designed to produce a target rate of return on common equityof 9.75% is $15.3 million, which is based upon a deficiency of approximately $61.9 million for the 2020 projected year, netted with a creditof approximately $46.6 million in the 2018 historical year netting adjustment. During 2018 Entergy Arkansas experienced higher-thanexpected sales volume, and actual costs were lower than forecasted. These changes, coupled with a reduced income tax rate resulting fromthe Tax Cuts and Jobs Act, resulted in the credit for the historical year netting adjustment. In the fourth quarter 2018,74 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Arkansas recorded a provision of $35.1 million that reflected the estimate of the historical year netting adjustment that was expectedto be included in the 2019 filing. In 2019, Entergy Arkansas recorded additional provisions totaling $11.5 million to reflect the updatedestimate of the historical year netting adjustment included in the 2019 filing. In October 2019 other parties in the proceeding filed theirerrors and objections requesting certain adjustments to Entergy Arkansas’s filing that would reduce or eliminate Entergy Arkansas’s proposedrevenue change. Entergy Arkansas filed its response addressing the requested adjustments in October 2019. In its response, Entergy Arkansasaccepted certain of the adjustments recommended by the General Staff of the APSC that would reduce the proposed formula rate plan riderrevenue change to $14 million. Entergy Arkansas disputed the remaining adjustments proposed by the parties. In October 2019, EntergyArkansas filed a unanimous settlement agreement with the other parties in the proceeding seeking APSC approval of a revised total formularate plan rider revenue change of $10.1 million. In its July 2019 formula rate plan filing, Entergy Arkansas proposed to recover an $11.2million regulatory asset, amortized over five years, associated with specific costs related to the potential construction of scrubbers at theWhite Bluff plant. Although Entergy Arkansas does not concede that the regulatory asset lacks merit, for purposes of reaching a settlementon the total formula rate plan rider amount, Entergy Arkansas agreed not to include the White Bluff scrubber regulatory asset cost in the 2019formula rate plan filing or future filings. Entergy Arkansas recorded a write-off in 2019 of the $11.2 million White Bluff scrubber regulatoryasset. In December 2019 the APSC approved the settlement as being in the public interest and approved Entergy Arkansas’s compliance tariffeffective with the first billing cycle of January 2020.Internal RestructuringIn November 2017, Entergy Arkansas filed an application with the APSC seeking authorization to undertake a restructuring thatwould result in the transfer of substantially all of the assets and operations of Entergy Arkansas to a new entity, which would ultimately beowned by an existing Entergy subsidiary holding company. In July 2018, Entergy Arkansas filed a settlement, reached by all parties in theAPSC proceeding, resolving all issues. The APSC approved the settlement agreement and restructuring in August 2018. Pursuant to thesettlement agreement, Entergy Arkansas will credit retail customers $39.6 million over six years, beginning in 2019. Entergy Arkansas alsoreceived the required FERC and NRC approvals.In November 2018, Entergy Arkansas undertook a multi-step restructuring, including the following:•Entergy Arkansas, Inc. redeemed its outstanding preferred stock at the aggregate redemption price of approximately $32.7 million.•Entergy Arkansas, Inc. converted from an Arkansas corporation to a Texas corporation.•Under the Texas Business Organizations Code (TXBOC), Entergy Arkansas, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy Arkansas Power, LLC, a Texas limited liability company (Entergy Arkansas Power), and Entergy ArkansasPower assumed substantially all of the liabilities of Entergy Arkansas, Inc., in a transaction regarded as a merger under the TXBOC.Entergy Arkansas, Inc. remained in existence and held the membership interests in Entergy Arkansas Power.•Entergy Arkansas, Inc. contributed the membership interests in Entergy Arkansas Power to an affiliate (Entergy Utility HoldingCompany, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution, EntergyArkansas Power is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC. In December 2018, Entergy Arkansas, Inc. changed its name to Entergy Utility Property, Inc., and Entergy Arkansas Power then changed itsname to Entergy Arkansas, LLC. Entergy Arkansas, LLC holds substantially all of the assets, and assumed substantially all of the liabilities,of Entergy Arkansas, Inc. The transaction was accounted for as a transaction between entities under common control.75 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsFilings with the LPSC (Entergy Louisiana)Retail Rates - Electric2016 Formula Rate Plan FilingIn May 2017, Entergy Louisiana filed its formula rate plan evaluation report for its 2016 calendar year operations. The evaluationreport reflected an earned return on common equity of 9.84%. As such, no adjustment to base formula rate plan revenue was required.Adjustments, however, were required under the formula rate plan; the 2016 formula rate plan evaluation report showed a decrease in formularate plan revenue of approximately $16.9 million, comprised of a decrease in legacy Entergy Louisiana formula rate plan revenue of $3.5million, a decrease in legacy Entergy Gulf States Louisiana formula rate plan revenue of $9.7 million, and a decrease in incremental formularate plan revenue of $3.7 million. Additionally, the formula rate plan evaluation report called for a decrease of $40.5 million in the MISOcost recovery revenue requirement from $46.8 million to $6.3 million. Rates reflecting these adjustments were implemented with the firstbilling cycle of September 2017, subject to refund. In September 2017 the LPSC staff issued its report indicating that no changes to EntergyLouisiana’s original formula rate plan evaluation report were required but reserved for several issues, including Entergy Louisiana’sSeptember 2017 update to its formula rate plan evaluation report. In July 2018, Entergy Louisiana and the LPSC staff filed an unopposedjoint report setting forth a correction to the annualization calculation, the effect of which was a net $3.5 million revenue requirementreduction and indicating that there are no outstanding issues with the 2016 formula rate plan report, the supplemental report, or the interimupdates. In September 2018 the LPSC approved the unopposed joint report.Formula Rate Plan Extension Through 2019 Test YearIn August 2017, Entergy Louisiana filed a request with the LPSC seeking to extend its formula rate plan for three years (2017-2019)with limited modifications of its terms. In April 2018 the LPSC approved an unopposed joint motion filed by Entergy Louisiana and theLPSC staff that settled the matter and extended the formula rate plan for three years, providing for rates through at least August 2021. Inaddition to retaining the major features of the traditional formula rate plan, substantive features of the extended formula rate plan include:•a mid-point reset of formula rate plan revenues to a 9.95% earned return on common equity for the 2017 test year and for the St.Charles Power Station when it enters commercial operation;•a 9.8% target earned return on common equity for the 2018 and 2019 test years;•narrowing of the common equity bandwidth to plus or minus 60 basis points around the target earned return on common equity;•a cap on potential revenue increase of $35 million for the 2018 evaluation period, and $70 million for the cumulative 2018 and 2019evaluation periods, on formula rate plan cost of service rate increases (the cap excludes rate changes associated with the transmissionrecovery mechanism described below and rate changes associated with additional capacity);•a framework for the flow back of certain tax benefits created by the Tax Act to customers, as described in “Regulatory activityregarding the Tax Cuts and Jobs Act” above; and•a transmission recovery mechanism providing for the opportunity to recover certain transmission-related expenditures in excess of$100 million annually for projects placed in service up to one month prior to rate change outside of sharing that is designed to operatein a fashion similar to the additional capacity mechanism.Entergy Louisiana has indicated its intent to seek an extension of its formula rate plan on terms similar to the existing terms. 76 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2017 Formula Rate Plan FilingIn June 2018, Entergy Louisiana filed its formula rate plan evaluation report for its 2017 calendar year operations. The 2017 test yearevaluation report produced an earned return on equity of 8.16%, due in large part to revenue-neutral realignments to other recoverymechanisms. Without these realignments, the evaluation report produces an earned return on equity of 9.88% and a resulting base riderformula rate plan revenue increase of $4.8 million. Excluding the Tax Act credits provided for by the tax reform adjustment mechanisms,total formula rate plan revenues were further increased by a total of $98 million as a result of the evaluation report due to adjustments to theadditional capacity and MISO cost recovery mechanisms of the formula rate plan, and implementation of the transmission recoverymechanism. In August 2018, Entergy Louisiana filed a supplemental formula rate plan evaluation report to reflect changes from the 2016 testyear formula rate plan proceedings, a decrease to the transmission recovery mechanism to reflect lower actual capital additions, and adecrease to evaluation period expenses to reflect the terms of a new power sales agreement. Based on the August 2018 update, EntergyLouisiana recognized a total decrease in formula rate plan revenue of approximately $17.6 million. Results of the updated 2017 evaluationreport filing were implemented with the September 2018 billing month subject to refund and review by the LPSC staff and intervenors. Inaccordance with the terms of the formula rate plan, in September 2018 the LPSC staff and intervenors submitted their responses to EntergyLouisiana’s original formula rate plan evaluation report and supplemental compliance updates. The LPSC staff assertedobjections/reservations regarding 1) Entergy Louisiana’s proposed rate adjustments associated with the return of excess accumulated deferredincome taxes pursuant to the Tax Act and the treatment of accumulated deferred income taxes related to reductions of rate base; 2) EntergyLouisiana’s reservation regarding treatment of a regulatory asset related to certain special orders by the LPSC; and 3) test year expensesbilled from Entergy Services to Entergy Louisiana. Intervenors also objected to Entergy Louisiana’s treatment of the regulatory asset relatedto certain special orders by the LPSC. A procedural schedule has not yet been established to resolve these issues.Entergy Louisiana also included in its filing a presentation of an initial proposal to combine the legacy Entergy Louisiana and legacyEntergy Gulf States Louisiana residential rates, which combination, if approved, would be accomplished on a revenue-neutral basis intendednot to affect the rates of other customer classes.Commercial operation at St. Charles Power Station commenced in May 2019. In May 2019, Entergy Louisiana filed an update to its2017 formula rate plan evaluation report to include the estimated first-year revenue requirement of $109.5 million associated with the St.Charles Power Station. The resulting interim adjustment to rates became effective with the first billing cycle of June 2019.2018 Formula Rate Plan FilingIn May 2019, Entergy Louisiana filed its formula rate plan evaluation report for its 2018 calendar year operations. The 2018 test yearevaluation report produced an earned return on common equity of 10.61% leading to a base rider formula rate plan revenue decrease of $8.9million. While base rider formula rate plan revenue will decrease as a result of this filing, overall formula rate plan revenues will increase byapproximately $118.7 million. This outcome is primarily driven by a reduction to the credits previously flowed through the tax reformadjustment mechanism and an increase in the transmission recovery mechanism, partially offset by reductions in the additional capacitymechanism revenue requirements and extraordinary cost items. The filing is subject to review by the LPSC. Resulting rates wereimplemented in September 2019, subject to refund.Entergy Louisiana also included in its filing a presentation of an initial proposal to combine the legacy Entergy Louisiana and legacyEntergy Gulf States Louisiana residential rates, which combination, if approved, would be accomplished on a revenue-neutral basis intendednot to affect the rates of other customer classes. Entergy Louisiana contemplates that any combination of residential rates resulting from thisrequest would be implemented with the results of the 2019 test year formula rate plan filing.77 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsSeveral parties intervened in the proceeding and the LPSC staff filed its report of objections/reservations in accordance with theapplicable provisions of the formula rate plan. In its report the LPSC staff re-urged reservations with respect to the outstanding issues fromthe 2017 test year formula rate plan filing and disputed the inclusion of certain affiliate costs for test years 2017 and 2018. The LPSC staffobjected to Entergy Louisiana’s proposal to combine residential rates but proposed the setting of a status conference to establish a proceduralschedule to more fully address the issue. The LPSC staff also reserved its right to object to the treatment of the sale of Willow Glen reflectedin the evaluation report and to the August 2019 compliance update, which was made primarily to update the capital additions reflected in theformula rate plan’s transmission recovery mechanism, based on limited time to review it. Additionally, since the completion of certaintransmission projects, the LPSC staff has issued supplemental data requests addressing the prudence of Entergy Louisiana’s expenditures inconnection with those projects. Entergy Louisiana is in the process of responding to those requests.Investigation of Costs Billed by Entergy ServicesIn November 2018 the LPSC issued a notice of proceeding initiating an investigation into costs incurred by Entergy Services that areincluded in the retail rates of Entergy Louisiana. As stated in the notice of proceeding, the LPSC observed an increase in capital construction-related costs incurred by Entergy Services. Discovery was issued and included efforts to seek highly detailed information on a broad range ofmatters unrelated to the scope of the audit. There has been no further activity in the investigation since May 2019.Waterford 3 Replacement Steam Generator ProjectFollowing the completion of the Waterford 3 replacement steam generator project, the LPSC undertook a prudence review inconnection with a filing made by Entergy Louisiana in April 2013 with regard to the following aspects of the replacement project: 1) projectmanagement; 2) cost controls; 3) success in achieving stated objectives; 4) the costs of the replacement project; and 5) the outage length andreplacement power costs. In July 2014 the LPSC staff filed testimony recommending potential project and replacement power costdisallowances of up to $71 million, citing a need for further explanation or documentation from Entergy Louisiana. An intervenor filedtestimony recommending disallowance of $141 million of incremental project costs, claiming the steam generator fabricator was imprudent. Entergy Louisiana provided further documentation and explanation requested by the LPSC staff. An evidentiary hearing was held inDecember 2014. Entergy Louisiana believed that the replacement steam generator costs were prudently incurred and applicable legalprinciples supported their recovery in rates. Nevertheless, Entergy Louisiana recorded a write-off of $16 million of Waterford 3’s plantbalance in December 2014 because of the uncertainty at the time associated with the resolution of the prudence review. In December 2015 theALJ issued a proposed recommendation, which was subsequently finalized, concluding that Entergy Louisiana prudently managed theWaterford 3 replacement steam generator project, including the selection, use, and oversight of contractors, and could not reasonably haveanticipated the damage to the steam generators. Nevertheless, the ALJ concluded that Entergy Louisiana was liable for the conduct of itscontractor and subcontractor and, therefore, recommended a disallowance of $67 million in capital costs. Additionally, the ALJ concludedthat Entergy Louisiana did not sufficiently justify the incurrence of $2 million in replacement power costs during the replacement outage.Although the ALJ’s recommendation had not yet been considered by the LPSC, after considering the progress of the proceeding in light ofthe ALJ recommendation, Entergy Louisiana recorded in the fourth quarter 2015 approximately $77 million in charges, including a $45million asset write-off and a $32 million regulatory charge, to reflect that a portion of the assets associated with the Waterford 3 replacementsteam generator project was no longer probable of recovery. Entergy Louisiana maintained that the ALJ’s recommendation containedsignificant factual and legal errors.In October 2016 the parties reached a settlement in this matter. The settlement was approved by the LPSC in December 2016. Thesettlement effectively provided for an agreed-upon disallowance of $67 million of plant, which had been previously written off by EntergyLouisiana, as discussed above. The refund to customers of approximately $71 million as a result of the settlement approved by the LPSC wasmade to customers in January 2017. Of the $71 million of refunds, $68 million was credited to customers through Entergy Louisiana’sformula rate plan, outside of sharing, and $3 million through its fuel adjustment clause. Entergy Louisiana had previously recorded aprovision of78 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements$48 million for this refund. The previously-recorded provision included the cumulative revenues recorded through December 2016 related tothe $67 million of disallowed plant. An additional regulatory charge of $23 million was recorded in fourth quarter 2016 to reflect the effectsof the settlement. The settlement also provided that Entergy Louisiana could retain the value associated with potential service credits agreedto by the project contractor, to the extent they are realized in the future. Following a review by the parties, an unopposed joint report ofproceedings was filed by the LPSC staff and Entergy Louisiana in May 2017 and the LPSC accepted the joint report of proceedings resolvingthe matter.Retail Rates - Gas 2016 Rate Stabilization Plan FilingIn January 2017, Entergy Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2016.The filing of the evaluation report for test year 2016 reflected an earned return on common equity of 6.37%. In April 2017 the LPSCapproved a joint report of proceedings and Entergy Louisiana submitted a revised evaluation report reflecting a $1.2 million annual increasein revenue with rates implemented with the first billing cycle of May 2017. 2017 Rate Stabilization Plan FilingIn January 2018, Entergy Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2017. The filing of the evaluation report for the test year 2017 reflected an earned return on common equity of 9.06%. This earned return is belowthe earnings sharing band of the rate stabilization plan and results in a rate increase of $0.1 million. Due to the enactment in late-December2017 of the Tax Cuts and Jobs Act, Entergy Louisiana did not have adequate time to reflect the effects of this tax legislation in the ratestabilization plan. In April 2018, Entergy Louisiana filed a supplemental evaluation report for the test year ended September 2017, reflectingthe effects of the Tax Act, including a proposal to use the unprotected excess accumulated deferred income taxes to offset approximately$1.4 million of storm restoration deferred operation and maintenance costs incurred by Entergy Louisiana in connection with the August2016 flooding disaster in its gas service area. The supplemental filing reflects an earned return on common equity of 10.79%. As-filed ratesfrom the supplemental filing were implemented, subject to refund, with customers receiving a cost reduction of approximately $0.7 millioneffective with bills rendered on and after the first billing cycle of May 2018, as well as a $0.2 million reduction in the gas infrastructure ridereffective with bills rendered on and after the first billing cycle of July 2018. In October 2019 the LPSC staff issued its report finding thatEntergy Louisiana’s filing complied with the terms of the rate stabilization plan but recommending an additional refund of $0.7 millionrelated to the Tax Act. A procedural schedule has not been established.2018 Rate Stabilization Plan FilingIn January 2019, Entergy Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2018.The filing of the evaluation report for the test year 2018 reflected an earned return on common equity of 2.69%. This earned return is belowthe earning sharing band of the gas rate stabilization plan and results in a rate increase of $2.8 million. Entergy Louisiana made a compliancefiling in April 2019 and rates were implemented during the first billing cycle of May 2019, subject to refund and final LPSC review. Theproceeding is currently in its discovery phase.79 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsGas Rate Stabilization Plan Extension RequestIn August 2019, Entergy Louisiana submitted an application to the LPSC seeking extension of the gas rate stabilization plan for the2019-2021 test years on the same terms as those approved for the 2018 test year. The LPSC established a procedural schedule to address thisrequest with a hearing scheduled in May 2020. Entergy Louisiana and the LPSC staff recently submitted a joint stipulation that recommendsapproval of the requested extension with certain modifications to the current terms, including a 9.8% evaluation period cost rate for commonequity and provisions for the return of the excess accumulated deferred income tax to customers on a dollar for dollar basis in a mannerconsistent with IRS normalization rules. The LPSC approved the joint stipulation in January 2020.2019 Rate Stabilization Plan FilingIn January 2020, Entergy Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2019.The filing of the evaluation report for the test year 2019 reflected an earned return on common equity of 10.78%. This earned return exceedsthe earning sharing band of the gas rate stabilization plan leading to a rate reduction of approximately $256 thousand.Filings with the MPSC (Entergy Mississippi)Formula Rate Plan FilingsIn March 2017, Entergy Mississippi submitted its formula rate plan 2017 test year filing and 2016 look-back filing showing EntergyMississippi’s earned return for the historical 2016 calendar year and projected earned return for the 2017 calendar year to be within theformula rate plan bandwidth, resulting in no change in rates. In June 2017, Entergy Mississippi and the Mississippi Public Utilities Staffentered into a stipulation that confirmed that Entergy Mississippi’s earned returns for both the 2016 look-back filing and 2017 test year werewithin the respective formula rate plan bandwidths. In June 2017 the MPSC approved the stipulation, which resulted in no change in rates.In March 2018, Entergy Mississippi submitted its formula rate plan 2018 test year filing and 2017 look-back filing showing EntergyMississippi’s earned return for the historical 2017 calendar year and projected earned return for the 2018 calendar year, in large part as aresult of the lower federal corporate income tax rate effective in 2018, to be within the formula rate plan bandwidth, resulting in no change inrates. In June 2018, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a stipulation that confirmed that EntergyMississippi’s earned returns for both the 2017 look-back filing and 2018 test year were within the respective formula rate plan bandwidths. InJune 2018 the MPSC approved the stipulation, which resulted in no change in rates. See “Regulatory activity regarding the Tax Cuts and JobsAct” above for additional discussion regarding the treatment of the effects of the lower federal corporate income tax rate.In October 2018, Entergy Mississippi proposed revisions to its formula rate plan that would provide for a mechanism in the formularate plan, the interim capacity rate adjustment mechanism, to recover the non-fuel related costs of additional owned capacity acquired byEntergy Mississippi, including the non-fuel annual ownership costs of the Choctaw Generating Station, as well as to allow similar costrecovery treatment for other future capacity acquisitions, such as the Sunflower Solar Facility, that are approved by the MPSC. In December2019 the MPSC approved Entergy Mississippi’s proposed revisions to its formula rate plan to provide for an interim capacity rate adjustmentmechanism, which Entergy Mississippi began billing in January 2020. The MPSC must approve recovery through the interim capacity rateadjustment for each new resource. In addition, the MPSC approved revisions to the formula rate plan which allows Entergy Mississippi tobegin billing rate adjustments effective April 1 of the filing year on a temporary basis subject to refund or credit to customers, subject to finalMPSC order. The MPSC also authorized Entergy Mississippi to remove vegetation management costs from the formula rate plan and recoverthese costs through the establishment of a vegetation management rider.80 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsIn March 2019, Entergy Mississippi submitted its formula rate plan 2019 test year filing and 2018 look-back filing showing EntergyMississippi’s earned return for the historical 2018 calendar year to be above the formula rate plan bandwidth and projected earned return forthe 2019 calendar year to be below the formula rate plan bandwidth. The 2019 test year filing shows a $36.8 million rate increase isnecessary to reset Entergy Mississippi’s earned return on common equity to the specified point of adjustment of 6.94% return on rate base,within the formula rate plan bandwidth. The 2018 look-back filing compares actual 2018 results to the approved benchmark return on ratebase and shows a $10.1 million interim decrease in formula rate plan revenues is necessary. In the fourth quarter 2018, Entergy Mississippirecorded a provision of $9.3 million that reflected the estimate of the difference between the 2018 expected earned rate of return on rate baseand an established performance-adjusted benchmark rate of return under the formula rate plan performance-adjusted bandwidth mechanism.In the first quarter 2019, Entergy Mississippi recorded a $0.8 million increase in the provision to reflect the amount shown in the look-backfiling. In June 2019, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a joint stipulation that confirmed that the 2019test year filing showed that a $32.8 million rate increase is necessary to reset Entergy Mississippi’s earned return on common equity to thespecified point of adjustment of 6.93% return on rate base, within the formula rate plan bandwidth. Additionally, pursuant to the jointstipulation, Entergy Mississippi’s 2018 look-back filing reflected an earned return on rate base of 7.81% in calendar year 2018 which isabove the look-back benchmark return on rate base of 7.13%, resulting in an $11 million decrease in formula rate plan revenues on an interimbasis through May 2020. In the second quarter 2019, Entergy Mississippi recorded an additional $0.9 million increase in the provision toreflect the $11 million shown in the look-back filing. In June 2019 the MPSC approved the joint stipulation with rates effective for the firstbilling cycle of July 2019.Internal RestructuringIn March 2018, Entergy Mississippi filed an application with the MPSC seeking authorization to undertake a restructuring that wouldresult in the transfer of substantially all of the assets and operations of Entergy Mississippi to a new entity, which would ultimately be heldby an existing Entergy subsidiary holding company. In September 2018, Entergy Mississippi and the Mississippi Public Utilities Staffentered into and filed a joint stipulation regarding the restructuring filing. In September 2018 the MPSC issued an order accepting thestipulation in its entirety and approving the restructuring and credits of $27 million to retail customers over six years, consisting of annualpayments of $4.5 million for the years 2019-2024. Entergy Mississippi also received the required FERC approval.In November 2018, Entergy Mississippi undertook a multi-step restructuring, including the following:•Entergy Mississippi, Inc. redeemed its outstanding preferred stock, at the aggregate redemption price of approximately $21.2 million.•Entergy Mississippi, Inc. converted from a Mississippi corporation to a Texas corporation.•Under the Texas Business Organizations Code (TXBOC), Entergy Mississippi, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy Mississippi Power and Light, LLC, a Texas limited liability company (Entergy Mississippi Power and Light), andEntergy Mississippi Power and Light assumed substantially all of the liabilities of Entergy Mississippi, Inc., in a transaction regardedas a merger under the TXBOC. Entergy Mississippi, Inc. remained in existence and held the membership interests in EntergyMississippi Power and Light.•Entergy Mississippi, Inc. contributed the membership interests in Entergy Mississippi Power and Light to an affiliate (Entergy UtilityHolding Company, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution,Entergy Mississippi Power and Light is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC.In December 2018, Entergy Mississippi, Inc. changed its name to Entergy Utility Enterprises, Inc., and Entergy Mississippi Power and Lightthen changed its name to Entergy Mississippi, LLC. Entergy Mississippi, LLC holds substantially all of the assets, and assumed substantiallyall of the liabilities, of Entergy Mississippi, Inc. The restructuring was accounted for as a transaction between entities under common control.81 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsIn December 2018, Entergy Mississippi filed its notice of intent to implement the restructuring credit rider to allow EntergyMississippi to return credits of $27 million to retail customers over six years. In January 2019 the MPSC approved the proposed restructuringcredit adjustment factor, which is effective for bills rendered beginning February 2019.Filings with the City Council (Entergy New Orleans)Retail RatesAs a provision of the settlement agreement approved by the City Council in May 2015 providing for the transfer from EntergyLouisiana to Entergy New Orleans of certain assets that supported the provision of service to Entergy Louisiana’s customers in Algiers, itwas agreed that, with limited exceptions, no action may be taken with respect to Entergy New Orleans’s base rates until rates areimplemented from a base rate case that must be filed for its electric and gas operations in 2018. This provision eliminated the formula rateplan applicable to Algiers operations. The limited exceptions included continued implementation of the then-remaining two years of the four-year phased-in rate increase for the Algiers area and certain exceptional cost increases or decreases in the base revenue requirement. Anadditional provision of the settlement agreement allowed for continued recovery of the revenue requirement associated with the capacity andenergy from Ninemile 6 received by Entergy New Orleans under a power purchase agreement with Entergy Louisiana (Algiers PPA). Thesettlement authorized Entergy New Orleans to recover the remaining revenue requirement related to the Algiers PPA through base ratescharged to Algiers customers. The settlement also provided for continued implementation of the Algiers MISO recovery rider.A 2008 rate case settlement included $3.1 million per year in electric rates to fund the Energy Smart energy efficiencyprograms. The rate settlement provided an incentive for Entergy New Orleans to meet or exceed energy savings targets set by the CityCouncil and provided a mechanism for Entergy New Orleans to recover lost contribution to fixed costs associated with the energy savingsgenerated from the energy efficiency programs. In January 2015 the City Council approved funding for the Energy Smart program fromApril 2015 through March 2017 using the remainder of the approximately $12.8 million of 2014 rough production cost equalization funds,with any remaining costs being recovered through the fuel adjustment clause. This funding methodology was modified in November 2015when the City Council directed Entergy New Orleans to use a combination of guaranteed customer savings related to a prior agreement withthe City Council and rough production cost equalization funds to cover program costs prior to recovering any costs through the fueladjustment clause. In April 2017 the City Council approved an implementation plan for the Energy Smart program from April 2017 throughDecember 2019. The City Council directed that the $11.8 million balance reported for Energy Smart funds be used to continue funding theprogram for Entergy New Orleans’s legacy customers and that the Energy Smart Algiers program continue to be funded through the Algiersfuel adjustment clause, until additional customer funding is required for the legacy customers. In September 2017, Entergy New Orleans fileda supplemental plan and proposed several options for an interim cost recovery mechanism necessary to recover program costs during theperiod between when existing funds directed to Energy Smart programs are depleted and when new rates from the 2018 combined rate case,which includes a cost recovery mechanism for Energy Smart funding, take effect. In December 2017 the City Council approved an energyefficiency cost recovery rider as an interim funding mechanism for Energy Smart, subject to verification that no additional funding sourcesexist. In June 2018 the City Council also approved a resolution recommending that Entergy New Orleans allocate approximately $13.5million of benefits resulting from the Tax Act to Energy Smart. In December 2019, Entergy New Orleans filed an application with the CityCouncil seeking approval of an implementation plan for the Energy Smart program from April 2020 through December 2022. Entergy NewOrleans proposed to recover the costs of the program through mechanisms previously approved by the City Council or through the energyefficiency cost recovery rider, which was approved in the 2018 combined rate case resolution. In January 2020 the City Council’s advisorsrecommended that the City Council allow Entergy New Orleans to earn a utility performance incentive of 7% of Energy Smart costs for eachyear in which Entergy New Orleans achieves 100% of the City Council’s savings targets for Energy Smart. The City Council is expected todecide on the matter in February 2020.82 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsIn September 2018, Entergy New Orleans filed an electric and gas base rate case with the City Council. The filing requested a 10.5%return on equity for electric operations with opportunity to earn a 10.75% return on equity through a performance adder provision of theelectric formula rate plan in subsequent years under a formula rate plan and requested a 10.75% return on equity for gas operations. Theproposed electric rates in the revised filing reflect a net reduction of $20.3 million. The reduction in electric rates includes a base rate increaseof $135.2 million, of which $131.5 million is associated with moving costs currently collected through fuel and other riders into base rates,plus a request for an advanced metering surcharge to recover $7.1 million associated with advanced metering infrastructure, offset by a netdecrease of $31.1 million related to fuel and other riders. The filing also included a proposed gas rate decrease of $142 thousand. EntergyNew Orleans’s rates reflected the inclusion of federal income tax reductions due to the Tax Act and the provisions of a previously-approvedagreement in principle determining how the benefits of the Tax Act would flow. Entergy New Orleans included cost of service studies forelectric and gas operations for the twelve months ended December 31, 2017 and the projected twelve months ending December 31, 2018. Inaddition, Entergy New Orleans included capital additions expected to be placed into service for the period through December 31, 2019.Entergy New Orleans based its request for a change in rates on the projected twelve months ending December 31, 2018.The filing’s major provisions included: (1) a new electric rate structure, which realigns the revenue requirement associated withcapacity and long-term service agreement expense from certain existing riders to base revenue, provides for the recovery of the cost ofadvanced metering infrastructure, and partially blends rates for Entergy New Orleans’s customers residing in Algiers with customers residingin the remainder of Orleans Parish through a three-year phase-in; (2) contemporaneous cost recovery riders for investments in energyefficiency/demand response, incremental changes in capacity/long-term service agreement costs, grid modernization investment, and gasinfrastructure replacement investment; and (3) formula rate plans for both electric and gas operations. In February 2019 the City Council’sadvisors and several intervenors filed testimony in response to Entergy New Orleans’s application. The City Council’s advisorsrecommended, among other things, overall rate reductions of approximately $33 million in electric rates and $3.8 million in gas rates.Certain intervenors recommended overall rate reductions of up to approximately $49 million in electric rates and $5 million in gas rates. Anevidentiary hearing was held in June 2019, and the record and post-hearing briefs were submitted in July 2019.In October 2019 the City Council’s Utility Committee approved a resolution for a change in electric and gas rates for considerationby the full City Council that included a 9.35% return on common equity, an equity ratio of the lesser of 50% or Entergy New Orleans’s actualequity ratio, and a total reduction in revenues that Entergy New Orleans initially estimated to be approximately $39 million ($36 millionelectric; $3 million gas). At its November 7, 2019 meeting, the full City Council approved the resolution that had previously been approvedby the City Council’s Utility Committee. Based on the approved resolution, in the fourth quarter 2019 Entergy New Orleans recorded anaccrual of $10 million that reflects the estimate of the revenue billed in 2019 to be refunded to customers in 2020 based on an August 2019effective date for the rate decrease. Entergy New Orleans also recorded a total of $12 million in regulatory assets for rate case costs andinformation technology costs associated with integrating Algiers customers with Entergy New Orleans’s legacy system and records. EntergyNew Orleans also transferred $10 million of retired general plant costs to a regulatory asset to be recovered over a 20-year period.The resolution directed Entergy New Orleans to submit a compliance filing within 30 days of the date of the resolution to facilitatethe eventual implementation of rates, including all necessary calculations and conforming rate schedules and riders. The electric formula rateplan rider includes, among other things, 1) a provision for forward-looking adjustments to include known and measurable changes realized upto 12 months after the evaluation period; 2) a decoupling mechanism; and 3) recognition that Entergy New Orleans is authorized to make anin-service adjustment to the formula rate plan to include the non-fuel cost of the New Orleans Power Station in rates, unless the two pendingappeals in the New Orleans Power Station proceeding have not concluded. Under this circumstance, Entergy New Orleans shall be permittedto defer the New Orleans Power Station non-fuel costs, including the cost of capital, until Entergy New Orleans commences non-fuel costrecovery. After taking into account the requirements for submission of the compliance filing, the total annual revenue requirement reductionrequired by the resolution was refined to approximately $45 million ($42 million electric, including $29 million in rider reductions; $3million gas). In January83 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2020 the City Council’s advisors found that the rates calculated by Entergy New Orleans and reflected in the December 2019 compliancefiling should be implemented, except with respect to the City Council-approved energy efficiency cost recovery rider, which rider calculationshould take into account events to be determined by the City Council in the future. Also in response to the resolution, Entergy New Orleansfiled timely a petition for appeal and judicial review and for stay of or injunctive relief alleging that the resolution is unlawful in failing toproduce just and reasonable rates. Based on the general acceptance of Entergy New Orleans’s compliance filing, however, during thependency of its appeal Entergy New Orleans expects to implement the compliance filing rates in April 2020. A hearing on the requestedinjunction was scheduled in Civil District Court for February 2020, but by joint motion of the City Council and Entergy New Orleans, theCivil District Court issued an order for a limited remand to the City Council to consider a potential agreement in principle/stipulation at itsFebruary 20, 2020 meeting. On February 17, 2020, Entergy New Orleans filed with the City Council an agreement in principle betweenEntergy New Orleans and the City Council’s advisors. On February 20, 2020, the full City Council voted to approve the proposed agreementin principle and issued a resolution modifying the required treatment of certain accumulated deferred income taxes. As a result of theagreement in principle, the total annual revenue requirement reduction will be approximately $45 million ($42 million electric, including $29million in rider reductions; and $3 million gas). As a result, Entergy New Orleans will fully implement new rates by April 2020. The meritsof the appeal will be subject to a separate procedural schedule issued by the Civil District Court.Internal RestructuringIn July 2016, Entergy New Orleans filed an application with the City Council seeking authorization to undertake a restructuring thatwould result in the transfer of substantially all of the assets and operations of Entergy New Orleans, Inc. to a new entity, which wouldultimately be owned by an existing Entergy subsidiary holding company. In May 2017 the City Council adopted a resolution approving theproposed internal restructuring pursuant to an agreement in principle with the City Council advisors and certain intervenors. Pursuant to theagreement in principle, Entergy New Orleans would credit retail customers $10 million in 2017, $1.4 million in the first quarter of the yearafter the transaction closes, and $117,500 each month in the second year after the transaction closes until such time as new base rates go intoeffect as a result of the then-anticipated 2018 base rate case (which has subsequently been filed). Entergy New Orleans began crediting retailcustomers in June 2017. In June 2017 the FERC approved the transaction and, pursuant to the agreement in principle, Entergy New Orleanswill provide additional credits to retail customers of $5 million in each of the years 2018, 2019, and 2020.In November 2017, Entergy New Orleans undertook a multi-step restructuring, including the following:•Entergy New Orleans, Inc. redeemed its outstanding preferred stock at a price of approximately $21 million, which included a callpremium of approximately $819,000, plus any accumulated and unpaid dividends.•Entergy New Orleans, Inc. converted from a Louisiana corporation to a Texas corporation.•Under the Texas Business Organizations Code (TXBOC), Entergy New Orleans, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy New Orleans Power, LLC, a Texas limited liability company (Entergy New Orleans Power), and Entergy NewOrleans Power assumed substantially all of the liabilities of Entergy New Orleans, Inc., in a transaction regarded as a merger underthe TXBOC. Entergy New Orleans, Inc. remained in existence and held the membership interests in Entergy New Orleans Power.•Entergy New Orleans, Inc. contributed the membership interests in Entergy New Orleans Power to an affiliate (Entergy UtilityHolding Company, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution,Entergy New Orleans Power is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC.In December 2017, Entergy New Orleans, Inc. changed its name to Entergy Utility Group, Inc., and Entergy New Orleans Power thenchanged its name to Entergy New Orleans, LLC. Entergy New Orleans, LLC holds substantially all of the assets, and has assumedsubstantially all of the liabilities, of Entergy New Orleans, Inc. The restructuring was accounted for as a transaction between entities undercommon control.84 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsFilings with the PUCT and Texas Cities (Entergy Texas)Retail Rates2018 Base Rate CaseIn May 2018, Entergy Texas filed a base rate case with the PUCT seeking an increase in base rates and rider rates of approximately$166 million, of which $48 million is associated with moving costs currently being collected through riders into base rates such that the totalincremental revenue requirement increase is approximately $118 million. The base rate case was based on a 12-month test year endingDecember 31, 2017. In addition, Entergy Texas included capital additions placed into service for the period of April 1, 2013 throughDecember 31, 2017, as well as a post-test year adjustment to include capital additions placed in service by June 30, 2018.In October 2018 the parties filed an unopposed settlement resolving all issues in the proceeding and a motion for interim rateseffective for usage on and after October 17, 2018. The unopposed settlement reflects the following terms: a base rate increase of $53.2million (net of costs realigned from riders and including updated depreciation rates), a $25 million refund to reflect the lower federal incometax rate applicable to Entergy Texas from January 25, 2018 through the date new rates are implemented, $6 million of capitalized skyliningtree hazard costs will not be recovered from customers, $242.5 million of protected excess accumulated deferred income taxes, whichincludes a tax gross-up, will be returned to customers through base rates under the average rate assumption method over the lives of theassociated assets, and $185.2 million of unprotected excess accumulated deferred income taxes, which includes a tax gross-up, will bereturned to customers through a rider. The unprotected excess accumulated deferred income taxes rider will include carrying charges andwill be in effect over a period of 12 months for large customers and over a period of four years for other customers. The settlement alsoprovides for the deferral of $24.5 million of costs associated with the remaining book value of the Neches and Sabine 2 plants, previouslytaken out of service, to be recovered over a ten-year period and the deferral of $20.5 million of costs associated with Hurricane Harvey to berecovered over a 12-year period, each beginning in October 2018. The settlement provides final resolution of all issues in the matter,including those related to the Tax Act. In October 2018 the ALJ granted the unopposed motion for interim rates to be effective for servicerendered on or after October 17, 2018. In December 2018 the PUCT issued an order approving the unopposed settlement.In January 2019, Entergy Texas filed for recovery of rate case expenses totaling $7.2 million. The amounts requested primarilyinclude internal and external expenses related to litigating the 2018 base rate case. Parties filed testimony in April 2019 recommending adisallowance ranging from $3.2 million to $4.2 million of the $7.2 million requested. In May 2019, Entergy Texas filed rebuttal testimonyresponding to the parties’ positions. In September 2019 an order was issued abating the procedural schedule and scheduled hearing to allowthe finalization of a settlement in principle reached among the parties. The settlement provides for a black box disallowance of $1.4 million.In the third quarter 2019, Entergy Texas recorded a provision for the 2018 base rate case expenses based on the settlement in principle. InOctober 2019 the settlement was filed for review by the PUCT. In February 2020 the PUCT approved the settlement.Distribution Cost Recovery Factor (DCRF) RiderIn June 2017, Entergy Texas filed an application to amend its DCRF rider by increasing the total collection from $8.65 million toapproximately $19 million. In July 2017, Entergy Texas, the PUCT staff, and the two other parties in the proceeding entered into anunopposed stipulation and settlement agreement resulting in an amended DCRF annual revenue requirement of $18.3 million. In September2017 the PUCT issued its final order approving the unopposed stipulation and settlement agreement. The amended DCRF rider rates becameeffective for usage on and after September 1, 2017. DCRF rates were set to zero upon implementation of new base rates on October 17,2018, as described above in the discussion of the 2018 base rate case. 85 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsIn March 2019, Entergy Texas filed with the PUCT a request to set a new DCRF rider. The proposed new DCRF rider is designed tocollect approximately $3.2 million annually from Entergy Texas’s retail customers based on its capital invested in distribution betweenJanuary 1, 2018 and December 31, 2018. In September 2019 the PUCT issued an order approving rates, which had been effective on aninterim basis since June 2019, at the level proposed in Entergy Texas’s application.Transmission Cost Recovery Factor (TCRF) RiderIn September 2016, Entergy Texas filed with the PUCT a request to amend its TCRF rider. The proposed amended TCRF rider wasdesigned to collect approximately $29.5 million annually from Entergy Texas’s retail customers. In December 2016, concurrent with the2016 fuel reconciliation stipulation and settlement agreement discussed above, Entergy Texas and the PUCT staff reached a settlementagreeing to the amended TCRF annual revenue requirement of $29.5 million. As discussed above, the terms of the two settlements areinterdependent. The PUCT approved the settlement and issued a final order in March 2017. Entergy Texas implemented the amended TCRFrider beginning with bills covering usage on and after March 20, 2017. TCRF rates were set to zero upon implementation of new base rateson October 17, 2018, as described above in the 2018 base rate case discussion.In December 2018, Entergy Texas filed with the PUCT a request to set a new TCRF rider. The proposed new TCRF rider is designedto collect approximately $2.7 million annually from Entergy Texas’s retail customers based on its capital invested in transmission betweenJanuary 1, 2018 and September 30, 2018. In April 2019 parties filed testimony proposing a load growth adjustment, which would fully offsetEntergy Texas’s proposed TCRF revenue requirement. In July 2019 the PUCT granted Entergy Texas’s application as filed to begin recoveryof the requested $2.7 million annual revenue requirement, rejecting opposing parties’ proposed adjustment; however, the PUCT found thatthe question of prudence of the actual investment costs should be determined in Entergy Texas’s next rate case similar to the procedure usedfor the costs recovered through the DCRF rider. In October 2019 the PUCT issued an order on a motion for rehearing, clarifying andaffirming its prior order granting Entergy Texas’s application as filed. Also in October 2019 a second motion for rehearing was filed, andEntergy Texas filed a response in opposition to the motion. The second motion for rehearing was overruled by operation of law. In December2019, Texas Industrial Energy Consumers filed an appeal to the PUCT order in district court alleging that the PUCT erred in declining toapply a load growth adjustment. In August 2019, Entergy Texas filed with the PUCT a request to amend its TCRF rider. The proposed new TCRF rider is designed tocollect approximately $19.4 million annually from Entergy Texas’s retail customers based on its capital invested in transmission betweenJanuary 1, 2018 and June 30, 2019, which is $16.7 million in incremental annual revenue above the $2.7 million approved in the priorpending TCRF proceeding. In November 2019, Entergy Texas filed an unopposed stipulation and settlement agreement providing forrecovery of the requested revenue requirement. In January 2020 the PUCT issued an order approving the unopposed settlement.Advanced Metering Infrastructure (AMI) FilingsEntergy ArkansasIn September 2016, Entergy Arkansas filed an application seeking a finding from the APSC that Entergy Arkansas’s deployment ofAMI is in the public interest. Entergy Arkansas proposed to replace existing meters with advanced meters that enable two-way datacommunication; design and build a secure and reliable network to support such communications; and implement support systems. AMI isintended to serve as the foundation of Entergy Arkansas’s modernized power grid. The filing included an estimate of implementation costsfor AMI of $208 million and identified a number of quantified and unquantified benefits. Entergy Arkansas proposed a 15-year depreciablelife for the new advanced meters, the three-year deployment of which began in January 2019. Deployment of the communications networkbegan in 2018. In October 2017 the APSC issued an order finding that Entergy Arkansas’s AMI deployment is in the public interest andapproving the settlement agreement subject to a minor modification. Entergy Arkansas is recovering the AMI deployment costs and thequantified benefits through its formula rate plan. Entergy Arkansas will86 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsrecover the undepreciated balance of its existing meters through a regulatory asset to be amortized over 15 years, as approved by the APSC.Entergy LouisianaIn November 2016, Entergy Louisiana filed an application seeking a finding from the LPSC that Entergy Louisiana’s deployment ofadvanced electric and gas metering infrastructure is in the public interest. Entergy Louisiana proposed to deploy advanced meters that enabletwo-way data communication; design and build a secure and reliable network to support such communications; and implement supportsystems. AMI is intended to serve as the foundation of Entergy Louisiana’s modernized power grid. The filing included an estimate ofimplementation costs for AMI of $330 million and identified a number of quantified and unquantified benefits. Entergy Louisiana proposed a15-year useful life for the new advanced meters, the three-year deployment of which began in 2019. Deployment of the communicationsnetwork began in 2018. Entergy Louisiana proposed to recover the cost of AMI through the implementation of a customer charge, net ofcertain benefits, phased in over the period 2019 through 2022. The parties reached an uncontested stipulation permitting implementation ofEntergy Louisiana’s proposed AMI system, with modifications to the proposed customer charge. In July 2017 the LPSC approved thestipulation. Entergy Louisiana will recover the undepreciated balance of its existing meters through a regulatory asset to be amortized atcurrent depreciation rates, as approved by the LPSC.Entergy MississippiIn November 2016, Entergy Mississippi filed an application seeking an order from the MPSC granting a certificate of publicconvenience and necessity and finding that Entergy Mississippi’s deployment of AMI is in the public interest. Entergy Mississippi proposedto replace existing meters with advanced meters that enable two-way data communication; to design and build a secure and reliable networkto support such communications; and to implement support systems. AMI is intended to serve as the foundation of Entergy Mississippi’smodernized power grid. The filing included an estimate of implementation costs for AMI of $132 million and identified a number ofquantified and unquantified benefits. Entergy Mississippi proposed a 15-year depreciable life for the new advanced meters, the three-yeardeployment of which began in 2019. Deployment of the communications network began in 2018. Entergy Mississippi proposed to includethe AMI deployment costs and the quantified benefits in existing rate mechanisms, primarily through future formula rate plan filings and/orfuture energy cost recovery rider schedule re-determinations, as applicable. In May 2017 the Mississippi Public Utilities Staff and EntergyMississippi entered into and filed a joint stipulation supporting Entergy Mississippi’s filing, and the MPSC issued an order approving thefiling without material changes, finding that Entergy Mississippi’s deployment of AMI is in the public interest and granting a certificate ofpublic convenience and necessity. The MPSC order also confirmed that Entergy Mississippi shall continue to include in rate base theremaining book value of existing meters that will be retired as part of the AMI deployment and also to depreciate those assets using currentdepreciation rates. In June 2018, as part of the order approving the joint stipulation between the Mississippi Public Utilities Staff and EntergyMississippi addressing Entergy Mississippi’s 2018 formula rate plan evaluation report and the ratemaking effects of the Tax Act, the MPSCapproved the acceleration of the recovery of substantially all of Entergy Mississippi’s existing customer meters in anticipation of AMIdeployment. Entergy New OrleansIn October 2016, Entergy New Orleans filed an application seeking a finding from the City Council that Entergy New Orleans’sdeployment of advanced electric and gas metering infrastructure is in the public interest. Entergy New Orleans proposed to deploy advancedmeters that enable two-way data communication; design and build a secure and reliable network to support such communications; andimplement support systems. AMI is intended to serve as the foundation of Entergy New Orleans’s modernized power grid. The filingincluded an estimate of implementation costs for AMI of $75 million and identified a number of quantified and unquantified benefits. Entergy New Orleans proposed a 15-year depreciable life for the new advanced meters. Deployment of the information technologyinfrastructure began in 2017 and deployment of the communications network began in 2018. Entergy New Orleans proposed to87 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsrecover the cost of AMI through the implementation of a customer charge, net of certain benefits, phased in over the period 2019 through2022. The City Council’s advisors filed testimony in May 2017 recommending the adoption of AMI subject to certain modifications,including the denial of Entergy New Orleans’s proposed customer charge as a cost recovery mechanism. In January 2018 a settlement wasreached between the City Council’s advisors and Entergy New Orleans. In February 2018 the City Council approved the settlement, whichdeferred cost recovery to the 2018 Entergy New Orleans rate case, but also stated that an adjustment for 2018-2019 AMI costs can be filed inthe rate case and that, for all subsequent AMI costs, the mechanism to be approved in the 2018 rate case will allow for the timely recovery ofsuch costs. In April 2018 the City Council adopted a resolution directing Entergy New Orleans to explore the options for accelerating thedeployment of AMI. In June 2018 the City Council approved a one-year acceleration of AMI in its service area for an incremental $4.4million. Entergy New Orleans began deployment of AMI during the first quarter of 2019 and expects to complete deployment by the end of2020. Entergy New Orleans will recover the undepreciated balance of its existing meters through a regulatory asset to be amortized on astraight-line basis over 12 years, as approved by the City Council.Entergy TexasIn April 2017 the Texas legislature enacted legislation that extends statutory support for AMI deployment to Entergy Texas anddirects that if Entergy Texas elects to deploy AMI, it shall do so as rapidly as practicable. In July 2017, Entergy Texas filed an applicationseeking an order from the PUCT approving Entergy Texas’s deployment of AMI. Entergy Texas proposed to replace existing meters withadvanced meters that enable two-way data communication; design and build a secure and reliable network to support such communications;and implement support systems. AMI is intended to serve as the foundation of Entergy Texas’s modernized power grid. The filing includedan estimate of implementation costs for AMI of $132 million and identified a number of quantified and unquantified benefits. Entergy Texasproposed a seven-year depreciable life for the new advanced meters. Entergy Texas also proposed a surcharge tariff to recover the reasonableand necessary costs it has and will incur under the deployment plan for the full deployment of advanced meters. Further, Entergy Texassought approval of fees that would be charged to customers who choose to opt out of receiving service through an advanced meter andinstead receive electric service with a non-standard meter. In October 2017, Entergy Texas and other parties entered into and filed anunopposed stipulation and settlement agreement permitting deployment of AMI with limited modifications. The PUCT approved thestipulation and settlement agreement in December 2017. Entergy Texas implemented the AMI surcharge tariff beginning with January 2018bills. As of December 31, 2019, Entergy Texas has a regulatory liability related to the collection of the surcharge from customers. Consistentwith the approval, deployment of the communications network began in 2018 and the three-year deployment of the advanced meters beganin 2019. Entergy Texas will recover the undepreciated balance of its existing meters through a regulatory asset to be amortized at currentdepreciation rates, as approved by the PUCT.System Agreement Cost Equalization ProceedingsPrior to final termination of the System Agreement in 2016, the Utility operating companies engaged in the coordinated planning,construction, and operation of generating and bulk transmission facilities under the terms of that agreement. Entergy Arkansas terminatedparticipation in the System Agreement in December 2013. Entergy Mississippi terminated participation in the System Agreement inNovember 2015. The System Agreement terminated with respect to the remaining participants in August 2016.Although the System Agreement has terminated, certain of the Utility operating companies’ retail regulators continue to pursuelitigation involving the System Agreement at the FERC and in federal courts. The proceedings include challenges to the allocation of costs asdefined by the System Agreement and to other matters.In June 2005 the FERC issued a decision in System Agreement litigation that had been commenced by the LPSC, and essentiallyaffirmed its decision in a December 2005 order on rehearing. The decision included, among other things:88 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements•The FERC’s conclusion that the System Agreement no longer roughly equalized total production costs among the Utility operatingcompanies.•In order to reach rough production cost equalization, the FERC imposed a bandwidth remedy by which each company’s total annualproduction costs would have to be within +/- 11% of Entergy System average total annual production costs.•The remedy ordered by the FERC in 2005 required no refunds and became effective based on calendar year 2006 production costswith the first reallocation payments made in 2007.The FERC’s decision reallocated total production costs of the Utility operating companies whose relative total production costsexpressed as a percentage of Entergy System average production costs are outside an upper or lower bandwidth. This was accomplished bypayments from Utility operating companies whose production costs were more than 11% below Entergy System average production costs toUtility operating companies whose production costs were more than the Entergy System average production cost, with payments going firstto those Utility operating companies whose total production costs were farthest above the Entergy System average.The LPSC, APSC, MPSC, and the Arkansas Electric Energy Consumers appealed the FERC’s December 2005 decision to the UnitedStates Court of Appeals for the D.C. Circuit. Entergy and the City of New Orleans intervened in the various appeals. The D.C. Circuit issuedits decision in April 2008. The D.C. Circuit concluded that the FERC’s orders had failed to adequately explain both its conclusion that it wasprohibited from ordering refunds for the 20-month period from September 13, 2001 - May 2, 2003 and its determination to implement thebandwidth remedy commencing on January 1, 2006, rather than June 1, 2005. The D.C. Circuit remanded the case to the FERC for furtherproceedings on those two issues.In October 2011 the FERC issued an order addressing the D.C. Circuit remand on the two issues. On the first issue, the FERCconcluded that it did have the authority to order refunds, but decided that it would exercise its equitable discretion and not require refunds forthe 20-month period from September 13, 2001 - May 2, 2003. Because the ruling on refunds relied on findings in a separate FERCproceeding, the FERC concluded that this refund ruling would be held in abeyance pending the outcome of the rehearing requests in the otherproceeding. On the second issue, the FERC reversed its prior decision and ordered that the prospective bandwidth remedy begin on June 1,2005 (the date of its initial order in the proceeding) rather than January 1, 2006, as it had previously ordered. Pursuant to the October 2011order, Entergy was required to calculate bandwidth payments for the period June - December 2005 utilizing the bandwidth formula tariffprescribed by the FERC that was filed in a December 2006 compliance filing and accepted by the FERC in an April 2007 order. In December 2011, Entergy filed with the FERC its compliance filing that provided the payments and receipts among the Utilityoperating companies pursuant to the FERC’s October 2011 order. The APSC, the LPSC, the PUCT, and other parties intervened in theDecember 2011 compliance filing proceeding, and the APSC and the LPSC also filed protests. The filing showed the followingpayments/receipts among the Utility operating companies: Payments(Receipts) (In Millions)Entergy Arkansas$156Entergy Louisiana($75)Entergy Mississippi($33)Entergy New Orleans($5)Entergy Texas($43)Entergy Arkansas made its payment in January 2012. In February 2012, Entergy Arkansas filed for an interim adjustment to its productioncost allocation rider requesting that the $156 million be collected from customers over the 22-month period from March 2012 throughDecember 2013. In March 2012 the APSC issued an order stating that89 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsthe payment can be recovered from retail customers through the production cost allocation rider, subject to refund. The LPSC and the APSCrequested rehearing of the FERC’s October 2011 order. In February 2014 the FERC issued a rehearing order addressing its October 2011 order. The FERC denied the LPSC’s request forrehearing on the issues of whether the bandwidth remedy should be made effective earlier than June 1, 2005, and whether refunds should beordered for the 20-month refund effective period. The FERC granted the LPSC’s rehearing request on the issue of interest on the bandwidthpayments/receipts for the June - December 2005 period, requiring that interest be accrued from June 1, 2006 until the date those bandwidthpayments/receipts are made. Also in February 2014 the FERC issued an order rejecting the December 2011 compliance filing that calculatedthe bandwidth payments/receipts for the June - December 2005 period. The FERC order required a new compliance filing that calculates thebandwidth payments/receipts for the June - December 2005 period based on monthly data for the seven individual months including interestpursuant to the February 2014 rehearing order. Entergy sought rehearing of the February 2014 order with respect to the FERC’sdeterminations regarding interest. In April 2014 the LPSC filed a petition for review of the FERC’s October 2011 and February 2014 orderswith the U.S. Court of Appeals for the D.C. Circuit. In August 2017 the D.C. Circuit issued a decision denying the LPSC’s appeal of theFERC’s October 2011 and February 2014 orders. On the issue of the FERC’s implementation of the prospective remedy as of June 2005 andwhether the bandwidth remedy should be extended for an additional 17 months in years 2004-2005, the D.C. Circuit affirmed the FERC’simplementation of the remedy and denied the LPSC’s appeal. On the issue of whether the operating companies should be required to issuerefunds for the 20-month period from September 2001 to May 2003, the D.C. Circuit granted the FERC’s request for agency reconsiderationand remanded that issue back to the FERC for further proceedings as requested by all parties to the appeal. In response to the D.C. Circuit’sremand, various parties filed briefs with the FERC addressing whether the FERC should require the Utility operating companies to issuerefunds for the 20-month refund period from September 2001 to May 2003. The LPSC argued in favor of such remands and Entergy hasopposed the LPSC’s request. In an order issued in November 2019, the FERC ruled that refunds are not appropriate for the 20-month refundperiod.In April and May 2014, Entergy filed with the FERC an updated compliance filing that provided the payments and receipts among theUtility operating companies pursuant to the FERC’s February 2014 orders. The filing showed the following net payments and receipts,including interest, among the Utility operating companies: Payments(Receipts) (In Millions)Entergy Arkansas$68Entergy Louisiana($10)Entergy Mississippi($11)Entergy New Orleans$2Entergy Texas($49)These payments were made in May 2014. The LPSC, City Council, and APSC filed protests.The hearing on the bandwidth calculation for the seven months June 1, 2005 through December 31, 2005 occurred in July 2016. Thepresiding judge issued an initial decision in November 2016. In the initial decision, the presiding judge agreed with the Utility operatingcompanies’ position that: (1) interest on the bandwidth payments for the 2005 test period should be accrued from June 1, 2006 until the datethat the bandwidth payments for that calculation are paid, which is consistent with how the Utility operating companies performed thecalculation; and (2) a portion of Entergy Louisiana’s 2001-vintage Louisiana state net operating loss accumulated deferred income tax thatresults from the Vidalia tax deduction should be excluded from the 2005 test period bandwidth calculation. Various participants filed briefson exceptions or briefs opposing exceptions, or both, related to the initial decision, including the LPSC, the APSC, the FERC trial staff, andEntergy Services. In May 2018 the FERC issued an order affirming the initial decision and ordered a comprehensive recalculation of thebandwidth payments/receipts for the seven months June 1,90 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2005 through December 31, 2005 and a recalculation of the 2006 and 2007 test years as a result of limited revisions. Entergy filed thecomprehensive recalculation of the bandwidth payments/receipts for the seven months June 1, 2005 through December 31, 2005 and the2006 and 2007 test years in July 2018. The filing shows the additional following payments and receipts among the Utility operatingcompanies: Payments(Receipts) (In Millions)Entergy Arkansas($4)Entergy Louisiana($23)Entergy Mississippi$16Entergy New Orleans$5Entergy Texas$6These payments were made in July 2018. In May 2019, the FERC accepted the July 2018 compliance filing, and the LPSC sought rehearingof that decision in June 2019. In December 2019 the FERC denied the LPSC’s request for rehearing, and the LPSC appealed the FERC’sprior orders to the D.C. Circuit in January 2020.In the course of these proceedings the FERC rejected the APSC’s protest that Entergy Arkansas should not be subject to the 2014compliance filing because Entergy Arkansas would be making the payments during a period following its exit from the System Agreement.In January 2018 the D.C. Circuit affirmed the FERC decision that Entergy Arkansas was subject to the compliance filing.Rough Production Cost Equalization RatesEach May from 2007 through 2016 Entergy filed with the FERC the rates to implement the FERC’s orders in the System Agreementproceeding. These filings showed the following payments/receipts among the Utility operating companies were necessary to achieve roughproduction cost equalization as defined by the FERC’s orders: Payments (Receipts) 2007 2008 2009 2010 2011 2012 2013 2014 (In Millions)Entergy Arkansas$278 $252 $390 $47 $77 $41 $— $—Entergy Louisiana($203) ($160) ($247) ($25) ($12) ($41) $— $—Entergy Mississippi($34) ($20) ($24) ($21) ($40) $— $— $—Entergy New Orleans$— ($7) $— ($1) ($25) $— ($15) ($15)Entergy Texas($41) ($65) ($119) $— $— $— $15 $15The Utility operating companies recorded accounts payable or accounts receivable to reflect the rough production cost equalization paymentsand receipts required to implement the FERC’s remedy. When accounts payable were recorded, a corresponding regulatory asset wasrecorded for the right to collect the payments from customers. When accounts receivable were recorded, a corresponding regulatory liabilitywas recorded for the obligations to pass the receipts on to customers. No payments were required in 2016 or 2015 to implement the FERC’sremedy based on calendar year 2015 production costs and 2014 production costs, respectively. The System Agreement terminated in August2016.The APSC approved a production cost allocation rider for recovery from customers of the retail portion of the costs allocated toEntergy Arkansas. Entergy Texas recovered its 2013 rough production cost equalization payment over three years beginning April 2014.Entergy Texas included its 2014 rough production cost equalization payment as a component of an interim fuel refund made in 2014.Management believes that any changes in the allocation of production costs resulting from the FERC’s decision and related retailproceedings should result in similar rate changes for retail customers, subject to specific circumstances that have caused trapped costs.91 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe following rough production cost equalization rate proceedings are still ongoing.2011 Rate Filing Based on Calendar Year 2010 Production CostsIn May 2011, Entergy filed with the FERC the 2011 rates in accordance with the FERC’s orders in the System Agreementproceeding. Several parties intervened in the proceeding at the FERC, including the LPSC, which also filed a protest. In July 2011 theFERC accepted Entergy’s proposed rates for filing, effective June 1, 2011, subject to refund. After an abeyance of the proceeding schedule,in December 2014 the FERC consolidated the 2011 rate filing with the 2012, 2013, and 2014 rate filings for settlement and hearingprocedures. See discussion below regarding the consolidated settlement and hearing procedures in connection with this proceeding.2012 Rate Filing Based on Calendar Year 2011 Production CostsIn May 2012, Entergy filed with the FERC the 2012 rates in accordance with the FERC’s orders in the System Agreementproceeding. Several parties intervened in the proceeding at the FERC, including the LPSC, which also filed a protest. In August 2012 theFERC accepted Entergy’s proposed rates for filing, effective June 2012, subject to refund. After an abeyance of the proceeding schedule, inDecember 2014 the FERC consolidated the 2012 rate filing with the 2011, 2013, and 2014 rate filings for settlement and hearing procedures.See discussion below regarding the consolidated settlement and hearing procedures in connection with this proceeding.2013 Rate Filing Based on Calendar Year 2012 Production CostsIn May 2013, Entergy filed with the FERC the 2013 rates in accordance with the FERC’s orders in the System Agreementproceeding. Several parties intervened in the proceeding at the FERC, including the LPSC, which also filed a protest. The City Councilintervened and filed comments related to including the outcome of a related FERC proceeding in the 2013 cost equalization calculation. InAugust 2013 the FERC issued an order accepting the 2013 rates, effective June 1, 2013, subject to refund. After an abeyance of theproceeding schedule, in December 2014 the FERC consolidated the 2013 rate filing with the 2011, 2012, and 2014 rate filings for settlementand hearing procedures. See discussion below regarding the consolidated settlement and hearing procedures in connection with thisproceeding.2014 Rate Filing Based on Calendar Year 2013 Production CostsIn May 2014, Entergy filed with the FERC the 2014 rates in accordance with the FERC’s orders in the System Agreementproceeding. Several parties intervened in the proceeding at the FERC, including the LPSC, which also filed a protest. The City Councilintervened and filed comments. In December 2014 the FERC issued an order accepting the 2014 rates, effective June 1, 2014, subject torefund, set the proceeding for hearing procedures, and consolidated the 2014 rate filing with the 2011, 2012, and 2013 rate filings forsettlement and hearing procedures. See discussion below regarding the consolidated settlement and hearing procedures in connection withthis proceeding.Consolidated 2011, 2012, 2013, and 2014 Rate Filing ProceedingsAs discussed above, in December 2014 the FERC consolidated the 2011, 2012, 2013, and 2014 rate filings for settlement and hearingprocedures. In May 2015, Entergy filed direct testimony in the consolidated rate filings and the LPSC filed direct testimony concerning itscomplaint proceeding that is consolidated with the rate filings, challenging certain components of the pending bandwidth calculations forprior years. Hearings occurred in November 2015, and the ALJ issued an initial decision in July 2016. In the initial decision, the ALJgenerally agreed with Entergy’s bandwidth calculations with one exception on the accounting related to the Waterford 3 sale/leaseback. InMarch 2018 the FERC issued an order affirming the initial decision. In April 2018 the LPSC requested rehearing of the FERC’s March 2018order affirming the ALJ’s initial decision. Entergy filed in May 2018 the bandwidth true-up payments and receipts for the 2011-2014 ratefilings (table does not net to zero due to rounding):92 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements Payments(Receipts) (In Millions)Entergy Arkansas$3Entergy Louisiana$3Entergy Mississippi($1)Entergy New Orleans$1Entergy Texas($5)These payments were made in May 2018. The LPSC request for rehearing is pending.Entergy Arkansas Opportunity Sales ProceedingIn June 2009 the LPSC filed a complaint requesting that the FERC determine that certain of Entergy Arkansas’s sales of electricenergy to third parties: (a) violated the provisions of the System Agreement that allocated the energy generated by Entergy System resources;(b) imprudently denied the Entergy System and its ultimate consumers the benefits of low-cost Entergy System generating capacity; and (c)violated the provision of the System Agreement that prohibited sales to third parties by individual companies absent an offer of a right-of-first-refusal to other Utility operating companies. The LPSC’s complaint challenged sales made beginning in 2002 and requestedrefunds. In July 2009 the Utility operating companies filed a response to the complaint arguing among other things that the SystemAgreement contemplates that the Utility operating companies may make sales to third parties for their own account, subject to therequirement that those sales be included in the load (or load shape) for the applicable Utility operating company. The FERC subsequentlyordered a hearing in the proceeding.After a hearing, the ALJ issued an initial decision in December 2010. The ALJ found that the System Agreement allowed forEntergy Arkansas to make the sales to third parties but concluded that the sales should be accounted for in the same manner as joint accountsales. The ALJ concluded that “shareholders” should make refunds of the damages to the Utility operating companies, along withinterest. Entergy disagreed with several aspects of the ALJ’s initial decision and in January 2011 filed with the FERC exceptions to thedecision.The FERC issued a decision in June 2012 and held that, while the System Agreement is ambiguous, it does provide authority forindividual Utility operating companies to make opportunity sales for their own account and Entergy Arkansas made and priced these sales ingood faith. The FERC found, however, that the System Agreement does not provide authority for an individual Utility operating company toallocate the energy associated with such opportunity sales as part of its load but provides a different allocation authority. The FERC furtherfound that the after-the-fact accounting methodology used to allocate the energy used to supply the sales was inconsistent with the SystemAgreement. The FERC in its decision established further hearing procedures to quantify the effect of repricing the opportunity sales inaccordance with the FERC’s June 2012 decision. The hearing was held in May 2013 and the ALJ issued an initial decision in August 2013.The LPSC, the APSC, the City Council, and FERC staff filed briefs on exceptions and/or briefs opposing exceptions. Entergy filed a brief onexceptions requesting that the FERC reverse the initial decision and a brief opposing certain exceptions taken by the LPSC and FERC staff.In April 2016 the FERC issued orders addressing requests for rehearing filed in July 2012 and the ALJ’s August 2013 initial decision.The first order denied Entergy’s request for rehearing and affirmed the FERC’s earlier rulings that Entergy’s original methodology forallocating energy costs to the opportunity sales was incorrect and, as a result, Entergy Arkansas must make payments to the other Utilityoperating companies to put them in the same position that they would have been in absent the incorrect allocation. The FERC clarified thatinterest should be included with the payments. The second order affirmed in part, and reversed in part, the rulings in the ALJ’s August 2013initial decision regarding the methodology that should be used to calculate the payments Entergy Arkansas is to make to the other Utilityoperating companies. The FERC affirmed the ALJ’s ruling that a full re-run of intra-system bills should be performed but required thatmethodology be modified so that the sales have the same priority for purposes of energy93 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsallocation as joint account sales. The FERC reversed the ALJ’s decision that any payments by Entergy Arkansas should be reduced by 20%.The FERC also reversed the ALJ’s decision that adjustments to other System Agreement service schedules and excess bandwidth paymentsshould not be taken into account when calculating the payments to be made by Entergy Arkansas. The FERC held that such adjustments andexcess bandwidth payments should be taken into account but ordered further proceedings before an ALJ to address whether a cap on anyreduction due to bandwidth payments was necessary and to implement the other adjustments to the calculation methodology.In May 2016, Entergy Services filed a request for rehearing of the FERC’s April 2016 order arguing that payments made by EntergyArkansas should be reduced as a result of the timing of the LPSC’s approval of certain contracts. Entergy Services also filed a request forclarification and/or rehearing of the FERC’s April 2016 order addressing the ALJ’s August 2013 initial decision. The APSC and the LPSCalso filed requests for rehearing of the FERC’s April 2016 order. In September 2017 the FERC issued an order denying the request forrehearing on the issue of whether any payments by Entergy Arkansas to the other Utility operating companies should be reduced due to thetiming of the LPSC’s approval of Entergy Arkansas’s wholesale baseload contract with Entergy Louisiana. In November 2017 the FERCissued an order denying all of the remaining requests for rehearing of the April 2016 order. In November 2017, Entergy Services filed apetition for review in the D.C. Circuit of the FERC’s orders in the first two phases of the opportunity sales case. In December 2017 the D.C.Circuit granted Entergy Services’ request to hold the appeal in abeyance pending final resolution of the related proceeding before the FERC.In January 2018 the APSC and the LPSC filed separate petitions for review in the D.C. Circuit, and the D.C. Circuit consolidated the appealswith Entergy Services’ appeal and held all of the appeals in abeyance pending final resolution of the related proceeding before the FERC.The hearing required by the FERC’s April 2016 order was held in May 2017. In July 2017 the ALJ issued an initial decisionaddressing whether a cap on any reduction due to bandwidth payments was necessary and whether to implement the other adjustments to thecalculation methodology. In August 2017 the Utility operating companies, the LPSC, the APSC, and FERC staff filed individual briefs onexceptions challenging various aspects of the initial decision. In September 2017 the Utility operating companies, the LPSC, the APSC, theMPSC, the City Council, and FERC staff filed separate briefs opposing exceptions taken by various parties.Based on testimony previously submitted in the case and its assessment of the April 2016 FERC orders, in the first quarter 2016,Entergy Arkansas recorded a liability of $87 million, which included interest, for its estimated increased costs and payment to the otherUtility operating companies, and a deferred fuel regulatory asset of $75 million. Following its assessment of the course of the proceedings,including the FERC’s denial of rehearing in November 2017 described above, in the fourth quarter 2017, Entergy Arkansas recorded anadditional liability of $35 million and a regulatory asset of $31 million.In October 2018 the FERC issued an order addressing the ALJ’s July 2017 initial decision. The FERC reversed the ALJ’s decision tocap the reduction in Entergy Arkansas’s payment to account for the increased bandwidth payments that Entergy Arkansas made to the otheroperating companies. The FERC also reversed the ALJ’s decision that Grand Gulf sales from January through September 2000 should beincluded in the calculation of Entergy Arkansas’s payment. The FERC affirmed on other grounds the ALJ’s rejection of the LPSC’s claimthat certain joint account sales should be accounted for as part of the calculation of Entergy Arkansas’s payment. In November 2018 theLPSC requested rehearing of the FERC’s October 2018 decision. In December 2019 the FERC denied the LPSC’s request for rehearing.In December 2018, Entergy made a compliance filing in response to the FERC’s October 2018 order. The compliance filing provideda final calculation of Entergy Arkansas’s payments to the other Utility operating companies, including interest. No protests were filed inresponse to the December 2018 compliance filing. The December 2018 compliance filing is pending FERC action. Refunds and interest inthe following amounts were paid by Entergy Arkansas to the other operating companies in December 2018:94 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements Total refunds including interest Payment/(Receipt) (In Millions) PrincipalInterestTotalEntergy Arkansas$68$67$135Entergy Louisiana($30)($29)($59)Entergy Mississippi($18)($18)($36)Entergy New Orleans($3)($4)($7)Entergy Texas($17)($16)($33)Entergy Arkansas previously recognized a regulatory asset with a balance of $116 million as of December 31, 2018 for a portion of thepayments due as a result of this proceeding.In February 2019 the LPSC filed a new complaint relating to two issues that were raised in the opportunity sales proceeding, but that,in its October 2018 order, the FERC held were outside the scope of the proceeding. In March 2019, Entergy Services filed an answer andmotion to dismiss the new complaint. In November 2019 the FERC issued an order denying the LPSC’s complaint. The order concluded thatthe settlement agreement approved by FERC in December 2015 terminating the System Agreement barred the LPSC’s new complaint.In May 2019, Entergy Arkansas filed an application and supporting testimony with the APSC requesting approval of a special ridertariff to recover the costs of these payments from its retail customers over a 24-month period. The application requested that the APSCapprove the rider to take effect within 30 days or, if suspended by the APSC as allowed by commission rule, approve the rider to take effectin the first billing cycle of the first month occurring 30 days after issuance of the APSC’s order approving the rider. In June 2019 the APSCsuspended Entergy Arkansas’s tariff and granted Entergy Arkansas’s motion asking the APSC to establish the proceeding as the singledesignated proceeding in which interested parties may assert claims related to the appropriate retail rate treatment of the FERC’s October2018 order and related FERC orders in the opportunity sales proceeding. In January 2020 the APSC adopted a procedural schedule with ahearing in April 2020. In January 2020 the Attorney General and Arkansas Electric Energy Consumers, Inc. filed a joint motion seeking todismiss Entergy Arkansas’s application alleging that the APSC, in a prior proceeding, ruled on the issues addressed in the application anddetermined that Entergy Arkansas’s requested relief violates the filed rate doctrine and the prohibition against retroactive ratemaking. EntergyArkansas responded to the joint motion in February 2020 rebutting these arguments, including demonstrating that the claims in thisproceeding differ substantially from those the APSC addressed previously and that the payment resulting from a FERC tariff violation forwhich Entergy Arkansas seeks retail cost recovery in this proceeding differs materially from the refunds resulting from a FERC tariffamendment that the APSC previously rejected on filed rate doctrine and the retroactive ratemaking grounds. In addition, in January 2020 theAttorney General and Arkansas Electric Energy Consumers, Inc. filed testimony opposing the recovery by Entergy Arkansas of theopportunity sales payment but also claiming that certain components of the payment should be segregated and refunded to customers. Complaints Against System EnergyReturn on Equity and Capital Structure ComplaintsIn January 2017 the APSC and MPSC filed a complaint with the FERC against System Energy. The complaint seeks a reduction inthe return on equity component of the Unit Power Sales Agreement pursuant to which System Energy sells its Grand Gulf capacity andenergy to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. Entergy Arkansas also sells some of itsGrand Gulf capacity and energy to Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans under separate agreements. The currentreturn on equity under the Unit Power Sales Agreement is 10.94%, which was established in a rate proceeding that became final in July 2001.95 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe APSC and MPSC complaint alleges that the return on equity is unjust and unreasonable because capital market and otherconsiderations indicate that it is excessive. The complaint requests the FERC to institute proceedings to investigate the return on equity andestablish a lower return on equity, and also requests that the FERC establish January 23, 2017 as a refund effective date. The complaintincludes return on equity analysis that purports to establish that the range of reasonable return on equity for System Energy is between 8.37%and 8.67%. System Energy answered the complaint in February 2017 and disputes that a return on equity of 8.37% to 8.67% is just andreasonable. The LPSC and the City Council intervened in the proceeding expressing support for the complaint. System Energy is recording aprovision against revenue for the potential outcome of this proceeding. In September 2017 the FERC established a refund effective date ofJanuary 23, 2017 and directed the parties to engage in settlement proceedings before an ALJ. The parties have been unable to settle the returnon equity issue and a FERC hearing judge was assigned in July 2018. The 15-month refund period in connection with the APSC/MPSCcomplaint expired on April 23, 2018.In April 2018 the LPSC filed a complaint with the FERC against System Energy seeking an additional 15-month refund period. TheLPSC complaint requests similar relief from the FERC with respect to System Energy’s return on equity and also requests the FERC toinvestigate System Energy’s capital structure. The APSC, MPSC, and City Council intervened in the proceeding, filed an answer expressingsupport for the complaint, and asked the FERC to consolidate this proceeding with the proceeding initiated by the complaint of the APSC andMPSC in January 2017. System Energy answered the LPSC complaint in May 2018 and also filed a motion to dismiss the complaint. The 15-month refund period in connection with the LPSC return on equity complaint expired on July 26, 2019.In August 2018 the FERC issued an order dismissing the LPSC’s request to investigate System Energy’s capital structure and settingfor hearing the return on equity complaint, with a refund effective date of April 27, 2018. The portion of the LPSC’s complaint dealing withreturn on equity was subsequently consolidated with the APSC and MPSC complaint for hearing. The parties are required to address an order(issued in a separate proceeding involving New England transmission owners) that proposed modifying the FERC’s standard methodologyfor determining return on equity. In September 2018, System Energy filed a request for rehearing and the LPSC filed a request for rehearingor reconsideration of the FERC’s August 2018 order. The LPSC’s request referenced an amended complaint that it filed on the same dayraising the same capital structure claim the FERC had earlier dismissed. The FERC initiated a new proceeding for the amended capitalstructure complaint, and System Energy submitted a response in October 2018. In January 2019 the FERC set the amended complaint forsettlement and hearing proceedings. Settlement proceedings in the capital structure proceeding commenced in February 2019. As notedbelow, in June 2019 settlement discussions were terminated and the amended capital structure complaint was consolidated with the ongoingreturn on equity proceeding. The 15-month refund period in connection with the capital structure complaint is from September 24, 2018 toDecember 23, 2019.In January 2019 the LPSC and the APSC and MPSC filed direct testimony in the return on equity proceeding. For the refund periodJanuary 23, 2017 through April 23, 2018, the LPSC argues for an authorized return on equity for System Energy of 7.81% and the APSC andMPSC argue for an authorized return on equity for System Energy of 8.24%. For the refund period April 27, 2018 through July 27, 2019, andfor application on a prospective basis, the LPSC argues for an authorized return on equity for System Energy of 7.97% and the APSC andMPSC argue for an authorized return on equity for System Energy of 8.41%. In March 2019, System Energy submitted answering testimonyin the return on equity proceeding. For the first refund period, System Energy’s testimony argues for a return on equity of 10.10% (median)or 10.70% (midpoint). For the second refund period, System Energy’s testimony shows that the calculated returns on equity for the firstperiod fall within the range of presumptively just and reasonable returns on equity, and thus the second complaint should be dismissed (andthe first period return on equity used going forward). If the FERC nonetheless were to set a new return on equity for the second period (andgoing forward), System Energy argues the return on equity should be either 10.32% (median) or 10.69% (midpoint).In May 2019 the FERC trial staff filed its direct and answering testimony in the return on equity proceeding. For the first refundperiod, the FERC trial staff calculates an authorized return on equity for System Energy of 9.89% based on the application of FERC’sproposed methodology. The FERC trial staff’s direct and answering testimony noted that an authorized return on equity of 9.89% for the firstrefund period was within the range of presumptively96 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsjust and reasonable returns on equity for the second refund period, as calculated using a study period ending January 31, 2019 for the secondrefund period.In June 2019, System Entergy filed testimony responding to the testimony filed by the FERC trial staff. Among other things, SystemEnergy’s testimony rebutted arguments raised by the FERC trial staff and provided updated calculations for the second refund period basedon the study period ending May 31, 2019. For that refund period, System Energy’s testimony shows that strict application of the return onequity methodology proposed by the FERC staff indicates that the second complaint would not be dismissed, and the new return on equitywould be set at 9.65% (median) or 9.74% (midpoint). System Energy’s testimony argues that these results are insufficient in light ofbenchmarks such as state returns on equity and treasury bond yields, and instead proposes that the calculated returns on equity for the secondperiod should be either 9.91% (median) or 10.3% (midpoint). System Energy’s testimony also argues that, under application of its proposedmodified methodology, the 10.10% return on equity calculated for the first refund period would fall within the range of presumptively justand reasonable returns on equity for the second refund period. System Energy is recording a provision against revenue for the potentialoutcome of this proceeding.Also in June 2019, the FERC’s Chief ALJ issued an order terminating settlement discussions in the amended complaint addressingSystem Energy’s capital structure. The ALJ consolidated the amended capital structure complaint with the ongoing return on equityproceeding and set new procedural deadlines for the consolidated hearing.In August 2019 the LPSC and the APSC and MPSC filed rebuttal testimony in the return on equity proceeding and direct andanswering testimony relating to System Energy’s capital structure. The LPSC re-argues for an authorized return on equity for System Energyof 7.81% for the first refund period and 7.97% for the second refund period. The APSC and MPSC argue for an authorized return on equityfor System Energy of 8.26% for the first refund period and 8.32% for the second refund period. With respect to capital structure, the LPSCproposes that the FERC establish a hypothetical capital structure for System Energy for ratemaking purposes. Specifically, the LPSCproposes that System Energy’s common equity ratio be set to Entergy Corporation’s equity ratio of 37% equity and 63% debt. In thealternative, the LPSC argues that the equity ratio should be no higher than 49%, the composite equity ratio of System Energy and the otherEntergy operating companies who purchase under the Unit Power Sales Agreement. The APSC and MPSC recommend that 35.98% be set asthe common equity ratio for System Energy. As an alternative, the APSC and MPSC propose that System Energy’s common equity be set at46.75% based on the median equity ratio of the proxy group for setting the return on equity.In September 2019 the FERC trial staff filed its rebuttal testimony in the return on equity proceeding. For the first refund period, theFERC trial staff calculates an authorized return on equity for System Energy of 9.40% based on the application of the FERC’s proposedmethodology and an updated proxy group. For the second refund period, based on the study period ending May 31, 2019, the FERC trial staffrebuttal testimony argues for a return on equity of 9.63%. In September 2019 the FERC trial staff also filed direct and answering testimonyrelating to System Energy’s capital structure. The FERC trial staff argues that the average capital structure of the proxy group used todevelop System Energy’s return on equity should be used to establish the capital structure. Using this approach, the FERC trial staffcalculates the average capital structure for its proposed proxy group of 46.74% common equity, and 53.26% debt.In October 2019, System Energy filed answering testimony disputing the FERC trial staff’s, the LPSC’s, and the APSC’s andMPSC’s arguments for the use of a hypothetical capital structure and arguing that the use of System Energy’s actual capital structure is justand reasonable.In November 2019, in a proceeding that did not involve Entergy, the FERC issued an order addressing the methodology fordetermining the return on equity applicable to transmission owners in MISO. Thereafter, the participants in the System Energy proceedingagreed to amend the procedural schedule to allow the participants to file testimony addressing the order in the MISO transmission ownerproceeding. Under the new schedule, the hearing in the System Energy proceeding will commence in June 2020 and the initial decision willbe due in October 2020.97 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsGrand Gulf Sale-leaseback Renewal ComplaintIn May 2018 the LPSC filed a complaint against System Energy and Entergy Services related to System Energy’s renewal of a sale-leaseback transaction originally entered into in December 1988 for an 11.5% undivided interest in Grand Gulf Unit 1. The complaint allegesthat System Energy violated the filed rate and the FERC’s ratemaking and accounting requirements when it included in Unit Power SalesAgreement billings the cost of capital additions associated with the sale-leaseback interest, and that System Energy is double-recoveringcosts by including both the lease payments and the capital additions in Unit Power Sales Agreement billings. The complaint also claims thatSystem Energy was imprudent in entering into the sale-leaseback renewal because the Utility operating companies that purchase GrandGulf’s output from System Energy could have obtained cheaper capacity and energy in the MISO markets. The complaint further alleges thatSystem Energy violated various other reporting and accounting requirements and should have sought prior FERC approval of the leaserenewal. The complaint seeks various forms of relief from the FERC. The complaint seeks refunds for capital addition costs for all years inwhich they were recorded in allegedly non-formula accounts or, alternatively, the disallowance of the return on equity for the capitaladditions in those years plus interest. The complaint also asks that the FERC disallow and refund the lease costs of the sale-leasebackrenewal on grounds of imprudence, investigate System Energy’s treatment of a DOE litigation payment, and impose certain forward-lookingprocedural protections, including audit rights for retail regulators of the Unit Power Sales Agreement formula rates. The APSC, MPSC, andCity Council intervened in the proceeding.In June 2018, System Energy and Entergy Services filed a motion to dismiss and an answer to the LPSC complaint denying thatSystem Energy’s treatment of the sale-leaseback renewal and capital additions violated the terms of the filed rate or any other FERCratemaking, accounting, or legal requirements or otherwise constituted double recovery. The response also argued that the complaint isinconsistent with a FERC-approved settlement to which the LPSC is a party and that explicitly authorizes System Energy to recover its leasepayments. Finally, the response argued that both the capital additions and the sale-leaseback renewal were prudent investments and the LPSCcomplaint fails to justify any disallowance or refunds. The response also offered to submit formula rate protocols for the Unit Power SalesAgreement similar to the procedures used for reviewing transmission rates under the MISO tariff. In September 2018 the FERC issued anorder setting the complaint for hearing and settlement proceedings. The FERC established a refund effective date of May 18, 2018.In February 2019 the presiding ALJ ruled that the hearing ordered by the FERC includes the issue of whether specific subcategoriesof 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 seeks refunds that include the renewal lease payments(approximately $17.2 million per year since July 2015), rate base reductions for accumulated deferred income tax associated with uncertaintax positions (claimed to be approximately $334.5 million as of December 2018), and the cost of capital additions associated with the sale-leaseback interest (claimed to be approximately $274.8 million), as well as interest on those amounts. The direct testimony of the CityCouncil and the APSC and MPSC address various issues raised by the LPSC. System Energy disputes that any refunds are owed for billingsunder the Unit Power Sales Agreement.In June 2019 System Energy filed answering testimony in the sale-leaseback complaint proceeding arguing that the FERC shouldreject all claims for refunds. Among other things, System Energy argued that claims for refunds of the costs of lease renewal payments andcapital additions should be rejected because those costs were recovered consistent with the Unit Power Sales Agreement formula rate, SystemEnergy was not over or double recovering any costs, and ratepayers will save approximately $850 million over initial and renewal terms ofthe leases. System Energy argued that claims for refunds associated with liabilities arising from uncertain tax positions should be rejectedbecause the liabilities do not provide cost-free capital, the repayment timing of the liabilities is uncertain, and the outcome of the underlyingtax 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 liabilitiesassociated with uncertain tax positions (claimed to be up to approximately $602 million plus interest).98 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe FERC trial staff also argued that System Energy recovered $32 million more than it should have in depreciation expense for capitaladditions. In September 2019, System Energy filed cross-answering testimony disputing the FERC trial staff’s arguments for refunds, statingthat the FERC trial staff’s position regarding depreciation rates for capital additions is not unreasonable and explaining that any change indepreciation expense is only one element of a Unit Power Sales Agreement rebilling calculation. Adjustments to depreciation expense in anyrebilling under the Unit Power Sales Agreement formula rate will also involve changes to accumulated depreciation, accumulated deferredincome taxes, and other formula elements as needed. In October 2019 the LPSC filed rebuttal testimony increasing the amount of refundssought for liabilities associated with uncertain tax positions. The LPSC now seeks approximately $512 million plus interest. At the sametime, the FERC trial staff filed rebuttal testimony conceding that it was no longer seeking up to $602 million related to the uncertain taxpositions; instead, it is seeking approximately $511 million plus interest. The LPSC also argued that adjustments to depreciation rates shouldaffect rate base on a prospective basis only.A hearing was held before a FERC ALJ in November 2019 and the initial decision is due in April 2020.Unit Power Sales AgreementIn August 2017, System Energy submitted to the FERC proposed amendments to the Unit Power Sales Agreement pursuant to whichSystem Energy sells its Grand Gulf capacity and energy to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy NewOrleans. The filing proposes limited amendments to the Unit Power Sales Agreement to adopt (1) updated rates for use in calculating GrandGulf plant depreciation and amortization expenses and (2) updated nuclear decommissioning cost annual revenue requirements, both ofwhich are recovered through the Unit Power Sales Agreement rate formula. The amendments result in lower charges to the Utility operatingcompanies that buy capacity and energy from System Energy under the Unit Power Sales Agreement. The changes were based on updateddepreciation and nuclear decommissioning studies that take into account the renewal of Grand Gulf’s operating license for a term throughNovember 1, 2044.In September 2017 the FERC accepted System Energy’s proposed Unit Power Sales Agreement amendments, subject to furtherproceedings to consider the justness and reasonableness of the amendments. Because the amendments propose a rate decrease, the FERC alsoinitiated an investigation under Section 206 of the Federal Power Act to determine if the rate decrease should be lower than proposed. TheFERC accepted the proposed amendments effective October 1, 2017, subject to refund pending the outcome of the further settlement and/orhearing proceedings, and established a refund effective date of October 11, 2017 with respect to the rate decrease. In June 2018, SystemEnergy filed with the FERC an uncontested settlement relating to the updated depreciation rates and nuclear decommissioning cost annualrevenue requirements. In August 2018 the FERC issued an order accepting the settlement. In the third quarter 2018, System Energy recordeda reduction in depreciation expense of approximately $26 million, representing the cumulative difference in depreciation expense resultingfrom the depreciation rates used from October 11, 2017 through September 30, 2018 and the depreciation rates included in the settlementfiling accepted by the FERC. Storm Cost Recovery Filings with Retail RegulatorsEntergy LouisianaHurricane IsaacIn August 2012, Hurricane Isaac caused extensive damage to Entergy Louisiana’s service area. The storm resulted in widespreadpower outages, significant damage primarily to distribution infrastructure, and the loss of sales during the power outages. In June 2014 theLPSC authorized Entergy Louisiana to utilize Louisiana Act 55 financing for Hurricane Isaac system restoration costs. Entergy Louisianacommitted to pass on to customers a minimum of $30.8 million of customer benefits through annual customer credits of approximately $6.2million for five years. Approvals for the Act 55 financings were obtained from the Louisiana Utilities Restoration Corporation (LURC) andthe Louisiana State Bond Commission.99 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsIn August 2014 the Louisiana Local Government Environmental Facilities and Community Development Authority (LCDA) issued$314.85 million in bonds under Louisiana Act 55. From the $309 million of bond proceeds loaned by the LCDA to the LURC, the LURCdeposited $16 million in a restricted escrow account as a storm damage reserve for Entergy Louisiana and transferred $293 million directly toEntergy Louisiana. Entergy Louisiana used the $293 million received from the LURC to acquire 2,935,152.69 Class C preferred, non-voting, membership interest units of Entergy Holdings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a7.5% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2014, and the membership interests have aliquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after tenyears under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which EntergyHoldings Company LLC is subject, including the requirement to maintain a net worth of at least $1.75 billion.Entergy and Entergy Louisiana do not report the bonds issued by the LCDA on their balance sheets because the bonds are theobligation of the LCDA and there is no recourse against Entergy or Entergy Louisiana in the event of a bond default. To service the bonds,Entergy Louisiana collects a system restoration charge on behalf of the LURC and remits the collections to the bond indenturetrustee. Entergy and Entergy Louisiana do not report the collections as revenue because Entergy Louisiana is merely acting as the billing andcollection agent for the state.Hurricane Gustav and Hurricane IkeIn September 2008, Hurricane Gustav and Hurricane Ike caused catastrophic damage to Entergy Louisiana’s service territory. InDecember 2009, Entergy Louisiana entered into a stipulation agreement with the LPSC staff regarding its storm costs. In March and April2010, Entergy Louisiana and other parties to the proceeding filed with the LPSC an uncontested stipulated settlement that included EntergyLouisiana’s proposal to utilize Act 55 financing, which included a commitment to pass on to customers a minimum of $43.3 million ofcustomer benefits through a prospective annual rate reduction of $8.7 million for five years. In April 2010 the LPSC approved the settlementand subsequently issued financing orders and a ratemaking order intended to facilitate the implementation of the Act 55 financings. In June2010 the Louisiana State Bond Commission approved the Act 55 financing. The settlement agreement allowed for an adjustment to thecredits if there was a change in the applicable federal or state income tax rate. As a result of the enactment of the Tax Cuts and Jobs Act, inDecember 2017, and the lowering of the federal corporate income tax rate from 35% to 21%, the Louisiana Act 55 financing savingsobligation regulatory liability related to Hurricane Gustav and Hurricane Ike was reduced by $2.7 million, with a corresponding increase toOther regulatory credits on the income statement. The effects of the Tax Cuts and Jobs Act are discussed further in Note 3 to the financialstatements.In July 2010, the LCDA issued two series of bonds totaling $713.0 million under Act 55. From the $702.7 million of bond proceedsloaned by the LCDA to the LURC, the LURC deposited $290 million in a restricted escrow account as a storm damage reserve for EntergyLouisiana and transferred $412.7 million directly to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from theLURC, Entergy Louisiana used $412.7 million to acquire 4,126,940.15 Class B preferred, non-voting, membership interest units of EntergyHoldings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 9% annual distribution rate. Distributions arepayable quarterly commencing on September 15, 2010, and the membership interests have a liquidation price of $100 per unit. The preferredmembership interests are callable at the option of Entergy Holdings Company LLC after ten years under the terms of the LLCagreement. The terms of the membership interests include certain financial covenants to which Entergy Holdings Company LLC is subject,including the requirement to maintain a net worth of at least $1 billion.Entergy and Entergy Louisiana do not report the bonds issued by the LCDA on their balance sheets because the bonds are theobligation of the LCDA, and there is no recourse against Entergy or Entergy Louisiana in the event of a bond default. To service the bonds,Entergy Louisiana collects a system restoration charge on behalf of the LURC100 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsand remits the collections to the bond indenture trustee. Entergy and Entergy Louisiana do not report the collections as revenue becauseEntergy Louisiana is merely acting as the billing and collection agent for the state.Hurricane Katrina and Hurricane RitaIn August and September 2005, Hurricanes Katrina and Rita caused catastrophic damage to Entergy Louisiana’s service territory. InMarch 2008, Entergy Louisiana and the LURC filed at the LPSC an application requesting that the LPSC grant a financing order authorizingthe financing of Entergy Louisiana storm costs, storm reserves, and issuance costs pursuant to Louisiana Act 55. Entergy Louisiana also filedan application requesting LPSC approval for ancillary issues including the mechanism to flow charges and savings to customers via a stormcost offset rider. In April 2008 the Louisiana Public Facilities Authority (LPFA), which is the issuer of the bonds pursuant to the Act 55financing, approved requests for the Act 55 financing. Also in April 2008, Entergy Louisiana and the LPSC staff filed with the LPSC anuncontested stipulated settlement that included Entergy Louisiana’s proposal under the Act 55 financing, which included a commitment topass on to customers a minimum of $40 million of customer benefits through a prospective annual rate reduction of $8 million for fiveyears. The LPSC subsequently approved the settlement and issued two financing orders and one ratemaking order intended to facilitateimplementation of the Act 55 financing. In May 2008 the Louisiana State Bond Commission granted final approval of the Act 55 financing.The settlement agreement allowed for an adjustment to the credits if there was a change in the applicable federal or state income tax rate. As aresult of the enactment of the Tax Cuts and Jobs Act, in December 2017, and the lowering of the federal corporate income tax rate from 35%to 21%, the Louisiana Act 55 financing savings obligation regulatory liability related to Hurricanes Katrina and Rita was reduced by $22.3million, with a corresponding increase to Other regulatory credits on the income statement. The effects of the Tax Cuts and Jobs Act arediscussed further in Note 3 to the financial statements.In July 2008 the LPFA issued $687.7 million in bonds under the aforementioned Act 55. From the $679 million of bond proceedsloaned by the LPFA to the LURC, the LURC deposited $152 million in a restricted escrow account as a storm damage reserve for EntergyLouisiana and transferred $527 million directly to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from theLURC, Entergy Louisiana invested $545 million, including $17.8 million that was withdrawn from the restricted escrow account as approvedby the April 16, 2008 LPSC orders, in exchange for 5,449,861.85 Class A preferred, non-voting, membership interest units of EntergyHoldings Company LLC, a company wholly-owned and consolidated by Entergy, that carry a 10% annual distribution rate. In August 2008,the LPFA issued $278.4 million in bonds under the aforementioned Act 55. From the $274.7 million of bond proceeds loaned by the LPFAto the LURC, the LURC deposited $87 million in a restricted escrow account as a storm damage reserve for Entergy Louisiana andtransferred $187.7 million directly to Entergy Louisiana. From the bond proceeds received by Entergy Louisiana from the LURC, EntergyLouisiana invested $189.4 million, including $1.7 million that was withdrawn from the restricted escrow account as approved by the April16, 2008 LPSC orders, in exchange for 1,893,918.39 Class A preferred, non-voting, membership interest units of Entergy Holdings CompanyLLC that carry a 10% annual distribution rate. Distributions are payable quarterly commencing on September 15, 2008 and have aliquidation price of $100 per unit. The preferred membership interests are callable at the option of Entergy Holdings Company LLC after tenyears under the terms of the LLC agreement. The terms of the membership interests include certain financial covenants to which EntergyHoldings Company LLC is subject, including the requirement to maintain a net worth of at least $1 billion. The bonds were repaid in 2018. Entergy and Entergy Louisiana did not report the bonds issued by the LPFA on their balance sheetsbecause the bonds are the obligation of the LPFA, and there was no recourse against Entergy or Entergy Louisiana in the event of a bonddefault. To service the bonds, Entergy Louisiana collected a system restoration charge on behalf of the LURC and remitted the collections tothe bond indenture trustee. Entergy and Entergy Louisiana did not report the collections as revenue because Entergy Louisiana was merelyacting as the billing and collection agent for the state.101 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy MississippiEntergy Mississippi has approval from the MPSC to collect a storm damage provision of $1.75 million per month. If EntergyMississippi’s accumulated storm damage provision balance exceeds $15 million, the collection of the storm damage provision ceases untilsuch time that the accumulated storm damage provision becomes less than $10 million. As of July 31, 2017, the balance in EntergyMississippi’s accumulated storm damage provision was less than $10 million, therefore Entergy Mississippi resumed billing the monthlystorm damage provision effective with September 2017 bills. As of June 30, 2018, Entergy Mississippi’s storm damage provision balanceexceeded $15 million. Accordingly, the storm damage provision was reset to zero beginning with August 2018 bills. As of May 31, 2019,Entergy Mississippi’s storm damage provision balance was less than $10 million. Accordingly, Entergy Mississippi resumed billing themonthly storm damage provision effective with July 2019 bills.Entergy New OrleansIn August 2012, Hurricane Isaac caused extensive damage to Entergy New Orleans’s service area. In January 2015 the City Councilissued a resolution approving the terms of a joint agreement in principle filed by Entergy New Orleans, Entergy Louisiana, and the CityCouncil Advisors determining, among other things, that Entergy New Orleans’s prudently-incurred storm recovery costs were $49.3 million,of which $31.7 million, net of reimbursements from the storm reserve escrow account, remained recoverable from Entergy New Orleans’selectric customers. The resolution also directed Entergy New Orleans to file an application to securitize the unrecovered City Council-approved storm recovery costs of $31.7 million pursuant to the Louisiana Electric Utility Storm Recovery Securitization Act (Louisiana Act64). In addition, the resolution found that it was reasonable for Entergy New Orleans to include in the principal amount of its potentialsecuritization the costs to fund and replenish Entergy New Orleans’s storm reserve in an amount that achieved the City Council-approvedfunding level of $75 million. In January 2015, in compliance with that directive, Entergy New Orleans filed with the City Council anapplication requesting that the City Council grant a financing order authorizing the financing of Entergy New Orleans’s storm costs, stormreserves, and issuance costs pursuant to Louisiana Act 64. In May 2015 the parties entered into an agreement in principle and the CityCouncil issued a financing order authorizing Entergy New Orleans to issue storm recovery bonds in the aggregate amount of $98.7 million,including $31.8 million for recovery of Entergy New Orleans’s Hurricane Isaac storm recovery costs, including carrying costs, $63.9 millionto fund and replenish Entergy New Orleans’s storm reserve, and approximately $3 million for estimated up-front financing costs associatedwith the securitization. See Note 5 to the financial statements for discussion of the issuance of the securitization bonds in July 2015.New Nuclear Generation Development CostsEntergy LouisianaEntergy Louisiana and Entergy Gulf States Louisiana were developing a project option for new nuclear generation at River Bend. InMarch 2010, Entergy Louisiana and Entergy Gulf States Louisiana filed with the LPSC seeking approval to continue the limited developmentactivities necessary to preserve an option to construct a new unit at River Bend. At its June 2012 meeting the LPSC voted to uphold an ALJrecommendation that the request of Entergy Louisiana and Entergy Gulf States Louisiana be declined on the basis that the LPSC’s rule onnew nuclear development does not apply to activities to preserve an option to develop and on the further grounds that the companiesimproperly engaged in advanced preparation activities prior to certification. The LPSC directed that Entergy Louisiana and Entergy GulfStates Louisiana be permitted to seek recovery of these costs in their upcoming rate case filings that were subsequently filed in February2013. In the resolution of the rate case proceeding the LPSC provided for an eight-year amortization of costs incurred in connection with thepotential development of new nuclear generation at River Bend, without carrying costs, beginning in December 2014, provided, however,that amortization of these costs shall not result in a future rate increase. As of December 31, 2019, Entergy Louisiana has a regulatory assetof $21.2 million on its balance sheet related to these new nuclear generation development costs.102 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 3. INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, Entergy Texas, and System Energy)Income taxes for 2019, 2018, and 2017 for Entergy Corporation and Subsidiaries consist of the following: 2019 2018 2017 (In Thousands)Current: Federal($14,416) $36,848 $29,595State6,535 7,274 15,478Total(7,881) 44,122 45,073Deferred and non-current - net(155,956) (1,074,416) 505,010Investment tax credit adjustments - net(5,988) (6,532) (7,513)Income taxes($169,825) ($1,036,826) $542,570 Income taxes for 2019, 2018, and 2017 for Entergy’s Registrant Subsidiaries consist of the following:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Current: Federal ($14,549) ($20,173) ($8,939) ($5,822) $16,035 $16,256State (714) (735) 5,823 1,856 663 (2,831)Total (15,263) (20,908) (3,116) (3,966) 16,698 13,425Deferred and non-current - net (30,278) 147,453 34,579 4,248 (69,963) 422Investment tax credit adjustments - net (1,228) (4,922) (597) (96) (631) 1,502Income taxes ($46,769) $121,623 $30,866 $186 ($53,896) $15,3492018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Current: Federal ($23,638) ($15,841) ($11,275) ($10,813) $16,190 ($9,786)State (1,617) (1,122) (1,066) 545 3,205 (1,821)Total (25,255) (16,963) (12,341) (10,268) 19,395 (11,607)Deferred and non-current - net (270,586) (32,725) (114,738) 7,943 (44,817) (35,329)Investment tax credit adjustments - net (1,226) (4,923) 1,306 (111) (821) (739)Income taxes ($297,067) ($54,611) ($125,773) ($2,436) ($26,243) ($47,675)103 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2017 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Current: Federal $16,086 ($84,250) ($8,845) ($30,635) $6,034 $47,674State 9,191 1,480 (924) (728) 310 5,314Total 25,277 (82,770) (9,769) (31,363) 6,344 52,988Deferred and non-current - net 69,753 572,988 83,501 62,946 43,102 19,243Investment tax credit adjustments - net (1,226) (4,920) 187 1,695 (965) (2,262)Income taxes $93,804 $485,298 $73,919 $33,278 $48,481 $69,969104 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsTotal income taxes for Entergy Corporation and Subsidiaries differ from the amounts computed by applying the statutory income taxrate to income before income taxes. The reasons for the differences for the years 2019, 2018, and 2017 are: 2019 2018 2017 (In Thousands)Net income (loss) attributable to Entergy Corporation$1,241,226 $848,661 $411,612Preferred dividend requirements of subsidiaries17,018 13,894 13,741Consolidated net income (loss)1,258,244 862,555 425,353Income taxes(169,825) (1,036,826) 542,570Income (loss) before income taxes$1,088,419 ($174,271) $967,923Computed at statutory rate (21% for 2019 and 2018) (35% for2017)$228,568 ($36,597) $338,773Increases (reductions) in tax resulting from: State income taxes net of federal income tax effect61,791 21,398 44,179Regulatory differences - utility plant items(45,336) (37,507) 39,825Equity component of AFUDC(30,444) (27,216) (33,282)Amortization of investment tax credits(8,093) (8,304) (10,204)Flow-through / permanent differences(2,059) 439 8,727Tax legislation enactment (a)— — 560,410Amortization of excess ADIT (a)(205,614) (577,082) —Revisions of the 2017 tax legislation enactment regulatoryliability accrual, including the effect of the Entergy Texas2018 base rate proceeding— (40,494) —Utility restructuring (b)— (169,918) —Settlement on treatment of regulatory obligations (c)— (52,320) —State income tax audit conclusion— (23,425) —IRS audit adjustment— (8,404) —Entergy Wholesale Commodities nuclear decommissioningtrust restructuring (d)— (106,833) —Entergy Wholesale Commodities restructuring (d)(173,725) — (373,277)FitzPatrick disposition— — (44,344)Charitable contribution (d)(19,101)——Net operating loss recognition(41,427)——Provision for uncertain tax positions7,332 24,569 8,756Valuation allowance59,345 2,211 —Other - net(1,062) 2,657 3,007Total income taxes as reported($169,825) ($1,036,826) $542,570Effective Income Tax Rate(15.6%) 595.0% 56.1%(a)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 andthe tax legislation enactment in 2017.(b)See “Other Tax Matters - Entergy Arkansas and Entergy Mississippi Internal Restructuring” below for discussion of theUtility restructuring.(c)See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement.(d)See “Other Tax Matters - Entergy Wholesale Commodities Restructuring” below for discussion of the Entergy WholesaleCommodities nuclear decommissioning trust restructuring in 2018, the Entergy Wholesale Commodities restructurings in 2017 and2019, and the charitable contribution in 2019.105 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsTotal income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate toincome before taxes. The reasons for the differences for the years 2019, 2018, and 2017 are:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Net income $262,964 $691,537 $119,925 $52,629 $159,397 $99,120Income taxes (46,769) 121,623 30,866 186 (53,896) 15,349Pretax income $216,195 $813,160 $150,791 $52,815 $105,501 $114,469Computed at statutory rate (21%) $45,401 $170,764 $31,666 $11,091 $22,155 $24,039Increases (reductions) in tax resulting from: State income taxes net of federal incometax effect 15,954 42,854 5,563 3,443 360 5,134Regulatory differences - utility plantitems (10,627) (19,421) (5,556) (1,532) (1,987) (6,213)Equity component of AFUDC (3,255) (15,545) (1,755) (2,088) (5,973) (1,829)Amortization of investment tax credits (1,201) (4,871) (160) (88) (617) (1,155)Flow-through / permanent differences 696 439 160 (741) 560 (500)Amortization of excess ADIT (b) (90,921) (28,531) 203 (11,724) (69,091) (5,550)Non-taxable dividend income — (26,795) — — — —Provision for uncertain tax positions (3,517) 1,519 500 1,672 430 1,300Other - net 701 1,210 245 153 267 123Total income taxes as reported ($46,769) $121,623 $30,866 $186 ($53,896) $15,349Effective Income Tax Rate (21.6%) 15.0% 20.5% 0.4% (51.1%) 13.4%106 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Net income $252,707 $675,614 $126,078 $53,152 $162,235 $94,109Income taxes (297,067) (54,611) (125,773) (2,436) (26,243) (47,675)Pretax income ($44,360) $621,003 $305 $50,716 $135,992 $46,434Computed at statutory rate (21%) ($9,316) $130,411 $64 $10,650 $28,558 $9,751Increases (reductions) in tax resultingfrom: State income taxes net of federalincome tax effect (794) 26,031 (1,747) 2,322 2,576 2,812Regulatory differences - utility plantitems (14,916) (12,604) (4,103) (1,502) (1,872) (2,510)Equity component of AFUDC (3,477) (16,784) (1,829) (1,248) (2,042) (1,837)Amortization of investment tax credits (1,201) (4,871) (160) (109) (808) (1,155)Flow-through / permanent differences 570 3,203 1,893 (4,222) 1,038 2,815Revisions of the 2017 tax legislationenactment regulatory liabilityaccrual, including the effect of theEntergy Texas 2018 base rateproceeding (a) 933 (2,810) (556) 884 (43,799) (3,565)Amortization of excess ADIT (b) (271,570) (104,313) (120,831) (9,878) (11,519) (58,971)Settlement on treatment of regulatoryobligations (c) — (52,320) — — — —IRS audit adjustment 1,290 1,097 1,018 (96) 524 (12)Non-taxable dividend income — (26,795) — — — —Provision for uncertain tax positions 724 3,949 240 613 839 4,876Other - net 690 1,195 238 150 262 121Total income taxes as reported ($297,067) ($54,611) ($125,773) ($2,436) ($26,243) ($47,675)Effective Income Tax Rate 669.7% (8.8%) (41,237.0%) (4.8%) (19.3%) (102.7%)107 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2017 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Net income $139,844 $316,347 $110,032 $44,553 $76,173 $78,596Income taxes 93,804 485,298 73,919 33,278 48,481 69,969Pretax income $233,648 $801,645 $183,951 $77,831 $124,654 $148,565Computed at statutory rate (35%) $81,777 $280,576 $64,383 $27,241 $43,629 $51,998Increases (reductions) in tax resulting from: State income taxes net of federal income taxeffect 11,586 31,927 6,202 2,842 527 5,635Regulatory differences - utility plant items 7,220 12,168 1,356 619 5,581 12,880Equity component of AFUDC (6,458) (18,020) (3,383) (847) (2,353) (2,221)Amortization of investment tax credits (1,201) (4,871) (160) (124) (951) (2,896)Flow-through / permanent differences 3,098 3,774 1,567 (3,352) 1,428 (276)Tax legislation enactment (b) (3,090) 217,258 3,492 6,153 2,981 (69)Non-taxable dividend income — (44,658) — — — —Provision for uncertain tax positions 200 5,700 228 600 (2,617) 4,800Other - net 672 1,444 234 146 256 118Total income taxes as reported $93,804 $485,298 $73,919 $33,278 $48,481 $69,969Effective Income Tax Rate 40.1% 60.5% 40.2% 42.8% 38.9% 47.1%(a)See Note 2 to the financial statements for discussion of the Entergy Texas rate case settlement.(b)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2018 and 2019 andthe tax legislation enactment in 2017.(c)See “Income Tax Audits - 2012-2013 IRS Audit” below for discussion of the settlement for Entergy Louisiana.108 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsSignificant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as ofDecember 31, 2019 and 2018 are as follows: 2019 2018 (In Thousands)Deferred tax liabilities: Plant basis differences - net($4,111,761) ($3,835,211)Regulatory assets(389,573) (370,484)Nuclear decommissioning trusts/receivables(1,015,542) (1,128,140)Pension, net funding(348,260) (307,626)Combined unitary state taxes(11,519) (9,440)Power purchase agreements— (73,335)Deferred fuel(8,360) (29,953)Other(445,378) (248,997)Total(6,330,393) (6,003,186)Deferred tax assets: Nuclear decommissioning liabilities929,251 1,070,583Regulatory liabilities806,777 895,756Pension and other post-employment benefits297,272 305,736Sale and leaseback102,420 121,473Compensation87,355 86,461Accumulated deferred investment tax credit56,013 57,643Provision for allowances and contingencies126,886 135,631Power purchase agreements231,502 —Unbilled/deferred revenues(10,218) 43,762Net operating loss carryforwards1,133,197 628,165Capital losses and miscellaneous tax credits22,597 20,549Valuation allowance(303,307) (243,726)Other289,557 125,522Total3,769,302 3,247,555Non-current accrued taxes (including unrecognized tax benefits)(1,775,638) (1,296,928)Accumulated deferred income taxes and taxes accrued($4,336,729) ($4,052,559)Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows:Carryover Description Carryover Amount Year(s) of expiration Federal net operating losses before 1/1/2018 $9.8 billion 2023-2037Federal net operating losses - 1/1/2018 forward $10.7 billion N/AState net operating losses $20.8 billion 2020-2039Federal and state charitable contributions $395.8 million 2020-2024Miscellaneous federal and state credits $101.1 million 2020-2038109 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsAs a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements isless than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributesreflected on income tax returns. Entergy evaluates the available positive and negative evidence to estimate whether sufficient future taxableincome of the appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation indicates thatEntergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce deferred tax assets to the realizableamount.Because it is more likely than not that the benefit from certain state net operating loss and other deferred tax assets will not beutilized, valuation allowances totaling $303 million as of December 31, 2019 and $244 million as of December 31, 2018 have been providedon the deferred tax assets related to federal and state jurisdictions in which Entergy does not currently expect to be able to utilize certainseparate company tax return attributes, preventing realization of such deferred tax assets.110 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsSignificant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31,2019 and 2018 are as follows:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Deferred tax liabilities: Plant basis differences - net ($979,033) ($1,987,025) ($565,202) ($133,073) ($551,365) ($380,594)Regulatory assets (170,949) (79,117) (10,528) (16,867) (59,745) (52,662)Nuclear decommissioningtrusts/receivables (120,306) (113,830) — — — (100,621)Pension, net funding (102,685) (98,743) (27,325) (11,859) (19,961) (21,609)Deferred fuel — (2,637) (609) (666) (4,380) (55)Other (82,682) (94,139) (27,905) (25,909) 2,059 (7,350)Total (1,455,655) (2,375,491) (631,569) (188,374) (633,392) (562,891)Deferred tax assets: Regulatory liabilities 250,410 283,507 53,421 33,258 65,602 121,011Nuclear decommissioning liabilities 111,078 56,300 — — — 52,633Pension and other post-employmentbenefits (21,828) 74,881 (5,844) (12,666) (15,406) (898)Sale and leaseback — — — — — 102,480Accumulated deferred investment taxcredit 8,285 32,534 2,396 556 2,217 10,025Provision for allowances andcontingencies 5,365 77,298 12,963 24,022 4,024 —Power purchase agreements (15,087) 18,004 1,147 7,961 26 —Unbilled/deferred revenues 5,897 (28,081) 4,715 1,428 5,544 —Compensation 2,550 3,670 1,625 496 1,282 75Net operating loss carryforwards 112,658 65,178 21,492 5,056 — —Capital losses and miscellaneous taxcredits — — 45 — — 7,857Other 12,541 35,401 999 9,027 2,004 3Total 471,869 618,692 92,959 69,138 65,293 293,186Non-current accrued taxes (includingunrecognized tax benefits) (199,340) (707,714) (56,222) (235,300) (17,314) (544,235)Accumulated deferred income taxesand taxes accrued ($1,183,126) ($2,464,513) ($594,832) ($354,536) ($585,413) ($813,940)111 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Deferred tax liabilities: Plant basis differences - net ($966,791) ($1,893,831) ($579,319) ($135,143) ($544,282) ($403,809)Regulatory assets (169,482) (74,917) (1,732) (20,009) (57,777) (46,627)Nuclear decommissioningtrusts/receivables (77,664) (71,470) — — — (86,882)Pension, net funding (91,962) (92,693) (24,398) (11,885) (20,331) (18,898)Deferred fuel (5,801) (6,974) (11,819) (1,701) (2,835) (312)Other (41,025) (34,700) (13,443) (7,640) (6,085) (4,544)Total (1,352,725) (2,174,585) (630,711) (176,378) (631,310) (561,072)Deferred tax assets: Regulatory liabilities 247,964 339,126 72,570 40,181 86,032 110,370Nuclear decommissioning liabilities 99,479 48,738 — — — 46,643Pension and other post-employmentbenefits (19,068) 80,102 (5,405) (11,371) (14,215) (632)Sale and leaseback — 18,999 — — — 102,481Accumulated deferred investment taxcredit 8,599 33,928 2,541 579 2,347 9,649Provision for allowances andcontingencies 9,877 81,108 13,412 23,962 5,579 —Power purchase agreements (17,223) 19,385 1,140 12,155 (18) —Unbilled/deferred revenues 7,471 (17,345) 5,527 636 7,016 —Compensation 1,708 1,959 1,265 512 995 (260)Net operating loss carryforwards 6,338 20,118 4,896 480 261 —Other 7,977 23,412 1,610 12,181 2,127 4Total 353,122 649,530 97,556 79,315 90,124 268,255Non-current accrued taxes (includingunrecognized tax benefits) (85,942) (701,666) (18,714) (226,532) (11,349) (512,479)Accumulated deferred income taxesand taxes accrued ($1,085,545) ($2,226,721) ($551,869) ($323,595) ($552,535) ($805,296)112 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2019 are as follows: EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy Federal net operating losses $4.4 billion $4.3 billion $2 billion $1.1 billion $— $—Year(s) of expiration N/A 2035-2037 N/A 2037 N/A N/A State net operating losses $4.5 billion $5.2 billion $2.1 billion $1.2 billion $— $—Year(s) of expiration 2024 2035-2039 2038-2039 2038-2039 N/A N/A Misc. federal credits $— $5.2 million $— $— $1.9 million $3.2 millionYear(s) of expiration N/A 2035-2038 N/A N/A 2029-2038 2029-2038 State credits $— $— $— $— $2.9 million $13.1 millionYear(s) of expiration N/A N/A N/A N/A 2026 2020-2023As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements isless than the amount of the tax effect of the federal and state net operating loss carryovers and tax credit carryovers.Unrecognized tax benefitsAccounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can berecognized in the financial statements. If a tax deduction is taken on a tax return but does not meet the more-likely-than-not recognitionthreshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded. A reconciliation ofEntergy’s beginning and ending amount of unrecognized tax benefits is as follows: 2019 2018 2017 (In Thousands)Gross balance at January 1$7,181,482 $4,871,846 $3,909,855Additions based on tax positions related to the current year731,276 2,276,614 1,120,687Additions for tax positions of prior years151,628 506,142 283,683Reductions for tax positions of prior years(681,232) (274,600) (442,379)Settlements— (198,520) —Gross balance at December 317,383,154 7,181,482 4,871,846Offsets to gross unrecognized tax benefits: Carryovers and refund claims(5,831,587) (5,957,992) (3,945,524)Cash paid to taxing authorities(10,000) (10,000) (10,000)Unrecognized tax benefits net of unused tax attributes, refund claims and payments (a)$1,541,567 $1,213,490 $916,322(a)Potential tax liability above what is payable on tax returnsThe balances of unrecognized tax benefits include $2,421 million, $2,161 million, and $1,462 million as of December 31, 2019,2018, and 2017, respectively, which, if recognized, would lower the effective income tax rates. Because of the effect of deferred taxaccounting, the remaining balances of unrecognized tax benefits of $4,962113 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsmillion, $5,020 million, and $3,410 million as of December 31, 2019, 2018, and 2017, respectively, if disallowed, would not affect theannual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense. Entergy’s December 31, 2019,2018, and 2017 accrued balance for the possible payment of interest is approximately $48 million, $44 million, and $38 million,respectively. Interest (net-of-tax) of $4 million, $7 million, and $8 million was recorded in 2019, 2018, and 2017, respectively.A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2019, 2018, and 2017is as follows:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Gross balance at January 1, 2019 $1,298,662 $2,400,171 $508,765 $686,687 $17,802 $467,487Additions based on tax positions related to thecurrent year 84,335 28,705 68,594 40,676 2,312 5,496Additions for tax positions of prior years 20,399 25,090 1,651 489 1,299 2,186Reductions for tax positions of prior years (62,154) (72,313) (12,723) (11,079) (7) (1,838)Gross balance at December 31, 2019 1,341,242 2,381,653 566,287 716,773 21,406 473,331Offsets to gross unrecognized tax benefits: Loss carryovers (1,134,187) (1,573,257) (506,976) (445,430) (3,944) (8,392)Unrecognized tax benefits net of unused taxattributes and payments $207,055 $808,396 $59,311 $271,343 $17,462 $464,9392018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Gross balance at January 1, 2018 ($117,716) $2,518,457 $15,122 $679,544 $16,399 $445,511Additions based on tax positions related to thecurrent year (a) 1,430,828 30,577 493,039 2,261 1,978 18,271Additions for tax positions of prior years 31,612 77,372 3,878 12,972 1,722 7,255Reductions for tax positions of prior years (21,619) (158,510) (3,253) (8,081) (2,262) (3,253)Settlements (24,443) (67,725) (21) (9) (35) (297)Gross balance at December 31, 2018 1,298,662 2,400,171 508,765 686,687 17,802 467,487Offsets to gross unrecognized tax benefits: Loss carryovers (1,173,839) (1,597,826) (478,268) (420,813) (3,199) (42,228)Unrecognized tax benefits net of unused taxattributes and payments $124,823 $802,345 $30,497 $265,874 $14,603 $425,259114 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2017 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Gross balance at January 1, 2017 $2,503 $2,440,339 $12,206 $166,230 $15,946 $472,372Additions based on tax positions related to thecurrent year (a) 8,974 32,843 2,105 509,183 1,747 909Additions for tax positions of prior years 3,682 235,331 1,267 13,364 3,115 1,432Reductions for tax positions of prior years (132,875) (190,056) (456) (9,233) (4,409) (29,202)Gross balance at December 31, 2017 (117,716) 2,518,457 15,122 679,544 16,399 445,511Offsets to gross unrecognized tax benefits: Loss carryovers — (1,591,907) (15,122) (441,374) (638) (12,536)Unrecognized tax benefits net of unused taxattributes and payments ($117,716) $926,550 $— $238,170 $15,761 $432,975(a)The primary additions for Entergy Mississippi in 2018, and Entergy New Orleans in 2017 are related to the mark-to-market treatmentdiscussed in “Other Tax Matters - Tax Accounting Methods” below. The primary additions for Entergy Arkansas in 2018 arerelated to the nuclear decommissioning costs treatment and the mark-to-market treatment discussed in “Other Tax Matters - TaxAccounting Methods” below.The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reducedincome tax expense as follows: December 31, 2019 2018 2017 (In Millions)Entergy Arkansas$203.3 $85.4 $2.6Entergy Louisiana$556.3 $594.0 $575.8Entergy Mississippi$1.9 $1.5 $—Entergy New Orleans$242.7 $246.2 $31.7Entergy Texas$5.7 $5.1 $4.4System Energy$— $— $—Accrued balances for the possible payment of interest related to unrecognized tax benefits are as follows: December 31, 2019 2018 2017 (In Millions)Entergy Arkansas$3.1 $1.7 $1.6Entergy Louisiana$14.2 $17.9 $14.1Entergy Mississippi$1.7 $1.2 $1.0Entergy New Orleans$4.7 $2.7 $2.1Entergy Texas$1.1 $0.9 $0.4System Energy$14.5 $13.2 $8.5115 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe Registrant Subsidiaries record interest and penalties related to unrecognized tax benefits in income tax expense. No penaltieswere recorded in 2019, 2018, and 2017. Interest (net-of-tax) was recorded as follows: 2019 2018 2017 (In Millions)Entergy Arkansas$1.4 $0.2 $0.2Entergy Louisiana($3.7) $3.8 $5.7Entergy Mississippi$0.5 $0.2 $0.2Entergy New Orleans$2.0 $0.6 $0.6Entergy Texas$0.2 $0.5 ($0.8)System Energy$1.3 $4.7 $4.8Income Tax AuditsEntergy and its subsidiaries file U.S. federal and various state and foreign income tax returns. IRS examinations are complete foryears before 2014. All state taxing authorities’ examinations are complete for years before 2015. Entergy regularly negotiates with the IRS toachieve settlements. The resolution of audit issues could result in significant changes to the amounts of unrecognized tax benefits in the nexttwelve months.2012-2013 IRS AuditThe IRS completed its examination of the 2012 and 2013 tax years and issued its 2012-2013 Revenue Agent Report (RAR) in June2018. Entergy agreed to all proposed adjustments contained in the RAR. Entergy and the Registrant Subsidiaries recorded the effects of theseadjustments in June 2018.As a result of the issuance of the RAR, Entergy Louisiana was able to recognize previously unrecognized tax benefits of $52 millionrelated to the Hurricane Katrina and Hurricane Rita contingent sharing obligation associated with the Louisiana Act 55 financing.2014-2015 IRS AuditThe IRS is examining the 2014 and 2015 tax years. Entergy expects the IRS to complete this examination in 2020. As of December31, 2019, Entergy has not received any proposed adjustments to taxable income from the IRS.Other Tax MattersTax Cuts and Jobs ActDeferred tax liabilities and assets have been adjusted for the effect of the enactment of the Tax Cuts and Jobs Act (the Act), signed byPresident Trump on December 22, 2017. The most significant effect of the Act for Entergy and the Registrant Subsidiaries was the change inthe federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Other significant provisions and their effect on Entergyand the Registrant Subsidiaries are summarized below.The Act limits the deduction for net business interest expense to 30 percent of adjusted taxable income which is similar to earningsbefore interest, taxes, depreciation, and amortization. The limitation does not apply to interest expense that is properly allocable to a trade orbusiness that furnishes or sells electrical energy, gas, or steam through a local distribution system, or transports gas or steam by pipeline if therates for such furnishing or sale are subject to ratemaking by a government entity or instrumentality or by a public utility commission.116 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe IRS issued proposed regulations relating to this limitation in November 2018. The regulations are generally proposed to beeffective for taxable years ending after the date Treasury adopts the regulations as final. Taxpayers may apply the rules of the proposedregulations to a taxable year beginning after December 31, 2017, so long as taxpayers consistently apply the rules of the proposedregulations. The proposed regulations provide guidance that if 90% of a tax group’s consolidated assets consist of utility property, the entireconsolidated tax group will be treated as a regulated public utility and all of the consolidated group’s interest expense will be currently taxdeductible.As a result of the limitation under the Act, Entergy recorded limitations in 2018 and 2019 and recorded a deferred tax asset on thenondeductible portion, as it has an unlimited carryover period. Entergy recorded a valuation allowance of $24 million due to a lack ofearnings from sources other than the Utility.The Act limits the net operating loss (NOL) deduction for a given year to 80% of taxable income, effective with respect to lossesarising in tax years beginning after December 31, 2017. Only NOLs generated after December 31, 2017 are subject to the 80% limitation.Prior law generally provided a two-year carryback and 20-year carryforward for NOLs. The Act does not allow a carryback period but doesprovide for the indefinite carryforward of NOLs arising in tax years ending after December 31, 2017. Because of the indefinite carryforward,the new limitations on NOL utilization are not expected to have a material effect on Entergy or the Registrant Subsidiaries.The Act also modified Internal Revenue Code section 162(m), which limits the deduction for compensation with respect to certaincovered employees to no more than $1 million per year. The IRS issued proposed regulations relating to this limitation in December 2019.The significant provisions of the Act and associated proposed regulations require inclusion of performance-based compensation and anexpanded definition of “covered employees” in the annual computation of the section 162 limitation. The Act amendments and associatedproposed regulations resulted in an increase in disallowed compensation expense, but this limitation does not have a material effect onEntergy or the Registrant Subsidiaries.With respect to the federal corporate income tax rate change from 35% to 21%, Entergy and the Registrant Subsidiaries recorded aregulatory liability associated with the decrease in the net accumulated deferred income tax liability, which is often referred to as “excessADIT,” a significant portion of which has been paid to customers in 2018 and 2019 in the form of lower rates. Entergy’s December 31, 2019and December 31, 2018 balance sheets reflect a regulatory liability of $1.7 billion and $2.1 billion, respectively, as a result of the re-measurement of deferred tax assets and liabilities from the income tax rate change, amortization of excess ADIT, and payments to customersduring 2018 and 2019. Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the effect thatexcess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect of a) the reduction of the netdeferred tax liability resulting in excess ADIT, b) the tax gross-up of excess ADIT, and c) the effect of the new tax rate on the previous netregulatory asset for income taxes. For the same reasons, the Registrant Subsidiaries’ December 31, 2019 and December 31, 2018 balancesheets reflect net regulatory liabilities for income taxes as follows: 2019 2018 (In Millions)Entergy Arkansas$487 $605Entergy Louisiana$531 $612Entergy Mississippi$237 $246Entergy New Orleans$59 $86Entergy Texas$253 $352System Energy$143 $163Excess ADIT is generally classified into two categories: 1) the portion that is subject to the normalization requirements of the Act,i.e., “protected”, and 2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. The Act provides that thenormalization method of accounting for income taxes is required for117 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsexcess ADIT associated with public utility property. The Act provides for the use of the average rate assumption method (ARAM) for thedetermination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over theremaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property istypically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalizationrequirements. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 and December 31, 2018,includes protected excess ADIT as follows: 2019 2018 (In Millions)Entergy Arkansas$490 $521Entergy Louisiana$797 $812Entergy Mississippi$261 $271Entergy New Orleans$62 $59Entergy Texas$228 $237System Energy$186 $202During the second quarter of 2018, the Registrant Subsidiaries began paying unprotected excess accumulated deferred income taxes,associated with the effects of the Act, to their customers through rate riders and other means approved by their respective regulatorycommissions. Payment of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability forincome taxes and a corresponding reduction in income tax expense. This has a significant effect on the effective tax rate for the period ascompared to the statutory tax rate. The Registrant Subsidiaries’ net regulatory liability for income taxes as of December 31, 2019 andDecember 31, 2018, includes unprotected excess ADIT as follows: 2019 2018 (In Millions)Entergy Arkansas$9 $117Entergy Louisiana$242 $295Entergy New Orleans$9 $25Entergy Texas$83 $171System Energy$— $4The return of unprotected excess accumulated deferred income taxes reduced Entergy’s and the Registrant Subsidiaries’ regulatoryliability for income taxes as follows for 2019 and 2018: 2019 2018 (In Millions)Entergy$273 $776Entergy Arkansas$126 $368Entergy Louisiana$39 $141Entergy Mississippi$— $159Entergy New Orleans$14 $13Entergy Texas$87 $15System Energy$7 $80In addition to the protected and unprotected excess ADIT amounts, the net regulatory liability for income taxes includes otherregulatory assets and liabilities for income taxes associated with AFUDC, which is described in Note 1 to the financial statements.118 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsFor a discussion of the proceedings commenced or other responses by Entergy’s regulators to the Act, see Note 2 to the financialstatements.Not all of Entergy’s excess ADIT is included in ratemaking. Consequently, Entergy recorded a net decrease in deferred tax assets of$560 million for which there was a corresponding charge to income tax expense for the year ended December 31, 2017. The correspondingincome tax expense (or benefit) recorded by the Registrant Subsidiaries was as follows: Entergy Arkansas, ($3 million); Entergy Louisiana,$217 million; Entergy Mississippi, $3 million; Entergy New Orleans, $6 million; Entergy Texas, $3 million; and System Energy, $0.Included in the effect of the computation of the changes in deferred tax assets and liabilities is the recognition threshold andmeasurement of uncertain tax positions resulting in unrecognized tax benefits. The final economic outcome of such unrecognized tax benefitsis generally the result of a negotiated settlement with the IRS that often differs from the amount that is recorded as realizable under GAAP.The intrinsic uncertainty with respect to all such tax positions means that the difference between current estimates of such amounts likely tobe realized and actual amounts realized upon settlement may have an effect on income tax expense and the regulatory liability for incometaxes in future periods.Entergy anticipates that the Act, including the federal corporate income tax rate change, may continue to have ramifications thatrequire adjustments in the future as certain events occur. These events include: 1) the evaluation by regulators in all of Entergy’s jurisdictionsregarding the ratemaking treatment of the Act and excess ADIT; 2) IRS audit adjustments to or amendments of federal and state income taxreturns that include modifications to the computation of taxable income resulting from the Act; and 3) additional guidance, interpretations, orrulings by the U.S. Department of the Treasury or the IRS. The potential exists for these types of events to result in future tax expenseadjustments because of the difference in the federal corporate income tax rate between past and future periods and the effect of the tax ratechange on ratemaking. In turn, these items also could potentially affect the regulatory liability for income taxes.Entergy Wholesale Commodities RestructuringThe tax classification of the entity that owned FitzPatrick changed in the second quarter 2016. The change in tax classificationrequired Entergy to recognize the plant’s nuclear decommissioning liability for income tax purposes resulting in a tax accounting permanentdifference that reduced income tax expense, net of unrecognized tax benefits, by $238 million. The accrual of the nuclear decommissioningliability also required Entergy to recognize a gain for income tax purposes, a significant portion of which resulted in an increase in tax basisof the assets. Recognition of the gain and the increase in tax basis of the assets represents a tax accounting temporary difference. Entergy soldFitzPatrick on March 31, 2017. The removal of the contingencies regarding the sale of the plant and the receipt of NRC approval for the saleallowed Entergy to re-determine the plant’s tax basis. The re-determined basis resulted in a $44 million income tax benefit in the first quarter2017.In the second quarter 2017, Entergy changed the tax classification of legal entities that own Entergy Wholesale Commodities nuclearpower plants. The change in tax classification required Entergy to recognize the plants’ nuclear decommissioning liabilities for income taxpurposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $373million. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a portionof which resulted in an increase in tax basis of the assets. Recognition of the gain and the increase in tax basis of the assets represents a taxaccounting temporary difference.In the third quarter 2018, Entergy completed a restructuring of the investment holdings in one of the Entergy Wholesale Commoditiesnuclear plant decommissioning trusts that resulted in an adjustment to tax basis for the trust. The accounting standards provide that a taxabletemporary difference does not exist if the tax law provides a means by which an amount can be recovered without incurrence of tax. Therestructuring allows Entergy to recover assets from the trust without incurring tax. As such, the tax basis recognized resulted in the reversalof a deferred tax liability and reduction of income tax expense of approximately $107 million.119 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsIn the fourth quarter 2019, two separate events occurred resulting in a reduction of tax expense of $174 million. In November 2019an Entergy Wholesale Commodities subsidiary recognized a reduction in income tax expense of $18 million in connection with theaccounting method on power contracts associated with the Palisades nuclear power station. Additionally, Entergy’s ownership of IndianPoint 2 and Indian Point 3 was restructured. The restructuring required Entergy to recognize Indian Point 2 and Indian Point 3 nucleardecommissioning liabilities for income tax purposes resulting in a tax accounting permanent difference that reduced income tax expense, netof unrecognized tax benefits, by $156 million. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize again for income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increasein the tax basis of the assets represents a tax accounting temporary difference.Immediately prior to the restructuring, through its ownership of Indian Point 2 and Indian Point 3, Entergy donated property to StonyBrook University and recognized an associated tax deduction resulting in a decrease to tax expense of $19 million.Entergy Wholesale Commodities Tax AuditA state income tax audit involving Entergy Wholesale Commodities was concluded during the third quarter 2018. Upon conclusionof the audit, subsidiaries within Entergy Wholesale Commodities reversed a portion of the provision for uncertain tax positions totalingapproximately $23 million, net of tax and interest paid.Tax Accounting MethodsIn the fourth quarter 2015, System Energy and Entergy Louisiana adopted a new method of accounting for income tax returnpurposes in which their nuclear decommissioning costs will be treated as production costs of electricity includable in cost of goods sold. Thenew method resulted in a reduction of taxable income of $1.2 billion for System Energy and $2.2 billion for Energy Louisiana. In the fourthquarter 2018, Entergy Arkansas adopted the same method of accounting for its nuclear decommissioning costs which resulted in a $2.2billion reduction in taxable income.In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric power purchase and saleagreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility and from System Energyunder the Unit Power Sales Agreement. The election resulted in a $2.2 billion deductible temporary difference. In 2017, Entergy NewOrleans also elected mark-to-market income tax treatment for wholesale electric contracts which resulted in a $1.1 billion deductibletemporary difference. In 2018, Entergy Arkansas and Entergy Mississippi accrued deductible temporary differences related to mark-to-market tax accounting for wholesale electric contracts of $2.1 billion and $1.9 billion, respectively.Entergy Arkansas and Entergy Mississippi Internal RestructuringIn the fourth quarter 2018, Entergy Arkansas and Entergy Mississippi became wholly-owned subsidiaries of Entergy Utility HoldingCompany, LLC. The change in ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for incometax purposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $165million. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a portionof which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increase in the tax basis of the assets representsa tax accounting temporary difference. Additionally, Entergy recorded a $5 million reduction of income tax expense associated with stateincome tax effects resulting in a total reduction of income tax expense of $170 million from the restructuring. Entergy recorded a regulatoryliability of $40 million ($30 million net-of-tax) which partially offsets the reduction of income tax expense. Entergy Arkansas’s member’sequity increased by $94 million as a result of the restructuring. See Note 2 to the financial statements for further discussion of the internalrestructuring.120 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsArkansas Corporate Income Tax Rate ReductionIn April 2019 the state of Arkansas enacted corporate income tax law changes that phase in an Arkansas tax rate reduction from thecurrent rate of 6.5% to 6.2% in 2021 and 5.9% in 2022. The rate reduction will eventually reduce Entergy Arkansas’s combined federal andstate applicable tax rate by less than 0.5% once fully adopted. As a result of the rate reduction, Entergy Arkansas recorded a regulatoryliability for income taxes of approximately $25 million which includes a tax gross-up related to the treatment of income taxes in theratemaking formula. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to tenyears.Consolidated Income Tax Return of Entergy CorporationIn September 2019, Entergy Utility Holding Company, LLC and its regulated, wholly-owned subsidiaries including EntergyArkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans, became eligible to and joined the Entergy Corporationconsolidated federal income tax group. As a result of these four Utility operating companies re-joining the Entergy Corporation consolidatedtax return group, Entergy was able to recognize a $41 million deferred tax asset associated with a previously unrecognized Arkansas netoperating loss carryover.Additionally, in September 2019, Entergy Texas issued $35 million of 5.375% Series A preferred stock with a liquidation value of$25 per share resulting in the disaffiliation and de-consolidation of Entergy Texas from the consolidated federal income tax return of EntergyCorporation. These changes will not affect the accrual or allocation of income taxes for the Registrant Subsidiaries. See Note 6 to thefinancial statements for discussion of the preferred stock issuance.Vermont YankeeThe Vermont Yankee transaction resulted in Entergy generating a net deferred tax asset in January 2019. The deferred tax assetcould not be fully realized by Entergy in the first quarter of 2019; accordingly, Entergy accrued a net tax expense of $29 million on thedisposition of Vermont Yankee. See Note 14 to the financial statements for discussion of the Vermont Yankee transaction.NOTE 4. REVOLVING CREDIT FACILITIES, LINES OF CREDIT, AND SHORT-TERM BORROWINGS (EntergyCorporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in September 2024. Thefacility includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the creditfacility. The commitment fee is currently 0.225% of the undrawn commitment amount. Commitment fees and interest rates on loans underthe credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation. The weighted average interest ratefor the year ended December 31, 2019 was 3.77% on the drawn portion of the facility. Following is a summary of the borrowingsoutstanding and capacity available under the facility as of December 31, 2019.Capacity Borrowings Letters of Credit Capacity Available(In Millions)$3,500 $440 $6 $3,054Entergy Corporation’s credit facility requires Entergy to maintain a consolidated debt ratio, as defined, of 65% or less of its totalcapitalization. Entergy is in compliance with this covenant. If Entergy fails to meet this ratio, or if Entergy Corporation or one of the Utilityoperating companies (except Entergy New Orleans) defaults on other indebtedness or is in bankruptcy or insolvency proceedings, anacceleration of the facility maturity date may occur.121 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Corporation has a commercial paper program with a Board-approved program limit of up to $2 billion. As of December 31,2019, Entergy Corporation had $1.947 billion of commercial paper outstanding. The weighted-average interest rate for the year endedDecember 31, 2019 was 2.71%.Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each had credit facilitiesavailable as of December 31, 2019 as follows:Company Expiration Date Amount of Facility InterestRate (a) Amount Drawn asof December 31,2019 Letters of CreditOutstanding as ofDecember 31, 2019Entergy Arkansas April 2020 $20 million (b) 2.92% — —Entergy Arkansas September 2024 $150 million (c) 2.92% — —Entergy Louisiana September 2024 $350 million (c) 2.92% — —Entergy Mississippi May 2020 $10 million (d) 3.30% — —Entergy Mississippi May 2020 $35 million (d) 3.30% — —Entergy Mississippi May 2020 $37.5 million (d) 3.30% — —Entergy New Orleans November 2021 $25 million (c) 2.92% $20 million $0.8 millionEntergy Texas September 2024 $150 million (c) 3.30% — $1.3 million(a)The interest rate is the estimated interest rate as of December 31, 2019 that would have been applied to outstanding borrowings underthe facility.(b)Borrowings under this Entergy Arkansas credit facility may be secured by a security interest in its accounts receivable at EntergyArkansas’s option.(c)The credit facility includes fronting commitments for the issuance of letters of credit against a portion of the borrowing capacity ofthe 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 EntergyMississippi’s option. The commitment fees on the credit facilities range from 0.075% to 0.225% of the undrawn commitment amount. Each of the credit facilitiesrequires the Registrant Subsidiary borrower to maintain a debt ratio, as defined, of 65% or less of its total capitalization. Each RegistrantSubsidiary is in compliance with this covenant.In addition, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each entered intoone or more uncommitted standby letter of credit facilities as a means to post collateral to support its obligations to MISO. Following is asummary of the uncommitted standby letter of credit facilities as of December 31, 2019:Company Amount ofUncommitted Facility Letter of Credit Fee Letters of Credit Issued asof December 31, 2019 (a)Entergy Arkansas $25 million 0.70% $1.0 millionEntergy Louisiana $125 million 0.70% $12.3 millionEntergy Mississippi $64 million 0.70% $1.8 millionEntergy New Orleans $15 million 1.00% $5.6 millionEntergy Texas $50 million 0.70% $12.1 million122 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(a)As of December 31, 2019, letters of credit posted with MISO covered financial transmission right exposure of $0.2 million forEntergy Mississippi. See Note 15 to the financial statements for discussion of financial transmission rights.The short-term borrowings of the Registrant Subsidiaries are limited to amounts authorized by the FERC. The current FERC-authorized limits for Entergy New Orleans are effective through October 31, 2021. The current FERC-authorized limits for EntergyArkansas, Entergy Louisiana, Entergy Mississippi, Entergy Texas, and System Energy are effective through November 8, 2020. In additionto borrowings from commercial banks, these companies may also borrow from the Entergy System money pool and from other internalshort-term borrowing arrangements. The money pool and the other internal borrowing arrangements are inter-company borrowingarrangements designed to reduce the Utility subsidiaries’ dependence on external short-term borrowings. Borrowings from internal andexternal short-term borrowings combined may not exceed the FERC-authorized limits. The following are the FERC-authorized limits forshort-term borrowings and the outstanding short-term borrowings as of December 31, 2019 (aggregating both internal and external short-termborrowings) for the Registrant Subsidiaries: Authorized Borrowings (In Millions)Entergy Arkansas$250 $22Entergy Louisiana$450 $83Entergy Mississippi$175 —Entergy New Orleans$150 —Entergy Texas$200 —System Energy$200 —Vermont Yankee Asset Retirement Management, LLC Credit FacilityIn January 2019, Entergy Nuclear Vermont Yankee was transferred to NorthStar and its credit facility was assumed by VermontYankee Asset Retirement Management, LLC, Entergy Nuclear Vermont Yankee’s parent company that remains an Entergy subsidiary afterthe transfer. The credit facility has a borrowing capacity of $139 million and expires in December 2021. The commitment fee is currently0.20% of the undrawn commitment amount. As of December 31, 2019, $139 million in cash borrowings were outstanding under the creditfacility. The weighted average interest rate for the year ended December 31, 2019 was 3.93% on the drawn portion of the facility. See Note14 to the financial statements for discussion of the transfer of Entergy Nuclear Vermont Yankee to NorthStar.Variable Interest Entities (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)See Note 17 to the financial statements for a discussion of the consolidation of the nuclear fuel company variable interest entities(VIE). To finance the acquisition and ownership of nuclear fuel, the nuclear fuel company VIEs have credit facilities and three of the fourVIEs also issue commercial paper, details of which follow as of December 31, 2019:Company Expiration Date Amount ofFacility Weighted AverageInterest Rate onBorrowings (a) Amount Outstanding asof December 31, 2019 (Dollars in Millions)Entergy Arkansas VIE September 2021 $80 3.33% $15.1Entergy Louisiana River Bend VIE September 2021 $105 3.23% $70.3Entergy Louisiana Waterford VIE September 2021 $105 3.30% $49.9System Energy VIE September 2021 $120 3.34% $31.6123 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(a)Includes letter of credit fees and bank fronting fees on commercial paper issuances by the nuclear fuel company variable interestentities for Entergy Arkansas, Entergy Louisiana, and System Energy. The nuclear fuel company variable interest entity for EntergyLouisiana River Bend does not issue commercial paper, but borrows directly on its bank credit facility.The commitment fees on the credit facilities are 0.10% of the undrawn commitment amount for the Entergy Arkansas, EntergyLouisiana, and System Energy VIEs. Each credit facility requires the respective lessee of nuclear fuel (Entergy Arkansas, Entergy Louisiana,or Entergy Corporation as guarantor for System Energy) to maintain a consolidated debt ratio, as defined, of 70% or less of its totalcapitalization.The nuclear fuel company variable interest entities had notes payable that are included in debt on the respective balance sheets as ofDecember 31, 2019 as follows:Company Description AmountEntergy Arkansas VIE 3.65% Series L due July 2021 $90 millionEntergy Arkansas VIE 3.17% Series M due December 2023 $40 millionEntergy Louisiana River Bend VIE 3.38% Series R due August 2020 $70 millionEntergy Louisiana Waterford VIE 3.92% Series H due February 2021 $40 millionEntergy Louisiana Waterford VIE 3.22% Series I due December 2023 $20 millionSystem Energy VIE 3.42% Series J due April 2021 $100 millionIn accordance with regulatory treatment, interest on the nuclear fuel company variable interest entities’ credit facilities, commercialpaper, and long-term notes payable is reported in fuel expense.Entergy Arkansas, Entergy Louisiana, and System Energy each have obtained financing authorizations from the FERC that extendthrough November 2020 for issuances by its nuclear fuel company variable interest entities.124 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 5. LONG - TERM DEBT (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, Entergy Texas, and System Energy)Long-term debt for Entergy Corporation and subsidiaries as of December 31, 2019 and 2018 consisted of:Type of Debt and Maturity WeightedAverageInterest RateDecember 31,2019 Interest Rate Ranges at December 31, Outstanding at December 31,2019 2018 2019 2018 (In Thousands)Mortgage Bonds 2019-2023 3.65% 2.55%-5.10% 2.55%-7.125% $2,400,000 $3,050,0002024-2028 3.59% 2.40%-5.59% 2.40%-5.59% 4,610,000 4,610,0002029-2039 4.05% 3.05%-4.52% 3.05%-4.52% 1,890,000 1,190,0002044-2066 4.63% 3.55%-5.625% 4.20%-5.625% 5,170,000 3,560,000Governmental Bonds (a) 2021-2022 2.48% 2.375%-2.50% 2.375%-5.875% 179,000 179,0002028-2030 3.45% 3.375%-3.50% 3.375%-3.50% 198,680 198,680Securitization Bonds 2021-2027 3.73% 2.04%-5.93% 2.04%-5.93% 302,145 429,118Variable Interest Entities Notes Payable (Note 4) 2020-2023 3.41% 3.17%-3.92% 3.17%-3.92% 360,000 360,000Entergy Corporation Notes due September 2020 n/a 5.125% 5.125% 450,000 450,000due July 2022 n/a 4.00% 4.00% 650,000 650,000due September 2026 n/a 2.95% 2.95% 750,000 750,000Entergy New Orleans Unsecured Term Loan n/a 3.00% — 70,000 —5 Year Credit Facility (Note 4) n/a 3.77% 3.60% 440,000 220,000Entergy New Orleans Credit Facility (Note 4) n/a 2.92% — 20,000 —Vermont Yankee Credit Facility (Note 4) n/a 3.93% 3.50% 139,000 139,000Entergy Arkansas VIE Credit Facility (Note 4) n/a 3.33% 3.48% 15,100 59,600Entergy Louisiana River Bend VIE Credit Facility (Note4) n/a 3.23% 3.44% 70,300 38,600Entergy Louisiana Waterford VIE Credit Facility (Note 4) n/a 3.30% 3.35% 49,900 82,000System Energy VIE Credit Facility (Note 4) n/a 3.34% 3.44% 31,600 113,900Long-term DOE Obligation (b) — — — 191,114 186,864Grand Gulf Sale-Leaseback Obligation n/a — — 34,346 34,352Unamortized Premium and Discount - Net (16,124) (14,784)Unamortized Debt Issuance Costs (143,502) (130,612)Other 12,096 12,594Total Long-Term Debt 17,873,655 16,168,312Less Amount Due Within One Year 795,012 650,009Long-Term Debt Excluding Amount Due Within OneYear $17,078,643 $15,518,303Fair Value of Long-Term Debt $19,059,950 $16,101,455125 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(a)Consists of pollution control revenue bonds and environmental revenue bonds, some of which are secured by collateral mortgagebonds.(b)Pursuant to the Nuclear Waste Policy Act of 1982, Entergy’s nuclear owner/licensee subsidiaries have contracts with the DOE forspent nuclear fuel disposal service. The contracts include a one-time fee for generation prior to April 7, 1983. Entergy Arkansas isthe only Entergy company that generated electric power with nuclear fuel prior to that date and includes the one-time fee, plusaccrued interest, in long-term debt.The annual long-term debt maturities (excluding lease obligations and long-term DOE obligations) for debt outstanding as ofDecember 31, 2019, for the next five years are as follows: Amount (In Thousands)2020$795,0002021$1,358,1592022$1,104,2892023$1,865,1542024$1,175,000Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy Texas, and System Energy have obtained long-term financingauthorizations from the FERC that extend through November 2020. Entergy New Orleans has obtained long-term financing authorizationfrom the FERC and the City Council that extends through October 2021. Entergy Arkansas has also obtained first mortgage bond/securedfinancing authorization from the APSC that extends through December 2020.126 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsLong-term debt for the Registrant Subsidiaries as of December 31, 2019 and 2018 consisted of: 2019 2018 (In Thousands)Entergy Arkansas Mortgage Bonds: 3.75% Series due February 2021 $350,000 $350,0003.05% Series due June 2023 250,000 250,0003.7% Series due June 2024 375,000 375,0003.5% Series due April 2026 600,000 600,0004.0% Series due June 2028 250,000 250,0004.95% Series due December 2044 250,000 250,0004.20% Series due April 2049 350,000 —4.90% Series due December 2052 200,000 200,0004.75% Series due June 2063 125,000 125,0004.875% Series due September 2066 410,000 410,000Total mortgage bonds 3,160,000 2,810,000Governmental Bonds (a): 2.375% Series due 2021, Independence County (c) 45,000 45,000Total governmental bonds 45,000 45,000Variable Interest Entity Notes Payable and Credit Facility (Note 4): 3.65% Series L due July 2021 90,000 90,0003.17% Series M due December 2023 40,000 40,000Credit Facility due September 2021, weighted avg rate 3.33% 15,100 59,600Total variable interest entity notes payable and credit facility 145,100 189,600Securitization Bonds: 2.30% Series Senior Secured due August 2021 7,259 21,692Total securitization bonds 7,259 21,692Other: Long-term DOE Obligation (b) 191,114 186,864Unamortized Premium and Discount – Net 1,664 4,408Unamortized Debt Issuance Costs (34,936) (33,831)Other 2,007 2,026Total Long-Term Debt 3,517,208 3,225,759Less Amount Due Within One Year — —Long-Term Debt Excluding Amount Due Within One Year $3,517,208 $3,225,759Fair Value of Long-Term Debt $3,747,914 $3,189,491127 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements 2019 2018 (In Thousands)Entergy Louisiana Mortgage Bonds: 3.95% Series due October 2020 $250,000 $250,0004.8% Series due May 2021 200,000 200,0003.3% Series due December 2022 200,000 200,0004.05% Series due September 2023 325,000 325,0005.59% Series due October 2024 300,000 300,0005.40% Series due November 2024 400,000 400,0003.78% Series due April 2025 110,000 110,0003.78% Series due April 2025 190,000 190,0004.44% Series due January 2026 250,000 250,0002.40% Series due October 2026 400,000 400,0003.12% Series due September 2027 450,000 450,0003.25% Series due April 2028 425,000 425,0003.05% Series due June 2031 325,000 325,0004.0% Series due March 2033 750,000 750,0005.0% Series due July 2044 170,000 170,0004.95% Series due January 2045 450,000 450,0004.20% Series due September 2048 600,000 600,0004.20% Series due April 2050 525,000 —5.25% Series due July 2052 200,000 200,0004.70% Series due June 2063 100,000 100,0004.875% Series due September 2066 270,000 270,000Total mortgage bonds 6,890,000 6,365,000Governmental Bonds (a): 3.375 % Series due 2028, Louisiana Public Facilities Authority (c) 83,680 83,6803.50% Series due 2030, Louisiana Public Facilities Authority (c) 115,000 115,000Total governmental bonds 198,680 198,680Variable Interest Entity Notes Payable and Credit Facilities (Note 4): 3.38% Series R due August 2020 70,000 70,0003.92% Series H due February 2021 40,000 40,0003.22% Series I due December 2023 20,000 20,000Credit Facility due September 2021, weighted avg rate 3.23% 70,300 38,600Credit Facility due September 2021, weighted avg rate 3.30% 49,900 82,000Total variable interest entity notes payable and credit facilities 250,200 250,600Securitization Bonds: 2.04% Series Senior Secured due September 2023 34,185 56,910Total securitization bonds 34,185 56,910Other: Unamortized Premium and Discount - Net (17,372) (14,955)Unamortized Debt Issuance Costs (58,089) (57,011)Other 6,065 6,544Total Long-Term Debt 7,303,669 6,805,768Less Amount Due Within One Year 320,002 2Long-Term Debt Excluding Amount Due Within One Year $6,983,667 $6,805,766 Fair Value of Long-Term Debt $7,961,168 $6,834,134128 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements 2019 2018 (In Thousands)Entergy Mississippi Mortgage Bonds: 6.64% Series due July 2019 $— $150,0003.1% Series due July 2023 250,000 250,0003.75% Series due July 2024 100,000 100,0003.25% Series due December 2027 150,000 150,0002.85% Series due June 2028 375,000 375,0004.52% Series due December 2038 55,000 55,0003.85% Series due June 2049 435,000 —4.90% Series due October 2066 260,000 260,000Total mortgage bonds 1,625,000 1,340,000Other: Unamortized Premium and Discount – Net 6,127 (989)Unamortized Debt Issuance Costs (16,998) (13,261)Total Long-Term Debt 1,614,129 1,325,750Less Amount Due Within One Year — 150,000Long-Term Debt Excluding Amount Due Within One Year $1,614,129 $1,175,750Fair Value of Long-Term Debt $1,709,505 $1,276,452 2019 2018 (In Thousands)Entergy New Orleans Mortgage Bonds: 5.10% Series due December 2020 $25,000 $25,0003.9% Series due July 2023 100,000 100,0004.0% Series due June 2026 85,000 85,0004.51% Series due September 2033 60,000 60,0005.0% Series due December 2052 30,000 30,0005.50% Series due April 2066 110,000 110,000Total mortgage bonds 410,000 410,000Securitization Bonds: 2.67% Series Senior Secured due June 2027 54,443 65,666Total securitization bonds 54,44365,666Other: 3.0% Unsecured Term Loan due May 2022 70,000 —Credit Facility due November 2021, weighted avg rate 2.92% 20,000 —Payable to associated company due November 2035 14,367 16,346Unamortized Premium and Discount – Net (129) (168)Unamortized Debt Issuance Costs (7,775) (8,140)Total Long-Term Debt 560,906 483,704Less Amount Due Within One Year 26,838 1,979Long-Term Debt Excluding Amount Due Within One Year $534,068 $481,725Fair Value of Long-Term Debt $523,846 $491,569 129 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements 2019 2018 (In Thousands)Entergy Texas Mortgage Bonds: 7.125% Series due February 2019 $— $500,0002.55% Series due June 2021 125,000 125,0004.1% Series due September 2021 75,000 75,0003.45% Series due December 2027 150,000 150,0004.0% Series due March 2029 300,000 —4.5% Series due March 2039 400,000 —5.15% Series due June 2045 250,000 250,0003.55% Series due September 2049 300,000 —5.625% Series due June 2064 135,000 135,000Total mortgage bonds 1,735,000 1,235,000Securitization Bonds: 5.93% Series Senior Secured, Series A due June 2022 50,289 81,2374.38% Series Senior Secured, Series A due November 2023 155,969 203,613Total securitization bonds 206,258 284,850Other: Unamortized Premium and Discount - Net (4,814) (992)Unamortized Debt Issuance Costs (17,510) (9,145)Other 4,022 4,022Total Long-Term Debt 1,922,956 1,513,735Less Amount Due Within One Year — 500,000Long-Term Debt Excluding Amount Due Within One Year $1,922,956 $1,013,735Fair Value of Long-Term Debt $2,090,215 $1,528,828130 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements 2019 2018 (In Thousands)System Energy Mortgage Bonds: 4.1% Series due April 2023 $250,000 $250,000Total mortgage bonds 250,000 250,000Governmental Bonds (a): 5.875% Series due 2022, Mississippi Business Finance Corp. — 134,0002.5% Series due 2022, Mississippi Business Finance Corp. 134,000 —Total governmental bonds 134,000 134,000Variable Interest Entity Notes Payable and Credit Facility (Note 4): 3.42% Series J due April 2021 100,000 100,000Credit Facility due September 2021, weighted avg rate 3.34% 31,600 113,900Total variable interest entity notes payable and credit facility 131,600 213,900Other: Grand Gulf Sale-Leaseback Obligation 34,346 34,352Unamortized Premium and Discount – Net (144) (328)Unamortized Debt Issuance Costs (1,697) (1,176)Other 2 2Total Long-Term Debt 548,107 630,750Less Amount Due Within One Year 10 6Long-Term Debt Excluding Amount Due Within One Year $548,097 $630,744Fair Value of Long-Term Debt $565,209 $630,475(a)Consists of pollution control revenue bonds and environmental revenue bonds.(b)Pursuant to the Nuclear Waste Policy Act of 1982, Entergy’s nuclear owner/licensee subsidiaries have contracts with the DOE forspent nuclear fuel disposal service. The contracts include a one-time fee for generation prior to April 7, 1983. Entergy Arkansas isthe only Entergy company that generated electric power with nuclear fuel prior to that date and includes the one-time fee, plusaccrued interest, in long-term debt.(c)The bonds are secured by a series of collateral mortgage bonds.The annual long-term debt maturities (excluding lease obligations and long-term DOE obligations) for debt outstanding as ofDecember 31, 2019, for the next five years are as follows: EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)2020$— $320,000 $— $25,000 $— $—2021$507,359 $360,200 $— $20,000 $200,000 $131,6002022$— $200,000 $— $70,000 $50,289 $134,0002023$290,000 $379,185 $250,000 $100,000 $155,969 $250,0002024$375,000 $700,000 $100,000 $— $— $—131 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Arkansas Securitization BondsIn June 2010 the APSC issued a financing order authorizing the issuance of bonds to recover Entergy Arkansas’s January 2009 icestorm damage restoration costs, including carrying costs of $11.5 million and $4.6 million of up-front financing costs. In August 2010,Entergy Arkansas Restoration Funding, LLC, a company wholly-owned and consolidated by Entergy Arkansas, issued $124.1 million ofstorm cost recovery bonds. The bonds have a coupon of 2.30%. Although the principal amount is not due until August 2021, EntergyArkansas Restoration Funding expects to make principal payments on the bonds in the amount of $7.3 million for 2020. With the proceeds,Entergy Arkansas Restoration Funding purchased from Entergy Arkansas the storm recovery property, which is the right to recover fromcustomers through a storm recovery charge amounts sufficient to service the securitization bonds. The storm recovery property is reflected asa regulatory asset on the consolidated Entergy Arkansas balance sheet. The creditors of Entergy Arkansas do not have recourse to the assetsor revenues of Entergy Arkansas Restoration Funding, including the storm recovery property, and the creditors of Entergy ArkansasRestoration Funding do not have recourse to the assets or revenues of Entergy Arkansas. Entergy Arkansas has no payment obligations toEntergy Arkansas Restoration Funding except to remit storm recovery charge collections.Entergy Louisiana Securitization Bonds – Little GypsyIn August 2011 the LPSC issued a financing order authorizing the issuance of bonds to recover Entergy Louisiana’s investmentrecovery costs associated with the canceled Little Gypsy repowering project. In September 2011, Entergy Louisiana Investment RecoveryFunding I, L.L.C., a company wholly-owned and consolidated by Entergy Louisiana, issued $207.2 million of senior secured investmentrecovery bonds. The bonds have an interest rate of 2.04%. Although the principal amount is not due until September 2023, EntergyLouisiana Investment Recovery Funding expects to make principal payments on the bonds over the next two years in the amounts of $23.2million for 2020 and $11 million for 2021. With the proceeds, Entergy Louisiana Investment Recovery Funding purchased from EntergyLouisiana the investment recovery property, which is the right to recover from customers through an investment recovery charge amountssufficient to service the bonds. In accordance with the financing order, Entergy Louisiana will apply the proceeds it received from the sale ofthe investment recovery property as a reimbursement for previously-incurred investment recovery costs. The investment recovery propertyis reflected as a regulatory asset on the consolidated Entergy Louisiana balance sheet. The creditors of Entergy Louisiana do not haverecourse to the assets or revenues of Entergy Louisiana Investment Recovery Funding, including the investment recovery property, and thecreditors of Entergy Louisiana Investment Recovery Funding do not have recourse to the assets or revenues of Entergy Louisiana. EntergyLouisiana has no payment obligations to Entergy Louisiana Investment Recovery Funding except to remit investment recovery chargecollections.Entergy New Orleans Securitization Bonds - Hurricane IsaacIn May 2015 the City Council issued a financing order authorizing the issuance of securitization bonds to recover Entergy NewOrleans’s Hurricane Isaac storm restoration costs of $31.8 million, including carrying costs, the costs of funding and replenishing the stormrecovery reserve in the amount of $63.9 million, and approximately $3 million of up-front financing costs associated with the securitization.In July 2015, Entergy New Orleans Storm Recovery Funding I, L.L.C., a company wholly owned and consolidated by Entergy New Orleans,issued $98.7 million of storm cost recovery bonds. The bonds have a coupon of 2.67%. Although the principal amount is not due until June2027, Entergy New Orleans Storm Recovery Funding expects to make principal payments on the bonds over the next five years in theamounts of $11.6 million for 2020, $11.9 million for 2021, $12.2 million for 2022, $12.5 million for 2023, and $6.2 million for 2024. Withthe proceeds, Entergy New Orleans Storm Recovery Funding purchased from Entergy New Orleans the storm recovery property, which is theright to recover from customers through a storm recovery charge amounts sufficient to service the securitization bonds. The storm recoveryproperty is reflected as a regulatory asset on the consolidated Entergy New Orleans balance sheet. The creditors of Entergy New Orleans donot have recourse to the assets or revenues of Entergy New Orleans Storm Recovery Funding, including the storm recovery property, and thecreditors of Entergy New Orleans Storm Recovery Funding do not have recourse to the132 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsassets or revenues of Entergy New Orleans. Entergy New Orleans has no payment obligations to Entergy New Orleans Storm RecoveryFunding except to remit storm recovery charge collections.Entergy Texas Securitization Bonds - Hurricane RitaIn April 2007 the PUCT issued a financing order authorizing the issuance of securitization bonds to recover $353 million of EntergyTexas’s Hurricane Rita reconstruction costs and up to $6 million of transaction costs, offset by $32 million of related deferred income taxbenefits. In June 2007, Entergy Gulf States Reconstruction Funding I, LLC, a company that is now wholly-owned and consolidated byEntergy Texas, issued $329.5 million of senior secured transition bonds (securitization bonds). As of December 31, 2019, $50.3 million at5.93% remain outstanding. Entergy Gulf States Reconstruction Funding expects to make principal payments on the bonds over the next twoyears in the amounts of $32.8 million for 2020 and $17.5 million for 2021.With the proceeds, Entergy Gulf States Reconstruction Funding purchased from Entergy Texas the transition property, which is theright to recover from customers through a transition charge amounts sufficient to service the securitization bonds. The transition property isreflected as a regulatory asset on the consolidated Entergy Texas balance sheet. The creditors of Entergy Texas do not have recourse to theassets or revenues of Entergy Gulf States Reconstruction Funding, including the transition property, and the creditors of Entergy Gulf StatesReconstruction Funding do not have recourse to the assets or revenues of Entergy Texas. Entergy Texas has no payment obligations toEntergy Gulf States Reconstruction Funding except to remit transition charge collections.Entergy Texas Securitization Bonds - Hurricane Ike and Hurricane GustavIn September 2009 the PUCT authorized the issuance of securitization bonds to recover $566.4 million of Entergy Texas’s HurricaneIke and Hurricane Gustav restoration costs, plus carrying costs and transaction costs, offset by insurance proceeds. In November 2009,Entergy Texas Restoration Funding, LLC (Entergy Texas Restoration Funding), a company wholly-owned and consolidated by EntergyTexas, issued $545.9 million of senior secured transition bonds (securitization bonds). As of December 31, 2019, $156 million at 4.38%remain outstanding. Entergy Texas Restoration Funding expects to make principal payments on the bonds over the next three years in theamount of $49.8 million for 2020, $52 million for 2021, and $54.3 million for 2022.With the proceeds, Entergy Texas Restoration Funding purchased from Entergy Texas the transition property, which is the right torecover from customers through a transition charge amounts sufficient to service the securitization bonds. The transition property is reflectedas a regulatory asset on the consolidated Entergy Texas balance sheet. The creditors of Entergy Texas do not have recourse to the assets orrevenues of Entergy Texas Restoration Funding, including the transition property, and the creditors of Entergy Texas Restoration Funding donot have recourse to the assets or revenues of Entergy Texas. Entergy Texas has no payment obligations to Entergy Texas RestorationFunding except to remit transition charge collections.Grand Gulf Sale-Leaseback TransactionsIn 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests inGrand Gulf for the aggregate sum of $500 million. The initial term of the leases expired in July 2015. System Energy renewed the leases forfair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option torepurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew orpurchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. As such, it hasrecognized debt for the lease obligation and retained the portion of the plant subject to the sale-leaseback on its balance sheet. For financialreporting purposes, System Energy has recognized interest expense on the debt balance and depreciation on the applicable plantbalance. The lease payments are recognized as principal and interest133 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementspayments on the debt balance. However, operating revenues include the recovery of the lease payments because the transactions areaccounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, SystemEnergy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed forinterest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero netbalance for the regulatory asset at the end of the lease term. The amount was a net regulatory liability of $55.6 million as of December 31,2019 and 2018.As of December 31, 2019, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimumlease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2020$17,188202117,188202217,188202317,188202417,188Years thereafter206,250Total292,190Less: Amount representing interest257,844Present value of net minimum lease payments$34,346134 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 6. PREFERRED EQUITY (Entergy Corporation and Entergy Texas)The number of shares and units authorized and outstanding and dollar value of preferred stock, preferred membership interests, andnon-controlling interest for Entergy Corporation subsidiaries as of December 31, 2019 and 2018 are presented below. Shares/UnitsAuthorized Shares/UnitsOutstanding 2019 2018 2019 2018 2019 2018Entergy Corporation (Dollars in Thousands)Utility: Preferred Stock or Preferred MembershipInterests without sinking fund: Entergy Utility Holding Company, LLC, 7.5%Series (a) 110,000 110,000 110,000 110,000 $107,425 $107,425Entergy Utility Holding Company, LLC, 6.25%Series (b) 15,000 15,000 15,000 15,000 14,366 14,366Entergy Utility Holding Company, LLC, 6.75%Series (c) 75,000 75,000 75,000 75,000 73,370 73,362Entergy Texas, 5.375% Series 1,400,000 — 1,400,000 — 35,000 —Total Utility Preferred Stock or PreferredMembership Interests without sinking fund 1,600,000 200,000 1,600,000 200,000 230,161 195,153Entergy Wholesale Commodities: Preferred Stock without sinking fund: Entergy Finance Holding, Inc. 8.75% (d) 250,000 250,000 250,000 250,000 24,249 24,249Total Subsidiaries’ Preferred Stock or PreferredMembership Interests without sinking fund 1,850,000 450,000 1,850,000 450,000 $254,410 $219,402(a)In October 2015, Entergy Utility Holding Company, LLC issued 110,000 units of $1,000 liquidation value 7.5% Series A PreferredMembership Interests, all of which are outstanding as of December 31, 2019. The distributions are cumulative and payable quarterly.These units are redeemable on or after January 1, 2036, at Entergy Utility Holding Company, LLC’s option, at the fixed redemptionprice of $1,000 per unit. Dollar amount outstanding is net of $2,575 thousand of preferred stock issuance costs.(b)In November 2017, Entergy Utility Holding Company, LLC issued 15,000 units of $1,000 liquidation value 6.25% Series BPreferred Membership Interests, all of which are outstanding as of December 31, 2019. The distributions are cumulative and payablequarterly. These units are redeemable on or after February 28, 2038, at Entergy Utility Holding Company, LLC’s option, at the fixedredemption price of $1,000 per unit. Dollar amount outstanding is net of $634 thousand of preferred stock issuance costs.(c)In November 2018, Entergy Utility Holding Company, LLC issued 75,000 units of $1,000 liquidation value 6.75% Series CPreferred Membership Interests, all of which are outstanding as of December 31, 2019. The distributions are cumulative and payablequarterly. These units are redeemable on or after February 28, 2039, at Entergy Utility Holding Company, LLC’s option, at the fixedredemption price of $1,000 per unit. Dollar amount outstanding is net of $1,630 thousand of preferred stock issuance costs.(d)In December 2013, Entergy Finance Holding, Inc. issued 250,000 shares of $100 par value 8.75% Series Preferred Stock, all ofwhich are outstanding as of December 31, 2019. The dividends are cumulative and payable quarterly. The preferred stock isredeemable on or after December 16, 2023, at Entergy Finance Holding, Inc.’s option, at the fixed redemption price of $100 pershare. Dollar amount outstanding is net of $751 thousand of preferred stock issuance costs. The number of shares authorized and outstanding and dollar value of preferred stock for Entergy Texas as of December 31, 2019 and2018 are presented below. 135 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements SharesAuthorizedand Outstanding Call Price perShare as ofDecember 31, 2019 2018 2019 2018 2019Entergy Texas Preferred Stock (Dollars in Thousands) Without sinking fund: Cumulative, $25 par value: 5.375% Series (a) 1,400,000 — $35,000 $— $—Total without sinking fund 1,400,000 — $35,000 $— (a)In September 2019, Entergy Texas issued $35 million of 5.375% Series A Preferred Stock, a total of 1,400,000 shares with aliquidation value of $25 per share, all of which are outstanding as of December 31, 2019. The dividends are cumulative and payablequarterly. The preferred stock is redeemable on or after October 15, 2024 at Entergy Texas’s option, at a fixed redemption price of$25 per share.Dividends and distributions paid on all of Entergy Corporation’s subsidiaries’ preferred stock and membership interests series maybe eligible for the dividends received deduction. Presentation of Preferred Stock without Sinking FundAccounting standards regarding non-controlling interests and the classification and measurement of redeemable securities require theclassification of preferred securities between liabilities and shareholders’ equity on the balance sheet if the holders of those securities haveprotective rights that allow them to gain control of the board of directors in certain circumstances. These rights would have the effect ofgiving the holders the ability to potentially redeem their securities, even if the likelihood of occurrence of these circumstances is consideredremote. The outstanding preferred stock of Entergy Texas has protective rights with respect to unpaid dividends but provides for the electionof board members that would not constitute a majority of the board, and the preferred stock of Entergy Texas is therefore classified as acomponent of equity.The outstanding preferred securities of Entergy Utility Holding Company (a Utility subsidiary) and Entergy Finance Holding (anEntergy Wholesale Commodities subsidiary), whose preferred holders have protective rights, are presented between liabilities and equity onEntergy’s consolidated balance sheets. The preferred dividends or distributions paid by all subsidiaries are reflected for all periods presentedoutside of consolidated net income.136 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 7. COMMON EQUITY (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, Entergy Texas, and System Energy)Common StockCommon stock and treasury stock shares activity for Entergy for 2019, 2018, and 2017 is as follows: 2019 2018 2017 CommonSharesIssued TreasuryShares CommonSharesIssued TreasuryShares CommonSharesIssued TreasurySharesBeginning Balance,January 1261,587,009 72,530,866 254,752,788 74,235,135 254,752,788 75,623,363Issuances: Equity forwards settled8,448,171 — 6,834,221 — — —Employee Stock-BasedCompensation Plans— (1,624,358) — (1,683,174) — (1,377,363)Directors’ Plan— (20,108) — (21,095) — (10,865)Ending Balance, December31270,035,180 70,886,400 261,587,009 72,530,866 254,752,788 74,235,135Entergy Corporation reissues treasury shares to meet the requirements of the Stock Plan for Outside Directors (Directors’ Plan), fourEquity Ownership Plans of Entergy Corporation and Subsidiaries, and certain other stock benefit plans. The Directors’ Plan awards to non-employee directors a portion of their compensation in the form of a fixed dollar value of shares of Entergy Corporation common stock.In October 2010 the Board granted authority for a $500 million share repurchase program. As of December 31, 2019, $350 millionof authority remains under the $500 million share repurchase program.Dividends declared per common share were $3.66 in 2019, $3.58 in 2018, and $3.50 in 2017.(System Energy)System Energy paid its parent, Entergy Corporation, distributions out of its common stock of $56.5 million in 2018 and $21 millionin 2017.Equity Forward Sale AgreementsIn June 2018, Entergy marketed an equity offering of 15.3 million shares of common stock. In lieu of issuing equity at the time of theoffering, Entergy entered into forward sale agreements with various investment banks. The equity forwards required Entergy to, at itselection prior to June 7, 2019, either (i) physically settle the transactions by issuing the total of 15.3 million shares of its common stock to theinvestment banks in exchange for net proceeds at the then-applicable forward sale price specified by the agreements (initially $74.45 pershare) or (ii) net settle the transactions in whole or in part through the delivery or receipt of cash or shares. The forward sale price was subjectto adjustment on a daily basis based on a floating interest rate factor and decreased by other fixed amounts specified in the agreements.In December 2018, Entergy physically settled a portion of its obligations under the forward sale agreements by delivering 6,834,221shares of common stock in exchange for cash proceeds of $500 million. The forward sale price used to determine the cash proceeds receivedby Entergy was calculated based on the initial forward sale price137 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsof $74.45 per share as adjusted in accordance with the forward sale agreements. Entergy incurred approximately $728 thousand of commonstock issuance costs with the settlement.In May 2019, Entergy physically settled its remaining obligations under the forward sale agreements by delivering 8,448,171 sharesof common stock in exchange for cash proceeds of $608 million. The forward sale price used to determine the cash proceeds received byEntergy was calculated based on the initial forward sale price of $74.45 per share as adjusted in accordance with the forward saleagreements. Entergy incurred approximately $7 thousand of common stock issuance costs with the settlement.Entergy used the net proceeds for general corporate purposes, which included repayment of commercial paper, outstanding loansunder Entergy’s revolving credit facility, and other debt.Retained Earnings and DividendsEntergy implemented ASU No. 2016-01 “Financial Instruments (Subtopic 825-10): Recognition and Measurement of FinancialAssets and Financial Liabilities” effective January 1, 2018. The ASU requires investments in equity securities, excluding those accounted forunder the equity method or resulting in consolidation of the investee, to be measured at fair value with changes recognized in net income.Entergy implemented this standard using a modified retrospective method, and recorded an adjustment increasing retained earnings andreducing accumulated other comprehensive income by $633 million as of January 1, 2018 for the cumulative effect of the unrealized gainsand losses on investments in equity securities held by the decommissioning trust funds that do not meet the criteria for regulatory accountingtreatment. See Note 16 to the financial statements for further discussion of effects of the new standard.Entergy implemented ASU No. 2016-16, “Income Taxes (Topic 740): Intra-Entity Transfers of Assets Other Than Inventory”effective January 1, 2018. The ASU requires entities to recognize the income tax consequences of intra-entity asset transfers, other thaninventory, at the time the transfer occurs. Entergy implemented this standard using a modified retrospective method, and recorded anadjustment decreasing retained earnings by $56 million as of January 1, 2018 for the cumulative effect of recording deferred tax assets onpreviously-recognized intra-entity asset transfers.Entergy adopted ASU No. 2018-02, “Income Statement - Reporting Comprehensive Income (Topic 220): Reclassification of CertainTax Effects from Accumulated Other Comprehensive Income,” in the first quarter 2018. The ASU allows a one-time reclassification fromaccumulated other comprehensive income to retained earnings for certain tax effects resulting from the Tax Cuts and Jobs Act that wouldotherwise be stranded in accumulated other comprehensive income. Entergy’s policy for releasing income tax effects from accumulatedother comprehensive income for available-for-sale securities is to use the portfolio approach. Entergy elected to reclassify the $15.5 millionof stranded tax effects in accumulated other comprehensive income resulting from the Tax Cuts and Jobs Act to retained earnings ($32million decrease) or the regulatory liability for income taxes ($16.5 million increase). Entergy’s reclassification only includes the effect of thechange in the federal corporate income tax rate on accumulated other comprehensive income.Entergy implemented ASU No. 2017-12 “Derivatives and Hedging (Topic 815): Targeted Improvements to Accounting for HedgingActivities” effective January 1, 2019. The ASU makes a number of amendments to hedge accounting, most significantly changing therecognition and presentation of highly effective hedges. Entergy implemented this standard using a modified retrospective method, andrecorded an adjustment increasing retained earnings and increasing accumulated other comprehensive loss by approximately $8 million as ofJanuary 1, 2019 for the cumulative effect of the ineffectiveness portion of designated hedges on nuclear power sales.Entergy implemented ASU 2017-08 “Receivables (Topic 310): Nonrefundable Fees and Other Costs” effective January 1, 2019. TheASU amends the amortization period for certain purchased callable debt securities held at a premium to the earliest call date. Entergyimplemented this standard using the modified retrospective approach, and138 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsrecorded an adjustment decreasing retained earnings and decreasing accumulated other comprehensive loss by approximately $1 million asof January 1, 2019 for the cumulative effect of the amended amortization period.Entergy Corporation received dividend payments and distributions from subsidiaries totaling $124 million in 2019, $27 million in2018, and $201 million in 2017.Comprehensive IncomeAccumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy and EntergyLouisiana. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the year ended December31, 2019 by component: Cash flowhedgesnetunrealizedgain (loss) Pensionandotherpostretirementliabilities Netunrealizedinvestmentgain (loss) Total AccumulatedOtherComprehensiveIncome (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) beforereclassifications191,147 (93,696) 32,914 130,365Amounts reclassified from accumulatedother comprehensive income (loss)(76,121) 68,546 (5,731) (13,306)Net other comprehensive income (loss) forthe period115,026 (25,150) 27,183 117,059Ending balance, December 31, 2019$84,206 ($557,072) $25,946 ($446,920)139 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe following table presents changes in accumulated other comprehensive income (loss) for Entergy for the year ended December31, 2018 by component: Cash flowhedgesnetunrealizedgain (loss) Pensionandotherpostretirementliabilities Netunrealizedinvestmentgain (loss) Total AccumulatedOtherComprehensiveIncome (Loss) (In Thousands) Ending balance, December 31, 2017($37,477) ($531,099) $545,045 ($23,531)Implementation of accounting standards— — (632,617) (632,617)Beginning balance, January 1, 2018($37,477) ($531,099) ($87,572) ($656,148) Other comprehensive income (loss) beforereclassifications(31,933) 26,702 (46,574) (51,805)Amounts reclassified from accumulatedother comprehensive income (loss)54,031 63,441 17,803 135,275Net other comprehensive income (loss) forthe period22,098 90,143 (28,771) 83,470Reclassification pursuant to ASU 2018-02(7,756) (90,966) 114,227 15,505Ending balance, December 31, 2018($23,135) ($531,922) ($2,116) ($557,173)The following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the year endedDecember 31, 2019: Pension and OtherPostretirementLiabilities (In Thousands) Beginning balance, January 1, 2019 ($6,153)Other comprehensive income (loss) before reclassifications 14,591Amounts reclassified from accumulated other comprehensiveincome (loss) (3,876)Net other comprehensive income (loss) for the period 10,715Ending balance, December 31, 2019 $4,562 140 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the year endedDecember 31, 2018: Pension and OtherPostretirementLiabilities (In Thousands) Beginning balance, January 1, 2018 ($46,400)Other comprehensive income (loss) before reclassifications 52,299Amounts reclassified from accumulated other comprehensiveincome (loss) (2,003)Net other comprehensive income (loss) for the period 50,296 Reclassification pursuant to ASU 2018-02 ($10,049) Ending balance, December 31, 2018 ($6,153) Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) for Entergy for the years ended December 31,2019 and 2018 are as follows: Amounts reclassified fromAOCI Income Statement Location 2019 2018 (In Thousands) Cash flow hedges net unrealized gain (loss) Power contracts $96,549 ($68,067) Competitive business operatingrevenuesInterest rate swaps (194) (327) Miscellaneous - netTotal realized gain (loss) on cash flow hedges 96,355 (68,394) Income taxes (20,234) 14,363 Income taxesTotal realized gain (loss) on cash flow hedges (net of tax) $76,121 ($54,031) Pension and other postretirement liabilities Amortization of prior-service costs $21,300 $21,700 (a)Amortization of loss (83,246) (99,186) (a)Settlement loss (25,155) (3,207) (a)Total (87,101) (80,693) Income taxes 18,555 17,252 Income taxesTotal amortization and settlement loss (net of tax) ($68,546) ($63,441) Net unrealized investment gain (loss) Realized gain (loss) $9,069 ($28,170) Interest and investment incomeIncome taxes (3,338) 10,367 Income taxesTotal realized investment gain (loss) (net of tax) $5,731 ($17,803) Total reclassifications for the period (net of tax) $13,306 ($135,275) 141 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(a)These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension andother postretirement cost. See Note 11 to the financial statements for additional details. Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) for Entergy Louisiana for the years endedDecember 31, 2019 and 2018 are as follows: Amounts reclassified fromAOCI Income Statement Location 2019 2018 (In Thousands) Pension and other postretirement liabilities Amortization of prior-service costs $7,349 $7,735 (a)Amortization of loss (2,106) (5,025) (a)Total amortization 5,243 2,710 Income taxes (1,367) (707) Income taxesTotal amortization (net of tax) 3,876 2,003 Total reclassifications for the period (net of tax) $3,876 $2,003 (a)These accumulated other comprehensive income (loss) components are included in the computation of net periodic pension andother postretirement cost. See Note 11 to the financial statements for additional details. NOTE 8. COMMITMENTS AND CONTINGENCIES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, EntergyMississippi, 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 withcertainty the outcome of such proceedings, management does not believe that the ultimate resolution of these matters will have a materialadverse effect on Entergy’s results of operations, cash flows, or financial condition. Entergy discusses regulatory proceedings in Note 2 tothe financial statements and discusses tax proceedings in Note 3 to the financial statements.Vidalia Purchased Power AgreementEntergy Louisiana has an agreement extending through the year 2031 to purchase energy generated by a hydroelectric facility knownas the Vidalia project. Entergy Louisiana made payments under the contract of approximately $135.5 million in 2019, $137.6 million in2018, and $122.9 million in 2017. If the maximum percentage (94%) of the energy is made available to Entergy Louisiana, currentproduction projections would require estimated payments of approximately $131 million in 2020, and a total of $1.44 billion for the years2021 through 2031. Entergy Louisiana currently recovers the costs of the purchased energy through its fuel adjustment clause.In an LPSC-approved settlement related to tax benefits from the tax treatment of the Vidalia contract, Entergy Louisiana agreed tocredit rates by $11 million each year for up to 10 years, beginning in October 2002. In October 2011 the LPSC approved a settlement underwhich Entergy Louisiana agreed to provide credits to customers by crediting billings an additional $20.235 million per year for 15 yearsbeginning January 2012. Entergy Louisiana recorded a regulatory charge and a corresponding regulatory liability to reflect thisobligation. The settlement agreement allowed for an adjustment to the credits if, among other things, there was a change in the applicablefederal or state income tax rate. As a result of the enactment of the Tax Cuts and Jobs Act, in December 2017, and the lowering of the federal142 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementscorporate income tax rate from 35% to 21%, the Vidalia purchased power regulatory liability was reduced by $30.5 million, with acorresponding increase to Other regulatory credits on the income statement. The effects of the Tax Cuts and Jobs Act are discussed further inNote 3 to the financial statements.ANO Damage, Outage, and NRC ReviewsIn March 2013, during a scheduled refueling outage at ANO 1, a contractor-owned and operated heavy-lifting apparatus collapsedwhile moving the generator stator out of the turbine building. The collapse resulted in the death of an ironworker and injuries to several othercontract workers, caused ANO 2 to shut down, and damaged the ANO turbine building. The total cost of assessment, restoration of off-sitepower, site restoration, debris removal, and replacement of damaged property and equipment was approximately $95 million. EntergyArkansas has pursued its options for recovering damages that resulted from the stator drop, including its insurance coverage and legal action.Entergy Arkansas collected $50 million in 2014 from Nuclear Electric Insurance Limited (NEIL), a mutual insurance company that providesproperty damage coverage to the members’ nuclear generating plants. Entergy Arkansas also collected a total of $21 million in 2018 as aresult of stator-related settlements.In addition, Entergy Arkansas incurred replacement power costs for ANO 2 power during its outage and incurred incrementalreplacement power costs for ANO 1 power because the outage extended beyond the originally-planned duration of the refueling outage. InFebruary 2014 the APSC authorized Entergy Arkansas to retain the $65.9 million in its deferred fuel balance with recovery to be reviewed ina later period after more information regarding various claims associated with the ANO stator incident is available.In March 2015, after several NRC inspections and regulatory conferences, arising from the stator incident, the NRC placed ANO intothe “multiple/repetitive degraded cornerstone column,” or Column 4, of the NRC’s Reactor Oversight Process Action Matrix. EntergyArkansas incurred incremental costs of approximately $53 million in 2015 to prepare for the NRC inspections that began in early 2016 inorder to address the issues required to move ANO back to “licensee response” or Column 1 of the NRC’s Reactor Oversight Process ActionMatrix. Excluding remediation and response costs that resulted from the additional NRC inspection activities, Entergy Arkansas incurredapproximately $44 million in 2016 and $7 million in 2017 in support of NRC inspection activities and to implement Entergy Arkansas’sperformance improvement initiatives developed in 2015. In June 2018 the NRC moved ANO 1 and ANO 2 into the “licensee responsecolumn,” or Column 1, of the NRC’s Reactor Oversight Process Action Matrix.In July 2017, Entergy Arkansas filed for a change in rates pursuant to its formula rate plan rider. In that proceeding, the APSCapproved a settlement agreement agreed upon by the parties, including a provision that requires Entergy Arkansas to initiate a regulatoryproceeding for the purpose of recovering funds currently withheld from rates and related to the stator incident, including the $65.9 million ofdeferred fuel and purchased energy costs and costs related to the incremental oversight previously noted, subject to certain timelines andconditions set forth in the settlement agreement. Spent Nuclear Fuel LitigationUnder the Nuclear Waste Policy Act of 1982, the DOE is required, for a specified fee, to construct storage facilities for, and todispose of, all spent nuclear fuel and other high-level radioactive waste generated by domestic nuclear power reactors. Entergy’s nuclearowner/licensee subsidiaries have been charged fees for the estimated future disposal costs of spent nuclear fuel in accordance with theNuclear Waste Policy Act of 1982. The affected Entergy companies entered into contracts with the DOE, whereby the DOE is to furnishdisposal services at a cost of one mill per net kWh generated and sold after April 7, 1983, plus a one-time fee for generation prior to thatdate. Entergy considers all costs incurred for the disposal of spent nuclear fuel, except accrued interest, to be proper components of nuclearfuel expense. Provisions to recover such costs have been or will be made in applications to regulatory authorities for the Utilityplants. Following the defunding of the Yucca Mountain spent fuel repository program, the National Association of Regulatory UtilityCommissioners and others sued the government seeking cessation of collection of the one mill per net kWh generated and sold after April 7,1983 fee. In November 2013 the D.C. Circuit Court of143 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsAppeals ordered the DOE to submit a proposal to Congress to reset the fee to zero until the DOE complies with the Nuclear Waste Policy Actor Congress enacts an alternative waste disposal plan. In January 2014 the DOE submitted the proposal to Congress under protest, and alsofiled a petition for rehearing with the D.C. Circuit. The petition for rehearing was denied. The zero spent fuel fee went into effectprospectively in May 2014.Because the DOE has not begun accepting spent fuel, it is in non-compliance with the Nuclear Waste Policy Act of 1982 and hasbreached its spent fuel disposal contracts. As a result of the DOE’s failure to begin disposal of spent nuclear fuel in 1998 pursuant to theNuclear Waste Policy Act of 1982 and the spent fuel disposal contracts, Entergy’s nuclear owner/licensee subsidiaries have incurred and willcontinue to incur damages. Beginning in November 2003 these subsidiaries have pursued litigation to recover the damages caused by theDOE’s delay in performance. Following are details of final judgments recorded by Entergy in 2017, 2018, and 2019 related to Entergy’snuclear owner licensee subsidiaries’ litigation with the DOE.In September 2016 the U.S. Court of Federal Claims issued a judgment in the Entergy Nuclear Palisades case in the amount of $14million. Entergy Nuclear Palisades recorded a receivable for that amount, and subsequently received payment from the U.S. Treasury inJanuary 2017. The effects of recording the judgment were reductions to plant and other operation and maintenance expenses. The Palisadesdamages awarded included $11 million related to costs previously capitalized and $3 million related to costs previously recorded as otheroperation and maintenance expense. Of the $11 million, Entergy recorded $1 million as a reduction to previously-recorded depreciationexpense. Entergy reduced its Palisades plant asset balance by the remaining $10 million. The Court previously issued a partial judgment inthe case in the amount of $21 million, which was paid by the U.S. Treasury in October 2015.In October 2016 the U.S. Court of Federal Claims issued a judgment in the second round Entergy Nuclear Indian Point 2 case in theamount of $34 million. Entergy Nuclear Indian Point 2 recorded a receivable for that amount, and subsequently received payment from theU.S. Treasury in January 2017. The effects of recording the judgment were reductions to plant and other operation and maintenanceexpenses. The Indian Point 2 damages awarded included $14 million related to costs previously capitalized, $15 million related to costspreviously recorded as other operation and maintenance expense, $3 million related to previously recorded decommissioning expense, and$2 million related to costs previously recorded as taxes other than income taxes. Of the $14 million, Entergy recorded $3 million as areduction to previously-recorded depreciation expense. Entergy reduced its Indian Point 2 plant asset balance by the remaining $11 million.In September 2018 the DOE submitted an offer of judgment to resolve claims in the second round Entergy Nuclear GenerationCompany case involving Pilgrim. The $62 million offer was accepted by Entergy Nuclear Generation Company, and the U.S. Court ofFederal Claims issued a judgment in that amount in favor of Entergy Nuclear Generation Company. Entergy received payment from the U.S.Treasury in October 2018. The effect in 2018 of recording the judgment was a reduction to plant and other operation and maintenanceexpenses. The Pilgrim damages awarded included $60 million related to costs previously capitalized and $2 million related to costspreviously recorded as other operation and maintenance expense. Of the $60 million, Entergy recorded $4 million as a reduction topreviously-recorded depreciation expense, a $10 million reduction to bring its remaining Pilgrim plant asset balance to zero, and the excess$46 million as a reduction to other operation and maintenance expense because Pilgrim’s plant asset balance is fully impaired.In August 2019 the U.S. Court of Federal Claims issued a final judgment in the amount of $19 million in favor of Entergy Louisianaagainst the DOE in the second round River Bend damages case. Entergy Louisiana received payment from the U.S. Treasury in September2019. The effects in 2019 of recording the judgment were reductions to plant, nuclear fuel expense, and other operation and maintenanceexpense. The River Bend damages awarded included $12 million related to costs previously recorded as nuclear fuel expense, $5 millionrelated to costs previously recorded as other operation and maintenance expense, and $2 million in costs previously capitalized.In December 2019 the DOE submitted an offer of judgment to resolve claims in the third round ANO damages case. The $80 millionoffer was accepted by Entergy Arkansas, and the U.S. Court of Federal Claims issued a judgment144 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsin that amount in favor of Entergy Arkansas and against the DOE. Entergy Arkansas received payment from the U.S. Treasury in January2020. The effects in 2019 of recording the judgment were reductions to plant, nuclear fuel expense, other operation and maintenanceexpense, depreciation expense, and taxes other than income taxes. The ANO damages awarded included $55 million in costs previouslycapitalized, $12 million related to costs previously recorded as nuclear fuel expense, $12 million related to costs previously recorded as otheroperation and maintenance expense, and $1 million related to costs previously recorded as taxes other than income taxes. Of the $55 million,Entergy Arkansas, recorded $5 million as a reduction to previously-recorded depreciation expense.In December 2019 the Entergy FitzPatrick Properties (formerly Entergy Nuclear FitzPatrick) and the DOE entered into a settlementagreement and the U.S. Court of Federal Claims issued a judgment in the amount of $7 million in favor of Entergy FitzPatrick Propertiesagainst the DOE in the second round FitzPatrick damages case. Entergy received payment from the U.S. Treasury in January 2020.Substantially all of the FitzPatrick damages awarded relate to costs previously expensed as asset write-offs, impairments, and related charges,and in December 2019 Entergy recorded $7 million as a reduction to asset write-offs, impairments, and related charges.Management cannot predict the timing or amount of any potential recoveries on other claims filed by Entergy subsidiaries, andcannot predict the timing of any eventual receipt from the DOE of the U.S. Court of Federal Claims damage awards.Nuclear InsuranceThird Party Liability InsuranceThe Price-Anderson Act requires that reactor licensees purchase insurance and participate in a secondary insurance pool that providesinsurance coverage for the public in the event of a nuclear power plant accident. The costs of this insurance are borne by the nuclear powerindustry. Congress amended and renewed the Price-Anderson Act in 2005 for a term through 2025. The Price-Anderson Act requiresnuclear power plants to show evidence of financial protection in the event of a nuclear accident. This protection must consist of two layers ofcoverage:1.The primary level is private insurance underwritten by American Nuclear Insurers (ANI) and provides public liability insurancecoverage of $450 million for each operating reactor. If this amount is not sufficient to cover claims arising from an accident, thesecond level, Secondary Financial Protection, applies.2.Within the Secondary Financial Protection level, each nuclear reactor has a contingent obligation to pay a retrospective premium,equal to its proportionate share of the loss in excess of the primary level, regardless of proximity to the incident or fault, up to amaximum of approximately $137.6 million per reactor per incident (Entergy’s maximum total contingent obligation per incident is$1.101 billion). This retrospective premium is payable at a rate currently set at approximately $21 million per year per incident pernuclear power reactor.3.In the event that one or more acts of terrorism cause a nuclear power plant accident, which results in third-party damages – off-siteproperty and environmental damage, off-site bodily injury, and on-site third-party bodily injury (i.e. contractors), the primary levelprovided by ANI combined with the Secondary Financial Protection would provide approximately $14 billion in coverage. TheTerrorism Risk Insurance Reauthorization Act of 2007 created a government program that provides for up to $100 billion in coveragein excess of existing coverage for a terrorist event. Under current law, the Terrorism Risk Insurance Act extends through 2020.Currently, 98 nuclear reactors are participating in the Secondary Financial Protection program that provides approximately $14billion in secondary layer insurance coverage to compensate the public in the event of a nuclear power reactor accident. The Price-AndersonAct provides that all potential liability for a nuclear accident is limited to the amounts of insurance coverage available under the primary andsecondary layers.Entergy Arkansas and Entergy Louisiana each have two licensed reactors. System Energy has one licensed reactor (10% of GrandGulf is owned by a non-affiliated company (Cooperative Energy) that would share on a pro-145 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsrata basis in any retrospective premium assessment to System Energy under the Price-Anderson Act). The Entergy Wholesale Commoditiessegment includes the ownership, operation, and decommissioning of three nuclear power reactors and the ownership of the shutdown IndianPoint 1 reactor and Big Rock Point facility. The Entergy Wholesale Commodities segment previously included two nuclear power reactorsthat were sold in 2019. Vermont Yankee was sold in January 2019 and Pilgrim was sold in August 2019.Property InsuranceEntergy’s nuclear owner/licensee subsidiaries are members of NEIL, a mutual insurance company that provides property damagecoverage, including decontamination and reactor stabilization, to the members’ nuclear generating plants. The property damage insurancelimits procured by Entergy for its Utility plants and Entergy Wholesale Commodity plants are in compliance with the financial protectionrequirements of the NRC.The Utility plants’ (ANO 1 and 2, Grand Gulf, River Bend, and Waterford 3) property damage insurance limits are $1.5 billion peroccurrence at each plant with an additional $100 million per occurrence that is shared among the plants. Property damage from earthquakeand volcanic eruption is excluded from the first $500 million in coverage for all Utility plants. Property damage from flood is excluded fromthe first $500 million in coverage at ANO 1 and 2 and Grand Gulf. Property damage from flood for Waterford 3 and River Bend includes adeductible of $10 million plus an additional 10% of the amount of the loss in excess of $10 million, up to a maximum deductible of $50million. Property damage from wind for all of the Utility nuclear plants includes a deductible of $10 million plus an additional 10% of theamount of the loss in excess of $10 million, up to a total maximum deductible of $50 million.The Entergy Wholesale Commodities’ plants (Palisades, Indian Point 2, Indian Point 3, and Big Rock Point) have property damageinsurance limits as follows: Big Rock Point - $50 million per occurrence; Palisades - $1.115 billion per occurrence; and Indian Point - $1.6billion per occurrence. For losses that are considered non-nuclear in nature, the property damage insurance limit at Palisades and Indian Pointis $500 million. Property damage from wind and flood at Indian Point includes a deductible of $10 million plus an additional 10% of theamount of the loss in excess of $10 million, up to a maximum deductible of $50 million, but property damage from earthquake and volcaniceruption at Indian Point is excluded from the first $500 million. Property damage from wind, flood, earthquake, and volcanic eruption atPalisades includes a deductible of $10 million plus an additional 10% of the amount of the loss in excess of $10 million, up to a maximumdeductible of $50 million. Property damage from wind, flood, earthquake, and volcanic eruption at Big Rock Point includes a deductible of$10 million plus an additional 10% of the amount of the loss in excess of $10 million, up to a maximum deductible of $14 million.The value of the insured property at the time of an accident at Palisades has been changed from replacement cost to actual cashvalue.In addition, Waterford 3 and Grand Gulf are also covered under NEIL’s Accidental Outage Coverage program. Due to Entergy’sgradual exit from the merchant/wholesale power business, Entergy no longer purchases Accidental Outage Coverage for its non-regulated,non-generation assets. Accidental outage coverage provides indemnification for the actual cost incurred in the event of an unplanned outageresulting from property damage covered under the NEIL Primary Property Insurance policy, subject to a deductible period. Theindemnification for the actual cost incurred is based on market power prices at the time of the loss. After the deductible period has passed,weekly indemnities for an unplanned outage, covered under NEIL’s Accidental Outage Coverage program, would be paid according to theamounts listed below:•100% of the weekly indemnity for each week for the first payment period of 52 weeks; then•80% of the weekly indemnity for each week for the second payment period of 52 weeks; and thereafter•80% of the weekly indemnity for an additional 58 weeks for the third and final payment period. 146 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsUnder the property damage and accidental outage insurance programs, all NEIL insured plants could be subject to assessmentsshould losses exceed the accumulated funds available from NEIL. Effective April 1, 2019, the maximum amounts of such possibleassessments per occurrence were as follows: Assessments (In Millions)Utility: Entergy Arkansas$36.2Entergy Louisiana$51.5Entergy Mississippi$0.12Entergy New Orleans$0.12Entergy TexasN/ASystem Energy$24.1 Entergy Wholesale Commodities$—Potential assessments for the Entergy Wholesale Commodities plants are covered by insurance obtained through NEIL’s reinsurers.NRC regulations provide that the proceeds of this insurance must be used, first, to render the reactor safe and stable, and second, tocomplete decontamination operations. Only after proceeds are dedicated for such use and regulatory approval is secured would anyremaining proceeds be made available for the benefit of plant owners or their creditors.In the event that one or more acts of terrorism causes property damage under one or more or all nuclear insurance policies issued byNEIL (including, but not limited to, those described above) within 12 months from the date the first property damage occurs, the maximumrecovery under all such nuclear insurance policies shall be an aggregate not exceeding $3.24 billion plus the additional amounts recoveredfor such losses from reinsurance, indemnity, and any other sources applicable to such losses. Non-Nuclear Property InsuranceEntergy’s non-nuclear property insurance program provides coverage on a system-wide basis for Entergy’s non-nuclear assets. Theinsurance program provides coverage for property damage up to $400 million per occurrence in excess of a $20 million self-insured retentionexcept for property damage caused by the following: earthquake shock, flood, and named windstorm, including associated storm surge. Forearthquake shock and flood, the insurance program provides coverage up to $400 million on an annual aggregate basis in excess of a $40million self-insured retention. For named windstorm and associated storm surge, the insurance program provides coverage up to $125 millionon an annual aggregate basis in excess of a $40 million self-insured retention. The coverage provided by the insurance program for theEntergy New Orleans gas distribution system is limited to $50 million per occurrence and is subject to the same annual aggregate limits andretentions listed above for earthquake shock, flood, and named windstorm, including associated storm surge.Covered property generally includes power plants, substations, facilities, inventories, and gas distribution-relatedproperties. Excluded property generally includes transmission and distribution lines, poles, and towers. For substations valued at $5 millionor less, coverage for named windstorm and associated storm surge is excluded. This coverage is in place for Entergy Corporation, theRegistrant Subsidiaries, and certain other Entergy subsidiaries, including the Entergy Wholesale Commodities segment. Entergy alsopurchases $300 million in terrorism insurance coverage for its conventional property. The Terrorism Risk Insurance Reauthorization Act of2007 created a government program that provides for up to $100 billion in coverage in excess of existing coverage for a terrorist event. Undercurrent law, the Terrorism Risk Insurance Act extends through 2020.147 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEmployment and Labor-related ProceedingsThe Registrant Subsidiaries and other Entergy subsidiaries are responding to various lawsuits in both state and federal courts and toother labor-related proceedings filed by current and former employees, recognized bargaining representatives, and certain thirdparties. Generally, the amount of damages being sought is not specified in these proceedings. These actions include, but are not limited to,allegations of wrongful employment actions; wage disputes and other claims under the Fair Labor Standards Act or its state counterparts;claims of race, gender, age, and disability discrimination; disputes arising under collective bargaining agreements; unfair labor practiceproceedings and other administrative proceedings before the National Labor Relations Board or concerning the National Labor Relations Act;claims of retaliation; claims of harassment and hostile work environment; and claims for or regarding benefits under various EntergyCorporation-sponsored plans. Entergy and the Registrant Subsidiaries are responding to these lawsuits and proceedings and deny liability tothe claimants. Management believes that loss exposure has been and will continue to be handled so that the ultimate resolution of thesematters will not be material, in the aggregate, to the financial position, results of operation, or cash flows of Entergy or the Utility operatingcompanies.Asbestos Litigation (Entergy Arkansas, Entergy Louisiana, Entergy New Orleans, and Entergy Texas)Numerous lawsuits have been filed in federal and state courts, primarily by contractor employees who worked in the 1940-1980stimeframe, primarily against Entergy Texas, and to a lesser extent the other Utility operating companies, as premises owners of power plants,for damages caused by alleged exposure to asbestos. Many other defendants are named in these lawsuits as well. Currently, there areapproximately 200 lawsuits involving approximately 400 claimants. Management believes that adequate provisions have been established tocover any exposure. Additionally, negotiations continue with insurers to recover reimbursements. Management believes that loss exposurehas been and will continue to be handled so that the ultimate resolution of these matters will not be material, in the aggregate, to the financialposition, results of operation, or cash flows of the Utility operating companies.Grand Gulf - Related AgreementsUnit Power Sales Agreement (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)System Energy has agreed to sell all of its share of capacity and energy from Grand Gulf to Entergy Arkansas, Entergy Louisiana,Entergy Mississippi, and Entergy New Orleans in accordance with specified percentages (Entergy Arkansas-36%, Entergy Louisiana-14%,Entergy Mississippi-33%, and Entergy New Orleans-17%) as ordered by the FERC. Charges under this agreement are paid in considerationfor the purchasing companies’ respective entitlement to receive capacity and energy and are payable irrespective of the quantity of energydelivered. The agreement will remain in effect until terminated by the parties and the termination is approved by the FERC, most likely uponGrand Gulf’s retirement from service. In December 2016 the NRC granted the extension of Grand Gulf’s operating license to 2044. Monthlyobligations are based on actual capacity and energy costs. The average monthly payments for 2019 under the agreement were approximately$17.6 million for Entergy Arkansas, $7 million for Entergy Louisiana, $15.5 million for Entergy Mississippi, and $8.5 million for EntergyNew Orleans. See Note 2 to the financial statements for discussion of the complaints filed with the FERC against System Energy seeking areduction in the return on equity component of the Unit Power Sales Agreement.Availability Agreement (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans are individually obligated to make payments orsubordinated advances to System Energy in accordance with stated percentages (Entergy Arkansas-17.1%, Entergy Louisiana-26.9%,Entergy Mississippi-31.3%, and Entergy New Orleans-24.7%) in amounts that, when added to amounts received under the Unit Power SalesAgreement or otherwise, are adequate to cover all148 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsof System Energy’s operating expenses as defined, including an amount sufficient to amortize the cost of Grand Gulf 2 over 27 years (SeeReallocation Agreement terms below) and expenses incurred in connection with a permanent shutdown of Grand Gulf. System Energy hasassigned its rights to payments and advances to certain creditors as security for certain obligations. Since commercial operation of GrandGulf began, payments under the Unit Power Sales Agreement have exceeded the amounts payable under the AvailabilityAgreement. Accordingly, no payments under the Availability Agreement have ever been required. If Entergy Arkansas or EntergyMississippi fails to make its Unit Power Sales Agreement payments, and System Energy is unable to obtain funds from other sources,Entergy Louisiana and Entergy New Orleans could become subject to claims or demands by System Energy or its creditors for payments oradvances under the Availability Agreement (or the assignments thereof) equal to the difference between their required Unit Power SalesAgreement payments and their required Availability Agreement payments.Reallocation Agreement (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy)System Energy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans entered into the ReallocationAgreement relating to the sale of capacity and energy from Grand Gulf and the related costs, in which Entergy Louisiana, EntergyMississippi, and Entergy New Orleans agreed to assume all of Entergy Arkansas’s responsibilities and obligations with respect to Grand Gulfunder the Availability Agreement. The FERC’s decision allocating a portion of Grand Gulf capacity and energy to Entergy Arkansassupersedes the Reallocation Agreement as it relates to Grand Gulf. Responsibility for any Grand Gulf 2 amortization amounts has beenindividually allocated (Entergy Louisiana-26.23%, Entergy Mississippi-43.97%, and Entergy New Orleans-29.80%) under the terms of theReallocation Agreement. However, the Reallocation Agreement does not affect Entergy Arkansas’s obligation to System Energy’s lendersunder the assignments referred to in the preceding paragraph. Entergy Arkansas would be liable for its share of such amounts if EntergyLouisiana, Entergy Mississippi, and Entergy New Orleans were unable to meet their contractual obligations. No payments of anyamortization amounts will be required so long as amounts paid to System Energy under the Unit Power Sales Agreement, including otherfunds available to System Energy, exceed amounts required under the Availability Agreement, which is expected to be the case for theforeseeable future.NOTE 9. ASSET RETIREMENT OBLIGATIONS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, EntergyMississippi, Entergy New Orleans, Entergy Texas, and System Energy)Accounting standards require companies to record liabilities for all legal obligations associated with the retirement of long-livedassets that result from the normal operation of the assets. For Entergy, substantially all of its asset retirement obligations consist of itsliability for decommissioning its nuclear power plants. In addition, an insignificant amount of removal costs associated with non-nuclearpower plants is also included in the decommissioning and asset retirement costs line item on the balance sheets. These liabilities are recorded at their fair values (which are the present values of the estimated future cash outflows) in the period inwhich they are incurred, with an accompanying addition to the recorded cost of the long-lived asset. The asset retirement obligation isaccreted each year through a charge to expense, to reflect the time value of money for this present value obligation. The accretion willcontinue through the completion of the asset retirement activity. The amounts added to the carrying amounts of the long-lived assets will bedepreciated over the useful lives of the assets. The application of accounting standards related to asset retirement obligations is earningsneutral to the rate-regulated business of the Registrant Subsidiaries.In accordance with ratemaking treatment and as required by regulatory accounting standards, the depreciation provisions for theRegistrant Subsidiaries include a component for removal costs that are not asset retirement obligations under accounting standards. Inaccordance with regulatory accounting principles, the Registrant Subsidiaries have recorded regulatory assets (liabilities) in the followingamounts to reflect their estimates of the difference between estimated incurred removal costs and estimated removal costs recovered in rates:149 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements December 31, 2019 2018 (In Millions)Entergy Arkansas$168.9 $138.3Entergy Louisiana($2.4) ($18.8)Entergy Mississippi$80.8 $63.5Entergy New Orleans$52.9 $49.3Entergy Texas$42.5 $50.9System Energy$75.9 $76.4The cumulative decommissioning and retirement cost liabilities and expenses recorded in 2019 and 2018 by Entergy were as follows: Liabilities asof December 31,2018 Accretion Change inCash FlowEstimate Spending Dispositions Liabilities asof December 31,2019 (In Millions)Entergy$6,923.4 $414.0 $273.7 ($45.6) ($1,406.3) $6,159.2 Utility Entergy Arkansas1,048.4 68.0 126.2 — — 1,242.6Entergy Louisiana1,280.3 69.5 147.5 — — 1,497.3Entergy Mississippi9.2 0.5 — — — 9.7Entergy New Orleans3.3 0.2 — — — 3.5Entergy Texas7.2 0.4 — — — 7.6System Energy896.0 35.7 — — — 931.7 Entergy Wholesale Commodities Big Rock Point39.7 3.2 — (2.6) — 40.3Indian Point 1227.9 19.5 — (8.8) — 238.6Indian Point 2768.0 65.5 — (4.5) — 829.0Indian Point 3750.6 62.5 — (4.7) — 808.4Palisades508.0 42.9 — (1.1) — 549.8Pilgrim816.5 44.1 — (23.9) (836.7)(b)—Vermont Yankee567.9 1.7 — — (569.6)(b)—Other (a)0.4 0.1 — — — 0.5150 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements Liabilities asof December 31,2017 Accretion Change inCash FlowEstimate Spending Liabilities asof December 31,2018 (In Millions) Entergy$6,185.8 $423.5 $505.4 ($191.3) $6,923.4 Utility Entergy Arkansas981.2 60.4 8.9 (2.1) 1,048.4 Entergy Louisiana1,140.5 63.2 85.4 (8.8) 1,280.3 Entergy Mississippi9.2 0.5 0.5 (1.0) 9.2 Entergy New Orleans3.1 0.2 — — 3.3 Entergy Texas6.8 0.4 — — 7.2 System Energy861.7 34.3 — — 896.0 Entergy Wholesale Commodities Big Rock Point38.9 3.2 — (2.4) 39.7 Indian Point 1217.6 18.6 — (8.3) 227.9 Indian Point 2708.7 60.6 — (1.3) 768.0 Indian Point 3694.5 58.0 — (1.9) 750.6 Palisades470.4 39.6 — (2.0) 508.0 Pilgrim651.4 58.6 117.5 (11.0) 816.5 Vermont Yankee401.5 25.9 293.0 (152.5) 567.9(c)Other (a)0.3 — 0.1 — 0.4 (a)See “Coal Combustion Residuals” below for additional discussion regarding the asset retirement obligations related to coalcombustion residuals management.(b)See Note 14 to the financial statements for discussion of the sale of the Pilgrim plant to Holtec International in August 2019 and thesale of the Vermont Yankee plant to NorthStar in January 2019.(c)The Vermont Yankee asset retirement obligation was classified as held for sale within other non-current liabilities on theconsolidated balance sheet as of December 31, 2018.Nuclear Plant DecommissioningEntergy periodically reviews and updates estimated decommissioning costs. The actual decommissioning costs may vary from theestimates because of the timing of plant decommissioning, regulatory requirements, changes in technology, and increased costs of labor,materials, and equipment. As described below, during 2019, 2018, and 2017, Entergy updated decommissioning cost estimates for certainnuclear power plants.UtilityIn the first quarter 2018, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for River Bend as aresult of a revised decommissioning cost study. The revised estimate resulted in an $85.4 million increase in its decommissioning costliability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of theunit.In the first quarter 2019, Entergy Arkansas recorded a revision to its estimated decommissioning cost liabilities for ANO 1 and ANO2 as a result of a revised decommissioning cost study. The revised estimates resulted in a $126.2151 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsmillion increase in its decommissioning cost liabilities, along with corresponding increases in the related asset retirement cost assets that willbe depreciated over the remaining lives of the units.In the second quarter 2019, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as aresult of a revised decommissioning cost study. The revised estimate resulted in a $147.5 million increase in its decommissioning costliability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining useful lifeof the unit.Entergy Wholesale CommoditiesPalisadesIn the third quarter 2017, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability forPalisades. The revised estimate resulted in a $68.7 million reduction in its decommissioning cost liability, along with a correspondingreduction in the plant asset. The reduction in its estimated decommissioning cost liability resulted from the change in expectation regardingthe timing of decommissioning cash flows due to the decision to continue to operate the plant until May 31, 2022.PilgrimEntergy Nuclear Generation Company filed its Post-Shutdown Decommissioning Activities report (PSDAR) with the NRC in thefourth quarter 2018 for the Pilgrim plant in anticipation of its May 2019 shutdown. As part of the development of the PSDAR, Entergyobtained a revised decommissioning cost study in the third quarter 2018. The revised estimate resulted in a $117.5 million increase in thedecommissioning cost liability and a corresponding impairment charge.Vermont YankeeIn the fourth quarter 2018, Entergy Wholesale Commodities recorded a revision to its estimated decommissioning cost liability forVermont Yankee. The revised estimate resulted in a $293 million increase in the decommissioning cost liability, along with a correspondingincrease in the related asset retirement cost asset. The revision was prompted by the progress of the Vermont Yankee sales transaction, whichis described in Note 14 to the financial statements. Entergy accordingly evaluated the Vermont Yankee asset retirement obligation in light ofthe terms of the sale transaction, upon determining that Vermont Yankee was in held for sale status. Based on the terms of the salesagreement, which include Entergy receiving a note receivable from the purchaser, Entergy determined that $165 million of the assetretirement cost was impaired, and it was accordingly written down in the fourth quarter 2018. The Vermont Yankee plant was sold toNorthStar in January 2019.NRC Filings Regarding Trust Funding LevelsPlant owners are required to provide the NRC with a biennial report (annually for units that have shut down or will shut down withinfive years), based on values as of December 31, addressing the owners’ ability to meet the NRC minimum funding levels. Depending on thevalue of the trust funds, plant owners may be required to take steps, such as providing financial guarantees through letters of credit or parentcompany guarantees or making additional contributions to the trusts, to ensure that the trusts are adequately funded and that NRC minimumfunding requirements are met.As nuclear plants individually approach and begin decommissioning, filings will be submitted to the NRC for planned shutdownactivities. These filings with the NRC also determine whether financial assurance may be required in addition to the nucleardecommissioning trust fund.152 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsCoal Combustion ResidualsIn June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1)regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” underthe hazardous waste program of Resource Conservation and Recovery Act (RCRA) Subtitle C; or (2) regulating CCRs destined for disposalin landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA. Under both options, CCRs that are beneficiallyreused in certain processes would remain excluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rulewith the material being regulated under the second scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D.The final regulations create new compliance requirements including modified storage, new notification and reporting practices, productdisposal considerations, and CCR unit closure criteria. Entergy believes that on-site disposal options will be available at its facilities, to theextent needed for CCR that cannot be transferred for beneficial reuse. In December 2016, the Water Infrastructure Improvements for theNation Act (WIIN Act) was signed into law, which authorizes states to regulate coal ash rather than leaving primary enforcement to citizensuit actions. States may submit to the EPA proposals for permit programs. In September 2017 the EPA agreed to reconsider certainprovisions of the coal combustion residuals (CCR) rule in light of the WIIN Act. In March 2018 the EPA published its proposed revisions tothe CCR rule with comments due at the end of April 2018. In July 2018 the EPA released its initial revisions extending certain deadlines andincorporating some risk-based standards. The EPA is expected to release additional revisions in another rulemaking. In August 2018 theD.C. Circuit vacated several provisions of the CCR rule on the basis that they were inconsistent with the Resource Conservation andRecovery Act and remanded the matter to the EPA to conduct further rulemaking. In August 2019 the EPA released its second set ofproposed revisions to the CCR rule and plans at least three additional rulemakings.In 2018 revisions to the CCR asset retirement obligations were made as a result of revised closure and post-closure cost estimates.The revised estimates resulted in increases of $8.9 million at Entergy Arkansas, $0.5 million at Entergy Mississippi, and $0.1 million atEntergy Wholesale Commodities in decommissioning cost liabilities, along with corresponding increases in related asset retirement costassets that will be depreciated over the remaining useful lives of the respective units.153 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 10. LEASES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,Entergy Texas, and System Energy)Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lesseeshould recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” andaccordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with theimplementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient forTransition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accountedfor as leases under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplifythe transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of atthe earliest comparative period. In implementing these ASUs, Entergy elected the options provided in both ASU 2018-01 and ASU 2018-11.This accounting was applied to all lease agreements using the modified retrospective method, which required an adjustment to retainedearnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowedEntergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. Inadopting the standard in January 2019, Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million forEntergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated netincome; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.GeneralAs of December 31, 2019, Entergy and the Registrant Subsidiaries held operating and finance leases for fleet vehicles used inoperations, real estate, and aircraft. Excluded are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and theGrand Gulf sale-leaseback which were determined not to be leases under the accounting standards.Leases have remaining terms of one year to 60 years. Real estate leases generally include at least one five-year renewal option;however, renewal is not typically considered reasonably certain unless Entergy or a Registrant Subsidiary makes significant leaseholdimprovements or other modifications that would hinder its ability to easily move. In certain of the lease agreements for fleet vehicles used inoperations, Entergy and the Registrant Subsidiaries provide residual value guarantees to the lessor. Due to the nature of the agreements andEntergy’s continuing relationship with the lessor, however, Entergy and the Registrant Subsidiaries expect to renegotiate or refinance theleases prior to conclusion of the lease. As such, Entergy and the Registrant Subsidiaries do not believe it is probable that they will be requiredto pay anything pertaining to the residual value guarantee, and the lease liabilities and right-of-use assets are measured accordingly.Entergy incurred the following total lease costs for the year ended December 31, 2019: (In Thousands)Operating lease cost $63,566Finance lease cost: Amortization of right-of-useassets $16,048Interest on lease liabilities $3,667The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included withinoperating activities on the Consolidated Statements of Cash Flows, except for the finance lease costs which are included in financingactivities.154 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe Registrant Subsidiaries incurred the following lease costs for the year ended December 31, 2019: EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas (In Thousands)Operating lease cost$13,213 $11,975 $6,927 $1,406 $4,259Finance lease cost: Amortization of right-of-use assets$3,643 $5,940 $2,097 $1,042 $1,568Interest on lease liabilities$594 $895 $353 $168 $241The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costsincluded within operating activities on the respective Statements of Cash Flows, except for the finance lease costs which are included infinancing activities. Entergy has elected to account for short-term leases in accordance with policy options provided by accounting guidance; therefore,there are no related lease liabilities or right-of-use assets for the costs recognized above by Entergy or by its Registrant Subsidiaries in thetable below.Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at December 31, 2019 are $234 millionrelated to operating leases and $61 million related to finance leases.Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at December 31, 2019 are the followingamounts: EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas (In Thousands)Operating leases$52,317 $36,034 $16,900 $3,878 $14,020Finance leases$11,216 $17,209 $6,869 $3,291 $5,273The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as ofDecember 31, 2019: (In Thousands)Current liabilities: Operating leases $52,678Finance leases $11,413Non-current liabilities: Operating leases $181,339Finance leases $53,396155 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respectivebalance sheets at December 31, 2019: EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas (In Thousands)Current liabilities: Operating leases$11,443 $10,331 $5,633 $1,134 $3,698Finance leases$2,442 $3,919 $1,487 $647 $1,222Non-current liabilities: Operating leases$40,880 $25,743 $11,232 $2,746 $10,364Finance leases$8,768 $13,376 $5,382 $2,644 $4,009The following information contains the weighted average remaining lease term in years and the weighted average discount rate forthe operating and finance leases of Entergy at December 31, 2019:Weighted average remaining leaseterms: Operating leases 5.14Finance leases 6.69Weighted average discount rate: Operating leases 3.86%Finance leases 4.60%The following information contains the weighted average remaining lease term in years and the weighted average discount rate forthe operating and finance leases of the Registrant Subsidiaries at December 31, 2019: EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas Weighted averageremaining lease terms: Operating leases5.84 4.33 5.04 5.62 4.54Finance leases5.43 5.24 5.32 5.93 5.12Weighted averagediscount rate: Operating leases3.67% 3.65% 3.75% 3.88% 3.73%Finance leases3.68% 3.65% 3.67% 3.74% 3.82%156 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsMaturity of the lease liabilities for Entergy as of December 31, 2019 are as follows:Year OperatingLeases FinanceLeases (In Thousands) 2020 $62,124 $14,0142021 56,386 12,4572022 47,919 11,2532023 37,228 10,1212024 30,376 8,454Years thereafter 29,138 20,010Minimum lease payments 263,171 76,309Less: amount representing interest 29,153 11,500Present value of net minimum lease payments $234,018 $64,809Maturity of the lease liabilities for the Registrant Subsidiaries as of December 31, 2019 are as follows:Operating LeasesYear EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas (In Thousands) 2020 $13,010 $11,376 $6,112 $1,248 $4,3392021 11,165 9,645 4,983 991 3,6112022 8,788 6,935 3,566 711 2,6892023 7,193 4,916 1,454 549 2,3362024 5,866 3,089 731 310 1,684Years thereafter 12,021 2,972 1,972 522 1,119Minimum lease payments 58,043 38,933 18,818 4,331 15,778Less: amount representinginterest 5,720 2,860 1,953 452 1,716Present value of netminimum leasepayments $52,323 $36,073 $16,865 $3,879 $14,062157 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsFinance LeasesYear EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas (In Thousands) 2020 $2,772 $4,422 $1,692 $744 $1,3822021 2,369 3,766 1,527 634 1,1882022 2,079 3,325 1,334 581 9812023 1,833 2,856 1,111 532 8392024 1,489 2,092 838 449 648Years thereafter 1,787 2,476 1,038 713 706Minimum lease payments 12,329 18,937 7,540 3,653 5,744Less: amount representinginterest 1,119 1,641 670 362 512Present value of netminimum leasepayments $11,210 $17,296 $6,870 $3,291 $5,232In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries havemade the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storageagreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estateleases.In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K for theyear ended December 31, 2018.GeneralAs of December 31, 2018, Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuelstorage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and theGrand Gulf sale and leaseback transaction, all of which are discussed elsewhere): Year OperatingLeases CapitalLeases (In Thousands)2019 $94,043 $2,8872020 82,191 2,8872021 75,147 2,8872022 60,808 2,8872023 47,391 2,887Years thereafter 88,004 16,117Minimum lease payments 447,584 30,552Less: Amount representing interest — 8,555Present value of net minimum lease payments $447,584 $21,997Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulfand Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018, $53.1 million in 2017, and $44.4 million in 2016.158 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsAs of December 31, 2018, the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, andfuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases,and the Grand Gulf lease obligation, all of which are discussed elsewhere):Operating Leases Year EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas (In Thousands)2019 $20,421 $25,970 $9,344 $2,493 $5,7442020 13,918 21,681 8,763 2,349 4,4312021 11,931 19,514 7,186 1,901 3,6252022 9,458 15,756 5,675 1,314 2,2182023 7,782 12,092 2,946 1,043 1,561Years thereafter 23,297 22,003 4,417 2,323 2,726Minimum lease payments $86,807 $117,016 $38,331 $11,423 $20,305Rental Expenses Year EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas SystemEnergy (In Millions)2018 $6.2 $20.2 $4.6 $2.5 $3.1 $1.92017 $7.5 $23.0 $5.6 $2.5 $3.4 $2.22016 $8.0 $17.8 $4.0 $0.9 $2.8 $1.6In addition to the above rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense inaccordance with regulatory treatment. Railcar operating lease payments were $2.8 million in 2018, $4 million in 2017, and $3.4 million in2016 for Entergy Arkansas and $0.4 million in 2018, $0.3 million in 2017, and $0.3 million in 2016 for Entergy Louisiana. Oil tankfacilities lease payments for Entergy Mississippi were $0.1 million in 2018, $1.6 million in 2017, and $1.6 million in 2016.Power Purchase AgreementsAs of December 31, 2018, Entergy Texas had a power purchase agreement that is accounted for as an operating lease under theaccounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum leasepayments under the power purchase agreement are as follows:Year EntergyTexas (a) Entergy (In Thousands)2019 $31,159 $31,1592020 31,876 31,8762021 32,609 32,6092022 10,180 10,180Minimum lease payments $105,824 $105,824159 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(a)Amounts reflect 100% of minimum payments. Under a separate contract, which expires May 31, 2022, Entergy Louisiana purchases50% of the capacity and energy from the power purchase agreement from Entergy Texas.Total capacity expense under the power purchase agreement accounted for as an operating lease at Entergy Texas was $30.5 million in 2018,$34.1 million in 2017, and $26.1 million in 2016.Sales and Leaseback TransactionsWaterford 3 Lease ObligationIn 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests inWaterford 3 for the aggregate sum of $353.6 million. The leases were scheduled to expire in July 2017. Entergy Louisiana was required toreport the sale-leaseback as a financing transaction in its financial statements.In December 2015, Entergy Louisiana agreed to purchase the undivided interests in Waterford 3 that were previously being leased.The purchase was accomplished in a two-step transaction in which Entergy Louisiana first acquired the equity participant’s beneficial interestin the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessordebt is paid.In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficialinterest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearingcollateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debtthat remained outstanding and that matured in January 2017. The combination of payments on the $52 million collateral trust mortgage noteissued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of thetransaction through the end of the lease term in July 2017.Throughout the term of the lease, Entergy Louisiana had accrued a liability for the amount it expected to pay to retain the use of theundivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financingtransaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liabilitywas $62.7 million. Upon entering into the agreement to purchase the equity participant’s beneficial interest in the undivided interests,Entergy Louisiana reduced the balance of the liability to $60 million, and recorded the $2.7 million difference as a credit to interest expense.The $60 million remaining liability was eliminated upon payment of the cash portion of the purchase price in 2016.As of December 31, 2016, Entergy Louisiana, in connection with the Waterford 3 lease obligation, had a future minimum leasepayment of $57.5 million, including $2.3 million in interest, due January 2017 that was recorded as long-term debt.In February 2017 the leases were terminated and the leased assets were conveyed to Entergy Louisiana.Grand Gulf Lease ObligationsIn 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests inGrand Gulf for the aggregate sum of $500 million. The initial term of the leases expired in July 2015. System Energy renewed the leases inDecember 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energyhas the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy doesnot renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacityand energy.160 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsSystem Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reportingpurposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenuesinclude the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemakingpurposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset thedifference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record thisdifference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the leaseterm. The amount was a net regulatory liability of $55.6 million as of December 31, 2018 and 2017.As of December 31, 2018, System Energy, in connection with the Grand Gulf sale and leaseback transactions, had future minimumlease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal: Amount (In Thousands) 2019$17,188202017,188202117,188202217,188202317,188Years thereafter223,437Total309,377Less: Amount representing interest275,025Present value of net minimum lease payments$34,352NOTE 11. RETIREMENT, OTHER POSTRETIREMENT BENEFITS, AND DEFINED CONTRIBUTION PLANS (EntergyCorporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)Qualified Pension PlansEntergy has eight defined benefit qualified pension plans covering substantially all employees. The Entergy Corporation RetirementPlan for Non-Bargaining Employees (Non-Bargaining Plan I), the Entergy Corporation Retirement Plan for Bargaining Employees(Bargaining Plan I), the Entergy Corporation Retirement Plan II for Non-Bargaining Employees (Non-Bargaining Plan II), the EntergyCorporation Retirement Plan II for Bargaining Employees, the Entergy Corporation Retirement Plan III, and the Entergy CorporationRetirement Plan IV for Bargaining Employees are non-contributory final average pay plans and provide pension benefits that are based onemployees’ credited service and compensation during employment. Non-bargaining employees whose most recent date of hire is after June30, 2014 participate in the Entergy Corporation Cash Balance Plan for Non-Bargaining Employees (Non-Bargaining Cash Balance Plan).Certain bargaining employees hired or rehired after June 30, 2014, or such later date provided for in their applicable collective bargainingagreements, participate in the Entergy Corporation Cash Balance Plan for Bargaining Employees (Bargaining Cash Balance Plan). TheRegistrant Subsidiaries participate in these four plans: Non-Bargaining Plan I, Bargaining Plan I, Non-Bargaining Cash Balance Plan, andBargaining Cash Balance Plan.The assets of the six final average pay defined benefit qualified pension plans are held in a master trust established by Entergy, andthe assets of the two cash balance pension plans are held in a second master trust established by Entergy. Each pension plan has an undividedbeneficial interest in each of the investment accounts in its respective master trust that is maintained by a trustee. Use of the master trustspermits the commingling of the trust assets of the pension plans of Entergy Corporation and its Registrant Subsidiaries for investment andadministrative161 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementspurposes. Although assets in the master trusts are commingled, the trustee maintains supporting records for the purpose of allocating the trustlevel equity in net earnings (loss) and the administrative expenses of the investment accounts in each trust to the various participating pensionplans in that particular trust. The fair value of the trusts’ assets is determined by the trustee and certain investment managers. For each trust,the trustee calculates a daily earnings factor, including realized and unrealized gains or losses, collected and accrued income, andadministrative expenses, and allocates earnings to each plan in the master trusts on a pro rata basis.Within each pension plan, the record of each Registrant Subsidiary’s beneficial interest in the plan assets is maintained by the plan’sactuary and is updated quarterly. Assets for each Registrant Subsidiary are increased for investment net income and contributions, and aredecreased for benefit payments. A plan’s investment net income/loss (i.e. interest and dividends, realized and unrealized gains and losses andexpenses) is allocated to the Registrant Subsidiaries participating in that plan based on the value of assets for each Registrant Subsidiary atthe beginning of the quarter adjusted for contributions and benefit payments made during the quarter.Entergy Corporation and its subsidiaries fund pension plans in an amount not less than the minimum required contribution under theEmployee Retirement Income Security Act of 1974, as amended, and the Internal Revenue Code of 1986, as amended. The assets of theplans include common and preferred stocks, fixed-income securities, interest in a money market fund, and insurance contracts. TheRegistrant Subsidiaries’ pension costs are recovered from customers as a component of cost of service in each of their respectivejurisdictions.162 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsComponents of Qualified Net Pension Cost and Other Amounts Recognized as a Regulatory Asset and/or Accumulated OtherComprehensive Income (AOCI)Entergy Corporation and its subsidiaries’ total 2019, 2018, and 2017 qualified pension costs and amounts recognized as a regulatoryasset and/or other comprehensive income, including amounts capitalized, included the following components: 2019 2018 2017 (In Thousands)Net periodic pension cost: Service cost - benefits earned during the period$134,193 $155,010 $133,641Interest cost on projected benefit obligation293,114 267,415 260,824Expected return on assets(414,947) (442,142) (408,225)Amortization of prior service cost— 398 261Recognized net loss241,117 274,104 227,720Settlement charges23,492 828 —Net periodic pension costs$276,969 $255,613 $214,221Other changes in plan assets and benefit obligations recognized as aregulatory asset and/or AOCI (before tax) Arising this period: Net loss$614,600 $394,951 $368,067Amounts reclassified from regulatory asset and/or AOCI to net periodic pensioncost in the current year: Amortization of prior service cost— (398) (261)Amortization of net loss(241,117) (274,104) (227,720)Settlement charge(23,492) (828) —Total$349,991 $119,621 $140,086Total recognized as net periodic pension cost, regulatory asset, and/or AOCI(before tax)$626,960 $375,234 $354,307Estimated amortization amounts from regulatory asset and/or AOCI to netperiodic cost in the following year: Prior service cost$— $— $398Net loss$349,038 $233,677 $274,104163 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe Registrant Subsidiaries’ total 2019, 2018, and 2017 qualified pension costs and amounts recognized as a regulatory asset and/orother comprehensive income, including amounts capitalized, for their employees included the following components:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Net periodic pension cost: Service cost - benefits earned during theperiod $21,043 $29,137 $6,516 $2,274 $5,401 $6,199Interest cost on projected benefit obligation 56,701 63,529 16,272 7,495 14,451 13,456Expected return on assets (80,705) (90,607) (23,873) (10,785) (23,447) (18,710)Recognized net loss 47,361 46,571 12,416 6,117 9,335 11,400Net pension cost $44,400 $48,630 $11,331 $5,101 $5,740 $12,345Other changes in plan assets and benefitobligations recognized as a regulatoryasset and/or AOCI (before tax) Arising this period: Net loss $118,898 $99,346 $41,088 $6,531 $10,869 $36,711Amounts reclassified from regulatory assetand/or AOCI to net periodic pension cost inthe current year: Amortization of net loss (47,361) (46,571) (12,416) (6,117) (9,335) (11,400)Total $71,537 $52,775 $28,672 $414 $1,534 $25,311Total recognized as net periodic pensioncost, regulatory asset, and/or AOCI(before tax) $115,937 $101,405 $40,003 $5,515 $7,274 $37,656Estimated amortization amounts fromregulatory asset and/or AOCI to netperiodic cost in the following year Net loss $67,588 $66,509 $18,994 $8,018 $13,060 $17,117164 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Net periodic pension cost: Service cost - benefits earned during theperiod $24,757 $33,783 $7,286 $2,693 $6,356 $7,102Interest cost on projected benefit obligation 52,017 59,761 15,075 7,253 13,390 12,907Expected return on assets (87,404) (99,236) (26,007) (11,973) (26,091) (19,963)Recognized net loss 53,650 57,800 14,438 7,816 10,503 14,859Net pension cost $43,020 $52,108 $10,792 $5,789 $4,158 $14,905Other changes in plan assets and benefitobligations recognized as a regulatoryasset and/or AOCI (before tax) Arising this period: Net (gain)/loss $74,570 $41,642 $19,244 $2,351 $24,121 ($2,359)Amounts reclassified from regulatory assetand/or AOCI to net periodic pension cost inthe current year: Amortization of net loss (53,650) (57,800) (14,438) (7,816) (10,503) (14,859)Total $20,920 ($16,158) $4,806 ($5,465) $13,618 ($17,218)Total recognized as net periodic pensioncost, regulatory asset, and/or AOCI(before tax) $63,940 $35,950 $15,598 $324 $17,776 ($2,313)Estimated amortization amounts fromregulatory asset and/or AOCI to netperiodic cost in the following year Net loss $47,361 $46,571 $12,416 $6,117 $9,335 $11,400165 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2017 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Net periodic pension cost: Service cost - benefits earned during theperiod $20,358 $27,698 $5,890 $2,500 $5,455 $6,145Interest cost on projected benefit obligation 51,776 59,235 14,927 7,163 13,569 12,364Expected return on assets (81,707) (92,067) (24,526) (11,199) (24,722) (18,650)Recognized net loss 46,560 49,417 12,213 6,632 9,241 11,857Net pension cost $36,987 $44,283 $8,504 $5,096 $3,543 $11,716Other changes in plan assets and benefitobligations recognized as a regulatoryasset and/or AOCI (before tax) Arising this period: Net loss $51,569 $57,510 $14,681 $8,601 $1,109 $27,733Amounts reclassified from regulatory assetand/or AOCI to net periodic pension costin the current year: Amortization of net loss (46,560) (49,417) (12,213) (6,632) (9,241) (11,857)Total $5,009 $8,093 $2,468 $1,969 ($8,132) $15,876Total recognized as net periodic pensioncost, regulatory asset, and/or AOCI(before tax) $41,996 $52,376 $10,972 $7,065 ($4,589) $27,592Estimated amortization amounts fromregulatory asset and/or AOCI to netperiodic cost in the following year Net loss $53,650 $57,800 $14,438 $7,816 $10,503 $14,859166 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsQualified Pension Obligations, Plan Assets, Funded Status, Amounts Recognized in the Balance SheetQualified pension obligations, plan assets, funded status, amounts recognized in the Consolidated Balance Sheets for EntergyCorporation and its Subsidiaries as of December 31, 2019 and 2018 are as follows: 2019 2018 (In Thousands)Change in Projected Benefit Obligation (PBO) Balance at January 1$7,404,917 $7,987,087Service cost134,193 155,010Interest cost293,114 267,415Actuarial (gain)/loss1,292,767 (395,242)Benefits paid (including settlement lump sum benefit payments of ($68,203) in 2019 and($1,794) in 2018)(718,788) (609,353)Balance at December 31$8,406,203 $7,404,917Change in Plan Assets Fair value of assets at January 1$5,497,415 $6,071,316Actual return on plan assets1,093,114 (348,051)Employer contributions399,419 383,503Benefits paid (including settlement lump sum benefit payments of ($68,203) in 2019 and($1,794) in 2018)(718,788) (609,353)Fair value of assets at December 31$6,271,160 $5,497,415Funded status($2,135,043) ($1,907,502)Amount recognized in the balance sheet Non-current liabilities($2,135,043) ($1,907,502)Amount recognized as a regulatory asset Net loss$2,831,408 $2,468,987Amount recognized as AOCI (before tax) Net loss$724,575 $737,004167 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsQualified pension obligations, plan assets, funded status, amounts recognized in the Balance Sheets for the Registrant Subsidiaries asof December 31, 2019 and 2018 are as follows:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Change in Projected BenefitObligation (PBO) Balance at January 1 $1,443,808 $1,599,916 $414,089 $191,190 $369,604 $339,034Service cost 21,043 29,137 6,516 2,274 5,401 6,199Interest cost 56,701 63,529 16,272 7,495 14,451 13,456Actuarial loss 248,213 248,509 79,453 24,299 49,235 66,460Benefits paid (154,681) (156,617) (44,820) (18,296) (41,927) (31,542)Balance at December 31 $1,615,084 $1,784,474 $471,510 $206,962 $396,764 $393,607Change in Plan Assets Fair value of assets atJanuary 1 $1,068,842 $1,215,926 $316,716 $145,968 $315,514 $245,516Actual return on plan assets 210,020 239,770 62,238 28,552 61,814 48,460Employer contributions 75,854 64,951 20,794 4,553 3,725 20,234Benefits paid (154,681) (156,617) (44,820) (18,296) (41,927) (31,542)Fair value of assets at December 31 $1,200,035 $1,364,030 $354,928 $160,777 $339,126 $282,668Funded status ($415,049) ($420,444) ($116,582) ($46,185) ($57,638) ($110,939)Amounts recognized in thebalance sheet (funded status) Non-current liabilities ($415,049) ($420,444) ($116,582) ($46,185) ($57,638) ($110,939)Amounts recognized asregulatory asset Net loss $799,235 $759,228 $225,354 $91,862 $160,564 $193,870Amounts recognized as AOCI(before tax) Net loss $— $23,481 $— $— $— $—168 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Change in Projected BenefitObligation (PBO) Balance at January 1 $1,580,756 $1,785,700 $457,549 $217,896 $410,720 $384,049Service cost 24,757 33,783 7,286 2,693 6,356 7,102Interest cost 52,017 59,761 15,075 7,253 13,390 12,907Actuarial gain (79,621) (133,520) (26,611) (18,844) (21,656) (37,842)Benefits paid (134,101) (145,808) (39,210) (17,808) (39,206) (27,182)Balance at December 31 $1,443,808 $1,599,916 $414,089 $191,190 $369,604 $339,034Change in Plan Assets Fair value of assets at January 1 $1,205,668 $1,365,741 $360,842 $165,747 $363,523 $274,432Actual return on plan assets (66,787) (75,926) (19,849) (9,221) (19,686) (15,520)Employer contributions 64,062 71,919 14,933 7,250 10,883 13,786Benefits paid (134,101) (145,808) (39,210) (17,808) (39,206) (27,182)Fair value of assets at December 31 $1,068,842 $1,215,926 $316,716 $145,968 $315,514 $245,516Funded status ($374,966) ($383,990) ($97,373) ($45,222) ($54,090) ($93,518)Amounts recognized in thebalance sheet (funded status) Non-current liabilities ($374,966) ($383,990) ($97,373) ($45,222) ($54,090) ($93,518)Amounts recognized asregulatory asset Net loss $727,703 $686,138 $196,683 $91,448 $159,030 $168,559Amounts recognized as AOCI (before tax) Net loss $— $43,796 $— $— $— $—Accumulated Pension Benefit ObligationThe accumulated benefit obligation for Entergy’s qualified pension plans was $7.8 billion and $6.9 billion at December 31, 2019 and2018, respectively.The qualified pension accumulated benefit obligation for each of the Registrant Subsidiaries for their employees as of December 31,2019 and 2018 was as follows: December 31, 2019 2018 (In Thousands)Entergy Arkansas$1,519,998 $1,362,425Entergy Louisiana$1,643,759 $1,481,158Entergy Mississippi$438,817 $387,635Entergy New Orleans$192,561 $179,907Entergy Texas$371,589 $347,852System Energy$368,771 $317,848169 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsOther Postretirement BenefitsEntergy also currently offers retiree medical, dental, vision, and life insurance benefits (other postretirement benefits) for eligibleretired employees. Employees who commenced employment before July 1, 2014 and who satisfy certain eligibility requirements (includingretiring from Entergy after a certain age and/or years of service with Entergy and immediately commencing their Entergy pension benefit),may become eligible for other postretirement benefits.Effective January 1, 1993, Entergy adopted an accounting standard requiring a change from a cash method to an accrual method ofaccounting for postretirement benefits other than pensions. Entergy Arkansas, Entergy Mississippi, Entergy New Orleans, and EntergyTexas have received regulatory approval to recover accrued other postretirement benefit costs through rates. The LPSC ordered EntergyLouisiana to continue the use of the pay-as-you-go method for ratemaking purposes for postretirement benefits other thanpensions. However, the LPSC retains the flexibility to examine individual companies’ accounting for other postretirement benefits todetermine if special exceptions to this order are warranted. Pursuant to regulatory directives, Entergy Arkansas, Entergy Mississippi, EntergyNew Orleans, Entergy Texas, and System Energy contribute the other postretirement benefit costs collected in rates into externaltrusts. System Energy is funding, on behalf of Entergy Operations, other postretirement benefits associated with Grand Gulf.Trust assets contributed by participating Registrant Subsidiaries are in master trusts, established by Entergy Corporation andmaintained by a trustee. Each participating Registrant Subsidiary holds a beneficial interest in the trusts’ assets. The assets in the mastertrusts are commingled for investment and administrative purposes. Although assets are commingled, supporting records are maintained forthe purpose of allocating the beneficial interest in net earnings/(losses) and the administrative expenses of the investment accounts to thevarious participating plans and participating Registrant Subsidiaries. Beneficial interest in an investment account’s net income/(loss) iscomprised of interest and dividends, realized and unrealized gains and losses, and expenses. Beneficial interest from these investments isallocated to the plans and participating Registrant Subsidiary based on their portion of net assets in the pooled accounts.170 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsComponents of Net Other Postretirement Benefit Cost and Other Amounts Recognized as a Regulatory Asset and/or AOCIEntergy Corporation’s and its subsidiaries’ total 2019, 2018, and 2017 other postretirement benefit costs, including amountscapitalized and amounts recognized as a regulatory asset and/or other comprehensive income, included the following components: 2019 2018 2017 (In Thousands)Other postretirement costs: Service cost - benefits earned during the period$18,699 $27,129 $26,915Interest cost on accumulated postretirement benefit obligation (APBO)47,901 50,725 55,838Expected return on assets(38,246) (41,493) (37,630)Amortization of prior service credit(35,377) (37,002) (41,425)Recognized net loss1,430 13,729 21,905Net other postretirement benefit (income)/cost($5,593) $13,088 $25,603Other changes in plan assets and benefit obligations recognized as a regulatoryasset and /or AOCI (before tax) Arising this period: Prior service credit for period$— $— ($2,564)Net gain(38,526) (274,354) (66,922)Amounts reclassified from regulatory asset and /or AOCI to net periodic benefit cost inthe current year: Amortization of prior service credit35,377 37,002 41,425Amortization of net loss(1,430) (13,729) (21,905)Total($4,579) ($251,081) ($49,966)Total recognized as net periodic benefit (income)/cost, regulatory asset, and/orAOCI (before tax)($10,172) ($237,993) ($24,363)Estimated amortization amounts from regulatory asset and/or AOCI to netperiodic benefit (income)/cost in the following year Prior service credit($17,563) ($35,377) ($37,002)Net loss$800 $1,430 $13,729171 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsTotal 2019, 2018, and 2017 other postretirement benefit costs of the Registrant Subsidiaries, including amounts capitalized anddeferred, for their employees included the following components:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy Other postretirement costs: Service cost - benefits earnedduring the period $2,363 $4,639 $1,046 $367 $943 $973Interest cost on APBO 7,226 10,664 2,681 1,581 3,415 1,902Expected return on assets (15,962) — (4,794) (4,947) (9,103) (2,788)Amortization of prior servicecredit (4,950) (7,349) (1,756) (682) (2,243) (1,450)Recognized net (gain)/ loss 576 (695) 723 231 485 354Net other postretirementbenefit (income)/cost ($10,747) $7,259 ($2,100) ($3,450) ($6,503) ($1,009)Other changes in plan assetsand benefit obligationsrecognized as a regulatoryasset and/or AOCI (beforetax) Arising this period: Net gain ($26,707) ($2,220) ($11,950) ($10,967) ($6,406) ($5,539)Amounts reclassified fromregulatory asset and/orAOCI to net periodic benefitcost in the current year: Amortization of prior servicecredit 4,950 7,349 1,756 682 2,243 1,450Amortization of net(gain)/loss (576) 695 (723) (231) (485) (354)Total ($22,333) $5,824 ($10,917) ($10,516) ($4,648) ($4,443)Total recognized as netperiodic otherpostretirement(income)/cost, regulatoryasset, and/or AOCI(before tax) ($33,080) $13,083 ($13,017) ($13,966) ($11,151) ($5,452)Estimated amortizationamounts from regulatoryasset and/or AOCI to netperiodic (income)/cost inthe following year Prior service credit ($3,174) ($3,142) ($1,037) $— ($1,421) ($747)Net (gain)/loss $4 ($1,030) $75 ($246) $810 $51172 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 EntergyArkansasEntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Other postretirement costs: Service cost - benefits earnedduring the period $3,170 $6,225 $1,284 $516 $1,319 $1,223Interest cost on APBO 7,986 11,154 2,731 1,669 3,754 1,998Expected return on assets (17,368) — (5,213) (5,250) (9,784) (3,130)Amortization of prior servicecredit (5,110) (7,735) (1,823) (745) (2,316) (1,513)Recognized net loss 1,154 1,550 1,508 137 823 932Net other postretirementbenefit (income)/cost ($10,168) $11,194 ($1,513) ($3,673) ($6,204) ($490)Other changes in plan assetsand benefit obligationsrecognized as a regulatoryasset and/or AOCI (beforetax) Arising this period: Net gain ($32,219) ($73,249) ($7,794) ($981) ($10,561) ($6,680)Amounts reclassified fromregulatory asset and/orAOCI to net periodic benefitcost in the current year: Amortization of prior servicecredit 5,110 7,735 1,823 745 2,316 1,513Amortization of net loss (1,154) (1,550) (1,508) (137) (823) (932)Total ($28,263) ($67,064) ($7,479) ($373) ($9,068) ($6,099)Total recognized as netperiodic otherpostretirement(income)/cost, regulatoryasset, and/or AOCI(before tax) ($38,431) ($55,870) ($8,992) ($4,046) ($15,272) ($6,589)Estimated amortizationamounts from regulatoryasset and/or AOCI to netperiodic (income)/cost inthe following year Prior service credit ($4,950) ($7,349) ($1,756) ($682) ($2,243) ($1,450)Net (gain)/loss $576 ($695) $723 $231 $485 $354173 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2017 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Other postretirement costs: Service cost - benefits earnedduring the period $3,451 $6,373 $1,160 $567 $1,488 $1,278Interest cost on APBO 9,020 12,101 2,759 1,874 4,494 2,236Expected return on assets (15,836) — (4,801) (4,635) (8,720) (2,869)Amortization of prior servicecredit (5,110) (7,735) (1,823) (745) (2,316) (1,513)Recognized net loss 4,460 1,859 1,675 418 3,303 1,560Net other postretirementbenefit (income)/cost ($4,015) $12,598 ($1,030) ($2,521) ($1,751) $692Other changes in plan assetsand benefit obligationsrecognized as a regulatoryasset and/or AOCI (beforetax) Arising this period: Net (gain)/loss (29,534) (1,256) 506 (7,342) (22,255) (5,459)Amounts reclassified fromregulatory asset and/orAOCI to net periodic benefitcost in the current year: Amortization of prior servicecredit 5,110 7,735 1,823 745 2,316 1,513Amortization of net loss (4,460) (1,859) (1,675) (418) (3,303) (1,560)Total ($28,884) $4,620 $654 ($7,015) ($23,242) ($5,506)Total recognized as netperiodic otherpostretirement(income)/cost, regulatoryasset, and/or AOCI(before tax) ($32,899) $17,218 ($376) ($9,536) ($24,993) ($4,814)Estimated amortizationamounts from regulatoryasset and/or AOCI to netperiodic (income)/cost inthe following year Prior service credit ($5,110) ($7,735) ($1,823) ($745) ($2,316) ($1,513)Net loss $1,154 $1,550 $1,508 $137 $823 $932174 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsOther Postretirement Benefit Obligations, Plan Assets, Funded Status, and Amounts Not Yet Recognized and Recognized in theBalance SheetOther postretirement benefit obligations, plan assets, funded status, and amounts not yet recognized and recognized in theConsolidated Balance Sheets of Entergy Corporation and its Subsidiaries as of December 31, 2019 and 2018 are as follows: 2019 2018 (In Thousands)Change in APBO Balance at January 1$1,232,619 $1,563,487Service cost18,699 27,129Interest cost47,901 50,725Plan participant contributions38,640 37,049Actuarial (gain)/loss23,673 (346,429)Benefits paid(109,223) (99,785)Medicare Part D subsidy received594 443Balance at December 31$1,252,903 $1,232,619Change in Plan Assets Fair value of assets at January 1$609,782 $659,327Actual return on plan assets100,445 (30,582)Employer contributions46,618 43,773Plan participant contributions38,640 37,049Benefits paid(109,223) (99,785)Fair value of assets at December 31$686,262 $609,782Funded status($566,641) ($622,837)Amounts recognized in the balance sheet Current liabilities($48,040) ($44,276)Non-current liabilities(518,601) (578,561)Total funded status($566,641) ($622,837)Amounts recognized as a regulatory asset Prior service credit($11,899) ($25,778)Net (gain)/loss(5,081) 51,774 ($16,980) $25,996Amounts recognized as AOCI (before tax) Prior service credit($21,231) ($42,730)Net gain(16,670) (33,569) ($37,901) ($76,299)175 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsOther postretirement benefit obligations, plan assets, funded status, and amounts not yet recognized and recognized in the BalanceSheets of the Registrant Subsidiaries as of December 31, 2019 and 2018 are as follows:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Change in APBO Balance at January 1 $187,830 $275,269 $68,976 $41,987 $88,310 $48,791Service cost 2,363 4,639 1,046 367 943 973Interest cost 7,226 10,664 2,681 1,581 3,415 1,902Plan participant contributions 8,125 8,876 2,197 1,343 2,602 1,765Actuarial (gain)/loss 166 (2,220) (3,778) (4,234) 8,279 (891)Benefits paid (20,048) (23,160) (5,159) (2,598) (8,830) (5,229)Medicare Part D subsidyreceived 82 107 16 14 23 37Balance at December 31 $185,744 $274,175 $65,979 $38,460 $94,742 $47,348Change in Plan Assets Fair value of assets at January1 $252,055 $— $75,853 $81,774 $144,846 $43,670Actual return on plan assets 42,835 — 12,966 11,680 23,788 7,436Employer contributions 1,257 14,284 228 1,659 (596) 829Plan participant contributions 8,125 8,876 2,197 1,343 2,602 1,765Benefits paid (20,048) (23,160) (5,159) (2,598) (8,830) (5,229)Fair value of assets atDecember 31 $284,224 $— $86,085 $93,858 $161,810 $48,471Funded status $98,480 ($274,175) $20,106 $55,398 $67,068 $1,123Amounts recognized in thebalance sheet Current liabilities $— ($18,467) $— $— $— $—Non-current liabilities 98,480 (255,708) 20,106 55,398 67,068 1,123Total funded status $98,480 ($274,175) $20,106 $55,398 $67,068 $1,123Amounts recognized inregulatory asset Prior service credit ($6,515) $— ($3,108) $— ($1,422) ($854)Net (gain)/loss (18,262) — 3,272 (8,046) 6,203 2,881 ($24,777) $— $164 ($8,046) $4,781 $2,027Amounts recognized inAOCI (before tax) Prior service credit $— ($4,915) $— $— $— $—Net gain — (24,739) — — — — $— ($29,654) $— $— $— $—176 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas System Energy (In Thousands)Change in APBO Balance at January 1 $249,019 $345,389 $84,621 $53,548 $116,702 $61,381Service cost 3,170 6,225 1,284 516 1,319 1,223Interest cost 7,986 11,154 2,731 1,669 3,754 1,998Plan participant contributions 8,136 8,162 2,233 1,171 2,565 1,837Actuarial gain (61,960) (73,249) (16,762) (10,847) (27,527) (11,985)Benefits paid (18,581) (22,476) (5,145) (4,078) (8,516) (5,685)Medicare Part D subsidyreceived 60 64 14 8 13 22Balance at December 31 $187,830 $275,269 $68,976 $41,987 $88,310 $48,791Change in Plan Assets Fair value of assets at January1 $274,678 $— $82,433 $85,504 $154,171 $49,124Actual return on plan assets (12,373) — (3,755) (4,616) (7,182) (2,175)Employer contributions 195 14,314 87 3,793 3,808 569Plan participant contributions 8,136 8,162 2,233 1,171 2,565 1,837Benefits paid (18,581) (22,476) (5,145) (4,078) (8,516) (5,685)Fair value of assets atDecember 31 $252,055 $— $75,853 $81,774 $144,846 $43,670Funded status $64,225 ($275,269) $6,877 $39,787 $56,536 ($5,121)Amounts recognized in thebalance sheet Current liabilities $— ($17,740) $— $— $— $—Non-current liabilities 64,225 (257,529) 6,877 39,787 56,536 (5,121)Total funded status $64,225 ($275,269) $6,877 $39,787 $56,536 ($5,121)Amounts recognized inregulatory asset Prior service credit ($11,465) $— ($4,864) ($681) ($3,665) ($2,304)Net loss 9,021 — 15,945 3,151 13,094 8,774 ($2,444) $— $11,081 $2,470 $9,429 $6,470Amounts recognized inAOCI (before tax) Prior service credit $— ($12,264) $— $— $— $—Net gain — (23,214) — — — — $— ($35,478) $— $— $— $—177 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNon-Qualified Pension PlansEntergy also sponsors non-qualified, non-contributory defined benefit pension plans that provide benefits to certain keyemployees. Entergy recognized net periodic pension cost related to these plans of $22.6 million in 2019, $24.4 million in 2018, and $37.6million in 2017. In 2019, 2018, and 2017 Entergy recognized $7.4 million, $7.7 million, and $20.3 million, respectively in settlementcharges related to the payment of lump sum benefits out of the plan that is included in the non-qualified pension plan cost above. The projected benefit obligation was $162.8 million as of December 31, 2019 of which $18.1 million was a current liability and$144.6 million was a non-current liability. The projected benefit obligation was $147 million as of December 31, 2018 of which $17 millionwas a current liability and $130 million was a non-current liability. The accumulated benefit obligation was $143.4 million and $131.9million as of December 31, 2019 and 2018, respectively. The unamortized prior service cost and net loss are recognized in regulatory assets($58.8 million at December 31, 2019 and $51.9 million at December 31, 2018) and accumulated other comprehensive income before taxes($24.9 million at December 31, 2019 and $19.2 million at December 31, 2018).The following Registrant Subsidiaries participate in Entergy’s non-qualified, non-contributory defined benefit pension plans thatprovide benefits to certain key employees. The net periodic pension cost for their employees for the non-qualified plans for 2019, 2018, and2017, was as follows: EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas (In Thousands)2019$275 $159 $326 $20 $4812018$474 $180 $300 $81 $6502017$679 $185 $251 $73 $499Included in the 2019 net periodic pension cost above are settlement charges of $40 thousand for Entergy Mississippi related to thelump sum benefits paid out of the plan. Included in the 2018 net periodic pension cost above are settlement charges of $30 thousand and$139 thousand for Entergy Arkansas and Entergy Texas, respectively, related to the lump sum benefits paid out of the plan. Included in the2017 net periodic pension cost above are settlement charges of $269 thousand for Entergy Arkansas related to the lump sum benefits paidout of the plan.The projected benefit obligation for their employees for the non-qualified plans as of December 31, 2019 and 2018 was as follows: EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas (In Thousands)2019$2,755 $1,682 $3,286 $231 $7,7832018$2,752 $1,881 $2,732 $206 $7,952178 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe accumulated benefit obligation for their employees for the non-qualified plans as of December 31, 2019 and 2018 was asfollows: EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas (In Thousands)2019$2,248 $1,682 $2,938 $230 $7,3912018$2,519 $1,881 $2,427 $206 $7,724The following amounts were recorded on the balance sheet as of December 31, 2019 and 2018:2019 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas (In Thousands)Current liabilities ($249) ($216) ($357) ($17) ($723)Non-current liabilities (2,506) (1,467) (2,930) (215) (7,060)Total funded status ($2,755) ($1,683) ($3,287) ($232) ($7,783)Regulatory asset/(liability) $1,232 $3 $1,432 ($559) ($603)2018 EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas (In Thousands)Current liabilities ($198) ($229) ($128) ($16) ($672)Non-current liabilities (2,554) (1,652) (2,604) (191) (7,280)Total funded status ($2,752) ($1,881) ($2,732) ($207) ($7,952)Regulatory asset/(liability) $1,314 $79 $1,009 ($579) ($517)Accumulated other comprehensive income (beforetaxes) $— $5 $— $— $—179 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsReclassification out of Accumulated Other Comprehensive Income (Loss)Entergy and Entergy Louisiana reclassified the following costs out of accumulated other comprehensive income (loss) (before taxesand including amounts capitalized) as of December 31, 2019: QualifiedPension Costs OtherPostretirementCosts Non-QualifiedPension Costs Total (In Thousands)Entergy Amortization of prior service cost$— $21,498 ($198) $21,300Amortization of loss(82,284) 1,230 (2,192) (83,246)Settlement loss(23,458) — (1,697) (25,155) ($105,742) $22,728 ($4,087) ($87,101)Entergy Louisiana Amortization of prior service cost$— $7,349 $— $7,349Amortization of loss(2,795) 695 (6) (2,106) ($2,795) $8,044 ($6) $5,243Entergy and Entergy Louisiana reclassified the following costs out of accumulated other comprehensive income (loss) (before taxesand including amounts capitalized) as of December 31, 2018: QualifiedPension Costs OtherPostretirement Costs Non-QualifiedPension Costs Total (In Thousands)Entergy Amortization of prior service cost($398)$22,379 ($281) $21,700Amortization of loss(87,828) (7,730) (3,628) (99,186)Settlement loss(828) — (2,379) (3,207) ($89,054) $14,649 ($6,288) ($80,693)Entergy Louisiana Amortization of prior service cost$—$7,735 $— $7,735Amortization of loss(3,468) (1,550) (7) (5,025) ($3,468) $6,185 ($7) $2,710Accounting for Pension and Other Postretirement BenefitsAccounting standards require an employer to recognize in its balance sheet the funded status of its benefit plans. This is measured asthe difference between plan assets at fair value and the benefit obligation. Entergy uses a December 31 measurement date for its pension andother postretirement plans. Employers are to record previously unrecognized gains and losses, prior service costs, and any remainingtransition asset or obligation (that resulted from adopting prior pension and other postretirement benefits accounting standards) ascomprehensive income and/or as a regulatory asset reflective of the recovery mechanism for pension and other postretirement benefit costs inthe Registrant Subsidiaries’ respective regulatory jurisdictions. For the portion of Entergy Louisiana that is not regulated, the unrecognizedprior service cost, gains and losses, and transition asset/obligation for its pension and other postretirement benefit obligations are recorded asother comprehensive income. Entergy Louisiana recovers other postretirement benefit costs on a pay-as-you-go basis and records theunrecognized prior service cost, gains and losses, and transition obligation for its other postretirement benefit obligation as othercomprehensive income. Accounting standards also require that changes in the funded status be recorded as other comprehensive incomeand/or a regulatory asset in the period in which the changes occur.180 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsWith regard to pension and other postretirement costs, Entergy calculates the expected return on pension and other postretirementbenefit plan assets by multiplying the long-term expected rate of return on assets by the market-related value (MRV) of plan assets. Ingeneral, Entergy determines the MRV of its pension plan assets by calculating a value that uses a 20-quarter phase-in of the differencebetween actual and expected returns and for its other postretirement benefit plan assets Entergy generally uses fair value.In accordance with ASU No. 2017-07, “Compensation - Retirement Benefits (Topic 715): Improving the Presentation of Net PeriodicPension Cost and Net Periodic Postretirement Benefit Cost”, the other components of net benefit cost are required to be presented in theincome statement separately from the service cost component and outside a subtotal of income from operations and are presented by Entergyin miscellaneous - net in other income.Qualified Pension and Other Postretirement Plans’ AssetsThe Plan Administrator’s trust asset investment strategy is to invest the assets in a manner whereby long-term earnings on the assets(plus cash contributions) provide adequate funding for retiree benefit payments. The mix of assets is based on an optimization study thatidentifies asset allocation targets in order to achieve the maximum return for an acceptable level of risk, while minimizing the expectedcontributions and pension and postretirement expense.In the optimization studies, the Plan Administrator formulates assumptions about characteristics, such as expected asset classinvestment returns, volatility (risk), and correlation coefficients among the various asset classes. The future market assumptions used in theoptimization study are determined by examining historical market characteristics of the various asset classes and making adjustments toreflect future conditions expected to prevail over the study period.The target asset allocation for pension adjusts dynamically based on the pension plans’ funded status. The current targets are shownbelow. The expectation is that the allocation to fixed income securities will increase as the pension plans’ funded status increases. Thefollowing ranges were established to produce an acceptable, economically efficient plan to manage around the targets.For postretirement assets the target and range asset allocations (as shown below) reflect recommendations made in the latestoptimization study. The target asset allocations for postretirement assets adjust dynamically based on the funded status of each sub-accountwithin each trust. The current weighted average targets shown below represent the aggregate of all targets for all sub-accounts within alltrusts.Entergy’s qualified pension and postretirement weighted-average asset allocations by asset category at December 31, 2019 and 2018and the target asset allocation and ranges for 2018 are as follows:Pension Asset Allocation Target Range Actual 2019 Actual 2018Domestic Equity Securities 39% 32%to46% 39% 40%International Equity Securities 19% 15%to23% 19% 18%Fixed Income Securities 42% 39%to45% 41% 41%Other 0% 0%to10% 1% 1%Postretirement Asset Allocation Non-Taxable and Taxable Target Range Actual 2019 Actual 2018Domestic Equity Securities 27% 22%to32% 29% 27%International Equity Securities 18% 13%to23% 18% 17%Fixed Income Securities 55% 50%to60% 53% 56%Other 0% 0%to5% 0% 0%181 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsIn determining its expected long-term rate of return on plan assets used in the calculation of benefit plan costs, Entergy reviews pastperformance, current and expected future asset allocations, and capital market assumptions of its investment consultant and some investmentmanagers.The expected long-term rate of return for the qualified pension plans’ assets is based primarily on the geometric average of thehistorical annual performance of a representative portfolio weighted by the target asset allocation defined in the table above, along with otherindications of expected return on assets. The time period reflected is a long-dated period spanning several decades.The expected long-term rate of return for the non-taxable postretirement trust assets is determined using the same methodologydescribed above for pension assets, but the aggregate asset allocation specific to the non-taxable postretirement assets is used.For the taxable postretirement trust assets, the investment allocation includes tax-exempt fixed income securities. This assetallocation, in combination with the same methodology employed to determine the expected return for other postretirement assets (asdescribed above), and with a modification to reflect applicable taxes, is used to produce the expected long-term rate of return for taxablepostretirement trust assets.Concentrations of Credit RiskEntergy’s investment guidelines mandate the avoidance of risk concentrations. Types of concentrations specified to be avoidedinclude, but are not limited to, investment concentrations in a single entity, type of industry, foreign country, geographic area and individualsecurity issuance. As of December 31, 2019, all investment managers and assets were materially in compliance with the approvedinvestment guidelines, therefore there were no significant concentrations (defined as greater than 10 percent of plan assets) of credit risk inEntergy’s pension and other postretirement benefit plan assets.Fair Value MeasurementsAccounting standards provide the framework for measuring fair value. That framework provides a fair value hierarchy that prioritizesthe inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in activemarkets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).The three levels of the fair value hierarchy are described below:•Level 1 - Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability toaccess at the measurement date. Active markets are those in which transactions for the asset or liability occur in sufficient frequencyand volume to provide pricing information on an ongoing basis.•Level 2 - Level 2 inputs are inputs other than quoted prices included in Level 1 that are, either directly or indirectly, observable forthe asset or liability at the measurement date. Assets are valued based on prices derived by an independent party that uses inputssuch as benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. Prices are reviewed and can be challenged withthe independent parties and/or overridden if it is believed such would be more reflective of fair value. Level 2 inputs include thefollowing:- 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; or182 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements- inputs that are derived principally from or corroborated by observable market data by correlation or other means.If an asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of theasset or liability.•Level 3 - Level 3 refers to securities valued based on significant unobservable inputs. Assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair valuemeasurement. The following tables set forth by level within the fair value hierarchy, measured at fair value on a recurring basis atDecember 31, 2019, and December 31, 2018, a summary of the investments held in the master trusts for Entergy’s qualified pension andother postretirement plans in which the Registrant Subsidiaries participate.Qualified Defined Benefit Pension Plan Trusts2019 Level 1 Level 2 Level 3 Total (In Thousands)Equity securities: Corporate stocks: Preferred $10,379(b)$— — $10,379Common 857,159(b)—(b)— 857,159Common collective trusts (c) 2,698,697Registered investment companies 132,389(d)— — 132,389Fixed income securities: U.S. Government securities — 805,671(a)— 805,671Corporate debt instruments — 762,577(a)— 762,577Registered investment companies (e) 53,842(d)2,903(d)— 1,008,371Other 73(f)43,106(f)— 43,179Other: Insurance company general account(unallocated contracts) — 40,452(g)— 40,452Total investments $1,053,842 $1,654,709 $— $6,358,874Cash 1,407Other pending transactions (22,549)Less: Other postretirement assets included in totalinvestments (66,572)Total fair value of qualified pension assets $6,271,160183 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 Level 1 Level 2 Level 3 Total (In Thousands)Short-term investments $— $7,715(a)$— $7,715Equity securities: Corporate stocks: Preferred $8,250(b)$— $— $8,250Common 695,003(b)—(b)— 695,003Common collective trusts (c) 2,408,053Registered investment companies 108,740(d)— — 108,740Fixed income securities: U.S. Government securities —(b)675,880(a)— 675,880Corporate debt instruments — 619,310(a)— 619,310Registered investment companies (e) 29,374(d)2,697(d)— 931,439Other 1,866(f)48,482(f)— 50,348Other: Insurance company general account(unallocated contracts) — 39,322(g)— 39,322Total investments $843,233 $1,393,406 $— $5,544,060Cash 2,591Other pending transactions 5,956Less: Other postretirement assets included in totalinvestments (55,192)Total fair value of qualified pension assets $5,497,415Other Postretirement Trusts2019 Level 1 Level 2 Level 3 Total (In Thousands)Equity securities: Common collective trust (c) $289,398Fixed income securities: U.S. Government securities 49,930(b)89,297(a)— 139,227Corporate debt instruments — 130,333(a)— 130,333Registered investment companies 1,877(d)— — 1,877Other — 57,210(f)— 57,210Total investments $51,807 $276,840 $— $618,045Other pending transactions 1,645Plus: Other postretirement assets included in theinvestments of the qualified pension trust 66,572Total fair value of other postretirement assets $686,262184 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 Level 1 Level 2 Level 3 Total (In Thousands)Equity securities: Common collective trust (c) $244,729Fixed income securities: U.S. Government securities 63,174(b)80,039(a)— 143,213Corporate debt instruments — 105,989(a)— 105,989Registered investment companies 2,442(d)— — 2,442Other — 56,980(f)— 56,980Total investments $65,616 $243,008 $— $553,353Other pending transactions 1,237Plus: Other postretirement assets included in theinvestments of the qualified pension trust 55,192Total fair value of other postretirement assets $609,782(a)Certain preferred stocks and certain fixed income debt securities (corporate, government, and securitized) are stated at fair value asdetermined by broker quotes.(b)Common stocks, certain preferred stocks, and certain fixed income debt securities (government) are stated at fair value determinedby quoted market prices.(c)The common collective trusts hold investments in accordance with stated objectives. The investment strategy of the trusts is tocapture the growth potential of equity markets by replicating the performance of a specified index. Net asset value per share ofcommon collective trusts estimate fair value. Certain of these common collective trusts are not publicly quoted and are valued by thefund administrators using net asset value as a practical expedient. Accordingly, these funds are not assigned a level in the fair valuetable, but are included in the total. In 2018 the fund administrator of these investments allowed trading three times in a 30-day periodat the net asset value for certain of these common collective trusts.(d)Registered investment companies are money market mutual funds with a stable net asset value of one dollar per share. Registeredinvestment companies may hold investments in domestic and international bond markets or domestic equities and estimate fair valueusing net asset value per share.(e)Certain of these registered investment companies are not publicly quoted and are valued by the fund administrators using net assetvalue as a practical expedient. Accordingly, these funds are not assigned a level in the fair value table, but are included in the total.(f)The other remaining assets are U.S. municipal and foreign government bonds stated at fair value as determined by broker quotes.(g)The unallocated insurance contract investments are recorded at contract value, which approximates fair value. The contract valuerepresents contributions made under the contract, plus interest, less funds used to pay benefits and contract expenses, and lessdistributions to the master trust.185 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEstimated Future Benefit PaymentsBased upon the assumptions used to measure Entergy’s qualified pension and other postretirement benefit obligations atDecember 31, 2019, and including pension and other postretirement benefits attributable to estimated future employee service, Entergyexpects that benefits to be paid and the Medicare Part D subsidies to be received over the next ten years for Entergy Corporation and itssubsidiaries will be as follows: Estimated Future Benefits Payments Qualified Pension Non-QualifiedPension Other Postretirement(before Medicare Subsidy) Estimated FutureMedicare D SubsidyReceipts (In Thousands)Year(s) 2020$548,493 $18,144 $81,100 $3592021$543,704 $15,724 $82,207 $3982022$549,488 $20,421 $82,619 $4462023$550,184 $19,720 $82,044 $4912024$554,602 $15,142 $80,649 $5392025 - 2029$2,604,810 $65,010 $373,404 $3,402Based upon the same assumptions, Entergy expects that benefits to be paid and the Medicare Part D subsidies to be received over thenext ten years for the Registrant Subsidiaries for their employees will be as follows:Estimated Future Qualified PensionBenefits Payments EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Year(s) 2020 $117,460 $123,520 $37,805 $14,865 $33,558 $26,3322021 $112,562 $124,235 $36,552 $14,598 $32,552 $26,5292022 $112,749 $124,692 $35,779 $14,628 $32,041 $26,9962023 $110,326 $123,347 $34,984 $14,472 $30,992 $27,0402024 $108,186 $122,228 $33,842 $14,028 $29,124 $26,6962025 - 2029 $512,732 $574,928 $152,681 $64,517 $127,736 $127,243Estimated Future Non-Qualified Pension BenefitsPayments EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas (In Thousands)Year(s) 2020 $249 $216 $357 $17 $7232021 $278 $200 $335 $17 $8172022 $340 $184 $329 $17 $7562023 $269 $168 $301 $21 $8442024 $235 $154 $356 $19 $7212025 - 2029 $1,152 $574 $1,510 $102 $2,970186 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEstimated Future OtherPostretirement Benefits Payments(before Medicare Part D Subsidy) EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Year(s) 2020 $13,088 $18,545 $4,046 $3,384 $6,292 $2,9322021 $13,074 $18,703 $4,205 $3,255 $6,468 $3,0442022 $12,801 $18,754 $4,261 $3,112 $6,520 $3,0552023 $12,450 $18,588 $4,249 $2,997 $6,446 $2,9902024 $12,155 $18,087 $4,250 $2,864 $6,239 $2,8932025 - 2029 $55,553 $84,395 $20,672 $12,151 $29,004 $13,110Estimated Future Medicare Part DSubsidy EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Thousands)Year(s) 2020 $78 $78 $27 $15 $28 $132021 $86 $87 $28 $15 $31 $142022 $95 $95 $31 $17 $32 $162023 $104 $104 $32 $17 $35 $192024 $111 $114 $35 $17 $38 $222025 - 2029 $685 $719 $205 $94 $222 $152ContributionsEntergy currently expects to contribute approximately $216.3 million to its qualified pension plans and approximately $49.1 millionto other postretirement plans in 2020. The expected 2020 pension and other postretirement plan contributions of the Registrant Subsidiariesfor their employees are shown below. The 2020 required pension contributions will be known with more certainty when the January 1, 2020valuations are completed, which is expected by April 1, 2020.The Registrant Subsidiaries expect to contribute approximately the following to the qualified pension and other postretirement plansfor their employees in 2020: EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas SystemEnergy (In Thousands)Pension Contributions$32,512 $38,766 $7,768 $3,248 $3,549 $10,544Other Postretirement Contributions$509 $18,545 $130 $162 $61 $21187 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsActuarial AssumptionsThe significant actuarial assumptions used in determining the pension PBO and the other postretirement benefit APBO as ofDecember 31, 2019 and 2018 were as follows: 2019 2018Weighted-average discount rate: Qualified pension3.26% - 3.43%Blended 3.39% 4.37% - 4.52%Blended 4.47%Other postretirement3.26% 4.42%Non-qualified pension2.72% 3.98%Weighted-average rate of increase in future compensation levels3.98% - 4.40% 3.98%Assumed health care trend rate: Pre-656.13% 6.59%Post-656.25% 7.15%Ultimate rate4.75% 4.75%Year ultimate rate is reached and beyond: Pre-652027 2027 Post-652027 2026The significant actuarial assumptions used in determining the net periodic pension and other postretirement benefit costs for2019, 2018, and 2017 were as follows: 2019 2018 2017Weighted-average discount rate: Qualified pension: Service cost4.57% 3.89% 4.75% Interest cost4.15% 3.44% 3.73%Other postretirement: Service cost4.62% 3.88% 4.60% Interest cost4.01% 3.33% 3.61%Non-qualified pension: Service cost3.94% 3.35% 3.65% Interest cost3.46% 2.76% 3.10%Weighted-average rate of increase in futurecompensation levels3.98% 3.98% 3.98%Expected long-term rate of return on plan assets: Pension assets7.25% 7.50% 7.50%Other postretirement non-taxable assets6.5%-7.25% 6.50% - 7.50% 6.50% - 7.50%Other postretirement taxable assets5.50% 5.50% 5.75%Assumed health care trend rate: Pre-656.59% 6.95% 6.55%Post-657.15% 7.25% 7.25%Ultimate rate4.75% 4.75% 4.75%Year ultimate rate is reached and beyond: Pre-652027 2027 2026 Post-652026 2027 2026 188 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsWith respect to the mortality assumptions, Entergy used the Pri-2012 Employee and Healthy Annuitant Tables with a fullygenerational MP-2019 projection scale, in determining its December 31, 2019 pension plans’ PBOs and the Pri.H 2012 (headcount weighted)Employee and Healthy Annuitant Tables with a fully generational MP-2019 projection scale, in determining its December 31, 2019 otherpostretirement benefit APBO. Entergy used the RP-2014 Employee and Healthy Annuitant Tables (adjusted to base year 2006) with a fullygenerational MP-2018 projection scale, in determining its December 31, 2018 pension plans’ PBOs and other postretirement benefit APBO. Entergy’s health care cost trend is affected by both medical cost inflation, and with respect to capped costs, the effects of generalinflation. A one percentage point change in Entergy’s assumed health care cost trend rate for 2019 would have the following effects: 1 Percentage Point Increase 1 Percentage Point Decrease2019 Impact on theAPBO Impact on the sum ofservice costs and interestcost Impact on theAPBO Impact on the sum ofservice costs and interestcost Increase /(Decrease)(In Thousands)Entergy Corporation and itssubsidiaries $109,954 $7,310 ($92,504) ($5,970)The Registrant Subsidiaries’ health care cost trend is affected by both medical cost inflation, and with respect to capped costs, theeffects of general inflation. A one percentage point change in the assumed health care cost trend rate for 2019 would have the followingeffects for the Registrant Subsidiaries for their employees: 1 Percentage Point Increase 1 Percentage Point Decrease2019 Impact on theAPBO Impact on the sum ofservice costs and interestcost Impact on theAPBO Impact on the sum ofservice costs and interestcost Increase/(Decrease)(In Thousands)Entergy Arkansas $14,480 $908 ($12,259) ($748)Entergy Louisiana $24,987 $1,769 ($21,017) ($1,443)Entergy Mississippi $6,085 $420 ($5,122) ($343)Entergy New Orleans $2,763 $179 ($2,363) ($148)Entergy Texas $8,561 $482 ($7,230) ($397)System Energy $4,876 $364 ($4,048) ($294)Defined Contribution PlansEntergy sponsors the Savings Plan of Entergy Corporation and Subsidiaries (System Savings Plan). The System Savings Plan is adefined contribution plan covering eligible employees of Entergy and certain of its subsidiaries. The participating Entergy subsidiary makesmatching contributions to the System Savings Plan for all eligible participating employees in an amount equal to either 70% or 100% of theparticipants’ basic contributions, up to 6% of their eligible earnings per pay period. The matching contribution is allocated to investments asdirected by the employee.Entergy also sponsors the Savings Plan of Entergy Corporation and Subsidiaries VI (established in April 2007) and the Savings Planof Entergy Corporation and Subsidiaries VII (established in April 2007) to which matching contributions are also made. The plans aredefined contribution plans that cover eligible employees, as defined by each plan, of Entergy and certain of its subsidiaries. Effective as ofthe close of business on December 31, 2017, the Savings Plan of Entergy Corporation and Subsidiaries IV (Entergy Savings Plan IV) wasmerged into the System Savings Plan and all of the assets of Entergy Savings Plan IV were transferred to the System Savings Plan. 189 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy’s subsidiaries’ contributions to defined contribution plans collectively were $57.6 million in 2019, $54.3 million in 2018,and $49.1 million in 2017. The majority of the contributions were to the System Savings Plan.The Registrant Subsidiaries’ 2019, 2018, and 2017 contributions to defined contribution plans for their employees were as follows: Year EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas (In Thousands)2019 $4,111 $5,641 $2,424 $882 $2,1362018 $3,985 $5,450 $2,307 $795 $1,9922017 $3,741 $5,079 $2,133 $731 $1,865NOTE 12. STOCK-BASED COMPENSATION (Entergy Corporation)Entergy grants stock options, restricted stock, performance units, and restricted stock units to key employees of the Entergysubsidiaries under its Equity Ownership Plans which are shareholder-approved stock-based compensation plans. Effective May 3, 2019,Entergy’s shareholders approved the 2019 Omnibus Incentive Plan (2019 Plan). The maximum number of common shares that can be issuedfrom the 2019 Plan for stock-based awards is 7,300,000 all of which are available for incentive stock option grants. The 2019 Plan applies toawards granted on or after May 3, 2019 and awards expire ten years from the date of grant. As of December 31, 2019, there were 7,266,822authorized shares remaining for stock-based awards.Stock OptionsStock options are granted at exercise prices that equal the closing market price of Entergy Corporation common stock on the date ofgrant. Generally, stock options granted will become exercisable in equal amounts on each of the first three anniversaries of the date ofgrant. Unless they are forfeited previously under the terms of the grant, options expire 10 years after the date of the grant if they are notexercised.The following table includes financial information for stock options for each of the years presented: 2019 2018 2017 (In Millions)Compensation expense included in Entergy’s consolidated net income$3.8 $4.3 $4.4Tax benefit recognized in Entergy’s consolidated net income$1.0 $1.1 $1.7Compensation cost capitalized as part of fixed assets and inventory$1.4 $0.7 $0.7Entergy determines the fair value of the stock option grants by considering factors such as lack of marketability, stock retentionrequirements, and regulatory restrictions on exercisability in accordance with accounting standards. The stock option weighted-averageassumptions used in determining the fair values are as follows: 2019 2018 2017Stock price volatility17.23% 17.44% 18.39%Expected term in years7.32 7.33 7.35Risk-free interest rate2.50% 2.54% 2.31%Dividend yield4.50% 4.75% 4.75%Dividend payment per share$3.66 $3.58 $3.50190 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsStock price volatility is calculated based upon the daily public stock price volatility of Entergy Corporation common stock over a periodequal to the expected term of the award. The expected term of the options is based upon historical option exercises and the weighted averagelife of options when exercised and the estimated weighted average life of all vested but unexercised options. In 2008, Entergy implementedstock ownership guidelines for its senior executive officers. These guidelines require an executive officer to own shares of EntergyCorporation common stock equal to a specified multiple of his or her salary. Until an executive officer achieves this ownership position theexecutive officer is required to retain 75% of the net-of-tax net profit upon exercise of the option to be held in Entergy Corporation commonstock. The reduction in fair value of the stock options due to this restriction is based upon an estimate of the call option value of thereinvested gain discounted to present value over the applicable reinvestment period. A summary of stock option activity for the year ended December 31, 2019 and changes during the year are presented below: Numberof Options Weighted-AverageExercisePrice AggregateIntrinsicValue Weighted-AverageContractualLifeOptions outstanding as of January 1, 20192,993,333 $75.14 Options granted693,161 $89.19 Options exercised(1,227,047) $76.35 Options forfeited/expired(10,534) $81.68 Options outstanding as of December 31, 20192,448,913 $78.48 $101,178,880 7.03 yearsOptions exercisable as of December 31, 20191,160,665 $73.97 $53,192,483 5.47 yearsWeighted-average grant-date fair value of options grantedduring 2019$8.32 The weighted-average grant-date fair value of options granted during the year was $6.99 for 2018 and $6.54 for 2017. The total intrinsicvalue of stock options exercised was $29 million during 2019, $19 million during 2018, and $11 million during 2017. The intrinsic value,which has no effect on net income, of the outstanding stock options exercised is calculated by the positive difference between the weightedaverage exercise price of the stock options granted and Entergy Corporation’s common stock price as of December 31, 2019. The aggregateintrinsic value of the stock options outstanding as of December 31, 2019 was $101 million. The intrinsic value of “in the money” stockoptions is $101 million as of December 31, 2019. Entergy recognizes compensation cost over the vesting period of the options based on theirgrant-date fair value. The total fair value of options that vested was approximately $5 million during 2019, $4 million during 2018, and $6million during 2017. Cash received from option exercises was $93 million for the year ended December 31, 2019. The tax benefits realizedfrom options exercised was $7 million for the year ended December 31, 2019.191 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe following table summarizes information about stock options outstanding as of December 31, 2019: Options Outstanding Options ExercisableRange of ExercisePrice As of December31, 2019 Weighted-AverageRemaining ContractualLife-Yrs. WeightedAverage ExercisePrice NumberExercisable as ofDecember 31,2019 WeightedAverage ExercisePrice$51 -$64.99 244,200 3.72 $63.69 244,200 $63.69$65 -$78.99 1,323,452 6.89 $73.97 694,093 $72.50$79 -$91.99 881,261 8.15 $89.36 222,372 $89.85$51 -$89.90 2,448,913 7.03 $78.48 1,160,665 $73.97Stock-based compensation cost related to non-vested stock options outstanding as of December 31, 2019 not yet recognized isapproximately $6 million and is expected to be recognized over a weighted-average period of 1.74 years.Restricted Stock AwardsEntergy grants restricted stock awards earned under its stock benefit plans in the form of stock units. One-third of the restricted stockawards will vest upon each anniversary of the grant date and are expensed ratably over the three-year vesting period. Shares of restrictedstock have the same dividend and voting rights as other common stock and are considered issued and outstanding shares of Entergy uponvesting. In January 2019 the Board approved and Entergy granted 355,537 restricted stock awards under the 2015 Equity OwnershipPlan. The restricted stock awards were made effective as of January 31, 2019 and were valued at $89.19 per share, which was the closingprice of Entergy Corporation’s common stock on that date. The following table includes information about the restricted stock awards outstanding as of December 31, 2019: Shares Weighted-Average GrantDate Fair Value Per ShareOutstanding shares at January 1, 2019693,527 $74.17Granted379,690 $88.75Vested(346,842) $72.96Forfeited(34,241) $78.66Outstanding shares at December 31, 2019692,134 $82.56The following table includes financial information for restricted stock for each of the years presented: 2019 2018 2017 (In Millions)Compensation expense included in Entergy’s consolidated net income$20.2 $19.8 $19.7Tax benefit recognized in Entergy’s consolidated net income$5.1 $5.1 $7.6Compensation cost capitalized as part of fixed assets and inventory$7.1 $5.7 $5.2The total fair value of the restricted stock awards granted was $34 million, $28 million, and $29 million for the years endedDecember 31, 2019, 2018, and 2017.192 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe total fair value of the restricted stock awards vested was $25 million, $25 million, and $24 million for the years ended December31, 2019, 2018, and 2017, respectively.Long-Term Performance Unit ProgramEntergy grants long-term incentive awards earned under its stock benefit plans in the form of performance units, which represents thevalue of, and are settled with, one share of Entergy Corporation common stock at the end of the three-year performance period, plusdividends accrued during the performance period on the number of performance units earned. The Long-Term Performance Unit Programspecifies a minimum, target, and maximum achievement level, the achievement of which will determine the number of performance unitsthat may be earned. Entergy measures performance by assessing Entergy’s total shareholder return relative to the total shareholder return ofthe companies in the Philadelphia Utility Index. For the 2019-2020 performance period, performance will be measured based eighty percenton relative total shareholder return and twenty percent on a cumulative adjusted earnings per share metric.In January 2019 the Board approved and Entergy granted 180,824 performance units under the 2015 Equity Ownership and Long-Term Cash Incentive Plan. The performance units were granted as of January 31, 2019, and eighty percent were valued at $102.07 per sharebased on various factors, primarily market conditions; and twenty percent were valued at $89.19 per share, the closing price of EntergyCorporation’s common stock on that date. Performance units have the same dividend and voting rights as other common stock, areconsidered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the 3-year vesting period, and compensationcost for the portion of the award based on cumulative adjusted earnings per share will be adjusted based on the number of units thatultimately vest.The following table includes information about the long-term performance units outstanding at the target level as of December 31,2019: Shares Weighted-AverageGrant Date Fair ValuePer ShareOutstanding shares at January 1, 2019566,626 $79.21Granted241,406 $96.18Vested(226,252) $84.52Forfeited(29,847) $87.43Outstanding shares at December 31, 2019551,933 $84.01The following table includes financial information for the long-term performance units for each of the years presented: 2019 2018 2017 (In Millions)Compensation expense included in Entergy’s consolidated net income$11.1 $11.5 $10.8Tax benefit recognized in Entergy’s consolidated net income$2.8 $2.9 $4.2Compensation cost capitalized as part of fixed assets and inventory$4.0 $3.3 $3.0 The total fair value of the long-term performance units granted was $23 million, $16 million, and $19 million for the years endedDecember 31, 2019, 2018, and 2017, respectively.In January 2019, Entergy issued 226,208 shares of Entergy Corporation common stock at a share price of $86.03 for awards earnedand dividends accrued under the 2016-2018 Long-Term Performance Unit Program. In193 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsJanuary 2018, Entergy issued 50,812 shares of Entergy Corporation common stock at a share price of $78.51 for awards earned anddividends accrued under the 2015-2017 Long-Term Performance Unit Program. In January 2017, Entergy issued 86,964 shares of EntergyCorporation common stock at a share price of $71.89 for awards earned and dividends accrued under the 2014-2016 Long-Term PerformanceUnit Program.Restricted Stock Unit AwardsEntergy grants restricted stock unit awards earned under its stock benefit plans in the form of stock units that are subject to time-basedrestrictions. The restricted stock units may be settled in shares of Entergy Corporation common stock or the cash value of shares of EntergyCorporation common stock at the time of vesting. The costs of restricted stock unit awards are charged to income over the restricted period,which varies from grant to grant. The average vesting period for restricted stock unit awards granted is 35 months. As of December 31,2019, there were 130,463 unvested restricted stock units that are expected to vest over an average period of 19 months.The following table includes information about the restricted stock unit awards outstanding as of December 31, 2019: Shares Weighted-AverageGrant Date Fair ValuePer ShareOutstanding shares at January 1, 2019186,763 $76.43Granted26,700 $109.10Vested(83,000) $77.05Outstanding shares at December 31, 2019130,463 $82.72The following table includes financial information for restricted stock unit awards for each of the years presented: 2019 2018 2017 (In Millions)Compensation expense included in Entergy’s consolidated net income$2.2 $2.9 $2.5Tax benefit recognized in Entergy’s consolidated net income$0.6 $0.7 $1.0Compensation cost capitalized as part of fixed assets and inventory$0.9 $0.7 $0.6The total fair value of the restricted stock unit awards granted was $3 million, $2 million, and $3 million for the years endedDecember 31, 2019, 2018, and 2017, respectively.The total fair value of the restricted stock unit awards vested was $6 million, $3 million, and $0.4 million for the years endedDecember 31, 2019, 2018, and 2017, respectively.NOTE 13. BUSINESS SEGMENT INFORMATION (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, EntergyMississippi, Entergy New Orleans, Entergy Texas, and System Energy) Entergy’s reportable segments as of December 31, 2019 are Utility and Entergy Wholesale Commodities. Utility includes thegeneration, transmission, distribution, and sale of electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, and natural gasutility service in portions of Louisiana. Entergy Wholesale Commodities includes the ownership, operation, and decommissioning of nuclearpower plants located in the northern United States and the sale of the electric power produced by its operating plants to wholesalecustomers. Entergy Wholesale Commodities also includes the ownership of interests in non-nuclear power plants that sell the electric powerproduced by those plants to wholesale customers. “All Other” includes the parent company, Entergy Corporation, and other businessactivity.194 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy’s segment financial information is as follows:2019 Utility Entergy WholesaleCommodities* All Other Eliminations Consolidated (In Thousands)Operating revenues $9,583,985 $1,294,719 $21 ($52) $10,878,673Asset write-offs, impairments, andrelated charges $— $290,027 $— $— $290,027Depreciation, amortization, &decommissioning $1,493,167 $384,707 $2,944 $— $1,880,818Interest and investment income $289,570 $414,636 $26,295 ($182,589) $547,912Interest expense $589,395 $29,450 $178,575 ($54,995) $742,425Income taxes $19,634 ($161,295) ($28,164) $— ($169,825)Consolidated net income (loss) $1,425,643 $148,870 ($188,675) ($127,594) $1,258,244Total assets $49,557,664 $4,154,961 $514,020 ($2,502,733) $51,723,912Cash paid for long-lived assetadditions $4,527,045 $104,300 $160 $— $4,631,5052018 Utility Entergy WholesaleCommodities* All Other Eliminations Consolidated (In Thousands)Operating revenues $9,540,670 $1,468,905 $— ($123) $11,009,452Asset write-offs, impairments, andrelated charges $— $532,321 $— $— $532,321Depreciation, amortization, &decommissioning $1,367,944 $388,732 $1,274 $— $1,757,950Interest and investment income $203,936 $14,543 $31,602 ($186,217) $63,864Interest expense $552,919 $33,694 $179,358 ($58,623) $707,348Income taxes ($732,548) ($269,025) ($35,253) $— ($1,036,826)Consolidated net income (loss) $1,495,061 ($340,641) ($164,271) ($127,594) $862,555Total assets $44,777,167 $5,459,275 $733,366 ($2,694,742) $48,275,066Cash paid for long-lived assetadditions $3,987,424 $283,707 $86 $— $4,271,217195 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2017 Utility Entergy WholesaleCommodities* All Other Eliminations Consolidated (In Thousands)Operating revenues $9,417,866 $1,656,730 $— ($115) $11,074,481Asset write-offs, impairments, andrelated charges $— $538,372 $— $— $538,372Depreciation, amortization, &decommissioning $1,345,906 $448,079 $1,678 $— $1,795,663Interest and investment income $218,317 $224,121 $21,669 ($175,910) $288,197Interest expense $547,301 $23,714 $139,619 ($48,291) $662,343Income taxes $794,616 ($146,480) ($105,566) $— $542,570Consolidated net income (loss) $773,148 ($172,335) ($47,840) ($127,620) $425,353Total assets $42,978,669 $5,638,009 $1,011,612 ($2,921,141) $46,707,149Investment in affiliates - at equity $198 $— $— $— $198Cash paid for long-lived assetadditions $3,680,513 $320,667 $438 $— $4,001,618Businesses marked with * are sometimes referred to as the “competitive businesses.” Eliminations are primarily intersegmentactivity. Almost all of Entergy’s goodwill is related to the Utility segment.In March 2017, Entergy sold the FitzPatrick plant, which it had intended to shut down, to Exelon. In January 2019, Entergy sold theVermont Yankee plant, which it had previously shut down, to NorthStar. In August 2019, Entergy sold the Pilgrim plant, which it hadpreviously shut down, to Holtec. Entergy has also announced plans to shut down Indian Point 2 in 2020, Indian Point 3 in 2021, and Palisadesin 2022, and has purchase and sale agreements with Holtec for each of them expected to close after they are shut down. Management expectsthese transactions to result in the cessation of merchant power generation at all Entergy Wholesale Commodities nuclear power plants ownedand operated by Entergy by 2022. Entergy will continue to have the obligation to decommission the nuclear plants pending their sales to thirdparties. The decisions to shut down these plants and the related transactions resulted in asset impairments; employee retention and severanceexpenses and other benefits-related costs; and contracted economic development contributions. The employee retention and severanceexpenses and other benefits-related costs and contracted economic development contributions are included in "Other operation andmaintenance" in the consolidated statement of operations.196 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsTotal restructuring charges in 2019, 2018, and 2017 were comprised of the following: Employee retention andseverance expenses andother benefits-relatedcosts Contracted economicdevelopment costs Total (In Millions)Balance as of December 31, 2016 $70 $21 $91Restructuring costs accrued 113 — 113Non-cash portion — (7) (7)Cash paid out 100 — 100Balance as of December 31, 2017 $83 $14 $97Restructuring costs accrued 139 — 139Cash paid out 43 — 43Balance as of December 31, 2018 $179 $14 $193Restructuring costs accrued 91 — 91Cash paid out 141 — 141Balance as of December 31, 2019 $129 $14 $143In addition, Entergy Wholesale Commodities incurred $290 million in 2019, $532 million in 2018, and $538 million in 2017 of impairment,loss on sales, and other related charges associated with these strategic decisions and transactions. See Note 14 to the financial statements forfurther discussion of these impairment charges.Going forward, Entergy Wholesale Commodities expects to incur employee retention and severance expenses of approximately $75million in 2020 and a total of approximately $55 million from 2021 through 2022 associated with these strategic transactions.Geographic AreasFor the years ended December 31, 2019, 2018, and 2017, the amount of revenue Entergy derived from outside of the United Stateswas insignificant. As of December 31, 2019 and 2018, Entergy had no long-lived assets located outside of the United States.Registrant SubsidiariesEach of the Registrant Subsidiaries has one reportable segment, which is an integrated utility business, except for System Energy,which is an electricity generation business. Each of the Registrant Subsidiaries’ operations is managed on an integrated basis by thatcompany because of the substantial effect of cost-based rates and regulatory oversight on the business process, cost structures, and operatingresults.197 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 14. ACQUISITIONS, DISPOSITIONS, AND IMPAIRMENT OF LONG-LIVED ASSETS (Entergy Corporation, EntergyArkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans)AcquisitionsChoctaw Generating StationIn October 2019, Entergy Mississippi purchased the Choctaw Generating Station, an 810 MW natural gas fired combined-cycleturbine plant located near French Camp, Mississippi, from a subsidiary of GenOn Energy Inc. The purchase price for the ChoctawGenerating Station was approximately $305 million.DispositionsPilgrimIn July 2018, Entergy entered into a purchase and sale agreement with Holtec International to sell to a Holtec subsidiary 100% of theequity interests in Entergy Nuclear Generation Company, the owner of the Pilgrim plant. In August 2019 the NRC approved the sale of theplant to Holtec. The transaction closed in August 2019 for a purchase price of $1,000 (subject to adjustments for net liabilities and otheramounts). The sale included the transfer of the Pilgrim nuclear decommissioning trust and obligation for spent fuel management and plantdecommissioning. The transaction resulted in a loss of $190 million ($156 million net-of-tax) in the third quarter 2019. The disposition-datefair value of the nuclear decommissioning trust fund was approximately $1,030 million and the disposition-date fair value of the assetretirement obligation was $837 million. The transaction also included property, plant, and equipment with a net book value of zero, materialsand supplies, and prepaid assets.Willow GlenIn December 2018, Entergy Louisiana sold the Willow Glen Power Station, a non-operating gas plant. Entergy Louisiana soldWillow Glen for approximately $12 million in cash and the transfer of the obligation to decommission the plant. Entergy Louisianarecognized a regulatory liability of $5.7 million for return of removal costs previously collected in rates. Entergy Louisiana realized a pre-taxgain of $14.8 million on the sale. Entergy Louisiana recorded a $31.9 million regulatory liability to recognize the obligation to refund excesscustomer collections for decommissioning Willow Glen.Vermont YankeeIn November 2016, Entergy entered into an agreement to sell 100% of the membership interests in Entergy Nuclear VermontYankee, LLC to a subsidiary of NorthStar. Entergy Nuclear Vermont Yankee was the owner of the Vermont Yankee plant. The sale ofEntergy Nuclear Vermont Yankee to NorthStar included the transfer of the nuclear decommissioning trust fund and the asset retirementobligation for the spent fuel management and decommissioning of the plant.In March 2018, Entergy and NorthStar entered into a settlement agreement and a Memorandum of Understanding with State ofVermont agencies and other interested parties that set forth the terms on which the agencies and parties support the Vermont Public UtilityCommission’s approval of the transaction. The agreements provide additional financial assurance for decommissioning, spent fuelmanagement and site restoration, and detail the site restoration standards. In October 2018 the NRC issued an order approving the applicationto transfer Vermont Yankee’s license to NorthStar for decommissioning. In December 2018, the Vermont Public Utility Commission issuedan order approving the transaction consistent with the Memorandum of Understanding’s terms. On January 11, 2019, Entergy and NorthStarclosed the transaction.198 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Nuclear Vermont Yankee had an outstanding credit facility that was used to pay for dry fuel storage costs. This credit facilitywas guaranteed by Entergy Corporation. A subsidiary of Entergy assumed the obligations under the credit facility. At the closing of the saletransaction, NorthStar caused Entergy Nuclear Vermont Yankee, renamed NorthStar Vermont Yankee, to issue a $139 million promissorynote to the Entergy subsidiary that assumed the credit facility obligations. The amount of the note included the balance outstanding on thecredit facility, as well as borrowing fees and costs incurred by Entergy in connection with the credit facility.With the receipt of the NRC and Vermont Public Utility Commission approvals and the resolution among the parties of thesignificant conditions of the sale, Entergy concluded that as of December 31, 2018 Vermont Yankee was in held for sale status. Entergyaccordingly evaluated the Vermont Yankee asset retirement obligation in light of the terms of the sale transaction and evaluated theremaining values of the Vermont Yankee assets. These evaluations resulted in an increase in the asset retirement obligation and $173 millionof asset impairment and related other charges in the fourth quarter 2018. See Note 9 to the financial statements for additional discussion ofthe asset retirement obligation. Upon closing of the transaction in January 2019, the Vermont Yankee decommissioning trust, along with thedecommissioning obligation for the plant, was transferred to NorthStar. The assets and liabilities associated with the sale of Vermont Yankeewere classified as held for sale on the Entergy Corporation and Subsidiaries Consolidated Balance Sheet as of December 31, 2018. As ofDecember 31, 2018, the value of the decommissioning trust was $532 million. As of December 31, 2018, the asset retirement cost asset was$127 million, classified within other deferred debits, and the asset retirement cost obligation was $568 million, classified within other non-current liabilities.The Vermont Yankee spent fuel disposal contract was assigned to NorthStar as part of the transaction. The Vermont Yankeetransaction resulted in Entergy generating a net deferred tax asset in January 2019. The deferred tax asset could not be fully realized byEntergy in the first quarter of 2019; accordingly, Entergy accrued a net tax expense of $29 million on the disposition of Vermont Yankee.The transaction also resulted in other charges of $5.4 million ($4.2 million net-of-tax) in the first quarter 2019.FitzPatrickIn August 2016, Entergy entered into an agreement to sell the FitzPatrick plant, an 838 MW nuclear power plant that was owned byEntergy in the Entergy Wholesale Commodities segment. In March 2017 the NRC approved the sale of the plant to Exelon. The transactionclosed in March 2017 for a purchase price of $110 million, which included a $10 million non-refundable signing fee paid in August 2016, inaddition to the assumption by Exelon of certain liabilities related to the FitzPatrick plant, resulting in a pre-tax gain on the sale of $16 million.At the transaction close, Exelon paid an additional $8 million for the proration of certain expenses prepaid by Entergy. The disposition-datefair value of the decommissioning trust fund was $805 million, classified within other deferred debits, and the disposition-date fair value ofthe asset retirement obligation was $727 million, classified within other non-current liabilities. The transaction also included property, plant,and equipment with a net book value of zero, materials and supplies, and prepaid assets.As part of the transaction, Entergy entered into a reimbursement agreement with Exelon pursuant to which Exelon reimbursedEntergy for specified out-of-pocket costs associated with Entergy’s operation of FitzPatrick prior to closing of the sale. In the first quarter2017, Entergy billed Exelon for reimbursement of $98 million of other operation and maintenance expenses, $7 million in lost operatingrevenues, and $3 million in taxes other than income taxes, partially offset by a $10 million defueling credit to Exelon.As discussed in Note 3 to the financial statements, as a result of the sale of FitzPatrick on March 31, 2017, Entergy redetermined theplant’s tax basis, resulting in a $44 million income tax benefit in the first quarter 2017.199 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsImpairment of Long-lived Assets2017, 2018, and 2019 ImpairmentsEntergy continues to execute its strategy to shut down and sell all of the remaining plants in Entergy Wholesale Commodities’merchant nuclear fleet, with planned shutdowns of Indian Point 2 by April 30, 2020, Indian Point 3 by April 30, 2021, and Palisades by May31, 2022. The remaining three Entergy Wholesale Commodities’ nuclear plants, FitzPatrick, Vermont Yankee, and Pilgrim, have been sold.The FitzPatrick plant was classified as held-for-sale at December 31, 2016, and subsequently sold to Exelon in March 2017. The VermontYankee plant was classified as held-for-sale at December 31, 2018, and subsequently sold to NorthStar on January 11, 2019. The Pilgrimplant was sold to Holtec International on August 26, 2019.Entergy Wholesale Commodities incurred $100 million in 2019, $532 million in 2018, and $538 million in 2017 of impairmentcharges related to nuclear fuel spending, nuclear refueling outage spending, expenditures for capital assets, and asset retirement obligationrevisions. These costs were charged to expense as incurred as a result of the impaired fair value of the Entergy Wholesale Commoditiesnuclear plants’ long-lived assets due to the significantly reduced remaining estimated operating lives associated with management’s strategyto exit the Entergy Wholesale Commodities merchant power business. Entergy expects to continue to incur costs associated with nuclearfuel-related spending, expenditures for capital assets and, except for Palisades, expects to continue to charge these costs to expense asincurred because Entergy expects the value of the plants to continue to be impaired.With respect to Palisades, Entergy and Consumers Energy had agreed to amend the existing PPA so that it would terminate early, onMay 31, 2018. In September 2017, however, Entergy and Consumers Energy agreed to terminate the PPA amendment agreement. Entergycontinues to operate Palisades under the current PPA with Consumers Energy, instead of shutting down in the fall of 2018 as previouslyplanned. Entergy intends to shut down the Palisades plant permanently no later than May 31, 2022. As a result of the change in expectedoperating life of the Palisades plant, the expected probability-weighted undiscounted net cash flows as of September 30, 2017 exceeded thecarrying value of the plant and related assets. Accordingly, nuclear fuel spending, nuclear refueling outage spending, and expenditures forcapital assets incurred at Palisades after September 30, 2017 are no longer charged to expense as incurred, but recorded as assets anddepreciated or amortized, subject to the typical periodic impairment reviews prescribed in the accounting rules.The impairments and other related charges are recorded as a separate line item in Entergy’s consolidated statements of operations andare included within the results of the Entergy Wholesale Commodities segment. In addition to the impairments and other related charges,Entergy expects to incur additional charges through mid-2022 associated with these strategic transactions. See Note 13 to the financialstatements for further discussion of these additional charges.2018 Pilgrim ImpairmentThe Pilgrim plant ceased operations on May 31, 2019, at the end of its current fuel cycle. Entergy Nuclear Generation Company filedits Post-Shutdown Decommissioning Activities Report (PSDAR) with the NRC in the fourth quarter 2018 for the Pilgrim plant. As part ofthe development of the PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2018. The revised estimateresulted in a $117.5 million increase in the decommissioning cost liability and a corresponding impairment charge in the third quarter 2018.As discussed above in Dispositions, on August 26, 2019, Entergy sold the Pilgrim plant to a Holtec International subsidiary.2018 Vermont Yankee ImpairmentAs discussed above in Dispositions, on January 11, 2019, Entergy sold the Vermont Yankee plant to NorthStar. With the receipt ofthe NRC and Vermont Public Utility Commission approvals and the resolution among the parties of the significant conditions of the sale,Entergy concluded that as of December 31, 2018 Vermont Yankee was in held-200 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsfor- sale status. Entergy accordingly evaluated the Vermont Yankee asset retirement obligation in light of the terms of the sale transaction,and evaluated the remaining values of the Vermont Yankee assets. These evaluations resulted in $173 million of asset impairment andrelated charges in the fourth quarter 2018. See Note 9 to the financial statements for additional discussion of the revision of the assetretirement obligation.NOTE 15. RISK MANAGEMENT AND FAIR VALUES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, EntergyMississippi, Entergy New Orleans, Entergy Texas, and System Energy)Market RiskIn the normal course of business, Entergy is exposed to a number of market risks. Market risk is the potential loss that Entergy mayincur as a result of changes in the market or fair value of a particular commodity or instrument. All financial and commodity-relatedinstruments, including derivatives, are subject to market risk including commodity price risk, equity price, and interest rate risk. Entergy usesderivatives primarily to mitigate commodity price risk, particularly power price and fuel price risk.The Utility has limited exposure to the effects of market risk because it operates primarily under cost-based rate regulation. To theextent approved by their retail regulators, the Utility operating companies use derivative instruments to hedge the exposure to price volatilityinherent in their purchased power, fuel, and gas purchased for resale costs that are recovered from customers.As a wholesale generator, Entergy Wholesale Commodities’ core business is selling energy, measured in MWh, to itscustomers. Entergy Wholesale Commodities enters into forward contracts with its customers and also sells energy and capacity in the dayahead or spot markets. In addition to its forward physical power and gas contracts, Entergy Wholesale Commodities may also use acombination of financial contracts, including swaps, collars, and options, to mitigate commodity price risk. When the market price falls, thecombination of instruments is expected to settle in gains that offset lower revenue from generation, which results in a more predictable cashflow.Entergy’s exposure to market risk is determined by a number of factors, including the size, term, composition, and diversification ofpositions held, as well as market volatility and liquidity. For instruments such as options, the time period during which the option may beexercised and the relationship between the current market price of the underlying instrument and the option’s contractual strike or exerciseprice also affects the level of market risk. A significant factor influencing the overall level of market risk to which Entergy is exposed is itsuse of hedging techniques to mitigate such risk. Hedging instruments and volumes are chosen based on ability to mitigate risk associatedwith future energy and capacity prices; however, other considerations are factored into hedge product and volume decisions includingcorporate liquidity, corporate credit ratings, counterparty credit risk, hedging costs, firm settlement risk, and product availability in themarketplace. Entergy manages market risk by actively monitoring compliance with stated risk management policies as well as monitoringthe effectiveness of its hedging policies and strategies. Entergy’s risk management policies limit the amount of total net exposure and rollingnet exposure during the stated periods. These policies, including related risk limits, are regularly assessed to ensure their appropriatenessgiven Entergy’s objectives.DerivativesSome derivative instruments are classified as cash flow hedges due to their financial settlement provisions while others are classifiedas normal purchase/normal sale transactions due to their physical settlement provisions. Normal purchase/normal sale risk management toolsinclude power purchase and sales agreements, fuel purchase agreements, capacity contracts, and tolling agreements. Financially-settled cashflow hedges can include natural gas and electricity swaps and options and interest rate swaps. Entergy may enter into financially-settledswap and option contracts to manage market risk that may or may not be designated as hedging instruments.Entergy enters into derivatives to manage natural risks inherent in its physical or financial assets or liabilities.201 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsElectricity over-the-counter instruments and futures contracts that financially settle against day-ahead power pool prices are used to manageprice exposure for Entergy Wholesale Commodities generation. The maximum length of time over which Entergy Wholesale Commoditiesis currently hedging the variability in future cash flows with derivatives for forecasted power transactions at December 31, 2019 isapproximately 1.25 years. Planned generation currently under contract from Entergy Wholesale Commodities nuclear power plants is 97%for 2020, of which approximately 65% is sold under financial derivatives and the remainder under normal purchase/normal sale contracts. Total planned generation for 2020 is 17.8 TWh. Entergy may use standardized master netting agreements to help mitigate the credit risk of derivative instruments. These masteragreements facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Cash, letters ofcredit, and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. The collateralagreements require a counterparty to post cash or letters of credit in the event an exposure exceeds an established threshold. The thresholdrepresents an unsecured credit limit, which may be supported by a parental/affiliate guarantee, as determined in accordance with Entergy’scredit policy. In addition, collateral agreements allow for termination and liquidation of all positions in the event of a failure or inability topost collateral.Certain of the agreements to sell the power produced by Entergy Wholesale Commodities power plants contain provisions thatrequire an Entergy subsidiary to provide credit support to secure its obligations depending on the mark-to-market values of thecontracts. The primary form of credit support to satisfy these requirements is an Entergy Corporation guarantee. As of December 31, 2019,there were no derivative contracts with counterparties in a liability position. In addition to the corporate guarantee, $11 million in cashcollateral was required to be posted by the Entergy subsidiary to its counterparties and $1 million in cash collateral and $98 million in lettersof credit were required to be posted by its counterparties to the Entergy subsidiary. As of December 31, 2018, derivative contracts with sixcounterparties were in a liability position (approximately $34 million total). In addition to the corporate guarantee, $19 million in cashcollateral was required to be posted by the Entergy subsidiary to its counterparties. If the Entergy Corporation credit rating falls belowinvestment grade, Entergy would have to post collateral equal to the estimated outstanding liability under the contract at the applicable date. Entergy manages fuel price volatility for its Louisiana jurisdictions (Entergy Louisiana and Entergy New Orleans) and EntergyMississippi through the purchase of natural gas swaps and options that financially settle against either the average Henry Hub Gas Dailyprices or the NYMEX Henry Hub. These swaps and options are marked-to-market through fuel expense with offsetting regulatory assets orliabilities. All benefits or costs of the program are recorded in fuel costs. The notional volumes of these swaps are based on a portion ofprojected annual exposure to gas price volatility for electric generation at Entergy Louisiana and Entergy Mississippi and projected winterpurchases for gas distribution at Entergy New Orleans. The maximum length of time over which Entergy has executed natural gas swaps andoptions as of December 31, 2019 is 4.25 years for Entergy Louisiana and the maximum length of time over which Entergy has executednatural gas swaps as of December 31, 2019 is 10 months for Entergy Mississippi and 3 months Entergy New Orleans. The total volume ofnatural gas swaps and options outstanding as of December 31, 2019 is 40,926,000 MMBtu for Entergy, including 31,040,000 MMBtu forEntergy Louisiana, 9,330,000 MMBtu for Entergy Mississippi, and 556,000 MMBtu for Entergy New Orleans. Credit support for thesenatural gas swaps and options is covered by master agreements that do not require Entergy to provide collateral based on mark-to-marketvalue but do carry adequate assurance language that may lead to requests for collateral.During the second quarter 2019, Entergy participated in the annual financial transmission rights auction process for the MISOplanning year of June 1, 2019 through May 31, 2020. Financial transmission rights are derivative instruments that represent economic hedgesof future congestion charges that will be incurred in serving Entergy’s customer load. They are not designated as hedging instruments.Entergy initially records financial transmission rights at their estimated fair value and subsequently adjusts the carrying value to theirestimated fair value at the end of each accounting period prior to settlement. Unrealized gains or losses on financial transmission rights heldby Entergy Wholesale Commodities are included in operating revenues. The Utility operating companies recognize regulatory liabilities orassets for unrealized gains or losses on financial transmission rights. The total volume of financial202 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementstransmission rights outstanding as of December 31, 2019 is 48,825 GWh for Entergy, including 11,078 GWh for Entergy Arkansas, 22,282GWh for Entergy Louisiana, 6,195 GWh for Entergy Mississippi, 2,331 GWh for Entergy New Orleans, and 6,741 GWh for Entergy Texas.Credit support for financial transmission rights held by the Utility operating companies is covered by cash and/or letters of credit issued byeach Utility operating company as required by MISO. Credit support for financial transmission rights held by Entergy WholesaleCommodities is covered by cash. No cash or letters of credit were required to be posted for financial transmission rights exposure for EntergyWholesale Commodities as of December 31, 2019 and December 31, 2018. Letters of credit posted with MISO covered the financialtransmission rights exposure for Entergy Mississippi as of December 31, 2019 and Entergy Mississippi and Entergy Texas as of December31, 2018.The fair values of Entergy’s derivative instruments in the consolidated balance sheet as of December 31, 2019 are shown in the tablebelow. Certain investments, including those not designated as hedging instruments, are subject to master netting agreements and are presentedin the balance sheet on a net basis in accordance with accounting guidance for derivatives and hedging.Instrument Balance Sheet Location Gross FairValue (a) OffsettingPosition (b) Net Fair Value(c) (d) Business (In Millions) Derivatives designated ashedging instruments Assets: Electricity swaps and options Prepayments and other(current portion) $92 ($1) $91 Entergy WholesaleCommoditiesElectricity swaps and optionsOther deferred debits andother assets (non-currentportion) $17 $— $17 Entergy WholesaleCommodities Liabilities: Electricity swaps and options Other current liabilities(current portion) $1 ($1) $— Entergy WholesaleCommodities203 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsDerivatives not designated ashedging instruments Assets: Electricity swaps and options Prepayments and other(current portion) $11 ($1) $10 Entergy WholesaleCommoditiesNatural gas swaps and options Other deferred debits andother assets (non-currentportion) $1 $— $1 UtilityFinancial transmission rights Prepayments and other $10 $— $10 Utility and EntergyWholesaleCommodities Liabilities: Electricity swaps and options Other current liabilities(current portion) $2 ($2) $— Entergy WholesaleCommoditiesNatural gas swaps and options Other current liabilities(current portion) $5 $— $5 UtilityNatural gas swaps and options Other non-current liabilities(non-current portion) $2 $— $2 Utility204 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe fair values of Entergy’s derivative instruments in the consolidated balance sheet as of December 31, 2018 are shown in the tablebelow. Certain investments, including those not designated as hedging instruments, are subject to master netting agreements and are presentedin the balance sheet on a net basis in accordance with accounting guidance for derivatives and hedging.Instrument Balance Sheet Location Gross FairValue (a) OffsettingPosition (b) Net Fair Value(c) (d) Business (In Millions) Derivatives designated ashedging instruments Assets: Electricity swaps and options Prepayments and other(current portion) $32 ($32) $— Entergy WholesaleCommoditiesElectricity swaps and options Other deferred debits andother assets (non-currentportion) $7 ($7) $— Entergy WholesaleCommodities Liabilities: Electricity swaps and options Other current liabilities(current portion) $54 ($33) $21 Entergy WholesaleCommoditiesElectricity swaps and options Other non-current liabilities(non-current portion) $20 ($7) $13 Entergy WholesaleCommoditiesDerivatives not designated ashedging instruments Assets: Electricity swaps and options Prepayments and other(current portion) $4 ($2) $2 Entergy WholesaleCommoditiesElectricity swaps and options Other deferred debits andother assets (non-currentportion) $1 $— $1 Entergy WholesaleCommoditiesNatural gas swaps and options Other deferred debits andother assets (non-currentportion) $2 $— $2 UtilityFinancial transmission rights Prepayments and other $16 ($1) $15 Utility and EntergyWholesaleCommodities Liabilities: Electricity swaps and options Other current liabilities(current portion) $1 ($1) $— Entergy WholesaleCommoditiesNatural gas swaps and options Other current liabilities $1 $— $1 Utility(a)Represents the gross amounts of recognized assets/liabilities(b)Represents the netting of fair value balances with the same counterparty205 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(c)Represents the net amounts of assets/liabilities presented on the Entergy Corporation and Subsidiaries’ Consolidated Balance Sheet(d)Excludes cash collateral in the amount of $11 million posted and $1 million held as of December 31, 2019 and $19 million posted asof December 31, 2018. Also excludes letters of credit in the amount of $98 million held as of December 31, 2019 and $4 millionposted as of December 31, 2018.The effects of Entergy’s derivative instruments designated as cash flow hedges on the consolidated income statements for the yearsended December 31, 2019, 2018, and 2017 are as follows:Instrument Amount of gain(loss) recognized inothercomprehensiveincome Income Statement location Amount of gain(loss) reclassified fromaccumulated othercomprehensive incomeinto income (a) (In Millions) (In Millions)2019 Electricity swaps and options $232 Competitive business operating revenues $97 2018 Electricity swaps and options ($40) Competitive business operating revenues ($68) 2017 Electricity swaps and options $44 Competitive business operating revenues $109(a)Before taxes of $20 million, ($14) million, and $38 million, for the years ended December 31, 2019, 2018, and 2017, respectivelyPrior to the adoption of ASU 2017-12, Entergy measured its hedges for ineffectiveness. Any ineffectiveness was recognized inearnings during the period. The ineffective portion of cash flow hedges was recorded in competitive businesses operating revenues. Thechange in fair value of Entergy’s cash flow hedges due to ineffectiveness was ($5.9) million and ($3) million for the years endedDecember 31, 2018 and 2017, respectively. Based on market prices as of December 31, 2019, unrealized gains (losses) recorded in accumulated other comprehensive income oncash flow hedges relating to power sales totaled $108 million of net unrealized losses. Approximately $91 million is expected to bereclassified from accumulated other comprehensive income to operating revenues in the next twelve months. The actual amount reclassifiedfrom accumulated other comprehensive income, however, could vary due to future changes in market prices. Entergy may effectively liquidate a cash flow hedge instrument by entering into a contract offsetting the original hedge, and then de-designating the original hedge in this situation. Gains or losses accumulated in other comprehensive income prior to de-designation continueto be deferred in other comprehensive income until they are included in income as the original hedged transaction occurs. From the point ofde-designation, the gains or losses on the original hedge and the offsetting contract are recorded as assets or liabilities on the balance sheetand offset as they flow through to earnings. 206 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe effects of Entergy’s derivative instruments not designated as hedging instruments on the consolidated income statements for theyears ended December 31, 2019, 2018, and 2017 are as follows:Instrument Income Statement location Amount of gain (loss)recorded in theincome statement (In Millions)2019 Natural gas swaps and options Fuel, fuel-related expenses, andgas purchased for resale(a)($13)Financial transmission rights Purchased power expense(b)$94Electricity swaps and options (c) Competitive business operatingrevenues $12 2018 Natural gas swaps Fuel, fuel-related expenses, andgas purchased for resale(a)$8Financial transmission rights Purchased power expense(b)$131Electricity swaps and options (c) Competitive business operatingrevenues $8 2017 Natural gas swaps Fuel, fuel-related expenses, andgas purchased for resale(a)($31)Financial transmission rights Purchased power expense(b)$139(a)Due to regulatory treatment, the natural gas swaps and options are marked-to-market through fuel, fuel-related expenses, and gaspurchased for resale and then such amounts are simultaneously reversed and recorded as an offsetting regulatory asset orliability. The gains or losses recorded as fuel expenses when the swaps and options are settled are recovered or refunded through fuelcost recovery mechanisms.(b)Due to regulatory treatment, the changes in the estimated fair value of financial transmission rights for the Utility operatingcompanies are recorded through purchased power expense and then such amounts are simultaneously reversed and recorded as anoffsetting regulatory asset or liability. The gains or losses recorded as purchased power expense when the financial transmissionrights 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.207 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe fair values of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their balance sheets asof December 31, 2019 and 2018 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 forderivatives and hedging. Instrument Balance Sheet Location Gross FairValue (a) OffsettingPosition (b) Net FairValue (c)(d) Registrant (In Millions) 2019 Assets: Natural gas swaps andoptions Other deferred debits andother assets $0.8 $— $0.8 Entergy Louisiana Financial transmissionrights Prepayments and other $3.4 ($0.1) $3.3 Entergy ArkansasFinancial transmissionrights Prepayments and other $4.5 $— $4.5 Entergy LouisianaFinancial transmissionrights Prepayments and other $0.8 $— $0.8 Entergy MississippiFinancial transmissionrights Prepayments and other $0.3 $— $0.3 Entergy New OrleansFinancial transmissionrights Prepayments and other $1.0 ($0.1) $0.9 Entergy Texas Liabilities: Natural gas swaps andoptions Other current liabilities $2.4 $— $2.4 Entergy LouisianaNatural gas swaps andoptions Other non-current liabilities $2.2 $— $2.2 Entergy LouisianaNatural gas swaps Other current liabilities $2.3 $— $2.3 Entergy MississippiNatural gas swaps Other current liabilities $0.2 $— $0.2 Entergy New Orleans208 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsInstrument Balance Sheet Location Gross FairValue (a) OffsettingPosition (b) Net FairValue (c)(d) Registrant 2018 Assets: Natural gas swaps andoptions Prepayments and other $0.3 $— $0.3 Entergy LouisianaNatural gas swaps andoptions Other deferred debits andother assets $1.6 $— $1.6 Entergy Louisiana Financial transmissionrights Prepayments and other $3.6 ($0.2) $3.4 Entergy ArkansasFinancial transmissionrights Prepayments and other $8.4 ($0.1) $8.3 Entergy LouisianaFinancial transmissionrights Prepayments and other $2.2 $— $2.2 Entergy MississippiFinancial transmissionrights Prepayments and other $1.3 $— $1.3 Entergy New Orleans Liabilities: Natural gas swaps andoptions Other current liabilities $1.1 $— $1.1 Entergy LouisianaNatural gas swaps Other current liabilities $0.1 $— $0.1 Entergy New Orleans Financial transmissionrights Other current liabilities $0.9 ($1.4) ($0.5) Entergy Texas(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 December 31, 2019, letters of credit posted with MISO covered financial transmission rights exposure of $0.2 million forEntergy Mississippi. As of December 31, 2018, letters of credit posted with MISO covered financial transmission rights exposure of$0.2 million for Entergy Mississippi and $4.1 million for Entergy Texas.209 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe effects of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their income statementsfor the years ended December 31, 2019, 2018, and 2017 are as follows:Instrument Income Statement Location Amount of gain (loss)recorded in the incomestatement Registrant (In Millions) 2019 Natural gas swaps and options Fuel, fuel-related expenses, andgas purchased for resale ($5.3)(a)Entergy LouisianaNatural gas swaps Fuel, fuel-related expenses, andgas purchased for resale ($7.7)(a)Entergy Mississippi Financial transmission rights Purchased power $22.3(b)Entergy ArkansasFinancial transmission rights Purchased power $46.7(b)Entergy LouisianaFinancial transmission rights Purchased power $6.8(b)Entergy MississippiFinancial transmission rights Purchased power $2.7(b)Entergy New OrleansFinancial transmission rights Purchased power $15.7(b)Entergy Texas 2018 Natural gas swaps and options Fuel, fuel-related expenses, andgas purchased for resale $4.4(a)Entergy LouisianaNatural gas swaps Fuel, fuel-related expenses, andgas purchased for resale $3.2(a)Entergy MississippiNatural gas swaps Fuel, fuel-related expenses, andgas purchased for resale $0.2(a)Entergy New Orleans Financial transmission rights Purchased power $25.3(b)Entergy ArkansasFinancial transmission rights Purchased power $72.7(b)Entergy LouisianaFinancial transmission rights Purchased power $26.3(b)Entergy MississippiFinancial transmission rights Purchased power $13.8(b)Entergy New OrleansFinancial transmission rights Purchased power ($6.0)(b)Entergy Texas 2017 Natural gas swaps Fuel, fuel-related expenses, andgas purchased for resale ($25.4)(a)Entergy LouisianaNatural gas swaps Fuel, fuel-related expenses, andgas purchased for resale ($5.2)(a)Entergy MississippiNatural gas swaps Fuel, fuel-related expenses, andgas purchased for resale ($0.3)(a)Entergy New Orleans Financial transmission rights Purchased power $41.7(b)Entergy ArkansasFinancial transmission rights Purchased power $45.8(b)Entergy LouisianaFinancial transmission rights Purchased power $18.9(b)Entergy MississippiFinancial transmission rights Purchased power $9.1(b)Entergy New OrleansFinancial transmission rights Purchased power $22.3(b)Entergy Texas(a)Due to regulatory treatment, the natural gas swaps and options are marked-to-market through fuel, fuel-related expenses, and gaspurchased for resale and then such amounts are simultaneously reversed and recorded as an210 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsoffsetting regulatory asset or liability. The gains or losses recorded as fuel expenses when the swaps and options are settled arerecovered 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 operatingcompanies are recorded through purchased power expense and then such amounts are simultaneously reversed and recorded as anoffsetting regulatory asset or liability. The gains or losses recorded as purchased power expense when the financial transmissionrights for the Utility operating companies are settled are recovered or refunded through fuel cost recovery mechanisms.Fair ValuesThe estimated fair values of Entergy’s financial instruments and derivatives are determined using historical prices, bid prices, marketquotes, and financial modeling. Considerable judgment is required in developing the estimates of fair value. Therefore, estimates are notnecessarily indicative of the amounts that Entergy could realize in a current market exchange. Gains or losses realized on financialinstruments other than those instruments held by the Entergy Wholesale Commodities business are reflected in future rates and therefore donot affect net income. Entergy considers the carrying amounts of most financial instruments classified as current assets and liabilities to be areasonable 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 wouldbe paid to transfer a liability in an orderly transaction between knowledgeable market participants at the date of measurement. Entergy andthe Registrant Subsidiaries use assumptions or market input data that market participants would use in pricing assets or liabilities at fairvalue. The inputs can be readily observable, corroborated by market data, or generally unobservable. Entergy and the Registrant Subsidiariesendeavor 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 establishesthe highest priority for unadjusted market quotes in an active market for the identical asset or liability and the lowest priority forunobservable 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 abilityto access at the measurement date. Active markets are those in which transactions for the asset or liability occur in sufficientfrequency and volume to provide pricing information on an ongoing basis. Level 1 primarily consists of individually ownedcommon stocks, cash equivalents (temporary cash investments, securitization recovery trust account, and escrow accounts), debtinstruments, and gas swaps traded on exchanges with active markets. Cash equivalents includes all unrestricted highly liquid debtinstruments 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 forthe asset or liability at the measurement date. Assets are valued based on prices derived by independent third parties that use inputssuch as benchmark yields, reported trades, broker/dealer quotes, and issuer spreads. Prices are reviewed and can be challenged withthe independent parties and/or overridden by Entergy if it is believed such would be more reflective of fair value. Level 2 inputsinclude 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.211 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsLevel 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 inputsare used with internally developed methodologies to produce management’s best estimate of fair value for the asset or liability. Level3 consists primarily of financial transmission rights and derivative power contracts used as cash flow hedges of power sales atmerchant power plants.The values for power contract assets or liabilities are based on both observable inputs including public market prices and interestrates, and unobservable inputs such as implied volatilities, unit contingent discounts, expected basis differences, and credit adjustedcounterparty interest rates. They are classified as Level 3 assets and liabilities. The valuations of these assets and liabilities are performed bythe Business Unit Risk Control group and the Accounting Policy and Entergy Wholesale Commodities Accounting group. The primaryfunctions of the Business Unit Risk Control group include: gathering, validating and reporting market data, providing market risk analysesand valuations in support of Entergy Wholesale Commodities’ commercial transactions, developing and administering protocols for themanagement of market risks, and implementing and maintaining controls around changes to market data in the energy trading and riskmanagement system. The Business Unit Risk Control group is also responsible for managing the energy trading and risk managementsystem, forecasting revenues, forward positions and analysis. The Accounting Policy and Entergy Wholesale Commodities Accountinggroup performs functions related to market and counterparty settlements, revenue reporting and analysis and financial accounting. TheBusiness Unit Risk Control group reports to the Vice President and Treasurer while the Accounting Policy and Entergy WholesaleCommodities 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 atthe 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 estimatedamount receivable to or payable by Entergy if the contracts were settled at that date. These derivative contracts include cash flow hedges thatswap fixed for floating cash flows for sales of the output from the Entergy Wholesale Commodities business. The fair values are based onthe mark-to-market comparison between the fixed contract prices and the floating prices determined each period from quoted forward powermarket prices. The differences between the fixed price in the swap contract and these market-related prices multiplied by the volumespecified in the contract and discounted at the counterparties’ credit adjusted risk free rate are recorded as derivative contract assets orliabilities. For contracts that have unit contingent terms, a further discount is applied based on the historical relationship between contractand 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 theend of each month for accounting purposes. Inputs to the valuation include end of day forward market prices for the period when thetransactions will settle, implied volatilities based on market volatilities provided by a third-party data aggregator, and U.S. Treasury rates fora risk-free return rate. As described further below, prices and implied volatilities are reviewed and can be adjusted if it is determined thatthere is a better representation of fair value. On a daily basis, the Business Unit Risk Control group calculates the mark-to-market for electricity swaps and options. The BusinessUnit Risk Control group also validates forward market prices by comparing them to other sources of forward market prices or to settlementprices of actual market transactions. Significant differences are analyzed and potentially adjusted based on these other sources of forwardmarket prices or settlement prices of actual market transactions. Implied volatilities used to value options are also validated using actualcounterparty quotes for Entergy Wholesale Commodities transactions when available and compared with other sources of market impliedvolatilities. Moreover, on a quarterly basis, the Office of Corporate Risk Oversight confirms the mark-to-market calculations and preparesprice scenarios and credit downgrade scenario analysis. The scenario analysis is communicated to senior management within Entergy andwithin Entergy Wholesale Commodities. Finally, for all proposed derivative transactions, an analysis is completed to assess the risk ofadding the proposed derivative to Entergy212 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsWholesale Commodities’ portfolio. In particular, the credit and liquidity effects are calculated for this analysis. This analysis iscommunicated 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 MISObetween applicable generation and load pricing nodes based on the 50th percentile of historical prices. They are classified as Level 3 assetsand liabilities. The valuations of these assets and liabilities are performed by the Business Unit Risk Control group. The values arecalculated internally and verified against the data published by MISO. Entergy’s Accounting Policy and Entergy Wholesale CommoditiesAccounting groups review these valuations for reasonableness, with the assistance of others within the organization with knowledge of thevarious inputs and assumptions used in the valuation. The Business Unit Risk Control groups report to the Vice President and Treasurer. TheAccounting Policy and Entergy Wholesale Commodities Accounting groups report to the Chief Accounting Officer.The following tables set forth, by level within the fair value hierarchy, Entergy’s assets and liabilities that are accounted for at fairvalue on a recurring basis as of December 31, 2019 and December 31, 2018. The assessment of the significance of a particular input to a fairvalue measurement requires judgment and may affect their placement within the fair value hierarchy levels.2019 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $391 $— $— $391Decommissioning trust funds (a): Equity securities 905 — — 905Debt securities 1,139 1,824 — 2,963Common trusts (b) 2,536Power contracts — — 118 118Securitization recovery trust account 47 — — 47Escrow accounts 459 — — 459Gas hedge contracts — 1 — 1Financial transmission rights — — 10 10 $2,941 $1,825 $128 $7,430Liabilities: Gas hedge contracts $5 $2 $— $7213 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $424 $— $— $424Decommissioning trust funds (a): Equity securities 1,686 — — 1,686Debt securities 1,259 1,625 — 2,884Common trusts (b) 2,350Power contracts — — 3 3Securitization recovery trust account 51 — — 51Escrow accounts 403 — — 403Gas hedge contracts — 2 — 2Financial transmission rights — — 15 15 $3,823 $1,627 $18 $7,818Liabilities: Power contracts $— $— $34 $34Gas hedge contracts 1 — — 1 $1 $— $34 $35(a)The decommissioning trust funds hold equity and fixed income securities. Equity securities are invested to approximate the returns ofmajor market indices. Fixed income securities are held in various governmental and corporate securities. See Note 16 to thefinancial statements 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 dailytrading 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 asLevel 3 in the fair value hierarchy for the years ended December 31, 2019, 2018, and 2017: 2019 2018 2017 PowerContractsFinancialtransmissionrights PowerContractsFinancialtransmissionrights PowerContractsFinancialtransmissionrights (In Millions)Balance as of January 1,($31)$15 ($65)$21 $5$21Total gains (losses) for theperiod (a) Included in earnings12— 2(1) (3)1Included in othercomprehensive income232— (40)— 44—Included as a regulatoryliability/asset—54 —80 —76Issuances of financialtransmission rights—35 —46 —62Settlements(95)(94) 72(131) (111)(139)Balance as of December31,$118$10 ($31)$15 ($65)$21214 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(a)Change in unrealized gains or losses for the period included in earnings for derivatives held at the end of the reporting period is($9.2) million, ($3.5) million, and $0.9 million for the years ended December 31, 2019, 2018, and 2017, respectively.The following table sets forth a description of the types of transactions classified as Level 3 in the fair value hierarchy and significantunobservable inputs to each which cause that classification, as of December 31, 2019:Transaction Type Fair Value as ofDecember 31, 2019 Significant UnobservableInputs Range fromAverage % Effect on FairValue (In Millions) (In Millions)Power contracts - electricityswaps $118 Unit contingent discount +/- 4.75% $11The values of financial transmission rights are based on unobservable inputs calculated internally and verified against historical pricing datapublished by MISO. The following table sets forth an analysis of each of the types of unobservable inputs impacting the fair value of items classified asLevel 3 within the fair value hierarchy, and the sensitivity to changes to those inputs:Significant UnobservableInput 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 areaccounted for at fair value on a recurring basis as of December 31, 2019 and December 31, 2018. The assessment of the significance of aparticular input to a fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels.Entergy Arkansas2019 Level 1 Level 2 Level 3 Total (In Millions)Assets: Decommissioning trust funds (a): Equity securities $0.6 $— $— $0.6Debt securities 108.7 304.1 — 412.8Common trusts (b) 687.9Securitization recovery trust account 4.0 — — 4.0Financial transmission rights — — 3.3 3.3 $113.3 $304.1 $3.3 $1,108.62018 Level 1 Level 2 Level 3 Total (In Millions)Assets: Decommissioning trust funds (a): Equity securities $4.0 $— $— $4.0Debt securities 94.8 286.5 — 381.3Common trusts (b) 526.7Securitization recovery trust account 4.7 — — 4.7Financial transmission rights — — 3.4 3.4 $103.5 $286.5 $3.4 $920.1215 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsEntergy Louisiana2019 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $1.5 $— $— $1.5Decommissioning trust funds (a): Equity securities 4.3 — — 4.3Debt securities 180.8 420.7 — 601.5Common trusts (b) 958.0Escrow accounts 295.9 — — 295.9Securitization recovery trust account 3.7 — — 3.7Gas hedge contracts — 0.8 — 0.8Financial transmission rights — — 4.5 4.5 $486.2 $421.5 $4.5 $1,870.2 Liabilities: Gas hedge contracts $2.4 $2.2 $— $4.62018 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $43.1 $— $— $43.1Decommissioning trust funds (a): Equity securities 13.3 — — 13.3Debt securities 162.0 370.9 — 532.9Common trusts (b) 738.8Escrow accounts 289.5 — — 289.5Securitization recovery trust account 3.6 — — 3.6Gas hedge contracts — 1.9 — 1.9Financial transmission rights — — 8.3 8.3 $511.5 $372.8 $8.3 $1,631.4 Liabilities: Gas hedge contracts $0.7 $0.4 $— $1.1Entergy Mississippi2019 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $51.6 $— $— $51.6Escrow accounts 80.2 — — 80.2Financial transmission rights — — 0.8 0.8 $131.8 $— $0.8 $132.6Liabilities: Gas hedge contracts $2.3 $— $— $2.3 216 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $36.9 $— $— $36.9Escrow accounts 32.4 — — 32.4Financial transmission rights — — 2.2 2.2 $69.3 $— $2.2 $71.5Entergy New Orleans2019 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $6.0 $— $— $6.0Securitization recovery trust account 2.0 — — 2.0Escrow accounts 82.6 — — 82.6Financial transmission rights — — 0.3 0.3 $90.6 $— $0.3 $90.9 Liabilities: Gas hedge contracts $0.2 $— $— $0.22018 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $19.7 $— $— $19.7Securitization recovery trust account 2.2 — — 2.2Escrow accounts 80.9 — — 80.9Financial transmission rights — — 1.3 1.3 $102.8 $— $1.3 $104.1 Liabilities: Gas hedge contracts $0.1 $— $— $0.1Entergy Texas2019 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $12.9 $— $— $12.9Securitization recovery trust account 37.7 — — 37.7Financial transmission rights — — 0.9 0.9 $50.6 $— $0.9 $51.5217 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements2018 Level 1 Level 2 Level 3 Total (In Millions)Assets: Securitization recovery trust account $40.2 $— $— $40.2 Liabilities: Financial transmission rights $— $— $0.5 $0.5System Energy2019 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $68.4 $— $— $68.4Decommissioning trust funds (a): Equity securities 13.3 — — 13.3Debt securities 176.3 209.9 — 386.2Common trusts (b) 654.6 $258.0 $209.9 $— $1,122.52018 Level 1 Level 2 Level 3 Total (In Millions)Assets: Temporary cash investments $95.6 $— $— $95.6Decommissioning trust funds (a): Equity securities 4.4 — — 4.4Debt securities 224.5 139.7 — 364.2Common trusts (b) 500.9 $324.5 $139.7 $— $965.1(a)The decommissioning trust funds hold equity and fixed income securities. Equity securities are invested to approximate the returns ofmajor market indices. Fixed income securities are held in various governmental and corporate securities. See Note 16 to thefinancial statements 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 dailytrading at the net asset value and trades settle at a later date.218 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe following table sets forth a reconciliation of changes in the net assets for the fair value of derivatives classified as Level 3 in thefair value hierarchy for the year ended December 31, 2019.EntergyArkansas EntergyLouisianaEntergyMississippiEntergy NewOrleansEntergyTexas (In Millions) Balance as of January 1, 2019$3.4 $8.3 $2.2 $1.3 ($0.5)Issuances of financial transmissionrights9.6 18.7 3.9 2.7 0.1Gains (losses) included as a regulatoryliability/asset12.6 24.2 1.5 (1.0) 17.0Settlements(22.3) (46.7) (6.8) (2.7) (15.7)Balance as of December 31, 2019$3.3 $4.5 $0.8 $0.3 $0.9The following table sets forth a reconciliation of changes in the net assets (liabilities) for the fair value of derivatives classified asLevel 3 in the fair value hierarchy for the year ended December 31, 2018. EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas (In Millions) Balance as of January 1, 2018$3.0 $10.2 $2.1 $2.2 $3.4Issuances of financial transmission rights11.8 20.0 4.5 3.7 6.1Gains (losses) included as a regulatoryliability/asset13.9 50.8 21.9 9.2 (16.0)Settlements(25.3) (72.7) (26.3) (13.8) 6.0Balance as of December 31, 2018$3.4 $8.3 $2.2 $1.3 ($0.5)NOTE 16. DECOMMISSIONING TRUST FUNDS (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and SystemEnergy)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 nucleardecommissioning trust funds invest in equity securities, fixed-rate debt securities, and cash and cash equivalents.Entergy implemented ASU No. 2016-01 “Financial Instruments (Subtopic 825-10): Recognition and Measurement of FinancialAssets and Financial Liabilities” effective January 1, 2018. The ASU requires investments in equity securities, excluding those accounted forunder the equity method or resulting in consolidation of the investee, to be measured at fair value with changes recognized in net income.Entergy implemented this ASU using a modified retrospective method, and Entergy recorded an adjustment increasing retained earnings andincreasing accumulated other comprehensive loss by $633 million as of January 1, 2018, for the cumulative effect of the unrealized gains andlosses on investments in equity securities held by the decommissioning trust funds that do not meet the criteria for regulatory accountingtreatment. Beginning in 2018, unrealized gains and losses on investments in equity securities held by the nuclear decommissioning trustfunds are recorded in earnings as they occur rather than in other comprehensive income. In accordance with the regulatory treatment of thedecommissioning trust funds of the219 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsRegistrant Subsidiaries, an offsetting amount of unrealized gains/(losses) will continue to be recorded in other regulatory liabilities/assets.As discussed in Note 14 to the financial statements, in January 2019, Entergy completed the transfer of the Vermont Yankee plant toNorthStar. As part of the transaction, Entergy transferred the Vermont Yankee decommissioning trust fund to NorthStar. As of December 31,2018, the fair value of the decommissioning trust fund was $532 million.As discussed in Note 14 to the financial statements, in August 2019, Entergy completed the transfer of the Pilgrim plant to Holtec. Aspart of the transaction, Entergy transferred the Pilgrim decommissioning trust fund to Holtec. The disposition-date fair value of thedecommissioning trust fund was approximately $1,030 million.Entergy records decommissioning trust funds on the balance sheet at their fair value. Because of the ability of the RegistrantSubsidiaries to recover decommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, theRegistrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities in other regulatoryliabilities/assets. For the 30% interest in River Bend formerly owned by Cajun, Entergy Louisiana records an offsetting amount in otherdeferred credits for the unrealized trust earnings not currently expected to be needed to decommission the plant. Decommissioning trustfunds 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 theavailable-for-sale debt securities in the trust funds are recognized in the accumulated other comprehensive income component ofshareholders’ equity. Unrealized losses (where cost exceeds fair market value) on the available-for-sale debt securities in the trust funds arealso recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other thantemporary and therefore recorded in earnings. A portion of Entergy’s decommissioning trust funds are held in a wholly-owned registeredinvestment company, and unrealized gains and losses on both the equity and debt securities held in the registered investment company arerecognized in earnings. Generally, Entergy records gains and losses on its debt and equity securities using the specific identification methodto determine the cost basis of its securities.The unrealized gains/(losses) recognized during the year ended December 31, 2019 on equity securities still held as of December 31,2019 were $640 million. The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return ofthe Standard Poor’s 500 Index. A relatively small percentage of the equity securities are held in funds intended to replicate the return of theWilshire 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 December 31, 2019 and 2018 are summarized as follows: Fair Value TotalUnrealizedGains TotalUnrealizedLosses (In Millions)2019 Debt Securities (a) $2,456 $96 $6 2018 Debt Securities (a) $2,495 $19 $35(a)Debt securities presented herein do not include the $507 million and $389 million of debt securities held in the wholly-ownedregistered investment company as of December 31, 2019 and 2018, respectively, which are not accounted for as available-for-sale. 220 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe unrealized gains/(losses) above are reported before deferred taxes of $13 million as of December 31, 2019 and ($1) million as ofDecember 31, 2018 for debt securities. The amortized cost of available-for-sale debt securities was $2,366 million as of December 31, 2019and $2,511 million as of December 31, 2018. As of December 31, 2019, available-for-sale debt securities have an average coupon rate ofapproximately 3.27%, an average duration of approximately 6.62 years, and an average maturity of approximately 10.42 years.The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities havebeen in a continuous loss position, are as follows as of December 31, 2019: Fair Value GrossUnrealizedLosses (In Millions)Less than 12 months$404 $5More than 12 months38 1Total$442 $6The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities havebeen in a continuous loss position, are as follows as of December 31, 2018: Fair Value GrossUnrealizedLosses (In Millions)Less than 12 months$652 $9More than 12 months782 26Total$1,434 $35The fair value of available-for-sale debt securities, summarized by contractual maturities, as of December 31, 2019 and 2018 are asfollows: 2019 2018 (In Millions)Less than 1 year$128 $1991 year - 5 years807 1,0665 years - 10 years666 54410 years - 15 years125 7715 years - 20 years126 7820 years+604 531Total$2,456 $2,495During the years ended December 31, 2019, 2018, and 2017, proceeds from the dispositions of available-for-sale securities amountedto $1,427 million, $2,406 million, and $3,163 million, respectively. During the years ended December 31, 2019, 2018, and 2017, grossgains of $25 million, $7 million, and $149 million, respectively, and gross losses of $4 million, $47 million, and $13 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 December 31,2019 are $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 related to the Entergy221 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsWholesale Commodities nuclear plants as of December 31, 2018 are $471 million for Indian Point 1, $598 million for Indian Point 2, $781million for Indian Point 3, $444 million for Palisades, $1,028 million for Pilgrim, and $532 million for Vermont Yankee. The fair values ofthe decommissioning trust funds for the Registrant Subsidiaries’ nuclear plants are detailed below.Entergy ArkansasEntergy Arkansas holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. Theavailable-for-sale securities held as of December 31, 2019 and 2018 are summarized as follows: Fair Value TotalUnrealizedGains TotalUnrealizedLosses (In Millions)2019 Debt Securities $412.8 $9.9 $2.6 2018 Debt Securities $381.3 $0.6 $8.2The amortized cost of available-for-sale debt securities was $405.4 million as of December 31, 2019 and $389 million as ofDecember 31, 2018. As of December 31, 2019, the available-for-sale debt securities have an average coupon rate of approximately 2.79%,an average duration of approximately 6.83 years, and an average maturity of approximately 8.81 years.The unrealized gains/(losses) recognized during the year ended December 31, 2019 on equity securities still held as of December 31,2019 were $147.7 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 4500Index.The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities havebeen in a continuous loss position, are as follows as of December 31, 2019: Fair Value GrossUnrealizedLosses (In Millions)Less than 12 months$104.8 $2.5More than 12 months7.7 0.1Total$112.5 $2.6222 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities havebeen in a continuous loss position, are as follows as of December 31, 2018: Fair Value GrossUnrealizedLosses (In Millions)Less than 12 months$65.8 $0.5More than 12 months231.1 7.7Total$296.9 $8.2The fair value of available-for-sale debt securities, summarized by contractual maturities, as of December 31, 2019 and 2018 are asfollows: 2019 2018 (In Millions)Less than 1 year$44.1 $32.51 year - 5 years109.1 170.35 years - 10 years156.0 114.010 years - 15 years31.3 10.315 years - 20 years23.8 8.120 years+48.5 46.1Total$412.8 $381.3During the years ended December 31, 2019, 2018, and 2017, proceeds from the dispositions of available-for-sale securities amountedto $110.6 million, $82.1 million, and $339.4 million, respectively. During the years ended December 31, 2019, 2018, and 2017, gross gainsof $2.9 million, $0.1 million, and $17.7 million, respectively, and gross losses of $0.1 million, $2.9 million, and $0.6 million, respectively,related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.Entergy LouisianaEntergy Louisiana holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. Theavailable-for-sale securities held as of December 31, 2019 and 2018 are summarized as follows: Fair Value TotalUnrealizedGains TotalUnrealizedLosses (In Millions)2019 Debt Securities $601.5 $29.3 $0.8 2018 Debt Securities $532.9 $4.1 $6.0The amortized cost of available-for-sale debt securities was $573 million as of December 31, 2019 and $534.8 million as ofDecember 31, 2018. As of December 31, 2019, the available-for-sale debt securities have an average coupon rate of approximately 3.82%,an average duration of approximately 6.80 years, and an average maturity of approximately 13.26 years.223 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe unrealized gains/(losses) recognized during the year ended December 31, 2019 on equity securities still held as of December 31,2019 were $208.1 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 4500Index.The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities havebeen in a continuous loss position, are as follows as of December 31, 2019: Fair Value GrossUnrealizedLosses (In Millions)Less than 12 months$71.2 $0.8More than 12 months7.9 —Total$79.1 $0.8The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities havebeen in a continuous loss position, are as follows as of December 31, 2018: Fair Value GrossUnrealizedLosses (In Millions)Less than 12 months$170.1 $2.1More than 12 months145.8 3.9Total$315.9 $6.0The fair value of available-for-sale debt securities, summarized by contractual maturities, as of December 31, 2019 and 2018 are asfollows: 2019 2018 (In Millions)Less than 1 year$40.7 $31.11 year - 5 years142.0 130.55 years - 10 years132.4 111.010 years - 15 years39.8 29.015 years - 20 years49.2 37.120 years+197.4 194.2Total$601.5 $532.9During the years ended December 31, 2019, 2018, and 2017, proceeds from the dispositions of available-for-sale securities amountedto $186 million, $401.7 million, and $231.3 million, respectively. During the years ended December 31, 2019, 2018, and 2017, gross gainsof $4.8 million, $2.1 million, and $12 million, respectively, and gross losses of $0.3 million, $7.5 million, and $0.4 million, respectively,related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.224 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsSystem Energy System Energy holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. Theavailable-for-sale securities held as of December 31, 2019 and 2018 are summarized as follows: Fair Value TotalUnrealizedGains TotalUnrealizedLosses (In Millions)2019 Debt Securities $386.2 $15.1 $0.3 2018 Debt Securities $364.2 $2.9 $5.8The amortized cost of available-for-sale debt securities was $371.4 million as of December 31, 2019 and $367.1 million as ofDecember 31, 2018. As of December 31, 2019, the available-for-sale debt securities have an average coupon rate of approximately 3.12%,an average duration of approximately 6.75 years, and an average maturity of approximately 10.41 years.The unrealized gains/(losses) recognized during the year ended December 31, 2019 on equity securities still held as of December 31,2019 were $140.5 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 4500Index.The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities havebeen in a continuous loss position, are as follows as of December 31, 2019: Fair Value GrossUnrealizedLosses (In Millions)Less than 12 months$56.9 $0.3More than 12 months0.3 —Total$57.2 $0.3The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities havebeen in a continuous loss position, are as follows as of December 31, 2018: Fair Value GrossUnrealizedLosses (In Millions)Less than 12 months$89.7 $2.4More than 12 months79.8 3.4Total$169.5 $5.8225 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe fair value of available-for-sale debt securities, summarized by contractual maturities, as of December 31, 2019 and 2018 are asfollows: 2019 2018 (In Millions)Less than 1 year$8.5 $22.81 year - 5 years154.6 188.05 years - 10 years92.3 73.410 years - 15 years13.4 5.215 years - 20 years14.4 10.220 years+103.0 64.6Total$386.2 $364.2During the years ended December 31, 2019, 2018, and 2017, proceeds from the dispositions of available-for-sale securities amountedto $338.1 million, $361.9 million, and $565.4 million, respectively. During the years ended December 31, 2019, 2018, and 2017, grossgains of $5.4 million, $0.5 million, and $1.4 million, respectively, and gross losses of $0.7 million, $6.1 million, and $3.3 million,respectively, related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.Other-than-temporary impairments and unrealized gains and lossesEntergy evaluates the available-for-sale debt securities in the Entergy Wholesale Commodities’ nuclear decommissioning trust fundswith unrealized losses at the end of each period to determine whether an other-than-temporary impairment has occurred. The assessment ofwhether an investment in a debt security has suffered an other-than-temporary impairment is based on whether Entergy has the intent to sellor more likely than not will be required to sell the debt security before recovery of its amortized costs. Further, if Entergy does not expect torecover the entire amortized cost basis of the debt security, an other-than-temporary impairment is considered to have occurred and it ismeasured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss). Entergy did not have anymaterial other-than-temporary impairments relating to credit losses on debt securities for the years ended December 31, 2019, 2018, and2017. Entergy’s trusts are managed by third parties who operate in accordance with agreements that define investment guidelines and placerestrictions on the purchases and sales of investments.NOTE 17. VARIABLE INTEREST ENTITIES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,Entergy New Orleans, Entergy Texas, and System Energy)Under applicable authoritative accounting guidance, a variable interest entity (VIE) is an entity that conducts a business or holdsproperty that possesses any of the following characteristics: an insufficient amount of equity at risk to finance its activities, equity ownerswho do not have the power to direct the significant activities of the entity (or have voting rights that are disproportionate to their ownershipinterest), or where equity holders do not receive expected losses or returns. An entity may have an interest in a VIE through ownership orother contractual rights or obligations, and is required to consolidate a VIE if it is the VIE’s primary beneficiary. The primary beneficiary of aVIE is the entity that has the power to direct the activities of the VIE that most significantly affect the VIE’s economic performance and hasthe obligation to absorb losses or has the right to residual returns that would potentially be significant to the entity.Entergy Arkansas, Entergy Louisiana, and System Energy consolidate the respective companies from which they lease nuclear fuel,usually in a sale and leaseback transaction. This is because Entergy directs the nuclear fuel companies with respect to nuclear fuel purchases,assists the nuclear fuel companies in obtaining financing, and, if financing cannot be arranged, the lessee (Entergy Arkansas, EntergyLouisiana, or System Energy) is responsible to repurchase nuclear fuel to allow the nuclear fuel company (the VIE) to meet its obligations.During the term of the226 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsarrangements, none of the Entergy operating companies have been required to provide financial support apart from their scheduled leasepayments. See Note 4 to the financial statements for details of the nuclear fuel companies’ credit facility and commercial paper borrowingsand long-term debt that are reported by Entergy, Entergy Arkansas, Entergy Louisiana, and System Energy. These amounts also representEntergy’s and the respective Registrant Subsidiary’s maximum exposure to losses associated with their respective interests in the nuclear fuelcompanies.Entergy Gulf States Reconstruction Funding I, LLC, and Entergy Texas Restoration Funding, LLC, companies wholly-owned andconsolidated by Entergy Texas, are variable interest entities and Entergy Texas is the primary beneficiary. In June 2007, Entergy Gulf StatesReconstruction Funding issued senior secured transition bonds (securitization bonds) to finance Entergy Texas’s Hurricane Ritareconstruction costs. In November 2009, Entergy Texas Restoration Funding issued senior secured transition bonds (securitization bonds) tofinance Entergy Texas’s Hurricane Ike and Hurricane Gustav restoration costs. With the proceeds, the variable interest entities purchasedfrom Entergy Texas the transition property, which is the right to recover from customers through a transition charge amounts sufficient toservice the securitization bonds. The transition property is reflected as a regulatory asset on the consolidated Entergy Texas balance sheet.The creditors of Entergy Texas do not have recourse to the assets or revenues of the variable interest entities, including the transitionproperty, and the creditors of the variable interest entities do not have recourse to the assets or revenues of Entergy Texas. Entergy Texas hasno payment obligations to the variable interest entities except to remit transition charge collections. See Note 5 to the financial statements foradditional details regarding the securitization bonds.Entergy Arkansas Restoration Funding, LLC, a company wholly-owned and consolidated by Entergy Arkansas, is a variable interestentity and Entergy Arkansas is the primary beneficiary. In August 2010, Entergy Arkansas Restoration Funding issued storm cost recoverybonds to finance Entergy Arkansas’s January 2009 ice storm damage restoration costs. With the proceeds, Entergy Arkansas RestorationFunding purchased from Entergy Arkansas the storm recovery property, which is the right to recover from customers through a stormrecovery charge amounts sufficient to service the securitization bonds. The storm recovery property is reflected as a regulatory asset on theconsolidated Entergy Arkansas balance sheet. The creditors of Entergy Arkansas do not have recourse to the assets or revenues of EntergyArkansas Restoration Funding, including the storm recovery property, and the creditors of Entergy Arkansas Restoration Funding do nothave recourse to the assets or revenues of Entergy Arkansas. Entergy Arkansas has no payment obligations to Entergy Arkansas RestorationFunding except to remit storm recovery charge collections. See Note 5 to the financial statements for additional details regarding the stormcost recovery bonds.Entergy Louisiana Investment Recovery Funding I, L.L.C., a company wholly-owned and consolidated by Entergy Louisiana, is avariable interest entity and Entergy Louisiana is the primary beneficiary. In September 2011, Entergy Louisiana Investment RecoveryFunding issued investment recovery bonds to recover Entergy Louisiana’s investment recovery costs associated with the canceled LittleGypsy repowering project. With the proceeds, Entergy Louisiana Investment Recovery Funding purchased from Entergy Louisiana theinvestment recovery property, which is the right to recover from customers through an investment recovery charge amounts sufficient toservice the bonds. The investment recovery property is reflected as a regulatory asset on the consolidated Entergy Louisiana balance sheet. The creditors of Entergy Louisiana do not have recourse to the assets or revenues of Entergy Louisiana Investment Recovery Funding,including the investment recovery property, and the creditors of Entergy Louisiana Investment Recovery Funding do not have recourse to theassets or revenues of Entergy Louisiana. Entergy Louisiana has no payment obligations to Entergy Louisiana Investment Recovery Fundingexcept to remit investment recovery charge collections. See Note 5 to the financial statements for additional details regarding the investmentrecovery bonds.Entergy New Orleans Storm Recovery Funding I, L.L.C., a company wholly-owned and consolidated by Entergy New Orleans, is avariable interest entity, and Entergy New Orleans is the primary beneficiary. In July 2015, Entergy New Orleans Storm Recovery Fundingissued storm cost recovery bonds to recover Entergy New Orleans’s Hurricane Isaac storm restoration costs, including carrying costs, thecosts of funding and replenishing the storm recovery reserve, and up-front financing costs associated with the securitization. With theproceeds, Entergy New Orleans Storm Recovery Funding purchased from Entergy New Orleans the storm recovery property, which is theright to recover from customers through a storm recovery charge amounts sufficient to service the securitization bonds. The227 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsstorm recovery property is reflected as a regulatory asset on the consolidated Entergy New Orleans balance sheet. The creditors of EntergyNew Orleans do not have recourse to the assets or revenues of Entergy New Orleans Storm Recovery Funding, including the storm recoveryproperty, and the creditors of Entergy New Orleans Storm Recovery Funding do not have recourse to the assets or revenues of Entergy NewOrleans. Entergy New Orleans has no payment obligations to Entergy New Orleans Storm Recovery Funding except to remit storm recoverycharge collections. See Note 5 to the financial statements for additional details regarding the securitization bonds.System Energy is considered to hold a variable interest in the lessor from which it leases an undivided interest in the Grand Gulfnuclear plant. System Energy is the lessee under this arrangement, which is described in more detail in Note 10 to the financial statements.System Energy made payments on its lease, including interest, of $17.2 million in 2019, $17.2 million in 2018, and $17.2 million in2017. The lessor is a bank acting in the capacity of owner trustee for the benefit of equity investors in the transaction pursuant to trustagreement entered solely for the purpose of facilitating the lease transaction. It is possible that System Energy may be considered as theprimary beneficiary of the lessor, but it is unable to apply the authoritative accounting guidance with respect to this VIE because the lessor isnot required to, and could not, provide the necessary financial information to consolidate the lessor. Because System Energy accounts forthis leasing arrangement as a capital financing, however, System Energy believes that consolidating the lessor would not materially affect thefinancial statements. In the unlikely event of default under a lease, remedies available to the lessor include payment by the lessee of the fairvalue of the undivided interest in the plant, payment of the present value of the basic rent payments, or payment of a predetermined casualtyvalue. System Energy believes, however, that the obligations recorded on the balance sheet materially represent its potential exposure toloss.Entergy has also reviewed various lease arrangements, power purchase agreements, including agreements for renewable power, andother agreements that represent variable interests in other legal entities which have been determined to be variable interest entities. In thesecases, Entergy has determined that it is not the primary beneficiary of the related VIE because it does not have the power to direct theactivities of the VIE that most significantly affect the VIE’s economic performance, or it does not have the obligation to absorb losses or theright to residual returns that would potentially be significant to the entity, or both. NOTE 18. TRANSACTIONS WITH AFFILIATES (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, Entergy Texas, and System Energy)Each Registrant Subsidiary purchases electricity from or sells electricity to the other Registrant Subsidiaries, or both, under rateschedules filed with the FERC. The Registrant Subsidiaries receive management, technical, advisory, operating, and administrative servicesfrom Entergy Services; and receive management, technical, and operating services from Entergy Operations. These transactions are on an “atcost” basis.As described in Note 1 to the financial statements, all of System Energy’s operating revenues consist of billings to Entergy Arkansas,Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans.As described in Note 4 to the financial statements, the Registrant Subsidiaries participate in Entergy’s money pool and earn interestincome from the money pool. As described in Note 2 to the financial statements, Entergy Louisiana receives preferred membership interestdistributions from Entergy Holdings Company.228 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe tables below contain the various affiliate transactions of the Utility operating companies, System Energy, and other Entergyaffiliates.Intercompany Revenues EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Millions)2019$117.5 $277.8 $1.4 $— $51.6 $584.12018$104.3 $299.0 $2.5 $— $58.8 $456.72017$127.8 $282.4 $1.7 $— $57.9 $633.5Intercompany Operating Expenses EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Millions)2019$534.0 $665.4 $306.7 $292.1 $255.0 $156.22018$471.9 $627.8 $266.8 $256.4 $240.2 $176.52017$510.2 $619.5 $310.5 $286.1 $234.6 $197.0Intercompany Interest and Investment Income EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy (In Millions) 2019$0.4 $128.5 $0.4 $— $0.4 $1.02018$0.4 $128.2 $— $— $0.2 $1.22017$— $128.0 $— $0.2 $— $0.9Transactions with Equity Method InvesteesEWO Marketing, LLC, an indirect wholly-owned subsidiary of Entergy, paid capacity charges and gas transportation to RS Cogen inthe amounts of $24.5 million in 2019, $24 million in 2018, and $24.6 million in 2017.Entergy’s operating transactions with its other equity method investees were not significant in 2019, 2018, or 2017.229 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 19. REVENUE (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,Entergy Texas, and System Energy)Entergy implemented ASU 2014-09, “Revenue from Contracts with Customers (Topic 606),” effective January 1, 2018. Topic 606requires entities to “recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects theconsideration to which the entity expects to be entitled in exchange for those goods or services.” The ASU details a five-step model thatshould be followed to achieve the core principle. This accounting was applied to all contracts using the modified retrospective method, whichrequires an adjustment to retained earnings for the cumulative effect of adopting the standard as of the effective date. Because the standarddid not result in any material change in Entergy’s revenue recognition no adjustment to retained earnings was required upon implementation.Similarly, there was no effect on revenues recognized under Topic 606 for the year ended December 31, 2018.Revenues from electric service and the sale of natural gas are recognized when services are transferred to the customer in an amountequal to what Entergy has the right to bill the customer because this amount represents the value of services provided to customers.Entergy’s total revenues for the years ended December 31, 2019 and 2018 are as follows: 2019 2018 (In Thousands)Utility: Residential $3,531,500 $3,565,522Commercial 2,475,586 2,426,477Industrial 2,541,287 2,499,227Governmental 228,470 225,882 Total billed retail 8,776,843 8,717,108 Sales for resale (a) 285,722 299,567Other electric revenues (b) 343,143 326,910 Revenues from contracts with customers 9,405,708 9,343,585Other revenues (c) 24,270 40,526 Total electric revenues 9,429,978 9,384,111 Natural gas 153,954 156,436 Entergy Wholesale Commodities: Competitive businesses sales from contracts with customers (a) 1,164,552 1,547,994Other revenues (c) 130,189 (79,089) Total competitive businesses revenues 1,294,741 1,468,905 Total operating revenues $10,878,673 $11,009,452230 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsThe Registrant Subsidiaries’ total revenues for the year ended December 31, 2019 were as follows:2019 EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas (In Thousands) Residential $795,269 $1,270,478 $562,219 $245,081 $658,453Commercial 538,850 947,412 444,173 202,138 343,013Industrial 520,958 1,450,966 164,491 31,824 373,048Governmental 20,795 71,046 44,300 70,865 21,464 Total billed retail 1,875,872 3,739,902 1,215,183 549,908 1,395,978Sales for resale (a) 257,864 333,395 39,295 38,626 59,074Other electric revenues (b) 112,618 135,783 58,269 9,842 32,424 Revenues from contracts with customers 2,246,354 4,209,080 1,312,747 598,376 1,487,476Other revenues (c) 13,240 13,947 10,296 (3,959) 1,479 Total electric revenues 2,259,594 4,223,027 1,323,043 594,417 1,488,955Natural gas — 62,148 — 91,806 — Total operating revenues $2,259,594 $4,285,175 $1,323,043 $686,223 $1,488,955 The Registrant Subsidiaries’ total revenues for the year ended December 31, 2018 were as follows:2018 EntergyArkansas EntergyLouisiana EntergyMississippi EntergyNewOrleans EntergyTexas (In Thousands) Residential $807,098 $1,244,413 $578,568 $261,585 $673,858Commercial 425,523 941,321 461,832 217,182 380,619Industrial 434,387 1,462,462 175,056 33,371 393,951Governmental 16,537 68,587 43,747 72,058 24,953 Total billed retail 1,683,545 3,716,783 1,259,203 584,196 1,473,381Sales for resale (a) 248,861 356,603 25,812 29,506 97,478Other electric revenues (b) 111,875 144,978 39,897 4,718 31,413 Revenues from contracts with customers 2,044,281 4,218,364 1,324,912 618,420 1,602,272Other revenues (c) 16,362 14,177 10,200 6,313 3,630 Total electric revenues 2,060,643 4,232,541 1,335,112 624,733 1,605,902Natural gas — 63,779 — 92,657 — Total operating revenues $2,060,643 $4,296,320 $1,335,112 $717,390 $1,605,902(a)Sales for resale and competitive businesses sales include day-ahead sales of energy in a market administered by an ISO. These salesrepresent financially binding commitments for the sale of physical energy the next day. These sales are adjusted to actual powergenerated and delivered in the real time market. Given the short duration of these transactions, Entergy does not consider them to bederivatives subject to fair value adjustments, and includes them as part of customer revenues.231 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statements(b)Other electric revenues consist primarily of transmission and ancillary services provided to participants of an ISO-administeredmarket and unbilled revenue.(c)Other revenues include the settlement of financial hedges, occasional sales of inventory, alternative revenue programs, provisions forrevenue subject to refund, and late fees.Electric RevenuesEntergy’s primary source of revenue is from retail electric sales sold under tariff rates approved by regulators in its variousjurisdictions. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas generate, transmit, anddistribute electric power primarily to retail customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy’s Utility operating companiesprovide power to customers on demand throughout the month, measured by a meter located at the customer’s property. Approved rates varyby customer class due to differing requirements of the customers and market factors involved in fulfilling those requirements. Entergy issuesmonthly bills to customers at rates approved by regulators for power and related services provided during the previous billing cycle.To the extent that deliveries have occurred but a bill has not been issued, Entergy’s Utility operating companies record an estimatefor energy delivered since the latest billings. The Utility operating companies calculate the estimate based upon several factors includingbillings through the last billing cycle in a month, actual generation in the month, historical line loss factors, and market prices of power in therespective jurisdiction. The inputs are revised as needed to approximate actual usage and cost. Each month, estimated unbilled amounts arerecorded as unbilled revenue and accounts receivable, and the prior month’s estimate is reversed. Price and volume differences resulting fromfactors such as weather affect the calculation of unbilled revenues from one period to the other.Entergy may record revenue based on rates that are subject to refund. Such revenues are reduced by estimated refund amounts whenEntergy believes refunds are probable based on the status of rate proceedings as of the date financial statements are prepared. Because theserefunds will be made through a reduction in future rates, and not as a reduction in bills previously issued, they are presented as other revenuesin the table above.System Energy’s only source of revenue is the sale of electric power and capacity generated from its 90% interest in the Grand Gulfnuclear plant to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. System Energy issues monthly bills toits affiliated customers equal to its actual operating costs plus a return on common equity approved by the FERC.Entergy’s Utility operating companies also sell excess power not needed for its own customers, primarily through transactions withMISO, a regional transmission organization that maintains functional control over the combined transmission systems of its members andmanages one of the largest energy markets in the U.S. In the MISO market, Entergy offers its generation and bids its load into the market.MISO settles these offers and bids based on locational marginal prices. These represent pricing for energy at a given location based on amarket clearing price that takes into account physical limitations on the transmission system, generation, and demand throughout the MISOregion. MISO evaluates each market participant’s energy offers and demand bids to economically and reliably dispatch the entire MISOsystem. Entergy nets purchases and sales within the MISO market and reports in operating revenues when in a net selling position and inoperating expenses when in a net purchasing position.Natural GasEntergy Louisiana and Entergy New Orleans also distribute natural gas to retail customers in and around Baton Rouge, Louisiana,and New Orleans, Louisiana, respectively. Gas transferred to customers is measured by a meter at the customer’s property. Entergy issuesmonthly invoices to customers at rates approved by regulators for the volume of gas transferred to date.232 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsCompetitive Businesses RevenuesThe Entergy Wholesale Commodities segment derives almost all of its revenue from sales of electric power and capacity producedby its operating plants to wholesale customers. The majority of Entergy Wholesale Commodities’ revenues are from Entergy’s nuclear powerplants located in the northern United States. Entergy issues monthly invoices to the counterparties for these electric sales at the respectivecontracted or ISO market rate of electricity and related services provided during the previous month.Most of the Palisades nuclear plant output is sold under a 15-year PPA with Consumers Energy, executed as part of the acquisition ofthe plant in 2007 and expiring in 2022. Prices under the PPA range from $43.50/MWh in 2007 to $61.50/MWh in 2022, and the averageprice under the PPA is $51/MWh. Entergy issues monthly invoices to Consumers Energy for electric sales based on the actual output ofelectricity and related services provided during the previous month at the contract price. The PPA was at below-market prices at the time ofthe acquisition and Entergy amortizes a liability to revenue over the life of the agreement. The amount amortized each period is based uponthe present value, calculated at the date of acquisition, of each year’s difference between revenue under the agreement and revenue based onestimated market prices. Amounts amortized to revenue were $10 million in 2019, $6 million in 2018, and $28 million in 2017. Amounts tobe amortized to revenue through the remaining life of the agreement will be approximately $11 million in 2020, $12 million in 2021, and $5million in 2022.Practical Expedients and ExceptionsEntergy has elected not to disclose the value of unsatisfied performance obligations for contracts with an original expected term ofone year or less, or for revenue recognized in an amount equal to what Entergy has the right to bill the customer for services performed.Most of Entergy’s contracts, except in a few cases where there are defined minimums or stated terms, are on demand. This results incustomer bills that vary each month based on an approved tariff and usage. Entergy imposes monthly or annual minimum requirements onsome customers primarily as credit and cost recovery guarantees and not as pricing for unsatisfied performance obligations. These minimumstypically expire after the initial term or when specified costs have been recovered. The minimum amounts are part of each month’s bill andrecognized as revenue accordingly. Some of the subsidiaries within the Entergy Wholesale Commodities segment have operations andmaintenance services contracts that have fixed components and terms longer than one year. The total fixed consideration related to theseunsatisfied performance obligations, however, is not material to Entergy revenues.Recovery of Fuel CostsEntergy’s Utility operating companies’ rate schedules include either fuel adjustment clauses or fixed fuel factors, which allow eithercurrent recovery in billings to customers or deferral of fuel costs until the costs are billed to customers. Where the fuel component ofrevenues is based on a pre-determined fuel cost (fixed fuel factor), the fuel factor remains in effect until changed as part of a general ratecase, fuel reconciliation, or fixed fuel factor filing. System Energy’s operating revenues are intended to recover from Entergy Arkansas,Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans operating expenses and capital costs attributable to Grand Gulf. Thecapital costs are based on System Energy’s common equity funds allocable to its net investment in Grand Gulf, plus System Energy’seffective interest cost for its debt allocable to its investment in Grand Gulf.Taxes Imposed on Revenue-Producing TransactionsGovernmental authorities assess taxes that are both imposed on and concurrent with a specific revenue-producing transactionbetween a seller and a customer, including, but not limited to, sales, use, value added, and some excise taxes. Entergy presents these taxes ona net basis, excluding them from revenues.233 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNOTE 20. QUARTERLY FINANCIAL DATA (UNAUDITED) (Entergy Corporation, Entergy Arkansas, Entergy Louisiana,Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)Operating results for the four quarters of 2019 and 2018 for Entergy Corporation and subsidiaries were: OperatingRevenues OperatingIncome (Loss) Consolidated NetIncome (Loss) Net Income (Loss)Attributable toEntergyCorporation (In Thousands)2019: First Quarter$2,609,584 $283,254 $258,646 $254,537Second Quarter$2,666,209 $338,775 $240,533 $236,424Third Quarter$3,140,575 $519,929 $369,459 $365,240Fourth Quarter$2,462,305 $248,539 $389,606 $385,0252018: First Quarter$2,723,881 $335,664 $136,200 $132,761Second Quarter$2,668,770 $91,597 $248,860 $245,421Third Quarter$3,104,319 $271,035 $539,818 $536,379Fourth Quarter$2,512,482 ($228,931) ($62,323) ($65,900)Earnings (loss) per average common share 2019 2018 Basic Diluted Basic DilutedFirst Quarter$1.34 $1.32 $0.73 $0.73Second Quarter$1.22 $1.22 $1.36 $1.34Third Quarter$1.84 $1.82 $2.96 $2.92Fourth Quarter$1.96 $1.94 ($0.37) ($0.36)Results of operations for 2019 include: 1) a loss of $190 million ($156 million net-of-tax) as a result of the sale of the Pilgrim plant inAugust 2019; 2) a $156 million reduction in income tax expense recognized by Entergy Wholesale Commodities as a result of an internalrestructuring; and 3) impairment charges of $100 million ($79 million net-of-tax) due to costs being charged directly to expense as incurredas a result of the impaired value of the Entergy Wholesale Commodities nuclear plants’ long-lived assets due to the significantly reducedremaining estimated operating lives associated with management’s strategy to exit the Entergy Wholesale Commodities’ merchant powerbusiness. See Note 3 to the financial statements for further discussion of the internal restructuring. See Note 14 to the financial statements forfurther discussion of the sale of the Pilgrim plant. Results of operations for 2018 include: 1) $532 million ($421 million net-of-tax) of impairment charges due to costs being chargeddirectly to expense as incurred as a result of the impaired value of the Entergy Wholesale Commodities nuclear plants’ long-lived assets dueto the significantly reduced remaining estimated operating lives associated with management’s strategy to exit the Entergy WholesaleCommodities’ merchant power business; 2) a $170 million reduction of income tax expense and a regulatory liability of $40 million ($30million net-of-tax) as a result of customer credits recognized by Utility, as a result of an internal restructuring; 3) a $107 million reduction ofincome tax expense, recognized by Entergy Wholesale Commodities, as a result of a restructuring of the investment holdings in one of itsnuclear plant decommissioning trust funds; 4) a $52 million income tax benefit, recognized by Entergy Louisiana, as a result of thesettlement of the 2012-2013 IRS audit, associated with the Hurricane Katrina and Hurricane Rita contingent sharing obligation associatedwith the Louisiana Act 55 financing; and 5) a $23 million234 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial Statementsreduction of income tax expense, recognized by Entergy Wholesale Commodities, as a result of a state income tax audit. See Note 14 to thefinancial statements for further discussion of the impairment and related charges. See Notes 2 and 3 to the financial statements for furtherdiscussion of the internal restructuring and customer credits. See Note 3 to the financial statements for further discussion of the IRS auditsettlement, the state income tax audit, and restructuring of the decommissioning trust fund investment holdings.The business of the Utility operating companies is subject to seasonal fluctuations with the peak periods occurring during the thirdquarter. Operating results for the Registrant Subsidiaries for the four quarters of 2019 and 2018 were:Operating Revenues EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas SystemEnergy (In Thousands)2019: First Quarter$545,812 $959,330 $282,244 $163,194 $340,474 $140,104Second Quarter$542,929 $1,106,317 $302,737 $175,793 $363,580 $139,009Third Quarter$687,526 $1,231,677 $398,732 $194,204 $442,877 $145,472Fourth Quarter$483,327 $987,851 $339,330 $153,032 $342,024 $148,8252018: First Quarter$551,024 $1,029,344 $315,743 $188,275 $348,940 $148,443Second Quarter$494,605 $1,072,788 $353,689 $178,446 $403,486 $112,456Third Quarter$568,399 $1,206,612 $367,734 $200,182 $477,231 $78,965Fourth Quarter$446,615 $987,576 $297,946 $150,487 $376,245 $116,843Operating Income (Loss) EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas SystemEnergy (In Thousands)2019: First Quarter$42,471 $153,944 $30,792 $16,136 $16,741 $31,368Second Quarter$69,774 $241,520 $45,607 $17,509 $36,022 $24,300Third Quarter$182,176 $336,754 $87,024 $28,876 $69,510 $29,086Fourth Quarter$32,576 $164,424 $40,331 $6,164 $24,229 $30,2312018: First Quarter$66,647 $141,319 $41,432 $17,869 $41,082 $30,941Second Quarter$26,501 $150,160 ($63,801) $27,943 $58,637 $23,406Third Quarter$34,785 $236,518 $45,215 $21,544 $99,966 ($17,879)Fourth Quarter($82,704) $147,774 $23,600 $6,836 $6,741 $7,212235 Table of ContentsEntergy Corporation and SubsidiariesNotes to Financial StatementsNet Income EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans Entergy Texas SystemEnergy (In Thousands)2019: First Quarter$39,121 $127,633 $15,398 $9,023 $21,342 $23,578Second Quarter$50,299 $183,084 $26,667 $13,003 $38,936 $24,472Third Quarter$149,716 $255,260 $56,237 $24,908 $73,224 $25,031Fourth Quarter$23,828 $125,560 $21,623 $5,695 $25,895 $26,0392018: First Quarter$36,255 $111,593 $22,843 $10,882 $17,350 $22,308Second Quarter$82,556 $184,358 $38,242 $18,269 $30,789 $23,387Third Quarter$128,890 $218,308 $50,733 $21,407 $65,846 $22,972Fourth Quarter$5,006 $161,355 $14,260 $2,594 $48,250 $25,442Earnings Applicable to Common Equity/Stock EntergyArkansas EntergyMississippi Entergy NewOrleans Entergy Texas (In Thousands)2019: First Quarter$39,121 $15,398 $9,023 $21,342Second Quarter$50,299 $26,667 $13,003 $38,936Third Quarter$149,716 $56,237 $24,908 $73,114Fourth Quarter$23,828 $21,623 $5,695 $25,4252018: First Quarter$35,898 $22,605 $10,882 $17,350Second Quarter$82,199 $38,003 $18,269 $30,789Third Quarter$128,533 $50,495 $21,407 $65,846Fourth Quarter$4,828 $14,141 $2,594 $48,250236 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyENTERGY’S BUSINESSEntergy is an integrated energy company engaged primarily in electric power production and retail distribution operations. Entergyowns and operates power plants with approximately 30,000 MW of electric generating capacity, including approximately 9,000 MW ofnuclear power. Entergy delivers electricity to 2.9 million utility customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy hadannual revenues of $10.9 billion in 2019 and had more than 13,000 employees as of December 31, 2019.Entergy operates primarily through two business segments: Utility and Entergy Wholesale Commodities.•The Utility business segment includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas,Mississippi, Texas, and Louisiana, including the City of New Orleans; and operation of a small natural gas distribution business.•The Entergy Wholesale Commodities business segment includes the ownership, operation, and decommissioning of nuclear powerplants located in the northern United States and the sale of the electric power produced by its operating plants to wholesalecustomers. Entergy Wholesale Commodities also provides services to other nuclear power plant owners and owns interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers. See “MANAGEMENT’SFINANCIAL DISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business”for discussion of the operation and planned shutdown and sale of each of the Entergy Wholesale Commodities nuclear power plants.See Note 13 to the financial statements for financial information regarding Entergy’s business segments.StrategyEntergy’s strategy is to operate and grow a world-class utility business that creates sustainable value for its customers, employees,communities, and owners. Entergy’s current scope includes electricity generation, transmission, and distribution as well as natural gasdistribution. Entergy focuses on operational excellence with an emphasis on safety, reliability, customer service, sustainability, costefficiency, risk management, and engaged employees. Entergy also continually seeks opportunities to grow its utility business to benefit allstakeholders and to optimize its portfolio of assets in an ever-dynamic market. The Utility business segment will continue to modernize itsoperations, maintain reliability, and better serve its customers while growing the business. The Entergy Wholesale Commodities businesssegment will continue to manage the risk of its operating portfolio as Entergy completes its exit from the merchant power business.UtilityThe Utility business segment includes five retail electric utility subsidiaries: Entergy Arkansas, Entergy Louisiana, EntergyMississippi, Entergy New Orleans, and Entergy Texas. These companies generate, transmit, distribute, and sell electric power to retail andwholesale customers in Arkansas, Louisiana, Mississippi, and Texas. Entergy Louisiana and Entergy New Orleans also provide natural gasutility services to customers in and around Baton Rouge, Louisiana, and New Orleans, Louisiana, respectively. Also included in the Utility isSystem Energy, a wholly-owned subsidiary of Entergy Corporation that owns or leases 90 percent of Grand Gulf. System Energy sells itspower and capacity from Grand Gulf at wholesale to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy NewOrleans. The five retail utility subsidiaries are each regulated by the FERC and by state utility commissions, or, in the case of Entergy NewOrleans, the City Council. System Energy is regulated by the FERC because all of its transactions are at wholesale. The overall generationportfolio of the Utility, which relies heavily on natural gas and nuclear generation, is consistent with Entergy’s strong support for theenvironment.237 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyCustomersAs of December 31, 2019, the Utility operating companies provided retail electric and gas service to customers in Arkansas,Louisiana, Mississippi, and Texas, as follows: Electric Customers Gas Customers Area Served (In Thousands) (%) (In Thousands) (%)Entergy ArkansasPortions of Arkansas 715 25% Entergy LouisianaPortions of Louisiana 1,091 37% 94 47%Entergy MississippiPortions of Mississippi 451 15% Entergy New OrleansCity of New Orleans 205 7% 108 53%Entergy TexasPortions of Texas 461 16% Total customers 2,923 100% 202 100%Electric Energy SalesThe electric energy sales of the Utility operating companies are subject to seasonal fluctuations, with the peak sales period normallyoccurring during the third quarter of each year. On August 12, 2019, Entergy reached a 2019 peak demand of 21,598 MWh, compared to the2018 peak of 21,587 MWh recorded on July 20, 2018. Selected electric energy sales data is shown in the table below:Selected 2019 Electric Energy Sales Data EntergyArkansas EntergyLouisiana EntergyMississippi Entergy NewOrleans EntergyTexas SystemEnergy Entergy (a) (In GWh)Sales to retail customers21,818 56,027 13,236 5,821 19,008 — 115,911Sales for resale: Affiliates2,180 4,813 — — 1,472 9,940 —Others7,206 1,924 1,776 1,961 343 — 13,210Total31,204 62,764 15,012 7,782 20,823 9,940 129,121Average use per residential customer(kWh)13,432 14,941 15,005 12,761 14,956 — 14,433(a)Includes the effect of intercompany eliminations.The following table illustrates the Utility operating companies’ 2019 combined electric sales volume as a percentage of total electricsales volume, and 2019 combined electric revenues as a percentage of total 2019 electric revenue, each by customer class.Customer Class % of Sales Volume % of RevenueResidential 28.0 37.4Commercial 22.3 26.3Industrial (a) 37.5 27.0Governmental 2.0 2.4Wholesale/Other 10.2 6.9(a)Major industrial customers are primarily in the petroleum refining and chemical industries.238 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergySee “Selected Financial Data” for each of the Utility operating companies for the detail of their sales by customer class for 2015-2019.Selected 2019 Natural Gas Sales DataEntergy New Orleans and Entergy Louisiana provide both electric power and natural gas to retail customers. Entergy New Orleansand Entergy Louisiana sold 11,099,812 and 7,090,878 Mcf, respectively, of natural gas to retail customers in 2019. In 2019, 99% of EntergyLouisiana’s operating revenue was derived from the electric utility business, and only 1% from the natural gas distribution business. ForEntergy New Orleans, 87% of operating revenue was derived from the electric utility business and 13% from the natural gas distributionbusiness in 2019. Following is data concerning Entergy New Orleans’s 2019 retail operating revenue sources.Customer Class Electric Operating Revenue Natural Gas OperatingRevenueResidential 44% 48%Commercial 37% 27%Industrial 6% 6%Governmental/Municipal 13% 19%Retail Rate RegulationGeneral (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas)Each Utility operating company regularly participates in retail rate proceedings. The status of material retail rate proceedings isdescribed in Note 2 to the financial statements. Certain aspects of the Utility operating companies’ retail rate mechanisms are discussedbelow.239 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energy Rate base (inbillions) Currentauthorizedreturn oncommon equity Weightedaverage costof capital(after-tax) Equityratio Regulatory construct Entergy Arkansas $8.0 (a) 9.25% - 10.25% 5.20% 36.49% - forward test year formula rate plan- riders: MISO, capacity, Grand Gulf, tax adjustment, energy efficiency, fuel and purchased power EntergyLouisiana(electric) $10.4 (b) 9.2% - 10.4% 6.98% 48.64% - formula rate plan through 2019 test year- riders/specific recovery: MISO, capacity, transmission, fuel EntergyLouisiana (gas) $0.07 (c) 9.45% - 10.45% 7.04% 48.26% - gas rate stabilization plan- rider: gas infrastructure EntergyMississippi $2.6 (d) 9.33% - 11.35% 7.24% 49.67% - formula rate plan with forward-looking features- riders: power management, Grand Gulf, fuel, MISO, unit power cost, storm damage, energy efficiency, ad valorem tax adjustment, vegetation, grid modernization, restructuring credit Entergy NewOrleans (electric) $0.8 (e) 9.35% 7.09% 50% - formula rate plan with forward-lookingfeatures- specific recovery: fuel Entergy NewOrleans (gas) $0.1 (e) 9.35% 7.09% 50% - formula rate plan with forward-lookingfeatures- rider: purchased gas Entergy Texas $2.4 (f) 9.65% 7.73% 50.9% - rate case- riders: fuel, distribution and transmission, rate case expenses, AMI surcharge, tax reform, among others System Energy $1.4 (g) 10.94% (h) 8.50% 65% (h) - monthly cost of service (a)Based on 2020 test year.(b)Based on December 31, 2018 test year and excludes approximately $800 million for the St. Charles Power Station, included incapacity rider, and $300 million of transmission plant, included in transmission rider.(c)Based on September 30, 2018 test year.(d)Based on 2019 forward test year.(e)Based on December 31, 2018 test year and known and measurables through December 31, 2019. 240 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energy(f)Based on December 31, 2017 test year.(g)Based on calculation as of December 31, 2019.(h)See Note 2 to the financial statements for discussion of ongoing proceedings at the FERC challenging System Energy’s authorizedreturn on common equity and capital structure.Entergy ArkansasFuel and Purchased Power Cost RecoveryEntergy Arkansas’s rate schedules include an energy cost recovery rider to recover fuel and purchased power costs in monthlybills. The rider utilizes prior calendar year energy costs and projected energy sales for the twelve-month period commencing on April 1 ofeach year to develop an energy cost rate, which is redetermined annually and includes a true-up adjustment reflecting the over-recovery orunder-recovery, including carrying charges, of the energy cost for the prior calendar year. The energy cost recovery rider tariff also allowsan interim rate request depending upon the level of over- or under-recovery of fuel and purchased energy costs. In December 2007 the APSCissued an order stating that Entergy Arkansas’s energy cost recovery rider will remain in effect, and any future termination of the rider wouldbe subject to eighteen months advance notice by the APSC, which would occur following notice and hearing.Entergy LouisianaFuel RecoveryEntergy Louisiana’s rate schedules include a fuel adjustment clause designed to recover the cost of fuel and purchased powercosts. The fuel adjustment clause contains a surcharge or credit for deferred fuel expense and related carrying charges arising from themonthly reconciliation of actual fuel costs incurred with fuel cost revenues billed to customers, including carrying charges. See Note 2 to thefinancial statements for a discussion of proceedings related to audits of Entergy Louisiana’s fuel adjustment clause filings.To help stabilize electricity costs, Entergy Louisiana received approval from the LPSC to hedge its exposure to natural gas pricevolatility through the use of financial instruments. Entergy Louisiana hedges approximately one-third of the projected exposure to natural gasprice changes for the gas used to serve its native electric load for all months of the year. The hedge quantity is reviewed on an annual basis.In January 2018, Entergy Louisiana filed an application with the LPSC to suspend these seasonal hedging programs and implement financialhedges with terms up to five years for a portion of its natural gas exposure, which was approved in November 2018.Entergy Louisiana’s gas rates include a purchased gas adjustment clause based on estimated gas costs for the billing month adjustedby a surcharge or credit that arises from an annual reconciliation of fuel costs incurred with fuel cost revenues billed to customers, includingcarrying charges.Retail Rates - GasIn accordance with the settlement of Entergy Gulf States Louisiana’s gas rate stabilization plan for the test year ended September 30,2012, in August 2014, Entergy Gulf States Louisiana submitted for consideration a proposal for implementation of an infrastructure rider torecover expenditures associated with strategic plant investment and relocation projects mandated by local governments. After review by theLPSC staff and inclusion of certain customer safeguards required by the LPSC staff, in December 2014, Entergy Gulf States Louisiana andthe LPSC staff submitted a joint settlement for implementation of an accelerated gas pipe replacement program providing for the replacementof approximately 100 miles of pipe over the next ten years, as well as relocation of certain existing pipe resulting from local government-related infrastructure projects, and for a rider to recover the investment associated with these projects. The rider allows for recovery ofapproximately $65 million over ten years. The rider recovery will be adjusted on a quarterly basis to include actual investment incurred forthe prior quarter and is subject to the following conditions,241 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energyamong others: a ten-year term; application of any earnings in excess of the upper end of the earnings band as an offset to the revenuerequirement of the infrastructure rider; adherence to a specified spending plan, within plus or minus 20% annually; annual filings comparingactual versus planned rider spending with actual spending and explanation of variances exceeding 10%; and an annual true-up. The jointsettlement was approved by the LPSC in January 2015. Implementation of the infrastructure rider commenced with bills rendered on andafter the first billing cycle of April 2015.Storm Cost RecoverySee Note 2 to the financial statements for a discussion of Entergy Louisiana’s filings to recover storm-related costs.OtherIn March 2016 the LPSC opened two dockets to examine, on a generic basis, issues that it identified in connection with its review ofCleco Corporation’s acquisition by third party investors. The first docket is captioned “In re: Investigation of double leveraging issues forall LPSC-jurisdictional utilities,” and the second is captioned “In re: Investigation of tax structure issues for all LPSC-jurisdictionalutilities.” In April 2016 the LPSC clarified that the concerns giving rise to the two dockets arose as a result of its review of the structure ofthe Cleco-Macquarie transaction and that the specific intent of the directives is to seek more information regarding intra-corporate debtfinancing of a utility’s capital structure as well as the use of investment tax credits to mitigate the tax obligation at the parent level of aconsolidated entity. No schedule has been set for either docket, and limited discovery has occurred.In December 2019 an LPSC commissioner issued an unopposed directive to staff to research customer-centered options for allcustomer classes, as well as other regulatory environments, and recommend a plan for how to ensure customers are the focus. There was noopposition to the directive from other commissioners but several remarked that the intent of the directive was not initiated to pursue retailopen access. In furtherance of the directive, the LPSC issued a notice of the opening of a docket to conduct a rulemaking to research andevaluate customer-centered options for all electric customer classes as well as other regulatory environments in January 2020.Entergy MississippiFuel RecoveryEntergy Mississippi’s rate schedules include energy cost recovery riders to recover fuel and purchased power costs. The energy costrate for each calendar year is redetermined annually and includes a true-up adjustment reflecting the over-recovery or under-recovery of theenergy costs as of the 12-month period ended September 30. Entergy Mississippi’s fuel cost recoveries are subject to annual auditsconducted pursuant to the authority of the MPSC. To help stabilize electricity costs, Entergy Mississippi received approval from the MPSC to hedge its exposure to natural gas pricevolatility through the use of financial instruments. Entergy Mississippi hedges approximately one-third of the projected exposure to naturalgas price changes for the gas used to serve its native electric load for all months of the year. The hedge quantity is reviewed on an annualbasis.Storm Cost RecoverySee Note 2 to the financial statements for a discussion of proceedings regarding recovery of Entergy Mississippi’s storm-relatedcosts.242 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyFormula Rate PlanIn August 2012 the MPSC opened inquiries to review whether the current formulaic methodology used to calculate the return oncommon equity in both Entergy Mississippi’s formula rate plan and Mississippi Power Company’s annual formula rate plan was stillappropriate or could be improved to better serve the public interest. The intent of this inquiry and review was for informational purposesonly; the evaluation of any recommendations for changes to the existing methodology would take place in a general rate case or in theexisting formula rate plan proceeding. In March 2013 the Mississippi Public Utilities Staff filed its consultant’s report which noted the returnon common equity estimation methods used by Entergy Mississippi and Mississippi Power Company are commonly used throughout theelectric utility industry. The report suggested ways in which the methods used by Entergy Mississippi and Mississippi Power Companymight be improved, but did not recommend specific changes in the return on common equity formulas or calculations at that time. In June2014 the MPSC expanded the scope of the August 2012 inquiry to study the merits of adopting a uniform formula rate plan that could beapplied, where possible in whole or in part, to both Entergy Mississippi and Mississippi Power Company in order to achieve greaterconsistency in the plans. The MPSC directed the Mississippi Public Utilities Staff to investigate and review Entergy Mississippi’s formularate plan rider schedule and Mississippi Power Company’s Performance Evaluation Plan by considering the merits and deficiencies andpossibilities for improvement of each and then to propose a uniform formula rate plan that, where possible, could be applicable to bothcompanies. No procedural schedule has been set. In October 2014 the Mississippi Public Utilities Staff conducted a public technicalconference to discuss performance benchmarking and its potential application to the electric utilities’ formula rate plans. The docket remainsopen.Entergy New OrleansFuel RecoveryEntergy New Orleans’s electric rate schedules include a fuel adjustment tariff designed to reflect no more than targeted fuel andpurchased power costs, adjusted by a surcharge or credit for deferred fuel expense arising from the monthly reconciliation of actual fuel andpurchased power costs incurred with fuel cost revenues billed to customers, including carrying charges.Entergy New Orleans’s gas rate schedules include a purchased gas adjustment to reflect estimated gas costs for the billing month,adjusted by a surcharge or credit similar to that included in the electric fuel adjustment clause, including carrying charges. To help stabilize gas costs, Entergy New Orleans seeks approval annually from the City Council to continue implementation of itsnatural gas hedging program consistent with the City Council’s stated policy objectives. The program uses financial instruments to hedgeexposure to volatility in the wholesale price of natural gas purchased to serve Entergy New Orleans gas customers. Entergy New Orleanshedges up to 25% of actual gas sales made during the winter months.Storm Cost RecoverySee Note 2 to the financial statements for a discussion of Entergy New Orleans’s efforts to recover storm-related costs.Entergy TexasFuel RecoveryEntergy Texas’s rate schedules include a fixed fuel factor to recover fuel and purchased power costs, including interest, that are notincluded in base rates. Semi-annual revisions of the fixed fuel factor are made in March and September based on the market price of naturalgas and changes in fuel mix. The amounts collected under Entergy243 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyTexas’s fixed fuel factor and any interim surcharge or refund are subject to fuel reconciliation proceedings before the PUCT. The PUCT fuelcost proceedings are discussed in Note 2 to the financial statements.At the PUCT’s April 2013 open meeting, the PUCT Commissioners discussed their view that a purchased power capacity rider wasgood public policy. The PUCT issued an order in May 2013 adopting the rule allowing for a purchased power capacity rider, subject to anoffsetting adjustment for load growth. The rule, as adopted, also includes a process for obtaining pre-approval by the PUCT of purchasedpower agreements. Entergy Texas has not exercised the option to recover its capacity costs under the new rider mechanism, but will continueto evaluate the benefits of utilizing the new rider to recover future capacity costs.Electric Industry RestructuringIn June 2009, a law was enacted in Texas that required Entergy Texas to cease all activities relating to Entergy Texas’s transition tocompetition. The law allows Entergy Texas to remain a part of the SERC Reliability Corporation (SERC) Region, although it does notprevent Entergy Texas from joining another power region. The law provides that proceedings to certify a power region that Entergy Texasbelongs to as a qualified power region can be initiated by the PUCT, or on motion by another party, when the conditions supporting such aproceeding exist. Under the law, the PUCT may not approve a transition to competition plan for Entergy Texas until the expiration of fouryears from the PUCT’s certification of Entergy Texas’s power region.The law also contains provisions that allow Entergy Texas to take advantage of a cost recovery mechanism that permits annual filingsfor the recovery of reasonable and necessary expenditures for transmission infrastructure improvement and changes in wholesaletransmission charges. This mechanism was previously available to other non-ERCOT Texas utility companies, but not to Entergy Texas.The law further amended already existing law that had required Entergy Texas to propose for PUCT approval a tariff to allow eligiblecustomers the ability to contract for competitive generation. The amending language in the law provides, among other things, that: 1) thetariff shall not be implemented in a manner that harms the sustainability or competitiveness of manufacturers who choose not to participate inthe tariff; 2) Entergy Texas shall “purchase competitive generation service, selected by the customer, and provide the generation at retail tothe customer;” and 3) Entergy Texas shall provide and price transmission service and ancillary services under that tariff at a rate that isunbundled from its cost of service. The law directs that the PUCT may not issue an order on the tariff that is contrary to an applicabledecision, rule, or policy statement of a federal regulatory agency having jurisdiction.The PUCT determined that unrecovered costs that may be recovered through the rider consist only of those costs necessary toimplement and administer the competitive generation program and do not include lost revenues or embedded generation costs. The amountof customer load that may be included in the competitive generation service program is limited to 115 MW. In September 2011 the PUCT adopted a proposed rule implementing a distribution cost recovery factor to recover capital and capital-related costs related to distribution infrastructure. The distribution cost recovery factor permits utilities once per year to implement anincrease or decrease in rates above or below amounts reflected in base rates to reflect depreciation expense, federal income tax and othertaxes, and return on investment. The distribution cost recovery factor rider may be changed a maximum of four times between base ratecases.In September 2019 the PUCT initiated a rulemaking to promulgate a generation cost recovery factor rule, implementing legislationpassed in the 2019 Texas legislative session intended to allow electric utilities to recover generation investments between base rateproceedings. The draft rule was approved for publication at the PUCT’s February 2020 open meeting, and two rounds of public commentwill be taken in March and April 2020. The PUCT is expected to approve a final rule within six months of publication.244 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyFranchisesEntergy Arkansas holds exclusive franchises to provide electric service in approximately 308 incorporated cities and towns inArkansas. These franchises are unlimited in duration and continue unless the municipalities purchase the utility property. In Arkansasfranchises are considered to be contracts and, therefore, are terminable pursuant to the terms of the franchise agreement and applicablestatutes.Entergy Louisiana holds non-exclusive franchises to provide electric service in approximately 175 incorporated municipalities and inthe unincorporated areas of approximately 59 parishes of Louisiana. Entergy Louisiana holds non-exclusive franchises to provide natural gasservice to customers in the City of Baton Rouge and in East Baton Rouge Parish. Municipal franchise agreement terms range from 25 to 60years while parish franchise terms range from 25 to 99 years.Entergy Mississippi has received from the MPSC certificates of public convenience and necessity to provide electric service to areaswithin 45 counties, including a number of municipalities, in western Mississippi. Under Mississippi statutory law, such certificates areexclusive. Entergy Mississippi may continue to serve in such municipalities upon payment of a statutory franchise fee, regardless of whetheran original municipal franchise is still in existence.Entergy New Orleans provides electric and gas service in the City of New Orleans pursuant to indeterminate permits set forth in cityordinances. These ordinances contain a continuing option for the City of New Orleans to purchase Entergy New Orleans’s electric and gasutility properties.Entergy Texas holds a certificate of convenience and necessity from the PUCT to provide electric service to areas withinapproximately 27 counties in eastern Texas, and holds non-exclusive franchises to provide electric service in approximately 68 incorporatedmunicipalities. Entergy Texas typically obtains 25-year franchise agreements as existing agreements expire. Entergy Texas’s electricfranchises expire over the period 2020-2058.The business of System Energy is limited to wholesale power sales. It has no distribution franchises.Property and Other Generation ResourcesOwned Generating StationsThe total capability of the generating stations owned and leased by the Utility operating companies and System Energy as ofDecember 31, 2019, is indicated below: Owned and Leased Capability MW(a)Company Total Gas/Oil Nuclear Coal Hydro SolarEntergy Arkansas 5,183 2,106 1,810 1,194 73 —Entergy Louisiana 10,050 7,556 2,144 350 — —Entergy Mississippi 3,342 2,923 — 417 — 2Entergy New Orleans 508 507 — — — 1Entergy Texas 2,293 2,034 — 259 — —System Energy 1,393 — 1,393 — — —Total 22,769 15,126 5,347 2,220 73 3(a)“Owned and Leased Capability” is the dependable load carrying capability as demonstrated under actual operating conditions basedon the primary fuel (assuming no curtailments) that each station was designed to utilize.245 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergySummer peak load for the Utility has averaged 21,636 MW over the previous decade. The Utility operating companies’ load and capacity projections are reviewed periodically to assess the need and timing for additionalgenerating capacity and interconnections. These reviews consider existing and projected demand, the availability and price of power, thelocation of new load, the economy, environmental regulations, public policy goals, and the age and condition of Entergy’s existinginfrastructure.The Utility operating companies’ long-term resource strategy (Portfolio Transformation Strategy) calls for the bulk of capacity needsto be met through long-term resources, whether owned or contracted. Over the past decade, the Portfolio Transformation Strategy hasresulted in the addition of about 7,314 MW of new long-term resources and the deactivation of over 4,465 MW of legacy generation. AsMISO market participants, the Utility operating companies also participate in MISO’s Day Ahead and Real Time Energy and AncillaryServices markets to economically dispatch generation and purchase energy to serve customers reliably and at the lowest reasonable cost.Other Generation ResourcesRFP ProcurementsThe Utility operating companies from time to time issue requests for proposals (RFP) to procure supply-side resources from sourcesother than the spot market to meet the unique regional needs of the Utility operating companies. The RFPs issued by the Utility operatingcompanies have sought resources needed to meet near-term MISO reliability requirements as well as longer-term requirements through abroad range of wholesale power products, including limited-term (1 to 3 years) and long-term contractual products and asset acquisitions. TheRFP process has resulted in selections or acquisitions, including, among other things:•Entergy Louisiana’s June 2005 purchase of the 718 MW, gas-fired Perryville plant, of which 35% of the output is sold to EntergyTexas;•Entergy Arkansas’s September 2008 purchase of the 789 MW, combined-cycle, gas-fired Ouachita Generating Facility. EntergyLouisiana, as successor in interest to Entergy Gulf States Louisiana, owns one-third of the facility;•Entergy Arkansas’s November 2012 purchase of the 620 MW, combined-cycle, gas-fired Hot Spring Energy facility;•Entergy Mississippi’s November 2012 purchase of the 450 MW, combined-cycle, gas-fired Hinds Energy facility;•Entergy Louisiana’s construction of the 560 MW, combined-cycle, gas turbine Ninemile 6 generating facility at its existing NinemilePoint electric generating station. The facility began commercial operation in December 2014;•Entergy Louisiana’s construction of the 980 MW, combined-cycle, gas turbine St. Charles generating facility at its existing LittleGypsy electric generating station. The facility began commercial operation in May 2019;•Entergy Texas’s construction of the 993 MW, combined-cycle, gas turbine Montgomery County generating facility at its existingLewis Creek electric generating station. Entergy Texas received regulatory approval from the PUCT in July 2017 and the facility isscheduled to be in service by mid-2021;•Entergy Louisiana’s construction of the 994 MW, combined-cycle, gas turbine Lake Charles generating facility at its existing Nelsonelectric generating station. Entergy Louisiana received regulatory approval from the LPSC in July 2017 and the facility is scheduledto be in service by mid-2020;•In October 2018, Entergy Mississippi signed an asset acquisition agreement for the purchase of an approximately 100 MW to-be-constructed solar photovoltaic facility located in Sunflower County, Mississippi. In December 2018, Entergy Mississippi filed forregulatory approval. A hearing before the MPSC is targeted to occur by the second quarter 2020, and closing is expected to occur bythe end of 2021;•In March 2019, Entergy Arkansas signed an agreement for the purchase of an approximately 100 MW to-be- constructed solar energyfacility that will be sited on approximately 800 acres in White County near Searcy, Arkansas. In May 2019, Entergy Arkansas filed apetition with the APSC seeking a finding that the transaction246 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energyis in the public interest and requesting all necessary approvals. Closing is expected to occur by the end of 2021; and•Entergy New Orleans’s construction of the 20 MW, self-build solar project New Orleans Solar Station located at the NASA MichoudFacility. In August 2019, Entergy New Orleans received regulatory approval and the facility is scheduled to be in service as early aslate-2020.The RFP process has also resulted in the selection, or confirmation of the economic merits of, long-term purchased power agreements(PPAs), including, among others:•River Bend 30% life-of-unit PPA between Entergy Louisiana and Entergy New Orleans for 100 MW related to Entergy Louisiana’sunregulated portion of the River Bend nuclear station, which portion was formerly owned by Cajun;•Entergy Arkansas wholesale base load capacity life-of-unit PPAs executed in 2003 totaling approximately 220 MW between EntergyArkansas and Entergy Louisiana (110 MW) and between Entergy Arkansas and Entergy New Orleans (110 MW) related to the sale ofa portion of Entergy Arkansas’s coal and nuclear base load resources (which had not been included in Entergy Arkansas’s retailrates);•In December 2009, Entergy Texas and Exelon Generation Company, LLC executed a 10-year agreement for 150-300 MW from theFrontier Generating Station located in Grimes County, Texas;•In May 2011, Entergy Texas and Calpine Energy Services, L.P. executed a 10-year agreement for 485 MW from the Carville EnergyCenter located in St. Gabriel, Louisiana. Entergy Louisiana purchases 50% of the facility’s capacity and energy from Entergy Texas.In July 2014, LS Power purchased the Carville Energy Center and replaced Calpine Energy Services as the counterparty to theagreement;•In September 2012, Entergy Gulf States Louisiana executed a 20-year agreement for 28 MW, with the potential to purchase anadditional 9 MW when available, from Rain CII Carbon LLC’s petroleum coke calcining facility in Sulphur, Louisiana. The facilitybegan commercial operation in May 2013. Entergy Louisiana, as successor in interest to Entergy Gulf States Louisiana, now holdsthe agreement with the facility;•In March 2013, Entergy Gulf States Louisiana executed a 20-year agreement for 8.5 MW from Agrilectric Power Partners, LP’srefurbished rice hull-fueled electric generation facility located in Lake Charles, Louisiana. Entergy Louisiana, as successor in interestto Entergy Gulf States Louisiana, now holds the agreement with Agrilectric;•In September 2013, Entergy Louisiana executed a 10-year agreement with TX LFG Energy, LP, a wholly-owned subsidiary ofMontauk Energy Holdings, LLC, to purchase approximately 3 MW from its landfill gas-fueled power generation facility located inCleveland, Texas;•Entergy Mississippi’s cost-based purchase, beginning in January 2013, of 90 MW from Entergy Arkansas’s share of Grand Gulf(only 60 MW of this PPA came through the RFP process). Cost recovery for the 90 MW was approved by the MPSC in January2013;•In April 2015, Entergy Arkansas and Stuttgart Solar, LLC executed a 20-year agreement for 81 MW from a solar photovoltaicelectric generation facility located near Stuttgart, Arkansas. The APSC approved the project and deliveries pursuant to that agreementcommenced in June 2018;•In November 2016, Entergy Louisiana and LS Power executed a 10-year agreement for 485 MW from the Carville Energy Centerlocated in St. Gabriel, Louisiana. The transaction received regulatory approval and will begin in June 2022;•In November 2016, Entergy Louisiana and Occidental Chemical Corporation executed a 10-year agreement for 500 MW from theTaft Cogeneration facility located in Hahnville, Louisiana. The transaction received regulatory approval and began in June 2018;•In June 2017, Entergy Arkansas and Chicot Solar, LLC executed a 20-year agreement for 100 MW from a solar photovoltaic electricgenerating facility located in Chicot County, Arkansas. The transaction received regulatory approval and will begin in August 2020;•In February 2018, Entergy Louisiana and LA3 West Baton Rouge, LLC (Capital Region Solar project) executed a 20-year agreementfor 50 MW from a solar photovoltaic electric generating facility located in West Baton Rouge Parish, Louisiana. The transactionreceived regulatory approval in February 2019 and the agreement is expected to begin in second quarter 2020;247 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energy•In July 2018, Entergy New Orleans and St. James Solar, LLC executed a 20-year agreement for 20 MW from a solar photovoltaicelectric generating facility located in St. James Parish, Louisiana. The transaction received regulatory approval in July 2019; and•In February 2019, Entergy New Orleans and Iris Solar, LLC executed a 20-year agreement for 50 MW from a solar photovoltaicelectric generating facility located in Washington Parish, Louisiana. The transaction received regulatory approval in July 2019.Other Procurements From Third PartiesThe Utility operating companies have also made resource acquisitions outside of the RFP process, including Entergy Mississippi’sJanuary 2006 acquisition of the 480 MW, combined-cycle, gas-fired Attala power plant; Entergy Gulf States Louisiana’s March 2008acquisition of the 322 MW, simple-cycle, gas-fired Calcasieu Generating Facility; Entergy Louisiana’s April 2011 acquisition of the 580MW, combined-cycle, gas-fired Acadia Energy Center Unit 2; Entergy Arkansas’s (Power Block 2), Entergy Louisiana’s (Power Blocks 3and 4), and Entergy New Orleans’s (Power Block 1) March 2016 acquisitions of the 1,980 MW (summer rating), natural gas-fired,combined-cycle gas turbine Union Power Station power blocks, each rated at 495 MW (summer rating); and Entergy Mississippi’s October2019 acquisition of the 810 MW, combined-cycle, natural gas-fired Choctaw Generating Station. The Utility operating companies have alsoentered into various limited- and long-term contracts in recent years as a result of bilateral negotiations.The Washington Parish Energy Center is a 361 MW natural gas-fired peaking power plant under construction approximately 60 milesnorth of New Orleans on a site Entergy Louisiana purchased from Calpine in 2019. In May 2018, Entergy Louisiana received LPSC approvalof its certification application for this simple-cycle power plant to be developed pursuant to an agreement between Calpine and EntergyLouisiana. Calpine began construction on the plant in early 2019 and Entergy Louisiana will purchase the plant upon completion, anticipatedto be later in 2020, for a fixed payment to reimburse construction costs plus an associated premium.InterconnectionsThe Utility operating companies’ generating units are interconnected by a transmission system operating at various voltages up to500 kV. These generating units consist primarily of steam-electric production facilities and are provided dispatch instructions by MISO.Entergy’s Utility operating companies are MISO market participants and are interconnected with many neighboring utilities. MISO is anessential link in the safe, cost-effective delivery of electric power across all or parts of 15 U.S. states and the Canadian province of Manitoba.As a Regional Transmission Organization, MISO assures consumers of unbiased regional grid management and open access to thetransmission facilities under MISO’s functional supervision. In addition, the Utility operating companies are members of SERC. SERC is anonprofit corporation responsible for promoting and improving the reliability, adequacy, and critical infrastructure of the bulk power supplysystems in all or portions of 16 central and southeastern states. SERC serves as a regional entity with delegated authority from the NorthAmerican Electric Reliability Corporation (NERC) for the purpose of proposing and enforcing reliability standards within the SERC Region.Gas PropertyAs of December 31, 2019, Entergy New Orleans distributed and transported natural gas for distribution within New Orleans,Louisiana, through approximately 2,600 miles of gas pipeline. As of December 31, 2019, the gas properties of Entergy Louisiana, which arelocated in and around Baton Rouge, Louisiana, were not material to Entergy Louisiana’s financial position.TitleThe Utility operating companies’ generating stations are generally located on properties owned in fee simple. Most of thesubstations and transmission and distribution lines are constructed on private property or public248 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energyrights-of-way pursuant to easements, servitudes, or appropriate franchises. Some substation properties are owned in fee simple. The Utilityoperating companies generally have the right of eminent domain, whereby they may perfect title to, or secure easements or servitudes on,private property for their utility operations.Substantially all of the physical properties and assets owned by Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, EntergyNew Orleans, Entergy Texas, and System Energy are subject to the liens of mortgages securing bonds issued by those companies. The LewisCreek generating station of Entergy Texas was acquired by merger with a subsidiary of Entergy Texas and is currently not subject to the lienof the Entergy Texas indenture.Fuel SupplyThe sources of generation and average fuel cost per kWh for the Utility operating companies and System Energy for the years 2017-2019 were: Natural Gas Nuclear Coal Purchased Power MISO PurchasesYear % ofGen Cents PerkWh % ofGen Cents PerkWh % ofGen Cents PerkWh % ofGen Cents PerkWh % ofGen Cents PerkWh2019 40 2.33 28 0.73 6 2.31 8 4.86 18 2.712018 39 2.84 27 0.84 9 2.24 8 5.23 17 3.712017 38 2.60 26 0.86 8 2.35 8 4.02 20 3.09Actual 2019 and projected 2020 sources of generation for the Utility operating companies and System Energy, including certainpower purchases from affiliates under life of unit power purchase agreements, including the Unit Power Sales Agreement, are: Natural Gas Nuclear Coal Purchased Power(d) MISO Purchases(e) 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020Entergy Arkansas (a)28% 33% 53% 53% 15% 13% 1 1% 3% —Entergy Louisiana43% 56% 25% 28% 2% 4% 10% 12% 20% —Entergy Mississippi (b)49% 72% 25% 19% 9% 9% — — 17% —Entergy New Orleans(b)51% 58% 39% 39% 2% 2% 1% 1% 7% —Entergy Texas29% 32% 9% 18% 4% 11% 30% 39% 28% —System Energy (c)— — 100% 100% — — — — — —Utility (a) (b)40% 51% 28% 32% 6% 7% 8% 10% 18% —(a)Hydroelectric power provided less than 1% of Entergy Arkansas’s generation in 2019 and is expected to provide less than 1% of itsgeneration in 2020.(b)Solar power provided less than 1% of Entergy Mississippi’s and Entergy New Orleans's generation in 2019 and is expected toprovide less than 1% of each of Entergy Mississippi’s and Entergy New Orleans's generation in 2020.(c)Capacity and energy from System Energy’s interest in Grand Gulf is allocated as follows under the Unit Power Sales Agreement:Entergy Arkansas - 36%; Entergy Louisiana - 14%; Entergy Mississippi - 33%; and Entergy New Orleans - 17%. Pursuant topurchased power agreements, Entergy Arkansas is selling a portion of its owned capacity and energy from Grand Gulf to EntergyLouisiana, Entergy Mississippi, and Entergy New Orleans.(d)Excludes MISO purchases.(e)In December 2013, Entergy integrated its transmission system into the MISO RTO. Entergy offers all of its generation into the MISOenergy market on a day-ahead and real-time basis and bids for power in the MISO energy market to serve the demand of itscustomers, with MISO making dispatch decisions. The MISO purchases metric provided for 2019 is not projected for 2020.249 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergySome of the Utility’s gas-fired plants are also capable of using fuel oil, if necessary. Although based on current economics the Utility doesnot expect fuel oil use in 2020, it is possible that various operational events including weather or pipeline maintenance may require the use offuel oil.Natural GasThe Utility operating companies have long-term firm and short-term interruptible gas contracts for both supply and transportation.Over 50% of the Utility operating companies’ power plants maintain some level of long-term firm transportation. Short-term contracts andspot-market purchases satisfy additional gas requirements. Entergy Texas owns a gas storage facility that provides reliable and flexiblenatural gas service to certain generating stations.Many factors, including wellhead deliverability, storage, pipeline capacity, and demand requirements of end users, influence theavailability and price of natural gas supplies for power plants. Demand is primarily tied to weather conditions as well as to the prices andavailability of other energy sources. Pursuant to federal and state regulations, gas supplies to power plants may be interrupted during periodsof shortage. To the extent natural gas supplies are disrupted or natural gas prices significantly increase, the Utility operating companies mayin some instances use alternate fuels, such as oil when available, or rely to a larger extent on coal, nuclear generation, and purchased power.CoalEntergy Arkansas has committed to seven one- to three-year and two spot contracts that will supply approximately 85% of the totalcoal supply needs in 2020. These contracts are staggered in term so that not all contracts have to be renewed the same year. The remaining15% of total coal requirements will be satisfied by contracts with a term of less than one year. Based on continued improved Powder RiverBasin (PRB) coal deliveries by rail and the high cost of alternate sources and modes of transportation, no alternative coal consumption isexpected at Entergy Arkansas during 2020. Coal will be transported to Arkansas via an existing transportation agreement that is expected toprovide all of Entergy Arkansas’s rail transportation requirements for 2020.Entergy Louisiana has committed to four one- to three-year contracts that will supply approximately 90% of Nelson Unit 6 coal needsin 2020. If needed, additional PRB coal will be purchased through contracts with a term of less than one year to provide the remainingsupply needs. For the same reasons as for Entergy Arkansas’s plants, no alternative coal consumption is expected at Nelson Unit 6 during2020. Coal will be transported to Nelson primarily via an existing transportation agreement that is expected to provide all of EntergyLouisiana’s rail transportation requirements for 2020.For the year 2019, coal transportation delivery rates to Entergy Arkansas-and Entergy Louisiana-operated coal-fired units weresatisfactory to meet supply needs and obligations. Delivery rates improved in the second half of the year as track restoration efforts werecompleted by the railroads following spring flooding events, although flooding impacts were overall inconsequential to the companies’ coaloperations. Both Entergy Arkansas and Entergy Louisiana control a sufficient number of railcars to satisfy the rail transportation requirement.The operator of Big Cajun 2 - Unit 3, Louisiana Generating, LLC, has advised Entergy Louisiana and Entergy Texas that it hasadequate rail car and barge capacity to meet the volumes of PRB coal requested for 2020. Entergy Louisiana’s and Entergy Texas’s coalnomination requests to Big Cajun 2 - Unit 3 are made on an annual basis.Nuclear FuelThe nuclear fuel cycle consists of the following:•mining and milling of uranium ore to produce a concentrate;•conversion of the concentrate to uranium hexafluoride gas;250 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energy•enrichment of the uranium hexafluoride gas;•fabrication of nuclear fuel assemblies for use in fueling nuclear reactors; and•disposal of spent fuel.The Registrant Subsidiaries that own nuclear plants, Entergy Arkansas, Entergy Louisiana, and System Energy, are responsiblethrough a shared regulated uranium pool for contracts to acquire nuclear material to be used in fueling Entergy’s Utility nuclear units. Thesecompanies own the materials and services in this shared regulated uranium pool on a pro rata fractional basis determined by the nucleargeneration capability of each company. Any liabilities for obligations of the pooled contracts are on a several but not joint basis. The sharedregulated uranium pool maintains inventories of nuclear materials during the various stages of processing. The Registrant Subsidiariespurchase enriched uranium hexafluoride for their nuclear plant reload requirements at the average inventory cost from the shared regulateduranium pool. Entergy Operations, Inc. contracts separately for the fabrication of nuclear fuel as agent on behalf of each of the RegistrantSubsidiaries that owns a nuclear plant. All contracts for the disposal of spent nuclear fuel are between the DOE and the owner of a nuclearpower plant.Based upon currently planned fuel cycles, the Utility nuclear units have a diversified portfolio of contracts and inventory thatprovides substantially adequate nuclear fuel materials and conversion and enrichment services at what Entergy believes are reasonablypredictable or fixed prices through most of 2023. Entergy’s ability to purchase nuclear fuel at reasonably predictable prices, however,depends upon the performance reliability of uranium miners. There are a number of possible supply alternatives that may be accessed tomitigate any supplier performance failure, including potentially drawing upon Entergy’s inventory intended for later generation periodsdepending upon its risk management strategy at that time, although the pricing of any alternate uranium supply from the market will bedependent upon the market for uranium supply at that time. In addition, some nuclear fuel contracts are on a non-fixed price basis subject toprevailing prices at the time of delivery.The effects of market price changes may be reduced and deferred by risk management strategies, such as negotiation of floor andceiling amounts for long-term contracts, buying for inventory or entering into forward physical contracts at fixed prices when Entergybelieves it is appropriate and useful. Entergy buys uranium from a diversified mix of sellers located in a diversified mix of countries, andfrom time to time purchases from nearly all qualified reliable major market participants worldwide that sell into the U.S.Entergy’s ability to assure nuclear fuel supply also depends upon the performance reliability of conversion, enrichment, andfabrication services providers. There are fewer of these providers than for uranium. For conversion and enrichment services, like uranium,Entergy diversifies its supply by supplier and country and may take special measures as needed to ensure supply of enriched uranium for thereliable fabrication of nuclear fuel. For fabrication services, each plant is dependent upon the effective performance of the fabricator of thatplant’s nuclear fuel, therefore, Entergy provides additional monitoring, inspection, and oversight for the fabrication process to assurereliability and quality.Entergy Arkansas, Entergy Louisiana, and System Energy each have made arrangements to lease nuclear fuel and related equipmentand services. The lessors, which are consolidated in the financial statements of Entergy and the applicable Registrant Subsidiary, finance theacquisition and ownership of nuclear fuel through credit agreements and the issuance of notes. These credit facilities are subject to periodicrenewal, and the notes are issued periodically, typically for terms between three and seven years.Natural Gas Purchased for ResaleEntergy New Orleans has several suppliers of natural gas. Its system is interconnected with one interstate and three intrastatepipelines. Entergy New Orleans has a “no-notice” service gas purchase contract with CenterPoint Energy Services which guarantees EntergyNew Orleans gas delivery at specific delivery points and at any volume within the minimum and maximum set forth in the contract amounts. The CenterPoint Energy Service gas supply is251 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energytransported to Entergy New Orleans pursuant to a transportation service agreement with Gulf South Pipeline Co. This service is subject toFERC-approved rates. Entergy New Orleans also makes interruptible spot market purchases. Entergy Louisiana purchased natural gas for resale in 2019 under a firm contract from Sequent Energy Management L.P. The gas isdelivered through a combination of intrastate and interstate pipelines.As a result of the implementation of FERC-mandated interstate pipeline restructuring in 1993, curtailments of interstate gas supplycould occur if Entergy Louisiana’s or Entergy New Orleans’s suppliers failed to perform their obligations to deliver gas under their supplyagreements. Gulf South Pipeline Co. could curtail transportation capacity only in the event of pipeline system constraints.Federal Regulation of the UtilityState or local regulatory authorities, as described above, regulate the retail rates of the Utility operating companies. The FERCregulates wholesale sales of electricity rates and interstate transmission of electricity, including System Energy’s sales of capacity and energyfrom Grand Gulf to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans pursuant to the Unit Power SalesAgreement. See Note 2 to the financial statements for further discussion of federal regulation proceedings.System Agreement (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and EntergyTexas)Prior to each operating company’s termination of participation in the System Agreement (Entergy Arkansas in December 2013,Entergy Mississippi in November 2015, and Entergy Louisiana, Entergy New Orleans, and Entergy Texas each in August 2016), the Utilityoperating companies engaged in the coordinated planning, construction, and operation of generating and bulk transmission facilities underthe terms of the System Agreement, which was a rate schedule approved by the FERC. Under the terms of the System Agreement, generatingcapacity and other power resources were jointly operated by the Utility operating companies that were participating in the SystemAgreement. The System Agreement provided, among other things, that parties having generating reserves greater than their allocated shareof reserves (long companies) would receive payments from those parties having generating reserves that were less than their allocated shareof reserves (short companies). Such payments were at amounts sufficient to cover certain of the long companies’ costs for intermediate andpeaking oil/gas-fired generation, including operating expenses, fixed charges on debt, dividend requirements on preferred equity, and a fairrate of return on common equity investment. Under the System Agreement, the rates used to compensate long companies were based oncosts associated with the long companies’ steam electric generating units fueled by oil or gas and having an annual average heat rate above10,000 Btu/kWh. In addition, for all energy exchanged among the Utility operating companies under the System Agreement, the companiespurchasing exchange energy were required to pay the cost of fuel consumed in generating such energy plus a charge to cover other associatedcosts.Although the System Agreement has terminated, certain of the Utility operating companies’ and their retail regulators are pursuinglitigation involving the System Agreement at the FERC and in federal courts. The proceedings include challenges to the allocation of costs asdefined by the System Agreement and other matters. See Note 2 to the financial statements for discussion of legal proceedings at the FERCand in federal courts involving the System Agreement.Transmission and MISO MarketsIn December 2013 the Utility operating companies integrated into the MISO RTO. Although becoming a member of MISO did notaffect the ownership by the Utility operating companies of their transmission facilities or the responsibility for maintaining those facilities,MISO maintains functional control over the combined transmission systems of its members and administers wholesale energy and ancillaryservices markets for market participants in the MISO region, including the Utility operating companies. MISO also exercises functionalcontrol of transmission252 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energyplanning and congestion management and provides schedules and pricing for the commitment and dispatch of generation that is offered intoMISO’s markets, as well as pricing for load that bids into the markets. The Utility operating companies sell capacity, energy, and ancillaryservices on a bilateral basis to certain wholesale customers and offer available electricity production of their generating facilities into theMISO day-ahead and real-time energy markets pursuant to the MISO tariff and market rules. Each Utility operating company has its owntransmission pricing zone and a formula rate template (included as Attachment O to the MISO tariff) used to establish transmission rateswithin MISO. The terms and conditions of the MISO tariff, including provisions related to the design and implementation of wholesalemarkets and the allocation of transmission upgrade costs, are subject to regulation by the FERC.System Energy and Related AgreementsSystem Energy recovers costs related to its interest in Grand Gulf through rates charged to Entergy Arkansas, Entergy Louisiana,Entergy Mississippi, and Entergy New Orleans for capacity and energy under the Unit Power Sales Agreement (described below). In July2001 a rate proceeding commenced by System Energy at the FERC in 1995 became final, with the FERC approving a prospective 10.94%return on equity. In 1998 the FERC approved requests by Entergy Arkansas and Entergy Mississippi to accelerate a portion of their GrandGulf purchased power obligations. Entergy Arkansas’s and Entergy Mississippi’s acceleration of Grand Gulf purchased power obligationsceased effective July 2001 and July 2003, respectively, as approved by the FERC. See Note 2 to the financial statements for discussion ofcomplaints filed with the FERC regarding System Energy’s return on equity.Unit Power Sales AgreementThe Unit Power Sales Agreement allocates capacity, energy, and the related costs from System Energy’s ownership and leaseholdinterests in Grand Gulf to Entergy Arkansas (36%), Entergy Louisiana (14%), Entergy Mississippi (33%), and Entergy New Orleans(17%). Each of these companies is obligated to make payments to System Energy for its entitlement of capacity and energy on a full cost-of-service basis regardless of the quantity of energy delivered. Payments under the Unit Power Sales Agreement are System Energy’s onlysource of operating revenue. The financial condition of System Energy depends upon the continued commercial operation of Grand Gulf andthe receipt of such payments. Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans generally recoverpayments made under the Unit Power Sales Agreement through rates charged to their customers.In the case of Entergy Arkansas and Entergy Louisiana, payments are also recovered through sales of electricity from their respectiveretained shares of Grand Gulf. Under a settlement agreement entered into with the APSC in 1985 and amended in 1988, Entergy Arkansasretains 22% of its 36% share of Grand Gulf-related costs and recovers the remaining 78% of its share in rates. In the event that EntergyArkansas is not able to sell its retained share to third parties, it may sell such energy to its retail customers at a price equal to its avoided cost,which is currently less than Entergy Arkansas’s cost from its retained share. Entergy Arkansas has life-of-resources purchased poweragreements with Entergy Louisiana and Entergy New Orleans that sell a portion of the output of Entergy Arkansas’s retained share of GrandGulf to those companies, with the remainder of the retained share being sold to Entergy Mississippi through a separate life-of-resourcespurchased power agreement. In a series of LPSC orders, court decisions, and agreements from late 1985 to mid-1988, Entergy Louisiana wasgranted rate relief with respect to costs associated with Entergy Louisiana’s share of capacity and energy from Grand Gulf, subject to certainterms and conditions. Entergy Louisiana retains and does not recover from retail ratepayers 18% of its 14% share of the costs of Grand Gulfcapacity and energy and recovers the remaining 82% of its share in rates. Entergy Louisiana is allowed to recover through the fueladjustment clause at 4.6 cents per kWh for the energy related to its retained portion of these costs. Alternatively, Entergy Louisiana may sellsuch energy to non-affiliated parties at prices above the fuel adjustment clause recovery amount, subject to the LPSC’s approval. EntergyArkansas also has a life-of-resources purchased power agreement with Entergy Mississippi to sell a portion of the output of EntergyArkansas’s non-retained share of Grand Gulf. Entergy Mississippi was granted rate relief for those purchases by the MPSC through its annualunit power cost rate mechanism.253 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyAvailability AgreementThe Availability Agreement among System Energy and Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy NewOrleans was entered into in 1974 in connection with the financing by System Energy of Grand Gulf. The Availability Agreement providesthat System Energy make available to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans all capacity andenergy available from System Energy’s share of Grand Gulf.Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans also agreed severally to pay System Energymonthly for the right to receive capacity and energy from Grand Gulf in amounts that (when added to any amounts received by SystemEnergy under the Unit Power Sales Agreement) would at least equal System Energy’s total operating expenses for Grand Gulf (includingdepreciation at a specified rate and expenses incurred in a permanent shutdown of Grand Gulf) and interest charges.The allocation percentages under the Availability Agreement are fixed as follows: Entergy Arkansas - 17.1%; Entergy Louisiana -26.9%; Entergy Mississippi - 31.3%; and Entergy New Orleans - 24.7%. The allocation percentages under the Availability Agreement wouldremain in effect and would govern payments made under such agreement in the event of a shortfall of funds available to System Energy fromother sources, including payments under the Unit Power Sales Agreement.System Energy has assigned its rights to payments and advances from Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,and Entergy New Orleans under the Availability Agreement as security for its one outstanding series of first mortgage bonds. In theseassignments, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans further agreed that, in the event they wereprohibited by governmental action from making payments under the Availability Agreement (for example, if the FERC reduced ordisallowed such payments as constituting excessive rates), they would then make subordinated advances to System Energy in the sameamounts and at the same times as the prohibited payments. System Energy would not be allowed to repay these subordinated advances solong as it remained in default under the related indebtedness or in other similar circumstances.Each of the assignment agreements relating to the Availability Agreement provides that Entergy Arkansas, Entergy Louisiana,Entergy Mississippi, and Entergy New Orleans will make payments directly to System Energy. However, if there is an event of default, thosepayments must be made directly to the holders of indebtedness that are the beneficiaries of such assignment agreements. The payments mustbe made pro rata according to the amount of the respective obligations secured.The obligations of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans to make payments under theAvailability Agreement are subject to the receipt and continued effectiveness of all necessary regulatory approvals. Sales of capacity andenergy under the Availability Agreement would require that the Availability Agreement be submitted to the FERC for approval with respectto the terms of such sale. No such filing with the FERC has been made because sales of capacity and energy from Grand Gulf are being madepursuant to the Unit Power Sales Agreement. If, for any reason, sales of capacity and energy are made in the future pursuant to theAvailability Agreement, the jurisdictional portions of the Availability Agreement would be submitted to the FERC for approval.Since commercial operation of Grand Gulf began, payments under the Unit Power Sales Agreement to System Energy have exceededthe amounts payable under the Availability Agreement and, therefore, no payments under the Availability Agreement have ever beenrequired. If Entergy Arkansas or Entergy Mississippi fails to make its Unit Power Sales Agreement payments, and System Energy is unableto obtain funds from other sources, Entergy Louisiana and Entergy New Orleans could become subject to claims or demands by SystemEnergy or its creditors for payments or advances under the Availability Agreement (or the assignments thereof) equal to the differencebetween their required Unit Power Sales Agreement payments and their required Availability Agreement payments because their AvailabilityAgreement obligations exceed their Unit Power Sales Agreement obligations.254 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyThe Availability Agreement may be terminated, amended, or modified by mutual agreement of the parties thereto, without furtherconsent of any assignees or other creditors.Service CompaniesEntergy Services, a limited liability company wholly-owned by Entergy Corporation, provides management, administrative,accounting, legal, engineering, and other services primarily to the Utility operating companies, but also provides services to EntergyWholesale Commodities. Entergy Operations is also wholly-owned by Entergy Corporation and provides nuclear management, operationsand maintenance services under contract for ANO, River Bend, Waterford 3, and Grand Gulf, subject to the owner oversight of EntergyArkansas, Entergy Louisiana, and System Energy, respectively. Entergy Services and Entergy Operations provide their services to theUtility operating companies and System Energy on an “at cost” basis, pursuant to cost allocation methodologies for these service agreementsthat were approved by the FERC.Jurisdictional Separation of Entergy Gulf States, Inc. into Entergy Gulf States Louisiana and Entergy TexasEffective December 31, 2007, Entergy Gulf States, Inc. completed a jurisdictional separation into two vertically integrated utilitycompanies, one operating under the sole retail jurisdiction of the PUCT, Entergy Texas, and the other operating under the sole retailjurisdiction of the LPSC, Entergy Gulf States Louisiana. Entergy Texas owns all Entergy Gulf States, Inc. distribution and transmissionassets located in Texas, the gas-fired generating plants located in Texas, undivided 42.5% ownership shares of Entergy Gulf States, Inc.’s70% ownership interest in Nelson Unit 6 and 42% ownership interest in Big Cajun 2, Unit 3, which are coal-fired generating plants located inLouisiana, and other assets and contract rights to the extent related to utility operations in Texas. Entergy Louisiana, as successor in interestto Entergy Gulf States Louisiana, owns all of the remaining assets that were owned by Entergy Gulf States, Inc. On a book value basis,approximately 58.1% of the Entergy Gulf States, Inc. assets were allocated to Entergy Gulf States Louisiana and approximately 41.9% wereallocated to Entergy Texas.Entergy Texas purchases from Entergy Louisiana pursuant to a life-of-unit purchased power agreement a 42.5% share of capacity andenergy from the 70% of River Bend subject to retail regulation. Entergy Texas was allocated a share of River Bend’s nuclear andenvironmental liabilities that is identical to the share of the plant’s output purchased by Entergy Texas under the purchased poweragreement. In connection with the termination of the System Agreement effective August 31, 2016, the purchased power agreements thatwere put in place for certain legacy units at the time of the jurisdictional separation were also terminated at that time. See Note 2 to thefinancial statements for additional discussion of the purchased power agreements.Entergy Louisiana and Entergy Gulf States Louisiana Business CombinationOn October 1, 2015, the businesses formerly conducted by Entergy Louisiana (Old Entergy Louisiana) and Entergy Gulf StatesLouisiana (Old Entergy Gulf States Louisiana) were combined into a single public utility. In order to effect the business combination, underthe Texas Business Organizations Code (TXBOC), Old Entergy Louisiana allocated substantially all of its assets to a new subsidiary, EntergyLouisiana Power, LLC, a Texas limited liability company (New Entergy Louisiana), and New Entergy Louisiana assumed the liabilities ofOld Entergy Louisiana, in a transaction regarded as a merger under the TXBOC. Under the TXBOC, Old Entergy Gulf States Louisianaallocated substantially all of its assets to a new subsidiary (New Entergy Gulf States Louisiana) and New Entergy Gulf States Louisianaassumed the liabilities of Old Entergy Gulf States Louisiana, in a transaction regarded as a merger under the TXBOC. New Entergy GulfStates Louisiana then merged into New Entergy Louisiana with New Entergy Louisiana surviving the merger. Thereupon, Old EntergyLouisiana changed its name from “Entergy Louisiana, LLC” to “EL Investment Company, LLC” and New Entergy Louisiana changed itsname from “Entergy Louisiana Power, LLC” to “Entergy Louisiana, LLC” (Entergy Louisiana). With the completion of the businesscombination, Entergy Louisiana holds substantially all of the assets, and has assumed the liabilities, of Old Entergy Louisiana and OldEntergy Gulf States Louisiana.255 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyEntergy New Orleans Internal RestructuringIn November 2017, pursuant to the agreement in principle, Entergy New Orleans, Inc. undertook a multi-step restructuring, includingthe following:•Entergy New Orleans, Inc. redeemed its outstanding preferred stock at a price of approximately $21 million, which included a callpremium of approximately $819,000, plus any accumulated and unpaid dividends.•Entergy New Orleans, Inc. converted from a Louisiana corporation to a Texas corporation.•Under the Texas Business Organizations Code (TXBOC), Entergy New Orleans, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy New Orleans Power, LLC, a Texas limited liability company (Entergy New Orleans Power), and Entergy NewOrleans Power assumed substantially all of the liabilities of Entergy New Orleans, Inc. in a transaction regarded as a merger underthe TXBOC. Entergy New Orleans, Inc. remained in existence and held the membership interests in Entergy New Orleans Power.•Entergy New Orleans, Inc. contributed the membership interests in Entergy New Orleans Power to an affiliate (Entergy UtilityHolding Company, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution,Entergy New Orleans Power is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC.In December 2017, Entergy New Orleans, Inc. changed its name to Entergy Utility Group, Inc., and Entergy New Orleans Power thenchanged its name to Entergy New Orleans, LLC. Entergy New Orleans, LLC holds substantially all of the assets, and has assumedsubstantially all of the liabilities, of Entergy New Orleans, Inc. The restructuring was accounted for as a transaction between entities undercommon control.Entergy Arkansas Internal RestructuringIn November 2018, Entergy Arkansas undertook a multi-step restructuring, including the following:•Entergy Arkansas, Inc. redeemed its outstanding preferred stock at the aggregate redemption price of approximately $32.7 million.•Entergy Arkansas, Inc. converted from an Arkansas corporation to a Texas corporation.•Under the Texas Business Organizations Code (TXBOC), Entergy Arkansas, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy Arkansas Power, LLC, a Texas limited liability company (Entergy Arkansas Power), and Entergy ArkansasPower assumed substantially all of the liabilities of Entergy Arkansas, Inc., in a transaction regarded as a merger under the TXBOC.Entergy Arkansas, Inc. remained in existence and held the membership interests in Entergy Arkansas Power.•Entergy Arkansas, Inc. contributed the membership interests in Entergy Arkansas Power to an affiliate (Entergy Utility HoldingCompany, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution, EntergyArkansas Power is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC. In December 2018, Entergy Arkansas, Inc. changed its name to Entergy Utility Property, Inc., and Entergy Arkansas Power then changed itsname to Entergy Arkansas, LLC. Entergy Arkansas, LLC holds substantially all of the assets, and assumed substantially all of the liabilities,of Entergy Arkansas, Inc. The transaction was accounted for as a transaction between entities under common control.Entergy Mississippi Internal RestructuringIn November 2018, Entergy Mississippi undertook a multi-step restructuring, including the following:•Entergy Mississippi, Inc. redeemed its outstanding preferred stock, at the aggregate redemption price of approximately $21.2 million.•Entergy Mississippi, Inc. converted from a Mississippi corporation to a Texas corporation.256 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energy•Under the Texas Business Organizations Code (TXBOC), Entergy Mississippi, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy Mississippi Power and Light, LLC, a Texas limited liability company (Entergy Mississippi Power and Light), andEntergy Mississippi Power and Light assumed substantially all of the liabilities of Entergy Mississippi, Inc., in a transaction regardedas a merger under the TXBOC. Entergy Mississippi, Inc. remained in existence and held the membership interests in EntergyMississippi Power and Light.•Entergy Mississippi, Inc. contributed the membership interests in Entergy Mississippi Power and Light to an affiliate (Entergy UtilityHolding Company, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution,Entergy Mississippi Power and Light is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC.In December 2018, Entergy Mississippi, Inc. changed its name to Entergy Utility Enterprises, Inc., and Entergy Mississippi Power and Lightthen changed its name to Entergy Mississippi, LLC. Entergy Mississippi, LLC holds substantially all of the assets, and assumed substantiallyall of the liabilities, of Entergy Mississippi, Inc. The restructuring was accounted for as a transaction between entities under common control.Entergy Wholesale CommoditiesEntergy Wholesale Commodities includes the ownership, operation, and decommissioning of nuclear power plants, located in thenorthern United States and the sale of the electric power produced by its operating plants to wholesale customers. Entergy WholesaleCommodities revenues are primarily derived from sales of energy and generation capacity from these plants. Entergy WholesaleCommodities also provides operations and management services, including decommissioning-related services, to nuclear power plants ownedby non-affiliated entities in the United States. Entergy Wholesale Commodities also includes the ownership of interests in non-nuclear powerplants that sell the electric power produced by those plants to wholesale customers.See “Entergy Wholesale Commodities Exit from the Merchant Power Business” in Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for further discussion of the operation and planned shutdown and sale of each of theremaining Entergy Wholesale Commodities nuclear power plants.PropertyNuclear Generating StationsEntergy Wholesale Commodities includes the ownership of the following nuclear power plants:Power Plant Market In ServiceYear Acquired Location Capacity - Reactor Type LicenseExpirationDateIndian Point 3 (a) NYISO 1976 Nov. 2000 Buchanan, NY 1,041 MW - Pressurized Water 2025 (a)Indian Point 2 (a) NYISO 1974 Sept. 2001 Buchanan, NY 1,028 MW - Pressurized Water 2024 (a)Palisades (b) MISO 1971 Apr. 2007 Covert, MI 811 MW - Pressurized Water 2031 (b)(a)The Indian Point 2 and Indian Point 3 plants are expected to cease operation by April 30, 2020 and April 30, 2021, respectively.(b)The Palisades plant is expected to cease operations no later than May 31, 2022.See “Entergy Wholesale Commodities Exit from the Merchant Power Business” in Entergy Corporation and Subsidiaries Management’sFinancial Discussion and Analysis for further discussion of the operation and planned shutdown and sale of each of the remaining EntergyWholesale Commodities nuclear power plants. 257 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyEntergy Wholesale Commodities also includes the ownership of two non-operating nuclear facilities, Big Rock Point in Michigan andIndian Point 1 in New York that were acquired when Entergy purchased the Palisades and Indian Point 2 nuclear plants, respectively. Thesefacilities are in various stages of the decommissioning process. Both Big Rock Point and Indian Point 1 are under contract to be sold withtheir respective plants.Non-nuclear Generating StationsEntergy Wholesale Commodities includes the ownership, or interests in joint ventures that own, the following non-nuclear powerplants:Plant Location Ownership Net OwnedCapacity (a) TypeIndependence Unit 2; 842 MW Newark, AR 14% 121 MW(b) CoalRS Cogen; 425 MW (c) Lake Charles, LA 50% 213 MW Gas/SteamNelson Unit 6; 550 MW Westlake, LA 11% 60 MW(b) Coal(a)“Net Owned Capacity” refers to the nameplate rating on the generating unit.(b)The owned MW capacity is the portion of the plant capacity owned by Entergy Wholesale Commodities. For a complete listing ofEntergy’s jointly-owned generating stations, refer to “Jointly-Owned Generating Stations” in Note 1 to the financial statements.(c)Indirectly owned through interests in unconsolidated joint ventures.Independent System OperatorsThe Indian Point plants fall under the authority of the New York Independent System Operator (NYISO). The Palisades plant fallsunder the authority of the MISO. The primary purpose of NYISO and MISO is to direct the operations of the major generation andtransmission facilities in their respective regions; ensure grid reliability; administer and monitor wholesale electricity markets; and plan fortheir respective region’s energy needs.Energy and Capacity SalesAs a wholesale generator, Entergy Wholesale Commodities’ core business is selling energy, measured in MWh, to itscustomers. Entergy Wholesale Commodities enters into forward contracts with its customers and also sells energy in the day ahead or spotmarkets. Entergy Wholesale Commodities also sells unforced capacity, which allows load-serving entities to meet specified reserve andrelated requirements placed on them by the ISOs in their respective areas. Entergy Wholesale Commodities’ forward physical powercontracts consist of contracts to sell energy only, contracts to sell capacity only, and bundled contracts in which it sells both capacity andenergy. While the terminology and payment mechanics vary in these contracts, each of these types of contracts requires Entergy WholesaleCommodities to deliver MWh of energy, make capacity available, or both. See “Market and Credit Risk Sensitive Instruments” inEntergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for additional information regarding these contracts.As part of the purchase of the Palisades plant in 2007, Entergy executed a 15-year PPA with the seller, Consumers Energy, for 100%of the plant’s output, excluding any future uprates. Under the purchased power agreement, Consumers Energy receives the value of any newenvironmental credits for the first ten years of the agreement. Palisades and Consumers Energy will share on a 50/50 basis the value of anynew environmental credits for years 11 through 15 of the agreement. The environmental credits are defined as benefits from a change in lawthat causes capability of the plant as of the purchase date to become a tradable attribute (e.g., emission credit, renewable energy credit,environmental credit, “green” credit, etc.) or otherwise to have a market value. Entergy intends to shut down the Palisades nuclear powerplant permanently on May 31, 2022 and transfer to Holtec thereafter.258 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyCustomersEntergy Wholesale Commodities’ customers for the sale of both energy and capacity from its nuclear plants include retail powerproviders, utilities, electric power co-operatives, power trading organizations, and other power generation companies. These customersinclude Consumers Energy, the company from which Entergy purchased the Palisades plant, and NYISO and MISO. Substantially all of thecredit exposure associated with the planned energy output under contract for Entergy Wholesale Commodities nuclear plants is withcounterparties or their guarantors that have public investment grade credit ratings.CompetitionThe NYISO market is highly competitive. Entergy Wholesale Commodities has numerous competitors in New York includinggeneration companies affiliated with regulated utilities, other independent power producers, municipal and co-operative generators, ownersof co-generation plants and wholesale power marketers. Entergy Wholesale Commodities is an independent power producer, which means itgenerates power for sale to third parties at day ahead or spot market prices to the extent that the power is not sold under a fixed pricecontract. Municipal and co-operative generators also generate power but use most of it to deliver power to their municipal or co-operativepower customers. Owners of co-generation plants produce power primarily for their own consumption. Wholesale power marketers do notown generation; rather they buy power from generators or other market participants and resell it to retail providers or other marketparticipants. Competition in the New York power market is affected by, among other factors, the amount of generation and transmissioncapacity in these markets. MISO does not have a centralized clearing capacity market, but load serving entities do meet the majority of theircapacity needs through bilateral contracts and self-supply with a smaller portion coming through voluntary MISO auctions. The majority ofPalisades’ current output is contracted to Consumers Energy through 2022. Entergy Wholesale Commodities does not expect to be materiallyaffected by competition in the MISO market in the near term.SeasonalityEntergy Wholesale Commodities’ revenues and operating income are subject to fluctuations during the year due to seasonal factors,weather conditions, and contract pricing. Refueling outages are generally in the spring and fall, and cause volumetric decreases during thoseseasons. When outdoor and cooling water temperatures are low, generally during colder months, Entergy Wholesale Commodities nuclearpower plants operate more efficiently, and consequently, generate more electricity. Many of Entergy Wholesale Commodities’ contractsprovide for shaped pricing over the course of the year. As a result of these factors, Entergy Wholesale Commodities’ revenues are typicallyhigher in the first and third quarters than in the second and fourth quarters.Fuel SupplyNuclear FuelSee “Fuel Supply - Nuclear Fuel” in the Utility portion of Part I, Item 1 for a discussion of the nuclear fuel cycle and markets.Entergy Nuclear Fuels Company, a wholly-owned subsidiary, is responsible for contracts to acquire nuclear materials, except for fuelfabrication, for Entergy Wholesale Commodities nuclear power plants, while Entergy Nuclear Operations, Inc. acts as the agent for thepurchase of nuclear fuel assembly fabrication services. All contracts for the disposal of spent nuclear fuel are between the DOE and each ofthe nuclear power plant owners. The nuclear fuel supply portfolio for the Entergy Wholesale Commodities segment has been adjusted toreflect reduced overall requirements related to the planned permanent shutdowns of the Indian Point 2, Indian Point 3, and Palisades plants.Fuel procurement for the Entergy Wholesale Commodities segment is limited to the requirements of the Palisades plant’s final refueling in2020.259 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyOther Business ActivitiesEntergy Nuclear Power Marketing, LLC (ENPM) was formed in 2005 to centralize the power marketing function for EntergyWholesale Commodities nuclear plants. Upon its formation, ENPM entered into long-term power purchase agreements with the EntergyWholesale Commodities subsidiaries that own nuclear power plants (generating subsidiaries). As part of a series of agreements, ENPMagreed to assume and/or otherwise service the existing power purchase agreements that were in effect between the generating subsidiariesand their customers. ENPM’s functions include origination of new energy and capacity transactions and generation scheduling.Entergy Nuclear, Inc. can pursue service agreements with other nuclear power plant owners who seek the advantages of Entergy’sscale and expertise but do not necessarily want to sell their assets. Services provided by either Entergy Nuclear, Inc. or other EntergyWholesale Commodities subsidiaries include engineering, operations and maintenance, fuel procurement, management and supervision,technical support and training, administrative support, and other managerial or technical services required to operate, maintain, anddecommission nuclear electric power facilities.TLG Services, a subsidiary of Entergy Nuclear, Inc., offers decommissioning, engineering, and related services to nuclear powerplant owners.Entergy provides plant operation support services for the 800 MW Cooper Nuclear Station located near Brownville, Nebraska. In2010 an Entergy subsidiary signed an agreement to extend the management support services to Cooper Nuclear Station by 15 years, throughJanuary 2029.Regulation of Entergy’s BusinessFederal Power ActThe Federal Power Act provides the FERC the authority to regulate:•the transmission and wholesale sale of electric energy in interstate commerce;•the reliability of the high voltage interstate transmission system through reliability standards;•sale or acquisition of certain assets;•securities issuances;•the licensing of certain hydroelectric projects;•certain other activities, including accounting policies and practices of electric and gas utilities; and•changes in control of FERC jurisdictional entities or rate schedules.The Federal Power Act gives the FERC jurisdiction over the rates charged by System Energy for Grand Gulf capacity and energyprovided to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans and over the rates charged by EntergyArkansas and Entergy Louisiana to unaffiliated wholesale customers. The FERC also regulates wholesale power sales between the Utilityoperating companies. In addition, the FERC regulates the MISO RTO, an independent entity that maintains functional control over thecombined transmission systems of its members and administers wholesale energy, capacity, and ancillary services markets for marketparticipants in the MISO region, including the Utility operating companies. FERC regulation of the MISO RTO includes regulation of thedesign and implementation of the wholesale markets administered by the MISO RTO, as well as the rates, terms, and conditions of openaccess transmission service over the member systems and the allocation of costs associated with transmission upgrades.Entergy Arkansas holds a FERC license that expires in 2053 for two hydroelectric projects totaling 70 MW of capacity.260 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyState RegulationUtilityEntergy Arkansas is subject to regulation by the APSC as to the following:•utility service;•utility service areas;•retail rates and charges, including depreciation rates;•fuel cost recovery, including audits of the energy cost recovery rider;•terms and conditions of service;•service standards;•the acquisition, sale, or lease of any public utility plant or property constituting an operating unit or system;•certificates of convenience and necessity and certificates of environmental compatibility and public need, as applicable, forgenerating and transmission facilities;•avoided cost payments to Qualifying Facilities;•net energy metering;•integrated resource planning;•utility mergers and acquisitions and other changes of control; and•the issuance and sale of certain securities.Additionally, Entergy Arkansas serves a limited number of retail customers in Tennessee. Pursuant to legislation enacted in Tennessee,Entergy Arkansas is subject to complaints before the Tennessee Regulatory Authority only if it fails to treat its retail customers in Tennesseein the same manner as its retail customers in Arkansas. Additionally, Entergy Arkansas maintains limited facilities in Missouri but does notprovide retail electric service to customers in Missouri. Although Entergy Arkansas obtained a certificate with respect to its Missourifacilities, Entergy Arkansas is not subject to the retail rate or regulatory scheme in Missouri.Entergy Louisiana’s electric and gas business is subject to regulation by the LPSC as to the following:•utility service;•retail rates and charges, including depreciation rates;•fuel cost recovery, including audits of the fuel adjustment clause and purchased gas adjustment charge;•terms and conditions of service;•service standards;•certification of certain transmission projects;•certification of capacity acquisitions, both for owned capacity and purchase power contracts;•procurement process to acquire over 50 MW;•audits of the environmental adjustment charge, avoided cost payment to Qualifying Facilities, and energy efficiency rider;•integrated resource planning;•net energy metering; and•utility mergers and acquisitions and other changes of control.Entergy Mississippi is subject to regulation by the MPSC as to the following:•utility service;•utility service areas;•retail rates and charges, including depreciation rates;•fuel cost recovery, including audits of the energy cost recovery mechanism;•terms and conditions of service;•service standards;261 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energy•certification of generating facilities and certain transmission projects;•avoided cost payments to Qualifying Facilities;•integrated resource planning;•net energy metering; and•utility mergers, acquisitions, and other changes of control.Entergy Mississippi is also subject to regulation by the APSC as to the certificate of environmental compatibility and public need forthe Independence Station, which is located in Arkansas.Entergy New Orleans is subject to regulation by the City Council as to the following:•utility service;•retail rates and charges, including depreciation rates;•fuel cost recovery, including audits of the fuel adjustment charge and purchased gas adjustment charge;•terms and conditions of service;•service standards;•audit of the environmental adjustment charge;•certification of the construction or extension of any new plant, equipment, property, or facility that comprises more than 2% of theutility’s rate base;•integrated resource planning;•net energy metering;•issuance and sale of certain securities; and•utility mergers and acquisitions and other changes of control.To the extent authorized by governing legislation, Entergy Texas is subject to the original jurisdiction of the municipal authorities ofa number of incorporated cities in Texas with appellate jurisdiction over such matters residing in the PUCT. Entergy Texas is also subject toregulation by the PUCT as to the following:•retail rates and charges, including depreciation rates, and terms and conditions of service in unincorporated areas of its serviceterritory, and in municipalities that have ceded jurisdiction to the PUCT;•fuel recovery, including reconciliations (audits) of the fuel adjustment charges;•service standards;•certification of certain transmission and generation projects;•utility service areas, including extensions into new areas;•avoided cost payments to Qualifying Facilities; and•utility mergers, sales/acquisitions/leases of plants over $10 million, sales of greater than 50% voting stock of utilities, and transfers ofcontrolling interest in or operation of utilities.Regulation of the Nuclear Power IndustryAtomic Energy Act of 1954 and Energy Reorganization Act of 1974Under the Atomic Energy Act of 1954 and the Energy Reorganization Act of 1974, the operation of nuclear plants is heavilyregulated by the NRC, which has broad power to impose licensing and safety-related requirements. The NRC has broad authority to imposecivil penalties or shut down a unit, or both, depending upon its assessment of the severity of the situation, until compliance is achieved.Entergy Arkansas, Entergy Louisiana, and System Energy, as owners of all or portions of ANO, River Bend and Waterford 3, and GrandGulf, respectively, and Entergy Operations, as the licensee and operator of these units, are subject to the jurisdiction of the NRC. Entergysubsidiaries in the Entergy Wholesale Commodities segment are subject to the NRC’s jurisdiction as the owners and operators of Indian PointEnergy Center, Palisades, and Big Rock Point.262 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyNuclear Waste Policy Act of 1982Spent Nuclear FuelUnder the Nuclear Waste Policy Act of 1982, the DOE is required, for a specified fee, to construct storage facilities for, and todispose of, all spent nuclear fuel and other high-level radioactive waste generated by domestic nuclear power reactors. Entergy’s nuclearowner/licensee subsidiaries have been charged fees for the estimated future disposal costs of spent nuclear fuel in accordance with theNuclear Waste Policy Act of 1982. The affected Entergy companies entered into contracts with the DOE, whereby the DOE is to furnishdisposal services at a cost of one mill per net kWh generated and sold after April 7, 1983, plus a one-time fee for generation prior to that date.Entergy Arkansas is the only one of the Utility operating companies that generated electric power with nuclear fuel prior to that date and hasa recorded liability as of December 31, 2019 of $191.1 million for the one-time fee. Entergy accepted assignment of the Pilgrim, FitzPatrickand Indian Point 3, Indian Point 1 and Indian Point 2, Vermont Yankee, Palisades, and Big Rock Point spent fuel disposal contracts with theDOE held by their previous owners. The FitzPatrick spent fuel disposal contract was assigned to Exelon as part of the sale of the plant,completed in March 2017. The Vermont Yankee spent fuel disposal contract was assigned to NorthStar as part of the sale of the plant whichwas completed in January 2019. The Pilgrim spent fuel disposal contract was transferred to Holtec as part of the sale of Entergy NuclearGeneration Company in August 2019. The owners of these plants previous to Entergy have paid or retained liability for the fees for allgeneration prior to the purchase dates of those plants. The fees payable to the DOE may be adjusted in the future to assure fullrecovery. Entergy considers all costs incurred for the disposal of spent nuclear fuel, except accrued interest, to be proper components ofnuclear fuel expense. Provisions to recover such costs have been or will be made in applications to regulatory authorities for the Utilityplants. Entergy’s total spent fuel fees to date, including the one-time fee liability of Entergy Arkansas, have surpassed $1.6 billion (exclusiveof amounts relating to Entergy plants that were paid or are owed by prior owners of those plants).The permanent spent fuel repository in the U.S. has been legislated to be Yucca Mountain, Nevada. The DOE is required by law toproceed with the licensing (the DOE filed the license application in June 2008) and, after the license is granted by the NRC, proceed with therepository construction and commencement of receipt of spent fuel. Because the DOE has not begun accepting spent fuel, it is in non-compliance with the Nuclear Waste Policy Act of 1982 and has breached its spent fuel disposal contracts. The DOE continues to delaymeeting its obligation. Specific steps were taken to discontinue the Yucca Mountain project, including a motion to the NRC to withdraw thelicense application with prejudice and the establishment of a commission to develop recommendations for alternative spent fuel storagesolutions. In August 2013 the U.S. Court of Appeals for the D.C. Circuit ordered the NRC to continue with the Yucca Mountain licensereview, but only to the extent of funds previously appropriated by Congress for that purpose and not yet used. Although the NRC completedthe safety evaluation report for the license review in 2015, the previously appropriated funds are not sufficient to complete the review,including required hearings. The government has taken no effective action to date related to the recommendations of the appointed spent fuelstudy commission. Accordingly, large uncertainty remains regarding the time frame under which the DOE will begin to accept spent fuelfrom Entergy’s facilities for storage or disposal. As a result, continuing future expenditures will be required to increase spent fuel storagecapacity at Entergy’s nuclear sites.Following the defunding of the Yucca Mountain spent fuel repository program, the National Association of Regulatory UtilityCommissioners and others sued the government seeking cessation of collection of the one mill per net kWh generated and sold after April 7,1983 fee. In November 2013 the D.C. Circuit Court of Appeals ordered the DOE to submit a proposal to Congress to reset the fee to zerountil the DOE complies with the Nuclear Waste Policy Act or Congress enacts an alternative waste disposal plan. In January 2014 the DOEsubmitted the proposal to Congress under protest, and also filed a petition for rehearing with the D.C. Circuit. The petition for rehearing wasdenied. The zero spent fuel fee went into effect prospectively in May 2014.As a result of the DOE’s failure to begin disposal of spent nuclear fuel in 1998 pursuant to the Nuclear Waste Policy Act of 1982 andthe spent fuel disposal contracts, Entergy’s nuclear owner/licensee subsidiaries have incurred and will continue to incur damages. Thesesubsidiaries have been, and continue to be, involved in litigation to recover263 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energythe damages caused by the DOE’s delay in performance. See Note 8 to the financial statements for discussion of final judgments recorded byEntergy in 2017, 2018, and 2019 related to Entergy’s nuclear owner licensee subsidiaries’ litigation with the DOE. Through 2019, Entergy’ssubsidiaries won and collected on judgments against the government totaling over $600 million.Pending DOE acceptance and disposal of spent nuclear fuel, the owners of nuclear plants are providing their own spent fuelstorage. Storage capability additions using dry casks began operations at Palisades in 1993, at ANO in 1996, at River Bend in 2005, atGrand Gulf in 2006, at Indian Point in 2008, and at Waterford 3 in 2011. These facilities will be expanded as needed. Nuclear Plant DecommissioningEntergy Arkansas, Entergy Louisiana, and System Energy are entitled to recover from customers through electric rates the estimateddecommissioning costs for ANO, Waterford 3, and Grand Gulf, respectively. In addition, Entergy Louisiana and Entergy Texas are entitledto recover from customers through electric rates the estimated decommissioning costs for the portion of River Bend subject to retail rateregulation. The collections are deposited in trust funds that can only be used in accordance with NRC and other applicable regulatoryrequirements. Entergy periodically reviews and updates the estimated decommissioning costs to reflect inflation and changes in regulatoryrequirements and technology, and then makes applications to the regulatory authorities to reflect, in rates, the changes in projecteddecommissioning costs.In July 2010 the LPSC approved increased decommissioning collections for Waterford 3 and the Louisiana regulated share of RiverBend and in December 2010 the PUCT approved increased decommissioning collections for the Texas share of River Bend to addresspreviously identified funding shortfalls. This LPSC decision contemplated that the level of decommissioning collections could be revisitedshould the NRC grant license extensions for both Waterford 3 and River Bend. In July 2019, following the NRC approval of licenseextensions for Waterford 3 and River Bend, Entergy made a filing with the LPSC seeking to adjust decommissioning and depreciation ratesfor those plants, including one proposed scenario that would adjust Louisiana-jurisdictional decommissioning collections to zero for bothplants (including an offsetting increase in depreciation rates). An evidentiary hearing on the filing has been scheduled for July 2020, andmanagement cannot predict the outcome of the case. In December 2018 the APSC ordered collections in rates for decommissioning ANO 2and found that ANO 1’s decommissioning was adequately funded without additional collections. In November 2019, Entergy Arkansas fileda revised decommissioning cost recovery tariff for ANO indicating that both ANO 1 and ANO 2 decommissioning trusts were adequatelyfunded without further collections, and in December 2019, the APSC ordered zero collections for ANO 1 and ANO 2 decommissioning. InDecember 2018 the PUCT approved a settlement that eliminated River Bend decommissioning collections for the Texas jurisdictional shareof the plant based on a determination by Entergy Texas that the existing decommissioning fund was adequate following license renewal. InSeptember 2016 the NRC issued a 20-year operating license renewal for Grand Gulf. In a 2017 filing at the FERC, System Energy stated thatwith the renewed operating license, Grand Gulf’s decommissioning trust was sufficiently funded, and proposed (among other things) to ceasedecommissioning collections for Grand Gulf effective October 1, 2017. The FERC accepted a settlement including the proposeddecommissioning revenue requirement by letter order in August 2018. Entergy currently believes its decommissioning funding will besufficient for its nuclear plants subject to retail rate regulation, although decommissioning cost inflation and trust fund performance willultimately determine the adequacy of the funding amounts.In January 2019, Entergy sold 100% of the membership interest in Entergy Nuclear Vermont Yankee to a subsidiary of NorthStar. Asa result of the sale, NorthStar assumed ownership of Vermont Yankee and its decommissioning and site restoration trusts, together withcomplete responsibility for the facility’s decommissioning and site restoration. See Note 9 to the financial statements for further discussion ofVermont Yankee decommissioning costs and see “Entergy Wholesale Commodities Exit from the Merchant Power Business” in EntergyCorporation and Subsidiaries Management’s Financial Discussion and Analysis for further discussion of the NorthStar transaction.264 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyIn August 2019, Entergy sold 100% of the equity interests in Entergy Nuclear Generation Company, LLC to a subsidiary of HoltecInternational. As a result of the sale, Holtec assumed ownership of Pilgrim and its decommissioning trust, together with completeresponsibility for the facility’s decommissioning and site restoration. See Note 14 to the financial statements for further discussion of thesale.For the Indian Point 3 and FitzPatrick plants purchased in 2000 from NYPA, NYPA retained the decommissioning trust funds andthe decommissioning liabilities with the right to require the Entergy subsidiaries to assume each of the decommissioning liabilities providedthat it assigns the corresponding decommissioning trust, up to a specified level, to the Entergy subsidiaries. In August 2016, Entergy enteredinto a trust transfer agreement with NYPA to transfer the decommissioning trust funds and decommissioning liabilities for the Indian Point 3and FitzPatrick plants to Entergy, which was completed in January 2017. In March 2017, Entergy sold the FitzPatrick plant to Exelon, and aspart of the transaction, the FitzPatrick decommissioning trust fund, along with the decommissioning obligation for that plant, was transferredto Exelon. The FitzPatrick spent fuel disposal contract was assigned to Exelon as part of the transaction. See Note 14 to the financialstatements for discussion of the FitzPatrick sale.In March 2019 filings with the NRC were made for Entergy subsidiaries’ nuclear plants reporting on decommissioningfunding. Those reports showed that decommissioning funding for each of those nuclear plants met the NRC’s financial assurance andplanning requirements.Additional information with respect to Entergy’s decommissioning costs and decommissioning trust funds is found in Note 9 andNote 16 to the financial statements.Price-Anderson ActThe Price-Anderson Act requires that reactor licensees purchase and maintain the maximum amount of nuclear liability insuranceavailable and participate in an industry assessment program called Secondary Financial Protection in order to protect the public in the eventof a nuclear power plant accident. The costs of this insurance are borne by the nuclear power industry. Congress amended and renewed thePrice-Anderson Act in 2005 for a term through 2025. The Price-Anderson Act limits the contingent liability for a single nuclear incident to amaximum assessment of approximately $137.6 million per reactor (with 98 nuclear industry reactors currently participating). In the case of anuclear event in which Entergy Arkansas, Entergy Louisiana, System Energy, or an Entergy Wholesale Commodities company is liable,protection is afforded through a combination of private insurance and the Secondary Financial Protection program. In addition to this,insurance for property damage, costs of replacement power, and other risks relating to nuclear generating units is also purchased. The Price-Anderson Act and insurance applicable to the nuclear programs of Entergy are discussed in more detail in Note 8 to the financial statements.NRC Reactor Oversight ProcessThe NRC’s Reactor Oversight Process is a program to collect information about plant performance, assess the information for itssafety significance, and provide for appropriate licensee and NRC response. The NRC evaluates plant performance by analyzing two distinctinputs: inspection findings resulting from the NRC’s inspection program and performance indicators reported by the licensee. Theevaluations result in the placement of each plant in one of the NRC’s Reactor Oversight Process Action Matrix columns: “licensee responsecolumn,” or Column 1, “regulatory response column,” or Column 2, “degraded cornerstone column,” or Column 3, and “multiple/repetitivedegraded 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 increasinglevels of associated costs. The nuclear generating plants owned and operated by Entergy’s Utility and Entergy Wholesale Commoditiesbusinesses are currently in Column 1.265 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyEnvironmental RegulationEntergy’s facilities and operations are subject to regulation by various governmental authorities having jurisdiction over air quality,water quality, control of toxic substances and hazardous and solid wastes, and other environmental matters. Management believes thatEntergy’s businesses are in substantial compliance with environmental regulations currently applicable to its facilities and operations, withreference to possible exceptions noted below. Because environmental regulations are subject to change, future compliance requirements andcosts cannot be precisely estimated. Except to the extent discussed below, at this time compliance with federal, state, and local provisionsregulating the discharge of materials into the environment, or otherwise protecting the environment, is incorporated into the routine coststructure of Entergy’s businesses and is not expected to have a material effect on their competitive position, results of operations, cash flows,or financial position.Clean Air Act and Subsequent AmendmentsThe Clean Air Act and its amendments establish several programs that currently or in the future may affect Entergy’s fossil-fueledgeneration facilities and, to a lesser extent, certain operations at nuclear and other facilities. Individual states also operate similarindependent state programs or delegated federal programs that may include requirements more stringent than federal regulatoryrequirements. These programs include:•New source review and preconstruction permits for new sources of criteria air pollutants, greenhouse gases, and significantmodifications to existing facilities;•Acid rain program for control of sulfur dioxide (SO2) and nitrogen oxides (NOx);•Nonattainment area programs for control of criteria air pollutants, which could include fee assessments for air pollutant emissionsources under Section 185 of the Clean Air Act if attainment is not reached in a timely manner;•Hazardous air pollutant emissions reduction programs;•Interstate Air Transport;•Operating permit programs and enforcement of these and other Clean Air Act programs;•Regional Haze programs; and•New and existing source standards for greenhouse gas and other air emissions.New Source Review (NSR)Preconstruction permits are required for new facilities and for existing facilities that undergo a modification that results in asignificant net emissions increase and is not classified as routine repair, maintenance, or replacement. Units that undergo certain non-routinemodifications must obtain a permit modification and may be required to install additional air pollution control technologies. In August 2019the EPA proposed to amend the NSR regulations to clarify when a physical change or change in the method of operation will constitute sucha modification. Entergy has an established process for identifying modifications requiring additional permitting approval and is monitoringthe regulations and associated guidance provided by the states and the federal government with regard to the determination of routine repair,maintenance, and replacement. Several years ago, however, the EPA implemented an enforcement initiative, aimed primarily at coal plants,to identify modifications that it does not consider routine for which the unit did not obtain a modified permit. Various courts and the EPAhave been inconsistent in their judgments regarding modifications that are considered routine and on other legal issues that affect thisprogram.In February 2011, Entergy received a request from the EPA for several categories of information concerning capital and maintenanceprojects at the White Bluff and Independence facilities, both located in Arkansas, in order to determine compliance with the Clean Air Act,including NSR requirements and air permits issued by the Arkansas Department of Environmental Quality. In August 2011, Entergy’sNelson facility, located in Louisiana, received a similar request for information from the EPA. In September 2015 an additional request forsimilar information was received for the White Bluff facility. Entergy responded to all requests. None of these EPA requests for informationalleged that the facilities were in violation of law.266 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyIn January and February 2018, Entergy Arkansas, Entergy Mississippi, Entergy Power, and other co-owners received 60-day noticeof intent to sue letters from the Sierra Club and the National Parks Conservation Association concerning allegations of violations of newsource review and permitting provisions of the Clean Air Act at the Independence and White Bluff coal-burning units, respectively. InNovember 2018, following extensive negotiations, Entergy Arkansas, Entergy Mississippi, and Entergy Power entered a proposed settlementresolving those claims as well as other issues facing Entergy Arkansas’s fossil generation plants. The settlement, which formally resolves acomplaint filed by the Sierra Club and the National Parks Conservation Association, is subject to approval by the U.S. District Court for theDistrict of Arkansas. In October 2019 the District Court requested supplemental briefing on several issues to be resolved prior to addressingthe motion to approve the settlement. For further information about the settlement, see “Regional Haze” discussed below. National Ambient Air Quality StandardsThe Clean Air Act requires the EPA to set National Ambient Air Quality Standards (NAAQS) for ozone, carbon monoxide, lead,nitrogen dioxide, particulate matter, and sulfur dioxide, and requires periodic review of those standards. When an area fails to meet anambient standard, it is considered to be in nonattainment and is classified as “marginal,” “moderate,” “serious,” or “severe.” When an areafails to meet the ambient air standard, the EPA requires state regulatory authorities to prepare state implementation plans meant to causeprogress toward bringing the area into attainment with applicable standards.Ozone NonattainmentEntergy Texas operates one fossil-fueled generating facility (Lewis Creek) and is in the process of constructing another fossil-fueledgenerating facility (Montgomery County Power Station) in a geographic area that is not in attainment with the applicable NAAQS forozone. The ozone nonattainment area that affects Entergy Texas is the Houston-Galveston-Brazoria area. Both Lewis Creek and theMontgomery County Power Station hold all necessary permits for construction and operation and comply with applicable air quality programregulations. Measures enacted to return the area to ozone attainment could make these program regulations more stringent. Entergy willcontinue to work with state environmental agencies on appropriate methods for assessing attainment and nonattainment with the ozoneNAAQS.Potential SO2 NonattainmentThe EPA issued a final rule in June 2010 adopting an SO2 1-hour national ambient air quality standard of 75 parts per billion. InEntergy’s utility service territory, only St. Bernard Parish and Evangeline Parish in Louisiana are designated as nonattainment. In August2017 the EPA issued a letter indicating that East Baton Rouge and St. Charles parishes would be designated by December 31, 2020, asmonitors were installed to determine compliance. Entergy continues to monitor this situation.Hazardous Air PollutantsThe EPA released the final Mercury and Air Toxics Standard (MATS) rule in December 2011, which had a compliance date, with awidely granted one-year extension, of April 2016. The required controls have been installed and are operational at all affected Entergy units.In February 2019 the EPA published its proposed rule that finds that it is not “appropriate and necessary” to regulate hazardous air pollutantsfrom electric steam generating units under the provisions of section 112(n) of the Clean Air Act. This is a reversal of the EPA’s previousfinding requiring such regulation. However, the proposal does not seek to revise the MATS rule at this time. Entergy will continue to monitorthis situation.267 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyRegional HazeIn June 2005 the EPA issued its final Clean Air Visibility Rule (CAVR) regulations that potentially could result in a requirement toinstall SO2 and NOx pollution control technology as Best Available Retrofit Control Technology (BART) to continue operating certain ofEntergy’s fossil generation units. The rule leaves certain CAVR determinations to the states. In Arkansas, the Arkansas Department of Environmental Quality prepared a state implementation plan (SIP) for Arkansas facilities toimplement its obligations under the CAVR. In April 2012 the EPA finalized a decision addressing the Arkansas Regional Haze SIP, inwhich it disapproved a large portion of the Arkansas plan, including the emission limits for NOx and SO2 at White Bluff. In April 2015 theEPA published a proposed federal implementation plan (FIP) for Arkansas, taking comment on requiring installation of scrubbers and lowNOx burners to continue operating both units at the White Bluff plant and both units at the Independence plant and NOx controls to continueoperating the Lake Catherine plant. Entergy filed comments by the deadline in August 2015. Among other comments, including opposition tothe EPA’s proposed controls on the Independence units, Entergy proposed to meet more stringent SO2 and NOx limits at both White Bluffand Independence within three years of the effective date of the final FIP and to cease the use of coal at the White Bluff units at a later date.In September 2016 the EPA published the final Arkansas Regional Haze FIP. In most respects, the EPA finalized its originalproposal but shortened the time for compliance for installation of the NOx controls. The FIP required an emission limitation consistent withSO2 scrubbers at both White Bluff and Independence by October 2021 and NOx controls by April 2018. The EPA declined to adopt Entergy’sproposals related to ceasing coal use as an alternative to SO2 scrubbers for White Bluff SO2 BART. In November 2016, Entergy and otherinterested parties, including the State of Arkansas, filed petitions for administrative reconsideration and stay at the EPA as well as petitionsfor judicial review in the U.S. Court of Appeals for the Eighth Circuit. The Eighth Circuit granted the stay pending settlement discussions andpending the State’s development of a SIP that, if approved by the EPA, would replace the FIP. The state has proposed its replacement SIP intwo parts: Part I considers NOx requirements, and Part II considers SO2 requirements. The EPA approved the Part I NOx SIP in January 2018.The Part I SIP requires that Entergy address NOx impacts on visibility via compliance with the Cross State Air Pollution Rule ozone-seasonemission trading program. Arkansas has finalized a Part II SIP which has been approved by the EPA but is currently pending a state courtappeal. That appeal has been stayed pending the outcome of a federal court case, which may resolve many of the issues on appeal. The finalPart II SIP requires that Entergy achieve SO2 emission reductions via the use of low-sulfur coal at both White Bluff and Independence withinthree years. The Part II SIP also requires that Entergy cease to use coal at White Bluff by December 31, 2028 and notes the current planningassumption that Entergy’s Independence units will cease to burn coal by December 31, 2030.In January and February 2018, Entergy Arkansas, Entergy Mississippi, Entergy Power, and other co-owners received 60-day noticeof intent to sue letters from the Sierra Club and the National Parks Conservation Association concerning allegations of violations of newsource review and permitting provisions of the Clean Air Act at the Independence and White Bluff coal-burning units, respectively. InNovember 2018, following extensive negotiations, Entergy Arkansas, Entergy Mississippi, and Entergy Power entered a proposed settlementresolving those claims and reducing the risk that Entergy Arkansas, as operator of Independence and White Bluff, might be compelled underthe Clean Air Act’s regional haze program to install costly emissions control technologies. Consistent with the terms of the settlement and inmany cases also the Part II SIP, Entergy Arkansas, along with co-owners, will begin using only low-sulfur coal at Independence and WhiteBluff by mid-2021; cease to use coal at White Bluff and Independence by the end of 2028 and 2030, respectively; cease operation of theremaining gas unit at Lake Catherine by the end of 2027; reserve the option to develop new generating sources at each plant site; and committo 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 theend of 2022 (which includes two existing Entergy Arkansas projects) and with all qualifying co-owner projects counting toward satisfactionof the obligation. Under the settlement, the Sierra Club and the National Parks Conservation Association also waive certain potential existingclaims under federal and state environmental law with respect to specified generating plants. The settlement, which formally resolves acomplaint filed by the Sierra Club and the268 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyNational Parks Conservation Association, is subject to approval by the U.S. District Court for the Eastern District of Arkansas. The EPA,which is allowed to comment on such a settlement agreement, has stated that it has no objections to the settlement. Pending before the courtare a motion by the plaintiffs to approve the settlement, in support of which Entergy made a filing, and motions by the Arkansas AttorneyGeneral and the Arkansas Affordable Energy Coalition to intervene and to stay the proceedings. The Arkansas Attorney General also filed anapplication before the APSC in December 2018 seeking an investigation into the effects of the settlement. The Arkansas Affordable EnergyCoalition filed to support the application, and Entergy Arkansas filed a motion to dismiss. The application remains pending before the APSC.In October 2019 the District Court requested supplemental briefing on several issues to be resolved prior to addressing the motion to approvethe settlement.In Louisiana, Entergy has worked with the Louisiana Department of Environmental Quality (LDEQ) and the EPA to revise theLouisiana SIP for regional haze, which had been disapproved in part in 2012. The LDEQ submitted a revised SIP in February 2017. In May2017 the EPA proposed to approve a majority of the revisions. In September 2017 the EPA issued a proposed SIP approval for the Nelsonplant, requiring an emission limitation consistent with the use of low-sulfur coal, with a compliance date of January 22, 2021. The EPAissued final approval in December 2017. The EPA approval was appealed to the U.S. Court of Appeals for the Fifth Circuit. In October 2019the Fifth Circuit affirmed EPA’s SIP approval.New and Existing Source Performance Standards for Greenhouse Gas EmissionsIn July 2019 the EPA released the Affordable Clean Energy Rule (ACE), which applies only to existing coal-fired electric generatingunits. The ACE determines that heat rate improvements are the best system of emission reductions and lists six candidate technologies forconsideration by states at each coal unit. The rule and associated rulemakings by the EPA replace the Obama administration’s Clean PowerPlan rule. The ACE rule provides states discretion in determining how the best system for emission reductions applies to individual units,including through the consideration of technical feasibility and the remaining useful life of the facility. Entergy is evaluating the finalAffordable Clean Energy Rule’s impacts on its coal units and will monitor litigation challenging the rule. The EPA also has proposed arevision to the new source performance standard on greenhouse gas emissions that primarily impacts new coal units and, therefore, shouldnot impact Entergy.Potential Legislative, Regulatory, and Judicial DevelopmentsIn addition to the specific instances described above, there are a number of legislative and regulatory initiatives concerning airemissions, as well as other media, that are under consideration at the federal, state, and local level. Because of the nature of Entergy’sbusiness, the imposition of any of these initiatives could affect Entergy’s operations. Entergy continues to monitor these initiatives andactivities in order to analyze their potential operational and cost implications. These initiatives include:•designation by the EPA and state environmental agencies of areas that are not in attainment with national ambient air qualitystandards;•introduction of bills in Congress and development of regulations by the EPA proposing further limits on NOx, SO2, mercury, andcarbon dioxide and other air emissions. New legislation or regulations applicable to stationary sources could take the form ofmarket-based cap-and-trade programs, direct requirements for the installation of air emission controls onto air emission sources, orother or combined regulatory programs;•efforts in Congress or at the EPA to establish a federal carbon dioxide emission tax, control structure or unit performance standards;•revisions to the estimates of the Social Cost of Carbon and its use for regulatory impact analysis of Federal laws and regulations;•implementation of the Regional Greenhouse Gas Initiative by several states in the northeastern United States and similar actions inother regions of the United States;269 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energy•efforts on the state and federal level to codify renewable portfolio standards, clean energy standards, or a similar mechanism requiringutilities to produce or purchase a certain percentage of their power from defined renewable energy sources or energy sources withlower emissions;•efforts to develop more stringent state water quality standards, effluent limitations for Entergy’s industry sector, stormwater runoffcontrol regulations, and cooling water intake structure requirements;•efforts to restrict the previously-approved continued use of oil-filled equipment containing certain levels of PCBs;•efforts by certain external groups to encourage reporting and disclosure of carbon dioxide emissions and risk;•the listing of additional species as threatened or endangered, the protection of critical habitat for these species, and developments inthe legal protection of eagles and migratory birds; and•the regulation of the management, disposal, and beneficial reuse of coal combustion residuals.Entergy continues to support national legislation that would increase planning certainty for electric utilities while addressing carbondioxide emissions in a responsible and flexible manner. By virtue of its proportionally large investment in low-emitting gas-fired and nucleargeneration technologies, Entergy has a low overall carbon dioxide emission “intensity,” or rate of carbon dioxide emitted per megawatt-hourof electricity generated. In anticipation of the imposition of carbon dioxide emission limits on the electric industry, Entergy initiated actionsdesigned to reduce its exposure to potential new governmental requirements related to carbon dioxide emissions. These voluntary actionsincluded a formal program to stabilize owned power plant carbon dioxide emissions at 2000 levels through 2005, and Entergy succeeded inreducing emissions below 2000 levels. In 2006, Entergy started including emissions from controllable power purchases in addition to itsownership share of generation and established a second formal voluntary program to stabilize power plant carbon dioxide emissions andemissions from controllable power purchases, cumulatively over the period, at 20% below 2000 levels through 2010. In 2011, Entergyextended this commitment through 2020. Total carbon dioxide emissions representing Entergy’s ownership share of power plants andcontrollable power purchases in the United States were approximately 40.7 million tons in 2019 and 43.7 tons in 2018.Entergy voluntarily conducted a climate scenario analysis and published a comprehensive report in March 2019. The report followsthe framework and recommendations of the Task Force on Climate-related Disclosures, describing climate-related governance, strategy, riskmanagement, and metrics and targets. Scenario analysis resulted in Entergy developing and publishing a new goal of reducing the Utility’semission rate by 50 percent from 2000 levels by 2030.Entergy participates in the M.J. Bradley & Associates’ Annual Benchmarking Air Emissions Report, an annual analysis of the 100largest U.S. electric power producers. The report is available on the M.J. Bradley website. Entergy’s annual greenhouse gas emissionsinventory is also third-party verified, and that certification is made available on the American Carbon Registry website. Entergy participatesannually in the Dow Jones Sustainability Index and in 2019 was listed on the North American Index. Entergy has been listed on the World orNorth American Index, or both, for eighteen consecutive years.Clean Water ActThe 1972 amendments to the Federal Water Pollution Control Act (known as the Clean Water Act) provide the statutory basis for theNational Pollutant Discharge Elimination System (NPDES) permit program, section 402, and the basic structure for regulating the dischargeof pollutants from point sources to waters of the United States. The Clean Water Act requires virtually all discharges of pollutants to watersof the United States to be permitted. Section 316(b) of the Clean Water Act regulates cooling water intake structures, section 401 of theClean Water Act requires a water quality certification from the state in support of certain federal actions and approvals, and section 404regulates the dredge and fill of waters of the United States, including jurisdictional wetlands.270 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergySteam Electric Effluent GuidelinesThe 2015 Steam Electric Effluent Limitations Guidelines (ELG) rule requires, among other things, that there be no discharge ofbottom ash transport water. The no-discharge requirement contains no exceptions and could cause compliance problems for Entergy’s coalfacilities during heavy storm events and under certain non-routine operational conditions. The ELG rule’s compliance dates currently aredelayed while the EPA reconsiders the rule. Additionally, the Fifth Circuit Court of Appeals recently vacated and remanded the provisions ofthe rule related to legacy wastewater and leachate. In November 2019 the EPA released a proposed rule revision on bottom ash transportwater that will allow some flexibility for storm events and non-routine operations. A separate rulemaking is expected to address the legacywastewater and leachate issues. Despite the impending rulemaking, Entergy is implementing projects at its White Bluff and Independenceplants to convert to zero-discharge systems to comply with the ELG rule and the coal combustion residuals restrictions on impoundments.Additionally, the Nelson Unit 6 facility is implementing operational and maintenance measures to ensure its original zero-discharge design ismaintained for compliance with the ELG rule.Federal Jurisdiction of Waters of the United StatesIn February 2019 the EPA published its proposed revised definition of Waters of the United States, which proposes to narrow thescope of Clean Water Act jurisdiction, as compared to a 2015 definition which had been stayed by several federal courts. The final rule wasreleased in January 2020. In October 2019 the EPA repealed the 2015 rule and re-codified the pre-existing regulations. That rule waseffective late December 2019. Numerous challenges are expected for both rules.Groundwater at Certain Nuclear SitesThe NRC requires nuclear power plants to monitor and report regularly the presence of radioactive material in theenvironment. Entergy joined other nuclear utilities and the Nuclear Energy Institute in 2006 to develop a voluntary groundwater monitoringand protection program. This initiative began after detection of very low levels of radioactive material, primarily tritium, in groundwater atseveral plants in the United States. Tritium is a radioactive form of hydrogen that occurs naturally and is also a byproduct of nuclear plantoperations. In addition to tritium, other radionuclides have been found in site groundwater at nuclear plants.As part of the groundwater monitoring and protection program, Entergy has: (1) performed reviews of plant groundwatercharacteristics (hydrology) and historical records of past events on site that may have potentially impacted groundwater; (2) implementedfleet procedures on how to handle events that could impact groundwater; and (3) installed groundwater monitoring wells and began periodicsampling. The program also includes protocols for notifying local officials if contamination is found. To date, radionuclides such as tritiumhave been detected at Arkansas Nuclear One, Indian Point, Palisades, Grand Gulf, and River Bend. Each of these sites has installedgroundwater monitoring wells and implemented a program for testing groundwater at the sites for the presence of tritium and otherradionuclides. Based on current information, the concentrations and locations of radionuclides detected at these plants pose no threat topublic health or safety, but each site continues to evaluate the results from its groundwater monitoring program.Comprehensive Environmental Response, Compensation, and Liability Act of 1980The Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA), authorizes the EPAto mandate clean-up by, or to collect reimbursement of clean-up costs from, owners or operators of sites at which hazardous substances maybe or have been released. Certain private parties also may use CERCLA to recover response costs. Parties that transported hazardoussubstances to these sites or arranged for the disposal of the substances are also deemed liable by CERCLA. CERCLA has been interpreted toimpose strict, joint and several liability on responsible parties. Many states have adopted programs similar to CERCLA. Entergy subsidiariesin the Utility and Entergy Wholesale Commodities businesses have sent waste materials to various disposal271 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System Energysites over the years, and releases have occurred at Entergy facilities including nuclear facilities that have been or will be sold todecommissioning companies. In addition, environmental laws now regulate certain of Entergy’s operating procedures and maintenancepractices that historically were not subject to regulation. Some disposal sites used by Entergy subsidiaries have been the subject ofgovernmental action under CERCLA or similar state programs, resulting in site clean-up activities. Entergy subsidiaries have participated tovarious degrees in accordance with their respective potential liabilities in such site clean-ups and have developed experience with clean-upcosts. The affected Entergy subsidiaries have established provisions for the liabilities for such environmental clean-up and restorationactivities. Details of potentially material CERCLA and similar state program liabilities are discussed in the “Other Environmental Matters”section below.Coal Combustion ResidualsIn June 2010 the EPA issued a proposed rule on coal combustion residuals (CCRs) that contained two primary regulatory options: (1)regulating CCRs destined for disposal in landfills or received (including stored) in surface impoundments as so-called “special wastes” underthe hazardous waste program of RCRA Subtitle C; or (2) regulating CCRs destined for disposal in landfills or surface impoundments as non-hazardous wastes under Subtitle D of RCRA. Under both options, CCRs that are beneficially reused in certain processes would remainexcluded from hazardous waste regulation. In April 2015 the EPA published the final CCR rule with the material being regulated under thesecond scenario presented above - as non-hazardous wastes regulated under RCRA Subtitle D.The final regulations create new compliance requirements including modified storage, new notification and reporting practices,product disposal considerations, and CCR unit closure criteria. Entergy believes that on-site disposal options will be available at itsfacilities, to the extent needed for CCR that cannot be transferred for beneficial reuse. As of December 31, 2019, Entergy has recorded assetretirement obligations related to CCR management of $19.2 million.In December 2016 the Water Infrastructure Improvements for the Nation Act (WIIN Act) was signed into law, which authorizesstates to regulate coal ash rather than leaving primary enforcement to citizen suit actions. States may submit to the EPA proposals for apermit program. In September 2017 the EPA agreed to reconsider certain provisions of the CCR rule in light of the WIIN Act. In July 2018the EPA released its initial revisions extending certain deadlines and incorporating some risk-based standards. In August 2018 the D.C.Circuit vacated several provisions of the CCR rule on the basis that they were inconsistent with the Resource Conservation and Recovery Actand remanded the matter to the EPA to conduct further rulemaking. In August 2019 the EPA released its second set of proposed revisions tothe CCR rule and plans at least three additional rulemakings.Pursuant to the EPA Rule, Entergy operates groundwater monitoring systems surrounding its coal combustion residual landfillslocated at White Bluff, Independence, and Nelson. Monitoring to date has detected concentrations of certain listed constituents in the area,but has not indicated that these constituents originated at the active landfill cells. Reporting has occurred as required, and detectionmonitoring will continue as the rule requires. In late-2017, Entergy determined that certain in-ground wastewater treatment system recycleponds at its White Bluff and Independence facilities require management under the new EPA regulations. In order to meet these regulations,one of two recycle ponds at White Bluff commenced closure in October 2018. Additionally, the second recycle pond at White Bluff plans toinitiate closure on or before October 31, 2020. Any potential requirements for corrective action or operational changes under the new EPArule continue to be assessed. Notably, ongoing litigation has resulted in the EPA’s continuing review of the rule. Consequently, the natureand cost of additional corrective action requirements may depend, in part, on the outcome of the EPA’s review.272 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyOther Environmental MattersEntergy Louisiana and Entergy TexasEntergy Louisiana, as successor in interest to Entergy Gulf States Louisiana, currently is involved in the second phase of the remedialinvestigation of the Lake Charles Service Center site, located in Lake Charles, Louisiana. A manufactured gas plant (MGP) is believed tohave operated at this site from approximately 1916 to 1931. Coal tar, a by-product of the distillation process employed at MGPs, apparentlywas routed to a portion of the property for disposal. The same area also has been used as a landfill. In 1999, Entergy Gulf States, Inc. signeda second administrative consent order with the EPA to perform a removal action at the site. Removal actions addressed contaminated sourcematerial, soil, and sediment and included capping certain soil on and off-site. In 2002 approximately 7,400 tons of contaminated soil anddebris were excavated and disposed of from an area within the service center. In 2003 a cap was constructed over the remedial area toprevent the migration of contamination to the surface. In August 2005 an administrative order was issued by the EPA requiring that a 10-year groundwater study be conducted at this site. The groundwater monitoring study commenced in January 2006. The EPA released thesecond Five Year Review in 2015. In that review, the EPA indicated that the remediation technique was insufficient and that Entergy wouldneed to utilize other remediation technologies on the site. In July 2015, Entergy submitted a Focused Feasibility Study to the EPA outliningthe potential remedies and suggesting installation of the new remedial method, a waterloo barrier. The estimated cost for this remedy isapproximately $2 million, to be allocated between Entergy Louisiana and Entergy Texas. In early 2017 the EPA indicated that the waterloobarrier may not be necessary and requested revisions to the Focused Feasibility Study. The EPA released the third Five Year Review in late-2019 confirming that a new remedial method is not necessary but requiring continuation of the current groundwater monitoring. The site’sremedy includes monitored natural attenuation of groundwater, and institutional controls to restrict groundwater and land use. The EPA hasdetermined that no additional actions are needed for the remedy to be protective over the long-term, and the remedy is protective of humanhealth and the environment.Entergy Arkansas, Entergy Louisiana, Entergy New Orleans, and Entergy TexasThe Texas Commission on Environmental Quality (TCEQ) notified Entergy Arkansas, Entergy Louisiana, Entergy New Orleans, andEntergy Texas that the TCEQ believes those entities are potentially responsible parties (PRPs) concerning contamination existing at the SanAngelo Electric Service Company (SESCO) facility in San Angelo, Texas. The facility operated as a transformer repair and scrappingfacility from the 1930s until 2003. Both soil and groundwater contamination existed at the site. Entergy subsidiaries sent transformers to thisfacility. Entergy Arkansas, Entergy Louisiana, and Entergy Texas responded to an information request from the TCEQ. Entergy Louisianaand Entergy Texas joined a group of PRPs responding to site conditions in cooperation with the State of Texas, creating cost allocationmodels based on review of SESCO documents and employee interviews, and investigating contribution actions against other PRPs. EntergyLouisiana and Entergy Texas have agreed to contribute to the remediation of contaminated soil and groundwater at the site in a measureproportionate to those companies’ involvement at the site. Current estimates, although variable depending on ultimate remediation designand performance, indicate that Entergy’s total share of remediation costs likely will be approximately $1.5 million to $2million. Groundwater monitoring wells at the site were plugged and abandoned in December 2019 following receipt of a certificate ofcompletion issued by the TCEQ. Site decommissioning activities will occur, and final disposition of the property will be determined at a latertime.273 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyEntergy TexasIn December 2016 a transformer inside the Hartburg, Texas Substation had an internal fault resulting in a release of approximately15,000 gallons of non-PCB mineral oil. Cleanup ensued immediately; however, rain caused much of the oil to spread across the substationyard and into a nearby wetland. The Texas Commission on Environmental Quality (TCEQ) and the National Response Center wereimmediately notified, and the TCEQ responded to the site approximately two hours after the cleanup was initiated. The remediation liabilityis estimated at $2.2 million; however, this number could fluctuate depending on the remediation extent and wetland mitigation requirements.In July 2017, Entergy entered into the Voluntary Cleanup Program with the TCEQ. In November 2017, additional soil sampling wascompleted in the wetland area and, in February 2018, a site summary report of findings was submitted to the TCEQ. The TCEQ responded inJune 2018 and requested an ecological exclusion criteria checklist/Tier II screening-level ecological risk assessment, and additional siteassessment, additional soil samples, groundwater samples, and some additional diagrams and maps. In October 2018, Entergy submitted therequested information to the TCEQ. In January 2019 the TCEQ responded with another request for information. In March 2019, Entergysubmitted the requested information to the TCEQ. In August 2019 the TCEQ responded with a request for additional information includingan Affected Property Assessment Report (APAR) and water well survey. The TCEQ has agreed that the necessity of the water well survey isdependent on the results of the groundwater resampling that will occur. Groundwater sampling was completed in December 2019 and resultswere submitted to the TCEQ for review. Based on the groundwater sampling results, the TCEQ has indicated that a water well survey is notnecessary. The deadline for submittal of the APAR will be 180 days following the receipt of the TCEQ’s letter confirming approval of thegroundwater sampling results.LitigationEntergy uses legal and appropriate means to contest litigation threatened or filed against it, but certain states in which Entergyoperates have proven to be unusually litigious environments. Judges and juries in Louisiana, Mississippi, and Texas have demonstrated awillingness to grant large verdicts, including punitive damages, to plaintiffs in personal injury, property damage, and business tort cases. Thelitigation environment in these states poses a significant business risk to Entergy.Ratepayer and Fuel Cost Recovery Lawsuits (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, and Entergy Texas)Mississippi Attorney General ComplaintSee Note 2 to the financial statements for a discussion of this proceeding. Asbestos Litigation (Entergy Arkansas, Entergy Louisiana, Entergy New Orleans, and Entergy Texas)See Note 8 to the financial statements for a discussion of this litigation.Employment and Labor-related Proceedings (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, Entergy Texas, and System Energy)See Note 8 to the financial statements for a discussion of these proceedings.274 Table of ContentsPart I Item 1Entergy Corporation, Utility operating companies, and System EnergyEmployeesEmployees are an integral part of Entergy’s commitment to serving customers. As of December 31, 2019, Entergy subsidiariesemployed 13,635 people.Utility: Entergy Arkansas1,251Entergy Louisiana1,670Entergy Mississippi745Entergy New Orleans308Entergy Texas643System Energy—Entergy Operations3,564Entergy Services3,899Entergy Nuclear Operations1,505Other subsidiaries50Total Entergy13,635Approximately 4,100 employees are represented by the International Brotherhood of Electrical Workers, the Utility Workers Unionof America, the International Brotherhood of Teamsters, the United Government Security Officers of America, and the International Union,Security, Police, and Fire Professionals of America.Availability of SEC filings and other information on Entergy’s websiteEntergy electronically files reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, currentreports on Form 8-K, proxies, and amendments to such reports. The SEC maintains an internet site that contains reports, proxy andinformation statements, and other information regarding registrants that file electronically with the SEC at http://www.sec.gov. Copies of thereports that Entergy files with the SEC can be obtained at the SEC’s website.Entergy uses its website, http://www.entergy.com, as a routine channel for distribution of important information, including newsreleases, analyst presentations and financial information. Filings made with the SEC are posted and available without charge on Entergy’swebsite as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. These filings include annual andquarterly reports on Forms 10-K and 10-Q (including related filings in Inline XBRL format) and current reports on Form 8-K; proxystatements; and any amendments to those reports or statements. All such postings and filings are available on Entergy’s Investor Relationswebsite free of charge. Entergy is providing the address to its internet site solely for the information of investors and does not intend theaddress to be an active link. The contents of the website are not incorporated into this report.275 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System EnergyRISK FACTORSInvestors should review carefully the following risk factors and the other information in this Form 10-K. The risks that Entergy facesare not limited to those in this section. There may be additional risks and uncertainties (either currently unknown or not currently believed tobe material) that could adversely affect Entergy’s financial condition, results of operations, and liquidity. See “FORWARD-LOOKINGINFORMATION.”Utility Regulatory Risks(Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, andSystem Energy)The terms and conditions of service, including electric and gas rates, of the Utility operating companies and System Energy aredetermined through regulatory approval proceedings that can be lengthy and subject to appeal that could result in delays in effecting ratechanges and uncertainty as to ultimate results. The Utility operating companies are regulated on a cost-of-service and rate of return basis and are subject to statutes and regulatorycommission rules and procedures. The rates that the Utility operating companies and System Energy charge reflect their capital expenditures,operations and maintenance costs, allowed rates of return, financing costs, and related costs of service. These rates significantly influence thefinancial condition, results of operations, and liquidity of Entergy and each of the Utility operating companies and System Energy. Theserates are determined in regulatory proceedings and are subject to periodic regulatory review and adjustment, including adjustment upon theinitiative of a regulator or affected stakeholders.In addition, regulators may initiate proceedings to investigate the prudence of costs in the Utility operating companies’ base rates andexamine, among other things, the reasonableness or prudence of the companies’ operation and maintenance practices, level of expenditures(including storm costs and costs associated with capital projects), allowed rates of return and rate base, proposed resource acquisitions, andpreviously incurred capital expenditures that the operating companies seek to place in rates. The regulators may disallow costs subject totheir jurisdiction found not to have been prudently incurred or found not to have been incurred in compliance with applicable tariffs, creatingsome risk to the ultimate recovery of those costs. Regulatory proceedings relating to rates and other matters typically involve multipleparties seeking to limit or reduce rates. Traditional base rate proceedings, as opposed to formula rate plans, generally have long timelines, areprimarily based on historical costs, and may or may not be limited in scope or duration by statute. The length of these base rate proceedingscan cause the Utility operating companies and System Energy to experience regulatory lag in recovering costs through rates, such that theUtility operating companies may not fully recover all costs during the rate effective period and the Utility operating companies may,therefore, earn less than their allowed returns. Decisions are typically subject to appeal, potentially leading to additional uncertaintyassociated with rate case proceedings. The Utility operating companies have large customer and stakeholder bases and, as a result, could be the subject of public criticism oradverse publicity focused on issues including the operation of their assets and infrastructure or the quality of their service. Criticism oradverse publicity of this nature could render legislatures and other governing bodies, public service commissions and other regulatoryauthorities, and government officials less likely to view the applicable operating company in a favorable light and could potentially negativelyaffect legislative or regulatory processes or outcomes, as well as lead to increased regulatory oversight or more stringent legislative orregulatory requirements.The base rates of Entergy Texas are established largely in traditional base rate case proceedings. Between base rate proceedings,Entergy Texas has available rate riders to recover the revenue requirements associated with certain incremental costs. For example, EntergyTexas has recovered distribution-related capital investments through the distribution cost recovery factor rider mechanism, transmission-related capital investments and certain non-fuel MISO charges through the transmission cost recovery factor rider mechanism, and MISOfuel and energy-related costs276 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energythrough the fixed fuel factor mechanism. Entergy Texas is also required to make a filing every three years, at a minimum, reconciling its fueland purchased power costs and fuel factor revenues. In the course of this reconciliation, the PUCT determines whether eligible fuel and fuel-related expenses and revenues are necessary and reasonable, and makes a prudence finding for each of the fuel-related contracts for thereconciliation period.Between base rate cases, Entergy Arkansas and Entergy Mississippi are able to adjust base rates annually through formula rate plansthat utilize a forward test year (Entergy Arkansas) or forward-looking features (Entergy Mississippi). In response to Entergy Arkansas’sapplication for a general change in rates in 2015, the APSC approved the formula rate plan tariff proposed by Entergy Arkansas including itsuse of a projected year test period and an initial five-year term. The initial five-year term expires in 2021 unless Entergy Arkansas requests,and the APSC approves, the extension of the formula rate plan tariff for an additional five years through 2026. If Entergy Arkansas’s formularate plan were terminated or not extended beyond the initial term, Entergy Arkansas could file an application for a general change in ratesthat may include a request for continued regulation under a formula rate review mechanism. If Entergy Mississippi’s formula rate plan isterminated, it would revert to the more traditional rate case environment or seek approval of a new formula rate plan. Entergy Arkansas andEntergy Mississippi recover fuel and purchased energy and certain non-fuel costs through other APSC-approved and MPSC-approved tariffs,respectively.Entergy Louisiana historically sets electric base rates annually through a formula rate plan using an historic test year. The form of theformula rate plan, on a combined basis, was approved in connection with the business combination of Entergy Louisiana and Entergy GulfStates Louisiana and largely followed the formula rate plans that were approved by the LPSC in connection with the full electric base ratecases filed by those companies in February 2013. The formula rate plan was most recently extended through the test year 2019; certainmodifications were made in that extension, including a decrease to the allowed return on equity and the addition of a transmission costrecovery mechanism. The formula rate plan continues to include exceptions from the rate cap and sharing requirements for certain largecapital investment projects, including acquisition or construction of generating facilities and purchase power agreements approved by theLPSC and as noted, for certain transmission investment, among other items. MISO fuel and energy-related costs are recoverable in EntergyLouisiana’s fuel adjustment clause. In the event that the electric formula rate plan is not renewed or extended, Entergy Louisiana wouldrevert to the more traditional rate case environment.Entergy New Orleans previously operated under a formula rate plan that ended with the 2011 test year. Based on a settlementagreement approved by the City Council, with limited exceptions, the base rates of Entergy New Orleans were frozen until rates wereimplemented in connection with the base rate case filed by Entergy New Orleans in 2018. In November 2019 the City Council issued aresolution resolving the rate case, with rates to become effective retroactive to August 2019. The resolution allows Entergy New Orleans toimplement a three-year formula rate plan, beginning with the 2019 test year as adjusted for forward-looking known and measurable changes.Entergy New Orleans has appealed the resolution. See Note 2 to the financial statements for further discussion.The rates of System Energy are established by the FERC, and the costs allowed to be charged pursuant to these rates are, in turn,passed through to the participating Utility operating companies through the Unit Power Sales Agreement, which allows monthly adjustmentsto reflect the current operating costs of, and investment in, Grand Gulf. The Unit Power Sales Agreement is currently the subject of severallitigation proceedings at the FERC, including a challenge with respect to System Energy’s authorized return on equity and capital structureand a request in a separate proceeding for FERC to initiate a broader investigation of rates under the Unit Power Sales Agreement. See Note 2to the financial statements for further discussion of the proceedings. The Utility operating companies have agreed to implement certainprotocols for providing retail regulators with information regarding rates billed under the Unit Power Sales Agreement.The Utility operating companies and System Energy, and the energy industry as a whole, have experienced a period of rising costsand investments, and an upward trend in spending, especially with respect to infrastructure investments, which is likely to continue in theforeseeable future and could result in more frequent rate cases and277 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyrequests for, and the continuation of, cost recovery mechanisms. For information regarding rate case proceedings and formula rate plansapplicable to the Utility operating companies, see Note 2 to the financial statements.Changes to state or federal legislation or regulation affecting electric generation, electric and natural gas transmission,distribution and related activities could adversely affect Entergy and the Utility operating companies’ financial position, results ofoperations or cash flows and their utility businesses.If legislative and regulatory structures evolve in a manner that erodes the Utility operating companies’ exclusive rights to serve theirregulated customers, they could lose customers and sales and their results of operations, financial position or cash flows could be materiallyaffected. Additionally, technological advances in energy efficiency and distributed energy resources are reducing the costs of thesetechnologies and together with ongoing state and federal subsidies, the increasing penetration of these technologies could result in reducedsales by the Utility operating companies. Such loss of sales could put upward pressure on rates, resulting in adverse regulatory actions tomitigate such effects on rates. Entergy and the Utility operating companies cannot predict if or when they may be subject to changes inlegislation or regulation, or the extent and timing of reductions of the cost of distributed energy resources, nor can they predict the impact ofthese changes on their results of operations, financial position or cash flows.The Utility operating companies recover fuel, purchased power, and associated costs through rate mechanisms that are subject torisks of delay or disallowance in regulatory proceedings.The Utility operating companies recover their fuel, purchased power, and associated costs from their customers through ratemechanisms subject to periodic regulatory review and adjustment. Because regulatory review can result in the disallowance of incurred costsfound not to have been prudently incurred, including the cost of replacement power purchased when generators experience outages, with thepossibility of refunds to ratepayers, there exists some risk to the ultimate recovery of those costs. Regulators may also initiate proceedings toinvestigate the continued usage or the adequacy and operation of the fuel and purchased power recovery clauses of the Utility operatingcompanies and, therefore, there can be no assurance that existing recovery mechanisms will remain unchanged or in effect at all.The Utility operating companies’ cash flows can be negatively affected by the time delays between when gas, power, or othercommodities are purchased and the ultimate recovery from customers of the costs in rates. On occasion, when the level of incurred costs forfuel and purchased power rises very dramatically, some of the Utility operating companies may agree to defer recovery of a portion of thatperiod’s fuel and purchased power costs for recovery at a later date, which could increase the near-term working capital and borrowingrequirements of those companies. For a description of fuel and purchased power recovery mechanisms and information regarding theregulatory proceedings for fuel and purchased power costs recovery, see Note 2 to the financial statements. There remains uncertainty regarding the effect of the termination of the System Agreement on the Utility operating companies.The Utility operating companies historically engaged in the coordinated planning, construction, and operation of generating resourcesand bulk transmission facilities under the terms of the System Agreement, which is a rate schedule that had been approved by the FERC. TheSystem Agreement terminated in its entirety on August 31, 2016.There remains uncertainty regarding the long-term effect of the termination of the System Agreement on the Utility operatingcompanies because of the significant effect of the agreement on the generation and transmission functions of the Utility operating companiesand the significant period of time (over 30 years) that it had been in existence. In the absence of the System Agreement, there remainsuncertainty around the effectiveness of governance processes and the potential absence of federal authority to resolve certain issues amongthe Utility operating companies and their retail regulators.In addition, although the System Agreement terminated in its entirety in August 2016, there are a number of outstanding SystemAgreement proceedings at the FERC that may require future adjustments, including challenges to278 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energythe level and timing of payments made by Entergy Arkansas under the System Agreement. The outcome and timing of these FERCproceedings and resulting recovery and impact on rates cannot be predicted at this time.For further information regarding the regulatory proceedings relating to the System Agreement, see Note 2 to the financialstatements.The Utility operating companies are subject to economic risks associated with participation in the MISO markets and theallocation of transmission upgrade costs. The operation of the Utility operating companies’ transmission system pursuant to the MISORTO tariff and their participation in the MISO RTO’s wholesale markets may be adversely affected by regulatory or market designchanges, as well as liability under, or any future inability to comply with, existing or future regulations or requirements.On December 19, 2013, the Utility operating companies integrated into the MISO RTO. MISO maintains functional control over thecombined transmission systems of its members and administers wholesale energy and ancillary services markets for market participants inthe MISO region, including the Utility operating companies. The Utility operating companies sell capacity, energy, and ancillary services ona bilateral basis to certain wholesale customers and offer available electricity production of their generating facilities into the MISO day-ahead and real-time energy markets pursuant to the MISO tariff and market rules. The Utility operating companies are subject to economicrisks associated with participation in the MISO markets. MISO tariff rules and system conditions, including transmission congestion, couldaffect the Utility operating companies’ ability to sell power in certain regions and/or the economic value of such sales, and MISO marketrules may change in ways that cause additional risk.The Utility operating companies participate in the MISO regional transmission planning process and are subject to risks associatedwith planning decisions that MISO makes in the exercise of control over the planning of the Utility operating companies’ transmission assetsthat are under MISO’s functional control. The Utility operating companies pay transmission rates that reflect the cost of transmission projectsthat the Utility operating companies do not own, which could increase cash or financing needs. MISO has made filings with FERC proposingchanges in the transmission project criteria in MISO. These changes, if adopted, could potentially result in a larger volume of competitivelybid and regionally cost allocated transmission projects. In addition to the cash and financing-related risks arising from the potential additionalcost allocation to the Utility operating companies from these projects, there is a risk that the Utility operating companies’ business andfinancial position could be harmed as a result of lost investment opportunities and other effects that flow from an increased number ofcompetitive projects being approved and constructed that are interconnected with their transmission systems. Further, the terms andconditions of the MISO tariff, including provisions related to the design and implementation of wholesale markets, the allocation oftransmission upgrade costs, the MISO-wide allowed base rate of return on equity, and any required MISO-related charges and credits aresubject to regulation by the FERC. The operation of the Utility operating companies’ transmission system pursuant to the MISO tariff andtheir participation in the MISO wholesale markets may be adversely affected by regulatory or market design changes, as well as liabilityunder, or any future inability to comply with, existing or future regulations or requirements. In addition, orders from each of the Utilityoperating companies’ respective retail regulators generally require that the Utility operating companies make periodic filings, or generallyallow the retail regulator to direct the making of such filings, setting forth the results of analysis of the costs and benefits realized from MISOmembership as well as the projected costs and benefits of continued membership in MISO and/or requesting approval of their continuedmembership in MISO. These filings have been submitted periodically by each of the Utility operating companies as required by theirrespective retail regulators, and the outcome of the resulting proceedings may affect the Utility operating companies’ continued membershipin MISO.279 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energy(Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas)A delay or failure in recovering amounts for storm restoration costs incurred as a result of severe weather could have materialeffects on Entergy and those Utility operating companies affected by severe weather.Entergy’s and its Utility operating companies’ results of operations, liquidity, and financial condition can be materially affected bythe destructive effects of severe weather. Severe weather can also result in significant outages for the customers of the Utility operatingcompanies and, therefore, reduced revenues for the Utility operating companies during the period of the outages. A delay or failure inrecovering amounts for storm restoration costs incurred or revenues lost as a result of severe weather could have a material effect on Entergyand those Utility operating companies affected by severe weather.Nuclear Operating, Shutdown and Regulatory Risks(Entergy Corporation, Entergy Arkansas, Entergy Louisiana, and System Energy)Certain of the Utility operating companies, System Energy, and Entergy Wholesale Commodities must consistently operate theirnuclear power plants at high capacity factors in order to be successful, and lower capacity factors could materially affect Entergy’s andtheir results of operations, financial condition, and liquidity.Nuclear capacity factors significantly affect the results of operations of certain Utility operating companies, System Energy, andEntergy Wholesale Commodities. Nuclear plant operations involve substantial fixed operating costs. Consequently, to be successful, a plantowner must consistently operate its nuclear power plants at high capacity factors, consistent with safety requirements. For the Utilityoperating companies that own nuclear plants, lower capacity factors can increase production costs by requiring the affected companies togenerate additional energy, sometimes at higher costs, from their owned or contractually controlled facilities or purchase additional energy inthe spot or forward markets in order to satisfy their supply needs. For the Entergy Wholesale Commodities nuclear plants, lower capacityfactors directly affect revenues and cash flow from operations. Entergy Wholesale Commodities’ forward sales are comprised of varioushedge products, many of which have some degree of operational-contingent price risk. Certain unit-contingent contracts guarantee specifiedminimum capacity factors. In the event plants with these contracts were operating below the guaranteed capacity factors, Entergy would besubject to price risk for the undelivered power. Further, Entergy Wholesale Commodities’ nuclear forward sales contracts can also be on afirm LD basis, which subjects Entergy to increasing price risk as capacity factors decrease. Many of these firm hedge products have damagesrisk.Certain of the Utility operating companies, System Energy, and the Entergy Wholesale Commodities nuclear plant ownersperiodically shut down their nuclear power plants to replenish fuel. Plant maintenance and upgrades are often scheduled during suchrefueling outages. If refueling outages last longer than anticipated or if unplanned outages arise, Entergy’s and their results ofoperations, financial condition, and liquidity could be materially affected.Outages at nuclear power plants to replenish fuel require the plant to be “turned off.” Refueling outages generally are planned tooccur once every 18 to 24 months. Plant maintenance and upgrades are often scheduled during such planned outages, which typicallyextends the planned outage duration. When refueling outages last longer than anticipated or a plant experiences unplanned outages, capacityfactors decrease, and maintenance costs may increase. Lower than forecasted capacity factors may cause Entergy Wholesale Commoditiesto experience reduced revenues and may also create damages risk with certain hedge products as previously discussed.280 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System EnergyCertain of the Utility operating companies, System Energy, and Entergy Wholesale Commodities face risks related to thepurchase of uranium fuel (and its conversion, enrichment, and fabrication). These risks could materially affect Entergy’s and theirresults of operations, financial condition and liquidity.Based upon currently planned fuel cycles, Entergy’s nuclear units have a diversified portfolio of contracts and inventory that providessubstantially adequate nuclear fuel materials and conversion and enrichment services at what Entergy believes are reasonably predictableprices through 2020 and beyond. The nuclear fuel supply portfolio for the Entergy Wholesale Commodities segment has been adjusted toreflect reduced overall requirements related to the planned permanent shutdown and sale of the Palisades, Indian Point 2 and Indian Point 3plants over the next three years and fuel procurement is limited to the final refueling of the Palisades plant in 2020. Entergy’s ability topurchase nuclear fuel at reasonably predictable prices, however, depends upon the performance reliability of uranium miners. While there area number of possible alternate suppliers that may be accessed to mitigate any supplier performance failure, the pricing of any such alternateuranium supply from the market will be dependent upon the market for uranium supply at that time. Entergy buys uranium from a diversifiedmix of sellers located in a diversified mix of countries, and from time to time purchases from nearly all qualified reliable major marketparticipants worldwide that sell into the U.S. Market prices for nuclear fuel have been extremely volatile from time to time in the past andmay be subject to increased volatility due to the imposition of tariffs, domestic purchase requirements or shifting trade arrangements betweencountries. Although Entergy’s nuclear fuel contract portfolio provides a degree of hedging against market risks for several years, costs fornuclear fuel in the future cannot be predicted with certainty due to normal inherent market uncertainties, and price changes could materiallyaffect the liquidity, financial condition, and results of operations of certain of the Utility operating companies, System Energy, and EntergyWholesale Commodities.Entergy’s ability to assure nuclear fuel supply also depends upon the performance and reliability of conversion, enrichment, andfabrication services providers. These service providers are fewer in number than uranium suppliers. For conversion and enrichment services,Entergy diversifies its supply by supplier and country and may take special measures to ensure a reliable supply of enriched uranium forfabrication into nuclear fuel. For fabrication services, each plant is dependent upon the performance of the fabricator of that plant’s nuclearfuel; therefore, Entergy relies upon additional monitoring, inspection, and oversight of the fabrication process to assure reliability and qualityof its nuclear fuel. Certain of the suppliers and service providers are located in or dependent upon countries, such as Russia, in whichinternational sanctions or tariffs could restrict the ability of such suppliers to continue to supply fuel or provide such services at acceptableprices or at all. The inability of such suppliers or service providers to perform such obligations could materially affect the liquidity, financialcondition, and results of operations of certain of the Utility operating companies, System Energy, and Entergy Wholesale Commodities.Entergy Arkansas, Entergy Louisiana, System Energy, and the Entergy Wholesale Commodities business face the risk that theNRC will change or modify its regulations, suspend or revoke their licenses, or increase oversight of their nuclear plants, which couldmaterially affect Entergy’s and their results of operations, financial condition, and liquidity.Under the Atomic Energy Act and Energy Reorganization Act, the NRC regulates the operation of nuclear power plants. The NRCmay modify, suspend, or revoke licenses, shut down a nuclear facility and impose civil penalties for failure to comply with the AtomicEnergy Act, related regulations, or the terms of the licenses for nuclear facilities. Interested parties may also intervene which could result inprolonged proceedings. A change in the Atomic Energy Act, other applicable statutes, or the applicable regulations or licenses, or the NRC’sinterpretation thereof, may require a substantial increase in capital expenditures or may result in increased operating or decommissioningcosts and could materially affect the results of operations, liquidity, or financial condition of Entergy (through Entergy WholesaleCommodities), its Utility operating companies, or System Energy. A change in the classification of a plant owned by one of these companiesunder the NRC’s Reactor Oversight Process, which is the NRC’s program to collect information about plant performance, assess theinformation for its safety significance, and provide for appropriate licensee and NRC response, also could cause the owner of the plant toincur material additional costs as a result of the increased oversight activity and potential response costs associated with the change inclassification. For additional information concerning the current classification of the plants owned by Entergy Arkansas, Entergy Louisiana,System Energy, and281 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energythe Entergy Wholesale Commodities business, see “Regulation of Entergy’s Business - Regulation of the Nuclear Power Industry - NRCReactor Oversight Process” in Part I, Item 1 and Note 8 to the financial statements.Events at nuclear plants owned by one of these companies, as well as those owned by others, may lead to a change in laws orregulations or the terms of the applicable licenses, or the NRC’s interpretation thereof, or may cause the NRC to increase oversight activity orinitiate actions to modify, suspend, or revoke licenses, shut down a nuclear facility, or impose civil penalties. As a result, if an incident wereto occur at any nuclear generating unit, whether an Entergy nuclear generating unit or not, it could materially affect the financial condition,results of operations, and liquidity of Entergy, certain of the Utility operating companies, System Energy, or Entergy WholesaleCommodities. Certain of the Utility operating companies, System Energy, and Entergy Wholesale Commodities are exposed to risks and costsrelated to operating and maintaining their nuclear power plants, and their failure to maintain operational efficiency at their nuclearpower plants could materially affect Entergy’s and their results of operations, financial condition, and liquidity.The nuclear generating units owned by certain of the Utility operating companies, System Energy, and the Entergy WholesaleCommodities business began commercial operations in the 1970s-1980s. Older equipment may require more capital expenditures to keepeach of these nuclear power plants operating safely and efficiently. This equipment is also likely to require periodic upgrading andimprovement. Any unexpected failure, including failure associated with breakdowns, forced outages, or any unanticipated capitalexpenditures, could result in increased costs, some of which costs may not be fully recoverable by the Utility operating companies andSystem Energy in regulatory proceedings should there be a determination of imprudence. Operations at any of the nuclear generating unitsowned and operated by Entergy’s subsidiaries could degrade to the point where the affected unit needs to be shut down or operated at lessthan full capacity. If this were to happen, identifying and correcting the causes may require significant time and expense. A decision may bemade to close a unit rather than incur the expense of restarting it or returning the unit to full capacity. For the Utility operating companiesand System Energy, this could result in certain costs being stranded and potentially not fully recoverable in regulatory proceedings. ForEntergy Wholesale Commodities, this could result in lost revenue and increased fuel and purchased power expense to meet supplycommitments and penalties for failure to perform under their contracts with customers. In addition, the operation and maintenance ofEntergy’s nuclear facilities require the commitment of substantial human resources that can result in increased costs.The nuclear industry continues to address susceptibility to the effects of stress corrosion cracking and other corrosion mechanisms oncertain materials within plant systems. The issue is applicable at all nuclear units to varying degrees and is managed in accordance withindustry standard practices and guidelines that include in-service examinations, replacements, and mitigation strategies. Developments in theindustry or identification of issues at the nuclear units could require unanticipated remediation efforts that cannot be quantified in advance.Moreover, Entergy is becoming more dependent on fewer suppliers for key parts of Entergy’s nuclear power plants that may need tobe replaced or refurbished, and in some cases, parts are no longer available and have to be reverse-engineered for replacement. In addition,certain major parts have long lead-times to manufacture if an unplanned replacement is needed. This dependence on a reduced number ofsuppliers and long lead-times on certain major parts for unplanned replacements could result in delays in obtaining qualified replacementparts and, therefore, greater expense for Entergy.The costs associated with the storage of the spent nuclear fuel of certain of the Utility operating companies, System Energy, andthe owners of the Entergy Wholesale Commodities nuclear power plants, as well as the costs of and their ability to fully decommissiontheir nuclear power plants, could be significantly affected by the timing of the opening of a spent nuclear fuel disposal facility, as well asinterim storage and transportation requirements.Certain of the Utility operating companies, System Energy and the owners of the Entergy Wholesale Commodities nuclear plantsincur costs for the on-site storage of spent nuclear fuel. The approval of a license for a national repository for the disposal of spent nuclearfuel, such as the one proposed for Yucca Mountain, Nevada, or282 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyany interim storage facility, and the timing of such facility opening, will significantly affect the costs associated with on-site storage of spentnuclear fuel. For example, while the DOE is required by law to proceed with the licensing of Yucca Mountain and, after the license isgranted by the NRC, to construct the repository and commence the receipt of spent fuel, the NRC licensing of the Yucca Mountain repositoryis effectively at a standstill. These actions are prolonging the time before spent fuel is removed from Entergy’s plant sites. Because the DOEhas not accomplished its objectives, it is in non-compliance with the Nuclear Waste Policy Act of 1982 and has breached its spent fueldisposal contracts, and Entergy has sued the DOE for such breach. Furthermore, Entergy is uncertain as to when the DOE will commenceacceptance of spent fuel from its facilities for storage or disposal. As a result, continuing future expenditures will be required to increasespent fuel storage capacity at the companies’ nuclear sites and maintenance costs on existing storage facilities, including aging managementof fuel storage casks, may increase. The costs of on-site storage are also affected by regulatory requirements for such storage. In addition,the availability of a repository or other off-site storage facility for spent nuclear fuel may affect the ability to fully decommission the nuclearunits and the costs relating to decommissioning. For further information regarding spent fuel storage, see the “Critical AccountingEstimates – Nuclear Decommissioning Costs – Spent Fuel Disposal” section of Management’s Financial Discussion and Analysis forEntergy, Entergy Arkansas, Entergy Louisiana, and System Energy and Note 8 to the financial statements. Certain of the Utility operating companies, System Energy, and the Entergy Wholesale Commodities nuclear plant owners may berequired to pay substantial retrospective premiums imposed under the Price-Anderson Act in the event of a nuclear incident, and lossesnot covered by insurance could have a material effect on Entergy’s and their results of operations, financial condition, or liquidity.Accidents and other unforeseen problems at nuclear power plants have occurred both in the United States and elsewhere. The Price-Anderson Act limits each reactor owner’s public liability (off-site) for a single nuclear incident to the payment of retrospective premiums intoa secondary insurance pool, which is referred to as Secondary Financial Protection, up to approximately $137.6 million per reactor. With 98reactors currently participating, this translates to a total public liability cap of approximately $14 billion per incident. The limit is subject tochange to account for the effects of inflation, a change in the primary limit of insurance coverage, and changes in the number of licensedreactors. As required by the Price-Anderson Act, the Utility operating companies, System Energy, and Entergy Wholesale Commoditiescarry the maximum available amount of primary nuclear off-site liability insurance with American Nuclear Insurers, which is $450 millionfor each operating site. Claims for any nuclear incident exceeding that amount are covered under Secondary Financial Protection. As aresult, in the event of a nuclear incident that causes damages (off-site) in excess of the primary insurance coverage, each owner of a nuclearplant reactor, including Entergy’s Utility operating companies, System Energy, and the Entergy Wholesale Commodities plant owners,regardless of fault or proximity to the incident, will be required to pay a retrospective premium, equal to its proportionate share of the loss inexcess of the primary insurance level, up to a maximum of approximately $137.6 million per reactor per incident (Entergy’s maximum totalcontingent obligation per incident is $1.101 billion). The retrospective premium payment is currently limited to approximately $21 millionper year per incident per reactor until the aggregate public liability for each licensee is paid up to the $137.6 million cap.NEIL is a utility industry mutual insurance company, owned by its members, including the Utility operating companies, SystemEnergy, and the owners of the Entergy Wholesale Commodities plants. All member plants could be subject to an annual assessment(retrospective premium of up to 10 times current annual premium for all policies) should the NEIL surplus (reserve) be significantly depleteddue to insured losses. As of December 31, 2019, the maximum annual assessment amounts total $112 million for the Utilityplants. Retrospective premium insurance available through NEIL’s reinsurance treaty can cover the potential assessments and the EntergyWholesale Commodities plants currently maintain the retrospective premium insurance to cover those potential assessments.As an owner of nuclear power plants, Entergy participates in industry self-insurance programs and could be liable to fund claimsshould a plant owned by a different company experience a major event. Any resulting liability from a nuclear accident may exceed theapplicable primary insurance coverage and require contribution of additional funds through the industry-wide program that couldsignificantly affect the results of operations, financial condition,283 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyor liquidity of Entergy, certain of the Utility operating companies, System Energy, or the Entergy Wholesale Commodities subsidiaries.The decommissioning trust fund assets for the nuclear power plants owned by the Utility operating companies, System Energyand the Entergy Wholesale Commodities nuclear plant owners may not be adequate to meet decommissioning obligations if marketperformance and other changes decrease the value of assets in the decommissioning trusts, if one or more of Entergy’s nuclear powerplants is retired earlier than the anticipated shutdown date, if the plants cost more to decommission than estimated, or if currentregulatory requirements change, which then could require significant additional funding.Owners of nuclear generating plants have an obligation to decommission those plants. Certain of the Utility operating companies,System Energy, and owners of the Entergy Wholesale Commodities nuclear power plants maintain decommissioning trust funds for thispurpose. Certain of the Utility operating companies collect funds from their customers, which are deposited into the trusts covering the unitsoperated for or on behalf of those companies. Those rate collections, as adjusted from time to time by rate regulators, are generally basedupon operating license lives and trust fund balances as well as estimated trust fund earnings and decommissioning costs. Assets in these trustfunds are subject to market fluctuations, will yield uncertain returns that may fall below projected return rates, and may result in lossesresulting from the recognition of impairments of the value of certain securities held in these trust funds.Under NRC regulations, nuclear plant owners are permitted to project the NRC-required decommissioning amount, based on an NRCformula or a site-specific estimate, and the amount that will be available in each nuclear power plant’s decommissioning trusts combinedwith any other decommissioning financial assurances in place. The projections are made based on the operating license expiration date andthe mid-point of the subsequent decommissioning process, or the anticipated actual completion of decommissioning if a site-specific estimateis used. If the projected amount of each individual plant’s decommissioning trusts exceeds the NRC-required decommissioning amount, thenits decommissioning obligations are considered to be funded in accordance with NRC regulations. If the projected costs do not sufficientlyreflect the actual costs required to decommission these nuclear power plants, or funding is otherwise inadequate, or if the formula, formulainputs, or site-specific estimate is changed to require increased funding, additional resources or commitments would berequired. Furthermore, depending upon the level of funding available in the trust funds, the NRC may not permit the trust funds to be used topay for related costs such as the management of spent nuclear fuel that are not included in the NRC’s formula. The NRC may also require aplan for the provision of separate funding for spent fuel management costs. In addition to NRC requirements, there are otherdecommissioning-related obligations for certain of the Entergy Wholesale Commodities nuclear power plants, which management believes itwill be able to satisfy.Further, federal or state regulatory changes, including mandated increases in decommissioning funding or changes in the methods orstandards for decommissioning operations, may also increase the funding requirements of, or accelerate the timing for funding of, theobligations related to the decommissioning of the Utility operating companies, System Energy, or Entergy Wholesale Commodities nuclearpower plants or may restrict the decommissioning-related costs that can be paid from the decommissioning trusts. Such changes also couldresult in the need for additional contributions to decommissioning trusts, or the posting of parent guarantees, letters of credit, or other suretymechanisms. As a result, under any of these circumstances, Entergy’s results of operations, liquidity, and financial condition could bematerially affected.An early plant shutdown (either generally or relative to current expectations), poor investment results or higher than anticipateddecommissioning costs (including as a result of changing regulatory requirements) could cause trust fund assets to be insufficient to meet thedecommissioning obligations, with the result that the Utility operating companies, System Energy or the Entergy Wholesale Commoditiesnuclear plant owners may be required to provide significant additional funds or credit support to satisfy regulatory requirements fordecommissioning, which, with respect to the Utility operating companies, may not be recoverable from customers in a timely fashion or atall.For further information regarding nuclear decommissioning costs, management’s decision to exit the merchant284 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energypower business, the impairment charges that resulted from such decision, and the planned sale of Palisades (which will include the transfer ofthe decommissioning trust), see the “Critical Accounting Estimates - Nuclear Decommissioning Costs” section of Management’sFinancial Discussion and Analysis for Entergy, Entergy Arkansas, Entergy Louisiana, and System Energy, the “Entergy WholesaleCommodities Exit from the Merchant Power Business” section of Management’s Financial Discussion and Analysis for EntergyCorporation and Subsidiaries, and Notes 9 and 14 to the financial statements.New or existing safety concerns regarding operating nuclear power plants and nuclear fuel could lead to restrictions upon theoperation and decommissioning of Entergy’s nuclear power plants.New and existing concerns are being expressed in public forums about the safety of nuclear generating units and nuclear fuel. Theseconcerns have led to, and may continue to lead to, various proposals to Federal regulators and governing bodies in some localities whereEntergy’s subsidiaries own nuclear generating units for legislative and regulatory changes that might lead to the shutdown of nuclear units,additional requirements or restrictions related to spent nuclear fuel on-site storage and eventual disposal, or other adverse effects on owning,operating and decommissioning nuclear generating units. Entergy vigorously responds to these concerns and proposals. If any of theexisting proposals, or any proposals that may arise in the future with respect to legislative and regulatory changes, become effective, theycould have a material effect on Entergy’s results of operations and financial condition.(Entergy Corporation)Entergy Wholesale Commodities nuclear power plants are exposed to price risk.Entergy and its subsidiaries do not have a regulator-authorized rate of return on their capital investments in non-utilitybusinesses. As a result, the sale of capacity and energy from the Entergy Wholesale Commodities nuclear power plants, unless otherwisecontracted, is subject to the fluctuation of market power prices. In order to reduce future price risk to desired levels, Entergy WholesaleCommodities utilizes contracts that are unit-contingent and Firm LD and various products such as forward sales, options, and collars. As ofDecember 31, 2019, Entergy Wholesale Commodities’ nuclear power generation plants had sold forward 97% in 2020, 92% in 2021, and66% in 2022 of its generation portfolio’s planned energy output, reflecting the planned shutdown and sale of the remaining EntergyWholesale Commodities nuclear power plants by mid-2022.Market conditions such as product cost, market liquidity, and other portfolio considerations influence the product and contractualmix. The obligations under unit-contingent agreements depend on a generating asset that is operating; if the generation asset is not operating,the seller generally is not liable for damages. For some unit-contingent obligations, however, there is also a guarantee of availability thatprovides for the payment to the power purchaser of contract damages, if incurred, in the event the unit owner fails to deliver power as a resultof the failure of the specified generation unit to generate power at or above a specified availability threshold. Firm LD sales transactions maybe exposed to substantial operational price risk, a portion of which may be capped through the use of risk management products, to the extentthat the plants do not run as expected and market prices exceed contract prices.Market prices may fluctuate substantially, sometimes over relatively short periods of time, and at other times experience sustainedincreases or decreases. Demand for electricity and its fuel stock can fluctuate dramatically, creating periods of substantial under- or over-supply. During periods of over-supply, prices might be depressed. Also, from time to time there may be political pressure, or pressure fromregulatory authorities with jurisdiction over wholesale and retail energy commodity and transportation rates, to impose price limitations,credit requirements, bidding rules and other mechanisms to address volatility and other issues in these markets.The effects of sustained low natural gas prices and power market structure challenges have resulted in lower market prices forelectricity in the power regions where the Entergy Wholesale Commodities nuclear power plants are located. In addition, currently themarket design under which the plants operate does not adequately compensate merchant nuclear plants for their environmental and fueldiversity benefits in the region. These conditions were primary285 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyfactors leading to Entergy’s decision to shut down (or sell) Entergy Wholesale Commodities’ nuclear power plants before the end of theiroperating licenses (or requested operating licenses for Indian Point 2 and Indian Point 3).The price that different counterparties offer for various products including forward sales is influenced both by market conditions aswell as the contract terms such as damage provisions, credit support requirements, and the number of available counterparties interested incontracting for the desired forward period. Depending on differences between market factors at the time of contracting versus currentconditions, Entergy Wholesale Commodities’ contract portfolio may have average contract prices above or below current market prices,including at the expiration of the contracts, which may significantly affect Entergy Wholesale Commodities’ results of operations, financialcondition, or liquidity. New hedges are generally layered into on a rolling forward basis, which tends to drive hedge over-performance tomarket in a falling price environment, and hedge underperformance to market in a rising price environment; however, hedge timing, productchoice, and hedging costs will also affect these results. See the “Market and Credit Risk Sensitive Instruments” section of Management’sFinancial Discussion and Analysis for Entergy Corporation and Subsidiaries. Since Entergy Wholesale Commodities has announced theclosure (or sale) of its nuclear plants, Entergy Wholesale Commodities may enter into fewer forward sales contracts for output from suchplants.The Entergy Wholesale Commodities business is subject to substantial governmental regulation and may be adversely affected bylegislative, regulatory or market design changes, as well as liability under, or any future inability to comply with, existing or futureregulations or requirements.The Entergy Wholesale Commodities business is subject to extensive regulation under federal, state, and local laws. Compliance withthe requirements under these various regulatory regimes may cause the Entergy Wholesale Commodities business to incur significantadditional costs, and failure to comply with such requirements could result in the shutdown of the non-complying facility, the imposition ofliens, fines and/or civil or criminal liability.Public utilities under the Federal Power Act are required to obtain FERC acceptance of their rate schedules for wholesale sales ofelectricity. Each of the owners of the Entergy Wholesale Commodities nuclear power plants that generates electricity, as well as EntergyNuclear Power Marketing, LLC, is a “public utility” under the Federal Power Act by virtue of making wholesale sales of electric energyand/or owning wholesale electric transmission facilities. The FERC has granted these generating and power marketing companies theauthority to sell electricity at market-based rates. The FERC’s orders that grant the Entergy Wholesale Commodities’ generating and powermarketing companies market-based rate authority reserve the right to revoke or revise that authority if the FERC subsequently determinesthat the Entergy Wholesale Commodities business can exercise market power in transmission or generation, create barriers to entry, orengage in abusive affiliate transactions. In addition, the Entergy Wholesale Commodities’ market-based sales are subject to certain marketbehavior rules, and if any of its generating and power marketing companies were deemed to have violated one of those rules, they would besubject to potential disgorgement of profits associated with the violation and/or suspension or revocation of their market-based rate authorityand potential penalties of up to $1 million per day per violation. If the Entergy Wholesale Commodities’ generating or power marketingcompanies were to lose their market-based rate authority, such companies would be required to obtain the FERC’s acceptance of a cost-of-service rate schedule and could become subject to the accounting, record-keeping, and reporting requirements that are imposed on utilitieswith cost-based rate schedules. This could have an adverse effect on the rates the Entergy Wholesale Commodities business charges forpower from its facilities.The Entergy Wholesale Commodities business is also affected by legislative and regulatory changes, as well as changes to marketdesign, market rules, tariffs, cost allocations, and bidding rules imposed by the existing Independent System Operators. The IndependentSystem Operators that oversee most of the wholesale power markets may impose, and in the future may continue to impose, mitigation,including price limitations, offer caps and other mechanisms, to address some of the volatility and the potential exercise of market power inthese markets. These types of price limitations and other regulatory mechanisms may have an adverse effect on the profitability of theEntergy Wholesale Commodities business’ generation facilities that sell energy and capacity into the wholesale power markets. For furtherinformation regarding federal, state and local laws and regulation applicable to the Entergy Wholesale Commodities business, see the“Regulation of Entergy’s Business” section in Part I, Item 1.286 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System EnergyThe regulatory environment applicable to the electric power industry is subject to changes as a result of restructuring initiatives atboth the state and federal levels. Entergy cannot predict the future design of the wholesale power markets or the ultimate effect that thechanging regulatory environment will have on the Entergy Wholesale Commodities business. In addition, in some of these markets,interested parties have proposed material market design changes, including the elimination of a single clearing price mechanism, have raisedclaims that the competitive marketplace is not working because energy prices in wholesale markets exceed the marginal cost of operatingnuclear power plants, and have made proposals to re-regulate the markets, impose a generation tax, or require divestitures by generatingcompanies to reduce their market share. Other proposals to re-regulate may be made and legislative or other attention to the electric powermarket restructuring process may delay or reverse the deregulation process, which could require material changes to business planningmodels. If competitive restructuring of the electric power markets is reversed, modified, discontinued, or delayed, the Entergy WholesaleCommodities business’ results of operations, financial condition, and liquidity could be materially affected.The power plants owned by the Entergy Wholesale Commodities business are subject to impairment charges in certaincircumstances, which could have a material effect on Entergy’s results of operations, financial condition or liquidity.Entergy reviews long-lived assets held in all of its business segments whenever events or changes in circumstances indicate thatrecoverability of these assets is uncertain. Generally, the determination of recoverability is based on the undiscounted net cash flowsexpected to result from the operations of such assets. Projected net cash flows depend on the expected operating life of the assets, the futureoperating costs associated with the assets, the efficiency and availability of the assets and generating units, and the future market and price forenergy and capacity over the remaining life of the assets. In particular, the remaining assets of the Entergy Wholesale Commodities businessare subject to further impairment in connection with the closure and sale of its nuclear power plants. Moreover, prior to the closure and saleof these plants, the failure of the Entergy Wholesale Commodities business to achieve forecasted operating results and cash flows, anunfavorable change in forecasted operating results or cash flows, a reduction in the expected remaining useful life of a unit, or a decline inobservable industry market multiples could all result in potential additional impairment charges for the affected assets.If Entergy concludes that any of its nuclear power plants is unlikely to operate through its planned shutdown date, which conclusionwould be based on a variety of factors, such a conclusion could result in a further impairment of part or all of the carrying value of the plant. Any impairment charge taken by Entergy with respect to its long-lived assets, including the remaining power plants owned by the EntergyWholesale Commodities business, would likely be material in the quarter that the charge is taken and could otherwise have a material effecton Entergy’s results of operations, financial condition, or liquidity. For further information regarding evaluating long-lived assets forimpairment, see the “Critical Accounting Estimates - Impairment of Long-lived Assets and Trust Fund Investments” section ofManagement’s Financial Discussion and Analysis for Entergy Corporation and Subsidiaries and for further discussion of the impairmentcharges, see Note 14 to the financial statements.General Business(Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas)Entergy and the Utility operating companies depend on access to the capital markets and, at times, may face potential liquidityconstraints, which could make it more difficult to handle future contingencies such as natural disasters or substantial increases in gasand fuel prices. Disruptions in the capital and credit markets may adversely affect Entergy’s and its subsidiaries’ ability to meet liquidityneeds, access capital and operate and grow their businesses, and the cost of capital.Entergy’s business is capital intensive and dependent upon its ability to access capital at reasonable rates and287 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyother terms. At times there are also spikes in the price for natural gas and other commodities that increase the liquidity requirements of theUtility operating companies and Entergy Wholesale Commodities. In addition, Entergy’s and the Utility operating companies’ liquidityneeds could significantly increase in the event of a hurricane or other weather-related or unforeseen disaster similar to that experienced inEntergy’s service territory with Hurricane Katrina and Hurricane Rita in 2005, Hurricane Gustav and Hurricane Ike in 2008, and HurricaneIsaac in 2012. The occurrence of one or more contingencies, including a delay in regulatory recovery of fuel or purchased power costs orstorm restoration costs, an acceleration of payments or decreased credit lines, less cash flow from operations than expected, changes inregulation or governmental policy (including tax and trade policy), or other unknown events, could cause the financing needs of Entergy andits subsidiaries to increase. In addition, accessing the debt capital markets more frequently in these situations may result in an increase inleverage. Material leverage increases could negatively affect the credit ratings of Entergy and the Utility operating companies, which in turncould negatively affect access to the capital markets.The inability to raise capital on favorable terms, particularly during times of high interest rates, and uncertainty or reduced liquidityin the capital markets, could negatively affect Entergy and its subsidiaries’ ability to maintain and to expand their businesses. Access tocapital markets could be restricted and/or borrowing costs could be increased due to certain sources of debt and equity capital being unwillingto invest in companies that experience extreme weather events, that rely on fossil fuels or offerings to fund fossil fuel projects, or due to risksrelated to climate change. Events beyond Entergy’s control may create uncertainty that could increase its cost of capital or impair its abilityto access the capital markets, including the ability to draw on its bank credit facilities. Entergy and its subsidiaries are unable to predict thedegree of success they will have in renewing or replacing their credit facilities as they come up for renewal. Moreover, the size, terms, andcovenants of any new credit facilities may not be comparable to, and may be more restrictive than, existing facilities. If Entergy and itssubsidiaries are unable to access the credit and capital markets on terms that are reasonable, they may have to delay raising capital, issueshorter-term securities and/or bear an unfavorable cost of capital, which, in turn, could impact their ability to grow their businesses, decreaseearnings, significantly reduce financial flexibility and/or limit Entergy Corporation’s ability to sustain its current common stock dividendlevel.(Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, andSystem Energy)A downgrade in Entergy Corporation’s or its subsidiaries’ credit ratings could negatively affect Entergy Corporation’s and itssubsidiaries’ ability to access capital and/or could require Entergy Corporation or its subsidiaries to post collateral, accelerate certainpayments, or repay certain indebtedness.There are a number of factors that rating agencies evaluate to arrive at credit ratings for each of Entergy Corporation and theRegistrant Subsidiaries, including each Registrant’s regulatory framework, ability to recover costs and earn returns, diversification andfinancial strength and liquidity. If one or more rating agencies downgrade Entergy Corporation’s, any of the Utility operating companies’, orSystem Energy’s ratings, particularly below investment grade, borrowing costs would increase, the potential pool of investors and fundingsources would likely decrease, and cash or letter of credit collateral demands may be triggered by the terms of a number of commoditycontracts, leases, and other agreements.Most of Entergy Corporation’s and its subsidiaries’ suppliers and counterparties require sufficient creditworthiness to enter intotransactions. If Entergy Corporation’s or its subsidiaries’ ratings decline, particularly below investment grade, or if certain counterpartiesbelieve Entergy Corporation or the Utility operating companies are losing creditworthiness and demand adequate assurance under fuel, gas,and purchased power contracts, the counterparties may require posting of collateral in cash or letters of credit, prepayment for fuel, gas orpurchased power or accelerated payment, or counterparties may decline business with Entergy Corporation or its subsidiaries. At December31, 2019, based on power prices at that time, Entergy had liquidity exposure of $78 million under the guarantees in place supporting EntergyWholesale Commodities transactions and $19 million of posted cash collateral. In the event of a decrease in Entergy Corporation’s creditrating to below investment grade, based on power prices as288 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyof December 31, 2019, Entergy would have been required to provide approximately $30 million of additional cash or letters of credit undersome of the agreements. As of December 31, 2019, the liquidity exposure associated with Entergy Wholesale Commodities assurancerequirements, including return of previously posted collateral from counterparties, would increase by $90 million for a $1 per MMBtuincrease in gas prices in both the short- and long-term markets.Recent U.S. tax legislation may materially adversely affect Entergy’s financial condition, results of operations, and cash flows.The Tax Cuts and Jobs Act of 2017 significantly changed the U.S. Internal Revenue Code, including taxation of U.S. corporations,by, among other things, reducing the federal corporate income tax rate, limiting interest deductions, and altering the expensing of capitalexpenditures. The legislation and interpretive guidance from the IRS are unclear in certain respects and will require further interpretationsand implementing regulations by the IRS, as well as state tax authorities, and the legislation could be subject to potential amendments andtechnical corrections, any of which could lessen or increase certain impacts of the legislation.As further described in Note 3 to the financial statements, as a result of amortization of accumulated deferred income taxes andpayment of such amounts to customers in 2019, Entergy’s net regulatory liability for income taxes balance is $1.7 billion as of December 31,2019. Depending on the outcome of IRS examinations or tax positions and elections that Entergy may make, Entergy and the RegistrantSubsidiaries may be required to record additional charges or credits to income tax expense. Further, there may be other material effectsresulting from the legislation that have not been identified.For further information regarding the effects of the Act, see the “Income Tax Legislation” section of Management’s FinancialDiscussion and Analysis for Entergy. Also, Note 3 to the financial statements contains additional discussion of the effect of the Act on 2017,2018 and 2019 results of operations and financial position, the provisions of the Act, and the uncertainties associated with accounting for theAct, and Note 2 to the financial statements discusses the regulatory proceedings that have considered the effects of the Act.Changes in taxation as well as the inherent difficulty in quantifying potential tax effects of business decisions could negativelyimpact Entergy’s, the Utility operating companies’, and System Energy’s results of operations, financial condition and liquidity.Entergy and its subsidiaries make judgments regarding the potential tax effects of various transactions and results of operations toestimate their obligations to taxing authorities. These tax obligations include income, franchise, real estate, sales and use, and employment-related taxes. These judgments include provisions for potential adverse outcomes regarding tax positions that have been taken. Entergy andits subsidiaries also estimate their ability to utilize tax benefits, including those in the form of carryforwards for which the benefits havealready been reflected in the financial statements. Changes in federal, state, or local tax laws, adverse tax audit results or adverse tax rulingson positions taken by Entergy and its subsidiaries could negatively affect Entergy’s, the Utility operating companies’, and System Energy’sresults of operations, financial condition, and liquidity. For further information regarding Entergy’s income taxes, see Note 3 to the financialstatements.Entergy and its subsidiaries’ ability to successfully execute on their business strategies, including their ability to completestrategic transactions, is subject to significant risks, and, as a result, they may be unable to achieve some or all of the anticipated resultsof such strategies, which could materially affect their future prospects, results of operations and benefits that they anticipate from suchtransactions.Entergy and its subsidiaries’ future prospects and results of operations significantly depend on their ability to successfully implementtheir business strategies, which are subject to business, regulatory, economic and other risks and uncertainties, many of which are beyondtheir control. As a result, Entergy and its subsidiaries may be unable to fully achieve the anticipated results of such strategies.289 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System EnergyAdditionally, Entergy and its subsidiaries have pursued and may continue to pursue strategic transactions including merger,acquisition, divestiture, joint venture, restructuring or other strategic transactions. For example, Entergy has entered into an agreement to sellits equity interests in the subsidiary that owns the Palisades Nuclear Plant and the decommissioned Big Rock Point Nuclear Power Plant andan agreement to sell the equity interests of Indian Point 1, Indian Point 2, and Indian Point 3, in each case after each of the plants has beenshut down and defueled. Also, a significant portion of Entergy’s utility business over the next several years includes the construction and /orpurchase of a variety of generating units. These transactions and plans are or may become subject to regulatory approval and other materialconditions or contingencies. The failure to complete these transactions or plans or any future strategic transaction successfully or on a timelybasis could have an adverse effect on Entergy’s or its subsidiaries’ financial condition or results of operations and the market’s perception ofEntergy’s ability to execute its strategy. Further, these transactions, and any completed or future strategic transactions, involve substantialrisks, including the following:•acquired businesses or assets may not produce revenues, earnings or cash flow at anticipated levels;•acquired businesses or assets could have environmental, permitting or other problems for which contractual protections proveinadequate;•Entergy and/or its subsidiaries may assume liabilities that were not disclosed to them, that exceed their estimates, or for whichtheir rights to indemnification from the seller are limited;•Entergy may experience issues integrating businesses into its internal controls over financial reporting;•the disposition of a business, including Entergy’s planned exit from the merchant power business, could divert management’sattention from other business concerns;•Entergy and/or its subsidiaries may be unable to obtain the necessary regulatory or governmental approvals to close atransaction, such approvals may be granted subject to terms that are unacceptable to them, or Entergy or its subsidiariesotherwise may be unable to achieve anticipated regulatory treatment of any such transaction or acquired business or assets; and•Entergy or its subsidiaries otherwise may be unable to achieve the full strategic and financial benefits that they anticipate fromthe transaction, or such benefits may be delayed or may not occur at all.Entergy and its subsidiaries may not be successful in managing these or any other significant risks that they may encounter inacquiring or divesting a business, or engaging in other strategic transactions, which could have a material effect on their business, financialcondition or results of operations.The completion of capital projects, including the construction of power generation facilities, and other capital improvementsinvolve substantial risks. Should such efforts be unsuccessful, the financial condition, results of operations, or liquidity of Entergy andthe Utility operating companies could be materially affected.Entergy’s and the Utility operating companies’ ability to complete capital projects, including the construction of power generationfacilities, or make other capital improvements, in a timely manner and within budget is contingent upon many variables and subject tosubstantial risks. These variables include, but are not limited to, project management expertise, escalating costs for materials, labor, andenvironmental compliance, and reliance on suppliers for timely and satisfactory performance. Delays in obtaining permits, shortages inmaterials and qualified labor, levels of public support or opposition, suppliers and contractors not performing as expected or required undertheir contracts and/or experiencing financial problems that inhibit their ability to fulfill their obligations under contracts, changes in the scopeand timing of projects, poor quality initial cost estimates from contractors, the inability to raise capital on favorable terms, changes incommodity prices affecting revenue, fuel costs, or materials costs, downward changes in the economy, changes in law or regulation,including environmental compliance requirements, and other events beyond the control of the Utility operating companies or the EntergyWholesale Commodities business may occur that may materially affect the schedule, cost, and performance of these projects. If theseprojects or other capital improvements are significantly delayed or become subject to cost overruns or cancellation, Entergy and the Utilityoperating companies could incur additional costs and termination payments, or face increased risk of potential write-off of the investment inthe project. In addition, the Utility operating companies could be exposed to higher costs and market volatility, which could affect cash flowand cost recovery, should their respective regulators decline to approve the construction of the project or new generation needed to meet thereliability needs of customers at the lowest reasonable cost.290 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System EnergyFor further information regarding capital expenditure plans and other uses of capital in connection with capital projects, including thepotential construction and/or purchase of additional generation supply sources within the Utility operating companies’ service territory, andas to the Entergy Wholesale Commodities business, see the “Capital Expenditure Plans and Other Uses of Capital” section ofManagement’s Financial Discussion and Analysis for Entergy and each of the Registrant Subsidiaries.Failure to attract, retain and manage an appropriately qualified workforce could negatively affect Entergy or its subsidiaries’results of operations.We rely on a large and changing workforce of team members, including employees, contractors and temporary staffing. Certainevents, such as an aging workforce, mismatching of skill sets, failing to appropriately anticipate future workforce needs, or the unavailabilityof contract resources may lead to operating challenges and increased costs. The challenges include lack of resources, loss of knowledge baseand the time required for skill development. In this case, costs, including costs for contractors to replace employees, productivity costs andsafety costs, may increase. Failure to hire and adequately train replacement employees, or the future availability and cost of contract labormay adversely affect the ability to manage and operate the business, especially considering the workforce needs associated with nucleargeneration facilities and new skills required to operate a modernized, technology-enabled power grid. If Entergy and its subsidiaries areunable to successfully attract, retain and manage an appropriately qualified workforce, their results of operations, financial position and cashflows could be negatively affected.The Utility operating companies, System Energy, and the Entergy Wholesale Commodities business may incur substantial costs tofulfill their obligations related to environmental and other matters.The businesses in which the Utility operating companies, System Energy, and the Entergy Wholesale Commodities business operateare subject to extensive environmental regulation by local, state, and federal authorities. These laws and regulations affect the manner inwhich the Utility operating companies, System Energy, and the Entergy Wholesale Commodities business conduct their operations and makecapital expenditures. These laws and regulations also affect how the Utility operating companies, System Energy, and the EntergyWholesale Commodities business manage air emissions, discharges to water, wetlands impacts, solid and hazardous waste storage anddisposal, cooling and service water intake, the protection of threatened and endangered species, certain migratory birds and eagles, hazardousmaterials transportation, and similar matters. Federal, state, and local authorities continually revise these laws and regulations, and the lawsand regulations are subject to judicial interpretation and to the permitting and enforcement discretion vested in the implementingagencies. Developing and implementing plans for facility compliance with these requirements can lead to capital, personnel, and operationand maintenance expenditures. Violations of these requirements can subject the Utility operating companies, System Energy, and theEntergy Wholesale Commodities business to enforcement actions, capital expenditures to bring existing facilities into compliance, additionaloperating costs or operating restrictions to achieve compliance, remediation and clean-up costs, civil penalties, and exposure to third parties’claims for alleged health or property damages or for violations of applicable permits or standards. In addition, the Utility operatingcompanies, System Energy, and the Entergy Wholesale Commodities business potentially are subject to liability under these laws for thecosts of remediation of environmental contamination of property now or formerly owned or operated by the Utility operating companies,System Energy, and Entergy Wholesale Commodities and of property contaminated by hazardous substances they generate. The Utilityoperating companies are currently involved in proceedings relating to sites where hazardous substances have been released and may besubject to additional proceedings in the future. The Utility operating companies, System Energy, and the Entergy Wholesale Commoditiesbusiness have incurred and expect to incur significant costs related to environmental compliance.Emissions of nitrogen and sulfur oxides, mercury, particulates, greenhouse gases, and other regulated air emissions from generatingplants are potentially subject to increased regulation, controls and mitigation expenses. In addition, existing air regulations and programspromulgated by the EPA often are challenged legally, or are revised or withdrawn by the EPA, sometimes resulting in large-scale changes toanticipated regulatory regimes and the resulting need to shift course, both operationally and economically, depending on the nature of thechanges. Risks relating to291 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyglobal climate change, initiatives to compel greenhouse gas emission reductions, and water availability issues are discussed below.Entergy and its subsidiaries may not be able to obtain or maintain all required environmental regulatory approvals. If there is a delayin obtaining any required environmental regulatory approvals, or if Entergy and its subsidiaries fail to obtain, maintain, or comply with anysuch approval, the operation of its facilities could be stopped or become subject to additional costs. For further information regardingenvironmental regulation and environmental matters, see the “Regulation of Entergy’s Business – Environmental Regulation” section ofPart I, Item 1.The Utility operating companies, System Energy, and the Entergy Wholesale Commodities business may incur substantial costsrelated to reliability standards.Entergy’s business is subject to extensive and mandatory reliability standards. Such standards, which are established by the NERC,the SERC, and other regional enforcement entities, are approved by the FERC and frequently are reviewed, amended, andsupplemented. Failure to comply with such standards could result in the imposition of fines or civil penalties, and potential exposure to thirdparty claims for alleged violations of such standards. The standards, as well as the laws and regulations that govern them, are subject tojudicial interpretation and to the enforcement discretion vested in the implementing agencies. In addition to exposure to civil penalties andfines, the Utility operating companies have incurred and expect to incur significant costs related to compliance with new and existingreliability standards, including costs associated with the Utility operating companies’ transmission system and generation assets. In addition,the retail regulators of the Utility operating companies possess the jurisdiction, and in some cases have exercised such jurisdiction, to imposestandards governing the reliable operation of the Utility operating companies’ distribution systems, including penalties if these standards arenot met. The changes to the reliability standards applicable to the electric power industry are ongoing, and Entergy cannot predict the ultimateeffect that the reliability standards will have on its Utility and Entergy Wholesale Commodities businesses.(Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas)Weather, economic conditions, technological developments, and other factors may have a material impact on electricity and gasusage and otherwise materially affect the Utility operating companies’ results of operations.Temperatures above normal levels in the summer tend to increase electric cooling demand and revenues, and temperatures belownormal levels in the winter tend to increase electric and gas heating demand and revenues. As a corollary, mild temperatures in either seasontend to decrease energy usage and resulting revenues. Higher consumption levels coupled with seasonal pricing differentials typically causethe Utility operating companies to report higher revenues in the third quarter of the fiscal year than in the other quarters. Extreme weatherconditions including hurricanes or tropical storms, flooding events, or ice storms may stress the Utility operating companies’ generationfacilities and transmission and distribution systems, resulting in increased maintenance and capital costs (and potential increased financingneeds), limits on their ability to meet peak customer demand, increased regulatory oversight, and reduced customer satisfaction. Theseextreme conditions could have a material effect on the Utility operating companies’ financial condition, results of operations, and liquidity.Entergy’s electricity sales volumes are affected by a number of factors including weather and economic conditions, trends in energyefficiency, new technologies and self-generation alternatives, including the willingness and ability of large industrial customers to developco-generation facilities that greatly reduce their grid demand. Some of these factors are inherently cyclical or temporary in nature, such as theweather or economic conditions, and rarely have a long-lasting effect on Entergy’s operating results. Others, such as the organic turnover ofappliances and their replacement with more efficient ones, adoption of newer technologies including smart thermostats, new building codes,distributed energy resources, energy storage, demand side management, and rooftop solar are having a more permanent effect by reducingsales growth rates from historical norms. As a result of these emerging efficiencies and technologies, the Utility operating companies maylose customers or experience lower average use per customer in the residential and commercial classes, and continuing advances have thepotential to further limit sales growth in the future. The292 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System EnergyUtility operating companies also may face competition from other companies offering products and services to Entergy’s customers.Electricity sales to industrial customers, in particular, benefit from steady economic growth and favorable commodity markets; however,industrial sales are sensitive to changes in conditions in the markets in which its customers operate. Negative changes in any of these or otherfactors, particularly sustained economic downturns or sluggishness, have the potential to result in slower sales growth or sales declines andincreased bad debt expense, which could materially affect Entergy’s and the Utility operating companies’ results of operations, financialcondition, and liquidity.The effects of climate change and environmental and regulatory obligations intended to compel greenhouse gas emissionreductions or increase clean or renewable energy requirements or to place a price on greenhouse gas emissions could materially affectthe financial condition, results of operations, and liquidity of Entergy, the Utility operating companies, System Energy, and the EntergyWholesale Commodities business.In an effort to address climate change concerns, some federal, state, and local authorities are calling for additional laws andregulations aimed at known or suspected causes of climate change. For example, in response to the United States Supreme Court’s 2007decision holding that the EPA has authority to regulate emissions of CO2 and other “greenhouse gases” under the Clean Air Act, the EPA,various environmental interest groups, and other organizations focused considerable attention on CO2 emissions from power generationfacilities and their potential role in climate change. In 2010, the EPA promulgated its first regulations controlling greenhouse gas emissionsfrom certain vehicles and from new and significantly modified stationary sources of emissions, including electric generating units. During2012 and 2014, the EPA proposed CO2 emission standards for new and existing sources. The EPA finalized these standards in 2015;however, in June 2019, the EPA repealed and replaced certain aspects of those regulations. As examples of state action, in the Northeast, theRegional Greenhouse Gas Initiative establishes a cap on CO2 emissions from electric power plants and requires generators to purchaseemission permits to cover their CO2 emissions, and a similar program has been developed in California. The impact that continued changes inthe governmental response to climate change risk will have on existing and pending environmental laws and regulations related to greenhousegas emissions is currently unclear.Developing and implementing plans for compliance with greenhouse gas emissions reduction or clean/renewable energyrequirements can lead to additional capital, personnel, and operation and maintenance expenditures and could significantly affect theeconomic position of existing facilities and proposed projects. The operations of low or non-emitting generating units (such as nuclear units)at lower than expected capacity factors could require increased generation from higher emitting units, thus increasing the company’sgreenhouse gas emission rate. Moreover, long-term planning to meet environmental requirements can be negatively impacted and costs mayincrease to the extent laws and regulations change prior to full implementation. These requirements could, in turn, lead to changes in theplanning or operations of balancing authorities or organized markets in areas where the Utility operating companies, System Energy, orEntergy Wholesale Commodities do business. Violations of such requirements may subject Entergy Wholesale Commodities and the Utilityoperating companies to enforcement actions, capital expenditures to bring existing facilities into compliance, additional operating costs oroperating restrictions to achieve compliance, civil penalties, and exposure to third parties’ claims for alleged health or property damages orfor violations of applicable permits or standards. To the extent Entergy believes any of these costs are recoverable in rates, however,additional material rate increases for customers could be resisted by Entergy’s regulators and, in extreme cases, Entergy’s regulators mightdeny or defer timely recovery of these costs. Future changes in environmental regulation governing the emission of CO2 and othergreenhouse gases or mix of generation sources could (i) result in significant additional costs to Entergy’s utility operating companies, theirsuppliers or customers, (ii) make some of Entergy’s electric generating units uneconomical to maintain or operate, (iii) result in the earlyretirement of generation facilities and stranded costs if Entergy’s utility operating companies are unable to fully recover the costs andinvestment in generation and (iv) could increase the difficulty that Entergy and its utility operating companies have with obtaining ormaintaining required environmental regulatory approvals, each of which could materially affect the financial condition, results of operationsand liquidity of Entergy and its subsidiaries. In addition, lawsuits have occurred or are reasonably expected against emitters of greenhousegases alleging that these companies are liable for personal injuries and property damage caused by climate change. These lawsuits may seekinjunctive relief, monetary compensation, and punitive damages.293 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System EnergyIn addition to the regulatory and financial risks associated with climate change discussed above, potential physical risks from climatechange include an increase in sea level, wind and storm surge damages, wildfires, wetland and barrier island erosion, risks of flooding andchanges in weather conditions, (such as increases in precipitation, drought, or changes in average temperatures), and potential increasedimpacts of extreme weather conditions or storms. Entergy subsidiaries own assets in, and serve, communities that are at risk from sea levelrise, changes in weather conditions, storms, and loss of the protection offered by coastal wetlands. A significant portion of the nation’s oiland gas infrastructure is located in these areas and susceptible to storm damage that could be aggravated by the physical impacts of climatechange, which could give rise to fuel supply interruptions and price spikes. Entergy and its subsidiaries also face the risk that climate changecould impact the availability and quality of water supply necessary for operations.These and other physical changes could result in changes in customer demand, increased costs associated with repairing andmaintaining generation facilities and transmission and distribution systems resulting in increased maintenance and capital costs (and potentialincreased financing needs), limits on the Entergy System’s ability to meet peak customer demand, more frequent and longer lasting outages,increased regulatory oversight, and lower customer satisfaction. Also, to the extent that climate change adversely impacts the economichealth of a region or results in energy conservation or demand side management programs, it may adversely impact customer demand andrevenues. Such physical or operational risks could have a material effect on Entergy’s, Entergy Wholesale Commodities’, System Energy’s,and the Utility operating companies’ financial condition, results of operations, and liquidity.Continued and future availability and quality of water for cooling, process, and sanitary uses could materially affect the financialcondition, results of operations, and liquidity of the Utility operating companies, System Energy, and the Entergy Wholesale Commoditiesbusiness.Water is a vital natural resource that is also critical to the Utility operating companies’, System Energy’s, and Entergy WholesaleCommodities’ business operations. Entergy’s facilities use water for cooling, boiler make-up, sanitary uses, potable supply, and many otheruses. Entergy’s Utility operating companies also own and/or operate hydroelectric facilities. Accordingly, water availability and quality arecritical to Entergy’s business operations. Impacts to water availability or quality could negatively impact both operations and revenues.Entergy secures water through various mechanisms (ground water wells, surface waters intakes, municipal supply, etc.) and operatesunder the provisions and conditions set forth by the provider and/or regulatory authorities. Entergy also obtains and operates in substantialcompliance with water discharge permits issued under various provisions of the Clean Water Act and/or state water pollution controlprovisions. Regulations and authorizations for both water intake and use and for waste discharge can become more stringent in times of watershortages, low flows in rivers, low lake levels, low groundwater aquifer volumes, and similar conditions. The increased use of water byindustry, agriculture, and the population at large, population growth, and the potential impacts of climate change on water resources maycause water use restrictions that affect Entergy and its subsidiaries.Entergy and its subsidiaries may not be adequately hedged against changes in commodity prices, which could materially affectEntergy’s and its subsidiaries’ results of operations, financial condition, and liquidity.To manage near-term financial exposure related to commodity price fluctuations, Entergy and its subsidiaries, including the Utilityoperating companies and the Entergy Wholesale Commodities business, may enter into contracts to hedge portions of their purchase and salecommitments, fuel requirements, and inventories of natural gas, uranium and its conversion and enrichment, coal, refined products, and othercommodities, within established risk management guidelines. As part of this strategy, Entergy and its subsidiaries may utilize fixed- andvariable-price forward physical purchase and sales contracts, futures, financial swaps, and option contracts traded in the over-the-countermarkets or on exchanges. However, Entergy and its subsidiaries normally cover only a portion of the exposure of their assets and positions tomarket price volatility, and the coverage will vary over time. In addition, Entergy also elects to leave certain volumes during certain yearsunhedged. To the extent Entergy and its subsidiaries have unhedged positions,294 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyfluctuating commodity prices can materially affect Entergy’s and its subsidiaries’ results of operations and financial position.Although Entergy and its subsidiaries devote a considerable effort to these risk management strategies, they cannot eliminate all therisks associated with these activities. As a result of these and other factors, Entergy and its subsidiaries cannot predict with precision theimpact that risk management decisions may have on their business, results of operations, or financial position.Entergy’s over-the-counter financial derivatives are subject to rules implementing the Dodd-Frank Wall Street Reform and ConsumerProtection Act that are designed to promote transparency, mitigate systemic risk and protect against market abuse. Entergy cannot predict theimpact any proposed or not fully-implemented final rules will have on its ability to hedge its commodity price risk or on over-the-counterderivatives markets as a whole, but such rules and regulations could have a material effect on Entergy's risk exposure, as well as reducemarket liquidity and further increase the cost of hedging activities.Entergy has guaranteed or indemnified the performance of a portion of the obligations relating to hedging and risk managementactivities. Reductions in Entergy’s or its subsidiaries’ credit quality or changes in the market prices of energy commodities could increase thecash or letter of credit collateral required to be posted in connection with hedging and risk management activities, which could materiallyaffect Entergy’s or its subsidiaries’ liquidity and financial position.The Utility operating companies and the Entergy Wholesale Commodities business are exposed to the risk that counterpartiesmay not meet their obligations, which may materially affect the Utility operating companies and Entergy Wholesale Commodities.The hedging and risk management practices of the Utility operating companies and the Entergy Wholesale Commodities business areexposed to the risk that counterparties that owe Entergy and its subsidiaries money, energy, or other commodities will not perform theirobligations. Currently, some hedging agreements contain provisions that require the counterparties to provide credit support to secure all orpart of their obligations to Entergy or its subsidiaries. If the counterparties to these arrangements fail to perform, Entergy or its subsidiariesmay enforce and recover the proceeds from the credit support provided and acquire alternative hedging arrangements, which credit supportmay not always be adequate to cover the related obligations. In such event, Entergy and its subsidiaries might incur losses in addition toamounts, if any, already paid to the counterparties. In addition, the credit commitments of Entergy’s lenders under its bank facilities may notbe honored for a variety of reasons, including unexpected periods of financial distress affecting such lenders, which could materially affectthe adequacy of its liquidity sources.Market performance and other changes may decrease the value of benefit plan assets, which then could require additionalfunding and result in increased benefit plan costs.The performance of the capital markets affects the values of the assets held in trust under Entergy’s pension and postretirementbenefit plans. A decline in the market value of the assets may increase the funding requirements relating to Entergy’s benefit plan liabilitiesand also result in higher benefit costs. As the value of the assets decreases, the “expected return on assets” component of benefit costsdecreases, resulting in higher benefits costs. Additionally, asset losses are incorporated into benefit costs over time, thus increasing benefitscosts. Volatility in the capital markets has affected the market value of these assets, which may affect Entergy’s planned levels ofcontributions in the future. Additionally, changes in interest rates affect the liabilities under Entergy’s pension and postretirement benefitplans; as interest rates decrease, the liabilities increase, potentially requiring additional funding and recognition of higher liability carryingcosts. The funding requirements of the obligations related to the pension benefit plans can also increase as a result of changes in, amongother factors, retirement rates, life expectancy assumptions, or Federal regulations. For further information regarding Entergy’s pension andother postretirement benefit plans, refer to the “Critical Accounting Estimates – Qualified Pension and Other Postretirement Benefits”section of Management’s Financial Discussion and Analysis for Entergy and each of its Registrant Subsidiaries and Note 11 to the financialstatements.295 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System EnergyThe litigation environment in the states in which certain Entergy subsidiaries operate poses a significant risk to those businesses.Entergy and its subsidiaries are involved in the ordinary course of business in a number of lawsuits involving employment,commercial, asbestos, hazardous material and ratepayer matters, and injuries and damages issues, among other matters. The states in whichthe Utility operating companies operate, in particular Louisiana, Mississippi, and Texas, have proven to be unusually litigiousenvironments. Judges and juries in these states have demonstrated a willingness to grant large verdicts, including punitive damages, toplaintiffs in personal injury, property damage, and business tort cases. Entergy and its subsidiaries use legal and appropriate means to contestlitigation threatened or filed against them, but the litigation environment in these states poses a significant business risk.Terrorist attacks, cyber attacks, system failures or data breaches of Entergy’s and its subsidiaries’ or our suppliers’ technologysystems may adversely affect Entergy’s results of operations.Entergy and its subsidiaries operate in a business that requires evolving information technology systems that include sophisticateddata collection, processing systems, software, network infrastructure and other technologies that are becoming more complex and may besubject to mandatory and prescriptive reliability and security standards. The functionality of Entergy’s technology systems depends on itsown and its suppliers’ and their contractors’ technology. Suppliers’ and their contractors’ technology systems to which Entergy is connecteddirectly or indirectly support a variety of business processes and activities to store sensitive data, including (i) intellectual property, (ii)proprietary business information, (iii) personally identifiable information of customers and employees, and (iv) data with respect to invoicingand the collection of payments, accounting, procurement, and supply chain activities. Any significant failure or malfunction of suchinformation technology systems could result in loss of data or disruptions of operations.There have been attacks and threats of attacks on energy infrastructure by cyber actors, including those associated with foreigngovernments. As an operator of critical infrastructure, Entergy and its subsidiaries face heightened risk of an act or threat of terrorism, cyberattacks, and data breaches, whether as a direct or indirect act against one of Entergy’s generation, transmission or distribution facilities,operations centers, infrastructure, or information technology systems used to manage, monitor, and transport power to customers and performday-to-day business functions. An actual act could affect Entergy’s ability to operate, including its ability to operate the informationtechnology systems and network infrastructure on which it relies to conduct business.Given the rapid technological advancements of existing and emerging threats, Entergy’s technology systems remain inherentlyvulnerable despite implementations and enhancements of the multiple layers of security and controls. If Entergy’s or its subsidiaries’technology systems were compromised and unable to detect or recover in a timely fashion to a normal state of operations, Entergy or itssubsidiaries could be unable to perform critical business functions that are essential to the company’s well-being and could result in a loss ofits confidential, sensitive, and proprietary information, including personal information of its customers, employees, suppliers, and others inEntergy’s care. Although malware was discovered on Entergy’s business network in 2018, it was remediated on a timely basis and did notaffect Entergy’s operational systems, generation plants (including nuclear), or transmission and distribution networks, nor did it have amaterial effect on Entergy’s business operations.Any such attacks, failures or data breaches could have a material effect on Entergy’s and the Utility operating companies’ business,financial condition, results of operations or reputation. Insurance may not be adequate to cover losses that might arise in connection withthese events. Such events may also expose Entergy to an increased risk of litigation (and associated damages and fines).296 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energy(Entergy New Orleans)The effect of higher purchased gas cost charges to customers taking gas service may adversely affect Entergy New Orleans’sresults of operations and liquidity.Gas rates charged to retail gas customers are comprised primarily of purchased gas cost charges, which provide no return or profit toEntergy New Orleans, and distribution charges, which provide a return or profit to the utility. Distribution charges recover fixed costs on avolumetric basis and, thus, are affected by the amount of gas sold to customers. When purchased gas cost charges increase due to higher gasprocurement costs, customer usage may decrease, especially in weaker economic times, resulting in lower distribution charges for EntergyNew Orleans, which could adversely affect results of operations. Purchased gas cost charges, which comprise most of a customer’s bill andmay be adjusted monthly, represent gas commodity costs that Entergy New Orleans recovers from its customers. Entergy New Orleans’scash flows can be affected by differences between the time period when gas is purchased and the time when ultimate recovery fromcustomers occurs.(System Energy)System Energy owns and, through an affiliate, operates a single nuclear generating facility, and it is dependent on affiliatedcompanies for all of its revenues.System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90%ownership/leasehold interest in Grand Gulf. Charges under the Unit Power Sales Agreement are paid by the Utility operating companies asconsideration for their respective entitlements to receive capacity and energy. The useful economic life of Grand Gulf is finite and is limitedby the terms of its operating license, which expires in November 2044. System Energy’s financial condition depends both on the receipt ofpayments from the Utility operating companies under the Unit Power Sales Agreement and on the continued commercial operation of GrandGulf. The Unit Power Sales Agreement is currently the subject of several litigation proceedings at the FERC, including a challenge withrespect to System Energy’s authorized return on equity and capital structure and a request in separate proceeding for FERC to initiate abroader investigation of rates under the Unit Power Sales Agreement. See Note 2 to the financial statements for further discussion of theproceedings. The Utility operating companies have agreed to implement certain protocols for providing retail regulators with informationregarding rates billed under the Unit Power Sales Agreement.For information regarding the Unit Power Sales Agreement, the sale and leaseback transactions and certain other agreements relatingto the Entergy System companies’ support of System Energy, see Notes 8 and 10 to the financial statements and the “Utility - System Energyand Related Agreements” section of Part I, Item 1.(Entergy Corporation)As a holding company, Entergy Corporation depends on cash distributions from its subsidiaries to meet its debt service and otherfinancial obligations and to pay dividends on its common stock.Entergy Corporation is a holding company with no material revenue generating operations of its own or material assets other than thestock of its subsidiaries. Accordingly, all of its operations are conducted by its subsidiaries. Entergy Corporation’s ability to satisfy itsfinancial obligations, including the payment of interest and principal on its outstanding debt, and to pay dividends on its common stockdepends on the payment to it of dividends or distributions by its subsidiaries. The subsidiaries of Entergy Corporation are separate anddistinct legal entities and have no obligation, contingent or otherwise, to pay any dividends or make distributions to Entergy Corporation. Theability of such subsidiaries to make payments of dividends or distributions to Entergy Corporation depends on their results of operations andcash flows and other items affecting retained earnings, and on any applicable legal, regulatory, or contractual limitations on subsidiaries’ability to pay such dividends or distributions. Prior to providing funds to Entergy Corporation, such subsidiaries have financial and regulatoryobligations that must be satisfied, including among others, debt service and, in the case of Entergy Utility Holding Company and EntergyTexas, dividends and distributions on preferred securities. Any distributions from the Registrant Subsidiaries other than Entergy Texas andSystem Energy297 Table of ContentsPart I Item 1A & 1BEntergy Corporation, Utility operating companies, and System Energyare paid directly to Entergy Utility Holding Company and are therefore subject to prior payment of distributions on its preferred securities.298 Table of Contents ENTERGY ARKANSAS, LLC AND SUBSIDIARIESMANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSISResults of Operations2019 Compared to 2018Net IncomeNet income increased $10.3 million primarily due to higher retail electric price and lower nuclear refueling outage expenses,partially offset by lower volume/weather, higher interest expense, and higher depreciation and amortization expenses.Operating RevenuesFollowing is an analysis of the change in operating revenues comparing 2019 to 2018: Amount (In Millions)2018 operating revenues$2,060.6Fuel, rider, and other revenues that do not significantlyaffect net income(74.9)Return of unprotected excess accumulated deferredincome taxes to customers241.4Retail electric price66.7Volume/weather(34.2)2019 operating revenues$2,259.6Entergy Arkansas’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs suchthat the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues thatdo not significantly affect net income” includes the revenue variance associated with these items.The return of unprotected excess accumulated deferred income taxes to customers resulted from the return of unprotected excessaccumulated deferred income taxes through a tax adjustment rider beginning in April 2018. In 2019, $126.3 million was returned tocustomers as compared to $367.7 million in 2018. There was no effect on net income as the reduction in operating revenues in each periodwas offset by a reduction in income tax expense. See Note 2 to the financial statements for further discussion of regulatory activity regardingthe Tax Cuts and Jobs Act.The retail electric price variance is primarily due to an increase in formula rate plan rates effective with the first billing cycle ofJanuary 2019, as approved by the APSC. See Note 2 to the financial statements for further discussion of the formula rate plan filing.The volume/weather variance is primarily due to a decrease of 707 GWh, or 3%, in billed electricity usage, including the effect ofless favorable weather on residential and commercial sales and a decrease in industrial usage. The decrease in industrial usage is primarilydue to a decrease in small industrial sales.Other Income Statement VariancesNuclear refueling outage expenses decreased primarily due to the amortization of lower costs associated with the most recent outagesas compared to previous outages. 299 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisOther operation and maintenance expenses decreased primarily due to:•a decrease of $20.2 million in nuclear generation expenses primarily due to a lower scope of work performed in 2019 as compared to2018;•the effects of recording in 2019 a final judgment to resolve claims in the ANO damages case against the DOE related to spent nuclearfuel storage costs. The damages awarded include the reimbursement of approximately $11.9 million of spent nuclear fuel storagecosts previously recorded as other operation and maintenance expense. See Note 8 to the financial statements for discussion of thespent nuclear fuel litigation; and•a decrease of $5.5 million in vegetation maintenance costs.The decrease was partially offset by:•an $11.2 million write-off in 2019 of specific costs related to the potential construction of scrubbers at the White Bluff plant;•an increase of $8.5 million in information technology expenses primarily due to higher costs related to applications and infrastructuresupport, enhanced cyber security, and upgrades and maintenance;•an increase of $7.4 million due to spending on initiatives to explore new customer products and services; and•an increase of $5.5 million in compensation and benefits costs primarily due to higher incentive-based compensation accruals in 2019as compared to prior year.Taxes other than income taxes increased primarily due to increases in local franchise taxes and ad valorem taxes. The increase inlocal franchise taxes is primarily due to higher electric retail revenues. The increase in ad valorem taxes is primarily due to higherassessments and millage rates.Depreciation and amortization expenses increased primarily due to additions to plant in service and an increase in the ANO 1 andANO 2 asset retirement cost assets. See Note 9 to the financial statements for discussion of the increase in the asset retirement cost assets.Interest expense increased primarily due to the issuance of $350 million of 4.20% Series mortgage bonds in March 2019 and theissuance of $250 million of 4.00% Series mortgage bonds in May 2018.The effective income tax rates were (21.6%) for 2019 and 669.7% for 2018. The differences in the effective income tax rates versusthe federal statutory rate of 21% for 2019 and 2018 were primarily due to the amortization of excess accumulated deferred income taxes. SeeNote 3 to the financial statements for a reconciliation of the federal statutory rate of 21% to the effective income tax rates.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Results of Operations” in Entergy Arkansas’s AnnualReport on Form 10-K for the year ended December 31, 2018 for discussion of results of operations for 2018 compared to 2017.Income Tax LegislationSee the “Income Tax Legislation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion andAnalysis for discussion of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017. Note 3 to the financialstatements contains additional discussion of the effect of the Act on 2017, 2018, and 2019 results of operations and financial position, theprovisions of the Act, and the uncertainties associated with accounting for the Act, and Note 2 to the financial statements discusses theregulatory proceedings that have considered the effects of the Act.300 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisLiquidity and Capital ResourcesCash FlowCash flows for the years ended December 31, 2019, 2018, and 2017 were as follows: 2019 2018 2017 (In Thousands)Cash and cash equivalents at beginning of period$119 $6,216 $20,509 Net cash provided by (used in): Operating activities677,766 211,825 555,556Investing activities(676,293) (688,727) (829,312)Financing activities1,927 470,805 259,463Net increase (decrease) in cash and cash equivalents3,400 (6,097) (14,293) Cash and cash equivalents at end of period$3,519 $119 $6,2162019 Compared to 2018Operating ActivitiesNet cash flow provided by operating activities increased $465.9 million in 2019 primarily due to:•a decrease in the return of unprotected excess accumulated deferred income taxes to customers in 2019 as compared to 2018. SeeNote 2 to the financial statements for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act;•payments in 2018 of $135 million to the other Utility operating companies as a result of a compliance filing made in response to theFERC’s October 2018 order in the opportunity sales proceeding. See Note 2 to the financial statements for further discussion of theopportunity sales proceeding;•income tax refunds of $34 million in 2019 compared to income tax payments of $44.4 million in 2018. Entergy Arkansas had incometax refunds in 2019 and income tax payments in 2018 in accordance with an intercompany income tax allocation agreement. Theincome tax refunds in 2019 resulted from the utilization of Entergy Arkansas’s net operating losses. The income tax payments in2018 primarily resulted from the settlement of the 2012-2013 audit;•a decrease of $44.1 million in spending on nuclear refueling outages in 2019; and•the timing of recovery of fuel and purchased power costs.The increase was partially offset by the timing of collection of receivables from customers and an increase of $11.8 million in pensioncontributions in 2019. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” belowand Note 11 to the financial statements for a discussion of qualified pension and other postretirement benefits funding. 301 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisInvesting ActivitiesNet cash flow used in investing activities decreased $12.4 million in 2019 primarily due to:•a decrease of $32.1 million in nuclear construction expenditures primarily due to a lower scope of work performed on various nuclearprojects in 2019 as compared to 2018;•a decrease of $25.8 million in transmission construction expenditures primarily due to a lower scope of work performed on variousprojects in 2019 as compared to 2018; and•a decrease of $13 million as a result of fluctuations in nuclear fuel activity because of variations from year to year in the timing andpricing of fuel reload requirements in the Utility business, material and service deliveries, and the timing of cash payments during thenuclear fuel cycle.The decrease was partially offset by an increase of $35.6 million in distribution construction expenditures primarily due to investment in thereliability and infrastructure of Entergy Arkansas’s distribution system, including increased spending on advanced metering infrastructure,and an increase of $15.6 million in storm spending. Financing ActivitiesEntergy Arkansas’s cash provided by financing activities decreased $468.9 million in 2019 primarily due to:•a $350 million capital contribution from Entergy Corporation in May 2018 in anticipation of the return of unprotected excessaccumulated deferred income taxes to customers and upcoming planned capital investments;•the issuance of $250 million of 4.0% Series first mortgage bonds in May 2018;•money pool activity;•net repayments of long-term borrowings of $44.5 million in 2019 compared to net long-term borrowings of $34.7 million in 2018 onthe Entergy Arkansas nuclear fuel company variable interest entity credit facility; and•an increase of $23.2 million in common equity distributions paid in 2019 primarily to maintain Entergy Arkansas’s capital structure.The decrease was partially offset by:•the issuance of $350 million of 4.20% Series mortgage bonds in March 2019;•net repayments of short-term borrowings of $50 million on the Entergy Arkansas nuclear fuel company variable interest entity creditfacility in 2018; and•the redemption of $31.4 million of preferred stock in 2018 in connection with the internal restructuring. See Note 2 to the financialstatements for further discussion of the internal restructuring and Note 6 to the financial statements for details of preferred stockactivity.Decreases in Entergy Arkansas’s payable to the money pool are a use of cash flow, and Entergy Arkansas’s payable to the moneypool decreased by $161.1 million in 2019 compared to increasing by $16.6 million in 2018. The money pool is an inter-company borrowingarrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.See Note 5 to the financial statements for further details of long-term debt.302 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and Analysis2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Cash Flow” inEntergy Arkansas’s Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of operating, investing, and financingcash flow activities for 2018 compared to 2017.Capital StructureEntergy Arkansas’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio is primarily due tothe issuance of long-term debt in 2019. December 31, 2019 December 31, 2018Debt to capital53.0% 52.0%Effect of excluding the securitization bonds—% (0.2%)Debt to capital, excluding securitization bonds (a)53.0% 51.8%Effect of subtracting cash—% —%Net debt to net capital, excluding securitization bonds (a)53.0% 51.8%(a)Calculation excludes the securitization bonds, which are non-recourse to Entergy Arkansas.Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings, finance lease obligations, and long-termdebt, including the currently maturing portion. Capital consists of debt and equity. Net capital consists of capital less cash and cashequivalents. Entergy Arkansas uses the debt to capital ratios excluding securitization bonds in analyzing its financial condition and believesthey provide useful information to its investors and creditors in evaluating Entergy Arkansas’s financial condition because the securitizationbonds are non-recourse to Entergy Arkansas, as more fully described in Note 5 to the financial statements. Entergy Arkansas also uses the netdebt to net capital ratio excluding securitization bonds in analyzing its financial condition and believes it provides useful information to itsinvestors and creditors in evaluating Entergy Arkansas’s financial condition because net debt indicates Entergy Arkansas’s outstanding debtposition that could not be readily satisfied by cash and cash equivalents on hand.Entergy Arkansas seeks to optimize its capital structure in accordance with its regulatory requirements and to control its cost ofcapital while also maintaining equity capitalization at a level consistent with investment-grade debt ratings. To the extent that operating cashflows are in excess of planned investments, cash may be used to reduce outstanding debt or may be paid as a distribution, or both, inappropriate amounts to maintain the capital structure. To the extent that operating cash flows are insufficient to support planned investments,Entergy Arkansas may issue incremental debt or reduce distributions, or both, to maintain its capital structure. In addition, in certaininfrequent circumstances, such as large transactions that would materially alter the capital structure if financed entirely with debt andreducing distributions, Entergy Arkansas may receive equity contributions to maintain its capital structure.Uses of CapitalEntergy Arkansas requires capital resources for:•construction and other capital investments;•debt maturities or retirements;•working capital purposes, including the financing of fuel and purchased power costs; and•distribution and interest payments.303 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisFollowing are the amounts of Entergy Arkansas’s planned construction and other capital investments. 2020 2021 2022 (In Millions)Planned construction and capital investment: Generation$250 $445 $595Transmission110 50 65Distribution190 125 125Utility Support185 165 240Total$735 $785 $1,025Following are the amounts of Entergy Arkansas’s existing debt and lease obligations (includes estimated interest payments) and otherpurchase obligations. 2020 2021-2022 2023-2024 After 2024 Total (In Millions)Long-term debt (a)$142 $737 $877 $4,377 $6,133Operating leases (b)$13 $20 $13 $12 $58Finance leases (b)$3 $4 $3 $2 $12Purchase obligations (c)$553 $939 $561 $4,485 $6,538(a)Includes estimated interest payments. Long-term debt is discussed in Note 5 to the financial statements.(b)Lease obligations are discussed in Note 10 to the financial statements.(c)Purchase obligations represent the minimum purchase obligation or cancellation charge for contractual obligations to purchase goodsor services. For Entergy Arkansas, almost all of the total consists of unconditional fuel and purchased power obligations, includingits obligations under the Unit Power Sales Agreement, which are discussed in Note 8 to the financial statements.In addition to the contractual obligations given above, Entergy Arkansas currently expects to contribute approximately $32.5 million to itsqualified pension plans and approximately $509 thousand to its other postretirement health care and life insurance plans in 2020, although the2020 required pension contributions will be known with more certainty when the January 1, 2020 valuations are completed, which isexpected by April 1, 2020. See “Critical Accounting Estimates – Qualified Pension and Other Postretirement Benefits” below for adiscussion of qualified pension and other postretirement benefits funding.Also in addition to the contractual obligations, Entergy Arkansas has $207.1 million of unrecognized tax benefits and interest net ofunused tax attributes for which the timing of payments beyond 12 months cannot be reasonably estimated due to uncertainties in the timing ofeffective settlement of tax positions. See Note 3 to the financial statements for additional information regarding unrecognized tax benefits.In addition to routine capital spending to maintain operations, the planned capital investment estimate for Entergy Arkansas includesspecific investments, such as transmission projects to enhance reliability, reduce congestion, and enable economic growth; distributionspending to enhance reliability and improve service to customers, including advanced meters and related investments; resource planning,including potential generation projects; system improvements; investments in ANO 1 and 2; software and security; and other investments.Estimated capital expenditures are subject to periodic review and modification and may vary based on the ongoing effects of regulatoryconstraints and requirements, environmental compliance, business opportunities, market volatility, economic trends, business restructuring,changes in project plans, and the ability to access capital. Management provides more information on long-term debt maturities in Note 5 tothe financial statements.304 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisAs a wholly-owned subsidiary of Entergy Utility Holding Company, LLC, Entergy Arkansas pays distributions from its earnings at apercentage determined monthly.Searcy Solar Facility In March 2019, Entergy Arkansas announced that it signed an agreement for the purchase of an approximately 100 MW to-be-constructed solar energy facility that will be sited on approximately 800 acres in White County near Searcy, Arkansas. The purchase iscontingent upon, among other things, obtaining necessary approvals from applicable federal and state regulatory and permitting agencies. The project will be constructed by a subsidiary of NextEra Energy Resources. Entergy Arkansas will purchase the facility upon mechanicalcompletion and after the other purchase contingencies have been met. Closing is expected to occur by the end of 2021. In May 2019, EntergyArkansas filed a petition with the APSC seeking a finding that the transaction is in the public interest and requesting all necessary approvals.In September 2019 other parties filed testimony largely supporting the resource acquisition but disputing Entergy Arkansas’s proposedmethod of cost recovery. Entergy Arkansas filed its rebuttal testimony in October 2019. In February 2020, Entergy Arkansas, the AttorneyGeneral, and the APSC general staff filed a partial settlement agreement asking the APSC to approve, based on the record in the proceeding,all issues except certain issues that are submitted to the APSC for determination.Sources of CapitalEntergy Arkansas’s sources to meet its capital requirements include:•internally generated funds;•cash on hand;•debt or preferred membership interest issuances;•capital contributions; and•bank financing under new or existing facilities.Entergy Arkansas may refinance, redeem, or otherwise retire debt prior to maturity, to the extent market conditions and interest ratesare favorable.All debt and common and preferred membership interest issuances by Entergy Arkansas require prior regulatory approval. Debtissuances are also subject to issuance tests set forth in Entergy Arkansas’s bond indentures and other agreements. Entergy Arkansas hassufficient capacity under these tests to meet its foreseeable capital needs.Entergy Arkansas’s payables to the money pool were as follows as of December 31 for each of the following years.2019 2018 2017 2016(In Thousands)$21,634 $182,738 $166,137 $51,232See Note 4 to the financial statements for a description of the money pool.Entergy Arkansas has a credit facility in the amount of $150 million scheduled to expire in September 2024. Entergy Arkansas alsohas a $20 million credit facility scheduled to expire in April 2020. The $150 million credit facility includes fronting commitments for theissuance of letters of credit against $5 million of the borrowing capacity of the facility. As of December 31, 2019, there were no cashborrowings and no letters of credit outstanding under the credit facilities. In addition, Entergy Arkansas is a party to an uncommitted letter ofcredit facility as a means to post collateral to support its obligations to MISO. As of December 31, 2019, a $1 million letter of credit wasoutstanding under Entergy Arkansas’s uncommitted letter of credit facility. See Note 4 to the financial statements for further discussion ofthe credit facilities.305 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisThe Entergy Arkansas nuclear fuel company variable interest entity has a credit facility in the amount of $80 million scheduled toexpire in September 2021. As of December 31, 2019, $15.1 million in loans were outstanding under the Entergy Arkansas nuclear fuelcompany variable interest entity credit facility. See Note 4 to the financial statements for further discussion of the nuclear fuel companyvariable interest entity credit facility.Entergy Arkansas obtained authorization from the FERC through November 2020 for short-term borrowings not to exceed anaggregate amount of $250 million at any time outstanding and borrowings by its nuclear fuel company variable interest entity. See Note 4 tothe financial statements for further discussion of Entergy Arkansas’s short-term borrowing limits. The long-term securities issuances ofEntergy Arkansas are limited to amounts authorized by the FERC. The APSC has concurrent jurisdiction over Entergy Arkansas’s firstmortgage bond/secured issuances. Entergy Arkansas has obtained long-term financing authorization from the FERC that extends throughNovember 2020. Entergy Arkansas has obtained first mortgage bond/secured financing authorization from the APSC that extends throughDecember 2020.State and Local Rate Regulation and Fuel-Cost RecoveryRetail Rates2017 Formula Rate Plan FilingIn July 2017, Entergy Arkansas filed with the APSC its 2017 formula rate plan filing showing Entergy Arkansas’s projected earnedreturn on common equity for the twelve months ended December 31, 2018 test period to be below the formula rate plan bandwidth. Thefiling projected a $129.7 million revenue requirement increase to achieve Entergy Arkansas’s target earned return on common equity of9.75%. Entergy Arkansas’s formula rate plan is subject to a four percent annual revenue constraint and the projected annual revenuerequirement increase exceeded the four percent, resulting in a proposed increase for the 2017 formula rate plan of $70.9 million. In October2017, Entergy Arkansas filed with the APSC revised formula rate plan attachments that projected a $126.2 million revenue requirementincrease based on acceptance of certain adjustments and recommendations made by the APSC staff and other intervenors. The revisedformula rate plan filing included a proposed $71.1 million revenue requirement increase based on a revision to the four percent constraintcalculation. In October 2017, Entergy Arkansas and the parties to the proceeding filed a joint motion to approve a unanimous settlementagreement resolving all issues in the proceeding and providing for recovery of certain 2017 and 2018 nuclear costs. In December 2017 theAPSC approved the settlement agreement and the $71.1 million revenue requirement increase, as well as Entergy Arkansas’s formula rateplan compliance tariff, and the rates became effective with the first billing cycle of January 2018.2018 Formula Rate Plan FilingIn July 2018, Entergy Arkansas filed with the APSC its 2018 formula rate plan filing to set its formula rate for the 2019 calendaryear. The filing showed Entergy Arkansas’s projected earned return on common equity for the twelve months ended December 31, 2019 testperiod to be below the formula rate plan bandwidth. Additionally, the filing includes the first netting adjustment under the current formularate plan for the historical test year 2017, reflecting the change in formula rate plan revenues associated with actual 2017 results whencompared to the allowed rate of return on equity. The filing includes a projected $73.4 million revenue deficiency for 2019 and a $95.6million revenue deficiency for the 2017 historical test year, for a total revenue requirement of $169 million for this filing. By operation of theformula rate plan, Entergy Arkansas’s recovery of the revenue requirement is subject to a four percent annual revenue constraint. BecauseEntergy Arkansas’s revenue requirement in this filing exceeds the constraint, the resulting increase is limited to four percent of total revenue,which originally was $65.4 million but was increased to $66.7 million based upon the APSC staff’s updated calculation of 2018 revenue. InOctober 2018, Entergy Arkansas and the parties to the proceeding filed joint motions to approve a partial settlement agreement as to certainfactual issues and agreed to brief contested legal issues. In November 2018 the APSC held a hearing and was briefed on a certain contestedlegal issue. In December 2018 the APSC issued a decision related to the initial legal brief, approved the306 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and Analysispartial settlement agreement and $66.7 million revenue requirement increase, as well as Entergy Arkansas’s formula rate plan, with updatedrates going into effect for the first billing cycle of January 2019. 2019 Formula Rate Plan FilingIn July 2019, Entergy Arkansas filed with the APSC its 2019 formula rate plan filing to set its formula rate for the 2020 calendaryear. The filing contained an evaluation of Entergy Arkansas’s earnings for the projected year 2020 and a netting adjustment for thehistorical year 2018. The total proposed formula rate plan rider revenue change designed to produce a target rate of return on common equityof 9.75% is $15.3 million, which is based upon a deficiency of approximately $61.9 million for the 2020 projected year, netted with a creditof approximately $46.6 million in the 2018 historical year netting adjustment. During 2018 Entergy Arkansas experienced higher-thanexpected sales volume, and actual costs were lower than forecasted. These changes, coupled with a reduced income tax rate resulting fromthe Tax Cuts and Jobs Act, resulted in the credit for the historical year netting adjustment. In the fourth quarter 2018 Entergy Arkansasrecorded a provision of $35.1 million that reflected the estimate of the historical year netting adjustment that was expected to be included inthe 2019 filing. In 2019, Entergy Arkansas recorded additional provisions totaling $11.5 million to reflect the updated estimate of thehistorical year netting adjustment included in the 2019 filing. In October 2019 other parties in the proceeding filed their errors and objectionsrequesting certain adjustments to Entergy Arkansas’s filing that would reduce or eliminate Entergy Arkansas’s proposed revenue change.Entergy Arkansas filed its response addressing the requested adjustments in October 2019. In its response, Entergy Arkansas accepted certainof the adjustments recommended by the General Staff of the APSC that would reduce the proposed formula rate plan rider revenue change to$14 million. Entergy Arkansas disputed the remaining adjustments proposed by the parties. In October 2019, Entergy Arkansas filed aunanimous settlement agreement with the other parties in the proceeding seeking APSC approval of a revised total formula rate plan riderrevenue change of $10.1 million. In its July 2019 formula rate plan filing, Entergy Arkansas proposed to recover an $11.2 million regulatoryasset, amortized over five years, associated with specific costs related to the potential construction of scrubbers at the White Bluff plant.Although Entergy Arkansas does not concede that the regulatory asset lacks merit, for purposes of reaching a settlement on the total formularate plan rider amount, Entergy Arkansas agreed not to include the White Bluff scrubber regulatory asset cost in the 2019 formula rate planfiling or future filings. Entergy Arkansas recorded a write-off in 2019 of the $11.2 million White Bluff scrubber regulatory asset. InDecember 2019, the APSC approved the settlement as being in the public interest and approved Entergy Arkansas’s compliance tariffeffective with the first billing cycle of January 2020.Internal RestructuringIn November 2017, Entergy Arkansas filed an application with the APSC seeking authorization to undertake a restructuring thatwould result in the transfer of substantially all of the assets and operations of Entergy Arkansas to a new entity, which would ultimately beowned by an existing Entergy subsidiary holding company. In July 2018, Entergy Arkansas filed a settlement, reached by all parties in theAPSC proceeding, resolving all issues. The APSC approved the settlement agreement and restructuring in August 2018. Pursuant to thesettlement agreement, Entergy Arkansas will credit retail customers $39.6 million over six years, beginning in 2019. Entergy Arkansas alsoreceived the required FERC and NRC approvals.In November 2018, Entergy Arkansas undertook a multi-step restructuring, including the following:•Entergy Arkansas, Inc. redeemed its outstanding preferred stock at the aggregate redemption price of approximately $32.7 million.•Entergy Arkansas, Inc. converted from an Arkansas corporation to a Texas corporation.•Under the Texas Business Organizations Code (TXBOC), Entergy Arkansas, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy Arkansas Power, LLC, a Texas limited liability company (Entergy Arkansas Power), and Entergy ArkansasPower assumed substantially all of the liabilities of Entergy Arkansas, Inc., in a transaction regarded as a merger under the TXBOC.Entergy Arkansas, Inc. remained in existence and held the membership interests in Entergy Arkansas Power.307 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and Analysis•Entergy Arkansas, Inc. contributed the membership interests in Entergy Arkansas Power to an affiliate (Entergy Utility HoldingCompany, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution, EntergyArkansas Power is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC. In December 2018, Entergy Arkansas, Inc. changed its name to Entergy Utility Property, Inc., and Entergy Arkansas Power then changed itsname to Entergy Arkansas, LLC. Entergy Arkansas, LLC holds substantially all of the assets, and assumed substantially all of the liabilities,of Entergy Arkansas, Inc. The transaction was accounted for as a transaction between entities under common control.Advanced Metering Infrastructure (AMI)In September 2016, Entergy Arkansas filed an application seeking a finding from the APSC that Entergy Arkansas’s deployment ofAMI is in the public interest. Entergy Arkansas proposed to replace existing meters with advanced meters that enable two-way datacommunication; design and build a secure and reliable network to support such communications; and implement support systems. AMI isintended to serve as the foundation of Entergy Arkansas’s modernized power grid. The filing included an estimate of implementation costsfor AMI of $208 million and identified a number of quantified and unquantified benefits. Entergy Arkansas proposed a 15-year depreciablelife for the new advanced meters, the three-year deployment of which began in January 2019. Deployment of the communications networkbegan in 2018. In October 2017 the APSC issued an order finding that Entergy Arkansas’s AMI deployment is in the public interest andapproving the settlement agreement subject to a minor modification. Entergy Arkansas is recovering the AMI deployment costs and thequantified benefits through its formula rate plan. Entergy Arkansas will recover the undepreciated balance of its existing meters through aregulatory asset to be amortized over 15 years, as approved by the APSC.Production Cost Allocation RiderThe APSC approved a production cost allocation rider for recovery from customers of the retail portion of the costs allocated toEntergy Arkansas as a result of the System Agreement proceedings, which are discussed in the “System Agreement Cost EqualizationProceedings” section in Note 2 to the financial statements. Energy Cost Recovery RiderEntergy Arkansas’s retail rates include an energy cost recovery rider to recover fuel and purchased energy costs in monthly customerbills. The rider utilizes the prior calendar-year energy costs and projected energy sales for the twelve-month period commencing on April 1of each year to develop an energy cost rate, which is redetermined annually and includes a true-up adjustment reflecting the over- or under-recovery, including carrying charges, of the energy costs for the prior calendar year. The energy cost recovery rider tariff also allows aninterim rate request depending upon the level of over- or under-recovery of fuel and purchased energy costs.In January 2014, Entergy Arkansas filed a motion with the APSC relating to its upcoming energy cost rate redetermination filing thatwas made in March 2014. In that motion, Entergy Arkansas requested that the APSC authorize Entergy Arkansas to exclude from theredetermination of its 2014 energy cost rate $65.9 million of incremental fuel and replacement energy costs incurred in 2013 as a result of theANO stator incident. Entergy Arkansas requested that the APSC authorize Entergy Arkansas to retain that amount in its deferred fuelbalance, with recovery to be reviewed in a later period after more information was available regarding various claims associated with theANO stator incident. In February 2014 the APSC approved Entergy Arkansas’s request to retain that amount in its deferred fuel balance. InJuly 2017, Entergy Arkansas filed for a change in rates pursuant to its formula rate plan rider. In that proceeding, the APSC approved asettlement agreement agreed upon by the parties, including a provision that requires Entergy Arkansas to initiate a regulatory proceeding forthe purpose of recovering funds currently withheld from rates and related to the stator incident, including the $65.9 million of deferred fueland purchased energy costs previously noted, subject to308 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and Analysiscertain timelines and conditions set forth in the settlement agreement. See the “ANO Damage, Outage, and NRC Reviews” section in Note8 to the financial statements for further discussion of the ANO stator incident.In March 2017, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider,which reflected an increase in the rate from $0.01164 per kWh to $0.01547 per kWh. The APSC staff filed testimony in March 2017recommending that the redetermined rate be implemented with the first billing cycle of April 2017 under the normal operation of the tariff.Accordingly, the redetermined rate went into effect on March 31, 2017 pursuant to the tariff. In July 2017 the Arkansas Attorney Generalrequested additional information to support certain of the costs included in Entergy Arkansas’s 2017 energy cost rate redetermination.In March 2018, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider,which reflected an increase in the rate from $0.01547 per kWh to $0.01882 per kWh. The Arkansas Attorney General filed a response toEntergy Arkansas’s annual redetermination filing requesting that the APSC suspend the proposed tariff to investigate the amount of theredetermination or, alternatively, to allow recovery subject to refund. Among the reasons the Attorney General cited for suspension werequestions pertaining to how Entergy Arkansas forecasted sales and potential implications of the Tax Act. Entergy Arkansas replied to theAttorney General’s filing and stated that, to the extent there are questions pertaining to its load forecasting or the operation of the energy costrecovery rider, those issues exceed the scope of the instant rate redetermination. Entergy Arkansas also stated that potential effects of the TaxAct are appropriately considered in the APSC’s separate proceeding regarding potential implications of the tax law. The APSC general stafffiled a reply to the Attorney General’s filing and agreed that Entergy Arkansas’s filing complied with the terms of the energy cost recoveryrider. The redetermined rate became effective with the first billing cycle of April 2018. Subsequently in April 2018 the APSC issued an orderdeclining to suspend Entergy Arkansas’s energy cost recovery rider rate and declining to require further investigation at that time of theissues suggested by the Attorney General in the proceeding. Following a period of discovery, the Attorney General filed a supplementalresponse in October 2018 raising new issues with Entergy Arkansas’s March 2018 rate redetermination and asserting that $45.7 million ofthe increase should be collected subject to refund pending further investigation. Entergy Arkansas filed to dismiss the Attorney General’ssupplemental response, the APSC general staff filed a motion to strike the Attorney General’s filing, and the Attorney General filed asupplemental response disputing Entergy Arkansas and the APSC staff’s filing. Applicable APSC rules and processes authorize its generalstaff to initiate periodic audits of Entergy Arkansas’s energy cost recovery rider. In late-2018, the APSC general staff notified EntergyArkansas it has initiated an audit of the 2017 fuel costs. The time in which the audit will be complete is uncertain at this time.In March 2019, Entergy Arkansas filed its annual redetermination of its energy cost rate pursuant to the energy cost recovery rider,which reflected a decrease from $0.01882 per kWh to $0.01462 per kWh and became effective with the first billing cycle in April 2019. InMarch 2019 the Arkansas Attorney General filed a response to Entergy Arkansas’s annual adjustment and included with its filing a motionfor investigation of alleged overcharges to customers in connection with the FERC’s October 2018 order in the opportunity sales proceeding.Entergy Arkansas filed its response to the Attorney General’s motion in April 2019 in which Entergy Arkansas stated its intent to initiate aproceeding to address recovery issues related to the October 2018 FERC order. In May 2019, Entergy Arkansas initiated the opportunitysales recovery proceeding, discussed below, and requested that the APSC establish that proceeding as the single designated proceeding inwhich interested parties may assert claims related to the appropriate retail rate treatment of the FERC October 2018 order and related FERCorders in the opportunity sales proceeding. In June 2019 the APSC granted Entergy Arkansas’s request and also denied the AttorneyGeneral’s motion in the energy cost recovery proceeding seeking an investigation into Entergy Arkansas’s annual energy cost recovery rideradjustment and referred the evaluation of such matters to the opportunity sales recovery proceeding.309 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisOpportunity Sales ProceedingIn June 2009 the LPSC filed a complaint requesting that the FERC determine that certain of Entergy Arkansas’s sales of electricenergy to third parties: (a) violated the provisions of the System Agreement that allocated the energy generated by Entergy System resources;(b) imprudently denied the Entergy System and its ultimate consumers the benefits of low-cost Entergy System generating capacity; and (c)violated the provision of the System Agreement that prohibited sales to third parties by individual companies absent an offer of a right-of-first-refusal to other Utility operating companies. The LPSC’s complaint challenged sales made beginning in 2002 and requestedrefunds. In July 2009 the Utility operating companies filed a response to the complaint arguing among other things that the SystemAgreement contemplates that the Utility operating companies may make sales to third parties for their own account, subject to therequirement that those sales be included in the load (or load shape) for the applicable Utility operating company. The FERC subsequentlyordered a hearing in the proceeding.After a hearing, the ALJ issued an initial decision in December 2010. The ALJ found that the System Agreement allowed forEntergy Arkansas to make the sales to third parties but concluded that the sales should be accounted for in the same manner as joint accountsales. The ALJ concluded that “shareholders” should make refunds of the damages to the Utility operating companies, along withinterest. Entergy disagreed with several aspects of the ALJ’s initial decision and in January 2011 filed with the FERC exceptions to thedecision.The FERC issued a decision in June 2012 and held that, while the System Agreement is ambiguous, it does provide authority forindividual Utility operating companies to make opportunity sales for their own account and Entergy Arkansas made and priced these sales ingood faith. The FERC found, however, that the System Agreement does not provide authority for an individual Utility operating company toallocate the energy associated with such opportunity sales as part of its load but provides a different allocation authority. The FERC furtherfound that the after-the-fact accounting methodology used to allocate the energy used to supply the sales was inconsistent with the SystemAgreement. The FERC in its decision established further hearing procedures to quantify the effect of repricing the opportunity sales inaccordance with the FERC’s June 2012 decision. The hearing was held in May 2013 and the ALJ issued an initial decision in August 2013.The LPSC, the APSC, the City Council, and FERC staff filed briefs on exceptions and/or briefs opposing exceptions. Entergy filed a brief onexceptions requesting that the FERC reverse the initial decision and a brief opposing certain exceptions taken by the LPSC and FERC staff.In April 2016 the FERC issued orders addressing requests for rehearing filed in July 2012 and the ALJ’s August 2013 initial decision.The first order denied Entergy’s request for rehearing and affirmed the FERC’s earlier rulings that Entergy’s original methodology forallocating energy costs to the opportunity sales was incorrect and, as a result, Entergy Arkansas must make payments to the other Utilityoperating companies to put them in the same position that they would have been in absent the incorrect allocation. The FERC clarified thatinterest should be included with the payments. The second order affirmed in part, and reversed in part, the rulings in the ALJ’s August 2013initial decision regarding the methodology that should be used to calculate the payments Entergy Arkansas is to make to the other Utilityoperating companies. The FERC affirmed the ALJ’s ruling that a full re-run of intra-system bills should be performed but required thatmethodology be modified so that the sales have the same priority for purposes of energy allocation as joint account sales. The FERC reversedthe ALJ’s decision that any payments by Entergy Arkansas should be reduced by 20%. The FERC also reversed the ALJ’s decision thatadjustments to other System Agreement service schedules and excess bandwidth payments should not be taken into account when calculatingthe payments to be made by Entergy Arkansas. The FERC held that such adjustments and excess bandwidth payments should be taken intoaccount but ordered further proceedings before an ALJ to address whether a cap on any reduction due to bandwidth payments was necessaryand to implement the other adjustments to the calculation methodology.In May 2016, Entergy Services filed a request for rehearing of the FERC’s April 2016 order arguing that payments made by EntergyArkansas should be reduced as a result of the timing of the LPSC’s approval of certain contracts. Entergy Services also filed a request forclarification and/or rehearing of the FERC’s April 2016 order addressing the ALJ’s August 2013 initial decision. The APSC and the LPSCalso filed requests for rehearing of the FERC’s April 2016 order. In September 2017 the FERC issued an order denying the request forrehearing on the issue310 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and Analysisof whether any payments by Entergy Arkansas to the other Utility operating companies should be reduced due to the timing of the LPSC’sapproval of Entergy Arkansas’s wholesale baseload contract with Entergy Louisiana. In November 2017 the FERC issued an order denyingall of the remaining requests for rehearing of the April 2016 order. In November 2017, Entergy Services filed a petition for review in theD.C. Circuit of the FERC’s orders in the first two phases of the opportunity sales case. In December 2017 the D.C. Circuit granted EntergyServices’ request to hold the appeal in abeyance pending final resolution of the related proceeding before the FERC. In January 2018 theAPSC and the LPSC filed separate petitions for review in the D.C. Circuit, and the D.C. Circuit consolidated the appeals with EntergyServices’ appeal and held all of the appeals in abeyance pending final resolution of the related proceeding before the FERC.The hearing required by the FERC’s April 2016 order was held in May 2017. In July 2017 the ALJ issued an initial decisionaddressing whether a cap on any reduction due to bandwidth payments was necessary and whether to implement the other adjustments to thecalculation methodology. In August 2017 the Utility operating companies, the LPSC, the APSC, and FERC staff filed individual briefs onexceptions challenging various aspects of the initial decision. In September 2017 the Utility operating companies, the LPSC, the APSC, theMPSC, the City Council, and FERC staff filed separate briefs opposing exceptions taken by various parties.Based on testimony previously submitted in the case and its assessment of the April 2016 FERC orders, in the first quarter 2016,Entergy Arkansas recorded a liability of $87 million, which included interest, for its estimated increased costs and payment to the otherUtility operating companies, and a deferred fuel regulatory asset of $75 million. Following its assessment of the course of the proceedings,including the FERC’s denial of rehearing in November 2017 described above, in the fourth quarter 2017, Entergy Arkansas recorded anadditional liability of $35 million and a regulatory asset of $31 million.In October 2018 the FERC issued an order addressing the ALJ’s July 2017 initial decision. The FERC reversed the ALJ’s decision tocap the reduction in Entergy Arkansas’s payment to account for the increased bandwidth payments that Entergy Arkansas made to the otheroperating companies. The FERC also reversed the ALJ’s decision that Grand Gulf sales from January through September 2000 should beincluded in the calculation of Entergy Arkansas’s payment. The FERC affirmed on other grounds the ALJ’s rejection of the LPSC’s claimthat certain joint account sales should be accounted for as part of the calculation of Entergy Arkansas’s payment. In November 2018 theLPSC requested rehearing of the FERC’s October 2018 decision. In December 2019 the FERC denied the LPSC’s request for rehearing.In December 2018, Entergy made a compliance filing in response to the FERC’s October 2018 order. The compliance filing provideda final calculation of Entergy Arkansas’s payments to the other Utility operating companies, including interest. No protests were filed inresponse to the December 2018 compliance filing. The December 2018 compliance filing is pending FERC action. Refunds and interest inthe following amounts were paid by Entergy Arkansas to the other operating companies in December 2018: Total refunds including interest Payment/(Receipt) (In Millions) PrincipalInterestTotalEntergy Arkansas$68$67$135Entergy Louisiana($30)($29)($59)Entergy Mississippi($18)($18)($36)Entergy New Orleans($3)($4)($7)Entergy Texas($17)($16)($33)Entergy Arkansas previously recognized a regulatory asset with a balance of $116 million as of December 31, 2018 for a portion of thepayments due as a result of this proceeding. 311 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisIn February 2019 the LPSC filed a new complaint relating to two issues that were raised in the opportunity sales proceeding, but that,in its October 2018 order, the FERC held were outside the scope of the proceeding. In March 2019, Entergy Services filed an answer andmotion to dismiss the new complaint. In November 2019 the FERC issued an order denying the LPSC’s complaint. The order concluded thatthe settlement agreement approved by FERC in December 2015 terminating the System Agreement barred the LPSC’s new complaint.In May 2019, Entergy Arkansas filed an application and supporting testimony with the APSC requesting approval of a special ridertariff to recover the costs of these payments from its retail customers over a 24-month period. The application requested that the APSCapprove the rider to take effect within 30 days or, if suspended by the APSC as allowed by commission rule, approve the rider to take effectin the first billing cycle of the first month occurring 30 days after issuance of the APSC’s order approving the rider. In June 2019 the APSCsuspended Entergy Arkansas’s tariff and granted Entergy Arkansas’s motion asking the APSC to establish the proceeding as the singledesignated proceeding in which interested parties may assert claims related to the appropriate retail rate treatment of the FERC’s October2018 order and related FERC orders in the opportunity sales proceeding. In January 2020 the APSC adopted a procedural schedule with ahearing in April 2020. In January 2020 the Attorney General and Arkansas Electric Energy Consumers, Inc. filed a joint motion seeking todismiss Entergy Arkansas’s application alleging that the APSC, in a prior proceeding, ruled on the issues addressed in the application anddetermined that Entergy Arkansas’s requested relief violates the filed rate doctrine and the prohibition against retroactive ratemaking. EntergyArkansas responded to the joint motion in February 2020 rebutting these arguments, including demonstrating that the claims in thisproceeding differ substantially from those the APSC addressed previously and that the payment resulting from a FERC tariff violation forwhich Entergy Arkansas seeks retail cost recovery in this proceeding differs materially from the refunds resulting from a FERC tariffamendment that the APSC previously rejected on filed rate doctrine and the retroactive ratemaking grounds. In addition, in January 2020 theAttorney General and Arkansas Electric Energy Consumers, Inc. filed testimony opposing the recovery by Entergy Arkansas of theopportunity sales payment but also claiming that certain components of the payment should be segregated and refunded to customers.Net Metering LegislationAn Arkansas law was enacted effective July 2019 that, among other things, expands the definition of a “net metering customer” toinclude two additional types of customers: (1) customers that lease net metering facilities, subject to certain leasing arrangements, and (2)government entities or other entities exempt from state and federal income taxes that enter into a service contract for a net metering facility.The latter provision would allow eligible entities, many of whom are small and large general service customers, to purchase renewableenergy directly from third party providers and receive bill credits for these purchases. The APSC was given authority under this law toaddress certain matters, such as cost shifting and the appropriate compensation for net metered energy, and has initiated proceedings for thispurpose. Because of the size and number of customers eligible under this new law, there is a risk of loss of load and the shifting of costs tocustomers. A hearing was held in December 2019, with utilities, cooperatives, the Arkansas Attorney General, industrial customers, andEntergy Arkansas advocating the need for establishment of a reasonable rate structure that takes into account impacts to non-net meteringcustomers. Separately, as directed by the APSC general staff, the APSC opened a proceeding to compel utilities to amend their net meteringtariffs to incorporate the provisions of the legislation that the APSC general staff considered “black letter law.” Entergy Arkansas, theArkansas Attorney General, and other intervenors opposed this directive pending the development of the rules for implementation that arebeing considered in the separate net metering rulemaking docket. Nevertheless, reserving its rights, Entergy Arkansas has complied with thedirective to amend its tariffs. Asserting procedural and due process violations, in January 2020, Entergy Arkansas and the Arkansas AttorneyGeneral separately appealed certain APSC orders in this proceeding.Federal RegulationSee the “Rate, Cost-recovery, and Other Regulation – Federal Regulation” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis and Note 2 to the financial statements for a discussion of federal regulation.312 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisNuclear MattersEntergy Arkansas owns and, through an affiliate, operates the ANO 1 and ANO 2 nuclear power plants. Entergy Arkansas is,therefore, subject to the risks related to owning and operating nuclear plants. These include risks related to: the use, storage, and handling anddisposal of high-level and low-level radioactive materials; the substantial financial requirements, both for capital investments and operationalneeds, to position Entergy’s nuclear fleet to meet its operational goals, including the financial requirements to address emerging issues likestress corrosion cracking of certain materials within the plant systems and the Fukushima event; regulatory requirements and potential futureregulatory changes, including changes affecting the regulations governing nuclear plant ownership, operations, license renewal andamendments, and decommissioning; the performance and capacity factors of these nuclear plants; the availability of interim or permanentsites for the disposal of spent nuclear fuel and nuclear waste, including the fees charged for such disposal; the sufficiency of nucleardecommissioning trust fund assets and earnings to complete decommissioning of each site when required; and limitations on the amounts andtypes of insurance commercially available for losses in connection with nuclear plant operations and catastrophic events such as a nuclearaccident. In the event of an unanticipated early shutdown of either ANO 1 or ANO 2, Entergy Arkansas may be required to file with theAPSC a rate mechanism to provide additional funds or credit support to satisfy regulatory requirements for decommissioning. ANO 1’soperating license expires in 2034 and ANO 2’s operating license expires in 2038.Environmental RisksEntergy Arkansas’s facilities and operations are subject to regulation by various governmental authorities having jurisdiction over airquality, water quality, control of toxic substances and hazardous and solid wastes, and other environmental matters. Management believesthat Entergy Arkansas is in substantial compliance with environmental regulations currently applicable to its facilities and operations, withreference to possible exceptions noted in “Regulation of Entergy’s Business - Environmental Regulation” in Part I, Item 1. Becauseenvironmental regulations are subject to change, future compliance costs cannot be precisely estimated.Critical Accounting EstimatesThe preparation of Entergy Arkansas’s financial statements in conformity with generally accepted accounting principles requiresmanagement to apply appropriate accounting policies and to make estimates and judgments that can have a significant effect on reportedfinancial position, results of operations, and cash flows. Management has identified the following accounting policies and estimates ascritical because they are based on assumptions and measurements that involve a high degree of uncertainty, and the potential for futurechanges in the assumptions and measurements that could produce estimates that would have a material effect on the presentation of EntergyArkansas’s financial position or results of operations.In the first quarter 2019, Entergy Arkansas recorded a revision to its estimated decommissioning cost liabilities for ANO 1 and ANO2 as a result of a revised decommissioning cost study. The revised estimates resulted in a $126.2 million increase in its decommissioning costliabilities, along with corresponding increases in the related asset retirement cost assets that will be depreciated over the remaining lives ofthe units.Nuclear Decommissioning CostsSee “Nuclear Decommissioning Costs” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for discussion of the estimates inherent in accounting for nuclear decommissioning costs.Utility Regulatory AccountingSee “Utility Regulatory Accounting” in the “Critical Accounting Estimates” section of Entergy Corporation313 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and Analysisand Subsidiaries Management’s Financial Discussion and Analysis for discussion of accounting for the effects of rate regulation.Impairment of Long-lived Assets and Trust Fund InvestmentsSee “Impairment of Long-lived Assets and Trust Fund Investments” in the “Critical Accounting Estimates” section of EntergyCorporation and Subsidiaries Management’s Financial Discussion and Analysis for discussion of the estimates associated with theimpairment of long-lived assets and trust fund investments.Taxation and Uncertain Tax PositionsSee “Taxation and Uncertain Tax Positions” in the “Critical Accounting Estimates” section of Entergy Corporation andSubsidiaries Management’s Financial Discussion and Analysis for further discussion.Qualified Pension and Other Postretirement BenefitsEntergy Arkansas’s qualified pension and other postretirement reported costs, as described in Note 11 to the financial statements, areimpacted by numerous factors including the provisions of the plans, changing employee demographics, and various actuarial calculations,assumptions, and accounting mechanisms. See the “Qualified Pension and Other Postretirement Benefits” in the “Critical AccountingEstimates” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for furtherdiscussion. Because of the complexity of these calculations, the long-term nature of these obligations, and the importance of the assumptionsutilized, Entergy’s estimate of these costs is a critical accounting estimate.Costs and SensitivitiesThe following chart reflects the sensitivity of qualified pension cost and qualified projected benefit obligation to changes in certainactuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020 QualifiedPension Cost Impact on 2019 QualifiedProjected BenefitObligation Increase/(Decrease) Discount rate (0.25%) $2,633 $43,030Rate of return on plan assets (0.25%) $2,803 $—Rate of increase in compensation 0.25% $1,650 $7,967The following chart reflects the sensitivity of postretirement benefit cost and accumulated postretirement benefit obligation tochanges in certain actuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020Postretirement Benefit Cost Impact on 2019AccumulatedPostretirement BenefitObligation Increase/(Decrease) Discount rate (0.25%) $343 $5,316Health care cost trend 0.25% $430 $3,474Each fluctuation above assumes that the other components of the calculation are held constant.314 Table of ContentsEntergy Arkansas, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisCosts and Employer ContributionsTotal qualified pension cost for Entergy Arkansas in 2019 was $44.4 million. Entergy Arkansas anticipates 2020 qualified pensioncost to be $61.1 million. Entergy Arkansas contributed $75.9 million to its qualified pension plans in 2019 and estimates pensioncontributions will be approximately $32.5 million in 2020, although the 2020 required pension contributions will be known with morecertainty when the January 1, 2020 valuations are completed, which is expected by April 1, 2020.Total other postretirement health care and life insurance benefit income for Entergy Arkansas in 2019 was $10.7 million. EntergyArkansas expects 2020 postretirement health care and life insurance benefit income of approximately $12.5 million. Entergy Arkansascontributed $1.3 million to its other postretirement plans in 2019 and estimates 2020 contributions will be approximately $509 thousand. Other ContingenciesSee “Other Contingencies” in the “Critical Accounting Estimates” section of Entergy Corporation and Subsidiaries Management’sFinancial Discussion and Analysis for a discussion of the estimates associated with environmental, litigation, and other risks.New Accounting PronouncementsSee “New Accounting Pronouncements” section of Note 1 to the financial statements for a discussion of new accountingpronouncements.315 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the member and Board of Directors ofEntergy Arkansas, LLC and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Entergy Arkansas, LLC and Subsidiaries (the “Company”) as ofDecember 31, 2019 and 2018, the related consolidated statements of income, cash flows and changes in member’s equity (pages 317 through322 and applicable items in pages 49 through 236), for each of the three years in the period ended December 31, 2019, and the related notes(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the threeyears in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s financial statements based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of ouraudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error orfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significantestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits providea reasonable basis for our opinion./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020We have served as the Company’s auditor since 2001.316 Table of ContentsENTERGY ARKANSAS, LLC AND SUBSIDIARIESCONSOLIDATED INCOME STATEMENTS For the Years Ended December 31, 2019 2018 2017 (In Thousands) OPERATING REVENUES Electric $2,259,594 $2,060,643 $2,139,919 OPERATING EXPENSES Operation and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale 458,907 517,245 402,777Purchased power 204,640 252,390 230,652Nuclear refueling outage expenses 68,769 77,915 83,968Other operation and maintenance 720,217 724,831 694,157Decommissioning 68,030 60,420 56,860Taxes other than income taxes 115,869 104,771 103,662Depreciation and amortization 307,351 292,649 277,146Other regulatory credits - net (11,186) (14,807) (16,074)TOTAL 1,932,597 2,015,414 1,833,148 OPERATING INCOME 326,997 45,229 306,771 OTHER INCOME Allowance for equity funds used during construction 15,499 16,557 18,452Interest and investment income 26,020 25,406 35,882Miscellaneous - net (18,566) (14,874) (13,967)TOTAL 22,953 27,089 40,367 INTEREST EXPENSE Interest expense 140,087 124,459 122,075Allowance for borrowed funds used during construction (6,332) (7,781) (8,585)TOTAL 133,755 116,678 113,490 INCOME (LOSS) BEFORE INCOME TAXES 216,195 (44,360) 233,648 Income taxes (46,769) (297,067) 93,804 NET INCOME 262,964 252,707 139,844 Preferred dividend requirements — 1,249 1,428 EARNINGS APPLICABLE TO COMMON EQUITY $262,964 $251,458 $138,416 See Notes to Financial Statements. 317 Table of Contents(Page left blank intentionally)318 Table of ContentsENTERGY ARKANSAS, LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 201920182017 (In Thousands)OPERATING ACTIVITIES Net income $262,964 $252,707 $139,844Adjustments to reconcile net income to net cash flow provided by operating activities: Depreciation, amortization, and decommissioning, including nuclear fuel amortization 465,299 443,698 427,394Deferred income taxes, investment tax credits, and non-current taxes accrued 94,368 129,524 67,711Changes in assets and liabilities: Receivables (58,077) 4,294 (23,397)Fuel inventory (10,597) 6,210 3,402Accounts payable 3,059 (126,405) 16,011Prepaid taxes and taxes accrued 24,942 9,568 40,127Interest accrued 3,895 678 1,635Deferred fuel costs 72,560 43,869 33,190Other working capital accounts 18,783 (30,118) 15,087Provisions for estimated losses 14,901 14,250 16,047Other regulatory assets (131,873) 32,460 (76,762)Other regulatory liabilities 39,293 (341,682) 1,043,507Deferred tax rate change recognized as regulatory liability/asset — — (1,047,837)Pension and other postretirement liabilities 5,831 (40,157) (70,826)Other assets and liabilities (127,582) (187,071) (29,577)Net cash flow provided by operating activities 677,766 211,825 555,556INVESTING ACTIVITIES Construction expenditures (641,525) (660,044) (735,816)Allowance for equity funds used during construction 15,306 17,013 19,211Nuclear fuel purchases (54,344) (99,417) (151,424)Proceeds from sale of nuclear fuel 22,782 54,810 51,029Proceeds from nuclear decommissioning trust fund sales 317,377 300,801 339,434Investment in nuclear decommissioning trust funds (336,519) (315,163) (352,138)Insurance proceeds — 14,790 —Other 630 (1,517) 392Net cash flow used in investing activities (676,293)(688,727)(829,312)FINANCING ACTIVITIES Proceeds from the issuance of long-term debt 834,038 958,434 294,656Retirement of long-term debt (548,952) (690,488) (175,560)Capital contribution from parent — 350,000 —Redemption of preferred stock — (32,660) —Change in money pool payable - net (161,104) 16,601 114,905Changes in short-term borrowings - net — (49,974) 49,974Distributions/dividends paid: Common equity (115,000) (91,751) (15,000)Preferred stock — (1,606) (1,428)Other (7,055) 12,249 (8,084)Net cash flow provided by financing activities 1,927 470,805 259,463Net increase (decrease) in cash and cash equivalents 3,400 (6,097) (14,293)Cash and cash equivalents at beginning of period 119 6,216 20,509Cash and cash equivalents at end of period $3,519 $119 $6,216SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $131,134 $118,731 $115,162Income taxes ($33,989) $44,393 ($8,141)See Notes to Financial Statements. 319 Table of ContentsENTERGY ARKANSAS, LLC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSASSETS December 31, 2019 2018 (In Thousands) CURRENT ASSETS Cash and cash equivalents: Cash $3,519 $118Temporary cash investments — 1Total cash and cash equivalents 3,519 119Securitization recovery trust account 4,036 4,666Accounts receivable: Customer 117,679 94,348Allowance for doubtful accounts (1,169) (1,264)Associated companies 29,178 48,184Other 117,653 64,393Accrued unbilled revenues 108,489 108,092Total accounts receivable 371,830 313,753Deferred fuel costs — 19,235Fuel inventory - at average cost 33,745 23,148Materials and supplies - at average cost 211,320 196,314Deferred nuclear refueling outage costs 48,875 78,966Prepayments and other 14,096 14,553TOTAL 687,421 650,754 OTHER PROPERTY AND INVESTMENTS Decommissioning trust funds 1,101,283 912,049Other 345 5,480TOTAL 1,101,628 917,529 UTILITY PLANT Electric 12,293,483 11,611,041Construction work in progress 197,775 243,731Nuclear fuel 195,547 220,602TOTAL UTILITY PLANT 12,686,805 12,075,374Less - accumulated depreciation and amortization 5,019,826 4,864,818UTILITY PLANT - NET 7,666,979 7,210,556 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Other regulatory assets (includes securitization property of $1,706 as of December 31, 2019 and $14,329 as ofDecember 31, 2018) 1,666,850 1,534,977Deferred fuel costs 67,690 67,294Other 15,065 20,486TOTAL 1,749,605 1,622,757 TOTAL ASSETS $11,205,633 $10,401,596 See Notes to Financial Statements. 320 Table of ContentsENTERGY ARKANSAS, LLC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSLIABILITIES AND EQUITY December 31, 2019 2018 (In Thousands) CURRENT LIABILITIES Accounts payable: Associated companies $111,785 $251,768Other 202,201 187,387Customer deposits 101,411 99,053Taxes accrued 81,831 56,889Interest accrued 22,788 18,893Deferred fuel costs 53,721 —Current portion of unprotected excess accumulated deferred income taxes 9,296 99,316Other 38,760 23,943TOTAL 621,793 737,249 NON-CURRENT LIABILITIES Accumulated deferred income taxes and taxes accrued 1,183,126 1,085,545Accumulated deferred investment tax credits 31,701 32,903Regulatory liability for income taxes - net 478,174 505,748Other regulatory liabilities 559,555 402,668Decommissioning 1,242,616 1,048,428Accumulated provisions 63,880 48,979Pension and other postretirement liabilities 319,075 313,295Long-term debt (includes securitization bonds of $6,772 as of December 31, 2019 and $20,898 as of December 31,2018) 3,517,208 3,225,759Other 62,568 17,919TOTAL 7,457,903 6,681,244 Commitments and Contingencies EQUITY Member's equity 3,125,937 2,983,103TOTAL 3,125,937 2,983,103 TOTAL LIABILITIES AND EQUITY $11,205,633 $10,401,596 See Notes to Financial Statements. 321 Table of ContentsENTERGY ARKANSAS, LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITYFor the Years Ended December 31, 2019, 2018, and 2017 Member's Equity (In Thousands) Balance at December 31, 2016$2,253,317Net income139,844Common equity distributions(15,000)Preferred stock dividends(1,428)Other21Balance at December 31, 2017$2,376,754Net income252,707Capital contributions from parent350,000Common equity distributions(91,751)Non-cash contribution from parent94,335Preferred stock dividends(1,249)Other2,307Balance at December 31, 2018$2,983,103Net income262,964Common equity distributions(115,000)Other(5,130)Balance at December 31, 2019$3,125,937 See Notes to Financial Statements. 322 Table of ContentsENTERGY ARKANSAS, LLC AND SUBSIDIARIESSELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 2019 2018 2017 2016 2015 (In Thousands) Operating revenues $2,259,594 $2,060,643 $2,139,919 $2,086,608 $2,253,564Net income $262,964 $252,707 $139,844 $167,212 $74,272Total assets $11,205,633 $10,401,596 $10,134,029 $9,606,117 $8,747,774Long-term obligations (a) $3,517,208 $3,225,759 $2,983,749 $2,746,435 $2,691,189 (a) Includes long-term debt (excluding currently maturing debt) and preferred stock without sinking fund. 2019 2018 2017 2016 2015 (Dollars In Millions) Electric Operating Revenues: Residential $795 $807 $768 $789 $824Commercial 539 426 495 495 515Industrial 521 434 472 446 477Governmental 21 17 19 18 20Total billed retail 1,876 1,684 1,754 1,748 1,836Sales for resale: Associated companies 118 104 128 49 128Non-associated companies 140 145 121 118 195Other 126 128 137 172 95Total $2,260 $2,061 $2,140 $2,087 $2,254 Billed Electric Energy Sales (GWh): Residential 7,996 8,248 7,298 7,618 8,016Commercial 5,822 5,967 5,825 5,988 6,020Industrial 7,759 8,071 7,528 6,795 6,889Governmental 241 239 237 237 235Total retail 21,818 22,525 20,888 20,638 21,160Sales for resale: Associated companies 2,180 1,773 1,782 1,609 2,239Non-associated companies 7,206 6,447 6,549 7,115 7,980Total 31,204 30,745 29,219 29,362 31,379323 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESMANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSISResults of Operations2019 Compared to 2018Net IncomeNet income increased $15.9 million primarily due to higher retail electric price. The increase was partially offset by an income taxbenefit recognized in 2018 as a result of the settlement of the 2012-2013 IRS audit, higher depreciation and amortization expenses, higherother operation and maintenance expenses, lower volume/weather, and higher interest expense.Operating RevenuesFollowing is an analysis of the change in operating revenues comparing 2019 to 2018: Amount (In Millions)2018 operating revenues$4,296.3Fuel, rider, and other revenues that do not significantlyaffect net income(218.1)Retail electric price132.9Return of unprotected excess accumulated deferredincome taxes to customers102.5Volume/weather(28.4)2019 operating revenues$4,285.2Entergy Louisiana’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs suchthat the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues thatdo not significantly affect net income” includes the revenue variance associated with these items.The retail electric price variance is primarily due to an increase in formula rate plan revenues effective September 2018 and aninterim increase in formula rate plan revenues effective June 2019 due to the inclusion of the first-year revenue requirement for the St.Charles Power Station, each as approved by the LPSC. See Note 2 to the financial statements for further discussion of the formula rate planproceedings.The return of unprotected excess accumulated deferred income taxes to customers resulted from the return of unprotected excessaccumulated deferred income taxes through changes in the formula rate plan effective May 2018. In 2019, $38.6 million was returned tocustomers as compared to $141.1 million in 2018. There was no effect on net income as the reduction in operating revenues was offset by areduction in income tax expense. See Note 2 to the financial statements for further discussion of regulatory activity regarding the Tax Cutsand Jobs Act.The volume/weather variance is primarily due to a decrease of 673 GWh, or 3%, in billed electricity usage for residential andcommercial customers, including the effect of less favorable weather. The decrease was partially offset by an increase in industrial usageprimarily due to an increase in demand from expansion projects, primarily in the chemicals and transportation industries.324 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisOther Income Statement VariancesOther operation and maintenance expenses increased primarily due to:•a $14.8 million gain in 2018 from the sale of Willow Glen Power Station;•an increase of $12.7 million in information technology costs primarily due to higher costs related to applications and infrastructuresupport, enhanced cyber security, and upgrades and maintenance;•an increase of $12.4 million in spending on initiatives to explore new customer products and services; and•an increase of $9.6 million in compensation and benefits costs primarily due to higher incentive-based compensation accruals in 2019as compared to prior year.The increase was partially offset by:•a decrease of $8.5 million in nuclear generation expenses primarily due to a lower scope of work performed during plant outages in2019 as compared to 2018; and•the effects of recording in 2019 the final judgment to resolve claims in the River Bend damages case against the DOE related to spentnuclear fuel storage costs. The damages awarded include the reimbursement of $5.2 million of spent nuclear fuel storage costspreviously recorded as other operation and maintenance expense. See Note 8 to the financial statements for a discussion of the spentnuclear fuel litigation.Taxes other than income taxes increased primarily due to increases in ad valorem taxes. Ad valorem taxes increased primarily due tohigher assessments.Depreciation and amortization expenses increased primarily due to additions to plant in service, including the St. Charles PowerStation, which was placed into service in May 2019.Other regulatory charges (credits) include regulatory charges of $73.1 million recorded in 2018 to reflect the effects of a provision inthe settlement reached in the formula rate plan extension proceeding to return the benefits of the lower federal income tax rate in 2018 tocustomers. See Note 2 to the financial statements for discussion of the formula rate plan extension proceeding.Interest expense increased primarily due to the issuance of $525 million of 4.20% Series mortgage bonds in March 2019.The effective income tax rates were 15% for 2019 and (8.8%) for 2018. The difference in the effective income tax rate of 15% versusthe federal statutory rate of 21% for 2019 was primarily due to the amortization of excess accumulated deferred income taxes and book andtax differences related to the non-taxable income distributions earned on preferred membership interests. The difference in the effectiveincome tax rate of (8.8%) versus the federal statutory rate of 21% for 2018 was primarily due to the amortization of excess accumulateddeferred income taxes and an IRS audit settlement for the 2012-2013 tax returns. See Note 3 to the financial statements for a reconciliation ofthe federal statutory rates of 21% to the effective income tax rates. 2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Results of Operations” in Entergy Louisiana’sAnnual Report on Form 10-K for the year ended December 31, 2018 for discussion of results of operations for 2018 compared to 2017.325 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisIncome Tax LegislationSee the “Income Tax Legislation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion andAnalysis for discussion of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017. Note 3 to the financialstatements contains additional discussion of the effect of the Act on 2017, 2018, and 2019 results of operations and financial position, theprovisions of the Act, and the uncertainties associated with accounting for the Act, and Note 2 to the financial statements discusses theregulatory proceedings that have considered the effects of the Act.Liquidity and Capital ResourcesCash FlowCash flows for the years ended December 31, 2019, 2018, and 2017 were as follows: 2019 2018 2017 (In Thousands)Cash and cash equivalents at beginning of period$43,364 $35,907 $213,850 Net cash provided by (used in): Operating activities1,236,002 1,395,204 1,337,545Investing activities(1,653,634) (1,878,208) (1,787,409)Financing activities376,274 490,461 271,921Net increase (decrease) in cash and cash equivalents(41,358) 7,457 (177,943) Cash and cash equivalents at end of period$2,006 $43,364 $35,9072019 Compared to 2018Operating ActivitiesNet cash flow provided by operating activities decreased $159.2 million in 2019 primarily due to: •income tax payments of $15.3 million in 2019 compared to $105.2 million in income tax refunds in 2018. Entergy Louisiana hadincome tax payments in 2019 and income tax refunds in 2018 in accordance with an intercompany tax allocation agreement. Theincome tax refunds in 2018 resulted from the utilization of Entergy Louisiana’s net operating losses;•an increase of $65.2 million in spending on nuclear refueling outages;•the receipt of $58.6 million in 2018 from Entergy Arkansas as a result of a compliance filing made in response to the FERC’sOctober 2018 order in the Entergy Arkansas opportunity sales proceeding. The $58.6 million was credited to Entergy Louisianacustomers in 2019. See Note 2 to the financial statements for further discussion of the opportunity sales proceeding;•the timing of payments to vendors;•an increase of $25.7 million in storm expenses in 2019;•an increase of $24.5 million in interest paid; and•the timing of collection of receivables from customers.The decrease was partially offset by a decrease in return of unprotected excess accumulated deferred income taxes to customers and thetiming of recovery of fuel and purchased power costs. See Note 2 to the financial statements for a discussion of the effects and the regulatoryactivity regarding the Tax Cuts and Jobs Act.326 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisInvesting ActivitiesNet cash flow used in investing activities decreased $224.6 million in 2019 primarily due to a decrease of $320 million in fossil-fueled generation expenditures, primarily due to lower spending on the St. Charles Power Station and Lake Charles Power Station projects in2019 and money pool activity. The decrease was partially offset by:•an increase of $63.6 million in transmission expenditures primarily due to a higher scope of work performed in 2019 as compared tothe same period in 2018;•an increase of $63.1 million in distribution construction expenditures primarily due to investment in the reliability and infrastructureof Entergy Louisiana’s distribution system, including increased spending on advanced metering infrastructure; and•an increase of $46.5 million in storm spending in 2019. Decreases in Entergy Louisiana’s receivable from the money pool are a source of cash flow, and Entergy Louisiana’s receivable fromthe money pool decreased by $46.8 million in 2019 compared to increasing by $35.7 million in 2018. The money pool is an inter-companyborrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.Financing ActivitiesNet cash flow provided by financing activities decreased $114.2 million in 2019 primarily due to:•the issuance of $750 million of 4.00% Series mortgage bonds in March 2018. A portion of the proceeds was used to repay $375million of 6.0% Series mortgage bonds in May 2018;•the issuance of $600 million of 4.20% Series mortgage bonds in August 2018. A portion of the proceeds was used to repay $300million of 6.5% Series mortgage bonds in September 2018; and•an increase of $80 million in common equity distributions in 2019 primarily to maintain Entergy Louisiana’s capital structure.The decrease was partially offset by:•the issuance of $525 million of 4.20% Series mortgage bonds in March 2019;•money pool activity; and•net repayments of short-term borrowings of $43.5 million in 2018 on the nuclear fuel company variable interest entities’ creditfacilities.Increases in Entergy Louisiana’s payable to the money pool are a source of cash flow, and Entergy Louisiana’s payable to the moneypool increased by $82.8 million in 2019.See Note 5 to the financial statements for details of long-term debt.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Cash Flow” inEntergy Louisiana’s Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of operating, investing, andfinancing cash flow activities for 2018 compared to 2017.Capital StructureEntergy Louisiana’s debt to capital ratio is shown in the following table.327 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and Analysis December 31, 2019 December 31, 2018Debt to capital53.4% 53.6%Effect of excluding securitization bonds(0.1%) (0.3%)Debt to capital, excluding securitization bonds (a)53.3% 53.3%Effect of subtracting cash(0.1%) (0.1%)Net debt to net capital, excluding securitization bonds (a)53.2% 53.2%(a)Calculation excludes the securitization bonds, which are non-recourse to Entergy Louisiana.Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings, finance lease obligations, and long-termdebt, including the currently maturing portion. Capital consists of debt and common equity. Net capital consists of capital less cash and cashequivalents. Entergy Louisiana uses the debt to capital ratios excluding securitization bonds in analyzing its financial condition and believesthey provide useful information to its investors and creditors in evaluating Entergy Louisiana’s financial condition because the securitizationbonds are non-recourse to Entergy Louisiana, as more fully described in Note 5 to the financial statements. Entergy Louisiana also uses thenet debt to net capital ratio excluding securitization bonds in analyzing its financial condition and believes it provides useful information toits investors and creditors in evaluating Entergy Louisiana’s financial condition because net debt indicates Entergy Louisiana’s outstandingdebt position that could not be readily satisfied by cash and cash equivalents on hand.Entergy Louisiana seeks to optimize its capital structure in accordance with its regulatory requirements and to control its cost ofcapital while also maintaining equity capitalization at a level consistent with investment-grade debt ratings. To the extent that operating cashflows are in excess of planned investments, cash may be used to reduce outstanding debt or may be paid as a distribution, or both, inappropriate amounts to maintain the capital structure. To the extent that operating cash flows are insufficient to support planned investments,Entergy Louisiana may issue incremental debt or reduce distributions, or both, to maintain its capital structure. In addition, in certaininfrequent circumstances, such as large transactions that would materially alter the capital structure if financed entirely with debt andreducing distributions, Entergy Louisiana may receive equity contributions to maintain its capital structure.Uses of CapitalEntergy Louisiana requires capital resources for:•construction and other capital investments;•debt maturities or retirements;•working capital purposes, including the financing of fuel and purchased power costs; and•distribution and interest payments.Following are the amounts of Entergy Louisiana’s planned construction and other capital investments. 2020 2021 2022 (In Millions)Planned construction and capital investment: Generation$580 $485 $320Transmission440 445 230Distribution300 245 190Utility Support300 385 390Total$1,620 $1,560 $1,130328 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisFollowing are the amounts of Entergy Louisiana’s existing debt and lease obligations (includes estimated interest payments) andother purchase obligations. 2020 2021-2022 2023-2024 After 2024 Total (In Millions)Long-term debt (a)$640 $1,120 $1,550 $8,662 $11,972Operating leases (b)$11 $17 $8 $3 $39Finance leases (b)$4 $7 $5 $3 $19Purchase obligations (c)$731 $1,423 $1,521 $5,905 $9,580(a)Includes estimated interest payments. Long-term debt is discussed in Note 5 to the financial statements.(b)Lease obligations are discussed in Note 10 to the financial statements.(c)Purchase obligations represent the minimum purchase obligation or cancellation charge for contractual obligations to purchase goodsor services. For Entergy Louisiana, almost all of the total consists of unconditional fuel and purchased power obligations, includingits obligations under the Vidalia purchased power agreement and the Unit Power Sales Agreement, both of which are discussed inNote 8 to the financial statements.In addition to the contractual obligations given above, Entergy Louisiana currently expects to contribute approximately $38.8 million to itsqualified pension plans and approximately $18.5 million to its other postretirement health care and life insurance plans in 2020, although the2020 required pension contributions will be known with more certainty when the January 1, 2020 valuations are completed, which isexpected by April 1, 2020. See “Critical Accounting Estimates - Qualified Pension and Other Postretirement Benefits” below for adiscussion of qualified pension and other postretirement benefits funding.Also, in addition to the contractual obligations, Entergy Louisiana has $808.4 million of unrecognized tax benefits and interest net ofunused tax attributes for which the timing of payments beyond 12 months cannot be reasonably estimated due to uncertainties in the timing ofeffective settlement of tax positions. See Note 3 to the financial statements for additional information regarding unrecognized tax benefits.In addition to routine capital spending to maintain operations, the planned capital investment estimate for Entergy Louisiana includesspecific investments, such as the Washington Parish Energy Center and Lake Charles Power Station, each discussed below; transmissionprojects to enhance reliability, reduce congestion, and enable economic growth; distribution spending to enhance reliability and improveservice to customers, including investment to support advanced metering; resource planning, including potential generation projects; systemimprovements; investments in River Bend and Waterford 3; software and security; and other investments. Entergy’s Utility supply planinitiative will continue to seek to transform its generation portfolio with new or repowered generation resources. Opportunities resulting fromthe supply plan initiative, including new projects or the exploration of alternative financing sources, could result in increases or decreases inthe capital expenditure estimates given above. The estimated capital expenditures are subject to periodic review and modification and mayvary based on the ongoing effects of regulatory constraints and requirements, environmental compliance, business opportunities, marketvolatility, economic trends, business restructuring, changes in project plans, and the ability to access capital.As a wholly-owned subsidiary of Entergy Utility Holding Company, LLC, Entergy Louisiana pays distributions from its earnings at apercentage determined monthly.329 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisLake Charles Power StationIn November 2016, Entergy Louisiana filed an application with the LPSC seeking certification that the public convenience andnecessity would be served by the construction of the Lake Charles Power Station, a nominal 994 megawatt combined-cycle generating unit inWestlake, Louisiana, on land adjacent to the existing Nelson plant in Calcasieu Parish. The current estimated cost of the Lake Charles PowerStation is $872 million, including estimated costs of transmission interconnection and other related costs. In May 2017 the parties to theproceeding agreed to an uncontested stipulation finding that construction of the Lake Charles Power Station is in the public interest andauthorizing an in-service rate recovery plan. In July 2017 the LPSC issued an order unanimously approving the stipulation and approvedcertification of the unit. Construction is in progress and commercial operation is expected to occur by mid-2020.Washington Parish Energy Center In April 2017, Entergy Louisiana signed an agreement with a subsidiary of Calpine Corporation for the construction and purchaseof a peaking plant. Calpine will construct the plant, which will consist of two natural gas-fired combustion turbine units with a total nominalcapacity of approximately 361 MW. The plant, named the Washington Parish Energy Center, will be located in Bogalusa, Louisiana. Subjectto regulatory approvals, Entergy Louisiana will purchase the plant once it is complete for an estimated total investment of approximately$261 million, including transmission and other related costs. In May 2017, Entergy Louisiana filed an application with the LPSC seekingcertification of the plant. In April 2018 the parties reached a settlement recommending certification and cost recovery through the additionalcapacity mechanism of the formula rate plan, consistent with prior LPSC precedent with respect to the certification and recovery of plantspreviously acquired by Entergy Louisiana. The LPSC issued an order approving the settlement in May 2018. Construction is in progress andcommercial operation is expected to occur by the end of 2020.Sources of CapitalEntergy Louisiana’s sources to meet its capital requirements include:•internally generated funds;•cash on hand;•debt or preferred membership interest issuances;•capital contributions; and•bank financing under new or existing facilities.Entergy Louisiana may refinance, redeem, or otherwise retire debt prior to maturity, to the extent market conditions and interest ratesare favorable. All debt and common and preferred membership interest issuances by Entergy Louisiana require prior regulatory approval. Debtissuances are also subject to issuance tests set forth in its bond indentures and other agreements. Entergy Louisiana has sufficient capacityunder these tests to meet its foreseeable capital needs.Entergy Louisiana’s receivables from or (payables to) the money pool were as follows as of December 31 for each of the followingyears.2019 2018 2017 2016(In Thousands)($82,826) $46,843 $11,173 $22,503See Note 4 to the financial statements for a description of the money pool.330 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisEntergy Louisiana has a credit facility in the amount of $350 million scheduled to expire in September 2024. The credit facilityincludes fronting commitments for the issuance of letters of credit against $15 million of the borrowing capacity of the facility. As ofDecember 31, 2019, there were no cash borrowings and no letters of credit outstanding under the credit facility. In addition, EntergyLouisiana is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As ofDecember 31, 2019, a $12.3 million letter of credit was outstanding under Entergy Louisiana’s uncommitted letter of credit facility. SeeNote 4 to the financial statements for additional discussion of the credit facilities.The Entergy Louisiana nuclear fuel company variable interest entities have two separate credit facilities, each in the amount of $105million and scheduled to expire in September 2021. As of December 31, 2019, $70.3 million of loans were outstanding under the creditfacility for the Entergy Louisiana River Bend nuclear fuel company variable interest entity. As of December 31, 2019, $49.9 million in loanswere outstanding under the Entergy Louisiana Waterford nuclear fuel company variable interest entity credit facility. See Note 4 to thefinancial statements for additional discussion of the nuclear fuel company variable interest entity credit facilities.Entergy Louisiana obtained authorizations from the FERC through November 2020 for the following:•short-term borrowings not to exceed an aggregate amount of $450 million at any time outstanding;•long-term borrowings and security issuances; and•borrowings by its nuclear fuel company variable interest entities. See Note 4 to the financial statements for further discussion of Entergy Louisiana’s short-term borrowing limits.Hurricane IsaacIn June 2014 the LPSC voted to approve a series of orders which (i) quantified $290.8 million of Hurricane Isaac system restorationcosts as prudently incurred; (ii) determined $290 million as the level of storm reserves to be re-established; (iii) authorized Entergy Louisianato utilize Louisiana Act 55 financing for Hurricane Isaac system restoration costs; and (iv) granted other requested relief associated withstorm reserves and Act 55 financing of Hurricane Isaac system restoration costs. Entergy Louisiana committed to pass on to customers aminimum of $30.8 million of customer benefits through annual customer credits of approximately $6.2 million for five years. Approvals forthe Act 55 financings were obtained from the Louisiana Utilities Restoration Corporation and the Louisiana State Bond Commission. SeeNote 2 to the financial statements for a discussion of the August 2014 issuance of bonds under Act 55 of the Louisiana Legislature.Little Gypsy Repowering ProjectIn April 2007, Entergy Louisiana announced that it intended to pursue the solid fuel repowering of a 538 MW unit at its Little Gypsyplant. In March 2009 the LPSC voted in favor of a motion directing Entergy Louisiana to temporarily suspend the repowering project and,based upon an analysis of the project’s economic viability, to make a recommendation regarding whether to proceed with the project. Thisaction was based upon a number of factors including the recent decline in natural gas prices, as well as environmental concerns, the unknowncosts of carbon legislation and changes in the capital/financial markets. In April 2009, Entergy Louisiana complied with the LPSC’s directiveand recommended that the project be suspended for an extended period of time of three years or more. In May 2009 the LPSC issued an orderdeclaring that Entergy Louisiana’s decision to place the Little Gypsy project into a longer-term suspension of three years or more is in thepublic interest and prudent. In October 2009, Entergy Louisiana made a filing with the LPSC seeking permission to cancel the Little Gypsy repowering projectand seeking project cost recovery over a five-year period. In June 2010 and August 2010, the LPSC staff and intervenors filed testimony. TheLPSC staff (1) agreed that it was prudent to move the project from long-term suspension to cancellation and that the timing of the decision tosuspend on a longer-term basis was not imprudent; (2) indicated that, except for $0.8 million in compensation-related costs, the costsincurred should be deemed prudent;331 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and Analysis(3) recommended recovery from customers over ten years but stated that the LPSC may want to consider 15 years; (4) allowed for recoveryof carrying costs and earning a return on project costs, but at a reduced rate approximating the cost of debt, while also acknowledging that theLPSC may consider ordering no return; and (5) indicated that Entergy Louisiana should be directed to securitize project costs, if legallyfeasible and in the public interest. In the third quarter 2010, in accordance with accounting standards, Entergy Louisiana determined that itwas probable that the Little Gypsy repowering project would be abandoned and accordingly reclassified $199.8 million of project costs fromconstruction work in progress to a regulatory asset. A hearing on the issues, except for cost allocation among customer classes, was heldbefore the ALJ in November 2010. In January 2011 all parties participated in a mediation on the disputed issues, resulting in a settlement ofall disputed issues, including cost recovery and cost allocation. The settlement provides for Entergy Louisiana to recover $200 million as ofMarch 31, 2011, and carrying costs on that amount on specified terms thereafter. The settlement also provides for Entergy Louisiana torecover the approved project costs by securitization. In April 2011, Entergy Louisiana filed an application with the LPSC to authorize thesecuritization of the investment recovery costs associated with the project and to issue a financing order by which Entergy Louisiana couldaccomplish such securitization. In August 2011 the LPSC issued an order approving the settlement and also issued a financing order for thesecuritization. See Note 5 to the financial statements for a discussion of the September 2011 issuance of the securitization bonds.State and Local Rate Regulation and Fuel-Cost RecoveryThe rates that Entergy Louisiana charges for its services significantly influence its financial position, results of operations, andliquidity. Entergy Louisiana is regulated and the rates charged to its customers are determined in regulatory proceedings. A governmentalagency, the LPSC, is primarily responsible for approval of the rates charged to customers.Retail Rates - ElectricFilings with the LPSC2016 Formula Rate Plan FilingIn May 2017, Entergy Louisiana filed its formula rate plan evaluation report for its 2016 calendar year operations. The evaluationreport reflected an earned return on common equity of 9.84%. As such, no adjustment to base formula rate plan revenue was required.Adjustments, however, were required under the formula rate plan; the 2016 formula rate plan evaluation report showed a decrease in formularate plan revenue of approximately $16.9 million, comprised of a decrease in legacy Entergy Louisiana formula rate plan revenue of $3.5million, a decrease in legacy Entergy Gulf States Louisiana formula rate plan revenue of $9.7 million, and a decrease in incremental formularate plan revenue of $3.7 million. Additionally, the formula rate plan evaluation report called for a decrease of $40.5 million in the MISOcost recovery revenue requirement from $46.8 million to $6.3 million. Rates reflecting these adjustments were implemented with the firstbilling cycle of September 2017, subject to refund. In September 2017 the LPSC staff issued its report indicating that no changes to EntergyLouisiana’s original formula rate plan evaluation report were required but reserved for several issues, including Entergy Louisiana’sSeptember 2017 update to its formula rate plan evaluation report. In July 2018, Entergy Louisiana and the LPSC staff filed an unopposedjoint report setting forth a correction to the annualization calculation, the effect of which was a net $3.5 million revenue requirementreduction and indicating that there are no outstanding issues with the 2016 formula rate plan report, the supplemental report, or the interimupdates. In September 2018 the LPSC approved the unopposed joint report.332 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisFormula Rate Plan Extension Through 2019 Test YearIn August 2017, Entergy Louisiana filed a request with the LPSC seeking to extend its formula rate plan for three years (2017-2019)with limited modifications to its terms. In April 2018, the LPSC approved an unopposed joint motion filed by Entergy Louisiana and theLPSC staff that settles the matter and extends the formula rate plan for three years, providing for rates through at least August 2021. Inaddition to retaining the major features of the traditional formula rate plan, some of the more substantive features of the extended formula rateplan include:•a mid-point reset of formula rate plan revenues to a 9.95% earned return on common equity for the 2017 test year and for the St.Charles Power Station when it enters commercial operation;•a 9.8% target earned return on common equity for the 2018 and 2019 test years;•narrowing of the common equity bandwidth to plus or minus 60 basis points around the earned return on common equity;•a cap on potential revenue increase of $35 million for the 2018 evaluation period, and $70 million for the cumulative 2018 and 2019evaluation periods, on formula rate plan cost of service rate increases (the cap excludes rate changes associated with the transmissionrecovery mechanism described below and rate changes associated with additional capacity);•a framework for the flow back of certain tax benefits created by the Tax Act to customers; and•a transmission recovery mechanism providing for the opportunity to recover certain transmission related expenditures in excess of$100 million for projects placed in service up to one month prior to rate change outside of sharing that is designed to operate in afashion similar to the additional capacity mechanism.Entergy Louisiana has indicated its intent to seek an extension of its formula rate plan on terms similar to the existing terms.2017 Formula Rate Plan FilingIn June 2018, Entergy Louisiana filed its formula rate plan evaluation report for its 2017 calendar year operations. The 2017 test yearevaluation report produced an earned return on equity of 8.16%, due in large part to revenue-neutral realignments to other recoverymechanisms. Without these realignments, the evaluation report produces an earned return on equity of 9.88% and a resulting base riderformula rate plan revenue increase of $4.8 million. Excluding the Tax Act credits provided for by the tax reform adjustment mechanisms,total formula rate plan revenues were further increased by a total of $98 million as a result of the evaluation report due to adjustments to theadditional capacity and MISO cost recovery mechanisms of the formula rate plan, and implementation of the transmission recoverymechanism. In August 2018, Entergy Louisiana filed a supplemental formula rate plan evaluation report to reflect changes from the 2016 testyear formula rate plan proceedings, a decrease to the transmission recovery mechanism to reflect lower actual capital additions, and adecrease to evaluation period expenses to reflect the terms of a new power sales agreement. Based on the August 2018 update, EntergyLouisiana recognized a total decrease in formula rate plan revenue of approximately $17.6 million. Results of the updated 2017 evaluationreport filing were implemented with the September 2018 billing month subject to refund and review by the LPSC staff and intervenors. Inaccordance with the terms of the formula rate plan, in September 2018 the LPSC staff and intervenors submitted their responses to EntergyLouisiana’s original formula rate plan evaluation report and supplemental compliance updates. The LPSC staff assertedobjections/reservations regarding 1) Entergy Louisiana’s proposed rate adjustments associated with the return of excess accumulated deferredincome taxes pursuant to the Tax Act and the treatment of accumulated deferred income taxes related to reductions of rate base; 2) EntergyLouisiana’s reservation regarding treatment of a regulatory asset related to certain special orders by the LPSC; and 3) test year expensesbilled from Entergy Services to Entergy Louisiana. Intervenors also objected to Entergy Louisiana’s treatment of the regulatory asset relatedto certain special orders by the LPSC. A procedural schedule has not yet been established to resolve these issues.333 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisEntergy Louisiana also included in its filing a presentation of an initial proposal to combine the legacy Entergy Louisiana and legacyEntergy Gulf States Louisiana residential rates, which combination, if approved, would be accomplished on a revenue-neutral basis intendednot to affect the rates of other customer classes.Commercial operation at St. Charles Power Station commenced in May 2019. In May 2019, Entergy Louisiana filed an update to its2017 formula rate plan evaluation report to include the estimated first-year revenue requirement of $109.5 million associated with the St.Charles Power Station. The resulting interim adjustment to rates became effective with the first billing cycle of June 2019.2018 Formula Rate Plan FilingIn May 2019, Entergy Louisiana filed its formula rate plan evaluation report for its 2018 calendar year operations. The 2018 test yearevaluation report produced an earned return on common equity of 10.61% leading to a base rider formula rate plan revenue decrease of $8.9million. While base rider formula rate plan revenue will decrease as a result of this filing, overall formula rate plan revenues will increase byapproximately $118.7 million. This outcome is primarily driven by a reduction to the credits previously flowed through the tax reformadjustment mechanism and an increase in the transmission recovery mechanism, partially offset by reductions in the additional capacitymechanism revenue requirements and extraordinary cost items. The filing is subject to review by the LPSC. Resulting rates wereimplemented in September 2019, subject to refund.Entergy Louisiana also included in its filing a presentation of an initial proposal to combine the legacy Entergy Louisiana and legacyEntergy Gulf States Louisiana residential rates, which combination, if approved, would be accomplished on a revenue-neutral basis intendednot to affect the rates of other customer classes. Entergy Louisiana contemplates that any combination of residential rates resulting from thisrequest would be implemented with the results of the 2019 test year formula rate plan filing.Several parties intervened in the proceeding and the LPSC staff filed its report of objections/reservations in accordance with theapplicable provisions of the formula rate plan. In its report the LPSC staff re-urged reservations with respect to the outstanding issues fromthe 2017 test year formula rate plan filing and disputed the inclusion of certain affiliate costs for test years 2017 and 2018. The LPSC staffobjected to Entergy Louisiana’s proposal to combine residential rates but proposed the setting of a status conference to establish a proceduralschedule to more fully address the issue. The LPSC staff also reserved its right to object to the treatment of the sale of Willow Glen reflectedin the evaluation report and to the August 2019 compliance update, which was made primarily to update the capital additions reflected in theformula rate plan’s transmission recovery mechanism, based on limited time to review it. Additionally, since the completion of certaintransmission projects, the LPSC staff has issued supplemental data requests addressing the prudence of Entergy Louisiana’s expenditures inconnection with those projects. Entergy Louisiana is in the process of responding to those requests.Investigation of Costs Billed by Entergy ServicesIn November 2018 the LPSC issued a notice of proceeding initiating an investigation into costs incurred by Entergy Services that areincluded in the retail rates of Entergy Louisiana. As stated in the notice of proceeding, the LPSC observed an increase in capital construction-related costs incurred by Entergy Services. Discovery was issued and included efforts to seek highly detailed information on a broad range ofmatters unrelated to the scope of the audit. There has been no further activity in the investigation since May 2019.Waterford 3 Replacement Steam Generator ProjectFollowing the completion of the Waterford 3 replacement steam generator project, the LPSC undertook a prudence review inconnection with a filing made by Entergy Louisiana in April 2013 with regard to the following aspects of the replacement project: 1) projectmanagement; 2) cost controls; 3) success in achieving stated objectives; 4) the costs of the replacement project; and 5) the outage length andreplacement power costs. In July 2014 the LPSC334 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and Analysisstaff filed testimony recommending potential project and replacement power cost disallowances of up to $71 million, citing a need for furtherexplanation or documentation from Entergy Louisiana. An intervenor filed testimony recommending disallowance of $141 million ofincremental project costs, claiming the steam generator fabricator was imprudent. Entergy Louisiana provided further documentation andexplanation requested by the LPSC staff. An evidentiary hearing was held in December 2014. Entergy Louisiana believed that thereplacement steam generator costs were prudently incurred and applicable legal principles supported their recovery in rates. Nevertheless,Entergy Louisiana recorded a write-off of $16 million of Waterford 3’s plant balance in December 2014 because of the uncertainty at thetime associated with the resolution of the prudence review. In December 2015 the ALJ issued a proposed recommendation, which wassubsequently finalized, concluding that Entergy Louisiana prudently managed the Waterford 3 replacement steam generator project, includingthe selection, use, and oversight of contractors, and could not reasonably have anticipated the damage to the steam generators. Nevertheless,the ALJ concluded that Entergy Louisiana was liable for the conduct of its contractor and subcontractor and, therefore, recommended adisallowance of $67 million in capital costs. Additionally, the ALJ concluded that Entergy Louisiana did not sufficiently justify theincurrence of $2 million in replacement power costs during the replacement outage. Although the ALJ’s recommendation had not yet beenconsidered by the LPSC, after considering the progress of the proceeding in light of the ALJ recommendation, Entergy Louisiana recorded inthe fourth quarter 2015 approximately $77 million in charges, including a $45 million asset write-off and a $32 million regulatory charge, toreflect that a portion of the assets associated with the Waterford 3 replacement steam generator project was no longer probable of recovery.Entergy Louisiana maintained that the ALJ’s recommendation contained significant factual and legal errors.In October 2016 the parties reached a settlement in this matter. The settlement was approved by the LPSC in December 2016. Thesettlement effectively provided for an agreed-upon disallowance of $67 million of plant, which had been previously written off by EntergyLouisiana, as discussed above. The refund to customers of approximately $71 million as a result of the settlement approved by the LPSC wasmade to customers in January 2017. Of the $71 million of refunds, $68 million was credited to customers through Entergy Louisiana’sformula rate plan, outside of sharing, and $3 million through its fuel adjustment clause. Entergy Louisiana had previously recorded aprovision of $48 million for this refund. The previously-recorded provision included the cumulative revenues recorded through December2016 related to the $67 million of disallowed plant. An additional regulatory charge of $23 million was recorded in fourth quarter 2016 toreflect the effects of the settlement. The settlement also provided that Entergy Louisiana could retain the value associated with potentialservice credits agreed to by the project contractor, to the extent they are realized in the future. Following a review by the parties, anunopposed joint report of proceedings was filed by the LPSC staff and Entergy Louisiana in May 2017 and the LPSC accepted the jointreport of proceedings resolving the matter.Advanced Metering Infrastructure (AMI)In November 2016, Entergy Louisiana filed an application seeking a finding from the LPSC that Entergy Louisiana’s deployment ofadvanced electric and gas metering infrastructure is in the public interest. Entergy Louisiana proposed to deploy advanced meters that enabletwo-way data communication; design and build a secure and reliable network to support such communications; and implement supportsystems. AMI is intended to serve as the foundation of Entergy Louisiana’s modernized power grid. The filing included an estimate ofimplementation costs for AMI of $330 million and identified a number of quantified and unquantified benefits. Entergy Louisiana proposed a15-year useful life for the new advanced meters, the three-year deployment of which began in 2019. Deployment of the communicationsnetwork began in 2018. Entergy Louisiana proposed to recover the cost of AMI through the implementation of a customer charge, net ofcertain benefits, phased in over the period 2019 through 2022. The parties reached an uncontested stipulation permitting implementation ofEntergy Louisiana’s proposed AMI system, with modifications to the proposed customer charge. In July 2017 the LPSC approved thestipulation. Entergy Louisiana will recover the undepreciated balance of its existing meters through a regulatory asset to be amortized atcurrent depreciation rates, as approved by the LPSC.335 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisRetail Rates - Gas2016 Rate Stabilization Plan FilingIn January 2017, Entergy Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2016.The filing of the evaluation report for test year 2016 reflected an earned return on common equity of 6.37%. In April 2017 the LPSCapproved a joint report of proceedings and Entergy Louisiana submitted a revised evaluation report reflecting a $1.2 million annual increasein revenue with rates implemented with the first billing cycle of May 2017.2017 Rate Stabilization Plan FilingIn January 2018, Entergy Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2017. The filing of the evaluation report for the test year 2017 reflected an earned return on common equity of 9.06%. This earned return is belowthe earnings sharing band of the rate stabilization plan and results in a rate increase of $0.1 million. Due to the enactment in late-December2017 of the Tax Cuts and Jobs Act, Entergy Louisiana did not have adequate time to reflect the effects of this tax legislation in the ratestabilization plan. In April 2018, Entergy Louisiana filed a supplemental evaluation report for the test year ended September 2017, reflectingthe effects of the Tax Act, including a proposal to use the unprotected excess accumulated deferred income taxes to offset approximately $1.4million of storm restoration deferred operation and maintenance costs incurred by Entergy Louisiana in connection with the August 2016flooding disaster in its gas service area. The supplemental filing reflects an earned return on common equity of 10.79%. As-filed rates fromthe supplemental filing were implemented, subject to refund, with customers receiving a cost reduction of approximately $0.7 millioneffective with bills rendered on and after the first billing cycle of May 2018, as well as a $0.2 million reduction in the gas infrastructure ridereffective with bills rendered on and after the first billing cycle of July 2018. In October 2019 the LPSC staff issued its report finding thatEntergy Louisiana’s filing complied with the terms of the rate stabilization plan but recommending an additional refund of $0.7 millionrelated to the Tax Act. A procedural schedule has not been established.2018 Rate Stabilization Plan FilingIn January 2019, Entergy Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2018.The filing of the evaluation report for the test year 2018 reflected an earned return on common equity of 2.69%. This earned return is belowthe earning sharing band of the gas rate stabilization plan and results in a rate increase of $2.8 million. Entergy Louisiana made a compliancefiling in April 2019 and rates were implemented during the first billing cycle of May 2019, subject to refund and final LPSC review. Theproceeding is currently in its discovery phase.Gas Rate Stabilization Plan Extension RequestIn August 2019, Entergy Louisiana submitted an application to the LPSC seeking extension of the gas rate stabilization plan for the2019-2021 test years on the same terms as those approved for the 2018 test year. The LPSC established a procedural schedule to address thisrequest with a hearing scheduled in May 2020. Entergy Louisiana and the LPSC staff recently submitted a joint stipulation that recommendsapproval of the requested extension with certain modifications to the current terms, including a 9.8% evaluation period cost rate for commonequity and provisions for the return of the excess accumulated deferred income tax to customers on a dollar for dollar basis in a mannerconsistent with IRS normalization rules. The LPSC approved the joint stipulation in January 2020.336 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and Analysis2019 Rate Stabilization Plan FilingIn January 2020, Entergy Louisiana filed with the LPSC its gas rate stabilization plan for the test year ended September 30, 2019.The filing of the evaluation report for the test year 2019 reflected an earned return on common equity of 10.78%. This earned return exceedsthe earning sharing band of the gas rate stabilization plan leading to a rate reduction of approximately $256 thousand.Fuel and purchased power recoveryEntergy Louisiana recovers electric fuel and purchased power costs for the billing month based upon the level of such costs incurredtwo months prior to the billing month. Entergy Louisiana’s purchased gas adjustments include estimates for the billing month adjusted by asurcharge or credit that arises from an annual reconciliation of fuel costs incurred with fuel cost revenues billed to customers, includingcarrying charges.In July 2014 the LPSC authorized its staff to initiate an audit of the fuel adjustment clause filings by Entergy Gulf States Louisiana,whose business was combined with Entergy Louisiana in 2015. The audit includes a review of the reasonableness of charges flowed throughEntergy Gulf States Louisiana’s fuel adjustment clause for the period from 2010 through 2013. In January 2019, the LPSC staff consultantissued its audit report. In its report, the LPSC staff consultant recommended that Entergy Louisiana refund approximately $900,000, plusinterest, to customers based upon the imputation of a claim of vendor fault in servicing its nuclear plant. Entergy Louisiana recorded aprovision in first quarter 2019 for the potential outcome of the audit. In August 2019, Entergy Louisiana filed direct testimony challengingthe basis for the LPSC staff’s recommended disallowance and providing an alternative calculation of replacement power costs should it bedetermined that a disallowance is appropriate. Entergy Louisiana’s calculation would require no refund to customers.In July 2014 the LPSC authorized its staff to initiate an audit of Entergy Louisiana’s fuel adjustment clause filings. The auditincludes a review of the reasonableness of charges flowed by Entergy Louisiana through its fuel adjustment clause for the period from 2010through 2013. In January 2019, the LPSC staff consultant issued its audit report. In its report, the LPSC staff consultant recommended thatEntergy Louisiana refund approximately $7.3 million, plus interest, to customers based upon the imputation of a claim of vendor fault inservicing its nuclear plant. Entergy Louisiana recorded a provision in the first quarter 2019 for the potential outcome of the audit. In August2019, Entergy Louisiana filed direct testimony challenging the basis for the LPSC staff’s recommended disallowance and providing analternative calculation of replacement power costs should it be determined that a disallowance is appropriate. Entergy Louisiana’s calculationwould require a refund to customers of approximately $4.3 million, plus interest, as compared to the LPSC staff’s recommendation of $7.3million, plus interest. Responsive testimony was filed by the LPSC staff and intervenors in September 2019; all parties either agreed with ordid not oppose Entergy Louisiana’s alternative calculation of replacement power costs.In November 2019 the pending LPSC proceedings for the 2010-2013 Entergy Louisiana and Entergy Gulf States Louisiana auditswere consolidated to facilitate a settlement of both fuel audits. In December 2019 an unopposed settlement was reached that requires a refundto legacy Entergy Louisiana customers of approximately $2.3 million, including interest, and no refund to legacy Entergy Gulf StatesLouisiana customers. The LPSC approved the settlement in January 2020.In June 2016 the LPSC issued notice of audits of Entergy Louisiana’s fuel adjustment clause filings and purchased gas adjustmentclause filings for the period 2014 through 2015. In recognition of the business combination that occurred in 2015, the audit notice was issuedto Entergy Louisiana and will also include a review of charges to legacy Entergy Gulf States Louisiana customers prior to the businesscombination. The audit includes a review of the reasonableness of charges flowed through Entergy Louisiana’s fuel adjustment clause for theperiod from 2014 through 2015 and charges flowed through Entergy Louisiana’s purchased gas adjustment clause for the period from 2012through 2015. Discovery commenced in March 2017. No report of audit has been issued.337 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisIn May 2018 the LPSC staff provided notice of audits of Entergy Louisiana’s purchased gas adjustment clause filings. The auditincludes a review of the reasonableness of charges flowed through Entergy Louisiana’s purchased gas adjustment clause for the period from2016 through 2017. Discovery commenced in September 2018. No report of audit has been issued.Net Metering RulemakingIn September 2019 the LPSC issued an order modifying its rules regarding net metering installations. Among other things, the ruleprovides for 2-channel billing for net metering with excess energy put to the grid being compensated at the utility’s avoided cost. However,the rule does provide that net meter installations in place as of December 31, 2019 will be subject to 1:1 net metering with excess energy putto the grid being compensated at the full retail rate for a period of 15 years (through December 31, 2034), after which those installations willbe subject to 2-channel billing. The rule also eliminates the existing limit on the cumulative number of net meter installations. Industrial and Commercial CustomersEntergy Louisiana’s large industrial and commercial customers continually explore ways to reduce their energy costs. In particular,cogeneration is an option available to a portion of Entergy Louisiana’s industrial customer base. Entergy Louisiana responds by working withindustrial and commercial customers and negotiating electric service contracts to provide competitive rates that match specific customerneeds and load profiles. Entergy Louisiana actively participates in economic development, customer retention, and reclamation activities toincrease industrial and commercial demand, from both new and existing customers.Federal RegulationSee the “Rate, Cost-recovery, and Other Regulation – Federal Regulation” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis and Note 2 to the financial statements for a discussion of federal regulation.Nuclear MattersEntergy Louisiana owns and, through an affiliate, operates the River Bend and Waterford 3 nuclear power plants. Entergy Louisianais, therefore, subject to the risks related to owning and operating nuclear plants. These include risks related to: the use, storage, and handlingand disposal of high-level and low-level radioactive materials; the substantial financial requirements, both for capital investments andoperational needs, to position Entergy’s nuclear fleet to meet its operational goals, including the financial requirements to address emergingissues like stress corrosion cracking of certain materials within the plant systems and the Fukushima event; regulatory requirements andpotential future regulatory changes, including changes affecting the regulations governing nuclear plant ownership, operations, licenserenewal and amendments, and decommissioning; the performance and capacity factors of these nuclear plants; the availability of interim orpermanent sites for the disposal of spent nuclear fuel and nuclear waste, including the fees charged for such disposal; the sufficiency ofnuclear decommissioning trust fund assets and earnings to complete decommissioning of each site when required; and limitations on theamounts and types of insurance commercially available for losses in connection with nuclear plant operations and catastrophic events such asa nuclear accident. In the event of an unanticipated early shutdown of River Bend or Waterford 3, Entergy Louisiana may be required toprovide additional funds or credit support to satisfy regulatory requirements for decommissioning. Waterford 3’s operating license expires in2044 and River Bend’s operating license expires in 2045. Environmental RisksEntergy Louisiana’s facilities and operations are subject to regulation by various governmental authorities having jurisdiction over airquality, water quality, control of toxic substances and hazardous and solid wastes, and other environmental matters. Management believesthat Entergy Louisiana is in substantial compliance with environmental338 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and Analysisregulations currently applicable to its facilities and operations, with reference to possible exceptions noted in “Regulation of Entergy’sBusiness - Environmental Regulation” in Part I, Item 1. Because environmental regulations are subject to change, future compliance costscannot be precisely estimated.Critical Accounting EstimatesThe preparation of Entergy Louisiana’s financial statements in conformity with generally accepted accounting principles requiresmanagement to apply appropriate accounting policies and to make estimates and judgments that can have a significant effect on reportedfinancial position, results of operations, and cash flows. Management has identified the following accounting policies and estimates as criticalbecause they are based on assumptions and measurements that involve a high degree of uncertainty, and the potential for future changes inthe assumptions and measurements that could produce estimates that would have a material effect on the presentation of Entergy Louisiana’sfinancial position or results of operations.Nuclear Decommissioning CostsSee “Nuclear Decommissioning Costs” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for discussion of the estimates inherent in accounting for nuclear decommissioning costs.In the first quarter 2018, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for River Bend as aresult of a revised decommissioning cost study. The revised estimate resulted in an $85.4 million increase in its decommissioning costliability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining life of theunit.In the second quarter 2019, Entergy Louisiana recorded a revision to its estimated decommissioning cost liability for Waterford 3 as aresult of a revised decommissioning cost study. The revised estimate resulted in a $147.5 million increase in its decommissioning costliability, along with a corresponding increase in the related asset retirement cost asset that will be depreciated over the remaining useful lifeof the unit.Utility Regulatory AccountingSee “Utility Regulatory Accounting” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for discussion of accounting for the effects of rate regulation.Impairment of Long-lived Assets and Trust Fund InvestmentsSee “Impairment of Long-lived Assets and Trust Fund Investments” in the “Critical Accounting Estimates” section of EntergyCorporation and Subsidiaries Management’s Financial Discussion and Analysis for discussion of the estimates associated with theimpairment of long-lived assets and trust fund investments.Taxation and Uncertain Tax PositionsSee “Taxation and Uncertain Tax Positions” in the “Critical Accounting Estimates” section of Entergy Corporation andSubsidiaries Management’s Financial Discussion and Analysis for further discussion.Qualified Pension and Other Postretirement BenefitsEntergy Louisiana’s qualified pension and other postretirement reported costs, as described in Note 11 to the financial statements, areimpacted by numerous factors including the provisions of the plans, changing employee demographics, and various actuarial calculations,assumptions, and accounting mechanisms. See the “Qualified339 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisPension and Other Postretirement Benefits” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for further discussion. Because of the complexity of these calculations, the long-termnature of these obligations, and the importance of the assumptions utilized, Entergy’s estimate of these costs is a critical accounting estimate. Cost SensitivityThe following chart reflects the sensitivity of qualified pension cost and qualified projected benefit obligation to changes in certainactuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020 QualifiedPension Cost Impact on 2019 ProjectedQualified Benefit Obligation Increase/(Decrease) Discount rate (0.25%) $3,308 $47,877Rate of return on plan assets (0.25%) $3,201 $—Rate of increase in compensation 0.25% $2,095 $10,727The following chart reflects the sensitivity of postretirement benefit cost and accumulated postretirement benefit obligation tochanges in certain actuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020Postretirement Benefit Cost Impact on 2019Accumulatedpostretirement BenefitObligation Increase/(Decrease) Discount rate (0.25%) $715 $7,953Health care cost trend 0.25% $989 $5,985Each fluctuation above assumes that the other components of the calculation are held constant.Costs and Employer ContributionsTotal qualified pension cost for Entergy Louisiana in 2019 was $48.6 million. Entergy Louisiana anticipates 2020 qualified pensioncost to be $63.4 million. Entergy Louisiana contributed $65 million to its qualified pension plans in 2019 and estimates pensioncontributions will be approximately $38.8 million in 2020, although the 2020 required pension contributions will be known with morecertainty when the January 1, 2020 valuations are completed, which is expected by April 1, 2020.Total postretirement health care and life insurance benefit costs for Entergy Louisiana in 2019 were $7.3 million. Entergy Louisianaexpects 2020 postretirement health care and life insurance benefit costs of approximately $8.7 million. Entergy Louisiana contributed $14.3million to its other postretirement plans in 2019 and estimates that 2020 contributions will be approximately $18.5 million.Other ContingenciesSee “Other Contingencies” in the “Critical Accounting Estimates” section of Entergy Corporation and Subsidiaries Management’sFinancial Discussion and Analysis for a discussion of the estimates associated with environmental, litigation, and other risks.340 Table of ContentsEntergy Louisiana, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisNew Accounting PronouncementsSee “New Accounting Pronouncements” section of Note 1 to the financial statements for a discussion of new accountingpronouncements.341 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the member and Board of Directors ofEntergy Louisiana, LLC and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Entergy Louisiana, LLC and Subsidiaries (the “Company”) as ofDecember 31, 2019 and 2018, the related consolidated statements of income, comprehensive income, cash flows, and changes in equity(pages 343 through 348 and applicable items in pages 49 through 236), for each of the three years in the period ended December 31, 2019,and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in allmaterial respects, the financial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cashflows for each of the three years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in theUnited States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s financial statements based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of ouraudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error orfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significantestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits providea reasonable basis for our opinion./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020We have served as the Company’s auditor since 2001.342 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESCONSOLIDATED INCOME STATEMENTS For the Years Ended December 31, 2019 2018 2017 (In Thousands) OPERATING REVENUES Electric $4,223,027 $4,232,541 $4,246,020Natural gas 62,148 63,779 54,530TOTAL 4,285,175 4,296,320 4,300,550 OPERATING EXPENSES Operation and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale 845,108 915,410 912,060Purchased power 810,462 960,272 980,070Nuclear refueling outage expenses 54,170 51,626 52,074Other operation and maintenance 994,637 959,185 941,604Decommissioning 59,346 53,736 49,457Taxes other than income taxes 194,222 183,745 175,359Depreciation and amortization 535,791 492,179 467,369Other regulatory charges (credits) - net (105,203) 4,396 (152,080)TOTAL 3,388,533 3,620,549 3,425,913 OPERATING INCOME 896,642 675,771 874,637 OTHER INCOME Allowance for equity funds used during construction 74,023 79,922 51,485Interest and investment income 231,985 141,882 164,550Miscellaneous - net (115,427) (27,530) (39,756)TOTAL 190,581 194,274 176,279 INTEREST EXPENSE Interest expense 309,493 288,658 275,185Allowance for borrowed funds used during construction (35,430) (39,616) (25,914)TOTAL 274,063 249,042 249,271 INCOME BEFORE INCOME TAXES 813,160 621,003 801,645 Income taxes 121,623 (54,611) 485,298 NET INCOME $691,537 $675,614 $316,347 See Notes to Financial Statements. 343 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended December 31, 2019 2018 2017 (In Thousands) Net Income $691,537 $675,614 $316,347 Other comprehensive income Pension and other postretirement liabilities (net of tax expense of $3,781, $17,743, and $234) 10,715 50,296 2,042Other comprehensive income 10,715 50,296 2,042 Comprehensive Income $702,252 $725,910 $318,389 See Notes to Financial Statements. 344 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2019 2018 2017 (In Thousands)OPERATING ACTIVITIES Net income $691,537 $675,614 $316,347Adjustments to reconcile net income to net cash flow provided by operating activities: Depreciation, amortization, and decommissioning, including nuclear fuel amortization 685,062 662,390 621,018Deferred income taxes, investment tax credits, and non-current taxes accrued 196,533 174,063 575,804Changes in working capital: Receivables 13,942 89,701 (53,829)Fuel inventory (7,195) 5,310 11,010Accounts payable (33,375) 11,372 58,880Prepaid taxes and taxes accrued (38,827) 12,711 128,261Interest accrued 4,294 7,922 (70)Deferred fuel costs 24,234 (40,036) 23,236Other working capital accounts (62,536) (5,809) (30,911)Changes in provisions for estimated losses 9,664 8,307 (8,324)Changes in other regulatory assets (210,134) 40,765 492,696Changes in other regulatory liabilities (35,881) (125,185) 605,453Deferred tax rate change recognized as regulatory liability/asset — — (1,207,808)Changes in pension and other postretirement liabilities 35,162 (106,269) (32,309)Other (36,478) (15,652) (161,909)Net cash flow provided by operating activities 1,236,002 1,395,204 1,337,545INVESTING ACTIVITIES Construction expenditures (1,673,194) (1,805,641) (1,662,835)Allowance for equity funds used during construction 74,023 79,922 51,485Insurance proceeds 7,040 3,480 5,305Nuclear fuel purchases (85,984) (111,329) (197,829)Proceeds from the sale of nuclear fuel 11,596 53,603 42,634Payments to storm reserve escrow account (6,353) (4,770) (2,110)Receipts from storm reserve escrow account — 4 8,835Changes in securitization account (32) (1,655) 880Proceeds from nuclear decommissioning trust fund sales 412,559 1,055,690 231,293Investment in nuclear decommissioning trust funds (442,501) (1,097,204) (266,592)Changes in money pool receivable - net 46,843 (35,672) 11,330Proceeds from sale of assets — 11,987 —Payment for purchase of assets — (26,623) (9,805)Litigation proceeds for reimbursement of spent nuclear fuel storage costs 2,369 — —Net cash flow used in investing activities (1,653,634) (1,878,208) (1,787,409)FINANCING ACTIVITIES Proceeds from the issuance of long-term debt 2,691,133 2,319,799 733,344Retirement of long-term debt (2,199,053) (1,664,354) (407,736)Change in money pool payable - net 82,826 — —Changes in short-term borrowings - net — (43,540) 39,746Distributions paid: Common equity (208,000) (128,000) (91,250)Other 9,368 6,556 (2,183)Net cash flow provided by financing activities 376,274 490,461 271,921Net increase (decrease) in cash and cash equivalents (41,358) 7,457 (177,943)Cash and cash equivalents at beginning of period 43,364 35,907 213,850Cash and cash equivalents at end of period $2,006 $43,364 $35,907SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $296,842 $272,335 $266,871Income taxes $15,272 ($105,157) ($234,199) See Notes to Financial Statements. 345 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSASSETS December 31, 2019 2018 (In Thousands) CURRENT ASSETS Cash and cash equivalents: Cash $488 $252Temporary cash investments 1,518 43,112Total cash and cash equivalents 2,006 43,364Accounts receivable: Customer 194,869 199,903Allowance for doubtful accounts (1,902) (1,813)Associated companies 77,212 123,363Other 42,179 60,879Accrued unbilled revenues 169,201 167,052Total accounts receivable 481,559 549,384Fuel inventory 41,613 34,418Materials and supplies - at average cost 354,020 324,627Deferred nuclear refueling outage costs 56,743 24,406Prepaid taxes 7,959 —Prepayments and other 37,837 38,715TOTAL 981,737 1,014,914 OTHER PROPERTY AND INVESTMENTS Investment in affiliate preferred membership interests 1,390,587 1,390,587Decommissioning trust funds 1,563,812 1,284,996Storm reserve escrow account 295,875 289,525Non-utility property - at cost (less accumulated depreciation) 312,896 286,555Other 13,476 14,927TOTAL 3,576,646 3,266,590 UTILITY PLANT Electric 22,620,365 20,532,312Natural gas 235,678 211,421Construction work in progress 1,383,603 1,864,582Nuclear fuel 267,779 298,022TOTAL UTILITY PLANT 24,507,425 22,906,337Less - accumulated depreciation and amortization 9,118,524 8,837,596UTILITY PLANT - NET 15,388,901 14,068,741 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Other regulatory assets (includes securitization property of $27,596 as of December 31, 2019 and $49,753 as ofDecember 31, 2018) 1,315,211 1,105,077Deferred fuel costs 168,122 168,122Other 33,491 28,371TOTAL 1,516,824 1,301,570 TOTAL ASSETS $21,464,108 $19,651,815 See Notes to Financial Statements. 346 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSLIABILITIES AND EQUITY December 31, 2019 2018 (In Thousands) CURRENT LIABILITIES Currently maturing long-term debt $320,002 $2Accounts payable: Associated companies 187,615 102,749Other 357,206 390,367Customer deposits 153,097 155,314Taxes accrued — 30,868Interest accrued 87,744 83,450Deferred fuel costs 55,645 31,411Current portion of unprotected excess accumulated deferred income taxes 31,138 31,457Other 64,668 49,202TOTAL 1,257,115 874,820 NON-CURRENT LIABILITIES Accumulated deferred income taxes and taxes accrued 2,464,513 2,226,721Accumulated deferred investment tax credits 112,128 116,999Regulatory liability for income taxes - net 500,083 581,001Other regulatory liabilities 794,140 748,784Decommissioning 1,497,349 1,280,272Accumulated provisions 320,419 310,755Pension and other postretirement liabilities 677,619 643,171Long-term debt (includes securitization bonds of $33,220 as of December 31, 2019 and $55,682 as of December 31,2018) 6,983,667 6,805,766Other 459,957 160,608TOTAL 13,809,875 12,874,077 Commitments and Contingencies EQUITY Member’s equity 6,392,556 5,909,071Accumulated other comprehensive income (loss) 4,562 (6,153)TOTAL 6,397,118 5,902,918 TOTAL LIABILITIES AND EQUITY $21,464,108 $19,651,815 See Notes to Financial Statements. 347 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFor the Years Ended December 31, 2019, 2018, and 2017 Common Equity Member’s Equity Accumulated OtherComprehensive Income(Loss) Total (In Thousands) Balance at December 31, 2016 $5,130,251 ($48,442) $5,081,809Net income 316,347 — 316,347Other comprehensive income — 2,042 2,042Distributions declared on common equity (91,250) — (91,250)Other (144) — (144)Balance at December 31, 2017 $5,355,204 ($46,400) $5,308,804Net income 675,614 — 675,614Other comprehensive income — 50,296 50,296Distributions declared on common equity (128,000) — (128,000)Reclassification pursuant to ASU 2018-02 6,262 (10,049) (3,787)Other (9) — (9)Balance at December 31, 2018 $5,909,071 ($6,153) $5,902,918Net income 691,537 — 691,537Other comprehensive income — 10,715 10,715Distributions declared on common equity (208,000) — (208,000)Other (52) — (52)Balance at December 31, 2019 $6,392,556 $4,562 $6,397,118 See Notes to Financial Statements. 348 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESSELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 2019 2018 2017 2016 2015 (In Thousands) Operating revenues$4,285,175 $4,296,320 $4,300,550 $4,177,048 $4,417,146Net income$691,537 $675,614 $316,347 $622,047 $446,639Total assets$21,464,108 $19,651,815 $18,448,864 $17,701,271 $16,387,447Long-term obligations (a)$6,983,667 $6,805,766 $5,469,069 $5,612,593 $4,806,790 (a) Includes long-term debt (excluding currently maturing debt). 2019 2018 2017 2016 2015 (Dollars In Millions) Electric Operating Revenues: Residential$1,271 $1,244 $1,198 $1,196 $1,292Commercial947 941 956 930 989Industrial1,451 1,462 1,534 1,350 1,420Governmental71 69 69 67 67Total billed retail3,740 3,716 3,757 3,543 3,768Sales for resale: Associated companies273 295 278 368 406Non-associated companies60 62 64 50 36Other150 160 147 165 152Total$4,223 $4,233 $4,246 $4,126 $4,362 Billed Electric Energy Sales (GWh): Residential14,046 14,494 13,357 13,810 14,399Commercial11,353 11,578 11,342 11,478 11,700Industrial29,801 29,255 29,754 28,517 27,713Governmental827 823 790 794 756Total retail56,027 56,150 55,243 54,599 54,568Sales for resale: Associated companies4,813 5,498 4,793 7,345 7,500Non-associated companies1,924 1,762 1,711 1,690 770Total62,764 63,410 61,747 63,634 62,838 349 Table of ContentsENTERGY MISSISSIPPI, LLCMANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSISResults of Operations2019 Compared to 2018Net IncomeNet income decreased $6.2 million primarily due to higher depreciation and amortization expenses, lower volume/weather, and ahigher effective income tax rate, partially offset by higher retail electric price.Operating RevenuesFollowing is an analysis of the change in operating revenues comparing 2019 to 2018. Amount (In Millions)2018 operating revenues$1,335.1Fuel, rider, and other revenues that do not significantlyaffect net income(51.6)Volume/weather(15.9)Return of unprotected excess accumulated deferredincome taxes to customers25.8Retail electric price29.62019 operating revenues$1,323.0Entergy Mississippi’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs suchthat the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues thatdo not significantly affect net income” includes the revenue variance associated with these items.The volume/weather variance is primarily due to a decrease of 455 GWh, or 3%, in billed electricity usage, including the effect ofless favorable weather on residential sales and a decrease in industrial usage. The decrease in industrial usage is primarily due to decreasedsmall industrial sales.The return of unprotected excess accumulated deferred income taxes to customers is due to the return of unprotected excessaccumulated deferred income taxes through customer bill credits over a three-month period from July 2018 through September 2018 per anagreement approved by the MPSC in June 2018 resulting from the stipulation related to the effects of the Tax Cuts and Jobs Act. There wasno effect on net income as the reduction in operating revenues was offset by a reduction in income tax expense. See Note 2 to the financialstatements for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.The retail electric price variance is primarily due to an increase in formula rate plan rates effective with the first billing cycle of July2019 and an accrual in the fourth quarter 2019 for the interim capacity rate adjustment to the formula rate plan to recover non-fuel relatedcosts associated with the acquisition of the Choctaw Generating Station, each as approved by the MPSC. Entergy Mississippi began billingthe interim capacity rate adjustment in January 2020. See Note 2 to the financial statements for further discussion of the formula rate planfiling and the interim capacity rate adjustment.350 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisOther Income Statement VariancesOther operation and maintenance expenses increased primarily due to:•an increase of $4.7 million in spending on initiatives to explore new customer products and services; and•an increase of $4.6 million in information technology costs primarily due to higher costs related to applications and infrastructuresupport, enhanced cyber security, and upgrades and maintenance.The increase was partially offset by a $5.8 million loss in 2018 on the sale of fuel oil inventory per an agreement approved by the MPSC inJune 2018 resulting from the stipulation related to the effects of the Tax Act. There is no effect on net income as the loss on the sale of fueloil inventory is offset by a reduction in income tax expense.Depreciation and amortization expenses increased primarily as a result of higher depreciation rates, as approved by the MPSC, andadditions to plant in service.Other regulatory charges include a regulatory charge recorded in second quarter 2018 to reflect the return of unprotected excessaccumulated deferred income taxes per an agreement approved by the MPSC in June 2018 that resulted in a reduction in net utility plant of$127.2 million. There was no effect on net income as the regulatory charge was offset by a reduction in income tax expense. See Note 2 tothe financial statements for further discussion of regulatory activity related to the Tax Cuts and Jobs Act.Interest expense increased primarily due to issuances of $300 million in June 2019 and $135 million in November 2019, of 3.85%Series mortgage bonds and the issuance of $55 million of 4.52% Series mortgage bonds in December 2018, partially offset by the repayment,at maturity, of $150 million of 6.64% Series mortgage bonds in July 2019. See Note 5 to the financial statements for details on long-termdebt.The effective income tax rates were 20.5% for 2019 and (41,237%) for 2018. The difference in the effective income tax rate of(41,237%) versus the federal statutory rate of 21% for 2018 was primarily due to the flow through of excess accumulated deferred incometaxes. See Note 3 to the financial statements for a reconciliation of the federal statutory rate of 21% to the effective income tax rates.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Results of Operations” in Entergy Mississippi’sAnnual Report on Form 10-K for the year ended December 31, 2018 for discussion of results of operations for 2018 compared to 2017.Income Tax LegislationSee the “Income Tax Legislation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion andAnalysis for discussion of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017. Note 3 to the financialstatements contains additional discussion of the effect of the Act on 2017, 2018, and 2019 results of operations and financial position, theprovisions of the Act, and the uncertainties associated with accounting for the Act, and Note 2 to the financial statements discusses theregulatory proceedings that have considered the effects of the Act.351 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisLiquidity and Capital ResourcesCash FlowCash flows for the years ended December 31, 2019, 2018, and 2017 were as follows: 2019 2018 2017 (In Thousands)Cash and cash equivalents at beginning of period$36,954 $6,096 $76,834 Net cash provided by (used in): Operating activities339,952 418,382 226,585Investing activities(733,684) (419,453) (417,226)Financing activities408,379 31,929 119,903Net increase (decrease) in cash and cash equivalents14,647 30,858 (70,738) Cash and cash equivalents at end of period$51,601 $36,954 $6,0962019 Compared to 2018Operating ActivitiesNet cash flow provided by operating activities decreased $78.4 million in 2019 primarily due to:•the timing of collection of receivables from customers;•the receipt of $36.2 million from Entergy Arkansas as a result of a compliance filing made in response to the FERC’s October 2018order in the Entergy Arkansas opportunity sales proceeding. See Note 2 to the financial statements for further discussion of theopportunity sales proceeding; and•$26.2 million in proceeds from the sale of fuel oil inventory in 2018.The decrease was partially offset by the timing of recovery of fuel and purchased power costs and the return of unprotected excessaccumulated deferred income taxes to customers in 2018. See Note 2 to the financial statements for further discussion of regulatory activityregarding the Tax Cuts and Jobs Act.Investing ActivitiesNet cash flow used in investing activities increased $314.2 million in 2019 primarily due to:•the purchase of the Choctaw Generating Station in October 2019 for approximately $305 million. See Note 14 to the financialstatements for further discussion of the Choctaw Generating Station purchase;•an increase of $34.9 million primarily due to investment in the infrastructure of Entergy Mississippi’s distribution system, includingincreased spending on advanced metering infrastructure; and•an increase of $15.6 million in storm spending in 2019.The increase was partially offset by money pool activity.Increases in Entergy Mississippi’s receivable from the money pool are a use of cash flow, and Entergy Mississippi’s receivable fromthe money pool increased by $3.3 million in 2019 compared to increasing by $39.7 million in 2018. The money pool is an inter-companyborrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.352 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisFinancing ActivitiesNet cash flow provided by financing activities increased $376.5 million in 2019 primarily due to:•the issuance of $435 million of 3.85% Series mortgage bonds in 2019 compared to the issuance of $55 million of 4.52% Seriesmortgage bonds 2018;•a capital contribution of $130 million in October 2019 in anticipation of the purchase of the Choctaw Generating Station in October2019; and•the redemption of $20 million of preferred stock in 2018 in connection with the internal restructuring. See Note 2 to the financialstatements for further discussion of the internal restructuring and Note 6 to the financial statements for details of preferred stockactivity.The increase was partially offset by the repayment, at maturity, of $150 million of 6.64% Series mortgage bonds in July 2019.See Note 5 to the financial statements for details on long-term debt.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Cash Flow” inEntergy Mississippi’s Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of operating, investing, andfinancing cash flow activities for 2018 compared to 2017.Capital StructureEntergy Mississippi’s debt to capital ratio is shown in the following table. December 31, 2019 December 31, 2018Debt to capital51.2% 50.6%Effect of subtracting cash(0.8%) (0.7%)Net debt to net capital50.4% 49.9%Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings, finance lease obligations, and long-termdebt, including the currently maturing portion. Capital consists of debt and equity. Net capital consists of capital less cash and cashequivalents. Entergy Mississippi uses the debt to capital ratio in analyzing its financial condition and believes it provides useful informationto its investors and creditors in evaluating Entergy Mississippi’s financial condition. Entergy Mississippi uses the net debt to net capital ratioin analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating EntergyMississippi’s financial condition because net debt indicates Entergy Mississippi’s outstanding debt position that could not be readily satisfiedby cash and cash equivalents on hand.Entergy Mississippi seeks to optimize its capital structure in accordance with its regulatory requirements and to control its cost ofcapital while also maintaining equity capitalization at a level consistent with investment-grade debt ratings. To the extent that operating cashflows are in excess of planned investments, cash may be used to reduce outstanding debt or may be paid as a distribution, or both, inappropriate amounts to maintain the capital structure. To the extent that operating cash flows are insufficient to support planned investments,Entergy Mississippi may issue incremental debt or reduce distributions, or both, to maintain its capital structure. In addition, in certaininfrequent circumstances, such as large transactions that would materially alter the capital structure if financed entirely with debt andreducing distributions, Entergy Mississippi may receive equity contributions to maintain its capital structure.353 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisUses of CapitalEntergy Mississippi requires capital resources for:•construction and other capital investments;•debt maturities or retirements;•working capital purposes, including the financing of fuel and purchased power costs; and•distributions and interest payments. Following are the amounts of Entergy Mississippi’s planned construction and other capital investments. 2020 2021 2022 (In Millions)Planned construction and capital investment: Generation$110 $285 $85Transmission130 125 90Distribution150 115 95Utility Support145 130 135Total$535 $655 $405Following are the amounts of Entergy Mississippi’s existing debt obligations and lease obligations (includes estimated interestpayments) and other purchase obligations. 2020 2021-2022 2023-2024 After 2024 Total (In Millions)Long-term debt (a)$59 $118 $455 $2,301 $2,933Operating leases (b)$6 $9 $2 $2 $19Finance leases (b)$2 $3 $2 $1 $8Purchase obligations (c)$266 $502 $477 $4,444 $5,689(a)Includes estimated interest payments. Long-term debt is discussed in Note 5 to the financial statements.(b)Lease obligations are discussed in Note 10 to the financial statements.(c)Purchase obligations represent the minimum purchase obligation or cancellation charge for contractual obligations to purchase goodsor services. For Entergy Mississippi, almost all of the total consists of unconditional fuel and purchased power obligations, includingits obligations under the Unit Power Sales Agreement, which is discussed in Note 8 to the financial statements. In addition to the contractual obligations given above, Entergy Mississippi currently expects to contribute approximately $7.8 million to itsqualified pension plans and approximately $130 thousand to other postretirement health care and life insurance plans in 2020, although the2020 required pension contributions will be known with more certainty when the January 1, 2020 valuations are completed, which isexpected by April 1, 2020. See “Critical Accounting Estimates – Qualified Pension and Other Postretirement Benefits” below for adiscussion of qualified pension and other postretirement benefits funding. Also, in addition to the contractual obligations, Entergy Mississippi has $59.3 million of unrecognized tax benefits and interest net ofunused tax attributes for which the timing of payments beyond 12 months cannot be reasonably estimated due to uncertainties in the timing ofeffective settlement of tax positions. See Note 3 to the financial statements for additional information regarding unrecognized tax benefits.In addition to routine capital spending to maintain operations, the planned capital investment estimate for Entergy Mississippiincludes amounts associated with specific investments such as the Sunflower Solar Facility;354 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and Analysistransmission projects to enhance reliability, reduce congestion, and enable economic growth; distribution spending to enhance reliability andimprove service to customers, including advanced meters and related investments; resource planning, including potential generation projects;system improvements; software and security; and other investments. Estimated capital expenditures are subject to periodic review andmodification and may vary based on the ongoing effects of regulatory constraints and requirements, environmental compliance, businessopportunities, market volatility, economic trends, business restructuring, changes in project plans, and the ability to access capital.As a wholly-owned subsidiary of Entergy Utility Holding Company, LLC, Entergy Mississippi pays distributions from its earnings ata percentage determined monthly. Sunflower Solar FacilityIn November 2018, Entergy Mississippi announced that it signed an agreement for the purchase of an approximately 100 MW to-be-constructed solar photovoltaic facility that will be sited on approximately 1,000 acres in Sunflower County, Mississippi. The estimated basepurchase price is approximately $138.4 million. The estimated total investment, including the base purchase price and other related costs, forEntergy Mississippi to acquire the Sunflower Solar Facility is approximately $153.2 million. The purchase is contingent upon, among otherthings, obtaining necessary approvals, including full cost recovery, from applicable federal and state regulatory and permitting agencies. Theproject will be built by Sunflower County Solar Project, LLC, a sub-subsidiary of Recurrent Energy, LLC. Entergy Mississippi will purchasethe facility upon mechanical completion and after the other purchase contingencies have been met. In December 2018, Entergy Mississippifiled a joint petition with Sunflower Solar Project at the MPSC for Sunflower Solar Project to construct and for Entergy Mississippi to acquireand thereafter own, operate, improve, and maintain the solar facility. Entergy Mississippi proposed revisions to its formula rate plan thatwould provide for a mechanism, the interim capacity rate adjustment mechanism, in the formula rate plan to recover the non-fuel relatedcosts of additional owned capacity acquired by Entergy Mississippi, including the annual ownership costs of the Sunflower Solar Facility. InDecember 2019 the MPSC approved Entergy Mississippi’s proposed revisions to its formula rate plan to provide for an interim capacity rateadjustment mechanism. The MPSC must approve recovery through the interim capacity rate adjustment for each new resource. In August2019 consultants retained by the Mississippi Public Utilities Staff filed a report expressing concerns regarding the project economics andrecommended that, should the MPSC wish to approve the project, Entergy Mississippi should be required to guarantee the energy output ofthe unit. Entergy Mississippi and the Staff are engaged in settlement discussions to address these concerns. A hearing before the MPSC istargeted to occur by the second quarter of 2020. Closing is expected to occur by the end of 2021.Sources of CapitalEntergy Mississippi’s sources to meet its capital requirements include:•internally generated funds;•cash on hand;•debt or preferred membership interest issuances;•capital contributions; and•bank financing under new or existing facilities.Entergy Mississippi may refinance, redeem, or otherwise retire debt prior to maturity, to the extent market conditions and interestrates are favorable.All debt and preferred membership interest issuances by Entergy Mississippi require prior regulatory approval. Debt issuances arealso subject to issuance tests set forth in its bond indenture and other agreements. Entergy Mississippi has sufficient capacity under thesetests to meet its foreseeable capital needs.355 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisEntergy Mississippi’s receivables from the money pool were as follows as of December 31 for each of the following years.2019 2018 2017 2016(In Thousands)$44,693 $41,380 $1,633 $10,595See Note 4 to the financial statements for a description of the money pool.Entergy Mississippi has three separate credit facilities in the aggregate amount of $82.5 million scheduled to expire in May 2020. Noborrowings were outstanding under the credit facilities as of December 31, 2019. In addition, Entergy Mississippi is a party to anuncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of December 31, 2019, $1.8 millionof letters of credit were outstanding under Entergy Mississippi’s uncommitted letter of credit facility. See Note 4 to the financial statementsfor additional discussion of the credit facilities.Entergy Mississippi obtained authorization from the FERC through November 2020 for short-term borrowings not to exceed anaggregate amount of $175 million at any time outstanding and long-term borrowings and security issuances. See Note 4 to the financialstatements for further discussion of Entergy Mississippi’s short-term borrowing limits.State and Local Rate Regulation and Fuel-Cost RecoveryThe rates that Entergy Mississippi charges for electricity significantly influence its financial position, results of operations, andliquidity. Entergy Mississippi is regulated and the rates charged to its customers are determined in regulatory proceedings. A governmentalagency, the MPSC, is primarily responsible for approval of the rates charged to customers.Formula Rate Plan FilingsIn March 2017, Entergy Mississippi submitted its formula rate plan 2017 test year filing and 2016 look-back filing showing EntergyMississippi’s earned return for the historical 2016 calendar year and projected earned return for the 2017 calendar year to be within theformula rate plan bandwidth, resulting in no change in rates. In June 2017, Entergy Mississippi and the Mississippi Public Utilities Staffentered into a stipulation that confirmed that Entergy Mississippi’s earned returns for both the 2016 look-back filing and 2017 test year werewithin the respective formula rate plan bandwidths. In June 2017 the MPSC approved the stipulation, which resulted in no change in rates.In March 2018, Entergy Mississippi submitted its formula rate plan 2018 test year filing and 2017 look-back filing showing EntergyMississippi’s earned return for the historical 2017 calendar year and projected earned return for the 2018 calendar year, in large part as aresult of the lower federal corporate income tax rate effective in 2018, to be within the formula rate plan bandwidth, resulting in no change inrates. In June 2018, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a stipulation that confirmed that EntergyMississippi’s earned returns for both the 2017 look-back filing and 2018 test year were within the respective formula rate plan bandwidths. InJune 2018 the MPSC approved the stipulation, which resulted in no change in rates.In October 2018, Entergy Mississippi proposed revisions to its formula rate plan that would provide for a mechanism in the formularate plan, the interim capacity rate adjustment mechanism, to recover the non-fuel related costs of additional owned capacity acquired byEntergy Mississippi, including the non-fuel annual ownership costs of the Choctaw Generating Station, as well as to allow similar costrecovery treatment for other future capacity acquisitions, such as the Sunflower Solar Facility, that are approved by the MPSC. In December2019 the MPSC approved Entergy Mississippi’s proposed revisions to its formula rate plan to provide for an interim capacity rate adjustmentmechanism, which Entergy Mississippi began billing in January 2020. The MPSC must approve recovery through the interim356 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and Analysiscapacity rate adjustment for each new resource. In addition, the MPSC approved revisions to the formula rate plan which allows EntergyMississippi to begin billing rate adjustments effective April 1 of the filing year on a temporary basis subject to refund or credit to customers,subject to final MPSC order. The MPSC also authorized Entergy Mississippi to remove vegetation management costs from the formula rateplan and recover these costs through the establishment of a vegetation management rider.In March 2019, Entergy Mississippi submitted its formula rate plan 2019 test year filing and 2018 look-back filing showing EntergyMississippi’s earned return for the historical 2018 calendar year to be above the formula rate plan bandwidth and projected earned return forthe 2019 calendar year to be below the formula rate plan bandwidth. The 2019 test year filing shows a $36.8 million rate increase isnecessary to reset Entergy Mississippi’s earned return on common equity to the specified point of adjustment of 6.94% return on rate base,within the formula rate plan bandwidth. The 2018 look-back filing compares actual 2018 results to the approved benchmark return on ratebase and shows a $10.1 million interim decrease in formula rate plan revenues is necessary. In the fourth quarter 2018, Entergy Mississippirecorded a provision of $9.3 million that reflected the estimate of the difference between the 2018 expected earned rate of return on rate baseand an established performance-adjusted benchmark rate of return under the formula rate plan performance-adjusted bandwidth mechanism.In the first quarter 2019, Entergy Mississippi recorded a $0.8 million increase in the provision to reflect the amount shown in the look-backfiling. In June 2019, Entergy Mississippi and the Mississippi Public Utilities Staff entered into a joint stipulation that confirmed that the 2019test year filing showed that a $32.8 million rate increase is necessary to reset Entergy Mississippi’s earned return on common equity to thespecified point of adjustment of 6.93% return on rate base, within the formula rate plan bandwidth. Additionally, pursuant to the jointstipulation, Entergy Mississippi’s 2018 look-back filing reflected an earned return on rate base of 7.81% in calendar year 2018 which isabove the look-back benchmark return on rate base of 7.13%, resulting in an $11 million decrease in formula rate plan revenues on an interimbasis through May 2020. In the second quarter 2019, Entergy Mississippi recorded an additional $0.9 million increase in the provision toreflect the $11 million shown in the look-back filing. In June 2019 the MPSC approved the joint stipulation with rates effective for the firstbilling cycle of July 2019.Internal RestructuringIn March 2018, Entergy Mississippi filed an application with the MPSC seeking authorization to undertake a restructuring that wouldresult in the transfer of substantially all of the assets and operations of Entergy Mississippi to a new entity, which would ultimately be heldby an existing Entergy subsidiary holding company. In September 2018, Entergy Mississippi and the Mississippi Public Utilities Staffentered into and filed a joint stipulation regarding the restructuring filing. In September 2018 the MPSC issued an order accepting thestipulation in its entirety and approving the restructuring and credits of $27 million to retail customers over six years, consisting of annualpayments of $4.5 million for the years 2019-2024. Entergy Mississippi also received the required FERC approval.In November 2018, Entergy Mississippi undertook a multi-step restructuring, including the following:•Entergy Mississippi, Inc. redeemed its outstanding preferred stock, at the aggregate redemption price of approximately $21.2 million.•Entergy Mississippi, Inc. converted from a Mississippi corporation to a Texas corporation.•Under the Texas Business Organizations Code (TXBOC), Entergy Mississippi, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy Mississippi Power and Light, LLC, a Texas limited liability company (Entergy Mississippi Power and Light), andEntergy Mississippi Power and Light assumed substantially all of the liabilities of Entergy Mississippi, Inc., in a transaction regardedas a merger under the TXBOC. Entergy Mississippi, Inc. remained in existence and held the membership interests in EntergyMississippi Power and Light.•Entergy Mississippi, Inc. contributed the membership interests in Entergy Mississippi Power and Light to an affiliate (Entergy UtilityHolding Company, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution,Entergy Mississippi Power and Light is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC.357 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisIn December 2018, Entergy Mississippi, Inc. changed its name to Entergy Utility Enterprises, Inc., and Entergy Mississippi Power and Lightthen changed its name to Entergy Mississippi, LLC. Entergy Mississippi, LLC holds substantially all of the assets, and assumed substantiallyall of the liabilities, of Entergy Mississippi, Inc. The restructuring was accounted for as a transaction between entities under common control.In December 2018, Entergy Mississippi filed its notice of intent to implement the restructuring credit rider to allow EntergyMississippi to return credits of $27 million to retail customers over six years. In January 2019 the MPSC approved the proposed restructuringcredit adjustment factor, which is effective for bills rendered beginning February 2019.Advanced Metering Infrastructure (AMI)In November 2016, Entergy Mississippi filed an application seeking an order from the MPSC granting a certificate of publicconvenience and necessity and finding that Entergy Mississippi’s deployment of AMI is in the public interest. Entergy Mississippi proposedto replace existing meters with advanced meters that enable two-way data communication; to design and build a secure and reliable networkto support such communications; and to implement support systems. AMI is intended to serve as the foundation of Entergy Mississippi’smodernized power grid. The filing included an estimate of implementation costs for AMI of $132 million and identified a number ofquantified and unquantified benefits. Entergy Mississippi proposed a 15-year depreciable life for the new advanced meters, the three-yeardeployment of which began in 2019. Deployment of the communications network began in 2018. Entergy Mississippi proposed to includethe AMI deployment costs and the quantified benefits in existing rate mechanisms, primarily through future formula rate plan filings and/orfuture energy cost recovery rider schedule re-determinations, as applicable. In May 2017 the Mississippi Public Utilities Staff and EntergyMississippi entered into and filed a joint stipulation supporting Entergy Mississippi’s filing, and the MPSC issued an order approving thefiling without material changes, finding that Entergy Mississippi’s deployment of AMI is in the public interest and granting a certificate ofpublic convenience and necessity. The MPSC order also confirmed that Entergy Mississippi shall continue to include in rate base theremaining book value of existing meters that will be retired as part of the AMI deployment and also to depreciate those assets using currentdepreciation rates. In June 2018, as part of the order approving the joint stipulation between the Mississippi Public Utilities Staff and EntergyMississippi addressing Entergy Mississippi’s 2018 formula rate plan evaluation report and the ratemaking effects of the Tax Act, the MPSCapproved the acceleration of the recovery of substantially all of Entergy Mississippi’s existing customer meters in anticipation of AMIdeployment.Fuel and Purchased Power Cost RecoveryEntergy Mississippi’s rate schedules include an energy cost recovery rider that is adjusted annually to reflect accumulated over- orunder-recoveries. Entergy Mississippi’s fuel cost recoveries are subject to annual audits conducted pursuant to the authority of the MPSC. In January 2017 the MPSC certified to the Mississippi Legislature the audit reports of its independent auditors for the fuel yearending September 30, 2016. In November 2017 the Mississippi Public Utilities Staff separately engaged a consultant to review theSeptember 2016 outage at the Grand Gulf Nuclear Station and to review ongoing operations at Grand Gulf. This engagement continues, andsubsequently, was expanded to include all outages at Grand Gulf that occurred through 2019.In November 2017, Entergy Mississippi filed its annual redetermination of the annual factor to be applied under the energy costrecovery rider. The calculation of the annual factor included an under-recovery of approximately $61.5 million as of September 30, 2017. InJanuary 2018 the MPSC approved the proposed energy cost factors effective for February 2018 bills.358 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisIn November 2018, Entergy Mississippi filed its annual redetermination of the annual factor to be applied under the energy costrecovery rider. The calculation of the annual factor included an under-recovery of approximately $57 million as of September 30, 2018. InJanuary 2019 the MPSC approved the proposed energy cost factor effective for February 2019 bills.In November 2019, Entergy Mississippi filed its annual redetermination of the annual factor to be applied under the energy costrecovery rider. The calculation of the annual factor included an over-recovery of approximately $39.6 million as of September 30, 2019. InJanuary 2020 the MPSC approved the proposed energy cost factor effective for February 2020 bills.Mississippi Attorney General ComplaintThe Mississippi Attorney General filed a complaint in state court in December 2008 against Entergy Corporation, EntergyMississippi, Entergy Services, and Entergy Power alleging, among other things, violations of Mississippi statutes, fraud, and breach of goodfaith and fair dealing, and requesting an accounting and restitution. The complaint is wide ranging and relates to tariffs and procedures underwhich Entergy Mississippi purchases power not generated in Mississippi to meet electricity demand. Entergy believes the complaint isunfounded. In December 2008 the defendant Entergy companies removed the Attorney General’s lawsuit to U.S. District Court in Jackson,Mississippi. In June 2010 the MPSC authorized the deferral of certain legal expenses associated with this litigation until it is resolved. As ofDecember 31, 2019, Entergy Mississippi has a regulatory asset of $29.5 million for these deferred legal expenses. In April 2019 the DistrictCourt remanded the Attorney General’s lawsuit to the Hinds County Chancery Court. A hearing on procedural and dispositive motions washeld in August 2019. In December 2019 the Hinds County Chancery Court issued its ruling granting the motion for summary judgment filedby the Entergy defendants. The Chancery Court found it lacked subject matter jurisdiction and that the claims fall under the purview of theFERC. In February 2020 the Chancery Court entered a final order dismissing all claims. The order was approved by counsel for the AttorneyGeneral, and dismisses with prejudice all claims and matters in dispute and states that the plaintiff will not seek an appeal or further relief andthat all matters in dispute have been resolved.Storm Cost Recovery Filings with Retail RegulatorsEntergy Mississippi has approval from the MPSC to collect a storm damage provision of $1.75 million per month. If EntergyMississippi’s accumulated storm damage provision balance exceeds $15 million, the collection of the storm damage provision ceases untilsuch time that the accumulated storm damage provision becomes less than $10 million. As of July 31, 2017, the balance in EntergyMississippi’s accumulated storm damage provision was less than $10 million, therefore Entergy Mississippi resumed billing the monthlystorm damage provision effective with September 2017 bills. As of June 30, 2018, Entergy Mississippi’s storm damage provision balanceexceeded $15 million. Accordingly, the storm damage provision was reset to zero beginning with August 2018 bills. As of May 31, 2019,Entergy Mississippi’s storm damage provision balance was less than $10 million. Accordingly, Entergy Mississippi resumed billing themonthly storm damage provision effective with July 2019 bills.Federal RegulationSee the “Rate, Cost-recovery, and Other Regulation – Federal Regulation” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis and Note 2 to the financial statements for a discussion of federal regulation.Nuclear MattersSee the “Nuclear Matters” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for adiscussion of nuclear matters.359 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisEnvironmental RisksEntergy Mississippi’s facilities and operations are subject to regulation by various governmental authorities having jurisdiction overair quality, water quality, control of toxic substances and hazardous and solid wastes, and other environmental matters. Management believesthat Entergy Mississippi is in substantial compliance with environmental regulations currently applicable to its facilities and operations, withreference to possible exceptions noted in “Regulation of Entergy’s Business - Environmental Regulation” in Part I, Item 1. Becauseenvironmental regulations are subject to change, future compliance costs cannot be precisely estimated.Critical Accounting EstimatesThe preparation of Entergy Mississippi’s financial statements in conformity with generally accepted accounting principles requiresmanagement to apply appropriate accounting policies and to make estimates and judgments that can have a significant effect on reportedfinancial position, results of operations, and cash flows. Management has identified the following accounting policies and estimates as criticalbecause they are based on assumptions and measurements that involve a high degree of uncertainty, and there is the potential for futurechanges in the assumptions and measurements that could produce estimates that would have a material impact on the presentation of EntergyMississippi’s financial position or results of operations.Utility Regulatory AccountingSee “Utility Regulatory Accounting” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for discussion of accounting for the effects of rate regulation.Impairment of Long-lived Assets and Trust Fund InvestmentsSee “Impairment of Long-lived Assets and Trust Fund Investments” in the “Critical Accounting Estimates” section of EntergyCorporation and Subsidiaries Management’s Financial Discussion and Analysis for discussion of the estimates associated with theimpairment of long-lived assets.Taxation and Uncertain Tax PositionsSee “Taxation and Uncertain Tax Positions” in the “Critical Accounting Estimates” section of Entergy Corporation andSubsidiaries Management’s Financial Discussion and Analysis for further discussion.Qualified Pension and Other Postretirement BenefitsEntergy Mississippi’s qualified pension and other postretirement reported costs, as described in Note 11 to the financial statements,are impacted by numerous factors including the provisions of the plans, changing employee demographics, and various actuarial calculations,assumptions, and accounting mechanisms. See the “Qualified Pension and Other Postretirement Benefits” in the “Critical AccountingEstimates” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for furtherdiscussion. Because of the complexity of these calculations, the long-term nature of these obligations, and the importance of the assumptionsutilized, Entergy’s estimate of these costs is a critical accounting estimate.360 Table of ContentsEntergy Mississippi, LLCManagement’s Financial Discussion and AnalysisCost SensitivityThe following chart reflects the sensitivity of qualified pension cost and qualified projected benefit obligation to changes in certainactuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020 QualifiedPension Cost Impact on 2019 ProjectedQualified Benefit Obligation Increase/(Decrease) Discount rate (0.25%) $719 $11,678Rate of return on plan assets (0.25%) $823 $—Rate of increase in compensation 0.25% $483 $2,529The following chart reflects the sensitivity of postretirement benefit cost and accumulated postretirement benefit obligation tochanges in certain actuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020Postretirement Benefit Cost Impact on 2019 AccumulatedPostretirement BenefitObligation Increase/(Decrease) Discount rate (0.25%) $29 $1,939Health care cost trend 0.25% $81 $1,456Each fluctuation above assumes that the other components of the calculation are held constant.Costs and Employer ContributionsTotal qualified pension cost for Entergy Mississippi in 2019 was $11.3 million. Entergy Mississippi anticipates 2020 qualifiedpension cost to be $17.4 million. Entergy Mississippi contributed $20.8 million to its qualified pension plans in 2019 and estimates 2020pension contributions will be approximately $7.8 million, although the 2020 required pension contributions will be known with morecertainty when the January 1, 2020 valuations are completed, which is expected by April 1, 2020.Total postretirement health care and life insurance benefit income for Entergy Mississippi in 2019 was $2.1 million. EntergyMississippi expects 2020 postretirement health care and life insurance benefit income of approximately $3.1 thousand. Entergy Mississippicontributed $228 thousand to its other postretirement plans in 2019 and estimates that 2020 contributions will be approximately $130thousand.Other ContingenciesSee “Other Contingencies” in the “Critical Accounting Estimates” section of Entergy Corporation and Subsidiaries Management’sFinancial Discussion and Analysis for a discussion of the estimates associated with environmental, litigation, and other risks.New Accounting PronouncementsSee “New Accounting Pronouncements” section of Note 1 to the financial statements for a discussion of new accountingpronouncements.361 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the member and Board of Directors ofEntergy Mississippi, LLCOpinion on the Financial StatementsWe have audited the accompanying balance sheets of Entergy Mississippi, LLC (the “Company”) as of December 31, 2019 and 2018, therelated statements of income, cash flows and changes in member’s equity (pages 363 through 368 and applicable items in pages 49 through236), for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the “financialstatements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as ofDecember 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period ended December 31,2019, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s financial statements based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of ouraudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error orfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significantestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits providea reasonable basis for our opinion./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020We have served as the Company’s auditor since 2001.362 Table of ContentsENTERGY MISSISSIPPI, LLCINCOME STATEMENTS For the Years Ended December 31, 2019 2018 2017 (In Thousands) OPERATING REVENUES Electric $1,323,043 $1,335,112 $1,198,229 OPERATING EXPENSES Operation and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale 277,425 260,198 185,816Purchased power 284,492 364,575 328,463Other operation and maintenance 266,175 261,613 240,738Taxes other than income taxes 105,318 101,999 95,051Depreciation and amortization 170,886 152,577 143,479Other regulatory charges (credits) - net 14,993 147,704 (19,134)TOTAL 1,119,289 1,288,666 974,413 OPERATING INCOME 203,754 46,446 223,816 OTHER INCOME Allowance for equity funds used during construction 8,356 8,710 9,667Interest and investment income 1,412 135 85Miscellaneous - net (4,478) (2,732) (2,232)TOTAL 5,290 6,113 7,520 INTEREST EXPENSE Interest expense 61,785 55,905 51,260Allowance for borrowed funds used during construction (3,532) (3,651) (3,875)TOTAL 58,253 52,254 47,385 INCOME BEFORE INCOME TAXES 150,791 305 183,951 Income taxes 30,866 (125,773) 73,919 NET INCOME 119,925 126,078 110,032 Preferred dividend requirements and other — 834 953 EARNINGS APPLICABLE TO COMMON EQUITY $119,925 $125,244 $109,079 See Notes to Financial Statements. 363 Table of Contents(Page left blank intentionally)364 Table of ContentsENTERGY MISSISSIPPI, LLCSTATEMENTS OF CASH FLOWS For the Years Ended December 31, 2019 2018 2017 (In Thousands) OPERATING ACTIVITIES Net income $119,925 $126,078 $110,032Adjustments to reconcile net income to net cash flow provided by operating activities: Depreciation and amortization 170,886 152,577 143,479Deferred income taxes, investment tax credits, and non-current taxes accrued 32,547 56,502 84,816Changes in assets and liabilities: Receivables (17,245) 37,762 (29,528)Fuel inventory (3,208) 33,675 5,266Accounts payable (226) (7,472) 3,595Taxes accrued 13,109 (5,291) 18,803Interest accrued (1,331) (2,670) 1,248Deferred fuel costs 78,418 24,428 (25,487)Other working capital accounts (5,557) (9,902) 5,115Provisions for estimated losses (1,121) 6,378 (9,676)Other regulatory assets (34,923) 54,860 (17,412)Other regulatory liabilities (21,524) (131,856) 405,395 Deferred tax rate change recognized as regulatory liability/asset — — (452,429)Pension and other postretirement liabilities 6,534 (8,405) (8,055)Other assets and liabilities 3,668 91,718 (8,577)Net cash flow provided by operating activities 339,952 418,382 226,585INVESTING ACTIVITIES Construction expenditures (432,600) (387,293) (427,616)Allowance for equity funds used during construction 8,356 8,710 9,667Changes in money pool receivable - net (3,313) (39,747) 8,962Payment for purchase of plant or assets (305,472) — (6,958)Other (655) (1,123) (1,281)Net cash flow used in investing activities (733,684) (419,453) (417,226)FINANCING ACTIVITIES Proceeds from the issuance of long-term debt 437,153 54,449 148,185Retirement of long-term debt (150,000) — —Redemption of preferred stock — (21,208) —Capital contributions from parent 130,000 — —Distributions/dividends paid: Common equity — (10,000) (26,000)Preferred stock — (993) (953)Other (8,774) 9,681 (1,329)Net cash flow provided by financing activities 408,379 31,929 119,903Net increase (decrease) in cash and cash equivalents 14,647 30,858 (70,738)Cash and cash equivalents at beginning of period 36,954 6,096 76,834Cash and cash equivalents at end of period $51,601 $36,954 $6,096SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $60,533 $56,037 $47,631Income taxes ($12,204) ($19,118) ($25,043)See Notes to Financial Statements. 365 Table of ContentsENTERGY MISSISSIPPI, LLCBALANCE SHEETSASSETS December 31, 2019 2018 (In Thousands) CURRENT ASSETS Cash and cash equivalents: Cash $11 $11Temporary cash investments 51,590 36,943Total cash and cash equivalents 51,601 36,954Accounts receivable: Customer 92,050 73,205Allowance for doubtful accounts (636) (563)Associated companies 49,257 51,065Other 14,986 8,647Accrued unbilled revenues 47,426 50,171Total accounts receivable 203,083 182,525Deferred fuel costs — 8,016Fuel inventory - at average cost 15,139 11,931Materials and supplies - at average cost 57,972 47,255Prepayments and other 7,149 9,365TOTAL 334,944 296,046 OTHER PROPERTY AND INVESTMENTS Non-utility property - at cost (less accumulated depreciation) 4,560 4,576Escrow accounts 80,201 32,447TOTAL 84,761 37,023 UTILITY PLANT Electric 5,672,589 4,780,720Construction work in progress 88,373 128,149TOTAL UTILITY PLANT 5,760,962 4,908,869Less - accumulated depreciation and amortization 1,894,000 1,641,821UTILITY PLANT - NET 3,866,962 3,267,048 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Other regulatory assets 377,972 343,049Other 10,105 3,638TOTAL 388,077 346,687 TOTAL ASSETS $4,674,744 $3,946,804 See Notes to Financial Statements. 366 Table of ContentsENTERGY MISSISSIPPI, LLCBALANCE SHEETSLIABILITIES AND EQUITY December 31, 2019 2018 (In Thousands) CURRENT LIABILITIES Currently maturing long-term debt $— $150,000Accounts payable: Associated companies 48,090 42,928Other 94,729 79,117Customer deposits 85,938 85,085Taxes accrued 90,661 77,552Interest accrued 18,900 20,231Deferred fuel costs 70,402 —Other 32,667 7,526TOTAL 441,387 462,439 NON-CURRENT LIABILITIES Accumulated deferred income taxes and taxes accrued 594,832 551,869Accumulated deferred investment tax credits 9,602 10,186Regulatory liability for income taxes - net 236,988 246,402Other regulatory liabilities 21,512 33,622Asset retirement cost liabilities 9,727 9,206Accumulated provisions 50,021 51,142Pension and other postretirement liabilities 99,406 93,100Long-term debt 1,614,129 1,175,750Other 54,989 20,862TOTAL 2,691,206 2,192,139 Commitments and Contingencies EQUITY Member's equity 1,542,151 1,292,226TOTAL 1,542,151 1,292,226 TOTAL LIABILITIES AND EQUITY $4,674,744 $3,946,804 See Notes to Financial Statements. 367 Table of ContentsENTERGY MISSISSIPPI, LLCSTATEMENTS OF CHANGES IN MEMBER'S EQUITYFor the Years Ended December 31, 2019, 2018, and 2017 Member's Equity (In Thousands) Balance at December 31, 2016$1,094,791Net income110,032Common equity distributions(26,000)Preferred stock dividends(953)Balance at December 31, 2017$1,177,870Net income126,078Common equity distributions(10,000)Preferred stock dividends(834)Other(888)Balance at December 31, 2018$1,292,226Net income119,925Capital contribution from parent130,000Balance at December 31, 2019$1,542,151 See Notes to Financial Statements. 368 Table of ContentsENTERGY MISSISSIPPI, LLCSELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 2019 2018 2017 2016 2015 (In Thousands) Operating revenues$1,323,043 $1,335,112 $1,198,229 $1,094,649 $1,396,985Net income$119,925 $126,078 $110,032 $109,184 $92,708Total assets$4,674,744 $3,946,804 $3,879,375 $3,602,140 $3,477,407Long-term obligations (a)$1,614,129 $1,175,750 $1,290,503 $1,141,924 $972,058 (a) Includes long-term debt (excluding currently maturing debt), non-current capital lease obligations, and preferred stock without sinking fund. 2019 2018 2017 2016 2015 (Dollars In Millions) Electric Operating Revenues: Residential$562 $579 $502 $459 $565Commercial444 462 423 374 465Industrial165 175 159 134 164Governmental44 44 41 38 47Total billed retail1,215 1,260 1,125 1,005 1,241Sales for resale: Associated companies— 1 — 1 75Non-associated companies39 25 18 30 10Other69 49 55 59 71Total$1,323 $1,335 $1,198 $1,095 $1,397 Billed Electric Energy Sales (GWh): Residential5,659 5,829 5,308 5,617 5,661Commercial4,698 4,865 4,783 4,894 4,913Industrial2,443 2,559 2,536 2,493 2,283Governmental436 438 421 439 433Total retail13,236 13,691 13,048 13,443 13,290Sales for resale: Associated companies— — — — 1,419Non-associated companies1,776 1,060 857 1,021 261Total15,012 14,751 13,905 14,464 14,970369 Table of ContentsENTERGY NEW ORLEANS, LLC AND SUBSIDIARIESMANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSISResults of Operations2019 Compared to 2018Net IncomeNet income decreased $0.5 million primarily due to lower retail electric price and a higher effective income tax rate, substantiallyoffset by higher other income and lower other operation and maintenance expenses.Operating RevenuesFollowing is an analysis of the change in operating revenues comparing 2019 to 2018. Amount (In Millions) 2018 operating revenues$717.4Fuel, rider, and other revenues that do not significantlyaffect net income(37.4)Retail electric price(5.5)Volume/weather1.8Return of unprotected excess accumulated deferredincome taxes to customers9.92019 operating revenues$686.2 Entergy New Orleans’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costssuch that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and otherrevenues that do not significantly affect net income” includes the revenue variance associated with these items.The retail electric price variance is primarily due to a provision for rate refund recorded in fourth quarter 2019 as a result of the 2018combined rate case resolution approved by the City Council. See Note 2 to the financial statements for further discussion of the rate caseresolution.The volume/weather variance is primarily due to an increase in usage during the unbilled sales period.The return of unprotected excess accumulated deferred income taxes to customers variance is due to a decrease in the return ofunprotected excess accumulated deferred income taxes through the fuel adjustment clause. In 2019, $2.1 million was returned to customersas compared to $12 million in 2018. There is no effect on net income as the reduction in operating revenues in each period is offset by areduction in income tax expense. See Note 2 to the financial statements for discussion of regulatory activity regarding the Tax Cuts and JobsAct. Other Income Statement VariancesOther operation and maintenance expenses decreased primarily due to:•a decrease of $9.2 million as a result of the deferral in 2019 of 2018 costs related to the rate case and a system conversion for Algierscustomers as a result of the 2018 combined rate case resolution approved by the City370 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisCouncil. See Note 2 to the financial statements for further discussion of the rate case resolution; and•a decrease of $2.9 million in distribution expenses primarily due to lower contract labor costs.The decrease was partially offset by:•an increase of $2.9 million in spending on initiatives to explore new customer products and services;•an increase of $2.8 million in information technology costs primarily due to higher software maintenance costs and higher contractcosts;•an increase of $2 million in customer service costs primarily due to higher labor costs, including contract labor; and•an increase of $1.8 million in energy efficiency costs. Other income increased primarily due to:•an increase in allowance for equity funds used during construction resulting from higher construction work in progress in 2019,including the New Orleans Power Station project; and•the accrual in fourth quarter 2018 of a $5 million settlement offer in the New Orleans Power Station show cause proceeding. See“Liquidity and Capital Resources - Uses of Capital - New Orleans Power Station” below for discussion of the New Orleans PowerStation proceedings.The effective income tax rates were 0.4% for 2019 and (4.8%) for 2018. The differences in the effective income tax rates versus thefederal statutory rate of 21% for 2019 and 2018 were primarily due to the amortization of excess accumulated deferred income taxes. SeeNote 3 to the financial statements for a reconciliation of the federal statutory rate of 21% to the effective income tax rates.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Results of Operations” in Entergy New Orleans’sAnnual Report on Form 10-K for the year ended December 31, 2018 for discussion of results of operations for 2018 compared to 2017.Income Tax LegislationSee the “Income Tax Legislation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion andAnalysis for discussion of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017. Note 3 to the financialstatements contains additional discussion of the effect of the Act on 2017, 2018, and 2019 results of operations and financial position, theprovisions of the Act, and the uncertainties associated with accounting for the Act, and Note 2 to the financial statements discusses theregulatory proceedings that have considered the effects of the Act.371 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisLiquidity and Capital ResourcesCash FlowCash flows for the years ended December 31, 2019, 2018, and 2017 were as follows: 2019 2018 2017 (In Thousands)Cash and cash equivalents at beginning of period$19,677 $32,741 $103,068 Net cash provided by (used in): Operating activities115,604 171,778 127,797Investing activities(204,310) (207,616) (109,500)Financing activities75,046 22,774 (88,624)Net decrease in cash and cash equivalents(13,660)(13,064)(70,327) Cash and cash equivalents at end of period$6,017$19,677$32,7412019 Compared to 2018Operating ActivitiesNet cash flow provided by operating activities decreased $56.2 million in 2019 primarily due to a decrease of $34.5 million in 2019of income tax refunds and the timing of collection of receivables from customers. Entergy New Orleans had income tax refunds in 2019 and2018 in accordance with an intercompany income tax allocation agreement. The income tax refunds resulted from the utilization of EntergyNew Orleans’s net operating loss.Investing ActivitiesNet cash flow used in investing activities decreased $3.3 million in 2019 primarily due to money pool activity. The decrease wassubstantially offset by:•an increase of $15.6 million in transmission construction expenditures primarily due to a higher scope of work performed in 2019 ascompared to 2018, including investment in Entergy New Orleans’s system reliability and infrastructure; and•an increase of $10.7 million in distribution construction expenditures primarily due to investment in the reliability and infrastructureof Entergy New Orleans’s distribution system, including increased spending on advanced metering infrastructure.Decreases in Entergy New Orleans’s receivable from the money pool are a source of cash flow, and Entergy New Orleans’sreceivable from the money pool decreased by $16.8 million in 2019 compared to increasing by $9.3 million in 2018. The money pool is aninter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings. Financing ActivitiesNet cash flow provided by financing activities increased $52.3 million primarily due to:•proceeds from a $70 million 3.0% unsecured term loan due May 2022 in December 2019;•$23.8 million in common equity distributions in 2018. There were no common equity distributions made in 2019 in anticipation ofplanned capital investments; and372 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and Analysis•net borrowings of $20 million in 2019 on Entergy New Orleans’s credit facility.The increase was partially offset by the issuance of $60 million of 4.51% Series mortgage bonds in September 2018.See Note 5 to the financial statements for details on long-term debt.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Cash Flow” inEntergy New Orleans’s Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of operating, investing, andfinancing cash flow activities for 2018 compared to 2017.Capital StructureEntergy New Orleans’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio is primarily dueto the issuance of long-term debt in 2019. December 31, 2019 December 31, 2018Debt to capital53.1% 52.1%Effect of excluding securitization bonds(2.4%) (3.5%)Debt to capital, excluding securitization bonds (a)50.7% 48.6%Effect of subtracting cash(0.3%) (1.2%)Net debt to net capital, excluding securitization bonds (a)50.4% 47.4%(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. Netcapital consists of capital less cash and cash equivalents. Entergy New Orleans uses the debt to capital ratios excluding securitization bondsin analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy NewOrleans’s financial condition because the securitization bonds are non-recourse to Entergy New Orleans, as more fully described in Note 5 tothe financial statements. Entergy New Orleans also uses the net debt to net capital ratio excluding securitization bonds in analyzing itsfinancial condition and believes it provides useful information to its investors and creditors in evaluating Entergy New Orleans’s financialcondition because net debt indicates Entergy New Orleans’s outstanding debt position that could not be readily satisfied by cash and cashequivalents on hand.Entergy New Orleans seeks to optimize its capital structure in accordance with its regulatory requirements and to control its cost ofcapital while also maintaining equity capitalization at a level consistent with investment-grade debt ratings. To the extent that operating cashflows are in excess of planned investments, cash may be used to reduce outstanding debt or may be paid as a distribution, or both, inappropriate amounts to maintain the capital structure. To the extent that operating cash flows are insufficient to support planned investments,Entergy New Orleans may issue incremental debt or reduce distributions, or both, to maintain its capital structure. In addition, in certaininfrequent circumstances, such as large transactions that would materially alter the capital structure if financed entirely with debt andreducing distributions, Entergy New Orleans may receive equity contributions to maintain its capital structure.373 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisUses of CapitalEntergy New Orleans requires capital resources for:•construction and other capital investments;•working capital purposes, including the financing of fuel and purchased power costs;•debt maturities or retirements; and•distribution and interest payments.Following are the amounts of Entergy New Orleans’s planned construction and other capital investments. 2020 2021 2022 (In Millions)Planned construction and capital investment: Generation$70 $15 $15Transmission10 20 25Distribution90 80 40Utility Support65 40 70Total$235 $155 $150Following are the amounts of Entergy New Orleans’s existing debt and lease obligations (includes estimated interest payments) andother purchase obligations. 2020 2021-2022 2023-2024 After 2024 Total (In Millions)Long-term debt (a)$62 $159 $153 $612 $986Operating leases (b)$1 $2 $1 $— $4Finance leases (b)$1 $1 $1 $1 $4Purchase obligations (c)$224 $459 $448 $3,602 $4,733(a)Includes estimated interest payments. Long-term debt is discussed in Note 5 to the financial statements.(b)Lease obligations are discussed in Note 10 to the financial statements.(c)Purchase obligations represent the minimum purchase obligation or cancellation charge for contractual obligations to purchase goodsor services. For Entergy New Orleans, almost all of the total consists of unconditional fuel and purchased power obligations,including its obligations under the Unit Power Sales Agreement, which is discussed in Note 8 to the financial statements.In addition to the contractual obligations given above, Entergy New Orleans currently expects to contribute approximately $3.2 million to itsqualified pension plan and approximately $162 thousand to other postretirement health care and life insurance plans in 2020, although the2020 required pension contributions will be known with more certainty when the January 1, 2020 valuations are completed, which isexpected by April 1, 2020. See “Critical Accounting Estimates - Qualified Pension and Other Postretirement Benefits” below for adiscussion of qualified pension and other postretirement benefits funding.Also in addition to the contractual obligations, Entergy New Orleans has $271.3 million of unrecognized tax benefits and interest netof unused tax attributes and payments for which the timing of payments beyond 12 months cannot be reasonably estimated due touncertainties in the timing of effective settlement of tax positions. See Note 3 to the financial statements for additional information regardingunrecognized tax benefits.In addition to routine capital spending to maintain operations, the planned capital investment estimate for Entergy New Orleansincludes specific investments such as the New Orleans Power Station and New Orleans Solar374 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisStation; transmission projects to enhance reliability, reduce congestion, and enable economic growth; distribution spending to enhancereliability and improve service to customers, including advanced meters and related investments; system improvements; software andsecurity; and other investments. Estimated capital expenditures are subject to periodic review and modification and may vary based on theongoing effects of regulatory constraints and requirements, environmental compliance, business opportunities, market volatility, economictrends, business restructuring, changes in project plans, and the ability to access capital. Management provides more information on long-term debt and preferred stock maturities in Notes 5 and 6 to the financial statements.As a wholly-owned subsidiary of Entergy Utility Holding Company, LLC, Entergy New Orleans pays distributions from its earningsat a percentage determined monthly.New Orleans Power Station In March 2018 the City Council adopted a resolution approving construction of the New Orleans Power Station, a 128 MW unitcomposed of natural gas-fired reciprocating engines, and a related cost recovery plan. The cost estimate for the plant, which will be located atthe site of the Michoud generating facility that was retired in May 2016, is $210 million. Entergy New Orleans had previously filed anapplication with the City Council seeking a public interest determination and authorization to construct a 226 MW advanced combustionturbine power station. In January 2017 several intervenors filed testimony opposing the construction of the New Orleans Power Station onvarious grounds. In July 2017, Entergy New Orleans submitted a supplemental and amending application to the City Council seekingapproval to construct either the originally proposed 226 MW advanced combustion turbine power station, or alternatively, the 128 MW powerstation. In addition, the application renewed the commitment to pursue up to 100 MW of renewable resources to serve New Orleans.In April 2018 intervenors opposing the construction of the New Orleans Power Station filed with the City Council a request forrehearing, which was subsequently denied, and a petition for judicial review of the City Council’s decision, and also filed a lawsuitchallenging the City Council’s approval based on Louisiana’s open meeting law. In May 2018 the City Council announced that it wouldinitiate an investigation into allegations that Entergy New Orleans, Entergy, or some other entity paid or participated in paying certainattendees and speakers in support of the New Orleans Power Station to attend or speak at certain meetings organized by the City Council. InOctober 2018 investigators for the City Council released their report, concluding that individuals were paid to attend or speak in support ofthe New Orleans Power Station and that Entergy New Orleans “knew or should have known that such conduct occurred or reasonably mightoccur.” The City Council issued a resolution requiring Entergy New Orleans to show cause why it should not be fined $5 million as a resultof the findings in the report. In November 2018, Entergy New Orleans submitted its response to the show cause resolution, disagreeing withcertain characterizations and omissions of fact in the report and asserting that the City Council could not legally impose the proposed fine. Simultaneous with the filing of its response to the show cause resolution, Entergy New Orleans sent a letter to the City Council re-assertingthat the City Council’s imposition of the proposed fine would be unlawful, but acknowledging that the actions of a subcontractor, which wasretained by an Entergy New Orleans contractor without the knowledge or contractually-required consent of Entergy New Orleans, werecontrary to Entergy’s values. In that letter, Entergy New Orleans offered to donate $5 million to the City Council to resolve the show causeproceeding. In January 2019, Entergy New Orleans submitted a new settlement proposal to the City Council. The proposal retains thecomponents of the first offer but adds to it a commitment to make reasonable efforts to limit the costs of the project to the $210 million costestimate with advanced notification of anticipated cost overruns, additional reporting requirements for cost and environmental items, and acommitment regarding reliability investment and to work with the New Orleans Sewerage and Water Board to provide a reliable source ofpower. In February 2019 the City Council approved a resolution approving the settlement proposal and allowing the construction of the NewOrleans Power Station to commence.Also in February 2019 certain intervenors in the City Council proceeding on the New Orleans Power Station filed suit in Louisianastate court challenging the Louisiana Department of Environmental Quality’s issuance of the New Orleans Power Station’s air permit.Entergy New Orleans intervened in that lawsuit and, along with the Louisiana375 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisDepartment of Environmental Quality, filed exceptions seeking dismissal of the lawsuit. In June 2019 the state court judge sustained theexceptions and dismissed the plaintiffs’ petition with prejudice.Also in June 2019, a state court judge in New Orleans affirmed the City Council’s approval of the New Orleans Power Station anddismissed the petition for judicial review that had been filed in April 2018. The petitioners have filed an appeal of that ruling. Also in June2019, with regard to the lawsuit challenging the City Council’s decision on the basis of a violation of the open meetings law, the same statecourt judge in New Orleans ruled that there was a violation of the open meetings law at the February 2018 meeting of the City Council’sUtility Committee at which that Committee considered the New Orleans Power Station approval, and further ruled that, although there wasno 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 Orleanseach filed a suspensive appeal of the open meetings law ruling. A suspensive appeal suspends the effect of the judgment in the open meetingslaw 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 openmeetings law appeal and in the judicial review appeal occurred in November and December 2019 and oral argument in both cases was heardin January 2020. In February 2020 the state appellate court reversed the lower court’s ruling that the City Council’s approval of the NewOrleans Power Station was void due to a violation of the open meetings law at the City Council’s Utility Committee meeting in February2018. The state appellate court ruled that there was no violation of the open meetings law at the full City Council meeting in March 2018and that the lower court erred in voiding the City Council resolution approving the New Orleans Power Station. The appellate court’sdecision on the appeal of the judicial review decision that affirmed the City Council’s approval of the New Orleans Power Station as in thepublic interest is still pending. Construction of the plant is on schedule, with commercial operation expected in mid-2020.Gas Infrastructure Rebuild PlanIn September 2016, Entergy New Orleans submitted to the City Council a request for authorization for Entergy New Orleans toproceed with annual incremental capital funding of $12.5 million for its gas infrastructure rebuild plan, which would replace all of EntergyNew Orleans’s low pressure cast iron, steel, and vintage plastic pipe over a ten-year period commencing in 2017. Entergy New Orleans alsoproposed that recovery of the investment to fund its gas infrastructure replacement plan be determined in connection with its next base ratecase. The City Council authorized Entergy New Orleans to proceed with its replacement plans and established a schedule for proceedings inadvance of the rate case intended to provide an opportunity for evaluation of the gas infrastructure plan that would best serve the publicinterest and the effect on customers of the approval of any such plan. In the course of that proceeding, the City Council’s advisors submittedpre-filed testimony recommending that Entergy New Orleans be allowed to continue with its condition-based approach to gas pipelinereplacement to replace approximately 238 miles of low pressure pipe at a rate of approximately 25 miles per year. The City Council’sadvisors also recommended that Entergy New Orleans be required to adhere to certain reporting requirements and recognized the need toaddress the sustained level of investment in gas infrastructure on customer bills. In September 2017, Entergy New Orleans filed rebuttaltestimony suggesting that its recovery of future investment and customer effects would be addressed in the rate case that Entergy NewOrleans was required to file in July 2018. The procedural schedule was suspended in order to allow for resolution in the rate case proceeding.As a result of the rate case, the City Council approved the planned gas rebuild expenditures through 2019, but rejected Entergy NewOrleans’s proposed gas infrastructure rider. Entergy New Orleans is required to submit a gas infrastructure rebuild plan to the City Council inMarch 2020 and to convene a working group to explore appropriate cost mitigation measures.RenewablesIn July 2018, Entergy New Orleans filed an application with the City Council requesting approval of three utility-scale solar projectstotaling 90 MW. If approved, the resource additions will allow Entergy New Orleans to make significant progress towards meeting itsvoluntary commitment to the City Council to add up to 100 MW of renewable energy resources. The three projects include constructing aself-build solar plant in Orleans Parish with an376 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and Analysisoutput of 20 MW, acquiring a 50 MW solar facility in Washington Parish through a build-own-transfer acquisition, and procuring 20 MW ofsolar power from a project to be built in St. James Parish through a power purchase agreement. In December 2018 the City Council advisorsrequested that Entergy New Orleans pursue alternative deal structures for the Washington Parish project and attempt to reduce costs for the20 MW New Orleans Solar Station. As a result of settlement discussions, in March 2019, Entergy New Orleans revised its application toconvert the build-own transfer acquisition of the 50 MW facility in Washington Parish to a power purchase agreement. In June 2019 theparties to the proceeding executed a stipulated settlement term sheet, which recommends that the City Council approve Entergy NewOrleans’s revised application as to all three projects. In July 2019 the City Council approved the stipulated settlement.Sources of CapitalEntergy New Orleans’s sources to meet its capital requirements include:•internally generated funds;•cash on hand;•debt and preferred membership interest issuances;•capital contributions; and•bank financing under new or existing facilities.Entergy New Orleans may refinance, redeem, or otherwise retire debt prior to maturity, to the extent market conditions and interestrates are favorable.All debt and common and preferred membership interest issuances by Entergy New Orleans require prior regulatory approval. Debtissuances are also subject to issuance tests set forth in its bond indentures and other agreements. Entergy New Orleans has sufficient capacityunder these tests to meet its foreseeable capital needs.Entergy New Orleans’s receivables from the money pool were as follows as of December 31 for each of the following years.2019 2018 2017 2016(In Thousands)$5,191 $22,016 $12,723 $14,215See Note 4 to the financial statements 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 facilityincludes fronting commitments for the issuance of letters of credit against $10 million of the borrowing capacity of the facility. As ofDecember 31, 2019, there were $20 million of cash borrowings and a $0.8 million letter 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. Asof December 31, 2019, a $5.6 million letter of credit was outstanding under Entergy New Orleans’s letter of credit facility. See Note 4 to thefinancial statements for additional discussion of the credit facilities.Entergy New Orleans obtained authorization from the FERC through October 2021 for short-term borrowings not to exceed anaggregate amount of $150 million at any time outstanding and long-term borrowings and securities issuances. See Note 4 to the financialstatements for further discussion of Entergy New Orleans’s short-term borrowing limits. The long-term securities issuances of Entergy NewOrleans are limited to amounts authorized not only by the FERC, but also by the City Council, and the current City Council authorizationextends through October 2021.377 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisState and Local Rate RegulationThe rates that Entergy New Orleans charges for electricity and natural gas significantly influence its financial position, results ofoperations, and liquidity. Entergy New Orleans is regulated and the rates charged to its customers are determined in regulatory proceedings.A governmental agency, the City Council, is primarily responsible for approval of the rates charged to customers.Retail RatesAs a provision of the settlement agreement approved by the City Council in May 2015 providing for the transfer from EntergyLouisiana to Entergy New Orleans of certain assets that supported the provision of service to Entergy Louisiana’s customers in Algiers, itwas agreed that, with limited exceptions, no action may be taken with respect to Entergy New Orleans’s base rates until rates areimplemented from a base rate case that must be filed for its electric and gas operations in 2018. This provision eliminated the formula rateplan applicable to Algiers operations. The limited exceptions included continued implementation of the then-remaining two years of the four-year phased-in rate increase for the Algiers area and certain exceptional cost increases or decreases in the base revenue requirement. Anadditional provision of the settlement agreement allowed for continued recovery of the revenue requirement associated with the capacity andenergy from Ninemile 6 received by Entergy New Orleans under a power purchase agreement with Entergy Louisiana (Algiers PPA). Thesettlement authorized Entergy New Orleans to recover the remaining revenue requirement related to the Algiers PPA through base ratescharged to Algiers customers. The settlement also provided for continued implementation of the Algiers MISO recovery rider.A 2008 rate case settlement included $3.1 million per year in electric rates to fund the Energy Smart energy efficiencyprograms. The rate settlement provided an incentive for Entergy New Orleans to meet or exceed energy savings targets set by the CityCouncil and provided a mechanism for Entergy New Orleans to recover lost contribution to fixed costs associated with the energy savingsgenerated from the energy efficiency programs. In January 2015 the City Council approved funding for the Energy Smart program fromApril 2015 through March 2017 using the remainder of the approximately $12.8 million of 2014 rough production cost equalization funds,with any remaining costs being recovered through the fuel adjustment clause. This funding methodology was modified in November 2015when the City Council directed Entergy New Orleans to use a combination of guaranteed customer savings related to a prior agreement withthe City Council and rough production cost equalization funds to cover program costs prior to recovering any costs through the fueladjustment clause. In April 2017 the City Council approved an implementation plan for the Energy Smart program from April 2017 throughDecember 2019. The City Council directed that the $11.8 million balance reported for Energy Smart funds be used to continue funding theprogram for Entergy New Orleans’s legacy customers and that the Energy Smart Algiers program continue to be funded through the Algiersfuel adjustment clause, until additional customer funding is required for the legacy customers. In September 2017, Entergy New Orleans fileda supplemental plan and proposed several options for an interim cost recovery mechanism necessary to recover program costs during theperiod between when existing funds directed to Energy Smart programs are depleted and when new rates from the 2018 combined rate case,which includes a cost recovery mechanism for Energy Smart funding, take effect. In December 2017 the City Council approved an energyefficiency cost recovery rider as an interim funding mechanism for Energy Smart, subject to verification that no additional funding sourcesexist. In June 2018 the City Council also approved a resolution recommending that Entergy New Orleans allocate approximately $13.5million of benefits resulting from the Tax Act to Energy Smart. In December 2019, Entergy New Orleans filed an application with the CityCouncil seeking approval of an implementation plan for the Energy Smart program from April 2020 through December 2022. Entergy NewOrleans proposed to recover the costs of the program through mechanisms previously approved by the City Council or through the energyefficiency cost recovery rider, which was approved in the 2018 combined rate case resolution. In January 2020 the City Council’s advisorsrecommended that the City Council allow Entergy New Orleans to earn a utility performance incentive of 7% of Energy Smart costs for eachyear in which Entergy New Orleans achieves 100% of the City Council’s savings targets for Energy Smart. The City Council is expected todecide on the matter in February 2020.378 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisIn September 2018, Entergy New Orleans filed an electric and gas base rate case with the City Council. The filing requested a 10.5%return on equity for electric operations with opportunity to earn a 10.75% return on equity through a performance adder provision of theelectric formula rate plan in subsequent years under a formula rate plan and requested a 10.75% return on equity for gas operations. Theproposed electric rates in the revised filing reflect a net reduction of $20.3 million. The reduction in electric rates includes a base rate increaseof $135.2 million, of which $131.5 million is associated with moving costs currently collected through fuel and other riders into base rates,plus a request for an advanced metering surcharge to recover $7.1 million associated with advanced metering infrastructure, offset by a netdecrease of $31.1 million related to fuel and other riders. The filing also included a proposed gas rate decrease of $142 thousand. EntergyNew Orleans’s rates reflected the inclusion of federal income tax reductions due to the Tax Act and the provisions of a previously-approvedagreement in principle determining how the benefits of the Tax Act would flow. Entergy New Orleans included cost of service studies forelectric and gas operations for the twelve months ended December 31, 2017 and the projected twelve months ending December 31, 2018. Inaddition, Entergy New Orleans included capital additions expected to be placed into service for the period through December 31, 2019.Entergy New Orleans based its request for a change in rates on the projected twelve months ending December 31, 2018.The filing’s major provisions included: (1) a new electric rate structure, which realigns the revenue requirement associated withcapacity and long-term service agreement expense from certain existing riders to base revenue, provides for the recovery of the cost ofadvanced metering infrastructure, and partially blends rates for Entergy New Orleans’s customers residing in Algiers with customers residingin the remainder of Orleans Parish through a three-year phase-in; (2) contemporaneous cost recovery riders for investments in energyefficiency/demand response, incremental changes in capacity/long-term service agreement costs, grid modernization investment, and gasinfrastructure replacement investment; and (3) formula rate plans for both electric and gas operations. In February 2019 the City Council’sadvisors and several intervenors filed testimony in response to Entergy New Orleans’s application. The City Council’s advisorsrecommended, among other things, overall rate reductions of approximately $33 million in electric rates and $3.8 million in gas rates. Certainintervenors recommended overall rate reductions of up to approximately $49 million in electric rates and $5 million in gas rates. Anevidentiary hearing was held in June 2019, and the record and post-hearing briefs were submitted in July 2019.In October 2019 the City Council’s Utility Committee approved a resolution for a change in electric and gas rates for considerationby the full City Council that included a 9.35% return on common equity, an equity ratio of the lesser of 50% or Entergy New Orleans’s actualequity ratio, and a total reduction in revenues that Entergy New Orleans initially estimated to be approximately $39 million ($36 millionelectric; $3 million gas). At its November 7, 2019 meeting, the full City Council approved the resolution that had previously been approvedby the City Council’s Utility Committee. Based on the approved resolution, in the fourth quarter 2019 Entergy New Orleans recorded anaccrual of $10 million that reflects the estimate of the revenue billed in 2019 to be refunded to customers in 2020 based on an August 2019effective date for the rate decrease. Entergy New Orleans also recorded a total of $12 million in regulatory assets for rate case costs andinformation technology costs associated with integrating Algiers customers with Entergy New Orleans’s legacy system and records. EntergyNew Orleans also transferred $10 million of retired general plant costs to a regulatory asset to be recovered over a 20-year period.The resolution directed Entergy New Orleans to submit a compliance filing within 30 days of the date of the resolution to facilitatethe eventual implementation of rates, including all necessary calculations and conforming rate schedules and riders. The electric formula rateplan rider includes, among other things, 1) a provision for forward-looking adjustments to include known and measurable changes realized upto 12 months after the evaluation period; 2) a decoupling mechanism; and 3) recognition that Entergy New Orleans is authorized to make anin-service adjustment to the formula rate plan to include the non-fuel cost of the New Orleans Power Station in rates, unless the two pendingappeals in the New Orleans Power Station proceeding have not concluded. Under this circumstance, Entergy New Orleans shall be permittedto defer the New Orleans Power Station non-fuel costs, including the cost of capital, until Entergy New Orleans commences non-fuel costrecovery. After taking into account the requirements for submission of the compliance filing, the total annual revenue requirement reductionrequired by the resolution was refined to approximately $45 million ($42 million electric, including $29 million in rider reductions; $3million gas). In January379 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and Analysis2020 the City Council’s advisors found that the rates calculated by Entergy New Orleans and reflected in the December 2019 compliancefiling should be implemented, except with respect to the City Council-approved energy efficiency cost recovery rider, which rider calculationshould take into account events to be determined by the City Council in the future. Also in response to the resolution, Entergy New Orleansfiled timely a petition for appeal and judicial review and for stay of or injunctive relief alleging that the resolution is unlawful in failing toproduce just and reasonable rates. Based on the general acceptance of Entergy New Orleans’s compliance filing, however, during thependency of its appeal Entergy New Orleans expects to implement the compliance filing rates in April 2020. A hearing on the requestedinjunction was scheduled in Civil District Court for February 2020, but by joint motion of the City Council and Entergy New Orleans, theCivil District Court issued an order for a limited remand to the City Council to consider a potential agreement in principle/stipulation at itsFebruary 20, 2020 meeting. On February 17, 2020, Entergy New Orleans filed with the City Council an agreement in principle betweenEntergy New Orleans and the City Council’s advisors. On February 20, 2020, the full City Council voted to approve the proposed agreementin principle and issued a resolution modifying the required treatment of certain accumulated deferred income taxes. As a result of theagreement in principle, the total annual revenue requirement reduction will be approximately $45 million ($42 million electric, including $29million in rider reductions; and $3 million gas). As a result, Entergy New Orleans will fully implement new rates by April 2020. The meritsof the appeal will be subject to a separate procedural schedule issued by the Civil District Court.Advanced Metering Infrastructure (AMI)In October 2016, Entergy New Orleans filed an application seeking a finding from the City Council that Entergy New Orleans’sdeployment of advanced electric and gas metering infrastructure is in the public interest. Entergy New Orleans proposed to deploy advancedmeters that enable two-way data communication; design and build a secure and reliable network to support such communications; andimplement support systems. AMI is intended to serve as the foundation of Entergy New Orleans’s modernized power grid. The filingincluded an estimate of implementation costs for AMI of $75 million and identified a number of quantified and unquantified benefits. Entergy New Orleans proposed a 15-year depreciable life for the new advanced meters. Deployment of the information technologyinfrastructure began in 2017 and deployment of the communications network began in 2018. Entergy New Orleans proposed to recover thecost of AMI through the implementation of a customer charge, net of certain benefits, phased in over the period 2019 through 2022. The CityCouncil’s advisors filed testimony in May 2017 recommending the adoption of AMI subject to certain modifications, including the denial ofEntergy New Orleans’s proposed customer charge as a cost recovery mechanism. In January 2018 a settlement was reached between the CityCouncil’s advisors and Entergy New Orleans. In February 2018 the City Council approved the settlement, which deferred cost recovery tothe 2018 Entergy New Orleans rate case, but also stated that an adjustment for 2018-2019 AMI costs can be filed in the rate case and that, forall subsequent AMI costs, the mechanism to be approved in the 2018 rate case will allow for the timely recovery of such costs. In April 2018the City Council adopted a resolution directing Entergy New Orleans to explore the options for accelerating the deployment of AMI. In June2018 the City Council approved a one-year acceleration of AMI in its service area for an incremental $4.4 million. Entergy New Orleansbegan deployment of AMI during the first quarter of 2019 and expects to complete deployment by the end of 2020. Entergy New Orleanswill recover the undepreciated balance of its existing meters through a regulatory asset to be amortized on a straight-line basis over 12 years,as approved by the City Council.Internal RestructuringIn July 2016, Entergy New Orleans filed an application with the City Council seeking authorization to undertake a restructuring thatwould result in the transfer of substantially all of the assets and operations of Entergy New Orleans, Inc. to a new entity, which wouldultimately be owned by an existing Entergy subsidiary holding company. In May 2017 the City Council adopted a resolution approving theproposed internal restructuring pursuant to an agreement in principle with the City Council advisors and certain intervenors. Pursuant to theagreement in principle, Entergy New Orleans would credit retail customers $10 million in 2017, $1.4 million in the first quarter of the yearafter the transaction closes, and $117,500 each month in the second year after the transaction closes until such time as new base rates go intoeffect as a result of the then-anticipated 2018 base rate case. Entergy New Orleans began crediting retail customers380 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and Analysisin June 2017. In June 2017 the FERC approved the transaction and, pursuant to the agreement in principle, Entergy New Orleans will provideadditional credits to retail customers of $5 million in each of the years 2018, 2019, and 2020.In November 2017, Entergy New Orleans undertook a multi-step restructuring, including the following:•Entergy New Orleans, Inc. redeemed its outstanding preferred stock at a price of approximately $21 million, which included a callpremium of approximately $819,000, plus any accumulated and unpaid dividends.•Entergy New Orleans, Inc. converted from a Louisiana corporation to a Texas corporation.•Under the Texas Business Organizations Code (TXBOC), Entergy New Orleans, Inc. allocated substantially all of its assets to a newsubsidiary, Entergy New Orleans Power, LLC, a Texas limited liability company (Entergy New Orleans Power), and Entergy NewOrleans Power assumed substantially all of the liabilities of Entergy New Orleans, Inc. in a transaction regarded as a merger underthe TXBOC. Entergy New Orleans, Inc. remained in existence and held the membership interests in Entergy New Orleans Power.•Entergy New Orleans, Inc. contributed the membership interests in Entergy New Orleans Power to an affiliate (Entergy UtilityHolding Company, LLC, a Texas limited liability company and subsidiary of Entergy Corporation). As a result of the contribution,Entergy New Orleans Power is a wholly-owned subsidiary of Entergy Utility Holding Company, LLC.In December 2017, Entergy New Orleans, Inc. changed its name to Entergy Utility Group, Inc., and Entergy New Orleans Power thenchanged its name to Entergy New Orleans, LLC. Entergy New Orleans, LLC holds substantially all of the assets, and has assumedsubstantially all of the liabilities, of Entergy New Orleans, Inc. The restructuring was accounted for as a transaction between entities undercommon control.Fuel and Purchased Power Cost RecoveryEntergy New Orleans’s electric rate schedules include a fuel adjustment tariff designed to reflect no more than targeted fuel andpurchased power costs, adjusted by a surcharge or credit for deferred fuel expense arising from the monthly reconciliation of actual fuel andpurchased power costs incurred with fuel cost revenues billed to customers, including carrying charges. Entergy New Orleans’s gas rate schedules include a purchased gas adjustment to reflect estimated gas costs for the billing month,adjusted by a surcharge or credit similar to that included in the electric fuel adjustment clause, including carrying charges.Show Cause OrderIn July 2016 the City Council approved the issuance of a show cause order, which directed Entergy New Orleans to make a filing onor before September 29, 2016 to demonstrate the reasonableness of its actions or positions with regard to certain issues in four existingdockets that relate to Entergy New Orleans’s: (i) storm hardening proposal; (ii) 2015 integrated resource plan; (iii) gas infrastructure rebuildproposal; and (iv) proposed sizing of the New Orleans Power Station and its community outreach prior to the filing. In September 2016,Entergy New Orleans filed its response to the City Council’s show cause order. The City Council has not established any further proceduralschedule with regard to this proceeding.381 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisReliability InvestigationIn August 2017 the City Council established a docket to investigate the reliability of the Entergy New Orleans distribution system andto consider implementing certain reliability standards and possible financial penalties for not meeting any such standards. In April 2018 theCity Council adopted a resolution directing Entergy New Orleans to demonstrate that it has been prudent in the management and maintenanceof the reliability of its distribution system. The resolution also called for Entergy New Orleans to file a revised reliability plan addressing thecurrent state of its distribution system and proposing remedial measures for increasing reliability. In June 2018, Entergy New Orleans filed itsresponse to the City Council’s resolution regarding the prudence of its management and maintenance of the reliability of its distributionsystem. In July 2018, Entergy New Orleans filed its revised reliability plan discussing the various reliability programs that it uses to improvedistribution system reliability and discussing generally the positive effect that advanced meter deployment and grid modernization can haveon future reliability. Entergy New Orleans has retained a national consulting firm with expertise in distribution system reliability to conduct areview of Entergy New Orleans’s distribution system reliability-related practices and procedures and to provide recommendations forimproving distribution system reliability. The report was filed with the City Council in October 2018. The City Council also approved aresolution that opens a prudence investigation into whether Entergy New Orleans was imprudent for not acting sooner to address outages inNew Orleans and whether fines should be imposed. In January 2019, Entergy New Orleans filed testimony in response to the prudenceinvestigation and asserting that it had been prudent in managing system reliability. In April 2019 the City Council advisors filed commentsand testimony asserting that Entergy New Orleans did not act prudently in maintaining and improving its distribution system reliability inrecent years and recommending that a financial penalty in the range of $1.5 million to $2 million should be assessed. Entergy New Orleansdisagrees with the recommendation and submitted rebuttal testimony and rebuttal comments in June 2019. In November 2019 the CityCouncil passed a resolution that penalized Entergy New Orleans $1 million for alleged imprudence in the maintenance of its distributionsystem. In December 2019, Entergy New Orleans filed suit in Louisiana state court seeking judicial review of the City Council’s resolution.Renewable Portfolio Standard RulemakingIn March 2019 the City Council initiated a rulemaking proceeding to consider whether to establish a renewable portfolio standard.The rulemaking will consider, among other issues, whether to adopt a renewable portfolio standard, whether such standard should bevoluntary or mandatory, what kinds of technologies should qualify for inclusion in the rules, what level, if any, of renewable generationshould be required, and whether penalties are an appropriate component of the proposed rules. Parties to the proceeding submitted initialcomments in June 2019 and reply comments in July 2019. Entergy New Orleans recommends that the City Council adopt a voluntary cleanenergy standard of 70% of generation being clean energy by 2030, as so defined, which, in addition to renewable generation, would includenuclear, beneficial electrification, and demand-side management as compliant technologies. Several other industry leaders, academicresearchers, and environmental advocates filed comments also supporting a clean energy standard. Other parties, including manyrepresentatives of the solar and wind industry, are recommending mandatory, renewables-only requirements of up to 100% renewableresources by 2040. In September 2019 the City Council advisors issued a report and recommendations, which also put forth three alternativerules for comment from the parties. Comments were submitted in October 2019 and replies were filed in November 2019. Further CityCouncil action, including the establishment of additional procedural steps for the rulemaking, is expected in the first quarter of 2020.Federal RegulationSee the “Rate, Cost-recovery, and Other Regulation – Federal Regulation” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis and Note 2 to the financial statements for a discussion of federal regulation. 382 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisNuclear MattersSee the “Nuclear Matters” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for adiscussion of nuclear matters.Environmental RisksEntergy New Orleans’s facilities and operations are subject to regulation by various governmental authorities having jurisdiction overair quality, water quality, control of toxic substances and hazardous solid wastes, and other environmental matters. Management believesthat Entergy New Orleans is in substantial compliance with environmental regulations currently applicable to its facilities and operations,with reference to possible exceptions noted in “Regulation of Entergy’s Business - Environmental Regulation” in Part I, Item 1. Becauseenvironmental regulations are subject to change, future compliance costs cannot be precisely estimated.Critical Accounting EstimatesThe preparation of Entergy New Orleans’s financial statements in conformity with generally accepted accounting principles requiresmanagement to apply appropriate accounting policies and to make estimates and judgments that can have a significant effect on reportedfinancial position, results of operations, and cash flows. Management has identified the following accounting policies and estimates ascritical because they are based on assumptions and measurements that involve a high degree of uncertainty, and there is the potential forfuture changes in the assumptions and measurements that could produce estimates that would have a material impact on the presentation ofEntergy New Orleans’s financial position or results of operations.Utility Regulatory AccountingSee “Utility Regulatory Accounting” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for discussion of accounting for the effects of rate regulation.Impairment of Long-lived Assets and Trust Fund InvestmentsSee “Impairment of Long-lived Assets and Trust Fund Investments” in the “Critical Accounting Estimates” section of EntergyCorporation and Subsidiaries Management’s Financial Discussion and Analysis for discussion of the estimates associated with theimpairment of long-lived assets.Taxation and Uncertain Tax PositionsSee “Taxation and Uncertain Tax Positions” in the “Critical Accounting Estimates” section of Entergy Corporation andSubsidiaries Management’s Financial Discussion and Analysis for further discussion.Qualified Pension and Other Postretirement BenefitsEntergy New Orleans’s qualified pension and other postretirement reported costs, as described in Note 11 to the financial statements,are impacted by numerous factors including the provisions of the plans, changing employee demographics, and various actuarial calculations,assumptions, and accounting mechanisms. See the “Qualified Pension and Other Postretirement Benefits” in the “Critical AccountingEstimates” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for furtherdiscussion. Because of the complexity of these calculations, the long-term nature of these obligations, and the importance of the assumptionsutilized, Entergy’s estimate of these costs is a critical accounting estimate.383 Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and AnalysisCost SensitivityThe following chart reflects the sensitivity of qualified pension cost and qualified projected benefit obligation to changes in certainactuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020 QualifiedPension Cost Impact on 2019 ProjectedQualified Benefit Obligation Increase/(Decrease) Discount rate (0.25%) $334 $5,567Rate of return on plan assets (0.25%) $376 $—Rate of increase in compensation 0.25% $209 $1,118The following chart reflects the sensitivity of postretirement benefit cost and accumulated postretirement benefit obligation tochanges in certain actuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020Postretirement Benefit Cost Impact on 2019 AccumulatedPostretirement BenefitObligation Increase/(Decrease) Discount rate (0.25%) $61 $950Health care cost trend 0.25% $97 $665Each fluctuation above assumes that the other components of the calculation are held constant.Costs and Employer ContributionsTotal qualified pension cost for Entergy New Orleans in 2019 was $5.1 million. Entergy New Orleans anticipates 2020 qualifiedpension cost to be $6 million. Entergy New Orleans contributed $4.6 million to its qualified pension plans in 2019 and estimates 2020pension contributions will be approximately $3.2 million, although the 2020 required pension contributions will be known with morecertainty when the January 1, 2020 valuations are completed, which is expected by April 1, 2020.Total postretirement health care and life insurance benefit income for Entergy New Orleans in 2019 was $3.5 million. Entergy NewOrleans expects 2020 postretirement health care and life insurance benefit income of approximately $4.3 million. Entergy New Orleanscontributed $1.7 million to its other postretirement plans in 2019 and estimates 2020 contributions will be approximately $162 thousand.Other ContingenciesSee “Other Contingencies” in the “Critical Accounting Estimates” section of Entergy Corporation and Subsidiaries Management’sFinancial Discussion and Analysis for a discussion of the estimates associated with environmental, litigation, and other risks.New Accounting PronouncementsSee “New Accounting Pronouncements” section of Note 1 to the financial statements for a discussion of new accountingpronouncements.384 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the member and Board of Directors ofEntergy New Orleans, LLC and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Entergy New Orleans, LLC and Subsidiaries (the “Company”) as ofDecember 31, 2019 and 2018, the related consolidated statements of income, cash flows, and changes in member’s equity (pages 386 through390 and applicable items in pages 49 through 236), for each of the three years in the period ended December 31, 2019, and the related notes(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the threeyears in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s financial statements based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of ouraudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error orfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significantestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits providea reasonable basis for our opinion./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020We have served as the Company’s auditor since 2001.385 Table of ContentsENTERGY NEW ORLEANS, LLC AND SUBSIDIARIESCONSOLIDATED INCOME STATEMENTS For the Years Ended December 31, 2019 2018 2017 (In Thousands) OPERATING REVENUES Electric $594,417 $624,733 $631,744Natural gas 91,806 92,657 84,326TOTAL 686,223 717,390 716,070 OPERATING EXPENSES Operation and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale 105,217 114,787 111,082Purchased power 258,306 270,634 282,178Other operation and maintenance 121,057 124,293 107,977Taxes other than income taxes 55,270 56,141 54,590Depreciation and amortization 56,072 55,930 52,945Other regulatory charges - net 21,616 21,413 10,889TOTAL 617,538 643,198 619,661 OPERATING INCOME 68,685 74,192 96,409 OTHER INCOME Allowance for equity funds used during construction 9,941 5,941 2,418Interest and investment income 428 604 707Miscellaneous - net (6,038) (10,444) (1,269)TOTAL 4,331 (3,899) 1,856 INTEREST EXPENSE Interest expense 24,463 21,772 21,281Allowance for borrowed funds used during construction (4,262) (2,195) (847)TOTAL 20,201 19,577 20,434 INCOME BEFORE INCOME TAXES 52,815 50,716 77,831 Income taxes 186 (2,436) 33,278 NET INCOME 52,629 53,152 44,553 Preferred dividend requirements and other — — 841 EARNINGS APPLICABLE TO COMMON EQUITY $52,629 $53,152 $43,712 See Notes to Financial Statements. 386 Table of ContentsENTERGY NEW ORLEANS, LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2019 2018 2017 (In Thousands)OPERATING ACTIVITIES Net income $52,629 $53,152 $44,553Adjustments to reconcile net income to net cash flow provided by operating activities: Depreciation and amortization 56,072 55,930 52,945Deferred income taxes, investment tax credits, and non-current taxes accrued 21,350 24,548 64,036Changes in assets and liabilities: Receivables (9,372) 15,724 (18,058)Fuel inventory (387) 357 (49)Accounts payable (5,571) (385) 1,874Prepaid taxes and taxes accrued 234 30,547 (22,100)Interest accrued 550 879 44Deferred fuel costs 3,630 (6,486) 12,592Other working capital accounts 5,021 4,146 (2,711)Provisions for estimated losses 1,948 1,511 (3,430)Other regulatory assets (29,567) 21,637 16,673Other regulatory liabilities (22,105) (28,459) 110,147Deferred tax rate change recognized as regulatory liability/asset — — (111,170)Pension and other postretirement liabilities (14,624) (15,134) (15,994)Other assets and liabilities 55,796 13,811 (1,555)Net cash flow provided by operating activities 115,604 171,778 127,797INVESTING ACTIVITIES Construction expenditures (229,560) (202,186) (115,584)Allowance for equity funds used during construction 9,941 5,941 2,418Changes in money pool receivable - net 16,825 (9,293) 1,492Payments to storm reserve escrow account (1,752) (1,311) (597)Receipts from storm reserve escrow account — 3 2,488Changes in securitization account 236 (770) 283Net cash flow used in investing activities (204,310) (207,616) (109,500)FINANCING ACTIVITIES Proceeds from the issuance of long-term debt 113,876 59,234 —Retirement of long-term debt (35,376) (11,042) (10,600)Repayment of long-term payable due to associated company (1,979) (2,077) (2,104)Redemption of preferred stock — — (20,599)Capital contributions from parent — — 20,000Distributions/dividends paid: Common equity — (23,750) (74,250)Preferred stock — — (1,083)Other (1,475) 409 12Net cash flow provided by (used in) financing activities 75,046 22,774 (88,624)Net decrease in cash and cash equivalents (13,660) (13,064) (70,327)Cash and cash equivalents at beginning of period 19,677 32,741 103,068Cash and cash equivalents at end of period $6,017 $19,677 $32,741SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $22,873 $19,840 $20,180Income taxes ($5,310) ($39,781) ($8,660)See Notes to Financial Statements. 387 Table of ContentsENTERGY NEW ORLEANS, LLC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSASSETS December 31, 2019 2018 (In Thousands) CURRENT ASSETS Cash and cash equivalents Cash $26 $26Temporary cash investments 5,991 19,651Total cash and cash equivalents 6,017 19,677Securitization recovery trust account 1,989 2,224Accounts receivable: Customer 48,265 43,890Allowance for doubtful accounts (3,226) (3,222)Associated companies 6,280 27,938Other 7,378 4,090Accrued unbilled revenues 25,453 18,907Total accounts receivable 84,150 91,603Fuel inventory - at average cost 1,920 1,533Materials and supplies - at average cost 13,522 12,133Prepayments and other 4,846 6,905TOTAL 112,444134,075 OTHER PROPERTY AND INVESTMENTS Non-utility property at cost (less accumulated depreciation) 1,016 1,016Storm reserve escrow account 82,605 80,853TOTAL 83,621 81,869 UTILITY PLANT Electric 1,467,215 1,364,091Natural gas 311,432 284,728Construction work in progress 201,829 146,668TOTAL UTILITY PLANT 1,980,476 1,795,487Less - accumulated depreciation and amortization 715,406 670,135UTILITY PLANT - NET 1,265,070 1,125,352 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Deferred fuel costs 4,080 4,080Other regulatory assets (includes securitization property of $49,542 as of December 31, 2019 and $60,453 as ofDecember 31, 2018) 259,363 229,796Other 10,720 1,416TOTAL 274,163 235,292 TOTAL ASSETS $1,735,298 $1,576,588 See Notes to Financial Statements. 388 Table of ContentsENTERGY NEW ORLEANS, LLC AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSLIABILITIES AND EQUITY December 31, 2019 2018 (In Thousands) CURRENT LIABILITIES Currently maturing long-term debt $25,000 $—Payable due to associated company 1,838 1,979Accounts payable: Associated companies 43,222 43,416Other 43,963 36,686Customer deposits 28,493 28,667Taxes accrued 4,302 4,068Interest accrued 6,916 6,366Deferred fuel costs 4,918 1,288Current portion of unprotected excess accumulated deferred income taxes 9,470 25,301Other 15,827 9,521TOTAL CURRENT LIABILITIES 183,949 157,292 NON-CURRENT LIABILITIES Accumulated deferred income taxes and taxes accrued 354,536 323,595Accumulated deferred investment tax credits 2,131 2,219Regulatory liability for income taxes - net 49,090 60,249Asset retirement cost liabilities 3,522 3,291Accumulated provisions 88,542 86,594Long-term debt (includes securitization bonds of $52,641 as of December 31, 2019 and $63,620 as of December 31,2018) 521,539 467,358Long-term payable due to associated company 12,529 14,367Other 21,881 16,673TOTAL NON-CURRENT LIABILITIES 1,053,770 974,346 Commitments and Contingencies EQUITY Member's equity 497,579 444,950TOTAL 497,579 444,950 TOTAL LIABILITIES AND EQUITY $1,735,298 $1,576,588 See Notes to Financial Statements. 389 Table of ContentsENTERGY NEW ORLEANS, LLC AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN MEMBER'S EQUITYFor the Years Ended December 31, 2019, 2018, and 2017 Member’s Equity (In Thousands) Balance at December 31, 2016$426,946Net income44,553Capital contributions from parent20,000Common equity distributions(74,250)Preferred stock dividends(841)Other(860)Balance at December 31, 2017$415,548Net income53,152Common equity distributions(23,750)Balance at December 31, 2018$444,950Net income52,629Balance at December 31, 2019$497,579 See Notes to Financial Statements. 390 Table of ContentsENTERGY NEW ORLEANS, LLC AND SUBSIDIARIESSELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 2019 2018 2017 2016 2015 (In Thousands) Operating revenues$686,223 $717,390 $716,070 $665,463 $671,446Net income$52,629 $53,152 $44,553 $48,849 $44,925Total assets$1,735,298 $1,576,588 $1,497,836 $1,494,569 $1,215,144Long-term obligations (a)$534,068 $481,725 $434,793 $466,670 $357,687 (a) Includes long-term debt (including the long-term payable to associated company and excluding currently maturing debt) and preferred stock without sinkingfund. 2019 2018 2017 2016 2015 (Dollars In Millions) Electric Operating Revenues: Residential$245 $262 $250 $231 $220Commercial202 217 228 206 186Industrial32 33 36 33 30Governmental71 72 77 69 64Total billed retail550 584 591 539 500Sales for resale: Associated companies— — — 30 66Non-associated companies38 30 29 3 —Other6 11 12 15 18Total$594 $625 $632 $587 $584 Billed Electric Energy Sales (GWh): Residential2,353 2,401 2,155 2,231 2,301Commercial2,215 2,270 2,248 2,268 2,257Industrial438 448 429 441 463Governmental815 795 790 794 825Total retail5,821 5,914 5,622 5,734 5,846Sales for resale: Associated companies— — — 1,071 1,644Non-associated companies1,961 1,484 1,703 141 11Total7,782 7,398 7,325 6,946 7,501 391 Table of ContentsENTERGY TEXAS, INC. AND SUBSIDIARIESMANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSISResults of Operations2019 Compared to 2018Net IncomeNet income decreased $2.8 million primarily due to a higher effective income tax rate, after excluding the effect of the return ofunprotected excess accumulated deferred income taxes which is offset in operating revenues, higher depreciation and amortization expensesand higher other operation and maintenance expenses, partially offset by higher retail electric price and higher other income.Operating RevenuesFollowing is an analysis of the change in operating revenue comparing 2019 to 2018. Amount (In Millions) 2018 operating revenues$1,605.9Fuel, rider, and other revenues that do not significantlyaffect net income(88.4)Return of unprotected excess accumulated deferredincome taxes to customers(72.8)Retail electric price41.0Volume/weather3.32019 operating revenues$1,489.0Entergy Texas’s results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs such thatthe revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues that donot significantly affect net income” includes the revenue variance associated with these items. The return of unprotected excess accumulated deferred income taxes to customers resulted from the return of unprotected excessaccumulated deferred income taxes through a rider effective October 2018. In 2019, $87.4 million was returned to customers as compared to$14.6 million in 2018. 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 for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.The retail electric price variance is primarily due to a base rate increase effective October 2018 as approvedby the PUCT. See Note 2 to the financial statements for further discussion of the rate case.The volume/weather variance is primarily due to an increase in usage during the unbilled sales period.Other Income Statement VariancesOther operation and maintenance expenses increased primarily due to: •an increase of $5.1 million in information technology costs primarily due to higher costs related to applications392 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and Analysisand infrastructure support, enhanced cyber security, and upgrades and maintenance;•an increase of $4.7 million in spending on initiatives to explore new customer products and services;•an increase of $3.9 million in fossil-fueled generation expenses primarily due to a higher scope of work performed during plantoutages in 2019 as compared to 2018; and•an increase of $3.4 million in distribution operations and asset management costs primarily due to higher contract costs for meterreading services and higher advanced metering customer education costs.Depreciation and amortization expenses increased primarily as a result of new depreciation rates established in the settlement of the2018 base rate case and additions to plant in service.Other regulatory charges (credits) include regulatory charges of $25.4 million recorded in 2018 to reflect the effects of a provision inthe settlement reached in the 2018 rate case proceeding to return the benefits of the lower federal income tax rate in 2018 to customers. SeeNote 2 to the financial statements for discussion of the rate case proceeding.Other income increased primarily due to an increase in the allowance for equity funds used during construction due to higherconstruction work in progress in 2019, including the Montgomery County Power Station project.Interest expense decreased primarily due to an increase in the allowance for borrowed funds used during construction due to higherconstruction work in progress in 2019, including the Montgomery County Power Station project.The effective income tax rates were (51.1%) for 2019 and (19.3%) for 2018. The difference in the effective income tax rate of(51.1%) versus the federal statutory rate of 21% for 2019 was primarily due to the amortization of excess accumulated deferred income taxesand book and tax differences related to the allowance for equity funds used during construction. The difference in the effective income taxrate of (19.3%) versus the federal statutory rate of 21% for 2018 was primarily due to the flow through and amortization of excessaccumulated deferred income taxes, along with the effect on income tax expense of the resolution of Entergy Texas’s 2018 base rateproceeding. See Note 3 to the financial statements for a reconciliation of the federal statutory rate of 21% to the effective income tax rates.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Results of Operations” in Entergy Texas’s AnnualReport on Form 10-K for the year ended December 31, 2018 for discussion of results of operations for 2018 compared to 2017.Income Tax LegislationSee the “Income Tax Legislation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion andAnalysis for discussion of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017. Note 3 to the financialstatements contains additional discussion of the effect of the Act on 2017, 2018, and 2019 results of operations and financial position, theprovisions of the Act, and the uncertainties associated with accounting for the Act, and Note 2 to the financial statements discusses theregulatory proceedings that have considered the effects of the Act.393 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and AnalysisLiquidity and Capital ResourcesCash FlowCash flows for the years ended December 31, 2019, 2018, and 2017 were as follows: 2019 2018 2017 (In Thousands)Cash and cash equivalents at beginning of period$56 $115,513 $6,181 Net cash provided by (used in): Operating activities286,739 331,753 301,396Investing activities(878,280) (395,973) (383,176)Financing activities604,414 (51,237) 191,112Net increase (decrease) in cash and cash equivalents12,873 (115,457) 109,332 Cash and cash equivalents at end of period$12,929 $56 $115,5132019 Compared to 2018Operating ActivitiesNet cash flow provided by operating activities decreased $45 million in 2019 primarily due to the return of unprotected excessaccumulated deferred income taxes to customers and the receipt of $33.2 million in 2018 from Entergy Arkansas as a result of a compliancefiling made in response to the FERC’s October 2018 order in the Entergy Arkansas opportunity sales proceeding. The decrease was partiallyoffset by the timing of recovery of fuel and purchased power costs and the timing of collection of receivables from customers. See Note 2 tothe financial statements for further discussion of the opportunity sales proceeding and regulatory activity regarding the Tax Cuts and JobsAct.Investing ActivitiesNet cash flow used in investing activities increased $482.3 million in 2019 primarily due to:•an increase of $243.3 million in fossil-fueled generation construction expenditures primarily due to increased spending on theMontgomery County Power Station;•an increase of $153.4 million in transmission construction expenditures primarily due to a higher scope of work performed in 2019 ascompared to 2018;•an increase of $47.1 million in distribution construction expenditures primarily due to investment in the reliability and infrastructureof Entergy Texas’s distribution system, including increased spending on advanced metering infrastructure, and increased stormspending; and•money pool activity.Increases in Entergy Texas’s receivable from the money pool are a use of cash flow, and Entergy Texas’s receivable from the moneypool increased by $11.2 million in 2019 compared to decreasing $44.9 million in 2018. The money pool is an inter-company borrowingarrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.Financing ActivitiesEntergy Texas’s financing activities provided $604.4 million of cash in 2019 compared to using $51.2 million of cash in 2018primarily due to:394 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and Analysis•the issuance of $300 million of 4.0% Series mortgage bonds and $400 million of 4.5% Series mortgage bonds in January 2019;•the issuance of $300 million of 3.55% Series mortgage bonds in September 2019;•capital contributions of $185 million in 2019 received from Entergy Corporation in anticipation of upcoming constructionexpenditures, including Montgomery County Power Station; and•the issuance of $35 million aggregate liquidation value 5.375% Series A preferred stock in September 2019.The increase was partially offset by the repayment, at maturity, of $500 million of 7.125% Series mortgage bonds inFebruary 2019 and money pool activity. See Note 5 to the financial statements for more details on long-term debt. See Note 6 to the financialstatements for more details on the issuance of preferred stock.Decreases in Entergy Texas’s payable to the money pool are a use of cash flow, and Entergy Texas’s payableto the money pool decreased by $22.4 million in 2019 compared to increasing by $22.4 million in 2018.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Cash Flow” inEntergy Texas’s Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of operating, investing, and financingcash flow activities for 2018 compared to 2017.Capital StructureEntergy Texas’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratiofor Entergy Texas is primarily due to the net issuance of $500 million of mortgage bonds in 2019, partially offset byan increase in equity. December 31, 2019 December 31, 2018Debt to capital51.7% 51.6%Effect of excluding the securitization bonds(2.8%) (5.2%)Debt to capital, excluding securitization bonds (a)48.9% 46.4%Effect of subtracting cash(0.2%) —%Net debt to net capital, excluding securitization bonds (a)48.7% 46.4%(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 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 ratiosexcluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditorsin evaluating Entergy Texas’s financial condition because the securitization bonds are non-recourse to Entergy Texas, as more fully describedin Note 5 to the financial statements. Entergy Texas also uses the net debt to net capital ratio excluding securitization bonds in analyzing itsfinancial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Texas’s financial conditionbecause net debt indicates Entergy Texas’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.Entergy Texas seeks to optimize its capital structure in accordance with its regulatory requirements and to control its cost of capitalwhile also maintaining equity capitalization at a level consistent with investment-grade debt ratings. To the extent that operating cash flowsare in excess of planned investments, cash may be used to reduce outstanding debt or may be paid as a dividend, or both, in appropriateamounts to maintain the capital structure. To the extent that operating cash flows are insufficient to support planned investments, EntergyTexas may issue incremental debt or reduce dividends, or both, to maintain its capital structure. In addition, Entergy Texas may receiveequity395 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and Analysiscontributions to maintain its capital structure for certain circumstances such as large transactions that would materially alter the capitalstructure if financed entirely with debt and reduced dividends.Uses of CapitalEntergy Texas requires capital resources for:•construction and other capital investments;•debt maturities or retirements;•working capital purposes, including the financing of fuel and purchased power costs; and•dividend and interest payments.Following are the amounts of Entergy Texas’s planned construction and other capital investments. 2020 2021 2022 (In Millions)Planned construction and capital investment: Generation$235 $165 $195Transmission265 180 220Distribution150 125 170Utility Support115 135 130Total$765 $605 $715Following are the amounts of Entergy Texas’s existing debt and lease obligations (includes estimated interest payments) and otherpurchase obligations. 2020 2021-2022 2023-2024 After 2024 Total (In Millions)Long-term debt (a)$164 $466 $133 $2,683 $3,446Operating leases (b)$4 $7 $4 $1 $16Finance leases (b)$1 $2 $2 $1 $6Purchase obligations (c)$280 $434 $514 $1,039 $2,267(a)Includes estimated interest payments. Long-term debt is discussed in Note 5 to the financial statements.(b)Lease obligations are discussed in Note 10 to the financial statements.(c)Purchase obligations represent the minimum purchase obligation or cancellation charge for contractual obligations to purchase goodsor services. For Entergy Texas, it primarily includes unconditional fuel and purchased power obligations.In addition to the contractual obligations given above, Entergy Texas expects to contribute approximately $3.5 million to itsqualified pension plans and approximately $61 thousand to other postretirement health care and life insurance plans in 2020, although the2020 required pension contributions will be known with more certainty when the January 1, 2020 valuations are completed, which isexpected by April 1, 2020. See “Critical Accounting Estimates - Qualified Pension and Other Postretirement Benefits” below for adiscussion of qualified pension and other postretirement benefits funding.Also in addition to the contractual obligations, Entergy Texas has $17.5 million of unrecognized tax benefits and interest net ofunused tax attributes and payments for which the timing of payments beyond 12 months cannot be reasonably estimated due to uncertaintiesin the timing of effective settlement of tax positions. See Note 3 to the financial statements for additional information regarding unrecognizedtax benefits.396 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and AnalysisIn addition to routine capital spending to maintain operations, the planned capital investment estimate for Entergy Texas includesspecific investments such as the Montgomery County Power Station; transmission projects to enhance reliability, reduce congestion, andenable economic growth; distribution spending to enhance reliability and improve service to customers, including advanced meters andrelated investments; system improvements; software and security; and other investments. Estimated capital expenditures are subject toperiodic review and modification and may vary based on the ongoing effects of regulatory constraints and requirements, environmentalcompliance, business opportunities, market volatility, economic trends, business restructuring, changes in project plans, and the ability toaccess capital. Management provides more information on long-term debt in Note 5 to the financial statements.As a subsidiary, Entergy Texas dividends its earnings to Entergy Corporation at a percentage determined monthly. Montgomery County Power Station In October 2016, Entergy Texas filed an application with the PUCT seeking certification that the public convenience and necessitywould be served by the construction of the Montgomery County Power Station, a nominal 993 MW combined-cycle generating unit in Willis,Texas, on land adjacent to the existing Lewis Creek plant. The current estimated cost of the Montgomery County Power Station is $937million, including approximately $111 million of transmission interconnection and network upgrades and other related costs. Theindependent monitor, who oversaw the request for proposal process, filed testimony and a report affirming that the Montgomery CountyPower Station was selected through an objective and fair request for proposal process that showed no undue preference to any proposal. InJune 2017 parties to the proceeding filed an unopposed stipulation and settlement agreement. The stipulation contemplates that EntergyTexas’s level of cost-recovery for generation construction costs for Montgomery County Power Station is capped at $831 million, subject tocertain exclusions such as force majeure events. Transmission interconnection and network upgrades and other related costs are not subjectto the $831 million cap. In July 2017 the PUCT approved the stipulation. Subject to the timely receipt of other permits and approvals,commercial operation is estimated to occur by mid-2021.Sources of CapitalEntergy Texas’s sources to meet its capital requirements include:•internally generated funds;•cash on hand;•debt or preferred stock issuances;•capital contributions; and•bank financing under new or existing facilities.Entergy Texas may refinance, redeem, or otherwise retire debt prior to maturity, to the extent market conditions and interest anddividend rates are favorable.All debt and common and preferred stock issuances by Entergy Texas require prior regulatory approval. Debt issuances are alsosubject to issuance tests set forth in its bond indenture and other agreements. Entergy Texas has sufficient capacity under these tests to meetits foreseeable capital needs.Entergy Texas’s receivables from or (payables to) the money pool were as follows as of December 31 for each of the following years.2019 2018 2017 2016(In Thousands)$11,181 ($22,389) $44,903 $681See Note 4 to the financial statements for a description of the money pool.397 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and AnalysisEntergy Texas has a credit facility in the amount of $150 million scheduled to expire in September 2024. The credit facility includesfronting commitments for the issuance of letters of credit against $30 million of the borrowing capacity of the facility. As of December 31,2019, there were no cash borrowings and $1.3 million of letters of credit outstanding under the credit facility. In addition, Entergy Texas is aparty to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of December 31, 2019, a$12.1 million letter of credit was outstanding under Entergy Texas’s letter of credit facility. See Note 4 to the financial statements foradditional discussion of the credit facilities.Entergy Texas obtained authorizations from the FERC through November 2020 for short-term borrowings, not to exceed anaggregate amount of $200 million at any time outstanding, and long-term borrowings and security issuances. See Note 4 to the financialstatements for further discussion of Entergy Texas’s short-term borrowing limits.State and Local Rate Regulation and Fuel-Cost RecoveryThe rates that Entergy Texas charges for its services significantly influence its financial position, results of operations, and liquidity.Entergy Texas is regulated and the rates charged to its customers are determined in regulatory proceedings. The PUCT, a governmentalagency, is primarily responsible for approval of the rates charged to customers.Filings with the PUCT2018 Rate CaseIn May 2018, Entergy Texas filed a base rate case with the PUCT seeking an increase in base rates and rider rates of approximately$166 million, of which $48 million is associated with moving costs currently being collected through riders into base rates such that the totalincremental revenue requirement increase is approximately $118 million. The base rate case was based on a 12-month test year endingDecember 31, 2017. In addition, Entergy Texas included capital additions placed into service for the period of April 1, 2013 throughDecember 31, 2017, as well as a post-test year adjustment to include capital additions placed in service by June 30, 2018.In October 2018 the parties filed an unopposed settlement resolving all issues in the proceeding and a motion for interim rateseffective for usage on and after October 17, 2018. The unopposed settlement reflects the following terms: a base rate increase of $53.2million (net of costs realigned from riders and including updated depreciation rates), a $25 million refund to reflect the lower federal incometax rate applicable to Entergy Texas from January 25, 2018 through the date new rates are implemented, $6 million of capitalized skyliningtree hazard costs will not be recovered from customers, $242.5 million of protected excess accumulated deferred income taxes, whichincludes a tax gross-up, will be returned to customers through base rates under the average rate assumption method over the lives of theassociated assets, and $185.2 million of unprotected excess accumulated deferred income taxes, which includes a tax gross-up, will bereturned to customers through a rider. The unprotected excess accumulated deferred income taxes rider will include carrying charges andwill be in effect over a period of 12 months for large customers and over a period of four years for other customers. The settlement alsoprovides for the deferral of $24.5 million of costs associated with the remaining book value of the Neches and Sabine 2 plants, previouslytaken out of service, to be recovered over a ten-year period and the deferral of $20.5 million of costs associated with Hurricane Harvey to berecovered over a 12-year period, each beginning in October 2018. The settlement provides final resolution of all issues in the matter,including those related to the Tax Act. In October 2018 the ALJ granted the unopposed motion for interim rates to be effective for servicerendered on or after October 17, 2018. In December 2018 the PUCT issued an order approving the unopposed settlement.In January 2019, Entergy Texas filed for recovery of rate case expenses totaling $7.2 million. The amounts requested primarilyinclude internal and external expenses related to litigating the 2018 base rate case. Parties filed testimony in April 2019 recommending adisallowance ranging from $3.2 million to $4.2 million of the $7.2 million requested. In May 2019, Entergy Texas filed rebuttal testimonyresponding to the parties’ positions. In September 2019 an order was issued abating the procedural schedule and scheduled hearing to allowthe finalization of a settlement398 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and Analysisin principle reached among the parties. The settlement provides for a black box disallowance of $1.4 million. In the third quarter 2019,Entergy Texas recorded a provision for the 2018 base rate case expenses based on the settlement in principle. In October 2019 the settlementwas filed for review by the PUCT. In February 2020 the PUCT approved the settlement. Distribution Cost Recovery Factor (DCRF) RiderIn June 2017, Entergy Texas filed an application to amend its DCRF rider by increasing the total collection from $8.65 million toapproximately $19 million. In July 2017, Entergy Texas, the PUCT staff, and the two other parties in the proceeding entered into anunopposed stipulation and settlement agreement resulting in an amended DCRF annual revenue requirement of $18.3 million. In September2017 the PUCT issued its final order approving the unopposed stipulation and settlement agreement. The amended DCRF rider rates becameeffective for usage on and after September 1, 2017. DCRF rates were set to zero upon implementation of new base rates on October 17,2018, as described above in the 2018 base rate case discussion.In March 2019, Entergy Texas filed with the PUCT a request to set a new DCRF rider. The proposed new DCRF rider is designed tocollect approximately $3.2 million annually from Entergy Texas’s retail customers based on its capital invested in distribution betweenJanuary 1, 2018 and December 31, 2018. In September 2019 the PUCT issued an order approving rates, which had been effective on aninterim basis since June 2019, at the level proposed in Entergy Texas’s application.Transmission Cost Recovery Factor (TCRF) RiderIn September 2016, Entergy Texas filed with the PUCT a request to amend its TCRF rider. The proposed amended TCRF rider wasdesigned to collect approximately $29.5 million annually from Entergy Texas’s retail customers. In December 2016, concurrent with the2016 fuel reconciliation stipulation and settlement agreement discussed below, Entergy Texas and the PUCT staff reached a settlementagreeing to the amended TCRF annual revenue requirement of $29.5 million. As discussed below, the terms of the two settlements areinterdependent. The PUCT approved the settlement and issued a final order in March 2017. Entergy Texas implemented the amended TCRFrider beginning with bills covering usage on and after March 20, 2017. TCRF rates were set to zero upon implementation of new base rateson October 17, 2018, as discussed above in the 2018 base rate case discussion.In December 2018, Entergy Texas filed with the PUCT a request to set a new TCRF rider. The proposed new TCRF rider is designedto collect approximately $2.7 million annually from Entergy Texas’s retail customers based on its capital invested in transmission betweenJanuary 1, 2018 and September 30, 2018. In April 2019 parties filed testimony proposing a load growth adjustment, which would fully offsetEntergy Texas’s proposed TCRF revenue requirement. In July 2019 the PUCT granted Entergy Texas’s application as filed to begin recoveryof the requested $2.7 million annual revenue requirement, rejecting opposing parties’ proposed adjustment; however, the PUCT found thatthe question of prudence of the actual investment costs should be determined in Entergy Texas’s next rate case similar to the procedure usedfor the costs recovered through the DCRF rider. In October 2019 the PUCT issued an order on a motion for rehearing, clarifying andaffirming its prior order granting Entergy Texas’s application as filed. Also, in October 2019 a second motion for rehearing was filed, andEntergy Texas filed a response in opposition to the motion. The second motion for rehearing was overruled by operation of law. In December2019, Texas Industrial Energy Consumers filed an appeal to the PUCT order in district court alleging that the PUCT erred in declining toapply a load growth adjustment.In August 2019, Entergy Texas filed with the PUCT a request to amend its TCRF rider. The proposed new TCRF rider is designed tocollect approximately $19.4 million annually from Entergy Texas’s retail customers based on its capital invested in transmission betweenJanuary 1, 2018 and June 30, 2019, which is $16.7 million in incremental annual revenue above the $2.7 million approved in the priorpending TCRF proceeding. In November 2019, Entergy Texas filed an unopposed stipulation and settlement agreement providing forrecovery of the requested revenue requirement. In January 2020 the PUCT issued an order approving the unopposed settlement.399 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and AnalysisAdvanced Metering Infrastructure (AMI)In April 2017 the Texas legislature enacted legislation that extends statutory support for AMI deployment to Entergy Texas anddirects that if Entergy Texas elects to deploy AMI, it shall do so as rapidly as practicable. In July 2017, Entergy Texas filed an applicationseeking an order from the PUCT approving Entergy Texas’s deployment of AMI. Entergy Texas proposed to replace existing meters withadvanced meters that enable two-way data communication; design and build a secure and reliable network to support such communications;and implement support systems. AMI is intended to serve as the foundation of Entergy Texas’s modernized power grid. The filing includedan estimate of implementation costs for AMI of $132 million and identified a number of quantified and unquantified benefits. Entergy Texasproposed a seven-year depreciable life for the new advanced meters. Entergy Texas also proposed a surcharge tariff to recover the reasonableand necessary costs it has and will incur under the deployment plan for the full deployment of advanced meters. Further, Entergy Texassought approval of fees that would be charged to customers who choose to opt out of receiving service through an advanced meter andinstead receive electric service with a non-standard meter. In October 2017, Entergy Texas and other parties entered into and filed anunopposed stipulation and settlement agreement permitting deployment of AMI with limited modifications. The PUCT approved thestipulation and settlement agreement in December 2017. Entergy Texas implemented the AMI surcharge tariff beginning with January 2018bills. As of December 31, 2019, Entergy Texas has a regulatory liability related to the collection of the surcharge from customers. Consistentwith the approval, deployment of the communications network began in 2018 and the three-year deployment of the advanced meters beganin 2019. Entergy Texas will recover the undepreciated balance of its existing meters through a regulatory asset to be amortized at currentdepreciation rates, as approved by the PUCT.Fuel and Purchased Power Cost RecoveryEntergy Texas’s rate schedules include a fixed fuel factor to recover fuel and purchased power costs, including interest, not recoveredin base rates. Semi-annual revisions of the fixed fuel factor are made in March and September based on the market price of natural gas andchanges in fuel mix. The amounts collected under Entergy Texas’s fixed fuel factor and any interim surcharge or refund are subject to fuelreconciliation proceedings before the PUCT.In July 2015 certain parties filed briefs in the open proceeding asserting that Entergy Texas should refund to retail customers anadditional $10.9 million in bandwidth remedy payments Entergy Texas received related to calendar year 2006 production costs. In October2015 an ALJ issued a proposal for decision recommending that the additional $10.9 million in bandwidth remedy payments be refunded toretail customers. In January 2016 the PUCT issued its order affirming the ALJ’s recommendation, and Entergy Texas filed a motion forrehearing of the PUCT’s decision, which the PUCT denied. In March 2016, Entergy Texas filed a complaint in Federal District Court for theWestern District of Texas and a petition in the Travis County (State) District Court appealing the PUCT’s decision. The pending appeals didnot stay the PUCT’s decision. In April 2016, Entergy Texas filed with the PUCT an application to refund to customers approximately $56.2million. The refund resulted from (i) $41.8 million of fuel cost recovery over-collections through February 2016, (ii) the $10.9 million inbandwidth remedy payments, discussed above, that Entergy Texas received related to calendar year 2006 production costs, and (iii) $3.5million in bandwidth remedy payments that Entergy Texas received related to 2006-2008 production costs. In June 2016, Entergy Texas filedan unopposed settlement agreement that added additional over-recovered fuel costs for the months of March and April 2016. The settlementresulted in a $68 million refund. The ALJ approved the refund on an interim basis and it was made to most customers over a four-monthperiod beginning with the first billing cycle of July 2016. In July 2016 the PUCT issued an order approving the interim refund. The federalappeal of the PUCT’s January 2016 decision was heard in December 2016, and the Federal District Court granted Entergy Texas’s requestedrelief. In January 2017 the PUCT and an intervenor filed petitions for appeal to the U.S. Court of Appeals for the Fifth Circuit of the FederalDistrict Court ruling. Oral argument was held before the Fifth Circuit in February 2018. In April 2018 the Fifth Circuit reversed the decisionof the Federal District Court, reinstating the original PUCT decision. In October 2018, Entergy Texas filed a notice of nonsuit in its appeal tothe Travis County District Court regarding the PUCT’s January 2016 decision.400 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and AnalysisIn July 2016, Entergy Texas filed an application to reconcile its fuel and purchased power costs for the period April 1, 2013 throughMarch 31, 2016. During the reconciliation period, Entergy Texas incurred approximately $1.77 billion in Texas jurisdictional eligible fueland purchased power expenses, net of certain revenues credited to such expenses and other adjustments. Entergy Texas estimated an over-recovery balance of approximately $19.3 million, including interest, which Entergy Texas requested authority to carry over as the beginningbalance for the subsequent reconciliation period beginning April 2016. Entergy Texas also noted, however, that the estimated $19.3 millionover collection was being refunded to customers as a portion of the interim fuel refund beginning with the first billing cycle of July 2016,discussed above. Entergy Texas also requested a prudence finding for each of the fuel-related contracts and arrangements entered into ormodified during the reconciliation period that have not been reviewed by the PUCT in a prior proceeding. In December 2016, Entergy Texasentered into a stipulation and settlement agreement resulting in a $6 million disallowance not associated with any particular issue raised and arefund of the over-recovery balance of $21 million as of November 30, 2016, to most customers beginning April 2017 through June 2017.This settlement was developed concurrently with the stipulation and settlement agreement in the 2016 transmission cost recovery factor rideramendment discussed above, and the terms and conditions in both settlements are interdependent. The fuel reconciliation settlement wasapproved by the PUCT in March 2017 and the refunds were made.In June 2017, Entergy Texas filed an application for a fuel refund of approximately $30.7 million for the months of December 2016through April 2017. For most customers, the refunds flowed through bills for the months of July 2017 through September 2017. The fuelrefund was approved by the PUCT in August 2017.In December 2017, Entergy Texas filed an application for a fuel refund of approximately $30.5 million for the months of May 2017through October 2017. Also in December 2017, the PUCT’s ALJ approved the refund on an interim basis. For most customers, the refundsflowed through bills January 2018 through March 2018. The fuel refund was approved by the PUCT in March 2018.In September 2019, Entergy Texas filed an application to reconcile its fuel and purchased power costs for the period from April 2016through March 2019. During the reconciliation period, Entergy Texas incurred approximately $1.6 billion in Texas jurisdictional eligible fueland 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 beginningbalance for the subsequent reconciliation period beginning April 2019. The proceeding is currently pending.Federal RegulationSee the “Rate, Cost-recovery, and Other Regulation – Federal Regulation” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis and Note 2 to the financial statements for a discussion of federal regulation.Nuclear MattersSee the “Nuclear Matters” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for adiscussion of nuclear matters.Industrial and Commercial CustomersEntergy Texas’s large industrial and commercial customers continually explore ways to reduce their energy costs. In particular,cogeneration is an option available to a portion of Entergy Texas’s industrial customer base. Entergy Texas responds by working withindustrial and commercial customers and negotiating electric service contracts to provide, under existing rate schedules, competitive ratesthat match specific customer needs and load profiles. Entergy Texas actively participates in economic development, customer retention, andreclamation activities to increase industrial and commercial demand, from both new and existing customers.401 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and AnalysisEnvironmental RisksEntergy Texas’s facilities and operations are subject to regulation by various governmental authorities having jurisdiction over airquality, water quality, control of toxic substances and hazardous and solid wastes, and other environmental matters. Management believesthat Entergy Texas is in substantial compliance with environmental regulations currently applicable to its facilities and operations, withreference to possible exceptions noted in “Regulation of Entergy’s Business - Environmental Regulation” in Part I, Item 1. Becauseenvironmental regulations are subject to change, future compliance costs cannot be precisely estimated.Critical Accounting EstimatesThe preparation of Entergy Texas’s financial statements in conformity with generally accepted accounting principles requiresmanagement to apply appropriate accounting policies and to make estimates and judgments that can have a significant effect on reportedfinancial position, results of operations, and cash flows. Management has identified the following accounting policies and estimates as criticalbecause they are based on assumptions and measurements that involve a high degree of uncertainty, and the potential for future changes inthe assumptions and measurements that could produce estimates that would have a material effect on the presentation of Entergy Texas’sfinancial position or results of operations.Utility Regulatory AccountingSee “Utility Regulatory Accounting” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for discussion of accounting for the effects of rate regulation.Impairment of Long-lived Assets and Trust Fund InvestmentsSee “Impairment of Long-lived Assets and Trust Fund Investments” in the “Critical Accounting Estimates” section of EntergyCorporation and Subsidiaries Management’s Financial Discussion and Analysis for discussion of the estimates associated with theimpairment of long-lived assets.Taxation and Uncertain Tax PositionsSee “Taxation and Uncertain Tax Positions” in the “Critical Accounting Estimates” section of Entergy Corporation andSubsidiaries Management’s Financial Discussion and Analysis for further discussion.Qualified Pension and Other Postretirement BenefitsEntergy Texas’s qualified pension and other postretirement reported costs, as described in Note 11 to the financial statements, areimpacted by numerous factors including the provisions of the plans, changing employee demographics, and various actuarial calculations,assumptions, and accounting mechanisms. See the “Qualified Pension and Other Postretirement Benefits” in the “Critical AccountingEstimates” section of Entergy Corporation and Subsidiaries’ Management’s Financial Discussion and Analysis for further discussion.Because of the complexity of these calculations, the long-term nature of these obligations, and the importance of the assumptions utilized,Entergy’s estimate of these costs is a critical accounting estimate.402 Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and AnalysisCost SensitivityThe following chart reflects the sensitivity of qualified pension and qualified projected benefit obligation cost to changes in certainactuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020 QualifiedPension Cost Impact on 2019 QualifiedProjected Benefit Obligation Increase/(Decrease) Discount rate (0.25%) $535 $9,465Rate of return on plan assets (0.25%) $783 $—Rate of increase in compensation 0.25% $347 $1,676The following chart reflects the sensitivity of postretirement benefit cost and accumulated postretirement benefit obligation changesin certain actuarial assumptions (dollars in thousands).Actuarial Assumption Change in Assumption Impact on 2020Postretirement Benefit Cost Impact on 2019 AccumulatedPostretirement BenefitObligation Increase/(Decrease) Discount rate (0.25%) $— $2,673Health care cost trend 0.25% $97 $2,050Each fluctuation above assumes that the other components of the calculation are held constant.Costs and Employer ContributionsTotal qualified pension cost for Entergy Texas in 2019 was $5.7 million. Entergy Texas anticipates 2020 qualified pension cost to be$8.4 million. Entergy Texas contributed $3.7 million to its qualified pension plans in 2019 and estimates 2020 pension contributions will beapproximately $3.5 million, although the 2020 required pension contributions will be known with more certainty when the January 1, 2020valuations are completed, which is expected by April 1, 2020.Total postretirement health care and life insurance benefit income for Entergy Texas in 2019 was $6.5 million. Entergy Texasexpects 2020 postretirement health care and life insurance benefit income to approximate $6.7 million. In 2019, Entergy Texas’postretirement contributions (that is, contributions to the external trusts plus claims payments) were offset by trust claims reimbursements,resulting in a net reimbursement of $596 thousand. Entergy Texas estimates 2020 contributions will be approximately $61 thousand.Other ContingenciesSee “Other Contingencies” in the “Critical Accounting Estimates” section of Entergy Corporation and Subsidiaries Management’sFinancial Discussion and Analysis for a discussion of the estimates associated with environmental, litigation, and other risks.New Accounting PronouncementsSee “New Accounting Pronouncements” section of Note 1 to the financial statements for a discussion of new accountingpronouncements.403 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the shareholders and Board of Directors ofEntergy Texas, Inc. and SubsidiariesOpinion on the Financial StatementsWe have audited the accompanying consolidated balance sheets of Entergy Texas, Inc. and Subsidiaries (the “Company”) as of December 31,2019 and 2018, the related consolidated statements of income, cash flows, and changes in common equity (pages 405 through 410 andapplicable items in pages 49 through 236), for each of the three years in the period ended December 31, 2019, and the related notes(collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, thefinancial position of the Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the threeyears in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s financial statements based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of ouraudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error orfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significantestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits providea reasonable basis for our opinion./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020We have served as the Company’s auditor since 2001.404 Table of ContentsENTERGY TEXAS, INC. AND SUBSIDIARIESCONSOLIDATED INCOME STATEMENTS For the Years Ended December 31, 2019 2018 2017 (In Thousands) OPERATING REVENUES Electric $1,488,955 $1,605,902 $1,544,893 OPERATING EXPENSES Operation and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale 162,544 204,830 225,517Purchased power 602,563 614,012 610,279Other operation and maintenance 258,924 238,400 230,437Taxes other than income taxes 76,366 82,033 79,254Depreciation and amortization 153,286 128,534 117,520Other regulatory charges - net 88,770 131,667 82,328TOTAL 1,342,453 1,399,476 1,345,335 OPERATING INCOME 146,502 206,426 199,558 OTHER INCOME Allowance for equity funds used during construction 28,445 9,723 6,722Interest and investment income 3,072 2,188 981Miscellaneous - net 546 (655) 14TOTAL 32,063 11,256 7,717 INTEREST EXPENSE Interest expense 86,333 87,203 86,719Allowance for borrowed funds used during construction (13,269) (5,513) (4,098)TOTAL 73,064 81,690 82,621 INCOME BEFORE INCOME TAXES 105,501 135,992 124,654 Income taxes (53,896) (26,243) 48,481 NET INCOME 159,397 162,235 76,173 Preferred dividend requirements 580 — — EARNINGS APPLICABLE TO COMMON STOCK $158,817 $162,235 $76,173 See Notes to Financial Statements. 405 Table of Contents(Page left blank intentionally)406 Table of ContentsENTERGY TEXAS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2019 2018 2017 (In Thousands)OPERATING ACTIVITIES Net income $159,397 $162,235 $76,173Adjustments to reconcile net income to net cash flow provided by operating activities: Depreciation and amortization 153,286 128,534 117,520Deferred income taxes, investment tax credits, and non-current taxes accrued 20,143 (39,545) 42,119Changes in assets and liabilities: Receivables 58,445 (17,099) (15,934)Fuel inventory (4,926) 64 (25,054)Accounts payable (33,646) 43,319 32,842Prepaid taxes and taxes accrued (3,805) 7,854 30,308Interest accrued (5,363) (1,201) (421)Deferred fuel costs (6,696) (47,604) 12,758Other working capital accounts (13,822) 1,328 (7,852)Provisions for estimated losses (5,748) 3,741 2,531Other regulatory assets 85,400 63,350 184,574Other regulatory liabilities (105,517) (19,336) 410,968Deferred tax rate change recognized as regulatory liability/asset — — (520,547)Pension and other postretirement liabilities (7,152) (13,135) (49,445)Other assets and liabilities (3,257) 59,248 10,856Net cash flow provided by operating activities 286,739 331,753 301,396INVESTING ACTIVITIES Construction expenditures (898,090) (451,988) (348,027)Allowance for equity funds used during construction 28,526 9,861 6,874Proceeds from sale of assets — 3,753 —Insurance proceeds — — 2,431Changes in money pool receivable - net (11,181) 44,903 (44,222)Changes in securitization account 2,465 (2,502) (232)Net cash flow used in investing activities (878,280) (395,973) (383,176)FINANCING ACTIVITIES Proceeds from the issuance of long-term debt 986,019 — 148,277Retirement of long-term debt (578,593)(74,950)(71,683)Capital contributions from parent 185,000 — 115,000Proceeds from the issuance of preferred stock 33,188 — —Change in money pool payable - net (22,389) 22,389 —Other 1,189 1,324 (482)Net cash flow provided by (used in) financing activities 604,414 (51,237) 191,112Net increase (decrease) in cash and cash equivalents 12,873 (115,457) 109,332Cash and cash equivalents at beginning of period 56 115,513 6,181Cash and cash equivalents at end of period $12,929 $56 $115,513SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $89,402 $85,719 $84,556Income taxes $17,010 $20,787 ($21,107)See Notes to Financial Statements. 407 Table of ContentsENTERGY TEXAS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSASSETS December 31, 2019 2018 (In Thousands) CURRENT ASSETS Cash and cash equivalents: Cash $25 $26Temporary cash investments 12,904 30Total cash and cash equivalents 12,929 56Securitization recovery trust account 37,720 40,185Accounts receivable: Customer 59,365 69,714Allowance for doubtful accounts (471) (461)Associated companies 24,001 64,441Other 17,050 12,275Accrued unbilled revenues 50,048 51,288Total accounts receivable 149,993 197,257Fuel inventory - at average cost 47,593 42,667Materials and supplies - at average cost 46,056 41,883Prepayments and other 21,012 15,903TOTAL 315,303 337,951 OTHER PROPERTY AND INVESTMENTS Investments in affiliates - at equity 396 448Non-utility property - at cost (less accumulated depreciation) 376 376Other 20,077 19,218TOTAL 20,849 20,042 UTILITY PLANT Electric 5,199,027 4,773,984Construction work in progress 760,354 325,193TOTAL UTILITY PLANT 5,959,381 5,099,177Less - accumulated depreciation and amortization 1,770,852 1,684,569UTILITY PLANT - NET 4,188,529 3,414,608 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Other regulatory assets (includes securitization property of $160,375 as of December 31, 2019 and $236,336 as ofDecember 31, 2018) 512,648 598,048Other 33,393 29,371TOTAL 546,041 627,419 TOTAL ASSETS $5,070,722 $4,400,020 See Notes to Financial Statements. 408 Table of ContentsENTERGY TEXAS, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSLIABILITIES AND EQUITY December 31, 2019 2018 (In Thousands)CURRENT LIABILITIES Currently maturing long-term debt $— $500,000Accounts payable: Associated companies 58,055 119,371Other 188,460 150,679Customer deposits 40,232 43,387Taxes accrued 49,708 53,513Interest accrued 18,992 24,355Current portion of unprotected excess accumulated deferred income taxes 26,552 87,627Deferred fuel costs 13,001 19,697Other 10,521 6,353TOTAL 405,521 1,004,982 NON-CURRENT LIABILITIES Accumulated deferred income taxes and taxes accrued 585,413 552,535Accumulated deferred investment tax credits 10,559 11,176Regulatory liability for income taxes - net 225,980 264,623Other regulatory liabilities 42,085 47,884Asset retirement cost liabilities 7,631 7,222Accumulated provisions 8,108 13,856Long-term debt (includes securitization bonds of $205,349 as of December 31, 2019 and $283,659 as of December31, 2018) 1,922,956 1,013,735Other 63,062 61,605TOTAL 2,865,794 1,972,636 Commitments and Contingencies EQUITY Common stock, no par value, authorized 200,000,000 shares; issued and outstanding 46,525,000 shares in 2019 and2018 49,452 49,452Paid-in capital 780,182 596,994Retained earnings 934,773 775,956Total common shareholder's equity 1,764,407 1,422,402Preferred stock without sinking fund 35,000 —TOTAL 1,799,407 1,422,402 TOTAL LIABILITIES AND EQUITY $5,070,722 $4,400,020 See Notes to Financial Statements. 409 Table of ContentsENTERGY TEXAS, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN EQUITYFor the Years Ended December 31, 2019, 2018, and 2017 Common Equity PreferredStock CommonStock Paid-inCapital RetainedEarnings Total (In Thousands) Balance at December 31, 2016$— $49,452 $481,994 $537,548 $1,068,994Net income— — — 76,173 76,173Capital contributions from parent— — 115,000 — 115,000Balance at December 31, 2017$— $49,452 $596,994 $613,721 $1,260,167Net income— — — 162,235 162,235Balance at December 31, 2018$— $49,452 $596,994 $775,956 $1,422,402Net income— — — 159,397 159,397Capital contributions from parent— — 185,000 — 185,000Preferred stock issuance35,000 — (1,812) — 33,188Preferred stock dividends— — — (580) (580)Balance at December 31, 2019$35,000 $49,452 $780,182 $934,773 $1,799,407 See Notes to Financial Statements. 410 Table of ContentsENTERGY TEXAS, INC. AND SUBSIDIARIESSELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 2019 2018 2017 2016 2015 (In Thousands) Operating revenues$1,488,955 $1,605,902 $1,544,893 $1,615,619 $1,707,203Net income$159,397 $162,235 $76,173 $107,538 $69,625Total assets$5,070,722 $4,400,020 $4,279,738 $4,033,081 $3,898,582Long-term obligations (a)$1,922,956 $1,013,735 $1,587,150 $1,508,407 $1,451,967 (a) Includes long-term debt (excluding currently maturing debt). 2019 2018 2017 2016 2015 (Dollars In Millions) Electric Operating Revenues: Residential$658 $674 $636 $613 $633Commercial343 381 378 356 369Industrial373 394 384 365 372Governmental22 25 25 24 25Total billed retail1,396 1,474 1,423 1,358 1,399Sales for resale: Associated companies52 59 58 178 259Non-associated companies7 39 22 40 14Other34 34 42 40 35Total$1,489 $1,606 $1,545 $1,616 $1,707 Billed Electric Energy Sales (GWh): Residential6,039 6,135 5,716 5,836 5,889Commercial4,667 4,747 4,548 4,570 4,548Industrial8,043 8,052 7,521 7,493 7,036Governmental259 286 273 283 276Total retail19,008 19,220 18,058 18,182 17,749Sales for resale: Associated companies1,472 1,516 1,534 4,625 5,853Non-associated companies343 962 729 1,086 254Total20,823 21,698 20,321 23,893 23,856411 Table of ContentsSYSTEM ENERGY RESOURCES, INC.MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSISSystem Energy’s principal asset currently consists of an ownership interest and a leasehold interest in Grand Gulf. The capacity andenergy 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 UnitPower Sales Agreement are System Energy’s only source of operating revenues.Results of Operations2019 Compared to 2018Net IncomeNet income increased $5 million primarily due to the increase in operating revenues resulting from changes in rate base, as comparedto prior year, and a lower effective income tax rate, after excluding the effect of the return of unprotected excess accumulated deferredincome taxes to customers which is offset in income taxes.Income TaxesThe effective income tax rates were 13.4% for 2019 and (102.7%) for 2018. The difference in the effective income tax rate of 13.4%versus the federal statutory rate of 21% for 2019 was primarily due to the amortization of excess accumulated deferred income taxes andcertain book and tax differences related to utility plant items, partially offset by state income taxes. The difference in the effective income taxrate of (102.7%) versus the federal statutory rate of 21% for 2018 was primarily due to the amortization of excess accumulated deferredincome taxes. See Note 3 to the financial statements for a reconciliation of the federal statutory rate of 21% to the effective income tax rates.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Results of Operations” in System Energy’s AnnualReport on Form 10-K for the year ended December 31, 2018 for discussion of results of operations for 2018 compared to 2017.Income Tax LegislationSee the “Income Tax Legislation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion andAnalysis for discussion of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017. Note 3 to the financialstatements contains additional discussion of the effect of the Tax Act on 2017, 2018, and 2019 results of operations and financial position,the provisions of the Tax Act, and the uncertainties associated with accounting for the Tax Act, and Note 2 to the financial statementsdiscusses the regulatory proceedings that have considered the effects of the Tax Act.412 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and AnalysisLiquidity and Capital ResourcesCash FlowCash flows for the years ended December 31, 2019, 2018, and 2017 were as follows: 2019 2018 2017 (In Thousands)Cash and cash equivalents at beginning of period$95,685 $287,187 $245,863 Net cash provided by (used in): Operating activities300,141 101,328 371,278Investing activities(119,553) (286,161) (174,250)Financing activities(207,739) (6,669) (155,704)Net increase (decrease) in cash and cash equivalents(27,151) (191,502) 41,324 Cash and cash equivalents at end of period$68,534 $95,685 $287,1872019 Compared to 2018Operating ActivitiesNet cash flow provided by operating activities increased $198.8 million in 2019 primarily due to:•the decrease in the return of the unprotected excess accumulated deferred income taxes in 2018;•a decrease in spending of $48.5 million on nuclear refueling outages in 2019 as compared to prior year; and•a decrease of $51.7 million in income taxes paid in 2019. System Energy made income tax payments of $54 million in 2018 inaccordance with an intercompany income tax allocation agreement.Investing ActivitiesNet cash flow used in investing activities decreased by $166.6 million in 2019 primarily due to:•a decrease of $102.7 million as a result of fluctuations in nuclear fuel activity because of variations from year to year in the timingand pricing of fuel reload requirements in the Utility business, material and services deliveries, and the timing of cash paymentsduring the nuclear fuel cycle;•money pool activity; and•a decrease of $28.4 million in nuclear construction expenditures as a result of spending in 2018 on Grand Gulf outage projects.Decreases in System Energy’s receivable from the money pool are a source of cash flow and System Energy’s receivable from themoney pool decreased by $47.8 million in 2019 compared to decreasing by $4.5 million in 2018. The money pool is an inter-companyborrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings. Financing ActivitiesNet cash flow used in financing activities increased $201.1 million in 2019 primarily due to:•the issuance in March 2018 of $100 million of 3.42% Series J notes by the System Energy nuclear fuel company variable interestentity;413 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and Analysis•an increase of $56.5 million in common stock dividends and distributions in 2019. Common stock dividends and distributions werelower in 2018 in anticipation of the excess accumulated deferred income taxes being returned to customers as a result of the Tax Cutsand Jobs Act; and•net repayments of $82.3 million of long-term borrowings in 2019 compared to net borrowings of $63.9 million of long-termborrowings in 2018 on the nuclear fuel company variable interest entity’s credit facility.The increase was partially offset by:•the payment in October 2018, at maturity, of $85 million of the System Energy nuclear fuel company variable interest entity’s 3.78%Series I notes; and•net repayments of short-term borrowings of $17.8 million in 2018 on the nuclear fuel company variable interest entity’s creditfacility.In March 2019, System Energy issued $134 million of 2.50% Series 2019 revenue refunding bonds due April 2022. The proceedswere used to redeem, prior to maturity, $134 million of 5.875% Series 1998 pollution control revenue refunding bonds due April 2022.See Note 5 to the financial statements for additional details of long-term debt.2018 Compared to 2017See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Cash Flow” inSystem Energy’s Annual Report on Form 10-K for the year ended December 31, 2018 for discussion of operating, investing, and financingcash flow activities for 2018 compared to 2017.Capital StructureSystem Energy’s debt to capital ratio is shown in the following table. The decrease in the debt to capital ratio is primarily due to adecrease in long-term debt outstanding, partially offset by a decrease in retained earnings. December 31, 2019 December 31, 2018Debt to capital43.5% 46.1%Effect of subtracting cash(3.3%) (4.0%)Net debt to net capital40.2% 42.1%Net debt consists of debt less cash and cash equivalents. Debt consists of short-term borrowings and long-term debt, including the currentlymaturing portion. Capital consists of debt and common equity. Net capital consists of capital less cash and cash equivalents. System Energyuses the debt to capital ratio in analyzing its financial condition and believes it provides useful information to its investors and creditors inevaluating System Energy’s financial condition. System Energy uses the net debt to net capital ratio in analyzing its financial condition andbelieves it provides useful information to its investors and creditors in evaluating System Energy’s financial condition because net debtindicates System Energy’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.System Energy seeks to optimize its capital structure in accordance with its regulatory requirements and to control its cost of capitalwhile also maintaining equity capitalization at a level consistent with investment-grade debt ratings. To the extent that operating cash flowsare in excess of planned investments, cash may be used to reduce outstanding debt or may be paid as a dividend, or both, in appropriateamounts to maintain the capital structure. To the extent that operating cash flows are insufficient to support planned investments, SystemEnergy may issue incremental debt or reduce dividends, or both, to maintain its capital structure.414 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and AnalysisUses of CapitalSystem Energy requires capital resources for:•construction and other capital investments;•debt maturities or retirements;•working capital purposes, including the financing of fuel costs; and•dividend, distribution, and interest payments.Following are the amounts of System Energy’s planned construction and other capital investments. 2020 2021 2022 (In Millions)Planned construction and capital investment: Generation$165 $80 $145Utility Support5 15 15Total$170 $95 $160Following are the amounts of System Energy’s existing debt and lease obligations (includes estimated interest payments) and otherpurchase obligations. 2020 2021-2022 2023-2024 After 2024 Total (In Millions)Long-term debt (a)$35 $326 $287 $206 $854Purchase obligations (b)$32 $54 $47 $— $133(a)Includes estimated interest payments. Long-term debt is discussed in Note 5 to the financial statements.(b)Purchase obligations represent the minimum purchase obligation or cancellation charge for contractual obligations to purchase goodsor services. For System Energy, it includes nuclear fuel purchase obligations.In addition to the contractual obligations given above, System Energy expects to contribute approximately $10.5 million to its qualifiedpension plans and approximately $21 thousand to other postretirement health care and life insurance plans in 2020, although the 2020required pension contributions will be known with more certainty when the January 1, 2020 valuations are completed, which is expected byApril 1, 2020. See “Critical Accounting Estimates – Qualified Pension and Other Postretirement Benefits” below for a discussion ofqualified pension and other postretirement benefits funding.Also in addition to the contractual obligations, System Energy has $464.9 million of unrecognized tax benefits and interest net ofunused tax attributes and payments for which the timing of payments beyond 12 months cannot be reasonably estimated due to uncertaintiesin the timing of effective settlement of tax positions. See Note 3 to the financial statements for additional information regardingunrecognized tax benefits.In addition to routine spending to maintain operations, the planned capital investment estimate includes specific Grand Gulfinvestments and initiatives.As a wholly-owned subsidiary, System Energy dividends its earnings to Entergy Corporation at a percentage determined monthly. 415 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and AnalysisSources of CapitalSystem Energy’s sources to meet its capital requirements include:•internally generated funds;•cash on hand;•debt issuances; and•bank financing under new or existing facilities.System Energy may refinance, redeem, or otherwise retire debt prior to maturity, to the extent market conditions and interest rates arefavorable.All debt issuances by System Energy require prior regulatory approval. Debt issuances are also subject to issuance tests set forth inits bond indenture and other agreements. System Energy has sufficient capacity under these tests to meet its foreseeable capital needs.System Energy’s receivables from the money pool were as follows as of December 31 for each of the following years.2019 2018 2017 2016(In Thousands)$59,298 $107,122 $111,667 $33,809See Note 4 to the financial statements 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 toexpire in September 2021. As of December 31, 2019, $31.6 million in loans were outstanding under the System Energy nuclear fuelcompany variable interest entity credit facility. See Note 4 to the financial statements for additional discussion of the variable interest entitycredit facility.System Energy obtained authorizations from the FERC through November 2020 for the following:•short-term borrowings not to exceed an aggregate amount of $200 million at any time outstanding;•long-term borrowings and security issuances; and•borrowings by its nuclear fuel company variable interest entity.See Note 4 to the financial statements for further discussion of System Energy’s short-term borrowing limits.Federal RegulationSee the “Rate, Cost-recovery, and Other Regulation – Federal Regulation” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis and Note 2 to the financial statements for a discussion of federal regulation.Complaints Against System EnergyReturn on Equity and Capital Structure ComplaintsIn January 2017 the APSC and MPSC filed a complaint with the FERC against System Energy. The complaint seeks a reduction inthe return on equity component of the Unit Power Sales Agreement pursuant to which System Energy sells its Grand Gulf capacity andenergy to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. Entergy Arkansas also sells some of itsGrand Gulf capacity and energy to Entergy Louisiana,416 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and AnalysisEntergy Mississippi, and Entergy New Orleans under separate agreements. The current return on equity under the Unit Power SalesAgreement is 10.94%, which was established in a rate proceeding that became final in July 2001.The APSC and MPSC complaint alleges that the return on equity is unjust and unreasonable because capital market and otherconsiderations indicate that it is excessive. The complaint requests the FERC to institute proceedings to investigate the return on equity andestablish a lower return on equity, and also requests that the FERC establish January 23, 2017 as a refund effective date. The complaintincludes return on equity analysis that purports to establish that the range of reasonable return on equity for System Energy is between 8.37%and 8.67%. System Energy answered the complaint in February 2017 and disputes that a return on equity of 8.37% to 8.67% is just andreasonable. The LPSC and the City Council intervened in the proceeding expressing support for the complaint. System Energy is recording aprovision against revenue for the potential outcome of this proceeding. In September 2017 the FERC established a refund effective date ofJanuary 23, 2017 and directed the parties to engage in settlement proceedings before an ALJ. The parties have been unable to settle the returnon equity issue and a FERC hearing judge was assigned in July 2018. The 15-month refund period in connection with the APSC/MPSCcomplaint expired on April 23, 2018.In April 2018 the LPSC filed a complaint with the FERC against System Energy seeking an additional 15-month refund period. TheLPSC complaint requests similar relief from the FERC with respect to System Energy’s return on equity and also requests the FERC toinvestigate System Energy’s capital structure. The APSC, MPSC, and City Council intervened in the proceeding, filed an answer expressingsupport for the complaint, and asked the FERC to consolidate this proceeding with the proceeding initiated by the complaint of the APSC andMPSC in January 2017. System Energy answered the LPSC complaint in May 2018 and also filed a motion to dismiss the complaint. The 15-month refund period in connection with the LPSC return on equity complaint expired on July 26, 2019.In August 2018 the FERC issued an order dismissing the LPSC’s request to investigate System Energy’s capital structure and settingfor hearing the return on equity complaint, with a refund effective date of April 27, 2018. The portion of the LPSC’s complaint dealing withreturn on equity was subsequently consolidated with the APSC and MPSC complaint for hearing. The parties are required to address an order(issued in a separate proceeding involving New England transmission owners) that proposed modifying the FERC’s standard methodologyfor determining return on equity. In September 2018, System Energy filed a request for rehearing and the LPSC filed a request for rehearingor reconsideration of the FERC’s August 2018 order. The LPSC’s request referenced an amended complaint that it filed on the same dayraising the same capital structure claim the FERC had earlier dismissed. The FERC initiated a new proceeding for the amended capitalstructure complaint, and System Energy submitted a response in October 2018. In January 2019 the FERC set the amended complaint forsettlement and hearing proceedings. Settlement proceedings in the capital structure proceeding commenced in February 2019. As notedbelow, in June 2019 settlement discussions were terminated and the amended capital structure complaint was consolidated with the ongoingreturn on equity proceeding. The 15-month refund period in connection with the capital structure complaint is from September 24, 2018 toDecember 23, 2019.In January 2019 the LPSC and the APSC and MPSC filed direct testimony in the return on equity proceeding. For the refund periodJanuary 23, 2017 through April 23, 2018, the LPSC argues for an authorized return on equity for System Energy of 7.81% and the APSC andMPSC argue for an authorized return on equity for System Energy of 8.24%. For the refund period April 27, 2018 through July 27, 2019,and for application on a prospective basis, the LPSC argues for an authorized return on equity for System Energy of 7.97% and the APSCand MPSC argue for an authorized return on equity for System Energy of 8.41%. In March 2019, System Energy submitted answeringtestimony in the return on equity proceeding. For the first refund period, System Energy’s testimony argues for a return on equity of 10.10%(median) or 10.70% (midpoint). For the second refund period, System Energy’s testimony shows that the calculated returns on equity for thefirst period fall within the range of presumptively just and reasonable returns on equity, and thus the second complaint should be dismissed(and the first period return on equity used going forward). If the FERC nonetheless were to set a new return on equity for the second period(and going forward), System Energy argues the return on equity should be either 10.32% (median) or 10.69% (midpoint).417 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and AnalysisIn May 2019 the FERC trial staff filed its direct and answering testimony in the return on equity proceeding. For the first refundperiod, the FERC trial staff calculates an authorized return on equity for System Energy of 9.89% based on the application of FERC’sproposed methodology. The FERC trial staff’s direct and answering testimony noted that an authorized return on equity of 9.89% for the firstrefund period was within the range of presumptively just and reasonable returns on equity for the second refund period, as calculated using astudy period ending January 31, 2019 for the second refund period.In June 2019, System Entergy filed testimony responding to the testimony filed by the FERC trial staff. Among other things, SystemEnergy’s testimony rebutted arguments raised by the FERC trial staff and provided updated calculations for the second refund period basedon the study period ending May 31, 2019. For that refund period, System Energy’s testimony shows that strict application of the return onequity methodology proposed by the FERC staff indicates that the second complaint would not be dismissed, and the new return on equitywould be set at 9.65% (median) or 9.74% (midpoint). System Energy’s testimony argues that these results are insufficient in light ofbenchmarks such as state returns on equity and treasury bond yields, and instead proposes that the calculated returns on equity for the secondperiod should be either 9.91% (median) or 10.3% (midpoint). System Energy’s testimony also argues that, under application of its proposedmodified methodology, the 10.10% return on equity calculated for the first refund period would fall within the range of presumptively justand reasonable returns on equity for the second refund period. System Energy is recording a provision against revenue for the potentialoutcome of this proceeding.Also in June 2019, the FERC’s Chief ALJ issued an order terminating settlement discussions in the amended complaint addressingSystem Energy’s capital structure. The ALJ consolidated the amended capital structure complaint with the ongoing return on equityproceeding and set new procedural deadlines for the consolidated hearing.In August 2019 the LPSC and the APSC and MPSC filed rebuttal testimony in the return on equity proceeding and direct andanswering testimony relating to System Energy’s capital structure. The LPSC reargues for an authorized return on equity for System Energyof 7.81% for the first refund period and 7.97% for the second refund period. The APSC and MPSC argue for an authorized return on equityfor System Energy of 8.26% for the first refund period and 8.32% for the second refund period. With respect to capital structure, the LPSCproposes that the FERC establish a hypothetical capital structure for System Energy for ratemaking purposes. Specifically, the LPSCproposes that System Energy’s common equity ratio be set to Entergy Corporation’s equity ratio of 37% equity and 63% debt. In thealternative, the LPSC argues that the equity ratio should be no higher than 49%, the composite equity ratio of System Energy and the otherEntergy operating companies who purchase under the Unit Power Sales Agreement. The APSC and MPSC recommend that 35.98% be set asthe common equity ratio for System Energy. As an alternative, the APSC and MPSC propose that System Energy’s common equity be set at46.75% based on the median equity ratio of the proxy group for setting the return on equity.In September 2019 the FERC trial staff filed its rebuttal testimony in the return on equity proceeding. For the first refund period, theFERC trial staff calculates an authorized return on equity for System Energy of 9.40% based on the application of the FERC’s proposedmethodology and an updated proxy group. For the second refund period, based on the study period ending May 31, 2019, the FERC trial staffrebuttal testimony argues for a return on equity of 9.63%. In September 2019 the FERC trial staff also filed direct and answering testimonyrelating to System Energy’s capital structure. The FERC trial staff argues that the average capital structure of the proxy group used todevelop System Energy’s return on equity should be used to establish the capital structure. Using this approach, the FERC trial staffcalculates the average capital structure for its proposed proxy group of 46.74% common equity, and 53.26% debt.In October 2019, System Energy filed answering testimony disputing the FERC trial staff’s, the LPSC’s, and the APSC’s and MPSC’sarguments for the use of a hypothetical capital structure and arguing that the use of System Energy’s actual capital structure is just andreasonable.In November 2019, in a proceeding that did not involve Entergy, the FERC issued an order addressing the methodology fordetermining the return on equity applicable to transmission owners in MISO. Thereafter, the participants the System Energy proceedingagreed to amend the procedural schedule to allow the participants to file testimony addressing the order in the MISO transmission ownerproceeding. Under the new schedule, the hearing in the System Energy proceeding will commence in June 2020 and the initial decision willbe due in October 2020.418 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and AnalysisGrand Gulf Sale-leaseback Renewal ComplaintIn May 2018 the LPSC filed a complaint against System Energy and Entergy Services related to System Energy’s renewal of a sale-leaseback transaction originally entered into in December 1988 for an 11.5% undivided interest in Grand Gulf Unit 1. The complaint allegesthat System Energy violated the filed rate and the FERC’s ratemaking and accounting requirements when it included in Unit Power SalesAgreement billings the cost of capital additions associated with the sale-leaseback interest, and that System Energy is double-recoveringcosts by including both the lease payments and the capital additions in Unit Power Sales Agreement billings. The complaint also claims thatSystem Energy was imprudent in entering into the sale-leaseback renewal because the Utility operating companies that purchase GrandGulf’s output from System Energy could have obtained cheaper capacity and energy in the MISO markets. The complaint further alleges thatSystem Energy violated various other reporting and accounting requirements and should have sought prior FERC approval of the leaserenewal. The complaint seeks various forms of relief from the FERC. The complaint seeks refunds for capital addition costs for all years inwhich they were recorded in allegedly non-formula accounts or, alternatively, the disallowance of the return on equity for the capitaladditions in those years plus interest. The complaint also asks that the FERC disallow and refund the lease costs of the sale-leasebackrenewal on grounds of imprudence, investigate System Energy’s treatment of a DOE litigation payment, and impose certain forward-lookingprocedural protections, including audit rights for retail regulators of the Unit Power Sales Agreement formula rates. The APSC, MPSC, andCity Council intervened in the proceeding.In June 2018, System Energy and Entergy Services filed a motion to dismiss and an answer to the LPSC complaint denying thatSystem Energy’s treatment of the sale-leaseback renewal and capital additions violated the terms of the filed rate or any other FERCratemaking, accounting, or legal requirements or otherwise constituted double recovery. The response also argued that the complaint isinconsistent with a FERC-approved settlement to which the LPSC is a party and that explicitly authorizes System Energy to recover its leasepayments. Finally, the response argued that both the capital additions and the sale-leaseback renewal were prudent investments and the LPSCcomplaint fails to justify any disallowance or refunds. The response also offered to submit formula rate protocols for the Unit Power SalesAgreement similar to the procedures used for reviewing transmission rates under the MISO tariff. In September 2018 the FERC issued anorder setting the complaint for hearing and settlement proceedings. The FERC established a refund effective date of May 18, 2018.In February 2019 the presiding ALJ ruled that the hearing ordered by the FERC includes the issue of whether specific subcategoriesof 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 seeks refunds that include the renewal lease payments(approximately $17.2 million per year since July 2015), rate base reductions for accumulated deferred income tax associated with uncertaintax positions (claimed to be approximately $334.5 million as of December 2018), and the cost of capital additions associated with the sale-leaseback interest (claimed to be approximately $274.8 million), as well as interest on those amounts. The direct testimony of the CityCouncil and the APSC and MPSC address various issues raised by the LPSC. System Energy disputes that any refunds are owed for billingsunder the Unit Power Sales Agreement.In June 2019 System Energy filed answering testimony in the sale-leaseback complaint proceeding arguing that the FERC shouldreject all claims for refunds. Among other things, System Energy argued that claims for refunds of the costs of lease renewal payments andcapital additions should be rejected because those costs were recovered consistent with the Unit Power Sales Agreement formula rate, SystemEnergy was not over or double recovering any costs, and ratepayers will save approximately $850 million over initial and renewal terms ofthe leases. System Energy argued that claims for refunds associated with liabilities arising from uncertain tax positions should be rejectedbecause the liabilities do not provide cost-free capital, the repayment timing of the liabilities is uncertain, and the outcome of the underlyingtax positions is uncertain. System Energy’s testimony also challenged the refund calculations supplied by the other parties.419 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and AnalysisIn August 2019 the FERC trial staff filed direct and answering testimony seeking refunds for rate base reductions for liabilitiesassociated with uncertain tax positions (claimed to be up to approximately $602 million plus interest). The FERC trial staff also argued thatSystem Energy recovered $32 million more than it should have in depreciation expense for capital additions. In September 2019, SystemEnergy filed cross-answering testimony disputing the FERC trial staff’s arguments for refunds, stating that the FERC trial staff’s positionregarding depreciation rates for capital additions is not unreasonable and explaining that any change in depreciation expense is only oneelement of a Unit Power Sales Agreement rebilling calculation. Adjustments to depreciation expense in any rebilling under the Unit PowerSales Agreement formula rate will also involve changes to accumulated depreciation, accumulated deferred income taxes, and other formulaelements as needed. In October 2019 the LPSC filed rebuttal testimony increasing the amount of refunds sought for liabilities associated withuncertain tax positions. The LPSC now seeks approximately $512 million plus interest. At the same time, the FERC trial staff filed rebuttaltestimony conceding that it was no longer seeking up to $602 million related to the uncertain tax positions; instead, it is seekingapproximately $511 million plus interest. The LPSC also argued that adjustments to depreciation rates should affect rate base on aprospective basis only.A hearing was held before a FERC ALJ in November 2019 and the initial decision is due in April 2020.Unit Power Sales AgreementIn August 2017, System Energy submitted to the FERC proposed amendments to the Unit Power Sales Agreement pursuant to whichSystem Energy sells its Grand Gulf capacity and energy to Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy NewOrleans. The filing proposes limited amendments to the Unit Power Sales Agreement to adopt (1) updated rates for use in calculating GrandGulf plant depreciation and amortization expenses and (2) updated nuclear decommissioning cost annual revenue requirements, both ofwhich are recovered through the Unit Power Sales Agreement rate formula. The amendments result in lower charges to the Utility operatingcompanies that buy capacity and energy from System Energy under the Unit Power Sales Agreement. The changes were based on updateddepreciation and nuclear decommissioning studies that take into account the renewal of Grand Gulf’s operating license for a term throughNovember 1, 2044.In September 2017 the FERC accepted System Energy’s proposed Unit Power Sales Agreement amendments, subject to furtherproceedings to consider the justness and reasonableness of the amendments. Because the amendments propose a rate decrease, the FERC alsoinitiated an investigation under Section 206 of the Federal Power Act to determine if the rate decrease should be lower than proposed. TheFERC accepted the proposed amendments effective October 1, 2017, subject to refund pending the outcome of the further settlement and/orhearing proceedings, and established a refund effective date of October 11, 2017 with respect to the rate decrease. In June 2018, SystemEnergy filed with the FERC an uncontested settlement relating to the updated depreciation rates and nuclear decommissioning cost annualrevenue requirements. In August 2018 the FERC issued an order accepting the settlement. In the third quarter 2018, System Energy recordeda reduction in depreciation expense of approximately $26 million, representing the cumulative difference in depreciation expense resultingfrom the depreciation rates used from October 11, 2017 through September 30, 2018 and the depreciation rates included in the settlementfiling accepted by the FERC. Nuclear MattersSystem Energy owns and, through an affiliate, operates Grand Gulf. System Energy is, therefore, subject to the risks related toowning and operating a nuclear plant. These include risks related to: the use, storage, and handling and disposal of high-level and low-levelradioactive materials; the substantial financial requirements, both for capital investments and operational needs, to position Entergy’s nuclearfleet to meet its operational goals, including the financial requirements to address emerging issues like stress corrosion cracking of certainmaterials within the plant systems and the Fukushima event; regulatory requirements and potential future regulatory changes, includingchanges affecting the regulations governing nuclear plant ownership, operations, license renewal and amendments, and decommissioning; theperformance and capacity factors of these nuclear plants; the availability of interim or permanent sites for the disposal of spent nuclear fueland nuclear waste, including the fees charged for such disposal; the sufficiency420 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and Analysisof nuclear decommissioning trust fund assets and earnings to complete decommissioning of each site when required; and limitations on theamounts and types of insurance commercially available for losses in connection with nuclear plant operations and catastrophic events such asa nuclear accident. In the event of an unanticipated early shutdown of Grand Gulf, System Energy may be required to provide additionalfunds or credit support to satisfy regulatory requirements for decommissioning. Grand Gulf’s operating license expires in 2044. Environmental RisksSystem Energy’s facilities and operations are subject to regulation by various governmental authorities having jurisdiction over airquality, water quality, control of toxic substances and hazardous and solid wastes, and other environmental matters. Management believesthat System Energy is in substantial compliance with environmental regulations currently applicable to its facilities and operations, withreference to possible exceptions noted in “Regulation of Entergy’s Business - Environmental Regulation” in Part I, Item 1. Becauseenvironmental regulations are subject to change, future compliance costs cannot be precisely estimated.Critical Accounting EstimatesThe preparation of System Energy’s financial statements in conformity with generally accepted accounting principles requiresmanagement to apply appropriate accounting policies and to make estimates and judgments that can have a significant effect on reportedfinancial position, results of operations, and cash flows. Management has identified the following accounting policies and estimates ascritical because they are based on assumptions and measurements that involve a high degree of uncertainty, and there is the potential forfuture changes in the assumptions and measurements that could produce estimates that would have a material impact on the presentation ofSystem Energy’s financial position or results of operations. Nuclear Decommissioning CostsSee “Nuclear Decommissioning Costs” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for discussion of the estimates inherent in accounting for nuclear decommissioning costs.Utility Regulatory AccountingSee “Utility Regulatory Accounting” in the “Critical Accounting Estimates” section of Entergy Corporation and SubsidiariesManagement’s Financial Discussion and Analysis for discussion of accounting for the effects of rate regulation.Impairment of Long-lived Assets and Trust Fund InvestmentsSee “Impairment of Long-lived Assets and Trust Fund Investments” in the “Critical Accounting Estimates” section of EntergyCorporation and Subsidiaries Management’s Financial Discussion and Analysis for discussion of the estimates associated with theimpairment of long-lived assets and trust fund investments.Taxation and Uncertain Tax PositionsSee “Taxation and Uncertain Tax Positions” in the “Critical Accounting Estimates” section of Entergy Corporation andSubsidiaries Management’s Financial Discussion and Analysis for further discussion.Qualified Pension and Other Postretirement BenefitsSystem Energy’s qualified pension and other postretirement reported costs, as described in Note 11 to the financial statements, areimpacted by numerous factors including the provisions of the plans, changing employee421 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and Analysisdemographics, and various actuarial calculations, assumptions, and accounting mechanisms. See the “Qualified Pension and OtherPostretirement Benefits” in the “Critical Accounting Estimates” section of Entergy Corporation and Subsidiaries Management’s FinancialDiscussion and Analysis for further discussion. Because of the complexity of these calculations, the long-term nature of these obligations,and the importance of the assumptions utilized, Entergy’s estimate of these costs is a critical accounting estimate.Cost SensitivityThe following chart reflects the sensitivity of qualified pension cost and qualified projected benefit obligation to changes in certainactuarial assumptions (dollars in thousands).Actuarial Assumption Change inAssumption Impact on 2020 Qualified PensionCost Impact on 2019 ProjectedQualified Benefit Obligation Increase/(Decrease) Discount rate (0.25%) $737 $10,902Rate of return on plan assets (0.25%) $666 $—Rate of increase in compensation 0.25% $422 $2,072The following chart reflects the sensitivity of postretirement benefit cost and accumulated postretirement benefit obligation tochanges in certain actuarial assumptions (dollars in thousands).Actuarial Assumption Change inAssumption Impact on 2020 PostretirementBenefit Cost Impact on 2019 AccumulatedPostretirement Benefit Obligation Increase/(Decrease) Discount rate (0.25%) $31 $1,507Health care cost trend 0.25% $64 $1,164Each fluctuation above assumes that the other components of the calculation are held constant.Costs and Employer ContributionsTotal qualified pension cost for System Energy in 2019 was $12.3 million. System Energy anticipates 2020 qualified pension cost tobe $17.6 million. System Energy contributed $20.2 million to its qualified pension plans in 2019 and estimates 2020 pension contributionswill approximate $10.5 million, although the 2020 required pension contributions will be known with more certainty when the January 1,2020 valuations are completed, which is expected by April 1, 2020.Total postretirement health care and life insurance benefit income for System Energy in 2019 was $1 million. System Energy expects2020 postretirement health care and life insurance benefit income to approximate $1.3 million. System Energy contributed $829 thousand toits other postretirement plans in 2019 and expects 2020 contributions to approximate $21 thousand.Other ContingenciesSee “Other Contingencies” in the “Critical Accounting Estimates” section of Entergy Corporation and Subsidiaries Management’sFinancial Discussion and Analysis for a discussion of the estimates associated with environmental, litigation, and other risks.422 Table of ContentsSystem Energy Resources, Inc.Management’s Financial Discussion and AnalysisNew Accounting PronouncementsSee “New Accounting Pronouncements” section of Note 1 to the financial statements for a discussion of new accountingpronouncements.423 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the shareholder and Board of Directors ofSystem Energy Resources, Inc.Opinion on the Financial StatementsWe have audited the accompanying balance sheets of System Energy Resources, Inc. (the “Company”) as of December 31, 2019 and 2018,the related statements of income, cash flows, and changes in common equity (pages 425 through 430 and applicable items in pages 49through 236), for each of the three years in the period ended December 31, 2019, and the related notes (collectively referred to as the“financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Companyas of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the three years in the period endedDecember 31, 2019, in conformity with accounting principles generally accepted in the United States of America.Basis for OpinionThese financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on theCompany’s financial statements based on our audits. We are a public accounting firm registered with the Public Company AccountingOversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. TheCompany is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of ouraudits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinionon the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error orfraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding theamounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significantestimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits providea reasonable basis for our opinion./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020We have served as the Company’s auditor since 2001.424 Table of ContentsSYSTEM ENERGY RESOURCES, INC.INCOME STATEMENTS For the Years Ended December 31, 2019 2018 2017 (In Thousands) OPERATING REVENUES Electric $573,410 $456,707 $633,458 OPERATING EXPENSES Operation and Maintenance: Fuel, fuel-related expenses, and gas purchased for resale 82,438 64,778 71,700Nuclear refueling outage expenses 33,376 20,715 17,968Other operation and maintenance 206,444 196,505 207,344Decommissioning 35,729 34,336 43,347Taxes other than income taxes 29,018 28,090 26,180Depreciation and amortization 106,630 97,527 137,767Other regulatory credits - net (35,210) (28,924) (37,831)TOTAL 458,425 413,027 466,475 OPERATING INCOME 114,985 43,680 166,983 OTHER INCOME Allowance for equity funds used during construction 8,709 8,750 6,345Interest and investment income 29,488 35,985 17,538Miscellaneous - net (5,516) (5,775) (6,711)TOTAL 32,681 38,960 17,172 INTEREST EXPENSE Interest expense 35,328 38,424 37,141Allowance for borrowed funds used during construction (2,131) (2,218) (1,551)TOTAL 33,197 36,206 35,590 INCOME BEFORE INCOME TAXES 114,469 46,434 148,565 Income taxes 15,349 (47,675) 69,969 NET INCOME $99,120 $94,109 $78,596 See Notes to Financial Statements. 425 Table of Contents(Page left blank intentionally)426 Table of ContentsSYSTEM ENERGY RESOURCES, INC.STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2019 2018 2017 (In Thousands)OPERATING ACTIVITIES Net income $99,120 $94,109 $78,596Adjustments to reconcile net income to net cash flow provided by operating activities: Depreciation, amortization, and decommissioning, including nuclear fuel amortization 212,170 186,719 240,962Deferred income taxes, investment tax credits, and non-current taxes accrued 95 24,040 7,827Changes in assets and liabilities: Receivables (23,382) 18,169 9,210Accounts payable 18,204 (7,067) 15,969Prepaid taxes and taxes accrued 19,247 (51,999) 62,466Interest accrued (1,302) (94) (660)Other working capital accounts 15,879 (45,415) 12,083Other regulatory assets (43,712) (2,044) 60,012Other regulatory liabilities 130,949 (156,802) 331,251Deferred tax rate change recognized as regulatory liability/asset — — (325,707)Pension and other postretirement liabilities 11,177 (23,235) 4,024Other assets and liabilities (138,304) 64,947 (124,755)Net cash flow provided by operating activities 300,141 101,328 371,278INVESTING ACTIVITIES Construction expenditures (166,695) (194,696) (91,705)Allowance for equity funds used during construction 8,709 8,750 6,345Nuclear fuel purchases (18,170) (125,272) (49,728)Proceeds from the sale of nuclear fuel 26,223 30,634 69,516Proceeds from nuclear decommissioning trust fund sales 500,384 573,561 565,416Investment in nuclear decommissioning trust funds (517,828) (583,683) (596,236)Changes in money pool receivable - net 47,824 4,545 (77,858)Net cash flow used in investing activities (119,553) (286,161) (174,250)FINANCING ACTIVITIES Proceeds from the issuance of long-term debt 1,103,917 741,785 150,100Retirement of long-term debt (1,187,406) (662,904) (150,103)Changes in short-term credit borrowings - net — (17,830) (49,063)Common stock dividends and distributions (124,250) (67,720) (106,610)Other — — (28)Net cash flow used in financing activities (207,739) (6,669) (155,704)Net increase (decrease) in cash and cash equivalents (27,151) (191,502) 41,324Cash and cash equivalents at beginning of period 95,685 287,187 245,863Cash and cash equivalents at end of period $68,534 $95,685 $287,187SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid (received) during the period for: Interest - net of amount capitalized $21,052 $17,183 $26,251Income taxes $2,284 $53,956 ($2,227)See Notes to Financial Statements. 427 Table of ContentsSYSTEM ENERGY RESOURCES, INC.BALANCE SHEETSASSETS December 31, 2019 2018 (In Thousands) CURRENT ASSETS Cash and cash equivalents: Cash $93 $68Temporary cash investments 68,441 95,617Total cash and cash equivalents 68,534 95,685Accounts receivable: Associated companies 121,972 148,571Other 7,547 5,390Total accounts receivable 129,519 153,961Materials and supplies - at average cost 108,766 97,225Deferred nuclear refueling outage costs 14,493 44,424Prepaid taxes — 5,415Prepayments and other 6,045 2,985TOTAL 327,357 399,695 OTHER PROPERTY AND INVESTMENTS Decommissioning trust funds 1,054,098 869,543TOTAL 1,054,098 869,543 UTILITY PLANT Electric 5,070,859 5,036,116Construction work in progress 164,996 70,156Nuclear fuel 149,574 234,889TOTAL UTILITY PLANT 5,385,429 5,341,161Less - accumulated depreciation and amortization 3,285,487 3,212,080UTILITY PLANT - NET 2,099,942 2,129,081 DEFERRED DEBITS AND OTHER ASSETS Regulatory assets: Other regulatory assets 490,083 446,371Accumulated deferred income tax 8,023 —Other 3,192 4,124TOTAL 501,298 450,495 TOTAL ASSETS $3,982,695 $3,848,814 See Notes to Financial Statements. 428 Table of ContentsSYSTEM ENERGY RESOURCES, INC.BALANCE SHEETSLIABILITIES AND EQUITY December 31, 2019 2018 (In Thousands) CURRENT LIABILITIES Currently maturing long-term debt $10 $6Accounts payable: Associated companies 14,619 11,031Other 64,144 47,565Taxes accrued 13,832 —Interest accrued 11,993 13,295Current portion of unprotected excess accumulated deferred income taxes — 4,426Other 3,381 2,832TOTAL 107,979 79,155 NON-CURRENT LIABILITIES Accumulated deferred income taxes and taxes accrued 821,963 805,296Accumulated deferred investment tax credits 40,181 38,673Regulatory liability for income taxes - net 142,845 158,998Other regulatory liabilities 533,415 381,887Decommissioning 931,729 896,000Pension and other postretirement liabilities 109,816 98,639Long-term debt 548,097 630,744Other 34,602 22,224TOTAL 3,162,648 3,032,461 Commitments and Contingencies COMMON EQUITY Common stock, no par value, authorized 1,000,000 shares; issued and outstanding 789,350 shares in 2019 and 2018 601,850 601,850Retained earnings 110,218 135,348TOTAL 712,068 737,198 TOTAL LIABILITIES AND EQUITY $3,982,695 $3,848,814 See Notes to Financial Statements. 429 Table of ContentsSYSTEM ENERGY RESOURCES, INC.STATEMENTS OF CHANGES IN COMMON EQUITYFor the Years Ended December 31, 2019, 2018, and 2017 Common Equity Common Stock Retained Earnings Total (In Thousands) Balance at December 31, 2016$679,350 $59,473 $738,823Net income— 78,596 78,596Common stock dividends and distributions(21,000) (85,610) (106,610)Balance at December 31, 2017$658,350 $52,459 $710,809Net income— 94,109 94,109Common stock dividends and distributions(56,500) (11,220) (67,720)Balance at December 31, 2018$601,850 $135,348 $737,198Net income— 99,120 99,120Common stock dividends and distributions— (124,250) (124,250)Balance at December 31, 2019$601,850 $110,218 $712,068 See Notes to Financial Statements. 430 Table of ContentsSYSTEM ENERGY RESOURCES, INC.SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON 2019 2018 2017 2016 2015 (Dollars In Thousands) Operating revenues$573,410 $456,707 $633,458 $548,291 $632,405Net income$99,120 $94,109 $78,596 $96,744 $111,318Total assets$3,982,695 $3,848,814 $3,938,887 $3,927,712 $3,728,875Long-term obligations (a)$548,097 $630,744 $466,484 $501,129 $572,665Electric energy sales (GWh)9,940 6,264 6,675 5,384 10,547 (a) Includes long-term debt (excluding currently maturing debt).431 Table of ContentsItem 2. PropertiesInformation regarding the registrant’s properties is included in Part I. Item 1. - Entergy’s Business under the sections titled “Utility -Property and Other Generation Resources” and “Entergy Wholesale Commodities - Property” in this report.Item 3. Legal ProceedingsDetails of the registrant’s material environmental regulation and proceedings and other regulatory proceedings and litigation that arepending or those terminated in the fourth quarter of 2019 are discussed in Part I. Item 1. - Entergy’s Business under the sections titled “RetailRate Regulation,” “Environmental Regulation,” and “Litigation” and “Impairment of Long-lived Assets” in Note 14 to the financialstatements.Item 4. Mine Safety DisclosuresNot applicable.INFORMATION ABOUT EXECUTIVE OFFICERS OF ENTERGY CORPORATIONExecutive OfficersName Age Position PeriodLeo P. Denault (a) 60 Chairman of the Board and Chief Executive Officer of Entergy Corporation 2013-Present A. Christopher Bakken, III (a) 58 Executive Vice President and Chief Nuclear Officer of EntergyCorporation, Entergy Arkansas, Entergy Louisiana, and System Energy 2016-Present Project Director, Hinkley Point C of EDF Energy 2009-2016 Marcus V. Brown (a) 58 Executive Vice President and General Counsel of Entergy Corporation,Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, Entergy Texas, and System Energy 2013-Present Andrew S. Marsh (a) 48 Executive Vice President and Chief Financial Officer of EntergyCorporation 2013-Present Director of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,Entergy New Orleans, Entergy Texas, and System Energy 2013-Present Chief Financial Officer of Entergy Arkansas, Entergy Louisiana, EntergyMississippi, Entergy New Orleans, Entergy Texas, and System Energy 2014-Present432 Table of ContentsName Age Position PeriodRoderick K. West (a) 51 Group President Utility Operations of Entergy Corporation, EntergyArkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,and Entergy Texas 2017-Present President, Chief Executive Officer, and Director of System Energy 2017-Present Director of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,Entergy New Orleans, Entergy Texas, and System Energy 2017-Present President and Chief Executive Officer of Entergy New Orleans 2018 Executive Vice President of Entergy Corporation 2010-2017 Chief Administrative Officer of Entergy Corporation 2010-2016 Paul D. Hinnenkamp (a) 58 Executive Vice President and Chief Operating Officer of EntergyCorporation 2017-Present Director of Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,Entergy New Orleans, and Entergy Texas 2015-Present Senior Vice President and Chief Operating Officer of Entergy Corporation 2015-2017 Senior Vice President, Capital Project Management and Technology ofEntergy Services, Inc. 2015 Vice President, Capital Project Management and Technology of EntergyServices, Inc. 2013-2015 Kimberly A. Fontan (a) 46 Senior Vice President and Chief Accounting Officer of EntergyCorporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,Entergy New Orleans, Entergy Texas, and System Energy 2019-Present Vice President, System Planning of Entergy Services, Inc. 2017-2019 Vice President, Regulatory Services of Entergy Services, Inc. 2015-2017 Vice President, Regulatory Affairs of Entergy Louisiana 2014-2015 Peter S. Norgeot, Jr. (a) 54 Senior Vice President, Transformation of Entergy Corporation 2018-Present Senior Vice President, Power Generation of Entergy Services 2017-2018 Vice President, Fossil Generation of Entergy Services 2015-2017 Vice President, Power Plant Operations, Steam of Entergy Services 2014-2015 Julie E. Harbert (a) 46 Senior Vice President, Corporate Business Services of Entergy Corporation 2019-Present Vice President, Shared Services of Entergy Services, Inc. 2017-2019 Senior Vice President, Global Business Services of Philips Health Tech 2015-2017 Vice President and Group Head of Operations, Global Shared Services ofIBM 2014(a)In addition, this officer is an executive officer and/or director of various other wholly owned subsidiaries of Entergy Corporationand its operating companies.Each officer of Entergy Corporation is elected yearly by the Board of Directors. Each officer’s age and title are provided as ofDecember 31, 2019.433 Table of ContentsPART IIItem 5. Market for Registrants’ Common Equity and Related Stockholder Matters Entergy CorporationThe shares of Entergy Corporation’s common stock are listed on the New York Stock and Chicago Stock Exchanges under the tickersymbol ETR. As of January 31, 2020, there were 23,696 stockholders of record of Entergy Corporation.Unregistered Sales of Equity Securities and Use of ProceedsIssuer Purchases of Equity Securities (1)Period Total Number ofShares Purchased Average Price Paidper Share Total Number of SharesPurchased as Part of aPublicly Announced Plan Maximum $ Amount ofShares that May Yet bePurchased Under a Plan(2) 10/01/2019 - 10/31/2019 — $— — $350,052,91811/01/2019 - 11/30/2019 — $— — $350,052,91812/01/2019 - 12/31/2019 — $— — $350,052,918Total — $— — In accordance with Entergy’s stock-based compensation plans, Entergy periodically grants stock options to key employees, whichmay be exercised to obtain shares of Entergy’s common stock. According to the plans, these shares can be newly issued shares, treasurystock, or shares purchased on the open market. Entergy’s management has been authorized by the Board to repurchase on the open marketshares up to an amount sufficient to fund the exercise of grants under the plans. In addition to this authority, the Board has authorized sharerepurchase 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 inbusiness results or capital spending or new investment opportunities. In addition, in the first quarter 2019, Entergy withheld 76,735 shares ofits common stock at $86.03 per share, 82,550 shares of its common stock at $86.51 per share, 38,326 shares of its common stock at $87.10per share, 932 shares of its common stock at $89.19 per share, and 2,280 shares of its common stock at $93.25 per share to pay income taxesdue upon vesting of restricted stock granted and payout of performance units as part of its long-term incentive program.(1)See Note 12 to the financial statements for additional discussion of the stock-based compensation plans.(2)Maximum amount of shares that may yet be repurchased relates only to the $500 million plan does not include an estimate of theamount of shares that may be purchased to fund the exercise of grants under the stock-based compensation plans.Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and SystemEnergyThere is no market for the common equity of the Registrant Subsidiaries. Information with respect to restrictions that limit the abilityof the Registrant Subsidiaries to pay dividends or distributions is presented in Note 7 to the financial statements.434 Table of ContentsItem 6. Selected Financial DataRefer to “SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON OF ENTERGY CORPORATION ANDSUBSIDIARIES, ENTERGY ARKANSAS, LLC AND SUBSIDIARIES, ENTERGY LOUISIANA, LLC AND SUBSIDIARIES,ENTERGY MISSISSIPPI, LLC, ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES, ENTERGY TEXAS, INC. ANDSUBSIDIARIES, and SYSTEM ENERGY RESOURCES, INC.” which follow each company’s financial statements in this report, forinformation with respect to selected financial data and certain operating statistics.Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsRefer to “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS OF ENTERGY CORPORATION ANDSUBSIDIARIES, ENTERGY ARKANSAS, LLC AND SUBSIDIARIES, ENTERGY LOUISIANA, LLC AND SUBSIDIARIES,ENTERGY MISSISSIPPI, LLC, ENTERGY NEW ORLEANS, LLC AND SUBSIDIARIES, ENTERGY TEXAS, INC. ANDSUBSIDIARIES, and SYSTEM ENERGY RESOURCES, INC.”Item 7A. Quantitative and Qualitative Disclosures About Market RiskRefer to “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS OF ENTERGY CORPORATION ANDSUBSIDIARIES - Market and Credit Risk Sensitive Instruments.”Item 8. Financial Statements and Supplementary DataRefer to “TABLE OF CONTENTS - Entergy Corporation and Subsidiaries, Entergy Arkansas, LLC and Subsidiaries,Entergy Louisiana, LLC and Subsidiaries, Entergy Mississippi, LLC, Entergy New Orleans, LLC and Subsidiaries, Entergy Texas,Inc. and Subsidiaries, and System Energy Resources, Inc.”Item 9. Changes In and Disagreements With Accountants On Accounting and Financial DisclosureNo event that would be described in response to this item has occurred with respect to Entergy Corporation, Entergy Arkansas,Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, or System Energy.Item 9A. Controls and ProceduresDisclosure Controls and ProceduresAs of December 31, 2019, evaluations were performed under the supervision and with the participation of Entergy Corporation,Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy (individually“Registrant” and collectively the “Registrants”) management, including their respective Principal Executive Officers (PEO) and PrincipalFinancial Officers (PFO). The evaluations assessed the effectiveness of the Registrants’ disclosure controls and procedures. Based on theevaluations, each PEO and PFO has concluded that, as to the Registrant or Registrants for which they serve as PEO or PFO, the Registrant’sor Registrants’ disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant inreports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the timeperiods specified in Securities and Exchange Commission rules and forms; and that the Registrant’s or Registrants’ disclosure controls andprocedures are also effective in reasonably assuring that such information is accumulated and communicated to the Registrant’s orRegistrants’ management, including their respective PEOs and PFOs, as appropriate to allow timely decisions regarding required disclosure.435 Table of ContentsInternal Control over Financial Reporting (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, Entergy Texas, and System Energy)The managements of Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans,Entergy Texas, and System Energy (individually “Registrant” and collectively the “Registrants”) are responsible for establishing andmaintaining adequate internal control over financial reporting for the Registrants. Each Registrant’s internal control system is designed toprovide reasonable assurance regarding the preparation and fair presentation of each Registrant’s financial statements presented inaccordance with generally accepted accounting principles.All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to beeffective can provide only reasonable assurance with respect to financial statement preparation and presentation.Each Registrant’s management assessed the effectiveness of each Registrant’s internal control over financial reporting as ofDecember 31, 2019. In making this assessment, each Registrant’s management used the criteria set forth by the Committee of SponsoringOrganizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework. The 2013 COSO Framework was utilizedfor management’s assessment.Based on each management’s assessment and the criteria set forth by the 2013 COSO Framework, each Registrant’s managementbelieves that each Registrant maintained effective internal control over financial reporting as of December 31, 2019.The report of Deloitte & Touche LLP, Entergy Corporation’s independent registered public accounting firm, regarding EntergyCorporation’s internal control over financial reporting is included herein. The report of Deloitte & Touche LLP is not applicable to EntergyArkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy because these Registrants arenon-accelerated filers.Changes in Internal Controls over Financial ReportingUnder the supervision and with the participation of each Registrant’s management, including its respective PEO and PFO, eachRegistrant evaluated changes in internal control over financial reporting that occurred during the quarter ended December 31, 2019 and foundno change that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.436 Table of ContentsAttestation Report of Registered Public Accounting FirmREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the shareholders and Board of Directors ofEntergy Corporation and SubsidiariesOpinion on Internal Control over Financial ReportingWe have audited the internal control over financial reporting of Entergy Corporation and Subsidiaries (the “Corporation”) as of December 31,2019, based on criteria established in Internal Control -Integrated Framework (2013) issued by the Committee of Sponsoring Organizationsof the Treadway Commission (COSO). In our opinion, the Corporation maintained, in all material respects, effective internal control overfinancial reporting as of December 31, 2019, based on criteria established in Internal Control - Integrated Framework (2013) issued byCOSO.We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), theconsolidated financial statements as of and for the year ended December 31, 2019 of the Corporation and our report dated February 21, 2020expressed an unqualified opinion on those consolidated financial statements.Basis for OpinionThe Corporation’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of theeffectiveness of internal control over financial reporting, included in Item 9A, Internal Control over Financial Reporting. Our responsibility isto express an opinion on the Corporation’s internal control over financial reporting based on our audit. We are a public accounting firmregistered with the PCAOB and are required to be independent with respect to the Corporation in accordance with the U.S. federal securitieslaws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our auditincluded obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing andevaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as weconsidered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.Definition and Limitations of Internal Control over Financial ReportingA company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accountingprinciples. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of anyevaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, orthat the degree of compliance with the policies or procedures may deteriorate./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020437 Table of ContentsPART IIIItem 10. Directors, Executive Officers, and Corporate Governance of the Registrants (Entergy Corporation, Entergy Arkansas,Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas)Information required by this item concerning directors of Entergy Corporation is set forth under the heading “Proposal 1 – Election ofDirectors” contained in the Proxy Statement of Entergy Corporation, to be filed in connection with its Annual Meeting of Stockholders to beheld May 8, 2020, and is incorporated herein by reference.All officers and directors listed below held the specified positions with their respective companies as of the date of filing this report,unless otherwise noted.Name Age Position PeriodEntergy Arkansas, LLC Directors Laura R. Landreaux 46 President and Chief Executive Officer of Entergy Arkansas 2018-Present Director of Entergy Arkansas 2018-Present Operational Finance Director of Entergy Arkansas 2017-2018 Vice President, Regulatory Affairs of Entergy Arkansas 2014-2017 Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. Officers A. Christopher Bakken, III See information under the Information about Executive Officers ofEntergy Corporation in Part I. Marcus V. Brown See information under the Information about Executive Officers ofEntergy Corporation in Part I. Leo P. Denault See information under the Information about Executive Officers ofEntergy Corporation in Part I. Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Laura R. Landreaux See information under the Entergy Arkansas Directors Section above. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Kimberly A. Fontan See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. 438 Table of ContentsENTERGY LOUISIANA, LLCDirectors Phillip R. May, Jr. 57 President and Chief Executive Officer of Entergy Louisiana 2013-Present Director of Entergy Louisiana 2013-Present Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. Officers A. Christopher Bakken, III See information under the Information about Executive Officers ofEntergy Corporation in Part I. Marcus V. Brown See information under the Information about Executive Officers ofEntergy Corporation in Part I. Leo P. Denault See information under the Information about Executive Officers ofEntergy Corporation in Part I. Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Phillip R. May, Jr. See information under the Entergy Louisiana Directors Section above. Kimberly A. Fontan See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. ENTERGY MISSISSIPPI, LLCDirectors Haley R. Fisackerly 54 President and Chief Executive Officer of Entergy Mississippi 2008-Present Director of Entergy Mississippi 2008-Present Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. 439 Table of ContentsOfficers Marcus V. Brown See information under the Information about Executive Officers ofEntergy Corporation in Part I. Leo P. Denault See information under the Information about Executive Officers ofEntergy Corporation in Part I. Haley R. Fisackerly See information under the Entergy Mississippi Directors Section above. Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Kimberly A. Fontan See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. ENTERGY NEW ORLEANS, LLCDirectors David D. Ellis 51 President and Chief Executive Officer of Entergy New Orleans 2018-Present Director of Entergy New Orleans 2018-Present President and Chief Executive Officer, Global Power Technologies 2018 Managing Director and Chairman of Comverge International, Inc. 2010-2017 Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. Officers Marcus V. Brown See information under the Information about Executive Officers ofEntergy Corporation in Part I. Leo P. Denault See information under the Information about Executive Officers ofEntergy Corporation in Part I. David D. Ellis See information under the Entergy New Orleans Directors Section above. Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Kimberly A. Fontan See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. 440 Table of ContentsENTERGY TEXAS, INC.Directors Sallie T. Rainer 57 President and Chief Executive Officer of Entergy Texas 2012-Present Director of Entergy Texas 2012-Present Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. Officers Marcus V. Brown See information under the Information about Executive Officers ofEntergy Corporation in Part I. Leo P. Denault See information under the Information about Executive Officers ofEntergy Corporation in Part I. Paul D. Hinnenkamp See information under the Information about Executive Officers ofEntergy Corporation in Part I. Andrew S. Marsh See information under the Information about Executive Officers ofEntergy Corporation in Part I. Kimberly A. Fontan See information under the Information about Executive Officers ofEntergy Corporation in Part I. Sallie T. Rainer See information under the Entergy Texas Directors Section above. Roderick K. West See information under the Information about Executive Officers ofEntergy Corporation in Part I. The directors and officers of Entergy Texas are elected annually to serve by the unanimous consent of its sole common stockholder.The directors and officers of Entergy Arkansas, LLC, Entergy Louisiana, LLC, Entergy Mississippi, LLC and Entergy New Orleans, LLC areelected annually to serve by the unanimous consent of the sole common membership owner, Entergy Utility Holding Company, LLC.Entergy Corporation’s directors are elected annually at the annual meeting of shareholders. Entergy Corporation’s officers are elected at theannual organizational meeting of the Board of Directors, which immediately follows the annual meeting of shareholders. The age of eachofficer and director for whom information is presented above is as of December 31, 2019.Corporate Governance Guidelines and Committee ChartersEach of the Audit, Corporate Governance, and Personnel Committees of Entergy Corporation’s Board of Directors operates under awritten charter. In addition, the Board has adopted Corporate Governance Guidelines. Each charter and the guidelines are available throughEntergy’s website (www.entergy.com) or upon written request.Audit Committee of the Entergy Corporation BoardThe following directors are members of the Audit Committee of Entergy Corporation’s Board of Directors:Patrick J. Condon (Chairman)Philip L. FredericksonM. Elise HylandKaren A. Puckett441 Table of ContentsAll Audit Committee members are independent. In addition to the general independence requirements of the NYSE, all Audit Committeemembers must meet the heightened independence standards imposed by the SEC and NYSE. All Audit Committee members possess thelevel of financial literacy required by the NYSE rules and the Board has determined that Messrs. Condon and Frederickson satisfy thefinancial expertise requirements of the NYSE and have the requisite experience to be designated an audit committee financial expert as thatterm is defined by the rules of the SEC.Code of EthicsEffective October 2018, the Entergy Corporation Board of Directors adopted a Code of Business Conduct and Ethics that applies tomembers of the Entergy Corporation Board of Directors and all Entergy officers and employees. The Code of Business Conduct and Ethicsincludes Special Provisions Relating to Principal Executive Officer and Senior Financial Officers. It is to be read in conjunction withEntergy’s omnibus code of integrity under which Entergy operates, called the Code of Entegrity, as well as system policies. All employeesare expected to abide by the Codes. Non-bargaining employees are required to acknowledge annually that they understand and abide by theCode of Entegrity. The Code of Business Conduct and Ethics, including any amendments or any waivers thereto, and the Code of Entegrityare available through Entergy’s website (www.entergy.com) or upon written request.Nominations to the Entergy Corporation Board of Directors; Nominating ProcedureShareholders wishing to recommend a candidate to the Corporate Governance Committee should do so by submitting therecommendation in writing to Entergy Corporation’s Secretary at 639 Loyola Avenue, P.O. Box 61000, New Orleans, LA 70161, and it willbe forwarded to the Corporate Governance Committee members for their consideration. Any recommendation should include:•the number of shares of Entergy Corporation stock held by the shareholder;•the name and address of the candidate;•a brief biographical description of the candidate, including his or her occupation for at least the last five years, and a statement of thequalifications of the candidate, taking into account the qualification requirements discussed in the Proxy Statement under “Board ofDirectors - Identifying Director Candidates”; and•the candidate’s signed consent to be named in the Proxy Statement and a representation of such candidates’ intent to serve as adirector for the entire term if elected. Once the Corporate Governance Committee receives the recommendation, it may request additional information from the candidateabout the candidate’s independence, qualifications, and other information that would assist the Corporate Governance Committee inevaluating the candidate, as well as certain information that must be disclosed about the candidate in the Proxy Statement, if nominated. TheCorporate Governance Committee will apply the same standards in considering director candidates recommended by shareholders as itapplies to other candidates.442 Table of ContentsItem 11. Executive CompensationENTERGY CORPORATIONInformation concerning compensation earned by the directors and officers of Entergy Corporation is set forth in its Proxy Statement,to be filed in connection with the Annual Meeting of Shareholders to be held May 8, 2020, under the headings “Compensation Discussionand Analysis,” “Annual Compensation Risk Assessment,” “Executive Compensation Tables,” “Pay Ratio Disclosure,” “Our 2020 DirectorNominees,” and “2019 Non-Employee Director Compensation,” all of which information is incorporated herein by reference. References inthis section to the “Company” refer to Entergy Corporation.ENTERGY ARKANSAS, ENTERGY LOUISIANA, ENTERGY MISSISSIPPI, ENTERGY NEW ORLEANS, AND ENTERGYTEXASCOMPENSATION DISCUSSION AND ANALYSISIn this section, the compensation earned in 2019 by the following executive officers (referred to herein as “Named ExecutiveOfficers”) is discussed.Name(1)TitleA. Christopher Bakken, IIIExecutive Vice President, Nuclear Operations/Chief Nuclear OfficerMarcus V. BrownExecutive Vice President and General CounselLeo P. DenaultChairman of the Board and Chief Executive OfficerDavid D. EllisPresident and Chief Executive Officer, Entergy New OrleansHaley R. FisackerlyPresident and Chief Executive Officer, Entergy MississippiLaura R. LandreauxPresident and Chief Executive Officer, Entergy ArkansasAndrew S. MarshExecutive Vice President and Chief Financial Officer Entergy Arkansas, EntergyLouisiana, Entergy Mississippi, Entergy New Orleans, and Entergy TexasPhillip R. May, Jr.President and Chief Executive Officer, Entergy LouisianaSallie T. RainerPresident and Chief Executive Officer, Entergy TexasRoderick K. WestGroup President Utility Operations(1)Messrs. Bakken, Brown, Denault, Marsh, and West hold the positions referenced above as executive officers of Entergy Corporationand are members of Entergy Corporation’s Office of the Chief Executive. No additional compensation was paid in 2019 to any ofthese officers for their service as Named Executive Officers of the Utility operating companies.Entergy Corporation’s Executive Compensation Programs and Practices Entergy Corporation regularly reviews its executive compensation programs to align them with commonly viewed best practices inthe market and to reflect feedback from discussions with investors on executive compensation.Entergy Corporation’s Compensation Principles and PhilosophyEntergy Corporation’s executive compensation programs are based on a philosophy of pay for performance that is embodied in thedesign of its annual and long-term incentive plans. It believes the executive pay programs:•Motivate its management team to drive strong financial and operational results.443 Table of Contents•Attract and retain a highly experienced and successful management team.•Incentivize and reward the achievement of financial and operational metrics that are deemed by the Personnel Committee to beconsistent with the overall goals and strategic direction that the Board has approved for Entergy Corporation.•Align the interests of the executives and Entergy Corporation shareholders by directly tying the value of equity-based awards toEntergy Corporation’s stock price performance, relative total shareholder return and earnings growth.•Create sustainable value for the benefit of all of Entergy Corporation’s stakeholders, including its owners, customers, employees andcommunities. Executive Compensation Best Practices:What EntergyCorporation Does*Executive compensation programs are highly correlated to performance and focused on long-term valuecreation*Double trigger for cash severance payments and equity acceleration in the event of a change in control*Clawback policy*Maximum payout capped at 200% of target under the Annual Incentive Plan and Long-Term Performance UnitProgram for members of the Office of the Chief Executive*Rigorous goal setting aligned with externally disclosed annual and multi-year financial targets*Minimum vesting periods for equity-based awards*Long-term compensation mix weighted more toward performance units than service-based equity awards*All long-term incentive compensation is settled in Entergy Corporation common stock*Rigorous stock ownership and share retention requirements*Annual Say on Pay voteWhat EntergyCorporationDoesn’t Do*No 280G tax “gross up” payments in the event of a change in control*No tax “gross up” payments on any executive perquisites for members of the Office of the Chief Executive,other than relocation benefits*No option repricing or cash buy-outs for underwater options without shareholder approval*No agreements providing for severance payments to executive officers that exceed 2.99 times annual basesalary and annual incentive awards without shareholder approval*No unusual or excessive perquisites*No hedging or pledging of Entergy Corporation common stock*No fixed term employment agreements*No new officer participation in the System Executive Retirement Plan*No grants of supplemental service credit to newly-hired officers under any of Entergy Corporation’s non-qualified retirement plans2019 Executive Compensation Program ChangesDuring 2019, the following changes were made to Entergy Corporation’s executive officer compensation programs:Annual Incentive Plan In recognition of Entergy Corporation’s successful execution on its strategy to exit the Entergy Wholesale Commodities merchantpower business, Entergy Corporation decided to establish a new, single earnings measure not calculated in accordance with generallyaccepted accounting principles in the United States (“GAAP”) for guidance444 Table of Contentsand investor reporting purposes that would better reflect its ongoing business and respond to feedback received from investors on theearnings measures on which Entergy Corporation had previously reported and guided. This new measure, Entergy Adjusted Earnings PerShare (“ETR Adjusted EPS”), adjusts the Company’s as reported (GAAP) earnings per share results to eliminate the impact of its EntergyWholesale Commodities merchant power business, significant tax items and other non-routine items. With this change in the externalguidance measure, and given the Personnel Committee’s desire to maintain an appropriate degree of alignment between the Company’sexternally communicated earnings targets and the targets under the annual incentive plan, the committee adopted new performance measuresto determine the maximum funding level of the annual incentive plan with each performance measure weighted equally:•The earnings measure, ETR Tax Adjusted EPS, is based on the externally reported ETR Adjusted EPS, which is then adjusted to addback the effect of significant tax items, and to eliminate the effect of major storms, the resolution of certain unresolved regulatorylitigation matters, changes in federal income tax law and unrealized gains or losses on equity securities (the “Pre-DeterminedExclusions”).•The cash flow measure, ETR Adjusted Operating Cash Flow is calculated based on Entergy Corporation’s as-reported (GAAP)operating cash flow, adjusted to eliminate the effect of any Pre-Determined Exclusions.Long-Term IncentivesIn keeping with the change in Entergy Corporation’s external guidance measure, the committee also adopted a new earnings measurefor use in measuring performance under the Long-Term Performance Unit Program. In particular, the committee decided that, for the 2019-2021 the Long-Term Performance Unit Program period, the performance measures will be (1) cumulative ETR Adjusted EPS, adjusted toeliminate the effect of any Pre-Determined Exclusions; and (2) relative total shareholder return with relative total shareholder returnweighted eighty percent and cumulative ETR Adjusted EPS accounting for the remaining twenty percent.Short-Term and Long-Term Incentive Targets Tailored to RoleBeginning in 2019, the short and long-term incentive targets for officers who are members of Entergy Corporation’s Office of theChief Executive are being determined based on job-specific market data for the officer’s role. Previously, the targets were the average of themarket data for the officers within a specific management level, without regard to the officer’s specific job functions. The targets for theNamed Executive Officers who are Presidents of the Utility operating companies continue to be determined based on the average of themarket data for the officers within a specific management level, without regard to their specific job function. Entergy Corporation believesthat this change for the members of the Office of the Chief Executive will help assure that each officer’s incentive targets are marketcompetitive with respect to the officer’s particular role.2019 Incentive Pay Outcomes Entergy Corporation believes the 2019 incentive pay outcomes for the Named Executive Officers demonstrated the application ofEntergy Corporation’s pay for performance philosophy.Annual Incentive PlanAwards under the Executive Annual Incentive Plan, or Annual Incentive Plan, are tied to Entergy Corporation’s financial andoperational performance through the Entergy Achievement Multiplier (“EAM”), which is the performance metric used to determine themaximum funding available for awards under the plan. The 2019 EAM was determined based on the two equally weighted performancemetrics discussed in the “2019 Executive Compensation Program Changes” section above.445 Table of Contents2019 Annual Incentive Plan PayoutFor 2019, the Personnel Committee, based on the recommendation of the Finance Committee, determined that management exceededits ETR Tax Adjusted EPS goal of $5.30 per share by $1.23 per share and fell short of its ETR Adjusted Operating Cash Flow goal of $3.1billion by approximately $134 million. Based on the targets and ranges previously established by the Personnel Committee, these resultsresulted in a calculated EAM of 139%.Long-Term Performance Unit ProgramUnder the Long-Term Performance Unit Program, units are granted with performance measured over a three-year period based onEntergy Corporation’s total shareholder return in relation to the total shareholder return of the companies included in the Philadelphia UtilityIndex. Payouts, if any, are based on Entergy Corporation’s performance on these measures against pre-established performance goals.Long-Term Performance Unit Program PayoutFor the three-year performance period ending in 2019, Entergy Corporation’s total shareholder return was in the top quartile of thecompanies in the Philadelphia Utility Index, yielding a payout of 200% of target for the Named Executive Officers. Payouts were made inshares of Entergy Corporation stock which are required to be held by the executive officers until they satisfy the executive stock ownershipguidelines.What Entergy Corporation Pays and WhyCompetitive PositioningMarket Data for Compensation ComparisonAnnually, the Personnel Committee reviews:•Published and private compensation survey data compiled by Pay Governance, LLC (“Pay Governance”), the Personnel Committee’sindependent compensation consultant;•Both utility and general industry data to determine total cash compensation (base salary and annual incentive) for non-industryspecific roles;•Data from utility companies to determine total cash compensation for management roles that are utility-specific, such as GroupPresident, Utility Operations; and•Utility market data to determine long-term incentives for all positions.How the Personnel Committee Uses the Market DataThe Personnel Committee uses this survey data to develop compensation opportunities that are designed to deliver total targetcompensation within a targeted range of approximately the 50th percentile of the surveyed companies in the aggregate. In most cases, thecommittee considers its objectives to have been met if Entergy Corporation’s Chief Executive Officer and the eight other executive officers(including the applicable Named Executive Officers) who constitute the Office of the Chief Executive each has a target compensationopportunity that falls within a targeted range of 85% - 115% of the 50th percentile of the survey data. In general, compensation levels for anexecutive officer who is new to a position tend to be at the lower end of the competitive range, while seasoned executive officers with strongperformance who are viewed as critical to retain would be positioned at the higher end of the competitive range. Generally, differences in thelevels of total direct compensation among the Named Executive Officers are primarily driven by the scope of their responsibilities,differences in the competitive market pay range for similar positions and considerations of internal pay equity. 446 Table of ContentsProxy Peer GroupAlthough the survey data described above are the primary data used in benchmarking compensation, the committee usescompensation information from the companies included in the Philadelphia Utility Index to evaluate the overall reasonableness of EntergyCorporation’s compensation programs and to determine relative total shareholder return for the 2017-2019 Long-Term Performance UnitProgram awards. Companies included in the Philadelphia Utility Index at the time the proxy data was compiled were as follows:ŸAES CorporationŸEl Paso Electric Co.ŸAmeren CorporationŸEversource EnergyŸAmerican Electric Power Co. Inc.ŸExelon CorporationŸAmerican Water WorksŸFirstEnergy CorporationŸCenterPoint Energy Inc.ŸNextEra Energy, Inc.ŸConsolidated Edison Inc.ŸPG&E CorporationŸDominion EnergyŸPublic Service Enterprise Group, Inc.ŸDTE Energy CompanyŸSouthern CompanyŸDuke Energy CorporationŸXcel Energy, Inc.ŸEdison International Principal Executive Compensation ElementsThe following table summarizes the elements of total direct compensation (“TDC”) granted or paid to the executive officers underthe 2019 executive compensation programs. The programs use a mix of fixed and variable compensation elements and are designed toprovide alignment with both short- and long-term business goals through annual and long-term incentives. An executive officer’s TDC isbased primarily on corporate performance, market-based compensation levels and individual performance with each of these elementsreviewed annually for each Named Executive Officer. CompensationComponentPrimary PurposePerformance MeasuredPerformance PeriodBase Salary (Cash)Provides a base level of competitive cashcompensation for executive talent.Experience, job scope, market data, individualperformance and internal equityAnnualAnnual Incentive (Cash)Motivates and rewards executives forperformance on key financial measures duringthe year.ETR Tax Adjusted EPSETR Adjusted Operating Cash Flow1 yearLong-Term PerformanceUnit Program (Equity)Focuses the executives on growing earningsand building long-term shareholder value andincreases the executives’ ownership in EntergyCorporation common stock.Relative total shareholder returnCumulative ETR Adjusted EPS3 yearsStock Options (Equity)Align interests of executives with long-termshareholder value, provide competitivecompensation, and increase the executives’ownership in Entergy Corporation’s commonstock.Stock price, job scope, market data, andindividual performance3 yearsRestricted Stock (Equity)Aligns interests of executives with long-termshareholder value, provides competitivecompensation, retains executive talent andincreases the executives’ ownership in EntergyCorporation’s common stock.Stock price, job scope, market data, andindividual performance3 years447 Table of ContentsFixed CompensationBase SalaryThe Personnel Committee determines the base salaries for all of the Named Executive Officers who are members of the Office of theChief Executive based on competitive compensation data, performance considerations, and advice provided by the committee’s independentcompensation consultant. For the other Named Executive Officers, their salaries are established by their immediate supervisors using thesame criteria. The base salaries of the Named Executive Officers are considered annually as part of the performance review process, andupon a Named Executive Officer’s promotion or other change in job responsibilities. In 2019, all of the Named Executive Officers, otherthan Mr. Denault, received merit increases in their base salaries ranging from approximately 2.5% to 4.5%. In 2019, Mr. Denault did notreceive a merit increase in his base salary. Instead, the Personnel Committee increased Mr. Denault’s TDC by increasing his annual and long-term incentive target opportunities; thus, increasing the share of his compensation that is “at risk.” The increases in base salary were based onthe market data previously discussed in this CD&A under “What Entergy Corporation Pays and Why.” The following table sets forth the 2018 and 2019 base salaries for the Named Executive Officers. Changes in base salaries for 2019were effective in April.Named Executive Officer 2018 Base Salary 2019 Base SalaryA. Christopher Bakken, III $638,125 $654,078Marcus V. Brown $650,000 $666,250Leo P. Denault $1,260,000 $1,260,000David D. Ellis $305,000 $313,388Haley R. Fisackerly $365,959 $376,023Laura R. Landreaux $308,000 $316,470Andrew S. Marsh $622,000 $650,000Phillip R. May, Jr. $381,550 $392,043Sallie T. Rainer $338,123 $347,422Roderick K. West $696,598 $714,013Variable CompensationShort-Term Incentive CompensationAnnual Incentive PlanAwards under the Executive Annual Incentive Plan, or Annual Incentive Plan, are tied to Entergy Corporation’s financial andoperational performance through the EAM, which is the performance metric used to determine the maximum funding available for awardsunder the plan. Entergy Corporation uses the following process to determine annual incentive awards:•Establish Performance Measures to Determine EAM Pool. Annually, the Personnel Committee engages in a rigorous process todetermine the performance measures used to determine the EAM. The Personnel Committee’s goal is to establish measures that areconsistent with Entergy Corporation’s strategy and business objectives for the upcoming year, as reflected in its financial plan, andare designed to drive results that represent a high level of achievement. These measures are approved based on a comprehensivereview by the full Board of Entergy Corporation’s financial plan, conducted in December of the preceding year and updated inJanuary to reflect key drivers of anticipated changes in performance from the preceding year.448 Table of Contents•Establish Target Achievement Levels. In January, after Entergy Corporation’s financial plan is updated to reflect any changes fromthat reviewed in December, the Personnel Committee establishes the specific targets that must be achieved for each performancemeasure. The Personnel Committee also seeks to assure that the targets:◦Take into account changes in the business environment and specific challenges facing Entergy Corporation;◦Reflect an appropriate balancing of the various risks and opportunities recognized at the time the targets are set; and◦Are aligned with external expectations communicated to Entergy Corporation’s shareholders.•Establish Named Officer Target Opportunities. In January of each year, the Personnel Committee establishes the target opportunitiesfor the members of the Office of the Chief Executive based on its review of the competitive analysis of job-specific market dataprepared by Pay Governance as well as the officer’s role, individual performance and internal equity considerations. For the NamedExecutive Officers who are members of the Office of the Chief Executive (Messrs. Bakken, Brown, Denault, Marsh and West), targetaward opportunities are established based on these factors. For the other Named Executive Officers, target award opportunities aredetermined based on their management level within the Entergy organization. Executive management levels at Entergy Corporationrange from ML level 1 through ML level 4 (the “ML 1-4 Officers”). At December 31, 2019, Mr. May held a Level 3 position, andMr. Ellis, Mr. Fisackerly, Ms. Landreaux and Ms. Rainer held Level 4 positions. Accordingly, their respective incentive awardopportunities differ from one another based on either their management level or the external market data developed by theCommittee’s independent compensation consultant. The 2019 target opportunities were increased for Mr. Denault, Mr. Marsh andMr. Brown to align more closely with market data. The target levels for the other Named Executive Officers are comparable to thelevels set for 2018. •Determine the EAM. After the end of the fiscal year, the Finance and Personnel Committees jointly review Entergy Corporation’sfinancial results and the Personnel Committee determines the EAM, which represents the level of success in achieving theperformance objectives established by the committee and determines the maximum funding level of the annual incentive plan, as apercentage of the total target opportunity.•Determine Annual Incentive Awards. To determine individual executive officer awards under the annual incentive plan, thePersonnel Committee considers not only each executive’s role in executing on Entergy Corporation’s strategies and delivering thefinancial performance achieved, but also the individual’s accountability for any challenges the Company experienced during the year.2019 TargetsUsing the process described above, in December 2018, the Personnel Committee decided to use ETR Tax Adjusted EPS and ETRAdjusted Operating Cash Flow, with each measure weighted equally, as the performance measures for determining the 2019 EAM pool. ETRTax Adjusted EPS is based on ETR Adjusted EPS, which is the primary earnings measure used by the Company externally and the measureon which it provides annual earnings guidance, which is then adjusted to add back the effect of any significant tax items that were excludedto arrive at ETR Adjusted EPS and to eliminate the effects, if any, of the Pre-Determined Exclusions. ETR Adjusted Operating Cash Flow iscalculated based on Entergy Corporation’s as-reported (GAAP) operating cash flow, adjusted to eliminate the effect of any Pre-DeterminedExclusions. The Personnel Committee determined that ETR Tax Adjusted EPS and ETR Adjusted Operating Cash Flow were the appropriatemetrics to use for this purpose because:•They are based on objective financial measures that Entergy Corporation and its investors consider to be important in evaluating itsfinancial performance;•They are based on the same metrics we use for internal and external financial reporting; and•They provide both discipline and transparency.449 Table of ContentsThe Personnel Committee considered it appropriate to use ETR Tax Adjusted EPS, which adds back the effect of significant tax itemsthat may have been excluded from ETR Adjusted EPS, as the earnings measure because of the significant benefits to Entergy Corporationresulting from such tax items and the management effort required to achieve them. The Personnel Committee also considered theappropriateness of excluding the effect of each of the Pre-Determined Exclusions from each of the financial measures. It viewed theexclusion of major storms as appropriate because although Entergy Corporation includes estimates for storm costs in its financial plan, it doesnot include estimates for a major storm event, such as a hurricane. The Personnel Committee considered the exclusion of any unanticipatedeffects of the tax reform legislation adopted at the end of 2017 to be appropriate because of the lingering uncertainty around those effects andthe inability of management to impact those results. The Personnel Committee approved the other exclusions from reported results - for theimpact of certain legacy unresolved regulatory litigation and unanticipated unrealized gains and losses on securities held by EntergyCorporation’s nuclear decommissioning trusts - primarily because of management’s inability to influence either of the related outcomes.In determining the targets to set for 2019, the Personnel Committee reviewed anticipated drivers for consolidated operationalearnings per share and consolidated operational operating cash flow for 2019 as set forth in Entergy Corporation’s financial plan, as well asfactors driving the strong financial performance achieved in 2018. The Personnel Committee confirmed that the proposed plan targets forETR Tax Adjusted EPS and ETR Adjusted Operating Cash Flow reflected substantial growth in the core weather-adjusted utility earningsand consolidated operating cash flow measures underlying the annual incentive plan targets. The Personnel Committee also considered thepotential impact of a wide range of identified risks and opportunities and confirmed that there appeared to be more downside risk than upsideopportunity embedded in the financial plan targets and, as a result, the Personnel Committee believed that the related annual incentive plantargets reflected a reasonable degree of challenge. 2019 Performance AssessmentThe following table shows the 2019 Incentive Plan targets established by the Personnel Committee and 2019 results:Annual Incentive Plan Targets and Results Performance Goals(1) WeightMinimumTargetMaximum2019 ResultsETR Tax Adjusted EPS ($)(2)50%$4.77$5.30$5.83$6.53ETR Adjusted Operating Cash Flow ($billions)(2)50%$2.650$3.100$3.550$2.966EAM as % of Target 25%100%200%139%(1)Payouts for performance between minimum and target achievement levels and between target and maximum achievement levels arecalculated using straight-line interpolation. There is no payout for performance below the minimum achievement level.(2)ETR Tax Adjusted Earnings Per Share is a different measure than the consolidated operational earnings per share, and ETR AdjustedOperating Cash Flow is a different measure than the consolidated operational operating cash flow used to determine the 2018 annualincentive awards. As a result, the goals and results are not comparable year over year.In January 2020, the Finance and Personnel Committees jointly reviewed Entergy Corporation’s financial results against theperformance objectives reflected in the table above. Management discussed with the committees Entergy Corporation’s ETR Tax AdjustedEPS and ETR Adjusted Operating Cash Flow results for 2019, including primary factors explaining how those results compared to the 2019business plan and Annual Incentive Plan targets set in January 2019. ETR Tax Adjusted EPS exceeded Entergy Corporation’s ETR TaxAdjusted EPS target of $5.30 per share by $1.23, but management fell short of achieving its ETR Adjusted Operating Cash Flow target of$3.1 billion by approximately $134 million, leading to a calculated EAM of 139%. None of the Pre-Determined Exclusions resulted in anyadjustment to ETR Tax Adjusted EPS and ETR Adjusted Operating Cash Flow.450 Table of ContentsIn addition to the foregoing results, the Personnel Committee considered management’s degree of success in achieving variousoperational and regulatory goals set out at the beginning of the year and in overcoming certain challenges that arose in the business during thecourse of the year. The Personnel Committee also considered (i) the Entergy Corporation’s degree of success in achieving its publishedearnings guidance, which it exceeded by $0.10 per share at the midpoint of the original guidance range for ETR Adjusted EPS provided atthe beginning of the year and by $0.05 per share at the midpoint of the adjusted guidance range published in July 2019, and (ii) totalshareholder return for 2019 in relation to the Philadelphia Utility Index, which placed Entergy Corporation in the top quartile of companies inthe index with a total shareholder return of 44.3% for the year. Finally, the committee reviewed the impact on ETR Tax Adjusted EPS andETR Adjusted Operating Cash Flow of significant tax items that were included in the results and additional pension contributions madeduring the year beyond those that were required or included in the initial 2019 financial plan. Following this review, the PersonnelCommittee decided to approve the EAM as calculated in accordance with the plan design. To determine individual executive officer awards under the Annual Incentive Plan for the Named Executive Officers who are members ofthe Office of the Chief Executive, the Personnel Committee considered not only each executive’s role in executing on Entergy Corporation’sstrategies and delivering the strong financial performance achieved in 2018, but also the individual’s accountability for certain operationaland regulatory challenges it experienced during the year. With these considerations in mind, the committee exercised negative discretion todetermine individual awards that ranged from 135% to 137% of target for each of the Named Executive Officers who are members of theOffice of the Chief Executive, with the extent of the negative discretion applied varying based on the executive’s specific accountabilities andaccomplishments. After the EAM was established to determine overall funding for the Annual Incentive Plan, Entergy Corporation’s Chief ExecutiveOfficer allocated incentive award funding to individual business units based on business unit results. Individual awards were determined forthe remaining Named Executive Officers who are not members of the Office of the Chief Executive by their immediate supervisor based onthe individual officer’s key accountabilities, accomplishments, and performance. This resulted in payouts that ranged from 127% of target to208% of target for the Named Executive Officers who are not members of the Office of the Chief Executive.Based on the foregoing evaluation of management performance, the Named Executive Officers received the following AnnualIncentive Plan payouts for 2019:Named Executive OfficerBase SalaryTarget as Percentageof Base SalaryPayout as Percentageof Target2019 AnnualIncentive AwardA. Christopher Bakken, III$654,07870%135%$618,104Marcus V. Brown$666,25075%137%$684,573Leo P. Denault$1,260,000140%137%$2,416,680David D. Ellis$313,38840%127%$159,804Haley R. Fisackerly$376,02340%183%$274,570Laura R. Landreaux$316,47040%208%$263,523Andrew S. Marsh$650,00080%137%$712,400Phillip R. May, Jr.$392,04360%173%$407,922Sallie T. Rainer$347,42240%158%$219,069Roderick K. West$714,01370%135%$674,742Long-Term Incentive CompensationLong-term incentive compensation, consisting solely of equity awards in 2019, represents the largest portion of the Named ExecutiveOfficers’ compensation. Entergy Corporation’s believes the combination of long-term incentives we employ acts in retaining the seniormanagement team, and aligns the interests of the executive officers451 Table of Contentswith the interests of Entergy Corporation’s shareholders and customers by enhancing executives’ focus on the Company’s long-term goals. Ingeneral, Entergy Corporation seeks to allocate the total value of long-term incentive compensation 60% to performance units and 40% to acombination of stock options and restricted stock, equally divided in value, based on the value the compensation model seeks to deliver.Awards for individual Named Executive Officers may vary from this target as a result of individual performance, promotions, and internalpay equity.2019 Long-Term Incentive Award MixBeginning in 2019, a dollar value was established for the target long-term incentive awards for each Named Executive Officer who isa member of the Office of the Chief Executive. The targeted award value for these officers was determined based on market mediancompensation data for the officer’s role, adjusted to reflect individual performance and internal equity. Previously, the targets for theseNamed Executive Officers were the average of the market data for the officers within a specific management level, without regard to theofficer’s specific job functions. In January 2019, the Personnel Committee approved the 2019 long-term incentive award target values for theNamed Executive Officers who are members of the Office of the Chief Executive. This value was then converted into the number ofperformance units, stock options and shares of restricted stock granted using the allocation described above based on the target grant datevalue.In consultation with Entergy Corporation’s Chief Executive Officer, the Personnel Committee reviews each of the other NamedExecutive Officer’s performance, role and responsibilities, strengths, developmental opportunities and internal equity and allocates awards ofrestricted stock and stock options to each of these officers based on these factors. Grants of long-term performance units for these NamedExecutive Officers was determined based on the average of the market data for the officers within a specific management level, withoutregard to the officer’s specific job function. Performance Unit ProgramThe Named Executive Officers are issued performance unit awards under the Long-Term Performance Unit Program.•Each performance unit represents one share of Entergy Corporation’s common stock at the end of the three-year performance period,plus dividends accrued during the performance period.•The performance units and accrued dividends on any shares earned during the performance period are settled in shares of EntergyCorporation common stock.•The Personnel Committee sets payout opportunities for the program at the outset of each performance period, with payouts onlyoccurring if the performance goals are met.•Payouts under this program will not be made for the 2019-2021 performance period if total shareholder return falls within the lowestquartile of the peer companies in the Philadelphia Utility Index and Cumulative Entergy Adjusted EPS is below the minimumperformance goal.•All shares paid out under the Long-Term Performance Unit Program are required to be retained by Entergy Corporation’s officersuntil applicable executive stock ownership requirements are met.The Long-Term Performance Unit Program specifies a minimum, target and maximum achievement level, the achievement of whichwill determine the number of performance units that may be earned by each participant. For the 2019 - 2021 performance period, thePersonnel Committee chose the performance measures and targets set forth below.Given the economic and market conditions at the time the targets were set, the target payout level for the Cumulative ETR Adjusted EPSgoal was designed to be challenging, but achievable while payout at the maximum levels was designed to require stretch performance.452 Table of Contents2019-2021 Long-Term Performance Unit Performance Period Measures and Goals(1) Performance Measures(1)Long-Term PerformanceMeasure WeightPayoutRelative Total Shareholder Return80%Minimum (25%) - Bottom of 3rd QuartileTarget (100%) - Median PercentileMaximum (200%) - Top QuartileCumulative ETR Adjusted EPS($)20%Minimum (25%) - Minus 10% of TargetTarget (100%) - 100% of TargetMaximum (200%) - Plus 10% of Target(1)Payouts for performance between achievement levels are calculated using straight-line interpolation, with no payouts for performancebelow the minimum achievement level for both performance measures. Performance MeasuresTotal Shareholder Return•The Personnel Committee chose relative total shareholder return as a performance measure because it reflects Entergy Corporation’screation of shareholder value relative to other electric utilities included in the Philadelphia Utility Index over the performance period.By measuring performance in relation to an industry benchmark, this measure is intended to isolate and reward management for thecreation of shareholder value that is not driven by events that affect the industry as a whole.•Minimum, target and maximum performance levels are determined by reference to the ranking of Entergy Corporation’s totalshareholder return in relation to the TSR of the companies in the Philadelphia Utility Index. The Personnel Committee identified thePhiladelphia Utility Index as the appropriate industry peer group for determining relative total shareholder return because thecompanies included in this index, in the aggregate, are deemed to be comparable to the Company in terms of business and scale.Cumulative ETR Adjusted EPS•Cumulative ETR Adjusted EPS, which adjusts Entergy Corporation’s as reported (GAAP) results to eliminate the impact of earningsor loss from Entergy Wholesale Commodities and other non-routine items, was selected in 2019 as a performance measure becausethe Personnel Committee wished to incentivize management to achieve steady, predictable earnings growth for the Company over the3 year performance period, and because it aligns with the earnings measure used to communicate the Company’s earningsexpectations externally to investors.•In a manner similar to the way targets are established for the annual incentives, targets for the Cumulative ETR Adjusted EPSperformance measure were established by the Personnel Committee after the Entergy Corporation Board’s review of Entergy’sfinancial plan for the three-year period beginning in 2019 and are consistent with the earnings expectations for the Company that arecommunicated to investors. These targets also incorporate the Pre-Determined Exclusions discussed previously with respect to theannual incentive measures.Stock Options and Restricted Stock Entergy Corporation grants stock options and shares of restricted stock because they align the interests of the executive officers withlong-term shareholder value, provide competitive compensation, and increase the executives’ ownership in Entergy Corporation commonstock. Generally, stock options are granted with a maximum term of ten years, and vest one-third on each of the first three anniversaries ofthe date of grant. The exercise price for each option granted in 2019 was $89.19, which was the closing price of Entergy’s common stock onthe date of grant. Shares of restricted stock vest one-third on each of the first three anniversaries of the date of grant, are paid dividends whichare453 Table of Contentsreinvested in shares of Entergy stock and have the ability to vote. The dividend reinvestment shares are subject to forfeiture similar to theterms of the original grant.2019 Long-Term Incentive AwardsIn January 2019, the Personnel Committee granted the following long-term performance units, stock options and shares of restrictedstock to each Named Executive Officer. The number of long-term performance units, stock options and shares of restricted stock weredetermined as discussed above under “Long-Term Incentive Compensation - 2019 Long-Term Incentive Award Mix.”Named Executive Officer2019-2021Target Long-TermPerformance UnitsStock OptionsShares of Restricted StockA. Christopher Bakken, III9,56836,4213,604Marcus V. Brown9,38335,7193,535Leo P. Denault40,508154,20615,259David D. Ellis1,4504,700500Haley R. Fisackerly1,4506,200600Laura R. Landreaux1,4505,100500Andrew S. Marsh11,86945,1824,471Phillip R. May, Jr.2,1509,300900Sallie T. Rainer1,4506,200600Roderick K. West10,07338,3463,795All of the outstanding performance units and all of the shares of restricted stock and stock options granted to the Named ExecutiveOfficers in 2019 were granted pursuant to the 2015 Equity Ownership Plan or 2015 Equity Plan. The 2015 Equity Plan requires both achange in control and an involuntary job loss or substantial diminution of duties (a “double trigger”) for the acceleration of these awards upona change in control.2019 Long-Term Performance Unit Program PayoutsPayout for the 2017-2019 Long-Term Performance Unit Program Period. For the 2017-2019 three-year performance period, thePersonnel Committee chose relative total shareholder return as the performance measure with the payout subject to achievement of thefollowing:2017-2019 Long-Term Performance Unit Program Period Measures and Goals(1) Performance Measure(1) MinimumTargetMaximumRelative Total Shareholder Return4th QuartileBottom of 3rd QuartileMedian PercentileTop QuartilePayoutNo PayoutMinimum Payout of 25%of Target100% of Target200% of Target(1)Payouts for performance between achievement levels are calculated using straight-line interpolation, with no payouts for performancebelow the minimum achievement level.In January 2020, the Personnel Committee reviewed the Company’s total shareholder return for the 2017 - 2019 performance periodin order to determine the payout to participants. The committee compared Entergy Corporation’s total shareholder return against the totalshareholder return of the companies that comprise the Philadelphia Utility Index, with the performance measures and range of potentialpayouts for the 2017 - 2019 performance period as provided above. As recommended by the Finance Committee, the Personnel Committee454 Table of Contentsconcluded that the Company’s relative total shareholder return for the 2017 - 2019 performance period was in the top quartile, yielding apayout of 200% of target for the Named Executive Officers.Named Executive Officer2017-2019 TargetNumber of SharesIssued(1)Value of SharesActually Issued(2)Grant Date Fair Value(3)A. Christopher Bakken, III8,30018,088$2,284,695$592,620Marcus V. Brown8,30018,088$2,284,695$592,620Leo P. Denault48,700106,131$13,405,407$3,477,180David D. Ellis(4)6171,271$160,540$44,054Haley R. Fisackerly1,8504,031$509,156$132,090Laura R. Landreaux(5)9251,934$244,284$66,045Andrew S. Marsh8,30018,088$2,284,695$592,620Phillip R. May, Jr.3,1506,864$866,992$224,910Sallie T. Rainer1,8504,031$509,156$132,090Roderick K. West8,30018,088$2,284,695$592,620(1)Includes accrued dividends.(2)Value determined based on the closing price of Entergy Corporation common stock on January 17, 2020 ($126.31), the date thePersonnel Committee certified the 2017-2019 performance period results.(3)Represents the aggregate grant date fair value calculated in accordance with applicable accounting rules as reflected in the 2017Summary Compensation Table.(4)As a new hire in 2018, Mr. Ellis received a pro-rata target award opportunity for the 2017-2019 performance period.(5)As a new officer in 2018, Ms. Landreaux received a pro-rata target award opportunity for the 2017-2019 performance period.455 Table of ContentsBenefits and PerquisitesEntergy Corporation’s Named Executive Officers are eligible to participate in or receive the following benefits:Plan TypeDescriptionRetirement PlansEntergy Corporation-sponsored:Entergy Retirement Plan - a tax-qualified final average pay defined benefit pension planthat covers a broad group of employees hired before July 1, 2014.Cash Balance Plan - a tax-qualified cash balance defined benefit pension plan that covers abroad group of employees hired on or after July 1, 2014.Pension Equalization Plan - a non-qualified pension restoration plan for a select group ofmanagement or highly compensated employees who participate in the Entergy Retirement Plan.Cash Balance Equalization Plan - a non-qualified restoration plan for a select group ofmanagement or highly compensated employees who participate in the Cash Balance Plan.System Executive Retirement Plan - a non-qualified supplemental retirement plan forindividuals who became executive officers before July 1, 2014.See “2019 Pension Benefits” for additional information regarding the operation of the plans describedabove.Savings PlanEntergy Corporation-sponsored 401(k) Savings Plan that covers a broad group of employees.Health & WelfareBenefitsMedical, dental, and vision coverage, life and accidental death and dismemberment insurance, businesstravel accident insurance, and long-term disability insurance.Eligibility, coverage levels, potential employee contributions, and other plan design features are the samefor the Named Executive Officers as for the broad employee population.2019 PerquisitesCorporate aircraft usage, annual mandatory physical exams, relocation assistance, and event tickets. TheNamed Executive Offices who are members of the Office of the Chief Executive do not receive tax grossups on any benefits, except for relocation assistance. Named Executive Officers who are not members of the Office of the Chief Executive also were providedin 2019 with club dues and tax gross up payments on some perquisites.For additional information regarding perquisites, see the “All Other Compensation” column in the 2019Summary Compensation Table.DeferredCompensationThe Named Executive Officers are eligible to defer up to 100% of their base salary and Annual IncentivePlan awards into the Entergy Corporation sponsored Executive Deferred Compensation Plan.Executive DisabilityPlanEligible individuals who become disabled under the terms of the plan are eligible for 65% of thedifference between their annual base salary and $276,923 (i.e. the annual base salary that produces themaximum $15,000 monthly disability payment under the general long-term disability plan).Entergy Corporation provides these benefits to the Named Executive Officers as part of its effort to provide a competitive executivecompensation program and because it believes that these benefits are important retention and recruitment tools since many of the companieswith which it competes for executive talent provide similar arrangements to their senior executive officers.456 Table of ContentsSeverance and Other Compensation ArrangementsThe Personnel Committee believes that retention and transitional compensation arrangements are an important part of overallcompensation as they help to secure the continued employment and dedication of the Named Executive Officers, notwithstanding anyconcern that they might have at the time of a change in control regarding their own continued employment. In addition, the PersonnelCommittee believes that these arrangements are important as recruitment and retention devices, as many of the companies with whichEntergy Corporation competes for executive talent have similar arrangements in place for their senior employees.To achieve these objectives, Entergy Corporation has established a System Executive Continuity Plan under which ML 1-4 Officersare entitled to receive “change in control” payments and benefits if such officer’s employment is involuntarily terminated in connection witha change in control of Entergy Corporation and its subsidiaries. Entergy Corporation strives to ensure that the benefits and payment levelsunder the System Executive Continuity Plan are consistent with market practices. Entergy Corporation’s executive officers, including theNamed Executive Officers, are not entitled to any tax gross up payments on any severance benefits received under this plan. For moreinformation regarding the System Executive Continuity Plan, see “2019 Potential Payments Upon Termination or Change in Control.”In certain cases, the Personnel Committee may approve the execution of a retention agreement with an individual executive officer.These decisions are made on a case by case basis to reflect specific retention needs or other factors, including market practice. If a retentionagreement is entered into with an individual officer, the committee considers the economic value associated with that agreement in makingoverall compensation decisions for that officer.Mr. EllisIn connection with the commencement of his employment as President, Entergy New Orleans, Mr. Ellis was eligible for certainrelocation benefits pursuant to Entergy Corporation’s Relocation Assistance Policy, including assistance with moving expenses,transportation of household goods and assistance with the sale of his home. Mr. Ellis also received a sign-on bonus of $200,000 when heassumed this role. Mr. Ellis’s sign-on bonus and certain of his relocation benefits are subject to forfeiture under certain circumstances if Mr.Ellis’s employment is terminated within 24 months of the commencement of his employment. Also, in accordance with the terms of theLong-Term Performance Unit Program in January 2019, Mr. Ellis received pro-rated target award opportunities for the 2017-2019 and 2018-2020 performance periods. Nuclear Retention PlanMr. Bakken participates in the Nuclear Retention Plan, a retention plan for officers and other leaders with expertise in the nuclearindustry. The Personnel Committee authorized this plan to attract and retain key management and employee talent in the nuclear power field,a field that requires unique technical and other expertise that is in great demand in the utility industry. The plan provides for bonuses to bepaid annually over a three-year service period with the bonus opportunity dependent on the participant’s management level and continuedemployment. Each annual payment is equal to an amount ranging from 15% to 30% of the employee’s base salary as of their date ofenrollment in the plan. Mr. Bakken’s participation in the plan commenced in May 2016, and in accordance with the terms and conditions ofthe plan, in May 2017, 2018 and 2019, Mr. Bakken received a cash bonus equal to $181,500 or 30% of his May 1, 2016 base salary. Thisplan does not provide for accelerated or prorated payout upon termination of any kind.Compensation Policies and PracticesEntergy Corporation strives to ensure that its compensation philosophy and practices are in line with the best practices of companiesin its industry as well as other companies in the S&P 500. Some of these practices include the following:457 Table of ContentsClawback ProvisionsEntergy Corporation has adopted a clawback policy that covers all individuals subject to Section 16 of the Exchange Act, includingthe members of the Office of the Chief Executive. Under the policy, which goes beyond the requirements of Sarbanes-Oxley Act of 2002(Sarbanes-Oxley), the Personnel Committee will require reimbursement of incentives paid to these executive officers where:•(i) the payment was predicated upon the achievement of certain financial results with respect to the applicable performance periodthat were subsequently determined to be the subject of a material restatement other than a restatement due to changes in accountingpolicy; or (ii) a material miscalculation of a performance award occurs, whether or not the financial statements were restated and, ineither such case, a lower payment would have been made to the executive officer based upon the restated financial results or correctcalculation; or•in the Board of Directors’ view, the executive officer engaged in fraud that caused or partially caused the need for a restatement orcaused a material miscalculation of a performance award, in each case, whether or not the financial statements were restated.The amount the Personnel Committee requires to be reimbursed is equal to the excess of the gross incentive payment made over thegross payment that would have been made if the original payment had been determined based on the restated financial results or correctcalculation. Further, following a material restatement of Entergy Corporation’s financial statements, Entergy Corporation will seek to recoverany compensation received by Entergy Corporation’s Chief Executive Officer and Chief Financial Officer that is required to be reimbursedunder Sarbanes-Oxley.Stock Ownership Guidelines and Share Retention RequirementsFor many years, Entergy Corporation has had stock ownership guidelines for executives, including the Named Executive Officers.These guidelines are designed to align the executives’ long-term financial interests with the interests of Entergy Corporation’s shareholders.Annually, the Personnel Committee monitors the executive officers’ compliance with these guidelines.The ownership guidelines are as follows:RoleValue of Common Stock to be OwnedChief Executive Officer6 times base salaryExecutive Vice Presidents3 times base salarySenior Vice Presidents2 times base salaryVice Presidents1 time base salaryFurther, to facilitate compliance with the guidelines, until an executive officer satisfies the stock ownership guidelines, the officermust retain:•all net after-tax shares paid out under the Long-Term Performance Unit Program;•all net after-tax shares of the restricted stock and restricted stock units received upon vesting; and•at least 75% of the after-tax net shares received upon the exercise of Entergy Corporation stock options.Trading ControlsExecutive officers, including the Named Executive Officers, are required to receive permission from Entergy Corporation’s GeneralCounsel or his designee prior to entering into any transaction involving Entergy Corporation securities, including gifts, other than theexercise of employee stock options. Trading is generally permitted only during specified open trading windows beginning shortly after therelease of earnings. Employees, who are subject to trading restrictions, including the Named Executive Officers, may enter into trading plansunder Rule 10b5-1 of the Exchange Act, but these trading plans may be entered into only during an open trading window and must beapproved by Entergy Corporation. The Named Executive Officer bears full responsibility if he or she violates Entergy Corporation’s policyby buying or selling shares of Entergy Corporation stock without pre-approval or when trading is restricted.458 Table of ContentsEntergy Corporation also prohibits directors and executive officers, including the Named Executive Officers, from pledging anyEntergy Corporation securities or entering into margin accounts involving Entergy Corporation securities. Entergy Corporation prohibitsthese transactions because of the potential that sales of Entergy Corporation securities could occur outside trading periods and without therequired approval of the General Counsel.Entergy Corporation also has adopted an anti-hedging policy that prohibits officers, directors, and employees from entering intohedging or monetization transactions involving Entergy Corporation’s common stock. Prohibited transactions include, without limitation,zero-cost collars, forward sale contracts, purchase or sale of options, puts, calls, straddles or equity swaps or other derivatives that are directlylinked to Entergy Corporation’s stock or transactions involving “short-sales” of its common stock. The Board adopted this policy to requireofficers, directors, and employees to continue to own Entergy Corporation stock with the full risks and rewards of ownership, therebyensuring continued alignment of their objectives with those of Entergy Corporation’s other shareholders.How Entergy Corporation Makes Compensation DecisionsThe Personnel Committee oversees Entergy Corporation’s executive compensation programs and policies with the advice of itsindependent compensation consultant and support from its management team.459 Table of ContentsPersonnelCommitteeŸThe Personnel Committee is responsible for the review and approval of all aspects of EntergyCorporation’s executive compensation programs.ŸAmong its duties, the Personnel Committee is responsible for approving the compensation forall members of the Office of Chief Executive, including: ŸAnnual review of the compensation elements and mix of elements for the following year; ŸAnnual review and approval of incentive program design, goals and objectives foralignment with Entergy Corporation’s compensation and business strategies; ŸEvaluation of Entergy Corporation and individual performance results in light of thesegoals and objectives; ŸEvaluation of the competitiveness of each executive officer’s total compensation package; ŸApproval of any changes to the officers’ compensation, including but not limited to, basesalary, annual and long-term incentive award opportunities, and retention programs; ŸEvaluation of the performance of Entergy Corporation’s Chairman and Chief ExecutiveOfficer; and ŸReporting, at least annually, to the Board on succession planning.ŸThe Personnel Committee has the sole authority to hire its compensation consultant, approveits compensation, determine the nature and scope of its services, evaluate its performance andterminate its engagement.ManagementŸThe CEO and Chief Human Resources Officer work closely with the Personnel Committee inmanaging the executive compensation programs and attend meetings of the PersonnelCommittee. During 2019, Mr. Denault attended 8 meetings of the Personnel Committee.ŸThe CEO makes recommendations to the Committee regarding compensation for executiveofficers other than himself.IndependentCompensationConsultantŸDuring 2019, Pay Governance assisted the Personnel Committee with its responsibilitiesrelated to Entergy Corporation’s executive compensation programs.ŸPay Governance: ŸRegularly attended meetings of the committee; ŸConducted studies of competitive compensation practices; ŸIdentified Entergy Corporation’s market surveys and proxy peer group; ŸProvided updates on executive compensation trends and regulatory developments; ŸReviewed base salary, annual incentives and long-term incentive compensationopportunities relative to competitive practices; and ŸDeveloped conclusions and recommendations related to Entergy Corporation’s executivecompensation programs for consideration by the committee.Compensation Consultant IndependenceTo maintain the independence of the Personnel Committee’s compensation consultant, the Board has adopted a policy that anyconsultant (including its affiliates) retained by the Board of Directors or any committee of the Board of Directors to provide advice orrecommendations on the amount or form of executive or director compensation should not be retained by Entergy Corporation or any of itsaffiliates to provide other services in an aggregate amount that exceeds $120,000 in any year. Pay Governance, which serves as the PersonnelCommittee’s compensation consultant, did not provide any services to management in 2019.460 Table of ContentsAnnually, the Personnel Committee reviews the relationship with its compensation consultant, including services provided, quality ofthose services, and fees associated with services in its evaluation of the compensation consultant’s independence. The committee alsoassesses Pay Governance’s independence under NYSE rules and has concluded that no conflicts of interest exist that would prevent PayGovernance from independently advising the Personnel Committee.PERSONNEL COMMITTEE REPORTThe Personnel Committee Report included in the Entergy Corporation Proxy Statement is incorporated by reference, but will not bedeemed to be “filed” in this Annual Report on Form 10-K. None of the Registrant Subsidiaries has a compensation committee or other boardcommittee performing equivalent functions. The board of directors of each of the Registrant Subsidiaries is comprised of individuals who areofficers or employees of Entergy Corporation or one of the Registrant Subsidiaries. These boards do not make determinations regarding thecompensation paid to executive officers of the Registrant Subsidiaries.461 Table of ContentsEXECUTIVE COMPENSATION TABLES2019 Summary Compensation TablesThe following table summarizes the total compensation paid or earned by each of the Named Executive Officers for the fiscal yearended December 31, 2019, and to the extent required by SEC executive compensation disclosure rules, the fiscal years ended December 31,2018 and 2017. For information on the principal positions held by each of the Named Executive Officers, see Item 10, “Directors, ExecutiveOfficers, and Corporate Governance of the Registrants.” The compensation set forth in the table represents the aggregate compensation paid by all Entergy System companies. For additionalinformation regarding the material terms of the awards reported in the following tables, including a general description of the formula orcriteria to be applied in determining the amounts payable, see “Compensation Discussion and Analysis.”(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Name and PrincipalPosition(1) Year Salary(2) Bonus(3) StockAwards (4) OptionAwards (5) Non-EquityIncentivePlanCompen-sation(6) Change inPensionValue andNon-qualifiedDeferredCompen-sationEarnings (7) AllOtherCompens-ation (8) Total A. Christopher Bakken,III 2019 $649,507 $181,500 $1,273,399 $303,023 $618,104 $98,500 $62,407 $3,186,440Executive VicePresident and 2018 $632,967 $181,500 $1,041,479 $283,095 $544,959 $108,700 $452,012 $3,244,712Chief Nuclear Officerof Entergy Corp. 2017 $615,791 $181,500 $959,376 $245,904 $559,973 $33,000 $114,494 $2,710,038 Marcus V. Brown 2019 $661,563 $— $1,248,839 $297,182 $684,573 $1,455,300 $69,955 $4,417,412Executive VicePresident and 2018 $644,231 $— $1,041,479 $283,095 $546,000 $371,800 $61,885 $2,948,490General Counsel ofEntergy Corp. 2017 $622,788 $— $1,022,853 $287,760 $568,890 $1,217,200 $43,269 $3,762,760 Leo P. Denault 2019 $1,260,000 $— $5,391,253 $1,282,994 $2,416,680 $3,704,500 $208,822 $14,264,249Chairman of the 2018 $1,251,346 $— $4,744,977 $1,168,029 $2,041,200 $982,800 $138,104 $10,326,456Board and CEO - 2017 $1,221,346 $— $4,676,190 $1,173,276 $2,142,045 $3,819,500 $125,863 $13,158,220Entergy Corp. David D. Ellis 2019 $311,004 $— $188,861 $39,104 $159,804 $18,000 $15,267 $732,040CEO - Entergy 2018 $7,258 $200,000 $— $— $— $600 $35,308 $243,166New Orleans Haley R. Fisackerly 2019 $373,313 $— $197,780 $51,584 $274,570 $644,700 $37,897 $1,579,844CEO - Entergy 2018 $363,089 $— $198,449 $46,134 $172,000 $— $35,982 $815,654Mississippi 2017 $354,451 $— $192,041 $49,704 $169,123 $406,300 $35,724 $1,207,343 Laura R. Landreaux 2019 $314,407 $— $188,861 $42,432 $263,523 $228,700 $26,536 $1,064,459CEO - Entergy 2018 $246,136 $— $273,062 $— $124,000 $21,500 $10,741 $675,439Arkansas 462 Table of Contents(a) (b) (c) (d) (e) (f) (g) (h) (i) (j) Name and PrincipalPosition(1) Year Salary(2) Bonus(3) StockAwards (4) OptionAwards (5) Non-EquityIncentivePlanCompen-sation(6) Change inPensionValue andNon-qualifiedDeferredCompen-sationEarnings (7) AllOtherCompens-ation (8) Total Andrew S. Marsh 2019 $641,923 $— $1,579,663 $375,914 $712,400 $1,554,300 $69,863 $4,934,063Executive Vice 2018 $615,654 $— $1,057,095 $342,510 $531,188 $— $57,638 $2,604,085President and CFO - 2017 $588,291 $— $1,022,853 $287,760 $541,800 $801,900 $51,647 $3,294,251Entergy Corp., Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas Phillip R. May, Jr. 2019 $389,016 $— $294,183 $77,376 $407,922 $877,100 $28,297 $2,073,894CEO - Entergy 2018 $377,108 $— $288,238 $69,201 $270,000 $— $26,874 $1,031,421Louisiana 2017 $363,410 $— $302,493 $68,670 $300,000 $503,400 $26,981 $1,564,954 Sallie T. Rainer 2019 $344,722 $— $197,780 $51,584 $219,069 $617,200 $37,361 $1,467,716CEO - Entergy 2018 $335,263 $— $198,449 $46,134 $159,000 $— $35,379 $774,225Texas 2017 $325,737 $— $195,567 $51,012 $156,259 $435,900 $35,785 $1,200,260 Roderick K. West 2019 $709,023 $— $1,340,679 $319,039 $674,742 $1,604,100 $67,191 $4,714,774Group President 2018 $690,581 $— $1,057,095 $297,075 $560,762 $— $67,234 $2,672,747Utility Operations of 2017 $670,876 $— $818,316 $190,968 $610,065 $867,200 $52,220 $3,209,645Entergy Corp. (1)Mr. Ellis was named Chief Executive Officer, Entergy New Orleans in December 2018, and Ms. Landreaux was named ChiefExecutive Officer, Entergy Arkansas in July 2018.(2)The amounts in column (c) represent the actual base salary paid to the Named Executive Officers in the applicable year. The 2019changes in base salaries noted in the Compensation Discussion and Analysis were effective in April 2019.(3)The amount in column (d) in 2019, 2018 and 2017 for Mr. Bakken represents the cash bonus paid to him pursuant to the NuclearRetention Plan. See “Nuclear Retention Plan” in Compensation Discussion and Analysis. The amount in column (d) in 2018 for Mr.Ellis represents a cash sign-on bonus paid in connection with his commencement of employment with Entergy New Orleans.(4)The amounts in column (e) represent the aggregate grant date fair value of restricted stock and performance units granted under the2015 Equity Plan, each calculated in accordance with FASB ASC Topic 718, without taking into account estimated forfeitures. Thegrant date fair value of the restricted stock is based on the closing price of Entergy Corporation common stock on the date ofgrant. The grant date fair value of the portion of the performance units with vesting based on the total shareholder return wasmeasured using a Monte Carlo simulation valuation model. The simulation model applies a risk-free interest rate and an expectedvolatility assumption. The risk-free interest rate is assumed to equal the yield on a three-year treasury bond on the grantdate. Volatility is based on historical volatility for the 36-month period preceding the grant date. The performance units in the tableare also valued based on the probable outcome of the applicable performance condition at the time of grant. The maximum value ofshares that will be received if the highest achievement level is attained with respect to both the total shareholder return andCumulative ETR Adjusted EPS, for performance units granted in 2019 are as follows: Mr. Bakken, $1,953,212; Mr. Brown,$1,915,446; Mr. Denault, $8,269,303; Mr. Ellis, $296,003; Mr.463 Table of ContentsFisackerly, $296,003; Ms. Landreaux $296,003; Mr. Marsh, $2,422,938; Mr. May, $438,901; Ms. Rainer, $296,003; and Mr. West,$2,056,302.(5)The amounts in column (f) represent the aggregate grant date fair value of stock options granted under the 2015 Equity Plancalculated in accordance with FASB ASC Topic 718. For a discussion of the relevant assumptions used in valuing these awards, seeNote 12 to the financial statements.(6)The amounts in column (g) represent cash payments made under the Annual Incentive Plan.(7)For all Named Executive Officers, the amounts in column (h) include the annual actuarial increase in the present value of theseNamed Executive Officers’ benefits under all pension plans established by Entergy Corporation using interest rate and mortality rateassumptions consistent with those used in Entergy Corporation’s financial statements and include amounts which the NamedExecutive Officers may not currently be entitled to receive because such amounts are not vested (see “2019 Pension Benefits”). Theincrease in pension benefits for all of the Named Executive Officers in 2019 was driven by a decline in the discount rate that was aresult of the decrease in prevailing interest rates. None of the increases for any of the Named Executive Officers is attributable toabove-market or preferential earnings on non-qualified deferred compensation. For 2018, the aggregate change in the actuarialpresent value was a decrease of pension benefits of $52,000 for Mr. Fisackerly, $163,000 for Mr. Marsh, $700 for Mr. May, $110,700for Ms. Rainer, and $149,300 for Mr. West.(8)The amounts in column (i) for 2019 include (a) matching contributions by Entergy Corporation under the Savings Plan to each of theNamed Executive Officers; (b) dividends paid on restricted stock when vested; (c) life insurance premiums; (d) tax gross up paymentson club dues and relocation expenses; and (e) perquisites and other compensation as described further below. The amounts are listedin the following table:Named Executive OfficerCompanyContribution –Savings PlanDividends Paidon RestrictedStockLife InsurancePremiumTax GrossUpPaymentsPerquisites andOtherCompensation TotalA. Christopher Bakken, III$16,800$20,114$12,277$—$13,216$62,407Marcus V. Brown$11,760$48,749$7,482$—$1,964$69,955Leo P. Denault$11,760$129,470$11,484$—$56,108$208,822David D. Ellis$14,436$—$722$—$109$15,267Haley R. Fisackerly$11,760$7,793$2,959$4,729$10,656$37,897Laura R. Landreaux$—$11,257$477$4,510$10,292$26,536Andrew S. Marsh$11,760$49,010$6,275$—$2,818$69,863Phillip R. May, Jr.$11,760$9,958$5,779$—$800$28,297Sallie T. Rainer$11,760$7,879$6,872$2,728$8,122$37,361Roderick K. West$11,760$39,754$4,002$—$11,675$67,191Perquisites and Other CompensationThe amounts set forth in column (i) also include perquisites and other personal benefits that Entergy Corporation provides to itsNamed Executive Officers as part of providing a competitive executive compensation programs and for employee retention. The followingperquisites were provided to the Named Executive Officers in 2019.464 Table of ContentsNamed Executive OfficerRelocationPersonal Use ofCorporateAircraftClub DuesExecutivePhysicalExamsEvent TicketsA. Christopher Bakken, III X X Marcus V. Brown X Leo P. Denault X X David D. EllisX Haley R. Fisackerly X Laura R. Landreaux X XAndrew S. Marsh X X Phillip R. May, Jr. XSallie T. Rainer X Roderick K. West X X For security and business reasons, Entergy Corporation’s Chief Executive Officer is permitted to use its corporate aircraft forpersonal use at the expense of Entergy Corporation. The other Named Executive Officers may use the corporate aircraft for personal travelsubject to the approval of Entergy Corporation’s Chief Executive Officer. The Personnel Committee reviews the level of usage throughoutthe year. Entergy Corporation believes that its officers’ ability to use its plane for limited personal use saves time and provides additionalsecurity for them, thereby benefiting Entergy Corporation. The amounts included in column (i) for the personal use of corporateaircraft, reflect the incremental cost to Entergy Corporation for use of the corporate aircraft, determined on the basis of the variableoperational costs of each flight, including fuel, maintenance, flight crew travel expense, catering, communications, and fees, including flightplanning, ground handling, and landing permits. The aggregate incremental aircraft usage cost associated with Mr. Denault’s personal use ofthe corporate aircraft was $56,108 for fiscal year 2019. In addition, Entergy Corporation offers its executives comprehensive annual physicalexams at Entergy Corporation’s expense. Tickets to cultural and sporting events are purchased for business purposes, and if not utilized forbusiness purposes, the tickets are made available to the employees, including the Named Executive Officers, for personal use. None of theother perquisites referenced above exceeded $25,000 for any of the other Named Executive Officers. 465 Table of Contents2019 Grants of Plan-Based AwardsThe following table summarizes award grants during 2019 to the Named Executive Officers. Estimated Possible Payouts Under Non-Equity Incentive Plan Awards (1) Estimated Future Payoutsunder Equity Incentive PlanAwards (2) (a) (b) (c)(d)(e) (f)(g)(h) (i) (j) (k) (l)Name Grant Date Thresh-oldTargetMaximum Thresh-oldTargetMaximum All OtherStockAwards:Number ofShares ofStock orUnits All OtherOptionAwards:Number ofSecuritiesUnder-lyingOptions Exercise orBase Priceof OptionAwards Grant Date FairValue of Stockand OptionAwards ($)($)($) (#)(#)(#) (#)(3) (#)(4) ($/Sh) ($)(5)A.Christopher 1/31/19 $-$457,855$915,710 Bakken, III 1/31/19 2,3929,56819,136 $951,959 1/31/19 3,604 $321,441 1/31/19 36,421 $89.19 $303,023 Marcus V. 1/31/19 $-$499,688$999,376 Brown 1/31/19 2,3469,38318,766 $933,552 1/31/19 3,535 $315,287 1/31/19 35,719 $89.19 $297,182 Leo P. 1/31/19 $-$1,764,000$3,528,000 Denault 1/31/19 10,12740,50881,016 $4,030,303 1/31/19 15,259 $1,360,950 1/31/19 154,206 $89.19 $1,282,994 David D. 1/31/19 $-$125,355$250,710 Ellis 1/31/19 3631,4502,900 $144,266 500 $44,595 4,700 $89.19 $39,104 Haley R. 1/31/19 $-$150,409$300,818 Fisackerly 1/31/19 3631,4502,900 $144,266 1/31/19 600 $53,514 1/31/19 6,200 $89.19 $51,584 Laura R. 1/31/19 $-$126,588$253,176 Landreaux 1/31/19 3631,4502,900 $144,266 1/31/19 500 $44,595 5,100 $89.19 $42,432 Andrew S. 1/31/19 $-$520,000$1,040,000 Marsh 1/31/19 2,96711,86923,738 $1,180,894 1/31/19 4,471 $398,768 1/31/19 45,182 $89.19 $375,914 466 Table of Contents Estimated Possible Payouts UnderNon-Equity Incentive Plan Awards (1) Estimated Future Payouts underEquity Incentive Plan Awards (2) (a) (b) (c)(d)(e) (f)(g)(h) (i) (j) (k) (l)Name Grant Date Thresh-oldTargetMaximum Thresh-oldTargetMaximum All OtherStockAwards:Number ofShares ofStock orUnits All OtherOptionAwards:Number ofSecuritiesUnder-lyingOptions Exercise orBase Priceof OptionAwards Grant DateFair Value ofStock andOptionAwards ($)($)($) (#)(#)(#) (#)(3) (#)(4) ($/Sh) ($)(5)Phillip R. 1/31/19 $-$235,226$470,452 May, Jr. 1/31/19 5382,1504,300 $213,912 1/31/19 900 $80,271 1/31/19 9,300 $89.19 $77,376 Sallie T. 1/31/19 $-$138,969$277,938 Rainer 1/31/19 3631,4502,900 $144,266 1/31/19 600 $53,514 1/31/19 6,200 $89.19 $51,584 Roderick K. 1/31/19 $-$499,809$999,618 West 1/31/19 2,51810,07320,146 $1,002,203 1/31/19 3,795 $338,476 1/31/19 38,346 $89.19 $319,039(1)The amounts in columns (c), (d), and (e) represent minimum, target, and maximum payment levels under the Annual IncentivePlan. The actual amounts awarded are reported in column (g) of the Summary Compensation Table.(2)The amounts in columns (f), (g), and (h) represent the minimum, target, and maximum payment levels under the Long-TermPerformance Unit Program. Performance under the program is measured by Entergy Corporation’s total shareholder return relativeto the total shareholder returns of the companies included in the Philadelphia Utility Index and Cumulative Entergy Adjusted EPSwith total shareholder return weighted eighty percent and Cumulative Entergy Adjusted EPS weighted twenty percent. There is nopayout under the program if Entergy Corporation’s total shareholder return falls within the lowest quartile of the peer companies inthe Philadelphia Utility Index and Cumulative Entergy Adjusted EPS is below the minimum performance goal. Subject to theachievement of performance targets, each unit will be converted into one share of Entergy Corporation’s common stock on the lastday of the performance period (December 31, 2021.) Accrued dividends on the shares earned will also be paid in EntergyCorporation common stock.(3)The amounts in column (i) represent shares of restricted stock granted under the 2015 Equity Plan. Shares of restricted stock vestone-third on each of the first through third anniversaries of the grant date, have voting rights, and accrue dividends during the vestingperiod.(4)The amounts in column (j) represent options to purchase shares of Entergy Corporation’s common stock. The options vest one-thirdon each of the first through third anniversaries of the grant date and have a ten-year term from the date of grant. The options weregranted under the 2015 Equity Plan.(5)The amounts in column (l) are valued based on the aggregate grant date fair value of the award calculated in accordance with FASBASC Topic 718 and, in the case of the performance units, are based on the probable outcome of the applicable performanceconditions. See Notes 4 and 5 to the 2019 Summary Compensation Table for a discussion of the relevant assumptions used incalculating the grant date fair value.467 Table of Contents2019 Outstanding Equity Awards at Fiscal Year-EndThe following table summarizes, for each Named Executive Officer, unexercised options, restricted stock that has not vested, andequity incentive plan awards outstanding as of December 31, 2019. Option Awards Stock Awards(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)Name Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable Number ofSecuritiesUnderlyingUnexercisedOptionsUnexercisable EquityIncentive PlanAwards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions OptionExercisePrice OptionExpirationDate Number ofShares orUnits ofStock ThatHave NotVested Market Valueof Shares orUnits of StockThat HaveNot Vested EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRights ThatHave NotVested EquityIncentivePlan Awards:Market orPayout Valueof UnearnedShares, Unitsor OtherRights ThatHave NotVested (#) (#) (#) ($) (#) ($) (#) ($)A. ChristopherBakken, III — 36,421(1) $89.19 1/31/2029 — 27,000(2) $78.08 1/25/2028 — 12,534(3) $70.53 1/26/2027 19,136(4) $2,292,493 15,800(5) $1,892,840 3,604(6) $431,759 3,334(7) $399,413 1,734(8) $207,733 20,000(10) $2,396,000 Marcus V.Brown — 35,719(1) $89.19 1/31/2029 — 27,000(2) $78.08 1/25/2028 1 14,667(3) $70.53 1/26/2027 1 — $70.56 1/28/2026 18,766(4) $2,248,167 15,800(5) $1,892,840 3,535(6) $423,493 3,334(7) $399,413 2,034(8) $243,673 468 Table of Contents Option Awards Stock Awards(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)Name Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable Number ofSecuritiesUnderlyingUnexercisedOptionsUnexercisable EquityIncentive PlanAwards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions OptionExercisePrice OptionExpirationDate Number ofShares orUnits ofStock ThatHave NotVested MarketValue ofShares orUnits ofStock ThatHave NotVested EquityIncentivePlan Awards:Number ofUnearnedShares, Unitsor OtherRights ThatHave NotVested EquityIncentive PlanAwards:Market orPayout Valueof UnearnedShares, Unitsor OtherRights ThatHave NotVested (#) (#) (#) ($) (#) ($) (#) ($)Leo P.Denault — 154,206(1) $89.19 1/31/2029 55,700 111,400(2) $78.08 1/25/2028 119,600 59,800(3) $70.53 1/26/2027 167,000 — $70.56 1/28/2026 88,000 — $89.90 1/29/2025 106,000 — $63.17 1/30/2024 50,000 — $64.60 1/31/2023 81,016(4) $9,705,717 85,400(5) $10,230,920 15,259(6) $1,828,028 10,467(7) $1,253,947 5,667(8) $678,907 David D.Ellis — 4,700(1) $89.19 1/31/2029 2,900(4) $347,420 2,200(5) $263,560 500(6) $59,900 Haley R.Fisackerly — 6,200(1) $89.19 1/31/2029 — 4,400(2) $78.08 1/25/2028 — 2,534(3) $70.53 1/26/2027 2,900(4) $347,420 3,300(5) $395,340 600(6) $71,880 534(7) $63,973 284(8) $34,023 Laura R.Landreaux — 5,100(1) $89.19 1/31/2029 2,900(4) $347,420 2,750(5) $329,450 500(6) $59,900 800(7) $95,840 500(8) $59,900 469 Table of Contents Option Awards Stock Awards(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)Name Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable Number ofSecuritiesUnderlyingUnexercisedOptionsUnexercisable EquityIncentive PlanAwards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions OptionExercisePrice OptionExpirationDate Number ofShares orUnits ofStock ThatHave NotVested Market Valueof Shares orUnits of StockThat HaveNot Vested EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRights ThatHave NotVested EquityIncentive PlanAwards:Market orPayout Valueof UnearnedShares, Unitsor OtherRights ThatHave NotVested (#) (#) (#) ($) (#) ($) (#) ($)Andrew S.Marsh — 45,182(1) $89.19 1/31/2029 16,333 32,667(2) $78.08 1/25/2028 29,333 14,667(3) $70.53 1/26/2027 45,000 — $70.56 1/28/2026 24,000 — $89.90 1/29/2025 35,000 — $63.17 1/30/2024 32,000 — $64.60 1/31/2023 10,000 — $71.30 1/26/2022 4,000 — $72.79 1/27/2021 23,738(4) $2,843,812 15,800(5) $1,892,840 4,471(6) $535,626 3,467(7) $415,347 2,034(8) $243,673 21,100(9) $2,527,780 Phillip R.May, Jr. — 9,300(1) $89.19 1/31/2029 — 6,600(2) $78.08 1/25/2028 — 3,500(3) $70.53 1/26/2027 2,000 — $63.17 1/30/2024 2,000 — $64.60 1/31/2023 4,300(4) $515,140 5,100(5) $610,980 900(6) $107,820 667(7) $79,907 367(8) $43,967 Sallie T.Rainer — 6,200(1) $89.19 1/31/2029 — 4,400(2) $78.08 1/25/2028 — 2,600(3) $70.53 1/26/2027 2,900(4) $347,420 3,300(5) $395,340 600(6) $71,880 534(7) $63,973 300(8) $35,940 470 Table of Contents Option Awards Stock Awards(a) (b) (c) (d) (e) (f) (g) (h) (i) (j)Name Number ofSecuritiesUnderlyingUnexercisedOptionsExercisable Number ofSecuritiesUnderlyingUnexercisedOptionsUnexercisable EquityIncentive PlanAwards:Number ofSecuritiesUnderlyingUnexercisedUnearnedOptions OptionExercisePrice OptionExpirationDate Number ofShares orUnits ofStock ThatHave NotVested Market Valueof Shares orUnits of StockThat HaveNot Vested EquityIncentivePlanAwards:Number ofUnearnedShares,Units orOtherRights ThatHave NotVested EquityIncentive PlanAwards:Market orPayout Valueof UnearnedShares, Unitsor OtherRights ThatHave NotVested (#) (#) (#) ($) (#) ($) (#) ($)Roderick K.West — 38,346(1) $89.19 1/31/2029 14,166 28,334(2) $78.08 1/25/2028 9,733 9,734(3) $70.53 1/26/2027 13,667 — $70.56 1/28/2026 23,000 — $89.90 1/29/2025 20,146(4) $2,413,491 15,800(5) $1,892,840 3,795(6) $454,641 3,467(7) $415,347 1,067(8) $127,827 (1)Consists of options granted under the 2015 Equity Plan that vested or will vest as follows: 1/3 of the options granted vest on each ofJanuary 31, 2020, January 31, 2021 and January 31, 2022.(2)Consists of options granted under the 2015 Equity Plan that vested or will vest as follows: 1/2 of the remaining unexercisable optionsvest on each of January 25, 2020 and January 25, 2021.(3)Consists of options granted under the 2015 Equity Plan that vested on January 26, 2020.(4)Consists of performance units granted under the 2015 Equity Plan that will vest on December 31, 2021 based on two performancemeasures: 1) Entergy Corporation’s total shareholder return performance over the 2019-2021 performance period and 2) CumulativeEntergy Adjusted EPS with total shareholder return weighted eighty percent and Cumulative Entergy Adjusted EPS weighted twentypercent, as described under “What Entergy Corporation Pays and Why - Principal Executive Compensation Elements - VariableCompensation - Long-Term Incentive Compensation - Performance Unit Program” in the Compensation Discussion and Analysis.(5)Consists of performance units granted under the 2015 Equity Plan that will vest on December 31, 2020 based on two performancemeasures: 1) Entergy Corporation’s total shareholder return performance over the 2018-2020 performance period and 2) CumulativeUtility, Parent and Other Adjusted EPS with each performance measure weighted equally.(6)Consists of shares of restricted stock granted under the 2015 Equity Plan that vested or will vest as follows: 1/3 of the shares ofrestricted stock granted vest on each of January 31, 2020, January 31, 2021, and January 31, 2022.(7)Consists of shares of restricted stock granted under the 2015 Equity Plan that vested or will vest as follows: 1/2 of the shares ofrestricted stock granted vest on each of January 25, 2020 and January 25, 2021.(8)Consists of shares of restricted stock granted under the 2015 Equity Plan that vested on January 26, 2020.(9)Consists of restricted stock units granted under the 2015 Equity Plan which will vest on August 3, 2020.(10)Consists of restricted stock units granted under the 2015 Equity Plan which will vest 1/2 on each of April 6, 2022 and April 6, 2025.471 Table of Contents2019 Option Exercises and Stock VestedThe following table provides information concerning each exercise of stock options and each vesting of stock during 2019 for theNamed Executive Officers. Options Awards Stock Awards(a) (b) (c) (d) (e)Name Number of SharesAcquired onExercise Value Realizedon Exercise Number ofShares Acquiredon Vesting Value Realizedon Vesting (1) (#) ($) (#) ($)A. Christopher Bakken, III 38,566 $1,377,860 31,719 $3,543,240 Marcus V. Brown 145,031 $4,056,865 24,484 $2,839,040 Leo P. Denault 105,000 $2,861,250 123,760 $14,933,716 David D. Ellis — $— 1,271 $160,540 Haley R. Fisackerly 13,700 $280,882 5,037 $596,349 Laura R. Landreaux — $— 3,431 $374,036 Andrew S. Marsh 17,100 $468,315 24,554 $2,845,137 Phillip R. May, Jr. 18,900 $456,820 8,146 $978,103 Sallie T. Rainer 15,667 $372,696 5,055 $597,906 Roderick K. West — $— 23,347 $2,740,719(1)Represents the value of performance units for the 2017-2019 performance period (payable solely in shares based on the closing stockprice of Entergy Corporation on the date of vesting) under the Performance Unit Program and the vesting of shares of restricted stockin 2019.472 Table of Contents2019 Pension BenefitsThe following table shows the present value as of December 31, 2019, of accumulated benefits payable to each of the NamedExecutive Officers, including the number of years of service credited to each Named Executive Officer, under the retirement plans sponsoredby Entergy Corporation, determined using interest rate and mortality rate assumptions set forth in Note 11 to the financialstatements. Additional information regarding these retirement plans follows this table. Name Plan Name Number ofYearsCreditedService Present Value ofAccumulatedBenefit PaymentsDuring 2019A. Christopher Bakken, III Cash Balance Equalization Plan 3.74 $196,900 $— Cash Balance Plan 3.74 $71,200 $— Marcus V. Brown(1) System Executive Retirement Plan 24.74 $6,368,400 $— Entergy Retirement Plan 24.74 $1,160,000 $— Leo P. Denault (1)(2) System Executive Retirement Plan 35.83 $26,526,500 $— Entergy Retirement Plan 20.83 $1,035,100 $— David D. Ellis Cash Balance Equalization Plan 1.06 $1,900 $— Cash Balance Plan 1.06 $16,700 $— Haley R. Fisackerly System Executive Retirement Plan 24.08 $1,728,000 $— Entergy Retirement Plan 24.08 $1,023,900 $— Laura R. Landreaux Pension Equalization Plan 12.48 $86,300 $— Entergy Retirement Plan 12.48 $418,700 $— Andrew S. Marsh System Executive Retirement Plan 21.37 $4,694,700 $— Entergy Retirement Plan 21.37 $738,700 $— Phillip R. May, Jr. (1) System Executive Retirement Plan 33.56 $2,964,100 $— Entergy Retirement Plan 33.56 $1,538,500 $— Sallie T. Rainer (1)(3) System Executive Retirement Plan 35.38 $1,511,300 $— Entergy Retirement Plan 35.00 $1,766,400 $— Roderick K. West System Executive Retirement Plan 20.75 $5,892,400 $— Entergy Retirement Plan 20.75 $792,700 $—(1)As of December 31, 2019, Mr. Brown, Mr. Denault, Mr. May, and Ms. Rainer were retirement eligible.(2)In 2006, Mr. Denault entered into a retention agreement granting him an additional 15 years of service and permission to retire underthe non-qualified System Executive Retirement Plan in the event his employment is terminated by his Entergy employer other thanfor cause (as defined in the retention agreement), by Mr. Denault for good reason (as defined in the retention agreement), or onaccount of his death or disability. His retention agreement also provides that if he terminates employment for any other reason, heshall be entitled to the additional 15 years of service under the non-qualified System Executive Retirement Plan only if his Entergyemployer grants him permission to retire. The additional 15 years of service increases the present value of his benefit by $3,887,900.(3)Service under the non-qualified System Executive Retirement Plan is granted from the date of hire. Service under the qualifiedEntergy Retirement Plan is granted from the later of the date of hire or the plan participation date. 473 Table of ContentsRetirement BenefitsThe tables below contain summaries of the pension benefit plans sponsored by Entergy Corporation that the Named ExecutiveOfficers participated in during 2019. Benefits for the Named Executive Officers who participate in these plans are determined using the sameformulas as for other eligible employees.Qualified Retirement Benefits Entergy Retirement PlanCash Balance PlanEligible NamedExecutive OfficersMarcus V. BrownHaley R. FisackerlyLeo P. DenaultAndrew S. MarshLaura R. LandreauxPhillip R. May, Jr.Sallie T. RainerRoderick K. WestA. Christopher Bakken, IIIDavid D. EllisEligibilityNon-bargaining employees hired before July 1, 2014Non-bargaining employees hired on or after July 1,2014VestingA participant becomes vested in the Entergy RetirementPlan upon attainment of at least 5 years of vestingservice or upon attainment of age 65 while activelyemployed by an Entergy system company.A participant becomes vested in the Cash Balance Planupon attainment of at least 3 years of vesting service orupon attainment of age 65 while actively employed byan Entergy system company.Form of PaymentUpon RetirementBenefits are payable as an annuity. For employees whoseparate from service on or after January 1, 2018, asingle lump sum distribution may be elected by theparticipant if eligibility criteria are met.Benefits are payable as an annuity or single lump sumdistribution.Retirement BenefitFormulaBenefits are calculated as a single life annuity payable atage 65 and generally are equal to 1.5% of a participant’sFinal Average Monthly Earnings (FAME) multiplied byyears of service (not to exceed 40).“Earnings” for the purpose of calculating FAMEgenerally includes the employee’s base salary andeligible annual incentive awards subject to InternalRevenue Code limitations, and excludes all otherbonuses. Executive annual incentive awards are noteligible for inclusion in Earnings under this plan.FAME is calculated using the employee’s averagemonthly Earnings for the 60 consecutive months inwhich the employee’s earnings were highest during the120 month period immediately preceding the employee’sretirement and includes up to 5 eligible annual incentiveawards paid during the 60 month period.The normal retirement benefit at age 65 is determinedby converting the sum of an employee’s annual paycredits and his or her annual interest credits, into anactuarially equivalent annuity.Pay credits ranging from 4-8% of an employee’seligible Earnings are allocated annually to a notionalaccount for the employee based on an employee’s ageand years of service. Earnings for purposes ofcalculating an employee’s pay credit include theemployee’s base salary and annual incentive awardssubject to Internal Revenue Code limitations andexclude all other bonuses. Executive annual incentiveawards are eligible for inclusion in Earnings under thisplan.Interest credits are calculated based upon the annualrate of interest on 30-year U.S. Treasury securities, asspecified by the Internal Revenue Service, for themonth of August preceding the first day of theapplicable calendar year subject to a minimum rate of2.6% and a maximum rate of 9%.474 Table of ContentsBenefit TimingNormal retirement age under the plan is 65.A reduced terminated vested benefit may be commencedas early as age 55. The amount of this benefit isdetermined by reducing the normal retirement benefit by7% per year for the first 5 years commencementprecedes age 65, and 6% per year for each additionalyear commencement precedes age 65.A subsidized early retirement benefit may becommenced by employees who are at least age 55 with10 years of service at the time they separate fromservice. The amount of this benefit is determined byreducing the normal retirement benefit by 2% per yearfor each year that early retirement precedes age 65.Normal retirement age under the plan is 65.A vested cash balance benefit can be commenced asearly as the first day of the month following separationfrom service. The amount of the benefit is determinedin the same manner as the normal retirement benefitdescribed above in the “Retirement Benefit Formula”section.Non-qualified Retirement BenefitsThe Named Executive Officers are eligible to participate in certain non-qualified retirement benefit plans that provide retirementincome, including the Pension Equalization Plan, the Cash Balance Equalization Plan, and the System Executive Retirement Plan. Each ofthese plans is an unfunded non-qualified defined benefit pension plan that provides benefits to key management employees. In these plans, asdescribed below, an executive may participate in one or more non-qualified plans, but is only paid the amount due under the plan thatprovides the highest benefit. In general, upon disability, participants in the Pension Equalization Plan and the System Executive RetirementPlan remain eligible for continued service credits until the earlier of recovery, separation from service due to disability, or retirementeligibility. Generally, spouses of participants who die before commencement of benefits may be eligible for a portion of the participant’saccrued benefit.475 Table of Contents Pension Equalization PlanCash Balance EqualizationPlanSystem Executive Retirement PlanEligibleNamedExecutiveOfficersMarcus V. BrownHaley R. FisackerlyLeo P. DenaultLaura R. LandreauxAndrew S. MarshPhillip R. May, Jr.Sallie T. RainerRoderick K. WestA. Christopher Bakken, IIIDavid D. EllisMarcus V. BrownHaley R. FisackerlyLeo P. DenaultAndrew S. MarshPhillip R. May, Jr.Sallie T. RainerRoderick K. WestEligibilityManagement or highly compensatedemployees who participate in the EntergyRetirement PlanManagement or highlycompensated employees whoparticipate in the CashBalance PlanCertain individuals who became executiveofficers before July 1, 2014Form ofPayment UponRetirementSingle lump sum distributionSingle lump sum distributionSingle lump sum distributionRetirementBenefitFormulaBenefits generally are equal to the actuarialpresent value of the difference between (1)the amount that would have been payable asan annuity under the Entergy RetirementPlan, including executive annual incentiveawards as eligible earnings and withoutapplying limitations of the Internal RevenueCode of 1986, as amended (the “Code”) onpension benefits and earnings that may beconsidered in calculating tax-qualifiedpension benefits, and (2) the amount actuallypayable an annuity under the EntergyRetirement Plan. Executive annual incentive awards are takeninto account as eligible earnings under thisplan.Benefits generally are equalto the difference between theamount that would have beenpayable as a lump sum underthe Cash Balance Plan, but forthe Code limitations onpension benefits and earningsthat may be considered incalculating tax-qualified cashbalance plan benefits, and theamount actually payable as alump sum under the CashBalance Plan.Benefits generally are equal to the actuarialpresent value of a specified percentage, basedon the participant’s years of service(including supplemental service grantedunder the plan) and management level of theparticipant’s “Final Average MonthlyCompensation” (which is generally 1/36th ofthe sum of the participant’s base salary andannual incentive plan award for the 3 highestyears during the last 10 years precedingseparation from service), after first beingreduced by the value of the participant’sEntergy Retirement Plan benefit.Benefit timingPayable at age 65Benefits payable prior to age 65 are subject tothe same reduced terminated vested or earlyretirement reduction factors as benefitspayable under the Entergy Retirement Plan asdescribed above.An employee with supplemental creditedservice who terminates employment prior toage 65 must receive prior written consent ofthe Entergy employer in order to receive theportion of their benefit attributable to theirsupplemental credited service agreement.Benefits payable upon separation fromservice subject to the 6 month delay requiredunder the Code Section 409A.Payable upon separation fromservice subject to 6 monthdelay required under the CodeSection 409A.Payable at age 65Prior to age 65, vesting is conditioned on theprior written consent of the officer’s Entergyemployer.Benefits payable prior to age 65 are subjectto the same reduced terminated vested orsubsidized early retirement reduction factorsas benefits payable under the EntergyRetirement Plan as described above.Benefits payable upon separation fromservice subject to the 6 month delay requiredunder Internal Revenue Code Section 409A.476 Table of ContentsAdditional Information(1)Effective July 1, 2014, (a) no new grants of supplemental service may be provided to participants in the Pension Equalization Plan; (b)supplemental credited service granted prior to July 1, 2014 was grandfathered; and (c) participants in Entergy Corporation’s CashBalance Plan are not eligible to participate in the Pension Equalization Plan and instead may be eligible to participate in the CashBalance Equalization Plan.(2)Benefits accrued under the System Executive Retirement Plan, Pension Equalization Plan, and Cash Balance Equalization Plan, if any,will become fully vested if a participant is involuntarily terminated without cause or terminates his or her employment for good reasonin connection with a change in control with payment generally made in a lump-sum payment as soon as reasonably practicablefollowing the first day of the month after the termination of employment, unless delayed 6 months under Internal Revenue CodeSection 409A.(3)The System Executive Retirement Plan was closed to new executive officers effective July 1, 2014.2019 Non-qualified Deferred CompensationAs of December 31, 2019, Mr. May had a deferred account balance under a frozen Defined Contribution Restoration Plan. Theamount is deemed invested, as chosen by Mr. May, in certain T. Rowe Price investment funds that are also available to the participant underthe Savings Plan. Mr. May has elected to receive the deferred account balance after he retires. The Defined Contribution Restoration Plan,until it was frozen in 2005, credited eligible employees’ deferral accounts with employer contributions to the extent contributions under thequalified savings plan in which the employee participated were subject to limitations imposed by the Internal Revenue Code.Defined Contribution Restoration PlanName ExecutiveContributions in2019 RegistrantContributions in2019 AggregateEarnings in2019(1) AggregateWithdrawals/Distributions AggregateBalance atDecember 31,2019(a) (b) (c) (d) (e) (f) Phillip R. May,Jr. $— $— $805 $— $2,987(1)Amounts in this column are not included in the Summary Compensation Table.2019 Potential Payments Upon Termination or Change in ControlEntergy Corporation has plans and other arrangements that provide compensation to a Named Executive Officer if his or heremployment terminates under specified conditions, including following a change in control of Entergy Corporation or its subsidiaries.Change in ControlUnder Entergy Corporation’s System Executive Continuity Plan (the “Continuity Plan”), ML 1-4 Officers are eligible to receive theseverance benefits described below if their employment is terminated by their Entergy System employer other than for cause or if theyterminate their employment for good reason during a period beginning with a potential change in control and ending 24 months following theeffective date of a change in control (a “Qualifying Termination”). A participant will not be eligible for benefits under the Continuity Plan ifsuch participant: accepts employment with Entergy Corporation or any of its subsidiaries; elects to receive the benefits of another severanceor separation program; removes, copies or fails to return any property belonging to Entergy Corporation or any of its subsidiaries or violateshis or her non-compete provision (which generally runs for two years but extends to three years if permissible under applicable law). EntergyCorporation does not have any plans or agreements that provide for payments or benefits to any of the Named Executive Officers solely upona change in control.477 Table of ContentsIn the event of a Qualifying Termination, executive officers, including the Named Executive Officers, generally will receive thebenefits set forth below:Compensation ElementPaymentSeverance*A lump sum severance payment equal to a multiple of the sum of: (a) the participant’s annual base salary as ineffect at any time within one year prior to the commencement of a change of control period or, if higher,immediately prior to a circumstance constituting good reason, plus (b) the participant’s annual incentive,calculated using the average annual target opportunity derived under the Annual Incentive Plan for the twocalendar years immediately preceding the calendar year in which termination occurs.Performance UnitsParticipants will forfeit outstanding performance units, and in lieu of any payment for any outstandingperformance period, will receive a single-lump sum payment calculated by multiplying the target performanceunits for the most recent performance period preceding (but not including) the calendar year in which terminationoccurs by the closing price of Entergy’s common stock as of the later of the date of such termination or the dateof the Change in Control.Equity AwardsAll unvested stock options, shares of restricted stock and restricted stock units will vest immediately upon a“double trigger” Qualifying Termination pursuant to the terms of the Equity Ownership Plan.Retirement BenefitsBenefits already accrued under the System Executive Retirement Plan, Pension Equalization Plan and CashBalance Equalization Plan, if any, will become fully vested.Welfare BenefitsParticipants who are not retirement-eligible would be eligible to receive Entergy-subsidized COBRA benefits fora period ranging from 12 to 18 months.*Cash severance payments are capped at 2.99 times the sum of (a) an executive’s annual base salary plus (b) the higher of his or heractual annual incentive payment under the Annual Incentive Plan or his or her annual incentive, calculated using the average annualtarget opportunity derived under the Annual Incentive Plan for the two calendar years immediately preceding the calendar year inwhich termination occurs. Any cash severance payments to be paid under the Continuity Plan in excess of this cap will be forfeited bythe participant.To protect shareholders and Entergy Corporation’s business model, executives are required to comply with non-compete, non-solicitation, confidentiality and non-denigration provisions. If an executive discloses non-public data or information concerning EntergyCorporation or any of its subsidiaries or violates his or her non-compete provision, he or she will be required to repay any benefits previouslyreceived under the Continuity Plan. For purposes of the Continuity Plan the following events are generally defined as:•Change in Control: (a) the purchase of 30% or more of either Entergy Corporation’s common stock or the combined voting power ofEntergy Corporation’s voting securities; (b) the merger or consolidation of Entergy Corporation (unless its Board members constituteat least a majority of the board members of the surviving entity); (c) the liquidation, dissolution or sale of all or substantially all ofEntergy Corporation’s assets; or (d) a change in the composition of Entergy Corporation’s Board such that, during any two-yearperiod, the individuals serving at the beginning of the period no longer constitute a majority of Entergy Corporation’s Board at theend of the period.•Potential Change in Control: (a) Entergy Corporation or an affiliate enters into an agreement the consummation of which wouldconstitute a Change in Control; (b) the Entergy Corporation Board adopts resolutions determining that, for purposes of the ContinuityPlan, a potential Change in Control has occurred; (c) a System Company or other person or entity publicly announces an intention totake actions that would constitute a Change in Control; or (d) any person or entity becomes the beneficial owner (directly orindirectly) of Entergy Corporation’s outstanding shares of common stock constituting 20% or more of the voting power or value ofthe Entergy Corporation’s outstanding common stock.478 Table of Contents•Cause: The participant’s (a) willful and continuous failure to perform substantially his or her duties after written demand forperformance; (b) engagement in conduct that is materially injurious to Entergy Corporation or any of its subsidiaries; (c) convictionor guilty or nolo contendere plea to a felony or other crime that materially and adversely affects either his or her ability to perform hisor her duties or Entergy Corporation’s reputation; (d) material violation of any agreement with Entergy Corporation or any of itssubsidiaries; or (e) disclosure of any of Entergy Corporation’s confidential information without authorization.•Good Reason: The participant’s (a) nature or status of duties and responsibilities is substantially altered or reduced; (b) salary isreduced by 5% or more; (c) primary work location is relocated outside the continental United States; (d) compensation plans arediscontinued without an equitable replacement; (e) benefits or number of vacation days are substantially reduced; or (f) employmentis terminated by an Entergy employer for reasons other than in accordance with the Continuity Plan.Other Termination EventsFor termination events, other than in connection with a Change in Control, the executive officers, including the Named ExecutiveOfficers, generally will receive the benefits set forth below:TerminationEventCompensation ElementSeveranceAnnual IncentiveStock OptionsRestrictedStockPerformance UnitsVoluntaryResignationNoneForfeited*Unvested options areforfeited. Vested optionsexpire on the earlier of (i) 90days from the last day ofactive employment and (ii)the option’s normalexpiration date.ForfeitedForfeited**Termination forCauseNoneForfeitedForfeitedForfeitedForfeitedRetirementNonePro-rated based on numberof days employed duringthe performance periodUnvested stock options veston the retirement date andexpire on the earlier of (i)five years from theRetirement date and (ii) theoption’s normal expirationdate.ForfeitedOfficers with aminimum of 12 monthsof participation areeligible for a pro-ratedaward based on actualperformance and fullmonths of serviceduring the performanceperiodDeath/DisabilityNonePro-rated based on numberof days employed duringthe performance periodUnvested stock options veston the termination date andexpire on the earlier of (i)five years from thetermination date and (ii) theoption’s normal expirationdateFully VestOfficers are eligible forpro-rated award basedon actual performanceand full months ofservice during theperformance period*If an officer resigns after the completion of an annual incentive plan, he or she may receive, at the Company’s discretion, an annualincentive payment.**If an officer resigns after the completion of a Long-Term Performance Unit Program performance period, he or she may receive apayout under the Long-Term Performance Unit Program based on the outcome of the performance period.479 Table of ContentsMr. Denault’s 2006 Retention AgreementIn 2006, Entergy Corporation entered into a retention agreement with Mr. Denault that provides benefits to him in addition to, or inlieu of, the benefits described above. Specifically, in the event of a Termination Event (as defined in his agreement): 1) Mr. Denault isentitled to a Target LTIP Award calculated by using the average annual number of performance units with respect to the two most recentperformance periods preceding the calendar year in which his employment termination occurs, assuming all performance goals wereachieved at target; and 2) all of Mr. Denault’s unvested stock options and shares of restricted stock will immediately vest.In the event of death or disability, Mr. Denault would receive the greater of the Target LTIP Award calculated as described above orthe pro-rated number of performance units for all open performance periods, based on the number of months of his participation in each openperformance period.Under the terms of his 2006 retention agreement, Mr. Denault’s employment may be terminated for cause upon Mr. Denault’s: (a)continuing failure to substantially perform his duties (other than because of physical or mental illness or after he has given notice oftermination for good reason) that remains uncured for 30 days after receiving a written notice from the Personnel Committee; (b) willfullyengaging in conduct that is demonstrably and materially injurious to Entergy; (c) conviction of or entrance of a plea of guilty or nolocontendere to a felony or other crime that has or may have a material adverse effect on his ability to carry out his duties or upon Entergy’sreputation; (d) material violation of any agreement that he has entered into with Entergy; or (e) unauthorized disclosure of Entergy’sconfidential information.Mr. Denault may terminate his employment for good reason upon: (a) the substantial reduction in the nature or status of his duties orresponsibilities from those in effect immediately prior to the date of the retention agreement, other than de minimis acts that are remediedafter notice from Mr. Denault; (b) a reduction of 5% or more in his base salary as in effect on the date of the retention agreement; (c) therelocation of his principal place of employment to a location other than the corporate headquarters; (d) the failure to continue to allow him toparticipate in programs or plans providing opportunities for equity awards, incentive compensation and other plans on a basis not materiallyless favorable than enjoyed at the time of the retention agreement (other than changes similarly affecting all senior executives); (e) the failureto continue to allow him to participate in programs or plans with opportunities for benefits not materially less favorable than those enjoyed byhim under any of the pension, savings, life insurance, medical, health and accident, disability or vacation plans or policies at the time of theretention agreement (other than changes similarly affecting all senior executives); or (f) any purported termination of his employment nottaken in accordance with his retention agreement.Aggregate Termination PaymentsThe tables below reflect the amount of compensation each of the Named Executive Officers would have received if his or heremployment had been terminated as of December 31, 2019 under the various scenarios described above. For purposes of these tables, a stockprice of $119.80 was used, which was the closing market price on December 31, 2019, the last trading day of the year.480 Table of ContentsBenefits and Payments Upon TerminationVoluntaryResignationForCauseTermination for GoodReason or Not forCauseRetirementDisabilityDeathTerminationRelated to aChange in ControlA. Christopher Bakken, III(1) Severance Payment——————$3,335,798Performance Units(3)————$1,013,149$1,013,149$1,964,720Stock Options————$2,858,837$2,858,837$2,858,837Restricted Stock————$1,113,669$1,113,669$1,113,669Welfare Benefits(5)——————$22,248Unvested Restricted Stock Units(7)——————$2,369,000 Marcus V. Brown(2) Severance Payment——————$3,397,875Performance Units(3)———$1,005,721$1,005,721$1,005,721$1,964,720Stock Options———$2,942,442$2,942,442$2,942,442$2,942,442Restricted Stock————$1,145,708$1,145,708$1,145,708Welfare Benefits(6)——————— Leo P. Denault(2) Severance Payment——————$9,870,588Performance Units(3)(4)——$4,480,520$5,028,006$5,028,006$5,028,006$9,991,320Stock Options——$12,314,200$12,314,200$12,314,200$12,314,200$12,314,200Restricted Stock——$4,015,803—$4,015,803$4,015,803$4,015,803Welfare Benefits(6)——————— David D. Ellis(1) Severance Payment——————$376,065Performance Units(3)————$145,916$145,916$431,280Stock Options————$143,867$143,867$143,867Restricted Stock————$62,022$62,022$62,022Welfare Benefits(5)——————$19,908 Haley R. Fisackerly(1) Severance Payment——————$526,432Performance Units(3)————$189,763$189,763$431,280Stock Options————$498,200$498,200$498,200Restricted Stock————$182,045$182,045$182,045Welfare Benefits(5)——————$19,908 Laura R. Landreaux(1) Severance Payment——————$419,322Performance Units(3)(4)————$167,840$167,840$431,280Stock Options————$156,111$156,111$156,111Restricted Stock————$233,335$233,335$233,335Welfare Benefits(5)——————$19,908481 Table of ContentsBenefits and Payments Upon TerminationVoluntaryResignationForCauseTermination for GoodReason or Not forCauseRetirementDisabilityDeathTerminationRelated to aChange in ControlAndrew S. Marsh(1) Severance Payment——————$3,315,000Performance Units(3)————$1,105,035$1,105,035$1,964,720Stock Options————$3,468,531$3,468,531$3,468,531Restricted Stock————$1,279,045$1,279,045$1,279,045Welfare Benefits(5)——————$29,862Unvested Restricted Stock Units(8)————$2,527,780$2,527,780$2,527,780 Phillip R. May, Jr.(2) Severance Payment——————$1,254,536Performance Units(3)———$289,557$289,557$289,557$646,920Stock Options———$732,470$732,470$732,470$732,470Restricted Stock————$247,721$247,721$247,721Welfare Benefits(6)——————— Sallie T. Rainer(2) Severance Payment——————$486,390Performance Units(3)———$189,763$189,763$189,763$431,280Stock Options———$501,452$501,452$501,452$501,452Restricted Stock————$184,210$184,210$184,210Welfare Benefits(6)——————— Roderick K. West(1) Severance Payment——————$3,641,466Performance Units(3)————$1,033,275$1,033,275$1,964,720Stock Options————$2,835,460$2,835,460$2,835,460Restricted Stock————$1,064,329$1,064,329$1,064,329Welfare Benefits(5)——————$29,8621)See “2019 Pension Benefits” for a description of the pension benefits Mr. Bakken, Mr. Ellis, Mr. Fisackerly, Ms. Landreaux, Mr.Marsh, and Mr. West may receive upon the occurrence of certain termination events. 2)As of December 31, 2019, Mr. Brown, Mr. Denault, Mr. May, and Ms. Rainer are retirement eligible and would retire rather thanvoluntarily resign, and in addition to the payments and benefits in the table, Mr. Brown, Mr. Denault, Mr. May, and Ms. Rainer alsowould be entitled to receive their vested pension benefits under the Entergy Retirement Plan. For a description of these benefits, see“2019 Pension Benefits.”3)For purposes of the table, the value of Mr. Denault’s payments was calculated by multiplying the target performance units for the2016-2018 Performance Unit Program (41,700) by the closing price of Entergy stock on December 31, 2019 ($119.80), which wouldequal a payment of $4,995,660 for the forfeited performance units for each performance period. The value of Mr. Bakken’s, Mr.Brown’s, Mr. Marsh’s, and Mr. West’s payments was calculated by multiplying the target performance units for the 2016-2018Performance Unit Program (8,200) by the closing price of Entergy stock on December 31, 2019 ($119.80), which would equal apayment of $982,360 for the forfeited performance units for each performance period. The value of Mr. May’s payment was calculatedby multiplying the target performance units for the 2016-2018 Performance Unit Program (2,700) by the closing price of Entergy stockon December 31, 2019 ($119.80), which would equal a payment of $323,460 for the forfeited performance units for each performanceperiod. The value of the payments for the other Named Executives Officers was calculated by multiplying the target performance unitsfor the 2016-2018 Performance Unit Program (1,800) by482 Table of Contentsthe closing price of Entergy stock on December 31, 2019 ($119.80), which would equal a payment of $215,640 for the forfeitedperformance units for each performance period.For purposes of the table, the values of the awards payable in the event of retirement in the case of Mr. Brown, Mr. Denault, Mr. May,or Ms. Rainer or upon death or disability, other than Mr. Denault, for each Named Executive Officer were calculated as follows:Mr. Denault’s:2018-2020 Performance Period: 28,467 (24/36 × 42,700) performance units at target, assuming a stock price of $119.802019-2021 Performance Period: 13,503 (12/36 × 40,508) performance units at target, assuming a stock price of $119.80 Mr. Bakken’s:2018-2020 Performance Period: 5,267 (24/36 × 7,900) performance units at target, assuming a stock price of $119.802019-2021 Performance Period: 3,190 (12/36 × 9,568) performance units at target, assuming a stock price of $119.80Mr. Brown’s:2018-2020 Performance Period: 5,267 (24/36 × 7,900) performance units at target, assuming a stock price of $119.802019-2021 Performance Period: 3,128 (12/36 ×9,383) performance units at target, assuming a stock price of $119.80Mr. Marsh’s:2018-2020 Performance Period: 5,267 (24/36 × 7,900) performance units at target, assuming a stock price of $119.802019-2021 Performance Period: 3,957 (12/36 × 11,869) performance units at target, assuming a stock price of $119.80Mr. West’s:2018-2020 Performance Period: 5,267 (24/36 × 7,900) performance units at target, assuming a stock price of $119.802019-2021 Performance Period: 3,358 (12/36 × 10,073) performance units at target, assuming a stock price of $119.80Mr. May’s:2018-2020 Performance Period: 1,700 (24/36 × 2,550) performance units at target, assuming a stock price of $119.802019-2021 Performance Period: 717 (12/36 × 2,150) performance units at target, assuming a stock price of $119.80Mr. Fisackerly’s and Ms. Rainer’s:2018-2020 Performance Period: 1,100 (24/36 × 1,650) performance units at target, assuming a stock price of $119.802019-2021 Performance Period: 484 (12/36 × 1,450) performance units at target, assuming a stock price of $119.80Ms. Landreaux’s:2018-2020 Performance Period: 917 (24/36 × 1,375) performance units at target, assuming a stock price of $119.80483 Table of Contents2019-2021 Performance Period: 484 (12/36 × 1,450) performance units at target, assuming a stock price of $119.80Mr. Ellis’s:2018-2020 Performance Period: 734 (24/36 × 1,100) performance units at target, assuming a stock price of $119.802019-2021 Performance Period: 484 (12/36 × 1,450) performance units at target, assuming a stock price of $119.804)For purposes of the table, the value of Mr. Denault’s retention payment was calculated by taking an average of the target performanceunits from the 2015-2017 Performance Unit Program (33,100) and from the 2016-2018 Performance Unit Program (41,700). Thisaverage number of units (37,400) multiplied by the closing price of Entergy stock on December 31, 2019 ($119.80) would equal apayment of $4,480,520.5)Pursuant to the System Executive Continuity Plan, in the event of a termination related to a change in control, Mr. Bakken, Mr. Marsh,and Mr. West would be eligible to receive Entergy-subsidized COBRA benefits for 18 months and Mr. Ellis, Mr. Fisackerly, and Ms.Landreaux would be eligible to receive Entergy-subsidized COBRA benefits for 12 months.6)Upon retirement, Mr. Brown, Mr. Denault, Mr. May, and Ms. Rainer would be eligible for retiree medical and dental benefits, thesame as all other retirees.7)Mr. Bakken’s 20,000 restricted stock units vest in two equal installments on April 6, 2022 and April 6, 2025. In the event of a changein control, the unvested restricted stock units will fully vest upon Mr. Bakken’s Qualifying Termination during a change in controlperiod. Pursuant to his restricted stock unit agreement, Mr. Bakken is subject to certain restrictions on his ability to compete withEntergy and its affiliates or solicit its employees or customers during and for 12 months after his employment with his Entergyemployer. In addition, the restricted stock unit agreement limits Mr. Bakken’s ability to disparage Entergy and its affiliates. In theevent of a breach of these restrictions, other than following certain constructive terminations of his employment, Mr. Bakken willforfeit any restricted stock units that are not yet vested and paid, and must repay to Entergy any shares of Entergy stock paid to him inrespect of the restricted stock units and any amounts he received upon the sale or transfer of any such shares.8)Mr. Marsh’s 21,100 restricted stock units vest 100% in 2020. Pursuant to his restricted stock unit agreement, any unvested restrictedstock units will vest immediately in the event of his termination of employment due to Mr. Marsh’s total disability or death or aQualifying Termination during a change in control period. Pursuant to his restricted stock unit agreement, Mr. Marsh is subject tocertain restrictions on his ability to compete with Entergy and its affiliates during and for 12 months after his employment withEntergy, or to solicit its employees or customers during and for 24 months after his employment with Entergy. In addition, therestricted stock unit agreement limits Mr. Marsh’s ability to disparage Entergy and its affiliates. In the event of a breach of theserestrictions, Mr. Marsh will forfeit any restricted stock units that are not yet vested and paid, and must repay to Entergy any shares ofEntergy stock paid to him in respect of the restricted stock units and any amounts he received upon the sale or transfer of any suchshares.Pay RatioAs required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the following disclosure isbeing provided about the relationship of the annual total compensation of the employees of each of the Utility operating companies to theannual total compensation of their respective Presidents and Chief Executive Officers. The pay ratio estimate for each of the Utility operatingcompanies has been calculated in a manner consistent with Item 402(u) of Regulation S-K.Identification of Median EmployeeFor each of the Utility operating companies, October 4, 2019 was selected as the date on which to determine the median employee.This date is different from the date used in the prior year; however, the methodology used to determine484 Table of Contentsthe date is consistent with that used in the prior year. Both dates correspond to the first day of the three month period prior to fiscal year-endfor which information can be obtained about employees and all subsidiaries have the same number of pay cycles. To identify the medianemployee from each of the Utility operating companies’ employee population base, all compensation included in Box 5 of Form W-2 wasconsidered with all before-tax deductions added back to this compensation (“Box 5 Compensation”). For purposes of determining the medianemployee of each Utility operating company, Box 5 Compensation was selected as it is believed it is representative of the compensationreceived by the employees of each respective Utility operating company and is readily available. The calculation of annual totalcompensation of the median employee for each Utility operating company is the same calculation used to determine total compensation forpurposes of the 2019 Summary Compensation Table with respect to each of the Named Executive Officers.Entergy Arkansas RatioFor 2019,•The median of the annual total compensation of all of Entergy Arkansas’s employees, other than Ms. Landreaux, was $230,966.•Ms. Landreaux’s annual total compensation, as reported in the Total column of the 2019 Summary Compensation Table was$1,064,459.•Based on this information, the ratio of the annual total compensation of Mrs. Landreaux to the median of the annual totalcompensation of all employees is estimated to be 5:1.Entergy Louisiana RatioFor 2019,•The median of the annual total compensation of all of Entergy Louisiana’s employees, other than Mr. May, was $173,745.•Mr. May’s annual total compensation, as reported in the Total column of the 2019 Summary Compensation Table, was $2,073,894.•Based on this information, the ratio of the annual total compensation of Mr. May to the median of the annual total compensation ofall employees is estimated to be 12:1.Entergy Mississippi RatioFor 2019,•The median of the annual total compensation of all of Entergy Mississippi’s employees, other than Mr. Fisackerly, was $254,843.•Mr. Fisackerly’s annual total compensation, as reported in the Total column of the 2019 Summary Compensation Table, was$1,579,844.•Based on this information, the ratio of the annual total compensation of Mr. Fisackerly to the median of the annual totalcompensation of all employees is estimated to be 6:1.Entergy New Orleans RatioFor 2019,•The median of the annual total compensation of all of Entergy New Orleans’s employees, other than Mr. Ellis, was $145,217.•Mr. Ellis’s annual total compensation, as reported in the Total column of the 2019 Summary Compensation Table was $732,040.•Based on this information, the ratio of the annual total compensation of Mr. Ellis to the median of the annual total compensation ofall employees is estimated to be 5:1.485 Table of ContentsEntergy Texas RatioFor 2019,•The median of the annual total compensation of all of Entergy Texas’s employees, other than Ms. Rainer, was $233,988.•Ms. Rainer’s annual total compensation, as reported in the Total column of the 2019 Summary Compensation Table, was $1,467,716.•Based on this information, the ratio of the annual total compensation of Ms. Rainer to the median of the annual total compensation ofall employees is estimated to be 6:1.Item 12. Security Ownership of Certain Beneficial Owners and ManagementEntergy Corporation owns 100% of the outstanding common stock of registrant Entergy Texas and indirectly 100% of theoutstanding common membership interests of registrants Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy NewOrleans. The information with respect to persons known by Entergy Corporation to be beneficial owners of more than 5% of EntergyCorporation’s outstanding common stock is included under the heading “Entergy Share Ownership - Beneficial Owners of More Than FivePercent of Entergy Common Stock” in the Entergy Corporation Proxy Statement, which information is incorporated herein byreference. The registrants know of no contractual arrangements that may, at a subsequent date, result in a change in control of any of theregistrants.The following table sets forth the beneficial ownership of common stock of Entergy Corporation and stock-based units as of January31, 2020 for all directors and Named Executive Officers. Unless otherwise noted, each person had sole voting and investment power overthe number of shares of common stock and stock-based units of Entergy Corporation set forth across from his or her name.486 Table of ContentsName Shares (1)(2) Options Exercisable Within 60Days Stock Units (3)Entergy Corporation A. Christopher Bakken, III** 38,397 38,174 —Marcus V. Brown** 44,758 40,075 —John R. Burbank* 2,417 — —Patrick J. Condon* 7,834 — —Leo P. Denault*** 265,416 753,202 —Kirkland H. Donald* 7,721 — 2,949Philip L. Frederickson* 6,284 — 805Alexis M. Herman* 14,506 — —M. Elise Hyland* 727 Stuart L. Levenick* 21,421 — —Blanche L. Lincoln* 14,879 — —Andrew S. Marsh** 86,740 241,726 —Karen A. Puckett* 7,834 — —Roderick K. West** 64,999 97,249 —All directors and executive officers asa group (19 persons) 656,574 1,273,794 3,754 Entergy Arkansas A. Christopher Bakken, III** 38,397 38,174 —Marcus V. Brown** 44,758 40,075 —Leo P. Denault** 265,416 753,202 —Andrew S. Marsh*** 86,740 241,726 —Laura R. Landreaux*** 5,866 1,700 —Roderick K. West*** 64,999 97,249 —All directors and executive officers asa group (8 persons) 555,420 1,242,596 — Entergy Louisiana A. Christopher Bakken, III** 38,397 38,174 —Marcus V. Brown** 44,758 40,075 —Leo P. Denault** 265,416 753,202 —Andrew S. Marsh*** 86,740 241,726 —Phillip R. May, Jr.*** 25,880 13,900 13Roderick K. West*** 64,999 97,249 —All directors and executive officers asa group (8 persons) 575,434 1,254,796 13487 Table of ContentsName Shares (1)(2) Options Exercisable Within 60Days Stock Units (3)Entergy Mississippi Marcus V. Brown** 44,758 40,075 —Leo P. Denault** 265,416 753,202 —Haley R. Fisackerly*** 9,847 6,800 —Andrew S. Marsh*** 86,740 241,726 —Roderick K. West*** 64,999 97,249 —All directors and executive officers as agroup (7 persons) 521,004 1,209,522 — Entergy New Orleans Marcus V. Brown** 44,758 40,075 —Leo P. Denault** 265,416 753,202 —David D. Ellis*** 1,812 1,566 —Andrew S. Marsh*** 86,740 241,726 —Roderick K. West*** 64,999 97,249 —All directors and executive officers as agroup (7 persons) 512,969 1,204,288 — Entergy Texas Marcus V. Brown** 44,758 40,075 —Leo P. Denault** 265,416 753,202 —Andrew S. Marsh*** 86,740 241,726 —Sallie T. Rainer*** 10,799 6,866 —Roderick K. West*** 64,999 97,249 —All directors and executive officers as agroup (7 persons) 521,956 1,209,588 —*Director of the respective Company**Named Executive Officer of the respective Company***Director and Named Executive Officer of the respective Company(1)The number of shares of Entergy Corporation common stock owned by each individual and by all non-employee directors andexecutive officers as a group does not exceed one percent of the outstanding shares of Entergy Corporation common stock.(2)For the non-employee directors, the balances include phantom units that are issued under the Service Recognition Program. All non-employee directors are credited with phantom units for each year of service on the Entergy Corporation Board. These phantom unitsdo not have voting rights or accrue dividends, and will be settled in shares of Entergy Corporation common stock following the non-employee director’s separation from the Board.(3)Represents the balances of phantom units each executive holds under the defined contribution restoration plan and the deferralprovisions of Entergy Corporation’s equity ownership plans. These units will be paid out in either Entergy Corporation CommonStock or cash equivalent to the value of one share of Entergy Corporation common stock per unit on the date of payout, includingaccrued dividends. The deferral period is determined by the individual and is at least two years from the award of the bonus. Messrs. Donald and Frederickson have deferred receipt of some of their quarterly stock grants. The deferred shares will be settled incash in an amount equal to the market value of Entergy Corporation common stock at the end of the deferral period.488 Table of ContentsEquity Compensation Plan InformationThe following table summarizes the equity compensation plan information as of December 31, 2019. Information is included forequity compensation plans approved by the shareholders. There are no shares authorized for issuance under equity compensation plans notapproved by the shareholders.Plan Number of Securities to beIssued Upon Exercise ofOutstanding Options, Warrantsand Rights (a) WeightedAverageExercise Price(b)(2) Number of SecuritiesRemaining Available forFuture Issuance (excludingsecurities reflected in column(a))(c)Equity compensation plans approved bysecurity holders (1) 2,448,913 $78.48 7,266,822Equity compensation plans not approvedby security holders — — —Total 2,448,913 $78.48 7,266,822(1)Includes the 2007 Equity Ownership Plan, the 2011 Equity Ownership Plan, the 2015 Equity Plan, and the 2019 Omnibus IncentivePlan. The 2007 Equity Ownership Plan was approved by Entergy Corporation shareholders on May 12, 2006, and only applied toawards granted between January 1, 2007 and May 5, 2011. The 2011 Equity Ownership Plan was approved by Entergy Corporationshareholders on May 6, 2011, and only applied to awards granted between May 6, 2011 and May 7, 2015. The 2015 Equity Plan wasapproved by Entergy Corporation shareholders on May 8, 2015, and only applied to awards granted between May 8, 2015 and May3, 2019. The 2019 Omnibus Incentive Plan was approved by the Entergy Corporation shareholders on May 3, 2019, and 7,300,000shares of Entergy Corporation common stock can be issued from the 2019 Omnibus Incentive Plan, with all shares available forequity-based incentive awards. The 2007 Equity Ownership Plan, the 2011 Equity Ownership Plan, the 2015 Equity Plan, and the2019 Omnibus Incentive Plan (collectively, the “Plans”) are administered by the Personnel Committee of the Board of Directors(other than with respect to awards granted to non-employee directors, which awards are administered by the entire Board ofDirectors). Eligibility under the Plans is limited to the non-employee directors and to the officers and employees of an Entergyemployer or an affiliate of Entergy Corporation. The Plans provide for the issuance of stock options, restricted stock, equity awards(units whose value is related to the value of shares of the common stock but do not represent actual shares of common stock),performance awards (performance shares or units valued by reference to shares of common stock or performance units valued byreference to financial measures or property other than common stock), restricted stock unit awards, and other stock-based awards.(2)The weighted average exercise price reported in this column does not include outstanding performance awards.489 Table of ContentsItem 13. Certain Relationships and Related Party Transactions and Director IndependenceFor information regarding certain relationship, related transactions and director independence of Entergy Corporation, see theEntergy Corporation Proxy Statement under the headings “Corporate Governance at Entergy - Director Independence” and “CorporateGovernance - Corporate Governance Policies - Review and Approval of Related Party Transactions.”Entergy Corporation’s Board of Directors has adopted a written Related Party Transaction Approval Policy that applies:•To any transaction or series of transactions in which Entergy Corporation or a subsidiary is a participant;•When the amount involved exceeds $120,000; and•When a Related Party (an Entergy Corporation director or executive officer, any nominee for director, any shareholder owning anexcess of 5% of the total equity of Entergy Corporation and any immediate family member of any such person) has a direct orindirect material interest (other than solely as a result of being a director or a less than 10% beneficial owner of another entity).The policy is administered by Entergy Corporation’s Corporate Governance Committee. The committee will consider relevant factsand circumstance in determining whether or not to approve or ratify such a transaction, and will approve or ratify only those transactionsthat are, in the Corporate Governance Committee’s judgment, appropriate or desirable under the circumstances. The Corporate GovernanceCommittee has determined that certain types of transactions do not create or involve a direct or indirect material interest, including (i)compensation and related party transactions involving a director or an executive officer solely resulting from service as a director oremployment with Entergy Corporation so long as the compensation is approved by the Entergy Corporation Board of Directors (or anappropriate committee); (ii) transactions involving public utility services at rates or charges fixed in conformity with law or governmentalauthority; or (iii) all business relationships between Entergy Corporation and a Related Party made in the ordinary course of business onterms and conditions generally available in the marketplace an in accordance with applicable law. To Entergy Corporation’s knowledge,since January 1, 2019, neither Entergy Corporation nor any of its affiliates has participated in any Related Party transaction.490 Table of ContentsItem 14. Principal Accountant Fees and Services (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,Entergy New Orleans, Entergy Texas, and System Energy)Aggregate fees billed to Entergy Corporation (consolidated), Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, EntergyNew Orleans, Entergy Texas, and System Energy for the years ended December 31, 2019 and 2018 by Deloitte & Touche LLP were asfollows: 2019 2018Entergy Corporation (consolidated) Audit Fees$8,710,000 $8,801,895Audit-Related Fees (a)775,000 1,067,119Total audit and audit-related fees9,485,000 9,869,014Tax Fees— —All Other Fees31,835 —Total Fees (b)$9,516,835 $9,869,014Entergy Arkansas Audit Fees$1,015,125 $1,030,758Audit-Related Fees (a)— —Total audit and audit-related fees1,015,125 1,030,758Tax Fees— —All Other Fees— —Total Fees (b)$1,015,125 $1,030,758Entergy Louisiana Audit Fees$1,871,918 $1,916,517Audit-Related Fees (a)360,000 500,000Total audit and audit-related fees2,231,918 2,416,517Tax Fees— —All Other Fees— —Total Fees (b)$2,231,918 $2,416,517Entergy Mississippi Audit Fees$1,005,125 $910,758Audit-Related Fees (a)— —Total audit and audit-related fees1,005,125 910,758Tax Fees— —All Other Fees— —Total Fees (b)$1,005,125 $910,758491 Table of Contents 2019 2018Entergy New Orleans Audit Fees$950,125 $965,758Audit-Related Fees (a)— —Total audit and audit-related fees950,125 965,758Tax Fees— —All Other Fees— —Total Fees (b)$950,125 $965,758Entergy Texas Audit Fees$1,165,125 $1,200,758Audit-Related Fees (a)— —Total audit and audit-related fees1,165,125 1,200,758Tax Fees— —All Other Fees— —Total Fees (b)$1,165,125 $1,200,758System Energy Audit Fees$930,125 $850,758Audit-Related Fees (a)— —Total audit and audit-related fees930,125 850,758Tax Fees— —All Other Fees— —Total Fees (b)$930,125 $850,758(a)Includes fees for employee benefit plan audits, consultation on financial accounting and reporting, and other attestation services.(b)100% of fees paid in 2019 and 2018 were pre-approved by the Entergy Corporation Audit Committee.492 Table of ContentsEntergy Audit Committee Guidelines for Pre-approval of Independent Auditor ServicesThe Audit Committee has adopted the following guidelines regarding the engagement of Entergy’s independent auditor to performservices for Entergy:1.The independent auditor will provide the Audit Committee, for approval, an annual engagement letter outlining the scope ofservices proposed to be performed during the fiscal year, including audit services and other permissible non-audit services (e.g.audit-related services, tax services, and all other services).2.For other permissible services not included in the engagement letter, Entergy management will submit a description of theproposed service, including a budget estimate, to the Audit Committee for pre-approval. Management and the independentauditor must agree that the requested service is consistent with the SEC’s rules on auditor independence prior to submission to theAudit Committee. The Audit Committee, at its discretion, will pre-approve permissible services and has established thefollowing additional guidelines for permissible non-audit services provided by the independent auditor:•Aggregate non-audit service fees are targeted at fifty percent or less of the approved audit service fee.•All other services should only be provided by the independent auditor if it is a highly qualified provider of that service orif the Audit Committee pre-approves the independent audit firm to provide the service.3.The Audit Committee will be informed quarterly as to the status of pre-approved services actually provided by the independentauditor.4.To ensure prompt handling of unexpected matters, the Audit Committee delegates to the Audit Committee Chair or its designeethe authority to approve permissible services and fees. The Audit Committee Chair or designee will report action taken to theAudit Committee at the next scheduled Audit Committee meeting.5.The Vice President and General Auditor will be responsible for tracking all independent auditor fees and will report quarterly tothe Audit Committee.493 Table of ContentsPART IVItem 15. Exhibits and Financial Statement Schedules(a)1.Financial Statements and Independent Auditors’ Reports for Entergy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,Entergy New Orleans, Entergy Texas, and System Energy are listed in the Table of Contents. (a)2.Financial Statement Schedules Reports of Independent Registered Public Accounting Firm (see page 517) Financial Statement Schedules are listed in the Index to Financial Statement Schedules (see page S-1) (a)3.Exhibits Exhibits for Entergy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, andSystem Energy are listed in the Exhibit Index (see page 494 and are incorporated by reference herein). Each management contractor compensatory plan or arrangement required to be filed as an exhibit hereto is identified as such by footnote in the Exhibit Index.Item 16. Form 10-K Summary (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy NewOrleans, Entergy Texas, and System Energy) None.494 Table of ContentsEXHIBIT INDEXThe following exhibits indicated by an asterisk preceding the exhibit number are filed herewith. The balance of the exhibits havepreviously been filed with the SEC as the exhibits and in the file numbers indicated and are incorporated herein by reference. The exhibitsmarked with a (+) are management contracts or compensatory plans or arrangements required to be filed herewith and required to beidentified as such by Item 15 of Form 10-K.Some of the agreements included or incorporated by reference as exhibits to this Form 10-K contain representations and warrantiesby each of the parties to the applicable agreement. These representations and warranties were made solely for the benefit of the other partiesto the applicable agreement and (i) were not intended to be treated as categorical statements of fact, but rather as a way of allocating the riskto one of the parties if those statements prove to be inaccurate; (ii) may have been qualified in such agreement by disclosures that were madeto the other party in connection with the negotiation of the applicable agreement; (iii) may apply contract standards of “materiality” that aredifferent from the standard of “materiality” under the applicable securities laws; and (iv) were made only as of the date of the applicableagreement or such other date or dates as may be specified in the agreement.Entergy acknowledges that, notwithstanding the inclusion of the foregoing cautionary statements, it is responsible for consideringwhether additional specific disclosures of material information regarding material contractual provisions are required to make the statementsin this Form 10-K not misleading.(2) Plan of Acquisition, Reorganization, Arrangement, Liquidation or SuccessionEntergy Arkansas(a) 1 --Plan of Merger of Entergy Arkansas, Inc. and Entergy Arkansas Power, LLC (2.1 to Form 8-K12B filed December 3, 2018 in1-10764).Entergy Louisiana(b) 1 --Plan of Merger of Entergy Gulf States Power, LLC and Entergy Gulf States Louisiana, LLC (2.1 to Form 8-K12B filedOctober 1, 2015 in 1-32718). (b) 2 --Plan of Merger of Entergy Louisiana, LLC and Entergy Louisiana Power, LLC (2.2 to Form 8-K12B filed October 1, 2015 in1-32718). (b) 3 --Plan of Merger of Entergy Gulf States Power, LLC and Entergy Louisiana Power, LLC (2.3 to Form 8-K12B filed October 1,2015 in 1-32718).Entergy Mississippi(c) 1 --Plan of Merger of Entergy Mississippi, Inc. and Entergy Mississippi Power and Light, LLC (2.1 to Form 8-K12B filedDecember 3, 2018 in 1-31508).Entergy New Orleans(d) 1 --Plan of Merger of Entergy New Orleans, Inc. and Entergy New Orleans Power, LLC (2.1 to Form 8-K12B filed December 1,2017 in 1-35747).(3) Articles of Incorporation and BylawsEntergy Corporation(a) 1 --Restated Certificate of Incorporation of Entergy Corporation dated October 10, 2006 (3(a) to Form 10-Q for the quarterended September 30, 2006 in 1-11299). (a) 2 --Bylaws of Entergy Corporation as amended January 27, 2017, and as presently in effect (3.1 to Form 8-K filed January 30,2017 in 1-11299).495 Table of ContentsSystem Energy(b) 1 --Amended and Restated Articles of Incorporation of System Energy effective April 28, 1989 (3(b)1 to Form 10-K for the yearended December 31, 2017 in 1-9067). (b) 2 --By-Laws of System Energy effective July 6, 1998, and as presently in effect (3(f) to Form 10-Q for the quarter ended June30, 1998 in 1-9067).Entergy Arkansas(c) 1 --Amended and Restated Certificate of Formation of Entergy Arkansas effective December 1, 2018 (3.3 to Form 8-K12B filedDecember 3, 2018 in 1-10764). (c) 2 --Amended and Restated Company Agreement of Entergy Arkansas effective December 1, 2018 (3.4 to Form 8-K12B filedDecember 3, 2018 in 1-10764).Entergy Louisiana(d) 1 --Certificate of Formation of Entergy Louisiana Power, LLC (including Certificate of Amendment to Certificate of Formationto change the company name to Entergy Louisiana, LLC) effective July 7, 2015 (3.3 to Form 8-K12B filed October 1,2015 in 1-32718). (d) 2 --Company Agreement of Entergy Louisiana Power, LLC (including First Amendment to Company Agreement to change thecompany name to Entergy Louisiana, LLC) effective July 7, 2015 (3.4 to Form 8-K12B filed October 1, 2015 in 1-32718).Entergy Mississippi(e) 1 --Amended and Restated Certificate of Formation of Entergy Mississippi effective December 1, 2018 (3(e)1 to Form 10-K forthe year ended December 31, 2018 in 1-31508). (e) 2 --Amended and Restated Company Agreement of Entergy Mississippi effective December 1, 2018 (3.4 to Form 8-K12B filedDecember 3, 2018 in 1-31508).Entergy New Orleans(f) 1 --Composite Certificate of Formation of Entergy New Orleans effective December 1, 2017 (3.3 to Form 8-K12B filedDecember 1, 2017 in 1-35747). (f) 2 --Composite Company Agreement of Entergy New Orleans effective December 1, 2017 (3.4 to Form 8-K12B filed December1, 2017 in 1-35747).Entergy Texas(g) 1 --Amended and Restated Certificate of Formation of Entergy Texas effective August 21, 2019 (3.1 to Form 8-K filed August21, 2019 in 1-34360), as amended by Statement of Resolution Establishing the 5.375% Series A Preferred Stock,Cumulative, No Par Value (Liquidation Value $25 Per Share) of Entergy Texas (3.3 to Form 8-A filed September 4, 2019in 1-34360). (g) 2 --Amended and Restated Bylaws of Entergy Texas effective August 19, 2019 (3.2 to Form 8-K filed August 21, 2019 in 1-34360).496 Table of Contents(4)Instruments Defining Rights of Security Holders, Including IndenturesEntergy Corporation(a) 1 --See (4)(b) through (4)(g) below for instruments defining the rights of security holders of System Energy, Entergy Arkansas,Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas. (a) 2 --Indenture (For Unsecured Debt Securities), dated as of September 1, 2010, between Entergy Corporation and Wells FargoBank, National Association (4.01 to Form 8-K filed September 16, 2010 in 1-11299). (a) 3 --Officer’s Certificate for Entergy Corporation relating to 5.125% Senior Notes due September 15, 2020 (4.02(b) to Form 8-Kfiled September 16, 2010 in 1-11299). (a) 4 --Officer’s Certificate for Entergy Corporation relating to 4.0% Senior Notes due July 15, 2022 (4.02 to Form 8-K filed July 1,2015 in 1-11299). (a) 5 --Officer’s Certificate for Entergy Corporation relating to 2.95% Senior Notes due September 1, 2026 (4.02 to Form 8-K filedAugust 19, 2016 in 1-11299). (a) 6 --Officer’s Certificate for Entergy Corporation relating to 4.50% Senior Note due December 16, 2028 (4(a)7 to Form 10-K forthe year ended December 31, 2013 in 1-11299). (a) 7 --Second Amended and Restated Credit Agreement dated as of September 14, 2018, among Entergy Corporation, asBorrower, the banks and other financial institutions listed on the signatures pages thereof, as Lenders, Citibank, N.A., asAdministrative Agent and LC Issuing Bank, MUFG Bank, Ltd., as LC Issuing Bank, and the other LC Issuing Banks fromtime to time parties thereto (4(g) to Form 10-Q for the quarter ended September 30, 2018 in 1-11299). (a) 8 --Extension Agreement, dated September 13, 2019, to Second Amended and Restated Credit Agreement dated as ofSeptember 14, 2018, among Entergy Corporation, as Borrower, the banks and other financial institutions listed on thesignature pages thereof, as Lenders, Citibank, N.A., as Administrative Agent and LC Issuing Bank, MUFG Bank, Ltd., asLC Issuing Bank, and the other LC Issuing Banks from time to time parties thereto (4(a) to Form 10-Q for the quarterended September 30, 2019 in 1-11299). *(a) 9 --Description of Entergy Corporation’s securities registered under Section 12 of the Securities Exchange Act of 1934.System Energy(b) 1 --Mortgage and Deed of Trust, dated as of June 15, 1977, as amended and restated by the following Supplemental Indenture:(4.42 to Form 8-K filed September 25, 2012 in 1-9067 (Twenty-fourth)). (b) 2 --Fuel Lease, dated as of February 24, 1989, between River Fuel Funding Company #3, Inc. and System Energy (4(b)3 toForm 10-K for the year ended December 31, 2017 in 1-9067). (b) 3 --Loan Agreement, dated as of March 1, 2019, between System Energy and Mississippi Business Finance Corporation (4(b) toForm 8-K filed March 28, 2019 in 1-9067).497 Table of ContentsEntergy Arkansas(c) 1 --Mortgage and Deed of Trust, dated as of October 1, 1944, as amended by the following Supplemental Indentures: (7(d) in 2-5463 (Mortgage); 7(b) in 2-7121 (First); 4(a)-7 in 2-10261 (Seventh); 2(b)-10 in 2-15767 (Tenth); 2(c) in 2-28869(Sixteenth); 2(c) in 2-35107 (Eighteenth); 2(d) in 2-36646 (Nineteenth); 2(c) in 2-39253 (Twentieth); 4(c)1 to Form 10-Kfor the year ended December 31, 2017 in 1-10764 (Thirtieth); 4(c)1 to Form 10-K for the year ended December 31, 2017in 1-10764 (Thirty-first); 4(c)1 to Form 10-K for the year ended December 31, 2017 in 1-10764 (Thirty-ninth); 4(c)1 toForm 10-K for the year ended December 31, 2017 in 1-10764 (Forty-first); 4(d)(2) in 33-54298 (Forty-sixth); C-2 to FormU5S for the year ended December 31,1995 (Fifty-third); 4(c)1 to Form 10-K for the year ended December 31, 2008 in 1-10764 (Sixty-eighth); 4.06 to Form 8-K filed October 8, 2010 in 1-10764 (Sixty-ninth); 4.06 to Form 8-K filed November12, 2010 in 1-10764 (Seventieth); 4.06 to Form 8-K filed December 13, 2012 in 1-10764 (Seventy-first); 4(e) to Form 8-Kfiled January 9, 2013 in 1-10764 (Seventy-second); 4.06 to Form 8-K filed May 30, 2013 in 1-10764 (Seventy-third); 4.06to Form 8-K filed June 4, 2013 in 1-10764 (Seventy-fourth); 4.05 to Form 8-K filed March 14, 2014 in 1-10764 (Seventy-sixth); 4.05 to Form 8-K filed December 9, 2014 in 1-10764 (Seventy-seventh); 4.05 to Form 8-K filed January 8, 2016 in1-10764 (Seventy-eighth); 4.05 to Form 8-K filed August 16, 2016 in 1-10764 (Seventy-ninth); 4(a) to Form 10-Q for thequarter ended September 30, 2018 (Eightieth); 4.1 to Form 8-K12B filed December 3, 2018 in 1-10764 (Eighty-first); and4.39 to Form 8-K filed March 19, 2019 in 1-10764 (Eighty-second)). (c) 2 --Second Amended and Restated Credit Agreement dated as of September 14, 2018, among Entergy Arkansas, as Borrower,the banks and other financial institutions listed on the signature pages thereof, as Lenders, Citibank, N.A., asAdministrative Agent, JPMorgan Chase Bank, N.A., as LC Issuing Bank, and the other LC Issuing Banks from time totime parties thereto (4(h) to Form 10-Q for the quarter ended September 30, 2018 in 1-10764). (c) 3 --Borrower Assumption Agreement dated as of November 30, 2018 of Entergy Arkansas Power, LLC under the SecondAmended and Restated Credit Agreement dated as of September 14, 2018, among Entergy Arkansas, as Borrower, thebanks and other financial institutions listed on the signature pages thereof, as Lenders, Citibank, N.A., as AdministrativeAgent, JPMorgan Chase Bank, N.A., as LC Issuing Bank, and the other LC Issuing Banks from time to time parties thereto(4.2 to Form 8-K12B filed December 3, 2018 in 1-10764). (c) 4 --Extension Agreement, dated September 13, 2019, to Second Amended and Restated Credit Agreement dated as ofSeptember 14, 2018, as supplemented by the Borrower Assumption Agreement of Entergy Arkansas Power, LLC dated asof November 30, 2018, among Entergy Arkansas, as Borrower, the banks and other financial institutions listed on thesignature pages thereof, as Lenders, Citibank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., as LC IssuingBank, and the other LC Issuing Banks from time to time parties thereto (4(b) to Form 10-Q for the quarter endedSeptember 30, 2019 in 1-10764). (c) 5 --Fuel Lease, dated as of December 22, 1988, between River Fuel Trust #1 and Entergy Arkansas (4(c)9 to Form 10-K for theyear ended December 31, 2017 in 1-10764). (c) 6 --Loan Agreement, dated as of January 1, 2013, between Independence County, Arkansas and Entergy Arkansas relating toRevenue Refunding Bonds (Entergy Arkansas, Inc. Project) Series 2013 (4(d) to Form 8-K filed January 9, 2013 in 1-10764). *(c) 7 --Description of Entergy Arkansas’s securities registered under Section 12 of the Securities Exchange Act of 1934.498 Table of ContentsEntergy Louisiana(d) 1 --Mortgage and Deed of Trust, dated as of April 1, 1944, as amended by the following Supplemental Indentures: (7(d) in 2-5317 (Mortgage); 7(b) in 2-7408 (First); 4(d)1 to Form 10-K for the year ended December 31, 2017 in 1-32718(Sixth); 2(c) in 2-34659 (Twelfth); 4(d)1 to Form 10-K for the year ended December 31, 2017 in 1-32718 (Thirteenth);2(b)-2 in 2-38378 (Fourteenth); 4(d)1 to Form 10-K for the year ended December 31, 2017 in 1-32718 (Twenty-first); 4(d)1 to Form 10-K for the year ended December 31, 2017 in 1-32718 (Twenty-fifth); 4(d)1 to Form 10-K for theyear ended December 31, 2017 in 1-32718 (Twenty-ninth); 4(d)1 to Form 10-K for the year ended December 31, 2017 in1-32718 (Forty-second); A-2(a) to Rule 24 Certificate filed April 4, 1996 in 70-8487 (Fifty-first); B-4(i) to Rule 24Certificate filed January 10, 2006 in 70-10324 (Sixty-third); B-4(ii) to Rule 24 Certificate filed January 10, 2006 in 70-10324 (Sixty-fourth); 4(a) to Form 10-Q for the quarter ended September 30, 2008 in 1-32718 (Sixty-fifth); 4(e)1 to Form10-K for the year ended December 31, 2009 in 1-132718 (Sixty-sixth); 4.08 to Form 8-K filed September 24, 2010 in 1-32718 (Sixty-eighth); 4.08 to Form 8-K filed March 24, 2011 in 1-32718 (Seventy-first); 4(a) to Form 10-Q for the quarterended June 30, 2011 in 1-32718 (Seventy-second); 4.08 to Form 8-K filed July 3, 2012 in 1-32718 (Seventy-fifth); 4.08 toForm 8-K filed December 4, 2012 in 1-32718 (Seventy-sixth); 4.08 to Form 8-K filed May 21, 2013 in 1-32718 (Seventy-seventh); 4.08 to Form 8-K filed August 23, 2013 in 1-32718 (Seventy-eighth); 4.08 to Form 8-K filed June 24, 2014 in 1-32718 (Seventy-ninth); 4.08 to Form 8-K filed July 1, 2014 in 1-32718 (Eightieth); 4.08 to Form 8-K filed November 21,2014 (Eighty-first); 4.1 to Form 8-K12B filed October 1, 2015 (Eighty-second); 4(g) to Form 8-K filed March 18, 2016 in1-32718 (Eighty-third); 4.33 to Form 8-K filed March 24, 2016 in 1-32718 (Eighty-fourth); 4.33 to Form 8-K filed August17, 2016 in 1-32718 (Eighty-sixth); 4.43 to Form 8-K filed October 4, 2016 in 1-32718 (Eighty-seventh); 4.43 to Form 8-K filed May 23, 2017 in 1-32718 (Eighty-eighth); 4.43 to Form 8‑K filed March 23, 2018 in 1-32718 (Eighty-ninth); 4.43to Form 8-K filed August 14, 2018 in 1-32718 (Ninetieth); and 4.43 to Form 8-K filed March 12, 2019 in 1-32718(Ninety-first)). (d) 2 --Second Amended and Restated Credit Agreement dated as of September 14, 2018, among Entergy Louisiana, as Borrower,the banks and other financial institutions listed on the signature pages thereof, as Lenders, Citibank, N.A., asAdministrative Agent, Wells Fargo Bank, National Association and BNP Paribas, as LC Issuing Banks, and the other LCIssuing Banks from time to time parties thereto (4(i) to Form 10-Q for the quarter ended September 30, 2018 in 1-32718). (d) 3 --Extension Agreement, dated September 13, 2019, to Second Amended and Restated Credit Agreement dated as ofSeptember 14, 2018, among Entergy Louisiana, as Borrower, the banks and other financial institutions listed on thesignature pages thereof, as Lenders, Citibank, N.A., as Administrative Agent, Wells Fargo Bank, National Association andBNP Paribas, as LC Issuing Banks, and the other LC Issuing Banks from time to time parties thereto (4(c) to Form 10-Qfor the quarter ended September 30, 2019 in 1-32718). (d) 4 --Fuel Lease, dated as of January 31, 1989, between River Fuel Company #2, Inc., and Entergy Louisiana (4(d)10 to Form 10-K for the year ended December 31, 2017 in 1-32718). (d) 5 --Nuclear Fuel Lease Agreement between Entergy Gulf States, Inc. and River Bend Fuel Services, Inc. to lease the fuel forRiver Bend Unit 1, dated February 7, 1989 (4(d)11 to Form 10-K for the year ended December 31, 2017 in 1-32718). (d) 6 --Exhibit A to Trust Indenture dated as of February 7, 1989 between River Bend Fuel Services, Inc. and U.S. Bank NationalAssociation (as successor Trustee) (4(d)12 to Form 10-K for the year ended December 31, 2017 in 1-32718). (d) 7 --Loan Agreement, dated as of March 1, 2016, between the Louisiana Public Facilities Authority and Entergy Louisianarelating to Refunding Revenue Bonds (Entergy Louisiana, LLC Project) Series 2016A (4(b) to Form 8-K filed March 18,2016 in 1-32718). (d) 8 --Loan Agreement, dated as of March 1, 2016, between Louisiana Public Facilities Authority and Entergy Louisiana relatingto Refunding Revenue Bonds (Entergy Louisiana, LLC Project) Series 2016B (4(d) to Form 8-K filed March 18, 2016 in1-32718).499 Table of Contents(d) 9 --Indenture of Mortgage, dated September 1, 1926, as amended by the following Supplemental Indentures: (7-A-9 inRegistration No. 2-6893 (Seventh); 4(d)15 to Form 10-K for the year ended December 31, 2017 in 1-32718 (Eighteenth);2-A-8 in Registration No. 2-66612 (Thirty-eighth); 4(b) to Form 10-Q for the quarter ended March 31,1999 in 1-27031(Fifty-eighth); 4(a) to Form 10-Q for the quarter ended September 30, 2009 in 0-20371 (Seventy-seventh); 4.07 to Form 8-K filed October 1, 2010 in 0-20371 (Seventy-eighth); 4.07 to Form 8-K filed July 1, 2014 in 0-20371 (Eighty-first); 4.2 toForm 8-K12B filed October 1, 2015 in 1-32718 (Eighty-second); 4.3 to Form 8-K12B filed October 1, 2015 in 1-32718(Eighty-third); 4.42 to Form 8-K filed March 24, 2016 in 1-32718 (Eighty-fourth); 4.42 to Form 8-K filed May 19, 2016 in1-32718 (Eighty-fifth); 4.42 to Form 8-K filed August 17, 2016 in 1-32718 (Eighty-sixth); 4.42 to Form 8-K filed October4, 2016 in 1-32718 (Eighty-seventh); 4.42 to Form 8-K filed May 23, 2017 in 1-32718 (Eighty-eighth); 4.42 to Form 8-Kfiled March 23, 2018 in 1-32718 (Eighty-ninth); 4.42 to Form 8-K filed August 14, 2018 in 1-32718 (Ninetieth); and 4.42to Form 8-K filed March 12, 2019 in 1-32718 (Ninety-first)). (d) 10 --Agreement of Resignation, Appointment and Acceptance, dated as of October 3, 2007, among Entergy Gulf States, Inc.,JPMorgan Chase Bank, National Association, as resigning trustee, and The Bank of New York, as successor trustee (4(a)to Form 10-Q for the quarter ended September 30, 2007 in 1-27031). (d) 11 --Mortgage and Deed of Trust of Entergy Louisiana, dated as of November 1, 2015, as amended by the followingSupplemental Indentures: (4.38 in Registration No. 333-190911-07 (Mortgage); 4(f) to Form 8-K filed March 18, 2016 in1-32718 (First); 4.40 to Form 8-K filed March 24, 2016 in 1-32718 (Second); 4(h) to Form 10-Q for the quarter endedMarch 31, 2016 in 1-32718 (Fourth); 4.40 to Form 8-K filed May 19, 2016 in 1-32718 (Fifth); 4.40 to Form 8-K filedAugust 17, 2016 in 1-32718 (Sixth); 4.41 to Form 8-K filed October 4, 2016 in 1-32718 (Seventh); 4.41 to Form 8-K filedMay 23, 2017 in 1-32718 (Eighth); 4.41 to Form 8-K filed March 23, 2018 in 1-32718 (Ninth); 4.41 to Form 8-K filedAugust 14, 2018 in 1-32718 (Tenth); and 4.41 to Form 8-K filed March 12, 2019 in 1-32718 (Eleventh)). (d) 12 --Officer’s Certificate No. 1-B-1, dated March 18, 2016, supplemental to Mortgage and Deed of Trust of Entergy Louisiana,dated as of November 1, 2015 (4(e) to Form 8-K filed March 18, 2016 in 1-32718). (d) 13 --Officer’s Certificate No. 2-B-2, dated March 17, 2016, supplemental to Mortgage and Deed of Trust of Entergy Louisiana,dated as of November 1, 2015 (4.39 to Form 8-K filed March 24, 2016 in 1-32718). (d) 14 --Officer’s Certificate No. 4-B-4, dated May 16, 2016, supplemental to Mortgage and Deed of Trust of Entergy Louisiana,dated as of November 1, 2015 (4.39 to Form 8-K filed May 19, 2016 in 1-32718). (d) 15 --Officer’s Certificate No. 6-B-5, dated August 10, 2016, supplemental to Mortgage and Deed of Trust of Entergy Louisiana,dated as of November 1, 2015 (4.39 to Form 8-K filed August 17, 2016 in 1-32718). (d) 16 --Officer’s Certificate No. 7-B-6, dated September 28, 2016, supplemental to Mortgage and Deed of Trust of EntergyLouisiana, dated as of November 1, 2015 (4.40 to Form 8-K filed October 4, 2016 in 1-32718). (d) 17 --Officer’s Certificate No. 8-B-7, dated May 17, 2017, supplemental to Mortgage and Deed of Trust of Entergy Louisiana,dated as of November 1, 2015 (4.40 to Form 8-K filed May 23, 2017 in 1-32718). (d) 18 --Officer’s Certificate No. 10-B-8, dated March 20, 2018, supplemental to Mortgage and Deed of Trust of Entergy Louisiana,dated as of November 1, 2015 (4.40 to Form 8-K filed March 23, 2018 in 1-32718). (d) 19 --Officer’s Certificate No. 12-B-9, dated August 8, 2018, supplemental to Mortgage and Deed of Trust of Entergy Louisiana,dated as of November 1, 2015 (4.40 to Form 8-K filed August 14, 2018 in 1-32718). (d) 20 --Officer’s Certificate No. 14-B-10, dated March 6, 2019, supplemental to Mortgage and Deed of Trust of Entergy Louisiana,dated as of November 1, 2015 (4.40 to Form 8-K filed March 12, 2019 in 1-32718). *(d) 21 --Description of Entergy Louisiana’s securities registered under Section 12 of the Securities Exchange Act of 1934.500 Table of ContentsEntergy Mississippi(e) 1 --Mortgage and Deed of Trust, dated as of February 1, 1988, as amended by the following Supplemental Indentures: (4(e)1 toForm 10-K for the year ended December 31, 2017 in 1-31508 (Mortgage); 4(e)1 to Form 10-K for the year endedDecember 31, 2017 in 1-31508 (Sixth); A-2(c) to Rule 24 Certificate filed May 14, 1999 in 70-8719 (Thirteenth); 4(b) toForm 10-Q for the quarter ended June 30, 2009 in 1-31508 (Twenty-sixth); 4.38 to Form 8-K filed December 11, 2012 in1-31508 (Thirtieth); 4.05 to Form 8-K filed March 21, 2014 in 1-31508 (Thirty-first); 4.05 to Form 8-K filed May 13,2016 in 1-31508 (Thirty-second); 4.16 to Form 8-K filed September 15, 2016 in 1-31508 (Thirty-third); 4.16 to Form 8-Kfiled November 14, 2017 in 1-31508 (Thirty-fourth); 4.1 to Form 8-K filed November 21, 2018 in 1-31508 (Thirty-fifth);4.1 to Form 8-K12B filed December 3, 2018 in 1-31508 (Thirty-sixth); 4(a) to Form 8-K filed December 12, 2018 in 1-31508 (Thirty-seventh); and 4.46 to Form 8-K filed June 5, 2019 in 1-31508 (Thirty-eighth)). *(e) 2 --Description of Entergy Mississippi’s securities registered under Section 12 of the Securities Exchange Act of 1934.Entergy New Orleans(f) 1 --Mortgage and Deed of Trust, dated as of May 1, 1987, as amended by the following Supplemental Indentures: (4(f)1 to Form10-K for the year ended December 31, 2017 in 1-35747 (Mortgage); 4(f)1 to Form 10-K for the year ended December 31,2017 in 1-35747 (Third); 4(b) to Form 10-Q for the quarter ended June 30, 1998 in 0-5807 (Seventh); 4.02 to Form 8-Kfiled November 23, 2010 in 0-5807 (Fifteenth); 4.02 to Form 8-K filed November 29, 2012 in 1-35747 (Sixteenth); 4.02 toForm 8-K filed June 21, 2013 in 1-35747 (Seventeenth); 4(m) to Form 10-Q for the quarter ended March 31, 2016 in 1-35747 (Eighteenth); 4.02 to Form 8-K filed March 22, 2016 in 1-35747 (Nineteenth); 4.02 to Form 8-K filed May 24,2016 in 1-35747 (Twentieth); 4.1 to Form 8-K12B filed December 1, 2017 in 1-35747 (Twenty-first); and 4(a) to Form 8-K filed September 27, 2018 in 1-35747 (Twenty-second)). (f) 2 --Second Amended and Restated Credit Agreement dated as of November 16, 2018, among Entergy New Orleans, asBorrower, the banks and other financial institutions listed on the signature pages thereof, as Lenders, Bank of America,N.A., as Administrative Agent and LC Issuing Bank, and the other LC Issuing Banks from time to time parties thereto(4(f)2 to Form 10-K for the year ended December 31, 2018 in 1-35747). (f) 3 --Term Loan Credit Agreement dated as of December 18, 2019, by and among Entergy New Orleans, the banks and otherfinancial institutions listed on the signature pages thereof, as Lenders, and Bank of America, N.A., as AdministrativeAgent (4(a) to Form 8-K filed December 18, 2019 in 1-35747). *(f) 4 --Description of Entergy New Orleans’s securities registered under Section 12 of the Securities Exchange Act of 1934.Entergy Texas(g) 1 --Indenture, Deed of Trust and Security Agreement dated as of October 1, 2008, between Entergy Texas and The Bank of NewYork Mellon, as trustee, as amended by the following Supplemental Indenture: (4(h)2 to Form 10-K for the year endedDecember 31, 2008 in 0-53134 (Indenture) and 4.61 to Form 8-K filed September 20, 2019 in 1-34360 (First)). (g) 2 --Officer’s Certificate No. 5-B-4 dated September 7, 2011, supplemental to Indenture, Deed of Trust and Security Agreementdated as of October 1, 2008, between Entergy Texas and The Bank of New York Mellon, as trustee (4.40 to Form 8-K filedSeptember 13, 2011 in 1-34360). (g) 3 --Officer’s Certificate No. 7-B-5 dated May 13, 2014, supplemental to Indenture, Deed of Trust and Security Agreement datedas of October 1, 2008, between Entergy Texas and The Bank of New York Mellon, as trustee (4(g)4 to Form 10-K for theyear ended December 31, 2017 in 1-34360). (g) 4 --Officer’s Certificate No. 8-B-6 dated May 18, 2015, supplemental to Indenture, Deed of Trust and Security Agreement datedas of October 1, 2008, between Entergy Texas and The Bank of New York Mellon, as trustee (4.40 to Form 8-K filed May21, 2015 in 1-34360).501 Table of Contents(g) 5 --Officer’s Certificate No. 9-B-7 dated March 8, 2016, supplemental to Indenture, Deed of Trust and Security Agreementdated as of October 1, 2008, between Entergy Texas and The Bank of New York Mellon, as trustee (4.40 to Form 8-Kfiled March 11, 2016 in 1-34360). (g) 6 --Officer’s Certificate No. 10-B-8 dated November 14, 2017, supplemental to Indenture, Deed of Trust and SecurityAgreement dated as of October 1, 2008, between Entergy Texas and The Bank of New York Mellon, as trustee (4.48 toForm 8-K filed November 17, 2017 in 1-34360). (g) 7 --Officer’s Certificate No. 12-B-9 dated January 3, 2019, supplemental to Indenture, Deed of Trust and Security Agreementdated as of October 1, 2008, between Entergy Texas and The Bank of New York Mellon, as trustee (4.47(a) to Form 8-Kfiled January 8, 2019 in 1-34360). (g) 8 --Officer’s Certificate No. 12-B-10 dated January 3, 2019, supplemental to Indenture, Deed of Trust and Security Agreementdated as of October 1, 2008, between Entergy Texas and The Bank of New York Mellon, as trustee (4.47(b) to Form 8-Kfiled January 8, 2019 in 1-34360). (g) 9 --Officer’s Certificate No. 13-B-11 dated September 16, 2019, supplemental to Indenture, Deed of Trust and SecurityAgreement dated as of October 1, 2008, between Entergy Texas and The Bank of New York Mellon, as trustee (4.57 toForm 8-K filed September 20, 2019 in 1-34360). (g) 10 --Second Amended and Restated Credit Agreement dated as of September 14, 2018, among Entergy Texas, as Borrower, thebanks and other financial institutions listed on the signature pages thereof, as Lenders, Citibank, N.A., as AdministrativeAgent, JPMorgan Chase Bank, N.A., BNP Paribas, Mizuho Bank, Ltd., and The Bank of Nova Scotia, as LC IssuingBanks, and the other LC Issuing Banks from time to time parties thereto (4(j) to Form 10-Q for the quarter endedSeptember 30, 2018 in 1-34360). (g) 11 --Extension Agreement, dated September 13, 2019, to Second Amended and Restated Credit Agreement dated as ofSeptember 14, 2018, among Entergy Texas, as Borrower, the banks and other financial institutions listed on the signaturepages thereof, as Lenders, Citibank, N.A., as Administrative Agent, JPMorgan Chase Bank, N.A., BNP Paribas, MizuhoBank, Ltd., and The Bank of Nova Scotia, as LC Issuing Banks, and the other LC Issuing Banks from time to time partiesthereto (4(d) to Form 10-Q for the quarter ended September 30, 2019 in 1-34360). (g) 12 --Statement of Resolution Establishing the 5.375% Series A Preferred Stock, Cumulative, No Par Value (Liquidation Value$25 Per Share) of Entergy Texas (3.3 to Form 8-A filed September 4, 2019 in 1-34360). *(g) 13 --Description of Entergy Texas’s securities registered under Section 12 of the Securities Exchange Act of 1934.(10) Material ContractsEntergy Corporation+(a) 1 --2007 Equity Ownership and Long Term Cash Incentive Plan of Entergy Corporation and Subsidiaries (Effective for Grantsand Elections On or After January 1, 2007) (Appendix B to Entergy Corporation’s Definitive Proxy Statement filed onMarch 24, 2006 in 1-11299). +(a) 2 --First Amendment of the 2007 Equity Ownership and Long Term Cash Incentive Plan of Entergy Corporation andSubsidiaries effective October 26, 2006 (10(a)50 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 3 --Second Amendment of the 2007 Equity Ownership and Long Term Cash Incentive Plan of Entergy Corporation andSubsidiaries effective January 1, 2009 (10(a)51 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 4 --Third Amendment of the 2007 Equity Ownership and Long Term Cash Incentive Plan of Entergy Corporation andSubsidiaries effective December 30, 2010 (10(a)52 to Form 10-K for the year ended December 31, 2010 in 1-11299).502 Table of Contents +(a) 5 --2011 Equity Ownership and Long Term Cash Incentive Plan of Entergy Corporation and Subsidiaries (Annex A to EntergyCorporation’s Definitive Proxy Statement filed on March 24, 2011 in 1-11299). +(a) 6 --2015 Equity Ownership Plan of Entergy Corporation and Subsidiaries (Appendix C to 2015 Entergy Corporation’sDefinitive Proxy Statement filed on March 20, 2015 in 1-11299). +(a) 7 --Supplemental Retirement Plan of Entergy Corporation and Subsidiaries, as amended and restated effective January 1, 2009(10(a)57 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 8 --First Amendment of the Supplemental Retirement Plan of Entergy Corporation and Subsidiaries, effective December 30,2010 (10(a)58 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 9 --Second Amendment of the Supplemental Retirement Plan of Entergy Corporation and Subsidiaries, effective January 27,2011 (10(a)57 to Form 10-K for the year ended December 31, 2011 in 1-11299). +(a) 10 --Third Amendment of the Supplemental Retirement Plan of Entergy Corporation and Subsidiaries, effective July 25, 2013(10(b) to Form 10-Q for the quarter ended September 30, 2014 in 1-11299). +(a) 11 --Fourth Amendment of the Supplemental Retirement Plan of Entergy Corporation and Subsidiaries, effective July 1, 2014(10(c) to Form 10-Q for the quarter ended September 30, 2014 in 1-11299). +(a) 12 --Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries, as amended and restated effective January 1,2009 (10(a)59 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 13 --First Amendment of the Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries, effective December30, 2010 (10(a)60 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 14 --Second Amendment of the Defined Contribution Restoration Plan of Entergy Corporation and Subsidiaries, effective January27, 2011 (10(a)60 to Form 10-K for the year ended December 31, 2011 in 1-11299). +(a) 15 --Executive Disability Plan of Entergy Corporation and Subsidiaries (10(a)74 to Form 10-K for the year ended December 31,2001 in 1-11299). +(a) 16 --Executive Deferred Compensation Plan of Entergy Corporation and Subsidiaries, as amended and restated effective January1, 2009 (10(a)62 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 17 --First Amendment of the Executive Deferred Compensation Plan of Entergy Corporation and Subsidiaries, effectiveDecember 30, 2010 (10(a)63 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 18 --Second Amendment of the Executive Deferred Compensation Plan of Entergy Corporation and Subsidiaries, effectiveJanuary 27, 2011 (10(a)64 to Form 10-K for the year ended December 31, 2011 in 1-11299). +(a) 19 --System Executive Continuity Plan of Entergy Corporation and Subsidiaries, effective January 1, 2009 (10(a)77 to Form 10-Kfor the year ended December 31, 2009 in 1-11299). +(a) 20 --First Amendment of the System Executive Continuity Plan of Entergy Corporation and Subsidiaries, effective January 1,2010 (10(a)78 to Form 10-K for the year ended December 31, 2009 in 1-11299). +(a) 21 --Second Amendment of the System Executive Continuity Plan of Entergy Corporation and Subsidiaries, effective December30, 2010 (10(a)69 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 22 --Third Amendment of the System Executive Continuity Plan of Entergy Corporation and Subsidiaries, effective January 27,2011 (10(a)71 to Form 10-K for the year ended December 31, 2011 in 1-11299). 503 Table of Contents+(a) 23 --Post-Retirement Plan of Entergy Corporation and Subsidiaries, as amended effective January 1, 2000 (10(a)80 to Form 10-Kfor the year ended December 31, 2001 in 1-11299). +(a) 24 --First Amendment of the Post-Retirement Plan of Entergy Corporation and Subsidiaries effective December 28, 2001(10(a)81 to Form 10-K for the year ended December 31, 2001 in 1-11299). +(a) 25 --Pension Equalization Plan of Entergy Corporation and Subsidiaries, as amended and restated effective January 1, 2009(10(a)74 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 26 --First Amendment of the Pension Equalization Plan of Entergy Corporation and Subsidiaries, effective December 30, 2010(10(a)75 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 27 --Second Amendment of the Pension Equalization Plan of Entergy Corporation and Subsidiaries, effective January 27, 2011(10(a)76 to Form 10-K for the year ended December 31, 2011 in 1-11299). +(a) 28 --Third Amendment of the Pension Equalization Plan of Entergy Corporation and Subsidiaries, effective June 19, 2013 (10(b)to Form 10-Q for the quarter ended June 30, 2013 in 1-11299). +(a) 29 --Fourth Amendment of the Pension Equalization Plan of Entergy Corporation and Subsidiaries, effective July 25, 2013 (10(c)to Form 10-Q for the quarter ended June 30, 2013 in 1-11299). +(a) 30 --Fifth Amendment of the Pension Equalization Plan of Entergy Corporation and Subsidiaries, effective July 1, 2014 (10(a) toForm 10-Q for the quarter ended September 30, 2014 in 1-11299). *+(a) 31 --Cash Balance Equalization Plan of Entergy Corporation effective July 1, 2014. +(a) 32 --System Executive Retirement Plan of Entergy Corporation and Subsidiaries, effective January 1, 2009 (10(a)78 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 33 --First Amendment of the System Executive Retirement Plan of Entergy Corporation and Subsidiaries, effective December 30,2010 (10(a)79 to Form 10-K for the year ended December 31, 2010 in 1-11299). +(a) 34 --Second Amendment of the System Executive Retirement Plan of Entergy Corporation and Subsidiaries, effective January 27,2011 (10(a)81 to Form 10-K for the year ended December 31, 2011 in 1-11299). +(a) 35 --Third Amendment of the System Executive Retirement Plan of Entergy Corporation and Subsidiaries, effective January 1,2009 (10(a)81 to Form 10-K for the year ended December 31, 2013 in 1-11299). +(a) 36 --Fourth Amendment of the System Executive Retirement Plan of Entergy Corporation and Subsidiaries, effective July 25,2013 (10(d) to Form 10-Q for the quarter ended June 30, 2013 in 1-11299). +(a) 37 --Fifth Amendment of the System Executive Retirement Plan of Entergy Corporation and Subsidiaries, effective July 1, 2014(10(d) to Form 10-Q for the quarter ended September 30, 2014 in 1-11299). +(a) 38 --Retention Agreement effective August 3, 2006 between Leo P. Denault and Entergy Corporation (10(b) to Form 10-Q for thequarter ended June 30, 2006 in 1-11299). +(a) 39 --Amendment to Retention Agreement effective January 1, 2009 between Leo P. Denault and Entergy Corporation (10(a)93 toForm 10-K for the year ended December 31, 2010 in 1-11299). +(a) 40 --Amendment to Retention Agreement effective January 1, 2010 between Leo P. Denault and Entergy Corporation (10(a)101to Form 10-K for the year ended December 31, 2009 in 1-11299). +(a) 41 --Amendment to Retention Agreement effective December 30, 2010 between Leo P. Denault and Entergy Corporation(10(a)95 to Form 10-K for the year ended December 31, 2010 in 1-11299). 504 Table of Contents+(a) 42 --Shareholder Approval of Future Severance Agreements Policy, effective March 8, 2004 (10(f) to Form 10-Q for the quarterended March 31, 2004 in 1-11299). +(a) 43 --Entergy Nuclear Retention Plan, as amended and restated effective January 1, 2007 (10(a)107 to Form 10-K for the yearended December 31, 2007 in 1-11299). +(a) 44 --2019 Entergy Corporation Omnibus Incentive Plan (Appendix B to 2019 Proxy Statement, dated March 22, 2019 in 1-11299). *+(a) 45 --Form of Stock Option Grant Agreement. *+(a) 46 --Form of Long Term Incentive Program Performance Unit Agreement. *+(a) 47 --Form of Restricted Stock Grant Agreement. *+(a) 48 --Form of Restricted Stock Units Grant Agreement. +(a) 49 --Restricted Stock Unit Agreement between Andrew Marsh and Entergy Corporation effective August 3, 2015 (10(a)102 toForm 10-K for the year ended December 31, 2015 in 1-11299). +(a) 50 --Restricted Stock Units Agreement by and between A. Christopher Bakken, III and Entergy Corporation effective April 6,2016 (10(a)54 to Form 10-K for the year ended December 31, 2016 in 1-11299). +(a) 51 --The 2019 Entergy Corporation Non-Employee Director Stock Program (10(b) to Form 10-Q for the quarter ended June 30,2019 in 1-11299). +(a) 52 --2019 Entergy Corporation Non-Employee Director Service Recognition Program (10(c) to Form 10-Q for the quarter endedJune 30, 2019 in 1-11299).System Energy(b) 1 --Availability Agreement, dated June 21, 1974, among System Energy and certain other System companies (10(b)1 to Form10-K for the year ended December 31, 2017 in 1-9067). (b) 2 --First Amendment to Availability Agreement, dated as of June 30, 1977 (10(b)2 to Form 10-K for the year ended December31, 2017 in 1-9067). (b) 3 --Second Amendment to Availability Agreement, dated as of June 15, 1981 (10(b)3 to Form 10-K for the year ended December31, 2017 in 1-9067). (b) 4 --Third Amendment to Availability Agreement, dated as of June 28, 1984 (10(b)4 to Form 10-K for the year ended December31, 2017 in 1-9067). (b) 5 --Fourth Amendment to Availability Agreement, dated as of June 1, 1989 (10(b)5 to Form 10-K for the year ended December31, 2017 in 1-9067). (b) 6 --Thirty-seventh Assignment of Availability Agreement, Consent and Agreement, dated as of September 1, 2012, amongSystem Energy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and The Bank of NewYork Mellon, as successor trustee (10(a)15 to Form 10-K for the year ended December 31, 2012 in 1-11299). (b) 7 --Amendment to the Thirty-seventh Assignment of Availability Agreement, Consent and Agreement, dated as of September 18,2015, among System Energy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and TheBank of New York Mellon, as successor trustee (4.25 to Form S-3 filed October 2, 2015).505 Table of Contents (b) 8 --Facility Lease No. 1, dated as of December 1, 1988, between Meridian Trust Company and Stephen M. Carta (Stephen J.Kaba, successor), as Owner Trustees, and System Energy (10(b)11 to Form 10-K for the year ended December 31, 2017 in1-9067). (b) 9 --Lease Supplement No. 4, dated as of January 15, 2014, to Facility Lease No. 1 (10(b)12 to Form 10-K for the year endedDecember 31, 2016 in 1-11299). (b) 10 --Facility Lease No. 2, dated as of December 1, 1988 between Meridian Trust Company and Stephen M. Carta (Stephen J.Kaba, successor), as Owner Trustees, and System Energy (10(b)13 to Form 10-K for the year ended December 31, 2017 in1-9067). (b) 11 --Lease Supplement No. 4, dated as of May 28, 2014, to Facility Lease No. 2 (10(b)14 to Form 10-K for the year endedDecember 31, 2016 in 1-11299). (b) 12 --Reallocation Agreement, dated as of July 28, 1981, among System Energy and certain other System companies (10(b)15 toForm 10-K for the year ended December 31, 2017 in 1-9067). (b) 13 --Unit Power Sales Agreement among System Energy, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, andEntergy New Orleans dated as of June 10, 1982, as amended and revised (10(b)16 to Form 10-K for the year endedDecember 31, 2018 in 1-9067).Entergy Louisiana(c) 1 --Amendment, effective as of May 26, 2017, to the Fourth Amended and Restated Limited Liability Company Agreement ofEntergy Holdings Company LLC effective as of September 19, 2015 (10(c)1 to Form 10-K for the year ended December31, 2017 in 1-32718).(14) Code of EthicsEntergy Corporation(a)Entergy Corporation Code of Business Conduct and Ethics (14 to Form 10-Q for the quarter ended September 30, 2018 in 1-11299).*(21) Subsidiaries of the Registrants(23) Consents of Experts and Counsel*(a)The consent of Deloitte & Touche LLP is contained herein at page 516.*(24) Powers of Attorney(31) Rule 13a-14(a)/15d-14(a) Certifications*(a)Rule 13a-14(a)/15d-14(a) Certification for Entergy Corporation. *(b)Rule 13a-14(a)/15d-14(a) Certification for Entergy Corporation. *(c)Rule 13a-14(a)/15d-14(a) Certification for Entergy Arkansas. *(d)Rule 13a-14(a)/15d-14(a) Certification for Entergy Arkansas. *(e)Rule 13a-14(a)/15d-14(a) Certification for Entergy Louisiana.506 Table of Contents*(f)Rule 13a-14(a)/15d-14(a) Certification for Entergy Louisiana. *(g)Rule 13a-14(a)/15d-14(a) Certification for Entergy Mississippi. *(h)Rule 13a-14(a)/15d-14(a) Certification for Entergy Mississippi. *(i)Rule 13a-14(a)/15d-14(a) Certification for Entergy New Orleans. *(j)Rule 13a-14(a)/15d-14(a) Certification for Entergy New Orleans. *(k)Rule 13a-14(a)/15d-14(a) Certification for Entergy Texas. *(l)Rule 13a-14(a)/15d-14(a) Certification for Entergy Texas. *(m)Rule 13a-14(a)/15d-14(a) Certification for System Energy. *(n)Rule 13a-14(a)/15d-14(a) Certification for System Energy.(32) Section 1350 Certifications**(a)Section 1350 Certification for Entergy Corporation. **(b)Section 1350 Certification for Entergy Corporation. **(c)Section 1350 Certification for Entergy Arkansas. **(d)Section 1350 Certification for Entergy Arkansas. **(e)Section 1350 Certification for Entergy Louisiana. **(f)Section 1350 Certification for Entergy Louisiana. **(g)Section 1350 Certification for Entergy Mississippi. **(h)Section 1350 Certification for Entergy Mississippi. **(i)Section 1350 Certification for Entergy New Orleans. **(j)Section 1350 Certification for Entergy New Orleans. **(k)Section 1350 Certification for Entergy Texas. **(l)Section 1350 Certification for Entergy Texas. **(m)Section 1350 Certification for System Energy. **(n)Section 1350 Certification for System Energy.507 Table of Contents(101) Interactive Data File*INS -Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tagsare embedded within the Inline XBRL document. *SCH -Inline XBRL Schema Document. *CAL -Inline XBRL Calculation Linkbase Document. *DEF -Inline XBRL Definition Linkbase Document. *LAB -Inline XBRL Label Linkbase Document. *PRE -Inline XBRL Presentation Linkbase Document.*(104) Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibits 101)_________________ *Filed herewith. **Furnished, not filed, herewith. + Management contracts or compensatory plans or arrangements.508 Table of ContentsENTERGY CORPORATIONSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relateonly to matters having reference to such company and any subsidiaries thereof. ENTERGY CORPORATION By /s/ Kimberly A. Fontan Kimberly A. Fontan Senior Vice President and Chief Accounting Officer Date: February 21, 2020Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relateonly to matters having reference to the above-named company and any subsidiaries thereof.SignatureTitleDate /s/ Kimberly A. FontanKimberly A. FontanSenior Vice President andChief Accounting Officer(Principal Accounting Officer)February 21, 2020Leo P. Denault (Chairman of the Board, Chief Executive Officer and Director; Principal Executive Officer); Andrew S. Marsh(Executive Vice President and Chief Financial Officer; Principal Financial Officer); John R. Burbank, Patrick J. Condon, Kirkland H.Donald, Philip L. Frederickson, Alexis M. Herman, M. Elise Hyland, Stuart L. Levenick, Blanche L. Lincoln, and Karen A. Puckett(Directors).By: /s/ Kimberly A. FontanFebruary 21, 2020(Kimberly A. Fontan, Attorney-in-fact) 509 Table of ContentsENTERGY ARKANSAS, LLCSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relateonly to matters having reference to such company and any subsidiaries thereof. ENTERGY ARKANSAS, LLC By /s/ Kimberly A. Fontan Kimberly A. Fontan Senior Vice President and Chief Accounting Officer Date: February 21, 2020Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relateonly to matters having reference to the above-named company and any subsidiaries thereof.SignatureTitleDate /s/ Kimberly A. FontanKimberly A. FontanSenior Vice President andChief Accounting Officer(Principal Accounting Officer)February 21, 2020Laura R. Landreaux (Chair of the Board, President, Chief Executive Officer, and Director; Principal Executive Officer); Andrew S.Marsh (Executive Vice President, Chief Financial Officer, and Director; Principal Financial Officer); Paul D. Hinnenkamp and Roderick K.West (Directors).By: /s/ Kimberly A. FontanFebruary 21, 2020(Kimberly A. Fontan, Attorney-in-fact) 510 Table of ContentsENTERGY LOUISIANA, LLCSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relateonly to matters having reference to such company and any subsidiaries thereof. ENTERGY LOUISIANA, LLC By /s/ Kimberly A. Fontan Kimberly A. Fontan Senior Vice President and Chief Accounting Officer Date: February 21, 2020Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relateonly to matters having reference to the above-named company and any subsidiaries thereof.SignatureTitleDate /s/ Kimberly A. FontanKimberly A. FontanSenior Vice President andChief Accounting Officer(Principal Accounting Officer)February 21, 2020Phillip R. May, Jr. (Chairman of the Board, President, Chief Executive Officer, and Director; Principal Executive Officer); AndrewS. Marsh (Executive Vice President, Chief Financial Officer, and Director; Principal Financial Officer); Paul D. Hinnenkamp and RoderickK. West (Directors).By: /s/ Kimberly A. FontanFebruary 21, 2020(Kimberly A. Fontan, Attorney-in-fact) 511 Table of ContentsENTERGY MISSISSIPPI, LLCSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relateonly to matters having reference to such company and any subsidiaries thereof. ENTERGY MISSISSIPPI, LLC By /s/ Kimberly A. Fontan Kimberly A. Fontan Senior Vice President and Chief Accounting Officer Date: February 21, 2020Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relateonly to matters having reference to the above-named company and any subsidiaries thereof.SignatureTitleDate /s/ Kimberly A. FontanKimberly A. FontanSenior Vice President andChief Accounting Officer(Principal Accounting Officer)February 21, 2020Haley R. Fisackerly (Chairman of the Board, President, Chief Executive Officer, and Director; Principal Executive Officer); AndrewS. Marsh (Executive Vice President, Chief Financial Officer, and Director; Principal Financial Officer); Paul D. Hinnenkamp and RoderickK. West (Directors).By: /s/ Kimberly A. FontanFebruary 21, 2020(Kimberly A. Fontan, Attorney-in-fact) 512 Table of ContentsENTERGY NEW ORLEANS, LLCSIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relateonly to matters having reference to such company and any subsidiaries thereof. ENTERGY NEW ORLEANS, LLC By /s/ Kimberly A. Fontan Kimberly A. Fontan Senior Vice President and Chief Accounting Officer Date: February 21, 2020Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relateonly to matters having reference to the above-named company and any subsidiaries thereof.SignatureTitleDate /s/ Kimberly A. FontanKimberly A. FontanSenior Vice President andChief Accounting Officer(Principal Accounting Officer)February 21, 2020David D. Ellis (Chairman of the Board, President, Chief Executive Officer, and Director; Principal Executive Officer); Andrew S.Marsh (Executive Vice President, Chief Financial Officer, and Director; Principal Financial Officer); Paul D. Hinnenkamp and Roderick K.West (Directors).By: /s/ Kimberly A. FontanFebruary 21, 2020(Kimberly A. Fontan, Attorney-in-fact) 513 Table of ContentsENTERGY TEXAS, INC.SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relateonly to matters having reference to such company and any subsidiaries thereof. ENTERGY TEXAS, INC. By /s/ Kimberly A. Fontan Kimberly A. Fontan Senior Vice President and Chief Accounting Officer Date: February 21, 2020Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relateonly to matters having reference to the above-named company and any subsidiaries thereof.SignatureTitleDate /s/ Kimberly A. FontanKimberly A. FontanSenior Vice President andChief Accounting Officer(Principal Accounting Officer)February 21, 2020Sallie T. Rainer (Chair of the Board, President, Chief Executive Officer, and Director; Principal Executive Officer); Andrew S.Marsh (Executive Vice President, Chief Financial Officer, and Director; Principal Financial Officer); Paul D. Hinnenkamp and Roderick K.West (Directors).By: /s/ Kimberly A. FontanFebruary 21, 2020(Kimberly A. Fontan, Attorney-in-fact) 514 Table of ContentsSYSTEM ENERGY RESOURCES, INC.SIGNATURESPursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this reportto be signed on its behalf by the undersigned, thereunto duly authorized. The signature of the undersigned company shall be deemed to relateonly to matters having reference to such company and any subsidiaries thereof. SYSTEM ENERGY RESOURCES, INC. By /s/ Kimberly A. Fontan Kimberly A. Fontan Senior Vice President and Chief Accounting Officer Date: February 21, 2020Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated. The signature of each of the undersigned shall be deemed to relateonly to matters having reference to the above-named company and any subsidiaries thereof.SignatureTitleDate /s/ Kimberly A. FontanKimberly A. FontanSenior Vice President andChief Accounting Officer(Principal Accounting Officer)February 21, 2020Roderick K. West (Chairman of the Board, President, Chief Executive Officer, and Director; Principal Executive Officer); Andrew S.Marsh (Executive Vice President, Chief Financial Officer, and Director; Principal Financial Officer); A. Christopher Bakken, III and StevenC. McNeal (Directors).By: /s/ Kimberly A. FontanFebruary 21, 2020(Kimberly A. Fontan, Attorney-in-fact) 515 Table of ContentsEXHIBIT 23(a)CONSENTS OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMWe consent to the incorporation by reference in Registration Statement No. 333-233403 on Form S-3 and in Registration Statements Nos.333-140183, 333-174148, 333-204546, 333-206556, 333-227150 and 333-231800 on Form S-8 of our reports dated February 21, 2020,relating to the financial statements and financial statement schedule of Entergy Corporation and Subsidiaries, and the effectiveness of EntergyCorporation and Subsidiaries’ internal control over financial reporting, appearing in this Annual Report on Form 10-K of EntergyCorporation for the year ended December 31, 2019.We consent to the incorporation by reference in Registration Statement No. 333-233403-05 on Form S-3 of our reports dated February 21,2020, relating to the financial statements and financial statement schedule of Entergy Arkansas, LLC and Subsidiaries appearing in thisAnnual Report on Form 10-K of Entergy Arkansas, LLC for the year ended December 31, 2019.We consent to the incorporation by reference in Registration Statement No. 233403-04 on Form S-3 of our reports dated February 21, 2020,relating to the financial statements and financial statement schedule of Entergy Louisiana, LLC and Subsidiaries appearing in this AnnualReport on Form 10‑K of Entergy Louisiana, LLC for the year ended December 31, 2019.We consent to the incorporation by reference in Registration Statement No. 233403-03 on Form S-3 of our reports dated February 21, 2020,relating to the financial statements and financial statement schedule of Entergy Mississippi, LLC appearing in this Annual Report on Form10‑K of Entergy Mississippi, LLC for the year ended December 31, 2019.We consent to the incorporation by reference in Registration Statement No. 233403-02 on Form S-3 of our reports dated February 21, 2020,relating to the financial statements and financial statement schedule of Entergy Texas, Inc. and Subsidiaries appearing in this Annual Reporton Form 10-K of Entergy Texas, Inc. for the year ended December 31, 2019.We consent to the incorporation by reference in Registration Statement No. 233403-01 on Form S-3 of our report dated February 21, 2020,relating to the financial statements of System Energy Resources, Inc. appearing in this Annual Report on Form 10-K of System EnergyResources, Inc. for the year ended December 31, 2019./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020516 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the shareholders and Board of Directors ofEntergy Corporation and SubsidiariesOpinion on the Financial Statement ScheduleWe have audited the consolidated financial statements of Entergy Corporation and Subsidiaries (the “Corporation”) as of December 31, 2019and 2018, and for each of the three years in the period ended December 31, 2019, and the Corporation’s internal control over financialreporting as of December 31, 2019, and have issued our reports thereon dated February 21, 2020. Our audits also included the consolidatedfinancial statement schedule of the Corporation listed in Item 15. This consolidated financial statement schedule is the responsibility of theCorporation’s management. Our responsibility is to express an opinion on the Corporation’s consolidated financial statement schedule basedon our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the consolidated financialstatements taken as a whole, presents fairly, in all material respects, the information set forth therein./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020517 Table of ContentsREPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRMTo the shareholders and Board of Directors ofEntergy Texas, Inc. and SubsidiariesTo the member and Board of Directors ofEntergy Arkansas, LLC and SubsidiariesEntergy Louisiana, LLC and SubsidiariesEntergy Mississippi, LLCEntergy New Orleans, LLC and SubsidiariesOpinion on the Financial Statement SchedulesWe have audited the consolidated financial statements of Entergy Arkansas, LLC and Subsidiaries, Entergy Louisiana, LLC and Subsidiaries,Entergy New Orleans, LLC and Subsidiaries, and Entergy Texas, Inc. and Subsidiaries, and we have also audited the financial statements ofEntergy Mississippi, LLC (collectively the “Companies”) as of December 31, 2019 and 2018, and for each of the three years in the periodended December 31, 2019, and have issued our reports thereon dated February 21, 2020. Our audits also included the financial statementschedules of the respective Companies listed in Item 15. These financial statement schedules are the responsibility of the respectiveCompanies’ management. Our responsibility is to express an opinion on the Companies’ financial statement schedules based on our audits. Inour opinion, such financial statement schedules, when considered in relation to the financial statements taken as a whole, present fairly, in allmaterial respects, the information set forth therein./s/ DELOITTE & TOUCHE LLPNew Orleans, LouisianaFebruary 21, 2020518 Table of ContentsINDEX TO FINANCIAL STATEMENT SCHEDULESSchedule Page IIValuation and Qualifying Accounts 2019, 2018, and 2017: Entergy Corporation and SubsidiariesS-2 Entergy Arkansas, LLC and SubsidiariesS-3 Entergy Louisiana, LLC and SubsidiariesS-4 Entergy Mississippi, LLCS-5 Entergy New Orleans, LLC and SubsidiariesS-6 Entergy Texas, Inc. and SubsidiariesS-7Schedules other than those listed above are omitted because they are not required, not applicable, or the required information isshown in the financial statements or notes thereto.Columns have been omitted from schedules filed because the information is not applicable.S-1 Table of ContentsENTERGY CORPORATION AND SUBSIDIARIESSCHEDULE II - VALUATION AND QUALIFYING ACCOUNTSFor the Years Ended December 31, 2019, 2018, and 2017(In Thousands)Column A Column B Column C Column D Column E Other Balance at Additions Changes BalanceDescription Beginning ofPeriod Charged toIncome Deductions (1) at End ofPeriodAllowance for doubtful accounts 2019 $7,322 $2,806 $2,724 $7,4042018 $13,587 $3,936 $10,201 $7,3222017 $11,924 $4,211 $2,548 $13,587Notes: (1) Deductions represent write-offs of accounts receivable balances and are reduced by recoveries of amounts previously written off.S-2 Table of ContentsENTERGY ARKANSAS, LLC AND SUBSIDIARIESSCHEDULE II - VALUATION AND QUALIFYING ACCOUNTSFor the Years Ended December 31, 2019, 2018, and 2017(In Thousands)Column A Column B Column C Column D Column E Other Balance at Additions Changes BalanceDescription Beginning ofPeriod Charged toIncome Deductions (1) at End ofPeriodAllowance for doubtful accounts 2019 $1,264 $1,000 $1,095 $1,1692018 $1,063 $810 $609 $1,2642017 $1,211 $503 $651 $1,063Notes: (1) Deductions represent write-offs of accounts receivable balances and are reduced by recoveries of amounts previously written off.S-3 Table of ContentsENTERGY LOUISIANA, LLC AND SUBSIDIARIESSCHEDULE II - VALUATION AND QUALIFYING ACCOUNTSFor the Years Ended December 31, 2019, 2018, and 2017(In Thousands)Column A Column B Column C Column D Column E Other Balance at Additions Changes BalanceDescription Beginning ofPeriod Charged toIncome Deductions (1) at End ofPeriodAllowance for doubtful accounts 2019 $1,813 $762 $673 $1,9022018 $8,430 $2,395 $9,012 $1,8132017 $6,277 $3,108 $955 $8,430Notes: (1) Deductions represent write-offs of accounts receivable balances and are reduced by recoveries of amounts previously written off.S-4 Table of ContentsENTERGY MISSISSIPPI, LLCSCHEDULE II - VALUATION AND QUALIFYING ACCOUNTSFor the Years Ended December 31, 2019, 2018, and 2017(In Thousands)Column A Column B Column C Column D Column E Other Balance at Additions Changes BalanceDescription Beginningof Period Charged toIncome Deductions (1) at End ofPeriodAllowance for doubtful accounts 2019 $563 $406 $333 $6362018 $574 $265 $276 $5632017 $549 $255 $230 $574Notes: (1) Deductions represent write-offs of accounts receivable balances and are reduced by recoveries of amounts previously written off.S-5 Table of ContentsENTERGY NEW ORLEANS, LLC AND SUBSIDIARIESSCHEDULE II - VALUATION AND QUALIFYING ACCOUNTSFor the Years Ended December 31, 2019, 2018, and 2017(In Thousands)Column A Column B Column C Column D Column E Other Balance at Additions Changes BalanceDescription Beginningof Period Charged toIncome Deductions (1) at End ofPeriodAllowance for doubtful accounts 2019 $3,222 $316 $312 $3,2262018 $3,057 $187 $22 $3,2222017 $3,059 $152 $154 $3,057Notes: (1) Deductions represent write-offs of accounts receivable balances and are reduced by recoveries of amounts previously written off.S-6 Table of ContentsENTERGY TEXAS, INC. AND SUBSIDIARIESSCHEDULE II - VALUATION AND QUALIFYING ACCOUNTSFor the Years Ended December 31, 2019, 2018, and 2017(In Thousands)Column A Column B Column C Column D Column E Other Balance at Additions Changes BalanceDescription Beginningof Period Charged toIncome Deductions (1) at End ofPeriodAllowance for doubtful accounts 2019 $461 $321 $311 $4712018 $463 $279 $281 $4612017 $828 $192 $557 $463Notes: (1) Deductions represent write-offs of accounts receivable balances and are reduced by recoveries of amounts previously written off.S-7 Exhibit 4(a)9DESCRIPTION OF ENTERGY CORPORATION’S SECURITIESREGISTERED PURSUANT TO SECTION 12OF THE SECURITIES EXCHANGE ACT OF 1934References in this exhibit to “we,” “us,” or “our” are to Entergy Corporation, and does not include our subsidiaries.As of February 21, 2020, the only security registered by us under Section 12(b) of the Securities Exchange Act of 1934, asamended (the “Exchange Act”) is our common stock, par value $0.01.The following descriptions of our common stock and the relevant provisions of our certificate of incorporation and bylawsare summaries and are qualified by reference to our certificate of incorporation and bylaws that are filed as exhibits to the AnnualReport on Form 10-K to which this is filed as an exhibit. The following also summarizes certain applicable provisions of theGeneral Corporation Law of the State of Delaware (the “DGCL”) and that summary is qualified by reference to the DGCL.GeneralOur authorized capital stock consists of 500,000,000 shares of common stock, par value $0.01 per share.Dividend RightsWe will pay dividends on our common stock as determined by our board of directors out of legally available funds. Ourability to pay dividends depends primarily upon the ability of our subsidiaries to pay dividends or distributions or otherwise transferfunds to us. Various financing arrangements, charter provisions and regulatory requirements may impose certain restrictions on theability of our subsidiaries to transfer funds to us in the form of cash dividends or distributions, loans or advances.Voting RightsHolders of common stock are entitled to one vote for each share held by them on all matters submitted to our shareholders.Holders of our common stock do not have cumulative voting rights in the election of directors. Unless otherwise required by law, inall matters other than the election of directors, the affirmative vote of the holders of a majority of the shares represented at ashareholder meeting and entitled to vote on the subject matter shall be the act of the shareholders. At a meeting for the election ofdirectors at which a quorum is present, directors are elected by a majority of votes cast with respect to such director; provided,however, that, if the number of nominees is greater than the number of directors who will be elected, the nominees receiving aplurality of the votes cast will be elected as directors.Liquidation RightsIn the event of any liquidation, dissolution or winding up of our affairs, voluntarily or involuntarily, the holders of ourcommon stock will be entitled to receive the remainder, if any, of our assets after the payment of all our debts and liabilities. Preemptive RightsThe holders of our common stock do not have a preemptive right to purchase shares of our common stock or securitiesconvertible into such shares nor are they liable for future capital calls or to assessments by us.ListingOur common stock is listed under the “ETR” symbol on both the New York Stock Exchange and the NYSE Chicago.Transfer Agent and RegistrarThe transfer agent and registrar for our common stock is Equiniti Trust Company, doing business as EQ ShareownerServices.Certain Anti-Takeover EffectsGeneral. Certain provisions of our certificate of incorporation, bylaws and the DGCL could have the effect of delaying,deferring or preventing an acquisition of control of us by means of a tender offer, a proxy fight, open market purchases or otherwisein a transaction not approved by our board of directors. The provisions described below may reduce our vulnerability to anunsolicited proposal for the restructuring or sale of all or substantially all of our assets or an unsolicited takeover attempt which isunfair to our shareholders.Our board of directors has no present intention to introduce additional measures that might have an anti-takeover effect;however, our board of directors expressly reserves the right to introduce these measures in the future.Business Combinations. Section 203 of the DGCL prohibits a publicly held Delaware corporation from engaging in a“business combination” with an “interested stockholder” for a period of three years after the time the stockholder became aninterested stockholder, subject to certain exceptions, including if, prior to such time, the board of directors approved the businesscombination or the transaction which resulted in the stockholder becoming an interested stockholder. “Business combinations”include mergers, asset sales and other transactions resulting in a financial benefit to the “interested stockholder.” Subject to variousexceptions, an “interested stockholder” is a person who, together with his or her affiliates and associates, owns, or within the priorthree years did own, 15% or more of the corporation’s outstanding voting stock. The restrictions on business combinations withinterested stockholders contained in Section 203 do not apply to a corporation whose certificate of incorporation or bylaws containsa provision expressly electing not to be governed by the statute; however, neither our certificate of incorporation nor our bylawscontain a provision electing to “opt-out” of Section 203.Special Meetings. Pursuant to the DGCL, a special meeting of stockholders may be called by the board of directors or by anyother person authorized to do so in the certificate of incorporation or bylaws. Our certificate of incorporation and bylaws providethat special meetings of stockholders may only be called by: our board of directors; the Chairman of our board of directors; amajority of the members of the entire Executive Committee of the board of directors; the Chief Executive Officer; or the holders ofa majority of the outstanding shares of our common stock entitled to vote at the special meeting.Advance Notice Requirements for Shareholder Nominations and Proposals. Our bylaws establish advance notice procedureswith respect to stockholder proposals for annual meetings and the nomination of candidates for election as directors, other than nominations made by or at the direction of our board of directors or a committee ofthe board of directors. A stockholder who wishes to bring a matter before a meeting must comply with our advance noticerequirements and provide us with certain information. Additionally, vacancies and newly created directorships may be filled only bya vote of a majority of the directors then in office, even in the case that such directors may represent less than a quorum. Exhibit 4(c)7DESCRIPTION OF ENTERGY ARKANSAS, LLC’S SECURITIESREGISTERED PURSUANT TO SECTION 12OF THE SECURITIES EXCHANGE ACT OF 1934References in this exhibit to “we,” “us,” or “our” are to Entergy Arkansas, LLC.We have issued, and may from time to time issue, bonds in one or more series under one or more separate supplementalindentures to the Mortgage and Deed of Trust dated as of October 1, 1944, with Deutsche Bank Trust Company Americas, successorcorporate trustee, and, as to property in Missouri, The Bank of New York Mellon Trust Company, N.A., successor co-trustee, andtogether referred to in this exhibit as “trustees.” This Mortgage and Deed of Trust, as it has heretofore been and may be amended orsupplemented from time to time, is referred to in this exhibit as the “mortgage.” All first mortgage bonds issued or to be issued underthe mortgage, including the Bonds (as defined below), are referred to herein as “first mortgage bonds.”As of February 21, 2020, we have three series of first mortgage bonds outstanding that are registered under Section 12(b) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”):•our First Mortgage Bonds, 4.90% Series due December 1, 2052, issued in an aggregate principal amount of $200,000,000under the Seventy-First Supplemental Indenture, dated as of December 1, 2012, to the mortgage and traded on the New YorkStock Exchange (the “NYSE”) under the ticker EAB (the “2052 Bonds”);•our First Mortgage Bonds, 4.75% Series due June 1, 2063, issued in an aggregate principal amount of $125,000,000 underthe Seventy-Fourth Supplemental Indenture, dated as of June 1, 2013, to the mortgage and traded on the NYSE under theticker EAE (the “2063 Bonds”); and•our First Mortgage Bonds, 4.875% Series due September 1, 2066, issued in an aggregate principal amount of $410,000,000under the Seventy-Ninth Supplemental Indenture, dated as of August 1, 2016, to the mortgage and traded on the NYSE underthe ticker EAI (the “2066 Bonds,” and collectively with the 2052 Bonds and the 2063 Bonds, the “Bonds”).The full aggregate principal amount of each series of the Bonds is currently outstanding.The mortgage, including the applicable supplemental indentures relating to the Bonds, contains the full legal texts of thematters described herein. Because this is a summary, it does not describe every aspect of the mortgage, the supplemental indenturesrelating to each series of Bonds, or the outstanding first mortgage bonds, including the Bonds. The mortgage and the supplementalindentures that relate to the outstanding first mortgage bonds, including the Bonds, are filed as exhibits to the Annual Report onForm 10-K to which this is filed as an exhibit. You should read the mortgage for provisions that may be important to you. Thissummary is subject to and qualified in its entirety by reference to all the provisions of the mortgage, including the definitions ofsome of the terms used in the mortgage, and to the particular terms of the supplemental indenture that relates to each series ofBonds. The mortgage has been qualified under the Trust Indenture Act of 1939, and you should also refer to the Trust Indenture Actof 1939 for provisions that apply to the Bonds.General The mortgage permits us to issue first mortgage bonds from time to time subject to limitations described below under“Issuance of Additional First Mortgage Bonds.” All first mortgage bonds of any one series need not be issued at the same time, and aseries may be reopened for issuances of additional first mortgage bonds of that series. This means that we may from time to time,without the consent of the existing holders of the first mortgage bonds of any series, including the Bonds, create and issue additionalfirst mortgage bonds of a series having the same terms and conditions as the previously issued first mortgage bonds of that series inall respects, except for issue date, issue price and, if applicable, the initial interest payment on those additional first mortgage bonds.Additional first mortgage bonds issued in this manner will be consolidated with and will form a single series with the previouslyissued first mortgage bonds of that series. For more information, see the discussion below under “Issuance of Additional FirstMortgage Bonds.”PaymentThe principal amount of the Bonds and interest thereon is and will be paid in any coin or currency of the United States ofAmerica that at the time of payment is legal tender at the corporate trust office of the corporate trustee in the Borough of Manhattan,City and State of New York.Interest on the 2052 Bonds accrues at the rate of 4.90% per year. Interest on the 2063 Bonds accrues at the rate of 4.75% peryear. Interest on the 2066 Bonds accrues at the rate of 4.875% per year. In each case, interest started to accrue from the date that therespective series of Bonds was issued. Interest payments on the Bonds are made on March 1, June 1, September 1 and December 1of each year. As long as the Bonds are registered in the name of The Depository Trust Company (“DTC”) or its nominee, the recorddate for interest payable on any interest payment date shall be the close of business on the Business Day (defined as any day otherthan a Saturday or a Sunday or a day on which banking institutions in The City of New York are authorized or required by law orexecutive order to remain closed or a day on which the corporate trust office of the corporate trustee is closed for business)immediately preceding such interest payment date. We have agreed to pay interest on any overdue principal and, if such payment isenforceable under applicable law, on any overdue installment of interest on the Bonds at a rate of 6% per year to holders of record atthe close of business on the Business Day immediately preceding our payment of such interest.Interest on the Bonds is computed on the basis of a 360-day year of twelve 30-day months. If any interest payment date orthe maturity date of a Bond falls on a day that is not a Business Day, the payment due on that interest payment date or the maturitydate will be made on the next Business Day, and without any interest or other payment in respect of such delay.As long as the Bonds are registered in the name of DTC or its nominee, we will pay principal and interest due on the Bondsto DTC. DTC will then make payment to its participants for disbursement to the beneficial owners of the Bonds as described underthe heading “Book-Entry Only Securities.”RedemptionWe may redeem the Bonds prior to maturity, in whole or in part, at our option, on not less than 30 days’ nor more than 60days’ notice, (i) in the case of the 2052 Bonds and the 2063 Bonds, at any time; and (ii) in the case of the 2066 Bonds, at any timeon or after September 1, 2021; in each case, at a redemption price equal to 100% of the principal amount of the Bonds beingredeemed plus any accrued and unpaid interest thereon to, but not including, the redemption date. Unless the Bonds are held inbook-entry only form through the facilities of DTC, in which case DTC’s procedures for selection shall apply (see “Book-Entry Only Securities”), if less than all of the Bonds of any series are to be redeemed, the corporate trustee will selectthe Bonds to be redeemed.Unless we default in the payment of the redemption price and accrued interest, if any, in the case of an unconditional noticeof redemption, the Bonds subject to such notice of redemption will cease to bear interest on the redemption date. We will pay theredemption price and any accrued interest to the redemption date upon surrender of any Bond for redemption. If only part of a Bondis redeemed, the corporate trustee will deliver to the holder of the Bond a new Bond of the same series for the remaining portionwithout charge.We may make any redemption at our option conditional upon the receipt by the corporate trustee, prior to the date fixed forredemption, of money sufficient to pay the redemption price and accrued interest, if any. If the corporate trustee has not received themoney by the date fixed for redemption, we will not be required to redeem the Bonds.Form and ExchangeThe Bonds are fully-registered bonds without coupons, issued in denominations of $25 and integral multiples of $25 inexcess thereof. Each series of the Bonds is represented by a global certificate without coupons registered in the name of a nomineeof DTC.The Bonds are exchangeable for other Bonds of the same series in equal aggregate principal amounts. No service charge willbe made for any registration of transfer or exchange of the Bonds. However, we may require payment to cover any tax or othergovernmental charge that may be imposed in connection with a registration of transfer or exchange. We will not be required toprovide for the transfer or exchange of any Bond:1.during the 10 days before an interest payment date,2.during the 10 days before any designation of such Bond to be redeemed, or3.selected for redemption.SecurityThe Bonds, together with all other first mortgage bonds now or in the future outstanding under the mortgage, are and will besecured, equally and ratably, by the lien of the mortgage. The mortgage constitutes a first mortgage lien on substantially all of ourproperty (the “mortgaged property”) subject to bankruptcy law and to:1.leases of minor portions of our mortgaged property to others for uses which do not interfere with our business;2.leases of certain of our mortgaged property not used in our business; and3.excepted encumbrances (as defined below).There is excepted from the lien certain of our property, including:1.cash and securities;2.certain equipment, materials and supplies;3.automobiles and other vehicles and aircraft, timber, minerals, mineral rights and royalties;4.receivables, contracts, leases and operating agreements; and5.certain unimproved lands sold or to be sold.The “excepted encumbrances” mean the following: •tax liens, assessments and other governmental charges or requirements which are not delinquent or which are beingcontested in good faith and by appropriate proceedings or of which at least ten business days’ notice has not been given toour general counsel or to such other person designated by us to receive such notices;•mechanics’, workmen’s, repairmen’s, materialmen’s, warehousemen’s and carriers’ liens, other liens incident toconstruction, liens or privileges of any of our employees for salary or wages earned, but not yet payable, and other liens,including without limitation liens for worker’s compensation awards, arising in the ordinary course of business for chargesor requirements which are not delinquent or which are being contested in good faith and by appropriate proceedings or ofwhich at least ten business days’ notice has not been given to our general counsel or to such other person designated by us toreceive such notices;•specified judgment liens and prepaid liens;•easements, leases, reservations or other rights of others (including governmental entities) in, and defects of title in, ourproperty;•liens securing indebtedness or other obligations relating to real property we acquired for specified transmission, distributionor communication purposes or for the purpose of obtaining rights-of-way;•specified leases and leasehold, license, franchise and permit interests;•liens resulting from laws, rules, regulations, orders or rights of governmental authorities and specified liens required by lawor governmental regulations;•liens to secure public obligations; rights of others to take minerals, timber, electric energy or capacity, gas, water, steam orother products produced by us or by others on our property;•rights and interests of persons other than us arising out of agreements relating to the common ownership or joint use ofproperty, and liens on the interests of those persons in the property;•restrictions on assignment and/or requirements of any assignee to qualify as a permitted assignee and/or public utility orpublic services corporation; and•liens which have been bonded for the full amount in dispute or for the payment of which other adequate securityarrangements have been made.The mortgage contains provisions that impose the lien of the mortgage on property that we acquire after the date of themortgage, other than excepted property, subject to pre-existing liens. However, if we consolidate or merge with, or convey ortransfer all or substantially all of our mortgaged property to, a successor, the lien created by the mortgage will generally not coverthe property of the successor, other than the mortgaged property it acquires from us and improvements, replacements and additionsto such property.The mortgage also provides that the trustees shall have a lien upon the mortgaged property to ensure the payment of theirreasonable compensation, expenses and disbursements and for indemnity against certain liabilities. This lien takes priority over thelien securing the first mortgage bonds, including the Bonds.The mortgage also contains restrictions on the issuance of debt secured by a prior lien on the mortgaged property (“qualifiedlien bonds”).Issuance of Additional First Mortgage BondsThe maximum principal amount of first mortgage bonds that may be issued under the mortgage is limited to $100 billion atany time outstanding under the mortgage, subject to property additions and other limitations of the mortgage. First mortgage bondsof any series may be issued from time to time on the basis of: 1.60% of the cost or fair value, whichever is less, of unfunded property additions after adjustments to offset retirements;2.retirements of first mortgage bonds or qualified lien bonds; or3.deposit of cash with the corporate trustee.Property additions generally include, among other things, electric, gas, steam or hot water property acquired after June 30,1944. Securities, automobiles or other vehicles or aircraft, or property used principally for the production or gathering of natural gas,are not included as property additions.We have the right to amend the mortgage at any time without the consent or other action of the holders of any first mortgagebonds, including the Bonds, to permit the issuance of first mortgage bonds on the basis of 80% of the cost or fair value, whichever isless, of unfunded property additions after adjustments to offset retirements.We have the right to amend the mortgage at any time without any consent or other action of the holders of any first mortgagebonds, including the Bonds, to make any form of space satellites including solar power satellites, space stations and other analogousfacilities available as property additions.As of December 31, 2019, we had approximately $3,206 million principal amount of first mortgage bonds outstanding. Alsoas of December 31, 2019, we had approximately $598 million of available property additions, entitling us to issue approximately$359 million principal amount of additional first mortgage bonds on the basis of property additions, and we could have issuedapproximately $1,152 million principal amount of additional first mortgage bonds on the basis of retired first mortgage bonds. The2052 Bonds were issued on the basis of retired first mortgage bonds; the 2063 Bonds were issued on the basis of property additions;and the 2066 Bonds were issued on the basis of property additions.Other than the security afforded by the lien of the mortgage and restrictions on the issuance of additional first mortgagebonds described above, there are no provisions of the mortgage that grant the holders of the first mortgage bonds protection in theevent of a highly leveraged transaction involving us.Release and Substitution of PropertyWe may release property from the lien of the mortgage on the bases of:1.the deposit of cash or, to a limited extent, purchase money mortgages;2.property additions, after adjustments in certain cases to offset retirements and after making adjustments for qualified lienbonds, if any, outstanding against property additions; and3.(i) the aggregate principal amount of first mortgage bonds that we would be entitled to issue on the basis of retired qualifiedlien bonds; or (ii) 10/6ths of the aggregate principal amount of first mortgage bonds that we would be entitled to issue on thebasis of retired first bonds; in each case with the entitlement being waived by operation of the release.We can withdraw cash upon the bases stated in clause (2) and/or (3) above. Should we amend the mortgage as describedunder “Issuance of Additional First Mortgage Bonds” above to permit the issuance of first mortgage bonds on the basis of anincreased percentage of the cost or fair value, whichever is less, of unfunded property additions after adjustments to offsetretirements, the ratio specified in clause (3)(ii) above would change to the reciprocal of such increased percentage. The mortgage also contains special provisions with respect to qualified lien bonds pledged and the disposition of moneysreceived on pledged prior lien bonds. We may also release unfunded property if after such release at least one dollar in unfundedproperty remains subject to the lien of the mortgage. We have the right to amend the mortgage at any time without the consent orother action of the holders of any first mortgage bonds, including the Bonds, to modify the definition of “Funded Property” in themortgage to mean property specified by us with a fair value determined by an independent expert not less than 10/8ths of the sum ofthe amount of the outstanding first mortgage bonds and retired first mortgage bonds.We may, without any release or consent by the corporate trustee,•grant, free from the lien of the mortgage, easements, ground leases or rights-of-way in, upon, over and/or across our propertyfor the purpose of roads, pipe lines, transmission lines, distribution lines, communication lines and similar purposes, or forthe joint or common use of real property, rights-of-way, facilities and/or equipment, but only if such grant shall notmaterially impair the use of the property or rights-of-way for the purposes for which such property or rights-of-way are heldby us, and•cancel or make changes or alterations in or substitutions for any and all easements, servitudes and similar rights and/orinterests.ModificationModification Without ConsentWithout the consent of any holder of first mortgage bonds, we and the trustees may enter into one or more supplementalindentures for any of the following purposes:•to evidence the assumption by any permitted successor of our covenants in the mortgage and in the first mortgage bonds;•to add one or more covenants or other provisions for the benefit of the holders of all or any series of first mortgage bonds, orto surrender any right or power conferred upon us;•to add additional events of default under the mortgage for all or any series of first mortgage bonds;•to correct or amplify the description of the mortgaged property or to subject additional property to the lien of the mortgage;•to change, eliminate or add any provision to the mortgage; provided that no such change, elimination or addition willadversely affect the interests of the holders of first mortgage bonds of any series in any material respect;•to establish the form or terms of first mortgage bonds of any other series as permitted by the mortgage;•to provide for the procedures required for use of a noncertificated system of registration for the first mortgage bonds of all orany series;•to change any place where principal, premium, if any, and interest shall be payable, first mortgage bonds may be surrenderedfor registration of transfer or exchange, and notices and demands to us may be served; or•to cure any ambiguity or inconsistency or to make any other changes or additions to the provisions of the mortgage if suchchanges or additions will not adversely affect the interests of first mortgage bonds of any series in any material respect.Modification Requiring Consent Except as provided below, the consent of the holders of a majority in aggregate principal amount of then outstanding firstmortgage bonds, considered as one class, is required for all other amendments or modifications to the mortgage. However, if lessthan all of the series of first mortgage bonds outstanding are directly affected by a proposed amendment or modification, then theconsent of the holders of only a majority in aggregate principal amount of the outstanding first mortgage bonds of all series that aredirectly affected, considered as one class, will be required. Notwithstanding the foregoing, no amendment or modification may bemade without the consent of the holder of each directly affected first mortgage bond then outstanding to:•extend the maturity of the principal of, or interest on, any first mortgage bond, or reduce the principal amount of any firstmortgage bond or its rate of interest or modify the terms of payment of such principal or interest;•create any lien ranking prior to or on a parity with the lien of the mortgage with respect to the mortgaged property, or depriveany non-assenting holder of a first mortgage bond of a lien on the mortgaged property for the security of such holder’s firstmortgage bonds (subject only to excepted encumbrances); or•reduce the percentage in principal amount of the outstanding first mortgage bonds of any series the consent of the holders ofwhich is required for any amendment or modification.The mortgage provides that first mortgage bonds owned by us, for our benefit or by any entity of which we own 25% ormore of the outstanding voting stock shall not be deemed outstanding for the purpose of certain votes, consents or quorums;provided that first mortgage bonds that have been pledged in good faith may be regarded as outstanding if the pledgee establishes tothe satisfaction of the corporate trustee its right to vote or give consents with respect to such first mortgage bonds and such pledgeeis not us or an entity of which we own 25% or more of the outstanding voting stock.Any request, consent or vote of the owner of any first mortgage bond will bind every future holder and owner of that firstmortgage bond and the holder and owner of every first mortgage bond issued upon the registration of transfer of or in exchange forthat first mortgage bond.DefaultsDefaults under the mortgage include:1.failure to pay the principal of any first mortgage bond when due and payable;2.failure to pay interest on any first mortgage bond or any installments of any fund required to be applied to the purchase orredemption of any first mortgage bond for a period of 60 days after the same shall have become due and payable;3.failure to pay interest upon or principal of any qualified lien bonds beyond any applicable grace period;4.certain events of bankruptcy, insolvency or reorganization; and5.the expiration of 90 days after the mailing by the corporate trustee to us of a written demand, or by holders of 15% inprincipal amount of the first mortgage bonds at the time outstanding under the mortgage to us and to the corporate trustee ofa written demand, that we perform a specified covenant or agreement contained in the mortgage, which specified covenantor agreement we have failed to perform prior to such mailing, unless during such period we shall have performed suchspecified covenant or agreement. The corporate trustee may, and, if requested to do so in writing by the holders of a majorityin principal amount of the first mortgage bonds then outstanding, shall, make such demand. The trustees may withhold notice of default, except in payment of principal, interest or funds for purchase or redemption offirst mortgage bonds, if they in good faith determine it is in the interests of the holders of the first mortgage bonds.RemediesAcceleration of MaturityIf a default under the mortgage occurs, then the corporate trustee, by written notice to us, or the holders of at least 25% inprincipal amount of the outstanding first mortgage bonds, by written notice to us and the corporate trustee, may declare the principalamount of all of the first mortgage bonds to be due and payable immediately, and upon the giving of such notice, such principalamount and accrued and unpaid interest will become immediately due and payable.There is no automatic acceleration, even in the event of our bankruptcy, insolvency or reorganization.Annulment of AccelerationAt any time after such a declaration of acceleration has been made but before any sale of the mortgaged property, the holdersof a majority in principal amount of all outstanding first mortgage bonds may annul such declaration of acceleration, by writtennotice to the trustees and us, if the default under the mortgage giving rise to such declaration of acceleration has been cured, and wehave paid or deposited with the corporate trustee a sum sufficient to pay:(1) all overdue interest on all outstanding first mortgage bonds;(2) the principal of and premium, if any, on the outstanding first mortgage bonds that have become due otherwise than by suchdeclaration of acceleration and overdue interest thereon;(3) interest on overdue interest, if any, to the extent lawful, at the rate of 6% per year; and(4) all amounts due to the trustees under the mortgage.Trustees’ PowersSubject to the mortgage, under specified circumstances and to the extent permitted by law, if a default under the mortgageoccurs, the trustees shall be entitled to the appointment of a receiver for the mortgaged property and are entitled to all other remediesavailable under applicable law.Control by HoldersThe holders of a majority in principal amount of the first mortgage bonds may direct the time, method and place ofconducting any proceedings for any remedy available to the trustees or exercising any trust or power conferred on the trustees. Thetrustees are not obligated to comply with directions that conflict with law or other provisions of the mortgage or that the corporatetrustee determines in good faith would involve the trustees in personal liability, would be unjustifiably prejudicial to non-assentingholders or would be in circumstances where indemnity would not be sufficient. The trustees are not required to risk their funds orincur personal liability if there is reasonable ground for believing that repayment is not reasonably assured. Limitation on Holders’ Right to Institute ProceedingsNo holder of first mortgage bonds will have any right to institute any proceeding under the mortgage, or any remedy underthe mortgage, unless:•the holder has previously given to the trustees written notice of a default under the mortgage;•the holders of 25% in aggregate principal amount of the outstanding first mortgage bonds of all series have made a writtenrequest to the trustees and have offered the trustees reasonable opportunity and indemnity satisfactory to the trustees toinstitute proceedings; and•the trustees have failed to institute any proceeding for 60 days after notice;provided that no holder or holders of first mortgage bonds shall have any right in any manner to affect or prejudice the lien of themortgage or to obtain priority over other holders of outstanding first mortgage bonds. However, these limitations do not apply to theabsolute and unconditional right of a holder of a first mortgage bond to institute suit for payment of the principal, premium, if any,or interest on the first mortgage bond on or after the applicable due date.We have reserved the right to amend the mortgage, without any consent or other action by the holders of any first mortgagebonds created on or after May 1, 2018, to revise the limitations described in the first sentence of the immediately precedingparagraph to apply to any proceeding or remedy under or with respect to the mortgage or the first mortgage bonds.Evidence to be Furnished to the TrusteeCompliance with the mortgage provisions is evidenced by written statements of our officers or persons we select or pay. Incertain cases, opinions of counsel and certifications of an engineer, accountant, appraiser or other expert (who in some cases must beindependent) must be furnished. We must give the corporate trustee an annual certificate as to whether or not we have fulfilled ourobligations under the mortgage throughout the preceding year.Satisfaction and Discharge of MortgageThe mortgage may be satisfied and discharged if and when we provide for the payment of all of the first mortgage bonds andall other sums due under the mortgage.Consolidation, Merger and Conveyance of AssetsThe mortgage provides that we may consolidate with or merge into any other entity or convey, transfer or lease as, orsubstantially as, an entirety to any entity the mortgaged property, if:•(a) the surviving or successor entity to such merger or consolidation has authority to carry on the electric, gas, steam or hotwater business, or (b) the successor entity that acquires by conveyance or transfer or that leases our mortgaged property as, orsubstantially as, an entirety, is authorized to acquire, lease or operate the mortgaged property so conveyed or transferred;•such merger, consolidation, conveyance, transfer or lease is upon such terms as to preserve, and in no respect impair, the lienand security of the mortgage and the rights and powers of the trustees and the holders of first mortgage bonds;•the survivor or successor entity expressly assumes by supplemental indenture our obligations on all first mortgage bonds thenoutstanding and under the mortgage; and •in the case of a lease, such lease is made expressly subject to termination by us or by the trustees and by the purchaser of theproperty so leased at any sale thereof at any time during the continuance of a default under the mortgage.In the case of the conveyance or other transfer of the mortgaged property as, or substantially as, an entirety to another entity,upon the satisfaction of all the conditions described above, we would be released and discharged from all our obligations andcovenants under the mortgage and on the first mortgage bonds then outstanding unless we elect to waive such release and discharge.The mortgage does not prevent or restrict any conveyance or other transfer, or lease, of any part of the mortgaged propertythat does not constitute the entirety, or substantially the entirety, of the mortgaged property.Although the successor entity may, in its sole discretion, subject to the lien of the mortgage property then owned or thereafteracquired by the successor entity, the lien of the mortgage generally will not cover the property of the successor entity other than themortgaged property it acquires from us and improvements, extensions and additions to such property and renewals, replacementsand substitutions thereof, within the meaning of the mortgage.The terms of the mortgage do not restrict mergers in which we are the surviving entity.The mortgage provides that a statutory merger in which our assets and liabilities may be allocated among one or moreentities shall not be considered to be a merger, consolidation or conveyance of mortgaged property subject to the provisions of themortgage relating to a merger, consolidation or conveyance of all or substantially all of the mortgaged property unless all orsubstantially all of the mortgaged property is allocated to one or more other entities.We have reserved the right to amend the mortgage without the consent or other action by the holders of any first mortgagebonds created after on or after May 1, 2018, to provide as follows:(1) that any conveyance, transfer or lease of any of our properties where we retain mortgaged property with a fair value in excessof 167% of the aggregate principal amount of all outstanding first mortgage bonds, and any other outstanding debt securedby a purchase money lien that ranks equally with, or senior to, the first mortgage bonds with respect to the mortgagedproperty, shall not be deemed to be a conveyance, transfer or lease of all or substantially all of our mortgaged property. Thisfair value will be determined within 90 days of the conveyance, transfer or lease by an independent expert selected by us;and(2) that, in the case of a consolidation or merger after the consummation of which we would be the surviving or resulting entity,unless we otherwise provide in a supplemental indenture to the mortgage, the lien of the mortgage will generally not coverany of the properties acquired by us in or as a result of such transaction or any improvements, extensions or additions tothose properties.Information about the Corporate TrusteeThe corporate trustee is Deutsche Bank Trust Company Americas. In addition to acting as corporate trustee, Deutsche BankTrust Company Americas and its affiliate, Deutsche Bank AG New York Branch, also act, and may act, as trustee under variousother of our and our affiliates’ indentures, trusts and guarantees. We and our affiliates maintain credit and liquidity facilities andconduct other banking transactions with the corporate trustee and its affiliates in the ordinary course of our respective businesses. We have reserved the right to amend the mortgage without the consent or other action by the holders of any first mortgagebonds created on or after May 1, 2018, to provide that so long as no event of default or event that, after notice or lapse of time, orboth, would become an event of default has occurred and is continuing and except with respect to a trustee appointed by act of theholders, if we have delivered to the trustees a board resolution appointing a successor for any trustee and the successor has acceptedthe appointment in accordance with the terms of the mortgage, the applicable trustee will be deemed to have resigned and thesuccessor will be deemed to have been appointed as trustee in accordance with the mortgage.Information about the Co-TrusteeThe co-trustee is The Bank of New York Mellon Trust Company, N.A. In addition to acting as co-trustee, The Bank of NewYork Mellon Trust Company, N.A. and its affiliate, The Bank of New York Mellon, also act, and may act, as trustee under variousother of our and our affiliates’ indentures, trusts and guarantees. We and our affiliates maintain deposit accounts and credit andliquidity facilities and conduct other banking transactions with the co-trustee and its affiliates in the ordinary course of ourrespective businesses.Book-Entry Only SecuritiesThe Bonds trade through DTC. Each series of Bonds is represented by a separate global certificate and registered in thename of Cede & Co., DTC’s nominee. The global certificates were deposited with the corporate trustee as custodian for DTC.Ownership of beneficial interests in the global certificates is limited to institutions that have accounts with DTC or its participants orpersons that may hold interests through participants.DTC is a New York clearing corporation and a clearing agency registered under Section 17A of the Exchange Act. DTCholds securities for its participants. DTC also facilitates the post-trade settlement of securities transactions among its participantsthrough electronic computerized book‑entry transfers and pledges in the participants’ accounts. This eliminates the need for physicalmovement of securities certificates. The participants include securities brokers and dealers, banks, trust companies, clearingcorporations and certain other organizations. DTC is a wholly‑owned subsidiary of The Depository Trust & Clearing Corporation(“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income ClearingCorporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Others whomaintain a custodial relationship with a participant can use the DTC system. The rules that apply to DTC and those using its systemsare on file with the SEC.Purchases of the Bonds within the DTC system must be made through participants, who will receive a credit for the Bondson DTC’s records. The beneficial ownership interest of each purchaser will be recorded on the appropriate participant’s records.Beneficial owners do not receive written confirmation from DTC of their purchases, but beneficial owners should receive writtenconfirmations of the transactions, as well as periodic statements of their holdings, from the participants through whom theypurchased Bonds. Transfers of ownership in the Bonds are to be accomplished by entries made on the books of the participantsacting on behalf of beneficial owners. Beneficial owners will not receive certificates for their Bonds of a series, except if use of thebook‑entry system for the Bonds of that series is discontinued.To facilitate subsequent transfers, all Bonds deposited by participants with DTC are registered in the name of DTC’snominee, Cede & Co. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. effects no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of theBonds. DTC’s records reflect only the identity of the participants to whose accounts such Bonds are credited. These participantsmay or may not be the beneficial owners. Participants are responsible for keeping account of their holdings on behalf of theircustomers.Conveyance of notices and other communications by DTC to participants, and by participants to beneficial owners, aregoverned by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.Beneficial owners of Bonds may wish to take certain steps to augment transmission to them of notices of significant events withrespect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the mortgage. Beneficial owners of theBonds may wish to ascertain that the nominee holding the Bonds has agreed to obtain and transmit notices to the beneficial owners.Redemption notices will be sent to Cede & Co., as registered holder of the Bonds. If less than all of the Bonds of a series arebeing redeemed, DTC’s practice is to determine by lot the amount of Bonds of such series held by each participant to be redeemed.Neither DTC nor Cede & Co. will itself consent or vote with respect to Bonds, unless authorized by a participant inaccordance with DTC’s procedures. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible afterthe record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those participants to whose accountsthe Bonds are credited on the record date. We believe that these arrangements will enable the beneficial owners to exercise rightsequivalent in substance to the rights that can be directly exercised by a registered holder of the Bonds.Payments of redemption proceeds, principal of, and interest on the Bonds are and will be made to Cede & Co., or such othernominee as may be requested by DTC. DTC’s practice is to credit participants’ accounts upon DTC’s receipt of funds andcorresponding detail information from us or our agent, on the payable date in accordance with their respective holdings shown onDTC’s records. Payments by participants to beneficial owners are and will be governed by standing instructions and customarypractices. Payments are the responsibility of participants and not of DTC, the trustee, or us, subject to any statutory or regulatoryrequirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest to Cede & Co. (or suchother nominee as may be requested by DTC) is our responsibility. Disbursement of payments to participants is the responsibility ofDTC, and disbursement of payments to the beneficial owners is the responsibility of participants.Other than in the circumstances described herein, a beneficial owner will not be entitled to receive physical delivery of theBonds. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the Bonds.DTC may discontinue providing its services as securities depositary with respect to the Bonds at any time by giving usreasonable notice. In the event no successor securities depositary is obtained, certificates for the Bonds will be printed and delivered.We may decide to replace DTC or any successor depositary. Additionally, subject to the procedures of DTC, we may decide todiscontinue use of the system of book‑entry transfers through DTC (or a successor depositary) with respect to some or all of theBonds. In that event or if an event of default with respect to a series of Bonds has occurred and is continuing, certificates for theBonds of such series will be printed and delivered. If certificates for such series of Bonds are printed and delivered,•those Bonds will be issued in fully registered form without coupons; •a holder of certificated Bonds would be able to exchange those Bonds, without charge, for an equal aggregate principalamount of Bonds of the same series, having the same issue date and with identical terms and provisions; and•a holder of certificated Bonds would be able to transfer those Bonds without cost to another holder, other than for applicablestamp taxes or other governmental charges.The information in this section concerning DTC and DTC’s book‑entry system has been obtained from sources that webelieve to be reliable, but we do not take any responsibility for the accuracy of this information. Exhibit 4(d)21DESCRIPTION OF ENTERGY LOUISIANA, LLC’S SECURITIESREGISTERED PURSUANT TO SECTION 12OF THE SECURITIES EXCHANGE ACT OF 1934References in this exhibit to the “we,” “us,” or “our” are to Entergy Louisiana, LLC, a limited liability company organized underthe laws of the State of Texas and, as of October 1, 2015, the successor by merger to the regulated utility operations of the Texaslimited liability companies Entergy Gulf States Louisiana, LLC (“EGSL”) and Entergy Louisiana, LLC (“Old Entergy Louisiana”),each formerly a public utility company providing services to customers in the State of Louisiana.As of February 21, 2020, we have three series of bonds outstanding that are registered under Section 12(b) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”):•our First Mortgage Bonds, 5.25% Series due July 1, 2052, issued in an aggregate principal amount of $200,000,000 under theSeventy-Fifth Supplemental Indenture, dated as of July 1, 2012, to our Mortgage and Deed of Trust dated as of April 1,1944, as it has heretofore been and may be amended or supplemented from time to time, with The Bank of New YorkMellon, as successor trustee, and traded on the New York Stock Exchange (the “NYSE”) under the ticker ELJ (the “2052Bonds”);•our First Mortgage Bonds, 4.70% Series due June 1, 2063, issued in an aggregate principal amount of $100,000,000 underthe Seventy-Seventh Supplemental Indenture, dated as of May 1, 2013, to our Mortgage and Deed of Trust dated as of April1, 1944, as it has heretofore been and may be amended or supplemented from time to time, with The Bank of New YorkMellon, as successor trustee, and traded on the NYSE under the ticker ELU (the “2063 Bonds,” and together with the 2052Bonds, the “FMBs”); and•our Collateral Trust Mortgage Bonds, 4.875% Series due September 1, 2066, issued in an aggregate principal amount of$270,000,000 with their terms established by Officer’s Certificate 6-B-5, dated August 10, 2016, pursuant to our Mortgageand Deed of Trust dated as of November 1, 2015, as it may be amended or supplemented from time to time, with The Bankof New York Mellon, as trustee, and traded on the NYSE under the ticker ELC (the “2066 Bonds”).The full aggregate principal amount of each series of FMBs and of the 2066 Bonds is currently outstanding.Description of the FMBsAll terms defined within this section “Description of the FMBs” are defined as such only for purposes of this section.We have issued, and may from time to time issue, bonds in one or more series under one or more separate supplementalindentures to the Mortgage and Deed of Trust dated as of April 1, 1944, with The Bank of New York Mellon, as successor trustee(the “trustee”). This Mortgage and Deed of Trust, as it has heretofore been and may be amended or supplemented from time to time,is referred to in this section as the “mortgage.” All first mortgage bonds issued or to be issued under the mortgage, including theFMBs, are referred to herein as “first mortgage bonds.” The mortgage, including the applicable supplemental indentures relating to the FMBs, contains the full legal texts of thematters described herein. Because this is a summary, it does not describe every aspect of the mortgage, the supplemental indenturesrelating to each series of FMBs, or the outstanding first mortgage bonds, including the FMBs. The mortgage and the supplementalindentures that relate to the outstanding first mortgage bonds, including the FMBs, are filed as exhibits to the Annual Report onForm 10-K to which this is filed as an exhibit. You should read the mortgage for provisions that may be important to you. Thissummary is subject to and qualified in its entirety by reference to all the provisions of the mortgage, including the definitions ofsome of the terms used in the mortgage, and to the particular terms of the supplemental indenture that relates to each series of FMBs.The mortgage has been qualified under the Trust Indenture Act of 1939, and you should also refer to the Trust Indenture Act of 1939for provisions that apply to the FMBs.GeneralThe mortgage permits us to issue first mortgage bonds from time to time subject to the limitations described under “-Issuanceof Additional First Mortgage Bonds.” All first mortgage bonds of any one series need not be issued at the same time, and a seriesmay be reopened for issuances of additional first mortgage bonds of that series. This means that we may from time to time, withoutthe consent of the existing holders of the first mortgage bonds of any series, including the FMBs, create and issue additional firstmortgage bonds of a series having the same terms and conditions as the previously issued first mortgage bonds of that series in allrespects, except for issue date, issue price and, if applicable, the initial interest payment on those additional first mortgage bonds.Additional first mortgage bonds issued in this manner will be consolidated with and will form a single series with the previouslyissued first mortgage bonds of that series. For more information, see the discussion below under “-Issuance of Additional FirstMortgage Bonds.”PaymentThe principal amount of the FMBs and interest thereon is and will be paid in any coin or currency of the United States ofAmerica that at the time of payment is legal tender at the corporate trust office of the trustee in the Borough of Manhattan, City andState of New York.Interest on the 2052 Bonds accrues at the rate of 5.25% per year. Interest on the 2063 Bonds accrues at the rate of 4.70% peryear. In both cases, interest started to accrue from the date that the respective series of FMBs was issued. Interest payments on the2052 Bonds are made on January 1, April 1, July 1 and October 1 of each year. Interest payments on the 2063 Bonds are made onMarch 1, June 1, September 1 and December 1 of each year. As long as the FMBs are registered in the name of The DepositoryTrust Company (“DTC”) or its nominee, the record date for interest payable on any interest payment date shall be the close ofbusiness on the Business Day (defined as any day other than a Saturday or a Sunday or a day on which banking institutions in TheCity of New York are authorized or required by law or executive order to remain closed or a day on which the corporate trust officeof the trustee is closed for business) immediately preceding such interest payment date. We have agreed to pay interest on anyoverdue principal and, if such payment is enforceable under applicable law, on any overdue installment of interest on the FMBs at arate of 6% per year to holders of record at the close of business on the Business Day immediately preceding our payment of suchinterest.Interest on the FMBs is computed on the basis of a 360-day year of twelve 30-day months. If any interest payment date orthe maturity date of a FMB falls on a day that is not a Business Day, the payment due on that interest payment date or the maturitydate will be made on the next Business Day, and without any interest or other payment in respect of such delay. As long as the FMBs are registered in the name of DTC or its nominee, we will pay principal and interest due on the FMBsto DTC. DTC will then make payment to its participants for disbursement to the beneficial owners of the FMBs as described underthe heading “-Book-Entry Only Securities.”Redemption and RetirementGeneralWe may redeem the FMBs prior to maturity, in whole or in part, at our option, on not less than 30 days’ nor more than 60days’ notice, at any time, at a redemption price equal to 100% of the principal amount of the FMBs being redeemed plus anyaccrued and unpaid interest thereon to, but not including, the redemption date. Unless the FMBs are held in book-entry only formthrough the facilities of DTC, in which case DTC’s procedures for selection shall apply (see “-Book-Entry Only Securities”), if lessthan all of the FMBs of either series are to be redeemed, the trustee will select the FMBs to be redeemed.Unless we default in the payment of the redemption price and accrued interest, if any, in the case of an unconditional noticeof redemption, the FMBs subject to such notice of redemption will cease to bear interest on the redemption date. We will pay theredemption price and any accrued interest to the redemption date upon surrender of any FMBs for redemption. If only part of anFMB is redeemed, the trustee will deliver to the holder of the FMB a new FMB of the same series for the remaining portion withoutcharge.We may make any redemption at our option conditional upon the receipt by the trustee, prior to the date fixed forredemption, of money sufficient to pay the redemption price and accrued interest, if any. If the trustee has not received the moneyby the date fixed for redemption, we will not be required to redeem the FMBs.Special Retirement ProvisionsIf, during any 12-month period, we dispose of mortgaged property (as defined under “-Security”, below) by order of or toany governmental authority, resulting in the receipt of $5,000,000 or more as proceeds, we, subject to certain conditions, must applysuch proceeds, less certain deductions, to the retirement of outstanding first mortgage bonds. If this occurs, we may redeem theoutstanding first mortgage bonds of any series that are redeemable before maturity by the application of cash deposited for thispurpose at the redemption prices applicable to those first mortgage bonds.Form and ExchangeThe FMBs are fully-registered first mortgage bonds without coupons, issued in denominations of $25 and integral multiplesof $25 in excess thereof. Each series of the FMBs is represented by a global certificate without coupons registered in the name of anominee of DTC.The FMBs are exchangeable for other FMBs of the same series in equal aggregate principal amounts. No service charge willbe made for any registration of transfer or exchange of the FMBs. However, we may require payment to cover any tax or othergovernmental charge that may be imposed in connection with a registration of transfer or exchange. We will not be required toprovide for the transfer or exchange of any FMB:1.during the 10 days before an interest payment date,2.during the 10 days before any designation of such FMB to be redeemed, or3.selected for redemption. SecurityThe FMBs, together with all other first mortgage bonds now or in the future outstanding under the mortgage, are and will besecured, equally and ratably, by the lien of the mortgage, which constitutes a first mortgage lien on substantially all of our propertythat was owned by Old Entergy Louisiana just before the effectiveness of the business combination of Old Entergy Louisiana andEGSL on October 1, 2015, together with replacements, additions and extensions of or to such property that we acquire on or afterOctober 1, 2015 (the “mortgaged property”), which lien is subject to bankruptcy law and to:1.leases of minor portions of our mortgaged property to others for uses which do not interfere with our business;2.leases of certain of our mortgaged property not used in our business; and3.excepted encumbrances.There is excepted from the lien certain of our property, including:1.cash and securities;2.certain equipment, materials and supplies;3.automobiles and other vehicles and aircraft, timber, minerals, mineral rights and royalties; and4.receivables, contracts, leases and operating agreements.The FMBs are not secured by (1) the property and franchises that were owned by EGSL just before the effectiveness of thebusiness combination on October 1, 2015, or (2) any property acquired by us on or after October 1, 2015, other than replacements,additions or extensions of or to the mortgaged property that was owned by Old Entergy Louisiana just before the effectiveness of thebusiness combination on October 1, 2015.On September 30, 2015, the day before the effectiveness of the business combination of Old Entergy Louisiana and EGSL,the mortgaged property owned by Old Entergy Louisiana was primarily its utility plant, which had a net book value ofapproximately $6.5 billion shown on its balance sheet as of September 30, 2015.We have other secured debt outstanding, and may issue additional secured debt, that is secured by the first lien of ourIndenture of Mortgage dated September 1, 1926 (as restated, amended and supplemented, the “EGSL Mortgage”) on substantiallyall of the property and franchises that were owned by EGSL just before the effectiveness of the business combination on October 1,2015, together with certain substitutions, replacements, additions, betterments, developments, extensions or enlargements of or tosuch property acquired by us on or after October 1, 2015. We also plan to issue other secured debt in the form of collateral trustmortgage bonds under our Mortgage and Deed of Trust dated as of November 1, 2015, as amended and supplemented, that may besecured (1) by first mortgage bonds issued under the mortgage or bonds issued under the EGSL Mortgage as the basis for theissuance of such collateral trust mortgage bonds, or (2) by a first lien on any of our property not subject to the lien of the mortgage orthe EGSL Mortgage subject to liens permitted by such mortgage, and (3) by a second lien on substantially all of the mortgagedproperty and the property subject to the EGSL Mortgage subject to liens permitted by such mortgage.The mortgage contains provisions that impose the lien of the mortgage on certain property that we acquire on or afterOctober 1, 2015, specifically the property that we acquired from Old Entergy Louisiana on October 1, 2015, together withreplacements, additions or extensions of or to such property, in each case, other than excepted property and property that we releasefrom the lien of the mortgage. If we consolidate or merge with, or convey or transfer all or substantially all of our mortgaged property to a successor, the lien createdby the mortgage will generally not cover the property of the successor, other than the mortgaged property it acquires from us andreplacements, additions or extensions of or to such property.The mortgage also provides that the trustee has a lien on the mortgaged property to ensure the payment of its reasonablecompensation, expenses and disbursements and for indemnity against certain liabilities. This lien takes priority over the lien securingthe first mortgage bonds, including the FMBs.The mortgage also contains restrictions on the issuance of debt secured by a prior lien on the mortgaged property (“qualifiedlien bonds”).We have reserved the right to amend the mortgage without the consent or other action by the holders of any first mortgagebonds created on or after June 30, 2014, to revise the definition of “excepted encumbrances” to mean the following:•tax liens, assessments and other governmental charges or requirements which are not delinquent or which are beingcontested in good faith and by appropriate proceedings or of which at least ten business days’ notice has not been given toour general counsel or to such other person designated by us to receive such notices;•mechanics’, workmen’s, repairmen’s, materialmen’s, warehousemen’s and carriers’ liens, other liens incident toconstruction, liens or privileges of any of our employees for salary or wages earned, but not yet payable, and other liens,including without limitation liens for worker’s compensation awards, arising in the ordinary course of business for chargesor requirements which are not delinquent or which are being contested in good faith and by appropriate proceedings or ofwhich at least ten business days’ notice has not been given to our general counsel or to such other person designated by us toreceive such notice;•specified judgment liens and prepaid liens;•easements, leases, reservations or other rights of others (including governmental entities) in, and defects of title in, ourproperty;•liens securing indebtedness or other obligations relating to real property we acquired for specified transmission, distributionor communication purposes or for the purpose of obtaining rights-of-way;•specified leases and leasehold, license, franchise and permit interests;•liens resulting from laws, rules, regulations, orders or rights of governmental authorities and specified liens required by lawor governmental regulations;•liens to secure public obligations; rights of others to take minerals, timber, electric energy or capacity, gas, water, steam orother products produced by us or by others on our property;•rights and interests of persons other than us arising out of agreements relating to the common ownership or joint use ofproperty, and liens on the interests of those persons in the property;•restrictions on assignment and/or requirements of any assignee to qualify as a permitted assignee and/or public utility orpublic services corporation; and•liens which have been bonded for the full amount in dispute or for the payment of which other adequate securityarrangements have been made.Issuance of Additional First Mortgage BondsThe maximum principal amount of first mortgage bonds that may be issued under the mortgage is limited to $100 billion atany time outstanding under the mortgage, subject to property additions and other limitations of the mortgage. First mortgage bonds of any series may be issued from time to time on the basis of:1.80% of the cost or fair value, whichever is less, of unfunded property additions after adjustments to offset retirements;2.retirements of first mortgage bonds or qualified lien bonds; or3.deposit of cash with the trustee.Property additions generally include, among other things, electric, gas, steam or hot water property acquired after December31, 1943. Securities, automobiles or other vehicles or aircraft, or property used principally for the production or gathering of naturalgas, are not included as property additions.We have right to amend the mortgage at any time without any consent or other action by holders of any first mortgage bonds,including the FMBs, to include nuclear fuel, and similar or analogous devices or substances, as property additions. We also have theright to amend the mortgage at any time without any consent or other action of the holders of any first mortgage bonds, including theFMBs, to make any form of space satellites including solar power satellites, space stations and other analogous facilities available asproperty additions.No first mortgage bonds may be issued on the basis of property additions subject to qualified liens if the qualified lien bondssecured thereby exceed 50% of such property additions, or if the qualified lien bonds and first mortgage bonds then outstandingwhich have been issued against property additions subject to continuing qualified liens and certain other items would in theaggregate exceed 15% of the first mortgage bonds and qualified lien bonds outstanding.As of December 31, 2019, we had approximately $4,649 million principal amount of first mortgage bonds outstanding underthe mortgage. Also as of December 31, 2019, we could have issued approximately $1,674 million principal amount of additionalfirst mortgage bonds on the basis of retired first mortgage bonds, and we had approximately $720 million of unfunded propertyadditions, entitling us to issue approximately $576 million principal amount of first mortgage bonds on the basis of unfundedproperty additions. The FMBs were issued on the basis of retired bond credits.Other than the security afforded by the lien of the mortgage and restrictions on the issuance of additional first mortgagebonds described above, there are no provisions of the mortgage that grant the holders of the first mortgage bonds protection in theevent of a highly leveraged transaction involving us.Release and Substitution of PropertyWe may release property from the lien of the mortgage on the basis of:1.the deposit of cash or purchase money mortgages;2.property additions, after adjustments in certain cases to offset retirements and after making adjustments for qualified lienbonds, if any, outstanding against property additions; and3.(i) the aggregate principal amount of first mortgage bonds that we would be entitled to issue on the basis of retired qualifiedlien bonds; or (ii) 10/6ths of the aggregate principal amount of first mortgage bonds that we would be entitled to issue on thebasis of retired first mortgage bonds that were issued prior to June 9, 2010; or (iii) 10/8ths of the aggregate principal amountof first mortgage bonds that we would be entitled to issue on the basis of retired first mortgage bonds that were issued afterJune 9, 2010; in each case with the entitlement being waived by operation of the release. We can withdraw cash upon the bases stated in clauses (2) and/or (3) above.If unfunded property is released, the property additions used to effect the release may become available again as creditsunder the mortgage and the waiver of the right to issue first mortgage bonds on the basis of retired first mortgage bonds to effect therelease may cease to be effective as such a waiver. Similar provisions are in effect as to cash proceeds of such property. Themortgage also contains special provisions with respect to qualified lien bonds pledged and the disposition of moneys received onpledged prior lien bonds.We may also release unfunded property if after such release at least one dollar in unfunded property remains subject to thelien of the mortgage.We have reserved the right to amend the mortgage without any consent or other action by any holders of first mortgagebonds created on or after June 30, 2014, to allow us, without any release or consent by the trustee, to•grant, free from the lien of the mortgage, easements, ground leases or rights-of-way in, upon, over and/or across themortgaged property for the purpose of roads, pipe lines, transmission lines, distribution lines, communication lines andsimilar purposes, or for the joint or common use of real property, rights-of-way, facilities and/or equipment, but only if suchgrant shall not materially impair the use of the property or rights-of-way for the purposes for which such property or rights-of-way are held by us, and•cancel or make changes or alterations in or substitutions for any and all easements, servitudes, rights-of-way and similarrights and/or interests.ModificationModification Without ConsentWithout the consent of any holder of first mortgage bonds, we and the trustee may enter into one or more supplementalindentures for any of the following purposes:•to evidence the assumption by any permitted successor of our covenants in the mortgage and in the first mortgage bonds;•to add one or more covenants or other provisions for the benefit of the holders of all or any series of first mortgage bonds, orto surrender any right or power conferred upon us;•to add additional events of default under the mortgage for all or any series of first mortgage bonds;•to correct or amplify the description of the mortgaged property or to subject additional property to the lien of the mortgage;•to change, eliminate or add any provision to the mortgage; provided that no such change, elimination or addition willadversely affect the interests of the holders of first mortgage bonds of any series in any material respect;•to establish the form or terms of first mortgage bonds of any other series as permitted by the mortgage;•to provide for the procedures required for use of a non-certificated system of registration for the first mortgage bonds of allor any series; •to change any place where principal, premium, if any, and interest shall be payable, first mortgage bonds may be surrenderedfor registration of transfer or exchange, and notices and demands to us may be served; or•to cure any ambiguity or inconsistency or to make any other changes or additions to the provisions of the mortgage if suchchanges or additions will not adversely affect the interests of first mortgage bonds of any series in any material respect.Modification Requiring ConsentExcept as provided below, the consent of the holders of a majority in aggregate principal amount of then outstanding firstmortgage bonds, considered as one class, is required for all other amendments or modifications to the mortgage. However, if lessthan all of the series of first mortgage bonds outstanding are directly affected by a proposed amendment or modification, then theconsent of the holders of only a majority in aggregate principal amount of the outstanding first mortgage bonds of all series that aredirectly affected, considered as one class, will be required. Notwithstanding the foregoing, no amendment or modification may bemade without the consent of the holder of each directly affected first mortgage bond then outstanding to:•extend the maturity of the principal of, or interest on, any first mortgage bond, or reduce the principal amount of any firstmortgage bond or its rate of interest or modify the terms of payment of such principal or interest;•create any lien ranking prior to or on a parity with the lien of the mortgage with respect to the mortgaged property, or depriveany non-assenting holder of a first mortgage bond of a lien on the mortgaged property for the security of such holder’s firstmortgage bonds (subject only to excepted encumbrances); or•reduce the percentage in principal amount of the outstanding first mortgage bonds of any series the consent of the holders ofwhich is required for any amendment or modification.The mortgage provides that first mortgage bonds owned by us, for our benefit or by any entity of which we own 25% ormore of the outstanding voting stock shall not be deemed outstanding for the purpose of certain votes, consents or quorums;provided that first mortgage bonds that have been pledged in good faith may be regarded as outstanding if the pledgee establishes tothe satisfaction of the trustee its right to vote or give consents with respect to such first mortgage bonds and such pledgee is not us oran entity of which we own 25% or more of the outstanding voting stock.Any request, consent or vote of the owner of any first mortgage bond will bind every future holder and owner of that firstmortgage bond and the holder and owner of every first mortgage bond issued upon the registration of transfer of or in exchange forthat first mortgage bond.DefaultsDefaults under the mortgage include:1.failure to pay the principal of any first mortgage bond when due and payable;2.failure to pay interest on any first mortgage bond or any installments of any fund required to be applied to the purchase orredemption of any first mortgage bond for a period of 60 days after the same shall have become due and payable;3.failure to pay interest upon or principal of any qualified lien bonds beyond any applicable grace period;4.certain events of bankruptcy, insolvency or reorganization; and 5.the expiration of 90 days after the mailing by the trustee to us of a written demand, or by holders of 15% in principal amountof the first mortgage bonds at the time outstanding under the mortgage to us and to the trustee of a written demand, that weperform a specified covenant or agreement contained in the mortgage, which specified covenant or agreement we have failedto perform prior to such mailing, unless during such period we shall have performed such specified covenant or agreement.The trustee may, and, if requested to do so in writing by the holders of a majority in principal amount of the first mortgagebonds then outstanding, shall, make such demand.The trustee may withhold notice of default, except in payment of principal, interest or funds for purchase or redemption offirst mortgage bonds, if it in good faith determines it is in the interests of the holders of the first mortgage bonds.RemediesAcceleration of MaturityIf a default under the mortgage occurs, then the trustee, by written notice to us, or the holders of at least 25% in aggregateprincipal amount of the outstanding first mortgage bonds, by written notice to the trustee and us, may declare the principal amountof all of the first mortgage bonds to be due and payable immediately, and upon the giving of such notice, such principal amount andaccrued and unpaid interest will become immediately due and payable.There is no automatic acceleration, even in the event of our bankruptcy, insolvency or reorganization.Annulment of AccelerationAt any time after such a declaration of acceleration has been made but before any sale of the mortgaged property, the holdersof a majority in principal amount of all outstanding first mortgage bonds may annul such declaration of acceleration, upon writtennotice to the trustee and us, if the default under the mortgage giving rise to such declaration of acceleration has been cured, and wehave paid or deposited with the trustee a sum sufficient to pay:(1)all overdue interest on all outstanding first mortgage bonds;(2)the principal of and premium, if any, on the outstanding first mortgage bonds that have become due otherwise than by suchdeclaration of acceleration and overdue interest thereon;(3)interest on overdue interest, if any, to the extent lawful, at the rate of 6% per year; and(4)all amounts due to the trustee under the mortgage.Trustee PowersSubject to the mortgage, under specified circumstances and to the extent permitted by law, if a default under the mortgageoccurs, the trustee shall be entitled to the appointment of a receiver for the mortgaged property and is entitled to all other remediesavailable under applicable law.Control by HoldersThe holders of a majority in principal amount of the first mortgage bonds may direct the time, method and place ofconducting any proceedings for any remedy available to the trustee or exercising any trust or power conferred on the trustee. Thetrustee is not obligated to comply with directions that conflict with law or other provisions of the mortgage or that the trusteedetermines in good faith would involve the trustee in personal liability, would be unjustifiably prejudicial to non-assenting holders or would be in circumstances whereindemnity would not be sufficient.Limitation on Holders’ Right to Institute ProceedingsNo holder of first mortgage bonds will have any right to institute any proceeding under the mortgage, or any remedy underthe mortgage, unless:•the holder has previously given to the trustee written notice of a default under the mortgage;•the holders of 25% in aggregate principal amount of the outstanding first mortgage bonds of all series have made a writtenrequest to the trustee and have offered the trustee reasonable opportunity and indemnity satisfactory to the trustee to instituteproceedings; and•the trustee has failed to institute any proceeding for 60 days after notice;provided that no holder or holders of first mortgage bonds shall have any right in any manner to affect or prejudice the lien of themortgage or to obtain priority over other holders of outstanding first mortgage bonds. However, these limitations do not apply to theabsolute and unconditional right of a holder of a first mortgage bond to institute suit for payment of the principal, premium, if any,or interest on the first mortgage bond on or after the applicable due date.Evidence to be Furnished to the TrusteeCompliance with the mortgage provisions is evidenced by written statements of our officers or persons we select or pay. Incertain cases, opinions of counsel and certifications of an engineer, accountant, appraiser or other expert (who in some cases must beindependent) must be furnished. We must give the trustee an annual certificate as to whether or not we have fulfilled our obligationsunder the mortgage throughout the preceding year.Satisfaction and Discharge of MortgageThe mortgage may be satisfied and discharged if and when we provide for the payment of all the first mortgage bonds andall other sums due under the mortgage.Consolidation, Merger and Conveyance of AssetsThe mortgage provides that we may consolidate with or merge into any other entity or convey, transfer or lease as, orsubstantially as, an entirety to any entity the mortgaged property, if:•(a) the surviving or successor entity to such merger or consolidation has authority to carry on the electric, gas, steam or hotwater business, or (b) the successor entity that acquires by conveyance or transfer or that leases our mortgaged property as, orsubstantially as, an entirety, is authorized to acquire, lease or operate the mortgaged property so conveyed or transferred;•such merger, consolidation, conveyance, transfer or lease is upon such terms as to preserve, and in no respect impair, the lienand security of the mortgage and the rights and powers of the trustee and the holders of first mortgage bonds;•the survivor or successor entity expressly assumes by supplemental indenture our obligations on all first mortgage bonds thenoutstanding and under the mortgage; and•in the case of a lease, such lease is made expressly subject to termination by us or by the trustee and by the purchaser of theproperty so leased at any sale thereof at any time during the continuance of a default under the mortgage. In the case of the conveyance or other transfer of the mortgaged property as, or substantially as, an entirety to another entity,upon the satisfaction of all the conditions described above, we would be released and discharged from all our obligations andcovenants under the mortgage and on the first mortgage bonds then outstanding unless we elect to waive such release and discharge.The mortgage does not prevent or restrict any conveyance or other transfer, or lease, of any part of the mortgaged propertythat does not constitute the entirety, or substantially the entirety, of the mortgaged property.Although the successor entity may, in its sole discretion, subject to the lien of the mortgage property then owned or thereafteracquired by the successor entity, the lien of the mortgage generally will not cover the property of the successor entity other than themortgaged property it acquires from us and improvements, extensions and additions to such property and renewals, replacementsand substitutions thereof, within the meaning of the mortgage.The terms of the mortgage do not restrict mergers in which we are the surviving entity.The mortgage provides that a statutory merger in which our assets and liabilities may be allocated among one or moreentities shall not be considered to be a merger, consolidation or conveyance of mortgaged property subject to the provisions of themortgage relating to a merger, consolidation or conveyance of all or substantially all of the mortgaged property unless all orsubstantially all of the mortgaged property is allocated to one or more other entities.Information about the TrusteeThe trustee is The Bank of New York Mellon. In addition to acting as the trustee, The Bank of New York Mellon also acts,and may act, as trustee under various other of our and our affiliates’ indentures, trusts and guarantees. We and our affiliates maintaindeposit accounts and credit and liquidity facilities and conduct other banking transactions with the trustee and its affiliates in theordinary course of our respective businesses.Book-Entry Only SecuritiesThe FMBs trade through DTC. Each series of FMBs is represented by a separate global certificate and registered in the nameof Cede & Co., DTC’s nominee. The global certificates were deposited with the trustee as custodian for DTC. Ownership ofbeneficial interests in the global certificates is limited to institutions that have accounts with DTC or its participants or persons thatmay hold interests through participants.DTC is a New York clearing corporation and a clearing agency registered under Section 17A of the Exchange Act. DTCholds securities for its participants. DTC also facilitates the post-trade settlement of securities transactions among its participantsthrough electronic computerized book‑entry transfers and pledges in the participants’ accounts. This eliminates the need for physicalmovement of securities certificates. The participants include securities brokers and dealers, banks, trust companies, clearingcorporations and certain other organizations. DTC is a wholly‑owned subsidiary of The Depository Trust & Clearing Corporation(“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income ClearingCorporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Others whomaintain a custodial relationship with a participant can use the DTC system. The rules that apply to DTC and those using its systemsare on file with the SEC. Purchases of the FMBs within the DTC system must be made through participants, who will receive a credit for the FMBson DTC’s records. The beneficial ownership interest of each purchaser will be recorded on the appropriate participant’s records.Beneficial owners do not receive written confirmation from DTC of their purchases, but beneficial owners should receive writtenconfirmations of the transactions, as well as periodic statements of their holdings, from the participants through whom theypurchased FMBs. Transfers of ownership in the FMBs are to be accomplished by entries made on the books of the participantsacting on behalf of beneficial owners. Beneficial owners will not receive certificates for their FMBs of a given series, except if useof the book‑entry system for the FMBs of that series is discontinued.To facilitate subsequent transfers, all FMBs deposited by participants with DTC are registered in the name of DTC’snominee, Cede & Co. The deposit of the FMBs with DTC and their registration in the name of Cede & Co. effects no change inbeneficial ownership. DTC has no knowledge of the actual beneficial owners of the FMBs. DTC’s records reflect only the identityof the participants to whose accounts such FMBs are credited. These participants may or may not be the beneficial owners.Participants are responsible for keeping account of their holdings on behalf of their customers.Conveyance of notices and other communications by DTC to participants, and by participants to beneficial owners, aregoverned by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.Beneficial owners of FMBs may wish to take certain steps to augment transmission to them of notices of significant events withrespect to the FMBs, such as redemptions, tenders, defaults and proposed amendments to the mortgage. Beneficial owners of theFMBs may wish to ascertain that the nominee holding the FMBs has agreed to obtain and transmit notices to the beneficial owners.Redemption notices will be sent to Cede & Co., as registered holder of the FMBs. If less than all of the FMBs of a series arebeing redeemed, DTC’s practice is to determine by lot the amount of FMBs of such series held by each participant to be redeemed.Neither DTC nor Cede & Co. will itself consent or vote with respect to FMBs, unless authorized by a participant inaccordance with DTC’s procedures. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible afterthe record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those participants to whose accountsthe FMBs are credited on the record date. We believe that these arrangements will enable the beneficial owners to exercise rightsequivalent in substance to the rights that can be directly exercised by a registered holder of the FMBs.Payments of redemption proceeds, principal of, and interest on the FMBs are and will be made to Cede & Co., or such othernominee as may be requested by DTC. DTC’s practice is to credit participants’ accounts upon DTC’s receipt of funds andcorresponding detail information from us or our agent, on the payable date in accordance with their respective holdings shown onDTC’s records. Payments by participants to beneficial owners are and will be governed by standing instructions and customarypractices. Payments are the responsibility of participants and not of DTC, the trustee, or us, subject to any statutory or regulatoryrequirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest to Cede & Co. (or suchother nominee as may be requested by DTC) is our responsibility. Disbursement of payments to participants is the responsibility ofDTC, and disbursement of payments to the beneficial owners is the responsibility of participants.Other than in the circumstances described herein, a beneficial owner will not be entitled to receive physical delivery of theFMBs. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the FMBs. DTC may discontinue providing its services as securities depositary with respect to the FMBs at any time by giving usreasonable notice. In the event no successor securities depositary is obtained, certificates for the FMBs will be printed and delivered.We may decide to replace DTC or any successor depositary. Additionally, subject to the procedures of DTC, we may decide todiscontinue use of the system of book‑entry transfers through DTC (or a successor depositary) with respect to some or all of theFMBs. In that event or if an event of default with respect to a series of FMBs has occurred and is continuing, certificates for theFMBs of such series will be printed and delivered. If certificates for such series of FMBs are printed and delivered,•those FMBs will be issued in fully registered form without coupons;•a holder of certificated FMBs would be able to exchange those FMBs, without charge, for an equal aggregate principalamount of FMBs of the same series, having the same issue date and with identical terms and provisions; and•a holder of certificated FMBs would be able to transfer those FMBs without cost to another holder, other than for applicablestamp taxes or other governmental charges.The information in this section concerning DTC and DTC’s book‑entry system has been obtained from sources that webelieve to be reliable, but we do not take any responsibility for the accuracy of this information.Description of the 2066 BondsAll terms defined within this section “Description of the 2066 Bonds” are defined as such only for purposes of this section.We have issued, and may from time to time issue, bonds in one or more series, under a Mortgage and Deed of Trust dated asof November 1, 2015, as it may be amended or supplemented from time to time (the “Mortgage”), between us and The Bank of NewYork Mellon, as trustee (the “Trustee”). All bonds issued or to be issued under the Mortgage, including the 2066 Bonds, are referredto herein as “Collateral Trust Mortgage Bonds.” As summarized below, the Collateral Trust Mortgage Bonds have and will have thebenefit of the lien of two mortgage indentures (the “Class A Mortgages”) to the extent of the aggregate principal amount of firstmortgage bonds (the “Class A Bonds”) issued under the Class A Mortgages held by the Trustee and the lien of the Mortgage on ourMortgaged Property (as described below).The Mortgage, including Officer’s Certificate 6-B-5, dated August 10, 2016, which established the terms of the 2066 Bonds(the “Officer’s Certificate”), and the Class A Mortgages contain the full legal texts of the matters described herein. Because this is asummary, it does not describe every aspect of the Mortgage, the Class A Mortgages, the supplemental indentures relating to the2066 Bonds and the related Class A Bonds, the Officer’s Certificate, the outstanding Collateral Trust Mortgage Bonds, includingthe 2066 Bonds, or the Class A Bonds, including those issued in connection with the 2066 Bonds. The Mortgage, the Officer’sCertificate, the Class A Mortgages, and the officer’s certificates and the supplemental indentures that relate to the outstandingCollateral Trust Mortgage Bonds and bonds under the Class A Mortgages, including the 2066 Bonds and the related Class A Bonds,are filed as exhibits to the Annual Report on Form 10-K to which this is filed as an exhibit. You should read these documents forprovisions that may be important to you. This summary is subject to and qualified in its entirety by reference to all the provisions ofthe Mortgage and the Class A Mortgages, including the definitions of some of the terms used in the Mortgage and the Class AMortgages, and to the particular terms of the Officer’s Certificate. We also include references in parentheses to some of the sectionsof the Mortgage. The Mortgage and the Class A Mortgages have been qualified under the Trust Indenture Act of 1939, and you should also refer to the Trust Indenture Act of 1939 for provisions that apply to the 2066 Bonds.GeneralThe Mortgage permits us to issue Collateral Trust Mortgage Bonds from time to time subject to the limitations describedunder “-Issuance of Additional Collateral Trust Mortgage Bonds.” All Collateral Trust Mortgage Bonds of any one series need notbe issued at the same time, and a series may be reopened for issuances of additional Collateral Trust Mortgage Bonds of that series.This means that we may from time to time, without the consent of the existing holders of the Collateral Trust Mortgage Bonds ofany series, including the 2066 Bonds, create and issue additional Collateral Trust Mortgage Bonds of a series having the same termsand conditions as the previously issued Collateral Trust Mortgage Bonds of that series in all respects, except for issue date, issueprice and, if applicable, the initial interest payment on those additional Collateral Trust Mortgage Bonds. Additional Collateral TrustMortgage Bonds issued in this manner will be consolidated with, and will form a single series with, the previously issued CollateralTrust Mortgage Bonds of that series. For more information, see the discussion below under “-Issuance of Additional Collateral TrustMortgage Bonds.”Other than the security afforded by the lien of the Mortgage and restrictions on the issuance of additional Collateral TrustMortgage Bonds described above, there are no provisions of the Mortgage that grant the holders of the Collateral Trust MortgageBonds protection in the event of a highly leveraged transaction involving us.RedemptionAt any time on or after September 1, 2021, we may redeem the 2066 Bonds prior to maturity, in whole or in part, at ouroption, on not less than 30 days’ nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the2066 Bonds being redeemed plus any accrued and unpaid interest thereon to, but not including, the redemption date. Unless the2066 Bonds are held in book-entry only form through the facilities of The Depository Trust Company (“DTC”), in which caseDTC’s procedures for selection shall apply (see “-Book-Entry Only Securities”), if less than all of the 2066 Bonds are to beredeemed, the Trustee will select the 2066 Bonds to be redeemed. (Mortgage, Section 503.)Unless we default in the payment of the redemption price and accrued interest, if any, in the case of an unconditional noticeof redemption, the 2066 Bonds subject to such notice of redemption will cease to bear interest on the redemption date. (Mortgage,Section 505.) We will pay the redemption price and any accrued interest to the redemption date upon surrender of any 2066 Bondfor redemption. (Mortgage, Section 505.) If only part of a 2066 Bond is redeemed, the Trustee will deliver to the holder of the 2066Bond a new 2066 Bond for the remaining portion at our expense. (Mortgage, Section 506.)We may make any redemption at our option conditional upon the receipt by the paying agent, on or prior to the date fixedfor such redemption, of money sufficient to pay the redemption price and accrued interest, if any. If the paying agent has notreceived the money by the date fixed for redemption, we will not be required to redeem the 2066 Bonds. (Mortgage, Section 504.)Payment and Paying AgentsInterest on the 2066 Bonds accrues at the rate of 4.875% per year. Interest started to accrue from the date that the 2066Bonds were issued. Interest payments on the 2066 Bonds are made on March 1, June 1, September 1 and December 1 of each year.As long as the 2066 Bonds are registered in the name of DTC or its nominee, the record date for interest payable on any interestpayment date shall be the close of business on the Business Day (defined as any day other than a Saturday or a Sunday or a day on which banking institutions in TheCity of New York are authorized or required by law or executive order to remain closed or a day on which the corporate trust officeof the Trustee is closed for business) immediately preceding such interest payment date. We have agreed to pay interest on anyoverdue principal and, if such payment is enforceable under applicable law, on any overdue installment of interest on the 2066Bonds at a rate of 4.875% per year, to holders of record at the close of business on the Business Day immediately preceding ourpayment of such interest.Interest on the 2066 Bonds is computed on the basis of a 360-day year of twelve 30-day months. If any interest payment dateor the maturity date of the 2066 Bonds falls on a day that is not a Business Day, the payment due on that interest payment date orthe maturity date will be made on the next Business Day and without any interest or other payment in respect of such delay.If there has been a default in the payment of interest on the 2066 Bonds, the defaulted interest may be paid to the holders asof the close of business on a date between 10 and 15 days before the date proposed by us for payment of the defaulted interest (andnot less than 10 days after the Trustee receives notice of our proposal) or in any other manner permitted by any securities exchangeon which the 2066 Bonds may be listed, if the Trustee finds it practicable. (Mortgage, Section 307.)The principal amount of the 2066 Bonds and interest thereon is and will be paid in any coin or currency of the United Statesof America that at the time of payment is legal tender at the corporate trust office of The Bank of New York Mellon in the Boroughof Manhattan, City and State of New York, as our paying agent. However, we may choose to make payment of interest by checkmailed to the address of the persons entitled to payment as they may appear or have appeared in the security register for the 2066Bonds. We may change the place of payment on the 2066 Bonds, appoint one or more additional paying agents (including us) andremove any paying agent, all at our discretion. (Mortgage, Section 702.)As long as the 2066 Bonds are registered in the name of DTC or its nominee, we will pay principal and interest due on the2066 Bonds to DTC. DTC will then make payment to its participants for disbursement to the beneficial owners of the 2066 Bonds asdescribed under the heading “-Book-Entry Only Securities.”Form and ExchangeThe 2066 Bonds are fully-registered bonds without coupons, issued in denominations of $25 and integral multiples of $25 inexcess thereof. The 2066 Bonds are represented by a global certificate without coupons registered in the name of a nominee of DTC.The transfer of 2066 Bonds may be registered, and 2066 Bonds may be exchanged for other 2066 Bonds of authorizeddenominations and with the same terms and principal amount, at the corporate trust office of the Trustee in The City of New York.(Mortgage, Section 305.) We may, upon prompt written notice to the Trustee and the holders of the 2066 Bonds, designate one ormore additional places, or change the place or places previously designated, for registration of transfer and exchange of the 2066Bonds. (Mortgage, Section 702.) No service charge will be made for any registration of transfer or exchange of the 2066 Bonds.However, we may require payment to cover any tax or other governmental charge that may be imposed in connection with aregistration of transfer or exchange of the 2066 Bonds. We will not be required to execute or to provide for the registration oftransfer or exchange of any 2066 Bond:•during the 15 days before an interest payment date; •during the 15 days before giving any notice of redemption; or•selected for redemption except the unredeemed portion of any 2066 Bond being redeemed in part.(Mortgage, Section 305.)SecurityThe Mortgage imposes a lien on all of our tangible electric and gas utility property located in Louisiana, whether real,personal or mixed, together with our franchises, permits and licenses that are transferable and necessary for the operation of suchproperty and our recorded easements and rights of way and our electric utility properties located in Union County, Arkansas andcertain related properties, in each case, other than Excepted Property (as defined below) and subject to Permitted Liens (as definedbelow). These properties are sometimes referred to as our “Mortgaged Property.”The 2066 Bonds, together with all other Collateral Trust Mortgage Bonds now or in the future outstanding under theMortgage, have and will have the equal and ratable benefit of: (1) the first mortgage lien of each Class A Mortgage on the part ofthe Mortgaged Property covered thereby, as described below, to the extent of the aggregate principal amount of Class A Bondsissued under such Class A Mortgage held by the Trustee, subject to liens permitted under such Class A Mortgage, and (2) the firstmortgage lien of the Mortgage on any of our Mortgaged Property that is not subject to the lien of any Class A Mortgage, subject toPermitted Liens. In addition, the 2066 Bonds, together with all other Collateral Trust Mortgage Bonds now or in the futureoutstanding under the Mortgage, have and will have the equal and ratable benefit of a second mortgage lien on all of our MortgagedProperty that is subject to the lien of a Class A Mortgage, subject to Permitted Liens. To the extent that any Class A Bonds do notbear interest, which is permissible under the Mortgage, holders of the Collateral Trust Mortgage Bonds do not have the benefit ofthe lien of the related Class A Mortgage in respect of an amount equal to the accrued interest, if any, on the related Collateral TrustMortgage Bonds (but would have the benefit of the first mortgage lien of the related Class A Mortgage in respect of an amountequal to the principal of the related Collateral Trust Mortgage Bonds and the benefit of the second mortgage lien of the Mortgage inrespect of an amount equal to the principal of, and any accrued interest or premium on, the related Collateral Trust MortgageBonds).Class A BondsClass A Bonds are first mortgage bonds issued and outstanding under either of our Class A Mortgages. We currently havetwo Class A Mortgages: our Indenture of Mortgage dated September 1, 1926 (as restated, amended and supplemented, the “EGSLMortgage”) and our Mortgage and Deed of Trust dated as of April 1, 1944 (as amended and supplemented, the “ELL Mortgage”).The Class A Bonds issued under the ELL Mortgage are and will be secured by a first mortgage lien (subject to liens permitted bythe ELL Mortgage) on substantially all of our Mortgaged Property that was owned by us just before the merger of Entergy GulfStates Power, LLC (“EGSP LLC”) into us on October 1, 2015, together with replacements, additions and extensions of or to suchproperty acquired by us. The Class A Bonds issued under the EGSL Mortgage are and will be secured by a first mortgage lien(subject to liens permitted by the EGSL Mortgage) on substantially all of our Mortgaged Property that was owned by EGSP LLCjust before its merger into us, together with substitutions, replacements, additions and extensions of or to such property acquired byus. Neither Class A Mortgage will cover additional property acquired by us after the date of the aforesaid merger except propertythat constitutes a replacement, addition or extension of the property covered by such Class A Mortgage. If we merge or consolidatewith an entity that has a first mortgage indenture on its property, we may designate that mortgage indenture as an additional Class AMortgage. If the Trustee holds all of the Class A Bonds outstanding under a particular Class A Mortgage, we may discharge that ClassA Mortgage, and the lien of the Mortgage will become a first mortgage lien on the Mortgaged Property that was subject to that ClassA Mortgage, subject only to Permitted Liens. As of December 31, 2019, we had approximately $4,649 million principal amount ofClass A Bonds outstanding under the ELL Mortgage and approximately $2,148 million principal amount of Class A Bondsoutstanding under the EGSL Mortgage.Permitted LiensThe lien of the Mortgage is subject to permitted liens described in the Mortgage (the “Permitted Liens”). These PermittedLiens include, among others,•liens existing at November 1, 2015 (the “Execution Date”), that have not been discharged, including the liens of the Class AMortgages;•as to property acquired by us after the Execution Date, liens existing or placed on such property at the time we acquire suchproperty, including the liens of any Class A Mortgages and any purchase money liens;•tax liens, assessments and other governmental charges or requirements which are not delinquent or which are beingcontested in good faith and by appropriate proceedings or of which at least ten business days’ notice has not been given toour general counsel or to such other person designated by us to receive such notices;•mechanics’, workmen’s, repairmen’s, materialmen’s, warehousemen’s and carriers’ liens, other liens incident toconstruction, liens or privileges of any of our employees for salary or wages earned, but not yet payable, and other liens,including liens for worker’s compensation awards, arising in the ordinary course of business for charges or requirementswhich are not delinquent or which are being contested in good faith and by appropriate proceedings or of which at least tenbusiness days’ notice has not been given to our general counsel or to such other person designated by us to receive suchnotices;•specified judgment liens and prepaid liens;•easements, leases, reservations or other rights of others (including governmental entities) in, and defects of title in, ourproperty;•liens securing indebtedness or other obligations relating to real property we acquired for specified transmission, distributionor communication purposes or for the purpose of obtaining rights-of-way;•specified leases and leasehold, license, franchise and permit interests;•liens resulting from laws, rules, regulations, orders or rights of Governmental Authorities and specified liens required by lawor governmental regulations;•liens to secure public or statutory obligations;•rights of others to take minerals, timber, electric energy or capacity, gas, water, steam or other products produced by us or byothers on our property;•rights and interests of persons other than us arising out of agreements relating to the common ownership or joint use ofproperty, and liens on the interests of those persons in the property;•restrictions on assignment and/or requirements of any assignee to qualify as a permitted assignee and/or public utility orpublic services corporation; and•liens which have been bonded for the full amount in dispute or for the payment of which other adequate securityarrangements have been made.(Mortgage, Granting Clauses and Section 101.)The Mortgage provides that the Trustee has a lien, prior to the lien on the Mortgaged Property securing the 2066 Bonds, forthe payment of its reasonable compensation and expenses and for indemnity against specified liabilities. (Mortgage, Section 1007.) This lien would be a Permitted Lien under the Mortgage.The first mortgage liens of the Class A Mortgages are subject to similar, although not identical, permitted liens.Excepted PropertyThe lien of the Mortgage does not cover, among other things, the following types of property:•all cash, deposit accounts, securities and all policies of insurance on the lives of our officers not paid or delivered to ordeposited with or held by the Trustee or required so to be;•all contracts, leases, operating agreements and other agreements of all kinds and rights thereunder (other than our franchises,permits and licenses that are transferable and necessary for the operation of the Mortgaged Property), bills, notes and otherinstruments, revenues, income and earnings, all accounts, accounts receivable, rights to payment, payment intangibles andunbilled revenues, rights created by statute or governmental action to bill and collect revenues or other amounts fromcustomers or others, credits, claims, demands and judgments;•all governmental and other licenses, permits, franchises, consents and allowances (other than our franchises, permits andlicenses that are transferable and necessary for the operation of Mortgaged Property);•all unrecorded easements and rights of way;•all intellectual property rights and other general intangibles;•all vehicles, movable equipment, aircraft and vessels and all parts, accessories and supplies used in connection with any ofthe foregoing;•all personal property of such character that the perfection of a security interest therein or other lien thereon is not governedby the Uniform Commercial Code in effect where we are organized;•all merchandise and appliances acquired for the purpose of resale in the ordinary course and conduct of our business, anynuclear fuel and all fuel, materials and supplies held for consumption in use or operation of any of our properties or held inadvance of use thereof for fixed capital purposes;•all electric energy and capacity, gas, steam and other materials and products generated, manufactured, produced or purchasedby us for sale, distribution or use in the ordinary course and conduct of our business;•all property that is the subject of a lease agreement designating us as lessee, and all our right, title and interest in and to theproperty and in, to and under the lease agreement, whether or not the lease agreement is intended as security; and the last dayof the term of any lease or leasehold which may become subject to the lien of the Mortgage;•all property, real, personal and mixed, that has been released from the lien of any Class A Mortgage, whether before or afterthe Execution Date, and any improvements, extensions and additions to such property and renewals, replacements,substitutions of or for any parts thereof;•all timber, minerals, mineral rights and royalties;•all natural gas wells, natural gas leases, natural gas lines or other property used in the production of natural gas or in thetransmission of natural gas up to the point of connection with any gas distribution system owned by us (other than anytransmission system or systems used for the transmission of natural gas between any gas distribution systems owned by us);and•all property, real, personal and mixed, that, after the Execution Date, has been released from the lien of the Mortgage, andany improvements, extensions and additions to such property and renewals, replacements, substitutions of or for any partsthereof. We sometimes refer to property of ours not covered by the lien of the Mortgage as “Excepted Property.” (Mortgage,Granting Clauses.)The Class A Mortgages have similar, although not identical, exceptions to the property subject thereto.Funded PropertyThe Mortgaged Property that is owned by us at any particular time is sometimes referred to as “Property Additions.”Property Additions will be or become Funded Property:•when designated by us to be funded in connection with the discharge of a Class A Mortgage; or•when used under the Mortgage for the issuance of Collateral Trust Mortgage Bonds, the release or retirement of FundedProperty, or the withdrawal of funded cash deposited with the Trustee.(Mortgage, Section 102.)Issuance of Additional BondsIssuance of Additional Collateral Trust Mortgage BondsCollateral Trust Mortgage Bonds of any series may be issued from time to time, subject to the limitation that the aggregateprincipal amount of Collateral Trust Mortgage Bonds issued under the Mortgage at any one time outstanding shall not exceed $200billion, on the basis of:•the aggregate principal amount of Class A Bonds (which need not bear interest) issued to the Trustee;•70% of the cost or fair value to us (whichever is less) of Property Additions that do not constitute Funded Property afterspecified deductions and additions, primarily including adjustments to offset property retirements;•the aggregate principal amount of Retired Securities, as defined below; or•an amount of cash deposited with the Trustee.(Mortgage, Sections 102, 1601, 1602, 1603, 1604 and 1605.)“Retired Securities” means any Collateral Trust Mortgage Bonds authenticated and delivered under the Mortgage which:•no longer remain outstanding;•have not been made the basis of the authentication and delivery of Collateral Trust Mortgage Bonds, the release ofMortgaged Property or the withdrawal of funded cash; and•have not been paid, redeemed, purchased or otherwise retired by the application thereto of funded cash.(Mortgage, Section 101.)Issuance of Additional Class A BondsThe maximum principal amount of bonds that may be issued under the ELL Mortgage is limited to $100 billion at any timeoutstanding under the ELL Mortgage, subject to property additions and other limitations of the ELL Mortgage. Class A Bonds maybe issued from time to time under the ELL Mortgage on the basis of: •80% of the cost or fair value, whichever is less, of unfunded property additions after adjustments to offset retirements;•retirements of bonds issued under the ELL Mortgage or qualified lien bonds; or•deposit of cash with the trustee under the ELL Mortgage.Property additions under the ELL Mortgage generally include the Mortgaged Property that was acquired by us afterDecember 31, 1943 and was owned by us just before the merger of EGSP LLC into us, together with replacements, additions andextensions of or to such property acquired by us. Unfunded property additions are generally those that have not been used under theELL Mortgage to issue bonds, release property, withdraw cash or replace retired property that has been used for such purposes.Class A Bonds may be issued from time to time under the EGSL Mortgage, subject to the limitation that the aggregateprincipal amount of bonds issued under the EGSL Mortgage at any one time outstanding shall not exceed $100 billion, on the basisof:•an amount not exceeding 60% of available net additions;•available debt retirements of bonds and/or refundable indebtedness under the EGSL Mortgage; or•the deposit of cash with the trustee under the EGSL Mortgage.Net additions under the EGSL Mortgage generally include the Mortgaged Property that was owned by EGSP LLC justbefore its merger into us, together with substitutions, replacements, additions and extensions of or to such property acquired by us.Available net additions are generally net additions that have not been used under the EGSL Mortgage to issue bonds, releaseproperty, withdraw cash or replace retired property that has been used for such purposes.As a condition to the authentication and delivery of bonds under the EGSL Mortgage on the basis of property additions and(with certain exceptions) on the basis of retired bonds, qualified lien bonds and/or refundable indebtedness, the Company’s netearnings (as defined in the EGSL Mortgage) for a recent period of twelve consecutive calendar months must have been at least twicethe annual interest requirements on all bonds outstanding under the EGSL Mortgage including the new bonds.As of December 31, 2019, we could have issued approximately $1,674 million principal amount of additional Class A Bondsunder the ELL Mortgage on the basis of retired bonds, and we had approximately $720 million of unfunded property additions,entitling us to issue approximately $576 million principal amount of additional Class A Bonds under the ELL Mortgage on the basisof property additions. As of December 31, 2019, we could have issued approximately $1,964 million principal amount of additionalClass A Bonds under the EGSL Mortgage on the basis of available debt retirements, and we had approximately $2,255 million ofavailable net additions, entitling us to issue approximately $1,353 million principal amount of additional Class A Bonds under theEGSL Mortgage on the basis of available net additions (in each case, assuming such additional Class A Bonds do not bear interest).As of December 31, 2019, we could have issued approximately $5,567 million principal amount of additional Collateral TrustMortgage Bonds on the basis of Class A Bonds. As of December 31, 2019, the Company had approximately $4,649 millionprincipal amount of Class A Bonds outstanding under the ELL Mortgage and approximately $2,148 million principal amount ofClass A Bonds outstanding under the EGSL Mortgage.As of December 31, 2019, we had approximately $3,949 million aggregate principal amount of Collateral Trust MortgageBonds outstanding. As of December 31, 2019, we had approximately $410 million of unfunded property additions under theMortgage, entitling us to issue approximately $287 million principal amount of Collateral Trust Mortgage Bonds on the basis ofproperty additions. As of December 31, 2019, we were not entitled to issue any Collateral Trust Mortgage Bonds on the basis of retired Collateral TrustMortgage Bonds. Class A Bonds, property additions and cash used as a basis for the issuance of Collateral Trust Mortgage Bondsunder the Mortgage from time to time will be for the benefit of the holders of all Collateral Trust Mortgage Bonds outstanding underthe Mortgage from time to time, including the holders of the 2066 Bonds.We have reserved the right to amend the EGSL Mortgage without any consent or other action by the holders of any bondsissued under the EGSL Mortgage created on or after July 1, 2014, to remove the earnings coverage test contained therein. Inaddition, each holder or future holder of Class A Bonds issued under the EGSL Mortgage created on or after July 1, 2014 (includingthe Trustee under the Mortgage), by its acquisition of an interest in such Class A Bonds, irrevocably (a) consented or will consent tothe amendment to the EGSL Mortgage to remove the net earnings test without any further action and (b) designated or willdesignate the trustee under the EGSL Mortgage as its proxy with irrevocable instructions to vote in favor of such amendment or todeliver a written consent thereto.Release of PropertySpecial Release Provision - While Class A Mortgage is in EffectUnless an event of default under the Mortgage has occurred and is continuing, we may obtain the release from the lien of theMortgage of any Mortgaged Property that is subject to a Class A Mortgage by obtaining the release of that property from theapplicable Class A Mortgage. (Mortgage, Section 1808.)Release of Property from Class A MortgagesProperties subject to the lien of the ELL Mortgage may be released on the basis of:•the deposit of cash or purchase money mortgages;•property additions, after adjustments in certain cases to offset retirements and after making adjustments for qualified lienbonds, if any, outstanding against property additions; and•the aggregate principal amount of bonds that we would be entitled to issue under the ELL Mortgage on the basis of retiredqualified lien bonds; or (ii) 10/6ths of the aggregate principal amount of bonds that we would be entitled to issue under theELL Mortgage on the basis of retired bonds that were issued prior to June 9, 2010; or (iii) 10/8ths of the aggregate principalamount of bonds that we would be entitled to issue under the ELL Mortgage on the basis of retired bonds that were issuedafter June 9, 2010; in each case with the entitlement being waived by operation of the release.Properties subject to the lien of the EGSL Mortgage may be released on the basis of:•the deposit of cash or, within certain limits, purchase money obligations and, in certain cases, governmental or municipalobligations;•the deposit of the proceeds of such properties with the holder of a prior lien;•available net additions; and•available debt retirements of bonds or refundable indebtedness under the EGSL Mortgage.General Release ProvisionsUnless an event of default under the Mortgage has occurred and is continuing, we may obtain the release from the lien of theMortgage of any Mortgaged Property, except for funded cash, upon delivery to the Trustee of an amount in cash equal to the amount, if any, as calculated by us, by which the lower of the cost or fair value of theproperty to be released exceeds the aggregate of:•an amount equal to the aggregate principal amount of any obligations secured by purchase money liens upon the property tobe released and delivered to the Trustee;•an amount equal to the cost or fair value to us (whichever is less) of Property Additions not constituting Funded Propertyafter specified deductions and additions, primarily including adjustments to offset property retirements (except that theseadjustments need not be made if the Property Additions were acquired, made or constructed within the 90-day periodpreceding the release);•10/7ths of the aggregate principal amount of Collateral Trust Mortgage Bonds that we would be entitled to issue on the basisof Retired Securities or Class A Bonds (with such entitlement being waived by operation of the release);•any amount in cash and/or an amount equal to the aggregate principal amount of any obligations secured by purchase moneyliens delivered to a holder of a prior lien on Mortgaged Property in consideration for the release of such Mortgaged Propertyfrom such prior lien; and•any taxes and expenses incidental to any sale, exchange, dedication or other disposition of the property to be released.(Mortgage, Section 1803.)Unless an event of default under the Mortgage has occurred and is continuing, we may obtain the release from the lien of theMortgage of any part of the Mortgaged Property or any interest therein, which does not constitute Funded Property or funded cashheld by the Trustee, without depositing any cash or property with the Trustee as long as (a) the aggregate amount of cost or fairvalue to us (whichever is less) of all Property Additions which do not constitute Funded Property (excluding the property to bereleased) after specified deductions and additions, primarily including adjustments to offset property retirements, is not less thanzero or (b) the cost or fair value (whichever is less) of property to be released does not exceed the aggregate amount of the cost orfair value to us (whichever is less) of Property Additions acquired, made or constructed within the 90-day period preceding therelease. (Mortgage, Section 1804.)The Mortgage provides simplified procedures for the release of Mortgaged Property with an aggregate cost or fair value(whichever is less) of up to the greater of $10 million or 3% of the sum of outstanding Collateral Trust Mortgage Bonds and Class ABonds (other than Class A Bonds held by the Trustee) during a calendar year and for the release of Mortgaged Property taken orsold in connection with the power of eminent domain; the Mortgage also provides for dispositions of certain obsolete or unnecessaryMortgaged Property and for grants or surrender of certain easements, leases or rights of way without any release or consent by theTrustee. (Mortgage, Sections 1802, 1805 and 1807.)If we retain any interest in any property released from the lien of the Mortgage, the Mortgage will not become a lien on thatproperty or the interest in that property or any improvements, extensions or additions to, or any renewals, replacements orsubstitutions of or for, any part or parts of that property unless we subject that property to the lien of the Mortgage. (Mortgage,Section 1810.)The Mortgage also provides that we may terminate, abandon, surrender, cancel, release, modify or dispose of any of ourfranchises, permits or licenses that are Mortgaged Property without any consent of the Trustee or the holders of outstandingCollateral Trust Mortgage Bonds, provided that such action is, in our opinion, necessary, desirable or advisable in the conduct of ourbusiness. In addition, the Mortgage provides that, if any of our franchises, permits or licenses that are Mortgaged Property becausethey are necessary for the operation of other Mortgaged Property cease to be necessary, in our opinion, for the operation of the Mortgaged Property, such franchises, permits or licenses shall automatically cease to be Mortgaged Propertywithout any release or consent, or report to, the Trustee. (Mortgage, Section 1802.)Withdrawal of CashUnless an event of default under the Mortgage has occurred and is continuing, and subject to specified limitations, cash heldby the Trustee may generally, (1) be withdrawn by us (a) to the extent of the cost or fair value to us (whichever is less) of PropertyAdditions not constituting Funded Property, after specified deductions and additions, primarily including adjustments to offsetretirements (except that these adjustments need not be made if the Property Additions were acquired, made or constructed within the90-day period preceding the withdrawal) or (b) in an amount equal to the aggregate principal amount of Collateral Trust MortgageBonds that we would be entitled to issue on the basis of Retired Securities or Class A Bonds (with the entitlement to the issuancebeing waived by operation of the withdrawal) or (c) in an amount equal to the aggregate principal amount of any outstandingCollateral Trust Mortgage Bonds delivered to the Trustee (with the Collateral Trust Mortgage Bonds being cancelled by theTrustee), or (2) upon our request, be applied to (a) the purchase of Collateral Trust Mortgage Bonds or (b) the payment (or provisionfor payment) at stated maturity of any Collateral Trust Mortgage Bonds or the redemption (or provision for payment) prior to statedmaturity of any Collateral Trust Mortgage Bonds which are redeemable. (Mortgage, Section 1806.)Satisfaction and Discharge of 2066 BondsSubject to certain conditions, the 2066 Bonds, or any portion of the 2066 Bonds, will be deemed paid and no longeroutstanding under the Mortgage and we can be discharged from our obligations on such 2066 Bonds, or such portion of the 2066Bonds, if we irrevocably deposit with the Trustee or any paying agent, other than us, sufficient cash or government securities to paythe principal, any interest and any other sums when due on such 2066 Bonds, or such portion of such 2066 Bonds, on the statedmaturity date or a redemption date of the 2066 Bonds, or such portion of the 2066 Bonds. (Mortgage, Section 801.)Consolidation, Merger and Conveyance of AssetsUnder the terms of the Mortgage, we may not consolidate with or merge into any other entity or convey, transfer or lease as,or substantially as, an entirety to any entity the Mortgaged Property, unless:•the surviving or successor entity, or an entity that acquires by conveyance or transfer or that leases our Mortgaged Propertyas, or substantially as, an entirety, is organized and validly existing under the laws of any domestic jurisdiction, and itexpressly assumes our obligations on all Collateral Trust Mortgage Bonds then outstanding and under the Mortgage andconfirms the lien of the Mortgage on the Mortgaged Property (as constituted immediately prior to the time such transactionbecomes effective), including subjecting to the lien of the Mortgage all property thereafter acquired by the successor entitythat constitutes an improvement, extension or addition to the Mortgaged Property (as so constituted) or a renewal,replacement or substitution of or for any part thereof, but only to the extent that such improvement, extension or addition isso affixed or attached to real property as to be regarded a part of such real property or is an improvement, extension oraddition to personal property that is made to maintain, renew, repair or improve the function of such personal property and isphysically installed in or affixed to such personal property;•in the case of a lease, such lease is made expressly subject to termination by us or by the Trustee and by the purchaser of theproperty so leased at any sale thereof at any time during the continuance of an event of default under the Mortgage; •we shall have delivered to the Trustee an officer’s certificate and an opinion of counsel as provided in the Mortgage; and•immediately after giving effect to such transaction (and treating any debt that becomes an obligation of the successor entityas a result of such transaction as having been incurred by the successor entity at the time of such transaction), no event ofdefault under the Mortgage, or event that, after notice or lapse of time or both, would become an event of default under theMortgage, shall have occurred and be continuing.(Mortgage, Section 1201.) In the case of the conveyance or other transfer of the Mortgaged Property as, or substantially as,an entirety to another entity, upon the satisfaction of all the conditions described above, we would be released and discharged fromall our obligations and covenants under the Mortgage and on the Collateral Trust Mortgage Bonds then outstanding unless we electto waive such release and discharge. (Mortgage, Section 1204.)The Mortgage does not prevent or restrict:•any conveyance or other transfer, or lease, of any part of the Mortgaged Property that does not constitute the entirety, orsubstantially the entirety, of the Mortgaged Property; or (Mortgage, Section 1205.)•any conveyance, transfer or lease of any of our properties where we retain Mortgaged Property with a fair value in excess of143% of the aggregate principal amount of all outstanding Collateral Trust Mortgage Bonds, and any other outstanding debtsecured by a Class A Mortgage or a purchase money lien that ranks equally with, or senior to, the Collateral Trust MortgageBonds with respect to the Mortgaged Property (other than Class A Bonds held by the Trustee). This fair value will bedetermined within 90 days of the conveyance, transfer or lease by an independent expert selected by us. (Mortgage, Section1206.)Although the successor entity may, in its sole discretion, subject to the lien of the Mortgage property then owned orthereafter acquired by the successor entity, the lien of the Mortgage generally will not cover the property of the successor entityother than the mortgaged property it acquires from us and improvements, extensions and additions to such property and renewals,replacements and substitutions thereof, within the meaning of the Mortgage, as described above. (Mortgage, Section 1203.)The terms of the Mortgage do not restrict mergers in which we are the surviving entity. (Mortgage, Section 1205.) Astatutory merger pursuant to which our assets and liabilities are allocated to one or more entities shall not be considered to be amerger subject to the provisions of the Mortgage described above unless all of our assets and liabilities are allocated to an entityother than us and we do not survive such statutory merger. In all other cases of a statutory merger pursuant to which any MortgagedProperty is allocated to one or more entities other than us, each allocation of any Mortgaged Property to an entity other than us shallbe deemed, for purposes of the Mortgage, to be a transfer of such Mortgaged Property to such entity and not a merger. (Mortgage,Section 1207.)Events of DefaultEvents of Default under the Mortgage“Event of default,” when used in the Mortgage with respect to Collateral Trust Mortgage Bonds, means any of the following: •failure to pay interest on any Collateral Trust Mortgage Bond for 30 days after it is due unless we have made a validextension of the interest payment period with respect to such Collateral Trust Mortgage Bond as provided in the Mortgage;•failure to pay the principal of or any premium on any Collateral Trust Mortgage Bond when due unless we have made avalid extension of the maturity of such Collateral Trust Mortgage Bond as provided in the Mortgage;•failure to perform or breach of any other covenant or warranty in the Mortgage that continues for 90 days after we receivewritten notice from the Trustee, or we and the Trustee receive written notice from the holders of at least 33% in aggregateprincipal amount of the outstanding Collateral Trust Mortgage Bonds, unless the Trustee, or the Trustee and the holders of aprincipal amount of Collateral Trust Mortgage Bonds not less than the principal amount of Collateral Trust Mortgage Bondsthe holders of which gave such notice, as the case may be, agree in writing to an extension of such period prior to itsexpiration; provided, however, that the Trustee, or the Trustee and the holders of such principal amount of Collateral TrustMortgage Bonds, as the case may be, shall be deemed to have agreed to an extension of such period if corrective action isinitiated by us within such period and is being diligently pursued;•events of our bankruptcy, insolvency or reorganization as specified in the Mortgage;•so long as the Trustee holds any Class A Bonds under the Mortgage corresponding to outstanding Collateral Trust MortgageBonds, any matured event of default under the applicable Class A Mortgage resulting in acceleration of such Class A Bonds;provided that any cure or waiver of such event of default and any rescission or annulment of such acceleration under theapplicable Class A Mortgage shall constitute a cure, waiver, rescission or annulment under the Mortgage; or•any other event of default included in any supplemental indenture, board resolution or officer’s certificate establishing aseries of Collateral Trust Mortgage Bonds.(Mortgage, Sections 301, 901 and 1301.)The Trustee is required to give notice of any default under the Mortgage known to the Trustee in the manner and to theextent required to do so by the Trust Indenture Act of 1939, unless such default shall have been cured or waived. However, in thecase of any default of the character specified in the third bullet in the preceding paragraph, no such notice to holders of the CollateralTrust Mortgage Bonds shall be given until at least 60 days after the occurrence thereof. The Trustee shall give to the trustee undereach Class A Mortgage a copy of each notice of default given to the holders of Collateral Trust Mortgage Bonds. In addition, theTrustee shall give to the holders of Collateral Trust Mortgage Bonds copies of each notice of default under any Class A Mortgagegiven to the Trustee in its capacity as owner and holder of Class A Bonds under that Class A Mortgage. (Mortgage, Section 1002.)So long as the Trustee holds any Class A Bonds under the Mortgage corresponding to outstanding Collateral Trust MortgageBonds, such Class A Bonds shall be redeemed by us, in whole at any time, or in part from time to time, at a redemption price equalto the principal amount thereof, upon receipt by the trustee under the related Class A Mortgage of a written notice from the Trusteeto us and such trustee stating that an Event of Default under the Mortgage has occurred and is continuing and that, as a result, thereis due and payable a specified amount with respect to such Collateral Trust Mortgage Bonds, for the payment of which the Trusteehas not received funds and specifying the principal amount of such Class A Bonds to be redeemed.Events of Default under the Class A MortgagesEvents of default under the existing Class A Mortgages include default in payment of principal or premium, if any, whendue; default, for 60 days under the ELL Mortgage and 30 days under the EGSL Mortgage, in the payment of interest; certain events of bankruptcy, insolvency or reorganization; and default in other covenants for90 days after notice by the trustee or the holders of a specified percentage of bonds outstanding under the applicable Class AMortgage.RemediesAcceleration of MaturityIf an event of default under the Mortgage occurs and is continuing, then the Trustee, by written notice to us, or the holders ofat least 33% in aggregate principal amount of the outstanding Collateral Trust Mortgage Bonds, by written notice the Trustee and us,may declare the principal amount of all of the Collateral Trust Mortgage Bonds to be due and payable immediately, and upon ourreceipt of such notice, such principal amount, together with premium, if any, and accrued and unpaid interest will becomeimmediately due and payable. (Mortgage, Section 902.)There is no automatic acceleration, even in the event of our bankruptcy, insolvency or reorganization.Rescission of AccelerationAt any time after such a declaration of acceleration has been made but before any sale of the Mortgaged Property and beforea judgment or decree for payment of the money due has been obtained by the Trustee, the event of default under the Mortgagegiving rise to such declaration of acceleration will be considered cured, and such declaration and its consequences will be consideredrescinded and annulled, if:•we have paid or deposited with the Trustee a sum sufficient to pay:(1)all overdue interest on all outstanding Collateral Trust Mortgage Bonds;(2)the principal of and premium, if any, on the outstanding Collateral Trust Mortgage Bonds that have become dueotherwise than by such declaration of acceleration and overdue interest thereon;(3)interest on overdue interest, if any, to the extent lawful; and(4)all amounts due to the Trustee under the Mortgage; and•any other event of default under the Mortgage with respect to the Collateral Trust Mortgage Bonds has been cured or waivedas provided in the Mortgage.(Mortgage, Section 902.)Trustee PowersSubject to the Mortgage, under specified circumstances and to the extent permitted by law, if an event of default under theMortgage occurs and is continuing, the Trustee is entitled to the appointment of a receiver for the Mortgaged Property and is entitledto all other remedies available to mortgagees and secured parties under the Uniform Commercial Code or any other applicable law.(Mortgage, Section 916.) In addition, the Trustee may exercise any right or remedy available to the Trustee as a holder of Class ABonds which arises as a result of a default or event of default under any Class A Mortgage. (Mortgage, Section 917.)Control by HoldersOther than its duties in the case of an event of default under the Mortgage, the Trustee is not obligated to exercise any of itsrights or powers under the Mortgage at the request, order or direction of any of the holders, unless the holders offer the Trustee an indemnity satisfactory to it. (Mortgage, Section 1003.) If an event ofdefault under the Mortgage has occurred and is continuing and they provide this indemnity, the holders of a majority in principalamount of the outstanding Collateral Trust Mortgage Bonds will have the right to direct the time, method and place of conductingany proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee. The Trustee is notobligated to comply with directions that conflict with law or other provisions of the Mortgage or that could involve the Trustee inpersonal liability in circumstances where indemnity would not, in the Trustee’s sole discretion, be adequate. (Mortgage, Section912.)Limitation on Holders’ Right to Institute ProceedingsNo holder of Collateral Trust Mortgage Bonds will have any right to institute any proceeding under the Mortgage, or anyremedy under the Mortgage, unless:•the holder has previously given to the Trustee written notice of a continuing event of default under the Mortgage;•the holders of a majority in aggregate principal amount of the outstanding Collateral Trust Mortgage Bonds of all series havemade a written request to the Trustee and have offered indemnity satisfactory to the Trustee to institute proceedings; and•the Trustee has failed to institute any proceeding for 60 days after notice and has not received during that period anydirection from the holders of a majority in aggregate principal amount of the outstanding Collateral Trust Mortgage Bondsinconsistent with the written request of holders referred to above;provided that no holder or holders of Collateral Trust Mortgage Bonds shall have any right in any manner to affect or prejudice therights of other holders of Collateral Trust Mortgage Bonds or to obtain priority over such other holders. (Mortgage, Section 907.)However, these limitations do not apply to the absolute and unconditional right of a holder of a Collateral Trust Mortgage Bond toinstitute suit for payment of the principal, premium, if any, or interest on the Collateral Trust Mortgage Bond on or after theapplicable due date. (Mortgage, Section 908.)We have the right to amend the Mortgage at any time without any consent or other action of the holders of any of the 2066Bonds to revise the limitations described in the first sentence of the immediately preceding paragraph above to apply to anyproceeding or remedy under or with respect to the Mortgage or the Collateral Trust Mortgage Bonds.Evidence to be Furnished to the TrusteeCompliance with the Mortgage provisions is evidenced by written statements of our officers or persons we select or pay. Incertain cases, opinions of counsel and certifications of an engineer, accountant, appraiser or other expert (who in some cases must beindependent) must be furnished. We must give the Trustee an annual certificate as to whether or not we have fulfilled ourobligations under the Mortgage throughout the preceding year. (Mortgage, Section 705.)Modification and WaiverModification Without ConsentWithout the consent of any holder of Collateral Trust Mortgage Bonds, we and the Trustee may enter into one or moresupplemental indentures for any of the following purposes: •to evidence the assumption by any permitted successor of our covenants in the Mortgage and in the Collateral TrustMortgage Bonds;•to add one or more covenants or other provisions for the benefit of the holders of all or any series or tranche of CollateralTrust Mortgage Bonds, or to surrender any right or power conferred upon us;•to add additional events of default under the Mortgage for all or any series of Collateral Trust Mortgage Bonds;•to change, eliminate or add any provision to the Mortgage; provided, however, if the change, elimination or addition willadversely affect the interests of the holders of Collateral Trust Mortgage Bonds of any series in any material respect, thechange, elimination or addition will become effective only:(1)when the consent of the holders of Collateral Trust Mortgage Bonds of such series has been obtained in accordancewith the Mortgage; or(2)when no Collateral Trust Mortgage Bonds of the affected series remain outstanding under the Mortgage;•to provide additional security for any Collateral Trust Mortgage Bonds;•to establish the form or terms of Collateral Trust Mortgage Bonds of any other series as permitted by the Mortgage;•to provide for the authentication and delivery of bearer securities with or without coupons;•to evidence and provide for the acceptance of appointment by a separate or successor Trustee or co-trustee;•to provide for the procedures required for us to use a noncertificated system of registration for the Collateral Trust MortgageBonds of all or any series;•to change any place where principal, premium, if any, and interest shall be payable, Collateral Trust Mortgage Bonds may besurrendered for registration of transfer or exchange, and notices and demands to us may be served;•to amend and restate the Mortgage as originally executed and as amended from time to time, with additions, deletions andother changes that do not adversely affect the interests of the holders of Collateral Trust Mortgage Bonds of any series in anymaterial respect;•to cure any ambiguity or inconsistency or to make any other changes or additions to the provisions of the Mortgage if suchchanges or additions will not adversely affect the interests of the holders of Collateral Trust Mortgage Bonds of any series inany material respect; or•to increase or decrease the maximum amount of Collateral Trust Mortgage Bonds that may be outstanding at any one timeunder the Mortgage to an amount that is not less than the aggregate principal amount of Collateral Trust Mortgage Bondsthen outstanding.(Mortgage, Section 1301.)Modification and Waiver Requiring ConsentExcept as provided below, the consent of the holders of a majority in aggregate principal amount of then outstandingCollateral Trust Mortgage Bonds, considered as one class, is required for all other amendments or modifications to the Mortgage.However, if less than all of the series of Collateral Trust Mortgage Bonds outstanding are directly affected by a proposedamendment or modification, then the consent of the holders of only a majority in aggregate principal amount of the outstandingCollateral Trust Mortgage Bonds of all series that are directly affected, considered as one class, will be required. Notwithstandingthe foregoing, no amendment or modification may be made without the consent of the holder of each directly affected CollateralTrust Mortgage Bond then outstanding to: •change the stated maturity of the principal of, or any installment of principal of or interest on, any Collateral Trust MortgageBond, or reduce the principal amount of any Collateral Trust Mortgage Bond or its rate of interest or change the method ofcalculating that interest rate or reduce any premium payable upon redemption, or change the currency in which payments aremade, or impair the right to institute suit for the enforcement of any payment on or after the stated maturity of any CollateralTrust Mortgage Bond;•create any lien ranking prior to or on a parity with the lien of the Mortgage with respect to the Mortgaged Property, terminatethe lien of the Mortgage on the Mortgaged Property or deprive any holder of a Collateral Trust Mortgage Bond of thebenefits of the security of the lien of the Mortgage;•reduce the percentage in principal amount of the outstanding Collateral Trust Mortgage Bonds of any series the consent ofthe holders of which is required for any amendment or modification or any waiver of compliance with a provision of theMortgage or of any default thereunder and its consequences, or reduce the requirements thereunder for a quorum or voting;or•modify certain provisions of the Mortgage relating to supplemental indentures, waivers of some covenants and waivers ofpast defaults with respect to the Collateral Trust Mortgage Bonds of any series.A supplemental indenture that changes the Mortgage solely for the benefit of one or more particular series of Collateral TrustMortgage Bonds, or modifies the rights of the holders of Collateral Trust Mortgage Bonds of one or more series, will not affect therights under the Mortgage of the holders of the Collateral Trust Mortgage Bonds of any other series. (Mortgage, Section 1302.)The holders of a majority in aggregate principal amount of then outstanding Collateral Trust Mortgage Bonds, considered asone class, may waive compliance by us with some restrictive provisions of the Mortgage. (Mortgage, Section 706.) The holders of amajority in principal amount of then outstanding Collateral Trust Mortgage Bonds may waive any past default under the Mortgage,except a default in the payment of principal, premium, if any, or interest on any outstanding Collateral Trust Mortgage Bonds andcertain covenants and provisions of the Mortgage that cannot be modified or amended without the consent of the holder of eachoutstanding Collateral Trust Mortgage Bond of any affected series. (Mortgage, Section 913.)The Mortgage provides that Collateral Trust Mortgage Bonds owned by us or anyone else required to make payment on theCollateral Trust Mortgage Bonds shall be disregarded and considered not to be outstanding in determining whether the requiredholders have given a request or consent. (Mortgage, Section 101.)We may fix in advance a record date to determine the holders entitled to give any request, demand, authorization, direction,notice, consent, waiver or similar act of the holders, but we have no obligation to do so. If we fix a record date, that request,demand, authorization, direction, notice, consent, waiver or other act of the holders may be given before or after that record date,but only the holders of record at the close of business on that record date will be considered holders for the purposes of determiningwhether holders of the required percentage of the outstanding Collateral Trust Mortgage Bonds have authorized or agreed orconsented to the request, demand, authorization, direction, notice, consent, waiver or other act of the holders. For that purpose, theoutstanding Collateral Trust Mortgage Bonds will be computed as of the record date.Any request, demand, authorization, direction, notice, consent, election, waiver or other act of a holder of any CollateralTrust Mortgage Bond will bind every future holder of that Collateral Trust Mortgage Bond and the holder of every Collateral TrustMortgage Bond issued upon the registration of transfer of or in exchange for that Collateral Trust Mortgage Bond. A transferee will also be bound by acts of the Trustee or us inreliance thereon, whether or not notation of that action is made upon the Collateral Trust Mortgage Bond. (Mortgage, Section 106.)Voting of Class A BondsThe Mortgage provides that the Trustee will, as holder of Class A Bonds delivered as the basis for the issuance of CollateralTrust Mortgage Bonds, attend meetings of holders of bonds under the related Class A Mortgage, or deliver its proxy in connectionwith those meetings, that relate to matters with respect to which it, as a holder, is entitled to vote or consent. The Mortgage providesthat, so long as no event of default under the Mortgage has occurred and is continuing and except for the rights and remedies of theTrustee in case of a default or matured event of default under a Class A Mortgage, the Trustee will, as holder of the Class A Bonds,vote or consent (without any consent or other action by the holders of the Collateral Trust Mortgage Bonds, except as described inthe proviso of clause (2) below) in favor of any amendments or modifications to the applicable Class A Mortgage as follows:(1)to conform any provision of a Class A Mortgage in all material respects to the correlative provision of the Mortgage, to addto a Class A Mortgage any provision not otherwise contained therein which conforms in all material respects to a provisioncontained in the Mortgage, to delete from a Class A Mortgage any provision to which the Mortgage contains no correlativeprovision and any combination of the foregoing and/or, without limiting the generality of the foregoing, to effect certainamendments included in supplemental indentures to the ELL Mortgage and the EGSL Mortgage; and/or;(2)with respect to any amendments or modifications to any Class A Mortgage other than those amendments or modificationsreferred to in clause (1) above, vote all the Class A Bonds delivered under such Class A Mortgage, or consent with respectthereto, proportionately with the vote or consent of holders of all other Class A Bonds outstanding under such Class AMortgage the holders of which are eligible to vote or consent, as evidenced by a certificate delivered by the trustee undersuch Class A Mortgage; provided, however, that the Trustee will not vote in favor of, or consent to, any amendment ormodification of a Class A Mortgage which, if it were an amendment or modification of the Mortgage, would require theconsent of holders of Collateral Trust Mortgage Bonds as described under “-Modification and Waiver,” without the priorconsent of holders of Collateral Trust Mortgage Bonds which would be required for an amendment or modification of theMortgage.(Mortgage, Section 1705.)We may make amendments to, or eliminate some of the covenants in, the ELL Mortgage with the consent of the holders of amajority of the bonds outstanding under the ELL Mortgage considered as one class, provided that, if less than all series of suchbonds are affected, only the consent of holders of a majority of such bonds of each series affected, considered as one class, isrequired for such modification, but no such modification shall, without the consent of the holder of any such bond affected by suchmodification, permit:•the extension of the maturity or reduction of the principal of or interest on such bond or other modification in the terms ofpayment of such principal or interest;•the creation of a lien that is prior or equal to the lien of the ELL Mortgage with respect to the mortgaged property under theELL Mortgage or the deprivation of any non-assenting holder of such bonds of the benefit of a lien on the mortgagedproperty under the ELL Mortgage (subject only to excepted encumbrances as defined in the ELL Mortgage); or •the reduction of the percentage required for modification of the ELL Mortgage.We may make amendments to, or eliminate some of the covenants in, the EGSL Mortgage with the consent of the holders ofnot less than 75% in aggregate principal amount of the bonds outstanding under the EGSL Mortgage, including not less than 60% ofeach series affected, but no such modification shall:•extend the maturity of any such bonds or reduce the rate or extend the time of payment of interest on any such bonds orreduce the amount of principal of any such bonds, or reduce any premium payable on the redemption of any such bonds,without the consent of the holder of such affected bond;•permit the creation of any lien, not otherwise permitted, prior to or on a parity with the lien of the EGSL Mortgage, withoutthe consent of the holders of all the bonds then outstanding under the EGSL Mortgage; or•reduce the above-described percentage of holders of bonds under the EGSL Mortgage required to approve any suchmodification, without the consent of the holders of all such bonds then outstanding.If we amend a Class A Mortgage to eliminate one or more covenants as described above, a holder of Collateral TrustMortgage Bonds would no longer benefit from such covenants.Resignation of a Trustee; RemovalThe Trustee may resign at any time by giving written notice to us or may be removed at any time by an act of the holders ofa majority in principal amount of Collateral Trust Mortgage Bonds then outstanding delivered to the Trustee and us at least 31 daysprior to such removal. No resignation or removal of the Trustee and no appointment of a successor Trustee will be effective until theacceptance of appointment by a successor Trustee. So long as no event of default or event that, after notice or lapse of time, or both,would become an event of default has occurred and is continuing and except with respect to a Trustee appointed by act of theholders, if we have delivered to the Trustee a board resolution appointing a successor Trustee and the successor has accepted theappointment in accordance with the terms of the Mortgage, the Trustee will be deemed to have resigned and the successor will bedeemed to have been appointed as Trustee in accordance with the Mortgage. (Mortgage, Section 1010.)NoticesNotices to holders of 2066 Bonds are given by mail in writing to the addresses of such holders as they may appear in thesecurity register for the 2066 Bonds. (Mortgage, Section 108.)TitleWe, the Trustee, and any of our or the Trustee’s agents, may treat the person in whose name 2066 Bonds are registered asthe absolute owner thereof, whether or not the 2066 Bonds may be overdue, for the purpose of making payments and for all otherpurposes irrespective of notice to the contrary. (Mortgage, Section 308.)Governing LawThe Mortgage and the 2066 Bonds are governed by, and construed in accordance with, the laws of the State of New York,without giving effect to its conflicts of laws principles, except where otherwise required by law, including with respect to the creation, perfection, priority or enforcement of the lien of the Mortgage. (Mortgage,Section 114.)Information about the TrusteeThe Trustee is The Bank of New York Mellon. In addition to acting as Trustee, The Bank of New York Mellon also acts, andmay act, as trustee under the ELL Mortgage, the EGSL Mortgage, and various other of our and our affiliates’ indentures, trusts andguarantees. We and our affiliates maintain deposit accounts and credit and liquidity facilities and conduct other banking transactionswith the Trustee and its affiliates in the ordinary course of our respective businesses.Book-Entry Only SecuritiesThe 2066 Bonds trade through DTC. The 2066 Bonds are represented by a global certificate and registered in the name ofCede & Co., DTC’s nominee. The global certificate was deposited with the Trustee as custodian for DTC. Ownership of beneficialinterests in the global certificate is limited to institutions that have accounts with DTC or its participants or persons that may holdinterests through participants.DTC is a New York clearing corporation and a clearing agency registered under Section 17A of the Exchange Act. DTCholds securities for its participants. DTC also facilitates the post-trade settlement of securities transactions among its participantsthrough electronic computerized book‑entry transfers and pledges in the participants’ accounts. This eliminates the need for physicalmovement of securities certificates. The participants include securities brokers and dealers, banks, trust companies, clearingcorporations and certain other organizations. DTC is a wholly‑owned subsidiary of The Depository Trust & Clearing Corporation(“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income ClearingCorporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Others whomaintain a custodial relationship with a participant can use the DTC system. The rules that apply to DTC and those using its systemsare on file with the SEC.Purchases of the 2066 Bonds within the DTC system must be made through participants, who will receive a credit for the2066 Bonds on DTC’s records. The beneficial ownership interest of each purchaser will be recorded on the appropriate participant’srecords. Beneficial owners do not receive written confirmation from DTC of their purchases, but beneficial owners should receivewritten confirmations of the transactions, as well as periodic statements of their holdings, from the participants through whom theypurchased 2066 Bonds. Transfers of ownership in the 2066 Bonds are to be accomplished by entries made on the books of theparticipants acting on behalf of beneficial owners. Beneficial owners will not receive certificates for their 2066 Bonds, except if useof the book‑entry system for the 2066 Bonds is discontinued.To facilitate subsequent transfers, all 2066 Bonds deposited by participants with DTC are registered in the name of DTC’snominee, Cede & Co. The deposit of the 2066 Bonds with DTC and their registration in the name of Cede & Co. effects no changein beneficial ownership. DTC has no knowledge of the actual beneficial owners of the 2066 Bonds. DTC’s records reflect only theidentity of the participants to whose accounts such 2066 Bonds are credited. These participants may or may not be the beneficialowners. Participants are responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to participants, and by participants to beneficial owners, aregoverned by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.Beneficial owners of 2066 Bonds may wish to take certain steps to augment transmission to them of notices of significant eventswith respect to the 2066 Bonds, such as redemptions, tenders, defaults and proposed amendments to the Mortgage. Beneficialowners of the 2066 Bonds may wish to ascertain that the nominee holding the 2066 Bonds has agreed to obtain and transmit noticesto the beneficial owners.Redemption notices will be sent to Cede & Co., as registered holder of the 2066 Bonds. If less than all of the 2066 Bonds arebeing redeemed, DTC’s practice is to determine by lot the amount of 2066 Bonds held by each participant to be redeemed.Neither DTC nor Cede & Co. will itself consent or vote with respect to 2066 Bonds, unless authorized by a participant inaccordance with DTC’s procedures. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible afterthe record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those participants to whose accountsthe 2066 Bonds are credited on the record date. We believe that these arrangements will enable the beneficial owners to exerciserights equivalent in substance to the rights that can be directly exercised by a registered holder of the 2066 Bonds.Payments of redemption proceeds, principal of, and interest on the 2066 Bonds are and will be made to Cede & Co., or suchother nominee as may be requested by DTC. DTC’s practice is to credit participants’ accounts upon DTC’s receipt of funds andcorresponding detail information from us or our agent, on the payable date in accordance with their respective holdings shown onDTC’s records. Payments by participants to beneficial owners are and will be governed by standing instructions and customarypractices. Payments are the responsibility of participants and not of DTC, the Trustee, or us, subject to any statutory or regulatoryrequirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest to Cede & Co. (or suchother nominee as may be requested by DTC) is our responsibility. Disbursement of payments to participants is the responsibility ofDTC, and disbursement of payments to the beneficial owners is the responsibility of participants.Other than in the circumstances described herein, a beneficial owner will not be entitled to receive physical delivery of the2066 Bonds. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the 2066 Bonds.DTC may discontinue providing its services as securities depositary with respect to the 2066 Bonds at any time by giving usreasonable notice. In the event no successor securities depositary is obtained, certificates for the 2066 Bonds will be printed anddelivered. We may decide to replace DTC or any successor depositary. Additionally, subject to the procedures of DTC, we maydecide to discontinue use of the system of book‑entry transfers through DTC (or a successor depositary) with respect to some or allof the 2066 Bonds. In that event or if an event of default with respect the 2066 Bonds has occurred and is continuing, certificates forthe 2066 Bonds will be printed and delivered. If certificates for the 2066 Bonds are printed and delivered,•the 2066 Bonds will be issued in fully registered form without coupons;•a holder of certificated 2066 Bonds would be able to exchange those 2066 Bonds, without charge, for an equal aggregateprincipal amount of 2066 Bonds having the same issue date and with identical terms and provisions; and•a holder of certificated 2066 Bonds would be able to transfer those 2066 Bonds without cost to another holder, other than forapplicable stamp taxes or other governmental charges. The information in this section concerning DTC and DTC’s book‑entry system has been obtained from sources that webelieve to be reliable, but we do not take any responsibility for the accuracy of this information. Exhibit 4(e)2DESCRIPTION OF ENTERGY MISSISSIPPI, LLC’S SECURITIESREGISTERED PURSUANT TO SECTION 12OF THE SECURITIES EXCHANGE ACT OF 1934References in this exhibit to “we,” “us,” or “our” are to Entergy Mississippi, LLC.We have issued, and may from time to time issue, bonds in one or more series under one or more separate supplementalindentures to the Mortgage and Deed of Trust dated as of February 1, 1988, with The Bank of New York Mellon, successor trustee(the “trustee”). This Mortgage and Deed of Trust, as it has heretofore been and may be amended or supplemented from time to time,is referred to in this exhibit as the “mortgage.” All first mortgage bonds issued or to be issued under the mortgage, including theBonds (as defined below), are referred to herein as “first mortgage bonds.”As of February 21, 2020, we have one series of first mortgage bonds outstanding that is registered under Section 12(b) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”), our First Mortgage Bonds, 4.90% Series due October 1, 2066,issued in an aggregate principal amount of $260,000,000 under the Thirty-Third Supplemental Indenture, dated as of September 1,2016, to the mortgage and traded on the New York Stock Exchange under the ticker EMP (the “Bonds”).The full aggregate principal amount of the Bonds is currently outstanding.The mortgage, including the applicable supplemental indenture relating to the Bonds, contains the full legal texts of thematters described herein. Because this is a summary, it does not describe every aspect of the mortgage, the supplemental indenturerelating to the Bonds, or the outstanding first mortgage bonds, including the Bonds. The mortgage and the supplemental indenturesthat relate to the outstanding first mortgage bonds, including the Bonds, are filed as exhibits to the Annual Report on Form 10-K towhich this is filed as an exhibit. You should read the mortgage for provisions that may be important to you. This summary is subjectto and qualified in its entirety by reference to all the provisions of the mortgage, including the definitions of some of the terms usedin the mortgage, and to the particular terms of the supplemental indenture that relates to the Bonds. The mortgage has been qualifiedunder the Trust Indenture Act of 1939, and you should also refer to the Trust Indenture Act of 1939 for provisions that apply to theBonds.GeneralThe mortgage permits us to issue first mortgage bonds from time to time in an unlimited aggregate amount subject to thelimitations described below under “Issuance of Additional First Mortgage Bonds.” All first mortgage bonds of any one series neednot be issued at the same time, and a series may be reopened for issuances of additional first mortgage bonds of that series. Thismeans that we may from time to time, without the consent of the existing holders of the first mortgage bonds of any series, includingthe Bonds, create and issue additional first mortgage bonds of a series having the same terms and conditions as the previously issuedfirst mortgage bonds of that series in all respects, except for issue date, issue price and, if applicable, the initial interest payment onthose additional first mortgage bonds. Additional first mortgage bonds issued in this manner will be consolidated with and will forma single series with, the previously issued first mortgage bonds of that series. For more information, see the discussion below under“Issuance of Additional First Mortgage Bonds.” PaymentThe principal amount of the Bonds and interest thereon is and will be paid in any coin or currency of the United States ofAmerica that at the time of payment is legal tender at the corporate trust office of the trustee in the Borough of Manhattan, City andState of New York. Interest on the Bonds accrues at the rate of 4.90% per year and started to accrue from the date that the Bondswere issued. Interest payments on the Bonds are made on March 1, June 1, September 1 and December 1 of each year. As long asthe Bonds are registered in the name of The Depository Trust Company (“DTC”) or its nominee, the record date for interest payableon any interest payment date shall be the close of business on the Business Day (defined as any day other than a Saturday or aSunday or a day on which banking institutions in The City of New York are authorized or required by law or executive order toremain closed or a day on which the corporate trust office of the trustee is closed for business) immediately preceding such interestpayment date. We have agreed to pay interest on any overdue principal and, if such payment is enforceable under applicable law, onany overdue installment of interest on the Bonds at a rate of 5.90% per year to holders of record at the close of business on theBusiness Day immediately preceding our payment of such interest.Interest on the Bonds is computed on the basis of a 360-day year of twelve 30-day months. If any interest payment date orthe maturity date of the Bonds falls on a day that is not a Business Day, the payment due on that interest payment date or thematurity date will be made on the next Business Day, and without any interest or other payment in respect of such delay.As long as the Bonds are registered in the name of DTC or its nominee, we will pay principal and interest due on the Bondsto DTC. DTC will then make payment to its participants for disbursement to the beneficial owners of the Bonds as described underthe heading “Book-Entry Only Securities.”Redemption and RetirementAt any time on or after October 1, 2021, we may redeem the Bonds prior to maturity, in whole or in part, at our option, onnot less than 30 days’ nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Bondsbeing redeemed plus any accrued and unpaid interest thereon to, but not including, the redemption date.Unless the Bonds are held in book-entry only form through the facilities of DTC, in which case DTC’s procedures forselection shall apply (see “Book-Entry Only Securities”), if less than all of the Bonds are to be redeemed, the trustee will select theBonds to be redeemed.Unless we default in the payment of the redemption price and accrued interest, if any, in the case of an unconditional noticeof redemption, the Bonds subject to such notice of redemption will cease to bear interest on the redemption date. We will pay theredemption price and any accrued interest to the redemption date upon presentation and surrender of any Bond for redemption. Ifonly part of a Bond is redeemed, the trustee will deliver to the holder of the Bond a new Bond for the remaining portion withoutcharge. We may make any redemption at our option conditional upon the receipt by the trustee, prior to the date fixed forredemption, of money sufficient to pay the redemption price and accrued interest, if any. If the trustee has not received the moneyby the date fixed for redemption, we will not be required to redeem the Bonds.Form and ExchangeThe Bonds are fully-registered bonds without coupons, issued in denominations of $25 and integral multiples of $25 inexcess thereof. The Bonds are represented by a global certificate without coupons registered in the name of a nominee of DTC.The Bonds are exchangeable for other Bonds in equal aggregate principal amounts. No service charge will be made for anyregistration of transfer or exchange of the Bonds. However, we may require payment to cover any tax or other governmental chargethat may be imposed in connection with a registration of transfer or exchange. We will not be required to provide for the transfer orexchange of any Bond:1.during the 15 days before an interest payment date (unless such Bond has a record date for the payment of interest),2.during the 15 days before any designation of such Bond to be redeemed, or3.selected for redemption.SecurityThe Bonds, together with all other first mortgage bonds now or in the future outstanding under the mortgage, are and will besecured, equally and ratably, by the lien of the mortgage. The mortgage constitutes a first mortgage lien on substantially all of ourproperty (the “mortgaged property”) subject to bankruptcy law and:1.minor defects and encumbrances customarily found in similar properties that do not materially impair the use of themortgaged property in the conduct of our business;2.other liens, defects and encumbrances, if any, existing or created at the time of our acquisition of the mortgaged property;and3.excepted encumbrances.The mortgage does not create a lien on the following “excepted property”:1.cash and securities;2.all merchandise, equipment, apparatus, materials or supplies held for sale or other disposition in the usual course of businessor consumable during use;3.automobiles, vehicles and aircraft, timber, minerals, mineral rights and royalties; and4.accounts receivable, contracts, leases and operating agreements.The mortgage contains provisions that impose the lien of the mortgage on property we acquire after the date of the mortgage,other than excepted property, subject to pre-existing liens. However, if we consolidate or merge with, or convey or transfer all orsubstantially all of our mortgaged property to, another entity, unless the successor entity elects otherwise in its sole discretion, thelien created by the mortgage will generally not cover the property of the successor company, other than the mortgaged property itacquires from us and improvements, replacements and additions to such property. The mortgage also provides that the trustee has a lien on the mortgaged property to ensure the payment of its reasonablecompensation, expenses and disbursements and for indemnity against certain liabilities. This lien takes priority over the lien securingthe first mortgage bonds, including the Bonds.We have reserved the right to amend the mortgage without the consent or other action by the holders of any first mortgagebonds created after April 30, 2016, including the Bonds, to revise the definition of “excepted encumbrances” to mean the following:•tax liens, assessments and other governmental charges or requirements which are not delinquent or which are beingcontested in good faith and by appropriate proceedings or of which at least ten business days’ notice has not been given toour general counsel or to such other person designated by us to receive such notices;•mechanics’, workmen’s, repairmen’s, materialmen’s, warehousemen’s and carriers’ liens, other liens incident toconstruction, liens or privileges of any of our employees for salary or wages earned, but not yet payable, and other liens,including without limitation liens for worker’s compensation awards, arising in the ordinary course of business for chargesor requirements which are not delinquent or which are being contested in good faith and by appropriate proceedings or ofwhich at least ten business days’ notice has not been given to our general counsel or to such other person designated by us toreceive such notices;•specified judgment liens and prepaid liens;•easements, leases, reservations or other rights of others (including governmental entities) in, and defects of title in, ourproperty;•liens securing indebtedness or other obligations relating to real property we acquired for specified transmission, distributionor communication purposes or for the purpose of obtaining rights-of-way;•specified leases and leasehold, license, franchise and permit interests;•liens resulting from laws, rules, regulations, orders or rights of governmental authorities and specified liens required by lawor governmental regulations;•liens to secure public or statutory obligations;•rights of others to take minerals, timber, electric energy or capacity, gas, water, steam or other products produced by us or byothers on our property;•rights and interests of persons other than us arising out of agreements relating to the common ownership or joint use ofproperty, and liens on the interests of those persons in the property;•restrictions on assignment and/or requirements of any assignee to qualify as a permitted assignee and/or public utility orpublic services corporation; and•liens which have been bonded for the full amount in dispute or for the payment of which other adequate securityarrangements have been made.Issuance of Additional First Mortgage BondsSubject to the issuance restrictions described below, the aggregate principal amount of first mortgage bonds that we can issueunder the mortgage is unlimited. First mortgage bonds of any series may be issued from time to time on the basis of:1.70% of property additions after adjustments to offset retirements;2.retirements of first mortgage bonds; or3.deposit of cash with the trustee.Property additions generally include, among other things, electric, gas, steam or hot water property acquired after December31, 1987. Securities, automobiles, vehicles or aircraft, or property used principally for the production or gathering of natural gas, are not included as property additions. Deposited cash may be withdrawnupon the bases stated in clause (1) or (2) above.The mortgage contains restrictions on the issuance of first mortgage bonds against property subject to liens.As of December 31, 2019, we had approximately $1,625 million principal amount of first mortgage bonds outstanding. As ofDecember 31, 2019, we could have issued approximately $1,134 million principal amount of additional first mortgage bonds on thebasis of retired first mortgage bonds, and we had approximately $711 million of unfunded property additions, entitling us to issueapproximately $498 million principal amount of additional first mortgage bonds on the basis of property additions. The Bonds wereissued on the basis of property additions.Other than the security afforded by the lien of the mortgage and restrictions on the issuance of additional first mortgagebonds described above, there are no provisions of the mortgage that grant the holders of the first mortgage bonds protection in theevent of a highly leveraged transaction involving us.Release and Substitution of PropertyProperty may be released from the lien of the mortgage on the basis of:1. the deposit with the trustee of cash or purchase money mortgages;2. the lower of cost or fair value to us of unfunded property additions designated by us, after adjustments in certain cases to offsetretirements and after making adjustments for certain prior lien bonds, if any, outstanding against property additions; or3. an amount equal to the principal amount of the retired first mortgage bonds that we elect to use as the basis for such releasetimes the reciprocal of the bonding ratio in effect at the time such retired first mortgage bonds were originally issued.Property owned by us on December 31, 1987, may be released from the lien of the mortgage at its depreciated book value onDecember 31, 1987; all other property may be released at its cost, as defined in the mortgage. Unfunded property may also bereleased without complying with clauses (1), (2) or (3) above if, after its release, we would have at least one dollar of unfundedproperty that remains subject to the lien of the mortgage.We can withdraw cash upon the bases stated in clauses (2) and/or (3) above.Generally, “Funded Property” under the mortgage means all mortgaged property owned by us on December 31, 1987, and allproperty additions used as the basis for the issuance of first mortgage bonds, the release of mortgaged property or the withdrawal ofcash held by the trustee. We may at any time, without further consent of any holders of first mortgage bonds, change the definitionof “Funded Property” to mean any mortgaged property specified by us with a fair value, to be determined by an independent expert,of not less than 10/7ths of the sum of the amount of the outstanding first mortgage bonds and retired bond credits, together with allproperty additions thereafter used as the basis for the issuance of first mortgage bonds, the release of mortgaged property or thewithdrawal of cash held by the trustee.We may, without any release or consent by the trustee, cancel or make changes or alterations in or substitutions for any andall easements, servitudes, rights-of-way and similar rights and/or interests. ModificationModification Without ConsentWithout the consent of any holder of first mortgage bonds, we and the trustee may enter into one or more supplementalindentures for any of the following purposes:•to evidence the assumption by any permitted successor of our covenants in the mortgage and in the first mortgage bonds;•to add one or more covenants or other provisions for the benefit of the holders of all or any series or tranche of first mortgagebonds, or to surrender any right or power conferred upon us;•to cure any ambiguity in the mortgage or any supplemental indenture; or•to establish the form or terms of first mortgage bonds of any other series as permitted by the mortgage;provided that any such modification does not adversely affect any first mortgage bonds then outstanding.We have the right to amend the mortgage at any time without any consent or other action of the holders of any first mortgagebonds, including the Bonds, to permit us to amend the mortgage without the consent of the holders of the first mortgage bonds forany of the following additional purposes:•to add additional events of default under the mortgage for all or any series of first mortgage bonds;•to correct or amplify the description of the mortgaged property or to subject additional property to the lien of the mortgage;•to change, eliminate or add any provision to the mortgage; provided that no such change, elimination or addition willadversely affect the interests of the holders of first mortgage bonds of any series in any material respect;•to provide for the procedures required for use of a non-certificated system of registration for the first mortgage bonds of allor any series;•to change any place where principal, premium, if any, and interest shall be payable, first mortgage bonds may be surrenderedfor registration of transfer or exchange, and notices and demands to us may be served; and•to cure any ambiguity or inconsistency or to make any other changes or additions to the provisions of the mortgage if suchchanges or additions will not adversely affect the interests of first mortgage bonds of any series in any material respect.Modification Requiring ConsentExcept as provided below, the consent of the holders of a majority in aggregate principal amount of then outstanding firstmortgage bonds, considered as one class, is required for all other amendments or modifications to the mortgage. However, if lessthan all of the series of first mortgage bonds outstanding are directly affected by a proposed amendment or modification, then theconsent of the holders of only a majority in aggregate principal amount of the outstanding first mortgage bonds of all series that aredirectly affected, considered as one class, will be required. Notwithstanding the foregoing, no amendment or modification may bemade without the consent of the holder of each directly affected first mortgage bond then outstanding to:•impair or affect the right of such holder to receive payment of the principal of (and premium, if any) and interest on such firstmortgage bond, on or after the respective due dates expressed in such first mortgage bond, or to institute suit for the enforcement of any such payment on or after such respective dates;•permit the creation of any lien ranking prior to or on a parity with the lien of the mortgage with respect to the mortgagedproperty, or permit the deprivation of any non-assenting holder of a first mortgage bond of a lien on the mortgaged propertyfor the security of such holder’s first mortgage bonds (subject only to certain tax, assessment and governmental liens andcertain prior liens); or•permit the reduction of the percentage in principal amount of the outstanding first mortgage bonds of any series the consentof the holders of which is required for any amendment or modification.The mortgage provides that first mortgage bonds owned by us, for our benefit or by any affiliate of ours shall not be deemedoutstanding for the purpose of certain votes, consents or quorums; provided that first mortgage bonds that have been pledged ingood faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the trustee its right to vote such firstmortgage bonds and such pledgee is not our affiliate.Any request, consent or vote of the owner of any first mortgage bond will bind every future holder and owner of that firstmortgage bond and the holder and owner of every first mortgage bond issued upon the registration of transfer of or in exchange forthat first mortgage bond.Defaults and Notices ThereofDefaults under the mortgage include:1.failure to pay the principal of any first mortgage bond after it is due and payable;2.failure to pay interest upon any first mortgage bond for a period of 30 days after it is due and payable;3.certain events of bankruptcy, insolvency or reorganization;4.defaults under a supplemental indenture; and5.the expiration of a period of 90 days after the mailing by the trustee to us of a written demand, or by the holders of 15% inprincipal amount of the first mortgage bonds at the time outstanding to the trustee and us of a written demand, that weperform a specified covenant or agreement in the mortgage or a first mortgage bond, which specified covenant or agreementwe shall have failed to perform prior to such mailing, unless during such period we shall have performed such covenant oragreement or shall have in good faith commenced efforts to perform the same. The trustee may, and, if requested to do so inwriting by the holders of a majority in principal amount of the first mortgage bonds outstanding, shall, make such demand.The trustee may withhold notice of default, except in payment of principal, interest or funds for purchase or redemption offirst mortgage bonds, if the trustee in good faith determines it is in the interests of the holders of first mortgage bonds.RemediesAcceleration of MaturityIf a default under the mortgage occurs and is continuing, then the trustee, by written notice to us, or the holders of at least25% in aggregate principal amount of the outstanding first mortgage bonds, by written notice to the trustee and us, may declare theprincipal amount of all of the first mortgage bonds to be due and payable immediately, and upon the giving of such notice, suchprincipal amount and accrued and unpaid interest will become immediately due and payable. There is no automatic acceleration, even in the event of our bankruptcy, insolvency or reorganization.Annulment of AccelerationAt any time after such a declaration of acceleration has been made but before any sale of the mortgaged property, the holdersof a majority in principal amount of all outstanding first mortgage bonds may annul such declaration of acceleration, by writtennotice to the trustee and us, if the default under the mortgage giving rise to such declaration of acceleration has been cured, and wehave paid or deposited with the trustee a sum sufficient to pay:(1)all overdue interest on all outstanding first mortgage bonds;(2)the principal of and premium, if any, on the outstanding first mortgage bonds that have become due otherwise than by suchdeclaration of acceleration and overdue interest thereon;(3)interest on overdue interest, if any, to the extent lawful, at the rate borne by the first mortgage bonds for which interest isoverdue plus 1% per year; and(4)all amounts due to the trustee under the mortgage.Trustee PowersSubject to the mortgage, under specified circumstances and to the extent permitted by law, if a default under the mortgageoccurs, the trustee shall be entitled to the appointment of a receiver for the mortgaged property and is entitled to all other remediesavailable under applicable law.Control by HoldersThe holders of a majority in principal amount of the first mortgage bonds may direct the time, method and place ofconducting any proceedings for any remedy available to the trustee or exercising any trust or power conferred on the trustee. Thetrustee is not obligated to comply with directions that conflict with law or other provisions of the mortgage or that the trusteedetermines in good faith would involve the trustee in personal liability, would be unjustifiably prejudicial to non-assenting holdersor would be in circumstances where indemnity would not be sufficient. The trustee is not required to risk its funds or incur personalliability if there is reasonable ground for believing that repayment is not reasonably assured.Limitation on Holders’ Right to Institute ProceedingsNo holder of first mortgage bonds will have any right to institute any proceeding under the mortgage, or any remedy underthe mortgage, unless:•the holder has previously given to the trustee written notice of a default under the mortgage;•the holders of 25% in aggregate principal amount of the outstanding first mortgage bonds of all series have made a writtenrequest to the trustee and have offered the trustee reasonable opportunity and indemnity satisfactory to the trustee to instituteproceedings; and•the trustee has failed to institute any proceeding for 60 days after notice;provided that no holder or holders of first mortgage bonds shall have any right in any manner to affect or prejudice the lien of themortgage or to obtain priority over other holders of outstanding first mortgage bonds. However, these limitations do not apply to theabsolute and unconditional right of a holder of a first mortgage bond to institute suit for payment of the principal, premium, if any,or interest on the first mortgage bond on or after the applicable due date. We have reserved the right to amend the mortgage, without any consent or other action by the holders of any first mortgagebonds created after October 31, 2017, to revise the limitations described in the first sentence of the immediately preceding paragraphto apply to any proceeding or remedy under or with respect to the mortgage or the first mortgage bonds.Evidence to be Furnished to the TrusteeCompliance with the mortgage provisions is evidenced by written statements of our officers or persons we select or pay. Incertain cases, opinions of counsel and certifications of an engineer, accountant, appraiser or other expert (who in some cases must beindependent) must be furnished. We must give the trustee an annual certificate as to whether or not we have fulfilled our obligationsunder the mortgage throughout the preceding year.Satisfaction and Discharge of MortgageAfter we provide for the payment of all of the first mortgage bonds (including the Bonds) and after paying all other sumsdue under the mortgage, the mortgage may be satisfied and discharged. The first mortgage bonds will be deemed to have been paidwhen money or Eligible Obligations (as defined below) sufficient to pay the first mortgage bonds (in the opinion of an independentaccountant in the case of Eligible Obligations) at maturity or upon redemption have been irrevocably set apart or deposited with thetrustee; provided that the trustee shall have received an opinion of counsel to the effect that the setting apart or deposit does notrequire registration under the Investment Company Act of 1940, does not violate any applicable laws and does not result in a taxableevent with respect to the holders of the first mortgage bonds prior to the time of their right to receive payment. “EligibleObligations” means obligations of the United States of America that do not permit the redemption thereof at the issuer’s option.Consolidation, Merger and Conveyance of AssetsThe mortgage provides that we may consolidate with or merge into any other entity or convey, transfer or lease as, orsubstantially as, an entirety to any entity the mortgaged property, if:•(a) the surviving or successor entity to such merger or consolidation has authority to carry on the energy, fuel, water or steambusiness, or (b) the successor entity that acquires by conveyance or transfer or that leases our mortgaged property as, orsubstantially as, an entirety, is authorized to acquire, lease or operate the mortgaged property so conveyed or transferred;•such merger, consolidation, conveyance, transfer or lease is upon such terms as to preserve, and in no respect impair, the lienand security of the mortgage and the rights and powers of the trustee and the holders of first mortgage bonds;•the survivor or successor entity expressly assumes by supplemental indenture our obligations on all first mortgage bonds thenoutstanding and under the mortgage;•immediately after giving effect to such transaction, no default under the mortgage shall have occurred and be continuing; and•in the case of a lease, such lease is made expressly subject to termination by us or by the trustee and by the purchaser of theproperty so leased at any sale thereof at any time during the continuance of a default under the mortgage. In the case of the conveyance or other transfer of the mortgaged property as, or substantially as, an entirety to another entity,upon the satisfaction of all the conditions described above, the successor entity would be substituted for us under the mortgage, butwe would not be released and discharged from our obligations on the first mortgage bonds then outstanding.We have the right to amend the mortgage at any time without any consent or other action of the holders of any first mortgagebonds, including the Bonds, to provide that, if we transfer as an entirety all or substantially all of our mortgaged property to asuccessor, the successor will assume all of our obligations under the mortgage and we may be released from all such obligations.The mortgage does not prevent or restrict any conveyance or other transfer or lease of any part of the mortgaged property thatdoes not constitute the entirety, or substantially the entirety, of the mortgaged property.Although the successor entity may, in its sole discretion, subject to the lien of the mortgage property then owned or thereafteracquired by the successor entity, the lien of the mortgage generally will not cover the property of the successor entity other than themortgaged property it acquires from us and improvements, extensions and additions to such property and renewals, replacementsand substitutions thereof, within the meaning of the mortgage.The terms of the mortgage do not restrict mergers in which we are the surviving entity.The mortgage provides:(1)that a statutory merger pursuant to which our assets and liabilities are allocated to one or more entities shall not beconsidered to be a merger subject to the provisions of the mortgage relating to a merger, consolidation or conveyance ofall or substantially all of the mortgaged property unless all of our assets and liabilities are allocated to an entity other thanus and we do not survive such statutory merger; in all other cases of a statutory merger pursuant to which any mortgagedproperty is allocated to one or more entities other than us, each allocation of any mortgaged property to an entity otherthan us shall be deemed, for purposes of the mortgage, to be a transfer of such mortgaged property to such entity and nota merger;(2)that any conveyance, transfer or lease of any of our properties where we retain mortgaged property with a fair value inexcess of 143% of the aggregate principal amount of all outstanding first mortgage bonds, and any other outstanding debtsecured by a purchase money lien that ranks equally with, or senior to, the first mortgage bonds with respect to themortgaged property, shall not be deemed to be a conveyance, transfer or lease of all or substantially all of our mortgagedproperty. This fair value will be determined within 90 days of the conveyance, transfer or lease by an independent expertselected by us; and(3)that, in the case of a consolidation or merger after the consummation of which we would be the surviving or resultingentity, unless we otherwise provide in a supplemental indenture to the mortgage, the lien of the mortgage will generallynot cover any of the properties acquired by us in or as a result of such transaction or any improvements, extensions oradditions to those properties.Release of Obligations under the Bonds upon Transfer of All or Substantially All Mortgaged PropertyIf we transfer as an entirety all or substantially all of our mortgaged property to a successor, the successor will assume all ofour obligations under the Bonds and we may be released of all such obligations. Consent to AmendmentsEach holder or future holder of the Bonds, by its acquisition of an interest in such Bonds, irrevocably (a) consented or willconsent to the amendments to the mortgage described herein under “- Security,” “- Modification - Modification Without Consent,”and “- Consolidation, Merger and Conveyance of Assets,” without any other or further action by any holder of such Bonds, and (b)designated or will designate the trustee, and its successors, as its proxy with irrevocable instructions to vote and deliver writtenconsents on behalf of such holder in favor of such amendments at any meeting of bondholders, in lieu of any meeting ofbondholders, in response to any consent solicitation or otherwise.Information about the TrusteeThe trustee is The Bank of New York Mellon. In addition to acting as trustee, The Bank of New York Mellon also acts, andmay act, as trustee under various other of our and our affiliates’ indentures, trusts and guarantees. We and our affiliates maintaindeposit accounts and credit and liquidity facilities and conduct other banking transactions with the trustee and its affiliates in theordinary course of our respective businesses.So long as no event of default or event that, after notice or lapse of time, or both, would become an event of default hasoccurred and is continuing and except with respect to a trustee appointed by act of the holders, if we have delivered to the trustee aboard resolution appointing a successor trustee and the successor has accepted the appointment in accordance with the terms of themortgage, the trustee will be deemed to have resigned and the successor will be deemed to have been appointed as trustee inaccordance with the mortgage.Book-Entry Only SecuritiesThe Bonds trade through DTC. The Bonds are represented by a global certificate and registered in the name of Cede & Co.,DTC’s nominee. The global certificate was deposited with the trustee as custodian for DTC. Ownership of beneficial interests in theglobal certificate is limited to institutions that have accounts with DTC or its participants or persons that may hold interests throughparticipants.DTC is a New York clearing corporation and a clearing agency registered under Section 17A of the Exchange Act. DTCholds securities for its participants. DTC also facilitates the post-trade settlement of securities transactions among its participantsthrough electronic computerized book-entry transfers and pledges in the participants’ accounts. This eliminates the need for physicalmovement of securities certificates. The participants include securities brokers and dealers, banks, trust companies, clearingcorporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation(“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income ClearingCorporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Others whomaintain a custodial relationship with a participant can use the DTC system. The rules that apply to DTC and those using its systemsare on file with the SEC.Purchases of the Bonds within the DTC system must be made through participants, who will receive a credit for the Bondson DTC’s records. The beneficial ownership interest of each purchaser will be recorded on the appropriate participant’s records.Beneficial owners do not receive written confirmation from DTC of their purchases, but beneficial owners should receive writtenconfirmations of the transactions, as well as periodic statements of their holdings, from the participants through whom theypurchased Bonds. Transfers of ownership in the Bonds are to be accomplished by entries made on the books of the participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates for their Bonds,except if use of the book-entry system for the Bonds is discontinued.To facilitate subsequent transfers, all Bonds deposited by participants with DTC are registered in the name of DTC’snominee, Cede & Co. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. effects no change inbeneficial ownership. DTC has no knowledge of the actual beneficial owners of the Bonds. DTC’s records reflect only the identityof the participants to whose accounts such Bonds are credited. These participants may or may not be the beneficial owners.Participants are responsible for keeping account of their holdings on behalf of their customers.Conveyance of notices and other communications by DTC to participants, and by participants to beneficial owners, aregoverned by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.Beneficial owners of Bonds may wish to take certain steps to augment transmission to them of notices of significant events withrespect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the mortgage. Beneficial owners of theBonds may wish to ascertain that the nominee holding the Bonds has agreed to obtain and transmit notices to the beneficial owners.Redemption notices will be sent to Cede & Co., as registered holder of the Bonds. If less than all of the Bonds are beingredeemed, DTC’s practice is to determine by lot the amount of Bonds held by each participant to be redeemed.Neither DTC nor Cede & Co. will itself consent or vote with respect to Bonds, unless authorized by a participant inaccordance with DTC’s procedures. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible afterthe record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those participants to whose accountsthe Bonds are credited on the record date. We believe that these arrangements will enable the beneficial owners to exercise rightsequivalent in substance to the rights that can be directly exercised by a registered holder of the Bonds.Payments of redemption proceeds, principal of, and interest on the Bonds are and will be made to Cede & Co., or such othernominee as may be requested by DTC. DTC’s practice is to credit participants’ accounts upon DTC’s receipt of funds andcorresponding detail information from us or our agent, on the payable date in accordance with their respective holdings shown onDTC’s records. Payments by participants to beneficial owners are and will be governed by standing instructions and customarypractices. Payments are the responsibility of participants and not of DTC, the trustee, or us, subject to any statutory or regulatoryrequirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest to Cede & Co. (or suchother nominee as may be requested by DTC) is our responsibility. Disbursement of payments to participants is the responsibility ofDTC, and disbursement of payments to the beneficial owners is the responsibility of participants.Other than in the circumstances described herein, a beneficial owner will not be entitled to receive physical delivery of theBonds. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the Bonds.DTC may discontinue providing its services as securities depositary with respect to the Bonds at any time by giving usreasonable notice. In the event no successor securities depositary is obtained, certificates for the Bonds will be printed and delivered.We may decide to replace DTC or any successor depositary. Additionally, subject to the procedures of DTC, we may decide todiscontinue use of the system of book-entry transfers through DTC (or a successor depositary) with respect to some or all of theBonds. In that event or if an event of default with respect to the Bonds has occurred and is continuing, certificates for the Bonds will be printed and delivered. If certificates for the Bonds are printed and delivered,•those Bonds will be issued in fully registered form without coupons;•a holder of certificated Bonds would be able to exchange those Bonds, without charge, for an equal aggregate principalamount of Bonds, having the same issue date and with identical terms and provisions; and•a holder of certificated Bonds would be able to transfer those Bonds without cost to another holder, other than for applicablestamp taxes or other governmental charges.The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that webelieve to be reliable, but we do not take any responsibility for the accuracy of this information. Exhibit 4(f)4DESCRIPTION OF ENTERGY NEW ORLEANS, LLC’S SECURITIESREGISTERED PURSUANT TO SECTION 12OF THE SECURITIES EXCHANGE ACT OF 1934References in this exhibit to “we,” “us,” or “our” are to Entergy New Orleans, LLC.We have issued, and may from time to time issue, bonds in one or more series under one or more separate supplementalindentures to the Mortgage and Deed of Trust dated as of May 1, 1987 with The Bank of New York Mellon, successor trustee (the“trustee”). This Mortgage and Deed of Trust, as it has heretofore been and may be amended or supplemented from time to time, isreferred to in this exhibit as the “mortgage.” All first mortgage bonds issued or to be issued under the mortgage, including the Bonds(as defined below), are referred to herein as “first mortgage bonds.”As of February 21, 2020, we have two series of first mortgage bonds outstanding that are registered under Section 12(b) ofthe Securities Exchange Act of 1934, as amended (the “Exchange Act”):•our First Mortgage Bonds, 5.0% Series due December 1, 2052, issued in an aggregate principal amount of $30,000,000 underthe Sixteenth Supplemental Indenture, dated as of November 1, 2012, to the mortgage and traded on the New York StockExchange (the “NYSE”) under the ticker ENJ (the “2052 Bonds”); and•our First Mortgage Bonds, 5.50% Series due April 1, 2066, issued in an aggregate principal amount of $110,000,000 underthe Nineteenth Supplemental Indenture, dated as of March 15, 2016, to the mortgage and traded on the NYSE under theticker EAE (the “2066 Bonds,” and together with the 2052 Bonds, the “Bonds”).The full aggregate principal amount of each series of the Bonds is currently outstanding.The mortgage, including the applicable supplemental indentures relating to the Bonds, contains the full legal texts of thematters described herein. Because this is a summary, it does not describe every aspect of the mortgage, the supplemental indenturesrelating to each series of Bonds, or the outstanding first mortgage bonds, including the Bonds. The mortgage and the supplementalindentures that relate to the outstanding first mortgage bonds, including the Bonds, are filed as exhibits to the Annual Report onForm 10-K to which this is filed as an exhibit. You should read the mortgage for provisions that may be important to you. Thissummary is subject to and qualified in its entirety by reference to all the provisions of the mortgage, including the definitions ofsome of the terms used in the mortgage, and to the particular terms of the supplemental indenture that relates to each series ofBonds. The mortgage has been qualified under the Trust Indenture Act of 1939, and you should also refer to the Trust Indenture Actof 1939 for provisions that apply to the Bonds.GeneralThe mortgage permits us to issue first mortgage bonds from time to time subject to limitations described under “Issuance ofAdditional First Mortgage Bonds.” All first mortgage bonds of any one series need not be issued at the same time, and a series maybe reopened for issuances of additional first mortgage bonds of that series. This means that we may from time to time, without theconsent of the existing holders of the first mortgage bonds of any series, including the Bonds, create and issue additional firstmortgage bonds of a series having the same terms and conditions as the previously issued first mortgage bonds of that series in all respects, except for issue date, issue price and, if applicable, the initial interest payment on thoseadditional first mortgage bonds. Additional first mortgage bonds issued in this manner will be consolidated with and will form asingle series with the previously issued first mortgage bonds of that series. For more information, see the discussion below under“Issuance of Additional First Mortgage Bonds.”PaymentThe principal amount of the Bonds and interest thereon is and will be paid in any coin or currency of the United States ofAmerica that at the time of payment is legal tender at the corporate trust office of the trustee in the Borough of Manhattan, City andState of New York.Interest on the 2052 Bonds accrues at the rate of 5.0% per year. Interest on the 2066 Bonds accrues at the rate of 5.50% peryear. In each case, interest started to accrue from the date that the respective series of Bonds was issued. Interest payments on the2052 Bonds are made on March 1, June 1, September 1 and December 1 of each year, and on the 2066 Bonds are made on January1, April 1, July 1 and October 1 of each year. As long as the Bonds are registered in the name of The Depository Trust Company(“DTC”) or its nominee, the record date for interest payable on any interest payment date shall be the close of business on theBusiness Day (defined as any day other than a Saturday or a Sunday or a day on which banking institutions in The City of NewYork are authorized or required by law or executive order to remain closed or a day on which the corporate trust office of the trusteeis closed for business) immediately preceding such interest payment date. We have agreed to pay interest on any overdue principaland, if such payment is enforceable under applicable law, on any overdue installment of interest, in the case of the 2052 Bonds at arate of 6.0% per year, and in the case of the 2066 Bonds at a rate of 6.50% per year, to the holders of record at the close of businesson the Business Day immediately preceding our payment of such interest.Interest on the Bonds is computed on the basis of a 360-day year of twelve 30-day months. If any interest payment date orthe maturity date of a Bond falls on a day that is not a Business Day, the payment due on that interest payment date or the maturitydate will be made on the next Business Day, and without any interest or other payment in respect of such delay.As long as the Bonds are registered in the name of DTC or its nominee, we will pay principal and interest due on the Bondsto DTC. DTC will then make payment to its participants for disbursement to the beneficial owners of the Bonds as described underthe heading “Book-Entry Only Securities.”Redemption and PurchaseOptional RedemptionWe may redeem the Bonds prior to maturity, in whole or in part, at our option, on not less than 30 days’ nor more than 60days’ notice to holders by mail, (i) in the case of the 2052 Bonds, at any time, and (ii) in the case of the 2066 Bonds, at any time onor after April 1, 2021; in each case, at a redemption price equal to 100% of the principal amount of the Bonds being redeemed plusany accrued and unpaid interest thereon to, but not including, the redemption date.Unless the Bonds are held in book-entry only form through the facilities of DTC, in which case DTC’s procedures forselection shall apply (see “Book-Entry Only Securities”), if less than all of the Bonds of any securities are to be redeemed, thetrustee will select the Bonds to be redeemed.Unless we default in the payment of the redemption price and accrued interest, if any, in the case of an unconditional noticeof redemption, the Bonds subject to such notice of redemption will cease to bear interest on the redemption date. We will pay the redemption price and any accrued interest to the redemption date uponpresentation and surrender of any Bond for redemption. If only part of a Bond is redeemed, the trustee will deliver to the holder ofthe Bond a new Bond of the same series for the remaining portion without charge.We may make any redemption at our option conditional upon the receipt by the trustee, prior to the date fixed forredemption, of money sufficient to pay the redemption price and accrued interest, if any. If the trustee has not received the moneyby the date fixed for redemption, we will not be required to redeem the Bonds.Redemption of Bonds at Option of HoldersThe terms of the franchise ordinances pursuant to which we provide electric and gas service to the City of New Orleans statethat the City has a continuing option to purchase our electric and gas properties. If all or substantially all of our property subject tothe mortgage is taken or acquired by the City of New Orleans or any instrumentality or designee thereof, upon the consummation ofthis taking or acquisition, we have agreed to direct the trustee to send a written notice to each registered holder of bonds thenoutstanding stating that each such holder has the right to require us to redeem its bonds, in whole or in part, at the special redemptionprice of 101% of the principal amount of the bonds being redeemed plus accrued and unpaid interest thereon to, but not including,the redemption date.Upon the mailing of notice by the trustee, each holder will have 45 days to deliver written notice to the trustee of suchholder’s intent to have its bonds redeemed by us in accordance with the preceding paragraph on the 60th day following the date ofthe notice upon delivery and surrender of such bond.Exchange or Redemption of Bonds upon Merger or ConsolidationAlthough we do not currently have any plans to merge or consolidate with Entergy Louisiana, LLC, one of our affiliates, themortgage provides that, in the event of such a merger or consolidation, we would have the right to offer to exchange all outstandingBonds for a like principal amount of the new merged or consolidated company’s first mortgage bonds with the same interest rates,interest payment dates, maturity dates and redemption provisions. Unless we waive this right, the holders of outstanding Bonds musteither accept such first mortgage bonds in exchange for all or a portion of their Bonds or tender to us for redemption any Bonds notso exchanged. The redemption price applicable for these purposes to the Bonds will be 100% of the principal amount plus accruedinterest thereon to, but not including, the redemption date.Form and ExchangeThe Bonds are fully-registered bonds without coupons, issued in denominations of $25 and integral multiples of $25 inexcess thereof. Each series of the Bonds is represented by a global certificate without coupons registered in the name of a nomineeof DTC.The Bonds are exchangeable for other Bonds of the same series in equal aggregate principal amounts. No service charge willbe made for any registration of transfer or exchange of the Bonds. However, we may require payment to cover any tax or othergovernmental charge that may be imposed in connection with a registration of transfer or exchange. We will not be required toprovide for the transfer or exchange of any Bond:•during the 15 days before an interest payment date (unless such series has a record date for the payment of interest), •during the 15 days before any designation of such Bond to be redeemed, or•selected for redemption.SecurityThe Bonds, together with all other first mortgage bonds now or in the future outstanding under the mortgage, are and will besecured, equally and ratably, by the lien of the mortgage. The mortgage constitutes a first mortgage lien on substantially all of ourproperty (the “mortgaged property”) subject to bankruptcy law and:1.minor defects and encumbrances customarily found in similar properties that do not materially impair the use of themortgaged property in the conduct of our business;2.other liens, defects and encumbrances, if any, existing or created at the time of our acquisition of the mortgaged property;and3.excepted encumbrances.The mortgage does not create a lien on the following “excepted property”:•cash and securities;•all merchandise, equipment, apparatus, materials or supplies held for sale or other disposition in the usual course of businessor consumable during use;•automobiles, vehicles and aircraft, timber, minerals, mineral rights and royalties; and•accounts receivable, contracts, leases and operating agreements.The mortgage contains provisions that impose the lien of the mortgage on property we acquire after the date of the mortgage,other than excepted property, subject to pre-existing liens. However, if we consolidate or merge with, or convey or transfer all orsubstantially all of our mortgaged property to, another entity, unless the successor entity elects otherwise in its sole discretion, thelien created by the mortgage will generally not cover the property of the successor company, other than the mortgaged property itacquires from us and improvements, replacements and additions to such property.The mortgage also provides that the trustee has a lien on the mortgaged property to ensure the payment of its reasonablecompensation, expenses and disbursements and for indemnity against certain liabilities. This lien takes priority over the lien securingthe first mortgage bonds, including the Bonds.We have reserved the right to amend the mortgage without the consent or other action by the holders of any first mortgage bondscreated after November 30, 2017, to revise the definition of “excepted encumbrances” to mean the following:•tax liens, assessments and other governmental charges or requirements which are not delinquent or which are beingcontested in good faith and by appropriate proceedings or of which at least ten business days’ notice has not been given toour general counsel or to such other person designated by us to receive such notices;•mechanics’, workmen’s, repairmen’s, materialmen’s, warehousemen’s and carriers’ liens, other liens incident toconstruction, liens or privileges of any of our employees for salary or wages earned, but not yet payable, and other liens,including without limitation liens for worker’s compensation awards, arising in the ordinary course of business for chargesor requirements which are not delinquent or which are being contested in good faith and by appropriate proceedings or ofwhich at least ten business days’ notice has not been given to our general counsel or to such other person designated by us toreceive such notices; •specified judgment liens and prepaid liens;•easements, leases, reservations or other rights of others (including governmental entities) in, and defects of title in, ourproperty;•liens securing indebtedness or other obligations relating to real property we acquired for specified transmission, distributionor communication purposes or for the purpose of obtaining rights-of-way;•specified leases and leasehold, license, franchise and permit interests;•liens resulting from laws, rules, regulations, orders or rights of governmental authorities and specified liens required by lawor governmental regulations;•liens to secure public or statutory obligations;•rights of others to take minerals, timber, electric energy or capacity, gas, water, steam or other products produced by us or byothers on our property;•rights and interests of persons other than us arising out of agreements relating to the common ownership or joint use ofproperty, and liens on the interests of those persons in the property;•restrictions on assignment and/or requirements of any assignee to qualify as a permitted assignee and/or public utility orpublic services corporation; and•liens which have been bonded for the full amount in dispute or for the payment of which other adequate securityarrangements have been made.Issuance of Additional First Mortgage BondsThe maximum principal amount of first mortgage bonds that may be issued under the mortgage is limited to $10 billion atany time outstanding under the mortgage, subject to the issuance restrictions described below. First mortgage bonds of any seriesmay be issued from time to time on the basis of:1.70% of property additions after adjustments to offset retirements;2.retirements of first mortgage bonds; or3.deposit of cash with the trustee.Property additions generally include, among other things, electric, gas, steam or hot water property acquired afterDecember 31, 1986. Securities, automobiles, vehicles or aircraft, or property used principally for the production or gathering ofnatural gas, are not included as property additions. Deposited cash may be withdrawn upon the bases stated in clause (1) or(2) above.The mortgage contains restrictions on the issuance of first mortgage bonds against property subject to liens.As of December 31, 2019, we had approximately $410 million principal amount of first mortgage bonds outstanding. As ofDecember 31, 2019, we could have issued approximately $280 million principal amount of additional first mortgage bonds on thebasis of retired first mortgage bonds, and we had approximately $180 million of unfunded property additions, entitling us to issueapproximately $126 million principal amount of additional first mortgage bonds on the basis of property additions. The 2052 Bondswere issued on the basis of retired bond credits, and the 2066 Bonds were issued on the basis of property additions.Other than the security afforded by the lien of the mortgage and restrictions on the issuance of additional first mortgagebonds described above, there are no provisions of the mortgage that grant the holders of the first mortgage bonds protection in theevent of a highly leveraged transaction involving us. Release and Substitution of PropertyProperty other than the Municipalization Interest (as defined in the mortgage) may be released from the lien of the mortgage,on the basis of:1.the deposit with the trustee of cash or purchase money mortgages;2.the lower of cost or fair value to us of unfunded property additions designated by us, after adjustments in certain cases tooffset retirements and after making adjustments for certain prior lien bonds, if any, outstanding against property additions; or3.an amount equal to the principal amount of the retired first mortgage bonds that we elect to use as the basis for such releasetimes the reciprocal of the bonding ratio in effect at the time such retired first mortgage bonds were originally issued.Property owned by us on December 31, 1986 may be released from the lien of the mortgage at its depreciated book value onDecember 31, 1986; all other property may be released at its cost, as defined in the mortgage. Unfunded property may also bereleased without complying with clauses (1), (2) or (3) above if, after its release, we would have at least one dollar in unfundedproperty that remains subject to the lien of the mortgage.We can withdraw cash upon the bases stated in clauses (2) or (3) above.Generally, “funded property” under the mortgage means all mortgaged property owned by us on December 31, 1986 and allproperty additions used as the basis for the issuance of first mortgage bonds, the release of mortgaged property or the withdrawal ofcash held by the trustee. We may at any time, without the further consent of any holders of first mortgage bonds, change thedefinition of “funded property” to mean any mortgaged property specified by us with a fair value, to be determined by anindependent expert, of not less than 10/7ths of the sum of the amount of the outstanding first mortgage bonds and retired bondcredits, together with all property additions thereafter used as the basis for the issuance of first mortgage bonds, the release ofmortgaged property or the withdrawal of cash held by the trustee.We may, without any release or consent by the trustee, cancel or make changes or alterations in or substitutions for any andall easements, servitudes, rights of way and similar rights and/or interests.ModificationModification Without ConsentWithout the consent of any holder of first mortgage bonds, we and the trustee may enter into one or more supplementalindentures for any of the following purposes:•to evidence the assumption by any permitted successor of our covenants in the mortgage and in the first mortgage bonds;•to add one or more covenants or other provisions for the benefit of the holders of all or any series or tranche of first mortgagebonds, or to surrender any right or power conferred upon us;•to cure any ambiguity in the mortgage or any supplemental indenture; or•to establish the form or terms of first mortgage bonds of any other series as permitted by the mortgage;provided that any such modification does not adversely affect any first mortgage bonds then outstanding. We have reserved the right to amend the mortgage without the consent or action of any of the holders of first mortgage bondscreated after October 31, 2012, including the Bonds, to permit us to amend the mortgage without the consent of the holders of firstmortgage bonds for any of the following additional purposes:•to add additional events of default under the mortgage for all or any series of first mortgage bonds;•to correct or amplify the description of the mortgaged property or to subject additional property to the lien of the mortgage;•to change, eliminate or add any provision to the mortgage; provided that no such change, elimination or addition willadversely affect the interests of the holders of first mortgage bonds of any series in any material respect;•to provide for the procedures required for use of a non-certificated system of registration for the first mortgage bonds of allor any series;•to change any place where principal, premium, if any, and interest shall be payable, first mortgage bonds may be surrenderedfor registration of transfer or exchange, and notices and demands to us may be served; and•to cure any ambiguity or inconsistency or to make any other changes or additions to the provisions of the mortgage if suchchanges or additions will not adversely affect the interests of first mortgage bonds of any series in any material respect.Modification Requiring ConsentExcept as provided below, the consent of the holders of a majority in aggregate principal amount of then outstanding firstmortgage bonds, considered as one class, is required for all other amendments or modifications to the mortgage. However, if lessthan all of the series of first mortgage bonds outstanding are directly affected by a proposed amendment or modification, then theconsent of the holders of only a majority in aggregate principal amount of the outstanding first mortgage bonds of all series that aredirectly affected, considered as one class, will be required. Notwithstanding the foregoing, no amendment or modification may bemade without the consent of the holder of each directly affected first mortgage bond then outstanding to:•impair or affect the right of such holder to receive payment of the principal of (and premium, if any) and interest on such firstmortgage bond, on or after the respective due dates expressed in such first mortgage bond, or to institute suit for theenforcement of any such payment on or after such respective dates;•permit the creation of any lien ranking prior to or on a parity with the lien of the mortgage with respect to the mortgagedproperty, or permit the deprivation of any non-assenting holder of a first mortgage bond of a lien on the mortgaged propertyfor the security of such holder’s first mortgage bonds (subject only to certain tax, assessment and governmental liens andcertain prior liens); or•permit the reduction of the percentage in principal amount of the outstanding first mortgage bonds of any series the consentof the holders of which is required for any amendment or modification.The mortgage provides that first mortgage bonds owned by us, for our benefit or by any affiliate of ours shall not be deemedoutstanding for the purpose of certain votes, consents or quorums; provided that first mortgage bonds that have been pledged ingood faith may be regarded as outstanding if the pledgee establishes to the satisfaction of the trustee its right to vote such firstmortgage bonds and such pledgee is not our affiliate. Any request, consent or vote of the owner of any first mortgage bond will bind every future holder and owner of that firstmortgage bond and the holder and owner of every first mortgage bond issued upon the registration of transfer of or in exchange forthat first mortgage bond.Defaults and Notices ThereofDefaults under the mortgage include:1.failure to pay the principal of any first mortgage bond after it is due and payable;2.failure to pay interest upon any first mortgage bond for a period of 30 days after it is due and payable;3.certain events of bankruptcy, insolvency or reorganization;4.defaults under a supplemental indenture; and5.the expiration of a period of 90 days after the mailing by the trustee to us of a written demand, or by the holders of 15% inprincipal amount of the first mortgage bonds at the time outstanding to the trustee and us of a written demand, that weperform a specified covenant or agreement in the mortgage or a first mortgage bond, which specified covenant or agreementwe shall have failed to perform prior to such mailing, unless during such period we shall have performed such covenant oragreement or shall have in good faith commenced efforts to perform the same. The trustee may, and, if requested to do so inwriting by the holders of a majority in principal amount of the first mortgage bonds outstanding, shall, make such demand.The trustee may withhold notice of default, except in payment of principal, interest or funds for purchase or redemption offirst mortgage bonds, if the trustee in good faith determines it is in the interests of the holders of first mortgage bonds.RemediesAcceleration of MaturityIf a default under the mortgage occurs and is continuing, then the trustee, by written notice to us, or the holders of at least25% in aggregate principal amount of the outstanding first mortgage bonds, by written notice to the trustee and us, may declare theprincipal amount of all of the first mortgage bonds to be due and payable immediately, and upon the giving of such notice, suchprincipal amount and accrued and unpaid interest will become immediately due and payable.There is no automatic acceleration, even in the event of our bankruptcy, insolvency or reorganization.Annulment of AccelerationAt any time after such a declaration of acceleration has been made but before any sale of the mortgaged property, the holders of amajority in principal amount of all outstanding first mortgage bonds may annul such declaration of acceleration, by written notice tothe trustee and us, if the default under the mortgage giving rise to such declaration of acceleration has been cured, and we have paidor deposited with the trustee a sum sufficient to pay:1.all overdue interest on all outstanding first mortgage bonds;2.the principal of and premium, if any, on the outstanding first mortgage bonds that have become due otherwise than by suchdeclaration of acceleration and overdue interest thereon; 3.interest on overdue interest, if any, to the extent lawful, at the rate borne by the first mortgage bonds for which interest isoverdue plus 1% per year; and4.all amounts due to the trustee under the mortgage.Trustee PowersSubject to the mortgage, under specified circumstances and to the extent permitted by law, if a default under the mortgageoccurs, the trustee shall be entitled to the appointment of a receiver for the mortgaged property and is entitled to all other remediesavailable under applicable law.Control by HoldersThe holders of a majority in principal amount of the first mortgage bonds may direct the time, method and place ofconducting any proceedings for any remedy available to the trustee or exercising any trust or power conferred on the trustee. Thetrustee is not obligated to comply with directions that conflict with law or other provisions of the mortgage or that the trusteedetermines in good faith would involve the trustee in personal liability, would be unjustifiably prejudicial to non-assenting holdersor would be in circumstances where indemnity would not be sufficient. The trustee is not required to risk its funds or incur personalliability if there is reasonable ground for believing that repayment is not reasonably assured.Limitation on Holders’ Right to Institute ProceedingsNo holder of first mortgage bonds will have any right to institute any proceeding under the mortgage, or any remedy underthe mortgage, unless:•the holder has previously given to the trustee written notice of a default under the mortgage;•the holders of 25% in aggregate principal amount of the outstanding first mortgage bonds of all series have made a writtenrequest to the trustee and have offered the trustee reasonable opportunity and indemnity satisfactory to the trustee to instituteproceedings; and•the trustee has failed to institute any proceeding for 60 days after notice;provided that no holder or holders of first mortgage bonds shall have any right in any manner to affect or prejudice the lien of themortgage or to obtain priority over other holders of outstanding first mortgage bonds. However, these limitations do not apply to theabsolute and unconditional right of a holder of a first mortgage bond to institute suit for payment of the principal, premium, if any,or interest on the first mortgage bond on or after the applicable due date.We have reserved the right to amend the mortgage, without any consent or other action by the holders of any first mortgagebonds created after November 30, 2017, to revise the limitations described in the first sentence of the immediately precedingparagraph to apply to any proceeding or remedy under or with respect to the mortgage or the first mortgage bonds.Evidence to be Furnished to the TrusteeCompliance with the mortgage provisions is evidenced by written statements of our officers or persons we select or pay. Incertain cases, opinions of counsel and certifications of an engineer, accountant, appraiser or other expert (who in some cases must beindependent) must be furnished. We must give the trustee an annual certificate as to whether or not we have fulfilled our obligationsunder the mortgage throughout the preceding year. Satisfaction and Discharge of MortgageAfter we provide for the payment of all of the first mortgage bonds (including the Bonds) and after paying all other sumsdue under the mortgage, the mortgage may be satisfied and discharged. The first mortgage bonds will be deemed to have been paidwhen money or Eligible Obligations (as defined below) sufficient to pay the first mortgage bonds (in the opinion of an independentaccountant in the case of Eligible Obligations) at maturity or upon redemption have been irrevocably set apart or deposited with thetrustee; provided that the trustee shall have received an opinion of counsel to the effect that the setting apart or deposit does notrequire registration under the Investment Company Act of 1940, does not violate any applicable laws and does not result in a taxableevent with respect to the holders of the first mortgage bonds prior to the time of their right to receive payment. “EligibleObligations” means obligations of the United States of America that do not permit the redemption thereof at the issuer’s option.Consolidation, Merger and Conveyance of AssetsThe mortgage provides that we may consolidate with or merge into any other entity or convey, transfer or lease as, orsubstantially as, an entirety to any entity the mortgaged property, if:•(a) the surviving or successor entity to such merger or consolidation has authority to carry on the energy, fuel, water or steambusiness, or (b) the successor entity that acquires by conveyance or transfer or that leases our mortgaged property as, orsubstantially as, an entirety, is authorized to acquire, lease or operate the mortgaged property so conveyed or transferred;•such merger, consolidation, conveyance, transfer or lease is upon such terms as to preserve, and in no respect impair, the lienand security of the mortgage and the rights and powers of the trustee and the holders of first mortgage bonds;•the survivor or successor entity expressly assumes by supplemental indenture our obligations on all first mortgage bonds thenoutstanding and under the mortgage;•immediately after giving effect to such transaction, no default under the mortgage shall have occurred and be continuing; and•in the case of a lease, such lease is made expressly subject to termination by us or by the trustee and by the purchaser of theproperty so leased at any sale thereof at any time during the continuance of a default under the mortgage.In the case of the conveyance or other transfer of the mortgaged property as, or substantially as, an entirety to another entity,upon the satisfaction of all the conditions described above, the successor entity would be substituted for us under the mortgage, butwe would not be released and discharged from our obligations on the first mortgage bonds then outstanding.The mortgage does not prevent or restrict any conveyance or other transfer, or lease, of any part of the mortgaged propertythat does not constitute the entirety, or substantially the entirety, of the mortgaged property.Although the successor entity may, in its sole discretion, subject to the lien of the mortgage property then owned or thereafteracquired by the successor entity, the lien of the mortgage generally will not cover the property of the successor entity other than themortgaged property it acquires from us and improvements, extensions and additions to such property and renewals, replacementsand substitutions thereof, within the meaning of the mortgage.The terms of the mortgage do not restrict mergers in which we are the surviving entity. We have reserved the right to amend the mortgage without the consent or other action of the holders of any of the firstmortgage bonds created after October 31, 2012, including the Bonds, to provide that, if we transfer as an entirety all or substantiallyall of our mortgaged property to a successor, the successor will assume all of our obligations under the mortgage and the firstmortgage bonds and we may be released of all such obligations.We have reserved the right to amend the mortgage, without any consent or other action by the holders of any first mortgagebonds created after November 30, 2017, as follows:1.to provide that a statutory merger pursuant to which our assets and liabilities are allocated to one or more entities shall not beconsidered to be a merger subject to the provisions of the mortgage relating to a merger, consolidation or conveyance of all orsubstantially all of the mortgaged property unless all of our assets and liabilities are allocated to an entity other than us andwe do not survive such statutory merger; in all other cases of a statutory merger pursuant to which any mortgaged property isallocated to one or more entities other than us, each allocation of any mortgaged property to an entity other than us shall bedeemed, for purposes of the mortgage, to be a transfer of such mortgaged property to such entity and not a merger;2.to provide that any conveyance, transfer or lease of any of our properties where we retain mortgaged property with a fairvalue in excess of 143% of the aggregate principal amount of all outstanding first mortgage bonds, and any other outstandingdebt secured by a purchase money lien that ranks equally with, or senior to, the first mortgage bonds with respect to themortgaged property, shall not be deemed to be a conveyance, transfer or lease of all or substantially all of our mortgagedproperty. This fair value will be determined within 90 days of the conveyance, transfer or lease by an independent expertselected by us; and3.to provide that, in the case of a consolidation or merger after the consummation of which we would be the surviving orresulting entity, unless we otherwise provide in a supplemental indenture to the mortgage, the lien of the mortgage willgenerally not cover any of the properties acquired by us in or as a result of such transaction or any improvements, extensionsor additions to those properties.Release of Obligations under the Bonds upon Transfer of All or Substantially All Mortgaged PropertyIf we transfer as an entirety all or substantially all of our mortgaged property to a successor, the successor will assume all ofour obligations under the Bonds and we may be released of all such obligations.Consent to AmendmentsEach holder or future holder of the 2066 Bonds, by its acquisition of an interest in such Bonds, irrevocably (a) consented orwill consent to the amendments to the mortgage described herein under “- Modification - Modification Without Consent” in the sixthparagraph under “Consolidation, Merger and Conveyance of Assets,” without any other or further action by any holder of suchBonds, and (b) designated or will designate the trustee, and its successors, as its proxy with irrevocable instructions to vote anddeliver written consents on behalf of such holder in favor of such amendments at any meeting of bondholders, in lieu of any meetingof bondholders, in response to any consent solicitation or otherwise.Information about the TrusteeThe trustee is The Bank of New York Mellon. In addition to acting as trustee, The Bank of New York Mellon also acts, andmay act, as trustee under various other of our and our affiliates’ indentures, trusts and guarantees. We and our affiliates maintain deposit accounts and credit and liquidity facilities and conduct other bankingtransactions with the trustee and its affiliates in the ordinary course of our respective businesses.We have reserved the right to amend the mortgage, without any consent or other action by the holders of any first mortgagebonds created after November 30, 2017, to provide that, so long as no event of default or event that, after notice or lapse of time, orboth, would become an event of default has occurred and is continuing and except with respect to a trustee appointed by act of theholders, if we have delivered to the trustee a board resolution appointing a successor trustee and the successor has accepted theappointment in accordance with the terms of the mortgage, the trustee will be deemed to have resigned and the successor will bedeemed to have been appointed as trustee in accordance with the mortgage.Book-Entry Only SecuritiesThe Bonds trade through DTC. Each series of Bonds is represented by a separate global certificate and registered in thename of Cede & Co., DTC’s nominee. The global certificates were deposited with the trustee as custodian for DTC. Ownership ofbeneficial interests in the global certificates is limited to institutions that have accounts with DTC or its participants or persons thatmay hold interests through participants.DTC is a New York clearing corporation and a clearing agency registered under Section 17A of the Exchange Act. DTCholds securities for its participants. DTC also facilitates the post-trade settlement of securities transactions among its participantsthrough electronic computerized book‑entry transfers and pledges in the participants’ accounts. This eliminates the need for physicalmovement of securities certificates. The participants include securities brokers and dealers, banks, trust companies, clearingcorporations and certain other organizations. DTC is a wholly‑owned subsidiary of The Depository Trust & Clearing Corporation(“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income ClearingCorporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Others whomaintain a custodial relationship with a participant can use the DTC system. The rules that apply to DTC and those using its systemsare on file with the SEC.Purchases of the Bonds within the DTC system must be made through participants, who will receive a credit for the Bondson DTC’s records. The beneficial ownership interest of each purchaser will be recorded on the appropriate participant’s records.Beneficial owners do not receive written confirmation from DTC of their purchases, but beneficial owners should receive writtenconfirmations of the transactions, as well as periodic statements of their holdings, from the participants through whom theypurchased Bonds. Transfers of ownership in the Bonds are to be accomplished by entries made on the books of the participantsacting on behalf of beneficial owners. Beneficial owners will not receive certificates for their Bonds of a given series, except if useof the book‑entry system for the Bonds of that series is discontinued.To facilitate subsequent transfers, all Bonds deposited by participants with DTC are registered in the name of DTC’snominee, Cede & Co. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. effects no change inbeneficial ownership. DTC has no knowledge of the actual beneficial owners of the Bonds. DTC’s records reflect only the identityof the participants to whose accounts such Bonds are credited. These participants may or may not be the beneficial owners.Participants are responsible for keeping account of their holdings on behalf of their customers. Conveyance of notices and other communications by DTC to participants, and by participants to beneficial owners, aregoverned by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.Beneficial owners of Bonds may wish to take certain steps to augment transmission to them of notices of significant events withrespect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the mortgage. Beneficial owners of theBonds may wish to ascertain that the nominee holding the Bonds has agreed to obtain and transmit notices to the beneficial owners.Redemption notices will be sent to Cede & Co., as registered holder of the Bonds. If less than all of the Bonds of a series arebeing redeemed, DTC’s practice is to determine by lot the amount of Bonds of such series held by each participant to be redeemed.Neither DTC nor Cede & Co. will itself consent or vote with respect to Bonds, unless authorized by a participant inaccordance with DTC’s procedures. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible afterthe record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those participants to whose accountsthe Bonds are credited on the record date. We believe that these arrangements will enable the beneficial owners to exercise rightsequivalent in substance to the rights that can be directly exercised by a registered holder of the Bonds.Payments of redemption proceeds, principal of, and interest on the Bonds are and will be made to Cede & Co., or such othernominee as may be requested by DTC. DTC’s practice is to credit participants’ accounts upon DTC’s receipt of funds andcorresponding detail information from us or our agent, on the payable date in accordance with their respective holdings shown onDTC’s records. Payments by participants to beneficial owners are and will be governed by standing instructions and customarypractices. Payments are the responsibility of participants and not of DTC, the trustee, or us, subject to any statutory or regulatoryrequirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest to Cede & Co. (or suchother nominee as may be requested by DTC) is our responsibility. Disbursement of payments to participants is the responsibility ofDTC, and disbursement of payments to the beneficial owners is the responsibility of participants.Other than in the circumstances described herein, a beneficial owner will not be entitled to receive physical delivery of theBonds. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the Bonds.DTC may discontinue providing its services as securities depositary with respect to the Bonds at any time by giving usreasonable notice. In the event no successor securities depositary is obtained, certificates for the Bonds will be printed and delivered.We may decide to replace DTC or any successor depositary. Additionally, subject to the procedures of DTC, we may decide todiscontinue use of the system of book‑entry transfers through DTC (or a successor depositary) with respect to some or all of theBonds. In that event or if an event of default with respect to a series of Bonds has occurred and is continuing, certificates for theBonds of such series will be printed and delivered. If certificates for such series of Bonds are printed and delivered,•those Bonds will be issued in fully registered form without coupons;•a holder of certificated Bonds would be able to exchange those Bonds, without charge, for an equal aggregate principalamount of Bonds of the same series, having the same issue date and with identical terms and provisions; and•a holder of certificated Bonds would be able to transfer those Bonds without cost to another holder, other than for applicablestamp taxes or other governmental charges. The information in this section concerning DTC and DTC’s book‑entry system has been obtained from sources that webelieve to be reliable, but we do not take any responsibility for the accuracy of this information. Exhibit 4(g)13DESCRIPTION OF ENTERGY TEXAS, INC.’S SECURITIESREGISTERED PURSUANT TO SECTION 12OF THE SECURITIES EXCHANGE ACT OF 1934References in this exhibit to “we,” “us,” or “our” are to Entergy Texas, Inc.As of February 21, 2020, we have two series of securities outstanding that are registered under Section 12(b) of theSecurities Exchange Act of 1934, as amended (the “Exchange Act”):•our First Mortgage Bonds, 5.625% Series due June 1, 2064, issued in an aggregate principal amount of $135,000,000 withtheir terms established by Officer’s Certificate No. 7-B-5, dated as of May 13, 2014 (the “Officer’s Certificate”) pursuant toour Indenture, Deed of Trust and Security Agreement dated as of October 1, 2008, as it has been heretofore supplementedand may be amended or supplemented from time to time (the “mortgage”), between us and The Bank of New York Mellon,as trustee (the “trustee”), and traded on the New York Stock Exchange (the “NYSE”) under the ticker EZT (the “Bonds”);and•our 5.375% Series A Preferred Stock, Cumulative, No Par Value (Liquidation Value $25 Per Share), traded on the NYSEunder the ticker ETI/PR (the “Series A Preferred Stock”).Description of the BondsAll first mortgage bonds issued or to be issued under the mortgage, including the Bonds, are referred to herein as “firstmortgage bonds.” The full aggregate principal amount of the Bonds is currently outstanding.The mortgage, including the Officer’s Certificate, contains the full legal texts of the matters described herein. Because this isa summary, it does not describe every aspect of the mortgage, the supplemental indenture thereto, the Officer’s Certificate or theoutstanding first mortgage bonds, including the Bonds. The mortgage, the supplemental indenture thereto and the officer’scertificates that relate to the outstanding first mortgage bonds, including the Bonds, are filed as exhibits to the Annual Report onForm 10-K to which this is filed as an exhibit. You should read the mortgage for provisions that may be important to you. Thissummary is subject to and qualified in its entirety by reference to all the provisions of the mortgage, including the definitions ofsome of the terms used in the mortgage, and the particular terms of the Officer’s Certificate. The mortgage has been qualified underthe Trust Indenture Act of 1939, and you should also refer to the Trust Indenture Act of 1939 for provisions that apply to the Bonds.GeneralThe mortgage permits us to issue first mortgage bonds from time to time in an unlimited aggregate amount subject to thelimitations described under “Issuance of Additional First Mortgage Bonds.” All first mortgage bonds of any one series need not beissued at the same time, and a series may be reopened for issuances of additional first mortgage bonds of that series. This means thatwe may from time to time, without the consent of the existing holders of the first mortgage bonds of any series, including the Bonds,create and issue additional first mortgage bonds of a series having the same terms and conditions as the previously issued firstmortgage bonds of that series in all respects, except for issue date, issue price and, if applicable, the initial interest payment on thoseadditional first mortgage bonds. Additional first mortgage bonds issued in this manner will be consolidated with and will form a single series with, the previously issued firstmortgage bonds of that series. For more information, see the discussion below under “Issuance of Additional First Mortgage Bonds.”RedemptionWe may redeem the Bonds prior to maturity, in whole or in part, at our option, on not less than 30 days’ nor more than 60days’ notice at any time at a redemption price equal to 100% of the principal amount of the Bonds being redeemed plus any accruedand unpaid interest thereon to, but not including, the redemption date. Unless the Bonds are held in book-entry only form throughthe facilities of The Depository Trust Company (“DTC”), in which case DTC’s procedures for selection shall apply (see “Book-Entry Only Securities”), if less than all of the Bonds are to be redeemed, the trustee will select the Bonds to be redeemed.(Mortgage, Section 503.)Unless we default in the payment of the redemption price and accrued interest, if any, in the case of an unconditional noticeof redemption, the Bonds subject to such notice of redemption will cease to bear interest on the redemption date. (Mortgage, Section505.) We will pay the redemption price and any accrued interest to the redemption date upon surrender of any Bond for redemption.(Mortgage, Section 505.) If only part of a Bond is redeemed, the trustee will deliver to the holder of the Bond a new Bond for theremaining portion without charge. (Mortgage, Section 506.)We may make any redemption at our option conditional upon the receipt by the paying agent, on or prior to the date fixedfor redemption, of money sufficient to pay the redemption price and accrued interest, if any. If the paying agent has not received themoney by the date fixed for redemption, we will not be required to redeem the Bonds. (Mortgage, Section 504.)Payment and Paying AgentsInterest on the Bonds accrues at the rate of 5.625% per year and started to accrue from the date that the Bonds were issued.Interest payments on the Bonds are made on March 1, June 1, September 1, and December 1 of each year. As long as the Bonds areregistered in the name of DTC or its nominee, the record date for interest payable on any interest payment date shall be the close ofbusiness on the Business Day (defined as any day other than a Saturday or a Sunday or a day on which banking institutions in TheCity of New York are authorized or required by law or executive order to remain closed or a day on which the corporate trust officeof the trustee is closed for business) immediately preceding such interest payment date. We have agreed to pay interest on anyoverdue principal and, if such payment is enforceable under applicable law, on any overdue installment of interest on the Bonds at arate of 5.625% per year to holders of record at the close of business on the Business Day immediately preceding our payment ofsuch interest.Interest on the Bonds is computed on the basis of a 360-day year of twelve 30-day months. If any interest payment date orthe maturity date of the Bonds falls on a day that is not a Business Day, the payment due on that interest payment date or thematurity date will be made on the next Business Day without any interest or other payment in respect of such delay.As long as the Bonds are registered in the name of DTC or its nominee, we will pay principal and interest due on the Bondsto DTC. DTC will then make payment to its participants for disbursement to the beneficial owners of the Bonds as described underthe heading “Book-Entry Only Securities.” If the Bonds are not registered in the name of DTC, or its nominee, interest on each Bond payable on any interest paymentdate will be paid to the person in whose name that Bond is registered at the close of business on the regular record date for thatinterest payment date. However, interest payable at maturity will be paid to the person to whom the principal is paid. If there hasbeen a default in the payment of interest on any Bond, the defaulted interest may be paid to the holder of that Bond as of the close ofbusiness on a date between 10 and 15 days before the date proposed by us for payment of the defaulted interest or in any othermanner permitted by any securities exchange on which that Bond may be listed, if the trustee finds it workable. (Mortgage, Section307.)If the Bonds are not registered in the name of DTC, or its nominee, principal and interest on the Bonds at maturity will bepayable upon presentation of the Bonds at the corporate trust office of The Bank of New York Mellon in The City of New York, asour paying agent. However, we may choose to make payment of interest by check mailed to the address of the persons entitled topayment as they may appear or have appeared in the security register for the Bonds. We may change the place of payment on theBonds, appoint one or more additional paying agents (including us) and remove any paying agent, all at our discretion. (Mortgage,Section 702.)Form, Registration and TransferThe Bonds are fully-registered bonds without coupons, issued in denominations of $25 and integral multiples of $25 inexcess thereof. The Bonds are represented by a global certificate without coupons registered in the name of a nominee of DTC.Subject to restrictions related to the issuance of Bonds through DTC’s book-entry system, the transfer of Bonds may beregistered, and Bonds may be exchanged for other Bonds of authorized denominations and with the same terms and principalamount, at the corporate trust office of the trustee in The City of New York. (Mortgage, Section 305.) We may, upon prompt writtennotice to the trustee and the holders of the Bonds, designate one or more additional places, or change the place or places previouslydesignated, for registration of transfer and exchange of the Bonds. (Mortgage, Section 702.) No service charge will be made for anyregistration of transfer or exchange of the Bonds. However, we may require payment to cover any tax or other governmental chargethat may be imposed in connection with a registration of transfer or exchange. We will not be required to execute or to provide forthe registration of transfer or exchange of any Bond:•during the 15 days before an interest payment date;•during the 15 days before giving any notice of redemption; or•selected for redemption except the unredeemed portion of such Bond being redeemed in part.(Mortgage, Section 305.)SecurityThe Bonds, together with all other first mortgage bonds now or in the future outstanding under the mortgage, are and will besecured, equally and ratably, by the lien of the mortgage. The mortgage constitutes a first mortgage lien on all of our tangibleelectric utility property located in Texas, together with our franchises, permits and licenses that are transferable and necessary for theoperation of such property and our recorded easements and rights of way, other than Excepted Property (as defined below) andsubject to Permitted Liens (as discussed below). These properties are sometimes referred to as our “Mortgaged Property”, and theMortgaged Property acquired by us after December 31, 2007, is sometimes referred to as “Property Additions.” Permitted LiensThe lien of the mortgage is subject to Permitted Liens described in the mortgage. These Permitted Liens include, amongothers:•liens existing at October 1, 2008 (the “Execution Date of the Mortgage”), that have not been discharged;•as to property acquired by us after the Execution Date of the Mortgage, liens existing or placed on such property at the timewe acquire such property and any Purchase Money Liens;•tax liens, assessments and other governmental charges or requirements which are not delinquent or which are beingcontested in good faith and by appropriate proceedings or of which at least ten business days’ notice has not been given toour general counsel or to such other person designated by us to receive such notices;•mechanics’, workmen’s, repairmen’s, materialmen’s, warehousemen’s and carriers’ liens, other liens incident toconstruction, liens or privileges of any of our employees for salary or wages earned, but not yet payable, and other liens,including without limitation liens for worker’s compensation awards, arising in the ordinary course of business for chargesor requirements which are not delinquent or which are being contested in good faith and by appropriate proceedings or ofwhich at least ten business days’ notice has not been given to our general counsel or to such other person designated by us toreceive such notices;•specified judgment liens and Prepaid Liens;•easements, leases, reservations or other rights of others (including governmental entities) in, and defects of title in, ourproperty;•liens securing indebtedness or other obligations relating to real property we acquired for specified transmission , distributionor communication purposes or for the purpose of obtaining rights-of-way;•specified leases and leasehold, license, franchise and permit interests;•liens resulting from laws, rules, regulations, orders or rights of Governmental Authorities and specified liens required by lawor governmental regulations;•liens to secure public obligations; rights of others to take minerals, timber, electric energy or capacity, gas, water, steam orother products produced by us or by others on our property;•rights and interests of persons other than us arising out of agreements relating to the common ownership or joint use ofproperty, and liens on the interests of those Persons in the property;•restrictions on assignment and/or requirements of any assignee to qualify as a permitted assignee and/or public utility orpublic services corporation; and•liens which have been bonded for the full amount in dispute or for the payment of which other adequate securityarrangements have been made.(Mortgage, Granting Clauses and Section 101.)The mortgage provides that the trustee will have a lien, prior to the lien on the Mortgaged Property securing the Bonds, forthe payment of its reasonable compensation and expenses and for indemnity against specified liabilities. (Mortgage, Section 1007.)This lien would be a Permitted Lien under the mortgage. Excepted PropertyThe lien of the mortgage does not cover, among other things, the following types of property:•all cash, deposit accounts, securities and all policies of insurance on the lives of our officers not paid or delivered to ordeposited with or held by the trustee or required so to be;•all contracts, leases, operating agreements and other agreements of all kinds (other than our franchises, permits and licensesthat are transferable and necessary for the operation of the Mortgaged Property), contract rights, bills, notes and otherinstruments, revenues, income and earnings, all accounts, accounts receivable, rights to payment, payment intangibles andunbilled revenues, rights created by statute or governmental action to bill and collect revenues or other amounts fromcustomers or others, credits, claims, demands and judgments;•all governmental and other licenses, permits, franchises, consents and allowances (other than our franchises, permits andlicenses that are transferable and necessary for the operation of Mortgaged Property);•all unrecorded easements and rights of way;•all intellectual property rights and other general intangibles;•all vehicles, movable equipment, aircraft and vessels and all parts, accessories and supplies used in connection with any ofthe foregoing;•all personal property of such character that the perfection of a security interest therein or other lien thereon is not governedby the Uniform Commercial Code in effect where we are organized;•all merchandise and appliances acquired for the purpose of resale in the ordinary course and conduct of our business, and allmaterials and supplies held for consumption in operation or held in advance of use thereof for fixed capital purposes;•all electric energy and capacity, gas, steam and other materials and products generated, manufactured, produced or purchasedby us for sale, distribution or use in the ordinary course and conduct of our business;•all property which is the subject of a lease agreement designating us as lessee, and all our right, title and interest in and to theproperty and in, to and under the lease agreement, whether or not the lease agreement is intended as security, and the last dayof the term of any lease or leasehold which may become subject to the lien of the mortgage;•all property which subsequent to the Execution Date of the mortgage has been released from the lien of the mortgage and anyimprovements, extensions and additions to such properties and renewals, replacements, substitutions of or for any partsthereof; and•all property located at Edison Plaza in Beaumont, Texas.We sometimes refer to property of ours not covered by the lien of the mortgage as “Excepted Property.” (Mortgage, GrantingClauses.)Funded PropertyThe Mortgaged Property that was owned by us on December 31, 2007, and on the Execution Date of the mortgage isconsidered Funded Property and is funded at its net book value on December 31, 2007. Property Additions will become FundedProperty when used under the mortgage for the issuance of first mortgage bonds, the release or retirement of Funded Property, or thewithdrawal of cash deposited with the trustee for the issuance of first mortgage bonds. Issuance of Additional First Mortgage BondsSubject to the issuance restrictions described below, the aggregate principal amount of first mortgage bonds that may beauthenticated and delivered under the mortgage is unlimited. (Mortgage, Section 301) First mortgage bonds of any series may beissued from time to time only on the basis of, and in an aggregate principal amount not exceeding, the sum of the following:•70% of the cost or fair value to us (whichever is less) of Property Additions which do not constitute Funded Property(generally, Property Additions which have been made the basis of the authentication and delivery of Bonds, the release ofMortgaged Property or the withdrawal of cash which have been substituted for retired Funded Property or which have beenused for other specified purposes (Mortgage, Section 102)) after specified deductions and additions, primarily includingadjustments to offset property retirements;•the aggregate principal amount of Retired Securities, as defined below; or•an amount of cash deposited with the trustee.“Retired Securities” means:•any first mortgage bonds authenticated and delivered under the mortgage which (i) no longer remain outstanding, (ii) havenot been made the basis of the authentication and delivery of first mortgage bonds, the release of Mortgaged Property or thewithdrawal of cash, which have been substituted for retired Funded Property or which have been used for other specifiedpurposes under any of the provisions of the mortgage; and (iii) have not been paid, redeemed, purchased or otherwise retiredby the application thereto of Funded Cash; and•any Assumed Debt which (i) no longer remains outstanding because we have paid or caused to be deposited with theapplicable trustee, paying agent or the holder of such Assumed Debt moneys sufficient to pay our obligations with respect tosuch Assumed Debt, (ii) has not been made the basis of the authentication and delivery of first mortgage bonds, the releaseof Mortgaged Property or the withdrawal of cash; and (iii) has not been paid, redeemed, purchased or otherwise retired bythe application thereto of Funded Cash.(Mortgage, Sections 101, 1601, 1602, 1603, 1604 and 1605.)As of December 31, 2019, we had approximately $1,735 million principal amount of first mortgage bonds outstanding. As ofDecember 31, 2019, we could have issued approximately $583 million principal amount of additional first mortgage bonds on thebasis of Retired Securities, and we had approximately $726 million of unfunded property additions, entitling us to issueapproximately $508 million principal amount of additional first mortgage bonds on the basis of Property Additions. The Bonds wereissued on the basis of Property Additions.Other than the security afforded by the lien of the mortgage and restrictions on the issuance of additional first mortgagebonds described above, there are no provisions of the mortgage that grant the holders of the first mortgage bonds protection in theevent of a highly leveraged transaction involving us.Release of PropertyUnless an event of default under the mortgage has occurred and is continuing, we may obtain the release from the lien of themortgage of any collateral for the first mortgage bonds that constitutes Funded Property, except for cash held by the trustee, upondelivery to the trustee of an amount in cash equal to the amount, if any, by which the lower of the cost or fair value of the property to be released exceeds the aggregate of:•an amount equal to the aggregate principal amount of any obligations secured by Purchase Money Liens upon the property tobe released and delivered to the trustee;•an amount equal to the cost or fair value to us (whichever is less) of certified Property Additions not constituting FundedProperty after specified deductions and additions, primarily including adjustments to offset property retirements (except thatthese adjustments need not be made if the Property Additions were acquired, made or constructed within the 90-day periodpreceding the release);•10/7ths of the aggregate principal amount of first mortgage bonds that we would be entitled to issue on the basis of RetiredSecurities or bond credits (with the entitlement being waived by operation of the release);•10/7ths of the aggregate principal amount of any outstanding first mortgage bonds delivered to the trustee (with the firstmortgage bonds to be cancelled by the trustee) other than first mortgage bonds issued on the basis of deposited cash;•any amount in cash and/or an amount equal to the aggregate principal amount of any obligations secured by Purchase MoneyLiens delivered to a holder of a prior lien on Mortgaged Property in consideration for the release of such Mortgaged Propertyfrom such prior lien; and•any taxes and expenses incidental to any sale, exchange, dedication or other disposition of the property to be released.(Mortgage, Section 1803.)Unless an event of default under the mortgage has occurred and is continuing, we may obtain the release from the lien of themortgage of any part of the Mortgaged Property or any interest therein, which does not constitute Funded Property or Funded Cashheld by the trustee, without depositing any cash or property with the trustee as long as (a) the aggregate amount of cost or fair valueto us (whichever is less) of all Property Additions which do not constitute Funded Property (excluding the property to be released)after specified deductions and additions, primarily including adjustments to offset property retirements, is not less than zero or(b) the cost or fair value (whichever is less) of property to be released does not exceed the aggregate amount of the cost or fair valueto us (whichever is less) of Property Additions acquired, made or constructed within the 90-day period preceding the release.(Mortgage, Section 1804.)The mortgage provides simplified procedures for the release of Mortgaged Property with a net book value of up to thegreater of $10 million or 3% of outstanding first mortgage bonds during a calendar year and for the release of Mortgaged Propertytaken or sold in connection with the power of eminent domain, provides for dispositions of certain obsolete or unnecessaryMortgaged Property and for grants or surrender of certain easements, leases or rights of way without any release or consent by thetrustee. (Mortgage Sections 1802, 1805 and 1807.)If we retain any interest in any property released from the lien of the mortgage, the mortgage will not become a lien on theproperty or the interest in the property or any improvements, extensions or additions to, or any renewals, replacements orsubstitutions of or for, any part or parts of the property unless we subject such property to the lien of the mortgage. (Mortgage,Section 1810.)The mortgage also provides that we may terminate, abandon, surrender, cancel, release, modify or dispose of any of ourfranchises, permits or licenses that are Mortgaged Property without any consent of the trustee or the holders of outstanding firstmortgage bonds; provided that (i) such action is, in our opinion, necessary, desirable or advisable in the conduct of our business, and(ii) any of our franchises, permits or licenses that, in our opinion, cease to be necessary for the operation of Mortgaged Property shall cease to be MortgagedProperty without any release or consent, or report to, the trustee. (Mortgage, Section 1802.)Withdrawal of CashUnless an event of default under the mortgage has occurred and is continuing, and subject to specified limitations, cash heldby the trustee may, generally, (1) be withdrawn by us (a) to the extent of the cost or fair value to us (whichever is less) of PropertyAdditions not constituting Funded Property, after specified deductions and additions, primarily including adjustments to offsetretirements (except that these adjustments need not be made if the Property Additions were acquired, made or constructed within the90-day period preceding the withdrawal) or (b) in an amount equal to the aggregate principal amount of first mortgage bonds that wewould be entitled to issue on the basis of Retired Securities or bond credits (with the entitlement to the issuance being waived byoperation of the withdrawal) or (c) in an amount equal to the aggregate principal amount of any outstanding first mortgage bondsdelivered to the trustee (with the first mortgage bonds to be cancelled by the trustee), or (2) upon our request, be applied to (a) thepurchase of first mortgage bonds or (b) the payment (or provision for payment) at stated maturity of any first mortgage bonds or theredemption (or provision for payment) of any first mortgage bonds which are redeemable. (Mortgage, Section 1806.)Satisfaction and Discharge of BondsSubject to certain conditions, we will be discharged from our obligations on Bonds if we irrevocably deposit with the trusteeor any paying agent, other than us, sufficient cash or government securities to pay the principal, interest and any other sums whendue on the stated maturity date or a redemption date of such Bonds. (Mortgage, Section 801.)Consolidation, Merger and Conveyance of AssetsUnder the terms of the mortgage, we may not consolidate with or merge into any other entity or convey, transfer or lease as,or substantially as, an entirety to any entity the Mortgaged Property, unless:•the surviving or successor entity, or an entity that acquires by conveyance or transfer or that leases our Mortgaged Propertyas, or substantially as, an entirety, is organized and validly existing under the laws of any domestic jurisdiction, and itexpressly assumes our obligations on all first mortgage bonds then outstanding and under the mortgage and confirms the lienof the mortgage on the Mortgaged Property (as constituted immediately prior to the time such transaction became effective)and subjecting to the lien of the mortgage all property thereafter acquired by the successor entity that constitutes animprovement, extension or addition to the Mortgaged Property (as so constituted) or a renewal, replacement or substitution ofor for any part thereof, but only to the extent that such improvement, extension or addition is so affixed or attached to realproperty as to be regarded a part of such real property or is an improvement, extension or addition to personal property that ismade to maintain, renew, repair or improve the function of such personal property and is physically installed in or affixed tosuch personal property;•in the case of a lease, such lease is made expressly subject to termination by us or by the trustee and by the purchaser of theproperty so leased at any sale thereof at any time during the continuance of an event of default under the mortgage;•we shall have delivered to the trustee an officer’s certificate and an opinion of counsel as provided in the mortgage; and •immediately after giving effect to such transaction (and treating any debt that becomes an obligation of the successor entityas a result of such transaction as having been incurred by the successor entity at the time of such transaction), no event ofdefault under the mortgage, or event which, after notice or lapse of time or both, would become an event of default under themortgage, shall have occurred and be continuing.(Mortgage, Section 1201.) In the case of the conveyance or other transfer of the Mortgaged Property as, or substantially as,an entirety to another entity, upon the satisfaction of all the conditions described above, we would be released and discharged fromall our obligations and covenants under the mortgage and on the first mortgage bonds then outstanding unless we elect to waive suchrelease and discharge. (Mortgage, Section 1204.)The mortgage does not prevent or restrict:•any conveyance or other transfer, or lease, of any part of the Mortgaged Property that does not constitute the entirety, orsubstantially the entirety, of the Mortgaged Property; or (Mortgage, Section 1205.)•any conveyance, transfer or lease of any of our properties where we retain Mortgaged Property with a fair value in excess of143% of the aggregate principal amount of all outstanding first mortgage bonds, and any other outstanding debt secured by aPurchase Money Lien that ranks equally with, or senior to, the first mortgage bonds with respect to the Mortgaged Property.This fair value will be determined within 90 days of the conveyance, transfer or lease by an independent expert selected byus. (Mortgage, Section 1206.)Although the successor entity may, in its sole discretion, subject to the lien of the mortgage property then owned or thereafteracquired by the successor entity, the lien of the mortgage generally will not cover the property of the successor entity other than themortgaged property it acquires from us and improvements, extensions and additions to such property and renewals, replacementsand substitutions thereof, within the meaning of the mortgage. (Mortgage, Section 1203)The terms of the mortgage do not restrict mergers in which we are the surviving entity. (Mortgage, Section 1205.) Astatutory merger of the sort permitted by Texas law in which our assets and liabilities may be allocated among one or more entitiesshall not be considered to be a merger, consolidation or conveyance of Mortgaged Property subject to the provisions of the mortgagedescribed above unless all or substantially all of the Mortgaged Property is allocated to one or more other entities.Events of Default“Event of default,” when used in the mortgage with respect to first mortgage bonds, means any of the following:•failure to pay interest on any first mortgage bond for 30 days after it is due unless we have made a valid extension of theinterest payment period with respect to such first mortgage bond as provided in the mortgage;•failure to pay the principal of or any premium on any first mortgage bond when due unless we have made a valid extensionof the maturity of such first mortgage bond as provided in the mortgage;•failure to perform or breach of any other covenant or warranty in the mortgage that continues for 90 days after we receivewritten notice from the trustee, or we and the trustee receive written notice from the holders of at least 33% in aggregateprincipal amount of the outstanding first mortgage bonds, unless the trustee, or the trustee and the holders of a principal amount of first mortgage bonds not less thanthe principal amount of first mortgage bonds the holders of which gave such notice, as the case may be, agree in writing toan extension of such period prior to its expiration; provided, however, that the trustee, or the trustee and the holders of suchprincipal amount of first mortgage bonds, as the case may be, shall be deemed to have agreed to an extension of such periodif corrective action is initiated by us within such period and is being diligently pursued;•events of our bankruptcy, insolvency or reorganization as specified in the mortgage; or•any other event of default included in any supplemental indenture, board resolution or officer’s certificate establishing aseries of first mortgage bonds.(Mortgage, Sections 301, 901 and 1301.)The trustee is required to give notice of any default under the mortgage known to the trustee in the manner and to the extentrequired to do so by the Trust Indenture Act of 1939, unless such default shall have been cured or waived. However, in the case ofany default of the character specified in the third bullet in the preceding paragraph, no such notice to holders of the outstanding firstmortgage bonds shall be given until at least 60 days after the occurrence thereof. (Mortgage, Section 1002.)RemediesAcceleration of MaturityIf an event of default under the mortgage occurs and is continuing, then the trustee, by written notice to us, or the holders ofat least 33% in aggregate principal amount of the outstanding first mortgage bonds, by written notice to the trustee and us, maydeclare the principal amount of all of the first mortgage bonds to be due and payable immediately, and upon our receipt of suchnotice, such principal amount, together with premium, if any, and accrued and unpaid interest will become immediately due andpayable. (Mortgage, Section 902.)There is no automatic acceleration, even in the event of our bankruptcy, insolvency or reorganization.Rescission of AccelerationAt any time after such a declaration of acceleration has been made but before any sale of the Mortgaged Property and beforea judgment or decree for payment of the money due has been obtained by the trustee, the event of default under the mortgage givingrise to such declaration of acceleration will be considered cured, and such declaration and its consequences will be consideredrescinded and annulled, if:•we have paid or deposited with the trustee a sum sufficient to pay:(1)all overdue interest on all outstanding first mortgage bonds;(2)the principal of and premium, if any, on the outstanding first mortgage bonds that have become due otherwise thanby such declaration of acceleration and overdue interest thereon;(3)interest on overdue interest, if any, to the extent lawful; and(4)all amounts due to the trustee under the mortgage; and•any other event of default under the mortgage with respect to the first mortgage bonds has been cured or waived as providedin the mortgage. (Mortgage, Section 902.)Trustee PowersSubject to the mortgage, under specified circumstances and to the extent permitted by law, if an event of default under themortgage occurs and is continuing, the trustee is entitled to the appointment of a receiver for the Mortgaged Property and is entitledto all other remedies available to mortgagees and secured parties under the Uniform Commercial Code or any other applicable law.(Mortgage, Section 916.)Control by HoldersOther than its duties in the case of an event of default under the mortgage, the trustee is not obligated to exercise any of itsrights or powers under the mortgage at the request, order or direction of any of the holders, unless the holders offer the trustee anindemnity satisfactory to it. (Mortgage, Section 1003.) If they provide this indemnity, the holders of a majority in principal amountof the outstanding first mortgage bonds will have the right to direct the time, method and place of conducting any proceeding for anyremedy available to the trustee, or exercising any trust or power conferred on the trustee. The trustee is not obligated to comply withdirections that conflict with law or other provisions of the mortgage or that could involve the trustee in personal liability incircumstances where indemnity would not, in the trustee’s sole discretion, be adequate. (Mortgage, Section 912.)Limitation on Holders’ Right to Institute ProceedingsNo holder of first mortgage bonds will have any right to institute any proceeding or remedy under or with respect to themortgage or the first mortgage bonds, unless:•the holder has previously given to the trustee written notice of a continuing event of default under the mortgage;•the holders of a majority in aggregate principal amount of the outstanding first mortgage bonds of all series have made awritten request to the trustee and have offered indemnity satisfactory to the trustee to institute proceedings; and•the trustee has failed to institute any proceeding for 60 days after notice and has not received during that period any directionfrom the holders of a majority in aggregate principal amount of the outstanding first mortgage bonds inconsistent with thewritten request of holders referred to above;provided that no holder or holders of first mortgage bonds shall have any right in any manner to affect or prejudice the rights of otherholders of outstanding first mortgage bonds or to obtain priority over such other holders. (Mortgage, Section 907.) However, theselimitations do not apply to the absolute and unconditional right of a holder of a first mortgage bond to institute suit for payment ofthe principal, premium, if any, or interest on the first mortgage bond on or after the applicable due date. (Mortgage, Section 908.)Evidence to be Furnished to the TrusteeCompliance with the mortgage provisions is evidenced by written statements of our officers or persons we select or pay. Incertain cases, opinions of counsel and certifications of an engineer, accountant, appraiser or other expert (who in some cases must beindependent) must be furnished. We must give the trustee an annual certificate as to whether or not we have fulfilled our obligations under the mortgage throughout thepreceding year.Modification and WaiverWithout the consent of any holder of first mortgage bonds, we and the trustee may enter into one or more supplementalindentures for any of the following purposes:•to evidence the assumption by any permitted successor of our covenants in the mortgage and in the first mortgage bonds;•to add one or more covenants or other provisions for the benefit of the holders of all or any series or tranche of first mortgagebonds, or to surrender any right or power conferred upon us;•to add additional events of default under the mortgage for all or any series of first mortgage bonds;•to change, eliminate or add any provision to the mortgage; provided, however, if the change, elimination or addition willadversely affect the interests of the holders of first mortgage bonds of any series in any material respect, the change,elimination or addition will become effective only:(1)when the consent of the holders of first mortgage bonds of such series has been obtained in accordance with themortgage; or(2)when no first mortgage bonds of the affected series remain outstanding under the mortgage;•to provide additional security for any first mortgage bonds;•to establish the form or terms of first mortgage bonds of any other series as permitted by the mortgage;•to provide for the authentication and delivery of bearer securities with or without coupons;•to evidence and provide for the acceptance of appointment by a separate or successor trustee or co-trustee;•to provide for the procedures required for use of a noncertificated system of registration for the first mortgage bonds of all orany series;•to change any place where principal, premium, if any, and interest shall be payable, first mortgage bonds may be surrenderedfor registration of transfer or exchange, and notices and demands to us may be served;•to amend and restate the mortgage as originally executed and as amended from time to time, with additions, deletions andother changes that do not adversely affect the interests of the holders of first mortgage bonds of any series in any materialrespect; or•to cure any ambiguity or inconsistency or to make any other changes or additions to the provisions of the mortgage if suchchanges or additions will not adversely affect the interests of first mortgage bonds of any series in any material respect.(Mortgage, Section 1301.)The holders of a majority in aggregate principal amount of then outstanding first mortgage bonds, considered as one class,may waive compliance by us with some restrictive provisions of the mortgage. (Mortgage, Section 706.) The holders of a majorityin principal amount of then outstanding first mortgage bonds may waive any past default under the mortgage, except a default in thepayment of principal, premium, if any, or interest and certain covenants and provisions of the mortgage that cannot be modified oramended without the consent of the holder of each outstanding first mortgage bond of any affected series. (Mortgage, Section 913.)Except as provided below, the consent of the holders of a majority in aggregate principal amount of then outstanding firstmortgage bonds, considered as one class, is required for all other amendments or modifications to the mortgage. However, if less than all of the series of first mortgage bonds outstanding are directly affected by aproposed amendment or modification, then the consent of the holders of only a majority in aggregate principal amount of theoutstanding first mortgage bonds of all series that are directly affected, considered as one class, will be required. Notwithstandingthe foregoing, no amendment or modification may be made without the consent of the holder of each directly affected mortgagebond then outstanding to:•change the stated maturity of the principal of, or any installment of principal of or interest on, any mortgage bond, or reducethe principal amount of any first mortgage bond or its rate of interest or change the method of calculating that interest rate orreduce any premium payable upon redemption, or change the currency in which payments are made, or impair the right toinstitute suit for the enforcement of any payment on or after the stated maturity of any first mortgage bond;•create any lien ranking prior to or on a parity with the lien of the mortgage with respect to the Mortgaged Property, terminatethe lien of the mortgage on the Mortgaged Property or deprive any holder of a first mortgage bond of the benefits of thesecurity of the lien of the mortgage;•reduce the percentage in principal amount of the outstanding first mortgage bonds of any series the consent of the holders ofwhich is required for any amendment or modification or any waiver of compliance with a provision of the mortgage or ofany default thereunder and its consequences, or reduce the requirements for a quorum or voting; or•modify certain provisions of the mortgage relating to supplemental indentures, waivers of some covenants and waivers ofpast defaults with respect to the first mortgage bonds of any series.A supplemental indenture that changes the mortgage solely for the benefit of one or more particular series of first mortgagebonds, or modifies the rights of the holders of first mortgage bonds of one or more series, will not affect the rights under themortgage of the holders of the first mortgage bonds of any other series. (Mortgage, Section 1302.)The mortgage provides that first mortgage bonds owned by us or anyone else required to make payment on the first mortgagebonds shall be disregarded and considered not to be outstanding in determining whether the required holders have given a request orconsent. (Mortgage, Section 101.)We may fix in advance a record date to determine the holders entitled to give any request, demand, authorization, direction,notice, consent, waiver or similar act of the holders, but we have no obligation to do so. If we fix a record date, that request,demand, authorization, direction, notice, consent, waiver or other act of the holders may be given before or after that record date,but only the holders of record at the close of business on that record date will be considered holders for the purposes of determiningwhether holders of the required percentage of the outstanding first mortgage bonds have authorized or agreed or consented to therequest, demand, authorization, direction, notice, consent, waiver or other act of the holders. For that purpose, the outstanding firstmortgage bonds will be computed as of the record date.Any request, demand, authorization, direction, notice, consent, election, waiver or other act of a holder of any mortgagebond will bind every future holder of that first mortgage bond and the holder of every first mortgage bond issued upon theregistration of transfer of or in exchange for that first mortgage bond. A transferee will also be bound by acts of the trustee or us inreliance thereon, whether or not notation of that action is made upon the first mortgage bond. (Mortgage, Section 106.)Resignation of a TrusteeThe trustee may resign at any time by giving written notice to us or may be removed at any time by an act of the holders of amajority in principal amount of first mortgage bonds then outstanding delivered to the trustee and us. No resignation or removal of the trustee and no appointment of a successor trustee will be effectiveuntil the acceptance of appointment by a successor trustee. So long as no event of default or event that, after notice or lapse of time,or both, would become an event of default has occurred and is continuing and except with respect to a trustee appointed by act of theholders, if we have delivered to the trustee a board resolution appointing a successor trustee and the successor has accepted theappointment in accordance with the terms of the mortgage, the trustee will be deemed to have resigned and the successor will bedeemed to have been appointed as trustee in accordance with the mortgage.(Mortgage, Section 1010.)NoticesNotices to holders of Bonds will be given by mail to the addresses of such holders as they may appear in the security registerfor the Bonds. (Mortgage, Section 108.)TitleWe, the trustee, and any of our or the trustee’s agents, may treat the person in whose name Bonds are registered as theabsolute owner thereof, whether or not the Bonds may be overdue, for the purpose of making payments and for all other purposesirrespective of notice to the contrary. (Mortgage, Section 308.)Governing LawThe mortgage and the Bonds are governed by, and construed in accordance with, the laws of the State of New York exceptwhere otherwise required by law, including with respect to the creation, perfection, priority or enforcement of the lien of themortgage. (Mortgage, Section 114.)Information about the TrusteeThe trustee is The Bank of New York Mellon. In addition to acting as trustee, The Bank of New York Mellon also acts, andmay act, as trustee under various other of our and our affiliates’ indentures, trusts and guarantees. We and our affiliates maintaindeposit accounts and credit and liquidity facilities and conduct other banking transactions with the trustee and its affiliates in theordinary course of our respective businesses.Book-Entry Only SecuritiesThe Bonds trade through DTC. The Bonds are represented by a global certificate and registered in the name of Cede & Co.,DTC’s nominee. The global certificate was deposited with the trustee as custodian for DTC. Ownership of beneficial interests in theglobal certificate is limited to institutions that have accounts with DTC or its participants or persons that may hold interests throughparticipants.DTC is a New York clearing corporation and a clearing agency registered under Section 17A of the Exchange Act. DTCholds securities for its participants. DTC also facilitates the post-trade settlement of securities transactions among its participantsthrough electronic computerized book-entry transfers and pledges in the participants’ accounts. This eliminates the need for physicalmovement of securities certificates. The participants include securities brokers and dealers, banks, trust companies, clearingcorporations and certain other organizations. DTC is a wholly-owned subsidiary of The Depository Trust & Clearing Corporation(“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation and Fixed Income ClearingCorporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulated subsidiaries. Others who maintain a custodial relationship with a participant can use the DTCsystem. The rules that apply to DTC and those using its systems are on file with the SEC.Purchases of the Bonds within the DTC system must be made through participants, who will receive a credit for the Bondson DTC’s records. The beneficial ownership interest of each purchaser will be recorded on the appropriate participant’s records.Beneficial owners do not receive written confirmation from DTC of their purchases, but beneficial owners should receive writtenconfirmations of the transactions, as well as periodic statements of their holdings, from the participants through whom theypurchased Bonds. Transfers of ownership in the Bonds are to be accomplished by entries made on the books of the participantsacting on behalf of beneficial owners. Beneficial owners will not receive certificates for their Bonds, except if use of the book-entrysystem for the Bonds is discontinued.To facilitate subsequent transfers, all Bonds deposited by participants with DTC are registered in the name of DTC’snominee, Cede & Co. The deposit of the Bonds with DTC and their registration in the name of Cede & Co. effects no change inbeneficial ownership. DTC has no knowledge of the actual beneficial owners of the Bonds. DTC’s records reflect only the identityof the participants to whose accounts such Bonds are credited. These participants may or may not be the beneficial owners.Participants are responsible for keeping account of their holdings on behalf of their customers.Conveyance of notices and other communications by DTC to participants, and by participants to beneficial owners, aregoverned by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.Beneficial owners of Bonds may wish to take certain steps to augment transmission to them of notices of significant events withrespect to the Bonds, such as redemptions, tenders, defaults and proposed amendments to the mortgage. Beneficial owners of theBonds may wish to ascertain that the nominee holding the Bonds has agreed to obtain and transmit notices to the beneficial owners.Redemption notices will be sent to Cede & Co., as registered holder of the Bonds. If less than all of the Bonds are beingredeemed, DTC’s practice is to determine by lot the amount of Bonds held by each participant to be redeemed.Neither DTC nor Cede & Co. will itself consent or vote with respect to Bonds, unless authorized by a participant inaccordance with DTC’s procedures. Under its usual procedures, DTC would mail an omnibus proxy to us as soon as possible afterthe record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those participants to whose accountsthe Bonds are credited on the record date. We believe that these arrangements will enable the beneficial owners to exercise rightsequivalent in substance to the rights that can be directly exercised by a registered holder of the Bonds.Payments of redemption proceeds, principal of, and interest on the Bonds are and will be made to Cede & Co., or such othernominee as may be requested by DTC. DTC’s practice is to credit participants’ accounts upon DTC’s receipt of funds andcorresponding detail information from us or our agent, on the payable date in accordance with their respective holdings shown onDTC’s records. Payments by participants to beneficial owners are and will be governed by standing instructions and customarypractices. Payments are the responsibility of participants and not of DTC, the trustee, or us, subject to any statutory or regulatoryrequirements as may be in effect from time to time. Payment of redemption proceeds, principal and interest to Cede & Co. (or suchother nominee as may be requested by DTC) is our responsibility. Disbursement of payments to participants is the responsibility ofDTC, and disbursement of payments to the beneficial owners is the responsibility of participants. Other than in the circumstances described herein, a beneficial owner will not be entitled to receive physical delivery of theBonds. Accordingly, each beneficial owner must rely on the procedures of DTC to exercise any rights under the Bonds.DTC may discontinue providing its services as securities depositary with respect to the Bonds at any time by giving usreasonable notice. In the event no successor securities depositary is obtained, certificates for the Bonds will be printed and delivered.We may decide to replace DTC or any successor depositary. Additionally, subject to the procedures of DTC, we may decide todiscontinue use of the system of book-entry transfers through DTC (or a successor depositary) with respect to some or all of theBonds. In that event or if an event of default with respect to the Bonds has occurred and is continuing, certificates for the Bonds willbe printed and delivered. If certificates for the Bonds are printed and delivered,•those Bonds will be issued in fully registered form without coupons;•a holder of certificated Bonds would be able to exchange those Bonds, without charge, for an equal aggregate principalamount of Bonds, having the same issue date and with identical terms and provisions; and•a holder of certificated Bonds would be able to transfer those Bonds without cost to another holder, other than for applicablestamp taxes or other governmental charges.The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that webelieve to be reliable, but we do not take any responsibility for the accuracy of this information.Description of the Series A Preferred StockThe following description of the Series A Preferred Stock does not purport to be complete. Reference is made to the TexasBusiness Organizations Code (“TXBOC”), our Amended and Restated Certificate of Formation, as amended by the Statement ofResolution Establishing the Series A Preferred Stock (“Resolution”) adopted by our Board of Directors (as so amended, the“Charter”), and our Amended and Restated Bylaws (the “Bylaws”). Each of the Charter and the Bylaws are filed as exhibits to theAnnual Report on Form 10-K to which this is filed as an exhibit. The following statements are qualified in their entirety by suchreferences.GeneralOur Board of Directors is authorized under the Charter to provide for the issuance from time to time of Preferred Stock, withno par value (“Preferred Stock”), in one or more series, and, as to each series, to fix and determine the designations, preferences,limitations, and relative rights, including voting rights, applicable to shares of such series.Under the Charter, we are authorized to issue 200,000,000 shares of common stock, with no par value (“Common Stock”)and 20,000,000 shares of Preferred Stock.The Series A Preferred Stock is not subject to further capital calls or to assessment by us and has no exchange or conversionrights.Dividends The holders of the Series A Preferred Stock are entitled to receive, when, as and if, declared by our Board of Directors out offunds legally available, cash dividends at a rate per year equal to 5.375% and are not entitled to receive any other dividends.Preferred dividends began accumulating on each share of Series A Preferred Stock from the date of issuance of that share.The preferred dividends accumulate from day to day, whether or not earned or declared by the Board of Directors, and arecumulative. The preferred dividends, if and when declared payable by the Board of Directors out of our legally available funds, willbe payable in lawful money of the United States of America, quarterly on January 15, April 15, July 15 and October 15 of each year(each, a “Dividend Payment Date”). To the extent that any preferred dividend is not paid on any Dividend Payment Date, thatpreferred dividend will accumulate until such preferred dividend is paid in full. The preferred dividends payable on each share ofSeries A Preferred Stock shall be computed on the basis of a 360-day year consisting of twelve 30-day months, and with respect toany period less than a full dividend period, on the basis of the actual number of days elapsed during such period.No dividend or distribution in cash or other property (other than shares of Junior Stock (as defined herein)) will be declared,paid, or set apart for payment on or with respect to the Junior Stock unless all preferred dividends on the Series A Preferred Stockaccumulated through the date of any distribution have been declared, paid, or set apart before or at the time of the declaration,distribution, or setting apart with respect to the Junior Stock. “Junior Stock” means the Common Stock and any series of PreferredStock that ranks junior to the Series A Preferred Stock as to dividends or liquidation, dissolution or winding up (whether voluntary orinvoluntary).At any time that dividend payments due on one or more Dividend Payment Date on any shares of the Series A PreferredStock are accumulated and unpaid, and thereafter until all accumulated and unpaid dividends on any such Series A Preferred Stockshall have been paid (without interest), we shall not redeem, repurchase or otherwise acquire, retire or make a liquidation paymentwith respect to any of our stock other than redemptions, repurchases, acquisitions, retirements or liquidation payments with respectto the Series A Preferred Stock and other series of Preferred Stock with similar redemption or repurchase provisions that rank seniorto the Series A Preferred Stock as to dividends and liquidation, dissolution or winding up (whether voluntary or involuntary).When dividends are not paid in full on any shares of outstanding Preferred Stock that rank equal with the Series A PreferredStock as to dividends and liquidation, dissolution or winding up (whether voluntary or involuntary) for a dividend period, alldividends declared with respect to shares of Series A Preferred Stock and all outstanding shares of such equal ranking PreferredStock for such dividend period shall be declared pro rata so that the respective amounts of such dividends declared bear the sameratio to each other as all accumulated but unpaid dividends per share on the shares of Series A Preferred Stock and all shares of suchoutstanding equal ranking Preferred Stock for such dividend period bear to each other. Therefore, if we are not paying full dividendson any outstanding shares of such equal ranking Preferred Stock, we will not be able to pay full dividends on the Series A PreferredStock. Similarly, if we issue any series of Preferred Stock that ranks senior to the Series A Preferred Stock as to dividends andliquidation, dissolution or winding up (whether voluntary or involuntary), we expect that if we do not pay any amount of stateddividends thereon, we will not be able to pay any dividends on the Series A Preferred Stock.Subject to the foregoing, dividends (payable in cash, stock or otherwise) as may be determined by the Board of Directorsmay be declared and paid on the Common Stock and any other shares of Junior Stock (as defined below) from time to timeoutstanding out of any funds legally available for such payment or as otherwise permitted by applicable law, and the Series APreferred Stock shall not be entitled to participate in any such dividend. RankingThe Series A Preferred Stock will rank senior to the Common Stock as to dividends, redemption, and amounts payable onour liquidation, dissolution or winding up.Except with respect to Preferred Stock issued in the future in accordance with the provisions described under “Voting Rights-Restrictions on Issuance of Senior Equity Securities,” the rights of the Series A Preferred Stock to dividends, redemption, andamounts payable on our liquidation, dissolution or winding up shall rank equal or senior to each other series of Preferred Stockwhich we may issue in the future.RedemptionOptional RedemptionWe may redeem shares of Series A Preferred Stock as follows:•in whole but not in part, at any time and from time to time prior to October 15, 2024, within 120 days after the conclusion ofany review or appeal process instituted by us following the occurrence of a Ratings Event (as defined herein), and theredemption price shall be equal to $25.50 per share, plus the amount of accumulated and unpaid preferred dividends on suchshares up to and including the date on which the redemption price on such shares has been paid in full; and/or•in whole or in part, at any time and from time to time on or after October 15, 2024, and the redemption price shall be equal to$25.00 per share, plus the amount of accumulated and unpaid preferred dividends on such shares being redeemed up to andincluding the date on which the redemption price on such shares being redeemed has been paid in full.Partial payments on any share will be applied first to preferred dividends and then to the redemption price.“Ratings Event” means that any nationally recognized statistical rating organization as defined in Section 3(a)(62) of theSecurities Exchange Act of 1934, as amended, or in any successor provision thereto, that then publishes a rating for us (a “ratingagency”) amends, clarifies or changes the criteria it uses to assign equity credit to the Series A Preferred Stock, which amendment,clarification or change results in:•the shortening of the length of time the Series A Preferred Stock is assigned a particular level of equity credit by that ratingagency as compared to the length of time the Series A Preferred Stock would have been assigned that level of equity creditby that rating agency or its predecessor on the initial issuance of the Series A Preferred Stock; or•the lowering of the equity credit (including up to a lesser amount) assigned to the Series A Preferred Stock by that ratingagency as compared to the equity credit assigned thereto by that rating agency or its predecessor on the initial issuance of theSeries A Preferred Stock.Redemption NoticeAt least 30 days and not more than 60 days before a redemption date, we will mail or cause to be mailed written notice,postage prepaid, to each holder of record of shares of Series A Preferred Stock to be redeemed at the holder’s mailing address lastshown on our share transfer records for the Series A Preferred Stock. The redemption notice will state: •the total number of shares of Series A Preferred Stock that we will redeem on the redemption date;•the number of shares of Series A Preferred Stock held by the holder that we will redeem on the redemption date;•the redemption date and the redemption price;•any conditions to such redemption; and•the time, place, and manner in which the holder is to surrender to the registrar the certificate or certificates representingshares of Series A Preferred Stock to be redeemed.Conditions to RedemptionIf the redemption notice shall specify conditions to redemption of shares of Series A Preferred Stock and such conditionsshall not have been satisfied on or prior to the redemption date, the redemption notice shall be of no force and effect and such SeriesA Preferred Stock shall not be subject to redemption on such redemption date.Partial RedemptionIn case of any redemption of only part of the shares of Series A Preferred Stock at the time outstanding, the shares of SeriesA Preferred Stock to be redeemed shall be selected either pro rata or by lot. Subject to the provisions of the Resolution, we shallhave full power and authority to prescribe the terms and conditions upon which shares of Series A Preferred Stock shall beredeemed from time to time. If fewer than all the shares of Series A Preferred Stock represented by any certificate are redeemed, anew certificate shall be issued representing the unredeemed shares of Series A Preferred Stock without charge to the holder thereof.Termination of RightsIf the redemption notice is duly given and if, on or before the redemption date, the redemption price is either paid or madeavailable for payment on or for the shares of the Series A Preferred Stock called for redemption, then all rights with respect to suchshares will terminate immediately after the redemption date, except the right of the holders of such shares to receive the redemptionprice (without interest) on surrender of their certificates. This termination of rights will not be affected by any failure to surrender onor before the redemption date, any of the certificates representing the shares of Series A Preferred Stock called for redemption.Notwithstanding the foregoing, in the event the redemption notice is duly given and a deposit of an amount sufficient forredemption is made with a bank or trust company in accordance with the TXBOC, rights with respect to such shares (other than theright to receive payment of the redemption price without interest thereon from the bank or trust company) shall terminate on the dateof such deposit.Liquidation RightsIn the event of our liquidation, dissolution, or winding up, whether voluntary or involuntary, the holders of the shares ofSeries A Preferred Stock then outstanding will be entitled to be paid out of our assets available for distribution to our stockholders,whether such assets are capital, surplus, or earnings, before any payment or declaration and setting apart for payment of any amountis made in respect of the Junior Stock.The holders of shares of Series A Preferred Stock will be paid an amount per share (the “Liquidation Value”) equal to thesum of $25.00 (subject to appropriate adjustment to maintain the same aggregate accumulated dividend on, and liquidation value of,the Series A Preferred Stock following any stock dividend, stock split, combination, or other similar recapitalization affecting the shares of Series A Preferred Stock) plus anamount equal to all accumulated and unpaid preferred dividends payable up to and including the date full payment is tendered to theholders of shares of Series A Preferred Stock with respect to the liquidation, dissolution, or winding up, and no more.If, upon our liquidation, dissolution, or winding up, whether voluntary or involuntary, the assets distributed to the holders ofshares of Series A Preferred Stock and the holders of outstanding shares of other series of Preferred Stock ranking equal to the SeriesA Preferred Stock as to liquidation, dissolution, or winding up are insufficient to permit payment of the full Liquidation Valuethereof and the full liquidation value of the outstanding shares of such other series of Preferred Stock, all of our assets will bedistributed ratably to each holder of outstanding shares of Series A Preferred Stock and each holder of outstanding shares of otherseries of Preferred Stock ranking equal to the Series A Preferred Stock as to liquidation, dissolution, or winding upon the basis of theLiquidation Value of the shares of Series A Preferred Stock held by each such holder and the liquidation value of the shares of suchother series of Preferred Stock.Voting RightsSeries A Preferred Stock and Common Stock Voting TogetherEach holder of Series A Preferred Stock will be entitled to vote on all matters as to which holders of the Common Stock shallbe entitled to vote, in the same manner and with the same effect as such holders of the Common Stock, voting together with theholders of the Common Stock and any other series of Preferred Stock whose voting rights so provide as one class. Those shares ofPreferred Stock entitled to vote with the Common Stock, including the Series A Preferred Stock, are referred to as “Voting PreferredStock.” Regardless of the number of issued and outstanding shares of Preferred Stock and Common Stock, so long as any VotingPreferred Stock is outstanding, issued and outstanding Voting Preferred Stock shall possess at all times, in the aggregate, 21% of thetotal votes of the issued and outstanding Common Stock and Voting Preferred Stock combined, and the issued and outstandingCommon Stock shall possess at all times 79% of the total votes of the issued and outstanding Common Stock and Voting PreferredStock combined. The total number of votes allocated to the Voting Preferred Stock shall be allocated among the issued andoutstanding shares of Voting Preferred Stock on a pro rata basis in the same manner as if the holders of issued and outstandingVoting Preferred Stock were all voting as a class as described below. So long as any Voting Preferred Stock is outstanding, the totalvotes allocated to the holders of Common Stock shall fluctuate from time to time depending on the number of shares of CommonStock and Voting Preferred Stock issued and outstanding and shall be calculated to be equal to that number of votes which would be79% of the total number of votes of Common Stock and Voting Preferred Stock combined and shall be allocated among the sharesof Common Stock on a pro rata basis. If no Voting Preferred Stock is outstanding, each holder of Common Stock will be entitled toone vote for each share of Common Stock held by such holder.Series A Preferred Stock Voting as a ClassFor any vote of the holders of the Series A Preferred Stock on a matter in which they are entitled to vote, considered as asingle class, each holder will be entitled to one vote for each share of Series A Preferred Stock held by such holder.Preferred Stock Voting as a Class For any vote of the holders of all series of Preferred Stock entitled to vote on a matter considered as a single class, eachholder of such Preferred Stock will have a number of votes equal to the number of dollars equaling the aggregate liquidation valueof the Preferred Stock held by such holder. If a series of Preferred Stock shall provide for different liquidation values in the cases ofvoluntary liquidation and involuntary liquidation, for purpose of the voting provisions, liquidation value shall mean the involuntaryliquidation value for Preferred Stock of such series.Election of Additional DirectorsIn addition to the voting powers expressly conferred upon the Series A Preferred Stock as described herein and in addition tovoting rights granted to the holders of Series A Preferred Stock in statutory proceedings as to which their vote may be mandatorilyrequired by the then-existing laws of the State of Texas and which is not permitted to be modified and so modified under theResolution, in case at any time we shall fail to declare and pay or set aside for payment in full dividend payments due on theSeries A Preferred Stock on six Dividend Payment Dates whether or not consecutive and thereafter until all dividends accumulatedand payable on the Series A Preferred Stock shall have been fully paid without interest, then in each case, such holders of the SeriesA Preferred Stock and all other series of Preferred Stock hereafter established with provisions corresponding to those describedherein for the election of additional directors shall thereupon have and continue to have, the right, voting together as a class for suchpurpose by vote of a majority of the votes entitled to be cast thereon by such holders of Preferred Stock, to elect two additionaldirectors to our Board of Directors (the “Additional Directors”), such that the number of directors then constituting the Board ofDirectors shall automatically be increased by two; and, during the continuance of such right of the holders of series of PreferredStock to elect the Additional Directors, the remaining directors shall continue to be elected as provided under the Charter, theBylaws and the laws of the State of Texas.Upon the termination at any time of such right of the holders of Preferred Stock entitled to vote thereon to elect AdditionalDirectors, the term of office of the Additional Directors shall end.Restriction on Issuance of Senior Equity SecuritiesSo long as any shares of the Series A Preferred Stock are outstanding, we shall not create, authorize or issue any new stockthat, after issuance, would rank senior to the Series A Preferred Stock as to dividends or in liquidation, dissolution or winding up(whether voluntary or involuntary) without the prior written consent, voting as a single class, of at least two-thirds of the votesentitled to be cast thereon by the holders of the Series A Preferred Stock and any other outstanding series of Preferred Stock rankingequal to the Series A Preferred Stock as to dividends or in liquidation, dissolution or winding up (whether voluntary or involuntary)(including the Series A Preferred Stock).Amendments or WaiversSo long as any shares of the Series A Preferred Stock are outstanding, the prior written consent of the holders of at least two-thirds of the votes entitled to be cast thereon by the holders of the Series A Preferred Stock, voting as a separate class, shall berequired for any amendment, modification or waiver of the provisions of the Charter (including the terms of the Series A PreferredStock) insofar as such amendment, modification or waiver amends, modifies or waives a provision in a manner prejudicial in anymaterial respect to the holders of the Series A Preferred Stock; provided, however, that, if more than one series of Preferred Stockshall be outstanding and if such amendment, modification or waiver would be correspondingly prejudicial to the rights of theholders of other series of Preferred Stock, in lieu of the separate class vote of the Series A Preferred Stock, the prior written consentor vote of at least two- thirds of the votes entitled to be cast thereon by the holders of all series of Preferred Stock so affected considered as a single classshall be required for such amendment, modification or waiver. For all purposes described in this paragraph, any increase in theamount of the authorized or issued Series A Preferred Stock or authorized Preferred Stock, or the creation and issuance, or anincrease in the authorized or issued amount, of any other series of Preferred Stock ranking equal with or junior to the Series APreferred Stock with respect to the payment of dividends (whether such dividends are cumulative or non-cumulative) or thedistribution of assets upon any liquidation, dissolution or winding up of our affairs will not be deemed to materially and prejudiciallyaffect the special rights, preferences, privileges or voting powers of the Series A Preferred Stock.Elimination of Need for Formal MeetingsIn accordance with Section 6.202 of the TXBOC, our Charter allows the taking of action without holding a meeting,providing notice, or taking a vote if stockholders having at least the minimum number of votes that would be necessary to take suchaction at a meeting at which the holders of all shares entitled to vote on the action were present and voted, sign a written consent orconsents stating the action taken.Transfer Agent, Registrar and Paying AgentEquiniti Trust Company, doing business as EQ Shareholder Services, is currently the transfer agent, registrar and payingagent for the Series A Preferred Stock.Book-Entry Only Issuance-The Depository Trust CompanyDTC is currently the securities depository for the Series A Preferred Stock. The Series A Preferred Stock is represented by aglobal certificate registered in the name of Cede & Co., DTC’s nominee. The global certificate was deposited with the transfer agentas custodian for DTC. Ownership of beneficial interests in the global certificate is limited to institutions that have accounts withDTC or its participants or persons that may hold interests through participants.DTC is a New York clearing corporation and a clearing agency registered under Section 17A of the Securities Exchange Actof 1934, as amended. DTC holds securities for its participants. DTC also facilitates the post-trade settlement of securitiestransactions among its participants through electronic computerized book-entry transfers and pledges in the participants’ accounts.This eliminates the need for physical movement of securities certificates. The participants include securities brokers and dealers,banks, trust companies, clearing corporations and certain other organizations. DTC is a wholly-owned subsidiary of The DepositoryTrust & Clearing Corporation (“DTCC”). DTCC is the holding company for DTC, National Securities Clearing Corporation andFixed Income Clearing Corporation, all of which are registered clearing agencies. DTCC is owned by the users of its regulatedsubsidiaries. Others who maintain a custodial relationship with a participant can use the DTC system. The rules that apply to DTCand those using its systems are on file with the SEC.Purchases of the Series A Preferred Stock within the DTC system must be made through participants, who will receive acredit for the Series A Preferred Stock on DTC’s records. The beneficial ownership interest of each purchaser will be recorded onthe appropriate participant’s records. Beneficial owners do not receive written confirmation from DTC of their purchases, butbeneficial owners should receive written confirmations of the transactions, as well as periodic statements of their holdings, from theparticipants through whom they purchased Series A Preferred Stock. Transfers of ownership in the Series A Preferred Stock are tobe accomplished by entries made on the books of the participants acting on behalf of beneficial owners. Beneficial owners will not receive certificates for their Series A Preferred Stock, except if use ofthe book-entry system for the Series A Preferred Stock is discontinued.To facilitate subsequent transfers, all shares of Series A Preferred Stock deposited by participants with DTC are registered inthe name of DTC’s nominee, Cede & Co. The deposit of the Series A Preferred Stock with DTC and its registration in the name ofCede & Co. effects no change in beneficial ownership. DTC has no knowledge of the actual beneficial owners of the Series APreferred Stock. DTC’s records reflect only the identity of the participants to whose accounts such Series A Preferred Stock iscredited. These participants may or may not be the beneficial owners. Participants are responsible for keeping account of theirholdings on behalf of their customers.Conveyance of notices and other communications by DTC to participants, and by participants to beneficial owners, will begoverned by arrangements among them, subject to any statutory or regulatory requirements as may be in effect from time to time.Beneficial owners of Series A Preferred Stock may wish to take certain steps to augment transmission to them of notices ofsignificant events with respect to the Series A Preferred Stock. Beneficial owners of the Series A Preferred Stock may wish toascertain that the nominee holding the Series A Preferred Stock has agreed to obtain and transmit notices to the beneficial owners.Redemption notices will be sent to Cede & Co., as registered holder of the Series A Preferred Stock. If less than all of theshares of Series A Preferred Stock are being redeemed, DTC’s practice is to determine by lot the amount of interest of eachparticipant in such Series A Preferred Stock to be redeemed.Neither DTC nor Cede & Co. will itself consent or vote with respect to the Series A Preferred Stock, unless authorized by aparticipant in accordance with DTC’s procedures. Under its usual procedures, DTC would mail an omnibus proxy to us as soon aspossible after the record date. The omnibus proxy assigns the consenting or voting rights of Cede & Co. to those participants towhose accounts the Series A Preferred Stock is credited on the record date. We believe that these arrangements will enable thebeneficial owners to exercise rights equivalent in substance to the rights that can be directly exercised by a registered holder of theSeries A Preferred Stock.Payments on the Series A Preferred Stock are and will be made to Cede & Co., or such other nominee as may be requestedby DTC. DTC’s practice is to credit participants’ accounts upon DTC’s receipt of funds and corresponding detail information fromus or our agent, on the payable date in accordance with their respective holdings shown on DTC’s records. Payments by participantsto beneficial owners are and will be governed by standing instructions and customary practices. Payments are the responsibility ofparticipants and not of DTC or us, subject to any statutory or regulatory requirements as may be in effect from time to time. Paymentto Cede & Co. (or such other nominee as may be requested by DTC) is our responsibility. Disbursement of payments to participantsis the responsibility of DTC, and disbursement of payments to the beneficial owners is the responsibility of participants.Other than in the circumstances described herein, a beneficial owner of a global share of Series A Preferred Stock will not beentitled to receive physical delivery of Series A Preferred Stock. Accordingly, each beneficial owner must rely on the procedures ofDTC to exercise any rights under the Series A Preferred Stock.DTC may discontinue providing its services as securities depositary with respect to the Series A Preferred Stock at any timeby giving us reasonable notice. In the event no successor securities depositary is obtained, certificates for the Series A PreferredStock will be printed and delivered. We may decide to replace DTC or any successor depositary. Additionally, subject to the procedures of DTC, we may decide to discontinue use of thesystem of book-entry transfers through DTC (or a successor depositary) with respect to the Series A Preferred Stock. Weunderstand, however, that under current industry practices, DTC would notify its participants of our decision, but will only withdrawbeneficial interests from global shares of Series A Preferred Stock at the request of each participant. In that event, certificates for theSeries A Preferred Stock will be printed and delivered.The information in this section concerning DTC and DTC’s book-entry system has been obtained from sources that webelieve to be reliable, but we do not take any responsibility for the accuracy of this information. Exhibit 10(a)31CASH BALANCE EQUALIZATION PLAN OF ENTERGY CORPORATION ANDSUBSIDIARIESEffective July 1, 2014Executed: June 30, 2014 CASH BALANCE EQUALIZATION PLAN OF ENTERGY CORPORATION AND SUBSIDIARIES(Effective July 1, 2014)Entergy Corporation has adopted this Cash Balance Equalization Plan of Entergy Corporation and Subsidiaries (the "Plan")effective July 1, 2014, to provide eligible non bargaining management employees of a System Company with certain benefits that wouldhave been payable under the Entergy Corporation Cash Balance Plan for Non-Bargaining Employees (the "Qualified Plan") but for thelimitations placed on benefits payable under the Qualified Plan by Section 415 of the Internal Revenue Code (the "Code") and thelimitations placed on eligible earnings by Section 401(a)(l 7) of the Code. The Plan also provides benefits with respect to certain amountsthat are deferred by the Participant and excluded from earnings under the Qualified Plan.The Plan is intended to constitute an unfunded "excess benefit plan" as defined in Section 3(36) of the Employee RetirementIncome Security Act of 1974, as amended ("ERISA"), to the extent it provides benefits that would be paid under the Qualified Plan but forthe limitations imposed by Code Section 415, and an "unfunded plan primarily for the purpose of providing deferred compensation for aselect group of management or highly compensated employees" for purposes of Title I of ERISA, to the extent it provides other benefits.ARTICLE IDEFINITIONSThe following terms shall have the meaning hereinafter indicated unless expressly provided herein to the contrary:1.01 "Administrator" shall mean the Personnel Committee of the Board of Directors, or such other individuals or committee as shall fromtime to time be designated in writing as the administrator of the Plan by the Personnel Committee. The Administrator shall be the "planadministrator" for the Plan within the meaning of ERISA. Notwithstanding the foregoing, from and after the date immediately preceding thecommencement of a Change in Control Period, the "Administrator" shall mean (a) the individuals (not fewer than three in number) who, onthe date six months before the commencement of the Change in Control Period, constitute the Administrator, plus (b) in the event that fewerthan three individuals are available from the group specified in clause (a) above for any reason, such individuals as may be appointed by theindividual or individuals so available (including for this purpose any individual or individuals previously so appointed under this clause (b));provided, however, that the maximum number of individuals constituting the Administrator shall not exceed The term "Administrator" shallfor Plan administrative purposes include the office of the senior-most System officer with responsibility for Human Resources andAdministration, to whom the Personnel Committee has delegated the authority to act on its behalf with respect to all Plan administrativematters.1.02 "Beneficiary" shall mean Participant's beneficiary for purposes of the pre-retirement death benefit under the Qualified Plan.1.03 "Board of Directors" shall mean the Board of Directors of Entergy Corporation.1.04 "Change in Control" shall mean:(a)the purchase or other acquisition by any person, entity or group of persons, acting in concert within the meaning ofSections 13(d) or 14(d) of the Securities Exchange Act of 1934 ("Act"), or any comparable successor provisions, ofbeneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of thirty percent (30%) or more ofeither the shares of common stock outstanding immediately following such acquisition or the combined voting power ofEntergy Corporation's voting securities entitled to vote generally and outstanding immediately following suchacquisition, other than any such purchase or acquisition in connection with a Non-CIC Merger (defined in Subsection (b) below);(b)the consummation of a merger or consolidation of Entergy Corporation, or any direct or indirect subsidiary of EntergyCorporation with any other corporation, other than a Non-CIC Merger, which shall mean a merger or consolidationimmediately following which the individuals who comprise the Board of Directors immediately prior thereto constituteat least a majority of the Board of Directors, or the board of directors of the entity surviving such merger orconsolidation, or the board of directors of any parent thereof (unless the failure of such individuals to comprise at leastsuch a majority is unrelated to such merger or consolidation);(c)the stockholders of Entergy Corporation approve a plan of complete liquidation or dissolution of Entergy Corporationor there is consummated an agreement for the sale or disposition by Entergy Corporation of all or substantially all ofEntergy Corporation's assets; or(d)any change in the composition of the Board of Directors such that during any period of two consecutive years,individuals who at the beginning of such period constitute the Board of Directors and any new director (other than adirector whose initial assumption of office is in connection with an actual or threatened election contest, including butnot limited to a consent solicitation, relating to the election of directors of Entergy Corporation) whose appointment orelection by the Board of Directors or nomination for election by Entergy Corporation's stockholders was approved orrecommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors at thebeginning of such two consecutive year period or appointment, election or nomination for election was previously soapprovedor recommended, cease for any reason to constitute at least a majority thereof.Provided, however, that no Change in Control shall be deemed to occur solely by virtue of (1) the insolvency or bankruptcyof Entergy Corporation; or (2) the transfer of assets of Entergy Corporation to an affiliate of Entergy Corporation, providedsuch affiliate assumes the obligations of the Plan and agrees to continue uninterrupted the rights of the Participants underthe Plan; or (3) the consummation of any transaction or series of integrated transactions immediately following which therecord holders of the common stock of Entergy Corporation immediately prior to such transaction or series of transactionscontinue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assetsof Entergy Corporation immediately following such transaction or series of transactions.1.05 "Change in Control Period" shall mean the period commencing on the date of a Potential Change in Control and ending onthe earlier of: (a) twenty-four (24) calendar months following the Change in Control event, or (b) the date on which the Change inControl event contemplated by the Potential Change in Control is terminated.1.06 "Claims Administrator" shall mean the Administrator or its delegate responsible for administering claims for benefits underthe Plan.1.07 "Claims Appeal Administrator" shall mean the Administrator or its delegate responsible for administering appeals from thedenial or partial denial of claims for benefits under the Plan.1.08 "Code" shall mean the Internal Revenue Code of 1986, as amended.1.09 "Eligible Employee" shall mean a non-bargaining Employee who satisfies the eligibility requirements of Section 2.01. 1.10 "Employee" shall mean any person who is covered by a System Company's payroll.1.11 "Employer" shall mean the System Company that has adopted the Plan and with which the Participant is last employed on orbefore the Participant's retirement or termination of employment.1.12 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as amended.1.13 "Good Reason" shall mean the occurrence, without the Participant's express written consent, of any of the following eventsduring the Change in Control Period:(a)the substantial reduction or alteration in the nature or status of the Participant's duties or responsibilities from those ineffect on the date immediately preceding the first day of the Change Control Period, other than an insubstantial andinadvertent act that is remedied by the System Company employer promptly after receipt of notice thereof given byParticipant and other than any such alteration primarily attributable to the fact that Entergy Corporation may no longerbe a public company;(b) a reduction of 5% or more in Participant's annual rate of base salary as in effect immediately prior to commencementof a Change in Control Period, which shall be calculated exclusive of any bonuses, overtime, or other specialpayments, but including the amount, if any, the Participant elects to defer under: (1) a cash or deferred arrangementqualified under Code Section 401(k); (2) a cafeteria plan under Code Section 125; (3) a qualified transportation fringeunder Code Section 132(f)(4); (4) the Executive Deferred Compensation Plan of Entergy Corporation and Subsidiaries,or any successor or replacement plan; and (5) any other nonqualified or statutory deferred compensation plan,agreement, or arrangement in which the Participant may hereafter participate or be a party;(c)requiring Participant to be based at a location outside of the continental United States and other than his primary worklocation as it existed on the date immediately preceding the first day of the Change in Control Period, except forrequired travel on business of any System Company to an extent substantially consistent with the Participant's presentbusiness obligations;(d)failure by System Company employer to continue in effect any compensation plan in which Participant participatesimmediately prior to the commencement of the Change in Control Period which is material to Participant's totalcompensation, including but not limited to compensation plans in effect, including stock option, restricted stock, stockappreciation right, incentive compensation, bonus and other plans or any substitute plans adopted prior to the Change inControl Period, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been madewith respect to such plan, or the failure by System Company employer to continue Participant's participation therein (orin such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing ofpayment of benefits provided and the level of the Participant's participation relative to other participants, as existedimmediately prior to the Change in Control; or(e)failure by System Company employer to continue to provide Participant with benefits similar to those enjoyed byParticipant under any of the System Company's pension, savings, life insurance, medical, health and accident, ordisability plans in which Participant was participating immediately prior to the Change in Control Period, the taking ofany other action by a System Company employer which would directly or indirectly materially reduce any of such benefits or depriveParticipant of any material fringe benefit enjoyed by Participant immediately prior to commencement of the Change inControl Period, including a material reduction in the number of paid vacation days to which Participant is entitled onthe basis of years of service with the System in accordance with the System Company's normal vacation policy in effectat the time of the Change in Control.Participant's right to terminate his employment for Good Reason shall not be affected by Participant's incapacity due tophysical or mental illness. Participant's continued employment shall not constitute consent to, or a waiver of rights withrespect to, any act or failure to act constituting Good Reason.1.14 "Income Payment Date" shall mean the first day of the first month next following the Participant's Separation from Service.1.15 "Key Employee" shall mean a "Key Employee" (as defined in Code Section 4l 6(i) without regard to paragraph (5) thereof),as determined by the Administrator, in its s9le discretion, in a manner consistent with the regulations issued under Code Section409A.1.16 "Participant" shall mean an Eligible Employee who satisfies the requirements for participation in this Plan as set forth inSection 2.02.1.17 "Personnel Committee" shall mean the Personnel Committee of the Board of Directors.1.18 "Plan" shall mean this Cash Balance Equalization Plan of Entergy Corporation and Subsidiaries, generally effective as of July1, 2014, and any amendments, supplements or modifications from time to time made hereto in accordance with Sections 8.01 and8.02.1.19 "Potential Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphsshall have occurred:(a)Entergy Corporation or any affiliate or subsidiary company enters into an agreement, the consummation of whichwould result in the occurrence of a Change in Control; or(b)the Board of Directors adopts a resolution to the effect that, for purposes of this Plan, a Potential Change in Control hasoccurred; or(c)any System Company or any person or entity publicly announces an intention to take or to consider taking actionswhich, if consummated, would constitute a Change in Control; or(d)any person or entity becomes the beneficial owner (as that term is defined in Rule 13d-3 under the Securities ExchangeAct of 1934, as amended from time to time), either directly or indirectly, of securities of Entergy Corporationrepresenting 20% or more of either the then outstanding shares of common stock of Entergy Corporation or thecombined voting power of Entergy Corporation's then outstanding securities (not including in the calculation of thesecurities beneficially owned by such person or entity any securities acquired directly from Entergy Corporation or itsaffiliates).1.20 "Qualified Plan" shall mean the Entergy Corporation Cash Balance Plan for Non Bargaining Employees, as it may from timeto time be amended and in which the Participant is a participant. 1.21 "Qualifying Event" shall mean the occurrence of one of the following within the Change Control Period:(a)The Participant's employment is terminated by Employer other than for Cause (as defined in Section 6.0l(a)); or(b)The Participant terminates his System employment for Good Reason.For purposes of this Plan, the following shall not constitute Qualifying Events:(1) Participant's death; or (2) Participant becoming disabled under the terms of the Entergy Corporation Companies'Benefits Plus Long Term Disability ("LTD") Plan or any other employee welfare benefit plan sponsored by a SystemCompany that provides long-term disability benefits. Notwithstanding anything in this Plan to the contrary, for purposes ofthis Plan a Participant's employment shall be deemed to have been terminated by the Employer without Cause or by theParticipant with Good Reason only if the Participant has incurred a Separation from Service.1.22 "Separation from Service," "Separates from Service," or "Separated from Service" shall mean the separation of a Participantfrom employment with the System determined in accordance with the requirements of Code Section 409A and regulationsthereunder.1.23 "Specified Employee" shall mean a Participant who is a Key Employee (as defined in Section 1.15) of a System Company ata time when the Employer or a member of any controlled group of corporations that includes the Employer is publicly traded on anestablished securities market whether inside or outside the United States. Whether a participant is a Specified Employee shall bedetermined under rules established by the Administrator in accordance with regulations under Code Section 409A. Alldeterminations by the Administrator with regard to whether a Participant is a Specified Employee shall be final and binding on theParticipant for purposes of the Plan.1.24 "System" shall mean Entergy Corporation and all other System Companies and, except in determining whether a Change inControl has occurred, shall include any successor thereto as contemplated in Section 8.03.1.25 "System Company" shall mean Entergy Corporation and any corporation whose stock is 80% or more (based on votingpower or value) owned, directly or indirectly, by Entergy Corporation and any partnership or trade or business which is 80% or morecontrolled, directly or indirectly, by Entergy Corporation, and, except in determining whether a Change in Control has occurred,shall include any successor thereto as contemplated in Section 8.03 of this Plan.1.26 "System Management Level" shall mean the applicable management level set forth below:(a)System Management Level I ( Chief Executive Officer and Chairman of the Board ofnn·rrn, Corporation);,,n,TPl-n Management 2 (Presidents and "=r,n+·,u Vice Presidents within the System);(c) System Management Level 3 (Senior Vice Presidents within the System); and System Management Level 4 (VicePresidents within the System). ARTICLE IIELIGIBILITY AND PARTICIPATION2.01 Eligibility Requirements. An Employee shall be eligible for benefits under this Plan only if he is a nonbargaining Employeewho is a member of his Employer's select group of management or highly compensated employees and a participant in the QualifiedPlan.2.02. Participation. An Eligible Employee shall become a Participant in the Plan on the date he satisfies the requirements ofSection 2.01.ARTICLE IIIAMOUNT OF BENEFITS3.01. General. No provision of the Plan shall in any way be construed as any amendment to the Qualified Plan, and to the extentthe qualified status under federal law of the Qualified Plan is threatened by any provision of, or payment under, this Plan, the Planshall be automatically reformed to the extent necessary to ensure the continuation of the qualified status of the Qualified Plan.3.02 Plan Benefits.(a)Separation Benefit. Subject to the remaining Subsections of this Section 3.02, each Participant who is fully vested in hisQualified Plan benefit and is a non-bargaining Employee at the time of his Separation from Service, shall be entitledupon his Separation from Service to a benefit under this Plan equal to the excess of (1) over (2), where (1) and (2) are asfollows:(1)the lump sum payment that would have been payable to the Participant on the Income Payment Date under theQualified Plan, but taking into account any additional earnings and compensation described in Subsection 3.02(b)and without regard to any provisions contained in the Qualified Plan relating to a maximum limitation on pensionbenefits imposed under Code Sections 401(a)(l 7) and/or 415; and(2)the lump sum payment that would have been payable to the Participant on the Income Payment Date, based on theprovisions of the Qualified Plan.Separation Benefit shall be paid in the event a Death Benefit is paid.(b)Earnings and Compensation Taken into Account. Solely for purposes of determining benefits under this Plan, aParticipant's earnings or compensation considered in determining the lump sum payment that would have been payableunder the Qualified Plan shall be deemed to also include the amount if any, of base salary and incentivespayable and otherwise included in earnings under the Qualified Plan, but which the Participant elects to defer under anynonqualified deferred compensation plan, agreement, or other arrangement in which the Participant may participate or be aparty thereto.Nothing stated in this Subsection 3.02(b) shall be construed as an amendment to the Qualified Plan.(c)Death Benefit. In the event of the death of a Participant prior to his Income Payment Date, if such Participant is fully vested inhis Qualified Plan benefit and is a non bargaining Employee at the time of his death, the Participant's Beneficiary shall receive adeath benefit under this Plan in a single-sum amount equal to the excess of (1)over (2), where (1) and (2) are as follows:(1)the lump sum pre-retirement death benefit that would have been payable to a Beneficiary under the Qualified Plan as of thefirst day of the month following the Participant's death, but determined taking into account any additional eligible earningsdescribed in Subsection 3.02(b), and without regard to any provisions contained in the Qualified Plan relating to amaximum limitation on pension and/or death benefits imposed under Code Sections 401(a)(l 7) and/or 415; and(2)the lump sum pre-retirement death benefit that would have been payable to a Beneficiary under the Qualified Plan as of thefirst day of the month following the Participant's death, based on the provisions of the Qualified Plan.No Death Benefit shall be paid in the event a Separation Benefit is paid.ARTICLE IVFORM OF BENEFIT PAYMEN'I'4.01 Single-Sum Form of Payment.(a)Separation Benefit. Subject to the remaining provisions of this Section 4.01, each Participant who satisfies the requirements ofSection 3.02(a) shall receive a single sum payment equal to the Participant's benefit determined under Subsection 3.02(a).Payment of such single-sum benefit shall be made as soon as reasonably practicable following the Participant's Income PaymentDate. In all events, the single-sum payment shall be made no later than the end of the calendar year that includes theParticipant's Income Payment Date or, if later, by the 15th day of the third calendar month following the Participant's IncomePayment Date. A Participant's benefits under Plan shall be paid in accordance with the terms of this Article IV, regardless ofthe date of benefit commencement under the Qualified Plan.(b)Death Benefit. In the event of the death of a Participant prior to his Income Payment Date, if such Participant satisfies therequirements of Section 3.02(c) at the time of his death, the Participant's Beneficiary shall receive a death benefit under thisPlan asdetermined under Subsection 3.02(c) in a single-sum payment as soon as reasonably practicable following the first dayof the first month next following the Participant's date of death (i.e., the "Beneficiary's Income Payment Date"). In allevents, the single-sum payment shall be made no later than the end of the calendar year that includes the Beneficiary'sIncome Payment Date, or, if later, by the 15th day of the third calendar month following the Beneficiary's IncomePayment Date.4.02 Participation in Additional Non-Account Balance Plans. Notwithstanding any other Plan provision to the contrary, to theextent applicable, a Participant's benefit commencement date shall be the same under this Plan, the Pension Equalization Plan ofEntergy Corporation and Subsidiaries ("PEP"), the System Executive Retirement Plan of Entergy Corporation and Subsidiaries("SERP") and the Supplemental Retirement Plan of Entergy Corporation and Subsidiaries ("SRP"), which plans, together with thisPlan, constitute Non-Account Balance Plans for purposes of Code Section 409A.4.03 Code Section 409A Delayed Payments. Notwithstanding any Plan provision to the contrary, no Plan benefits shall be paid toa Participant who is a Specified Employee at the time of his Separation from Service until the earlier of the Participant's death or sixmonths following the Participant's Separation from Service. If distribution is delayed pursuant to this Section 4.03, the delayeddistribution amount shall be credited with investment returns to the payment date as if such amount were invested in the EntergyStable Income Fund or such other investment fund as from time-to-time may be designated in advance and in writing by theAdministrator. The full amount of the Participant's delayed distribution amount, including investment returns deemed credited pursuant to this Section 4.03, shall be distributed to the Participant as soon as reasonably practicablefollowing the first day of the first month next following the earlier of the Participant's death or the last day of the six-month delayperiod (the "Delayed Payment Date"). In all events, such payment shall be made no later than the end of the calendar year thatincludes the Delayed Payment Date or, if later, by the 15th day of the third calendar month following the Participant's DelayedPayment Date.ARTICLE VSOURCE OF PAYMENTS5.01 Unfunded Plan. All rights of a Participant, Beneficiary or any other person or entity having or claiming a right to paymentsunder this Plan shall be entirely unfunded. It is a condition of the Plan that neither a Participant nor any other person or entity shalllook to any other person or entity other than the Employer for the payment of benefits under the Plan. The Participant or any otherperson or entity having or claiming a right to payments hereunder shall rely solely on the unsecured obligation of the Employer setforth herein. Nothing this Plan shall be construed to give the Participant or any such person or entity any right, title, interest, or claimin or to any specific asset, fund, reserve, account or property of any kind whatsoever, owned by any System Company or in which aSystem Company may have any right, title or interest now or in the future. However, the Participant or any such person or entityshall have the right to enforce his claim against the Employer the same manner as any other unsecured creditor of such entity.5.02 Employer Liability. At its own discretion, a System Company employer may purchase such insurance or annuity contracts orother types of investments as it deems desirable in order to accumulate the necessary funds to provide for future benefit paymentsunder the Plan. However, (a) a System Company employer shall be under no obligation to fund the benefits provided under thisPlan; (b) the investment of System Company employer funds credited to a special account established hereunder shall not berestricted in any way; and (c) such funds may be available for any purpose the System Company may choose. Nothing stated hereinshall prohibit a System Company employer from adopting or establishing a trust or other means as a source for paying anyobligations created hereunder provided, however, any and all rights that any such Participants shall have with respect to any suchtrust or other fund shall be governed by the terms thereof.5.03 Establishment of Trust. Notwithstanding any provisions of this Article V to the contrary, within thirty (30) days following thedate of a Change in Control, each System Company shall make a single irrevocable lump sum contribution to the Trust for DeferredPayments of Entergy Corporation and Subsidiaries ("Trust") pursuant to the terms and conditions described in such Trust, but only tothe extent consistent with the requirements of Code Section 409A. Each System Company's contribution shall be in an amount equalto the actuarial present value of the total benefits accrued by such System Company's Plan Participants (including a Participant'sBeneficiary) under the Plan through the date of any such Change in Control. For purposes of this Section 5.03, the actuarial presentvalue shall be deemed to be equal to the amount of the lump sum payment determined pursuant to Section 3.02(a), determined as ifpayment were made on the day preceding the Change in Control. If one or more of a System Company's Participants shall continueto be employed by a System Company after such a Change in Control, each calendar year the System Company shall, as soon aspossible, but in no event later than thirty (30) days following the end of such calendar year, make an irrevocable contribution to theTrust in an amount that is necessary in order to maintain a lump sum amount credited to the System Company's Plan account underthe Trust that is the actuarial present value of the total unpaid benefits accrued by the System Company's Participants as of the endof each applicable calendar year. Notwithstanding the foregoing provisions of this Section 5.03 to the contrary, a System Companymay make contributions to the Trust prior to a Change in Control in such amounts as it shall determine in its complete discretion.The Trust is intended as a "grantor" trust under the Internal Revenue Code and the establishment and funding of such Trust is notintended to cause Participants to realize current income on amounts contributed thereto, and the Trust shall be so interpreted.ARTICLE VICHANGE IN CONTROL6.01 Definitions. The following additional definitions shall be applicable to this Article VI:(a)"Cause" shall mean:(1)willful and continuing failure by Participant to substantially perform Participant's duties (other than such failureresulting from the Participant's incapacity due to physical or mental illness or any such actual or anticipated failureafter the issuance of a Notice of Termination for Good Reason by Participant) that has not been cured within thirty(30) days after a \\-Titten demand for substantial performance is delivered to Participant by the board of directors ofEmployer, which demand specifically identifies the manner in which the board believes that Participant has notsubstantially performed Participant's duties; or(2)the willful engaging by the Participant in conduct which is demonstrably and materially injurious to any SystemCompany, monetarily or otherwise; or(3)conviction of or entrance of a plea of guilty or nolo contendere to a felony or other crime which has or may have amaterial adverse effect on Participant's ability to carry out Participant's duties or upon the reputation of any SystemCompany; or(4)a material violation by Participant of any agreement Participant has with a System Company; or(5)unauthorized disclosure by Participant of the confidences of any System Company.For purposes of clauses (1) and (2) of this definition, no act, or failure to act, on the Participant's part shall be deemed"willful" unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that theParticipant's act, or failure to act, was in the best interest of the Employer.(b)"Notice of Termination" shall mean a notice that shall indicate the specific termination provision in this Plan reliedupon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination ofParticipant's employment under the provision so indicated. Further, a Notice of Termination for Cause is required toinclude a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entiremembership of the terminating Employer's board of directors at a meeting of such board of directors which was calledand held for the purpose of considering such termination (after reasonable notice to Participant and an opportunity forParticipant, together with Participant's counsel, to be heard before that board) finding that, in the good faith opinion ofthe board, Participant was guilty of conduct set forth in the definition of Cause herein, and specifying the particularsthereof in detaiLAccelerated Vesting. Notwithstanding any Plan provision to the contrary, if during a Change in Control Period there shouldoccur a Qualifying Event with respect to a Participant, Participant shall not cease to be a Participant and shall, regardless ofhis vested status under the Qualified Plan, become fully vested in, and have a non-forfeitable right to, all benefits accrued under the Plan as of the date of suchQualifying Event,provided the Participant is a non-bargaining Employee at the time of the Qualifying Event, except that all such benefitsshall be subject to forfeiture upon the occurrence of any of the following events:(a)Without Employer permission, Employee removes, copies, or fails to return if he or she has already removed, anyproperty belonging to one or all of the System Companies, including, but not limited to, the original or any copies ofany records, computer files or disks, reports, notes, documents, files, audio or video tapes, papers of any kind, orequipment provided by any one or all of the System Companies or created using property of or for the benefit of one orall of the System Companies;(b)Other than as authorized by a System Company, or as required by law, or as necessary for the Participant to perform hisduties for a System Company employer, the Participant shall divulge, communicate or use to the detriment of theEmployer or the System, or use for the benefit of any other person or entity, or misuse in any way, any confidential orproprietary information or trade secrets of the Employer or the System, including without limitation non-publicfinancial information, know-how, formulas, or other technical data. Disclosure of information pursuant to subpoena,judicial process, or request of a governmental authority shall not be deemed a violation of this provision, provided thatthe Participant gives the System Company immediate notice of any such subpoena or request and fully cooperates withany action by System Company to object to, quash, or limit such request; or(c)Participant engages in any employment (without the prior written consent of his last System Company employer) eitherindividually or with any person, corporation, governmental agency or body, or other entity in competition with, orsimilar in nature to, any business conducted by any System Company at any time within the "Applicable Period" (asdefined below) and commencing upon termination of employment, where such competing employer or employment islocated in, or servicing in any way customers located in, those parishes and counties in which any System Companyservices customers during such Applicable Period, in which case Participant shall be required to repay any Plan benefitspreviously received by him. For purposes of this Subsection 6.02(c), "Applicable Period" shall mean:(1)two (2) years for Participants at System Management Levels 1 and 2 at the commencement of the Change inControl Period, provided, however, that the two year Applicable Period shall be extended to three (3) years ifotherwise permissible under applicable law;twoyears Participants at System Management Level 3 at the commencement Change in Control Period; and(3) one (1) year for Participants at System Management Level 4 at the commencement of the Change in Control Period.However, the stated Applicable Periods described herein shall be impermissibleunder applicable law, then the Applicable Period for purposes of this Plan shall be the maximum time period allowedunder applicable law for breach of a covenant not to compete to cause a forfeiture of non-qualified plan benefitsotherwise payable. 6.03 Benefit Commencement Date. Notwithstanding any Plan provision to the contrary except Section 4.03, if during a Change inControl Period there should occur a Qualifying Event with respect to a Participant who is a non-bargaining Employee at the time ofsuch Qualifying Event and if there does not occur a forfeiture event referenced in Section 6.02, the Participant's Plan benefit amountshall be determined pursuant to Article III (taking into account the accelerated vesting of Section 6.02) and shall be payable pursuantto the provisions of this Plan as soon as reasonably practicable following the first day of the first month next following theParticipant's Qualifying Event, subject to the delay requirement set forth in Section 4.03 to the extent applicable. In all events,distributions shall be made no later than the end of the calendar year that includes the first day of the first month next followingsuch Qualifying Event or, if later, by the 15th day of the third calendar month following the first day of the first month nextfollowing the Participant's Qualifying Event.6.04 No Benefit Reduction. Notwithstanding anything stated above to the contrary, an amendment to, or termination of, the Planfollowing a Change in Control shall not reduce a Participant's benefits accrued under this Plan through the date of any suchamendment or termination. In no event shall a Participant's benefits accrued under this Plan following a Change in Control be lessthan such Participant's benefits accrued under this Plan immediately prior to the Change in Control Period, subject, however, to theforfeiture provisions described in Section 6.02 as in existence on the date immediately preceding the commencement date of theChange in Control Period, and provided further that the Participant is a non-bargaining Employee as of the date immediately prior tothe Change in Control.6.05 Provisions of Referenced Plans. To the extent this Plan references or incorporates provisions of any other System Companyplan, including, but not limited to, the Qualified Plan, and (a) such other plan is amended, supplemented, modified or terminatedduring the two-year period commencing on the date of a Potential Change in Control, (b) the Change in Control event contemplatedby the Potential Change in Control is not terminated, and (c) such amendment, supplementation, modification or terminationadversely affects any benefit under this Plan, whether it be in the method of calculation or otherwise, then for purposes ofdetermining benefits under this Plan, the Administrator shall rely upon the version of such other plan in existence immediately priorto any such amendment, supplementation, modification or termination, unless such change is agreed to writing and signed by theaffected Participant and by the Administrator, or by theirrepresentatives or successors.ARTICLE VIIPLAN ADMINISTRATION7.01 Administration of Plan. The Administrator shall operate and administer the Plan and, as such, shall have the authority as Administratorto exercise the powers and discretion conferred on it by the Plan, including the right to delegate any function to a specified person or persons.The Administrator shall discharge its duties for the exclusive benefit of the Participants and their Beneficiaries. The Plan is intended to satisfythe requirements of Code Section 409A and the Administrator shall interpret the Plan and exercise the power and discretion conferred underthe Plan in a manner that is at all times consistent with the requirements of Code Section 409A, to the extent that benefits under the Plan aresubject to the requirements of Code Section 409A.7.02 Powers of the Administrator. The Administrator and any of its delegates shall administer the Plan in accordance with its terms andshall have all powers, authority, and discretion necessary or proper for such purpose. In furtherance of this duty, the Administrator shall havethe sole and exclusive power and discretion to make factual determinations, construe and interpret the Plan, including the intent of the Planand any ambiguous, disputed or doubtful provisions of the Plan. All findings, decisions, or determinations of any type made by theAdministrator, including factual determinations and any interpretation or construction of the Plan, shall be final and binding on all parties andshall not be disturbed unless the Administrator's decisions are arbitrary and capricious. The Administrator shall be the sole judge of thestandard of proof required in any claim for benefits and/or in any question of eligibility for a benefit. By way of example, the Administrator shall have the sole and exclusive power and discretion:(a)to adopt such rules and regulations as it shall deem desirable or necessary for the administration of the Plan on a consistent anduniform basis;(b)to interpret the Plan including, without limitation, the power to use Administrator's sole and exclusive discretion to construeand interpret (1) the Plan, (2) the intent of the Plan, and (3) any ambiguous, disputed or doubtful provisions of the Plan;(c)to determine all questions arising in the administration of the Plan including, but not limited to, the power and discretion todetermine the rights or eligibility of any Employee, Participant, Beneficiary or other claimant to receive any benefit under thePlan;tosuch information as the Administrator may reasonably request from any Employee, Participant, Beneficiary or other claimantas a condition for receiving any benefit under the Plan;(c)to grant and/or deny any and all claims for benefits, and construe any and all issues of Plan interpretation and/or fact issuesrelating to eligibility for benefits;(d)to compute the amount of any benefits payable under the Plan;(e)to execute or deliver any instrument or make any payment on behalf of the Plan;(f)to employ one or more persons to render advice with respect to any of the Administrator's responsibilities under the Plan;(g)to direct the Employer concerning all payments that shall be made pursuant to the terms of the Plan; andG) to make findings of fact, to resolve disputed fact issues, and to make determinations based on the facts and evidence contained inthe administrative record developed during the claims review procedure.For any acts not specifically enumerated above, when applying, construing, or interpreting any and all Plan provisions and/or factquestions presented in claims for benefits, the Administrator shall have the same discretionary powers as enumerated above.7.03 Reliance on Reports and Certificates. The Administrator may rely conclusively upon all tables, valuations, certificates, opinions andreports furnished by an actuary, accountant, counsel or other person who may from time to time be employed or engaged for such purposes.7.04 Claims Administration. The Administrator may appoint and, in its sole discretion, remove a Claims Administrator and/or ClaimsAppeal Administrator to administer claims for benefits under the Plan in accordance with its terms, and, pursuant to Section 7.02, suchdelegates shall have all powers, authority, and discretion necessary or proper for such purpose. In the absence of such appointment, theAdministrator shall be the Claims Administrator and Claims Appeal Administrator.7.05 Filing Benefit Claims. Any claim asserting entitlement to a benefit under the Plan must be asserted within ninety (90) days after theevent giving rise to the claim by sending written notice of the claim to the Claims Administrator. The written notice of the claim must beaccompanied by any and all documents, materials, or other evidence allegedly supporting the claim for benefits. If the claim is granted, theclaimant will be so notified in writing by the Claims Administrator.706 Claim of Good Reason or Cause for Termination. For purposes of any determination regarding the existence of Good Reason orCause (as defined in Section 6.0l(a)) for termination during a Change in Control Period, any position taken by the Participant shall presumedcorrect unless Employer establishes to the Plan Administrator by clear and convincing evidence that such position is not correct.7.07 Denial or Partial Denial of Benefit Claims. If the Claims Administrator denies a claim for benefits in whole or part, the ClaimsAdministrator shall notify the claimant in writing the decision within ninety (90) days after the Claims Administrator has received the claim.In the Claim Administrator's sole discretion, the Claims Administrator may extend the time to decide the claim for an additionalninety (90) days, by giving written notice of the need for such an extension any time prior to the expiration of the initial 90 dayperiod. The Claims Administrator, in its sole discretion, reserves the right to request specific information from the claimant, andreserves the right to have the claimant examined or tested by person(s) employed or compensated by the Employer. If the claim isdenied or partially denied, the Claims Administrator shall provide the claimant with written notice stating:(a)the specific reasons for the denial of the claim (including the facts upon which the denial was based) and reference toany pertinent Plan provisions on which the denial is based;(b) if applicable, a description of any additional material or information necessary for claimant to perfect the claim andan explanation of why such material or information is necessary; and(c) an explanation of the claims review appeal procedure including the name and address of the person or committee towhom any appeal should be directed.7.08 Appeal of Claims That Are Denied or Partially Denied. The claimant may request review of the Claims Administrator's denialor partial denial of a claim for Plan benefits. Such request must be made in writing within sixty (60) days after claimant has receivednotice of the Claims Administrator's decision and shall include with the written request for an appeal any and all documents,materials, or other evidence which claimant believes supports his or her claim for benefits. The written request for an appeal,together with all documents, materials, or other evidence which claimant believes supports his or her claim for benefits should beaddressed to the Claims Administrator, who will be responsible for submitting the appeal for review to the Claims AppealAdministrator.7.09 The Appeal Process. The Claims Administrator will submit the appeal to the Claims Appeal Administrator for review of thedenial or partial denial of the claim. Within sixty (60) days after the receipt of claimant's appeal, claimant will be notified of the finaldecision of the Claims Appeal Administrator, unless, in the Claims Appeal Administrator's sole discretion, circumstances require anextension of this period for up to an additional sixty (60) days. If such an extension is required, the Claims Appeal Administratorshall notify claimant of this extension in writing before the expiration of the initial 60-day period. During the appeal, the ClaimsAppeal Administrator, in its sole discretion, reserves the right to request specific information from the claimant, and reserves theright to have the claimant examined or tested by person(s) employed or compensated by the Employer. The final decision the ClaimsAppeal Administrator shall set forth in writing the facts and plan provisions upon which the decision is based. All decisions of theClaims Appeal Administrator are final and binding on all employees, Participants, their Beneficiaries, or other claimants.7.10 Judicial Proceedings for Benefits. In order to institute any action or proceeding in any state or federal court of law or equity,or before any administrative tribunal or arbitrator, a claimant/appellant must initiate such action or proceeding within 90 days fromthe later of: (i) the earlier of (a) the date of the adverse appeal notification from the Claims Appeal Administrator or (b) 120 daysfrom the date the appeal is received by the Claims Appeal Administrator, and (ii) the end of the 60 days in which a claimant has toappeal an adverse benefit determination, as described in Section 7.09. Notwithstanding the foregoing, a claimant must exhaust allprocedures set forth herein prior to instituting any action or proceeding in any state or federal court of law or equity, or before any administrative tribunal or arbitrator, for a claim for benefits under the Plan.7.11 Code Section 409A Compliance. This Plan is intended to comply with, and shall be governed by and subject to, therequirements of Code Section 409A and regulations thereunder and shall be interpreted and administered in accordance with thatintent. If any provision of this Plan would otherwise conflict with or frustrate this intent, that provision shall be null, void and of noeffect and the Administrator shall interpret the document and deem it amended so as to avoid the conflict. The Administratorreserves the right to take any action it deems appropriate or necessary to comply with the requirements of Code Section 409A andmay take advantage of such transition rules under Code Section 409A as it deems necessary or appropriate.ARTICLE VIIIAMENDMENT OR TERMINATION OF THE PLAN8.01 General. The Board of Directors, the Personnel Committee or any other person or persons whom the Personnel Committeemay expressly from time to time authorize to take any and all such actions for and on behalf of Entergy Corporation and therespective Employers, shall have the right, in its absolute discretion and consistent with the requirements of Code Section 409A, atany time and from time to time, to modify or amend, in whole or in part, any or all of the provisions of this Plan, or suspend orterminate it entirely, subject to the provisions of Section 8.02 and the requirements of Code Section 409A. Any such action shall beevidenced by the minutes of the Board of Directors or the Personnel Committee or a written certificate of amendment or terminationexecuted by any person or persons so authorized by the Personnel Committee. The provisions of this Article VIII shall survive atermination of the Plan unless such termination is agreed to by the Participants.8.02 Restrictions on Amendment or Termination. Unless agreed to in writing and signed by the affected Participant and by thePlan Administrator, no provision of this Plan may be modified, waived or discharged during the period after the Potential ChangeControl and before the earlier of: the expiration of the two-year period commencing on the date of a Potential Change in Control, or(ii) the date on which the Change in Control event contemplated by the Potential Change in Control is terminated.8.03 Successors. An Employer shall require any successor (whether direct or indirect, by purchase, merger, consolidation, orotherwise) of all or substantially all of its business and/or assets to expressly assume and agree to perform under this Plan in thesame manner and to the same extent that the Employer would be required to perform it if no such succession had taken place. If theEmployer fails to obtain such assumption and agreement prior to the effectiveness of any such succession, then the Employer shallbe liable for payment of all Plan benefits to which Participants are entitled upon their Separation from Service. Any successor orsurviving entity that assumes or otherwise adopts this Plan as contemplated in this Section 8.03 shall succeed to all the rights, powersand duties of the Employer and the Personnel Committee hereunder, subject to the restrictions on amendment or termination of thePlan as set forth in this Article VIII. The employment of the Participant who has continued in the employ of such successor orsurviving entity shall not be deemed to have been terminated or severed for any purpose hereunder; however, such continuedemployment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason.ARTICLE IX MISCELLANEOUS9.01 Gender and Number. The masculine pronoun whenever used in the Plan shall include the feminine. Similarly, the feminine pronoun whenever used in the Plan shall include the masculine as the context or facts may require.Whenever any words are used herein in the singular, they shall be construed as if they were also used in the plural in all cases wherethe context so applies.9.02 Captions. The captions of this Plan are not part of the provisions of the Plan and shall have no force and effect.9.03 Severability. In the event any provision of the Plan shall be held illegal or invalid for any reason, the illegality or invalidityshall not affect the remaining parts of the Plan, and the Plan shall be construed and enforced as if the illegal or invalid provision hadnot been included.9.04 Controlling Law. The administration of the Plan, and any Trust established thereunder, shall be governed by applicablefederal law, including ERISA to the extent applicable, and to the extent federal law is inapplicable, the laws of the State ofDelaware, without regard to the conflict of law principles of any state. Any persons or corporations who now are or shallsubsequently become parties to the Plan shall be deemed to consent to this provision.9.05 Notices. direction, revocation or notice authorized or required by the Plan shall be deemed delivered to the Administrator onthe date it is personally delivered to the Administrator or business days after it is sent by registered mail, postage prepaid, andproperly addressed to Entergy Services, Inc., Total Rewards, Attention: Plan Administrator, Cash Balance Equalization Plan ofEntergy Corporation and Subsidiaries, 639 Loyola Avenue, 14th Floor, New Orleans, Louisiana 70113 and shall be deemeddelivered to a Participant on the date it is personally delivered to him or three business days after it is sent by registered or certifiedmail, postage prepaid, addressed to him at the last address sho¼n for him on the records of his Employer.9.06 No Right to Employment. This Plan does not confer nor express or implied contract of employment. be construed as creatingan9.07 Indemnification. To the extent not covered by insurance, or if there is a failure to provide full insurance coverage for anyreason, and to the extent permissible under applicable laws and regulations, Entergy Corporation and the System employers agree tohold harmless and indemnify the Administrator, its members and its employee delegates against any and all claims and causes ofaction by or on behalf of any and all parties whomsoever, and all losses therefrom, including, without limitation, costs of defenseand attorneys' fees, based upon or arising out of any act or omission relating to or in connection with the Plan and Trust other thanlosses resulting from any such person's fraud or willful misconduct.9.08 No Alienation. The benefits provided hereunder shall not be subject to alienation, assignment, pledge, anticipation,attachment, garnishment, receivership, execution or levy of any kind, including liability for alimony or support payments, and anyattempt to cause such benefits to be so subjected shall not be recognized, except to the extent as may be required by law.9.09 Code Section 409A Compliance. This Plan is intended to comply with the requirements of Code Section 409A andregulations thereunder. Any provision of this document that is contrary to the requirements of Code Section 409A and theregulations thereunder shall be null, void and of no effect and the Administrator shall interpret the document consistent with therequirements of Code Section 409A, which shall govern the administration of the Plan in the event of a conflict between Plan termsand the requirements of Code Section 409A and the regulations thereunder.IN WITNESS WHEREOF, the Personnel Committee of the Board of Directors of Entergy Corporation has caused this Cash Balance Equalization Plan of Entergy Corporation and Subsidiaries, effective July 1, 2014, to beexecuted by its duly authorized officer on this 30th day of June, 2014.ENTERGY CORPORATION PERSONNEL COMMITTEEthrough its duly authorized representativeDONALD W. VINCISenior Vice-PresidentHuman Resources & Chief Diversity Officer Exhibit 10(a)452020 TEMPLATEStock Option Agreement (“Agreement”)Under the 2019 Entergy Corporation Omnibus Incentive PlanThe Personnel Committee of the Board of Directors (“Committee”) of Entergy Corporation has agreed to grant you, pursuant to the 2019Entergy Corporation Omnibus Incentive Plan (the “Plan”), a nonstatutory stock option (the “Option”) to purchase that number of Shares setforth on the Stock Option Grant Notice to which this Agreement is attached (the “Grant Notice”) at the Exercise Price set forth as the awardprice on the Grant Notice, subject to the Plan and the following terms and conditions:1. Grant Date; Acknowledgement and Acceptance. This Option grant is effective as of the award date set forth on the Grant Notice(the “Grant Date”), contingent upon your acceptance of this Option in accordance with the terms of this Agreement and the Grant Notice. Theeffectiveness of this Agreement is subject to your electronically acknowledging and accepting this Agreement and all of its terms andconditions and the terms of the Plan in the manner and at the time set forth on the Grant Notice. If you do not timely acknowledge and acceptthis Agreement in accordance with the Grant Notice, the Company shall be entitled to unilaterally cancel and render void this Agreement andthe Grant Notice.2. Option Term. The term of the Option (the “Option Term”) shall commence on the Grant Date and, unless the Option ispreviously terminated pursuant to the Plan or this Agreement, shall terminate upon the expiration of ten years from the Grant Date. Unlessearlier terminated or forfeited, upon expiration of the Option Term, all of your rights under the Plan and this Agreement with respect to theOption shall terminate.3. Vesting. The Option shall vest and become exercisable as to one-third (1/3) of the Shares subject to the Option on each of the firstthree (3) anniversaries of the Grant Date (each such anniversary a “Vesting Date”), subject to the terms of Section 5 and the Plan; provided,that in order for the portion of the Option to vest that is scheduled to become vested on each such Vesting Date, through each such VestingDate you comply with Section 9 of this Agreement and you remain either (a) a continuous full-time regular employee of a System Companyor (b) a continuous part-time regular System Company employee participating in the phased retirement program under the Entergy SystemPolicies & Procedures Phased Retirement - Pre-Separation Policy (the “Phased Retirement Program”), unless otherwise provided in Section 5of this Agreement. There shall be no proportionate or partial vesting in the periods prior to each Vesting Date, and all vesting shall occur onlyon the appropriate Vesting Date set forth above. 4. Option Exercise.(a) Method of Exercise. You may exercise the vested portion of the Option by one of the methods approved by theCommittee in connection with the grant of this Option. You can determine the permissible methods of exercise by contacting therecordkeeper with the contact information made available to you from time to time. You will be required to choose from one of the paymentmethods made available by the Committee for exercising the Options, which method shall also provide for the payment by you of allapplicable income tax and employment tax amounts required to be withheld in connection with such exercise.(b) Limitations on Sale. Notwithstanding anything to the contrary in Section 4(a) above or in the general description ofexercise alternatives, as a Participant with System Management Level (“ML”) 1-4 status (“ML 1-4 Participant”), you must maintain theapplicable Common Stock Ownership Target Level reflected in the chart below, which level is expressed as a multiple of your base salaryand is based on your ML. System Management LevelCommon Stock Ownership Target LevelML16 times base salaryML23 times base salaryML32 times base salaryML41 times base salary These ownership multiples may be satisfied through any shares of Common Stock held by an ML 1-4 Participant, including, butnot limited to, unvested Restricted Shares and shares of Common Stock held in tax-qualified 401(k) plans. Until you achieve your applicableCommon Stock Ownership Target Level, you must continue to retain at least that number of Shares equal to 75% of your After-Tax NetProfit (as defined below) from the exercise of the Option divided by the Fair Market Value of the Common Stock on the exercise date,rounded down to the nearest whole number, until the earlier of (a) achieving and maintaining your applicable Common Stock OwnershipTarget Level, or (b) your termination of full-time employment (or part-time employment under the Phased Retirement Program) with allSystem Companies.For purposes of this Section 4, “After-Tax Net Profit” means the total Fair Market Value of the Shares that you elect toacquire by exercise under this Option, determined as of the date of exercise, minus the total of (i) the Exercise Price for these Shares, and (ii)the amount of all applicable federal, state and local income tax, employment tax, other tax withholding and other fees that must be withheldin connection with the exercise.5. Termination of Option. Except as otherwise set forth in this Agreement or the Plan, if your full-time System Companyemployment or part-time System Company employment under the Phased Retirement Program, as applicable, should terminate prior to theexpiration of ten years from the Grant Date, you, or your designated beneficiary or heirs, as applicable, shall have only the following periodsof time (“Remaining Exercise Period”), as specified below, and such additional periods of time, if any, that the Committee may designate inits sole discretion, to exercise the Option, to the extent vested at the time your employment terminates: (a) If you die while actively employed with a System Company, any unvested portion of the Option will immediately vest,and the Remaining Exercise Period for your designated beneficiary or heirs, as applicable, shall end on the earlier of (i) the fifth (5th)anniversary of the date of your death or (ii) the tenth (10th) anniversary of the Grant Date.(b) If your employment terminates due to Disability, any unvested portion of the Option shall immediately vest, and theRemaining Exercise Period shall end on the earlier of (i) the fifth (5th) anniversary of the date of such termination of employment or (ii) thetenth (10th) anniversary of the Grant Date.(c) If you Retire from System Company employment, any unvested portion of the Option shall continue to vest pursuant tothe vesting schedule set forth in Section 3 hereof as if your System Company employment had continued through each applicable VestingDate, and the Remaining Exercise Period shall end on the earlier of (i) the fifth (5th) anniversary of the date you Retire or (ii) the tenth (10th)anniversary of the Grant Date. For purposes of the preceding sentence, “Retire” means you incur a separation from service with the SystemCompanies and at the time of such separation from service, either (A) you are eligible to commence retirement benefits under a SystemCompany-sponsored qualified final average pay defined benefit pension plan or (B) you have attained age 65 or have attained age 55 with ten(10) or more years of service with System Companies that is considered vesting service under the System Company-sponsored qualifieddefined benefit pension plan in which you actively participate or, if none, under the System Company-sponsored qualified definedcontribution pension plan in which you actively participate.(d) If your employment with your System Company employer terminates for Cause, or the Committee or its delegeedetermines that you engaged in an activity that would constitute Cause, then both the vested and unvested portions of the Option shallimmediately terminate, and the Exercise Period shall immediately end. (e) If your full-time System Company employment or part-time System Company employment under the PhasedRetirement Program, as applicable, terminates for any other reason not set forth in Subsections 5(a), (b), (c) or (d) above, any unvestedportion of the Option will terminate, and the Remaining Exercise Period for the vested portion of the Option shall end on the earlier of (i) thetenth (10th) anniversary of the Grant Date or (ii) the date that is ninety (90) days following your last date of System Company employment.(f) Except as provided below for an employee on an extended leave of absence bridge to retirement under an approvedseverance program under the Entergy System Severance Pay Plan No. 537 or the Entergy System Severance Pay Plan No. 538, if you areapproved by your System Company employer for a leave of absence (whether paid or unpaid) for reasons other than Disability or are acontinuous part-time regular System Company employee participating in the Phased Retirement Program, your Option, to the extent not fullyvested, will continue to vest while you remain on the approved leave of absence or during such participation in the Phased RetirementProgram, as applicable, upon each anniversary of the Grant Date in accordance with the vesting schedule set forth in Section 3 hereof. If yourSystem Company employment terminates during such approved leave period, the Remaining Exercise Period for your vested Option, if any,shall be determined in accordance with the provisions of Subsections 5(a) through (e) above, depending upon the reason for such termination.If you are on an extended leave of absence bridge to retirement under an approved severance program under the Entergy System SeverancePay Plan No. 537 or the Entergy System Severance Pay Plan No. 538, you will not be considered under the Plan or this Agreement to be afull-time or eligible part-time System Company employee under the Phased Retirement Program during the extended leave of absence bridgeperiod, and your System Company employment will be considered terminated for purposes of vesting in Options under this Agreement as ofthe commencement of your extended leave of absence bridge period.6. Accelerated Change in Control Vesting. Notwithstanding any provision of Sections 3 or 5 hereof to the contrary, in the event that(A) a Change in Control occurs and (B) either (i) outstanding Options are not assumed or substituted in connection therewith as described inSection 12(b) of the Plan, or (ii) outstanding Options are so assumed or substituted in connection therewith and your employment or serviceis terminated by your System Company employer without Cause or by you for Good Reason on or after the effective date of the Change inControl but prior to twenty-four (24) months following the Change in Control, then the Options shall immediately become fully vested andthe restrictive covenants set forth in Section 9(b), (c) and (d) of this Agreement shall cease to apply as of the date of the Change in Control, ifsubclause (i) applies, or as of the applicable termination date, if subclause (ii) applies, and any such vested and exercisable Option may beexercised within the remaining term of the Option.7. Entergy Policies.(a) Hedging Policy. Pursuant to the Entergy Corporation Policy Relating to Hedging, as adopted by the Board at its meetingheld on December 3, 2010, and as in effect on the date hereof, officers, directors and employees are prohibited from entering into hedging ormonetization transactions involving Common Stock so they continue to own Common Stock with the full risks and rewards of ownership,thereby ensuring continued alignment of their objectives with the Company’s other shareholders. Participation in any hedging transactionwith respect to Common Stock (including Options) is prohibited.(b) Recoupment Policy; Dodd-Frank; Payment in Error. Pursuant to the Entergy Corporation Policy Relating to Recoupmentof Certain Compensation, as adopted by the Board at its meeting held on December 3, 2010, and as in effect on the date hereof, the Companyis allowed to seek reimbursement of certain incentive compensation (including Options) from “executive officers” for purposes of Section 16of the Securities Exchange Act of 1934, as amended, if the Company is required to restate its financial statements due to materialnoncompliance with any financial reporting requirement under the federal securities laws (other than corrections resulting from changes toaccounting standards); or there is a material miscalculation of a performance measure relative to incentive compensation, regardless of therequirement to restate the financial statements; or the Board determines that an executive officer engaged in fraud resulting in either arestatement of the Company’s financial statements or a material miscalculation of a performance measure relative to incentive compensationwhether or not the financial statements were restated. In addition, the Option is subject to any forfeiture and/or recoupment policy which theCompany has adopted or may adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and implementing rulesand regulations thereunder, or as may be required by applicable law. To the maximum extent permitted by applicable law, in the event that a payment is made to you (whether in cash, stock or other property) in error that exceeds the amount to which you areentitled pursuant to the terms of this Agreement or the Plan, including without limitation pursuant to Section 28 of the Plan (such excessamount, an “Excess Payment”), you will repay to the Company, and the Company shall have the right to recoup from you such ExcessPayment by notifying you in writing of the nature and amount of such Excess Payment together with (i) demand for direct repayment to theCompany by you in the amount of such Excess Payment or (ii) reduction of any amount(s) owed to you by the Company or any other SystemCompany by the amount of the Excess Payment.(c) Insider Trading Policy. All ML 1-4 Participants are considered “Restricted Employees” under the Entergy System InsiderTrading Policy. As a Restricted Employee, you may trade in Entergy Corporation securities only during an open window period (and only ifyou are not in possession of material, non-public information). Generally, window periods begin on the second business day after thequarterly earnings release and end at the close of trading on the 15th day of the third month of the Company’s fiscal quarter or, if such day isnot a trading day, on the last preceding trading day. In addition, if you are a Restricted Employee, the Insider Trading Policy requires that youpre-clear all transactions involving Entergy securities with Entergy Corporation’s Office of the General Counsel. All exercises of the Optionand transactions in the underlying Common Stock must be made in compliance with the Insider Trading Policy as in effect at such time.8. Option Nontransferable. This Option may not be sold, exchanged, pledged, transferred, assigned, or otherwise encumbered,hypothecated or disposed of by you (or your designated beneficiary) other than by will or laws of descent and distribution, and any suchpurported Transfer shall be null and void ab initio. During your lifetime, this Option may be exercised only by you or your guardian or legalrepresentative, if applicable.9. Confidentiality and Restrictive Covenants. In consideration of the grant to you of the Option set forth herein, you hereby agree asfollows:(a) Confidential Information. You acknowledge that the System Companies have unique methods and processes for thegeneration, transmission and distribution and sale of energy products, which give them a competitive advantage, including strategic and non-public plans for their products, geographic and customer markets, and for marketing, distributing and selling their products. You furtheracknowledge that you have held a position of confidence and trust with respect to the System Companies and that you have and will acquireadditional detailed knowledge of the System Companies’ unique and confidential methods of doing business and plans for the future. Youacknowledge that the System Companies are expending and will continue to expend substantial amounts of time, money and effort to developeffective business and regulatory strategies, methodologies and technology. You also acknowledge that the System Companies have acompelling business interest in protecting the System Companies’ Confidential Information (as defined below) and that the SystemCompanies would be seriously and irreparably damaged by the disclosure of Confidential Information. You therefore agree that, during youremployment or other service with any System Company and at all times thereafter, you will hold in a fiduciary capacity for the benefit of theSystem Companies and, other than as authorized in writing by the General Counsel of the Company or as required by law or in the properperformance of your duties and responsibilities, or as otherwise provided in this Section 9, you will not disclose, directly or indirectly, to anyperson or entity, or use, for any purpose other than the furtherance of your responsibilities to any System Company, any ConfidentialInformation. For purposes of this Agreement, “Confidential Information” means information that is not generally known by persons outsidethe System Companies and could not easily be determined or learned by someone outside the System Companies, including withoutlimitation, any and all information and knowledge, whether or not explicitly designated as confidential and whether or not reduced to writing,regarding (i) the System Companies’ utility business, including, without limitation, the generation, transmission, brokering, marketing,distribution, sale and delivery of electric power or generation capacity (through regulated utilities or otherwise), and their natural gasdistribution business, (ii) the Entergy Wholesale Commodities business, including, without limitation, the ownership, development,management or operation of power plants and power generation facilities (including, without limitation, nuclear power plants), and theprovision of operations and management services (including, without limitation, decommissioning services) with respect to power plants, andthe sale of the electric power produced by the System Companies’ operating plants to wholesale customers, (iii) the System Companies’proprietary methods and methodology, technical data, trade secrets, know-how, research and development information, product plans,customer lists, specific information relating to products, services and customers or prospective customers (including, but not limited to, customers or prospective customers of any System Company with whom you became orbecome acquainted during your relationship with the System Company), books and records of any System Company, corporate, regulatory,customer and strategic relationships, suppliers, markets, computer software, computer software development, inventions, processes,formulae, technology, designs, drawings, technical information, source codes, engineering information, hardware configuration information,and matters of a business nature such as information regarding marketing, costs, pricing, finances, financial models and projections, billings,new or existing business or economic development plans, initiatives, and opportunities, or any other similar business information madeavailable to you in connection with your relationship with any System Company and (iv) any attorney-client privileged information of aSystem Company. Confidential Information shall also include non-public information concerning any director, officer, employee,shareholder, or partner of any System Company. You agree that your obligation not to disclose or use Confidential Information, and yourobligation, detailed below, to return and, upon your termination of employment with all System Companies, not to retain materials andtangible property described in this Section shall also extend to such types of information, materials and tangible property of customers of andsuppliers to the System Companies and to other third parties, in each case who may have disclosed or entrusted the same to you or to anySystem Company during your employment with any System Company.(b) Non-Competition. You agree that (i) at all times during the period of your employment or service with any SystemCompany employer, and (ii) for one (1) year following the termination for any reason of your employment by or service with your lastSystem Company employer ((i) and (ii) collectively, as applicable, the “Non-Compete Period”), you will not engage in CompetingEmployment. For purposes of this Section 9, “Competing Employment” means working for, providing services to or otherwise directly orindirectly assisting (whether or not for compensation) any person, entity or business which directly or indirectly competes with any part of theSystem Company business, and such employment or services involves products, services and business activities that are the same as orsimilar to those you provided to a System Company, or as to which you had access to Confidential Information, in the two years precedingyour termination of employment or service with all System Companies. You agree that it is reasonable for the restriction contained in thisparagraph to apply in each and every county, province, state, city, parish or other political subdivision or territory of the United States inwhich any System Company engages in any business activity, or otherwise distributes, licenses or sells its products or services, including,without limitation, Arkansas, Connecticut, District of Columbia, Louisiana, Massachusetts, Michigan, Mississippi, Nebraska, New York,Texas, and Vermont and any other state in which any System Company engages in business at any time and, with respect to the State ofLouisiana, means the following Parishes: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo,Calcasieu, Caldwell, Cameron, Catahoula, Claiborne, Concordia, De Soto, East Baton Rouge, East Carroll, East Feliciana, Evangeline,Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis, Lafayette, Lafourche, La Salle, Lincoln, Livingston, Madison,Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Point Coupee, Rapides, Red River, Richland, Sabine, Saint Bernard, St. Charles,St. Helena, Saint James, Saint John the Baptist, Saint Landry, Saint Martin, Saint Mary, Saint Tammany, Tangipahoa, Tensas, Terrebonne,Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West Carroll, West Feliciana and Winn (the “Restricted Territory”).Notwithstanding the foregoing, if your employment is terminated by any System Company employer without Cause, the covenant not tocompete set forth in this Section 9(b) shall apply only for as long as the System Company employer continues to pay you, in accordance withthe System Company employer’s regular payroll practices and schedule, your bi-weekly base salary in effect on the effective date of thetermination of your employment, less any applicable tax withholdings and ordinary deductions (such payments, the “Non-CompetePayments”), but in no such event for longer than the Non-Compete Period. In any instance where a System Company employer has the rightto elect to make Non-Compete Payments, such System Company employer must notify you in writing of such election, and the duration forwhich it elects to make Non-Compete Payments, within ten (10) business days following the termination of your employment from theSystem Company. If the System Company elects to make the Non-Compete Payments for less than the full Non-Compete Period, you shallbe free to join a competitor after you cease receiving the Non-Compete Payments. For the purposes of clarity, in the event of yourtermination for Cause or voluntary resignation, you shall be subject to the restrictions set forth in this Section 9(b) without any requirementthat your System Company employer pay you any Non-Compete Payments.(c) Non-Solicitation. You agree that, while you are employed by any System Company and during the Non-Compete Period(or, if later, the last day you are scheduled to receive cash severance payments from your System Company employer pursuant to any severance plan or other agreement), except in the good faith performance of your duties to theSystem Companies, you shall not, other than as authorized in writing by the General Counsel of the Company: (i) directly or indirectly,solicit or seek to hire or identify for potential hiring (whether on your own behalf or on behalf of any other person, entity or organization) anyperson who is at that time (or was during the prior six (6) months) an employee or consultant of any System Company or (ii) within theRestricted Territory, directly or indirectly solicit the trade, business or patronage of any clients, customers or vendors or prospective clients,customers or vendors of any System Company to provide competing products or services or advise, or assist such clients, customers orvendors or prospective clients, customers or vendors to in any way modify their relationship with any System Company. The foregoing non-solicitation (1) shall not be violated by general advertising not targeted at the forgoing persons or entities; (2) shall not apply to solicitation ofpersons involuntarily terminated from System Company employment; and (3) shall only apply to persons or entities (A) who reporteddirectly or indirectly to you; (B) with whom you had material contact while at a System Company; or (C) about whom or which youpossessed (i) information regarding quality of performance while they were employed by a System Company, which information you wouldnot otherwise have except for the position you held with a System Company, or (ii) Confidential Information.(d) Non-Disparagement. You agree that, to the fullest extent permitted by applicable law, you will not at any time (whetherduring or after your employment or service with any System Company), other than in the proper performance of your duties, publish orcommunicate to any person or entity any “Disparaging” (as defined below) remarks, comments or statements concerning any SystemCompany or any of their respective directors, officers, shareholders, employees, agents, attorneys, successors and assigns. “Disparaging”remarks, comments or statements are those that are intended to, or could be construed in a manner so as to, impugn, discredit, injure or impairthe business, reputation, character, honesty, integrity, judgment, morality or business acumen or abilities of the individual or entity beingdisparaged.(e) System Company Property. All tangible materials, equipment, devices, documents, copies of documents, datacompilations (in whatever form), software programs, and electronically created or stored materials that you receive or create in the course ofemployment with a System Company are and shall remain the property of the System Company and you shall immediately return (and/orcooperate in the supervised deletion of) such property to your System Company employer upon the termination of your employment, forwhatever reason. The obligation to return property and documents extends to anything received or made during and as a result ofemployment by a System Company, regardless of whether it was received from a System Company or a third party, such as an actual orpotential vendor or customer, and regardless of whether a document contains Confidential Information. The only documents not subject to theobligation to return are documents directly relating to your compensation and benefits, such as your pay stubs and benefit plan information.(f) Violation of the Restrictive Covenant Section. In the event that you violate any provision of this Section 9, the timeperiods set forth in those paragraphs shall be extended for the period of time you remain in violation of the provisions, to the greatest extentallowed by applicable law. The provisions of Section 9(a) - (e) hereof are, and shall be construed as, independent covenants, and no claimedor actual breach of any contractual or legal duty by any System Company shall excuse or terminate your obligations hereunder or precludeany System Company from obtaining injunctive relief for your violation, or threatened violation, of any of those provisions. You also agreeto indemnify and hold the System Companies harmless from any and all losses (including, but not limited to, reasonable attorney’s fees andother expenses incurred to enforce this Agreement) suffered by any System Company as a result of any violation or threatened violation ofany of your representations, warranties, covenants or undertakings set forth in this Agreement (in addition to any other remedies available tothe System Companies set forth in Section 9(i) below), provided that a System Company is found to be the prevailing party in any suchaction.(g) Restrictive Covenants Contained in Other Agreements. Notwithstanding any provision contained herein to the contrary,to the extent that you are or become subject to any other agreement that contains restrictive covenants different from the restrictive covenantscontained in this Agreement, the restrictive covenants set forth in such other agreement shall supplement, and shall not replace, the restrictivecovenants herein.(h) Exclusions. Notwithstanding anything else in this Section 9 or in this Agreement to the contrary: (1) The restrictive covenants in this Section 9 are not intended to restrict you from cooperating with any investigation or proceedinginitiated by the Nuclear Regulatory Commission (“NRC”) or any other federal or state regulatory agency. Further, you may makedisclosure (A) to exercise your rights as a whistleblower under the Dodd-Frank Wall Street Reform and Consumer Protection Act of2010, the Securities and Exchange Commission Rule 21F-17(a), or any other federal or state law providing whistleblower rights; (B)to the extent necessary when providing safety-related or other information to the NRC on matters within the NRC’s regulatoryjurisdiction; (C) when participating in “protected activities,” as defined in Section 211 of the Energy Reorganization Act of 1974 andin C.F.R. Part 50.7; (D) when engaging in activities protected by the National Labor Relations Act or any similar federal or state law;or (E) when required to do so by a court of law, by any governmental agency or administrative or legislative body with jurisdiction toorder you to divulge, disclose or make accessible such information. With the exception of Confidential Information subject to theattorney-client privilege, you shall have no obligation to seek prior approval of any System Company or to inform any SystemCompany of such disclosure. This Agreement does not limit your ability to communicate, without notice to any System Company,with any government agencies or otherwise participate in any investigation or proceeding that may be conducted by any governmentagency, or to collect a reward in connection with any whistleblower information provided to a government agency.(2) Defend Trade Secrets Act Immunity Notice. Pursuant to the Defend Trade Secrets Act of 2016, non-compliance with thedisclosure provisions of this Agreement shall not subject you to criminal or civil liability under any Federal or State trade secret lawfor the disclosure of a System Company trade secret: (A) in confidence to a Federal, State or local government official, either directlyor indirectly, or to an attorney in confidence solely for the purpose of reporting or investigating a suspected violation of law; (B) in acomplaint or other document filed in a lawsuit or other proceeding, provided that any complaint or document containing the tradesecret is filed under seal; or (C) to an attorney representing you in a lawsuit for retaliation by any System Company for reporting asuspected violation of law or to use the trade secret information in that court proceeding, provided that any document containing thetrade secret is filed under seal and you do not disclose the trade secret, except pursuant to court order.(i) Enforcement. You hereby agree that the covenants set forth in this Section 9 are reasonable with respect to their scope,duration, and geographical area. You further agree and acknowledge that the restrictions contained in Section 9 do not and would notunreasonably impose limitations on your ability to earn a living. If any court or other tribunal determines that any term or provision ofSection 9 is overbroad or otherwise invalid or unenforceable, you and the Company hereby agree that such court or tribunal shall have thepower and obligation to narrow or otherwise reform the unenforceable term or provision, including to delete, replace, or add specific words orphrases, but only to the narrowest extent necessary to render the provision valid and enforceable (provided that in no event shall the length ofany restrictive covenant or its scope be extended or expanded), and this Agreement shall be fully enforceable as so modified. Your agreementto the restrictions provided for in this Agreement and the Company’s agreement to grant the Award are mutually dependent consideration.Therefore, notwithstanding any other provision to the contrary in this Agreement, if (i) the enforceability of any material restrictionapplicable to you as provided for in this Section 9 is challenged and found unenforceable by a court or other tribunal or (ii) you breach any ofthe provisions of Section 9, then the Company shall have the right to terminate this Agreement and, to the extent that you have exercised theOption in whole or in part, recover from you an amount equal to the aggregate Fair Market Value of the Common Stock subject to suchexercise on the date of such exercise of the Option, less the aggregate exercise price thereof. This provision shall be construed as a return ofconsideration or ill-gotten gains due to the failure of your promises and consideration under the Agreement, and not as a liquidated damagesclause. In addition, in the event of the Company’s termination of this Agreement, you shall immediately forfeit all un-exercised Options. Youfurther hereby agree that, in the event of a breach by you of any of the provisions of Sections 9(a), (b), (c), (d), or (e), monetary damages shallnot constitute a sufficient remedy. Consequently, in the event of any such breach or threatened breach, the Company or a System Companymay, in addition to and without prejudice to other rights and remedies existing in its favor, apply to any court of competent jurisdiction forspecific performance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof, without therequirement of posting a bond or proving actual damages and without having to demonstrate that money damages would be inadequate. Youacknowledge (i) that you have carefully read this Agreement and have given careful consideration to the restraints imposed upon you by this Agreement, and you are in full accord as to their necessity for the reasonable and proper protection of theConfidential Information of the System Companies and their relationships with customers, suppliers and other business partners and (ii) thatyou are informed in writing hereby that you have a right to the advice of legal counsel and should consult with an attorney of your choicewith regard to this Agreement, and you have been provided ample opportunity to seek out and consult with such counsel.(j) For purposes of this Section 9, “Company” shall include all System Companies. You and the Company agree that eachSystem Company is an intended third-party beneficiary of this Section 9, and further agree that each System Company is entitled to enforcethe provisions of this Section 9 in accordance with its terms. Notwithstanding anything to the contrary in this Agreement, the terms of therestrictive covenants set forth in this Section 9 shall survive the termination of this Agreement and shall remain in full force according to theirrespective terms.(k) In the twelve (12) months following the termination of your employment with your last System Company employer, inthe event you seek or obtain employment or another business affiliation with any person or entity other than a System Company, you agree tonotify the Company in writing, as far in advance as is reasonably practicable, but in no event less than two weeks prior to your proposedcommencement of employment, of the details of such employment or business affiliation. You also agree to show these restrictive covenantprovisions to any prospective employer, and you consent to any System Company showing these provisions to any third party believed by aSystem Company to be a prospective or actual employer of you, or a receiver of services from you, and to insisting on your compliance withthese terms. Your obligations under this Section will expire on that date which is twelve months after the end of your employment with allSystem Companies (or, if later, the last date as of which you are scheduled to receive separation payments from any System Companypursuant to a severance plan or other agreement).10. Withholding Taxes. The Company will use the “net shares method” to satisfy any tax withholding obligation in respect of theOption, which means the Company will reduce the number of Shares otherwise payable to you upon exercise of the Option by the number ofShares with a value necessary to cover up to the maximum amount of such obligation in any applicable jurisdiction. In no event shall theCompany or any other System Company have any liability to you for your individual income tax liability, for withholding or failing towithhold taxes, or for remitting or failing to remit taxes with respect to your income.11. Governing Law/Court Proceedings. This Agreement shall be governed by and construed in accordance with the laws of theState of Delaware, without giving effect to principles of conflicts of law of such state. Any suit, action or proceeding arising out of, or withrespect to this Agreement, its enforcement, breach, or interpretation, shall be brought in any court of competent jurisdiction in the State ofDelaware, County of New Castle, and you and the Company hereby submit to the exclusive jurisdiction of such court (and its appellate court,whether or not located in the State of Delaware) for the purpose of any such suit, action, or proceeding. You and the Company herebyirrevocably waive (i) any objections which each may now or hereafter have to the laying of the venue of any suit, action or proceeding arisingout of or relating to this Agreement brought in any court of competent jurisdiction in the State of Delaware, County of New Castle, (ii) anyclaim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum and (iii) any right to a jurytrial.12. Incorporation of Plan. The Plan is hereby incorporated by reference and made a part hereof, and the Option and this Agreementshall be subject to all terms and conditions of the Plan, including, without limitation, the amendment provisions thereof, and to such rules,regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time to time. Anycapitalized term which is not defined in this Agreement shall have the meaning set forth in the Plan. If any terms of this Agreement areinconsistent with the terms of the Plan, the terms of the Plan shall govern, and this Agreement shall be deemed to be modified accordingly,unless the Plan allows for such modification of the Plan’s terms by this Agreement.13. Amendments. This Agreement may be amended or modified only by an instrument in writing signed by the parties hereto. 14. Rights as a Shareholder. Neither you nor any of your successors in interest shall have any rights as a stockholder of the Company with respect to any Shares subject to the Option until either (i) such Shares are credited to a separate book entryaccount in your name; or (ii) the date of issuance of a stock certificate for such Shares.15. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be inwriting and shall be deemed to have been duly given when delivered personally or by United States registered mail, return receipt requested,postage prepaid, if to you, to your last known address filed in the personnel records of the System Companies, and if to the Company, to theaddress set forth below, or thereafter to such other address as either party may have furnished to the other in writing in accordance herewith,except that any notice of change of address shall be effective only upon actual receipt thereof:If to the Company, by hand delivery or email to:Entergy Services, LLCAttention: Executive Vice President & General Counsel639 Loyola Avenue, 28th FloorNew Orleans, LA 70113-312516. Agreement Not a Contract of Employment. Your employment with your System Company employer shall remain at-will.Neither the Plan, the granting of the Option, this Agreement, the Grant Notice, nor any other action taken pursuant to the Plan shall constituteor be evidence of any agreement or understanding, express or implied, that you have a right to continue as an employee of any SystemCompany for any period of time or at any specific rate of compensation.17. Authority of the Committee. The Committee shall have full authority and discretion to interpret and construe the terms of thePlan, the Grant Notice, and this Agreement. The determination of the Committee as to any such matter of interpretation or construction shallbe final, binding and conclusive.18. Waivers. Any term or provision of this Agreement may only be waived by a System Company. Any such waiver shall bevalidly and sufficiently given for the purposes of this Agreement if it is in writing signed by an authorized Company officer. The failure ofany System Company to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor inany way to affect the validity of this Agreement or any part hereof or the right of any System Company thereafter to enforce each and everysuch provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.19. No Fractional Shares. If application of the vesting percentage set forth in Section 3 of this Agreement results in a fractionalShare, such Share shall be rounded down to the nearest whole Share for each year except for the last year of the vesting period, at the end ofwhich last year the Option shall become vested for the full remainder of the Shares. The Company will not pay out any fractional Shares.20. Headings. The titles and headings of the sections in this Agreement are for convenience of reference only, do not form part ofthis Agreement, and shall not affect the construction of this Agreement.21. Electronic Signature. Electronic signature of this Agreement shall have the same validity and effect as a signature affixed byhand.22. Entire Agreement. This Agreement (including the Plan) constitutes the entire agreement of the parties hereto with respect to thesubject matter hereof and supersedes any and all prior undertakings and agreements between the Company and its Affiliates and you withrespect to the subject matter hereof.23. Prospectus. This Agreement constitutes part of a prospectus covering Securities registered under the Securities Act of 1933.The remaining documents constituting the prospectus are available on Entergy Corporation’s intranet under Our Company, HumanResources, Money & Finances, Compensation, Equity https://entergy.sharepoint.com/sites/myhra/myBenefits/Pages/Compensation.aspx. Exhibit 10(a)462020 TEMPLATE2020-2022 Performance Unit Agreement (“Agreement”)Under the 2019 Entergy Corporation Omnibus Incentive PlanPursuant to the 2019 Entergy Corporation Omnibus Incentive Plan (the “Plan”), you are eligible to participate at a target Achievement Level(as defined below) of that number of performance units (the “Target Performance Units”) (based upon an Achievement Level of 100%) setforth under the heading “Total Granted” on the Performance Unit Grant Notice to which this Agreement is attached (the “Grant Notice”) forthe performance period commencing January 1, 2020 and ending December 31, 2022 (the “Performance Period”), subject to the terms of thePlan and to the following terms and conditions:1. Effective Date of Agreement; Acknowledgment and Acceptance of Performance Units. This Agreement is effective as of theAward Date set forth on the Grant Notice, contingent upon your acceptance of this Agreement in accordance with the terms of thisAgreement and the Grant Notice. The effectiveness of this Agreement is subject to your electronically acknowledging and accepting thisAgreement and all of its terms and conditions and the terms of the Plan in the manner and at the time set forth on the Grant Notice. If you donot timely acknowledge and accept this Agreement in accordance with the Grant Notice, the Company shall be entitled to unilaterally canceland render void this Agreement and the Grant Notice.2. Achievement Levels. The Personnel Committee of the Board (the “Committee”) shall determine the achievement level attainedby the Company for the Performance Period (the “Achievement Level”) based (i) eighty percent (80%) on TSR Achievement Level (asdefined below); and (ii) twenty percent (20%) on LTI Cumulative ETR Adjusted EPS Achievement Level (as defined below). The weightedaverage of the two performance measures will determine the Achievement Level and overall payout for the Performance Period. For thesepurposes, and subject to the terms of the Plan, the Achievement Level shall be determined as follows:a.The “TSR Achievement Level” shall be determined by comparing the Company’s “total shareholder return” for thePerformance Period (“Company TSR”) to that of the peer group companies comprising the Philadelphia Electric Utilities Index (the “PeerGroup”). For this purpose, subject to the terms of the Plan, “total shareholder return” shall be determined in accordance with Companyadministrative practice based on the changes in the stock price and dividends over the course of the Performance Period. The possible TSRAchievement Levels for the Performance Period shall be as follows: for bottom quartile performance (where Company TSR is in the bottomquartile of Peer Group TSR), no payout is earned; for third quartile performance (where Company TSR is in the third quartile of Peer GroupTSR), payout is determined by interpolating between index median (100% TSR Achievement Level) and the performance of the Peer Groupcompany at the top of the fourth quartile, starting at 25% TSR Achievement Level; for second quartile performance (where Company TSR isin the second quartile of Peer Group TSR), payout is determined by interpolating between the performance of the Peer Group Company at thebottom of the top quartile (200% TSR Achievement Level) and index median (100% TSR Achievement Level); and for top quartileperformance (where Company TSR is in the top quartile of Peer Group TSR), a maximum payout of 200% is earned.b. The “LTI Cumulative ETR Adjusted EPS Achievement Level” shall be determined by comparing (1) the sum of theCompany’s cumulative consolidated adjusted earnings per share performance (“ETR Adjusted EPS”) for each year in the Performance Periodand adjusting for pre-defined exclusions and other adjustments determined by the Committee (such aggregate amount, as adjusted, the “LTICumulative ETR Adjusted EPS”) to (2) the achievement levels established by the Committee as “Target,” (target LTI Cumulative ETR Adjusted EPS), “Minimum” (eight percent (8%) less than thetarget LTI Cumulative ETR Adjusted EPS), and “Maximum” (eight percent (8%) more than the target LTI Cumulative ETR Adjusted EPS).Subject to the terms of the Plan and such adjustments as set forth in this Section 2, this determination shall be made by the Committee inaccordance with Company administrative practice. The LTI Cumulative ETR Adjusted EPS Achievement Level shall result in payoutopportunities ranging from 0 to 200% of the target payout opportunity. Payout for performance at Target will equal 100% of the targetpayout opportunity established by the Committee, with no payout for LTI Cumulative ETR Adjusted EPS less than the Minimum, a 25%payout opportunity for LTI Cumulative ETR Adjusted EPS equal to the Minimum, and a 200% payout opportunity for LTI Cumulative ETRAdjusted EPS equal to or exceeding the Maximum, and with the payout for LTI Cumulative ETR Adjusted EPS greater than the Minimumand less than the Maximum determined by straight line interpolation between the Minimum and the Target and the Target and the Maximum,as the case may be.Notwithstanding anything herein to the contrary, the Achievement Level shall be adjusted for such items as the Committee may determine inits discretion during or after the Performance Period (but in any event before any delivery of Shares hereunder), whether resulting in anincrease or decrease (including to zero (0)) in the number of Shares otherwise deliverable hereunder, considering management accountabilityand business rationale.3. Performance Units Earned. The actual number of performance units awarded to you under this Agreement, if any (the“Performance Units”), shall be calculated by the Committee at the end of the Performance Period by multiplying the Target PerformanceUnits by the percentage of the Company’s attained Achievement Level, determined as outlined above. Unless otherwise provided in the Planor this Agreement, to earn Performance Units you must (i) remain a full-time employee of a System Company for the remainder of thePerformance Period, (ii) maintain your current System Management Level (“ML”) 1-4 role and, as applicable, current role within the Officeof the Chief Executive (each an “Eligible Role”), resulting in an award opportunity dependent on your specific ML or Office of the ChiefExecutive role (“Eligibility Level”); and (iii) comply with Section 10 of this Agreement.Except as provided below for an employee on an extended leave of absence bridge to retirement under an approved severance program underthe Entergy System Severance Pay Plan No. 537 or the Entergy System Severance Pay Plan No. 538, if you are approved by your SystemCompany employer for a leave of absence (whether paid or unpaid) for reasons other than Disability or are a continuous part-time regularSystem Company employee participating in the phased retirement program under the Entergy System Policies & Procedures PhasedRetirement - Pre-Separation Policy (the “Phased Retirement Program”), you will continue to be treated as a full-time employee of a SystemCompany while you are on such approved leave of absence for purposes of the Plan and this Agreement or during such participation in thePhased Retirement Program, as applicable. If you are on an extended leave of absence bridge to retirement under an approved severanceprogram offered pursuant to Entergy System Severance Pay Plan No. 537 or Entergy System Severance Pay Plan No. 538, you will not beconsidered under the Plan or this Agreement to be a full-time employee during the extended leave of absence bridge period or a part-timeSystem Company employee under the Phased Retirement Program during the extended leave of absence bridge period, and your SystemCompany employment will be considered terminated for purposes of vesting in Awards under this Agreement as of the commencement ofyour extended leave of absence bridge period.If you have completed a minimum of twelve months of full-time employment in an Eligible Role during the Performance Period and youRetire, you will be eligible for a prorated portion of the applicable Achievement Level of Performance Units, based on your full months ofparticipation and your Eligibility Level(s) during the Performance Period. For purposes of the preceding sentence, you will have “Retired” ifyou incur a separation from service with the System Companies and at the time of such separation from service, either (A) you are eligible tocommence retirement benefits under a System Company-sponsored qualified final average pay defined benefit pension plan or (B) you haveattained age 65 or have attained age 55 with ten (10) or more years of service with System Companies that is considered vesting serviceunder the System Company-sponsored qualified defined benefit pension plan in which you actively participate or, if none, the SystemCompany-sponsored qualified defined contribution pension plan in which you actively participate. If your employment terminates due toyour incurring a Disability or you die during the Performance Period, you (or your Beneficiary or heirs) will be eligible for a prorated portionof the applicable Achievement Level of Performance Units, based on your full months of full-time employment prior to your Disability ordeath and your Eligibility Level(s) during the Performance Period. Notwithstanding anything to the contrary herein, if, during the Performance Period (x) your employment is terminated for Cause or (y) the Committee or its delegee determines that you engaged in anactivity that would constitute Cause, then you shall not be entitled to receive any Performance Units pursuant to this Agreement.Regardless of eligibility, you shall not be entitled to receipt of nor vest in any Performance Units and/or any dividends that have accrued onany Performance Units unless and until the Personnel Committee has certified the Achievement Level after the close of the PerformancePeriod.If your Eligibility Level changes during the Performance Period, but you remain in an Eligible Role, the number of Target Performance Unitsset forth in this Agreement shall be adjusted to reflect the number of full months during the Performance Period for which you were eligiblehereunder in each Eligibility Level, and the number of Performance Units, if any, awarded to you will be prorated to reflect the number offull months you earned Performance Units at each Eligibility Level. If any change to an Eligibility Level is effective on a date other than thefirst day of a calendar month, the number of Performance Units, if any, awarded to you with respect to the transition month in accordancewith this paragraph will be determined based on your prior Eligibility Level.If you are demoted or otherwise no longer in an Eligible Role during the Performance Period, but remain employed on a regular full-timebasis by a System Company for the duration of the Performance Period, the number of Performance Units, if any, awarded to you will beprorated to reflect only the number of full months you earned Performance Units in an Eligible Role in accordance with your EligibilityLevel(s).4. Accelerated Change in Control Vesting. Notwithstanding anything herein to the contrary:a.in the event that (i) a Change in Control occurs and (ii) either (x) outstanding Target Performance Units are notassumed or substituted in connection therewith as described in Section 12(b) of the Plan, or (y) outstanding Target Performance Units are soassumed or substituted in connection therewith and your employment or service is terminated by your System Company employer withoutCause or by you for Good Reason on or after the effective date of the Change in Control but prior to twenty-four (24) months following theChange in Control (the date on which (x) or (y) occurs, the “CIC Vesting Date”), then (A) the Committee shall calculate the AchievementLevel for the Performance Period during which the CIC Vesting Date occurs treating the CIC Vesting Date as if it were the last day of thePerformance Period (the “CIC Achievement Level”) and you shall immediately become fully vested in that number of Performance Unitscalculated by multiplying the Adjusted Target Performance Units (as defined below) by the percentage of the Company’s attainedAchievement Level that is the greater of Target Achievement Level or CIC Achievement Level and (B) the restrictive covenants set forth inSection 10(b), (c), (d) and (e) of this Agreement shall cease to apply as of the CIC Vesting Date. In the event of accelerated vesting asdescribed in this Section 4.a., but subject to the conditions and limitations described herein and subject to Section 5 of the Plan, the Companyshall pay you a number of Shares equal to the number of Performance Units that vest in accordance with this Section 4.a. no later than sixty(60) days after the CIC Vesting Date; provided, that if such 60-day period straddles two of your taxable years, the payment shall be made inthe later year. “Adjusted Target Performance Units” means that number of units calculated by multiplying the Target Performance Units by afraction, the numerator of which is the number of days in the Performance Period up to and including the CIC Vesting Date and thedenominator of which is the total number of days in the Performance Period.b.Notwithstanding anything herein to the contrary, the time and form of any payments to which you may be entitledpursuant to this Section 4 are subject to the requirements and limitations set forth in Section 22 of the Plan.5. Dividend Equivalents. If you are awarded Performance Units pursuant to this Agreement, you will also be awarded the dividendequivalents attributable to such awarded Performance Units for the time you were a Participant in an Eligible Role and at the Eligibility Levelunderlying such Performance Units (“Dividend Equivalents”). The Dividend Equivalents with respect to each awarded Performance Unit willbe equal to only the dividends paid with respect to a Share for the period of your participation in the Plan at an Eligible Role during thePerformance Period.6. Settlement of Performance Units and Dividend Equivalents. a.As soon as reasonably practicable following the date on which the Committee determines the number ofPerformance Units, if any, to be awarded to you under this Agreement and no later than March 15th following the end of the calendar year inwhich the Performance Units are no longer subject to a “substantial risk of forfeiture” within the meaning of Code Section 409A, theCompany shall issue to you, after withholding all applicable income tax and employment tax amounts required to be withheld in connectionwith such payment in accordance with Section 6(d) of this Agreement: (i) one Share for each Performance Unit so determined to be awarded,and (ii) an additional number of Shares determined by dividing the total Dividend Equivalents with respect to such awarded PerformanceUnits by the closing share price of a Share on the last trading date of the Performance Period. Notwithstanding the foregoing, if DividendEquivalents are awarded with respect to Performance Units that are payable pursuant to Section 4.a., the number of Shares issuable pursuantto this Section 6 in respect of such Dividend Equivalents shall be calculated treating the CIC Vesting Date as the last day of the PerformancePeriod and shall be issued no later than sixty (60) days after the CIC Vesting Date; provided, that if such 60-day period straddles two of yourtaxable years, such Shares shall be issued in the later year.b.Shares (including any Dividend Equivalents that are settled in Shares) shall be credited to a separate book entryaccount in your name, and such vested Shares shall be free of all restrictions except any that may be imposed by law. Upon the crediting ofvested Shares to a book entry account, you may treat the Shares in the same manner as all other shares of Common Stock owned by you,subject to the provisions of Section 6(c) below. All ML 1-4 Participants are considered Restricted Employees under Entergy’s InsiderTrading Policy and, as such, may trade in Entergy Corporation securities only during an open window period (and only if not in possession ofmaterial, non-public information). Generally, window periods begin on the second business day after the quarterly earnings release and end atthe close of trading on the 15th day of the third month of the Company’s fiscal quarter or, if such day is not a trading day, on the lastpreceding trading day. In addition, if you are a Restricted Employee, the Insider Trading Policy requires that you pre-clear all transactionsinvolving Entergy securities with Entergy Corporation’s Office of the General Counsel.c.Share Ownership Guidelines. All ML 1-4 Participants must maintain the applicable Common Stock OwnershipTarget Level in the chart below, which is expressed as a multiple of your base salary and depends on your management level.System Management LevelCommon Stock Ownership Target LevelML 16 times base salaryML 23 times base salaryML 32 times base salaryML 41 times base salaryThese ownership multiples may be satisfied through any shares of Common Stock held by the ML 1-4 Participant, including those Sharesearned during this Performance Period, all Restricted Shares, shares of Common Stock held in tax-qualified 401(k) plans, etc. You mustcontinue to retain the book entry Shares issued to you pursuant to this Agreement until the earlier of (i) achieving and maintaining yourapplicable Common Stock Ownership Target Level, or (ii) your termination of full-time employment with all System Companies. Once youhave achieved and maintain your applicable Common Stock Ownership Target Level, you are no longer bound to hold the Shares earnedduring this Performance Period in book entry. However, you are still subject to the trading restrictions and pre-clearance requirements intransacting in these Shares described in Subsection 6(b) of this Agreement.d.Withholding Taxes. The Company shall use the “net shares method” to satisfy any tax withholding obligation inrespect of any payment under this Agreement, which means the Company will reduce the number of earned Shares otherwise payable to youby the amount necessary to cover up to the maximum amount of such obligation in any applicable jurisdiction. In no event shall the Companyor any other System Company have any liability to you for your individual income tax liability, for withholding or failing to withhold taxes,or for remitting or failing to remit taxes with respect to your income, including without limitation, in the event that you are subject to penaltytax pursuant to Code Section 409A. e.No Fractional Shares. Any fractional Share to be distributed shall be settled in cash and applied to satisfy taxwithholding requirements. The Company will not pay out any fractional Shares.7. Termination of Agreement. Except as otherwise provided herein or in the Plan, this Agreement (other than the restrictivecovenants set forth in Section 10) and your Target Performance Units award opportunity shall terminate and be forfeited on the date on whichyour full-time System Company employment terminates.8. Performance Units Nontransferable. Your Target Performance Units award opportunity and any Performance Units awardedpursuant to this Agreement may not be sold, exchanged, pledged, transferred, assigned, or otherwise encumbered, hypothecated or disposedof by you (or your beneficiary) other than by will or laws of descent and distribution.9. Entergy Policies.a.Hedging Policy. Pursuant to the Entergy Corporation Policy Relating to Hedging, as adopted by the Board at itsmeeting held on December 3, 2010, and as in effect on the date hereof, officers, directors and employees are prohibited from entering intohedging or monetization transactions involving Common Stock so they continue to own Common Stock with the full risks and rewards ofownership, thereby ensuring continued alignment of their objectives with the Company’s other shareholders. Participation in any hedgingtransaction with respect to Common Stock (including Target Performance Units or Performance Units) is prohibited.b.Recoupment Policy; Dodd-Frank; Payment in Error. Pursuant to the Entergy Corporation Policy Relating toRecoupment of Certain Compensation, as adopted by the Board at its meeting held on December 3, 2010, and as in effect on the date hereof,the Company is allowed to seek reimbursement of certain incentive compensation (including Performance Units and Shares issued inpayment of Performance Units) from “executive officers” for purposes of Section 16 of the Securities Exchange Act of 1934, as amended, ifthe Company is required to restate its financial statements due to material noncompliance with any financial reporting requirement under thefederal securities laws (other than corrections resulting from changes to accounting standards) or there is a material miscalculation of aperformance measure relative to incentive compensation, regardless of the requirement to restate the financial statements; or the Boarddetermines that an executive officer engaged in fraud resulting in either a restatement of the Company’s financial statements or a materialmiscalculation of a performance measure relative to incentive compensation whether or not the financial statements were restated. Inaddition, the Performance Units (and Shares issued in payment of Performance Units) are subject to any forfeiture and/or recoupment policywhich the Company has adopted or may adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 andimplementing rules and regulations thereunder, or as may be required by applicable law. To the maximum extent permitted by applicablelaw, in the event that a payment is made to you (whether in cash, stock or other property) in error that exceeds the amount to which you areentitled pursuant to the terms of this Agreement or the Plan, including without limitation pursuant to Section 28 of the Plan (such excessamount, an “Excess Payment”), you will repay to the Company, and the Company shall have the right to recoup from you such ExcessPayment by notifying you in writing of the nature and amount of such Excess Payment together with (i) demand for direct repayment to theCompany by you in the amount of such Excess Payment or (ii) reduction of any amount(s) owed to you by the Company or any other SystemCompany by the amount of the Excess Payment.10. Confidentiality and Restrictive Covenants. In consideration of the grant to you of the Target Performance Units awardopportunity set forth herein and any Performance Units awarded to you pursuant to this Agreement, you hereby agree to the followingrestrictive covenants:a.Confidential Information. You acknowledge that the System Companies have unique methods and processes for thegeneration, transmission and distribution and sale of energy products, which give them a competitive advantage, including strategic and non-public plans for their products, geographic and customer markets, and for marketing, distributing and selling their products. You furtheracknowledge that you have held a position of confidence and trust with respect to the System Companies and that you have and will acquireadditional detailed knowledge of the System Companies’ unique and confidential methods of doing business and plans for the future. Youacknowledge that the System Companies are expending and will continue to expend substantial amounts of time, money and effort to develop effective business and regulatory strategies, methodologies and technology. You also acknowledge that theSystem Companies have a compelling business interest in protecting the System Companies’ Confidential Information (as defined below)and that the System Companies would be seriously and irreparably damaged by the disclosure of Confidential Information. You thereforeagree that, during your employment or other service with any System Company and at all times thereafter, you will hold in a fiduciarycapacity for the benefit of the System Companies and, other than as authorized in writing by the General Counsel of the Company or asrequired by law or in the proper performance of your duties and responsibilities, or as otherwise provided in this Section 10, you will notdisclose, directly or indirectly, to any person or entity, or use, for any purpose other than the furtherance of your responsibilities to anySystem Company, any Confidential Information. For purposes of this Agreement, “Confidential Information” means information that is notgenerally known by persons outside the System Companies and could not easily be determined or learned by someone outside the SystemCompanies, including without limitation, any and all information and knowledge, whether or not explicitly designated as confidential andwhether or not reduced to writing, regarding (i) the System Companies’ utility business, including, without limitation, the generation,transmission, brokering, marketing, distribution, sale and delivery of electric power or generation capacity (through regulated utilities orotherwise), and their natural gas distribution business, (ii) the Entergy Wholesale Commodities business, including, without limitation, theownership, development, management or operation of power plants and power generation facilities (including, without limitation, nuclearpower plants), and the provision of operations and management services (including, without limitation, decommissioning services) withrespect to power plants, and the sale of the electric power produced by the System Companies’ operating plants to wholesale customers, (iii)the System Companies’ proprietary methods and methodology, technical data, trade secrets, know-how, research and developmentinformation, product plans, customer lists, specific information relating to products, services and customers or prospective customers(including, but not limited to, customers or prospective customers of any System Company with whom you became or become acquaintedduring your relationship with the System Company), books and records of any System Company, corporate, regulatory, customer andstrategic relationships, suppliers, markets, computer software, computer software development, inventions, processes, formulae, technology,designs, drawings, technical information, source codes, engineering information, hardware configuration information, and matters of abusiness nature such as information regarding marketing, costs, pricing, finances, financial models and projections, billings, new or existingbusiness or economic development plans, initiatives, and opportunities, or any other similar business information made available to you inconnection with your relationship with any System Company and (iv) any attorney-client privileged information of a System Company.Confidential Information shall also include non-public information concerning any director, officer, employee, shareholder, or partner of anySystem Company. You agree that your obligation not to disclose or use Confidential Information, and your obligation, detailed below, toreturn and, upon your termination of employment with all System Companies, not to retain materials and tangible property described in thisSection shall also extend to such types of information, materials and tangible property of customers of and suppliers to the SystemCompanies and to other third parties, in each case who may have disclosed or entrusted the same to you or any System Company during youremployment with any System Company.b.Non-Competition. You agree that (i) at all times during the period of your employment or service with any SystemCompany employer, and (ii) for one (1) year following the termination for any reason of your employment by or service with your lastSystem Company employer ((i) and (ii) collectively, as applicable, the “Non-Compete Period”), you will not engage in CompetingEmployment. For purposes of this Section 10, “Competing Employment” means working for, providing services to or otherwise directly orindirectly assisting (whether or not for compensation) any person, entity or business which directly or indirectly competes with any part of theSystem Company business, and such employment or services involves products, services and business activities that are the same as orsimilar to those you provided to a System Company, or as to which you had access to Confidential Information, in the two years precedingyour termination of employment or service with all System Companies. You agree that it is reasonable for the restriction contained in thisparagraph to apply in each and every county, province, state, city, parish or other political subdivision or territory of the United States inwhich any System Company engages in any business activity, or otherwise distributes, licenses or sells its products or services, including,without limitation, Arkansas, Connecticut, District of Columbia, Louisiana, Massachusetts, Michigan, Mississippi, Nebraska, New York,Texas, and Vermont and any other state in which any System Company engages in business at any time and, with respect to the State ofLouisiana, means the following Parishes: Acadia, Allen, Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo,Calcasieu, Caldwell, Cameron, Catahoula, Claiborne, Concordia, De Soto, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis, Lafayette,Lafourche, La Salle, Lincoln, Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Point Coupee, Rapides, RedRiver, Richland, Sabine, Saint Bernard, St. Charles, St. Helena, Saint James, Saint John the Baptist, Saint Landry, Saint Martin, Saint Mary,Saint Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West Carroll, WestFeliciana and Winn (the “Restricted Territory”). Notwithstanding the foregoing, if your employment is terminated by any System Companyemployer without Cause, the covenant not to compete set forth in this Section 10(b) shall apply only for as long as the System Companyemployer continues to pay you, in accordance with the System Company employer’s regular payroll practices and schedule, your bi-weeklybase salary in effect on the effective date of the termination of your employment, less any applicable tax withholdings and ordinarydeductions (such payments, the “Non-Compete Payments”), but in no such event for longer than the Non-Compete Period. In any instancewhere a System Company employer has the right to elect to make Non-Compete Payments, such System Company employer must notify youin writing of such election, and the duration for which it elects to make Non-Compete Payments, within ten (10) business days following thetermination of your employment from the System Company. If the System Company elects to make the Non-Compete Payments for less thanthe full Non-Compete Period, you shall be free to join a competitor after you cease receiving the Non-Compete Payments. For the purposesof clarity, in the event of your termination for Cause or voluntary resignation, you shall be subject to the restrictions set forth in this Section10(b) without any requirement that your System Company employer pay you any Non-Compete Payments.c.Non-Solicitation. You agree that, while you are employed by any System Company and during the Non-CompetePeriod (or, if later, the last day you are scheduled to receive cash severance payments from your System Company employer pursuant to anyseverance plan or other agreement), except in the good faith performance of your duties to the System Companies, you shall not, other thanas authorized in writing by the General Counsel of the Company: (i) directly or indirectly, solicit or seek to hire or identify for potential hiring(whether on your own behalf or on behalf of any other person, entity or organization) any person who is at that time (or was during the priorsix (6) months) an employee or consultant of any System Company, or (ii) within the Restricted Territory, directly or indirectly solicit thetrade, business or patronage of any clients, customers or vendors or prospective clients, customers or vendors of any System Company toprovide competing products or services or advise, or assist such clients, customers or vendors or prospective clients, customers or vendors toin any way modify their relationship with any System Company. The foregoing non-solicitation (1) shall not be violated by generaladvertising not targeted at the forgoing persons or entities; (2) shall not apply to solicitation of persons involuntarily terminated from SystemCompany employment; and (3) shall only apply to persons or entities (A) who reported directly or indirectly to you; (B) with whom you hadmaterial contact while at a System Company; or (C) about whom or which you possessed (i) information regarding quality of performancewhile they were employed by a System Company, which information you would not otherwise have except for the position you held with aSystem Company, or (ii) Confidential Information.d.Non-Disparagement. You agree that, to the fullest extent permitted by applicable law, you will not at any time(whether during or after your employment or service with any System Company), other than in the proper performance of your duties,publish or communicate to any person or entity any “Disparaging” (as defined below) remarks, comments or statements concerning anySystem Company or any of their respective directors, officers, shareholders, employees, agents, attorneys, successors and assigns.“Disparaging” remarks, comments or statements are those that are intended to, or could be construed in a manner so as to, impugn, discredit,injure or impair the business, reputation, character, honesty, integrity, judgment, morality or business acumen or abilities of the individual orentity being disparaged.e.System Company Property. All tangible materials, equipment, devices, documents, copies of documents, datacompilations (in whatever form), software programs, and electronically created or stored materials that you receive or create in the course ofemployment with a System Company are and shall remain the property of the System Company and you shall immediately return (and/orcooperate in the supervised deletion of) such property to your System Company employer upon the termination of your employment, forwhatever reason. The obligation to return property and documents extends to anything received or made during and as a result ofemployment by a System Company, regardless of whether it was received from a System Company or a third party, such as an actual orpotential vendor or customer, and regardless of whether a document contains Confidential Information. The only documents not subject to the obligation to return are documents directly relating to your compensation and benefits, such as your pay stubsand benefit plan information.f.Violation of the Restrictive Covenant Section. In the event that you violate any provision of this Section 10, thetime periods set forth in those paragraphs shall be extended for the period of time you remain in violation of the provisions, to the greatestextent allowed by applicable law. The provisions of Section 10(a) - (e) hereof are, and shall be construed as, independent covenants, and noclaimed or actual breach of any contractual or legal duty by any System Company shall excuse or terminate your obligations hereunder orpreclude any System Company from obtaining injunctive relief for your violation, or threatened violation, of any of those provisions. Youalso agree to indemnify and hold the System Companies harmless from any and all losses (including, but not limited to, reasonable attorney’sfees and other expenses incurred to enforce this Agreement) suffered by any System Company as a result of any violation or threatenedviolation of any of your representations, warranties, covenants or undertakings set forth in this Agreement (in addition to any other remediesavailable to the System Companies set forth in Section 10(i) below), provided that a System Company is found to be the prevailing party inany such action.g.Exclusions. Notwithstanding anything else in this Section 10 or in this Agreement to the contrary:(i) The restrictive covenants in this Section 10 are not intended to restrict you from cooperating with any investigation orproceeding initiated by the Nuclear Regulatory Commission (“NRC”) or any other federal or state regulatory agency. Further, you may makedisclosure (A) to exercise your rights as a whistleblower under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010,the Securities and Exchange Commission Rule 21F-17(a), or any other federal or state law providing whistleblower rights; (B) to the extentnecessary when providing safety-related or other information to the NRC on matters within the NRC’s regulatory jurisdiction; (C) whenparticipating in “protected activities,” as defined in Section 211 of the Energy Reorganization Act of 1974 and in C.F.R. Part 50.7; (D) whenengaging in activities protected by the National Labor Relations Act or any similar federal or state law; or (E) when required to do so by acourt of law, by any governmental agency or administrative or legislative body with jurisdiction to order you to divulge, disclose or makeaccessible such information. With the exception of Confidential Information subject to the attorney-client privilege, you shall have noobligation to seek prior approval of any System Company or to inform any System Company of such disclosure. This Agreement does notlimit your ability to communicate, without notice to any System Company, with any government agencies or otherwise participate in anyinvestigation or proceeding that may be conducted by any government agency, or to collect a reward in connection with any whistleblowerinformation provided to a government agency.(ii) Defend Trade Secrets Act Immunity Notice. Pursuant to the Defend Trade Secrets Act of 2016, non-compliance with thedisclosure provisions of this Agreement shall not subject you to criminal or civil liability under any Federal or State trade secret law for thedisclosure of a System Company trade secret: (A) in confidence to a Federal, State or local government official, either directly or indirectly,or to an attorney in confidence solely for the purpose of reporting or investigating a suspected violation of law; (B) in a complaint or otherdocument filed in a lawsuit or other proceeding, provided that any complaint or document containing the trade secret is filed under seal; or(C) to an attorney representing you in a lawsuit for retaliation by any System Company for reporting a suspected violation of law or to use thetrade secret information in that court proceeding, provided that any document containing the trade secret is filed under seal and you do notdisclose the trade secret, except pursuant to court order.(h) Restrictive Covenants Contained in Other Agreements. Notwithstanding any provision contained herein to the contrary,to the extent that you are or become subject to any other agreement that contains restrictive covenants different from the restrictive covenantscontained in this Agreement, the restrictive covenants set forth in such other agreement shall supplement, and shall not replace, the restrictivecovenants herein.(i) Enforcement. You hereby agree that the covenants set forth in this Section 10 are reasonable with respect to their scope,duration, and geographical area. You further agree and acknowledge that the restrictions contained in Section 10 do not and would notunreasonably impose limitations on your ability to earn a living. If any court or other tribunal determines that any term or provision ofSection 10 is overbroad or otherwise invalid or unenforceable, you and the Company hereby agree that such court or tribunal shall have thepower and obligation to narrow or otherwise reform the unenforceable term or provision, including to delete, replace, or add specific words or phrases, but only to thenarrowest extent necessary to render the provision valid and enforceable (provided that in no event shall the length of any restrictive covenantor its scope be extended or expanded), and this Agreement shall be fully enforceable as so modified. Your agreement to the restrictionsprovided for in this Agreement and the Company’s agreement to grant the Award are mutually dependent consideration. Therefore,notwithstanding any other provision to the contrary in this Agreement, if (i) the enforceability of any material restriction applicable to you asprovided for in this Section 10 is challenged and found unenforceable by a court or other tribunal or (ii) you breach any of the provisions ofSection 10, then the Company shall have the right to terminate this Agreement and recover from you all Shares paid to you pursuant to thisAgreement and if you have sold, transferred, or otherwise disposed of any Shares paid to you pursuant to this Agreement, an amount equal tothe aggregate Fair Market Value of such Shares on the date such Shares were paid to you pursuant to this Agreement. This provision shall beconstrued as a return of consideration or ill-gotten gains due to the failure of your promises and consideration under the Agreement, and notas a liquidated damages clause. In addition, in the event of the Company’s termination of this Agreement, you shall immediately forfeit allunvested Target Performance Units and your Target Performance Units award opportunity under this Agreement. You further hereby agreethat, in the event of a breach by you of any of the provisions of Sections 10(a), (b), (c), (d), or (e), monetary damages shall not constitute asufficient remedy. Consequently, in the event of any such breach or threatened breach, the Company or a System Company may, in additionto and without prejudice to other rights and remedies existing in its favor, apply to any court of competent jurisdiction for specificperformance and/or injunctive or other relief in order to enforce or prevent any violations of the provisions hereof, without the requirement ofposting a bond or proving actual damages and without having to demonstrate that money damages would be inadequate. You acknowledge(i) that you have carefully read this Agreement and have given careful consideration to the restraints imposed upon you by this Agreement,and you are in full accord as to their necessity for the reasonable and proper protection of the Confidential Information of the SystemCompanies and their relationships with customers, suppliers and other business partners and (ii) that you are informed in writing hereby thatyou have a right to the advice of legal counsel and should consult with an attorney of your choice with regard to this Agreement, and youhave been provided ample opportunity to seek out and consult with such counsel.(j) For purposes of this Section 10, “Company” shall include all System Companies. You and the Company agree that eachSystem Company is an intended third-party beneficiary of this Section 10, and further agree that each System Company is entitled to enforcethe provisions of this Section 10 in accordance with its terms. Notwithstanding anything to the contrary in this Agreement, the terms of therestrictive covenants set forth in this Section 10 shall survive the termination of this Agreement and shall remain in full force according totheir respective terms.(k) In the twelve (12) months following the termination of your employment with your last System Company employer, inthe event you seek or obtain employment or another business affiliation with any person or entity other than a System Company, you agree tonotify the Company in writing, as far in advance as is reasonably practicable, but in no event less than two weeks prior to your proposedcommencement of employment, of the details of such employment or business affiliation. You also agree to show these restrictive covenantprovisions to any prospective employer, and you consent to any System Company showing these provisions to any third party believed by aSystem Company to be a prospective or actual employer of you, or a receiver of services from you, and to insisting on your compliance withthese terms. Your obligations under this Section will expire on that date which is twelve months after the end of your employment with allSystem Companies (or, if later, the last date as of which you are scheduled to receive separation payments from any System Companypursuant to a severance plan or other agreement).11. Governing Law/Court Proceedings. This Agreement shall be governed by and construed in accordance with the laws of theState of Delaware, without giving effect to principles of conflicts of law of such state. Any suit, action or proceeding arising out of, or withrespect to this Agreement, its enforcement, breach, or interpretation, shall be brought in any court of competent jurisdiction in the State ofDelaware, County of New Castle, and you and the Company hereby submit to the exclusive jurisdiction of such court (and its appellate court,whether or not located in the State of Delaware) for the purpose of any such suit, action, or proceeding. You and the Company herebyirrevocably waive (i) any objections which each may now or hereafter have to the laying of the venue of any suit, action or proceeding arisingout of or relating to this Agreement brought in any court of competent jurisdiction in the State of Delaware, County of New Castle, (ii) any claim that any such suit, action or proceeding brought in any such court has been brought in aninconvenient forum and (iii) any right to a jury trial.12. Incorporation of Plan. The Plan is hereby incorporated by reference and made a part hereof, and the Target Performance Units,your Target Performance Units award opportunity under this Agreement, any Performance Units (and any Dividend Equivalents) awardedpursuant to this Agreement, and this Agreement shall be subject to all terms and conditions of the Plan, including, without limitation, theamendment provisions thereof, and to such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee andas may be in effect from time to time. Any capitalized term that is not defined in this Agreement shall have the meaning set forth in the Plan.In the event of any conflict between the terms of this Agreement and the Plan, the terms of the Plan shall govern, and this Agreement shall bedeemed to be modified accordingly, unless the Plan allows for such modification of the Plan’s terms by this Agreement.13. Amendments. This Agreement may be amended or modified only by an instrument in writing signed by the parties hereto.14. Rights as a Shareholder. Neither you nor any of your successors in interest shall have any rights as a stockholder of theCompany with respect to any Target Performance Units, your Target Performance Units award opportunity under this Agreement,Performance Units awarded pursuant to this Agreement, or Dividend Equivalents.15. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be inwriting and shall be deemed to have been duly given when delivered personally or by United States registered mail, return receipt requested,postage prepaid, if to you, to your last known address filed in the personnel records of the System Companies, and if to the Company, to theaddress set forth below, or thereafter to such other address as either party may have furnished to the other in writing in accordance herewith,except that any notice of change of address shall be effective only upon actual receipt thereof:If to the Company, by hand-delivery or email to:Entergy Services, LLCAttention: Executive Vice-President & General Counsel639 Loyola Avenue, 28th FloorNew Orleans, LA 70113-312516. Agreement Not a Contract of Employment. Your employment with your System Company Employer shall remain at will.Neither the Plan, the granting of the Target Performance Units and/or Dividend Equivalents, the Grant Notice, this Agreement nor any otheraction taken pursuant to the Plan shall constitute or be evidence of any agreement or understanding, express or implied, that you have a rightto continue as an employee of any System Company for any period of time or at any specific rate of compensation.17. Authority of the Committee. The Committee shall have full authority and discretion to interpret and construe the terms of thePlan, the Grant Notice, and this Agreement. The determination of the Committee as to any such matter of interpretation or construction shallbe final, binding and conclusive.18. Compliance with Code Section 409A Limitations. Notwithstanding any provision to the contrary, all provisions of the GrantNotice and this Agreement shall be construed, administered and interpreted to comply with or be exempt from Code Section 409A, and, ifnecessary, any provision shall be held null and void to the extent such provision (or part thereof) fails to comply with Code Section 409A orfinal regulations issued thereunder. Specifically, the terms “termination” and “termination of employment” shall be applied in a mannerconsistent with the definition of “separation from service” within the meaning of Code Section 409A. A right of any System Company, ifany, to offset or otherwise reduce any sums that may be due or become payable by any System Company to you by any overpayment orindebtedness of yours shall be subject to limitations imposed by Code Section 409A. For purposes of the limitations on nonqualified deferredcompensation under Code Section 409A, each payment of compensation under this Agreement shall be treated as a separate payment ofcompensation for purposes of applying the Code Section 409A deferral election rules and the exclusion from Code Section 409A for certainshort-term deferral amounts. Amounts payable under this Agreement shall be excludible from the requirements of Code Section 409A, to the maximum possible extent, either as (i)short-term deferral amounts (e.g., amounts payable no later than the 15th day of the third month following the end of the taxable year of yourSystem Company employer in which such Performance Units are no longer subject to a substantial risk of forfeiture), or (ii) under theexclusion for involuntary separation pay provided in Treasury Regulations Section 1.409A-1(b)(9)(iii). To the extent that deferredcompensation subject to the requirements of Code Section 409A becomes payable under this Agreement to you at a time when you are a“specified employee” (within the meaning of Code Section 409A), any such payments shall be delayed by six months to the extent necessaryto comply with the requirements of Code Section 409A(a)(2)(B). The Company makes no representation that any or all of the payments orbenefits described in the Plan or this Agreement will be exempt from or comply with Code Section 409A and makes no undertaking topreclude Code Section 409A from applying to any such payment.19. Waivers. Any term or provision of this Agreement may only be waived by a System Company. Any such waiver shall bevalidly and sufficiently given for the purposes of this Agreement if it is in writing signed by an authorized Company officer. The failure ofany System Company to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor inany way to affect the validity of this Agreement or any part hereof or the right of any System Company thereafter to enforce each and everysuch provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.20. Headings. The titles and headings of the sections in this Agreement are for convenience of reference only, do not form part ofthis Agreement, and shall not affect the construction of this Agreement.21. Electronic Signature. Electronic signature of this Agreement shall have the same validity and effect as a signature affixed byhand.22. Entire Agreement. This Agreement (including the Plan) constitutes the entire agreement of the parties hereto with respect to thesubject matter hereof and supersedes any and all prior undertakings and agreements between the Company and its Affiliates and you withrespect to the subject matter hereof.23. Prospectus. This Agreement constitutes part of a prospectus covering Securities registered under the Securities Act of 1933.The remaining documents constituting the prospectus are available on Entergy Corporation’s intranet under Our Company, HumanResources, Money & Finances, Compensation, Equity https://entergy.sharepoint.com/sites/myhra/myBenefits/Pages/Compensation.aspx. Exhibit 10(a)472020 Restricted StockGrant TemplateAPPENDIXRRestricted Stock Agreement (“Agreement”)Under the 2019 Entergy Corporation Omnibus Incentive PlanThe Personnel Committee of the Board of Directors (“Committee”) of Entergy Corporation has agreed to grant you (“Grantee”), pursuant tothe 2019 Entergy Corporation Omnibus Incentive Plan, that number of Restricted Shares set forth on the Restricted Stock Grant Notice towhich this Agreement is attached (the “Grant Notice”), subject to the terms and conditions of this Agreement and the Plan.1. Effective Date of Restricted Stock Grant; Acknowledgment and Acceptance of Restricted Stock Grant. This grant ofRestricted Shares is effec(cid:20)ve as of the award date set forth on the Grant No(cid:20)ce (“Grant Date”), contingent upon your acceptance of theRestricted Shares in accordance with the terms of this Agreement and the Grant Notice. The effectiveness of this Agreement is subject to yourelectronically acknowledging and accepting this Agreement and all of its terms and conditions and the terms of the Plan in the manner and atthe time set forth on the Grant Notice. If you do not timely acknowledge and accept this Agreement in accordance the Grant Notice, theCompany shall be entitled to unilaterally cancel and render void this Agreement and the Grant Notice.2. Restricted Period. (a) Except as otherwise provided in Subsection 2(b) to the contrary, and except as provided in Section 12 of the Plan, thefollowing vesting provisions shall apply during the thirty-six (36)-months immediately following the Grant Date (the “Restricted Period”): (i) Restrictions shall lift on one-third (1/3rd) of the total Restricted Shares subject to this Agreement on each ofthe first three (3) anniversaries of the Grant Date (each such anniversary, a “Vesting Date”), provided you (A) are and remain a continuousfull-time regular employee of a System Company at System Management Level (“ML”) 1 through 6 through each such anniversary date orare, or later become and then remain, a continuous part-time regular System Company employee participating in the phased retirementprogram under the Entergy System Policies & Procedures Phased Retirement - Pre-Separation Policy (the “Phased Retirement Program”)through each such Vesting Date, and (B) comply with Section 12 of this Agreement. (ii) Unless solely attributable to your becoming a participant in the Phased Retirement Program, and subject toSection 2(b) hereof, upon your termination of continuous full-time regular employment to become a part-time employee, or upon yourdemotion to a position below ML 6, you shall forfeit all Restricted Shares on which restrictions have not already lifted in accordance withSubsection 2(a)(i) at such time. (iii) Except as set forth in Section 2(b) below, upon your retirement or termination from System Companyemployment for any reason or no reason (including with or without Cause), you shall forfeit all Restricted Shares on which restrictions havenot already lifted in accordance with Subsection 2(a)(i) at such time. (b) Notwithstanding the foregoing provisions of Subsection 2(a) to the contrary, the following provisions shall govern tothe extent applicable: (i) If, during the Restricted Period, you die or incur a Disability while actively employed as an eligible SystemCompany employee in accordance with the requirements set forth in Subsection 2(a)(i)(A) and you have continuously satisfied the vestingcriteria of Section 2(a)(i) through the date of your death or Disability, then any then-remaining restrictions immediately shall lift on all of thethen-outstanding Restricted Shares on which restrictions have not already lifted (as well as dividends declared on the Restricted Shares). (ii) If you are demoted to a position below ML 6 and you thereafter remain a regular, full-time System Companyemployee until the immediately following Vesting Date, then you shall remain eligible to vest, upon such Vesting Date, in a pro-rated portionof the Restricted Shares on which restrictions were otherwise scheduled to lift on such immediately following Vesting Date (as well asdividends declared on such pro-rated portion of the Restricted Shares), which pro-rated vested portion shall be determined by multiplying(A) a fraction, the numerator of which shall be the number of days between (x) the immediately preceding Vesting Date or, if no VestingDate has yet occurred, the Grant Date and (y) the date of your demotion, and the denominator of which shall be 365, times (B) that number ofRestricted Shares on which restrictions were otherwise scheduled to lift on the immediately following Vesting Date. (iii) Except as provided below for an employee on an extended leave of absence bridge to retirement under anapproved severance program under the Entergy System Severance Pay Plan No. 537 or the Entergy System Severance Pay Plan No. 538, ifyou are on a leave of absence (whether paid or unpaid) approved by your System Company employer for reasons other than Disability or area continuous part-time regular System Company employee participating in the Phased Retirement Program, you will be treated, solely forpurposes of the Plan and this Agreement, as continuing to satisfy the requirements of Subsection 2(a)(i) while on such approved leave ofabsence or during such participation in the Phased Retirement Program, as applicable. If your System Company employment terminatesduring such approved leave of absence, the remaining provisions of this Section 2 shall apply as if you were actively employed by yourSystem Company employer immediately prior to such termination event. If you are on an extended leave of absence bridge to retirementunder an approved severance program under the Entergy System Severance Plan Pay No. 537 or the Entergy System Severance Pay Plan No.538, you will not be considered under the Plan or this Agreement to be a full-time employee or part-time System Company employee underthe Phased Retirement Program during the extended leave of absence bridge period, and your System Company employment will beconsidered terminated for purposes of vesting in the Restricted Shares under this Agreement as of the commencement of your extended leaveof absence bridge period.(iv) Subject to the terms of this Agreement and Section 5 of the Plan, in the event that (A) a Change in Controloccurs and (B) either (1) outstanding Restricted Shares are not assumed or substituted in connection therewith as described in Section 12(b)of the Plan, or (2) outstanding Restricted Shares are so assumed or substituted in connection therewith and your employment or service isterminated by your System Company employer without Cause or by you for Good Reason on or after the effective date of the Change inControl but prior to twenty-four (24) months following the Change in Control, then all restrictions imposed hereunder on the RestrictedShares (as well as dividends declared on the Restricted Shares) shall lift effective as of the date of the Change in Control, if subclause (B)(1)applies, or as of the applicable termination date, if subclause (B)(2) applies (whichever date so applies, the “CIC Vesting Date”) and therestrictive covenants set forth in Section 12(b), (c) and (d) of this Agreement shall cease to apply as of the CIC Vesting Date.(v) Notwithstanding anything herein to the contrary, if your employment with your System Company employerterminates for Cause, then all Restricted Shares shall immediately terminate and be forfeited. 3. Share Issuance. During the Restricted Period, the Restricted Shares shall be held in an account in book entry form and withthe restrictions noted. 4. Lifting of Restrictions. Upon the satisfaction of all requirements for restrictions to lift on all or a portion of the RestrictedShares, the restrictions on such Restricted Shares shall lift and such vested Shares (including any dividends on such Restricted Shares) shallbe credited to a separate book entry account in your name, and such vested shares shall be free of all restrictions except any that may beimposed by law. Upon the crediting of Shares in respect of Restricted Shares upon which restrictions have lifted to a book entry account,participants may treat the Shares in the same manner as all other shares of Common Stock owned by the participant. All Participants withML 1-4 status (“ML 1-4 Participants”) are considered “Restricted Employees” under Entergy’s Insider Trading Policy and, as such, maytrade in Entergy Corporation securities only during an open window period (and only if not in possession of material, non-publicinformation). Generally, window periods begin on the second business day after the quarterly earnings release and end at the close of tradingon the 15th day of the third month of the Company’s fiscal quarter or, if such day is not a trading day, on the last preceding trading day. Inaddition, if you are a Restricted Employee, the Insider Trading Policy requires that you pre-clear all transactions involving Entergy securitieswith Entergy Corporation’s Office of the General Counsel.5. Common Stock Ownership Guidelines. If you are an ML 1-4 Participant, you must maintain the applicable Common StockOwnership Target Level in the chart below, which is expressed as a multiple of your base salary and dependent on your ML. System Management LevelCommon Stock Ownership Target LevelML16 times base salaryML23 times base salaryML32 times base salaryML41 times base salary These ownership multiples may be satisfied through any shares of Common Stock held by the ML 1-4 Participant, includingRestricted Shares on which restrictions have not yet lifted, shares of Common Stock held in tax-qualified 401(k) plans, etc. Until youachieve your multiple of base salary ownership position, upon restrictions lifting on your Restricted Shares, you must continue to retain thebook entry shares until the earlier of (a) achieving and maintaining your applicable Common Stock Ownership Target Level, or (b) yourtermination of full-time employment with all System Companies. Once you have achieved and maintain your Common Stock OwnershipTarget Level, you are no longer bound to hold the Restricted Shares converted to book entry shares upon restrictions lifting. However, youare still subject to the trading restrictions and pre-clearance requirements in transacting in these Shares described in Section 4 of thisAgreement. 6. Withholding Taxes. The Company shall use the “net shares method” to satisfy any tax withholding obligation, which meansthe Company shall reduce the number of Shares otherwise payable to you in respect of Restricted Shares upon which the restrictions havelifted by the number of Shares with a value necessary to cover up to the maximum amount of such obligation in any applicable jurisdiction.In no event shall the Company or any other System Company have any liability to you for your individual income tax liability, forwithholding or failing to withhold taxes, or for remitting or failing to remit taxes with respect to your income.7. No Fractional Shares. Any fractional Shares to be distributed shall be settled in cash and applied to satisfy tax withholdingrequirements. The Company will not pay out any fractional Shares. 8. Shareholder Rights. Subject to the terms and conditions set forth herein and in the Plan, as the Grantee of the RestrictedShares you shall have all rights as a Company shareholder, including, but not limited to, voting rights, the right to receive vested dividendsand the right to participate in any capital adjustment applicable to all holders of Common Stock. Notwithstanding the preceding sentence,any and all dividends paid with respect to the Restricted Shares shall be reinvested in Common Stock based on the Fair Market Value of theCommon Stock on the date the dividend is paid and shall be subject to the same restrictions on transfer and risks of forfeiture as applicable to the underlying RestrictedShares and shall also be subject to any other provisions or different or additional reinvestment requirements as the Committee may, in itsdiscretion, determine. You shall have the same rights and privileges, and be subject to the same restrictions, with respect to any additional orsubstitute shares of Common Stock received pursuant to Section 5 of the Plan. 9. No Code Section 83(b) Election. This Award of Restricted Shares is conditioned upon you refraining from making anelection with respect to the Award under Section 83(b) of the Code. 10. Restricted Shares Nontransferable. None of the Restricted Shares shall be sold, exchanged, pledged, transferred, assigned, orotherwise encumbered, hypothecated or disposed of by you (or your designated beneficiary) other than by will or laws of descent anddistribution. 11. Entergy Policies. (a) Hedging Policy. Pursuant to the Entergy Corporation Policy Relating to Hedging, as adopted by the Board at its meetingheld on December 3, 2010, and as in effect on the date hereof, officers, directors and employees are prohibited from entering into hedging ormonetization transactions involving Common Stock so they continue to own Common Stock with the full risks and rewards of ownership,thereby ensuring continued alignment of their objectives with the Company’s other shareholders. Participation in any hedging transactionwith respect to Common Stock (including Restricted Shares) is prohibited.(b) Recoupment Policy; Dodd-Frank; Payment in Error. Pursuant to the Entergy Corporation Policy Relating to Recoupmentof Certain Compensation, as adopted by the Board at its meeting held on December 3, 2010, and as in effect on the date hereof, the Companyis allowed to seek reimbursement of certain incentive compensation (including Restricted Shares) from “executive officers” for purposes ofSection 16 of the Securities Exchange Act of 1934, as amended, if the Company is required to restate its financial statements due to materialnoncompliance with any financial reporting requirement under the federal securities laws (other than corrections resulting from changes toaccounting standards); or there is a material miscalculation of a performance measure relative to incentive compensation, regardless of therequirement to restate the financial statements; or the Board determines that an executive officer engaged in fraud resulting in either arestatement of the Company’s financial statements or a material miscalculation of a performance measure relative to incentive compensationwhether or not the financial statements were restated. In addition, the Restricted Shares are subject to any forfeiture and/or recoupmentpolicy which the Company has adopted or may adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 andimplementing rules and regulations thereunder, or as may be required by applicable law. To the maximum extent permitted by applicablelaw, in the event that a payment is made to you (whether in cash, stock or other property) in error that exceeds the amount to which you areentitled pursuant to the terms of this Agreement or the Plan, including without limitation pursuant to Section 28 of the Plan (such excessamount, an “Excess Payment”), you will repay to the Company, and the Company shall have the right to recoup from you such ExcessPayment by notifying you in writing of the nature and amount of such Excess Payment together with (i) demand for direct repayment to theCompany by you in the amount of such Excess Payment or (ii) reduction of any amount(s) owed to you by the Company or any other SystemCompany by the amount of the Excess Payment.12. Confidentiality and Restrictive Covenants. In consideration of the grant to you of the Restricted Shares set forth herein, youhereby agree to the following restrictive covenants:(a) Confidential Information. You acknowledge that the System Companies have unique methods and processes for thegeneration, transmission and distribution and sale of energy products, which give them a competitive advantage, including strategic and non-public plans for their products, geographic and customer markets, and for marketing, distributing and selling their products. You furtheracknowledge that you have held a position of confidence and trust with respect to the System Companies and that you have and will acquireadditional detailed knowledge of the System Companies’ unique and confidential methods of doing business and plans for the future. Youacknowledge that the System Companies are expending and will continue to expend substantial amounts of time, money and effort to developeffective business and regulatory strategies, methodologies and technology. You also acknowledge that the System Companies have a compelling business interest in protecting the System Companies’ Confidential Information(as defined below) and that the System Companies would be seriously and irreparably damaged by the disclosure of ConfidentialInformation. You therefore agree that, during your employment or other service with any System Company and at all times thereafter, youwill hold in a fiduciary capacity for the benefit of the System Companies and, other than as authorized in writing by the General Counsel ofthe Company or as required by law or in the proper performance of your duties and responsibilities, or as otherwise provided in this Section12, you will not disclose, directly or indirectly, to any person or entity, or use, for any purpose other than the furtherance of yourresponsibilities to any System Company, any Confidential Information. For purposes of this Agreement, “Confidential Information” meansinformation that is not generally known by persons outside the System Companies and could not easily be determined or learned by someoneoutside the System Companies, including without limitation, any and all information and knowledge, whether or not explicitly designated asconfidential and whether or not reduced to writing, regarding (i) the System Companies’ utility business, including, without limitation, thegeneration, transmission, brokering, marketing, distribution, sale and delivery of electric power or generation capacity (through regulatedutilities or otherwise), and their natural gas distribution business, (ii) the Entergy Wholesale Commodities business, including, withoutlimitation, the ownership, development, management or operation of power plants and power generation facilities (including, withoutlimitation, nuclear power plants), and the provision of operations and management services (including, without limitation, decommissioningservices) with respect to power plants, and the sale of the electric power produced by the System Companies’ operating plants to wholesalecustomers, (iii) the System Companies’ proprietary methods and methodology, technical data, trade secrets, know-how, research anddevelopment information, product plans, customer lists, specific information relating to products, services and customers or prospectivecustomers (including, but not limited to, customers or prospective customers of any System Company with whom you became or becomeacquainted during your relationship with the System Company), books and records of any System Company, corporate, regulatory, customerand strategic relationships, suppliers, markets, computer software, computer software development, inventions, processes, formulae,technology, designs, drawings, technical information, source codes, engineering information, hardware configuration information, andmatters of a business nature such as information regarding marketing, costs, pricing, finances, financial models and projections, billings, newor existing business or economic development plans, initiatives, and opportunities, or any other similar business information made availableto you in connection with your relationship with any System Company and (iv) any attorney-client privileged information of a SystemCompany. Confidential Information shall also include non-public information concerning any director, officer, employee, shareholder, orpartner of any System Company. You agree that your obligation not to disclose or use Confidential Information, and your obligation, detailedbelow, to return and, upon your termination of employment with all System Companies, not to retain materials and tangible propertydescribed in this Section shall also extend to such types of information, materials and tangible property of customers of and suppliers to theSystem Companies and to other third parties, in each case who may have disclosed or entrusted the same to you or any System Companyduring your employment with any System Company.(b) Non-Competition. You agree that (i) at all times during the period of your employment or service with any SystemCompany employer, and (ii) if you are an ML 1-4 Participant immediately prior to your date of termination then for one (1) year followingthe termination for any reason of your employment by or service with your last System Company employer ((i) and (ii) collectively, asapplicable, the “Non-Compete Period”), you will not engage in Competing Employment. For purposes of this Section 12, “CompetingEmployment” means working for, providing services to or otherwise directly or indirectly assisting (whether or not for compensation) anyperson, entity or business which directly or indirectly competes with any part of the System Company business, and such employment orservices involves products, services and business activities that are the same as or similar to those you provided to a System Company, or asto which you had access to Confidential Information, in the two years preceding your termination of employment or service with all SystemCompanies. You agree that it is reasonable for the restriction contained in this paragraph to apply in each and every county, province, state,city, parish or other political subdivision or territory of the United States in which any System Company engages in any business activity, orotherwise distributes, licenses or sells its products or services, including, without limitation, Arkansas, Connecticut, District of Columbia,Louisiana, Massachusetts, Michigan, Mississippi, Nebraska, New York, Texas, and Vermont and any other state in which any SystemCompany engages in business at any time and, with respect to the State of Louisiana, means the following Parishes: Acadia, Allen,Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu, Caldwell, Cameron, Catahoula, Claiborne, Concordia,De Soto, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis, Lafayette, Lafourche, La Salle, Lincoln,Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Point Coupee, Rapides, Red River, Richland, Sabine, SaintBernard, St. Charles, St. Helena, Saint James, Saint John the Baptist, Saint Landry, Saint Martin, Saint Mary, Saint Tammany, Tangipahoa,Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West Baton Rouge, West Carroll, West Feliciana and Winn (the“Restricted Territory”). Notwithstanding the foregoing, if your employment is terminated by any System Company employer without Cause,the covenant not to compete set forth in this Section 12(b) shall apply only for as long as the System Company employer continues to payyou, in accordance with the System Company employer’s regular payroll practices and schedule, your bi-weekly base salary in effect on theeffective date of the termination of your employment, less any applicable tax withholdings and ordinary deductions (such payments, the“Non-Compete Payments”), but in no such event for longer than the Non-Compete Period. In any instance where a System Companyemployer has the right to elect to make Non-Compete Payments, such System Company employer must notify you in writing of suchelection, and the duration for which it elects to make Non-Compete Payments, within ten (10) business days following the termination ofyour employment from the System Company. If the System Company elects to make the Non-Compete Payments for less than the full Non-Compete Period, you shall be free to join a competitor after you cease receiving the Non-Compete Payments. For the purposes of clarity, inthe event of your termination for Cause or voluntary resignation, you shall be subject to the restrictions set forth in this Section 12(b) withoutany requirement that your System Company employer pay you any Non-Compete Payments.(c) Non-Solicitation. You agree that, while you are employed by any System Company and during the Non-Compete Period(or, if later, the last day you are scheduled to receive cash severance payments from your System Company employer pursuant to anyseverance plan or other agreement), except in the good faith performance of your duties to the System Companies, you shall not, other thanas authorized in writing by the General Counsel of the Company: (i) directly or indirectly, solicit or seek to hire or identify for potential hiring(whether on your own behalf or on behalf of any other person, entity or organization) any person who is at that time (or was during the priorsix (6) months) an employee or consultant of any System Company, or (ii) within the Restricted Territory, directly or indirectly solicit thetrade, business or patronage of any clients, customers or vendors or prospective clients, customers or vendors of any System Company toprovide competing products or services or advise, or assist such clients, customers or vendors or prospective clients, customers or vendors toin any way modify their relationship with any System Company. The foregoing non-solicitation (1) shall not be violated by generaladvertising not targeted at the forgoing persons or entities; (2) shall not apply to solicitation of persons involuntarily terminated from SystemCompany employment; and (3) shall only apply to persons or entities (A) who reported directly or indirectly to you; (B) with whom you hadmaterial contact while at a System Company; or (C) about whom or which you possessed (i) information regarding quality of performancewhile they were employed by a System Company, which information you would not otherwise have except for the position you held with aSystem Company, or (ii) Confidential Information.(d) Non-Disparagement. You agree that, to the fullest extent permitted by applicable law, you will not at any time (whetherduring or after your employment or service with any System Company), other than in the proper performance of your duties, publish orcommunicate to any person or entity any “Disparaging” (as defined below) remarks, comments or statements concerning any SystemCompany or any of their respective directors, officers, shareholders, employees, agents, attorneys, successors and assigns. “Disparaging”remarks, comments or statements are those that are intended to, or could be construed in a manner so as to, impugn, discredit, injure or impairthe business, reputation, character, honesty, integrity, judgment, morality or business acumen or abilities of the individual or entity beingdisparaged.(e) System Company Property. All tangible materials, equipment, devices, documents, copies of documents, datacompilations (in whatever form), software programs, and electronically created or stored materials that you receive or create in the course ofemployment with a System Company are and shall remain the property of the System Company and you shall immediately return (and/orcooperate in the supervised deletion of) such property to your System Company employer upon the termination of your employment, forwhatever reason. The obligation to return property and documents extends to anything received or made during and as a result ofemployment by a System Company, regardless of whether it was received from a System Company or a third party, such as an actual orpotential vendor or customer, and regardless of whether a document contains Confidential Information. The only documents not subject to the obligation to return are documents directly relating to your compensation and benefits, such as your pay stubsand benefit plan information.(f) Violation of the Restrictive Covenant Section. In the event that you violate any provision of this Section 12, the timeperiods set forth in those paragraphs shall be extended for the period of time you remain in violation of the provisions, to the greatest extentallowed by applicable law. The provisions of Sections 12(a) - (e) hereof are, and shall be construed as, independent covenants, and noclaimed or actual breach of any contractual or legal duty by any System Company shall excuse or terminate your obligations hereunder orpreclude any System Company from obtaining injunctive relief for your violation, or threatened violation, of any of those provisions. Youalso agree to indemnify and hold the System Companies harmless from any and all losses (including, but not limited to, reasonable attorney’sfees and other expenses incurred to enforce this Agreement) suffered by any System Company as a result of any violation or threatenedviolation of any of your representations, warranties, covenants or undertakings set forth in this Agreement (in addition to any other remediesavailable to the System Companies set forth in Section 12(i) below), provided that a System Company is found to be the prevailing party inany such action.(g) Exclusions. Notwithstanding anything else in this Section 12 or in this Agreement to the contrary:(1) The restrictive covenants in this Section 12 are not intended to restrict you from cooperating with anyinvestigation or proceeding initiated by the Nuclear Regulatory Commission (“NRC”) or any other federal or state regulatory agency.Further, you may make disclosure (A) to exercise your rights as a whistleblower under the Dodd-Frank Wall Street Reform and ConsumerProtection Act of 2010, the Securities and Exchange Commission Rule 21F-17(a), or any other federal or state law providing whistleblowerrights; (B) to the extent necessary when providing safety-related or other information to the NRC on matters within the NRC’s regulatoryjurisdiction; (C) when participating in “protected activities,” as defined in Section 211 of the Energy Reorganization Act of 1974 and inC.F.R. Part 50.7; (D) when engaging in activities protected by the National Labor Relations Act or any similar federal or state law; or (E)when required to do so by a court of law, by any governmental agency or administrative or legislative body with jurisdiction to order you todivulge, disclose or make accessible such information. With the exception of Confidential Information subject to the attorney-client privilege,you shall have no obligation to seek prior approval of any System Company or to inform any System Company of such disclosure. ThisAgreement does not limit your ability to communicate, without notice to any System Company, with any government agencies or otherwiseparticipate in any investigation or proceeding that may be conducted by any government agency, or to collect a reward in connection with anywhistleblower information provided to a government agency.(2) Defend Trade Secrets Act Immunity Notice. Pursuant to the Defend Trade Secrets Act of 2016, non-compliancewith the disclosure provisions of this Agreement shall not subject you to criminal or civil liability under any Federal or State trade secret lawfor the disclosure of a System Company trade secret: (A) in confidence to a Federal, State or local government official, either directly orindirectly, or to an attorney in confidence solely for the purpose of reporting or investigating a suspected violation of law; (B) in a complaintor other document filed in a lawsuit or other proceeding, provided that any complaint or document containing the trade secret is filed underseal; or (C) to an attorney representing you in a lawsuit for retaliation by any System Company for reporting a suspected violation of law or touse the trade secret information in that court proceeding, provided that any document containing the trade secret is filed under seal and youdo not disclose the trade secret, except pursuant to court order.(h) Restrictive Covenants Contained in Other Agreements. Notwithstanding any provision contained herein to the contrary,to the extent that you are or become subject to any other agreement that contains restrictive covenants different from the restrictive covenantscontained in this Agreement, the restrictive covenants set forth in such other agreement shall supplement, and shall not replace, the restrictivecovenants herein.(i) Enforcement. You hereby agree that the covenants set forth in this Section 12 are reasonable with respect to their scope,duration, and geographical area. You further agree and acknowledge that the restrictions contained in Section 12 do not and would notunreasonably impose limitations on your ability to earn a living. If any court or other tribunal determines that any term or provision ofSection 12 is overbroad or otherwise invalid or unenforceable, you and the Company hereby agree that such court or tribunal shall have thepower and obligation to narrow or otherwise reform the unenforceable term or provision, including to delete, replace, or add specific words or phrases, but only to thenarrowest extent necessary to render the provision valid and enforceable (provided that in no event shall the length of any restrictive covenantor its scope be extended or expanded), and this Agreement shall be fully enforceable as so modified. Your agreement to the restrictionsprovided for in this Agreement and the Company’s agreement to grant the Award are mutually dependent consideration. Therefore,notwithstanding any other provision to the contrary in this Agreement, if (A) the enforceability of any material restriction applicable to you asprovided for in this Section 12 is challenged and found unenforceable by a court or other tribunal or (B) you breach any of the provisions ofSection 12, then the Company shall have the right to terminate this Agreement and recover from you all Shares paid to you pursuant to thisAgreement and, if you have sold, transferred, or otherwise disposed of any Common Stock paid to you pursuant to this Agreement in respectof Restricted Shares on which the restrictions have lifted or in respect of dividends paid thereon, an amount equal to the aggregate FairMarket Value of such Shares on the date on which such restrictions lifted. This provision shall be construed as a return of consideration or ill-gotten gains due to the failure of your promises and consideration under the Agreement, and not as a liquidated damages clause. In addition,in the event of the Company’s termination of this Agreement, you shall immediately forfeit all Restricted Shares on which restrictions havenot already lifted (as well as dividends declared on the Restricted Shares). You further hereby agree that, in the event of a breach by you ofany of the provisions of Sections 12(a), (b), (c), (d), or (e), monetary damages shall not constitute a sufficient remedy. Consequently, in theevent of any such breach or threatened breach, the Company or a System Company may, in addition to and without prejudice to other rightsand remedies existing in its favor, apply to any court of competent jurisdiction for specific performance and/or injunctive or other relief inorder to enforce or prevent any violations of the provisions hereof, without the requirement of posting a bond or proving actual damages andwithout having to demonstrate that money damages would be inadequate. You acknowledge (i) that you have carefully read this Agreementand have given careful consideration to the restraints imposed upon you by this Agreement, and you are in full accord as to their necessity forthe reasonable and proper protection of the Confidential Information of the System Companies and their relationships with customers,suppliers and other business partners and (ii) that you are informed in writing hereby that you have a right to the advice of legal counsel andshould consult with an attorney of your choice with regard to this Agreement, and you have been provided ample opportunity to seek out andconsult with such counsel.(j) For purposes of this Section 12, “Company” shall include all System Companies. You and the Company agree that eachSystem Company is an intended third-party beneficiary of this Section 12, and further agree that each System Company is entitled to enforcethe provisions of this Section 12 in accordance with its terms. Notwithstanding anything to the contrary in this Agreement, the terms of therestrictive covenants set forth in this Section 12 shall survive the termination of this Agreement and shall remain in full force according totheir respective terms.(k) In the twelve (12) months following the termination of your employment as an ML 1-4 employee with your last SystemCompany employer, in the event you seek or obtain employment or another business affiliation with any person or entity other than a SystemCompany, you agree to notify the Company in writing, as far in advance as is reasonably practicable, but in no event less than two weeksprior to your proposed commencement of employment, of the details of such employment or business affiliation. You also agree to showthese restrictive covenant provisions to any prospective employer, and you consent to any System Company showing these provisions to anythird party believed by a System Company to be a prospective or actual employer of you, or a receiver of services from you, and to insistingon your compliance with these terms. Your obligations under this Section will expire on that date which is twelve months after the end ofyour employment with all System Companies (or, if later, the last date as of which you are scheduled to receive separation payments fromany System Company pursuant to a severance plan or other agreement).13. Governing Law/Court Proceedings. This Agreement shall be governed by and construed in accordance with the laws of theState of Delaware, without giving effect to principles of conflicts of law of such state. Any suit, action or proceeding arising out of, or withrespect to this Agreement, its enforcement, breach, or interpretation, shall be brought in any court of competent jurisdiction in the State ofDelaware, County of New Castle, and you and the Company hereby submit to the exclusive jurisdiction of such court (and its appellate court,whether or not located in the State of Delaware) for the purpose of any such suit, action, or proceeding. You and the Company herebyirrevocably waive (i) any objections which each may now or hereafter have to the laying of the venue of any suit, action or proceeding arising out of or relating to this Agreement brought in any court of competent jurisdiction in the State of Delaware, County ofNew Castle, (ii) any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum and(iii) any right to a jury trial.14. Incorporation of Plan. The Plan is hereby incorporated by reference and made a part hereof, and the Restricted Shares andthis Agreement shall be subject to all terms and conditions of the Plan, including, without limitation, the amendment provisions thereof, andto such rules, regulations and interpretations relating to the Plan as may be adopted by the Committee and as may be in effect from time totime. Any capitalized term which is not defined in this Agreement shall have the meaning set forth in the Plan. If any terms of thisAgreement are inconsistent with the terms of the Plan, the terms of the Plan shall govern unless the Plan allows for such modification by thisAgreement.15. Amendments. This Agreement may be amended or modified only by an instrument in writing signed by the parties hereto. 16. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall bein writing and shall be deemed to have been duly given when delivered personally or by United States registered mail, return receiptrequested, postage prepaid, if to you, to your last known address filed in the personnel records of the System Companies, and if to theCompany, to the address set forth below, or thereafter to such other address as either party may have furnished to the other in writing inaccordance herewith, except that any notice of change of address shall be effective only upon actual receipt thereof:If to the Company, by hand delivery or email to:Entergy Services, LLCAttention: Executive Vice President & General Counsel639 Loyola Avenue, 28th FloorNew Orleans, LA 70113-312517. Agreement Not a Contract of Employment. Your employment with your System Company employer shall remain at-will.Neither the Plan, the granting of the Restricted Shares, the Grant Notice, this Agreement nor any other action taken pursuant to the Plan shallconstitute or be evidence of any agreement or understanding, express or implied, that you have a right to continue as an employee of anySystem Company for any period of time or at any specific rate of compensation. 18. Authority of the Committee. The Committee shall have full authority and discretion to interpret and construe the terms ofthe Plan, the Grant Notice, and this Agreement. The determination of the Committee as to any such matter of interpretation or construc-tionshall be final, binding and conclusive.19. Waivers. Any term or provision of this Agreement may only be waived by a System Company. Any such waiver shall bevalidly and sufficiently given for the purposes of this Agreement if it is in writing signed by an authorized Company officer. The failure ofany System Company to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor inany way to affect the validity of this Agreement or any part hereof or the right of any System Company thereafter to enforce each and everysuch provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.20. Headings. The titles and headings of the sections in this Agreement are for convenience of reference only, do not form part ofthis Agreement, and shall not affect the construction of this Agreement.21. Electronic Signature. Electronic signature of this Agreement shall have the same validity and effect as a signature affixed byhand.22. Entire Agreement. This Agreement (including the Plan) constitutes the entire agreement of the parties hereto with respect to thesubject matter hereof and supersedes any and all prior undertakings and agreements between the Company and its Affiliates and you withrespect to the subject matter hereof. 23. Prospectus. This Agreement constitutes part of a prospectus covering Securities registered under the Securities Act of 1933.The remaining documents constituting the prospectus are available on Entergy Corporation’s intranet under Our Company, HumanResources, Money & Finances, Compensation, Equity https://entergy.sharepoint.com/sites/myhra/myBenefits/Pages/Compensation.aspx. Exhibit 10(a)48Restricted Stock Units Agreement (Stock Settled)Under the 2019 Entergy Corporation Omnibus Incentive PlanTHIS RESTRICTED STOCK UNITS AGREEMENT (the “Agreement”), by and between Entergy Corporation (“Entergy”) and______ (“Grantee”), is effective on _______ (the “Effective Date”), subject to Grantee remaining a regular full-time employee of a SystemCompany employer (a “System Company Employer”) through such date. For purposes of this Agreement, Entergy shall include anysuccessor to its business or assets by operation of law or otherwise and any entity that assumes or agrees to perform this Agreement.1. Grant of Restricted Stock Units. Entergy hereby grants to Grantee, pursuant to the 2019 Entergy Corporation OmnibusIncentive Plan (the “Plan”), ______ Restricted Stock Units (the “Restricted Units”), for the purposes of retaining Grantee’s full-time activeservices as described herein through the Vesting Date described below, and for Grantee’s agreement to the terms and conditions of the Planand this Agreement.2. Incorporation of Plan. The Plan is hereby incorporated by reference and made a part hereof, and the Restricted Unitsand this Agreement shall be subject to all terms and conditions of the Plan, a copy of which has been provided or otherwise made accessibleto Grantee. Any capitalized term that is not defined in this Agreement shall have the meaning set forth in the Plan.3. Vesting of Restricted Units. Subject to the release requirement described in Section 4 of this Agreement, the RestrictedUnits (excluding dividend equivalents) shall vest on the third (3rd) anniversary of the Effective Date (such date, the “Vesting Date”),provided that Grantee complies with Section 15 of this Agreement and remains continuously and actively employed through the VestingDate as a regular full-time employee of a System Company Employer and performs Grantee’s job duties in a satisfactory manner throughthe Vesting Date, as determined solely in the discretion of ______ (“Vesting Criteria”). For purposes of this Section 3, Grantee shall nolonger be considered a regular full-time employee of any System Company Employer on the date Grantee is no longer actively employed ona full-time basis with any System Company Employer for any reason, including without limitation because of Grantee’s resignation,retirement, death, separation from employment due to Disability, involuntary termination of employment for any reason or no reason, or anyother separation from full-time active employment with Grantee’s System Company Employer, except as otherwise required by law. IfGrantee fails to meet the Vesting Criteria, then Grantee shall not vest in the Restricted Units, except as otherwise provided in Section 5 ofthis Agreement. 4. Scheduled Payment of Restricted Units. If Grantee meets the Vesting Criteria then, subject to Grantee executing arelease agreement in a form satisfactory to Entergy that, subject to applicable legal requirements, releases all claims that may then existagainst all System Companies and their related persons and affiliates (a “Release”) and submitting the executed original Release to Entergywithin the time period and in the manner provided in the Release, and upon the Release becoming irrevocable, then Entergy shall pay toGrantee, or Grantee’s beneficiary or estate (if Grantee should die after vesting, but prior to the payment date), as the case may be, a numberof Shares equal to the whole number of Restricted Units that vest on the Vesting Date, subject to withholding for all federal, state and localdeductions, tax withholdings, and other withholdings and offsets that may apply or be required to be withheld in connection with suchpayment, which shall be effected using the “net shares method” described in Section 9 of this Agreement. Such payment shall be made assoon as reasonably practicable after the date on which the Release becomes irrevocable, but in no event later than sixty (60) days after theVesting Date; provided, that if such 60-day period straddles two of Grantee’s taxable years, the payment shall be made in the later year. Forthe avoidance of doubt, if Grantee does not timely sign and submit the executed original Release to Entergy, or signs but revokes the Release,then Grantee shall not be paid any Shares or any other property or payment in respect of such Restricted Units and such Restricted Units shallbe forfeited.5. Accelerated Change in Control Vesting. Notwithstanding the Vesting Criteria to the contrary and subject to the termsof this Agreement, in the event that (i) a Change in Control occurs and (ii) either (x) outstanding Restricted Units are not assumed orsubstituted in connection therewith as described in Section 12(b) of the Plan, or (y) outstanding Restricted Units are so assumed or substituted in connection therewith and Grantee’s employment or service is terminated byGrantee’s System Company Employer without Cause or by Grantee for Good Reason on or after the effective date of the Change in Controlbut prior to twenty-four (24) months following the Change in Control, then the Restricted Units shall immediately become fully vested andthe restrictive covenants set forth in Section 15(b), (c) and (d) of this Agreement shall cease to apply as of the date of the Change in Control,if subclause (x) applies, or as of the applicable termination date, if subclause (y) applies (whichever date so applies, the “CIC Vesting Date”).In the event of accelerated vesting as described in this Section 5, but subject to Section 5 of the Plan and the conditions and limitationsdescribed herein, Entergy shall pay Grantee a number of Shares equal to the number of Restricted Units that vest in accordance with thisSection 5 no later than sixty (60) days after the CIC Vesting Date; provided, that if such 60-day period straddles two of Grantee’s taxableyears, the payment shall be made in the later year. Any payment to Grantee pursuant to this Section 5 shall be subject to withholding for allfederal, state and local deductions, tax withholdings, and other withholdings and offsets that may apply or be required to be withheld inconnection with such payment, which withholding shall be effected using the “net shares method” described in Section 9 of this Agreement.6. Termination and Forfeiture of Restricted Units. Except as otherwise provided herein, this Agreement (other than therestrictive covenants set forth in Section 15 of this Agreement) shall terminate and the then-unvested Restricted Units shall be forfeited on thedate on which Grantee’s full-time employment with all System Company Employers terminates. Further, except as otherwise provided inSection 5 of this Agreement, if Grantee fails to meet a condition of the Vesting Criteria at any time prior to the Vesting Date, then Granteeshall not vest in any then-unvested Restricted Units and shall forfeit all unvested Restricted Units.7. Compliance with Code Section 409A Limitations. Notwithstanding any provision to the contrary, all provisions of thisAgreement shall be construed, administered and interpreted to comply with or be exempt from Code Section 409A, and, if necessary, anyprovision shall be held null and void to the extent such provision (or part thereof) fails to comply with Code Section 409A or final regulationsissued thereunder. Specifically, the terms “termination” and “termination of employment” shall be applied in a manner consistent with thedefinition of “separation from service” within the meaning of Code Section 409A. A right of any System Company, if any, to offset orotherwise reduce any sums that may be due or become payable by any System Company to Grantee by any overpayment or indebtedness ofGrantee shall be subject to limitations imposed by Code Section 409A. For purposes of the limitations on nonqualified deferredcompensation under Code Section 409A, each payment of compensation under this Agreement shall be treated as a separate payment ofcompensation for purposes of applying the Code Section 409A deferral election rules and the exclusion from Code Section 409A for certainshort-term deferral amounts. Amounts payable under this Agreement shall be excludible from the requirements of Code Section 409A, to themaximum possible extent, either as (i) short-term deferral amounts (e.g., amounts payable no later than the 15th day of the third monthfollowing the end of the taxable year of Grantee’s System Company Employer in which such Restricted Units are no longer subject to asubstantial risk of forfeiture), or (ii) under the exclusion for involuntary separation pay provided in Treasury Regulations Section 1.409A-1(b)(9)(iii). To the extent that deferred compensation subject to the requirements of Code Section 409A becomes payable under this Agreement toGrantee at a time when Grantee is a “specified employee” (within the meaning of Code Section 409A), any such payments shall be delayedby six months to the extent necessary to comply with the requirements of Code Section 409A(a)(2)(B). Entergy makes no representation thatany or all of the payments or benefits described in the Plan or this Agreement will be exempt from or comply with Code Section 409A andmakes no undertaking to preclude Code Section 409A from applying to any such payment.8. Restricted Units Nontransferable. Restricted Units awarded pursuant to this Agreement may not be sold, exchanged, pledged,transferred, assigned, or otherwise encumbered, hypothecated or disposed of by Grantee (or any beneficiary) other than by will or laws ofdescent and distribution, and any such purported Transfer shall be null and void ab initio.9. Withholding Taxes. Entergy will use the “net shares method” to satisfy any tax withholding obligation in respect of theRestricted Units, which means Entergy will reduce the number of Shares in respect of any vested Restricted Units otherwise payable toGrantee under the terms and conditions of the Agreement by the number of vested Shares with a value necessary to cover up to the maximumamount of such obligation in any applicable jurisdiction. In no event shall Entergy or any other System Company have any liability toGrantee for Grantee’s individual income tax liability, for withholding or failing to withhold taxes, or for remitting or failing to remit taxes with respect to Grantee’s income, including, without limitation, in the event that Grantee is subject to penalty tax pursuant to Code Section409A.10. Governing Law/Court Proceedings. This Agreement shall be governed by, and construed in accordance with, the laws of theState of Delaware, without giving effect to principles of conflicts of law of such state. Any suit, action or proceeding arising out of, or withrespect to this Agreement, its enforcement, breach, or interpretation, shall be brought in any court of competent jurisdiction in the State ofDelaware, County of New Castle, and the Company and Grantee hereby submit to the exclusive jurisdiction of such court (and its appellatecourt, whether or not located in the State of Delaware) for the purpose of any such suit, action, or proceeding. The Company and Granteehereby irrevocably waive (i) any objections which each may now or hereafter have to the laying of the venue of any suit, action or proceedingarising out of or relating to this Agreement brought in any court of competent jurisdiction in the State of Delaware, County of New Castle, (ii)any claim that any such suit, action or proceeding brought in any such court has been brought in an inconvenient forum and (iii) any right to ajury trial.11. Amendments. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification ordischarge is agreed to in writing and signed by Grantee and such officer as may be specifically designated by the Committee. No waiver byeither party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of thisAgreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or atany prior or subsequent time.12. Rights as a Shareholder. Neither Grantee nor any of Grantee’s successors in interest shall have any rights as a shareholder ofEntergy with respect to any Restricted Units, including without limitation the right to any dividends or dividend equivalents.13. Agreement Not a Contract of Employment. Grantee’s employment with Grantee’s System Company Employer shall remainat-will. Neither the Plan, the granting of the Restricted Units, this Agreement nor any other action taken pursuant to the Plan or thisAgreement shall constitute or be evidence of any agreement or understanding, express or implied, that Grantee has a right to continue as anemployee of any System Company Employer for any period of time or at any specific rate of compensation.14. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be inwriting and shall be deemed to have been duly given when delivered personally or by United States registered mail, return receipt requested,postage prepaid, if to Grantee, to Grantee’s last known address as shown in the personnel records of Grantee’s System Company Employer,and if to Entergy or Grantee’s System Company Employer, to the following address shown below or thereafter to such other address as eitherparty may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only uponactual receipt:If to Entergy or Grantee’s System Company Employer, by hand delivery or email to: Entergy Services, LLCAttention: General Counsel639 Loyola Avenue, 28th FloorNew Orleans, LA 70113-3125 15. Confidentiality and Restrictive Covenants. In consideration of the grant to Grantee of the Restricted Units set forth herein,Grantee hereby agrees as follows:(a) Confidential Information. Grantee acknowledges that the System Companies have unique methods and processes forthe generation, transmission and distribution and sale of energy products, which give them a competitive advantage, including strategic andnon-public plans for their products, geographic and customer markets, and for marketing, distributing and selling their products. Granteefurther acknowledges that Grantee has held a position of confidence and trust with respect to the System Companies and that Grantee has andwill acquire additional detailed knowledge of the System Companies’ unique and confidential methods of doing business and plans for the future. Grantee acknowledges thatEntergy and the System Companies are expending and will continue to expend substantial amounts of time, money and effort to developeffective business and regulatory strategies, methodologies and technology. Grantee also acknowledges that the System Companies have acompelling business interest in protecting the System Companies’ Confidential Information (as defined below) and that the SystemCompanies would be seriously and irreparably damaged by the disclosure of Confidential Information. Grantee therefore agrees that, fromthe date of Grantee’s execution of this Agreement and during Grantee’s employment or other service with any System Company and at alltimes thereafter, Grantee shall hold in a fiduciary capacity for the benefit of the System Companies and, other than as authorized in writing bythe General Counsel of the Company or as required by law, in the proper performance of Grantee’s duties and responsibilities, or as otherwiseprovided in this Section 15, Grantee shall not disclose, directly or indirectly, to any person or entity or use for any purpose other than thefurtherance of Grantee’s responsibilities to Entergy and any other System Company, any Confidential Information. For purposes of thisAgreement, “Confidential Information” means information that is not generally known by persons outside the System Companies and couldnot easily be determined or learned by someone outside the System Companies, including without limitation, any and all information andknowledge, whether or not explicitly designated as confidential and whether or not reduced to writing, regarding (i) the System Companies’utility business, including, without limitation, the generation, transmission, brokering, marketing, distribution, sale and delivery of electricpower or generation capacity (through regulated utilities or otherwise), and its natural gas distribution business, (ii) the Entergy WholesaleCommodities business, including, without limitation, the ownership, development, management or operation of power plants and powergeneration facilities (including, without limitation, nuclear power plants) and the provision of operations and management services (includingdecommissioning services) with respect to power plants and the sale of the electric power produced by the System Companies’ operatingplants to wholesale customers, (iii) the System Companies’ proprietary methods and methodology, technical data, trade secrets, know-how,research and development information, product plans, customer lists, specific information relating to products, services and customers orprospective customers (including, but not limited to, customers or prospective customers of the System Companies with whom Granteebecomes acquainted during Grantee’s relationship with Entergy or any System Company), books and records of the System Companies,corporate and strategic relationships, suppliers, markets, computer software, computer software development, inventions, processes,formulae, technology, designs, drawings, technical information, source codes, engineering information, hardware configuration information,and matters of a business nature such as information regarding marketing, costs, pricing, finances, financial models and projections, billings,new or existing business or economic development plans, initiatives, and opportunities, or any other similar business information madeavailable to Grantee prior to or during Grantee’s employment with a System Company or otherwise in connection with Grantee’s relationshipwith any System Company and (iv) any attorney-client privileged information of a System Company. Confidential Information shall alsoinclude non-public information concerning any director, officer, employee, shareholder, or partner of any System Company. Grantee agreesthat Grantee’s obligation not to disclose or use Confidential Information, and Grantee’s obligation, detailed below, to return and, uponGrantee’s termination of employment with all System Companies, not to retain materials and tangible property described in this Section 15shall also extend to such types of information, materials and tangible property of customers of and suppliers to the System Companies and toother third parties, in each case who may have disclosed or entrusted the same to Grantee or to any System Company during Grantee’semployment with any System Company.(b) Non-Competition. At all times during Grantee’s employment or service with any System Company Employer and forone (1) year following the termination for any reason of Grantee’s employment by or service with Grantee’s last System Company Employer(the “Non-Compete Period”), Grantee will not engage in Competing Employment. For purposes of this Section 15, “CompetingEmployment” means working for, providing services to or otherwise directly or indirectly assisting (whether or not for compensation) anyperson, entity or business which directly or indirectly competes with any part of the System Company business, and such employment orservices involves products, services and business activities that are the same as or similar to those Grantee provided to a System Company, oras to which Grantee had access to Confidential Information, in the two years preceding Grantee’s termination of employment or service withall System Companies. Grantee agrees that it is reasonable for the restriction contained in this paragraph to apply in each and every county,province, state, city, parish or other political subdivision or territory of the United States in which any System Company engages in anybusiness activity, or otherwise distributes, licenses or sells its products or services, including, without limitation, Arkansas, Connecticut,District of Columbia, Louisiana, Massachusetts, Michigan, Mississippi, Nebraska, New York, Texas, and Vermont and any other state in which any SystemCompany engages in business at any time and, with respect to the State of Louisiana, means the following Parishes: Acadia, Allen,Ascension, Assumption, Avoyelles, Beauregard, Bienville, Bossier, Caddo, Calcasieu, Caldwell, Cameron, Catahoula, Claiborne, Concordia,De Soto, East Baton Rouge, East Carroll, East Feliciana, Evangeline, Franklin, Grant, Iberia, Iberville, Jackson, Jefferson, Jefferson Davis,Lafayette, Lafourche, La Salle, Lincoln, Livingston, Madison, Morehouse, Natchitoches, Orleans, Ouachita, Plaquemines, Point Coupee,Rapides, Red River, Richland, Sabine, Saint Bernard, St. Charles, St. Helena, Saint James, Saint John the Baptist, Saint Landry, SaintMartin, Saint Mary, Saint Tammany, Tangipahoa, Tensas, Terrebonne, Union, Vermilion, Vernon, Washington, Webster, West BatonRouge, West Carroll, West Feliciana and Winn (the “Restricted Territory”). Notwithstanding the foregoing, if Grantee’s employment isterminated by any System Company Employer without Cause, the covenant not to compete set forth in this Section 15(b) shall apply only foras long as the System Company Employer continues to pay Grantee, in accordance with the System Company Employer’s regular payrollpractices and schedule, Grantee’s bi-weekly base salary in effect on the effective date of the termination of Grantee’s employment, less anyapplicable tax withholdings and ordinary deductions (such payments, the “Non-Compete Payments”), but in no such event for longer than theNon-Compete Period. In any instance where a System Company Employer has the right to elect to make Non-Compete Payments, suchSystem Company Employer must notify Grantee in writing of such election, and the duration for which it elects to make Non-CompetePayments, within ten (10) business days following the termination of Grantee’s employment from the System Company. If the SystemCompany elects to make the Non-Compete Payments for less than the full Non-Compete Period, Grantee shall be free to join a competitorafter Grantee ceases receiving the Non-Compete Payments. For the purposes of clarity, in the event of Grantee’s termination for Cause orvoluntary resignation, Grantee shall be subject to the restrictions set forth in this Section 15(b) without any requirement that Grantee’s SystemCompany Employer pay Grantee any Non-Compete Payments.(c) Non-Solicitation. Grantee agrees that, while Grantee is employed by any System Company and during the Non-Compete Period (or, if later, the last day Grantee is scheduled to receive cash severance payments from Grantee’s System CompanyEmployer pursuant to any severance plan or other agreement), except in the good faith performance of Grantee’s duties to the SystemCompanies, Grantee shall not, other than as authorized in writing by the General Counsel of the Company: (i) directly or indirectly, solicit orseek to hire or identify for potential hiring (whether on Grantee’s own behalf or on behalf of any other person, entity or organization) anyperson who is at that time (or was during the prior six (6) months) an employee or consultant of any System Company, or (ii) within theRestricted Territory, directly or indirectly solicit the trade, business or patronage of any clients, customers or vendors or prospective clients,customers or vendors of any System Company to provide competing products or services or advise, or assist such clients, customers orvendors or prospective clients, customers or vendors to in any way modify their relationship with any System Company. The foregoing non-solicitation (1) shall not be violated by general advertising not targeted at the forgoing persons or entities; (2) shall not apply to solicitation ofpersons involuntarily terminated from System Company employment; and (3) shall only apply to persons or entities (A) who reporteddirectly or indirectly to Grantee; (B) with whom Grantee had material contact while at a System Company; or (C) about whom or whichGrantee possessed (i) information regarding quality of performance while they were employed by a System Company, which informationGrantee would not otherwise have except for the position Grantee held with a System Company, or (ii) Confidential Information.(d) Non-Disparagement. Grantee agrees that, to the fullest extent permitted by applicable law, Grantee will not at any time(whether during or after Grantee’s employment or service with any System Company), other than in the proper performance of Grantee’sduties, publish or communicate to any person or entity any “Disparaging” (as defined below) remarks, comments or statements concerningany System Company or any of their respective directors, officers, shareholders, employees, agents, attorneys, successors and assigns.“Disparaging” remarks, comments or statements are those that are intended to, or could be construed in a manner so as to, impugn, discredit,injure or impair the business, reputation, character, honesty, integrity, judgment, morality or business acumen or abilities of the individual orentity being disparaged.(e) System Company Property. All tangible materials, equipment, devices, documents, copies of documents, datacompilations (in whatever form), software programs, and electronically created or stored materials that Grantee receives or creates in thecourse of employment with a System Company are and shall remain the property of the System Company, and Grantee shall immediatelyreturn (and/or cooperate in the supervised deletion of) such property to Grantee’s System Company Employer upon the termination of Grantee’s employment, for whatever reason. The obligation toreturn property and documents extends to anything received or made during and as a result of employment by a System Company, regardlessof whether it was received from a System Company or a third party, such as an actual or potential vendor or customer, and regardless ofwhether a document contains Confidential Information. The only documents not subject to the obligation to return are documents directlyrelating to Grantee’s compensation and benefits, such as Grantee’s pay stubs and benefit plan information.(f) Violation of the Restrictive Covenant Section. In the event that Grantee violates any provision of this Section 15, thetime periods set forth in those paragraphs shall be extended for the period of time Grantee remains in violation of the provisions, to thegreatest extent allowed by applicable law. The provisions of Section 15(a) - (e) hereof are, and shall be construed as, independent covenants,and no claimed or actual breach of any contractual or legal duty by any System Company shall excuse or terminate Grantee’s obligationshereunder or preclude any System Company from obtaining injunctive relief for Grantee’s violation, or threatened violation, of any of thoseprovisions. Grantee also agrees to indemnify and hold the System Companies harmless from any and all losses (including, but not limited to,reasonable attorney’s fees and other expenses incurred to enforce this Agreement) suffered by any System Company as a result of anyviolation or threatened violation of any of Grantee’s representations, warranties, covenants or undertakings set forth in this Agreement (inaddition to any other remedies available to the System Companies set forth in Section 15(i) below), provided that a System Company isfound to be the prevailing party in any such action.(g) Exclusions. Notwithstanding anything else in this Section 15 or in this Agreement to the contrary:(i) the restrictive covenants in this Section 15 are not intended to restrict Grantee from cooperating with anyinvestigation or proceeding initiated by the Nuclear Regulatory Commission (“NRC”) or any other federal or state regulatory agency.Further, Grantee may make disclosure (i) to exercise Grantee’s rights as a whistleblower under the Dodd-Frank Wall Street Reformand Consumer Protection Act of 2010, the Securities and Exchange Commission Rule 21F-17(a) or any other federal or state lawproviding whistleblower rights; (ii) to the extent necessary when providing safety-related or other information to the NRC on matterswithin the NRC’s regulatory jurisdiction; (iii) when participating in “protected activities”, as defined in Section 211 of the EnergyReorganization Act of 1974 and in C.F.R. Part 50.7; (iv) when engaging in activities protected by the National Labor Relations Act orany similar federal or state law; or (v) when required to do so by a court of law, or by any governmental agency or administrative orlegislative body with jurisdiction to order Grantee to divulge, disclose or make accessible such information. With the exception ofConfidential Information subject to the attorney-client privilege, Grantee shall have no obligation to seek prior approval of anySystem Company or to inform any System Company of such disclosure. This Agreement does not limit Grantee’s ability tocommunicate, without notice to any System Company, with any governmental agencies or otherwise participate in any investigationor proceeding that may be conducted by any governmental agency, or to collect a reward in connection with any whistleblowerinformation provided to a government agency.(ii) Defend Trade Secrets Act Immunity Notice. Pursuant to the Defend Trade Secrets Act of 2016, non-compliancewith the disclosure provisions of this Agreement shall not subject Grantee to criminal or civil liability under any Federal or Statetrade secret law for the disclosure of a System Company trade secret: (A) in confidence to a Federal, State or local governmentofficial, either directly or indirectly, or to an attorney in confidence solely for the purpose of reporting or investigating a suspectedviolation of law; (B) in a complaint or other document filed in a lawsuit or other proceeding, provided that any complaint ordocument containing the trade secret is filed under seal; or (C) to an attorney representing Grantee in a lawsuit for retaliation by anySystem Company for reporting a suspected violation of law or to use the trade secret information in that court proceeding, providedthat any document containing the trade secret is filed under seal and Grantee does not disclose the trade secret, except pursuant tocourt order.(h) Restrictive Covenants Contained in Other Agreements. Notwithstanding any provision contained herein to the contrary,to the extent that Grantee is or becomes subject to any other agreement that contains restrictive covenants that are different from the restrictive covenants contained in this agreement, the restrictive covenants set forth in suchother agreement shall supplement, and shall not replace, the restrictive covenants herein.(i) Enforcement. Grantee hereby agrees that the covenants set forth in this Section 15 are reasonable with respect to theirscope, duration, and geographical area. Grantee further agrees and acknowledges that the restrictions contained in Section 15 do not andwould not unreasonably impose limitations on Grantee’s ability to earn a living. If any court or other tribunal determines that any term orprovision of Sections 15 is overbroad or otherwise invalid or unenforceable, Grantee and Entergy hereby agree that such court or tribunalshall have the power and obligation to narrow or otherwise reform the unenforceable term or provision, including to delete, replace, or addspecific words or phrases, but only to the narrowest extent necessary to render the provision valid and enforceable (provided that in no eventshall the length of any restrictive covenant or its scope be extended or expanded), and this Agreement shall be fully enforceable as somodified. Grantee’s agreement to the restrictions provided for in this Agreement and Entergy’s agreement to grant the Award are mutuallydependent consideration. Therefore, notwithstanding any other provision to the contrary in this Agreement, if (i) the enforceability of anymaterial restriction applicable to Grantee as provided for in this Section 15 is challenged and found unenforceable by a court or other tribunalor (ii) Grantee breaches any of the provisions of Section 15, then Entergy shall have the right to terminate this Agreement and recover fromGrantee all Shares paid to Grantee pursuant to this Agreement and, if Grantee has sold, transferred, or otherwise disposed of any Sharesreceived in respect of the Restricted Units, an amount equal to the aggregate Fair Market Value of such Shares on the date on which suchCommon Stock was paid to Grantee pursuant to this Agreement. This provision shall be construed as a return of consideration or ill-gottengains due to the failure of Grantee’s promises and consideration under the Agreement, and not as a liquidated damages clause. In addition, inthe event of Entergy’s termination of this Agreement, Grantee shall immediately forfeit all unvested Restricted Units and all vested andunpaid Restricted Units. Grantee further hereby agrees that, in the event of a breach by Grantee of any of the provisions of Sections 15(a),(b), (c) (d) or (e), monetary damages shall not constitute a sufficient remedy. Consequently, in the event of any such breach or threatenedbreach, Entergy or a System Company may, in addition to and without prejudice to other rights and remedies existing in its favor, apply toany court of competent jurisdiction for specific performance and/or injunctive or other relief in order to enforce or prevent any violations ofthe provisions hereof, in each case without the requirement of posting a bond or proving actual damages and without having to demonstratethat money damages would be inadequate. Grantee acknowledges (i) that Grantee has carefully read this Agreement and has given carefulconsideration to the restraints imposed upon Grantee by this Agreement, and Grantee is in full accord as to their necessity for the reasonableand proper protection of Confidential Information of the System Companies and their relationships with customers, suppliers and otherbusiness partners and (ii) that Grantee is informed in writing hereby that Grantee has a right to the advice of legal counsel and should consultwith an attorney of Grantee’s choice with regard to this Agreement, and Grantee has been provided ample opportunity to seek out and consultwith such counsel.(j) For purposes of this Section 15, “System Company” shall include Entergy and all other System Companies. Grantee andEntergy agree that each System Company is an intended third-party beneficiary of this Section 15 and further agree that each SystemCompany is entitled to enforce the provisions of this Section 15 in accordance with its terms. Notwithstanding anything to the contrary in thisAgreement, the terms and conditions of the restrictive covenants set forth in this Section 15 shall survive the termination of this Agreementand shall remain in full force according to their respective terms and conditions.(k) In the twelve (12) months following the termination of Grantee’s employment with Grantee’s last System CompanyEmployer, in the event Grantee seeks or obtains employment or another business affiliation with any person or entity other than a SystemCompany, Grantee agrees to notify the Company in writing, as far in advance as is reasonably practicable, but in no event less than twoweeks prior to Grantee’s proposed commencement of employment, of the details of such employment or business affiliation. Grantee alsoagrees to show these restrictive covenant provisions to any prospective employer, and Grantee consents to any System Company showingthese provisions to any third party believed by a System Company to be a prospective or actual employer of Grantee, or a receiver of servicesfrom Grantee, and to insisting on Grantee’s compliance with these terms. Grantee’s obligations under this Section 15 will expire on that datewhich is twelve months after the end of Grantee’s employment with all System Companies (or, if later, the last date as of which Grantee isscheduled to receive separation payments from any System Company pursuant to a severance plan or other agreement). 16. Validity. Except as specifically provided in Section 15(i) of this Agreement, the invalidity or unenforceability of any provisionof this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force andeffect.17. Payment in Error. To the maximum extent permitted by applicable law, in the event that a payment is made to Grantee orGrantee’s successor (whether in cash, stock or other property) in error that exceeds the amount to which Grantee and Grantee’s successor isentitled pursuant to the terms and conditions of this Agreement or the Plan, including without limitation Section 28 thereof (such excessamount, an “Excess Payment”), Grantee or Grantee’s successor will repay to Entergy, and Entergy shall have the right to recoup fromGrantee or Grantee’s successor such Excess Payment by notifying Grantee or Grantee’s successor in writing of the nature and amount of suchExcess Payment together with (i) demand for direct repayment to Entergy by Grantee or Grantee’s successor in the amount of such ExcessPayment or (ii) reduction of any amount(s) owed to Grantee or Grantee’s successor by Entergy or any other System Company by the amountof the Excess Payment.18. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but allof which together will constitute one and the same instrument.19. Waivers. Any term or provision of this Agreement may only be waived by a System Company. Any such waiver shall bevalidly and sufficiently given for the purposes of this Agreement if it is in writing signed by an authorized Company officer. The failure ofany System Company to enforce at any time any provision of this Agreement shall not be construed to be a waiver of such provision, nor inany way to affect the validity of this Agreement or any part hereof or the right of any System Company thereafter to enforce each and everysuch provision. No waiver of any breach of this Agreement shall be held to constitute a waiver of any other or subsequent breach.20. Policies. Without limiting Section 17 of the Agreement, the Restricted Units shall be subject to all applicable Entergy policies,including without limitation those relating to hedging and recoupment of compensation, as they may be in effect from time to time.21. No Fractional Shares. Any fractional Share to be distributed shall be settled in cash and applied to satisfy tax withholdingrequirements. The Company will not pay out any fractional Shares.22. Authority of the Committee. The Committee or its delegee shall have full authority and discretion to interpret and construe theterms of the Plan and this Agreement. The determination of the Committee as to any such matter of interpretation or construction shall befinal, binding and conclusive.23. Headings. The titles and headings of the sections in this Agreement are for convenience of reference only, do not form part ofthis Agreement, and shall not affect the construction of this Agreement.24. Electronic Signature. Electronic signature of this Agreement shall have the same validity and effect as a signature affixed byhand.25. Entire Agreement. This Agreement (including the Plan) constitutes the entire agreement of the parties hereto with respect tothe subject matter hereof and supersedes any and all prior undertakings and agreements between the Company and its Affiliates and Granteewith respect to the subject matter hereof. IN WITNESS WHEREOF, the parties have executed and delivered this Agreement, which is effective as of the Effective Date.ENTERGY CORPORATION ________________________ By: Date: ____________________The undersigned hereby accepts and agrees to all the terms and provisions of the foregoing Agreement and to all the terms andprovisions of the Plan herein incorporated by reference. The undersigned Grantee further acknowledges that the Plan and Plan Prospectus areavailable to Grantee on Entergy’s internal Web page under Our Company, Human Resources, Money & Finances, Compensation, Equity(https://entergy.sharepoint.com/sites/myhra/myBenefits/Pages/Compensation.aspx). GranteeDate: _________________________________ Exhibit 21Subsidiaries of Entergy Corporation as of December 31, 2019Certain subsidiaries, which if considered in the aggregate as a single subsidiary would not constitute a significant subsidiary as of December 31, 2019, have beenomitted.Name of Company State of Incorporation Entergy Corporation Delaware Entergy Utility Affiliates Holdings, Inc. Texas Entergy Utility Affiliates, LLC Texas Entergy Utility Holding Company, LLC Texas Entergy Holdings Company LLC Delaware Entergy Arkansas, LLC Texas Arkansas Power & Light Company, LLC Arkansas Entergy Arkansas Restoration Funding, LLC Delaware Entergy Louisiana, LLC Texas Entergy Holdings Company LLC Delaware Prudential Oil & Gas L.L.C. Texas Gulf States Utilities Company Texas Varibus L.L.C. Texas Southern Gulf Railway LLC Texas Entergy Louisiana Investment Recovery Funding I, L.L.C. Louisiana Louisiana Power & Light Company, LLC Delaware Entergy New Orleans, LLC Texas Entergy New Orleans Storm Recovery Funding I, L.L.C. Louisiana New Orleans Public Service Inc. Louisiana Entergy Mississippi, LLC Texas Jackson Gas Light Company Mississippi Entergy Power & Light Company Mississippi The Light, Heat and Water Company of Jackson, Mississippi Mississippi Mississippi Power & Light Company Mississippi Entergy Utility Assets Holdings, Inc. Texas Entergy Louisiana Properties, LLC Texas System Fuels, Inc. Louisiana Entergy Utility Assets, LLC Texas Entergy Utility Holding Company, LLC Texas Entergy Holdings Company LLC Delaware Entergy Arkansas, LLC Texas Arkansas Power & Light Company, LLC Arkansas Entergy Arkansas Restoration Funding, LLC Delaware Entergy Louisiana, LLC Texas Entergy Holdings Company LLC Delaware Prudential Oil & Gas L.L.C. Texas Gulf States Utilities Company Texas Varibus L.L.C. Texas Southern Gulf Railway LLC Texas Entergy Louisiana Investment Recovery Funding I, L.L.C. Louisiana Louisiana Power & Light Company, LLC Delaware Entergy New Orleans, LLC Texas Entergy New Orleans Storm Recovery Funding I, L.L.C. Louisiana New Orleans Public Service Inc. Louisiana Entergy Mississippi, LLC Texas Jackson Gas Light Company Mississippi Entergy Power & Light Company Mississippi The Light, Heat and Water Company of Jackson, Mississippi Mississippi Mississippi Power & Light Company Mississippi Entergy Utility Group, Inc. Texas System Fuels, Inc. Louisiana Entergy Utility Holding Company, LLC Texas Entergy Holdings Company LLC Delaware Entergy Arkansas, LLC Texas Arkansas Power & Light Company, LLC Arkansas Entergy Arkansas Restoration Funding, LLC Delaware Entergy Louisiana, LLC Texas Entergy Holdings Company LLC Delaware Prudential Oil & Gas L.L.C. Texas Gulf States Utilities Company Texas Varibus L.L.C. Texas Southern Gulf Railway LLC Texas Entergy Louisiana Investment Recovery Funding I, L.L.C. Louisiana Louisiana Power & Light Company, LLC Delaware Entergy New Orleans, LLC Texas Entergy New Orleans Storm Recovery Funding I, L.L.C. Louisiana New Orleans Public Service Inc. Louisiana Entergy Mississippi, LLC Texas Jackson Gas Light Company Mississippi Entergy Power & Light Company Mississippi The Light, Heat and Water Company of Jackson, Mississippi Mississippi Mississippi Power & Light Company Mississippi Entergy Utility Holding Company, LLC Texas Entergy Holdings Company LLC Delaware Entergy Arkansas, LLC Texas Arkansas Power & Light Company, LLC Arkansas Entergy Arkansas Restoration Funding, LLC Delaware Entergy Louisiana, LLC Texas Entergy Holdings Company LLC Delaware Prudential Oil & Gas L.L.C. Texas Gulf States Utilities Company Texas Varibus L.L.C. Texas Southern Gulf Railway LLC Texas Entergy Louisiana Investment Recovery Funding I, L.L.C. Louisiana Louisiana Power & Light Company, LLC Delaware Entergy New Orleans, LLC Texas Entergy New Orleans Storm Recovery Funding I, L.L.C. Louisiana New Orleans Public Service Inc. Louisiana Entergy Mississippi, LLC Texas Jackson Gas Light Company Mississippi Entergy Power & Light Company Mississippi The Light, Heat and Water Company of Jackson, Mississippi Mississippi Mississippi Power & Light Company Mississippi Entergy Texas, Inc. Texas Entergy Texas Restoration Funding, LLC Delaware Entergy Gulf States Reconstruction Funding I, LLC Delaware Prudential Oil & Gas L.L.C. Texas Southern Gulf Railway LLC Texas System Energy Resources, Inc. Arkansas Entergy Services Holding, Inc. Delaware Entergy Services, LLC Louisiana Entergy Account Services, LLC Delaware Entergy Operations, Inc. Delaware Entergy Enterprises, Inc. Louisiana Entergy Nuclear, Inc. Delaware TLG Services, Inc. Connecticut Entergy Nuclear PFS Company Delaware Entergy Nuclear Potomac Company Delaware Entergy Finance Holding, Inc. Arkansas Entergy Nuclear Holding Company # 1 Delaware Entergy Nuclear New York Investment Company, LLC Delaware Entergy Nuclear Indian Point 3, LLC Delaware Entergy Northeast Holdings, LLC Delaware Entergy Power Marketing Assets, LLC Delaware Entergy Nuclear Power Marketing, LLC Delaware Entergy Nuclear Holding Company # 2 Delaware Entergy Nuclear Operations, Inc. Delaware Entergy Nuclear Fuels Company Delaware Entergy Nuclear Vermont Finance Company Delaware Entergy Nuclear Holding Company, LLC Delaware Entergy Nuclear Midwest Investment Company, LLC Delaware Entergy Nuclear Palisades, LLC Delaware Entergy Nighthawk GP, LLC Delaware Entergy Nighthawk LP, LLC Delaware Entergy Nuclear Holding Company # 3, LLC Delaware Entergy Nuclear Indian Point 2, LLC Delaware Entergy Nuclear Nebraska, LLC Delaware Entergy Nuclear Vermont Investment Company, LLC Delaware Vermont Yankee Asset Retirement Management, LLC Delaware Entergy Power Marketing Holding I, Inc. Delaware Entergy Power Marketing Properties, LLC Delaware Entergy Power Marketing Holding II, Inc. Delaware Entergy Amalgamated Competitive Holdings, LLC Delaware Entergy Power Operations U.S. Inc. Delaware Entergy Power Gas Operations, LLC Delaware EWO Wind II, LLC Delaware Entergy Power Ventures, LLC Delaware EWO Marketing, LLC Delaware EAM Nelson Holding, LLC Delaware EK Holding III, LLC Delaware Entergy Power Investment Holding, Inc. Delaware Entergy Asset Management, Inc. Delaware Entergy Power, LLC Delaware Entergy International Holdings, LLC Delaware Entergy Global, LLC Arkansas Entergy International LTD LLC Delaware Exhibit 24February 20, 2020TO: Kimberly A. FontanDaniel T. FalstadRe: Power of Attorney - Form 10-KEntergy Corporation, referred to herein as the Company, will file with the Securities and Exchange Commission its Annual Reporton Form 10-K for the year ended December 31, 2019, pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.The Company and the undersigned persons, in their respective capacities as directors and/or officers of the Company, as specified inAttachment I, do each hereby make, constitute and appoint Kimberly A. Fontan and Daniel T. Falstad and each of them, their trueand lawful Attorneys (with full power of substitution) for each of the undersigned and in his or her name, place and stead to sign andcause to be filed with the Securities and Exchange Commission the aforementioned Annual Report on Form 10-K and anyamendments thereto.Yours very truly,ENTERGY CORPORATIONBy: /s/ Leo P. Denault Leo P. Denault Director, Chairman of the Boardand Chief Executive Officer /s/ John R. Burbank /s/ Alexis M. HermanJohn R. Burbank Alexis M. HermanDirector Director /s/ Patrick J. Condon /s/ M. Elise HylandPatrick J. Condon M. Elise HylandDirector Director /s/ Leo P. Denault /s/ Stuart L. LevenickLeo P. Denault Stuart L. LevenickDirector, Chairman of the Board andChief Executive Officer Director /s/ Kirkland H. Donald /s/ Blanche L. LincolnKirkland H. Donald Blanche L. LincolnDirector Director /s/ Philip L. Frederickson /s/ Karen A. PuckettPhilip L. Frederickson Karen A. PuckettDirector Director /s/ Andrew S. Marsh Andrew S. Marsh Executive Vice President and ChiefFinancial Officer ATTACHMENT IEntergy CorporationChairman of the Board and Chief Executive Officer - Leo P. Denault (principal executive officer)Executive Vice President and Chief Financial Officer - Andrew S. Marsh (principal financial officer)Directors - John R. Burbank, Patrick J. Condon, Leo P. Denault, Kirkland H. Donald, Philip L. Frederickson, Alexis M. Herman, M.Elise Hyland, Stuart L. Levenick, Blanche L. Lincoln and Karen A. Puckett February 20, 2020TO: Kimberly A. FontanDaniel T. FalstadRe: Power of Attorney - Form 10-KEntergy Arkansas, LLC., Entergy Louisiana, LLC, Entergy Mississippi, LLC, Entergy New Orleans, LLC, Entergy Texas, Inc. andSystem Energy Resources, Inc. (collectively referred to herein as the Companies) will each file with the Securities and ExchangeCommission its Annual Report on Form 10-K for the year ended December 31, 2019, pursuant to Section 13 or 15(d) of theSecurities Exchange Act of 1934.The Companies and the undersigned persons, in their respective capacities as directors and/or officers of the Companies, asspecified in Attachment I, do each hereby make, constitute and appoint Kimberly A. Fontan and Daniel T. Falstad and each of them,their true and lawful Attorneys (with full power of substitution) for each of the undersigned and in his or her name, place and steadto sign and cause to be filed with the Securities and Exchange Commission the aforementioned Annual Report on Form 10-K andany amendments thereto.Yours very truly,ENTERGY ARKANSAS, LLCENTERGY LOUISIANA, LLCENTERGY MISSISSIPPI, LLCENTERGY NEW ORLEANS, LLCENTERGY TEXAS, INC. SYSTEM ENERGY RESOURCES, INC. /s/ A. Christopher Bakken, III /s/ Steven C. McNealA. Christopher Bakken, IIIDirector of System Energy Resources, Inc. Steven C. McNealDirector of System Energy Resources, Inc. /s/ Haley R. Fisackerly /s/ Sallie T. RainerHaley R. FisackerlyDirector, Chairman of the Board, President and ChiefExecutive Officer of Entergy Mississippi, LLC Sallie T. RainerDirector, Chair of the Board of Directors, President and ChiefExecutive Officer of Entergy Texas, Inc. /s/ Paul D. Hinnenkamp /s/ David D. EllisPaul D. HinnenkampDirector of Entergy Arkansas, LLC, Entergy Louisiana, LLC,Entergy Mississippi, LLC, Entergy New Orleans, LLC andEntergy Texas, Inc. David D. EllisDirector, Chairman of the Board, President and ChiefExecutive Officer of Entergy New Orleans, LLC /s/ Andrew S. Marsh /s/ Laura R. LandreauxAndrew S. MarshDirector, Executive Vice President and Chief Financial Officerof Entergy Arkansas, LLC, Entergy Louisiana, LLC, EntergyMississippi, LLC, Entergy New Orleans, LLC, Entergy Texas,Inc. and System Energy Resources, Inc. Laura R. LandreauxDirector, Chair of the Board of Directors, President and ChiefExecutive Officer of Entergy Arkansas, LLC /s/ Phillip R. May, Jr. /s/ Roderick K. WestPhillip R. May, Jr.Director, Chairman of the Board, President and ChiefExecutive Officer of Entergy Louisiana, LLC Roderick K. WestDirector of Entergy Arkansas, LLC, Entergy Louisiana, LLC,Entergy Mississippi, LLC, Entergy New Orleans, LLC andEntergy Texas, Inc.Director, Chairman of the Board, President and ChiefExecutive Officer of System Energy Resources, Inc. ATTACHMENT IEntergy Arkansas, LLCChair of the Board of Directors, President and Chief Executive Officer - Laura R. Landreaux (principal executive officer)Executive Vice President and Chief Financial Officer - Andrew S. Marsh (principal financial officer)Directors - Paul D. Hinnenkamp, Laura R. Landreaux, Andrew S. Marsh and Roderick K. WestEntergy Louisiana, LLCChairman of the Board, President and Chief Executive Officer - Phillip R. May, Jr. (principal executive officer)Executive Vice President and Chief Financial Officer - Andrew S. Marsh (principal financial officer)Directors - Paul D. Hinnenkamp, Andrew S. Marsh, Phillip R. May, Jr. and Roderick K. WestEntergy Mississippi, LLCChairman of the Board, President and Chief Executive Officer - Haley R. Fisackerly (principal executive officer)Executive Vice President and Chief Financial Officer - Andrew S. Marsh (principal financial officer)Directors - Haley R. Fisackerly, Paul D. Hinnenkamp, Andrew S. Marsh and Roderick K. WestEntergy New Orleans, LLCChairman of the Board, President and Chief Executive Officer - David D. Ellis (principal executive officer)Executive Vice President and Chief Financial Officer - Andrew S. Marsh (principal financial officer)Directors - David D. Ellis, Paul D. Hinnenkamp, Andrew S. Marsh and Roderick K. WestEntergy Texas, Inc.Chair of the Board of Directors, President and Chief Executive Officer - Sallie T. Rainer (principal executive officer)Executive Vice President and Chief Financial Officer - Andrew S. Marsh (principal financial officer)Directors - Paul D. Hinnenkamp, Andrew S. Marsh, Sallie T. Rainer and Roderick K. WestSystem Energy Resources, Inc.Chairman of the Board, President and Chief Executive Officer - Roderick K. West (principal executive officer)Executive Vice President and Chief Financial Officer - Andrew S. Marsh (principal financial officer)Directors - A. Christopher Bakken, III, Andrew S. Marsh, Steven C. McNeal and Roderick K. West Exhibit 31(a)CERTIFICATIONSI, Leo P. Denault, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Leo P. DenaultLeo P. DenaultChairman of the Board and Chief Executive Officerof Entergy CorporationDate: February 21, 2020 Exhibit 31(b)CERTIFICATIONSI, Andrew S. Marsh, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Corporation;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President andChief Financial Officer of Entergy CorporationDate: February 21, 2020 Exhibit 31(c)CERTIFICATIONSI, Laura R. Landreaux, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Arkansas, LLC;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Laura R. LandreauxLaura R. LandreauxChair of the Board, President, andChief Executive Officer of Entergy Arkansas, LLCDate: February 21, 2020 Exhibit 31(d)CERTIFICATIONSI, Andrew S. Marsh, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Arkansas, LLC;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy Arkansas, LLCDate: February 21, 2020 Exhibit 31(e)CERTIFICATIONSI, Phillip R. May, Jr., certify that:1.I have reviewed this annual report on Form 10-K of Entergy Louisiana, LLC;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Phillip R. May, Jr.Phillip R. May, Jr.Chairman of the Board, President, and Chief ExecutiveOfficer of Entergy Louisiana, LLCDate: February 21, 2020 Exhibit 31(f)CERTIFICATIONSI, Andrew S. Marsh, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Louisiana, LLC;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy Louisiana, LLCDate: February 21, 2020 Exhibit 31(g)CERTIFICATIONSI, Haley R. Fisackerly, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Mississippi, LLC;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Haley R. FisackerlyHaley R. FisackerlyChairman of the Board, President, andChief Executive Officerof Entergy Mississippi, LLCDate:February 21, 2020 Exhibit 31(h)CERTIFICATIONSI, Andrew S. Marsh, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Mississippi, LLC;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy Mississippi, LLCDate: February 21, 2020 Exhibit 31(i)CERTIFICATIONSI, David D. Ellis, certify that:1.I have reviewed this annual report on Form 10-K of Entergy New Orleans, LLC;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ David D. EllisDavid D. EllisChairman of the Board, President, andChief Executive Officer of Entergy New Orleans, LLCDate: February 21, 2020 Exhibit 31(j)CERTIFICATIONSI, Andrew S. Marsh, certify that:1.I have reviewed this annual report on Form 10-K of Entergy New Orleans, LLC;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officer ofEntergy New Orleans, LLCDate: February 21, 2020 Exhibit 31(k)CERTIFICATIONSI, Sallie T. Rainer, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Texas, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Sallie T. RainerSallie T. RainerChair of the Board, President, andChief Executive Officer of Entergy Texas, Inc.Date: February 21, 2020 Exhibit 31(l)CERTIFICATIONSI, Andrew S. Marsh, certify that:1.I have reviewed this annual report on Form 10-K of Entergy Texas, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy Texas, Inc.Date: February 21, 2020 Exhibit 31(m)CERTIFICATIONSI, Roderick K. West, certify that:1.I have reviewed this annual report on Form 10-K of System Energy Resources, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Roderick K. WestRoderick K. WestChairman of the Board, President, and Chief ExecutiveOfficer of System Energy Resources, Inc.Date: February 21, 2020 Exhibit 31(n)CERTIFICATIONSI, Andrew S. Marsh, certify that:1.I have reviewed this annual report on Form 10-K of System Energy Resources, Inc.;2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material factnecessary to make the statements made, in light of the circumstances under which such statements were made, not misleadingwith respect to the period covered by this report;3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in allmaterial respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presentedin this report;4.The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls andprocedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as definedin Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed underour supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is madeknown to us by others within those entities, particularly during the period in which this report is being prepared;b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to bedesigned under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generally accepted accounting principles;c)Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report ourconclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this reportbased on such evaluation; andd)Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during theregistrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materiallyaffected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and5.The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control overfinancial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or personsperforming the equivalent functions):a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reportingwhich are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financialinformation; andb)Any fraud, whether or not material, that involves management or other employees who have a significant role in theregistrant's internal control over financial reporting./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof System Energy Resources, Inc.Date: February 21, 2020 Exhibit 32(a)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Leo P. Denault, Chairman of the Board and Chief Executive Officer of Entergy Corporation (the “Company”), certify pursuant to18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Leo P. DenaultLeo P. DenaultChairman of the Board andChief Executive Officerof Entergy CorporationDate: February 21, 2020 Exhibit 32(b)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Andrew S. Marsh, Executive Vice President and Chief Financial Officer of Entergy Corporation (the “Company”), certify pursuantto 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President andChief Financial Officer of Entergy CorporationDate: February 21, 2020 Exhibit 32(c)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Laura R. Landreaux, Chair of the Board, President, and Chief Executive Officer of Entergy Arkansas, LLC (the “Company”),certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Laura R. LandreauxLaura R. Landreaux Chair of the Board, President, and Chief Executive Officer of Entergy Arkansas, LLCDate: February 21, 2020 Exhibit 32(d)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Andrew S. Marsh, Executive Vice President and Chief Financial Officer of Entergy Arkansas, LLC (the “Company”), certifypursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy Arkansas, LLCDate: February 21, 2020 Exhibit 32(e)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Phillip R. May, Jr., Chairman of the Board, President, and Chief Executive Officer of Entergy Louisiana, LLC (the “Company”),certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Phillip R. May, Jr.Phillip R. May, Jr.Chairman of the Board, President,and Chief Executive Officer of Entergy Louisiana, LLCDate: February 21, 2020 Exhibit 32(f)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Andrew S. Marsh, Executive Vice President and Chief Financial Officer of Entergy Louisiana, LLC (the “Company”), certifypursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy Louisiana, LLCDate: February 21, 2020 Exhibit 32(g)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Haley R. Fisackerly, Chairman of the Board, President, and Chief Executive Officer of Entergy Mississippi, LLC (the“Company”), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Haley R. FisackerlyHaley R. FisackerlyChairman of the Board, President, and Chief ExecutiveOfficer of Entergy Mississippi, LLCDate: February 21, 2020 Exhibit 32(h)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Andrew S. Marsh, Executive Vice President and Chief Financial Officer of Entergy Mississippi, LLC (the “Company”), certifypursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy Mississippi, LLCDate: February 21, 2020 Exhibit 32(i)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, David D. Ellis, Chairman of the Board, President, and Chief Executive Officer of Entergy New Orleans, LLC (the “Company”),certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ David D. EllisDavid D. EllisChairman of the Board, President, andChief Executive Officer ofEntergy New Orleans, LLCDate: February 21, 2020 Exhibit 32(j)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Andrew S. Marsh, Executive Vice President and Chief Financial Officer of Entergy New Orleans, LLC (the “Company”), certifypursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy New Orleans, LLCDate: February 21, 2020 Exhibit 32(k)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Sallie T. Rainer, Chair of the Board, President, and Chief Executive Officer of Entergy Texas, Inc. (the “Company”), certifypursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Sallie T. RainerSallie T. RainerChair of the Board, President, andChief Executive Officerof Entergy Texas, Inc.Date: February 21, 2020 Exhibit 32(l)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Andrew S. Marsh, Executive Vice President and Chief Financial Officer of Entergy Texas, Inc. (the “Company”), certify pursuantto 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof Entergy Texas, Inc.Date: February 21, 2020 Exhibit 32(m)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Roderick K. West, Chairman of the Board, President, and Chief Executive Officer of System Energy Resources, Inc. (the“Company”), certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Roderick K. WestRoderick K. WestChairman of the Board, President, and Chief ExecutiveOfficer of System Energy Resources, Inc.Date: February 21, 2020 Exhibit 32(n)CERTIFICATION PURSUANT TO18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TOSECTION 906 OF THE SARBANES-OXLEY ACT OF 2002I, Andrew S. Marsh, Executive Vice President and Chief Financial Officer of System Energy Resources, Inc. (the “Company”),certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:(1)The Annual Report on Form 10-K of the Company for the year ended December 31, 2019 (the “Report”) fully complieswith the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results ofoperations of the Company as of the dates and for the periods presented in the Report./s/ Andrew S. MarshAndrew S. MarshExecutive Vice President and Chief Financial Officerof System Energy Resources, Inc.Date: February 21, 2020

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