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

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

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

Following are income statement variances for Utility, Entergy Wholesale Commodities, Parent & Other, and Entergy comparing the ~~third~~first quarter ~~2018~~2019 to the ~~third~~first quarter ~~2017~~2018 showing how much the line item increased or (decreased) in comparison to the prior period:

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

First quarter 2019 results of operations includes impairment charges of $74 million ($58 million net-of-tax) and first quarter 2018 results of operations includes impairment charges of $73 million ($58 million net-of-tax) due to costs being charged directly to expense as incurred as a result of the impaired value of the Entergy Wholesale Commodities nuclear plants’ long-lived assets due to the significantly reduced remaining estimated operating lives associated with management’s strategy to ~~reduce the size of~~exit the Entergy Wholesale Commodities’ merchant fleet, a $107 million reduction of income tax expense, recognized by Entergy Wholesale Commodities, as a result of a restructuring of the investment holdings in one of its nuclear plant decommissioning trust funds, and a $23 million reduction of income tax expense, recognized by Entergy Wholesale Commodities, as a result of a state income tax audit.power business. See “~~MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS~~ - Entergy Wholesale Commodities Exit from the Merchant Power Business” below and in the Form 10-K for a discussion of management’s strategy to ~~reduce~~shut down and sell all of the ~~size of the~~remaining plants in Entergy Wholesale Commodities’ merchant nuclear fleet. ~~See Note 10 to the financial statements herein for discussion of the state income tax audit and restructuring of its interest in the decommissioning trust fund.~~

Following is an analysis of the change in net revenue comparing the ~~third~~first quarter ~~2018~~2019 to the ~~third~~first quarter ~~2017:~~2018:

The return of unprotected excess accumulated deferred income taxes to customers resulted from activity in 2019 at the ~~third quarter 2018 at Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy~~Utility operating companies in response to the enactment of the Tax Cuts and Jobs Act. The return of unprotected excess accumulated deferred income taxes began in second quarter 2018. There is no effect on net income as the reductions in net revenue were offset by reductions in income tax expense. ~~Entergy Texas’s proposal for the return of its unprotected excess accumulated deferred income taxes is pending before the PUCT in an unopposed settlement in its base rate case proceeding.~~ See Note 2 to the financial statements ~~herein and~~ in the Form 10-K for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.

The ~~Grand Gulf recovery~~volume/weather variance is primarily due to ~~a reduction in depreciation expense recognized in third quarter 2018 upon FERC approval~~the effect of ~~the settlement in the Unit Power Sales Agreement proceeding, a reduction in income tax expense associated with the reduction in the federal income tax rate in 2018,~~less favorable weather on residential and ~~a reduction in recoverable decommissioning costs, primarily attributable to increased earnings on the decommissioning trust funds. This was~~commercial sales, partially offset by ~~increases~~an increase in ~~other capacity costs. See Note 2 to the financial statements herein for a discussion of the Unit Power Sales Agreement settlement. See Note 3 to the financial statements~~industrial usage. The increase in ~~the Form 10-K for a discussion of the Tax Cut~~industrial usage is primarily driven by continued growth from new and ~~Jobs Act.~~expansion projects and increased demand from existing customers.

The retail electric price variance is primarily due toto:

Following is an analysis of the change in net revenue comparing the ~~third~~first quarter ~~2018~~2019 to the ~~third~~first quarter ~~2017:~~2018:

As shown in the table above, net revenue for Entergy Wholesale Commodities ~~decreased~~increased by ~~$51~~$11 million in the ~~third~~first quarter ~~2018~~2019 as compared to the ~~third~~first quarter ~~2017~~2018 primarily due to ~~lower realized wholesale energy prices, partially offset by~~ higher ~~capacity prices, and lower~~ volume in the Entergy Wholesale Commodities nuclear fleet resulting from ~~more~~fewer non-refueling outage days in the ~~third~~first quarter ~~2018~~2019 as compared to the ~~third~~first quarter ~~2017.~~2018.

Following are key performance measures for Entergy Wholesale Commodities for the ~~third quarter~~first quarters ~~2018~~2019 and ~~2017:~~2018:

Other operation and maintenance expenses ~~increased~~decreased from ~~$584~~$588 million for the ~~third~~first quarter ~~2017~~2018 to ~~$635~~$585 million for the ~~third~~first quarter ~~2018~~2019 primarily due to:

Depreciation and amortization expenses ~~decreased~~increased primarily due to additions to plant in service, partially offset by updated depreciation rates used in calculating Grand Gulf plant depreciation and amortization expenses under the Unit Power Sales Agreement as part of a settlement approved by the FERC in August 2018. See Note 2 to the financial statements ~~herein and~~ in the Form 10-K for further discussion of the Unit Power Sales Agreement.

Other income increased primarily due to ~~changes in decommissioning trust fund investment activity, including portfolio rebalancing of certain of the decommissioning trust funds in the third quarter 2018.~~

Interest expense increased primarily due to an increase ~~of $17 million~~ in ~~severance and retention costs as a result of management’s strategy~~debt outstanding at the Utility operating companies. See Note 5 to ~~reduce~~ the ~~size of the Entergy Wholesale Commodities’ merchant fleet. See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS -~~ ~~Entergy Wholesale Commodities Exit from the Merchant Power Business” below and~~financial statements in the Form 10-K ~~for a discussion of management’s strategy to reduce the size of the Entergy Wholesale Commodities’ merchant fleet.~~

Other income increased primarily due to ~~higher realized~~ gains on ~~the~~ decommissioning trust fund investments in the ~~nine months ended September 30, 2018~~first quarter 2019 as compared to the ~~nine months ended September 30, 2017, including~~first quarter 2018. See Notes 8 and 9 to the ~~effect~~financial statements herein for a discussion of ~~portfolio rebalancing in 2018.~~

Other expenses ~~decreased~~increased primarily due to ~~the absence of decommissioning expense from the FitzPatrick plant after it was sold to Exelon~~an increase in ~~March 2017 and a reduction in deferred~~nuclear refueling outage ~~amortization costs related to the impairments~~expenses as a result of the ~~Indian Point 3, Indian Point 2, and Palisades plants and related assets. See Note 14 to the financial statements in the Form 10-K for discussion~~amortization of ~~the sale of FitzPatrick and impairments and related charges.~~higher costs associated with a refueling outage at Palisades.

The effective income tax rate was ~~(128.4%)~~14.2% for the ~~nine months ended September 30, 2018.~~first quarter 2019. The difference in the effective income tax rate for the ~~nine months ended September 30, 2018~~first quarter 2019 versus the federal statutory rate of 21% was primarily due to amortization of excess accumulated deferred income taxes, ~~a restructuring~~partially offset by the tax effects of the ~~investment holdings in one~~disposition of ~~the Entergy Wholesale Commodities’ nuclear plant decommissioning trusts for which additional tax basis is now recoverable, and an IRS audit settlement for the 2012-2013 tax returns.~~Vermont Yankee. See Notes 2 and 10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act. See Note 10 to the financial statements herein for a discussion of the ~~IRS audit settlement and~~tax effects of the ~~restructuring.~~Vermont Yankee disposition.

The effective income tax rate was ~~(10.8%)~~24.3% for the ~~nine months ended September 30, 2017.~~first quarter 2018. The difference in the effective income tax rate for the ~~nine months ended September 30, 2017~~first quarter 2018 versus the federal statutory rate of ~~35%~~21% was primarily due to state income taxes, a ~~change in the~~write-off of a stock-based compensation deferred tax ~~classification of legal entities that own Entergy Wholesale Commodities nuclear power plants, which resulted in both permanent and temporary differences under the income tax accounting standards~~asset, and the ~~re-determined~~provision for uncertain tax ~~basis of the FitzPatrick plant as a result of its sale on March 31, 2017,~~positions, partially offset by ~~state income taxes. See Note 3~~certain book and tax differences related to utility plant items and book and tax differences related to the ~~financial statements in the Form 10-K~~allowance for ~~further discussion of the change in tax classification and the tax benefit associated with the sale of FitzPatrick.~~equity funds used during construction.

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Income Tax Legislation” in the Form 10-K for a discussion of the Tax Cuts and Jobs Act enacted in December 2017.

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Entergy Wholesale Commodities Exit from the Merchant Power Business” in the Form 10-K for a discussion of management’s strategy to ~~reduce the size of~~shut down and sell all remaining plants in the Entergy Wholesale Commodities’ merchant nuclear fleet. Following are updates to that discussion.

As discussed in more detail in Note 16 to the ~~Form 10-K,~~financial statements herein, in ~~December 2014 the Vermont Yankee plant ceased power production and entered its decommissioning phase, and in November 2016,~~January 2019, Entergy ~~entered into an agreement to sell~~transferred 100% of the membership interests in Entergy Nuclear Vermont Yankee, LLC, the owner of the Vermont Yankee plant, to a subsidiary of NorthStar. ~~In March 2018,~~

As discussed in the Form 10-K, Entergy ~~and NorthStar~~ entered into a ~~settlement~~purchase and sale agreement ~~and a Memorandum~~to sell 100% of ~~Understanding with State~~the equity interests in Entergy Nuclear Generation Company, the owner of ~~Vermont agencies~~Pilgrim, for $1,000 (subject to adjustments for net liabilities and other ~~interested parties that set forth~~amounts). The sale of Entergy Nuclear Generation Company will include the ~~terms on which the agencies and parties support the Vermont Public Utility Commission’s approval~~transfer of the ~~transaction. The agreements provide additional financial assurance~~nuclear decommissioning trust and obligation for ~~decommissioning,~~ spent fuel management and ~~site restoration, and detail~~plant decommissioning. Subject to the ~~site restoration standards that will apply to protect~~conditions discussed in the ~~environment and~~Form 10-K, the ~~health and safety of workers and the public. The provisions of the agreements will become effective upon approval of the~~ transaction ~~by the Vermont Public Utility Commission consistent with the agreements’ terms, the NRC’s approval of the license transfer application, and the closing of the transaction. In October 2018 the~~

In April 2019, Entergy entered into an agreement to sell, directly or indirectly, 100% of the equity interests in the subsidiaries that own Indian Point 1, Indian Point 2, and Indian Point 3, after Indian Point 3 has been shut down and defueled, to a Holtec International subsidiary for decommissioning. The sale includes the transfer of the licenses, spent fuel, decommissioning liabilities, and nuclear decommissioning trusts for the three units.

The transaction is subject to closing conditions, including approval from the NRC. Entergy and Holtec also plan to seek an order from the New York State Public Service Commission disclaiming jurisdiction, or alternatively approving the transaction. Closing is also conditioned on obtaining from the New York State Department of Environmental Conservation an agreement related to Holtec’s decommissioning plan as being consistent with applicable standards. The transaction closing is targeted for third quarter 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 Indian Point transaction is expected to result in a loss based on the difference between Entergy’s adjusted net investment in the subsidiaries at closing and the sale price net of any agreed adjustments. As of March 31, 2019, Entergy’s adjusted net investment in the Indian Point units was $315 million. The primary variables in the ultimate loss that Entergy will incur are the values of the nuclear decommissioning trusts and the asset retirement obligations at closing, the financial results from plant operations until the closing, and the level of unrealized any deferred tax balances at closing. The terms of the transaction include limitations on withdrawals from the nuclear decommissioning trusts to fund decommissioning activities and controls on how Entergy manages the investment of nuclear decommissioning trust assets between signing and closing; however, the agreement does not require a minimum level of funding in the nuclear decommissioning trusts as a condition to closing.

Entergy expects to incur employee retention and severance expenses associated with management’s strategy to reduce the size of the Entergy Wholesale Commodities’ merchant fleet of approximately ~~$155~~$130 million in ~~2018,~~2019, of which ~~$103~~$34 million has been incurred as of ~~September 30, 2018,~~March 31, 2019, and a total of approximately ~~$215~~$110 million from ~~2019~~2020 through ~~mid-2022.~~2022. In addition, Entergy Wholesale Commodities incurred impairment charges related to nuclear fuel spending, nuclear refueling outage spending, and expenditures for capital assets of ~~$155~~$74 million for the three months ended ~~September 30, 2018 and $297 million for the nine months ended September 30, 2018.~~March 31, 2019. These costs were charged to expense as incurred as a result of the impaired value of certain of the Entergy Wholesale Commodities nuclear plants’ long-lived assets due to the significantly reduced remaining estimated operating lives associated with management’s strategy to reduce the size of the Entergy Wholesale Commodities’ merchant fleet. Entergy expects to continue to incur costs associated with nuclear fuel-related spending and expenditures for capital assets and, except for Palisades, expects to continue to charge these costs to expense as incurred because Entergy expects the value of the plants to continue to be impaired.

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

Entergy’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for Entergy as of ~~September 30, 2018~~March 31, 2019 is primarily due to the net issuance of debt in ~~2018.~~2019.

Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in September 2023. The facility includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the credit facility. The commitment fee is currently 0.225% of the undrawn commitment amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation. The weighted average interest rate for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 was ~~3.46%~~4.03% on the drawn portion of the facility. Following is a summary of the borrowings outstanding and capacity available under the facility as of ~~September 30, 2018:~~March 31, 2019:

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

In ~~June 2018,~~January 2019, Entergy ~~marketed~~Nuclear Vermont Yankee was transferred to NorthStar and its credit facility was assumed by Vermont Yankee Asset Retirement Management, LLC, Entergy Nuclear Vermont Yankee’s parent company that remains an ~~equity offering~~Entergy subsidiary after the transfer. The credit facility has a borrowing capacity of ~~15.3~~$139 million ~~shares~~and expires in November 2020. As of ~~common stock. In lieu of issuing equity at~~March 31, 2019, $139 million in cash borrowings were outstanding under the ~~time~~credit facility. The weighted average interest rate for the three months ended March 31, 2019 was 4.28% on the drawn portion of the ~~offering, Entergy entered into forward sale agreements with several counterparties. Settlement of the forward sale agreements is expected to occur on or prior to June 7, 2019.~~facility. See Note 314 to the financial statements in the Form 10-K and Note 16 to the financial statements herein for discussion of the ~~equity forwards.~~transfer of Entergy Nuclear Vermont Yankee to NorthStar.

See the table and discussion in the Form 10-K under “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Liquidity and Capital Resources - Capital Expenditure Plans and Other Uses of Capital,” that sets forth the amounts of planned construction and other capital investments by operating segment for ~~2018~~2019 through ~~2020.~~2021. Following are updates to ~~the~~that discussion.

In August 2018, Entergy Mississippi announced that it signed an asset purchase agreement to acquire from a subsidiary of GenOn Energy Inc. the Choctaw Generating Station, an 810 MW natural gas fired combined-cycle turbine plant located near French Camp, Mississippi. The purchase price is expected to be approximately $314 million. Entergy Mississippi also expects to invest in various plant upgrades at the facility after closing and expects the total cost of the acquisition to be approximately $401 million. The purchase is contingent upon, among other things, obtaining necessary approvals, including full cost recovery, from applicable federal and state regulatory and permitting agencies. These include regulatory approvals from the MPSC and the ~~FERC, as well as clearance~~FERC. Clearance under the Hart-Scott-Rodino Antitrust Improvements ~~Act.~~Act has occurred. In October 2018, Entergy Mississippi filed an application with the MPSC seeking approval of the acquisition and cost recovery. In a separate filing in October 2018, Entergy Mississippi proposed revisions to its formula rate plan that would provide for a mechanism, the interim capacity rate adjustment mechanism, in the formula rate plan to recover the non-fuel related costs of additional owned capacity acquired by Entergy Mississippi, including the non-fuel annual ownership costs of the Choctaw Generating Station, as well as to allow similar cost recovery treatment for other future capacity additions approved by the MPSC. Closing is expected to occur by the end of 2019. Due diligence performed on the plant indicates that there exists a potential mechanical issue that must be addressed prior to closing. There is some possibility that closing may be delayed to allow time for this issue to be resolved.

Declarations of dividends on Entergy’s common stock are made at the discretion of the Board. Among other things, the Board evaluates the level of Entergy’s common stock dividends based upon earnings per share from the Utility operating segment and the Parent and Other portion of the business, financial strength, and future investment opportunities. At its ~~October 2018~~April 2019 meeting, the Board declared a dividend of $0.91 per share, ~~an increase from~~which is the ~~previous $0.89~~same quarterly dividend per share that Entergy has paid since the ~~fourth~~third quarter ~~2017.~~2018.

As shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~ were as follows:

Net cash flow provided by operating activities ~~increased~~decreased by ~~$147~~$56 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to:

Net cash flow used in investing activities ~~increased $172~~decreased $23 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to:

Net cash flow provided by financing activities increased ~~$874~~$111 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to a decrease in net repayments of $812 million of commercial paper in 2019. The increase was partially offset by:

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

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

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

As a wholesale generator, Entergy Wholesale Commodities’ core business is selling energy, measured in MWh, to its customers. Entergy Wholesale Commodities enters into forward contracts with its customers and also sells energy in the day ahead or spot markets. Entergy Wholesale Commodities also sells unforced capacity, which allows load-serving entities to meet specified reserve and related requirements placed on them by the ISOs in their respective areas. Entergy Wholesale Commodities’ forward physical power contracts consist of contracts to sell energy only, contracts to sell capacity only, and bundled contracts in which it sells both capacity and energy. While the terminology and payment mechanics vary in these contracts, each of these types of contracts requires Entergy Wholesale Commodities to deliver MWh of energy, make capacity available, or both. In addition to its forward physical power contracts, Entergy Wholesale Commodities may also use a combination of financial contracts, including swaps, collars, and options, to manage forward commodity price risk. Certain hedge volumes have price downside and upside relative to market price movement. The contracted minimum, expected value, and sensitivities are provided in the table below to show potential variations. The sensitivities may not reflect the total maximum upside potential from higher market prices. The information contained in the following table represents projections at a point in time and will vary over time based on numerous factors, such as future market prices, contracting activities, and generation. Following is a summary of Entergy Wholesale Commodities’ current forward capacity and generation contracts as well as total revenue projections based on market prices as of ~~September 30, 2018 (2018~~March 31, 2019 (2019 represents the remainder of the year):

Entergy estimates that a positive $10 per MWh change in the annual average energy price in the markets in which the Entergy Wholesale Commodities nuclear business sells power, based on ~~September 30, 2018~~March 31, 2019 market conditions, planned generation volumes, and hedged positions, would have a corresponding effect on pre-tax income of ~~($1)~~$4 million for the remainder of ~~2018.~~2019. As of ~~September 30, 2017,~~March 31, 2018, a positive $10 per ~~MWh~~MW change would have had a corresponding effect on pre-tax income of $9$1.4 million for the remainder of ~~2017.~~2018. A negative $10 per MWh change in the annual average energy price in the markets based on ~~September 30, 2018~~March 31, 2019 market conditions, planned generation volumes, and hedged positions, would have a corresponding effect on pre-tax income of $1($4) million for the remainder of ~~2018.~~2019. As of ~~September 30, 2017,~~March 31, 2018, a negative $10 per ~~MWh~~MW change would have had a corresponding effect on pre-tax income of ($9)1.4) million for the remainder of ~~2017.~~2018.

Some of the agreements to sell the power produced by Entergy Wholesale Commodities’ power plants contain provisions that require an Entergy subsidiary to provide credit support to secure its obligations under the agreements. The Entergy subsidiary is required to provide credit support based upon the difference between the current market prices and contracted power prices in the regions where Entergy Wholesale Commodities sells power. The primary form of credit support to satisfy these requirements is an Entergy Corporation ~~guaranty.~~guarantee. Cash and letters of credit are also acceptable forms of credit support. At ~~September 30, 2018,~~March 31, 2019, based on power prices at that time, Entergy had liquidity exposure of ~~$131~~$121 million under the guarantees in place supporting Entergy Wholesale Commodities transactions and ~~$42~~$34 million of posted cash collateral. In the event of a decrease in Entergy Corporation’s credit rating to below investment grade, based on power prices as of ~~September 30, 2018,~~March 31, 2019, Entergy would have been required to provide approximately ~~$78~~$75 million of additional cash or letters of credit under some of the agreements. As of ~~September 30, 2018,~~March 31, 2019, the liquidity exposure associated with Entergy Wholesale Commodities assurance requirements, including return of previously posted collateral from counterparties, would increase by ~~$307~~$235 million for a $1 per MMBtu increase in gas prices in both the short- and long-term markets.

As of ~~September 30, 2018,~~March 31, 2019, substantially all of the credit exposure associated with the planned energy output under contract for Entergy Wholesale Commodities nuclear plants through 2022 is with counterparties or their guarantors that have public investment grade credit ratings.

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

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

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

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

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

See Note 8 to the financial statements in the Form 10-K for a discussion of the ANO stator incident, subsequent NRC reviews, and the deferral of replacement power costs. In June 2018 the NRC moved ANO 1 and ANO 2 into the “licensee response column,” or Column 1, of the NRC’s Reactor Oversight Process Action Matrix. This action followed NRC inspections to review ANO 1’s and ANO 2’s performance in addressing issues that had previously resulted in classification in Column 4.

See Note 8 to the financial statements in the Form 10-K for a discussion of the NRC’s enhanced inspections of Pilgrim and Entergy’s planned shutdown of Pilgrim on May 31, 2019. In March 2019 the NRC moved Pilgrim from its “multiple/repetitive degraded cornerstone column,” or Column 4, of its Reactor Oversight Process Action Matrix to its “licensee response column,” or Column 1.

See Note 8 to the financial statements in the Form 10-K for information on Entergy’s spent nuclear fuel litigation. In September 2018 the DOE submitted an offer of judgment to resolve claims in the second round Entergy Nuclear Generation Company case involving Pilgrim. The $62 million offer was accepted by Entergy Nuclear Generation Company, and the U.S. Court of Federal 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.

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

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

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

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

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

~~Entergy Arkansas~~

~~See~~In July 2014 the ~~Form 10-K for~~LPSC authorized its staff to initiate an audit of Entergy Louisiana’s fuel adjustment clause filings. The audit includes a ~~discussion~~review of the ~~activity~~reasonableness of charges flowed by Entergy Louisiana through its fuel adjustment clause for the period from 2010 through 2013. In January 2019 the LPSC ~~and Entergy Louisiana after enactment of the Tax Act in December 2017.~~staff consultant issued its audit report. In ~~July 2018~~its report, the LPSC issued a proposed rule requiring utilities to adjust rates prospectively to reflect the lower tax rate (either through a formula rate plan or rate case), refund excess tax expense collected since January 1, 2018 until the lower tax rate is reflected in rates (with the refund occurring over one year), and refund excess accumulated deferred income taxes over two years. Entergy Louisiana believes that its formula rate plan settlement, approved in April 2018 and discussed below, addresses fully its obligations regarding the Tax Act and will seek such confirmation in its comments to the proposed rule.

As discussed in the Form 10-K, the Mississippi Attorney General filed a complaint in state court in December 2008 against Entergy Corporation, Entergy Mississippi, Entergy Services, and Entergy Power alleging, among other things, violations of Mississippi statutes, fraud, and breach of good faith and fair dealing, and requesting an accounting and restitution. The defendants have denied the allegations. In June 2017 the District Court issued a case management order setting a trial date in November 2018. Discovery ended in May 2018. In June 2018, Entergy filed motions for summary judgment, which are currently pending before the District Court. In July 2018 the Attorney General filed briefs opposing the summary judgment.

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately ~~1.1~~0.7 million for the three months ended ~~September 30, 2018~~March 31, 2019 and approximately ~~2.5~~4 million for the three months ended ~~September 30, 2017.~~

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

Dividends declared per common share were $0.91 for the three months ended March 31, 2019 and $0.89 for the three months ended ~~September 30, 2018~~March 31, 2018.

InAs discussed in Note 7 to the financial statements in the Form 10-K, in June 2018, Entergy 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 various investment banks. No

Until settlement of the remaining equity forwards, earnings per share dilution resulting from the agreements, if any, will be determined under the treasury stock method. Share dilution occurs when the average market price of Entergy’s common stock is higher than the average forward sales price. If Entergy had elected to net share settle the forward sale agreements as of ~~September 30, 2018,~~March 31, 2019, Entergy would have been required to deliver ~~1.4~~2.0 million shares.

During the ~~nine~~three months ended ~~September 30, 2018,~~March 31, 2019, Entergy Corporation issued ~~613,662~~860,093 shares of its previously repurchased common stock to satisfy stock option exercises, vesting of shares of restricted stock, and other stock-based awards. Entergy Corporation did not repurchase any of its common stock during the ~~nine~~three months ended ~~September 30, 2018.~~March 31, 2019.

On ~~October 26, 2018,~~April 3, 2019, Entergy Corporation’s Board of Directors declared a common stock dividend of $0.91 per share, payable on ~~December~~June 3, ~~2018,~~2019, to holders of record as of ~~November 8, 2018.~~May 9, 2019.

Entergy implemented ASU No. ~~2016-01 “Financial Instruments (Subtopic 825-10)~~2017-12 “Derivatives and Hedging (Topic 815): ~~Recognition and Measurement of Financial Assets and Financial Liabilities”~~Targeted Improvements to Accounting for Hedging Activities” effective January 1, ~~2018.~~2019. The ASU ~~requires investments in equity securities, excluding those accounted for under~~makes a number of amendments to hedge accounting, most significantly changing the ~~equity method or resulting in consolidation~~recognition and presentation of ~~the investee, to be measured at fair value with changes recognized in net income.~~highly effective hedges. Entergy implemented this standard using a modified retrospective method, and recorded an adjustment increasing retained earnings and ~~reducing~~increasing accumulated other comprehensive ~~income~~loss by ~~$633~~approximately $8 million as of January 1, ~~2018~~2019 for the cumulative effect of the ~~unrealized gains and losses~~ineffectiveness portion of designated hedges on investments in equity securities held by the decommissioning trust funds that do not meet the criteria for regulatory accounting treatment. See Note 9 to the financial statements herein for further discussion of effects of the new standard.nuclear power sales.

Entergy implemented ASU ~~No. 2016-16, “Income Taxes~~2017-08 “Receivables (Topic ~~740)~~310): ~~Intra-Entity Transfers of Assets~~Nonrefundable Fees and Other ~~Than Inventory”~~Costs” effective January 1, ~~2018.~~2019. The ASU ~~requires entities~~amends the amortization period for certain purchased callable debt securities held at a premium to ~~recognize~~ the ~~income tax consequences of intra-entity asset transfers, other than inventory, at the time the transfer occurs.~~earliest call date. Entergy implemented this standard using athe modified retrospective ~~method,~~approach, and recorded an adjustment decreasing retained earnings and decreasing accumulated other comprehensive loss by ~~$56~~approximately $1 million as of January 1, ~~2018~~2019 for the cumulative effect of ~~recording deferred tax assets on previously-recognized intra-entity asset transfers.~~

Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy and Entergy Louisiana. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended ~~September 30, 2018~~March 31, 2019 by component:

The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended ~~September 30, 2017 by component:~~

The following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the three months ended ~~September 30, 2018~~March 31, 2019 and ~~2017:~~2018:

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy Louisiana for the three months ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~ are as follows:

Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in September 2023. The facility includes fronting commitments for the issuance of letters of credit against $20 million of the total borrowing capacity of the credit facility. The commitment fee is currently 0.225% of the undrawn commitment amount. Commitment fees and interest rates on loans under the credit facility can fluctuate depending on the senior unsecured debt ratings of Entergy Corporation. The weighted average interest rate for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 was ~~3.46%~~4.03% on the drawn portion of the facility. Following is a summary of the borrowings outstanding and capacity available under the facility as of ~~September 30, 2018.~~

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

Entergy Corporation has a commercial paper program with a Board-approved program limit of up to $2 billion. At ~~September 30, 2018,~~March 31, 2019, Entergy Corporation had approximately ~~$1,947~~$1,942 million of commercial paper outstanding. The weighted-average interest rate for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 was ~~2.42%~~3.03%.

Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each had credit facilities available as of ~~September 30, 2018~~March 31, 2019 as follows:

In addition, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas each entered into uncommitted standby letter of credit facilities as a means to post collateral to support its obligations to MISO. Following is a summary of the uncommitted standby letter of credit facilities as of ~~September 30, 2018:~~

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, 2019. The current FERC-

In January 2019, Entergy Nuclear Vermont Yankee ~~Credit Facility~~

See Note 17 to the financial statements in the Form 10-K for a discussion of the consolidation of the nuclear fuel company variable interest entities (VIEs). To finance the acquisition and ownership of nuclear fuel, the nuclear fuel company VIEs have credit facilities and three of the four VIEs ~~also issued~~have commercial paper programs in place. Following is a summary as of ~~September 30, 2018~~March 31, 2019 as follows:

The commitment fees on the credit facilities are 0.10% of the undrawn commitment amount for the Entergy Arkansas, Entergy Louisiana, and System Energy VIEs. Each credit facility requires the respective lessee of nuclear fuel (Entergy Arkansas, Entergy Louisiana, or Entergy Corporation as guarantor for System Energy) to maintain a consolidated debt ratio, as defined, of 70% or less of its total capitalization.

The nuclear fuel company variable interest entities had notes payable that are included in debt on the respective balance sheets as of ~~September 30, 2018~~March 31, 2019 as follows:

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

In ~~May 2018,~~March 2019, Entergy Arkansas issued ~~$250~~$350 million of ~~4.00%~~4.20% Series first mortgage bonds due ~~June 2028.~~April 2049. Entergy Arkansas expects to use the proceeds ~~together with other funds, to redeem $9.35 million of its 4.72% Series preferred stock, $7 million of its 4.32% Series preferred stock, and $15 million of its 4.56% Series preferred stock, and~~ for general corporate purposes.

In March ~~2018,~~2019, Entergy Louisiana issued ~~$750~~$525 million of ~~4.00%~~4.20% Series collateral trust mortgage bonds due ~~March 2033.~~April 2050. Entergy Louisiana expects to use the proceeds, together with other funds, to finance the construction of the Lake Charles Power Station and the St. Charles Power Station, and for general corporate purposes.

In January 2019, Entergy Texas issued $300 million of 4.0% Series first mortgage bonds due March 2029 and $400 million of 4.5% Series first mortgage bonds due March 2039. Entergy Texas used ~~a portion of~~ the proceeds to repay, at maturity, its ~~$375~~$500 million of ~~6.0%~~7.125% Series first mortgage bonds due ~~May 2018;~~February 2019, and for general corporate purposes.

In March 2019, System Energy issued $134 million of 2.50% Series 2019 revenue refunding bonds due April 2022. The proceeds were used to ~~repay borrowings from the money pool; and~~redeem, prior to ~~repay borrowings under its $350~~maturity, $134 million of 5.875% Series 1998 pollution control revenue refunding bonds due April 2022.

The book value and the fair value of long-term debt for Entergy Corporation and the Registrant Subsidiaries as of ~~September 30, 2018~~March 31, 2019 are as follows:

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

Entergy granted options on ~~687,400~~693,161 shares of its common stock under the 2015 Equity Ownership Plan during the first quarter ~~2018~~2019 with a fair value of ~~$6.99~~$8.32 per option. As of ~~September 30, 2018,~~March 31, 2019, there were options on ~~4,071,301~~3,210,237 shares of common stock outstanding with a weighted-average exercise price of ~~$74.53.~~$78.25. The intrinsic value, which has no effect on net income, of the outstanding stock options is calculated by the positive difference between the weighted average exercise price of the stock options granted and Entergy Corporation’s common stock price as of ~~September 30, 2018.~~March 31, 2019. The aggregate intrinsic value of the stock options outstanding as of ~~September 30, 2018~~March 31, 2019 was ~~$26.9~~$55.8 million.

The following table includes financial information for outstanding stock options for the three months ended ~~September 30, 2018~~March 31, 2019 and ~~2017:~~2018:

In January ~~2018~~2019 the Board approved and Entergy granted ~~333,850~~355,537 restricted stock awards and ~~182,408~~180,824 long-term incentive awards under the 2015 Equity Ownership Plan. The restricted stock awards were made effective as of January ~~25, 2018~~31, 2019 and were valued at ~~$78.08~~$89.19 per share, which was the closing price of Entergy’s common stock on that date. One-third of the restricted stock awards will vest upon each anniversary of the grant date. Shares of restricted stock have the same dividend and voting rights as other common stock, are considered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the three-year vesting period.

In addition, long-term incentive awards were also granted in the form of performance units that represent the value of, and are settled with, one share of Entergy Corporation common stock at the end of the three-year performance period, plus dividends accrued during the performance period on the number of performance units earned. For the ~~2018-2020~~2019-2021 performance period, ~~a cumulative utility earnings metric was added to the Long-Term Performance Unit Program to supplement the~~performance will be measured based eighty percent on relative total shareholder return ~~measure that historically has been used in this program with each measure equally weighted.~~and twenty percent on a cumulative adjusted earnings per share metric. The performance units were granted ~~effective~~ as of January ~~25, 2018~~31, 2019 and ~~half~~eighty percent were valued at ~~$78.08~~$102.07 per share based on various factors, primarily market conditions; and twenty percent were valued at $89.19 per share, the closing price of Entergy’s common stock on that ~~date;~~date. Performance units have the same dividend rights as shares of Entergy common stock and ~~half were valued at $86.75~~are considered issued and outstanding shares of Entergy upon vesting. Performance units are expensed ratably over the three-year vesting period and compensation cost for the portion of the award based on cumulative adjusted earnings per share will be adjusted based on ~~various factors, primarily market conditions.~~the number of units that ultimately vest. See Note 12 to the financial statements in the Form 10-K for a description of the Long-Term Performance Unit Program. Shares of restricted stock have the same dividend and voting rights as other common stock, are considered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the 3-year vesting period. Performance units have the same dividend rights as shares of Entergy common stock, are considered issued and outstanding shares of Entergy upon vesting, and are expensed ratably over the 3-year vesting period.

The following table includes financial information for other outstanding equity awards for the three months ended ~~September 30, 2018~~March 31, 2019 and ~~2017:~~2018:

Entergy’s qualified pension cost, including amounts capitalized, for the ~~third~~first quarters of ~~2018~~2019 and ~~2017,~~2018, included the following components:

The Registrant Subsidiaries’ qualified pension cost, including amounts capitalized, for their employees for the ~~third~~first quarters of ~~2018~~2019 and ~~2017,~~2018, included the following components:

Entergy recognized ~~$4.2~~$4 million and ~~$15.8~~$8.9 million in pension cost for its non-qualified pension plans in the ~~third~~first quarters of ~~2018~~2019 and ~~2017,~~2018, respectively. Reflected in the pension cost for non-qualified pension plans in the ~~third quarters~~first quarter of 2018 ~~and 2017~~ were settlement charges of ~~$212 thousand and $11.6~~$4.4 million respectively, related to the payment of lump sum benefits out of the plan. Entergy recognized $19.7 million and $28.9 million in pension cost for its non-qualified pension plans for the nine months ended September 30, 2018 and 2017, respectively. Reflected in the pension cost for non-qualified pension plans for the nine months ended September 30, 2018 and 2017 were settlement charges of $7 million and $15.5 million, respectively, related to the payment of lump sum benefits out of this plan.

The Registrant Subsidiaries recognized the following pension cost for their employees for their non-qualified pension plans for the ~~nine months ended September 30, 2018~~first quarters of 2019 and ~~2017:~~2018:

Reflected in Entergy Arkansas’s non-qualified pension costs ~~for~~in the ~~nine months ended September 30, 2018 and 2017, were settlement charges~~first quarter of $30 thousand and $173 thousand, respectively, related to the payment of lump sum benefits out of the plan. Reflected in Entergy Texas’s non-qualified pension costs for the nine months ended September 30, 2018 were settlement charges of ~~$139~~$12 thousand related to the payment of lump sum benefits out of the plan.

Entergy’s other postretirement benefit cost, including amounts capitalized, for the ~~third~~first quarters of ~~2018~~2019 and ~~2017,~~2018, included the following components:

The Registrant Subsidiaries’ other postretirement benefit cost, including amounts capitalized, for their employees for ~~the third~~first quarters of ~~2018~~2019 and ~~2017,~~2018, included the following components:

Entergy and Entergy Louisiana reclassified the following costs out of accumulated other comprehensive income (loss) (before taxes and including amounts capitalized) for the ~~third~~first quarters of ~~2018~~2019 and ~~2017:~~2018:

Based on current assumptions, Entergy expects to contribute ~~$383.5~~$176.9 million to its qualified pension plans in ~~2018.~~2019. As of ~~September 30, 2018,~~March 31, 2019, Entergy had contributed ~~$315.6~~$11.7 million to its pension plans. Based on current assumptions, the Registrant Subsidiaries expect to contribute the following to qualified pension plans for their employees in ~~2018:~~2019:

Entergy’s reportable segments as of ~~September 30, 2018~~March 31, 2019 are Utility and Entergy Wholesale Commodities. Utility includes the generation, transmission, distribution, and sale of electric power in portions of Arkansas, Louisiana, Mississippi, and Texas, and ~~Louisiana, including the City of New Orleans; and operation of a small~~ natural gas ~~distribution business.~~utility service in portions of Louisiana. Entergy Wholesale Commodities includes the ownership, operation, and decommissioning of nuclear power plants located in the northern United States and the sale of the electric power produced by its operating plants to wholesale customers. Entergy Wholesale Commodities also ~~provides services to other nuclear power plant owners and owns~~includes the ownership of interests in non-nuclear power plants that sell the electric power produced by those plants to wholesale customers. “All Other” includes the parent company, Entergy Corporation, and other business activity.

As discussed in Note 13 to the financial statements in the Form 10-K, Entergy management has undertaken a strategy to manage and reduce the risk of the Entergy Wholesale Commodities business, which includes taking actions to ~~reduce the size~~shut down and sell all of the remaining plants in the merchant nuclear fleet. These decisions and transactions resulted in asset impairments; employee retention and severance expenses and other benefits-related costs; and contracted economic development contributions.

Total restructuring charges for the ~~third~~first quarters of ~~2018~~2019 and ~~2017~~2018 were comprised of the following:

Going forward, Entergy Wholesale Commodities expects to incur employee retention and severance expenses associated with management’s strategy to ~~reduce~~exit the ~~size of the Entergy Wholesale Commodities’~~ merchant ~~fleet~~power business of approximately ~~$155~~$130 million in ~~2018,~~2019, of which ~~$103~~$34 million has been incurred as of ~~September 30, 2018,~~March 31, 2019, and a total of approximately ~~$215~~$110 million from ~~2019~~2020 through mid-2022.

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

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

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

As a wholesale generator, Entergy Wholesale Commodities’ core business is selling energy, measured in MWh, to its customers. Entergy Wholesale Commodities enters into forward contracts with its customers and also sells energy and capacity in the day ahead or spot markets. In addition to its forward physical power and gas contracts, Entergy Wholesale Commodities also uses a combination of financial contracts, including swaps, collars, and options, to mitigate commodity price risk. When the market price falls, the combination of instruments is expected to settle in gains that offset lower revenue from generation, which results in a more predictable cash flow.

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

Some derivative instruments are classified as cash flow hedges due to their financial settlement provisions

Entergy enters into derivatives to manage natural risks inherent in its physical or financial assets or liabilities. Electricity over-the-counter instruments and futures contracts that financially settle against day-ahead power pool prices are used to manage price exposure for Entergy Wholesale Commodities generation. The maximum length of time over which Entergy Wholesale Commodities is currently hedging the variability in future cash flows with derivatives for forecasted power transactions at ~~September 30, 2018~~March 31, 2019 is approximately ~~2.5~~2 years. Planned generation currently under contract from Entergy Wholesale Commodities nuclear power plants is 98% for the remainder of ~~2018,~~2019, of which approximately ~~87%~~72% is sold under financial derivatives and the remainder under normal purchase/normal sale contracts. Total planned generation for the remainder of ~~2018~~2019 is ~~6.7~~18.6 TWh.

Entergy may use standardized master netting agreements to help mitigate the credit risk of derivative instruments. These master agreements facilitate the netting of cash flows associated with a single counterparty and may include collateral requirements. Cash, letters of credit, and parental/affiliate guarantees may be obtained as security from counterparties in order to mitigate credit risk. The collateral agreements require a counterparty to post cash or letters of credit in the event an exposure exceeds an established threshold. The threshold represents an unsecured credit limit, which may be supported by a parental/affiliate ~~guaranty,~~guarantee, as determined in accordance with Entergy’s credit policy. In addition, collateral agreements allow for termination and liquidation of all positions in the event of a failure or inability to post collateral.

Certain of the agreements to sell the power produced by Entergy Wholesale Commodities power plants contain provisions that require an Entergy subsidiary to provide credit support to secure its obligations depending on the mark-to-market values of the contracts. The primary form of credit support to satisfy these requirements is an Entergy Corporation guarantee. As of ~~September 30, 2018,~~March 31, 2019, derivative contracts with seven counterparties were in a liability position (approximately ~~$68~~$49 million total). In addition to the corporate guarantee, ~~$30~~$19 million in cash collateral ~~was required to be posted by the Entergy subsidiary to its counterparties. As of December 31, 2017, derivative contracts with eight counterparties~~ were ~~in a liability position (approximately $65 million total). In addition to the corporate guarantee, $1 million in cash collateral was~~ required to be posted by the Entergy subsidiary to its counterparties and $4$1 million in cash ~~collateral~~ and ~~$34~~$4 million in letters of credit were required to be posted by its counterparties to the Entergy subsidiary. As of December 31, 2018, derivative contracts with six counterparties were in a liability position (approximately $34 million total). In addition to the corporate guarantee, $19 million in cash collateral was required to be posted by the Entergy subsidiary to its counterparties. If the Entergy Corporation credit rating falls below investment 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 Entergy Mississippi through the purchase of ~~short-term~~ natural gas swaps and options that financially settle against either the average Henry Hub Gas Daily prices or the NYMEX ~~futures.~~Henry Hub. These swaps and options are marked-to-market through fuel expense with offsetting regulatory assets or liabilities. All benefits or costs of the program are recorded in fuel costs. The notional volumes of these swaps are based on a portion of projected annual exposure to gas price volatility for electric generation at Entergy Louisiana and Entergy Mississippi and projected winter purchases for gas distribution at Entergy New Orleans. The maximum length of time over which Entergy has executed natural gas swaps and options as of March 31, 2019 is 5 years for Entergy Louisiana and the maximum length of time over which Entergy ~~New Orleans.~~has executed natural gas swaps as of March 31, 2019 is 7 months for Entergy Mississippi. The total volume of natural gas swaps and options outstanding as of ~~September 30, 2018~~March 31, 2019 is ~~13,814,000~~45,740,000 MMBtu for Entergy, including ~~6,300,000~~36,540,000 MMBtu for Entergy Louisiana ~~6,790,000~~and 9,200,000 MMBtu for Entergy ~~Mississippi, and 724,000 MMBtu for Entergy New Orleans.~~Mississippi. Credit support for these natural gas swaps and options is covered by master agreements that do not require Entergy to provide collateral based on mark-to-market value, but do carry adequate assurance language that may lead to requests for collateral.

During the second quarter 2018, Entergy participated in the annual financial transmission rights auction process for the MISO planning year of June 1, 2018 through May 31, 2019. Financial transmission rights are derivative instruments which represent economic hedges of future congestion charges that will be incurred in serving Entergy’s customer load. They are not designated as hedging instruments. Entergy initially records financial transmission rights at their estimated fair value and subsequently adjusts the carrying value to their estimated fair value at the end of each

The fair values of Entergy’s derivative instruments in the consolidated balance sheet as of ~~September 30,~~March 31, 2019 are shown in the table below. Certain investments, including those not designated as hedging instruments, are subject to master netting agreements and are presented in the balance sheet on a net basis in accordance with accounting guidance for derivatives and hedging.

The fair values of Entergy’s derivative instruments in the consolidated balance sheet as of December 31, 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 for derivatives and hedging.

The effects of Entergy’s derivative instruments designated as cash flow hedges on the consolidated income statements for the three months ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~ are as follows:

~~At each reporting period,~~Prior to the adoption of ASU 2017-12, Entergy ~~measures~~measured its hedges for ineffectiveness. Any ineffectiveness iswas recognized in earnings during the period. The ineffective portion of cash flow hedges iswas recorded in competitive ~~business~~businesses operating revenues. The change in fair value of Entergy’s cash flow hedges due to ineffectiveness during the three months ended ~~September 30,~~March 31, 2018 ~~and 2017~~ was ($3.1) million and $2.4 million, respectively. The change in fair value of Entergy’s cash flow hedges due to ineffectiveness during the nine months ended September 30, 2018 and 2017 was ($5.2) million and $6.4 million, respectively.

Based on market prices as of ~~September 30, 2018,~~March 31, 2019, unrealized gains (losses) recorded in accumulated other comprehensive income on cash flow hedges relating to power sales totaled ($~~58)~~53) million of net unrealized losses. Approximately ($~~47)~~39) million is expected to be reclassified from accumulated other comprehensive income to operating revenues in the next twelve months. The actual amount reclassified from 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 continue to be deferred in other comprehensive income until they are included in income as the original hedged transaction occurs. From the point of de-designation, the gains or losses on the original hedge and the offsetting contract are recorded as assets or liabilities on the balance sheet and offset as they flow through to earnings.

The effects of Entergy’s derivative instruments not designated as hedging instruments on the consolidated income statements for the ~~nine~~three months ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~ are as follows:

The fair values of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their balance sheets as of ~~September 30, 2018~~March 31, 2019 are shown in the table below. Certain investments are subject to master netting agreements and are presented on the balance sheets on a net basis in accordance with accounting guidance for derivatives and hedging.

The fair values of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their balance sheets as of December 31, ~~2017~~2018 are as follows:

The effects of the Registrant Subsidiaries’ derivative instruments not designated as hedging instruments on their income statements for the ~~nine~~three months ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~ are as follows:

The estimated fair values of Entergy’s financial instruments and derivatives are determined using historical prices, bid prices, market quotes, and financial modeling. Considerable judgment is required in developing the estimates

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

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

The three levels of the fair value hierarchy are:

The values for power contract assets or liabilities are based on both observable inputs including public market prices and interest rates, and unobservable inputs such as implied volatilities, unit contingent discounts, expected basis differences, and credit adjusted counterparty interest rates. They are classified as Level 3 assets and liabilities. The valuations of these assets and liabilities are performed by the Business Unit Risk Control group and the Accounting Policy and Entergy Wholesale Commodities Accounting group. The primary functions of the Business Unit Risk Control group include: gathering, validating and reporting market data, providing market risk analyses and valuations

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

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

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

The values of financial transmission rights are based on unobservable inputs, including estimates of congestion costs in MISO between applicable generation and load pricing nodes based on the 50th percentile of historical prices. They are classified as Level 3 assets and liabilities. The valuations of these assets and liabilities are performed by the Business Unit Risk Control group. The values are calculated internally and verified against the data published by MISO. Entergy’s Accounting Policy and Entergy Wholesale Commodities Accounting ~~group reviews~~groups review these valuations for reasonableness, with the assistance of others within the organization with knowledge of the various inputs and assumptions used in the valuation. The Business Unit Risk Control groups report to the Vice President and Treasurer. The Accounting Policy and Entergy Wholesale Commodities Accounting ~~group reports~~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 fair value on a recurring basis as of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017.~~2018. The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels.

The following table sets forth a reconciliation of changes in the net assets (liabilities) for the fair value of derivatives classified as Level 3 in the fair value hierarchy for the three months ended ~~September 30, 2018~~March 31, 2019 and ~~2017:~~2018:

The following table sets forth a description of the types of transactions classified as Level 3 in the fair value hierarchy and significant unobservable inputs to each which cause that classification as of ~~September 30, 2018:~~March 31, 2019:

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

The following table sets forth, by level within the fair value hierarchy, the Registrant Subsidiaries’ assets and liabilities that are accounted for at fair value on a recurring basis as of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017.~~2018. The assessment of the significance of a particular input to a fair value measurement requires judgment and may affect its placement within the fair value hierarchy levels.

The following table sets forth a reconciliation of changes in the net assets (liabilities) for the fair value of derivatives classified as Level 3 in the fair value hierarchy for the three months ended March 31, 2019.

The following table sets forth a reconciliation of changes in the net assets (liabilities) for the fair value of derivatives classified as Level 3 in the fair value hierarchy for the three months ended March 31, 2018.

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, Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, and Palisades. Entergy’s nuclear decommissioning trust funds invest in equity securities, fixed-rate debt securities, and cash and cash equivalents.

As discussed in Note 16 to the financial statements herein and Note 14 to the financial statements in the Form 10-K, in January 2019, Entergy completed the transfer of the Vermont Yankee plant to NorthStar. As part of the transaction, Entergy transferred the Vermont Yankee decommissioning trust fund to NorthStar. As of December 31, 2018, the value of the decommissioning trust fund was $532 million.

Entergy records decommissioning trust funds on the balance sheet at their fair value. Because of the ability of the Registrant Subsidiaries to recover decommissioning costs in rates and in accordance with the regulatory treatment for decommissioning trust funds, the Registrant Subsidiaries have recorded an offsetting amount of unrealized gains/(losses) on investment securities in other regulatory liabilities/assets. For the 30% interest in River Bend formerly owned by Cajun, Entergy Louisiana records an offsetting amount in other deferred credits for the unrealized trust earnings not currently expected to be needed to decommission the plant. Decommissioning trust funds for Pilgrim, Indian Point 1, Indian Point 2, Indian Point 3, and Palisades do not meet the criteria for regulatory accounting treatment. Accordingly, unrealized gains/(losses) recorded on the equity securities in the trust funds are recognized in earnings. Unrealized gains recorded on the available-for-sale debt securities in the trust funds are recognized in the accumulated other comprehensive income component of shareholders’ equity. Unrealized losses (where cost exceeds fair market value) on the available-for-sale debt securities in the trust funds are also recorded in the accumulated other comprehensive income component of shareholders’ equity unless the unrealized loss is other than temporary and therefore recorded in earnings. A portion of Entergy’s decommissioning trust funds are held in a wholly-owned registered investment company, and unrealized gains and losses on both the equity and debt securities held in the registered investment company are recognized in earnings. Generally, Entergy records gains and losses on its debt and equity securities using the specific identification method to determine the cost basis of its securities.

The unrealized gains/(losses) recognized during the three months ended March 31, 2019 on equity securities still held as of March 31, 2019 were $340 million. The equity securities are generally held in funds that are designed to approximate or somewhat exceed the return of the Standard & Poor’s 500 Index. A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index or the Russell 3000 Index. The debt securities are generally held in individual government and credit issuances.

The available-for-sale securities held as of March 31, 2019 and December 31, 2018 are summarized as follows:

The unrealized gains/(losses) above are reported before deferred taxes of $7 million as of March 31, 2019 and ($1) million as of December 31, 2018 for debt securities. The amortized cost of available-for-sale debt securities was $2,520 million as of March 31, 2019 and $2,511 million as of December 31, 2018. As of March 31, 2019, available-for-sale debt securities have an average coupon rate of approximately 3.28%, an average duration of approximately 5.42 years, and an average maturity of approximately 9.13 years.

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities have been in a continuous loss position, are as follows as of March 31, 2019:

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2018:

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2019 and December 31, 2018 are as follows:

During the three months ended March 31, 2019 and 2018, proceeds from the dispositions of available-for-sale securities amounted to $365 million and $1,091 million, respectively. During the three months ended March 31, 2019 and 2018, gross gains of $2 million and $1 million, respectively, and gross losses of $2 million and $7 million, respectively, related to available-for-sale securities were reclassified out of other comprehensive income or other regulatory liabilities/assets into earnings.

The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of March 31, 2019 are $510 million for Indian Point 1, $645 million for Indian Point 2, $845 million for Indian Point 3, $481 million for Palisades, and $1,040 million for Pilgrim. The fair values of the decommissioning trust funds related to the Entergy Wholesale Commodities nuclear plants as of December 31, 2018 are $471 million

Entergy Arkansas holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. The available-for-sale securities held as of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 are summarized as follows:

The amortized cost of available-for-sale debt securities was ~~$365.5~~$390.4 million as of ~~September 30, 2018~~March 31, 2019 and ~~$327.5~~$389 million as of December 31, ~~2017.~~2018. As of ~~September 30, 2018,~~March 31, 2019, available-for-sale debt securities have an average coupon rate of approximately ~~2.95%~~2.85%, an average duration of approximately ~~6.2~~4.81 years, and an average maturity of approximately ~~9.08~~7.34 years.

The unrealized gains/(losses) recognized during the three ~~and nine~~ months ended ~~September 30, 2018~~March 31, 2019 on equity securities still held as of ~~September 30, 2018~~March 31, 2019 were ~~$35.9 million and $43.8 million, respectively.~~$70.7 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 4500 Index.

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by ~~investment type and~~ length of time that the securities have been in a continuous loss position, are as follows as of ~~September 30,~~March 31, 2019:

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2018:

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2019 and December 31, 2018 are as follows:

During the three months endedMarch 31, 2019 and 2018, proceeds from the dispositions of available-for-sale securities amounted to $10.9 million and $34.9 million, respectively. During the three months ended March 31, 2019 and 2018, gross gains of $0.02 million and $0.1 million, respectively, and gross losses of $0.1 million and $0.1 million, respectively, related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.

Entergy Louisiana holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. The available-for-sale securities held as of March 31, 2019 and December 31, 2018 are summarized as follows:

The amortized cost of available-for-sale debt securities was $539.9 million as of March 31, 2019 and $534.8 million as of December 31, 2018. As of March 31, 2019, the available-for-sale debt securities have an average coupon rate of approximately 3.92%, an average duration of approximately 6.62 years, and an average maturity of approximately 13.26 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2019 on equity securities still held as of March 31, 2019 were $98.5 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 4500 Index.

The fair value and gross unrealized losses of ~~the~~ available-for-sale debt securities, summarized by ~~investment type~~length of time that the securities have been in a continuous loss position, are as follows as of March 31, 2019:

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities have been in a continuous loss position, are as follows as of December 31, ~~2017:~~2018:

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of ~~September 30, 2018~~March 31, 2019 and December 31, ~~2017~~2018 are as follows:

During the three months ended ~~September 30,~~March 31, 2019 and 2018, ~~and 2017,~~ proceeds from the dispositions of available-for-sale securities amounted to ~~$157.8~~$56.2 million and ~~$54.6~~$125.5 million, respectively. During the three months ended ~~September 30,~~March 31, 2019 and 2018, ~~and 2017,~~ gross gains of ~~$6.5 thousand~~$0.3 million and ~~$0.2~~$0.5 million, respectively, and gross losses of ~~$0.3~~$0.2 million and ~~$0.2~~$0.8 million, respectively, related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.

System Energy holds equity securities and available-for-sale debt securities in nuclear decommissioning trust accounts. The available-for-sale securities held as of March 31, 2019 and December 31, 2018 are summarized as follows:

The amortized cost of available-for-sale debt securities was $369.5 million as of March 31, 2019 and $367.1 million as of December 31, 2018. As of March 31, 2019, available-for-sale debt securities have an average coupon rate of approximately 3.08%, an average duration of approximately 6.34 years, and an average maturity of approximately 9.06 years.

The unrealized gains/(losses) recognized during the three months ended March 31, 2019 on equity securities still held as of March 31, 2019 were $67.3 million. The equity securities are generally held in funds that are designed to approximate the return of the Standard & Poor’s 500 Index. A relatively small percentage of the equity securities are held in funds intended to replicate the return of the Wilshire 4500 Index.

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities have been in a continuous loss position, are as follows as of March 31, 2019:

The fair value and gross unrealized losses of available-for-sale debt securities, summarized by length of time that the securities have been in a continuous loss position, are as follows as of December 31, 2018:

The fair value of available-for-sale debt securities, summarized by contractual maturities, as of March 31, 2019 and December 31, 2018 are as follows:

During the ~~nine~~three months ended ~~September 30,~~March 31, 2019 and 2018, ~~and 2017,~~ proceeds from the dispositions of available-for-sale securities amounted to ~~$357.2~~$42.1 million and ~~$308.1~~$54.2 million, respectively. During the ~~nine~~three months ended ~~September 30,~~March 31, 2019 and 2018, ~~and 2017,~~ gross gains of ~~$0.3~~$0.4 million and ~~$0.7~~$0.1 million, respectively, and gross losses of ~~$4.8~~$0.1 million and ~~$1.5~~$0.6 million, respectively, related to available-for-sale securities were reclassified out of other regulatory liabilities/assets into earnings.

Entergy evaluates the available-for-sale debt securities in the Entergy Wholesale Commodities’ nuclear decommissioning trust funds with unrealized losses at the end of each period to determine whether an other-than-temporary impairment has occurred. The assessment of whether an investment in a debt security has suffered an other-than-temporary impairment is based on whether Entergy has the intent to sell or more likely than not will be required to sell the debt security before recovery of its amortized costs. Further, if Entergy does not expect to recover the entire amortized cost basis of the debt security, an other-than-temporary impairment is considered to have occurred and it is measured by the present value of cash flows expected to be collected less the amortized cost basis (credit loss). Entergy did not have any material other-than-temporary impairments relating to credit losses on debt securities for the three ~~and nine~~ months ended ~~September 30, 2018~~March 31, 2019 and ~~2017.~~2018. Entergy’s trusts are managed by third parties who operate in accordance with agreements that define investment guidelines and place restrictions on the purchases and sales of investments.

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

As discussed in the Form 10-K, the Tax Cuts and Jobs Act limits the deduction for net business interest expense in certain circumstances. The limitation does not apply to interest expense allocable to the Utility. In Notice 2018-28 released on April 2, 2018, the IRS announced that it intends to issue proposed regulations that will provide guidance to assist taxpayers in complying with the new interest provisions under the Tax Cuts and Jobs Act. The notice provides general and limited information of the IRS’s interpretation regarding methodologies that could be used for the allocation of the interest expense limitation. As a result of the new provision contained in the Tax Cuts and Jobs Act, Entergy recorded limitations in 2018 which did not have a material effect on financial position, results of operations, or cash flows.

In April 2019 the state of Arkansas enacted corporate income tax law changes that phase in an Arkansas tax rate reduction from 6.5% to 5.9% by the year 2022. The rate reduction will eventually reduce Entergy Arkansas’s combined federal and state applicable tax rate by 0.4% once fully adopted. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to ten years. The adoption of these tax law changes throughout the phase-in period is not expected to have a significant effect on the financial position, results of operations, or cash flows of Entergy Arkansas, the Utility, or Entergy.

The Vermont Yankee transaction resulted in Entergy generating a net deferred tax asset in January 2019. The deferred tax asset could not be fully realized by Entergy in the first quarter of 2019; accordingly, Entergy accrued a net tax expense of $29 million on the disposition of Vermont Yankee. See Note 216 to the financial statements herein the unopposed settlement of Entergy Texas’s 2018 rate case, if approved by the PUCT, establishes the amounts of protected and unprotected excess accumulated deferred income taxes that Entergy Texas will return to customers. As of September 30, 2018, Entergy Texas’s regulatory liability for ~~protected excess accumulated deferred income taxes was $269 million and its regulatory liability for unprotected excess accumulated deferred income taxes was $201 million.~~

Construction expenditures included in accounts payable at ~~September 30, 2018~~March 31, 2019 are ~~$255~~$324 million for Entergy, ~~$27.8~~$29.9 million for Entergy Arkansas, ~~$80.1~~$118 million for Entergy Louisiana, ~~$8.9~~$13.8 million for Entergy Mississippi, ~~$18.7~~$8.2 million for Entergy New Orleans, ~~$13.9~~$72.3 million for Entergy Texas, and ~~$38.1~~$20.2 million for System Energy. Construction expenditures included in accounts payable at December 31, ~~2017~~2018 are ~~$368~~$311 million for Entergy, ~~$58.8~~$35.7 million for Entergy Arkansas, ~~$160.4~~$104.6 million for Entergy Louisiana, ~~$17.1~~$13.6 million for Entergy Mississippi, ~~$2.5~~$5.8 million for Entergy New Orleans, ~~$32.8~~$55.6 million for Entergy Texas, and ~~$33.9~~$26.3 million for System Energy.

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

System Energy is considered to hold a variable interest in the lessor from which it leases an undivided interest representing approximately 11.5% of the Grand Gulf nuclear plant. System Energy is the lessee under this arrangement, which is described in more detail in Note 10 to the financial statements in the Form 10-K. System Energy made payments on its lease, including interest, of $8.6 million in the three months ended ~~September 30, 2018~~March 31, 2019 and in the three months ended ~~September 30, 2017. System Energy made payments on its lease, including interest, of $17.2 million in the nine months ended September 30, 2018 and in the nine months ended September 30, 2017.~~March 31, 2018.

~~Revenue Recognition~~

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

In the first quarter ~~2018,~~2019, Entergy ~~Louisiana~~Arkansas recorded a revision to its estimated decommissioning cost ~~liability~~liabilities for ~~River Bend~~ANO 1 and ANO 2 as a result of a revised decommissioning cost study. The revised ~~estimate~~estimates resulted in ~~an $85.4~~a $126.2 million increase in its decommissioning cost ~~liability,~~liabilities, along with a corresponding ~~increase~~increases in the related asset retirement cost ~~asset~~assets that will be depreciated over the remaining ~~life~~lives of the ~~unit.~~units.

Entergy implemented ASU 2016-02, “Leases (Topic 842),” effective January 1, 2019. The ASU’s core principle is that “a lessee should recognize the assets and liabilities that arise from leases.” The ASU considers that “all leases create an asset and a liability,” and accordingly requires recording the assets and liabilities related to all leases with a term greater than 12 months. Concurrent with the implementation of ASU 2016-02, Entergy implemented ASU 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” which provided Entergy the option to elect not to evaluate existing land easements that are not currently accounted for under the previous lease standard, and ASU 2018-11, “Leases (Topic 842): Targeted Improvements,” which intended to simplify the transition requirement giving Entergy the option to apply the transition provisions of the new standard at the date of adoption instead of at the 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 retained earnings for the cumulative effect of adopting the standard as of the effective date, and when implemented with ASU 2018-11, allowed Entergy to recognize the leased assets and liabilities on its balance sheet beginning on January 1, 2019 without restating prior periods. In adopting the standard, in January 2019 Entergy recognized right-of-use assets and corresponding lease liabilities totaling approximately $263 million, including $59 million for Entergy Arkansas, $51 million for Entergy Louisiana, $26 million for Entergy Mississippi, $7 million for Entergy New Orleans, and $16 million for Entergy Texas. Implementation of the standards had no material effect on consolidated net income; therefore, no adjustment to retained earnings was recorded. The adoption of the standards had no effect on cash flows.

As of March 31, 2019, Entergy and the Registrant Subsidiaries held operating and financing leases for fleet vehicles used in operations, real estate, fuel storage facilities, and power purchase agreements. Excluded from this are power purchase agreements not meeting the definition of a lease, nuclear fuel leases, and the Grand Gulf sale-leaseback which were determined not to be leases.

Leases have remaining terms of one year to 30 years. Real estate leases generally include at least one five-year renewal option; however, renewal is not typically considered certain unless Entergy or a Registrant Subsidiary makes significant leasehold improvements or other modifications which would hinder its ability to easily move. In

Entergy incurred the following total lease costs for the three months ended March 31, 2019:

The lease costs disclosed above materially approximate the cash flows used by Entergy for leases with all costs included within operating activities on the Consolidated Statements of Cash Flows, except for the financing lease costs which are included in financing activities.

The Registrant Subsidiaries incurred the following lease costs for the three months ended March 31, 2019:

The lease costs disclosed above materially approximate the cash flows used by the Registrant Subsidiaries for leases with all costs included within operating activities on the respective Statements of Cash Flows, except for the financing lease costs which are included in financing 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 the table below.

Included within Property, Plant, and Equipment on Entergy’s consolidated balance sheet at March 31, 2019 are $241 million related to operating leases and $60 million related to financing leases.

Included within Utility Plant on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019 are the following amounts:

The following lease-related liabilities are recorded within the respective Other lines on Entergy’s consolidated balance sheet as of March 31, 2019:

The following lease-related liabilities are recorded within the respective Other lines on the Registrant Subsidiaries’ respective balance sheets at March 31, 2019:

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of Entergy at March 31, 2019:

The following information contains the weighted average remaining lease term in years and the weighted average discount rate for the operating and financing leases of the Registrant Subsidiaries at March 31, 2019:

Maturity of the lease liabilities for Entergy as of March 31, 2019 are as follows:

Maturity of the lease liabilities for the Registrant Subsidiaries as of March 31, 2019 are as follows:

In allocating consideration in lease contracts to the lease and non-lease components, Entergy and the Registrant Subsidiaries have made the accounting policy election to combine lease and non-lease components related to fleet vehicles used in operations, fuel storage agreements, and purchased power agreements and to allocate the contract consideration to both lease and non-lease components for real estate leases.

In accordance with ASU 2018-11, below is the lease disclosure from Note 10 to the financial statements in the Form 10-K.

As of December 31, 2018, Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities with minimum lease payments as follows (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf sale and leaseback transaction, all of which are discussed elsewhere):

Total rental expenses for all leases (excluding power purchase agreement operating leases, nuclear fuel leases, and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $47.8 million in 2018, $53.1 million in 2017, and $44.4 million in 2016.

As of December 31, 2018 the Registrant Subsidiaries had non-cancelable operating leases for equipment, buildings, vehicles, and fuel 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):

On January 1, 2019, Entergy implemented ASU No. 2016-02, “Leases (Topic 842)” along with the practical expedients provided by ASU No. 2018-01, “Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842,” and ASU No. 2018-11, “Leases (Topic 842): Targeted Improvements.” See Note 1 to the financial statements in the Form 10-K for further discussion of ASU No. 2016-02.

As of December 31, 2018, Entergy Texas had a power purchase agreement that is accounted for as an operating lease under the accounting standards. The lease payments are recovered in fuel expense in accordance with regulatory treatment. The minimum lease payments under the power purchase agreement are as follows:

In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million. The leases were scheduled to expire in July 2017. Entergy Louisiana was required to report 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 interest in the leased assets, followed by a termination of the leases and transfer of the leased assets to Entergy Louisiana when the outstanding lessor debt is paid.

In March 2016, Entergy Louisiana completed the first step in the two-step transaction by acquiring the equity participant’s beneficial interest in the leased assets. Entergy Louisiana paid $60 million in cash and $52 million through the issuance of a non-interest bearing collateral trust mortgage note, payable in installments through July 2017. Entergy Louisiana continued to make payments on the lessor debt that remained outstanding and which matured in January 2017. The combination of payments on the $52 million collateral trust mortgage note issued and the debt service on the lessor debt was equal in timing and amount to the remaining lease payments due from the closing of the transaction 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 the undivided interests in Waterford 3 at the end of the lease term. Since the sale-leaseback transaction was accounted for as a financing transaction, the accrual of this liability was accounted for as additional interest expense. As of December 2015, the balance of this liability was $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 lease payment (reflecting an interest rate of 8.09%) 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.

In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million. The initial term of the leases expired in July 2015. System Energy renewed the leases in December 2013 for fair market value with renewal terms expiring in July 2036. At the end of the new lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase 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. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference 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 lease term. 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 minimum lease payments that are recorded as long-term debt, as follows, which reflects the effect of the December 2013 renewal:

As discussed in the Form 10-K, Entergy Wholesale Commodities plant owners will submit filings with the NRC for planned shutdown activities as the nuclear plants individually approach and begin decommissioning. Entergy Nuclear Generation Company expects to file its Post-Shutdown Decommissioning Activities Report (PSDAR) with the NRC in the fourth quarter 2018 for the Pilgrim plant. As part of the development of the PSDAR, Entergy obtained a revised decommissioning cost study in the third quarter 2018. The revised estimate resulted in a $117.5 million increase in the decommissioning cost liability and a corresponding impairment charge. See Note 14 to the financial statements in the Form 10-K, ~~for a discussion of impairment~~in January 2019, Entergy transferred 100% of the ~~Pilgrim plant.~~membership interests in Entergy Nuclear Vermont Yankee, LLC, the owner of the Vermont Yankee plant, to a subsidiary of NorthStar.

Entergy Nuclear Vermont Yankee had an outstanding credit facility that was used to pay for dry fuel storage costs. This credit facility was guaranteed by Entergy Corporation. Vermont Yankee Asset Retirement Management, LLC, a subsidiary of Entergy, assumed the obligations under the credit facility. At the closing of the transaction, NorthStar caused Entergy Nuclear Vermont Yankee, renamed NorthStar Vermont Yankee, to issue a $139 million promissory note to Vermont Yankee Asset Retirement Management. The amount of the note included the balance outstanding on the credit facility, as well as borrowing fees and costs incurred by Entergy in connection with the credit facility.

Upon closing of the transaction in January 2019, the Vermont Yankee decommissioning trust, along with the decommissioning obligation for the plant, was transferred to NorthStar. The Vermont Yankee spent fuel disposal contract was assigned to NorthStar as part of the transaction. The Vermont Yankee transaction resulted in Entergy generating a net deferred tax asset in January 2019. The deferred tax asset could not be fully realized by Entergy 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 after-tax) in the first quarter 2019.

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

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

As of ~~September 30, 2018,~~March 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 Principal Financial Officers (PFO). The evaluations assessed the effectiveness of the Registrants’ disclosure controls and procedures. Based on the evaluations, each PEO and PFO has concluded that, as to the Registrant or Registrants for which they serve as PEO or PFO, the Registrant’s or Registrants’ disclosure controls and procedures are effective to ensure that information required to be disclosed by each Registrant in reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in Securities and Exchange Commission rules and forms; and that the Registrant’s or Registrants’ disclosure controls and procedures are also effective in reasonably assuring that such information is accumulated and communicated to the Registrant’s or Registrants’ management, including their respective PEOs and PFOs, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of each Registrants’ management, including its respective PEO and PFO, each Registrant evaluated changes in internal control over financial reporting that occurred during the quarter ended ~~September 30, 2018~~March 31, 2019 and found no change that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

~~Third Quarter2018 Compared to Third Quarter2017~~

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory ~~credits.~~charges (credits). Following is an analysis of the change in net revenue comparing the ~~third~~first quarter ~~2018~~2019 to the ~~third~~first quarter ~~2017:~~2018:

The return of unprotected excess accumulated deferred income taxes to customers resulted from the return of unprotected excess accumulated deferred income taxes through a tax adjustment rider beginning in April 2018. There is no effect on net income as the reduction in net revenue was offset by a reduction in income tax expense. See Note 2 to the financial statements ~~herein and~~ in the Form 10-K for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.

The ~~volume/weather variance~~formula rate plan regulatory provision is ~~primarily~~ due to an increase of 548 GWh, or 9%, in billed electricity usage, including the effect of more favorable weather on residential and commercial sales and an increase in industrial usage. The increase in industrial usage is primarily due to an increase in demand from mid-size to small customers and a new customeradditional provision recorded in the ~~primary metals industry.~~

The retail electric price variance is primarily due to an increase in formula rate plan rates effective with the first billing cycle of January ~~2018 and an increase in the energy efficiency rider effective January 2018, each~~2019 as approved by the APSC. See Note 2 to the financial statements in the Form 10-K for further discussion of the formula rate plan filing.

~~Third Quarter 2018 Compared~~Nuclear refueling outage expenses decreased primarily due to ~~Third Quarter 2017~~the amortization of lower costs associated with the most recent outages as compared to previous outages.

Other operation and maintenance expenses ~~increased~~decreased primarily due to ~~an increase~~a decrease of ~~$8.5~~$8.9 million in ~~energy efficiency costs and an increase of $6.8 million in fossil-fueled~~nuclear generation expenses primarily due to a lower scope of work performed in the first quarter 2019 as compared to the first quarter 2018 and lower nuclear labor costs, including contract labor.

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

~~Other income increased primarily due to changes in decommissioning trust fund investment activity, including portfolio rebalancing for the ANO 1 decommissioning trust fund in third quarter 2018.~~

The effective income tax rate was ~~(631.3%~~(138.2%) for the ~~third~~first quarter ~~2018.~~2019. The difference in the effective income tax rate for the ~~third~~first quarter ~~2018~~2019 versus the federal statutory rate of 21% was primarily due to the amortization of excess accumulated deferred income taxes and certain book and tax differences related to utility plant items and book and tax differences related to the allowance for equity funds used during construction, partially offset by state income ~~taxes and the provision for uncertain tax positions.~~taxes. See ~~Notes 2 and~~Note 10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act. See Note 10 to the financial statements herein for discussion of corporate income tax law changes that phase in an Arkansas tax rate reduction.

The effective income tax rate was ~~(286.4%)~~20.7% for the ~~nine months ended September 30,~~first quarter 2018. The difference in the effective income tax rate for the ~~nine months ended September 30,~~first quarter 2018 versus the federal statutory rate of 21% was primarily due to ~~the amortization of excess accumulated deferred income taxes and~~ certain book and tax differences related to utility plant items ~~partially offset by state income taxes. See Notes 2~~ and ~~10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act.~~

See the “Income Tax Legislation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis in the Form 10-K for a discussion of the Tax Cuts and Jobs Act, the federal income tax legislation enacted in December 2017. Note 3 to the financial statements in the Form 10-K contains additional discussion of the effect of the Tax Act on ~~2017~~2018 results of operations and financial position, the provisions of the Tax Act, and the

Cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~ were as follows:

Net cash flow provided by operating activities ~~decreased $5~~increased $26.6 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to the return of unprotected excess accumulated deferred income taxes to customers. See Note 2 to the financial statements herein and in the Form 10-K for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act. The decrease was partially offset by:

Net cash flow used in investing activities decreased ~~$93.5~~$0.4 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due ~~to:~~

Increases in Entergy Arkansas’s receivable from the money pool are a use of cash flow, and Entergy Arkansas’s receivable from the money pool increased by ~~$13.4~~$30.5 million for the ~~nine~~three months ended ~~September 30, 2018.~~March 31, 2019. The money

Entergy Arkansas’s ~~cash provided by~~ financing activities ~~increased $147.1~~provided $144.6 million of cash for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to using $23.8 million of cash for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due ~~to:~~to the following activity:

Decreases in Entergy Arkansas’s payable to the money pool are a use of cash flow, and Entergy Arkansas’s payable to the money pool decreased by ~~$166.1~~$182.7 million in ~~2018~~2019 compared to ~~increasing~~decreasing by ~~$43.9~~$42.3 million in ~~2017.~~2018.

Entergy Arkansas’s debt to capital ratio is shown in the following table. The ~~decrease~~increase in the debt to capital ratio ~~for Entergy Arkansas~~ is primarily due to the issuance of $350 million ~~capital contribution from Entergy Corporation~~of first mortgage bonds in ~~2018.~~March 2019.

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

Entergy Arkansas is developing its capital investment plan for 2019 through 2021 and currently anticipates making $2.3 billion in capital investments during that period. The preliminary estimate includes amounts associated with specific investments such as transmission projects to enhance reliability, reduce congestion, and enable economic growth; distribution spending 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 regulatory constraints and requirements, environmental compliance, business opportunities, market volatility, economic trends, business restructuring, changes in project plans, and the ability to access capital.

Entergy Arkansas has a credit facility in the amount of $150 million scheduled to expire in September 2023. Entergy Arkansas also has a $20 million credit facility scheduled to expire in April ~~2019.~~2020. The $150 million credit facility includes fronting commitments for the issuance of letters of credit against $5 million of the borrowing capacity of the facility. As of ~~September 30, 2018,~~March 31, 2019, no cash borrowings and no letters of credit were outstanding under the credit facilities. In addition, Entergy Arkansas is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of ~~September 30, 2018,~~March 31, 2019, a $1 million letter of credit was outstanding under Entergy Arkansas’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

The Entergy Arkansas nuclear fuel company variable interest entity has a credit facility in the amount of $80 million scheduled to expire in September 2021. As of ~~September 30, 2018, $70.4~~March 31, 2019, $42.6 million in loans were outstanding under the credit facility for the Entergy Arkansas nuclear fuel company variable interest entity. See Note 4 to the financial statements herein for additional discussion of the nuclear fuel company variable interest entity credit facility.

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

~~2018 Formula Rate Plan Filing~~

In March ~~2018,~~2019, 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~~a decrease from ~~$0.01547~~$0.01882 per kWh to ~~$0.01882~~$0.01462 per ~~kWh. The~~kWh and became effective with the first billing cycle in April 2019. In March 2019 the Arkansas Attorney General filed a response to Entergy Arkansas’s annual ~~redetermination~~adjustment and included with its filing ~~requesting that~~a motion for investigation of alleged overcharges to customers in connection with the ~~APSC suspend~~FERC’s October 2018 order in the proposed tariff to investigate the amount of the redetermination or, alternatively, to allow recovery subject to refund. Among the reasons the Attorney General cited for suspension were questions pertaining to howopportunity sales proceeding. Entergy Arkansas ~~forecasted sales and potential implications of the Tax Act. Entergy Arkansas replied~~filed its response to the Attorney General’s ~~filing and~~motion in April 2019 in which Entergy Arkansas stated ~~that,~~its intent to initiate a proceeding to address recovery issues related to the extent there are questions pertaining to its load forecasting or the operation of the energy cost recovery rider, those issues exceed the scope of the instant rate redetermination. Entergy Arkansas also stated that potential effects of the Tax Act are appropriately considered in the APSC’s separate proceeding looking at potentialOctober 2018 FERC order.

~~See~~As discussed in the Form 10-K, ~~for discussion of the~~in December 2018, Entergy Arkansas opportunity sales proceeding filed with the FERC. In October 2018 the FERC issued an order addressing the ALJ’s July 2017 initial decision. The FERC reversed the ALJ’s decision to cap the reduction in Entergy Arkansas’s payment to account for the increased bandwidth payments that Entergy Arkansas made to the other operating companies. The FERC also reversed the ALJ’s decision that Grand Gulf sales from January through September 2000 should be included in the calculation of Entergy Arkansas’s payment. The FERC affirmed on other grounds the ALJ’s rejection of the LPSC’s claim that certain joint account sales should be accounted for as part of the calculation of Entergy Arkansas’s payment. The FERC directed Entergy to make a compliance filing ~~by December 17,~~in response to the FERC’s October 2018 ~~providing~~order in the opportunity sales proceeding. The compliance filing provided a final calculation of Entergy Arkansas’s payments to the other Utility operating companies, ~~pursuant~~including interest. No protests were filed in response to the findings in the order and explaining how Entergy Arkansas will pay refunds, including the timeline for making those refunds. The FERC’s decision effectively establishes the base amount Entergy Arkansas must pay to the other Utility operating companies for the period of 2000-2009 to be approximately $68 million. Entergy Arkansas will also pay interest on the base amount to the other Utility operating companies, currently estimated to be approximately $64 million as of September 30,December 2018 ~~for an estimated total of $132 million. This amount is consistent with the liability previously recognized by Entergy Arkansas.~~compliance filing. The December 2018 compliance filing ~~will include~~is pending FERC action.

In February 2019 the ~~recipients and final amount of payments owed by Entergy Arkansas, as well as~~LPSC filed a new complaint relating to two issues that were raised in the ~~timing~~opportunity sales proceeding, but that in its October 2018 order, the FERC held were outside the scope of the ~~payments. Because management currently expects~~proceeding. In March 2019, Entergy Services filed an answer and motion to ~~recover~~dismiss the ~~retail portion of the payments due as a result of this proceeding, Entergy Arkansas previously recognized a regulatory asset with a balance of $114 million as of September 30, 2018.~~new complaint.

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

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

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

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Arkansas’s accounting for nuclear decommissioning costs, utility regulatory accounting, ~~unbilled revenue,~~ impairment of long-lived assets and trust fund investments, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies. The following is an update to that discussion.

In the first quarter 2019, Entergy Arkansas recorded a revision to its estimated decommissioning cost liabilities for ANO 1 and ANO 2 as a result of a revised decommissioning cost study. The revised estimates resulted in a $126.2 million increase in its decommissioning cost liabilities, along with corresponding increases in the related asset retirement cost assets that will be depreciated over the remaining lives of the units.

See “New Accounting Pronouncements” section of ~~Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis~~Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements.

~~Third Quarter 2018 Compared to Third Quarter 2017~~

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory ~~credits.~~charges (credits). Following is an analysis of the change in net revenue comparing the ~~third~~first quarter ~~2018~~2019 to the ~~third~~first quarter ~~2017:~~2018:

The retail electric price variance is primarily due to regulatory charges of $27 million recorded in the first quarter 2018 to reflect the effects of a provision in the settlement reached in the formula rate plan extension proceeding to return the benefits of the lower federal income tax rate in 2018 to customers, an increase in formula rate plan revenues, as approved by the LPSC, implemented with the first billing cycle of September 2018, and the implementation of an advanced metering system customer charge, as approved by the LPSC, effective January 2019. See Note 2 to the financial statements in the Form 10-K for further discussion of the formula rate plan proceedings and advanced metering system customer charge.

The return of unprotected excess accumulated deferred income taxes to customers resulted from the return of unprotected excess accumulated deferred income taxes through changes in the formula rate plan effective May 2018. There is no effect on net income as the reduction in net revenue was offset by a reduction in income tax expense. See Note 2 to the financial statements ~~herein and~~ in the Form 10-K for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.

The ~~retail electric price~~volume/weather variance is primarily due to regulatory charges of $18.3 million recorded in the third quarter 2018 to reflect the effects of a provision in the settlement reached in the formula rate plan extension proceeding to return the benefits of the lower federal income tax rate in 2018 to customers anda decrease of 225 GWh, or 2%, in ~~formula rate plan revenues implemented with~~billed electricity usage, including the ~~first billing cycle~~effect of ~~September 2017.~~less favorable weather on residential and commercial sales. The decrease was partially offset by an increase in industrial usage primarily due to an increase in demand from existing customers.

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

Other income increased primarily due to an increase in the allowance for ~~equity~~borrowed funds used during construction due to higher construction work in progress in ~~2018, which included~~2019, including the Lake Charles Power Station and St. Charles Power Station projects. The increase was ~~partially offset due to a change in decommissioning trust fund investment activity, including portfolio rebalancing of certain of the decommissioning trust funds in 2017.~~

The effective income tax rate was ~~1.3%~~11.5% for the ~~third~~first quarter ~~2018.~~2019. The difference in the effective income tax rate for the ~~third~~first quarter ~~2018~~2019 versus the federal statutory rate of 21% was primarily due to book and tax differences related to the non-taxable income distributions earned on preferred membership interests, the amortization of excess accumulated deferred income taxes, and book and tax differences related to the ~~non-taxable income distributions earned on preferred membership interests,~~allowance for equity funds used during construction, partially offset by state income taxes. See ~~Notes 2 and~~Note 10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act.

The effective income tax rate was ~~(6.3%)~~16.3% for the ~~nine months ended September 30,~~first quarter 2018. The difference in the effective income tax rate for the ~~nine months ended September 30,~~first quarter 2018 versus the federal statutory rate of 21% was primarily due to the amortization of excess accumulated deferred income taxes, an IRS audit settlement for the 2012-2013 tax returns, and book and tax differences related to the non-taxable income distributions earned on preferred membership interests, partially offset by state income taxes. See Notes 2 and 10 to the financial statements herein and

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

Cash flows for the three months ended March 31, 2019 and 2018 were as follows:

Net cash flow provided by operating activities decreased $148.5 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018 primarily due to:

Net cash flow used in investing activities decreased ~~$95.5~~$172.6 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to:

Net cash flow provided by financing activities ~~increased $224.4~~decreased $288.7 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to:

Entergy Louisiana’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio is primarily due to the issuance of $525 million of first mortgage bonds in March 2019.

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

Entergy Louisiana is developing its capital investment plan for 2019 through 2021 and currently anticipates making $4.1 billion in capital investments during that period. The preliminary estimate includes amounts associated with specific investments, such as the Washington Parish Energy Center, discussed below, and the St. Charles Power Station and the Lake Charles Power Station; transmission projects to enhance reliability, reduce congestion, and enable economic growth; distribution spending to enhance reliability and improve service to customers, including advanced meters and related investments; resource planning, including potential generation projects; system improvements; investments in River Bend and Waterford 3; 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 regulatory constraints and requirements, environmental compliance, business opportunities, market volatility, economic trends, business restructuring, changes in project plans, and the ability to access capital.

Entergy Louisiana has a credit facility in the amount of $350 million scheduled to expire in September 2023. The credit facility includes fronting commitments for the issuance of letters of credit against $15 million of the borrowing capacity of the facility. As of ~~September 30, 2018,~~March 31, 2019, there were no cash borrowings and no letters of credit outstanding under the credit facility. In addition, Entergy Louisiana is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of ~~September 30, 2018,~~March 31, 2019, a ~~$22~~$43 million letter of credit was outstanding under Entergy Louisiana’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

The Entergy Louisiana nuclear fuel company variable interest entities have two separate credit facilities, each in the amount of $105 million and scheduled to expire in September 2021. As of ~~September 30, 2018, $34.5~~March 31, 2019, $95.4 million in loans were outstanding under the credit facility for the Entergy Louisiana River Bend nuclear fuel company variable interest entity. As of ~~September 30, 2018, $30.5~~March 31, 2019, $79.5 million in loans were outstanding under the credit facility for the Entergy Louisiana Waterford nuclear fuel company variable interest entity. See Note 4 to the financial statements herein for additional discussion of the nuclear fuel company variable interest entity credit facilities.

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

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 through Entergy Gulf States~~ Louisiana’s fuel ~~adjustment clause for the period from 2010 through 2013. Discovery commenced in July 2015. No report of audit has been issued.~~

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

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

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

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

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy Louisiana’s accounting for nuclear decommissioning costs, utility regulatory accounting, ~~unbilled revenue,~~ impairment of long-lived assets and trust fund investments, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies. ~~The following is an update to that discussion.~~

See “New Accounting Pronouncements” section of ~~Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis~~Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements.

~~Third Quarter2018 Compared to Third Quarter2017~~

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory ~~charges (credits).~~charges. Following is an analysis of the change in net revenue comparing the ~~third~~first quarter ~~2018~~2019 to the ~~third~~first quarter ~~2017:~~2018:

The volume/weather variance is primarily due to ~~an increase~~a decrease of ~~257~~226 GWh, or 7%, in billed electricity usage, including the effect of ~~more~~less favorable weather on residential sales.

The retail electric price variance is primarily due to ~~higher~~lower storm damage rider revenues. Entergy Mississippi resumed billing the storm damage rider effective with the September 2017 billing cycle and ceased billing the storm damage rider effective with the August 2018 billing cycle. The decrease was partially offset by higher ad valorem tax adjustment rider revenues resulting from a rate increase effective October 2018. See Note 2 to the financial statements ~~herein and~~ in the Form 10-K for further discussion of the storm damage rider.

Other operation and maintenance expenses ~~increased primarily due to:~~

The effective income tax rate was ~~(46.7%)~~18.3% for the ~~third~~first quarter ~~2018.~~2019. The difference in the effective income tax rate for the ~~third~~first quarter ~~2018~~2019 versus the federal statutory rate of 21% was primarily due to ~~the amortization of excess accumulated deferred income taxes. See Notes 2~~book and 10tax differences related to ~~the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act.~~

The effective income tax ~~rates were 37.8%~~rate was 23.3% for the ~~third~~first quarter ~~2017 and 38.4% for the nine months ended September 30, 2017.~~2018. The ~~differences~~difference in the effective income tax ~~rates~~rate for the ~~third~~first quarter ~~2017 and the nine months ended September 30, 2017~~2018 versus the federal statutory rate of ~~35% were~~21% was primarily due to state income taxes and a write-off of a stock-based compensation deferred tax asset, partially offset by certain book and tax differences related to ~~the allowance for equity funds used during construction.~~utility plant items.

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

Cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2019 and 2018 ~~and 2017~~ were as follows:

~~Net cash flow provided by~~Entergy Mississippi’s operating activities ~~increased $88.7~~provided $10 million in cash for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to using $8.8 million in cash for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to:

Net cash flow used in investing activities decreased ~~$32.8~~$21.9 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to a decrease of $48.8 million in transmission construction expenditures primarily due to a lower scope of work performed in 2018 as compared to the same period in 2017 and a decrease of $13.3 million in storm spending in 2018.money pool activity. The decrease was partially offset ~~by:~~

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

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

Entergy Mississippi has three ~~of its four~~ separate credit facilities ~~through May 2019, decreasing~~in the aggregate amount ~~available for borrowing under the~~of $82.5 million scheduled to expire in May 2019. Entergy Mississippi expects to renew its credit facilities prior to ~~$82.5 million.~~expiration. No borrowings were outstanding under the credit facilities as of ~~September 30, 2018.~~March 31, 2019. In addition, Entergy Mississippi is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO. As of ~~September 30, 2018, $11.2~~March 31, 2019, $12.1 million of letters of credit were outstanding under Entergy Mississippi’s uncommitted letter of credit facility. See Note 4 to the financial statements herein for additional discussion of the credit facilities.

In August 2018, Entergy Mississippi announced that it signed an asset purchase agreement to acquire from a subsidiary of GenOn Energy Inc. the Choctaw Generating Station, an 810 MW natural gas fired combined-cycle turbine plant located near French Camp, Mississippi. The purchase price is expected to be approximately $314 million. Entergy Mississippi also expects to invest in various plant upgrades at the facility after closing and expects the total cost of the acquisition to be approximately $401 million. The purchase is contingent upon, among other things, obtaining necessary approvals, including full cost recovery, from applicable federal and state regulatory and permitting agencies. These include regulatory approvals from the MPSC and the ~~FERC, as well as clearance~~FERC. Clearance under the Hart-Scott-Rodino Antitrust Improvements ~~Act.~~Act has occurred. In October 2018, Entergy Mississippi filed an application with the MPSC seeking approval of the acquisition and cost recovery. In a separate filing in October 2018, Entergy Mississippi proposed revisions to its formula rate plan that would provide for a mechanism, the interim capacity rate adjustment mechanism, in the formula rate plan to recover the non-fuel related costs of additional owned capacity acquired by Entergy Mississippi, including the non-fuel annual ownership costs of the Choctaw Generating Station, as well as to allow similar cost recovery treatment for other future capacity additions approved by the MPSC. Closing is expected to occur by the end of 2019. Due diligence performed on the plant indicates that there exists a potential mechanical issue that must be addressed prior to closing. There is some possibility that closing may be delayed to allow time for this issue to be resolved.

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

As discussed in the Form 10-K, the Mississippi Attorney General filed a complaint in state court in December 2008 against Entergy Corporation, Entergy Mississippi, Entergy Services, and Entergy Power alleging, among other things, violations of Mississippi statutes, fraud, and breach of good faith and fair dealing, and requesting an accounting and restitution. The defendants have denied the allegations. In June 2017 the District Court issued a case management order setting a trial date in November 2018. Discovery ended in May 2018. In June 2018, Entergy filed motions for summary judgment, which are currently pending before the District Court. In July 2018 the Attorney General filed briefs opposing the summary judgment.

In March ~~2018,~~2019, Entergy Mississippi submitted its formula rate plan ~~2018~~2019 test year filing and ~~2017~~2018 look-back filing showing Entergy Mississippi’s earned return for the historical ~~2017~~2018 calendar year to be above the formula rate plan bandwidth and projected earned return for the ~~2018~~2019 calendar year ~~in large part as~~to be below the formula rate plan bandwidth. The 2019 test year filing shows a ~~result~~$36.8 million rate increase is necessary to reset Entergy Mississippi’s earned return on common equity to the specified point of ~~the lower federal corporate income tax~~adjustment of 6.94% return on rate ~~effective in 2018, to be~~base, within the formula rate plan ~~bandwidth, resulting in no change in rates. In June~~bandwidth. The 2018 ~~Entergy Mississippi and the Mississippi Public Utilities Staff entered into a stipulation that confirmed that Entergy Mississippi’s earned returns for both the 2017~~ look-back filing and 2018 test year were within the respective formula rate plan bandwidths. In June 2018 the MPSC approved the stipulation, which resulted in no change in rates. See Note 2 to the financial statements herein and in the Form 10-K for further discussion regarding the proposed treatment of the effects of the lower federal corporate income tax rate.

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

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

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

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

See “New Accounting Pronouncements” section of ~~Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis~~Note 1 to the financial statements in the Form 10-K for ~~further~~a discussion of new accounting pronouncements.

~~Third Quarter 2018 Compared to Third Quarter2017~~

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory ~~charges.~~charges (credits). Following is an analysis of the change in net revenue comparing the ~~third~~first quarter ~~2018~~2019 to the ~~third~~first quarter ~~2017:~~2018:

The ~~return~~rough production cost equalization variance is due to the use in the first quarter of ~~unprotected excess accumulated deferred income taxes~~2018 of prior rough production cost equalization proceeds to ~~customers resulted from the return of unprotected excess accumulated deferred income taxes through the fuel adjustment clause beginning~~offset investments in ~~July 2018. There~~Energy Smart energy efficiency programs. The rough production cost equalization variance is offset in other operation and maintenance expenses and has no effect on net ~~income as the reduction in net revenue is offset by a reduction in income tax expense.~~income. See Note 2 to the financial statements ~~herein and~~ in the Form 10-K for ~~further~~ discussion of ~~regulatory activity regarding the Tax Cuts and Jobs Act.~~Energy Smart program funding.

The volume/weather variance is primarily due to ~~an increase~~a decrease of ~~111~~100 GWh, or 7%, in billed electricity usage, including the effect of ~~more favorable weather on residential and commercial sales and a 1% increase in the average number of electric customers.~~

The ~~retail electric price~~amortization of income tax rate change liability variance is primarily due to the amortization of the regulatory ~~charges of $4.1 million recorded~~liability that Entergy New Orleans began recording in 2018 ~~as a result~~for the lower income tax rate. This portion of ~~an agreement with the City Council to return~~ the benefits of the lower ~~federal~~ income tax rate are being given to customers through investments in ~~2018 to customers.~~Energy Smart energy efficiency programs. The amortization of income tax rate change liability is offset in other operation and maintenance expenses and has no effect on net income. See Note 2 to the financial statements ~~herein and in the Form 10-K for further discussion of regulatory proceedings.~~

~~Third Quarter 2018 Compared to Third Quarter2017~~

Taxes other than income taxes decreased primarily due to a decrease in local franchise taxes primarily due to lower electric retail revenues in 2019 as compared to the ~~prior year;~~

The effective income tax ~~rates were (20.0%)~~rate was 25.3% for the ~~third~~first quarter ~~2018 and 7.2% for the nine months ended September 30, 2018.~~2019. The ~~differences~~difference in the effective income tax ~~rates~~rate for the ~~third~~first quarter ~~2018~~2019 versus the federal statutory rate of 21% was primarily due to permanent book and tax differences, state income taxes, and the ~~nine months ended September 30,~~provision for uncertain tax positions, partially offset by flow-through tax accounting, certain book and tax differences related to utility plant items, and book and tax differences related to the allowance for equity funds used during construction.

The effective income tax rate was 19.5% for the first quarter 2018. The difference in the effective income tax rate for the first quarter 2018 versus the federal statutory rate of 21% ~~were~~was primarily due to ~~the amortization of excess accumulated deferred income taxes and~~ flow-through tax accounting partially offset by state income taxes. See Notes 2 and 10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act.

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

Cash flows for the three months ended March 31, 2019 and 2018 were as follows:

Net cash flow provided by operating activities increased ~~$16.1~~$9.5 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to to:

Net cash flow used in investing activities increased ~~$16.5~~$5.2 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to:

Decreases in Entergy New Orleans’s receivable from the money pool are a source of cash flow, and Entergy New Orleans’s receivable from the money pool decreased ~~$10.6~~$22 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to ~~increasing $32.1~~decreasing $12.3 million for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2018. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

Entergy New Orleans’s financing activities provided ~~$33.1~~$1.4 million of cash for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to using ~~$41.7~~$6.9 million of cash for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to ~~the issuance of $60 million of 4.51% Series first mortgage bonds in September 2018 and a decrease of $12.4~~$6.3 million in common equity distributions in ~~2018 as compared to 2017.~~2018. Common equity distributions were lower in ~~2018~~2019 primarily as a result of the ~~construction of the New Orleans Power Station, as discussed below, and~~increase in ~~anticipation of the excess accumulated deferred income taxes to be returned to customers as a result of the enactment of the Tax~~planned capital investments.

Entergy New Orleans’s debt to capital ratio is shown in the following table. The ~~increase~~decrease in the debt to capital ratio is primarily due to ~~the issuance of long-term debt~~an increase in ~~2018.~~member’s equity in 2019.

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

Entergy New Orleans is developing its capital investment plan for 2019 through 2021 and currently anticipates making $600 million in capital investments during that period. The preliminary estimate includes amounts associated with specific investments such as the New Orleans Power Station, discussed below; transmission projects to enhance reliability, reduce congestion, and enable economic growth; distribution spending to enhance reliability and improve service to customers, including advanced meters and related investments; system improvements; 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 regulatory constraints and requirements, environmental compliance, business opportunities, market volatility, economic trends, business restructuring, changes in project plans, and the ability to access capital.

~~158~~

As discussed in the Form 10-K, in September 2016, Entergy New Orleans submitted to the City Council a request for authorization for Entergy New Orleans to proceed with annual incremental capital funding of $12.5 million for its gas infrastructure rebuild plan and proposed that recovery of the investment be determined in connection with its next base rate case. The City Council authorized Entergy New Orleans to proceed with its replacement plans and established a schedule for proceedings in advance of the rate case intended to provide an opportunity for evaluation of the gas infrastructure plan that would best serve the public interest and the effect on customers of the approval of any such plan. In the course of that proceeding, the City Council’s advisors submitted pre-filed testimony recommending that Entergy New Orleans be allowed to continue with its conditioned-based approach to gas pipeline replacement to replace approximately 238 miles of low pressure pipe at a rate of approximately 25 miles per year. The City Council’s advisors also recommended that Entergy New Orleans be required to adhere to certain reporting requirements and recognized the need to address the sustained level of investment in gas infrastructure on customer bills. In September 2017, Entergy New Orleans filed rebuttal testimony suggesting that its recovery of future investment and customer effects would be addressed in the rate case that Entergy New Orleans was required to file in July 2018. The procedural schedule was suspended in order to allow for resolution of the proceeding.

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

In August 2017 the City Council established a docket to investigate the reliability of the Entergy New Orleans distribution system and to consider implementing certain reliability standards and possible financial penalties for not meeting any such standards. In April 2018 the City Council adopted a resolution directing Entergy New Orleans to demonstrate that it has been prudent in the management and maintenance of the reliability of its distribution system. The resolution also called for Entergy New Orleans to file a revised reliability plan addressing the current state of its distribution system and proposing remedial measures for increasing reliability. In June 2018, Entergy New Orleans filed its response to the City Council’s resolution regarding the prudence of its management and maintenance of the reliability of its distribution system. In July 2018, Entergy New Orleans filed its revised reliability plan discussing the various reliability programs that it uses to improve distribution system reliability and discussing generally the positive effect that advanced meter deployment and grid modernization can have on future reliability. Entergy New Orleans has retained a national consulting firm with expertise in distribution system reliability to conduct a review of Entergy New Orleans’s distribution system reliability-related practices and procedures and to provide recommendations for improving distribution system reliability. The report was filed with the City Council in October 2018. The City Council also approved a resolution that opens a prudence investigation into whether Entergy New Orleans was imprudent for not acting sooner to address outages in New Orleans and whether fines should be imposed. In January 2019, Entergy New Orleans filed testimony in response to the prudence investigation and asserting that it had been prudent in managing system reliability. In April 2019 the City Council advisors filed comments and testimony asserting that Entergy New Orleans did not act prudently in maintaining and improving its distribution system reliability in recent years and recommending that a financial penalty in the range of $1.5 million to $2 million should be assessed. Entergy New Orleans disagrees with the recommendation and plans to submit rebuttal testimony in May 2019.

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

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

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

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of the estimates and judgments necessary in Entergy New Orleans’s accounting for utility regulatory accounting, ~~unbilled revenue,~~ impairment of long-lived assets and trust fund investments, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

See “New Accounting Pronouncements” section of ~~Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis~~Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements.

~~Third Quarter2018 Compared to Third Quarter2017~~

Net revenue consists of operating revenues net of: 1) fuel, fuel-related expenses, and gas purchased for resale, 2) purchased power expenses, and 3) other regulatory charges. Following is an analysis of the change in net revenue comparing the ~~third~~first quarter ~~2018~~2019 to the ~~third~~first quarter ~~2017:~~2018:

The return of unprotected excess accumulated deferred income taxes to customers resulted from the return of unprotected excess accumulated deferred income taxes through a rider effective October 2018. There is no effect on net income as the reduction in net revenue was offset by a reduction in income tax expense. See Note 2 to the financial statements in the Form 10-K for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.

The volume/weather variance is primarily due to ~~an increase~~a decrease of ~~420~~160 GWh, or 8%4%, in billed electricity usage, including the effect of ~~more~~less favorable weather on residential and commercial sales and an increase in commercial and industrial usage. The increase in commercial usage is primarily due to the effects of the power outages caused by Hurricane Harvey, which decreased sales volume in 2017. The increase in industrial usage is primarily due to new customers in the chemicals and wood products industries and an increase in demand from mid-size to small customers.

The retail electric price variance is primarily due to an annual base rate increase ~~in the distribution cost recovery factor rider rate in September 2017,~~of $53.2 million effective October 2018 as approved by the PUCT. See Note 2 to the financial statements in the Form 10-K for further discussion of the ~~distribution cost recovery factor rider~~rate case filing.

Other operation and maintenance expenses increased primarily due to an increase of $4.3 million in fossil-fueled generation expenses primarily due to a higher scope of work performed during plant outages in 2019 as compared to 2018 and an increase of $1 million in information technology costs primarily due to higher labor costs and higher software maintenance costs in 2019 as compared to 2018.

Depreciation and amortization expenses increased primarily as result of new rates established in the settlement of the 2018 base rate case and additions to plant in service.

~~Nine Months Ended September 30, 2018 Compared to Nine Months Ended September 30, 2017~~

The effective income tax rate was ~~20.4%~~(554.5%) for the ~~third~~first quarter 2019. The difference in the effective income tax rate for the first quarter 2019 versus the federal statutory rate of 21% was primarily due to the amortization of excess accumulated deferred income taxes. See Note 10 to the financial statements herein and Notes 2 and 3 to the financial statements in the Form 10-K for a discussion of the effects and regulatory activity regarding the Tax Cuts and Jobs Act.

The effective income tax rate was 22.2% for the first quarter 2018. The difference in the effective income tax rate for the ~~third~~first quarter 2018 versus the federal statutory rate of 21% was primarily due to book and tax differences related to the allowance for equity funds used during construction and certain book and tax differences related to utility plant items.

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

Cash flows for the three months ended March 31, 2019 and 2018 were as follows:

Net cash flow provided by operating activities increased $41.6 million for the three months ended March 31, 2019 compared to the three months ended March 31, 2018 primarily due to the timing of recovery of fuel and purchased power costs, partially offset by the return of unprotected excess accumulated deferred income taxes to customers. See Note 2 to the financial statements in the Form 10-K for further discussion of regulatory activity regarding the Tax Cuts and Jobs Act.

Net cash flow used in investing activities increased ~~$5.3~~$111.8 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to to:

~~Decreases~~Increases in Entergy Texas’s receivable from the money pool are a ~~source~~use of cash flow, and Entergy Texas’s receivable from the money pool ~~decreased~~increased by ~~$43.7~~$3.6 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to decreasing by ~~$0.7~~$32.3 million for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2018. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

~~Increases~~Decreases in Entergy Texas’s payable to the money pool are a ~~source~~use of cash flow, and Entergy Texas’s payable to the money pool ~~increased~~decreased by ~~$89.3~~$22.4 million for the ~~nine~~three months ended ~~September 30, 2017.~~

Entergy Texas’s debt to capital ratio is shown in the following table. The ~~decrease~~increase in the debt to capital ratio for Entergy Texas is primarily due to the ~~increase~~net issuance of $200 million of first mortgage bonds in ~~retained earnings.~~2019.

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

Entergy Texas is developing its capital investment plan for 2019 through 2021 and currently anticipates making $1.9 billion in capital investments during that period. The preliminary estimate includes amounts associated with specific investments such as Montgomery County Power Station; transmission projects to enhance reliability, reduce congestion, and enable economic growth; distribution spending to enhance reliability and improve service to customers, including advanced meters and related investments; system improvements; 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 regulatory constraints and requirements, environmental compliance, business opportunities, market volatility, economic trends, business restructuring, changes in project plans, and the ability to access capital.

Entergy Texas has a credit facility in the amount of $150 million scheduled to expire in September 2023. The credit facility includes fronting commitments for the issuance of letters of credit against $30 million of the borrowing

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

In ~~May 2018,~~January 2019, Entergy Texas filed afor recovery of rate case expenses totaling $7.2 million. The amounts requested primarily include internal and external expenses related to litigating the 2018 base rate ~~case~~case. Parties filed testimony in April 2019 recommending a disallowance ranging from $3.2 million to $4.2 million of the $7.2 million requested. Entergy Texas is evaluating its response to the parties’ positions. A hearing is scheduled for June 2019.

In March 2019, Entergy Texas filed with the PUCT ~~seeking an increase in base rates and~~a request to set a new DCRF rider. The proposed new DCRF rider ~~rates of~~is designed to collect approximately ~~$166~~$3.2 million of which $48 million is associated with moving costs currently being collected through riders into base rates such that the total incremental revenue requirement increase is approximately $118 million.annually from Entergy Texas’s proposed rates and revenues reflect the inclusion of federal income tax reductions due to the Tax Act as well as a rider designed to return unprotected excess accumulated deferred income taxes over a period of two years following PUCT approval. The base rate case isretail customers based on ~~a 12-month test year ending~~its capital invested in distribution between January 1, 2018 and December 31, ~~2017. In addition, Entergy Texas included capital additions placed into service for the period of April 1, 2013 through December 31, 2017, as well as~~2018. A procedural schedule has been established, with a ~~post-test year adjustment to include capital additions placed~~hearing in ~~service by~~ June 30, 2018. In October 2018 the parties filed an unopposed settlement resolving all issues in the proceeding, supporting testimony, a proposed order approving the settlement, and a motion for interim rates effective for usage on and after October 17, 2018. The unopposed settlement reflects the following terms: a base rate increase of $53.2 million (net of costs realigned from riders), a $25 million refund to reflect the lower federal income tax rate applicable to Entergy Texas from January 25, 2018 through the date new rates are implemented, $6 million of capitalized skylining tree hazard costs will not be recovered from customers, $242.5 million of protected excess accumulated deferred income taxes, which includes a tax gross-up, will be returned to customers through base rates under the average rate assumption method over the lives of the associated assets, and $185.2 million of unprotected excess accumulated deferred income2019.

In December 2018, Entergy Texas filed with the PUCT a ~~tax gross-up, will be returned~~request to ~~customers through~~set a new TCRF rider. The ~~unprotected excess accumulated deferred income taxes~~proposed new TCRF rider ~~will include carrying charges~~is designed to collect approximately $2.7 million annually from Entergy Texas’s retail customers based on its capital invested in transmission between January 1, 2018 and ~~will~~September 30, 2018. In April 2019 parties filed testimony proposing a load growth adjustment, which would fully offset Entergy Texas’s proposed TCRF revenue requirement. The PUCT has previously ruled that load growth adjustments should not be included in ~~effect over~~ a ~~period of 12 months for large industrial customers and over~~TCRF. Entergy Texas filed a period of four years for other customers. The settlement, if approved by the PUCT, would provide 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 service rendered~~April 2019. In April 2019 the hearing on ~~or after October 17, 2018. The unopposed settlement~~Entergy Texas’s motion and the hearing on the merits were held, and the ALJ suspended the date on which the TCRF would be put into permanent effect until July 2019, unless an earlier decision is ~~pending consideration~~issued by the PUCT. This matter is currently awaiting the ALJ’s proposal for decision.

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

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

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

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

See “MANAGEMENT’S FINANCIAL DISCUSSION AND ANALYSIS - Critical Accounting Estimates” in the Form 10-K for a discussion of utility regulatory accounting, ~~unbilled revenue,~~ impairment of long-lived assets and trust fund investments, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies.

See “New Accounting Pronouncements” section of ~~Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis~~Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements.

System Energy’s principal asset currently consists of an ownership interest and a leasehold interest in Grand Gulf. The capacity and energy from its 90% interest is sold under the Unit Power Sales Agreement to its only four customers, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans. System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90% interest in Grand Gulf pursuant to the Unit Power Sales Agreement. Payments under the Unit Power Sales Agreement are System Energy’s only source of operating revenues.

~~Third Quarter 2018 Compared to Third Quarter2017~~

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

Cash flows for the three months ended March 31, 2019 and 2018 were as follows:

~~Cash Flow~~

~~Net cash flow used in~~System Energy’s investing activities ~~decreased $90~~provided $70.7 million of cash for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to using $86 million of cash for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to:

Decreases in System Energy’s receivable from the money pool are a source of cash flow and System Energy’s receivable from the money pool decreased by ~~$95.3~~$81.6 million for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to ~~increasing~~decreasing by ~~$202.7~~$21.5 million for the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2018. The money pool is an inter-company borrowing arrangement designed to reduce the Utility subsidiaries’ need for external short-term borrowings.

System Energy’s financing activities ~~provided $5.4~~used $65.8 million of cash for the ~~nine~~three months ended ~~September 30, 2018~~March 31, 2019 compared to ~~using $120.8~~providing $12.1 million of cash for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2018 primarily due to the following activity:

In March 2019, System Energy issued $134 million of 2.50% Series 2019 revenue refunding bonds due April 2022. The proceeds were used to redeem, prior to maturity, $134 million of 5.875% Series 1998 pollution control revenue refunding bonds due April 2022. See Note 4 to the financial statements herein and Note 5 to the financial statements in the Form 10-K for more details on long-term debt.

System Energy’s debt to capital ratio is shown in the following table. The increase in the debt to capital ratio for System Energy is 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 interest entity.

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

System Energy is developing its capital investment plan for 2019 through 2021 and currently anticipates making $405 million in capital investments during that period. The estimate includes amounts associated with specific investments and initiatives such as investments in Grand Gulf.

The System Energy nuclear fuel company variable interest entity has a credit facility in the amount of $120 million scheduled to expire in September 2021. As of ~~September 30, 2018, $37.7~~March 31, 2019, $94.1 million in letters of credit to support a like amount of commercial paper issued were outstanding under the System Energy nuclear fuel company variable interest entity credit facility. See Note 4 to the financial statements herein for additional discussion of the variable interest entity credit facility.

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

See the Form 10-K for a discussion of the return on equity complaints filed by the APSC and the MPSC and by the LPSC against System Energy. The LPSC’s complaint ~~in May 2018 and~~ also ~~filed~~includes a ~~motion~~challenge to ~~dismiss the complaint. In July 2018 the LPSC answered~~ System Energy’s ~~motion to dismiss.~~

InAs discussed in the Form 10-K, in May 2018 the LPSC filed a complaint against System Energy and Entergy Services related to System Energy’s renewal ~~in 2015~~ of a sale-leaseback transaction originally entered into in December 1988 for an 11.5% undivided interest in Grand Gulf Unit 1. ~~The complaint alleges~~

In February 2019 the presiding ALJ ruled that ~~System Energy violated~~ the ~~filed rate and~~hearing ordered by the ~~FERC’s ratemaking and accounting requirements when it~~FERC includes the issue of whether specific subcategories of accumulated deferred income tax should be included in, ~~Unit Power Sales Agreement billings~~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 taxes associated with uncertain tax 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 City Council and ~~that~~the APSC and MPSC address various issues raised by the LPSC. System Energy ~~is double-recovering costs by including both the lease payments and the capital additions in Unit Power Sales Agreement billings. The complaint also claims~~disputes that System Energy was imprudent in entering into the sale-leaseback renewal because the Utility operating companies that purchase Grand Gulf’s output from System Energy could have obtained cheaper capacity and energy in the MISO markets. The complaint further alleges that System Energy violated various other reporting and accounting requirements and should have sought prior FERC approval of the lease renewal. The complaint seeks various forms of relief from the FERC. The complaint seeksany refunds are owed for capital addition costs for all years in which they were recorded in allegedly non-formula accounts or, alternatively, the disallowance of the return on equity for the capital additions in those years plus interest. The complaint also asks that the FERC disallow and refund the lease costs of the sale-leaseback renewal on grounds of imprudence, investigate System Energy’s treatment of a DOE litigation payment, and impose certain forward-looking procedural protections, including audit rights for retail regulators ofbillings under the Unit Power Sales ~~Agreement formula rates.~~Agreement. A hearing has been scheduled for November 2019.

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

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

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

See “New Accounting Pronouncements” section of ~~Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis~~Note 1 to the financial statements in the Form 10-K for a discussion of new accounting pronouncements.

See “PART I, Item 1, Litigation” in the Form 10-K for a discussion of legal, administrative, and other regulatory proceedings affecting Entergy. Also see Note 1 and Note 2 to the financial statements herein and “Item 5, Other Information, Environmental Regulation” below for updates regarding environmental proceedings and regulation.

There have been no material changes to the risk factors discussed in “PART I, Item 1A, Risk Factors” in the Form 10-K.

In accordance with Entergy’s stock-based compensation plans, Entergy periodically grants stock options to key employees, which may be exercised to obtain shares of Entergy’s common stock. According to the plans, these shares can be newly issued shares, treasury stock, or shares purchased on the open market. Entergy’s management has been authorized by the Board to repurchase on the open market shares up to an amount sufficient to fund the exercise of grants under the plans. In addition to this authority, the Board has authorized share repurchase programs to enable opportunistic purchases in response to market conditions. In October 2010 the Board granted authority for a $500 million share repurchase program. The amount of share repurchases under these programs may vary as a result of material changes in business results or capital spending or new investment opportunities. In addition, in the first quarter ~~2018,~~2019, Entergy withheld ~~71,229~~76,735 shares of its common stock at ~~$76.83~~$86.03 per share, ~~43,698~~82,550 shares of its common stock at ~~$78.29~~$86.51 per share, ~~and 16,691~~38,326 shares of its common stock at ~~$78.51~~$87.10 per 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 taxes due upon vesting of restricted stock granted and payout of performance units as part of its long-term incentive program.

Following ~~are updates~~is an update to the “Regulation of the Nuclear Power Industry” section of Part I, Item 1 of the Form 10-K.

~~See the discussion in Part I, Item 1 in the Form 10-K for information regarding decommissioning funding for the nuclear plants. Following is an update to that discussion.~~

Following are updates to the “Environmental Regulation” section of Part I, Item 1 of the Form 10-K.

As discussed in the Form 10-K, Entergy continues to support national legislation that would increase planning certainty for electric utilities while addressing carbon dioxide emissions in a responsible and flexible manner. Entergy voluntarily conducted a climate scenario analysis and published a comprehensive report in March 2019. The report follows the Houston-Galveston-Brazoria area was originally classified as “moderate” nonattainment under the 1997 8-hour ozone standard with an attainment date of June 15, 2010. In April 2015 the EPA revoked the 1997 ozone national ambient air quality standards (NAAQS),framework and in May 2016 the EPA issued a proposed rule approving a substitute for the Houston-Galveston-Brazoria area. This redesignation indicates that the area has attained the revoked 1997 8-hour ozone NAAQS due to permanent and enforceable emission reductions and that it will maintain that NAAQS for 10 years from the daterecommendations of the ~~approval. Final approval, which was effective in December 2016,~~Task Force on Climate-related Disclosures (TCFD), describing climate-related governance, strategy, risk management, and metrics and targets. Scenario analysis resulted in Entergy developing and publishing a new goal of reducing the area no longer being subject to any remaining anti-backsliding or nonattainment new source review requirements associated with the revoked 1997 NAAQS. In February 2018 the U.S. Court of Appeals for the D.C. Circuit opined that the EPA violated the Clean Air ActUtility’s emission rate by ~~revoking the 1997 standard and~~50 percent from 2000 levels by creating the process that allowed states to avoid certain anti-backsliding provisions of the Act. Opponents filed a legal challenge to the December 2016 redesignation based on the February 2018 D.C. Circuit decision.2030.

As discussed in the Form 10-K, in ~~March 2008~~February 2016, Entergy disclosed that elevated tritium levels had been detected in samples from several monitoring wells that are part of Indian Point’s groundwater monitoring program. Investigation of the EPA revised the NAAQS for ozone, creating the potential for additional counties and parishes in which Entergy operates to be placed in nonattainment status. In April 2012 the EPA released its final nonattainment designations for the 2008 ozone NAAQS. In Entergy’s utility service area, the Houston-Galveston-Brazoria, Texas; Baton Rouge, Louisiana; and Memphis, Tennessee/Mississippi/Arkansas areas were designated as in “marginal” nonattainment. In August 2015 and January 2016, the EPA proposed determinations that the Baton Rouge and Memphis areas had attained the 2008 standard. In May 2016 the EPA finalized those determinations and extended the Houston-Galveston-Brazoria area’s attainment date for the 2008 ozone standard to July 20, 2016 and reclassified the Baton Rouge area as attainment for ozone under the 2008 8-hour ozone standard. In December 2016 the EPAsource of elevated tritium determined that the ~~Houston-Galveston-Brazoria area had failed~~source was related to ~~attain the 2008 ozone standard by the 2016 attainment date. This finding reclassified the Houston-Galveston-Brazoria area from marginal~~a temporary system to ~~“moderate” and set the attainment deadline as July 20, 2018. In May 2018 the EPA published a proposed rule approving the Houston-Galveston-Brazoria attainment demonstration~~process water in preparation for the ~~2008 8-hour ozone standard. Final EPA action remains pending.~~



(Mark One)
X	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the Quarterly Period Ended ~~September 30, 2018~~March 31, 2019
	OR
	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

	For the transition period from ____________ to ____________



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

1-11299	ENTERGY CORPORATION (a Delaware corporation) 639 Loyola Avenue New Orleans, Louisiana 70113 Telephone (504) 576-4000 72-1229752	1-35747	ENTERGY NEW ORLEANS, LLC (a Texas limited liability company) 1600 Perdido Street New Orleans, Louisiana 70112 Telephone (504) 670-3700 82-2212934


1-10764	ENTERGY ARKANSAS, ~~INC.~~LLC (~~an Arkansas corporation)~~a Texas limited liability company) 425 West Capitol Avenue Little Rock, Arkansas 72201 Telephone (501) 377-4000 ~~71-0005900~~83-1918668	1-34360	ENTERGY TEXAS, INC. (a Texas corporation) 10055 Grogans Mill Road The Woodlands, Texas 77380 Telephone (409) 981-2000 61-1435798


1-32718	ENTERGY LOUISIANA, LLC (a Texas limited liability company) 4809 Jefferson Highway Jefferson, Louisiana 70121 Telephone (504) 576-4000 47-4469646	1-09067	SYSTEM ENERGY RESOURCES, INC. (an Arkansas corporation) 1340 Echelon Parkway Jackson, Mississippi 39213 Telephone (601) 368-5000 72-0752777


1-31508	ENTERGY MISSISSIPPI, ~~INC.~~LLC (a ~~Mississippi corporation)~~Texas limited liability company) 308 East Pearl Street Jackson, Mississippi 39201 Telephone (601) 368-5000 ~~64-0205830~~83-1950019



	Large accelerated filer	Accelerated filer	Non- accelerated filer	Smaller reporting company	Emerging growth company
Entergy Corporation	ü
Entergy Arkansas, ~~Inc.~~LLC			ü
Entergy Louisiana, LLC			ü��
Entergy Mississippi, ~~Inc.~~LLC			ü
Entergy New Orleans, LLC			ü
Entergy Texas, Inc.			ü
System Energy Resources, Inc.			ü



~~Common Stock Outstanding~~Registrant	Trading Symbol	Title of Class	Name of Each Exchange on Which Registered
		~~Outstanding at October 31, 2018~~
Entergy Corporation	~~($0.01 par value)~~ETR	~~181,142,215~~Common Stock, $0.01 Par Value – 189,926,451 shares outstanding at April 30, 2019	New York Stock Exchange LLC NYSE Chicago, Inc.

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

Entergy Louisiana, LLC	ELJ	Mortgage Bonds, 5.25% Series due July 2052	New York Stock Exchange LLC
	ELU	Mortgage Bonds, 4.70% Series due June 2063	New York Stock Exchange LLC
	ELC	Mortgage Bonds, 4.875% Series due September 2066	New York Stock Exchange LLC

Entergy Mississippi, LLC	EMP	Mortgage Bonds, 4.90% Series due October 2066	New York Stock Exchange LLC

Entergy New Orleans, LLC	ENJ	Mortgage Bonds, 5.0% Series due December 2052	New York Stock Exchange LLC
	ENO	Mortgage Bonds, 5.50% Series due April 2066	New York Stock Exchange LLC

Entergy Texas, Inc.	EZT	Mortgage Bonds, 5.625% Series due June 2064	New York Stock Exchange LLC



	Page Number

Forward-looking information	iii
Definitions	vi

Part I. Financial Information

Entergy Corporation and Subsidiaries
Management’s Financial Discussion and Analysis	1
Consolidated Income Statements	2214
Consolidated Statements of Comprehensive Income	2315
Consolidated Statements of Cash Flows	2416
Consolidated Balance Sheets	2618
Consolidated Statements of Changes in Equity	2820
Selected Operating Results	2921
Notes to Financial Statements
Note 1. Commitments and Contingencies	3022
Note 2. Rate and Regulatory Matters	3123
Note 3. Equity	4626
Note 4. Revolving Credit Facilities, Lines of Credit, Short-term Borrowings, and Long-term Debt	5330
Note 5. Stock-based Compensation	5834
Note 6. Retirement and Other Postretirement Benefits	6036
Note 7. Business Segment Information	6739
Note 8. Risk Management and Fair Values	6940
Note 9. Decommissioning Trust Funds	8858
Note 10. Income Taxes	9664
Note 11. Property, Plant, and Equipment	9765
Note 12. Variable Interest Entities	9765
Note 13. Revenue Recognition	9866
Note 14. Asset Retirement Obligations	~~102~~68
Note 15. Leases	68
Note 16. Dispositions	76
Item 3. Quantitative and Qualitative Disclosures About Market Risk	~~103~~77
Item 4. Controls and Procedures	~~103~~77
Entergy Arkansas, ~~Inc.~~LLC and Subsidiaries
Management’s Financial Discussion and Analysis	~~104~~78
Consolidated Income Statements	~~113~~84
Consolidated Statements of Cash Flows	~~115~~85
Consolidated Balance Sheets	~~116~~86
Consolidated Statements of Changes in ~~Common~~Member’s Equity	~~118~~88
Selected Operating Results	~~119~~89
Entergy Louisiana, LLC and Subsidiaries
Management’s Financial Discussion and Analysis	~~120~~90
Consolidated Income Statements	~~130~~
~~Consolidated Statements of Comprehensive Income~~	~~132~~
~~Consolidated Statements of Cash Flows~~	~~133~~96



Abbreviation or Acronym	Term

ALJ	Administrative Law Judge
ANO 1 and 2	Units 1 and 2 of Arkansas Nuclear One (nuclear), owned by Entergy Arkansas
APSC	Arkansas Public Service Commission
ASU	Accounting Standards Update issued by the FASB
Board	Board of Directors of Entergy Corporation
Cajun	Cajun Electric Power Cooperative, Inc.
capacity factor	Actual plant output divided by maximum potential plant output for the period
City Council	Council of the City of New Orleans, Louisiana
D.C. Circuit	U.S. Court of Appeals for the District of Columbia Circuit
DOE	United States Department of Energy
Entergy	Entergy Corporation and its direct and indirect subsidiaries
Entergy Corporation	Entergy Corporation, a Delaware corporation
Entergy Gulf States, Inc.	Predecessor company for financial reporting purposes to Entergy Gulf States Louisiana that included the assets and business operations of both Entergy Gulf States Louisiana and Entergy Texas
Entergy Gulf States Louisiana	Entergy Gulf States Louisiana, L.L.C., a Louisiana limited liability company formally created as part of the jurisdictional separation of Entergy Gulf States, Inc. and the successor company to Entergy Gulf States, Inc. for financial reporting purposes. The term is also used to refer to the Louisiana jurisdictional business of Entergy Gulf States, Inc., as the context requires. Effective October 1, 2015, the business of Entergy Gulf States Louisiana was combined with Entergy Louisiana.
Entergy Louisiana	Entergy Louisiana, LLC, a Texas limited liability company formally created as part of the combination of Entergy Gulf States Louisiana and the company formerly known as Entergy Louisiana, LLC (Old Entergy Louisiana) into a single public utility company and the successor to Old Entergy Louisiana for financial reporting purposes.
Entergy Texas	Entergy Texas, Inc., a Texas corporation formally created as part of the jurisdictional separation of Entergy Gulf States, Inc. The term is also used to refer to the Texas jurisdictional business of Entergy Gulf States, Inc., as the context requires.
Entergy Wholesale Commodities	Entergy’s non-utility business segment primarily comprised of the ownership, operation, and decommissioning of nuclear power plants, the ownership of interests in non-nuclear power plants, and the sale of the electric power produced by its operating power plants to wholesale customers
EPA	United States Environmental Protection Agency
FASB	Financial Accounting Standards Board
FERC	Federal Energy Regulatory Commission
FitzPatrick	James A. FitzPatrick Nuclear Power Plant (nuclear), previously owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment, which was sold in March 2017
Form 10-K	Annual Report on Form 10-K for the calendar year ended December 31, ~~2017~~2018 filed with the SEC by Entergy Corporation and its Registrant Subsidiaries
Grand Gulf	Unit No. 1 of Grand Gulf Nuclear Station (nuclear), 90% owned or leased by System Energy
GWh	Gigawatt-hour(s), which equals one million kilowatt-hours
Independence	Independence Steam Electric Station (coal), owned 16% by Entergy Arkansas, 25% by Entergy Mississippi, and 7% by Entergy Power, LLC



Abbreviation or Acronym	Term

Indian Point 2	Unit 2 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Indian Point 3	Unit 3 of Indian Point Energy Center (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
IRS	Internal Revenue Service
ISO	Independent System Operator
kW	Kilowatt, which equals one thousand watts
kWh	Kilowatt-hour(s)
LPSC	Louisiana Public Service Commission
MISO	Midcontinent Independent System Operator, Inc., a regional transmission organization
MMBtu	One million British Thermal Units
MPSC	Mississippi Public Service Commission
MW	Megawatt(s), which equals one thousand kilowatts
MWh	Megawatt-hour(s)
Net debt to net capital ratio	Gross debt less cash and cash equivalents divided by total capitalization less cash and cash equivalents
Net MW in operation	Installed capacity owned and operated
NRC	Nuclear Regulatory Commission
NYPA	New York Power Authority
Palisades	Palisades Nuclear Plant (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
Parent & Other	The portions of Entergy not included in the Utility or Entergy Wholesale Commodities segments, primarily consisting of the activities of the parent company, Entergy Corporation
Pilgrim	Pilgrim Nuclear Power Station (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment
PPA	Purchased power agreement or power purchase agreement
PUCT	Public Utility Commission of Texas
Registrant Subsidiaries	Entergy Arkansas, ~~Inc.,~~LLC, Entergy Louisiana, LLC, Entergy Mississippi, ~~Inc.,~~LLC, Entergy New Orleans, LLC, Entergy Texas, Inc., and System Energy Resources, Inc.
River Bend	River Bend Station (nuclear), owned by Entergy Louisiana
SEC	Securities and Exchange Commission
System Agreement	Agreement, effective January 1, 1983, as modified, among the Utility operating companies relating to the sharing of generating capacity and other power resources. The agreement terminated effective August 2016.
System Energy	System Energy Resources, Inc.
TWh	Terawatt-hour(s), which equals one billion kilowatt-hours
Unit Power Sales Agreement	Agreement, dated as of June 10, 1982, as amended and approved by the FERC, among Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and System Energy, relating to the sale of capacity and energy from System Energy’s share of Grand Gulf
Utility	Entergy’s business segment that generates, transmits, distributes, and sells electric power, with a small amount of natural gas distribution
Utility operating companies	Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, and Entergy Texas



Abbreviation or Acronym	Term

Vermont Yankee	Vermont Yankee Nuclear Power Station (nuclear), owned by an Entergy subsidiary in the Entergy Wholesale Commodities business segment, which ceased power production in December 2014 and was disposed of in January 2019
Waterford 3	Unit No. 3 (nuclear) of the Waterford Steam Electric Station, ~~100%~~ owned ~~or leased~~ by Entergy Louisiana
weather-adjusted usage	Electric usage excluding the effects of deviations from normal weather
White Bluff	White Bluff Steam Electric Generating Station, 57% owned by Entergy Arkansas


	Utility			Entergy Wholesale Commodities			Parent & Other (a)			Entergy			Utility			Entergy Wholesale Commodities			Parent & Other (a)			Entergy
	(In Thousands)												(In Thousands)
3rd Quarter 2017 Consolidated Net Income (Loss)		$403,733			$55,765			($57,854	)		$401,644
2018 Consolidated Net Income (Loss)														$217,940			($17,779	)		($63,961	)		$136,200

Net revenue (operating revenue less fuel expense, purchased power, and other regulatory charges/credits)	(253,847		)	(50,681		)	(2		)	(304,530		)	(43,585		)	10,643			19			(32,923		)
Other operation and maintenance	50,746			24,903			3,363			79,012			(2,636		)	(2,116		)	4,218			(534		)
Asset write-offs, impairments, and related charges	—			138,994			—			138,994			—			1,055			—			1,055
Taxes other than income taxes	1,388			775			279			2,442			(2,191		)	(3,607		)	(845		)	(6,643		)
Depreciation and amortization	(17,013		)	(12,845		)	(253		)	(30,111		)	10,020			(111		)	300			10,209
Other income	26,926			88,207			(624		)	114,509			7,076			182,512			(1,738		)	187,850
Interest expense	2,256			3,386			7,526			13,168			5,650			919			7,317			13,886
Other expenses	(628		)	(6,271		)	—			(6,899		)	229			15,171			—			15,400
Income taxes	(367,682		)	(161,222		)	4,103			(524,801		)	(63,788		)	66,986			(4,090		)	(892		)

3rd Quarter 2018 Consolidated Net Income (Loss)		$507,745			$105,571			($73,498	)		$539,818
2019 Consolidated Net Income (Loss)														$234,147			$97,079			($72,580	)		$258,646


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



	Amount
	(In Millions)
~~2017~~2018 net revenue		$~~1,811~~1,460
Return of unprotected excess accumulated deferred income taxes to customers	(~~277~~61		)
~~Grand Gulf recovery~~Volume/weather	(3938		)
Retail electric price	61
Other	(86		)
~~Volume/weather~~	44
~~Net wholesale revenue~~	26
~~2018~~2019 net revenue		$~~1,557~~1,416



	Amount
	(In Millions)
~~2017 net revenue~~		~~$392~~
~~Nuclear realized price changes~~	~~(24~~		)
~~Nuclear volume~~	~~(14~~		)
~~Other~~	~~(13~~		)
2018 net revenue		$~~341~~382
Nuclear volume	15
Other	(4		)
2019 net revenue		$393


	2018	2017	2019	2018
Owned capacity (MW)	3,962	3,962	3,962	3,962
GWh billed	7,576	8,234	7,203	6,996

Entergy Wholesale Commodities Nuclear Fleet ~~(a)~~
Capacity factor	90%	98%	85%	83%
GWh billed	6,976	7,633	6,690	6,408
Average energy price ($/MWh)	$38.01	$39.94	$51.43	$52.29
Average capacity price ($/kW-month)	$9.32	$9.09	$4.71	$3.83
Refueling outage days:
Indian Point 2			—	13
Indian Point 3			21	—


~~(a)~~	~~The Entergy Wholesale Commodities nuclear power plants had no refueling outage days in the third quarter 2018 or the third quarter 2017.~~


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


Capacity	Borrowings	Letters of Credit	Capacity Available	Borrowings	Letters of Credit	Capacity Available
(In Millions)
$3,500	$630	$6	$2,864	$320	$6	$3,174


	2018	2019	2020	2021	2022	2019	2020	2021	2022
Energy
Percent of planned generation under contract (a):
Unit-contingent (b)	98%	95%	86%	87%	66%	98%	95%	91%	66%
Firm LD (c)	10%	—%	—%	—%	—%
Offsetting positions (d)	(10%)	—%	—%	—%	—%
Total	98%	95%	86%	87%	66%
Planned generation (TWh) (e) (f)	6.7	25.6	17.7	9.6	2.8
Planned generation (TWh) (c) (d)						18.6	17.7	9.6	2.8
Average revenue per MWh on contracted volumes:
Expected based on market prices as of September 30, 2018	$33.6	$40.3	$42.9	$57.3	$58.8
Expected based on market prices as of March 31, 2019						$34.7	$42.0	$56.9	$58.8

Capacity
Percent of capacity sold forward (g):
Bundled capacity and energy contracts (h)	22%	26%	36%	68%	97%
Capacity contracts (i)	42%	22%	3%	—%	—%
Percent of capacity sold forward (e):
Bundled capacity and energy contracts (f)						27%	37%	68%	97%
Capacity contracts (g)						30%	27%	—%	—%
Total	64%	48%	39%	68%	97%	57%	64%	68%	97%
Planned net MW in operation (average) (f)	3,568	3,167	2,195	1,158	338
Planned net MW in operation (average) (d)						3,167	2,195	1,158	338
Average revenue under contract per kW per month (applies to capacity contracts only)	$8.0	$7.2	$1.8	$—	$—	$5.1	$3.2	$—	$—

Total Energy and Capacity Revenues (j)
Total Energy and Capacity Revenues (h)
Expected sold and market total revenue per MWh	$44.1	$46.3	$46.9	$55.3	$47.1	$38.9	$45.1	$55.0	$47.5
Sensitivity: -/+ $10 per MWh market price change	$44.0-$44.3	$45.8-$46.8	$45.9-$47.9	$54.0-$56.7	$43.3-$50.9	$38.7-$39.1	$45.0-$45.2	$54.1-$55.9	$44.1-$51.0

																			ENTERGY CORPORATION AND SUBSIDIARIES	CONSOLIDATED INCOME STATEMENTS
For the Three and Nine Months Ended September 30, 2018 and 2017
For the Three Months Ended March 31, 2019 and 2018													For the Three Months Ended March 31, 2019 and 2018
(Unaudited)

	Three Months Ended						Nine Months Ended
	2018			2017			2018			2017			2019			2018
	(In Thousands, Except Share Data)												(In Thousands, Except Share Data)
OPERATING REVENUES
Electric		$2,697,887			$2,793,798			$7,276,374			$7,056,758			$2,121,024			$2,248,262
Natural gas	26,352			26,585			112,990			100,011			54,948			56,695
Competitive businesses	380,080			423,245			1,107,606			1,293,867			433,612			418,924
TOTAL	3,104,319			3,243,628			8,496,970			8,450,636			2,609,584			2,723,881

OPERATING EXPENSES
Operation and Maintenance:
Fuel, fuel-related expenses, and gas purchased for resale	729,269			612,950			1,638,367			1,426,462			478,330			443,296
Purchased power	439,380			408,140			1,252,437			1,182,404			339,507			396,023
Nuclear refueling outage expenses	37,937			43,273			116,057			124,126			50,441			42,760
Other operation and maintenance	854,013			775,001			2,477,699			2,416,825			783,051			783,585
Asset write-offs, impairments, and related charges	155,215			16,221			297,082			421,584			73,979			72,924
Decommissioning	93,829			95,392			285,834			310,062			102,119			94,400
Taxes other than income taxes	161,916			159,474			485,682			469,090			158,575			165,218
Depreciation and amortization	324,628			354,739			1,022,099			1,052,332			357,274			347,065
Other regulatory charges (credits)	37,097			19,435			223,416			(59,314		)	(16,946		)	42,946
TOTAL	2,833,284			2,484,625			7,798,673			7,343,571			2,326,330			2,388,217

Gain on sale of assets	—			—			—			16,270

OPERATING INCOME	271,035			759,003			698,297			1,123,335			283,254			335,664

OTHER INCOME
Allowance for equity funds used during construction	32,354			24,338			92,367			65,722			38,216			28,343
Interest and investment income	177,081			58,332			265,086			194,978			228,149			16,870
Miscellaneous - net	(43,591		)	(31,335		)	(123,439		)	(78,726		)	(64,658		)	(31,356		)
TOTAL	165,844			51,335			234,014			181,974			201,707			13,857

INTEREST EXPENSE
Interest expense	195,311			178,391			570,548			522,857			200,993			182,923
Allowance for borrowed funds used during construction	(15,244		)	(11,492		)	(43,177		)	(31,057		)	(17,449		)	(13,265		)

														ENTERGY CORPORATION AND SUBSIDIARIES	CONSOLIDATED BALANCE SHEETS	ASSETS
September 30, 2018 and December 31, 2017
March 31, 2019 and December 31, 2018							March 31, 2019 and December 31, 2018
(Unaudited)
	2018			2017				2019			2018
	(In Thousands)							(In Thousands)
CURRENT ASSETS
Cash and cash equivalents:
Cash		$64,787			$56,629				$118,384			$56,690
Temporary cash investments	923,194			724,644				865,112			424,285
Total cash and cash equivalents	987,981			781,273				983,496			480,975
Accounts receivable:
Customer	789,633			673,347				589,519			558,494
Allowance for doubtful accounts	(15,589		)	(13,587		)		(7,458		)	(7,322		)
Other	166,222			169,377				158,293			167,722
Accrued unbilled revenues	426,387			383,813				334,355			395,511
Total accounts receivable	1,366,653			1,212,950				1,074,709			1,114,405
Deferred fuel costs	61,309			95,746				19,209			27,251
Fuel inventory - at average cost	132,916			182,643				121,705			117,304
Materials and supplies - at average cost	747,770			723,222				771,707			752,843
Deferred nuclear refueling outage costs	149,810			133,164				231,628			230,960
Prepayments and other	248,107			156,333				205,322			234,326
TOTAL	3,694,546			3,285,331				3,407,776			2,958,064

OTHER PROPERTY AND INVESTMENTS
Investment in affiliates - at equity	198			198
Decommissioning trust funds	7,444,346			7,211,993				6,877,865			6,920,164
Non-utility property - at cost (less accumulated depreciation)	302,784			260,980				310,215			304,382
Other	436,527			441,862				439,849			437,265
TOTAL	8,183,855			7,915,033				7,627,929			7,661,811

PROPERTY, PLANT, AND EQUIPMENT
Electric	48,362,347			47,287,370				50,260,871			49,831,486
Property under capital lease	620,419			620,544
Natural gas	488,169			453,162				509,987			496,150
Construction work in progress	2,832,826			1,980,508				3,289,734			2,888,639
Nuclear fuel	846,845			923,200				790,398			861,272
TOTAL PROPERTY, PLANT, AND EQUIPMENT	53,150,606			51,264,784				54,850,990			54,077,547
Less - accumulated depreciation and amortization	22,057,870			21,600,424				22,198,769			22,103,101
PROPERTY, PLANT, AND EQUIPMENT - NET	31,092,736			29,664,360				32,652,221			31,974,446



	~~Amount~~
	~~(In Millions)~~
~~2017 net revenue~~		~~$4,765~~
~~Return of unprotected excess accumulated deferred income taxes to customers~~	~~(555~~		)
~~Grand Gulf recovery~~	~~(74~~		)
~~Retail electric price~~	(4		)
~~Net wholesale revenue~~	35
~~Volume/weather~~	~~203~~
~~Other~~	18
~~2018 net revenue~~		~~$4,388~~


	September 30, 2018		December 31, 2017		March 31, 2019		December 31, 2018
Debt to capital	68.2	%	67.1	%	67.8	%	66.7	%
Effect of excluding securitization bonds	(0.5	%)	(0.8	%)	(0.5	%)	(0.6	%)
Debt to capital, excluding securitization bonds (a)	67.7	%	66.3	%	67.3	%	66.1	%
Effect of subtracting cash	(1.3	%)	(1.1	%)	(1.2	%)	(0.6	%)
Net debt to net capital, excluding securitization bonds (a)	66.4	%	65.2	%	66.1	%	65.5	%


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


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


~~(d)~~	~~Transactions for the purchase of energy, generally to offset a Firm LD transaction.~~


~~(e)~~	Amount of output expected to be generated by Entergy Wholesale Commodities nuclear resources considering plant operating characteristics and outage ~~schedules, and expected market conditions that affect dispatch.~~schedules.


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


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


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


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

														ENTERGY CORPORATION AND SUBSIDIARIES	CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30, 2018 and 2017
For the Three Months Ended March 31, 2019 and 2018							For the Three Months Ended March 31, 2019 and 2018
(Unaudited)
	2018			2017				2019			2018
	(In Thousands)							(In Thousands)
OPERATING ACTIVITIES
Consolidated net income		$924,877			$901,064				$258,646			$136,200
Adjustments to reconcile consolidated net income to net cash flow provided by operating activities:
Depreciation, amortization, and decommissioning, including nuclear fuel amortization	1,517,344			1,561,565				530,224			525,181
Deferred income taxes, investment tax credits, and non-current taxes accrued	82,641			(90,607		)		104,884			104,607
Asset write-offs, impairments, and related charges	210,263			241,838				25,462			25,800
Gain on sale of assets	—			(16,270		)
Changes in working capital:
Receivables	(153,703		)	(198,029		)		39,697			131,150
Fuel inventory	49,728			20,746				(4,401		)	(16,261		)
Accounts payable	79,949			(75,962		)		(63,613		)	(68,857		)
Taxes accrued	43,510			66,895				(44,083		)	(56,301		)
Interest accrued	(9,398		)	(6,111		)		(20,546		)	(10,011		)
Deferred fuel costs	(25,284		)	(117,636		)		20,201			(76,238		)
Other working capital accounts	(86,063		)	(81,779		)		(42,016		)	(28,004		)
Changes in provisions for estimated losses	28,599			(10,073		)		13,720			10,744
Changes in other regulatory assets	207,135			117,430				(162,192		)	84,349
Changes in other regulatory liabilities	(413,684		)	22,124				130,924			(31,380		)
Changes in pensions and other postretirement liabilities	(345,526		)	(354,297		)		(7,713		)	(97,418		)
Other	(250,884		)	(268,147		)		(278,005		)	(76,168		)
Net cash flow provided by operating activities	1,859,504			1,712,751				501,189			557,393

INVESTING ACTIVITIES
Construction/capital expenditures	(2,883,047		)	(2,622,104		)		(951,629		)	(931,479		)
Allowance for equity funds used during construction	92,829			66,437				38,322			28,512
Nuclear fuel purchases	(170,819		)	(226,054		)		(38,445		)	(49,647		)
Proceeds from sale of assets	12,915			100,000
Insurance proceeds received for property damages	10,523			26,157				—			1,582
Changes in securitization account	(12,985		)	(6,494		)		(1,084		)	(7,063		)
Payments to storm reserve escrow account	(4,515		)	(1,925		)		(2,285		)	(1,175		)
Receipts from storm reserve escrow account	—			8,836
Increase in other investments	(36,140		)	(112,217		)
Litigation proceeds for reimbursement of spent nuclear fuel storage costs	—			25,493
Decrease (increase) in other investments								39,045			(406		)
Proceeds from nuclear decommissioning trust fund sales	4,177,919			1,902,783				1,307,547			1,091,332
Investment in nuclear decommissioning trust funds	(4,187,161		)	(1,988,634		)		(1,342,429		)	(1,106,094		)
Net cash flow used in investing activities	(3,000,481		)	(2,827,722		)		(950,958		)	(974,438		)

See Notes to Financial Statements.

														ENTERGY CORPORATION AND SUBSIDIARIES	CONSOLIDATED BALANCE SHEETS	LIABILITIES AND EQUITY
September 30, 2018 and December 31, 2017
March 31, 2019 and December 31, 2018							March 31, 2019 and December 31, 2018
(Unaudited)
	2018			2017				2019			2018
	(In Thousands)							(In Thousands)
CURRENT LIABILITIES
Currently maturing long-term debt		$735,009			$760,007				$150,010			$650,009
Notes payable and commercial paper	1,946,677			1,578,308				1,942,322			1,942,339
Accounts payable	1,392,114			1,452,216				1,406,327			1,496,058
Customer deposits	409,153			401,330				409,433			411,505
Taxes accrued	258,477			214,967				210,156			254,241
Interest accrued	178,573			187,972				172,645			193,192
Deferred fuel costs	86,949			146,522				64,653			52,396
Obligations under capital leases	1,466			1,502
Pension and other postretirement liabilities	57,471			71,612				62,218			61,240
Current portion of unprotected excess accumulated deferred income taxes	500,419			—				239,664			248,127
Other	184,255			221,771				203,655			134,437
TOTAL	5,750,563			5,036,207				4,861,083			5,443,544

NON-CURRENT LIABILITIES
Accumulated deferred income taxes and taxes accrued	4,427,744			4,466,503				4,252,292			4,107,152
Accumulated deferred investment tax credits	213,237			219,634				211,013			213,101
Obligations under capital leases	20,887			22,015
Regulatory liability for income taxes-net	1,802,528			2,900,204				1,737,479			1,817,021
Other regulatory liabilities	1,772,093			1,588,520				1,839,183			1,620,254
Decommissioning and asset retirement cost liabilities	6,555,835			6,185,814				6,577,180			6,355,543
Accumulated provisions	506,959			478,273				527,866			514,107
Pension and other postretirement liabilities	2,579,270			2,910,654				2,607,394			2,616,085
Long-term debt (includes securitization bonds of $462,889 as of September 30, 2018 and $544,921 as of December 31, 2017)	15,780,827			14,315,259
Long-term debt (includes securitization bonds of $398,291 as of March 31, 2019 and $423,858 as of December 31, 2018)								17,167,886			15,518,303
Other	450,746			393,748				634,211			1,006,249
TOTAL	34,110,126			33,480,624				35,554,504			33,767,815

Commitments and Contingencies

Subsidiaries' preferred stock without sinking fund	197,771			197,803				219,427			219,402

COMMON EQUITY
Common stock, $.01 par value, authorized 500,000,000 shares; issued 254,752,788 shares in 2018 and in 2017	2,548			2,548
Common stock, $.01 par value, authorized 500,000,000 shares; issued 261,587,009 shares in 2019 and in 2018								2,616			2,616
Paid-in capital	5,441,696			5,433,433				5,920,183			5,951,431
Retained earnings	8,953,611			7,977,702				8,809,902			8,721,150
Accumulated other comprehensive loss	(632,126		)	(23,531		)		(551,152		)	(557,173		)
Less - treasury stock, at cost (73,621,473 shares in 2018 and 74,235,135 shares in 2017)	5,353,017			5,397,637
Less - treasury stock, at cost (71,670,773 shares in 2019 and 72,530,866 shares in 2018)								5,211,182			5,273,719
TOTAL	8,412,712			7,992,515				8,970,367			8,844,305

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$48,471,172			$46,707,149				$49,605,381			$48,275,066

See Notes to Financial Statements.



	~~Payments (Receipts)~~
	~~(In Millions)~~
~~Entergy Arkansas~~	~~($4)~~
~~Entergy Louisiana~~	~~($23)~~
~~Entergy Mississippi~~	~~$16~~
~~Entergy New Orleans~~	$5
~~Entergy Texas~~	$6


													For the Three Months Ended March 31,
	For the Three Months Ended September 30,												2019						2018
	2018						2017						(In Millions, Except Per Share Data)
	(In Millions, Except Per Share Data)												Income		Shares	$/share			Income		Shares	$/share
Basic earnings per share	Income		Shares	$/share			Income		Shares	$/share
Net income attributable to Entergy Corporation		$536.4	181.0		$2.96			$398.2	179.6		$2.22			$254.5	189.6		$1.34			$132.8	180.7		$0.73
Average dilutive effect of:
Stock options			0.4	(0.01		)			0.2	—					0.4	—					0.2	—
Other equity plans			0.8	(0.01		)			0.7	(0.01		)			0.5	(0.01		)			0.5	—
Equity forwards			1.5	(0.02		)			—	—					1.7	(0.01		)			—	—
Diluted earnings per share		$536.4	183.7		$2.92			$398.2	180.5		$2.21			$254.5	192.2		$1.32			$132.8	181.4		$0.73



	For the Nine Months Ended September 30,
	2018						2017
	(In Millions, Except Per Share Data)
Basic earnings per share	Income		Shares	$/share			Income		Shares	$/share
Net income attributable to Entergy Corporation		$914.6	180.8		$5.06			$890.7	179.5		$4.96
Average dilutive effect of:
Stock options			0.3	(0.01		)			0.2	(0.01		)
Other equity plans			0.7	(0.01		)			0.5	(0.01		)
Equity forwards			0.9	(0.03		)			—	—
Diluted earnings per share		$914.6	182.7		$5.01			$890.7	180.2		$4.94


	Cash flow hedges net unrealized gain (loss)			Pension and other postretirement liabilities			Net unrealized investment gain (loss)			Total Accumulated Other Comprehensive Income (Loss)			Cash flow hedges net unrealized gain (loss)			Pension and other postretirement liabilities			Net unrealized investment gain (loss)			Total Accumulated Other Comprehensive Income (Loss)
	(In Thousands)												(In Thousands)
Beginning balance, July 1, 2018		($14,874	)		($589,926	)		($8,842	)		($613,642	)
Ending balance, December 31, 2018														($23,135	)		($531,922	)		($2,116	)		($557,173	)
Implementation of accounting standards													(7,685		)	—			879			(6,806		)
Beginning balance, January 1, 2019														($30,820	)		($531,922	)		($1,237	)		($563,979	)

Other comprehensive income (loss) before reclassifications	(40,401		)	—			(7,173		)	(47,574		)	28,312			—			13,539			41,851
Amounts reclassified from accumulated other comprehensive income (loss)	8,397			15,265			5,428			29,090			(40,738		)	11,550			164			(29,024		)
Net other comprehensive income (loss) for the period	(32,004		)	15,265			(1,745		)	(18,484		)	(12,426		)	11,550			13,703			12,827
Ending balance, September 30, 2018		($46,878	)		($574,661	)		($10,587	)		($632,126	)
Ending balance, March 31, 2019														($43,246	)		($520,372	)		$12,466			($551,152	)



	Pension and Other Postretirement Liabilities
	2018			2017
	(In Thousands)
Beginning balance, July 1,		($57,451	)		($49,122	)
Amounts reclassified from accumulated other comprehensive income (loss)	(500		)	(370		)
Net other comprehensive income (loss) for the period	(500		)	(370		)

Ending balance, September 30,		($57,951	)		($49,492	)



	Amounts reclassified from AOCI						Income Statement Location
	2018			2017
	(In Thousands)
Cash flow hedges net unrealized gain (loss)
Power contracts		($10,566	)		$22,756		Competitive business operating revenues
Interest rate swaps	(63		)	(185		)	Miscellaneous - net
Total realized gain (loss) on cash flow hedges	(10,629		)	22,571
	2,232			(7,900		)	Income taxes
Total realized gain (loss) on cash flow hedges (net of tax)		($8,397	)		$14,671

Pension and other postretirement liabilities
Amortization of prior-service credit		$5,425			$6,565		(a)
Amortization of loss	(24,740		)	(21,480		)	(a)
Settlement loss	(76		)	(4,200		)	(a)
Total amortization	(19,391		)	(19,115		)
	4,126			6,818			Income taxes
Total amortization (net of tax)		($15,265	)		($12,297	)

Net unrealized investment gain (loss)
Realized gain (loss)		($8,589	)		$4,382		Interest and investment income
	3,161			(2,147		)	Income taxes
Total realized investment gain (loss) (net of tax)		($5,428	)		$2,235

Total reclassifications for the period (net of tax)		($29,090	)		$4,609


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



Company	Expiration Date	Amount of Facility	Interest Rate (a)	Amount Drawn as of ~~September 30, 2018~~March 31, 2019	Letters of Credit Outstanding as of ~~September 30, 2018~~March 31, 2019
Entergy Arkansas	April ~~2019~~2020	$20 million (b)	~~3.49%~~3.75%	$—	$—
Entergy Arkansas	September 2023	$150 million (c)	~~3.49%~~3.75%	$—	$—
Entergy Louisiana	September 2023	$350 million (c)	~~3.49%~~3.75%	$—	$—
Entergy Mississippi	May 2019	$37.5 million (d)	~~3.74%~~4.00%	$—	$—
Entergy Mississippi	May 2019	$35 million (d)	~~3.74%~~4.00%	$—	$—
Entergy Mississippi	May 2019	$10 million (d)	~~3.74%~~4.00%	$—	$—
Entergy New Orleans	November ~~2018~~2021	$25 million (c)	~~3.72%~~3.77%	$—	$0.8 million
Entergy Texas	September 2023	$150 million (c)	~~3.74%~~4.00%	$—	$1.3 million