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

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

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 quarter 20202021 to the third quarter 20192020 showing how much the line item increased or (decreased) in comparison to the prior period:

Following is an analysis of the change in operating revenues comparing the nine months ended September 30, 20202021 to the nine months ended September 30, 2019:2020:

The Utility operating companies’ results include revenues from rate mechanisms designed to recover fuel, purchased power, and other costs such that the revenues and expenses associated with these items generally offset and do not affect net income. “Fuel, rider, and other revenues that do not significantly affect net income” includes the revenue variance associated with these items.

The return of unprotected excess accumulated deferred income taxes to customers resulted from activity at the 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 the second quarter 2018. In the nine months ended September 30, 2020, $552021, $71 million was returned to customers through reductions in operating revenues as compared to $212$55 million in the nine months ended September 30, 2019.2020. There is no effect on net income as the reductions in operating revenues were offset by reductions 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.     

Operating revenues for Entergy Wholesale Commodities decreased from $1,024 million for the nine months ended September 30, 2019 to $747$746 million for the nine months ended September 30, 2020 to $559 million for the nine months ended September 30, 2021 primarily due to the shutdown of Pilgrim in May 2019, the shutdown of Indian Point 2 in April 2020 and lower realized wholesale energy and capacity prices. The decrease was partially offset by higher volumethe shutdown of Indian Point 3 in the remaining Entergy Wholesale Commodities nuclear fleet resulting from fewer outage days and a larger exercise of resupply options provided for in purchase power agreements where Entergy Wholesale Commodities may elect to supply power from another source when plants are not running.April 2021.

Other operation and maintenance expenses decreasedincreased from $1,894 million for the nine months ended September 30, 2019 to $1,787 million for the nine months ended September 30, 2020 to $1,937 million for the nine months ended September 30, 2021 primarily due to:

Depreciation and amortization expenses increased primarily due to additions to plant in service, including the J. Wayne Leonard Power Station (formerly St. Charles Power Station), the Lake Charles Power Station and the Choctaw Generating Station,Montgomery County Power Station.

Other income decreasedincreased primarily due to:

Other operation and maintenance expenses decreased from $513 million for the nine months ended September 30, 2019 to $385 million for the nine months ended September 30, 2020 to $233 million for the nine months ended September 30, 2021 primarily due to:

Depreciation and amortization expenses decreased primarily due to to:

Other income decreased primarily due to lower gains on decommissioning trust fund investments including the absence of earnings from nuclear decommissioning trust funds that were transferred in the nine months ended September 30, 2020 compared tosale of the nine months ended September 30, 2019.Indian Point Energy Center in May 2021. The decrease was partially offset by lower non-service pension costs. See Notes 8 and 9 to the financial statements herein for a discussion of decommissioning trust fund investments. See Note 14 to the financial statements herein for further discussion of the sale of the Indian Point Energy Center. See Note 6 to the financial statements herein and Note 11 to the financial statements in the Form 10-K for further discussion of pension and other postretirement benefits costs.

Other expenses decreased primarily due to the absence of decommissioning expense from Indian Point 2 and Indian Point 3, after the Pilgrim plant, after it was soldsale of the Indian Point Energy Center in August 2019.May 2021. See Note 14 to the financial statements in the Form 10-Kherein for further discussion of the sale of the Pilgrim plant.Indian Point Energy Center.

The effective income tax rate was 14.2% for the nine months ended September 30, 2020. The difference in the effective income tax rate for the nine months ended September 30, 2020 versus the federal statutory rate of 21% was primarily due to amortization of excess accumulated deferred income taxes, certain book and tax differences related to utility plant items, the settlement with the IRS on the treatment of funds received in conjunction with the Act 55 financing of Hurricane Isaac storm costs, and permanent differences related to income tax deductions for stock-based compensation, partially offset by state income taxes. See Note 103 to the financial statements hereinin the Form 10-K for discussion of the IRS settlement and the income tax deductions for stock-based compensation. 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.

As discussed in the Form 10-K, 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 subsidiary for decommissioning.decommissioning the plants.

Indian Point 2 permanently ceased operations on April 30, 2020 and Indian Point 3 permanently ceased operations on April 30, 2021. The transaction closed in May 2021. The sale will includeincluded the transfer of the licenses, spent fuel, decommissioning liabilities, and nuclear decommissioning trusts for the three units. SubjectThe transaction resulted in a charge of $340 million ($268 million net-of-tax) in the second quarter of 2021. See Note 14 to the conditions discussed in the Form 10-K, the transaction is targeted to close in May 2021, following the defueling of Indian Point 3. The NRC publicly stated it expects to complete its technical and financial assurance reviewstatements for discussion of the license transfer application by the endclosing of 2020. As consideration for the transfer to Holtec of its interest in Indian Point, Entergy will receive nominal cash consideration. The terms of the transaction do not require a minimum level of funding in the nuclear decommissioning trusts as a condition to closing. 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 September 30, 2020, Entergy’s adjusted net investment in the Indian Point units was $210 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 any unrealized deferred tax balances at closing. Indian Point 2 permanently ceased operations on April 30, 2020.transaction.

As discussed in the Form 10-K, in July 2018, Entergy entered into a purchase and sale agreement to sell 100% of the equity interests in the subsidiary that owns Palisades and the Big Rock Point Site, for $1,000 (subject to adjustment for net liabilities and other amounts). to a Holtec subsidiary. The sale will include the transfer of the nuclear decommissioning trust and obligation for spent fuel management and plant decommissioning.

In December 2020, Entergy and Holtec submitted a license transfer application to the NRC requesting approval to transfer the Palisades and Big Rock Point licenses from Entergy to Holtec. The NRC has indicated that it expects to complete its review of the application by January 2022. In February 20202021 several parties filed with the parties signedNRC petitions to intervene and requests for hearing challenging the license transfer application. In March 2021, Entergy and Holtec filed answers opposing the petitions to intervene and hearing requests, and the petitioners filed replies. In March 2021 an amendmentadditional party also filed a petition to intervene and request for hearing. Entergy and Holtec filed an answer to the purchase and sale agreement to remove the closing condition that the nuclear decommissioning trust fund must have a specified amount and Entergy agreed to contribute $20 million to the nuclear decommissioning trust fund at closing, among other amendments. March 2021 petition in April 2021.

Subject to the conditions discussed in the Form 10-K, the transaction is expected to close by the end of 2022. Entergy intends to shut down Palisades permanently no later than May 31, 2022. As of September 30, 2020,2021, Entergy’s adjusted net investment in Palisades was $75($25) million. The primary variables in the ultimate loss or gain that Entergy will incur on the transaction are the values of the nuclear decommissioning trust and the asset retirement obligations at closing, the financial results from plant operations until the closing, and the level of any unrealized deferred tax balances at closing. Palisades completed its final refueling outage in October 2020.

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, 20202021 is primarily due to the net issuance of debt in 2020.2021.

Entergy Corporation has in place a credit facility that has a borrowing capacity of $3.5 billion and expires in September 2024.June 2026.  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 months ended September 30, 20202021 was 2.50%1.60% 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, 2020:2021:

Entergy Corporation has a commercial paper program with a Board-approved program limit of up to $2

Certain of the Utility operating companies haveEntergy Mississippi had a total of $373$33 million in storm reserve escrow accounts at September 30, 2020.2021.

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 20202021 meeting, the Board declared a dividend of $0.95$1.01 per share, an increase from the previous $0.93$0.95 quarterly dividend per share that Entergy has paid since the third quarter 2019.2020.

As shown in Entergy’s Consolidated Statements of Cash Flows, cash flows for the nine months ended September 30, 20202021 and 20192020 were as follows:

Net cash flow used in investing activities increased $231$606 million for the nine months ended September 30, 20202021 compared to the nine months ended September 30, 20192020 primarily due to:

Net cash flow provided by financing activities increased $318decreased $608 million for the nine months ended September 30, 20202021 compared to the nine months ended September 30, 20192020 primarily due to:

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

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