Entergy (ETR) Risk Factor Changes

Entergy Corporation is a holding company with no material revenue generating operations of its own or material assets other than the equity of its subsidiaries.

Entergy’s non-utility operations, including wholesale sales of electricity, are subject to regulation under federal, state, and local laws.

System Energy’s operating revenues are derived from the allocation of the capacity, energy, and related costs associated with its 90% ownership/leasehold interest in Grand Gulf.

Entergy and its subsidiaries have observed and expect continued inflationary pressures related to commodity prices, other materials and supplies, and operation and maintenance expenses, including in the areas of labor…

The global economic cost to insurers resulting from cyber attacks, natural disasters, wildfires, and other catastrophic events, in addition to an increased focus on climate issues, has had and may continue to have dis…

The performance of the capital markets affects the values of the assets held in trust under Entergy’s pension and postretirement benefits plans.

The risk management practices of the Utility operating companies and Entergy's non-utility business are exposed to the risk that counterparties that owe Entergy and its subsidiaries performance of certain obligations,…

The Utility operating companies and Entergy’s non-utility business are exposed to the risk that counterparties may not meet their obligations, which may materially affect the Utility operating companies and Entergy’s…

Entergy and its subsidiaries may not be adequately hedged against changes in commodity prices or interest rates, which could materially affect Entergy’s and its subsidiaries’ results of operations, financial condition…

and to the enforcement discretion vested in the implementing agencies.

projects that may be necessary.

Due in part to the increase over the past two decades in frequency and intensity of major storm activity along the Gulf Coast, Entergy has and continues to pursue and execute on plans to accelerate investments that wo…

Recent or future changes in regulation or policies governing the reporting or emission of, or government programs relating to, CO2 and other greenhouse gases or mix of generation sources could (i) result in significan…

Developing and implementing plans for compliance with greenhouse gas emissions reduction or reporting or clean/renewable energy requirements, or for achieving a climate goal can lead to additional capital, personnel,…

Federal, state, and local authorities periodically propose and enact laws and regulations intended to address known or suspected causes of climate change.

Environmental and regulatory obligations intended to combat the effects of climate change, including by compelling greenhouse gas emission reductions or reporting, increasing clean or renewable energy requirements, or…

Emissions of nitrogen and sulfur oxides, mercury, particulates, greenhouse gases, and other regulated emissions from generating plants potentially are subject to increased regulation, controls, and mitigation expenses.

The businesses in which Entergy’s subsidiaries, including the Utility operating companies and System Energy, operate are subject to extensive existing environmental regulation by local, state, and federal authorities.

Entergy relies on a large and changing workforce, including employees, contractors, and temporary staffing, to provide the services necessary to operate its business and execute on its business plan and growth strategy.

Entergy’s and the Utility operating companies’ ability to complete capital projects, including the construction of power generation facilities, or make other capital improvements, such as transmission and distribution…

further influenced by changes in law or regulation, such as environmental compliance requirements or MISO tariff rules and processes; trade-related government actions, such as direct and indirect trade and tariff acti…

The success of these Utility operating companies’ investments in new generation and transmission assets to support large-scale data centers depends on the successful completion of large capital projects to provide ele…

Any of these situations may result in lower than anticipated revenue or the early termination or non-renewal of these customers’ electric service agreements or renewal on terms less favorable to the associated Utility…

This small number of data center customers representing a large portion of the anticipated business of certain of the Utility operating companies exposes these Utility operating companies to several risks, the impact…

being made primarily in connection with electric service agreements with a small number of customers representing significant new load to provide power for new data centers being constructed to support artificial inte…

Additionally, Entergy and its subsidiaries have pursued and may continue to pursue strategic transactions including merger, acquisition, divestiture, joint venture, restructuring, or other strategic transactions.

ratings.

See Note 3 to the financial statements for discussion of the effects of the Tax Cuts and Jobs Act on 2025, 2024, and 2023 results of operations and financial condition, the provisions of the Tax Cuts and Jobs Act, and…

Based on current IRS guidance and current internal forecasts, Entergy and the Registrant Subsidiaries may become subject to the corporate alternative minimum tax included in the Inflation Reduction Act of 2022 beginni…

The interpretive guidance issued by the IRS and state tax authorities may be inconsistent with Entergy’s own expectation or interpretation and the legislation could be subject to amendments, which could lessen or incr…

As with any company, Entergy’s and its Registrant Subsidiaries’ reputations are an important element of their ability to effectively conduct their businesses.

•adverse impacts on liquidity and cash flows, including through declining sales, reduced revenues, delays in receipts of customer payments, increased bad debt expense, or customers or other counterparties failing to s…

Entergy and the Utility operating companies could be adversely affected by various events beyond their control, including, without limitation, public health crises, natural disasters, wildfires, geopolitical tensions…

The inability to raise capital on favorable terms, particularly during times of high interest rates and inflation, and uncertainty or reduced liquidity in the capital markets, could negatively affect Entergy and its s…

Entergy’s business is capital intensive and dependent upon its ability to access capital at reasonable rates and other terms.

Owners of nuclear generating plants have an obligation to decommission those plants.

NEIL is a utility industry mutual insurance company, owned by its members, including the Utility operating companies and System Energy.

Events at nuclear plants owned by one of these companies, as well as those owned by others, may lead to a change in laws or regulations or the terms of the applicable licenses, or the NRC’s interpretation thereof, or…

penalties for failure to comply with the Atomic Energy Act, related regulations, or the terms of the licenses for nuclear facilities.

Based upon currently planned fuel cycles, Entergy’s nuclear units have a diversified portfolio of contracts and inventory that provides substantially adequate nuclear fuel materials and conversion and enrichment servi…

Electricity sales to industrial customers, in particular, benefit from steady economic growth and favorable commodity markets; however, industrial sales are or may be sensitive to changes in laws, regulations, trade-r…

The Utility operating companies also may face competition from other companies offering products and services to Entergy’s customers.

Entergy’s electricity sales volumes are affected by a number of factors including weather and economic conditions, trends in energy efficiency, new technologies, and self-generation alternatives, including the willing…

Entergy’s and its Utility operating companies’ results of operations, liquidity, and financial condition can be materially affected by the destructive effects of severe weather.

In addition, a large volume of parties and individual generation resources, including large-scale projects to serve data centers, are presently seeking to interconnect to the transmission system MISO administers and o…

The MISO tariff provisions governing the rights and obligations associated with the resource adequacy construct provided under the MISO tariff are subject to change and have recently undergone significant changes, som…

Further, the terms and conditions of the MISO tariff, including provisions related to the design and implementation of wholesale markets, the allocation of transmission upgrade costs, the MISO-wide allowed base rate o…

The Utility operating companies participate in the MISO regional transmission planning process and are subject to risks associated with planning decisions that MISO makes in the exercise of control over the planning o…

The Utility operating companies recover their fuel, purchased power, and associated costs from their customers through rate mechanisms subject to periodic regulatory review and adjustment.

The Utility operating companies recover fuel, purchased power, and associated costs through rate mechanisms that are subject to risks of delay or disallowance in regulatory proceedings, and sudden or

If legislative and regulatory structures evolve in a manner that erodes the Utility operating companies’ exclusive rights to serve their regulated customers, such as through “retail open access” or otherwise, they cou…

intended to support load growth to the system associated with large-scale data centers, the operation and maintenance of their assets and infrastructure, including with respect to climate or environmental matters, the…

The Utility operating companies have large customer and stakeholder bases and, as a result, could be the subject of public criticism or adverse publicity focused on issues including, but not limited to, efforts to obt…

were deemed to violate market behavior rules, the FERC can impose potential penalties of up to $1.544 million per day for each violation by any such entity of market-based rate rules and regulations.

Gas rates charged to retail gas customers are comprised primarily of purchased gas cost charges, which provide no return or profit to Entergy New Orleans, and distribution charges, which provide a return or profit to…

The effect of higher purchased gas cost charges to customers taking gas service may adversely affect Entergy New Orleans’s results of operations and liquidity.

increase, potentially requiring additional funding and recognition of higher liability carrying costs.

In March 2019, Entergy voluntarily set a climate goal to achieve a 50 percent reduction in its carbon emission rate from the year 2000 by 2030.

Future changes in regulation or policies governing the reporting or emission of, or government programs relating to, CO2 and other greenhouse gases or mix of generation sources could (i) result in significant addition…

estimated trust fund earnings and decommissioning costs.

Fuel Disposal” section of Management’s Financial Discussion and Analysis for Entergy, Entergy Arkansas, Entergy Louisiana, and System Energy and Note 8 to the financial statements.

whether an Entergy nuclear generating unit or not, it could materially affect the financial condition, results of operations, and liquidity of Entergy, certain of the Utility operating companies, or System Energy.

Based upon currently planned fuel cycles, Entergy’s nuclear units have a diversified portfolio of contracts and inventory that provides substantially adequate nuclear fuel materials and conversion and enrichment servi…

negatively impact Entergy’s and the Utility operating companies’ financial condition, results of operations, and cash flows.

Entergy’s and its Utility operating companies’ results of operations, liquidity, and financial condition can be materially affected by the destructive effects of severe weather.

The Utility operating companies recover their fuel, purchased power, and associated costs from their customers through rate mechanisms subject to periodic regulatory review and adjustment.

Entergy Corporation, Utility operating companies, and System Energy

small number of large-scale data center customers which makes recovery of Entergy’s significant investments in transmission and generation assets to power those new large-scale data centers subject to a significant de…

Entergy and its subsidiaries have in the past, and may in the future, enter into financial arrangements that are subject to variable interest rates and transactions to hedge variable interest rate risk associated with…

to achieve compliance, civil penalties, and exposure to third parties’ claims for alleged health or property damages or for violations of applicable permits or standards.

including the Utility operating companies and System Energy, have incurred and expect to incur significant costs related to environmental compliance.

The above risks are heightened by the number and size of the capital projects that Entergy and the Utility operating companies currently plan to undertake to serve load growth driven primarily by large-scale data cent…

Subject to any pending regulatory approvals, certain Utility operating companies are making or are planning to make significant infrastructure investments in new solar projects, natural gas power plants, and other tra…

Entergy and its subsidiaries anticipate a high level of load growth in their industrial and large commercial customer segments, including from large-scale data centers owned by a small number of large customers.

could result in unintended consequences not yet identified that could have a material adverse impact on Entergy’s financial results and future cash flows.

The Tax Cuts and Jobs Act of 2017 significantly changed the U.S.

thereof, including obtaining necessary regulatory approvals for scope and timing of such plans and projects; inability to keep their electricity rates stable; inability to provide quality customer service, including t…

customers of the Utility operating companies, and disruption of the operations of Entergy’s subsidiaries, due to, among other things:

leverage.

policies) should the NEIL surplus (reserve) be significantly depleted due to insured losses.

Under the Atomic Energy Act and Energy Reorganization Act, the NRC regulates the operation of nuclear power plants.

new building codes, distributed energy resources, energy storage, demand side management, and rooftop solar, are adversely affecting sales growth rates on a more permanent basis.

arising from the potential additional cost allocation to the Utility operating companies from transmission projects of others or changes in FERC policies or regulation related to cost responsibility for transmission p…

prolonged increases in fuel and purchased power costs could lead to increased customer arrearages or bad debt expenses.