Income Taxes

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Text Block]

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes for Entergy for 2023, 2022, and 2021 consist of the following:

	2023	2022	2021
	(In Thousands)
Current:
Federal	$60,639	$32,387	($5,003)
State	23,014	(3,091)	(8,995)
Total	83,653	29,296	(13,998)
Deferred and non-current - net	(768,941)	(67,520)	205,891
Investment tax credits - net	(5,247)	(754)	(519)
Income taxes	($690,535)	($38,978)	$191,374

Income taxes for the Registrant Subsidiaries for 2023, 2022, and 2021 consist of the following:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$33,100	($142,253)	$20,328	($99,343)	$2,851	$337
State	(4,201)	(6,397)	4,142	(5,854)	3,719	(1,570)
Total	28,899	(148,650)	24,470	(105,197)	6,570	(1,233)
Deferred and non-current - net	(126,878)	(52,451)	30,690	(84,744)	57,066	31,005
Investment tax credits - net	(1,231)	(4,680)	(796)	(32)	(764)	2,260
Income taxes	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$8,015	($79,079)	$9,242	$1,074	$37,471	($11,720)
State	(1,066)	(1,773)	(6,486)	6,221	2,260	581
Total	6,949	(80,852)	2,756	7,295	39,731	(11,139)
Deferred and non-current - net	74,802	(77,223)	48,443	16,814	11,520	(83,369)
Investment tax credits - net	(855)	(4,778)	3,665	168	(630)	1,680
Income taxes	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	($20,285)	($24,053)	($5,868)	($6,724)	($189)	$29,416
State	529	2,459	(11,506)	(413)	1,261	(10,258)
Total	(19,756)	(21,594)	(17,374)	(7,137)	1,072	19,158
Deferred and non-current - net	96,180	146,786	60,861	12,870	25,087	(25,229)
Investment tax credits - net	(1,229)	(4,783)	1,836	203	(633)	4,094
Income taxes	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)

Total income taxes for Entergy differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

	2023		2022		2021
	(In Thousands)
Net income attributable to Entergy Corporation	$2,356,536		$1,103,166		$1,118,492
Preferred dividend requirements of subsidiaries and noncontrolling interests	5,774		(6,028)		227
Consolidated net income	2,362,310		1,097,138		1,118,719
Income taxes	(690,535)		(38,978)		191,374
Income before income taxes	$1,671,775		$1,058,160		$1,310,093
Income taxes computed at statutory rate (21%)	$351,073		$222,214		$275,120
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	70,144		61,368		79,273
Regulatory differences - utility plant items	(27,901)		(32,143)		(57,556)
Equity component of AFUDC	(20,172)		(14,156)		(14,799)
Amortization of investment tax credits	(7,978)		(7,740)		(7,695)
Flow-through / permanent differences	(1,374)		1,011		(5,585)
Amortization of excess ADIT (a)	9,102		(34,899)		(66,478)
Arkansas and Louisiana rate changes (b)	—		—		(27,108)
IRS audit resolution (c)	(842,769)		—		—
Reversal of regulatory liability for Hurricane Isaac (d)	(105,649)		—		—
Entergy Louisiana securitization (e)	(129,034)		(282,620)		—
System Energy sale-leaseback order (f)	—		12,662		—
Provision for uncertain tax positions	18,884		34,423		16,533
Valuation allowance	(8,697)		(2,754)		(2,600)
Other - net	3,836		3,656		2,269
Total income taxes as reported	($690,535)		($38,978)		$191,374
Effective Income Tax Rate	(41.3	%)	(3.7	%)	14.6	%

(a)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess accumulated deferred income taxes (ADIT) in 2023, 2022, and 2021 and the tax legislation enactment in 2017.

(b)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

(c)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See “Other Tax Matters – Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(f)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$396,850	$1,273,370	$181,969	$228,938	$291,273	$108,772
Income taxes	(99,210)	(205,781)	54,364	(189,973)	62,872	32,032
Income before income taxes	$297,640	$1,067,589	$236,333	$38,965	$354,145	$140,804
Income taxes computed at statutory rate (21%)	$62,504	$224,194	$49,630	$8,183	$74,370	$29,569
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	13,291	51,899	11,133	1,907	2,574	5,798
Regulatory differences - utility plant items	(8,812)	(5,535)	(5,290)	(1,353)	(6,394)	(517)
Equity component of AFUDC	(4,093)	(6,754)	(1,796)	(309)	(5,920)	(1,301)
Amortization of investment tax credits	(1,201)	(4,625)	(223)	(25)	(748)	(1,155)
Flow-through / permanent differences	1,105	126	3,534	(1,913)	1,493	(191)
IRS audit resolution (a)	(159,588)	(179,111)	(3,291)	(198,424)	(3,112)	(1,575)
Amortization of excess ADIT (b)	(6,095)	14,032	—	1,147	17	—
Entergy Louisiana securitization (c)	—	(133,443)	—	—	—	—
Reversal of regulatory liability for Hurricane Isaac (d)	—	(105,649)	—	—	—	—
Non-taxable dividend income	—	(62,116)	—	—	—	—
Provision for uncertain tax positions	2,600	(400)	300	600	211	1,200
Other - net	1,079	1,601	367	214	381	204
Total income taxes as reported	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032
Effective Income Tax Rate	(33.3%)	(19.3%)	23.0%	(487.5%)	17.8%	22.7%

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$292,887	$855,870	$176,267	$64,101	$303,327	($276,593)
Income taxes	80,896	(162,853)	54,864	24,277	50,621	(92,828)
Income before income taxes	$373,783	$693,017	$231,131	$88,378	$353,948	($369,421)
Income taxes computed at statutory rate (21%)	$78,494	$145,534	$48,538	$18,559	$74,329	($77,578)
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	17,981	44,244	9,659	6,733	2,175	(16,727)
Regulatory differences - utility plant items	(12,466)	(6,347)	(7,726)	(1,908)	(3,010)	(686)
Equity component of AFUDC	(3,437)	(5,513)	(1,286)	(174)	(2,841)	(905)
Amortization of investment tax credits	(1,201)	(4,720)	(223)	175	(614)	(1,155)
Flow-through / permanent differences	106	3,467	4,837	230	765	(641)
Amortization of excess ADIT (b)	—	(13,164)	—	(752)	(20,983)	—
System Energy sale-leaseback order (e)	—	—	—	—	—	12,662
Entergy Louisiana securitization (c)	—	(289,609)	—	—	—	—
Non-taxable dividend income	—	(38,735)	—	—	—	—
Provision for uncertain tax positions	1,600	400	700	1,200	420	(8,000)
Valuation allowance	(1,258)	—	—	—	—	—
Other - net	1,077	1,590	365	214	380	202
Total income taxes as reported	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)
Effective Income Tax Rate	21.6%	(23.5%)	23.7%	27.5%	14.3%	25.1%

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$298,484	$653,984	$166,834	$31,798	$228,824	$106,814
Income taxes	75,195	120,409	45,323	5,936	25,526	(1,977)
Income before income taxes	$373,679	$774,393	$212,157	$37,734	$254,350	$104,837
Income taxes computed at statutory rate (21%)	$78,473	$162,623	$44,553	$7,924	$53,413	$22,016
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	19,633	41,030	9,305	2,579	1,553	5,385
Regulatory differences - utility plant items	(16,078)	(14,123)	(8,133)	(4,332)	(2,115)	(12,776)
Equity component of AFUDC	(3,207)	(6,016)	(1,701)	(498)	(2,077)	(1,300)
Amortization of investment tax credits	(1,201)	(4,729)	64	(56)	(617)	(1,155)
Flow-through / permanent differences	(814)	(2,655)	124	1,559	(475)	(1,235)
Amortization of excess ADIT (b)	(5,845)	(24,323)	—	(1,028)	(21,929)	(13,354)
Arkansas and Louisiana rate changes (f)	398	(6,126)	395	(1,569)	216	115
Non-taxable dividend income	—	(26,801)	—	—	—	—
Provision for uncertain tax positions	353	300	465	1,200	(2,716)	200
Valuation allowance	2,766	—	—	—	—	—
Other - net	717	1,229	251	157	273	127
Total income taxes as reported	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)
Effective Income Tax Rate	20.1%	15.5%	21.4%	15.7%	10.0%	(1.9%)

(a)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(b)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2023, 2022, 2021 and the tax legislation enactment in 2017.

(c)See “Other Tax Matters - Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

(f)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2023 and 2022 are as follows:

	2023	2022
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($6,192,156)	($5,270,010)
Regulatory assets	(989,405)	(937,554)
Nuclear decommissioning trusts/receivables	(467,267)	(318,570)
Pension, net regulatory asset	(363,829)	(336,496)
Combined unitary state taxes	(8,783)	(10,335)
Power purchase agreements	(75,612)	(3,993)
Accumulated storm damage provision	(2,474)	(35,213)
Deferred fuel	(69,436)	(181,222)
Other	(251,107)	(333,421)
Total	(8,420,069)	(7,426,814)
Deferred tax assets:
Nuclear and other decommissioning liabilities	147,011	173,201
Regulatory liabilities	1,247,530	1,108,075
Pension and other post-employment benefits	116,222	141,399
Compensation	81,226	76,317
Accumulated deferred investment tax credit	55,928	57,501
Provision for allowances and contingencies	149,479	97,545
Unbilled/deferred revenues	2,418	21,905
Net operating loss carryforwards	2,857,908	2,065,149
Capital losses and miscellaneous tax credits	107,009	28,876
Valuation allowance	(372,119)	(372,017)
Other	220,055	245,236
Total	4,612,667	3,643,187
Non-current accrued taxes (including unrecognized tax benefits)	(422,213)	(951,110)
Accumulated deferred income taxes and taxes accrued	($4,229,615)	($4,734,737)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses before 1/1/2018	$4.2 billion	2028-2037
Federal net operating losses - 1/1/2018 forward	$13.8 billion	N/A
State net operating losses	$3.9 billion	2028-2042
State net operating losses with no expiration	$11.1 billion	N/A
Other federal and state carryforwards	$523.6 million	2024-2037
Miscellaneous federal and state credits	$124.9 million	2024-2043

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes generated and reflected on income tax returns. Entergy evaluates the available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation

indicates that Entergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce deferred tax assets to the realizable amount.

Because it is more likely than not that the benefits from certain state net operating losses and other deferred tax assets will not be utilized, valuation allowances totaling $372 million as of December 31, 2023 and $372 million as of December 31, 2022 have been provided on the deferred tax assets related to federal and state jurisdictions in which Entergy does not currently expect to be able to utilize certain separate company tax return attributes, preventing realization of such deferred tax assets. Certain accelerated tax deductions which generated taxable losses in various taxing jurisdictions, and which have a limited term carryover period, have resulted in the impairment of the realizability of such carryovers and are reflected in the valuation allowance disclosed above.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2023 and 2022 are as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,421,272)	($2,639,079)	($810,120)	($272,187)	($671,072)	($450,559)
Regulatory assets	(241,427)	(500,395)	(41,519)	(23,618)	(104,562)	(76,522)
Nuclear decommissioning trusts/receivables	(154,106)	(173,402)	—	—	—	(139,858)
Pension, net regulatory asset	(96,853)	(82,305)	(24,342)	(9,216)	(17,522)	(18,895)
Deferred fuel	—	(17,065)	(21,137)	(1,563)	(29,194)	(37)
Accumulated storm damage provision	—	—	—	—	(1,387)	—
Power purchase agreements	15,993	(112,292)	1,140	(12,516)	(4,551)	—
Other	(21,187)	(126,952)	(6,844)	(4,270)	(3,301)	(9,051)
Total	(1,918,852)	(3,651,490)	(902,822)	(323,370)	(831,589)	(694,922)
Deferred tax assets:
Regulatory liabilities	296,278	575,459	54,586	42,921	41,137	240,310
Nuclear and other decommissioning liabilities	118,301	9,055	—	—	97	19,259
Pension and other post-employment benefits	(28,868)	46,837	(10,064)	(19,354)	(21,977)	(2,641)
Accumulated deferred investment tax credit	6,761	27,902	3,446	4,431	1,672	11,717
Provision for allowances and contingencies	23,956	70,297	10,072	25,846	8,659	225
Unbilled/deferred revenues	5,962	(20,375)	6,194	1,045	8,365	—
Compensation	4,054	6,078	3,649	1,268	2,181	406
Net operating loss carryforwards	94,321	459,553	8,375	26,227	61	35,089
Capital losses and miscellaneous tax credits	7,137	13,073	7,613	15,684	1,655	13,211
Other	17,072	52,438	1,556	(235)	1,740	—
Total	544,974	1,240,317	85,427	97,833	43,590	317,576
Non-current accrued taxes (including unrecognized tax benefits)	(63,175)	19,731	(4,349)	29,922	(26,906)	(28,398)
Accumulated deferred income taxes and taxes accrued	($1,437,053)	($2,391,442)	($821,744)	($195,615)	($814,905)	($405,744)

    

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,181,456)	($2,513,138)	($691,675)	($115,841)	($614,134)	($448,010)
Regulatory assets	(244,624)	(457,102)	(44,358)	(24,738)	(95,717)	(68,742)
Nuclear decommissioning trusts/receivables	(107,858)	(118,172)	—	—	—	(92,527)
Pension, net regulatory asset	(93,139)	(82,891)	(22,256)	(9,604)	(18,111)	(17,889)
Deferred fuel	(35,205)	(49,792)	(37,333)	(2,560)	(54,204)	(128)
Accumulated storm damage provision	—	(31,337)	—	—	(3,876)	—
Power purchase agreements	(8,296)	(11,181)	—	(9,372)	(22,014)	—
Other	(76,813)	(126,350)	(26,752)	(21,977)	(4,126)	(14,364)
Total	(1,747,391)	(3,389,963)	(822,374)	(184,092)	(812,182)	(641,660)
Deferred tax assets:
Regulatory liabilities	236,318	508,594	54,454	27,438	47,248	237,452
Nuclear and other decommissioning liabilities	139,499	12,883	1	—	97	18,940
Pension and other post-employment benefits	(28,463)	52,414	(9,196)	(18,114)	(20,867)	(2,481)
Accumulated deferred investment tax credit	7,171	29,271	3,641	4,438	1,829	11,151
Provision for allowances and contingencies	26,432	15,741	10,300	26,671	7,755	—
Unbilled/deferred revenues	6,211	(2,405)	5,826	4,090	7,572	—
Compensation	3,361	5,207	2,316	1,107	1,712	308
Net operating loss carryforwards	10,491	307,175	10,140	12,146	27,620	20,639
Capital losses and miscellaneous tax credits	719	2,774	5,152	11,006	3,728	8,261
Other	24,969	41,310	6,849	11,105	729	—
Total	426,708	972,964	89,483	79,887	77,423	294,270
Non-current accrued taxes (including unrecognized tax benefits)	(177,551)	42,121	(47,139)	(281,054)	(9,468)	(28,680)
Accumulated deferred income taxes and taxes accrued	($1,498,234)	($2,374,878)	($780,030)	($385,259)	($744,227)	($376,070)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
Federal net operating losses before 1/1/2018	$— million	$0.8 billion	$— million	$0.1 billion	$— million	$— million
Year(s) of expiration	N/A	2035-2037	N/A	2037	N/A	N/A
Federal net operating losses - 1/1/2018 forward	$0.5 billion	$2.8 billion	$10.8 million	$17.7 million	$1.8 billion	$0.1 billion
Year(s) of expiration	N/A	N/A	N/A	N/A	N/A	N/A
State net operating losses	$0.4 billion	$5.7 billion	$0.1 billion	$0.2 billion	$1 million	$0.2 billion
Year(s) of expiration	2028-2032	N/A	2040-2042	N/A	2028	N/A
Misc. federal credits	$10 million	$16.9 million	$3.9 million	$16.1 million	$0.8 million	$4.8 million
Year(s) of expiration	2038-2043	2035-2043	2038-2043	2037-2043	2039-2043	2029-2043
State credits	$— million	$— million	$8 million	$— million	$1.6 million	$19 million
Year(s) of expiration	N/A	N/A	2024-2026	N/A	2027-2033	2024-2027

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2023	2022	2021
	(In Thousands)
Gross balance at January 1	$6,393,599	$5,759,968	$5,699,339
Additions based on tax positions related to the current year	332,884	792,134	101,623
Additions for tax positions of prior years	194,894	37,259	33,419
Reductions for tax positions of prior years (a)	(1,300,381)	(195,762)	(74,413)
Settlements (a)	(3,181,086)	—	—
Gross balance at December 31	2,439,910	6,393,599	5,759,968
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(2,160,484)	(5,566,212)	(4,987,799)
Cash paid to taxing authorities	—	(82,000)	(60,000)
Unrecognized tax benefits net of unused tax attributes and payments (b)	$279,426	$745,387	$712,169

(a)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

(b)Potential tax liability above what is payable on tax returns.

The balances of unrecognized tax benefits include $1,899 million, $3,254 million, and $2,256 million as of December 31, 2023, 2022, and 2021, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $541 million, $3,140 million, and $3,504 million as of December 31, 2023, 2022, and 2021, respectively, if

disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2023, 2022, and 2021 accrued balance for the possible payment of interest is approximately $39 million, $50 million, and $52 million, respectively. Interest (net-of-tax) of ($11) million, $8 million, and ($4) million was recorded in 2023, 2022, and 2021, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2023, 2022, and 2021 is as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2023	$1,452,819	$1,350,836	$547,548	$638,726	$389,366	$23,702
Additions based on tax positions related to the current year (a)	2,249	332,320	209	78	196	752
Additions for tax positions of prior years	—	—	—	—	94,793	—
Reductions for tax positions of prior years (b)	(148,558)	(458,072)	(16,853)	(191,336)	(67,156)	(9,532)
Settlements (b)	(1,237,313)	(361,041)	(525,251)	(428,137)	(1,994)	(621)
Gross balance at December 31, 2023	69,197	864,043	5,653	19,331	415,205	14,301
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(34,683)	(735,612)	(3,778)	(11,721)	(381,561)	(14,301)
Unrecognized tax benefits net of unused tax attributes	$34,514	$128,431	$1,875	$7,610	$33,644	$—

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2022	$1,408,494	$604,628	$549,569	$639,497	$552,295	$23,356
Additions based on tax positions related to the current year (a)	40,502	750,320	185	72	173	690
Additions for tax positions of prior years	6,233	10,262	1,122	393	801	761
Reductions for tax positions of prior years	(2,410)	(14,374)	(3,328)	(1,236)	(163,903)	(1,105)
Gross balance at December 31, 2022	1,452,819	1,350,836	547,548	638,726	389,366	23,702
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(1,277,414)	(1,328,916)	(504,940)	(455,928)	(377,054)	(23,702)
Unrecognized tax benefits net of unused tax attributes	$175,405	$21,920	$42,608	$182,798	$12,312	$—

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2021	$1,364,635	$640,295	$549,717	$639,546	$521,932	$21,652
Additions based on tax positions related to the current year	30,419	13,437	684	1,050	32,616	1,753
Additions for tax positions of prior years	15,013	9,304	1,504	6	2,315	1,897
Reductions for tax positions of prior years	(1,573)	(58,408)	(2,336)	(1,105)	(4,568)	(1,946)
Gross balance at December 31, 2021	1,408,494	604,628	549,569	639,497	552,295	23,356
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(992,643)	(604,628)	(388,728)	(484,899)	(540,694)	(8,576)
Unrecognized tax benefits net of unused tax attributes	$415,851	$—	$160,841	$154,598	$11,601	$14,780

(a)The primary additions for Entergy Louisiana in 2022 and 2023 are related to the Entergy Louisiana securitizations as discussed in “Other Tax Matters - Act 293 Securitizations” below.

(b)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$57.2	$377.9	$262.1
Entergy Louisiana	$862.5	$720.8	$66.3
Entergy Mississippi	$1.0	$151.2	$51.7
Entergy New Orleans	$18.2	$310.7	$228.6
Entergy Texas	$2.9	$3.3	$2.6
System Energy	$3.1	$2.5	$1.7

Accrued balances for the possible payment of interest related to unrecognized tax benefits for the Registrant Subsidiaries are as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$7.8	$4.3	$2.7
Entergy Louisiana	$1.5	$4.1	$3.7
Entergy Mississippi	$2.1	$3.1	$2.4
Entergy New Orleans	$0.6	$6.4	$5.2
Entergy Texas	$—	$1.1	$1.1
System Energy	$1.9	$1.9	$12.1

The Registrant Subsidiaries record interest and penalties related to unrecognized tax benefits in income tax expense.  No penalties were recorded in 2023, 2022, and 2021. Interest (net-of-tax) was recorded as follows:

	2023	2022	2021
	(In Millions)
Entergy Arkansas	$3.5	$1.6	$0.4
Entergy Louisiana	($2.6)	$0.4	$0.3
Entergy Mississippi	($1.0)	$0.7	$0.5
Entergy New Orleans	($5.8)	$1.2	$1.3
Entergy Texas	($1.1)	$—	$0.2
System Energy	$—	($10.2)	$0.2

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state income tax returns.  IRS examinations are complete for years before 2019. All state taxing authorities’ examinations are complete for years before 2014. Entergy regularly defends its positions and works with the IRS to resolve audits.  The resolution of audit issues could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

2016-2018 IRS Audit

The IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report (RAR) for each federal filer under audit in November 2023. Entergy agreed to all adjustments contained in the RARs. Entergy and the Registrant Subsidiaries recorded all the material effects resulting from the RARs in the fourth quarter of 2023.

Utility Restructurings

In 2017, Entergy New Orleans undertook an internal restructuring, and in 2018, Entergy Arkansas and Entergy Mississippi also participated in internal restructurings under which these three Utility operating companies joined Entergy Louisiana as wholly-owned subsidiaries of Entergy Utility Holding Company, LLC. The change in ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for income tax purposes, which resulted in recognition of a gain for income tax purposes and a corresponding increase in the tax basis of assets, in accordance with the Internal Revenue Code and Treasury Regulations. Entergy determined that there was uncertainty regarding the treatment of certain aspects of the restructurings and recorded provisions for uncertain tax positions which are now considered to be effectively settled in accordance with accounting standards. The reversal of such provisions for uncertain tax positions results in a reduction of income tax expense of $156 million for Entergy Arkansas, $1 million for Entergy Mississippi, and $6 million for Entergy New Orleans.

The IRS also required Entergy New Orleans to reverse a tax gain associated with the 2017 restructuring that had been previously recognized, allowing Entergy New Orleans to reduce its tax expense by $39 million.

After the restructuring, Entergy Arkansas adopted a new method of accounting for income tax purposes in which its nuclear decommissioning costs are treated as production costs of electricity includable in cost of goods sold, which resulted in a $1.8 billion reduction in taxable income on its 2018 tax return that was treated as an unrecognized tax benefit. In conjunction with the audit, Entergy agreed with the IRS adjustments concerning the nuclear decommissioning tax position allowing Entergy Arkansas to include $102 million of its decommissioning liability in cost of goods sold.

Mark-to-Market Method of Accounting

In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility and from System Energy under the Unit Power Sales Agreement as well as other intercompany power purchase agreements. The election resulted in a $2 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with the Vidalia contract and various other third-party and intercompany wholesale electric power purchase and sale agreements. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $132 million and a corresponding reduction of income tax expense primarily associated with the effect of the Tax Cuts and Jobs Act rate reduction discussed below.

In 2017, Entergy New Orleans also elected mark-to-market income tax treatment for the Unit Power Sales Agreement and various intercompany wholesale electric contracts which resulted in a $1 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $139 million and a corresponding reduction of income tax expense.

In 2018, Entergy Arkansas and Entergy Mississippi each accrued approximately $2 billion in deductible temporary differences related to mark-to-market tax accounting for the Unit Power Sales Agreement and various wholesale electric contracts. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The effective settlement of the mark-to-market tax position for Entergy Arkansas resulted in the accrual of an increase to tax expense of $40 million, which was offset by approximately $5 million of miscellaneous excess ADIT recognized as a result of the 2016-2018 IRS audit resolution. The net increase to tax expense is deferred as a regulatory asset, as discussed within the “Regulatory and Other Matters” section below.

Restructuring of Entergy’s Non-Utility Operations Business

During the 2016 to 2018 audit period, the ownership of certain of Entergy’s non-utility operations business nuclear power plants (previously reported as part of Entergy Wholesale Commodities) was restructured. Such restructuring transactions required Entergy to recognize the plants’ nuclear decommissioning liabilities for income tax purposes. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a significant portion of which resulted in an increase in the tax basis of the assets. Because certain aspects of the restructuring transactions involved uncertainty, Entergy recorded a provision for uncertain tax positions. The IRS did not propose adjustments to the tax treatment of the restructuring transactions resulting in a net decrease to income tax expense of $288 million from the reversal of the provision for uncertain tax positions in fourth quarter 2023.

Reduction of Net Operating Loss Carryovers

The IRS audit reduced Entergy’s net operating loss carryover by $8 billion. A portion of Entergy’s audit adjustments were not offset by losses which resulted in a tax liability of $79 million, which was fully offset by prior deposits made by Entergy. Entergy received an assessment of interest in excess of prior deposits of $13 million in December 2023, and such interest was paid in January 2024.

Net operating loss carryovers were reduced by $4 billion for Entergy Arkansas, $1 billion for Entergy Louisiana, $2 billion for Entergy Mississippi, $1 billion for Entergy New Orleans, and $40 million for System

Energy. The IRS audit adjustments were also factored into the settle-up required under Entergy’s intercompany income tax allocation agreement, and such amounts were settled in the fourth quarter of 2023.

Regulatory and Other Matters

Additional customer credits related to the audit outcome may be due in accordance with prior regulatory agreements associated with the Entergy Louisiana and Entergy Gulf States Louisiana business combination and Entergy New Orleans restructuring and general rate-making principles. A regulatory liability and associated regulatory charge of $38 million and $60 million ($28 million and $44 million net-of-tax) were recorded for Entergy Louisiana and Entergy New Orleans, respectively. The inclusion of the effects of the audit on customer rates is subject to the review and approval of the retail regulators. Additionally, a regulatory asset for income tax associated with deficient ADIT of $35 million, $2 million, and $3 million, was recorded for Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi, respectively. See Note 2 to the financial statements for discussion of Entergy Arkansas’s regulatory activity related to the Tax Cuts and Jobs Act and for discussion of the settlement of Entergy Arkansas’s 2023 formula rate plan.

As noted above, Entergy accrues interest expense related to unrecognized tax benefits in income tax expense. As a result of the IRS audit resolution, Entergy reversed approximately $24 million of interest related to the allowance of previously unrecognized tax benefits.

Reversal of net deferred credits associated with the accounting for income taxes upon the resolution of the IRS audit resulted in a reduction/(increase) of income tax expense of $9 million, $42 million, ($2) million, $2 million, $2 million, and $1 million for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy, respectively.

Included in the effect of the IRS audit on the results of operations was the measurement of deferred tax assets and liabilities influenced by the 2017 enactment of the Tax Cuts and Jobs Act income tax rate change discussed below. With the conclusion of the audit, there are no remaining federal unrecognized tax benefits affected by the rate differential which could impact income tax expense and the regulatory liability for income taxes in future periods.

State Income Tax Audits

As a result of income tax audit adjustments proposed by the Arkansas Department of Finance and Administration, an Entergy subsidiary in the non-utility operations business recorded a provision in third quarter 2022 for uncertain tax positions of approximately $21 million, which includes interest expense.

Other Tax Matters

Tax Cuts and Jobs Act (TCJA)

The most significant effect of the TCJA for Entergy and the Registrant Subsidiaries was the change in the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Entergy had remaining regulatory liabilities of $1.0 billion and $1.3 billion as of December 31, 2023 and December 31, 2022, respectively, mainly associated with the re-measurement of deferred tax assets and liabilities from the income tax rate change, subsequent amortization of excess ADIT, and payments to customers since the enactment of the TCJA. In addition to the protected and unprotected excess ADIT amounts, the net regulatory liability for income taxes includes other regulatory assets and liabilities for income taxes mainly for AFUDC, which is described in Note 1 to the financial statements.

Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the effect that excess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect

of (1) the reduction of the net deferred tax liability resulting in excess ADIT, and (2) the tax gross-up of excess ADIT. The Registrant Subsidiaries’ December 31, 2023 and December 31, 2022 balance sheets reflect net regulatory liabilities for income taxes as follows:

	2023	2022
	(In Millions)
Entergy Arkansas	$392	$435
Entergy Louisiana	$194	$338
Entergy Mississippi	$189	$202
Entergy New Orleans	$36	$40
Entergy Texas	$115	$133
System Energy	$107	$111

Excess ADIT is generally classified into two categories: (1) the portion that is subject to the normalization requirements of the TCJA, referred to as “protected”, and (2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. See Note 2 to the financial statements for discussion of Entergy Louisiana’s $106 million reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the TCJA, recorded in fourth quarter 2023. The majority of the remaining unamortized Excess ADIT as of December 31, 2023 is classified as protected. The TCJA provides that the normalization method of accounting for income taxes is required for excess ADIT associated with public utility property. The TCJA provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements.

During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess accumulated deferred income taxes, associated with the effects of the TCJA, to their customers through rate riders and other means approved by their respective regulatory authorities. Return of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This manner of regulatory accounting affects the effective tax rate for the period as compared to the statutory tax rate. There was no return of unprotected excess accumulated deferred income taxes for Entergy or the Registrant Subsidiaries for the year ended December 31, 2023. For the year ended December 31, 2022, the return of unprotected excess accumulated deferred income taxes reduced the regulatory liability for income taxes by $53 million for Entergy, including $25 million for Entergy Louisiana, $1 million for Entergy New Orleans, and $27 million for Entergy Texas.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal tax incentives for clean energy production, including the extension of production tax credits to solar projects and certain qualified nuclear power plants. Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax on the buyback of public company stock and a new corporate alternative minimum tax. There are no effects on the financial statements of Entergy or the Registrant Subsidiaries as of and for the years ended December 31, 2023 and 2022 related to the enactment of the law. See the “Income Tax Legislation and Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for additional discussion of the effects of the Inflation Reduction Act of 2022.

Restructuring of Entergy’s Non-Utility Operations Business in 2020

In the fourth quarter 2020, Entergy’s ownership of Palisades was restructured. The restructuring required Entergy to recognize Palisades’ nuclear decommissioning liability for income tax purposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $9.2 million. The accrual of the nuclear decommissioning liability also required Entergy to recognize a gain for income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increase in the tax basis of the assets represents a tax accounting temporary difference.

Tax Accounting Methods

Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S. Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market valuation which includes analyses of market prices and conditions.

In 2020, Entergy Texas elected mark-to-market income tax treatment for wholesale electric power purchase and sale agreements which resulted in a $2.5 billion deductible temporary difference.

Arkansas and Louisiana Corporate Income Tax Rate Changes

Since 2019, the State of Arkansas has enacted corporate income tax law changes that phased in rate reductions from the former rate of 6.5% to 6.2% in 2021, 5.9% in 2022, 5.1% in 2023, and 4.8% in 2024.  Legislation in 2022 accelerated the rate reduction to 5.3% for tax years beginning on or after January 1, 2023, accelerating the rate reductions that were originally scheduled to take effect in the 2025 tax year. As a result of the rate reductions, Entergy Arkansas has recorded regulatory liabilities for income taxes of approximately $26 million, $15 million, $11 million, and $21 million in 2023, 2022, 2021, and 2020, respectively. The regulatory liabilities include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and have been or are scheduled to be included in the approved rate mechanisms. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to ten years.

Pursuant to legislation enacted in 2021 and approved by Louisiana citizens by amendment to the state constitution, beginning January 1, 2022, federal income taxes paid are no longer deductible for state income tax purposes, and the top Louisiana corporate income tax rate has been reduced from 8% to 7.5%. As a result of this change in Louisiana tax law, the Louisiana applicable tax rate increased by 0.85%. Accordingly, deferred tax assets and liabilities were adjusted to reflect the new applicable federal and state rates. In fourth quarter 2021, Entergy recorded a net increase to its deferred tax asset of $27 million. Entergy Louisiana and Entergy New Orleans recorded net increases to their deferred tax liabilities before consideration of the tax gross-up of $77 million and $8 million, respectively, which were offset by regulatory assets for income taxes. Therefore, these increases had no effect on tax expense. However, the increase of deferred tax assets associated with certain assets reduced tax expense for Entergy Louisiana and Entergy New Orleans by $6 million and $2 million, respectively. The legislation enacted in 2021 also provided that Louisiana net operating losses generally have an indefinite carryover period.

Act 293 Securitizations

As described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021. The first transaction occurred in May of 2022 and the second occurred in March of 2023. Act 293 provides that the LURC contribute the net bond proceeds to a LURC-sponsored trust. Over the 15-year term of the Act 293 bonds, the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will not be taxable to Entergy Louisiana. Additionally, Entergy Louisiana will not include the receipt of the system

restoration charges in taxable income because the right to receive the system restoration charges has been granted directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.

Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and $290 million in May 2022, both after taking into account a provision for uncertain tax positions. Entergy’s recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after taking into account a provision for uncertain tax positions.

In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to provide credits to its customers. See Note 2 to the financial statements for further discussion of the Entergy Louisiana March 2023 and May 2022 storm cost securitizations.

Entergy Arkansas [Member]

Income Tax Disclosure [Text Block]

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes for Entergy for 2023, 2022, and 2021 consist of the following:

	2023	2022	2021
	(In Thousands)
Current:
Federal	$60,639	$32,387	($5,003)
State	23,014	(3,091)	(8,995)
Total	83,653	29,296	(13,998)
Deferred and non-current - net	(768,941)	(67,520)	205,891
Investment tax credits - net	(5,247)	(754)	(519)
Income taxes	($690,535)	($38,978)	$191,374

Income taxes for the Registrant Subsidiaries for 2023, 2022, and 2021 consist of the following:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$33,100	($142,253)	$20,328	($99,343)	$2,851	$337
State	(4,201)	(6,397)	4,142	(5,854)	3,719	(1,570)
Total	28,899	(148,650)	24,470	(105,197)	6,570	(1,233)
Deferred and non-current - net	(126,878)	(52,451)	30,690	(84,744)	57,066	31,005
Investment tax credits - net	(1,231)	(4,680)	(796)	(32)	(764)	2,260
Income taxes	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$8,015	($79,079)	$9,242	$1,074	$37,471	($11,720)
State	(1,066)	(1,773)	(6,486)	6,221	2,260	581
Total	6,949	(80,852)	2,756	7,295	39,731	(11,139)
Deferred and non-current - net	74,802	(77,223)	48,443	16,814	11,520	(83,369)
Investment tax credits - net	(855)	(4,778)	3,665	168	(630)	1,680
Income taxes	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	($20,285)	($24,053)	($5,868)	($6,724)	($189)	$29,416
State	529	2,459	(11,506)	(413)	1,261	(10,258)
Total	(19,756)	(21,594)	(17,374)	(7,137)	1,072	19,158
Deferred and non-current - net	96,180	146,786	60,861	12,870	25,087	(25,229)
Investment tax credits - net	(1,229)	(4,783)	1,836	203	(633)	4,094
Income taxes	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)

Total income taxes for Entergy differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

	2023		2022		2021
	(In Thousands)
Net income attributable to Entergy Corporation	$2,356,536		$1,103,166		$1,118,492
Preferred dividend requirements of subsidiaries and noncontrolling interests	5,774		(6,028)		227
Consolidated net income	2,362,310		1,097,138		1,118,719
Income taxes	(690,535)		(38,978)		191,374
Income before income taxes	$1,671,775		$1,058,160		$1,310,093
Income taxes computed at statutory rate (21%)	$351,073		$222,214		$275,120
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	70,144		61,368		79,273
Regulatory differences - utility plant items	(27,901)		(32,143)		(57,556)
Equity component of AFUDC	(20,172)		(14,156)		(14,799)
Amortization of investment tax credits	(7,978)		(7,740)		(7,695)
Flow-through / permanent differences	(1,374)		1,011		(5,585)
Amortization of excess ADIT (a)	9,102		(34,899)		(66,478)
Arkansas and Louisiana rate changes (b)	—		—		(27,108)
IRS audit resolution (c)	(842,769)		—		—
Reversal of regulatory liability for Hurricane Isaac (d)	(105,649)		—		—
Entergy Louisiana securitization (e)	(129,034)		(282,620)		—
System Energy sale-leaseback order (f)	—		12,662		—
Provision for uncertain tax positions	18,884		34,423		16,533
Valuation allowance	(8,697)		(2,754)		(2,600)
Other - net	3,836		3,656		2,269
Total income taxes as reported	($690,535)		($38,978)		$191,374
Effective Income Tax Rate	(41.3	%)	(3.7	%)	14.6	%

(a)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess accumulated deferred income taxes (ADIT) in 2023, 2022, and 2021 and the tax legislation enactment in 2017.

(b)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

(c)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See “Other Tax Matters – Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(f)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$396,850	$1,273,370	$181,969	$228,938	$291,273	$108,772
Income taxes	(99,210)	(205,781)	54,364	(189,973)	62,872	32,032
Income before income taxes	$297,640	$1,067,589	$236,333	$38,965	$354,145	$140,804
Income taxes computed at statutory rate (21%)	$62,504	$224,194	$49,630	$8,183	$74,370	$29,569
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	13,291	51,899	11,133	1,907	2,574	5,798
Regulatory differences - utility plant items	(8,812)	(5,535)	(5,290)	(1,353)	(6,394)	(517)
Equity component of AFUDC	(4,093)	(6,754)	(1,796)	(309)	(5,920)	(1,301)
Amortization of investment tax credits	(1,201)	(4,625)	(223)	(25)	(748)	(1,155)
Flow-through / permanent differences	1,105	126	3,534	(1,913)	1,493	(191)
IRS audit resolution (a)	(159,588)	(179,111)	(3,291)	(198,424)	(3,112)	(1,575)
Amortization of excess ADIT (b)	(6,095)	14,032	—	1,147	17	—
Entergy Louisiana securitization (c)	—	(133,443)	—	—	—	—
Reversal of regulatory liability for Hurricane Isaac (d)	—	(105,649)	—	—	—	—
Non-taxable dividend income	—	(62,116)	—	—	—	—
Provision for uncertain tax positions	2,600	(400)	300	600	211	1,200
Other - net	1,079	1,601	367	214	381	204
Total income taxes as reported	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032
Effective Income Tax Rate	(33.3%)	(19.3%)	23.0%	(487.5%)	17.8%	22.7%

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$292,887	$855,870	$176,267	$64,101	$303,327	($276,593)
Income taxes	80,896	(162,853)	54,864	24,277	50,621	(92,828)
Income before income taxes	$373,783	$693,017	$231,131	$88,378	$353,948	($369,421)
Income taxes computed at statutory rate (21%)	$78,494	$145,534	$48,538	$18,559	$74,329	($77,578)
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	17,981	44,244	9,659	6,733	2,175	(16,727)
Regulatory differences - utility plant items	(12,466)	(6,347)	(7,726)	(1,908)	(3,010)	(686)
Equity component of AFUDC	(3,437)	(5,513)	(1,286)	(174)	(2,841)	(905)
Amortization of investment tax credits	(1,201)	(4,720)	(223)	175	(614)	(1,155)
Flow-through / permanent differences	106	3,467	4,837	230	765	(641)
Amortization of excess ADIT (b)	—	(13,164)	—	(752)	(20,983)	—
System Energy sale-leaseback order (e)	—	—	—	—	—	12,662
Entergy Louisiana securitization (c)	—	(289,609)	—	—	—	—
Non-taxable dividend income	—	(38,735)	—	—	—	—
Provision for uncertain tax positions	1,600	400	700	1,200	420	(8,000)
Valuation allowance	(1,258)	—	—	—	—	—
Other - net	1,077	1,590	365	214	380	202
Total income taxes as reported	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)
Effective Income Tax Rate	21.6%	(23.5%)	23.7%	27.5%	14.3%	25.1%

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$298,484	$653,984	$166,834	$31,798	$228,824	$106,814
Income taxes	75,195	120,409	45,323	5,936	25,526	(1,977)
Income before income taxes	$373,679	$774,393	$212,157	$37,734	$254,350	$104,837
Income taxes computed at statutory rate (21%)	$78,473	$162,623	$44,553	$7,924	$53,413	$22,016
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	19,633	41,030	9,305	2,579	1,553	5,385
Regulatory differences - utility plant items	(16,078)	(14,123)	(8,133)	(4,332)	(2,115)	(12,776)
Equity component of AFUDC	(3,207)	(6,016)	(1,701)	(498)	(2,077)	(1,300)
Amortization of investment tax credits	(1,201)	(4,729)	64	(56)	(617)	(1,155)
Flow-through / permanent differences	(814)	(2,655)	124	1,559	(475)	(1,235)
Amortization of excess ADIT (b)	(5,845)	(24,323)	—	(1,028)	(21,929)	(13,354)
Arkansas and Louisiana rate changes (f)	398	(6,126)	395	(1,569)	216	115
Non-taxable dividend income	—	(26,801)	—	—	—	—
Provision for uncertain tax positions	353	300	465	1,200	(2,716)	200
Valuation allowance	2,766	—	—	—	—	—
Other - net	717	1,229	251	157	273	127
Total income taxes as reported	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)
Effective Income Tax Rate	20.1%	15.5%	21.4%	15.7%	10.0%	(1.9%)

(a)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(b)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2023, 2022, 2021 and the tax legislation enactment in 2017.

(c)See “Other Tax Matters - Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

(f)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2023 and 2022 are as follows:

	2023	2022
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($6,192,156)	($5,270,010)
Regulatory assets	(989,405)	(937,554)
Nuclear decommissioning trusts/receivables	(467,267)	(318,570)
Pension, net regulatory asset	(363,829)	(336,496)
Combined unitary state taxes	(8,783)	(10,335)
Power purchase agreements	(75,612)	(3,993)
Accumulated storm damage provision	(2,474)	(35,213)
Deferred fuel	(69,436)	(181,222)
Other	(251,107)	(333,421)
Total	(8,420,069)	(7,426,814)
Deferred tax assets:
Nuclear and other decommissioning liabilities	147,011	173,201
Regulatory liabilities	1,247,530	1,108,075
Pension and other post-employment benefits	116,222	141,399
Compensation	81,226	76,317
Accumulated deferred investment tax credit	55,928	57,501
Provision for allowances and contingencies	149,479	97,545
Unbilled/deferred revenues	2,418	21,905
Net operating loss carryforwards	2,857,908	2,065,149
Capital losses and miscellaneous tax credits	107,009	28,876
Valuation allowance	(372,119)	(372,017)
Other	220,055	245,236
Total	4,612,667	3,643,187
Non-current accrued taxes (including unrecognized tax benefits)	(422,213)	(951,110)
Accumulated deferred income taxes and taxes accrued	($4,229,615)	($4,734,737)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses before 1/1/2018	$4.2 billion	2028-2037
Federal net operating losses - 1/1/2018 forward	$13.8 billion	N/A
State net operating losses	$3.9 billion	2028-2042
State net operating losses with no expiration	$11.1 billion	N/A
Other federal and state carryforwards	$523.6 million	2024-2037
Miscellaneous federal and state credits	$124.9 million	2024-2043

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes generated and reflected on income tax returns. Entergy evaluates the available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation

indicates that Entergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce deferred tax assets to the realizable amount.

Because it is more likely than not that the benefits from certain state net operating losses and other deferred tax assets will not be utilized, valuation allowances totaling $372 million as of December 31, 2023 and $372 million as of December 31, 2022 have been provided on the deferred tax assets related to federal and state jurisdictions in which Entergy does not currently expect to be able to utilize certain separate company tax return attributes, preventing realization of such deferred tax assets. Certain accelerated tax deductions which generated taxable losses in various taxing jurisdictions, and which have a limited term carryover period, have resulted in the impairment of the realizability of such carryovers and are reflected in the valuation allowance disclosed above.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2023 and 2022 are as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,421,272)	($2,639,079)	($810,120)	($272,187)	($671,072)	($450,559)
Regulatory assets	(241,427)	(500,395)	(41,519)	(23,618)	(104,562)	(76,522)
Nuclear decommissioning trusts/receivables	(154,106)	(173,402)	—	—	—	(139,858)
Pension, net regulatory asset	(96,853)	(82,305)	(24,342)	(9,216)	(17,522)	(18,895)
Deferred fuel	—	(17,065)	(21,137)	(1,563)	(29,194)	(37)
Accumulated storm damage provision	—	—	—	—	(1,387)	—
Power purchase agreements	15,993	(112,292)	1,140	(12,516)	(4,551)	—
Other	(21,187)	(126,952)	(6,844)	(4,270)	(3,301)	(9,051)
Total	(1,918,852)	(3,651,490)	(902,822)	(323,370)	(831,589)	(694,922)
Deferred tax assets:
Regulatory liabilities	296,278	575,459	54,586	42,921	41,137	240,310
Nuclear and other decommissioning liabilities	118,301	9,055	—	—	97	19,259
Pension and other post-employment benefits	(28,868)	46,837	(10,064)	(19,354)	(21,977)	(2,641)
Accumulated deferred investment tax credit	6,761	27,902	3,446	4,431	1,672	11,717
Provision for allowances and contingencies	23,956	70,297	10,072	25,846	8,659	225
Unbilled/deferred revenues	5,962	(20,375)	6,194	1,045	8,365	—
Compensation	4,054	6,078	3,649	1,268	2,181	406
Net operating loss carryforwards	94,321	459,553	8,375	26,227	61	35,089
Capital losses and miscellaneous tax credits	7,137	13,073	7,613	15,684	1,655	13,211
Other	17,072	52,438	1,556	(235)	1,740	—
Total	544,974	1,240,317	85,427	97,833	43,590	317,576
Non-current accrued taxes (including unrecognized tax benefits)	(63,175)	19,731	(4,349)	29,922	(26,906)	(28,398)
Accumulated deferred income taxes and taxes accrued	($1,437,053)	($2,391,442)	($821,744)	($195,615)	($814,905)	($405,744)

    

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,181,456)	($2,513,138)	($691,675)	($115,841)	($614,134)	($448,010)
Regulatory assets	(244,624)	(457,102)	(44,358)	(24,738)	(95,717)	(68,742)
Nuclear decommissioning trusts/receivables	(107,858)	(118,172)	—	—	—	(92,527)
Pension, net regulatory asset	(93,139)	(82,891)	(22,256)	(9,604)	(18,111)	(17,889)
Deferred fuel	(35,205)	(49,792)	(37,333)	(2,560)	(54,204)	(128)
Accumulated storm damage provision	—	(31,337)	—	—	(3,876)	—
Power purchase agreements	(8,296)	(11,181)	—	(9,372)	(22,014)	—
Other	(76,813)	(126,350)	(26,752)	(21,977)	(4,126)	(14,364)
Total	(1,747,391)	(3,389,963)	(822,374)	(184,092)	(812,182)	(641,660)
Deferred tax assets:
Regulatory liabilities	236,318	508,594	54,454	27,438	47,248	237,452
Nuclear and other decommissioning liabilities	139,499	12,883	1	—	97	18,940
Pension and other post-employment benefits	(28,463)	52,414	(9,196)	(18,114)	(20,867)	(2,481)
Accumulated deferred investment tax credit	7,171	29,271	3,641	4,438	1,829	11,151
Provision for allowances and contingencies	26,432	15,741	10,300	26,671	7,755	—
Unbilled/deferred revenues	6,211	(2,405)	5,826	4,090	7,572	—
Compensation	3,361	5,207	2,316	1,107	1,712	308
Net operating loss carryforwards	10,491	307,175	10,140	12,146	27,620	20,639
Capital losses and miscellaneous tax credits	719	2,774	5,152	11,006	3,728	8,261
Other	24,969	41,310	6,849	11,105	729	—
Total	426,708	972,964	89,483	79,887	77,423	294,270
Non-current accrued taxes (including unrecognized tax benefits)	(177,551)	42,121	(47,139)	(281,054)	(9,468)	(28,680)
Accumulated deferred income taxes and taxes accrued	($1,498,234)	($2,374,878)	($780,030)	($385,259)	($744,227)	($376,070)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
Federal net operating losses before 1/1/2018	$— million	$0.8 billion	$— million	$0.1 billion	$— million	$— million
Year(s) of expiration	N/A	2035-2037	N/A	2037	N/A	N/A
Federal net operating losses - 1/1/2018 forward	$0.5 billion	$2.8 billion	$10.8 million	$17.7 million	$1.8 billion	$0.1 billion
Year(s) of expiration	N/A	N/A	N/A	N/A	N/A	N/A
State net operating losses	$0.4 billion	$5.7 billion	$0.1 billion	$0.2 billion	$1 million	$0.2 billion
Year(s) of expiration	2028-2032	N/A	2040-2042	N/A	2028	N/A
Misc. federal credits	$10 million	$16.9 million	$3.9 million	$16.1 million	$0.8 million	$4.8 million
Year(s) of expiration	2038-2043	2035-2043	2038-2043	2037-2043	2039-2043	2029-2043
State credits	$— million	$— million	$8 million	$— million	$1.6 million	$19 million
Year(s) of expiration	N/A	N/A	2024-2026	N/A	2027-2033	2024-2027

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2023	2022	2021
	(In Thousands)
Gross balance at January 1	$6,393,599	$5,759,968	$5,699,339
Additions based on tax positions related to the current year	332,884	792,134	101,623
Additions for tax positions of prior years	194,894	37,259	33,419
Reductions for tax positions of prior years (a)	(1,300,381)	(195,762)	(74,413)
Settlements (a)	(3,181,086)	—	—
Gross balance at December 31	2,439,910	6,393,599	5,759,968
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(2,160,484)	(5,566,212)	(4,987,799)
Cash paid to taxing authorities	—	(82,000)	(60,000)
Unrecognized tax benefits net of unused tax attributes and payments (b)	$279,426	$745,387	$712,169

(a)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

(b)Potential tax liability above what is payable on tax returns.

The balances of unrecognized tax benefits include $1,899 million, $3,254 million, and $2,256 million as of December 31, 2023, 2022, and 2021, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $541 million, $3,140 million, and $3,504 million as of December 31, 2023, 2022, and 2021, respectively, if

disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2023, 2022, and 2021 accrued balance for the possible payment of interest is approximately $39 million, $50 million, and $52 million, respectively. Interest (net-of-tax) of ($11) million, $8 million, and ($4) million was recorded in 2023, 2022, and 2021, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2023, 2022, and 2021 is as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2023	$1,452,819	$1,350,836	$547,548	$638,726	$389,366	$23,702
Additions based on tax positions related to the current year (a)	2,249	332,320	209	78	196	752
Additions for tax positions of prior years	—	—	—	—	94,793	—
Reductions for tax positions of prior years (b)	(148,558)	(458,072)	(16,853)	(191,336)	(67,156)	(9,532)
Settlements (b)	(1,237,313)	(361,041)	(525,251)	(428,137)	(1,994)	(621)
Gross balance at December 31, 2023	69,197	864,043	5,653	19,331	415,205	14,301
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(34,683)	(735,612)	(3,778)	(11,721)	(381,561)	(14,301)
Unrecognized tax benefits net of unused tax attributes	$34,514	$128,431	$1,875	$7,610	$33,644	$—

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2022	$1,408,494	$604,628	$549,569	$639,497	$552,295	$23,356
Additions based on tax positions related to the current year (a)	40,502	750,320	185	72	173	690
Additions for tax positions of prior years	6,233	10,262	1,122	393	801	761
Reductions for tax positions of prior years	(2,410)	(14,374)	(3,328)	(1,236)	(163,903)	(1,105)
Gross balance at December 31, 2022	1,452,819	1,350,836	547,548	638,726	389,366	23,702
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(1,277,414)	(1,328,916)	(504,940)	(455,928)	(377,054)	(23,702)
Unrecognized tax benefits net of unused tax attributes	$175,405	$21,920	$42,608	$182,798	$12,312	$—

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2021	$1,364,635	$640,295	$549,717	$639,546	$521,932	$21,652
Additions based on tax positions related to the current year	30,419	13,437	684	1,050	32,616	1,753
Additions for tax positions of prior years	15,013	9,304	1,504	6	2,315	1,897
Reductions for tax positions of prior years	(1,573)	(58,408)	(2,336)	(1,105)	(4,568)	(1,946)
Gross balance at December 31, 2021	1,408,494	604,628	549,569	639,497	552,295	23,356
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(992,643)	(604,628)	(388,728)	(484,899)	(540,694)	(8,576)
Unrecognized tax benefits net of unused tax attributes	$415,851	$—	$160,841	$154,598	$11,601	$14,780

(a)The primary additions for Entergy Louisiana in 2022 and 2023 are related to the Entergy Louisiana securitizations as discussed in “Other Tax Matters - Act 293 Securitizations” below.

(b)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$57.2	$377.9	$262.1
Entergy Louisiana	$862.5	$720.8	$66.3
Entergy Mississippi	$1.0	$151.2	$51.7
Entergy New Orleans	$18.2	$310.7	$228.6
Entergy Texas	$2.9	$3.3	$2.6
System Energy	$3.1	$2.5	$1.7

Accrued balances for the possible payment of interest related to unrecognized tax benefits for the Registrant Subsidiaries are as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$7.8	$4.3	$2.7
Entergy Louisiana	$1.5	$4.1	$3.7
Entergy Mississippi	$2.1	$3.1	$2.4
Entergy New Orleans	$0.6	$6.4	$5.2
Entergy Texas	$—	$1.1	$1.1
System Energy	$1.9	$1.9	$12.1

The Registrant Subsidiaries record interest and penalties related to unrecognized tax benefits in income tax expense.  No penalties were recorded in 2023, 2022, and 2021. Interest (net-of-tax) was recorded as follows:

	2023	2022	2021
	(In Millions)
Entergy Arkansas	$3.5	$1.6	$0.4
Entergy Louisiana	($2.6)	$0.4	$0.3
Entergy Mississippi	($1.0)	$0.7	$0.5
Entergy New Orleans	($5.8)	$1.2	$1.3
Entergy Texas	($1.1)	$—	$0.2
System Energy	$—	($10.2)	$0.2

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state income tax returns.  IRS examinations are complete for years before 2019. All state taxing authorities’ examinations are complete for years before 2014. Entergy regularly defends its positions and works with the IRS to resolve audits.  The resolution of audit issues could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

2016-2018 IRS Audit

The IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report (RAR) for each federal filer under audit in November 2023. Entergy agreed to all adjustments contained in the RARs. Entergy and the Registrant Subsidiaries recorded all the material effects resulting from the RARs in the fourth quarter of 2023.

Utility Restructurings

In 2017, Entergy New Orleans undertook an internal restructuring, and in 2018, Entergy Arkansas and Entergy Mississippi also participated in internal restructurings under which these three Utility operating companies joined Entergy Louisiana as wholly-owned subsidiaries of Entergy Utility Holding Company, LLC. The change in ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for income tax purposes, which resulted in recognition of a gain for income tax purposes and a corresponding increase in the tax basis of assets, in accordance with the Internal Revenue Code and Treasury Regulations. Entergy determined that there was uncertainty regarding the treatment of certain aspects of the restructurings and recorded provisions for uncertain tax positions which are now considered to be effectively settled in accordance with accounting standards. The reversal of such provisions for uncertain tax positions results in a reduction of income tax expense of $156 million for Entergy Arkansas, $1 million for Entergy Mississippi, and $6 million for Entergy New Orleans.

The IRS also required Entergy New Orleans to reverse a tax gain associated with the 2017 restructuring that had been previously recognized, allowing Entergy New Orleans to reduce its tax expense by $39 million.

After the restructuring, Entergy Arkansas adopted a new method of accounting for income tax purposes in which its nuclear decommissioning costs are treated as production costs of electricity includable in cost of goods sold, which resulted in a $1.8 billion reduction in taxable income on its 2018 tax return that was treated as an unrecognized tax benefit. In conjunction with the audit, Entergy agreed with the IRS adjustments concerning the nuclear decommissioning tax position allowing Entergy Arkansas to include $102 million of its decommissioning liability in cost of goods sold.

Mark-to-Market Method of Accounting

In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility and from System Energy under the Unit Power Sales Agreement as well as other intercompany power purchase agreements. The election resulted in a $2 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with the Vidalia contract and various other third-party and intercompany wholesale electric power purchase and sale agreements. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $132 million and a corresponding reduction of income tax expense primarily associated with the effect of the Tax Cuts and Jobs Act rate reduction discussed below.

In 2017, Entergy New Orleans also elected mark-to-market income tax treatment for the Unit Power Sales Agreement and various intercompany wholesale electric contracts which resulted in a $1 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $139 million and a corresponding reduction of income tax expense.

In 2018, Entergy Arkansas and Entergy Mississippi each accrued approximately $2 billion in deductible temporary differences related to mark-to-market tax accounting for the Unit Power Sales Agreement and various wholesale electric contracts. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The effective settlement of the mark-to-market tax position for Entergy Arkansas resulted in the accrual of an increase to tax expense of $40 million, which was offset by approximately $5 million of miscellaneous excess ADIT recognized as a result of the 2016-2018 IRS audit resolution. The net increase to tax expense is deferred as a regulatory asset, as discussed within the “Regulatory and Other Matters” section below.

Restructuring of Entergy’s Non-Utility Operations Business

During the 2016 to 2018 audit period, the ownership of certain of Entergy’s non-utility operations business nuclear power plants (previously reported as part of Entergy Wholesale Commodities) was restructured. Such restructuring transactions required Entergy to recognize the plants’ nuclear decommissioning liabilities for income tax purposes. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a significant portion of which resulted in an increase in the tax basis of the assets. Because certain aspects of the restructuring transactions involved uncertainty, Entergy recorded a provision for uncertain tax positions. The IRS did not propose adjustments to the tax treatment of the restructuring transactions resulting in a net decrease to income tax expense of $288 million from the reversal of the provision for uncertain tax positions in fourth quarter 2023.

Reduction of Net Operating Loss Carryovers

The IRS audit reduced Entergy’s net operating loss carryover by $8 billion. A portion of Entergy’s audit adjustments were not offset by losses which resulted in a tax liability of $79 million, which was fully offset by prior deposits made by Entergy. Entergy received an assessment of interest in excess of prior deposits of $13 million in December 2023, and such interest was paid in January 2024.

Net operating loss carryovers were reduced by $4 billion for Entergy Arkansas, $1 billion for Entergy Louisiana, $2 billion for Entergy Mississippi, $1 billion for Entergy New Orleans, and $40 million for System

Energy. The IRS audit adjustments were also factored into the settle-up required under Entergy’s intercompany income tax allocation agreement, and such amounts were settled in the fourth quarter of 2023.

Regulatory and Other Matters

Additional customer credits related to the audit outcome may be due in accordance with prior regulatory agreements associated with the Entergy Louisiana and Entergy Gulf States Louisiana business combination and Entergy New Orleans restructuring and general rate-making principles. A regulatory liability and associated regulatory charge of $38 million and $60 million ($28 million and $44 million net-of-tax) were recorded for Entergy Louisiana and Entergy New Orleans, respectively. The inclusion of the effects of the audit on customer rates is subject to the review and approval of the retail regulators. Additionally, a regulatory asset for income tax associated with deficient ADIT of $35 million, $2 million, and $3 million, was recorded for Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi, respectively. See Note 2 to the financial statements for discussion of Entergy Arkansas’s regulatory activity related to the Tax Cuts and Jobs Act and for discussion of the settlement of Entergy Arkansas’s 2023 formula rate plan.

As noted above, Entergy accrues interest expense related to unrecognized tax benefits in income tax expense. As a result of the IRS audit resolution, Entergy reversed approximately $24 million of interest related to the allowance of previously unrecognized tax benefits.

Reversal of net deferred credits associated with the accounting for income taxes upon the resolution of the IRS audit resulted in a reduction/(increase) of income tax expense of $9 million, $42 million, ($2) million, $2 million, $2 million, and $1 million for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy, respectively.

Included in the effect of the IRS audit on the results of operations was the measurement of deferred tax assets and liabilities influenced by the 2017 enactment of the Tax Cuts and Jobs Act income tax rate change discussed below. With the conclusion of the audit, there are no remaining federal unrecognized tax benefits affected by the rate differential which could impact income tax expense and the regulatory liability for income taxes in future periods.

State Income Tax Audits

As a result of income tax audit adjustments proposed by the Arkansas Department of Finance and Administration, an Entergy subsidiary in the non-utility operations business recorded a provision in third quarter 2022 for uncertain tax positions of approximately $21 million, which includes interest expense.

Other Tax Matters

Tax Cuts and Jobs Act (TCJA)

The most significant effect of the TCJA for Entergy and the Registrant Subsidiaries was the change in the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Entergy had remaining regulatory liabilities of $1.0 billion and $1.3 billion as of December 31, 2023 and December 31, 2022, respectively, mainly associated with the re-measurement of deferred tax assets and liabilities from the income tax rate change, subsequent amortization of excess ADIT, and payments to customers since the enactment of the TCJA. In addition to the protected and unprotected excess ADIT amounts, the net regulatory liability for income taxes includes other regulatory assets and liabilities for income taxes mainly for AFUDC, which is described in Note 1 to the financial statements.

Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the effect that excess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect

of (1) the reduction of the net deferred tax liability resulting in excess ADIT, and (2) the tax gross-up of excess ADIT. The Registrant Subsidiaries’ December 31, 2023 and December 31, 2022 balance sheets reflect net regulatory liabilities for income taxes as follows:

	2023	2022
	(In Millions)
Entergy Arkansas	$392	$435
Entergy Louisiana	$194	$338
Entergy Mississippi	$189	$202
Entergy New Orleans	$36	$40
Entergy Texas	$115	$133
System Energy	$107	$111

Excess ADIT is generally classified into two categories: (1) the portion that is subject to the normalization requirements of the TCJA, referred to as “protected”, and (2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. See Note 2 to the financial statements for discussion of Entergy Louisiana’s $106 million reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the TCJA, recorded in fourth quarter 2023. The majority of the remaining unamortized Excess ADIT as of December 31, 2023 is classified as protected. The TCJA provides that the normalization method of accounting for income taxes is required for excess ADIT associated with public utility property. The TCJA provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements.

During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess accumulated deferred income taxes, associated with the effects of the TCJA, to their customers through rate riders and other means approved by their respective regulatory authorities. Return of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This manner of regulatory accounting affects the effective tax rate for the period as compared to the statutory tax rate. There was no return of unprotected excess accumulated deferred income taxes for Entergy or the Registrant Subsidiaries for the year ended December 31, 2023. For the year ended December 31, 2022, the return of unprotected excess accumulated deferred income taxes reduced the regulatory liability for income taxes by $53 million for Entergy, including $25 million for Entergy Louisiana, $1 million for Entergy New Orleans, and $27 million for Entergy Texas.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal tax incentives for clean energy production, including the extension of production tax credits to solar projects and certain qualified nuclear power plants. Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax on the buyback of public company stock and a new corporate alternative minimum tax. There are no effects on the financial statements of Entergy or the Registrant Subsidiaries as of and for the years ended December 31, 2023 and 2022 related to the enactment of the law. See the “Income Tax Legislation and Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for additional discussion of the effects of the Inflation Reduction Act of 2022.

Restructuring of Entergy’s Non-Utility Operations Business in 2020

In the fourth quarter 2020, Entergy’s ownership of Palisades was restructured. The restructuring required Entergy to recognize Palisades’ nuclear decommissioning liability for income tax purposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $9.2 million. The accrual of the nuclear decommissioning liability also required Entergy to recognize a gain for income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increase in the tax basis of the assets represents a tax accounting temporary difference.

Tax Accounting Methods

Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S. Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market valuation which includes analyses of market prices and conditions.

In 2020, Entergy Texas elected mark-to-market income tax treatment for wholesale electric power purchase and sale agreements which resulted in a $2.5 billion deductible temporary difference.

Arkansas and Louisiana Corporate Income Tax Rate Changes

Since 2019, the State of Arkansas has enacted corporate income tax law changes that phased in rate reductions from the former rate of 6.5% to 6.2% in 2021, 5.9% in 2022, 5.1% in 2023, and 4.8% in 2024.  Legislation in 2022 accelerated the rate reduction to 5.3% for tax years beginning on or after January 1, 2023, accelerating the rate reductions that were originally scheduled to take effect in the 2025 tax year. As a result of the rate reductions, Entergy Arkansas has recorded regulatory liabilities for income taxes of approximately $26 million, $15 million, $11 million, and $21 million in 2023, 2022, 2021, and 2020, respectively. The regulatory liabilities include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and have been or are scheduled to be included in the approved rate mechanisms. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to ten years.

Pursuant to legislation enacted in 2021 and approved by Louisiana citizens by amendment to the state constitution, beginning January 1, 2022, federal income taxes paid are no longer deductible for state income tax purposes, and the top Louisiana corporate income tax rate has been reduced from 8% to 7.5%. As a result of this change in Louisiana tax law, the Louisiana applicable tax rate increased by 0.85%. Accordingly, deferred tax assets and liabilities were adjusted to reflect the new applicable federal and state rates. In fourth quarter 2021, Entergy recorded a net increase to its deferred tax asset of $27 million. Entergy Louisiana and Entergy New Orleans recorded net increases to their deferred tax liabilities before consideration of the tax gross-up of $77 million and $8 million, respectively, which were offset by regulatory assets for income taxes. Therefore, these increases had no effect on tax expense. However, the increase of deferred tax assets associated with certain assets reduced tax expense for Entergy Louisiana and Entergy New Orleans by $6 million and $2 million, respectively. The legislation enacted in 2021 also provided that Louisiana net operating losses generally have an indefinite carryover period.

Act 293 Securitizations

As described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021. The first transaction occurred in May of 2022 and the second occurred in March of 2023. Act 293 provides that the LURC contribute the net bond proceeds to a LURC-sponsored trust. Over the 15-year term of the Act 293 bonds, the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will not be taxable to Entergy Louisiana. Additionally, Entergy Louisiana will not include the receipt of the system

restoration charges in taxable income because the right to receive the system restoration charges has been granted directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.

Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and $290 million in May 2022, both after taking into account a provision for uncertain tax positions. Entergy’s recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after taking into account a provision for uncertain tax positions.

In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to provide credits to its customers. See Note 2 to the financial statements for further discussion of the Entergy Louisiana March 2023 and May 2022 storm cost securitizations.

Entergy Louisiana [Member]

Income Tax Disclosure [Text Block]

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes for Entergy for 2023, 2022, and 2021 consist of the following:

	2023	2022	2021
	(In Thousands)
Current:
Federal	$60,639	$32,387	($5,003)
State	23,014	(3,091)	(8,995)
Total	83,653	29,296	(13,998)
Deferred and non-current - net	(768,941)	(67,520)	205,891
Investment tax credits - net	(5,247)	(754)	(519)
Income taxes	($690,535)	($38,978)	$191,374

Income taxes for the Registrant Subsidiaries for 2023, 2022, and 2021 consist of the following:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$33,100	($142,253)	$20,328	($99,343)	$2,851	$337
State	(4,201)	(6,397)	4,142	(5,854)	3,719	(1,570)
Total	28,899	(148,650)	24,470	(105,197)	6,570	(1,233)
Deferred and non-current - net	(126,878)	(52,451)	30,690	(84,744)	57,066	31,005
Investment tax credits - net	(1,231)	(4,680)	(796)	(32)	(764)	2,260
Income taxes	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$8,015	($79,079)	$9,242	$1,074	$37,471	($11,720)
State	(1,066)	(1,773)	(6,486)	6,221	2,260	581
Total	6,949	(80,852)	2,756	7,295	39,731	(11,139)
Deferred and non-current - net	74,802	(77,223)	48,443	16,814	11,520	(83,369)
Investment tax credits - net	(855)	(4,778)	3,665	168	(630)	1,680
Income taxes	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	($20,285)	($24,053)	($5,868)	($6,724)	($189)	$29,416
State	529	2,459	(11,506)	(413)	1,261	(10,258)
Total	(19,756)	(21,594)	(17,374)	(7,137)	1,072	19,158
Deferred and non-current - net	96,180	146,786	60,861	12,870	25,087	(25,229)
Investment tax credits - net	(1,229)	(4,783)	1,836	203	(633)	4,094
Income taxes	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)

Total income taxes for Entergy differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

	2023		2022		2021
	(In Thousands)
Net income attributable to Entergy Corporation	$2,356,536		$1,103,166		$1,118,492
Preferred dividend requirements of subsidiaries and noncontrolling interests	5,774		(6,028)		227
Consolidated net income	2,362,310		1,097,138		1,118,719
Income taxes	(690,535)		(38,978)		191,374
Income before income taxes	$1,671,775		$1,058,160		$1,310,093
Income taxes computed at statutory rate (21%)	$351,073		$222,214		$275,120
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	70,144		61,368		79,273
Regulatory differences - utility plant items	(27,901)		(32,143)		(57,556)
Equity component of AFUDC	(20,172)		(14,156)		(14,799)
Amortization of investment tax credits	(7,978)		(7,740)		(7,695)
Flow-through / permanent differences	(1,374)		1,011		(5,585)
Amortization of excess ADIT (a)	9,102		(34,899)		(66,478)
Arkansas and Louisiana rate changes (b)	—		—		(27,108)
IRS audit resolution (c)	(842,769)		—		—
Reversal of regulatory liability for Hurricane Isaac (d)	(105,649)		—		—
Entergy Louisiana securitization (e)	(129,034)		(282,620)		—
System Energy sale-leaseback order (f)	—		12,662		—
Provision for uncertain tax positions	18,884		34,423		16,533
Valuation allowance	(8,697)		(2,754)		(2,600)
Other - net	3,836		3,656		2,269
Total income taxes as reported	($690,535)		($38,978)		$191,374
Effective Income Tax Rate	(41.3	%)	(3.7	%)	14.6	%

(a)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess accumulated deferred income taxes (ADIT) in 2023, 2022, and 2021 and the tax legislation enactment in 2017.

(b)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

(c)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See “Other Tax Matters – Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(f)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$396,850	$1,273,370	$181,969	$228,938	$291,273	$108,772
Income taxes	(99,210)	(205,781)	54,364	(189,973)	62,872	32,032
Income before income taxes	$297,640	$1,067,589	$236,333	$38,965	$354,145	$140,804
Income taxes computed at statutory rate (21%)	$62,504	$224,194	$49,630	$8,183	$74,370	$29,569
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	13,291	51,899	11,133	1,907	2,574	5,798
Regulatory differences - utility plant items	(8,812)	(5,535)	(5,290)	(1,353)	(6,394)	(517)
Equity component of AFUDC	(4,093)	(6,754)	(1,796)	(309)	(5,920)	(1,301)
Amortization of investment tax credits	(1,201)	(4,625)	(223)	(25)	(748)	(1,155)
Flow-through / permanent differences	1,105	126	3,534	(1,913)	1,493	(191)
IRS audit resolution (a)	(159,588)	(179,111)	(3,291)	(198,424)	(3,112)	(1,575)
Amortization of excess ADIT (b)	(6,095)	14,032	—	1,147	17	—
Entergy Louisiana securitization (c)	—	(133,443)	—	—	—	—
Reversal of regulatory liability for Hurricane Isaac (d)	—	(105,649)	—	—	—	—
Non-taxable dividend income	—	(62,116)	—	—	—	—
Provision for uncertain tax positions	2,600	(400)	300	600	211	1,200
Other - net	1,079	1,601	367	214	381	204
Total income taxes as reported	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032
Effective Income Tax Rate	(33.3%)	(19.3%)	23.0%	(487.5%)	17.8%	22.7%

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$292,887	$855,870	$176,267	$64,101	$303,327	($276,593)
Income taxes	80,896	(162,853)	54,864	24,277	50,621	(92,828)
Income before income taxes	$373,783	$693,017	$231,131	$88,378	$353,948	($369,421)
Income taxes computed at statutory rate (21%)	$78,494	$145,534	$48,538	$18,559	$74,329	($77,578)
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	17,981	44,244	9,659	6,733	2,175	(16,727)
Regulatory differences - utility plant items	(12,466)	(6,347)	(7,726)	(1,908)	(3,010)	(686)
Equity component of AFUDC	(3,437)	(5,513)	(1,286)	(174)	(2,841)	(905)
Amortization of investment tax credits	(1,201)	(4,720)	(223)	175	(614)	(1,155)
Flow-through / permanent differences	106	3,467	4,837	230	765	(641)
Amortization of excess ADIT (b)	—	(13,164)	—	(752)	(20,983)	—
System Energy sale-leaseback order (e)	—	—	—	—	—	12,662
Entergy Louisiana securitization (c)	—	(289,609)	—	—	—	—
Non-taxable dividend income	—	(38,735)	—	—	—	—
Provision for uncertain tax positions	1,600	400	700	1,200	420	(8,000)
Valuation allowance	(1,258)	—	—	—	—	—
Other - net	1,077	1,590	365	214	380	202
Total income taxes as reported	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)
Effective Income Tax Rate	21.6%	(23.5%)	23.7%	27.5%	14.3%	25.1%

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$298,484	$653,984	$166,834	$31,798	$228,824	$106,814
Income taxes	75,195	120,409	45,323	5,936	25,526	(1,977)
Income before income taxes	$373,679	$774,393	$212,157	$37,734	$254,350	$104,837
Income taxes computed at statutory rate (21%)	$78,473	$162,623	$44,553	$7,924	$53,413	$22,016
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	19,633	41,030	9,305	2,579	1,553	5,385
Regulatory differences - utility plant items	(16,078)	(14,123)	(8,133)	(4,332)	(2,115)	(12,776)
Equity component of AFUDC	(3,207)	(6,016)	(1,701)	(498)	(2,077)	(1,300)
Amortization of investment tax credits	(1,201)	(4,729)	64	(56)	(617)	(1,155)
Flow-through / permanent differences	(814)	(2,655)	124	1,559	(475)	(1,235)
Amortization of excess ADIT (b)	(5,845)	(24,323)	—	(1,028)	(21,929)	(13,354)
Arkansas and Louisiana rate changes (f)	398	(6,126)	395	(1,569)	216	115
Non-taxable dividend income	—	(26,801)	—	—	—	—
Provision for uncertain tax positions	353	300	465	1,200	(2,716)	200
Valuation allowance	2,766	—	—	—	—	—
Other - net	717	1,229	251	157	273	127
Total income taxes as reported	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)
Effective Income Tax Rate	20.1%	15.5%	21.4%	15.7%	10.0%	(1.9%)

(a)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(b)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2023, 2022, 2021 and the tax legislation enactment in 2017.

(c)See “Other Tax Matters - Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

(f)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2023 and 2022 are as follows:

	2023	2022
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($6,192,156)	($5,270,010)
Regulatory assets	(989,405)	(937,554)
Nuclear decommissioning trusts/receivables	(467,267)	(318,570)
Pension, net regulatory asset	(363,829)	(336,496)
Combined unitary state taxes	(8,783)	(10,335)
Power purchase agreements	(75,612)	(3,993)
Accumulated storm damage provision	(2,474)	(35,213)
Deferred fuel	(69,436)	(181,222)
Other	(251,107)	(333,421)
Total	(8,420,069)	(7,426,814)
Deferred tax assets:
Nuclear and other decommissioning liabilities	147,011	173,201
Regulatory liabilities	1,247,530	1,108,075
Pension and other post-employment benefits	116,222	141,399
Compensation	81,226	76,317
Accumulated deferred investment tax credit	55,928	57,501
Provision for allowances and contingencies	149,479	97,545
Unbilled/deferred revenues	2,418	21,905
Net operating loss carryforwards	2,857,908	2,065,149
Capital losses and miscellaneous tax credits	107,009	28,876
Valuation allowance	(372,119)	(372,017)
Other	220,055	245,236
Total	4,612,667	3,643,187
Non-current accrued taxes (including unrecognized tax benefits)	(422,213)	(951,110)
Accumulated deferred income taxes and taxes accrued	($4,229,615)	($4,734,737)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses before 1/1/2018	$4.2 billion	2028-2037
Federal net operating losses - 1/1/2018 forward	$13.8 billion	N/A
State net operating losses	$3.9 billion	2028-2042
State net operating losses with no expiration	$11.1 billion	N/A
Other federal and state carryforwards	$523.6 million	2024-2037
Miscellaneous federal and state credits	$124.9 million	2024-2043

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes generated and reflected on income tax returns. Entergy evaluates the available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation

indicates that Entergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce deferred tax assets to the realizable amount.

Because it is more likely than not that the benefits from certain state net operating losses and other deferred tax assets will not be utilized, valuation allowances totaling $372 million as of December 31, 2023 and $372 million as of December 31, 2022 have been provided on the deferred tax assets related to federal and state jurisdictions in which Entergy does not currently expect to be able to utilize certain separate company tax return attributes, preventing realization of such deferred tax assets. Certain accelerated tax deductions which generated taxable losses in various taxing jurisdictions, and which have a limited term carryover period, have resulted in the impairment of the realizability of such carryovers and are reflected in the valuation allowance disclosed above.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2023 and 2022 are as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,421,272)	($2,639,079)	($810,120)	($272,187)	($671,072)	($450,559)
Regulatory assets	(241,427)	(500,395)	(41,519)	(23,618)	(104,562)	(76,522)
Nuclear decommissioning trusts/receivables	(154,106)	(173,402)	—	—	—	(139,858)
Pension, net regulatory asset	(96,853)	(82,305)	(24,342)	(9,216)	(17,522)	(18,895)
Deferred fuel	—	(17,065)	(21,137)	(1,563)	(29,194)	(37)
Accumulated storm damage provision	—	—	—	—	(1,387)	—
Power purchase agreements	15,993	(112,292)	1,140	(12,516)	(4,551)	—
Other	(21,187)	(126,952)	(6,844)	(4,270)	(3,301)	(9,051)
Total	(1,918,852)	(3,651,490)	(902,822)	(323,370)	(831,589)	(694,922)
Deferred tax assets:
Regulatory liabilities	296,278	575,459	54,586	42,921	41,137	240,310
Nuclear and other decommissioning liabilities	118,301	9,055	—	—	97	19,259
Pension and other post-employment benefits	(28,868)	46,837	(10,064)	(19,354)	(21,977)	(2,641)
Accumulated deferred investment tax credit	6,761	27,902	3,446	4,431	1,672	11,717
Provision for allowances and contingencies	23,956	70,297	10,072	25,846	8,659	225
Unbilled/deferred revenues	5,962	(20,375)	6,194	1,045	8,365	—
Compensation	4,054	6,078	3,649	1,268	2,181	406
Net operating loss carryforwards	94,321	459,553	8,375	26,227	61	35,089
Capital losses and miscellaneous tax credits	7,137	13,073	7,613	15,684	1,655	13,211
Other	17,072	52,438	1,556	(235)	1,740	—
Total	544,974	1,240,317	85,427	97,833	43,590	317,576
Non-current accrued taxes (including unrecognized tax benefits)	(63,175)	19,731	(4,349)	29,922	(26,906)	(28,398)
Accumulated deferred income taxes and taxes accrued	($1,437,053)	($2,391,442)	($821,744)	($195,615)	($814,905)	($405,744)

    

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,181,456)	($2,513,138)	($691,675)	($115,841)	($614,134)	($448,010)
Regulatory assets	(244,624)	(457,102)	(44,358)	(24,738)	(95,717)	(68,742)
Nuclear decommissioning trusts/receivables	(107,858)	(118,172)	—	—	—	(92,527)
Pension, net regulatory asset	(93,139)	(82,891)	(22,256)	(9,604)	(18,111)	(17,889)
Deferred fuel	(35,205)	(49,792)	(37,333)	(2,560)	(54,204)	(128)
Accumulated storm damage provision	—	(31,337)	—	—	(3,876)	—
Power purchase agreements	(8,296)	(11,181)	—	(9,372)	(22,014)	—
Other	(76,813)	(126,350)	(26,752)	(21,977)	(4,126)	(14,364)
Total	(1,747,391)	(3,389,963)	(822,374)	(184,092)	(812,182)	(641,660)
Deferred tax assets:
Regulatory liabilities	236,318	508,594	54,454	27,438	47,248	237,452
Nuclear and other decommissioning liabilities	139,499	12,883	1	—	97	18,940
Pension and other post-employment benefits	(28,463)	52,414	(9,196)	(18,114)	(20,867)	(2,481)
Accumulated deferred investment tax credit	7,171	29,271	3,641	4,438	1,829	11,151
Provision for allowances and contingencies	26,432	15,741	10,300	26,671	7,755	—
Unbilled/deferred revenues	6,211	(2,405)	5,826	4,090	7,572	—
Compensation	3,361	5,207	2,316	1,107	1,712	308
Net operating loss carryforwards	10,491	307,175	10,140	12,146	27,620	20,639
Capital losses and miscellaneous tax credits	719	2,774	5,152	11,006	3,728	8,261
Other	24,969	41,310	6,849	11,105	729	—
Total	426,708	972,964	89,483	79,887	77,423	294,270
Non-current accrued taxes (including unrecognized tax benefits)	(177,551)	42,121	(47,139)	(281,054)	(9,468)	(28,680)
Accumulated deferred income taxes and taxes accrued	($1,498,234)	($2,374,878)	($780,030)	($385,259)	($744,227)	($376,070)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
Federal net operating losses before 1/1/2018	$— million	$0.8 billion	$— million	$0.1 billion	$— million	$— million
Year(s) of expiration	N/A	2035-2037	N/A	2037	N/A	N/A
Federal net operating losses - 1/1/2018 forward	$0.5 billion	$2.8 billion	$10.8 million	$17.7 million	$1.8 billion	$0.1 billion
Year(s) of expiration	N/A	N/A	N/A	N/A	N/A	N/A
State net operating losses	$0.4 billion	$5.7 billion	$0.1 billion	$0.2 billion	$1 million	$0.2 billion
Year(s) of expiration	2028-2032	N/A	2040-2042	N/A	2028	N/A
Misc. federal credits	$10 million	$16.9 million	$3.9 million	$16.1 million	$0.8 million	$4.8 million
Year(s) of expiration	2038-2043	2035-2043	2038-2043	2037-2043	2039-2043	2029-2043
State credits	$— million	$— million	$8 million	$— million	$1.6 million	$19 million
Year(s) of expiration	N/A	N/A	2024-2026	N/A	2027-2033	2024-2027

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2023	2022	2021
	(In Thousands)
Gross balance at January 1	$6,393,599	$5,759,968	$5,699,339
Additions based on tax positions related to the current year	332,884	792,134	101,623
Additions for tax positions of prior years	194,894	37,259	33,419
Reductions for tax positions of prior years (a)	(1,300,381)	(195,762)	(74,413)
Settlements (a)	(3,181,086)	—	—
Gross balance at December 31	2,439,910	6,393,599	5,759,968
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(2,160,484)	(5,566,212)	(4,987,799)
Cash paid to taxing authorities	—	(82,000)	(60,000)
Unrecognized tax benefits net of unused tax attributes and payments (b)	$279,426	$745,387	$712,169

(a)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

(b)Potential tax liability above what is payable on tax returns.

The balances of unrecognized tax benefits include $1,899 million, $3,254 million, and $2,256 million as of December 31, 2023, 2022, and 2021, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $541 million, $3,140 million, and $3,504 million as of December 31, 2023, 2022, and 2021, respectively, if

disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2023, 2022, and 2021 accrued balance for the possible payment of interest is approximately $39 million, $50 million, and $52 million, respectively. Interest (net-of-tax) of ($11) million, $8 million, and ($4) million was recorded in 2023, 2022, and 2021, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2023, 2022, and 2021 is as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2023	$1,452,819	$1,350,836	$547,548	$638,726	$389,366	$23,702
Additions based on tax positions related to the current year (a)	2,249	332,320	209	78	196	752
Additions for tax positions of prior years	—	—	—	—	94,793	—
Reductions for tax positions of prior years (b)	(148,558)	(458,072)	(16,853)	(191,336)	(67,156)	(9,532)
Settlements (b)	(1,237,313)	(361,041)	(525,251)	(428,137)	(1,994)	(621)
Gross balance at December 31, 2023	69,197	864,043	5,653	19,331	415,205	14,301
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(34,683)	(735,612)	(3,778)	(11,721)	(381,561)	(14,301)
Unrecognized tax benefits net of unused tax attributes	$34,514	$128,431	$1,875	$7,610	$33,644	$—

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2022	$1,408,494	$604,628	$549,569	$639,497	$552,295	$23,356
Additions based on tax positions related to the current year (a)	40,502	750,320	185	72	173	690
Additions for tax positions of prior years	6,233	10,262	1,122	393	801	761
Reductions for tax positions of prior years	(2,410)	(14,374)	(3,328)	(1,236)	(163,903)	(1,105)
Gross balance at December 31, 2022	1,452,819	1,350,836	547,548	638,726	389,366	23,702
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(1,277,414)	(1,328,916)	(504,940)	(455,928)	(377,054)	(23,702)
Unrecognized tax benefits net of unused tax attributes	$175,405	$21,920	$42,608	$182,798	$12,312	$—

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2021	$1,364,635	$640,295	$549,717	$639,546	$521,932	$21,652
Additions based on tax positions related to the current year	30,419	13,437	684	1,050	32,616	1,753
Additions for tax positions of prior years	15,013	9,304	1,504	6	2,315	1,897
Reductions for tax positions of prior years	(1,573)	(58,408)	(2,336)	(1,105)	(4,568)	(1,946)
Gross balance at December 31, 2021	1,408,494	604,628	549,569	639,497	552,295	23,356
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(992,643)	(604,628)	(388,728)	(484,899)	(540,694)	(8,576)
Unrecognized tax benefits net of unused tax attributes	$415,851	$—	$160,841	$154,598	$11,601	$14,780

(a)The primary additions for Entergy Louisiana in 2022 and 2023 are related to the Entergy Louisiana securitizations as discussed in “Other Tax Matters - Act 293 Securitizations” below.

(b)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$57.2	$377.9	$262.1
Entergy Louisiana	$862.5	$720.8	$66.3
Entergy Mississippi	$1.0	$151.2	$51.7
Entergy New Orleans	$18.2	$310.7	$228.6
Entergy Texas	$2.9	$3.3	$2.6
System Energy	$3.1	$2.5	$1.7

Accrued balances for the possible payment of interest related to unrecognized tax benefits for the Registrant Subsidiaries are as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$7.8	$4.3	$2.7
Entergy Louisiana	$1.5	$4.1	$3.7
Entergy Mississippi	$2.1	$3.1	$2.4
Entergy New Orleans	$0.6	$6.4	$5.2
Entergy Texas	$—	$1.1	$1.1
System Energy	$1.9	$1.9	$12.1

The Registrant Subsidiaries record interest and penalties related to unrecognized tax benefits in income tax expense.  No penalties were recorded in 2023, 2022, and 2021. Interest (net-of-tax) was recorded as follows:

	2023	2022	2021
	(In Millions)
Entergy Arkansas	$3.5	$1.6	$0.4
Entergy Louisiana	($2.6)	$0.4	$0.3
Entergy Mississippi	($1.0)	$0.7	$0.5
Entergy New Orleans	($5.8)	$1.2	$1.3
Entergy Texas	($1.1)	$—	$0.2
System Energy	$—	($10.2)	$0.2

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state income tax returns.  IRS examinations are complete for years before 2019. All state taxing authorities’ examinations are complete for years before 2014. Entergy regularly defends its positions and works with the IRS to resolve audits.  The resolution of audit issues could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

2016-2018 IRS Audit

The IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report (RAR) for each federal filer under audit in November 2023. Entergy agreed to all adjustments contained in the RARs. Entergy and the Registrant Subsidiaries recorded all the material effects resulting from the RARs in the fourth quarter of 2023.

Utility Restructurings

In 2017, Entergy New Orleans undertook an internal restructuring, and in 2018, Entergy Arkansas and Entergy Mississippi also participated in internal restructurings under which these three Utility operating companies joined Entergy Louisiana as wholly-owned subsidiaries of Entergy Utility Holding Company, LLC. The change in ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for income tax purposes, which resulted in recognition of a gain for income tax purposes and a corresponding increase in the tax basis of assets, in accordance with the Internal Revenue Code and Treasury Regulations. Entergy determined that there was uncertainty regarding the treatment of certain aspects of the restructurings and recorded provisions for uncertain tax positions which are now considered to be effectively settled in accordance with accounting standards. The reversal of such provisions for uncertain tax positions results in a reduction of income tax expense of $156 million for Entergy Arkansas, $1 million for Entergy Mississippi, and $6 million for Entergy New Orleans.

The IRS also required Entergy New Orleans to reverse a tax gain associated with the 2017 restructuring that had been previously recognized, allowing Entergy New Orleans to reduce its tax expense by $39 million.

After the restructuring, Entergy Arkansas adopted a new method of accounting for income tax purposes in which its nuclear decommissioning costs are treated as production costs of electricity includable in cost of goods sold, which resulted in a $1.8 billion reduction in taxable income on its 2018 tax return that was treated as an unrecognized tax benefit. In conjunction with the audit, Entergy agreed with the IRS adjustments concerning the nuclear decommissioning tax position allowing Entergy Arkansas to include $102 million of its decommissioning liability in cost of goods sold.

Mark-to-Market Method of Accounting

In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility and from System Energy under the Unit Power Sales Agreement as well as other intercompany power purchase agreements. The election resulted in a $2 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with the Vidalia contract and various other third-party and intercompany wholesale electric power purchase and sale agreements. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $132 million and a corresponding reduction of income tax expense primarily associated with the effect of the Tax Cuts and Jobs Act rate reduction discussed below.

In 2017, Entergy New Orleans also elected mark-to-market income tax treatment for the Unit Power Sales Agreement and various intercompany wholesale electric contracts which resulted in a $1 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $139 million and a corresponding reduction of income tax expense.

In 2018, Entergy Arkansas and Entergy Mississippi each accrued approximately $2 billion in deductible temporary differences related to mark-to-market tax accounting for the Unit Power Sales Agreement and various wholesale electric contracts. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The effective settlement of the mark-to-market tax position for Entergy Arkansas resulted in the accrual of an increase to tax expense of $40 million, which was offset by approximately $5 million of miscellaneous excess ADIT recognized as a result of the 2016-2018 IRS audit resolution. The net increase to tax expense is deferred as a regulatory asset, as discussed within the “Regulatory and Other Matters” section below.

Restructuring of Entergy’s Non-Utility Operations Business

During the 2016 to 2018 audit period, the ownership of certain of Entergy’s non-utility operations business nuclear power plants (previously reported as part of Entergy Wholesale Commodities) was restructured. Such restructuring transactions required Entergy to recognize the plants’ nuclear decommissioning liabilities for income tax purposes. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a significant portion of which resulted in an increase in the tax basis of the assets. Because certain aspects of the restructuring transactions involved uncertainty, Entergy recorded a provision for uncertain tax positions. The IRS did not propose adjustments to the tax treatment of the restructuring transactions resulting in a net decrease to income tax expense of $288 million from the reversal of the provision for uncertain tax positions in fourth quarter 2023.

Reduction of Net Operating Loss Carryovers

The IRS audit reduced Entergy’s net operating loss carryover by $8 billion. A portion of Entergy’s audit adjustments were not offset by losses which resulted in a tax liability of $79 million, which was fully offset by prior deposits made by Entergy. Entergy received an assessment of interest in excess of prior deposits of $13 million in December 2023, and such interest was paid in January 2024.

Net operating loss carryovers were reduced by $4 billion for Entergy Arkansas, $1 billion for Entergy Louisiana, $2 billion for Entergy Mississippi, $1 billion for Entergy New Orleans, and $40 million for System

Energy. The IRS audit adjustments were also factored into the settle-up required under Entergy’s intercompany income tax allocation agreement, and such amounts were settled in the fourth quarter of 2023.

Regulatory and Other Matters

Additional customer credits related to the audit outcome may be due in accordance with prior regulatory agreements associated with the Entergy Louisiana and Entergy Gulf States Louisiana business combination and Entergy New Orleans restructuring and general rate-making principles. A regulatory liability and associated regulatory charge of $38 million and $60 million ($28 million and $44 million net-of-tax) were recorded for Entergy Louisiana and Entergy New Orleans, respectively. The inclusion of the effects of the audit on customer rates is subject to the review and approval of the retail regulators. Additionally, a regulatory asset for income tax associated with deficient ADIT of $35 million, $2 million, and $3 million, was recorded for Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi, respectively. See Note 2 to the financial statements for discussion of Entergy Arkansas’s regulatory activity related to the Tax Cuts and Jobs Act and for discussion of the settlement of Entergy Arkansas’s 2023 formula rate plan.

As noted above, Entergy accrues interest expense related to unrecognized tax benefits in income tax expense. As a result of the IRS audit resolution, Entergy reversed approximately $24 million of interest related to the allowance of previously unrecognized tax benefits.

Reversal of net deferred credits associated with the accounting for income taxes upon the resolution of the IRS audit resulted in a reduction/(increase) of income tax expense of $9 million, $42 million, ($2) million, $2 million, $2 million, and $1 million for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy, respectively.

Included in the effect of the IRS audit on the results of operations was the measurement of deferred tax assets and liabilities influenced by the 2017 enactment of the Tax Cuts and Jobs Act income tax rate change discussed below. With the conclusion of the audit, there are no remaining federal unrecognized tax benefits affected by the rate differential which could impact income tax expense and the regulatory liability for income taxes in future periods.

State Income Tax Audits

As a result of income tax audit adjustments proposed by the Arkansas Department of Finance and Administration, an Entergy subsidiary in the non-utility operations business recorded a provision in third quarter 2022 for uncertain tax positions of approximately $21 million, which includes interest expense.

Other Tax Matters

Tax Cuts and Jobs Act (TCJA)

The most significant effect of the TCJA for Entergy and the Registrant Subsidiaries was the change in the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Entergy had remaining regulatory liabilities of $1.0 billion and $1.3 billion as of December 31, 2023 and December 31, 2022, respectively, mainly associated with the re-measurement of deferred tax assets and liabilities from the income tax rate change, subsequent amortization of excess ADIT, and payments to customers since the enactment of the TCJA. In addition to the protected and unprotected excess ADIT amounts, the net regulatory liability for income taxes includes other regulatory assets and liabilities for income taxes mainly for AFUDC, which is described in Note 1 to the financial statements.

Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the effect that excess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect

of (1) the reduction of the net deferred tax liability resulting in excess ADIT, and (2) the tax gross-up of excess ADIT. The Registrant Subsidiaries’ December 31, 2023 and December 31, 2022 balance sheets reflect net regulatory liabilities for income taxes as follows:

	2023	2022
	(In Millions)
Entergy Arkansas	$392	$435
Entergy Louisiana	$194	$338
Entergy Mississippi	$189	$202
Entergy New Orleans	$36	$40
Entergy Texas	$115	$133
System Energy	$107	$111

Excess ADIT is generally classified into two categories: (1) the portion that is subject to the normalization requirements of the TCJA, referred to as “protected”, and (2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. See Note 2 to the financial statements for discussion of Entergy Louisiana’s $106 million reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the TCJA, recorded in fourth quarter 2023. The majority of the remaining unamortized Excess ADIT as of December 31, 2023 is classified as protected. The TCJA provides that the normalization method of accounting for income taxes is required for excess ADIT associated with public utility property. The TCJA provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements.

During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess accumulated deferred income taxes, associated with the effects of the TCJA, to their customers through rate riders and other means approved by their respective regulatory authorities. Return of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This manner of regulatory accounting affects the effective tax rate for the period as compared to the statutory tax rate. There was no return of unprotected excess accumulated deferred income taxes for Entergy or the Registrant Subsidiaries for the year ended December 31, 2023. For the year ended December 31, 2022, the return of unprotected excess accumulated deferred income taxes reduced the regulatory liability for income taxes by $53 million for Entergy, including $25 million for Entergy Louisiana, $1 million for Entergy New Orleans, and $27 million for Entergy Texas.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal tax incentives for clean energy production, including the extension of production tax credits to solar projects and certain qualified nuclear power plants. Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax on the buyback of public company stock and a new corporate alternative minimum tax. There are no effects on the financial statements of Entergy or the Registrant Subsidiaries as of and for the years ended December 31, 2023 and 2022 related to the enactment of the law. See the “Income Tax Legislation and Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for additional discussion of the effects of the Inflation Reduction Act of 2022.

Restructuring of Entergy’s Non-Utility Operations Business in 2020

In the fourth quarter 2020, Entergy’s ownership of Palisades was restructured. The restructuring required Entergy to recognize Palisades’ nuclear decommissioning liability for income tax purposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $9.2 million. The accrual of the nuclear decommissioning liability also required Entergy to recognize a gain for income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increase in the tax basis of the assets represents a tax accounting temporary difference.

Tax Accounting Methods

Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S. Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market valuation which includes analyses of market prices and conditions.

In 2020, Entergy Texas elected mark-to-market income tax treatment for wholesale electric power purchase and sale agreements which resulted in a $2.5 billion deductible temporary difference.

Arkansas and Louisiana Corporate Income Tax Rate Changes

Since 2019, the State of Arkansas has enacted corporate income tax law changes that phased in rate reductions from the former rate of 6.5% to 6.2% in 2021, 5.9% in 2022, 5.1% in 2023, and 4.8% in 2024.  Legislation in 2022 accelerated the rate reduction to 5.3% for tax years beginning on or after January 1, 2023, accelerating the rate reductions that were originally scheduled to take effect in the 2025 tax year. As a result of the rate reductions, Entergy Arkansas has recorded regulatory liabilities for income taxes of approximately $26 million, $15 million, $11 million, and $21 million in 2023, 2022, 2021, and 2020, respectively. The regulatory liabilities include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and have been or are scheduled to be included in the approved rate mechanisms. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to ten years.

Pursuant to legislation enacted in 2021 and approved by Louisiana citizens by amendment to the state constitution, beginning January 1, 2022, federal income taxes paid are no longer deductible for state income tax purposes, and the top Louisiana corporate income tax rate has been reduced from 8% to 7.5%. As a result of this change in Louisiana tax law, the Louisiana applicable tax rate increased by 0.85%. Accordingly, deferred tax assets and liabilities were adjusted to reflect the new applicable federal and state rates. In fourth quarter 2021, Entergy recorded a net increase to its deferred tax asset of $27 million. Entergy Louisiana and Entergy New Orleans recorded net increases to their deferred tax liabilities before consideration of the tax gross-up of $77 million and $8 million, respectively, which were offset by regulatory assets for income taxes. Therefore, these increases had no effect on tax expense. However, the increase of deferred tax assets associated with certain assets reduced tax expense for Entergy Louisiana and Entergy New Orleans by $6 million and $2 million, respectively. The legislation enacted in 2021 also provided that Louisiana net operating losses generally have an indefinite carryover period.

Act 293 Securitizations

As described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021. The first transaction occurred in May of 2022 and the second occurred in March of 2023. Act 293 provides that the LURC contribute the net bond proceeds to a LURC-sponsored trust. Over the 15-year term of the Act 293 bonds, the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will not be taxable to Entergy Louisiana. Additionally, Entergy Louisiana will not include the receipt of the system

restoration charges in taxable income because the right to receive the system restoration charges has been granted directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.

Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and $290 million in May 2022, both after taking into account a provision for uncertain tax positions. Entergy’s recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after taking into account a provision for uncertain tax positions.

In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to provide credits to its customers. See Note 2 to the financial statements for further discussion of the Entergy Louisiana March 2023 and May 2022 storm cost securitizations.

Entergy Mississippi [Member]

Income Tax Disclosure [Text Block]

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes for Entergy for 2023, 2022, and 2021 consist of the following:

	2023	2022	2021
	(In Thousands)
Current:
Federal	$60,639	$32,387	($5,003)
State	23,014	(3,091)	(8,995)
Total	83,653	29,296	(13,998)
Deferred and non-current - net	(768,941)	(67,520)	205,891
Investment tax credits - net	(5,247)	(754)	(519)
Income taxes	($690,535)	($38,978)	$191,374

Income taxes for the Registrant Subsidiaries for 2023, 2022, and 2021 consist of the following:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$33,100	($142,253)	$20,328	($99,343)	$2,851	$337
State	(4,201)	(6,397)	4,142	(5,854)	3,719	(1,570)
Total	28,899	(148,650)	24,470	(105,197)	6,570	(1,233)
Deferred and non-current - net	(126,878)	(52,451)	30,690	(84,744)	57,066	31,005
Investment tax credits - net	(1,231)	(4,680)	(796)	(32)	(764)	2,260
Income taxes	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$8,015	($79,079)	$9,242	$1,074	$37,471	($11,720)
State	(1,066)	(1,773)	(6,486)	6,221	2,260	581
Total	6,949	(80,852)	2,756	7,295	39,731	(11,139)
Deferred and non-current - net	74,802	(77,223)	48,443	16,814	11,520	(83,369)
Investment tax credits - net	(855)	(4,778)	3,665	168	(630)	1,680
Income taxes	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	($20,285)	($24,053)	($5,868)	($6,724)	($189)	$29,416
State	529	2,459	(11,506)	(413)	1,261	(10,258)
Total	(19,756)	(21,594)	(17,374)	(7,137)	1,072	19,158
Deferred and non-current - net	96,180	146,786	60,861	12,870	25,087	(25,229)
Investment tax credits - net	(1,229)	(4,783)	1,836	203	(633)	4,094
Income taxes	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)

Total income taxes for Entergy differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

	2023		2022		2021
	(In Thousands)
Net income attributable to Entergy Corporation	$2,356,536		$1,103,166		$1,118,492
Preferred dividend requirements of subsidiaries and noncontrolling interests	5,774		(6,028)		227
Consolidated net income	2,362,310		1,097,138		1,118,719
Income taxes	(690,535)		(38,978)		191,374
Income before income taxes	$1,671,775		$1,058,160		$1,310,093
Income taxes computed at statutory rate (21%)	$351,073		$222,214		$275,120
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	70,144		61,368		79,273
Regulatory differences - utility plant items	(27,901)		(32,143)		(57,556)
Equity component of AFUDC	(20,172)		(14,156)		(14,799)
Amortization of investment tax credits	(7,978)		(7,740)		(7,695)
Flow-through / permanent differences	(1,374)		1,011		(5,585)
Amortization of excess ADIT (a)	9,102		(34,899)		(66,478)
Arkansas and Louisiana rate changes (b)	—		—		(27,108)
IRS audit resolution (c)	(842,769)		—		—
Reversal of regulatory liability for Hurricane Isaac (d)	(105,649)		—		—
Entergy Louisiana securitization (e)	(129,034)		(282,620)		—
System Energy sale-leaseback order (f)	—		12,662		—
Provision for uncertain tax positions	18,884		34,423		16,533
Valuation allowance	(8,697)		(2,754)		(2,600)
Other - net	3,836		3,656		2,269
Total income taxes as reported	($690,535)		($38,978)		$191,374
Effective Income Tax Rate	(41.3	%)	(3.7	%)	14.6	%

(a)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess accumulated deferred income taxes (ADIT) in 2023, 2022, and 2021 and the tax legislation enactment in 2017.

(b)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

(c)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See “Other Tax Matters – Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(f)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$396,850	$1,273,370	$181,969	$228,938	$291,273	$108,772
Income taxes	(99,210)	(205,781)	54,364	(189,973)	62,872	32,032
Income before income taxes	$297,640	$1,067,589	$236,333	$38,965	$354,145	$140,804
Income taxes computed at statutory rate (21%)	$62,504	$224,194	$49,630	$8,183	$74,370	$29,569
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	13,291	51,899	11,133	1,907	2,574	5,798
Regulatory differences - utility plant items	(8,812)	(5,535)	(5,290)	(1,353)	(6,394)	(517)
Equity component of AFUDC	(4,093)	(6,754)	(1,796)	(309)	(5,920)	(1,301)
Amortization of investment tax credits	(1,201)	(4,625)	(223)	(25)	(748)	(1,155)
Flow-through / permanent differences	1,105	126	3,534	(1,913)	1,493	(191)
IRS audit resolution (a)	(159,588)	(179,111)	(3,291)	(198,424)	(3,112)	(1,575)
Amortization of excess ADIT (b)	(6,095)	14,032	—	1,147	17	—
Entergy Louisiana securitization (c)	—	(133,443)	—	—	—	—
Reversal of regulatory liability for Hurricane Isaac (d)	—	(105,649)	—	—	—	—
Non-taxable dividend income	—	(62,116)	—	—	—	—
Provision for uncertain tax positions	2,600	(400)	300	600	211	1,200
Other - net	1,079	1,601	367	214	381	204
Total income taxes as reported	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032
Effective Income Tax Rate	(33.3%)	(19.3%)	23.0%	(487.5%)	17.8%	22.7%

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$292,887	$855,870	$176,267	$64,101	$303,327	($276,593)
Income taxes	80,896	(162,853)	54,864	24,277	50,621	(92,828)
Income before income taxes	$373,783	$693,017	$231,131	$88,378	$353,948	($369,421)
Income taxes computed at statutory rate (21%)	$78,494	$145,534	$48,538	$18,559	$74,329	($77,578)
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	17,981	44,244	9,659	6,733	2,175	(16,727)
Regulatory differences - utility plant items	(12,466)	(6,347)	(7,726)	(1,908)	(3,010)	(686)
Equity component of AFUDC	(3,437)	(5,513)	(1,286)	(174)	(2,841)	(905)
Amortization of investment tax credits	(1,201)	(4,720)	(223)	175	(614)	(1,155)
Flow-through / permanent differences	106	3,467	4,837	230	765	(641)
Amortization of excess ADIT (b)	—	(13,164)	—	(752)	(20,983)	—
System Energy sale-leaseback order (e)	—	—	—	—	—	12,662
Entergy Louisiana securitization (c)	—	(289,609)	—	—	—	—
Non-taxable dividend income	—	(38,735)	—	—	—	—
Provision for uncertain tax positions	1,600	400	700	1,200	420	(8,000)
Valuation allowance	(1,258)	—	—	—	—	—
Other - net	1,077	1,590	365	214	380	202
Total income taxes as reported	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)
Effective Income Tax Rate	21.6%	(23.5%)	23.7%	27.5%	14.3%	25.1%

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$298,484	$653,984	$166,834	$31,798	$228,824	$106,814
Income taxes	75,195	120,409	45,323	5,936	25,526	(1,977)
Income before income taxes	$373,679	$774,393	$212,157	$37,734	$254,350	$104,837
Income taxes computed at statutory rate (21%)	$78,473	$162,623	$44,553	$7,924	$53,413	$22,016
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	19,633	41,030	9,305	2,579	1,553	5,385
Regulatory differences - utility plant items	(16,078)	(14,123)	(8,133)	(4,332)	(2,115)	(12,776)
Equity component of AFUDC	(3,207)	(6,016)	(1,701)	(498)	(2,077)	(1,300)
Amortization of investment tax credits	(1,201)	(4,729)	64	(56)	(617)	(1,155)
Flow-through / permanent differences	(814)	(2,655)	124	1,559	(475)	(1,235)
Amortization of excess ADIT (b)	(5,845)	(24,323)	—	(1,028)	(21,929)	(13,354)
Arkansas and Louisiana rate changes (f)	398	(6,126)	395	(1,569)	216	115
Non-taxable dividend income	—	(26,801)	—	—	—	—
Provision for uncertain tax positions	353	300	465	1,200	(2,716)	200
Valuation allowance	2,766	—	—	—	—	—
Other - net	717	1,229	251	157	273	127
Total income taxes as reported	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)
Effective Income Tax Rate	20.1%	15.5%	21.4%	15.7%	10.0%	(1.9%)

(a)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(b)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2023, 2022, 2021 and the tax legislation enactment in 2017.

(c)See “Other Tax Matters - Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

(f)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2023 and 2022 are as follows:

	2023	2022
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($6,192,156)	($5,270,010)
Regulatory assets	(989,405)	(937,554)
Nuclear decommissioning trusts/receivables	(467,267)	(318,570)
Pension, net regulatory asset	(363,829)	(336,496)
Combined unitary state taxes	(8,783)	(10,335)
Power purchase agreements	(75,612)	(3,993)
Accumulated storm damage provision	(2,474)	(35,213)
Deferred fuel	(69,436)	(181,222)
Other	(251,107)	(333,421)
Total	(8,420,069)	(7,426,814)
Deferred tax assets:
Nuclear and other decommissioning liabilities	147,011	173,201
Regulatory liabilities	1,247,530	1,108,075
Pension and other post-employment benefits	116,222	141,399
Compensation	81,226	76,317
Accumulated deferred investment tax credit	55,928	57,501
Provision for allowances and contingencies	149,479	97,545
Unbilled/deferred revenues	2,418	21,905
Net operating loss carryforwards	2,857,908	2,065,149
Capital losses and miscellaneous tax credits	107,009	28,876
Valuation allowance	(372,119)	(372,017)
Other	220,055	245,236
Total	4,612,667	3,643,187
Non-current accrued taxes (including unrecognized tax benefits)	(422,213)	(951,110)
Accumulated deferred income taxes and taxes accrued	($4,229,615)	($4,734,737)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses before 1/1/2018	$4.2 billion	2028-2037
Federal net operating losses - 1/1/2018 forward	$13.8 billion	N/A
State net operating losses	$3.9 billion	2028-2042
State net operating losses with no expiration	$11.1 billion	N/A
Other federal and state carryforwards	$523.6 million	2024-2037
Miscellaneous federal and state credits	$124.9 million	2024-2043

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes generated and reflected on income tax returns. Entergy evaluates the available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation

indicates that Entergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce deferred tax assets to the realizable amount.

Because it is more likely than not that the benefits from certain state net operating losses and other deferred tax assets will not be utilized, valuation allowances totaling $372 million as of December 31, 2023 and $372 million as of December 31, 2022 have been provided on the deferred tax assets related to federal and state jurisdictions in which Entergy does not currently expect to be able to utilize certain separate company tax return attributes, preventing realization of such deferred tax assets. Certain accelerated tax deductions which generated taxable losses in various taxing jurisdictions, and which have a limited term carryover period, have resulted in the impairment of the realizability of such carryovers and are reflected in the valuation allowance disclosed above.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2023 and 2022 are as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,421,272)	($2,639,079)	($810,120)	($272,187)	($671,072)	($450,559)
Regulatory assets	(241,427)	(500,395)	(41,519)	(23,618)	(104,562)	(76,522)
Nuclear decommissioning trusts/receivables	(154,106)	(173,402)	—	—	—	(139,858)
Pension, net regulatory asset	(96,853)	(82,305)	(24,342)	(9,216)	(17,522)	(18,895)
Deferred fuel	—	(17,065)	(21,137)	(1,563)	(29,194)	(37)
Accumulated storm damage provision	—	—	—	—	(1,387)	—
Power purchase agreements	15,993	(112,292)	1,140	(12,516)	(4,551)	—
Other	(21,187)	(126,952)	(6,844)	(4,270)	(3,301)	(9,051)
Total	(1,918,852)	(3,651,490)	(902,822)	(323,370)	(831,589)	(694,922)
Deferred tax assets:
Regulatory liabilities	296,278	575,459	54,586	42,921	41,137	240,310
Nuclear and other decommissioning liabilities	118,301	9,055	—	—	97	19,259
Pension and other post-employment benefits	(28,868)	46,837	(10,064)	(19,354)	(21,977)	(2,641)
Accumulated deferred investment tax credit	6,761	27,902	3,446	4,431	1,672	11,717
Provision for allowances and contingencies	23,956	70,297	10,072	25,846	8,659	225
Unbilled/deferred revenues	5,962	(20,375)	6,194	1,045	8,365	—
Compensation	4,054	6,078	3,649	1,268	2,181	406
Net operating loss carryforwards	94,321	459,553	8,375	26,227	61	35,089
Capital losses and miscellaneous tax credits	7,137	13,073	7,613	15,684	1,655	13,211
Other	17,072	52,438	1,556	(235)	1,740	—
Total	544,974	1,240,317	85,427	97,833	43,590	317,576
Non-current accrued taxes (including unrecognized tax benefits)	(63,175)	19,731	(4,349)	29,922	(26,906)	(28,398)
Accumulated deferred income taxes and taxes accrued	($1,437,053)	($2,391,442)	($821,744)	($195,615)	($814,905)	($405,744)

    

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,181,456)	($2,513,138)	($691,675)	($115,841)	($614,134)	($448,010)
Regulatory assets	(244,624)	(457,102)	(44,358)	(24,738)	(95,717)	(68,742)
Nuclear decommissioning trusts/receivables	(107,858)	(118,172)	—	—	—	(92,527)
Pension, net regulatory asset	(93,139)	(82,891)	(22,256)	(9,604)	(18,111)	(17,889)
Deferred fuel	(35,205)	(49,792)	(37,333)	(2,560)	(54,204)	(128)
Accumulated storm damage provision	—	(31,337)	—	—	(3,876)	—
Power purchase agreements	(8,296)	(11,181)	—	(9,372)	(22,014)	—
Other	(76,813)	(126,350)	(26,752)	(21,977)	(4,126)	(14,364)
Total	(1,747,391)	(3,389,963)	(822,374)	(184,092)	(812,182)	(641,660)
Deferred tax assets:
Regulatory liabilities	236,318	508,594	54,454	27,438	47,248	237,452
Nuclear and other decommissioning liabilities	139,499	12,883	1	—	97	18,940
Pension and other post-employment benefits	(28,463)	52,414	(9,196)	(18,114)	(20,867)	(2,481)
Accumulated deferred investment tax credit	7,171	29,271	3,641	4,438	1,829	11,151
Provision for allowances and contingencies	26,432	15,741	10,300	26,671	7,755	—
Unbilled/deferred revenues	6,211	(2,405)	5,826	4,090	7,572	—
Compensation	3,361	5,207	2,316	1,107	1,712	308
Net operating loss carryforwards	10,491	307,175	10,140	12,146	27,620	20,639
Capital losses and miscellaneous tax credits	719	2,774	5,152	11,006	3,728	8,261
Other	24,969	41,310	6,849	11,105	729	—
Total	426,708	972,964	89,483	79,887	77,423	294,270
Non-current accrued taxes (including unrecognized tax benefits)	(177,551)	42,121	(47,139)	(281,054)	(9,468)	(28,680)
Accumulated deferred income taxes and taxes accrued	($1,498,234)	($2,374,878)	($780,030)	($385,259)	($744,227)	($376,070)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
Federal net operating losses before 1/1/2018	$— million	$0.8 billion	$— million	$0.1 billion	$— million	$— million
Year(s) of expiration	N/A	2035-2037	N/A	2037	N/A	N/A
Federal net operating losses - 1/1/2018 forward	$0.5 billion	$2.8 billion	$10.8 million	$17.7 million	$1.8 billion	$0.1 billion
Year(s) of expiration	N/A	N/A	N/A	N/A	N/A	N/A
State net operating losses	$0.4 billion	$5.7 billion	$0.1 billion	$0.2 billion	$1 million	$0.2 billion
Year(s) of expiration	2028-2032	N/A	2040-2042	N/A	2028	N/A
Misc. federal credits	$10 million	$16.9 million	$3.9 million	$16.1 million	$0.8 million	$4.8 million
Year(s) of expiration	2038-2043	2035-2043	2038-2043	2037-2043	2039-2043	2029-2043
State credits	$— million	$— million	$8 million	$— million	$1.6 million	$19 million
Year(s) of expiration	N/A	N/A	2024-2026	N/A	2027-2033	2024-2027

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2023	2022	2021
	(In Thousands)
Gross balance at January 1	$6,393,599	$5,759,968	$5,699,339
Additions based on tax positions related to the current year	332,884	792,134	101,623
Additions for tax positions of prior years	194,894	37,259	33,419
Reductions for tax positions of prior years (a)	(1,300,381)	(195,762)	(74,413)
Settlements (a)	(3,181,086)	—	—
Gross balance at December 31	2,439,910	6,393,599	5,759,968
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(2,160,484)	(5,566,212)	(4,987,799)
Cash paid to taxing authorities	—	(82,000)	(60,000)
Unrecognized tax benefits net of unused tax attributes and payments (b)	$279,426	$745,387	$712,169

(a)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

(b)Potential tax liability above what is payable on tax returns.

The balances of unrecognized tax benefits include $1,899 million, $3,254 million, and $2,256 million as of December 31, 2023, 2022, and 2021, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $541 million, $3,140 million, and $3,504 million as of December 31, 2023, 2022, and 2021, respectively, if

disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2023, 2022, and 2021 accrued balance for the possible payment of interest is approximately $39 million, $50 million, and $52 million, respectively. Interest (net-of-tax) of ($11) million, $8 million, and ($4) million was recorded in 2023, 2022, and 2021, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2023, 2022, and 2021 is as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2023	$1,452,819	$1,350,836	$547,548	$638,726	$389,366	$23,702
Additions based on tax positions related to the current year (a)	2,249	332,320	209	78	196	752
Additions for tax positions of prior years	—	—	—	—	94,793	—
Reductions for tax positions of prior years (b)	(148,558)	(458,072)	(16,853)	(191,336)	(67,156)	(9,532)
Settlements (b)	(1,237,313)	(361,041)	(525,251)	(428,137)	(1,994)	(621)
Gross balance at December 31, 2023	69,197	864,043	5,653	19,331	415,205	14,301
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(34,683)	(735,612)	(3,778)	(11,721)	(381,561)	(14,301)
Unrecognized tax benefits net of unused tax attributes	$34,514	$128,431	$1,875	$7,610	$33,644	$—

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2022	$1,408,494	$604,628	$549,569	$639,497	$552,295	$23,356
Additions based on tax positions related to the current year (a)	40,502	750,320	185	72	173	690
Additions for tax positions of prior years	6,233	10,262	1,122	393	801	761
Reductions for tax positions of prior years	(2,410)	(14,374)	(3,328)	(1,236)	(163,903)	(1,105)
Gross balance at December 31, 2022	1,452,819	1,350,836	547,548	638,726	389,366	23,702
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(1,277,414)	(1,328,916)	(504,940)	(455,928)	(377,054)	(23,702)
Unrecognized tax benefits net of unused tax attributes	$175,405	$21,920	$42,608	$182,798	$12,312	$—

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2021	$1,364,635	$640,295	$549,717	$639,546	$521,932	$21,652
Additions based on tax positions related to the current year	30,419	13,437	684	1,050	32,616	1,753
Additions for tax positions of prior years	15,013	9,304	1,504	6	2,315	1,897
Reductions for tax positions of prior years	(1,573)	(58,408)	(2,336)	(1,105)	(4,568)	(1,946)
Gross balance at December 31, 2021	1,408,494	604,628	549,569	639,497	552,295	23,356
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(992,643)	(604,628)	(388,728)	(484,899)	(540,694)	(8,576)
Unrecognized tax benefits net of unused tax attributes	$415,851	$—	$160,841	$154,598	$11,601	$14,780

(a)The primary additions for Entergy Louisiana in 2022 and 2023 are related to the Entergy Louisiana securitizations as discussed in “Other Tax Matters - Act 293 Securitizations” below.

(b)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$57.2	$377.9	$262.1
Entergy Louisiana	$862.5	$720.8	$66.3
Entergy Mississippi	$1.0	$151.2	$51.7
Entergy New Orleans	$18.2	$310.7	$228.6
Entergy Texas	$2.9	$3.3	$2.6
System Energy	$3.1	$2.5	$1.7

Accrued balances for the possible payment of interest related to unrecognized tax benefits for the Registrant Subsidiaries are as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$7.8	$4.3	$2.7
Entergy Louisiana	$1.5	$4.1	$3.7
Entergy Mississippi	$2.1	$3.1	$2.4
Entergy New Orleans	$0.6	$6.4	$5.2
Entergy Texas	$—	$1.1	$1.1
System Energy	$1.9	$1.9	$12.1

The Registrant Subsidiaries record interest and penalties related to unrecognized tax benefits in income tax expense.  No penalties were recorded in 2023, 2022, and 2021. Interest (net-of-tax) was recorded as follows:

	2023	2022	2021
	(In Millions)
Entergy Arkansas	$3.5	$1.6	$0.4
Entergy Louisiana	($2.6)	$0.4	$0.3
Entergy Mississippi	($1.0)	$0.7	$0.5
Entergy New Orleans	($5.8)	$1.2	$1.3
Entergy Texas	($1.1)	$—	$0.2
System Energy	$—	($10.2)	$0.2

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state income tax returns.  IRS examinations are complete for years before 2019. All state taxing authorities’ examinations are complete for years before 2014. Entergy regularly defends its positions and works with the IRS to resolve audits.  The resolution of audit issues could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

2016-2018 IRS Audit

The IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report (RAR) for each federal filer under audit in November 2023. Entergy agreed to all adjustments contained in the RARs. Entergy and the Registrant Subsidiaries recorded all the material effects resulting from the RARs in the fourth quarter of 2023.

Utility Restructurings

In 2017, Entergy New Orleans undertook an internal restructuring, and in 2018, Entergy Arkansas and Entergy Mississippi also participated in internal restructurings under which these three Utility operating companies joined Entergy Louisiana as wholly-owned subsidiaries of Entergy Utility Holding Company, LLC. The change in ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for income tax purposes, which resulted in recognition of a gain for income tax purposes and a corresponding increase in the tax basis of assets, in accordance with the Internal Revenue Code and Treasury Regulations. Entergy determined that there was uncertainty regarding the treatment of certain aspects of the restructurings and recorded provisions for uncertain tax positions which are now considered to be effectively settled in accordance with accounting standards. The reversal of such provisions for uncertain tax positions results in a reduction of income tax expense of $156 million for Entergy Arkansas, $1 million for Entergy Mississippi, and $6 million for Entergy New Orleans.

The IRS also required Entergy New Orleans to reverse a tax gain associated with the 2017 restructuring that had been previously recognized, allowing Entergy New Orleans to reduce its tax expense by $39 million.

After the restructuring, Entergy Arkansas adopted a new method of accounting for income tax purposes in which its nuclear decommissioning costs are treated as production costs of electricity includable in cost of goods sold, which resulted in a $1.8 billion reduction in taxable income on its 2018 tax return that was treated as an unrecognized tax benefit. In conjunction with the audit, Entergy agreed with the IRS adjustments concerning the nuclear decommissioning tax position allowing Entergy Arkansas to include $102 million of its decommissioning liability in cost of goods sold.

Mark-to-Market Method of Accounting

In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility and from System Energy under the Unit Power Sales Agreement as well as other intercompany power purchase agreements. The election resulted in a $2 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with the Vidalia contract and various other third-party and intercompany wholesale electric power purchase and sale agreements. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $132 million and a corresponding reduction of income tax expense primarily associated with the effect of the Tax Cuts and Jobs Act rate reduction discussed below.

In 2017, Entergy New Orleans also elected mark-to-market income tax treatment for the Unit Power Sales Agreement and various intercompany wholesale electric contracts which resulted in a $1 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $139 million and a corresponding reduction of income tax expense.

In 2018, Entergy Arkansas and Entergy Mississippi each accrued approximately $2 billion in deductible temporary differences related to mark-to-market tax accounting for the Unit Power Sales Agreement and various wholesale electric contracts. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The effective settlement of the mark-to-market tax position for Entergy Arkansas resulted in the accrual of an increase to tax expense of $40 million, which was offset by approximately $5 million of miscellaneous excess ADIT recognized as a result of the 2016-2018 IRS audit resolution. The net increase to tax expense is deferred as a regulatory asset, as discussed within the “Regulatory and Other Matters” section below.

Restructuring of Entergy’s Non-Utility Operations Business

During the 2016 to 2018 audit period, the ownership of certain of Entergy’s non-utility operations business nuclear power plants (previously reported as part of Entergy Wholesale Commodities) was restructured. Such restructuring transactions required Entergy to recognize the plants’ nuclear decommissioning liabilities for income tax purposes. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a significant portion of which resulted in an increase in the tax basis of the assets. Because certain aspects of the restructuring transactions involved uncertainty, Entergy recorded a provision for uncertain tax positions. The IRS did not propose adjustments to the tax treatment of the restructuring transactions resulting in a net decrease to income tax expense of $288 million from the reversal of the provision for uncertain tax positions in fourth quarter 2023.

Reduction of Net Operating Loss Carryovers

The IRS audit reduced Entergy’s net operating loss carryover by $8 billion. A portion of Entergy’s audit adjustments were not offset by losses which resulted in a tax liability of $79 million, which was fully offset by prior deposits made by Entergy. Entergy received an assessment of interest in excess of prior deposits of $13 million in December 2023, and such interest was paid in January 2024.

Net operating loss carryovers were reduced by $4 billion for Entergy Arkansas, $1 billion for Entergy Louisiana, $2 billion for Entergy Mississippi, $1 billion for Entergy New Orleans, and $40 million for System

Energy. The IRS audit adjustments were also factored into the settle-up required under Entergy’s intercompany income tax allocation agreement, and such amounts were settled in the fourth quarter of 2023.

Regulatory and Other Matters

Additional customer credits related to the audit outcome may be due in accordance with prior regulatory agreements associated with the Entergy Louisiana and Entergy Gulf States Louisiana business combination and Entergy New Orleans restructuring and general rate-making principles. A regulatory liability and associated regulatory charge of $38 million and $60 million ($28 million and $44 million net-of-tax) were recorded for Entergy Louisiana and Entergy New Orleans, respectively. The inclusion of the effects of the audit on customer rates is subject to the review and approval of the retail regulators. Additionally, a regulatory asset for income tax associated with deficient ADIT of $35 million, $2 million, and $3 million, was recorded for Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi, respectively. See Note 2 to the financial statements for discussion of Entergy Arkansas’s regulatory activity related to the Tax Cuts and Jobs Act and for discussion of the settlement of Entergy Arkansas’s 2023 formula rate plan.

As noted above, Entergy accrues interest expense related to unrecognized tax benefits in income tax expense. As a result of the IRS audit resolution, Entergy reversed approximately $24 million of interest related to the allowance of previously unrecognized tax benefits.

Reversal of net deferred credits associated with the accounting for income taxes upon the resolution of the IRS audit resulted in a reduction/(increase) of income tax expense of $9 million, $42 million, ($2) million, $2 million, $2 million, and $1 million for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy, respectively.

Included in the effect of the IRS audit on the results of operations was the measurement of deferred tax assets and liabilities influenced by the 2017 enactment of the Tax Cuts and Jobs Act income tax rate change discussed below. With the conclusion of the audit, there are no remaining federal unrecognized tax benefits affected by the rate differential which could impact income tax expense and the regulatory liability for income taxes in future periods.

State Income Tax Audits

As a result of income tax audit adjustments proposed by the Arkansas Department of Finance and Administration, an Entergy subsidiary in the non-utility operations business recorded a provision in third quarter 2022 for uncertain tax positions of approximately $21 million, which includes interest expense.

Other Tax Matters

Tax Cuts and Jobs Act (TCJA)

The most significant effect of the TCJA for Entergy and the Registrant Subsidiaries was the change in the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Entergy had remaining regulatory liabilities of $1.0 billion and $1.3 billion as of December 31, 2023 and December 31, 2022, respectively, mainly associated with the re-measurement of deferred tax assets and liabilities from the income tax rate change, subsequent amortization of excess ADIT, and payments to customers since the enactment of the TCJA. In addition to the protected and unprotected excess ADIT amounts, the net regulatory liability for income taxes includes other regulatory assets and liabilities for income taxes mainly for AFUDC, which is described in Note 1 to the financial statements.

Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the effect that excess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect

of (1) the reduction of the net deferred tax liability resulting in excess ADIT, and (2) the tax gross-up of excess ADIT. The Registrant Subsidiaries’ December 31, 2023 and December 31, 2022 balance sheets reflect net regulatory liabilities for income taxes as follows:

	2023	2022
	(In Millions)
Entergy Arkansas	$392	$435
Entergy Louisiana	$194	$338
Entergy Mississippi	$189	$202
Entergy New Orleans	$36	$40
Entergy Texas	$115	$133
System Energy	$107	$111

Excess ADIT is generally classified into two categories: (1) the portion that is subject to the normalization requirements of the TCJA, referred to as “protected”, and (2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. See Note 2 to the financial statements for discussion of Entergy Louisiana’s $106 million reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the TCJA, recorded in fourth quarter 2023. The majority of the remaining unamortized Excess ADIT as of December 31, 2023 is classified as protected. The TCJA provides that the normalization method of accounting for income taxes is required for excess ADIT associated with public utility property. The TCJA provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements.

During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess accumulated deferred income taxes, associated with the effects of the TCJA, to their customers through rate riders and other means approved by their respective regulatory authorities. Return of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This manner of regulatory accounting affects the effective tax rate for the period as compared to the statutory tax rate. There was no return of unprotected excess accumulated deferred income taxes for Entergy or the Registrant Subsidiaries for the year ended December 31, 2023. For the year ended December 31, 2022, the return of unprotected excess accumulated deferred income taxes reduced the regulatory liability for income taxes by $53 million for Entergy, including $25 million for Entergy Louisiana, $1 million for Entergy New Orleans, and $27 million for Entergy Texas.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal tax incentives for clean energy production, including the extension of production tax credits to solar projects and certain qualified nuclear power plants. Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax on the buyback of public company stock and a new corporate alternative minimum tax. There are no effects on the financial statements of Entergy or the Registrant Subsidiaries as of and for the years ended December 31, 2023 and 2022 related to the enactment of the law. See the “Income Tax Legislation and Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for additional discussion of the effects of the Inflation Reduction Act of 2022.

Restructuring of Entergy’s Non-Utility Operations Business in 2020

In the fourth quarter 2020, Entergy’s ownership of Palisades was restructured. The restructuring required Entergy to recognize Palisades’ nuclear decommissioning liability for income tax purposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $9.2 million. The accrual of the nuclear decommissioning liability also required Entergy to recognize a gain for income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increase in the tax basis of the assets represents a tax accounting temporary difference.

Tax Accounting Methods

Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S. Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market valuation which includes analyses of market prices and conditions.

In 2020, Entergy Texas elected mark-to-market income tax treatment for wholesale electric power purchase and sale agreements which resulted in a $2.5 billion deductible temporary difference.

Arkansas and Louisiana Corporate Income Tax Rate Changes

Since 2019, the State of Arkansas has enacted corporate income tax law changes that phased in rate reductions from the former rate of 6.5% to 6.2% in 2021, 5.9% in 2022, 5.1% in 2023, and 4.8% in 2024.  Legislation in 2022 accelerated the rate reduction to 5.3% for tax years beginning on or after January 1, 2023, accelerating the rate reductions that were originally scheduled to take effect in the 2025 tax year. As a result of the rate reductions, Entergy Arkansas has recorded regulatory liabilities for income taxes of approximately $26 million, $15 million, $11 million, and $21 million in 2023, 2022, 2021, and 2020, respectively. The regulatory liabilities include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and have been or are scheduled to be included in the approved rate mechanisms. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to ten years.

Pursuant to legislation enacted in 2021 and approved by Louisiana citizens by amendment to the state constitution, beginning January 1, 2022, federal income taxes paid are no longer deductible for state income tax purposes, and the top Louisiana corporate income tax rate has been reduced from 8% to 7.5%. As a result of this change in Louisiana tax law, the Louisiana applicable tax rate increased by 0.85%. Accordingly, deferred tax assets and liabilities were adjusted to reflect the new applicable federal and state rates. In fourth quarter 2021, Entergy recorded a net increase to its deferred tax asset of $27 million. Entergy Louisiana and Entergy New Orleans recorded net increases to their deferred tax liabilities before consideration of the tax gross-up of $77 million and $8 million, respectively, which were offset by regulatory assets for income taxes. Therefore, these increases had no effect on tax expense. However, the increase of deferred tax assets associated with certain assets reduced tax expense for Entergy Louisiana and Entergy New Orleans by $6 million and $2 million, respectively. The legislation enacted in 2021 also provided that Louisiana net operating losses generally have an indefinite carryover period.

Act 293 Securitizations

As described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021. The first transaction occurred in May of 2022 and the second occurred in March of 2023. Act 293 provides that the LURC contribute the net bond proceeds to a LURC-sponsored trust. Over the 15-year term of the Act 293 bonds, the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will not be taxable to Entergy Louisiana. Additionally, Entergy Louisiana will not include the receipt of the system

restoration charges in taxable income because the right to receive the system restoration charges has been granted directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.

Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and $290 million in May 2022, both after taking into account a provision for uncertain tax positions. Entergy’s recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after taking into account a provision for uncertain tax positions.

In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to provide credits to its customers. See Note 2 to the financial statements for further discussion of the Entergy Louisiana March 2023 and May 2022 storm cost securitizations.

Entergy New Orleans [Member]

Income Tax Disclosure [Text Block]

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes for Entergy for 2023, 2022, and 2021 consist of the following:

	2023	2022	2021
	(In Thousands)
Current:
Federal	$60,639	$32,387	($5,003)
State	23,014	(3,091)	(8,995)
Total	83,653	29,296	(13,998)
Deferred and non-current - net	(768,941)	(67,520)	205,891
Investment tax credits - net	(5,247)	(754)	(519)
Income taxes	($690,535)	($38,978)	$191,374

Income taxes for the Registrant Subsidiaries for 2023, 2022, and 2021 consist of the following:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$33,100	($142,253)	$20,328	($99,343)	$2,851	$337
State	(4,201)	(6,397)	4,142	(5,854)	3,719	(1,570)
Total	28,899	(148,650)	24,470	(105,197)	6,570	(1,233)
Deferred and non-current - net	(126,878)	(52,451)	30,690	(84,744)	57,066	31,005
Investment tax credits - net	(1,231)	(4,680)	(796)	(32)	(764)	2,260
Income taxes	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$8,015	($79,079)	$9,242	$1,074	$37,471	($11,720)
State	(1,066)	(1,773)	(6,486)	6,221	2,260	581
Total	6,949	(80,852)	2,756	7,295	39,731	(11,139)
Deferred and non-current - net	74,802	(77,223)	48,443	16,814	11,520	(83,369)
Investment tax credits - net	(855)	(4,778)	3,665	168	(630)	1,680
Income taxes	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	($20,285)	($24,053)	($5,868)	($6,724)	($189)	$29,416
State	529	2,459	(11,506)	(413)	1,261	(10,258)
Total	(19,756)	(21,594)	(17,374)	(7,137)	1,072	19,158
Deferred and non-current - net	96,180	146,786	60,861	12,870	25,087	(25,229)
Investment tax credits - net	(1,229)	(4,783)	1,836	203	(633)	4,094
Income taxes	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)

Total income taxes for Entergy differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

	2023		2022		2021
	(In Thousands)
Net income attributable to Entergy Corporation	$2,356,536		$1,103,166		$1,118,492
Preferred dividend requirements of subsidiaries and noncontrolling interests	5,774		(6,028)		227
Consolidated net income	2,362,310		1,097,138		1,118,719
Income taxes	(690,535)		(38,978)		191,374
Income before income taxes	$1,671,775		$1,058,160		$1,310,093
Income taxes computed at statutory rate (21%)	$351,073		$222,214		$275,120
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	70,144		61,368		79,273
Regulatory differences - utility plant items	(27,901)		(32,143)		(57,556)
Equity component of AFUDC	(20,172)		(14,156)		(14,799)
Amortization of investment tax credits	(7,978)		(7,740)		(7,695)
Flow-through / permanent differences	(1,374)		1,011		(5,585)
Amortization of excess ADIT (a)	9,102		(34,899)		(66,478)
Arkansas and Louisiana rate changes (b)	—		—		(27,108)
IRS audit resolution (c)	(842,769)		—		—
Reversal of regulatory liability for Hurricane Isaac (d)	(105,649)		—		—
Entergy Louisiana securitization (e)	(129,034)		(282,620)		—
System Energy sale-leaseback order (f)	—		12,662		—
Provision for uncertain tax positions	18,884		34,423		16,533
Valuation allowance	(8,697)		(2,754)		(2,600)
Other - net	3,836		3,656		2,269
Total income taxes as reported	($690,535)		($38,978)		$191,374
Effective Income Tax Rate	(41.3	%)	(3.7	%)	14.6	%

(a)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess accumulated deferred income taxes (ADIT) in 2023, 2022, and 2021 and the tax legislation enactment in 2017.

(b)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

(c)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See “Other Tax Matters – Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(f)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$396,850	$1,273,370	$181,969	$228,938	$291,273	$108,772
Income taxes	(99,210)	(205,781)	54,364	(189,973)	62,872	32,032
Income before income taxes	$297,640	$1,067,589	$236,333	$38,965	$354,145	$140,804
Income taxes computed at statutory rate (21%)	$62,504	$224,194	$49,630	$8,183	$74,370	$29,569
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	13,291	51,899	11,133	1,907	2,574	5,798
Regulatory differences - utility plant items	(8,812)	(5,535)	(5,290)	(1,353)	(6,394)	(517)
Equity component of AFUDC	(4,093)	(6,754)	(1,796)	(309)	(5,920)	(1,301)
Amortization of investment tax credits	(1,201)	(4,625)	(223)	(25)	(748)	(1,155)
Flow-through / permanent differences	1,105	126	3,534	(1,913)	1,493	(191)
IRS audit resolution (a)	(159,588)	(179,111)	(3,291)	(198,424)	(3,112)	(1,575)
Amortization of excess ADIT (b)	(6,095)	14,032	—	1,147	17	—
Entergy Louisiana securitization (c)	—	(133,443)	—	—	—	—
Reversal of regulatory liability for Hurricane Isaac (d)	—	(105,649)	—	—	—	—
Non-taxable dividend income	—	(62,116)	—	—	—	—
Provision for uncertain tax positions	2,600	(400)	300	600	211	1,200
Other - net	1,079	1,601	367	214	381	204
Total income taxes as reported	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032
Effective Income Tax Rate	(33.3%)	(19.3%)	23.0%	(487.5%)	17.8%	22.7%

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$292,887	$855,870	$176,267	$64,101	$303,327	($276,593)
Income taxes	80,896	(162,853)	54,864	24,277	50,621	(92,828)
Income before income taxes	$373,783	$693,017	$231,131	$88,378	$353,948	($369,421)
Income taxes computed at statutory rate (21%)	$78,494	$145,534	$48,538	$18,559	$74,329	($77,578)
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	17,981	44,244	9,659	6,733	2,175	(16,727)
Regulatory differences - utility plant items	(12,466)	(6,347)	(7,726)	(1,908)	(3,010)	(686)
Equity component of AFUDC	(3,437)	(5,513)	(1,286)	(174)	(2,841)	(905)
Amortization of investment tax credits	(1,201)	(4,720)	(223)	175	(614)	(1,155)
Flow-through / permanent differences	106	3,467	4,837	230	765	(641)
Amortization of excess ADIT (b)	—	(13,164)	—	(752)	(20,983)	—
System Energy sale-leaseback order (e)	—	—	—	—	—	12,662
Entergy Louisiana securitization (c)	—	(289,609)	—	—	—	—
Non-taxable dividend income	—	(38,735)	—	—	—	—
Provision for uncertain tax positions	1,600	400	700	1,200	420	(8,000)
Valuation allowance	(1,258)	—	—	—	—	—
Other - net	1,077	1,590	365	214	380	202
Total income taxes as reported	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)
Effective Income Tax Rate	21.6%	(23.5%)	23.7%	27.5%	14.3%	25.1%

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$298,484	$653,984	$166,834	$31,798	$228,824	$106,814
Income taxes	75,195	120,409	45,323	5,936	25,526	(1,977)
Income before income taxes	$373,679	$774,393	$212,157	$37,734	$254,350	$104,837
Income taxes computed at statutory rate (21%)	$78,473	$162,623	$44,553	$7,924	$53,413	$22,016
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	19,633	41,030	9,305	2,579	1,553	5,385
Regulatory differences - utility plant items	(16,078)	(14,123)	(8,133)	(4,332)	(2,115)	(12,776)
Equity component of AFUDC	(3,207)	(6,016)	(1,701)	(498)	(2,077)	(1,300)
Amortization of investment tax credits	(1,201)	(4,729)	64	(56)	(617)	(1,155)
Flow-through / permanent differences	(814)	(2,655)	124	1,559	(475)	(1,235)
Amortization of excess ADIT (b)	(5,845)	(24,323)	—	(1,028)	(21,929)	(13,354)
Arkansas and Louisiana rate changes (f)	398	(6,126)	395	(1,569)	216	115
Non-taxable dividend income	—	(26,801)	—	—	—	—
Provision for uncertain tax positions	353	300	465	1,200	(2,716)	200
Valuation allowance	2,766	—	—	—	—	—
Other - net	717	1,229	251	157	273	127
Total income taxes as reported	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)
Effective Income Tax Rate	20.1%	15.5%	21.4%	15.7%	10.0%	(1.9%)

(a)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(b)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2023, 2022, 2021 and the tax legislation enactment in 2017.

(c)See “Other Tax Matters - Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

(f)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2023 and 2022 are as follows:

	2023	2022
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($6,192,156)	($5,270,010)
Regulatory assets	(989,405)	(937,554)
Nuclear decommissioning trusts/receivables	(467,267)	(318,570)
Pension, net regulatory asset	(363,829)	(336,496)
Combined unitary state taxes	(8,783)	(10,335)
Power purchase agreements	(75,612)	(3,993)
Accumulated storm damage provision	(2,474)	(35,213)
Deferred fuel	(69,436)	(181,222)
Other	(251,107)	(333,421)
Total	(8,420,069)	(7,426,814)
Deferred tax assets:
Nuclear and other decommissioning liabilities	147,011	173,201
Regulatory liabilities	1,247,530	1,108,075
Pension and other post-employment benefits	116,222	141,399
Compensation	81,226	76,317
Accumulated deferred investment tax credit	55,928	57,501
Provision for allowances and contingencies	149,479	97,545
Unbilled/deferred revenues	2,418	21,905
Net operating loss carryforwards	2,857,908	2,065,149
Capital losses and miscellaneous tax credits	107,009	28,876
Valuation allowance	(372,119)	(372,017)
Other	220,055	245,236
Total	4,612,667	3,643,187
Non-current accrued taxes (including unrecognized tax benefits)	(422,213)	(951,110)
Accumulated deferred income taxes and taxes accrued	($4,229,615)	($4,734,737)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses before 1/1/2018	$4.2 billion	2028-2037
Federal net operating losses - 1/1/2018 forward	$13.8 billion	N/A
State net operating losses	$3.9 billion	2028-2042
State net operating losses with no expiration	$11.1 billion	N/A
Other federal and state carryforwards	$523.6 million	2024-2037
Miscellaneous federal and state credits	$124.9 million	2024-2043

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes generated and reflected on income tax returns. Entergy evaluates the available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation

indicates that Entergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce deferred tax assets to the realizable amount.

Because it is more likely than not that the benefits from certain state net operating losses and other deferred tax assets will not be utilized, valuation allowances totaling $372 million as of December 31, 2023 and $372 million as of December 31, 2022 have been provided on the deferred tax assets related to federal and state jurisdictions in which Entergy does not currently expect to be able to utilize certain separate company tax return attributes, preventing realization of such deferred tax assets. Certain accelerated tax deductions which generated taxable losses in various taxing jurisdictions, and which have a limited term carryover period, have resulted in the impairment of the realizability of such carryovers and are reflected in the valuation allowance disclosed above.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2023 and 2022 are as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,421,272)	($2,639,079)	($810,120)	($272,187)	($671,072)	($450,559)
Regulatory assets	(241,427)	(500,395)	(41,519)	(23,618)	(104,562)	(76,522)
Nuclear decommissioning trusts/receivables	(154,106)	(173,402)	—	—	—	(139,858)
Pension, net regulatory asset	(96,853)	(82,305)	(24,342)	(9,216)	(17,522)	(18,895)
Deferred fuel	—	(17,065)	(21,137)	(1,563)	(29,194)	(37)
Accumulated storm damage provision	—	—	—	—	(1,387)	—
Power purchase agreements	15,993	(112,292)	1,140	(12,516)	(4,551)	—
Other	(21,187)	(126,952)	(6,844)	(4,270)	(3,301)	(9,051)
Total	(1,918,852)	(3,651,490)	(902,822)	(323,370)	(831,589)	(694,922)
Deferred tax assets:
Regulatory liabilities	296,278	575,459	54,586	42,921	41,137	240,310
Nuclear and other decommissioning liabilities	118,301	9,055	—	—	97	19,259
Pension and other post-employment benefits	(28,868)	46,837	(10,064)	(19,354)	(21,977)	(2,641)
Accumulated deferred investment tax credit	6,761	27,902	3,446	4,431	1,672	11,717
Provision for allowances and contingencies	23,956	70,297	10,072	25,846	8,659	225
Unbilled/deferred revenues	5,962	(20,375)	6,194	1,045	8,365	—
Compensation	4,054	6,078	3,649	1,268	2,181	406
Net operating loss carryforwards	94,321	459,553	8,375	26,227	61	35,089
Capital losses and miscellaneous tax credits	7,137	13,073	7,613	15,684	1,655	13,211
Other	17,072	52,438	1,556	(235)	1,740	—
Total	544,974	1,240,317	85,427	97,833	43,590	317,576
Non-current accrued taxes (including unrecognized tax benefits)	(63,175)	19,731	(4,349)	29,922	(26,906)	(28,398)
Accumulated deferred income taxes and taxes accrued	($1,437,053)	($2,391,442)	($821,744)	($195,615)	($814,905)	($405,744)

    

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,181,456)	($2,513,138)	($691,675)	($115,841)	($614,134)	($448,010)
Regulatory assets	(244,624)	(457,102)	(44,358)	(24,738)	(95,717)	(68,742)
Nuclear decommissioning trusts/receivables	(107,858)	(118,172)	—	—	—	(92,527)
Pension, net regulatory asset	(93,139)	(82,891)	(22,256)	(9,604)	(18,111)	(17,889)
Deferred fuel	(35,205)	(49,792)	(37,333)	(2,560)	(54,204)	(128)
Accumulated storm damage provision	—	(31,337)	—	—	(3,876)	—
Power purchase agreements	(8,296)	(11,181)	—	(9,372)	(22,014)	—
Other	(76,813)	(126,350)	(26,752)	(21,977)	(4,126)	(14,364)
Total	(1,747,391)	(3,389,963)	(822,374)	(184,092)	(812,182)	(641,660)
Deferred tax assets:
Regulatory liabilities	236,318	508,594	54,454	27,438	47,248	237,452
Nuclear and other decommissioning liabilities	139,499	12,883	1	—	97	18,940
Pension and other post-employment benefits	(28,463)	52,414	(9,196)	(18,114)	(20,867)	(2,481)
Accumulated deferred investment tax credit	7,171	29,271	3,641	4,438	1,829	11,151
Provision for allowances and contingencies	26,432	15,741	10,300	26,671	7,755	—
Unbilled/deferred revenues	6,211	(2,405)	5,826	4,090	7,572	—
Compensation	3,361	5,207	2,316	1,107	1,712	308
Net operating loss carryforwards	10,491	307,175	10,140	12,146	27,620	20,639
Capital losses and miscellaneous tax credits	719	2,774	5,152	11,006	3,728	8,261
Other	24,969	41,310	6,849	11,105	729	—
Total	426,708	972,964	89,483	79,887	77,423	294,270
Non-current accrued taxes (including unrecognized tax benefits)	(177,551)	42,121	(47,139)	(281,054)	(9,468)	(28,680)
Accumulated deferred income taxes and taxes accrued	($1,498,234)	($2,374,878)	($780,030)	($385,259)	($744,227)	($376,070)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
Federal net operating losses before 1/1/2018	$— million	$0.8 billion	$— million	$0.1 billion	$— million	$— million
Year(s) of expiration	N/A	2035-2037	N/A	2037	N/A	N/A
Federal net operating losses - 1/1/2018 forward	$0.5 billion	$2.8 billion	$10.8 million	$17.7 million	$1.8 billion	$0.1 billion
Year(s) of expiration	N/A	N/A	N/A	N/A	N/A	N/A
State net operating losses	$0.4 billion	$5.7 billion	$0.1 billion	$0.2 billion	$1 million	$0.2 billion
Year(s) of expiration	2028-2032	N/A	2040-2042	N/A	2028	N/A
Misc. federal credits	$10 million	$16.9 million	$3.9 million	$16.1 million	$0.8 million	$4.8 million
Year(s) of expiration	2038-2043	2035-2043	2038-2043	2037-2043	2039-2043	2029-2043
State credits	$— million	$— million	$8 million	$— million	$1.6 million	$19 million
Year(s) of expiration	N/A	N/A	2024-2026	N/A	2027-2033	2024-2027

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2023	2022	2021
	(In Thousands)
Gross balance at January 1	$6,393,599	$5,759,968	$5,699,339
Additions based on tax positions related to the current year	332,884	792,134	101,623
Additions for tax positions of prior years	194,894	37,259	33,419
Reductions for tax positions of prior years (a)	(1,300,381)	(195,762)	(74,413)
Settlements (a)	(3,181,086)	—	—
Gross balance at December 31	2,439,910	6,393,599	5,759,968
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(2,160,484)	(5,566,212)	(4,987,799)
Cash paid to taxing authorities	—	(82,000)	(60,000)
Unrecognized tax benefits net of unused tax attributes and payments (b)	$279,426	$745,387	$712,169

(a)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

(b)Potential tax liability above what is payable on tax returns.

The balances of unrecognized tax benefits include $1,899 million, $3,254 million, and $2,256 million as of December 31, 2023, 2022, and 2021, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $541 million, $3,140 million, and $3,504 million as of December 31, 2023, 2022, and 2021, respectively, if

disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2023, 2022, and 2021 accrued balance for the possible payment of interest is approximately $39 million, $50 million, and $52 million, respectively. Interest (net-of-tax) of ($11) million, $8 million, and ($4) million was recorded in 2023, 2022, and 2021, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2023, 2022, and 2021 is as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2023	$1,452,819	$1,350,836	$547,548	$638,726	$389,366	$23,702
Additions based on tax positions related to the current year (a)	2,249	332,320	209	78	196	752
Additions for tax positions of prior years	—	—	—	—	94,793	—
Reductions for tax positions of prior years (b)	(148,558)	(458,072)	(16,853)	(191,336)	(67,156)	(9,532)
Settlements (b)	(1,237,313)	(361,041)	(525,251)	(428,137)	(1,994)	(621)
Gross balance at December 31, 2023	69,197	864,043	5,653	19,331	415,205	14,301
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(34,683)	(735,612)	(3,778)	(11,721)	(381,561)	(14,301)
Unrecognized tax benefits net of unused tax attributes	$34,514	$128,431	$1,875	$7,610	$33,644	$—

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2022	$1,408,494	$604,628	$549,569	$639,497	$552,295	$23,356
Additions based on tax positions related to the current year (a)	40,502	750,320	185	72	173	690
Additions for tax positions of prior years	6,233	10,262	1,122	393	801	761
Reductions for tax positions of prior years	(2,410)	(14,374)	(3,328)	(1,236)	(163,903)	(1,105)
Gross balance at December 31, 2022	1,452,819	1,350,836	547,548	638,726	389,366	23,702
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(1,277,414)	(1,328,916)	(504,940)	(455,928)	(377,054)	(23,702)
Unrecognized tax benefits net of unused tax attributes	$175,405	$21,920	$42,608	$182,798	$12,312	$—

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2021	$1,364,635	$640,295	$549,717	$639,546	$521,932	$21,652
Additions based on tax positions related to the current year	30,419	13,437	684	1,050	32,616	1,753
Additions for tax positions of prior years	15,013	9,304	1,504	6	2,315	1,897
Reductions for tax positions of prior years	(1,573)	(58,408)	(2,336)	(1,105)	(4,568)	(1,946)
Gross balance at December 31, 2021	1,408,494	604,628	549,569	639,497	552,295	23,356
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(992,643)	(604,628)	(388,728)	(484,899)	(540,694)	(8,576)
Unrecognized tax benefits net of unused tax attributes	$415,851	$—	$160,841	$154,598	$11,601	$14,780

(a)The primary additions for Entergy Louisiana in 2022 and 2023 are related to the Entergy Louisiana securitizations as discussed in “Other Tax Matters - Act 293 Securitizations” below.

(b)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$57.2	$377.9	$262.1
Entergy Louisiana	$862.5	$720.8	$66.3
Entergy Mississippi	$1.0	$151.2	$51.7
Entergy New Orleans	$18.2	$310.7	$228.6
Entergy Texas	$2.9	$3.3	$2.6
System Energy	$3.1	$2.5	$1.7

Accrued balances for the possible payment of interest related to unrecognized tax benefits for the Registrant Subsidiaries are as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$7.8	$4.3	$2.7
Entergy Louisiana	$1.5	$4.1	$3.7
Entergy Mississippi	$2.1	$3.1	$2.4
Entergy New Orleans	$0.6	$6.4	$5.2
Entergy Texas	$—	$1.1	$1.1
System Energy	$1.9	$1.9	$12.1

The Registrant Subsidiaries record interest and penalties related to unrecognized tax benefits in income tax expense.  No penalties were recorded in 2023, 2022, and 2021. Interest (net-of-tax) was recorded as follows:

	2023	2022	2021
	(In Millions)
Entergy Arkansas	$3.5	$1.6	$0.4
Entergy Louisiana	($2.6)	$0.4	$0.3
Entergy Mississippi	($1.0)	$0.7	$0.5
Entergy New Orleans	($5.8)	$1.2	$1.3
Entergy Texas	($1.1)	$—	$0.2
System Energy	$—	($10.2)	$0.2

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state income tax returns.  IRS examinations are complete for years before 2019. All state taxing authorities’ examinations are complete for years before 2014. Entergy regularly defends its positions and works with the IRS to resolve audits.  The resolution of audit issues could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

2016-2018 IRS Audit

The IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report (RAR) for each federal filer under audit in November 2023. Entergy agreed to all adjustments contained in the RARs. Entergy and the Registrant Subsidiaries recorded all the material effects resulting from the RARs in the fourth quarter of 2023.

Utility Restructurings

In 2017, Entergy New Orleans undertook an internal restructuring, and in 2018, Entergy Arkansas and Entergy Mississippi also participated in internal restructurings under which these three Utility operating companies joined Entergy Louisiana as wholly-owned subsidiaries of Entergy Utility Holding Company, LLC. The change in ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for income tax purposes, which resulted in recognition of a gain for income tax purposes and a corresponding increase in the tax basis of assets, in accordance with the Internal Revenue Code and Treasury Regulations. Entergy determined that there was uncertainty regarding the treatment of certain aspects of the restructurings and recorded provisions for uncertain tax positions which are now considered to be effectively settled in accordance with accounting standards. The reversal of such provisions for uncertain tax positions results in a reduction of income tax expense of $156 million for Entergy Arkansas, $1 million for Entergy Mississippi, and $6 million for Entergy New Orleans.

The IRS also required Entergy New Orleans to reverse a tax gain associated with the 2017 restructuring that had been previously recognized, allowing Entergy New Orleans to reduce its tax expense by $39 million.

After the restructuring, Entergy Arkansas adopted a new method of accounting for income tax purposes in which its nuclear decommissioning costs are treated as production costs of electricity includable in cost of goods sold, which resulted in a $1.8 billion reduction in taxable income on its 2018 tax return that was treated as an unrecognized tax benefit. In conjunction with the audit, Entergy agreed with the IRS adjustments concerning the nuclear decommissioning tax position allowing Entergy Arkansas to include $102 million of its decommissioning liability in cost of goods sold.

Mark-to-Market Method of Accounting

In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility and from System Energy under the Unit Power Sales Agreement as well as other intercompany power purchase agreements. The election resulted in a $2 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with the Vidalia contract and various other third-party and intercompany wholesale electric power purchase and sale agreements. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $132 million and a corresponding reduction of income tax expense primarily associated with the effect of the Tax Cuts and Jobs Act rate reduction discussed below.

In 2017, Entergy New Orleans also elected mark-to-market income tax treatment for the Unit Power Sales Agreement and various intercompany wholesale electric contracts which resulted in a $1 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $139 million and a corresponding reduction of income tax expense.

In 2018, Entergy Arkansas and Entergy Mississippi each accrued approximately $2 billion in deductible temporary differences related to mark-to-market tax accounting for the Unit Power Sales Agreement and various wholesale electric contracts. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The effective settlement of the mark-to-market tax position for Entergy Arkansas resulted in the accrual of an increase to tax expense of $40 million, which was offset by approximately $5 million of miscellaneous excess ADIT recognized as a result of the 2016-2018 IRS audit resolution. The net increase to tax expense is deferred as a regulatory asset, as discussed within the “Regulatory and Other Matters” section below.

Restructuring of Entergy’s Non-Utility Operations Business

During the 2016 to 2018 audit period, the ownership of certain of Entergy’s non-utility operations business nuclear power plants (previously reported as part of Entergy Wholesale Commodities) was restructured. Such restructuring transactions required Entergy to recognize the plants’ nuclear decommissioning liabilities for income tax purposes. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a significant portion of which resulted in an increase in the tax basis of the assets. Because certain aspects of the restructuring transactions involved uncertainty, Entergy recorded a provision for uncertain tax positions. The IRS did not propose adjustments to the tax treatment of the restructuring transactions resulting in a net decrease to income tax expense of $288 million from the reversal of the provision for uncertain tax positions in fourth quarter 2023.

Reduction of Net Operating Loss Carryovers

The IRS audit reduced Entergy’s net operating loss carryover by $8 billion. A portion of Entergy’s audit adjustments were not offset by losses which resulted in a tax liability of $79 million, which was fully offset by prior deposits made by Entergy. Entergy received an assessment of interest in excess of prior deposits of $13 million in December 2023, and such interest was paid in January 2024.

Net operating loss carryovers were reduced by $4 billion for Entergy Arkansas, $1 billion for Entergy Louisiana, $2 billion for Entergy Mississippi, $1 billion for Entergy New Orleans, and $40 million for System

Energy. The IRS audit adjustments were also factored into the settle-up required under Entergy’s intercompany income tax allocation agreement, and such amounts were settled in the fourth quarter of 2023.

Regulatory and Other Matters

Additional customer credits related to the audit outcome may be due in accordance with prior regulatory agreements associated with the Entergy Louisiana and Entergy Gulf States Louisiana business combination and Entergy New Orleans restructuring and general rate-making principles. A regulatory liability and associated regulatory charge of $38 million and $60 million ($28 million and $44 million net-of-tax) were recorded for Entergy Louisiana and Entergy New Orleans, respectively. The inclusion of the effects of the audit on customer rates is subject to the review and approval of the retail regulators. Additionally, a regulatory asset for income tax associated with deficient ADIT of $35 million, $2 million, and $3 million, was recorded for Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi, respectively. See Note 2 to the financial statements for discussion of Entergy Arkansas’s regulatory activity related to the Tax Cuts and Jobs Act and for discussion of the settlement of Entergy Arkansas’s 2023 formula rate plan.

As noted above, Entergy accrues interest expense related to unrecognized tax benefits in income tax expense. As a result of the IRS audit resolution, Entergy reversed approximately $24 million of interest related to the allowance of previously unrecognized tax benefits.

Reversal of net deferred credits associated with the accounting for income taxes upon the resolution of the IRS audit resulted in a reduction/(increase) of income tax expense of $9 million, $42 million, ($2) million, $2 million, $2 million, and $1 million for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy, respectively.

Included in the effect of the IRS audit on the results of operations was the measurement of deferred tax assets and liabilities influenced by the 2017 enactment of the Tax Cuts and Jobs Act income tax rate change discussed below. With the conclusion of the audit, there are no remaining federal unrecognized tax benefits affected by the rate differential which could impact income tax expense and the regulatory liability for income taxes in future periods.

State Income Tax Audits

As a result of income tax audit adjustments proposed by the Arkansas Department of Finance and Administration, an Entergy subsidiary in the non-utility operations business recorded a provision in third quarter 2022 for uncertain tax positions of approximately $21 million, which includes interest expense.

Other Tax Matters

Tax Cuts and Jobs Act (TCJA)

The most significant effect of the TCJA for Entergy and the Registrant Subsidiaries was the change in the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Entergy had remaining regulatory liabilities of $1.0 billion and $1.3 billion as of December 31, 2023 and December 31, 2022, respectively, mainly associated with the re-measurement of deferred tax assets and liabilities from the income tax rate change, subsequent amortization of excess ADIT, and payments to customers since the enactment of the TCJA. In addition to the protected and unprotected excess ADIT amounts, the net regulatory liability for income taxes includes other regulatory assets and liabilities for income taxes mainly for AFUDC, which is described in Note 1 to the financial statements.

Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the effect that excess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect

of (1) the reduction of the net deferred tax liability resulting in excess ADIT, and (2) the tax gross-up of excess ADIT. The Registrant Subsidiaries’ December 31, 2023 and December 31, 2022 balance sheets reflect net regulatory liabilities for income taxes as follows:

	2023	2022
	(In Millions)
Entergy Arkansas	$392	$435
Entergy Louisiana	$194	$338
Entergy Mississippi	$189	$202
Entergy New Orleans	$36	$40
Entergy Texas	$115	$133
System Energy	$107	$111

Excess ADIT is generally classified into two categories: (1) the portion that is subject to the normalization requirements of the TCJA, referred to as “protected”, and (2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. See Note 2 to the financial statements for discussion of Entergy Louisiana’s $106 million reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the TCJA, recorded in fourth quarter 2023. The majority of the remaining unamortized Excess ADIT as of December 31, 2023 is classified as protected. The TCJA provides that the normalization method of accounting for income taxes is required for excess ADIT associated with public utility property. The TCJA provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements.

During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess accumulated deferred income taxes, associated with the effects of the TCJA, to their customers through rate riders and other means approved by their respective regulatory authorities. Return of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This manner of regulatory accounting affects the effective tax rate for the period as compared to the statutory tax rate. There was no return of unprotected excess accumulated deferred income taxes for Entergy or the Registrant Subsidiaries for the year ended December 31, 2023. For the year ended December 31, 2022, the return of unprotected excess accumulated deferred income taxes reduced the regulatory liability for income taxes by $53 million for Entergy, including $25 million for Entergy Louisiana, $1 million for Entergy New Orleans, and $27 million for Entergy Texas.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal tax incentives for clean energy production, including the extension of production tax credits to solar projects and certain qualified nuclear power plants. Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax on the buyback of public company stock and a new corporate alternative minimum tax. There are no effects on the financial statements of Entergy or the Registrant Subsidiaries as of and for the years ended December 31, 2023 and 2022 related to the enactment of the law. See the “Income Tax Legislation and Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for additional discussion of the effects of the Inflation Reduction Act of 2022.

Restructuring of Entergy’s Non-Utility Operations Business in 2020

In the fourth quarter 2020, Entergy’s ownership of Palisades was restructured. The restructuring required Entergy to recognize Palisades’ nuclear decommissioning liability for income tax purposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $9.2 million. The accrual of the nuclear decommissioning liability also required Entergy to recognize a gain for income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increase in the tax basis of the assets represents a tax accounting temporary difference.

Tax Accounting Methods

Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S. Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market valuation which includes analyses of market prices and conditions.

In 2020, Entergy Texas elected mark-to-market income tax treatment for wholesale electric power purchase and sale agreements which resulted in a $2.5 billion deductible temporary difference.

Arkansas and Louisiana Corporate Income Tax Rate Changes

Since 2019, the State of Arkansas has enacted corporate income tax law changes that phased in rate reductions from the former rate of 6.5% to 6.2% in 2021, 5.9% in 2022, 5.1% in 2023, and 4.8% in 2024.  Legislation in 2022 accelerated the rate reduction to 5.3% for tax years beginning on or after January 1, 2023, accelerating the rate reductions that were originally scheduled to take effect in the 2025 tax year. As a result of the rate reductions, Entergy Arkansas has recorded regulatory liabilities for income taxes of approximately $26 million, $15 million, $11 million, and $21 million in 2023, 2022, 2021, and 2020, respectively. The regulatory liabilities include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and have been or are scheduled to be included in the approved rate mechanisms. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to ten years.

Pursuant to legislation enacted in 2021 and approved by Louisiana citizens by amendment to the state constitution, beginning January 1, 2022, federal income taxes paid are no longer deductible for state income tax purposes, and the top Louisiana corporate income tax rate has been reduced from 8% to 7.5%. As a result of this change in Louisiana tax law, the Louisiana applicable tax rate increased by 0.85%. Accordingly, deferred tax assets and liabilities were adjusted to reflect the new applicable federal and state rates. In fourth quarter 2021, Entergy recorded a net increase to its deferred tax asset of $27 million. Entergy Louisiana and Entergy New Orleans recorded net increases to their deferred tax liabilities before consideration of the tax gross-up of $77 million and $8 million, respectively, which were offset by regulatory assets for income taxes. Therefore, these increases had no effect on tax expense. However, the increase of deferred tax assets associated with certain assets reduced tax expense for Entergy Louisiana and Entergy New Orleans by $6 million and $2 million, respectively. The legislation enacted in 2021 also provided that Louisiana net operating losses generally have an indefinite carryover period.

Act 293 Securitizations

As described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021. The first transaction occurred in May of 2022 and the second occurred in March of 2023. Act 293 provides that the LURC contribute the net bond proceeds to a LURC-sponsored trust. Over the 15-year term of the Act 293 bonds, the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will not be taxable to Entergy Louisiana. Additionally, Entergy Louisiana will not include the receipt of the system

restoration charges in taxable income because the right to receive the system restoration charges has been granted directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.

Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and $290 million in May 2022, both after taking into account a provision for uncertain tax positions. Entergy’s recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after taking into account a provision for uncertain tax positions.

In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to provide credits to its customers. See Note 2 to the financial statements for further discussion of the Entergy Louisiana March 2023 and May 2022 storm cost securitizations.

Entergy Texas [Member]

Income Tax Disclosure [Text Block]

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes for Entergy for 2023, 2022, and 2021 consist of the following:

	2023	2022	2021
	(In Thousands)
Current:
Federal	$60,639	$32,387	($5,003)
State	23,014	(3,091)	(8,995)
Total	83,653	29,296	(13,998)
Deferred and non-current - net	(768,941)	(67,520)	205,891
Investment tax credits - net	(5,247)	(754)	(519)
Income taxes	($690,535)	($38,978)	$191,374

Income taxes for the Registrant Subsidiaries for 2023, 2022, and 2021 consist of the following:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$33,100	($142,253)	$20,328	($99,343)	$2,851	$337
State	(4,201)	(6,397)	4,142	(5,854)	3,719	(1,570)
Total	28,899	(148,650)	24,470	(105,197)	6,570	(1,233)
Deferred and non-current - net	(126,878)	(52,451)	30,690	(84,744)	57,066	31,005
Investment tax credits - net	(1,231)	(4,680)	(796)	(32)	(764)	2,260
Income taxes	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$8,015	($79,079)	$9,242	$1,074	$37,471	($11,720)
State	(1,066)	(1,773)	(6,486)	6,221	2,260	581
Total	6,949	(80,852)	2,756	7,295	39,731	(11,139)
Deferred and non-current - net	74,802	(77,223)	48,443	16,814	11,520	(83,369)
Investment tax credits - net	(855)	(4,778)	3,665	168	(630)	1,680
Income taxes	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	($20,285)	($24,053)	($5,868)	($6,724)	($189)	$29,416
State	529	2,459	(11,506)	(413)	1,261	(10,258)
Total	(19,756)	(21,594)	(17,374)	(7,137)	1,072	19,158
Deferred and non-current - net	96,180	146,786	60,861	12,870	25,087	(25,229)
Investment tax credits - net	(1,229)	(4,783)	1,836	203	(633)	4,094
Income taxes	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)

Total income taxes for Entergy differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

	2023		2022		2021
	(In Thousands)
Net income attributable to Entergy Corporation	$2,356,536		$1,103,166		$1,118,492
Preferred dividend requirements of subsidiaries and noncontrolling interests	5,774		(6,028)		227
Consolidated net income	2,362,310		1,097,138		1,118,719
Income taxes	(690,535)		(38,978)		191,374
Income before income taxes	$1,671,775		$1,058,160		$1,310,093
Income taxes computed at statutory rate (21%)	$351,073		$222,214		$275,120
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	70,144		61,368		79,273
Regulatory differences - utility plant items	(27,901)		(32,143)		(57,556)
Equity component of AFUDC	(20,172)		(14,156)		(14,799)
Amortization of investment tax credits	(7,978)		(7,740)		(7,695)
Flow-through / permanent differences	(1,374)		1,011		(5,585)
Amortization of excess ADIT (a)	9,102		(34,899)		(66,478)
Arkansas and Louisiana rate changes (b)	—		—		(27,108)
IRS audit resolution (c)	(842,769)		—		—
Reversal of regulatory liability for Hurricane Isaac (d)	(105,649)		—		—
Entergy Louisiana securitization (e)	(129,034)		(282,620)		—
System Energy sale-leaseback order (f)	—		12,662		—
Provision for uncertain tax positions	18,884		34,423		16,533
Valuation allowance	(8,697)		(2,754)		(2,600)
Other - net	3,836		3,656		2,269
Total income taxes as reported	($690,535)		($38,978)		$191,374
Effective Income Tax Rate	(41.3	%)	(3.7	%)	14.6	%

(a)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess accumulated deferred income taxes (ADIT) in 2023, 2022, and 2021 and the tax legislation enactment in 2017.

(b)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

(c)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See “Other Tax Matters – Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(f)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$396,850	$1,273,370	$181,969	$228,938	$291,273	$108,772
Income taxes	(99,210)	(205,781)	54,364	(189,973)	62,872	32,032
Income before income taxes	$297,640	$1,067,589	$236,333	$38,965	$354,145	$140,804
Income taxes computed at statutory rate (21%)	$62,504	$224,194	$49,630	$8,183	$74,370	$29,569
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	13,291	51,899	11,133	1,907	2,574	5,798
Regulatory differences - utility plant items	(8,812)	(5,535)	(5,290)	(1,353)	(6,394)	(517)
Equity component of AFUDC	(4,093)	(6,754)	(1,796)	(309)	(5,920)	(1,301)
Amortization of investment tax credits	(1,201)	(4,625)	(223)	(25)	(748)	(1,155)
Flow-through / permanent differences	1,105	126	3,534	(1,913)	1,493	(191)
IRS audit resolution (a)	(159,588)	(179,111)	(3,291)	(198,424)	(3,112)	(1,575)
Amortization of excess ADIT (b)	(6,095)	14,032	—	1,147	17	—
Entergy Louisiana securitization (c)	—	(133,443)	—	—	—	—
Reversal of regulatory liability for Hurricane Isaac (d)	—	(105,649)	—	—	—	—
Non-taxable dividend income	—	(62,116)	—	—	—	—
Provision for uncertain tax positions	2,600	(400)	300	600	211	1,200
Other - net	1,079	1,601	367	214	381	204
Total income taxes as reported	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032
Effective Income Tax Rate	(33.3%)	(19.3%)	23.0%	(487.5%)	17.8%	22.7%

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$292,887	$855,870	$176,267	$64,101	$303,327	($276,593)
Income taxes	80,896	(162,853)	54,864	24,277	50,621	(92,828)
Income before income taxes	$373,783	$693,017	$231,131	$88,378	$353,948	($369,421)
Income taxes computed at statutory rate (21%)	$78,494	$145,534	$48,538	$18,559	$74,329	($77,578)
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	17,981	44,244	9,659	6,733	2,175	(16,727)
Regulatory differences - utility plant items	(12,466)	(6,347)	(7,726)	(1,908)	(3,010)	(686)
Equity component of AFUDC	(3,437)	(5,513)	(1,286)	(174)	(2,841)	(905)
Amortization of investment tax credits	(1,201)	(4,720)	(223)	175	(614)	(1,155)
Flow-through / permanent differences	106	3,467	4,837	230	765	(641)
Amortization of excess ADIT (b)	—	(13,164)	—	(752)	(20,983)	—
System Energy sale-leaseback order (e)	—	—	—	—	—	12,662
Entergy Louisiana securitization (c)	—	(289,609)	—	—	—	—
Non-taxable dividend income	—	(38,735)	—	—	—	—
Provision for uncertain tax positions	1,600	400	700	1,200	420	(8,000)
Valuation allowance	(1,258)	—	—	—	—	—
Other - net	1,077	1,590	365	214	380	202
Total income taxes as reported	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)
Effective Income Tax Rate	21.6%	(23.5%)	23.7%	27.5%	14.3%	25.1%

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$298,484	$653,984	$166,834	$31,798	$228,824	$106,814
Income taxes	75,195	120,409	45,323	5,936	25,526	(1,977)
Income before income taxes	$373,679	$774,393	$212,157	$37,734	$254,350	$104,837
Income taxes computed at statutory rate (21%)	$78,473	$162,623	$44,553	$7,924	$53,413	$22,016
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	19,633	41,030	9,305	2,579	1,553	5,385
Regulatory differences - utility plant items	(16,078)	(14,123)	(8,133)	(4,332)	(2,115)	(12,776)
Equity component of AFUDC	(3,207)	(6,016)	(1,701)	(498)	(2,077)	(1,300)
Amortization of investment tax credits	(1,201)	(4,729)	64	(56)	(617)	(1,155)
Flow-through / permanent differences	(814)	(2,655)	124	1,559	(475)	(1,235)
Amortization of excess ADIT (b)	(5,845)	(24,323)	—	(1,028)	(21,929)	(13,354)
Arkansas and Louisiana rate changes (f)	398	(6,126)	395	(1,569)	216	115
Non-taxable dividend income	—	(26,801)	—	—	—	—
Provision for uncertain tax positions	353	300	465	1,200	(2,716)	200
Valuation allowance	2,766	—	—	—	—	—
Other - net	717	1,229	251	157	273	127
Total income taxes as reported	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)
Effective Income Tax Rate	20.1%	15.5%	21.4%	15.7%	10.0%	(1.9%)

(a)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(b)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2023, 2022, 2021 and the tax legislation enactment in 2017.

(c)See “Other Tax Matters - Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

(f)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2023 and 2022 are as follows:

	2023	2022
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($6,192,156)	($5,270,010)
Regulatory assets	(989,405)	(937,554)
Nuclear decommissioning trusts/receivables	(467,267)	(318,570)
Pension, net regulatory asset	(363,829)	(336,496)
Combined unitary state taxes	(8,783)	(10,335)
Power purchase agreements	(75,612)	(3,993)
Accumulated storm damage provision	(2,474)	(35,213)
Deferred fuel	(69,436)	(181,222)
Other	(251,107)	(333,421)
Total	(8,420,069)	(7,426,814)
Deferred tax assets:
Nuclear and other decommissioning liabilities	147,011	173,201
Regulatory liabilities	1,247,530	1,108,075
Pension and other post-employment benefits	116,222	141,399
Compensation	81,226	76,317
Accumulated deferred investment tax credit	55,928	57,501
Provision for allowances and contingencies	149,479	97,545
Unbilled/deferred revenues	2,418	21,905
Net operating loss carryforwards	2,857,908	2,065,149
Capital losses and miscellaneous tax credits	107,009	28,876
Valuation allowance	(372,119)	(372,017)
Other	220,055	245,236
Total	4,612,667	3,643,187
Non-current accrued taxes (including unrecognized tax benefits)	(422,213)	(951,110)
Accumulated deferred income taxes and taxes accrued	($4,229,615)	($4,734,737)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses before 1/1/2018	$4.2 billion	2028-2037
Federal net operating losses - 1/1/2018 forward	$13.8 billion	N/A
State net operating losses	$3.9 billion	2028-2042
State net operating losses with no expiration	$11.1 billion	N/A
Other federal and state carryforwards	$523.6 million	2024-2037
Miscellaneous federal and state credits	$124.9 million	2024-2043

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes generated and reflected on income tax returns. Entergy evaluates the available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation

indicates that Entergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce deferred tax assets to the realizable amount.

Because it is more likely than not that the benefits from certain state net operating losses and other deferred tax assets will not be utilized, valuation allowances totaling $372 million as of December 31, 2023 and $372 million as of December 31, 2022 have been provided on the deferred tax assets related to federal and state jurisdictions in which Entergy does not currently expect to be able to utilize certain separate company tax return attributes, preventing realization of such deferred tax assets. Certain accelerated tax deductions which generated taxable losses in various taxing jurisdictions, and which have a limited term carryover period, have resulted in the impairment of the realizability of such carryovers and are reflected in the valuation allowance disclosed above.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2023 and 2022 are as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,421,272)	($2,639,079)	($810,120)	($272,187)	($671,072)	($450,559)
Regulatory assets	(241,427)	(500,395)	(41,519)	(23,618)	(104,562)	(76,522)
Nuclear decommissioning trusts/receivables	(154,106)	(173,402)	—	—	—	(139,858)
Pension, net regulatory asset	(96,853)	(82,305)	(24,342)	(9,216)	(17,522)	(18,895)
Deferred fuel	—	(17,065)	(21,137)	(1,563)	(29,194)	(37)
Accumulated storm damage provision	—	—	—	—	(1,387)	—
Power purchase agreements	15,993	(112,292)	1,140	(12,516)	(4,551)	—
Other	(21,187)	(126,952)	(6,844)	(4,270)	(3,301)	(9,051)
Total	(1,918,852)	(3,651,490)	(902,822)	(323,370)	(831,589)	(694,922)
Deferred tax assets:
Regulatory liabilities	296,278	575,459	54,586	42,921	41,137	240,310
Nuclear and other decommissioning liabilities	118,301	9,055	—	—	97	19,259
Pension and other post-employment benefits	(28,868)	46,837	(10,064)	(19,354)	(21,977)	(2,641)
Accumulated deferred investment tax credit	6,761	27,902	3,446	4,431	1,672	11,717
Provision for allowances and contingencies	23,956	70,297	10,072	25,846	8,659	225
Unbilled/deferred revenues	5,962	(20,375)	6,194	1,045	8,365	—
Compensation	4,054	6,078	3,649	1,268	2,181	406
Net operating loss carryforwards	94,321	459,553	8,375	26,227	61	35,089
Capital losses and miscellaneous tax credits	7,137	13,073	7,613	15,684	1,655	13,211
Other	17,072	52,438	1,556	(235)	1,740	—
Total	544,974	1,240,317	85,427	97,833	43,590	317,576
Non-current accrued taxes (including unrecognized tax benefits)	(63,175)	19,731	(4,349)	29,922	(26,906)	(28,398)
Accumulated deferred income taxes and taxes accrued	($1,437,053)	($2,391,442)	($821,744)	($195,615)	($814,905)	($405,744)

    

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,181,456)	($2,513,138)	($691,675)	($115,841)	($614,134)	($448,010)
Regulatory assets	(244,624)	(457,102)	(44,358)	(24,738)	(95,717)	(68,742)
Nuclear decommissioning trusts/receivables	(107,858)	(118,172)	—	—	—	(92,527)
Pension, net regulatory asset	(93,139)	(82,891)	(22,256)	(9,604)	(18,111)	(17,889)
Deferred fuel	(35,205)	(49,792)	(37,333)	(2,560)	(54,204)	(128)
Accumulated storm damage provision	—	(31,337)	—	—	(3,876)	—
Power purchase agreements	(8,296)	(11,181)	—	(9,372)	(22,014)	—
Other	(76,813)	(126,350)	(26,752)	(21,977)	(4,126)	(14,364)
Total	(1,747,391)	(3,389,963)	(822,374)	(184,092)	(812,182)	(641,660)
Deferred tax assets:
Regulatory liabilities	236,318	508,594	54,454	27,438	47,248	237,452
Nuclear and other decommissioning liabilities	139,499	12,883	1	—	97	18,940
Pension and other post-employment benefits	(28,463)	52,414	(9,196)	(18,114)	(20,867)	(2,481)
Accumulated deferred investment tax credit	7,171	29,271	3,641	4,438	1,829	11,151
Provision for allowances and contingencies	26,432	15,741	10,300	26,671	7,755	—
Unbilled/deferred revenues	6,211	(2,405)	5,826	4,090	7,572	—
Compensation	3,361	5,207	2,316	1,107	1,712	308
Net operating loss carryforwards	10,491	307,175	10,140	12,146	27,620	20,639
Capital losses and miscellaneous tax credits	719	2,774	5,152	11,006	3,728	8,261
Other	24,969	41,310	6,849	11,105	729	—
Total	426,708	972,964	89,483	79,887	77,423	294,270
Non-current accrued taxes (including unrecognized tax benefits)	(177,551)	42,121	(47,139)	(281,054)	(9,468)	(28,680)
Accumulated deferred income taxes and taxes accrued	($1,498,234)	($2,374,878)	($780,030)	($385,259)	($744,227)	($376,070)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
Federal net operating losses before 1/1/2018	$— million	$0.8 billion	$— million	$0.1 billion	$— million	$— million
Year(s) of expiration	N/A	2035-2037	N/A	2037	N/A	N/A
Federal net operating losses - 1/1/2018 forward	$0.5 billion	$2.8 billion	$10.8 million	$17.7 million	$1.8 billion	$0.1 billion
Year(s) of expiration	N/A	N/A	N/A	N/A	N/A	N/A
State net operating losses	$0.4 billion	$5.7 billion	$0.1 billion	$0.2 billion	$1 million	$0.2 billion
Year(s) of expiration	2028-2032	N/A	2040-2042	N/A	2028	N/A
Misc. federal credits	$10 million	$16.9 million	$3.9 million	$16.1 million	$0.8 million	$4.8 million
Year(s) of expiration	2038-2043	2035-2043	2038-2043	2037-2043	2039-2043	2029-2043
State credits	$— million	$— million	$8 million	$— million	$1.6 million	$19 million
Year(s) of expiration	N/A	N/A	2024-2026	N/A	2027-2033	2024-2027

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2023	2022	2021
	(In Thousands)
Gross balance at January 1	$6,393,599	$5,759,968	$5,699,339
Additions based on tax positions related to the current year	332,884	792,134	101,623
Additions for tax positions of prior years	194,894	37,259	33,419
Reductions for tax positions of prior years (a)	(1,300,381)	(195,762)	(74,413)
Settlements (a)	(3,181,086)	—	—
Gross balance at December 31	2,439,910	6,393,599	5,759,968
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(2,160,484)	(5,566,212)	(4,987,799)
Cash paid to taxing authorities	—	(82,000)	(60,000)
Unrecognized tax benefits net of unused tax attributes and payments (b)	$279,426	$745,387	$712,169

(a)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

(b)Potential tax liability above what is payable on tax returns.

The balances of unrecognized tax benefits include $1,899 million, $3,254 million, and $2,256 million as of December 31, 2023, 2022, and 2021, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $541 million, $3,140 million, and $3,504 million as of December 31, 2023, 2022, and 2021, respectively, if

disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2023, 2022, and 2021 accrued balance for the possible payment of interest is approximately $39 million, $50 million, and $52 million, respectively. Interest (net-of-tax) of ($11) million, $8 million, and ($4) million was recorded in 2023, 2022, and 2021, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2023, 2022, and 2021 is as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2023	$1,452,819	$1,350,836	$547,548	$638,726	$389,366	$23,702
Additions based on tax positions related to the current year (a)	2,249	332,320	209	78	196	752
Additions for tax positions of prior years	—	—	—	—	94,793	—
Reductions for tax positions of prior years (b)	(148,558)	(458,072)	(16,853)	(191,336)	(67,156)	(9,532)
Settlements (b)	(1,237,313)	(361,041)	(525,251)	(428,137)	(1,994)	(621)
Gross balance at December 31, 2023	69,197	864,043	5,653	19,331	415,205	14,301
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(34,683)	(735,612)	(3,778)	(11,721)	(381,561)	(14,301)
Unrecognized tax benefits net of unused tax attributes	$34,514	$128,431	$1,875	$7,610	$33,644	$—

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2022	$1,408,494	$604,628	$549,569	$639,497	$552,295	$23,356
Additions based on tax positions related to the current year (a)	40,502	750,320	185	72	173	690
Additions for tax positions of prior years	6,233	10,262	1,122	393	801	761
Reductions for tax positions of prior years	(2,410)	(14,374)	(3,328)	(1,236)	(163,903)	(1,105)
Gross balance at December 31, 2022	1,452,819	1,350,836	547,548	638,726	389,366	23,702
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(1,277,414)	(1,328,916)	(504,940)	(455,928)	(377,054)	(23,702)
Unrecognized tax benefits net of unused tax attributes	$175,405	$21,920	$42,608	$182,798	$12,312	$—

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2021	$1,364,635	$640,295	$549,717	$639,546	$521,932	$21,652
Additions based on tax positions related to the current year	30,419	13,437	684	1,050	32,616	1,753
Additions for tax positions of prior years	15,013	9,304	1,504	6	2,315	1,897
Reductions for tax positions of prior years	(1,573)	(58,408)	(2,336)	(1,105)	(4,568)	(1,946)
Gross balance at December 31, 2021	1,408,494	604,628	549,569	639,497	552,295	23,356
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(992,643)	(604,628)	(388,728)	(484,899)	(540,694)	(8,576)
Unrecognized tax benefits net of unused tax attributes	$415,851	$—	$160,841	$154,598	$11,601	$14,780

(a)The primary additions for Entergy Louisiana in 2022 and 2023 are related to the Entergy Louisiana securitizations as discussed in “Other Tax Matters - Act 293 Securitizations” below.

(b)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$57.2	$377.9	$262.1
Entergy Louisiana	$862.5	$720.8	$66.3
Entergy Mississippi	$1.0	$151.2	$51.7
Entergy New Orleans	$18.2	$310.7	$228.6
Entergy Texas	$2.9	$3.3	$2.6
System Energy	$3.1	$2.5	$1.7

Accrued balances for the possible payment of interest related to unrecognized tax benefits for the Registrant Subsidiaries are as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$7.8	$4.3	$2.7
Entergy Louisiana	$1.5	$4.1	$3.7
Entergy Mississippi	$2.1	$3.1	$2.4
Entergy New Orleans	$0.6	$6.4	$5.2
Entergy Texas	$—	$1.1	$1.1
System Energy	$1.9	$1.9	$12.1

The Registrant Subsidiaries record interest and penalties related to unrecognized tax benefits in income tax expense.  No penalties were recorded in 2023, 2022, and 2021. Interest (net-of-tax) was recorded as follows:

	2023	2022	2021
	(In Millions)
Entergy Arkansas	$3.5	$1.6	$0.4
Entergy Louisiana	($2.6)	$0.4	$0.3
Entergy Mississippi	($1.0)	$0.7	$0.5
Entergy New Orleans	($5.8)	$1.2	$1.3
Entergy Texas	($1.1)	$—	$0.2
System Energy	$—	($10.2)	$0.2

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state income tax returns.  IRS examinations are complete for years before 2019. All state taxing authorities’ examinations are complete for years before 2014. Entergy regularly defends its positions and works with the IRS to resolve audits.  The resolution of audit issues could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

2016-2018 IRS Audit

The IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report (RAR) for each federal filer under audit in November 2023. Entergy agreed to all adjustments contained in the RARs. Entergy and the Registrant Subsidiaries recorded all the material effects resulting from the RARs in the fourth quarter of 2023.

Utility Restructurings

In 2017, Entergy New Orleans undertook an internal restructuring, and in 2018, Entergy Arkansas and Entergy Mississippi also participated in internal restructurings under which these three Utility operating companies joined Entergy Louisiana as wholly-owned subsidiaries of Entergy Utility Holding Company, LLC. The change in ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for income tax purposes, which resulted in recognition of a gain for income tax purposes and a corresponding increase in the tax basis of assets, in accordance with the Internal Revenue Code and Treasury Regulations. Entergy determined that there was uncertainty regarding the treatment of certain aspects of the restructurings and recorded provisions for uncertain tax positions which are now considered to be effectively settled in accordance with accounting standards. The reversal of such provisions for uncertain tax positions results in a reduction of income tax expense of $156 million for Entergy Arkansas, $1 million for Entergy Mississippi, and $6 million for Entergy New Orleans.

The IRS also required Entergy New Orleans to reverse a tax gain associated with the 2017 restructuring that had been previously recognized, allowing Entergy New Orleans to reduce its tax expense by $39 million.

After the restructuring, Entergy Arkansas adopted a new method of accounting for income tax purposes in which its nuclear decommissioning costs are treated as production costs of electricity includable in cost of goods sold, which resulted in a $1.8 billion reduction in taxable income on its 2018 tax return that was treated as an unrecognized tax benefit. In conjunction with the audit, Entergy agreed with the IRS adjustments concerning the nuclear decommissioning tax position allowing Entergy Arkansas to include $102 million of its decommissioning liability in cost of goods sold.

Mark-to-Market Method of Accounting

In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility and from System Energy under the Unit Power Sales Agreement as well as other intercompany power purchase agreements. The election resulted in a $2 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with the Vidalia contract and various other third-party and intercompany wholesale electric power purchase and sale agreements. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $132 million and a corresponding reduction of income tax expense primarily associated with the effect of the Tax Cuts and Jobs Act rate reduction discussed below.

In 2017, Entergy New Orleans also elected mark-to-market income tax treatment for the Unit Power Sales Agreement and various intercompany wholesale electric contracts which resulted in a $1 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $139 million and a corresponding reduction of income tax expense.

In 2018, Entergy Arkansas and Entergy Mississippi each accrued approximately $2 billion in deductible temporary differences related to mark-to-market tax accounting for the Unit Power Sales Agreement and various wholesale electric contracts. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The effective settlement of the mark-to-market tax position for Entergy Arkansas resulted in the accrual of an increase to tax expense of $40 million, which was offset by approximately $5 million of miscellaneous excess ADIT recognized as a result of the 2016-2018 IRS audit resolution. The net increase to tax expense is deferred as a regulatory asset, as discussed within the “Regulatory and Other Matters” section below.

Restructuring of Entergy’s Non-Utility Operations Business

During the 2016 to 2018 audit period, the ownership of certain of Entergy’s non-utility operations business nuclear power plants (previously reported as part of Entergy Wholesale Commodities) was restructured. Such restructuring transactions required Entergy to recognize the plants’ nuclear decommissioning liabilities for income tax purposes. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a significant portion of which resulted in an increase in the tax basis of the assets. Because certain aspects of the restructuring transactions involved uncertainty, Entergy recorded a provision for uncertain tax positions. The IRS did not propose adjustments to the tax treatment of the restructuring transactions resulting in a net decrease to income tax expense of $288 million from the reversal of the provision for uncertain tax positions in fourth quarter 2023.

Reduction of Net Operating Loss Carryovers

The IRS audit reduced Entergy’s net operating loss carryover by $8 billion. A portion of Entergy’s audit adjustments were not offset by losses which resulted in a tax liability of $79 million, which was fully offset by prior deposits made by Entergy. Entergy received an assessment of interest in excess of prior deposits of $13 million in December 2023, and such interest was paid in January 2024.

Net operating loss carryovers were reduced by $4 billion for Entergy Arkansas, $1 billion for Entergy Louisiana, $2 billion for Entergy Mississippi, $1 billion for Entergy New Orleans, and $40 million for System

Energy. The IRS audit adjustments were also factored into the settle-up required under Entergy’s intercompany income tax allocation agreement, and such amounts were settled in the fourth quarter of 2023.

Regulatory and Other Matters

Additional customer credits related to the audit outcome may be due in accordance with prior regulatory agreements associated with the Entergy Louisiana and Entergy Gulf States Louisiana business combination and Entergy New Orleans restructuring and general rate-making principles. A regulatory liability and associated regulatory charge of $38 million and $60 million ($28 million and $44 million net-of-tax) were recorded for Entergy Louisiana and Entergy New Orleans, respectively. The inclusion of the effects of the audit on customer rates is subject to the review and approval of the retail regulators. Additionally, a regulatory asset for income tax associated with deficient ADIT of $35 million, $2 million, and $3 million, was recorded for Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi, respectively. See Note 2 to the financial statements for discussion of Entergy Arkansas’s regulatory activity related to the Tax Cuts and Jobs Act and for discussion of the settlement of Entergy Arkansas’s 2023 formula rate plan.

As noted above, Entergy accrues interest expense related to unrecognized tax benefits in income tax expense. As a result of the IRS audit resolution, Entergy reversed approximately $24 million of interest related to the allowance of previously unrecognized tax benefits.

Reversal of net deferred credits associated with the accounting for income taxes upon the resolution of the IRS audit resulted in a reduction/(increase) of income tax expense of $9 million, $42 million, ($2) million, $2 million, $2 million, and $1 million for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy, respectively.

Included in the effect of the IRS audit on the results of operations was the measurement of deferred tax assets and liabilities influenced by the 2017 enactment of the Tax Cuts and Jobs Act income tax rate change discussed below. With the conclusion of the audit, there are no remaining federal unrecognized tax benefits affected by the rate differential which could impact income tax expense and the regulatory liability for income taxes in future periods.

State Income Tax Audits

As a result of income tax audit adjustments proposed by the Arkansas Department of Finance and Administration, an Entergy subsidiary in the non-utility operations business recorded a provision in third quarter 2022 for uncertain tax positions of approximately $21 million, which includes interest expense.

Other Tax Matters

Tax Cuts and Jobs Act (TCJA)

The most significant effect of the TCJA for Entergy and the Registrant Subsidiaries was the change in the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Entergy had remaining regulatory liabilities of $1.0 billion and $1.3 billion as of December 31, 2023 and December 31, 2022, respectively, mainly associated with the re-measurement of deferred tax assets and liabilities from the income tax rate change, subsequent amortization of excess ADIT, and payments to customers since the enactment of the TCJA. In addition to the protected and unprotected excess ADIT amounts, the net regulatory liability for income taxes includes other regulatory assets and liabilities for income taxes mainly for AFUDC, which is described in Note 1 to the financial statements.

Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the effect that excess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect

of (1) the reduction of the net deferred tax liability resulting in excess ADIT, and (2) the tax gross-up of excess ADIT. The Registrant Subsidiaries’ December 31, 2023 and December 31, 2022 balance sheets reflect net regulatory liabilities for income taxes as follows:

	2023	2022
	(In Millions)
Entergy Arkansas	$392	$435
Entergy Louisiana	$194	$338
Entergy Mississippi	$189	$202
Entergy New Orleans	$36	$40
Entergy Texas	$115	$133
System Energy	$107	$111

Excess ADIT is generally classified into two categories: (1) the portion that is subject to the normalization requirements of the TCJA, referred to as “protected”, and (2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. See Note 2 to the financial statements for discussion of Entergy Louisiana’s $106 million reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the TCJA, recorded in fourth quarter 2023. The majority of the remaining unamortized Excess ADIT as of December 31, 2023 is classified as protected. The TCJA provides that the normalization method of accounting for income taxes is required for excess ADIT associated with public utility property. The TCJA provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements.

During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess accumulated deferred income taxes, associated with the effects of the TCJA, to their customers through rate riders and other means approved by their respective regulatory authorities. Return of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This manner of regulatory accounting affects the effective tax rate for the period as compared to the statutory tax rate. There was no return of unprotected excess accumulated deferred income taxes for Entergy or the Registrant Subsidiaries for the year ended December 31, 2023. For the year ended December 31, 2022, the return of unprotected excess accumulated deferred income taxes reduced the regulatory liability for income taxes by $53 million for Entergy, including $25 million for Entergy Louisiana, $1 million for Entergy New Orleans, and $27 million for Entergy Texas.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal tax incentives for clean energy production, including the extension of production tax credits to solar projects and certain qualified nuclear power plants. Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax on the buyback of public company stock and a new corporate alternative minimum tax. There are no effects on the financial statements of Entergy or the Registrant Subsidiaries as of and for the years ended December 31, 2023 and 2022 related to the enactment of the law. See the “Income Tax Legislation and Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for additional discussion of the effects of the Inflation Reduction Act of 2022.

Restructuring of Entergy’s Non-Utility Operations Business in 2020

In the fourth quarter 2020, Entergy’s ownership of Palisades was restructured. The restructuring required Entergy to recognize Palisades’ nuclear decommissioning liability for income tax purposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $9.2 million. The accrual of the nuclear decommissioning liability also required Entergy to recognize a gain for income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increase in the tax basis of the assets represents a tax accounting temporary difference.

Tax Accounting Methods

Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S. Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market valuation which includes analyses of market prices and conditions.

In 2020, Entergy Texas elected mark-to-market income tax treatment for wholesale electric power purchase and sale agreements which resulted in a $2.5 billion deductible temporary difference.

Arkansas and Louisiana Corporate Income Tax Rate Changes

Since 2019, the State of Arkansas has enacted corporate income tax law changes that phased in rate reductions from the former rate of 6.5% to 6.2% in 2021, 5.9% in 2022, 5.1% in 2023, and 4.8% in 2024.  Legislation in 2022 accelerated the rate reduction to 5.3% for tax years beginning on or after January 1, 2023, accelerating the rate reductions that were originally scheduled to take effect in the 2025 tax year. As a result of the rate reductions, Entergy Arkansas has recorded regulatory liabilities for income taxes of approximately $26 million, $15 million, $11 million, and $21 million in 2023, 2022, 2021, and 2020, respectively. The regulatory liabilities include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and have been or are scheduled to be included in the approved rate mechanisms. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to ten years.

Pursuant to legislation enacted in 2021 and approved by Louisiana citizens by amendment to the state constitution, beginning January 1, 2022, federal income taxes paid are no longer deductible for state income tax purposes, and the top Louisiana corporate income tax rate has been reduced from 8% to 7.5%. As a result of this change in Louisiana tax law, the Louisiana applicable tax rate increased by 0.85%. Accordingly, deferred tax assets and liabilities were adjusted to reflect the new applicable federal and state rates. In fourth quarter 2021, Entergy recorded a net increase to its deferred tax asset of $27 million. Entergy Louisiana and Entergy New Orleans recorded net increases to their deferred tax liabilities before consideration of the tax gross-up of $77 million and $8 million, respectively, which were offset by regulatory assets for income taxes. Therefore, these increases had no effect on tax expense. However, the increase of deferred tax assets associated with certain assets reduced tax expense for Entergy Louisiana and Entergy New Orleans by $6 million and $2 million, respectively. The legislation enacted in 2021 also provided that Louisiana net operating losses generally have an indefinite carryover period.

Act 293 Securitizations

As described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021. The first transaction occurred in May of 2022 and the second occurred in March of 2023. Act 293 provides that the LURC contribute the net bond proceeds to a LURC-sponsored trust. Over the 15-year term of the Act 293 bonds, the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will not be taxable to Entergy Louisiana. Additionally, Entergy Louisiana will not include the receipt of the system

restoration charges in taxable income because the right to receive the system restoration charges has been granted directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.

Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and $290 million in May 2022, both after taking into account a provision for uncertain tax positions. Entergy’s recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after taking into account a provision for uncertain tax positions.

In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to provide credits to its customers. See Note 2 to the financial statements for further discussion of the Entergy Louisiana March 2023 and May 2022 storm cost securitizations.

System Energy [Member]

Income Tax Disclosure [Text Block]

INCOME TAXES (Entergy Corporation, Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

Income taxes for Entergy for 2023, 2022, and 2021 consist of the following:

	2023	2022	2021
	(In Thousands)
Current:
Federal	$60,639	$32,387	($5,003)
State	23,014	(3,091)	(8,995)
Total	83,653	29,296	(13,998)
Deferred and non-current - net	(768,941)	(67,520)	205,891
Investment tax credits - net	(5,247)	(754)	(519)
Income taxes	($690,535)	($38,978)	$191,374

Income taxes for the Registrant Subsidiaries for 2023, 2022, and 2021 consist of the following:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$33,100	($142,253)	$20,328	($99,343)	$2,851	$337
State	(4,201)	(6,397)	4,142	(5,854)	3,719	(1,570)
Total	28,899	(148,650)	24,470	(105,197)	6,570	(1,233)
Deferred and non-current - net	(126,878)	(52,451)	30,690	(84,744)	57,066	31,005
Investment tax credits - net	(1,231)	(4,680)	(796)	(32)	(764)	2,260
Income taxes	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	$8,015	($79,079)	$9,242	$1,074	$37,471	($11,720)
State	(1,066)	(1,773)	(6,486)	6,221	2,260	581
Total	6,949	(80,852)	2,756	7,295	39,731	(11,139)
Deferred and non-current - net	74,802	(77,223)	48,443	16,814	11,520	(83,369)
Investment tax credits - net	(855)	(4,778)	3,665	168	(630)	1,680
Income taxes	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Current:
Federal	($20,285)	($24,053)	($5,868)	($6,724)	($189)	$29,416
State	529	2,459	(11,506)	(413)	1,261	(10,258)
Total	(19,756)	(21,594)	(17,374)	(7,137)	1,072	19,158
Deferred and non-current - net	96,180	146,786	60,861	12,870	25,087	(25,229)
Investment tax credits - net	(1,229)	(4,783)	1,836	203	(633)	4,094
Income taxes	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)

Total income taxes for Entergy differ from the amounts computed by applying the statutory income tax rate to income before income taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

	2023		2022		2021
	(In Thousands)
Net income attributable to Entergy Corporation	$2,356,536		$1,103,166		$1,118,492
Preferred dividend requirements of subsidiaries and noncontrolling interests	5,774		(6,028)		227
Consolidated net income	2,362,310		1,097,138		1,118,719
Income taxes	(690,535)		(38,978)		191,374
Income before income taxes	$1,671,775		$1,058,160		$1,310,093
Income taxes computed at statutory rate (21%)	$351,073		$222,214		$275,120
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	70,144		61,368		79,273
Regulatory differences - utility plant items	(27,901)		(32,143)		(57,556)
Equity component of AFUDC	(20,172)		(14,156)		(14,799)
Amortization of investment tax credits	(7,978)		(7,740)		(7,695)
Flow-through / permanent differences	(1,374)		1,011		(5,585)
Amortization of excess ADIT (a)	9,102		(34,899)		(66,478)
Arkansas and Louisiana rate changes (b)	—		—		(27,108)
IRS audit resolution (c)	(842,769)		—		—
Reversal of regulatory liability for Hurricane Isaac (d)	(105,649)		—		—
Entergy Louisiana securitization (e)	(129,034)		(282,620)		—
System Energy sale-leaseback order (f)	—		12,662		—
Provision for uncertain tax positions	18,884		34,423		16,533
Valuation allowance	(8,697)		(2,754)		(2,600)
Other - net	3,836		3,656		2,269
Total income taxes as reported	($690,535)		($38,978)		$191,374
Effective Income Tax Rate	(41.3	%)	(3.7	%)	14.6	%

(a)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess accumulated deferred income taxes (ADIT) in 2023, 2022, and 2021 and the tax legislation enactment in 2017.

(b)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

(c)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See “Other Tax Matters – Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(f)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

Total income taxes for the Registrant Subsidiaries differ from the amounts computed by applying the statutory income tax rate to income before taxes.  The reasons for the differences for the years 2023, 2022, and 2021 are:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$396,850	$1,273,370	$181,969	$228,938	$291,273	$108,772
Income taxes	(99,210)	(205,781)	54,364	(189,973)	62,872	32,032
Income before income taxes	$297,640	$1,067,589	$236,333	$38,965	$354,145	$140,804
Income taxes computed at statutory rate (21%)	$62,504	$224,194	$49,630	$8,183	$74,370	$29,569
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	13,291	51,899	11,133	1,907	2,574	5,798
Regulatory differences - utility plant items	(8,812)	(5,535)	(5,290)	(1,353)	(6,394)	(517)
Equity component of AFUDC	(4,093)	(6,754)	(1,796)	(309)	(5,920)	(1,301)
Amortization of investment tax credits	(1,201)	(4,625)	(223)	(25)	(748)	(1,155)
Flow-through / permanent differences	1,105	126	3,534	(1,913)	1,493	(191)
IRS audit resolution (a)	(159,588)	(179,111)	(3,291)	(198,424)	(3,112)	(1,575)
Amortization of excess ADIT (b)	(6,095)	14,032	—	1,147	17	—
Entergy Louisiana securitization (c)	—	(133,443)	—	—	—	—
Reversal of regulatory liability for Hurricane Isaac (d)	—	(105,649)	—	—	—	—
Non-taxable dividend income	—	(62,116)	—	—	—	—
Provision for uncertain tax positions	2,600	(400)	300	600	211	1,200
Other - net	1,079	1,601	367	214	381	204
Total income taxes as reported	($99,210)	($205,781)	$54,364	($189,973)	$62,872	$32,032
Effective Income Tax Rate	(33.3%)	(19.3%)	23.0%	(487.5%)	17.8%	22.7%

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$292,887	$855,870	$176,267	$64,101	$303,327	($276,593)
Income taxes	80,896	(162,853)	54,864	24,277	50,621	(92,828)
Income before income taxes	$373,783	$693,017	$231,131	$88,378	$353,948	($369,421)
Income taxes computed at statutory rate (21%)	$78,494	$145,534	$48,538	$18,559	$74,329	($77,578)
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	17,981	44,244	9,659	6,733	2,175	(16,727)
Regulatory differences - utility plant items	(12,466)	(6,347)	(7,726)	(1,908)	(3,010)	(686)
Equity component of AFUDC	(3,437)	(5,513)	(1,286)	(174)	(2,841)	(905)
Amortization of investment tax credits	(1,201)	(4,720)	(223)	175	(614)	(1,155)
Flow-through / permanent differences	106	3,467	4,837	230	765	(641)
Amortization of excess ADIT (b)	—	(13,164)	—	(752)	(20,983)	—
System Energy sale-leaseback order (e)	—	—	—	—	—	12,662
Entergy Louisiana securitization (c)	—	(289,609)	—	—	—	—
Non-taxable dividend income	—	(38,735)	—	—	—	—
Provision for uncertain tax positions	1,600	400	700	1,200	420	(8,000)
Valuation allowance	(1,258)	—	—	—	—	—
Other - net	1,077	1,590	365	214	380	202
Total income taxes as reported	$80,896	($162,853)	$54,864	$24,277	$50,621	($92,828)
Effective Income Tax Rate	21.6%	(23.5%)	23.7%	27.5%	14.3%	25.1%

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Net income	$298,484	$653,984	$166,834	$31,798	$228,824	$106,814
Income taxes	75,195	120,409	45,323	5,936	25,526	(1,977)
Income before income taxes	$373,679	$774,393	$212,157	$37,734	$254,350	$104,837
Income taxes computed at statutory rate (21%)	$78,473	$162,623	$44,553	$7,924	$53,413	$22,016
Increases (reductions) in tax resulting from:
State income taxes net of federal income tax effect	19,633	41,030	9,305	2,579	1,553	5,385
Regulatory differences - utility plant items	(16,078)	(14,123)	(8,133)	(4,332)	(2,115)	(12,776)
Equity component of AFUDC	(3,207)	(6,016)	(1,701)	(498)	(2,077)	(1,300)
Amortization of investment tax credits	(1,201)	(4,729)	64	(56)	(617)	(1,155)
Flow-through / permanent differences	(814)	(2,655)	124	1,559	(475)	(1,235)
Amortization of excess ADIT (b)	(5,845)	(24,323)	—	(1,028)	(21,929)	(13,354)
Arkansas and Louisiana rate changes (f)	398	(6,126)	395	(1,569)	216	115
Non-taxable dividend income	—	(26,801)	—	—	—	—
Provision for uncertain tax positions	353	300	465	1,200	(2,716)	200
Valuation allowance	2,766	—	—	—	—	—
Other - net	717	1,229	251	157	273	127
Total income taxes as reported	$75,195	$120,409	$45,323	$5,936	$25,526	($1,977)
Effective Income Tax Rate	20.1%	15.5%	21.4%	15.7%	10.0%	(1.9%)

(a)See “Income Tax Audits - 2016-2018 IRS Audit” below for discussion of the resolution of the 2016-2018 IRS audit in 2023.

(b)See “Other Tax Matters - Tax Cuts and Jobs Act” below for discussion of the amortization of excess ADIT in 2023, 2022, 2021 and the tax legislation enactment in 2017.

(c)See “Other Tax Matters - Act 293 Securitizations” below for discussion of the Entergy Louisiana May 2022 and March 2023 storm cost securitizations.

(d)See Note 2 to the financial statements for discussion of Entergy Louisiana’s reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the Tax Cuts and Jobs Act.

(e)See Note 2 to the financial statements for discussion of the December 2022 FERC order related to the Grand Gulf sale-leaseback renewal complaint.

(f)See “Other Tax Matters - Arkansas and Louisiana Corporate Income Tax Rate Changes” below for details.

Significant components of accumulated deferred income taxes and taxes accrued for Entergy Corporation and Subsidiaries as of December 31, 2023 and 2022 are as follows:

	2023	2022
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($6,192,156)	($5,270,010)
Regulatory assets	(989,405)	(937,554)
Nuclear decommissioning trusts/receivables	(467,267)	(318,570)
Pension, net regulatory asset	(363,829)	(336,496)
Combined unitary state taxes	(8,783)	(10,335)
Power purchase agreements	(75,612)	(3,993)
Accumulated storm damage provision	(2,474)	(35,213)
Deferred fuel	(69,436)	(181,222)
Other	(251,107)	(333,421)
Total	(8,420,069)	(7,426,814)
Deferred tax assets:
Nuclear and other decommissioning liabilities	147,011	173,201
Regulatory liabilities	1,247,530	1,108,075
Pension and other post-employment benefits	116,222	141,399
Compensation	81,226	76,317
Accumulated deferred investment tax credit	55,928	57,501
Provision for allowances and contingencies	149,479	97,545
Unbilled/deferred revenues	2,418	21,905
Net operating loss carryforwards	2,857,908	2,065,149
Capital losses and miscellaneous tax credits	107,009	28,876
Valuation allowance	(372,119)	(372,017)
Other	220,055	245,236
Total	4,612,667	3,643,187
Non-current accrued taxes (including unrecognized tax benefits)	(422,213)	(951,110)
Accumulated deferred income taxes and taxes accrued	($4,229,615)	($4,734,737)

Entergy’s estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

Carryover Description	Carryover Amount	Year(s) of expiration
Federal net operating losses before 1/1/2018	$4.2 billion	2028-2037
Federal net operating losses - 1/1/2018 forward	$13.8 billion	N/A
State net operating losses	$3.9 billion	2028-2042
State net operating losses with no expiration	$11.1 billion	N/A
Other federal and state carryforwards	$523.6 million	2024-2037
Miscellaneous federal and state credits	$124.9 million	2024-2043

As a result of the accounting for uncertain tax positions, the amount of the deferred tax assets reflected in the financial statements is less than the amount of the tax effect of the federal and state net operating loss carryovers, tax credit carryovers, and other tax attributes generated and reflected on income tax returns. Entergy evaluates the available positive and negative evidence to estimate whether sufficient future taxable income of the appropriate character will be generated to realize the benefits of existing deferred tax assets. When the evaluation

indicates that Entergy will not be able to realize the existing benefits, a valuation allowance is recorded to reduce deferred tax assets to the realizable amount.

Because it is more likely than not that the benefits from certain state net operating losses and other deferred tax assets will not be utilized, valuation allowances totaling $372 million as of December 31, 2023 and $372 million as of December 31, 2022 have been provided on the deferred tax assets related to federal and state jurisdictions in which Entergy does not currently expect to be able to utilize certain separate company tax return attributes, preventing realization of such deferred tax assets. Certain accelerated tax deductions which generated taxable losses in various taxing jurisdictions, and which have a limited term carryover period, have resulted in the impairment of the realizability of such carryovers and are reflected in the valuation allowance disclosed above.

Significant components of accumulated deferred income taxes and taxes accrued for the Registrant Subsidiaries as of December 31, 2023 and 2022 are as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,421,272)	($2,639,079)	($810,120)	($272,187)	($671,072)	($450,559)
Regulatory assets	(241,427)	(500,395)	(41,519)	(23,618)	(104,562)	(76,522)
Nuclear decommissioning trusts/receivables	(154,106)	(173,402)	—	—	—	(139,858)
Pension, net regulatory asset	(96,853)	(82,305)	(24,342)	(9,216)	(17,522)	(18,895)
Deferred fuel	—	(17,065)	(21,137)	(1,563)	(29,194)	(37)
Accumulated storm damage provision	—	—	—	—	(1,387)	—
Power purchase agreements	15,993	(112,292)	1,140	(12,516)	(4,551)	—
Other	(21,187)	(126,952)	(6,844)	(4,270)	(3,301)	(9,051)
Total	(1,918,852)	(3,651,490)	(902,822)	(323,370)	(831,589)	(694,922)
Deferred tax assets:
Regulatory liabilities	296,278	575,459	54,586	42,921	41,137	240,310
Nuclear and other decommissioning liabilities	118,301	9,055	—	—	97	19,259
Pension and other post-employment benefits	(28,868)	46,837	(10,064)	(19,354)	(21,977)	(2,641)
Accumulated deferred investment tax credit	6,761	27,902	3,446	4,431	1,672	11,717
Provision for allowances and contingencies	23,956	70,297	10,072	25,846	8,659	225
Unbilled/deferred revenues	5,962	(20,375)	6,194	1,045	8,365	—
Compensation	4,054	6,078	3,649	1,268	2,181	406
Net operating loss carryforwards	94,321	459,553	8,375	26,227	61	35,089
Capital losses and miscellaneous tax credits	7,137	13,073	7,613	15,684	1,655	13,211
Other	17,072	52,438	1,556	(235)	1,740	—
Total	544,974	1,240,317	85,427	97,833	43,590	317,576
Non-current accrued taxes (including unrecognized tax benefits)	(63,175)	19,731	(4,349)	29,922	(26,906)	(28,398)
Accumulated deferred income taxes and taxes accrued	($1,437,053)	($2,391,442)	($821,744)	($195,615)	($814,905)	($405,744)

    

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Deferred tax liabilities:
Plant basis differences - net	($1,181,456)	($2,513,138)	($691,675)	($115,841)	($614,134)	($448,010)
Regulatory assets	(244,624)	(457,102)	(44,358)	(24,738)	(95,717)	(68,742)
Nuclear decommissioning trusts/receivables	(107,858)	(118,172)	—	—	—	(92,527)
Pension, net regulatory asset	(93,139)	(82,891)	(22,256)	(9,604)	(18,111)	(17,889)
Deferred fuel	(35,205)	(49,792)	(37,333)	(2,560)	(54,204)	(128)
Accumulated storm damage provision	—	(31,337)	—	—	(3,876)	—
Power purchase agreements	(8,296)	(11,181)	—	(9,372)	(22,014)	—
Other	(76,813)	(126,350)	(26,752)	(21,977)	(4,126)	(14,364)
Total	(1,747,391)	(3,389,963)	(822,374)	(184,092)	(812,182)	(641,660)
Deferred tax assets:
Regulatory liabilities	236,318	508,594	54,454	27,438	47,248	237,452
Nuclear and other decommissioning liabilities	139,499	12,883	1	—	97	18,940
Pension and other post-employment benefits	(28,463)	52,414	(9,196)	(18,114)	(20,867)	(2,481)
Accumulated deferred investment tax credit	7,171	29,271	3,641	4,438	1,829	11,151
Provision for allowances and contingencies	26,432	15,741	10,300	26,671	7,755	—
Unbilled/deferred revenues	6,211	(2,405)	5,826	4,090	7,572	—
Compensation	3,361	5,207	2,316	1,107	1,712	308
Net operating loss carryforwards	10,491	307,175	10,140	12,146	27,620	20,639
Capital losses and miscellaneous tax credits	719	2,774	5,152	11,006	3,728	8,261
Other	24,969	41,310	6,849	11,105	729	—
Total	426,708	972,964	89,483	79,887	77,423	294,270
Non-current accrued taxes (including unrecognized tax benefits)	(177,551)	42,121	(47,139)	(281,054)	(9,468)	(28,680)
Accumulated deferred income taxes and taxes accrued	($1,498,234)	($2,374,878)	($780,030)	($385,259)	($744,227)	($376,070)

The Registrant Subsidiaries’ estimated tax attributes carryovers and their expiration dates as of December 31, 2023 are as follows:

	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
Federal net operating losses before 1/1/2018	$— million	$0.8 billion	$— million	$0.1 billion	$— million	$— million
Year(s) of expiration	N/A	2035-2037	N/A	2037	N/A	N/A
Federal net operating losses - 1/1/2018 forward	$0.5 billion	$2.8 billion	$10.8 million	$17.7 million	$1.8 billion	$0.1 billion
Year(s) of expiration	N/A	N/A	N/A	N/A	N/A	N/A
State net operating losses	$0.4 billion	$5.7 billion	$0.1 billion	$0.2 billion	$1 million	$0.2 billion
Year(s) of expiration	2028-2032	N/A	2040-2042	N/A	2028	N/A
Misc. federal credits	$10 million	$16.9 million	$3.9 million	$16.1 million	$0.8 million	$4.8 million
Year(s) of expiration	2038-2043	2035-2043	2038-2043	2037-2043	2039-2043	2029-2043
State credits	$— million	$— million	$8 million	$— million	$1.6 million	$19 million
Year(s) of expiration	N/A	N/A	2024-2026	N/A	2027-2033	2024-2027

Unrecognized tax benefits

Accounting standards establish a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements.  If a tax deduction is taken on a tax return but does not meet the more-likely-than-not recognition threshold, an increase in income tax liability, above what is payable on the tax return, is required to be recorded.  A reconciliation of Entergy’s beginning and ending amount of unrecognized tax benefits is as follows:

	2023	2022	2021
	(In Thousands)
Gross balance at January 1	$6,393,599	$5,759,968	$5,699,339
Additions based on tax positions related to the current year	332,884	792,134	101,623
Additions for tax positions of prior years	194,894	37,259	33,419
Reductions for tax positions of prior years (a)	(1,300,381)	(195,762)	(74,413)
Settlements (a)	(3,181,086)	—	—
Gross balance at December 31	2,439,910	6,393,599	5,759,968
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(2,160,484)	(5,566,212)	(4,987,799)
Cash paid to taxing authorities	—	(82,000)	(60,000)
Unrecognized tax benefits net of unused tax attributes and payments (b)	$279,426	$745,387	$712,169

(a)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

(b)Potential tax liability above what is payable on tax returns.

The balances of unrecognized tax benefits include $1,899 million, $3,254 million, and $2,256 million as of December 31, 2023, 2022, and 2021, respectively, which, if recognized, would lower the effective income tax rates.  Because of the effect of deferred tax accounting, the remaining balances of unrecognized tax benefits of $541 million, $3,140 million, and $3,504 million as of December 31, 2023, 2022, and 2021, respectively, if

disallowed, would not affect the annual effective income tax rate but would accelerate the payment of cash to the taxing authority to an earlier period.

Entergy accrues interest expense, if any, related to unrecognized tax benefits in income tax expense.  Entergy’s December 31, 2023, 2022, and 2021 accrued balance for the possible payment of interest is approximately $39 million, $50 million, and $52 million, respectively. Interest (net-of-tax) of ($11) million, $8 million, and ($4) million was recorded in 2023, 2022, and 2021, respectively.

A reconciliation of the Registrant Subsidiaries’ beginning and ending amount of unrecognized tax benefits for 2023, 2022, and 2021 is as follows:

2023	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2023	$1,452,819	$1,350,836	$547,548	$638,726	$389,366	$23,702
Additions based on tax positions related to the current year (a)	2,249	332,320	209	78	196	752
Additions for tax positions of prior years	—	—	—	—	94,793	—
Reductions for tax positions of prior years (b)	(148,558)	(458,072)	(16,853)	(191,336)	(67,156)	(9,532)
Settlements (b)	(1,237,313)	(361,041)	(525,251)	(428,137)	(1,994)	(621)
Gross balance at December 31, 2023	69,197	864,043	5,653	19,331	415,205	14,301
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(34,683)	(735,612)	(3,778)	(11,721)	(381,561)	(14,301)
Unrecognized tax benefits net of unused tax attributes	$34,514	$128,431	$1,875	$7,610	$33,644	$—

2022	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2022	$1,408,494	$604,628	$549,569	$639,497	$552,295	$23,356
Additions based on tax positions related to the current year (a)	40,502	750,320	185	72	173	690
Additions for tax positions of prior years	6,233	10,262	1,122	393	801	761
Reductions for tax positions of prior years	(2,410)	(14,374)	(3,328)	(1,236)	(163,903)	(1,105)
Gross balance at December 31, 2022	1,452,819	1,350,836	547,548	638,726	389,366	23,702
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(1,277,414)	(1,328,916)	(504,940)	(455,928)	(377,054)	(23,702)
Unrecognized tax benefits net of unused tax attributes	$175,405	$21,920	$42,608	$182,798	$12,312	$—

2021	Entergy Arkansas	Entergy Louisiana	Entergy Mississippi	Entergy New Orleans	Entergy Texas	System Energy
	(In Thousands)
Gross balance at January 1, 2021	$1,364,635	$640,295	$549,717	$639,546	$521,932	$21,652
Additions based on tax positions related to the current year	30,419	13,437	684	1,050	32,616	1,753
Additions for tax positions of prior years	15,013	9,304	1,504	6	2,315	1,897
Reductions for tax positions of prior years	(1,573)	(58,408)	(2,336)	(1,105)	(4,568)	(1,946)
Gross balance at December 31, 2021	1,408,494	604,628	549,569	639,497	552,295	23,356
Offsets to gross unrecognized tax benefits:
Loss and tax credit carryovers	(992,643)	(604,628)	(388,728)	(484,899)	(540,694)	(8,576)
Unrecognized tax benefits net of unused tax attributes	$415,851	$—	$160,841	$154,598	$11,601	$14,780

(a)The primary additions for Entergy Louisiana in 2022 and 2023 are related to the Entergy Louisiana securitizations as discussed in “Other Tax Matters - Act 293 Securitizations” below.

(b)Amounts in 2023 are primarily related to the resolution of the 2016-2018 IRS audit as discussed in “Income Tax Audits - 2016-2018 IRS Audit” below.

The Registrant Subsidiaries’ balances of unrecognized tax benefits included amounts which, if recognized, would have reduced income tax expense as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$57.2	$377.9	$262.1
Entergy Louisiana	$862.5	$720.8	$66.3
Entergy Mississippi	$1.0	$151.2	$51.7
Entergy New Orleans	$18.2	$310.7	$228.6
Entergy Texas	$2.9	$3.3	$2.6
System Energy	$3.1	$2.5	$1.7

Accrued balances for the possible payment of interest related to unrecognized tax benefits for the Registrant Subsidiaries are as follows:

	December 31,
	2023	2022	2021
	(In Millions)
Entergy Arkansas	$7.8	$4.3	$2.7
Entergy Louisiana	$1.5	$4.1	$3.7
Entergy Mississippi	$2.1	$3.1	$2.4
Entergy New Orleans	$0.6	$6.4	$5.2
Entergy Texas	$—	$1.1	$1.1
System Energy	$1.9	$1.9	$12.1

The Registrant Subsidiaries record interest and penalties related to unrecognized tax benefits in income tax expense.  No penalties were recorded in 2023, 2022, and 2021. Interest (net-of-tax) was recorded as follows:

	2023	2022	2021
	(In Millions)
Entergy Arkansas	$3.5	$1.6	$0.4
Entergy Louisiana	($2.6)	$0.4	$0.3
Entergy Mississippi	($1.0)	$0.7	$0.5
Entergy New Orleans	($5.8)	$1.2	$1.3
Entergy Texas	($1.1)	$—	$0.2
System Energy	$—	($10.2)	$0.2

Income Tax Audits

Entergy and its subsidiaries file U.S. federal and various state income tax returns.  IRS examinations are complete for years before 2019. All state taxing authorities’ examinations are complete for years before 2014. Entergy regularly defends its positions and works with the IRS to resolve audits.  The resolution of audit issues could result in significant changes to the amounts of unrecognized tax benefits in the next twelve months.

2016-2018 IRS Audit

The IRS completed its examination of the 2016 through 2018 tax years and issued a Revenue Agent Report (RAR) for each federal filer under audit in November 2023. Entergy agreed to all adjustments contained in the RARs. Entergy and the Registrant Subsidiaries recorded all the material effects resulting from the RARs in the fourth quarter of 2023.

Utility Restructurings

In 2017, Entergy New Orleans undertook an internal restructuring, and in 2018, Entergy Arkansas and Entergy Mississippi also participated in internal restructurings under which these three Utility operating companies joined Entergy Louisiana as wholly-owned subsidiaries of Entergy Utility Holding Company, LLC. The change in ownership required Entergy to recognize Entergy Arkansas’s nuclear decommissioning liabilities for income tax purposes, which resulted in recognition of a gain for income tax purposes and a corresponding increase in the tax basis of assets, in accordance with the Internal Revenue Code and Treasury Regulations. Entergy determined that there was uncertainty regarding the treatment of certain aspects of the restructurings and recorded provisions for uncertain tax positions which are now considered to be effectively settled in accordance with accounting standards. The reversal of such provisions for uncertain tax positions results in a reduction of income tax expense of $156 million for Entergy Arkansas, $1 million for Entergy Mississippi, and $6 million for Entergy New Orleans.

The IRS also required Entergy New Orleans to reverse a tax gain associated with the 2017 restructuring that had been previously recognized, allowing Entergy New Orleans to reduce its tax expense by $39 million.

After the restructuring, Entergy Arkansas adopted a new method of accounting for income tax purposes in which its nuclear decommissioning costs are treated as production costs of electricity includable in cost of goods sold, which resulted in a $1.8 billion reduction in taxable income on its 2018 tax return that was treated as an unrecognized tax benefit. In conjunction with the audit, Entergy agreed with the IRS adjustments concerning the nuclear decommissioning tax position allowing Entergy Arkansas to include $102 million of its decommissioning liability in cost of goods sold.

Mark-to-Market Method of Accounting

In 2016, Entergy Louisiana elected mark-to-market income tax treatment for various wholesale electric power purchase and sale agreements, including Entergy Louisiana’s contract to purchase electricity from the Vidalia hydroelectric facility and from System Energy under the Unit Power Sales Agreement as well as other intercompany power purchase agreements. The election resulted in a $2 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with the Vidalia contract and various other third-party and intercompany wholesale electric power purchase and sale agreements. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $132 million and a corresponding reduction of income tax expense primarily associated with the effect of the Tax Cuts and Jobs Act rate reduction discussed below.

In 2017, Entergy New Orleans also elected mark-to-market income tax treatment for the Unit Power Sales Agreement and various intercompany wholesale electric contracts which resulted in a $1 billion deductible temporary difference. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The net allowance resulted in a reversal of a provision for uncertain tax positions of $139 million and a corresponding reduction of income tax expense.

In 2018, Entergy Arkansas and Entergy Mississippi each accrued approximately $2 billion in deductible temporary differences related to mark-to-market tax accounting for the Unit Power Sales Agreement and various wholesale electric contracts. The IRS allowed the mark-to-market tax method of accounting associated with various intercompany and third-party wholesale electric contracts. The IRS disallowed the net deductions associated with the Unit Power Sales Agreement, which did not have an effect on net tax expense. The effective settlement of the mark-to-market tax position for Entergy Arkansas resulted in the accrual of an increase to tax expense of $40 million, which was offset by approximately $5 million of miscellaneous excess ADIT recognized as a result of the 2016-2018 IRS audit resolution. The net increase to tax expense is deferred as a regulatory asset, as discussed within the “Regulatory and Other Matters” section below.

Restructuring of Entergy’s Non-Utility Operations Business

During the 2016 to 2018 audit period, the ownership of certain of Entergy’s non-utility operations business nuclear power plants (previously reported as part of Entergy Wholesale Commodities) was restructured. Such restructuring transactions required Entergy to recognize the plants’ nuclear decommissioning liabilities for income tax purposes. The accrual of the nuclear decommissioning liabilities also required Entergy to recognize a gain for income tax purposes, a significant portion of which resulted in an increase in the tax basis of the assets. Because certain aspects of the restructuring transactions involved uncertainty, Entergy recorded a provision for uncertain tax positions. The IRS did not propose adjustments to the tax treatment of the restructuring transactions resulting in a net decrease to income tax expense of $288 million from the reversal of the provision for uncertain tax positions in fourth quarter 2023.

Reduction of Net Operating Loss Carryovers

The IRS audit reduced Entergy’s net operating loss carryover by $8 billion. A portion of Entergy’s audit adjustments were not offset by losses which resulted in a tax liability of $79 million, which was fully offset by prior deposits made by Entergy. Entergy received an assessment of interest in excess of prior deposits of $13 million in December 2023, and such interest was paid in January 2024.

Net operating loss carryovers were reduced by $4 billion for Entergy Arkansas, $1 billion for Entergy Louisiana, $2 billion for Entergy Mississippi, $1 billion for Entergy New Orleans, and $40 million for System

Energy. The IRS audit adjustments were also factored into the settle-up required under Entergy’s intercompany income tax allocation agreement, and such amounts were settled in the fourth quarter of 2023.

Regulatory and Other Matters

Additional customer credits related to the audit outcome may be due in accordance with prior regulatory agreements associated with the Entergy Louisiana and Entergy Gulf States Louisiana business combination and Entergy New Orleans restructuring and general rate-making principles. A regulatory liability and associated regulatory charge of $38 million and $60 million ($28 million and $44 million net-of-tax) were recorded for Entergy Louisiana and Entergy New Orleans, respectively. The inclusion of the effects of the audit on customer rates is subject to the review and approval of the retail regulators. Additionally, a regulatory asset for income tax associated with deficient ADIT of $35 million, $2 million, and $3 million, was recorded for Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi, respectively. See Note 2 to the financial statements for discussion of Entergy Arkansas’s regulatory activity related to the Tax Cuts and Jobs Act and for discussion of the settlement of Entergy Arkansas’s 2023 formula rate plan.

As noted above, Entergy accrues interest expense related to unrecognized tax benefits in income tax expense. As a result of the IRS audit resolution, Entergy reversed approximately $24 million of interest related to the allowance of previously unrecognized tax benefits.

Reversal of net deferred credits associated with the accounting for income taxes upon the resolution of the IRS audit resulted in a reduction/(increase) of income tax expense of $9 million, $42 million, ($2) million, $2 million, $2 million, and $1 million for Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy, respectively.

Included in the effect of the IRS audit on the results of operations was the measurement of deferred tax assets and liabilities influenced by the 2017 enactment of the Tax Cuts and Jobs Act income tax rate change discussed below. With the conclusion of the audit, there are no remaining federal unrecognized tax benefits affected by the rate differential which could impact income tax expense and the regulatory liability for income taxes in future periods.

State Income Tax Audits

As a result of income tax audit adjustments proposed by the Arkansas Department of Finance and Administration, an Entergy subsidiary in the non-utility operations business recorded a provision in third quarter 2022 for uncertain tax positions of approximately $21 million, which includes interest expense.

Other Tax Matters

Tax Cuts and Jobs Act (TCJA)

The most significant effect of the TCJA for Entergy and the Registrant Subsidiaries was the change in the federal corporate income tax rate from 35% to 21%, effective January 1, 2018. Entergy had remaining regulatory liabilities of $1.0 billion and $1.3 billion as of December 31, 2023 and December 31, 2022, respectively, mainly associated with the re-measurement of deferred tax assets and liabilities from the income tax rate change, subsequent amortization of excess ADIT, and payments to customers since the enactment of the TCJA. In addition to the protected and unprotected excess ADIT amounts, the net regulatory liability for income taxes includes other regulatory assets and liabilities for income taxes mainly for AFUDC, which is described in Note 1 to the financial statements.

Entergy’s regulatory liability for income taxes includes a gross-up at the applicable tax rate because of the effect that excess ADIT has on the ratemaking formula. The regulatory liability for income taxes includes the effect

of (1) the reduction of the net deferred tax liability resulting in excess ADIT, and (2) the tax gross-up of excess ADIT. The Registrant Subsidiaries’ December 31, 2023 and December 31, 2022 balance sheets reflect net regulatory liabilities for income taxes as follows:

	2023	2022
	(In Millions)
Entergy Arkansas	$392	$435
Entergy Louisiana	$194	$338
Entergy Mississippi	$189	$202
Entergy New Orleans	$36	$40
Entergy Texas	$115	$133
System Energy	$107	$111

Excess ADIT is generally classified into two categories: (1) the portion that is subject to the normalization requirements of the TCJA, referred to as “protected”, and (2) the portion that is not subject to such normalization provisions, referred to as “unprotected”. See Note 2 to the financial statements for discussion of Entergy Louisiana’s $106 million reversal of a regulatory liability, associated with the Hurricane Isaac securitization, recognized in 2017 as a result of the TCJA, recorded in fourth quarter 2023. The majority of the remaining unamortized Excess ADIT as of December 31, 2023 is classified as protected. The TCJA provides that the normalization method of accounting for income taxes is required for excess ADIT associated with public utility property. The TCJA provides for the use of the average rate assumption method (ARAM) for the determination of the timing of the return of excess ADIT associated with such property. Under ARAM, the excess ADIT is reduced over the remaining life of the asset. Remaining asset lives vary for each Registrant Subsidiary, but the average life of public utility property is typically 30 years or longer. Entergy will amortize the protected portion of the excess ADIT in conformity with the normalization requirements.

During the second quarter 2018, the Registrant Subsidiaries began returning unprotected excess accumulated deferred income taxes, associated with the effects of the TCJA, to their customers through rate riders and other means approved by their respective regulatory authorities. Return of the unprotected excess accumulated deferred income taxes results in a reduction in the regulatory liability for income taxes and a corresponding reduction in income tax expense. This manner of regulatory accounting affects the effective tax rate for the period as compared to the statutory tax rate. There was no return of unprotected excess accumulated deferred income taxes for Entergy or the Registrant Subsidiaries for the year ended December 31, 2023. For the year ended December 31, 2022, the return of unprotected excess accumulated deferred income taxes reduced the regulatory liability for income taxes by $53 million for Entergy, including $25 million for Entergy Louisiana, $1 million for Entergy New Orleans, and $27 million for Entergy Texas.

Inflation Reduction Act of 2022

The Inflation Reduction Act of 2022, signed into law on August 16, 2022, significantly expanded federal tax incentives for clean energy production, including the extension of production tax credits to solar projects and certain qualified nuclear power plants. Additionally, the Inflation Reduction Act of 2022 enacted a 1% excise tax on the buyback of public company stock and a new corporate alternative minimum tax. There are no effects on the financial statements of Entergy or the Registrant Subsidiaries as of and for the years ended December 31, 2023 and 2022 related to the enactment of the law. See the “Income Tax Legislation and Regulation” section of Entergy Corporation and Subsidiaries Management’s Financial Discussion and Analysis for additional discussion of the effects of the Inflation Reduction Act of 2022.

Restructuring of Entergy’s Non-Utility Operations Business in 2020

In the fourth quarter 2020, Entergy’s ownership of Palisades was restructured. The restructuring required Entergy to recognize Palisades’ nuclear decommissioning liability for income tax purposes resulting in a tax accounting permanent difference that reduced income tax expense, net of unrecognized tax benefits, by $9.2 million. The accrual of the nuclear decommissioning liability also required Entergy to recognize a gain for income tax purposes, a portion of which resulted in an increase in the tax basis of the assets. Recognition of the gain and the increase in the tax basis of the assets represents a tax accounting temporary difference.

Tax Accounting Methods

Certain Entergy subsidiaries have elected to apply the mark-to-market method of accounting for income tax return purposes to wholesale power purchase agreements as appropriate under the Internal Revenue Code and U.S. Treasury Regulations. The mark-to-market tax gain or loss computed each year is based on an estimated fair market valuation which includes analyses of market prices and conditions.

In 2020, Entergy Texas elected mark-to-market income tax treatment for wholesale electric power purchase and sale agreements which resulted in a $2.5 billion deductible temporary difference.

Arkansas and Louisiana Corporate Income Tax Rate Changes

Since 2019, the State of Arkansas has enacted corporate income tax law changes that phased in rate reductions from the former rate of 6.5% to 6.2% in 2021, 5.9% in 2022, 5.1% in 2023, and 4.8% in 2024.  Legislation in 2022 accelerated the rate reduction to 5.3% for tax years beginning on or after January 1, 2023, accelerating the rate reductions that were originally scheduled to take effect in the 2025 tax year. As a result of the rate reductions, Entergy Arkansas has recorded regulatory liabilities for income taxes of approximately $26 million, $15 million, $11 million, and $21 million in 2023, 2022, 2021, and 2020, respectively. The regulatory liabilities include a tax gross-up related to the treatment of income taxes in the retail and wholesale ratemaking formulas and have been or are scheduled to be included in the approved rate mechanisms. The Arkansas tax law enactment also phases in an increase to the net operating loss carryover period from five to ten years.

Pursuant to legislation enacted in 2021 and approved by Louisiana citizens by amendment to the state constitution, beginning January 1, 2022, federal income taxes paid are no longer deductible for state income tax purposes, and the top Louisiana corporate income tax rate has been reduced from 8% to 7.5%. As a result of this change in Louisiana tax law, the Louisiana applicable tax rate increased by 0.85%. Accordingly, deferred tax assets and liabilities were adjusted to reflect the new applicable federal and state rates. In fourth quarter 2021, Entergy recorded a net increase to its deferred tax asset of $27 million. Entergy Louisiana and Entergy New Orleans recorded net increases to their deferred tax liabilities before consideration of the tax gross-up of $77 million and $8 million, respectively, which were offset by regulatory assets for income taxes. Therefore, these increases had no effect on tax expense. However, the increase of deferred tax assets associated with certain assets reduced tax expense for Entergy Louisiana and Entergy New Orleans by $6 million and $2 million, respectively. The legislation enacted in 2021 also provided that Louisiana net operating losses generally have an indefinite carryover period.

Act 293 Securitizations

As described in Note 2 to the financial statements, Entergy Louisiana has implemented two separate securitization transactions authorized under Act 293 of the Louisiana Legislature’s Regular Session of 2021. The first transaction occurred in May of 2022 and the second occurred in March of 2023. Act 293 provides that the LURC contribute the net bond proceeds to a LURC-sponsored trust. Over the 15-year term of the Act 293 bonds, the respective storm trusts will make distributions to Entergy Louisiana, a beneficiary of the storm trusts, that will not be taxable to Entergy Louisiana. Additionally, Entergy Louisiana will not include the receipt of the system

restoration charges in taxable income because the right to receive the system restoration charges has been granted directly to the LURC, and Entergy Louisiana only acts as an agent to collect those charges on behalf of the LURC.

Accordingly, the securitizations provided for a tax accounting permanent difference resulting in net reductions of income tax expense for Entergy Louisiana of approximately $133 million in March 2023 and $290 million in May 2022, both after taking into account a provision for uncertain tax positions. Entergy’s recognition of reduced income tax expense was offset by other tax changes resulting in a net reduction of income tax expense for Entergy of approximately $129 million in March 2023 and $283 million in May 2022, both after taking into account a provision for uncertain tax positions.

In recognition of its obligations described in LPSC ancillary orders issued as part of the securitization regulatory proceedings, Entergy Louisiana recorded regulatory liabilities of $103 million ($76 million net-of-tax) in first quarter 2023 and $224 million ($165 million net-of-tax) in second quarter 2022 to reflect its obligation to provide credits to its customers. See Note 2 to the financial statements for further discussion of the Entergy Louisiana March 2023 and May 2022 storm cost securitizations.