Equity

3 Months Ended

Mar. 31, 2023

Equity

EQUITY (Entergy Corporation and Entergy Louisiana)

Common Stock

Earnings per Share

The following table presents Entergy’s basic and diluted earnings per share calculations included on the consolidated income statements:

	For the Three Months Ended March 31,
	2023			2022
	(In Millions, Except Per Share Data)
	Income	Shares	$/share	Income	Shares	$/share
Basic earnings per share
Net income attributable to Entergy Corporation	$310.9	211.4	$1.47	$276.4	202.9	$1.36
Average dilutive effect of:
Stock options		0.3	—		0.5	—
Other equity plans		0.4	—		0.4	—
Equity forwards		—	—		0.1	—
Diluted earnings per share	$310.9	212.1	$1.47	$276.4	203.9	$1.36

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 1.2 million for the three months ended March 31, 2023 and approximately 0.9 million for the three months ended March 31, 2022.

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

Dividends declared per common share were $1.07 for the three months ended March 31, 2023 and $1.01 for the three months ended March 31, 2022.

Equity Distribution Program

In January 2021, Entergy entered into an equity distribution sales agreement with several counterparties establishing an at the market equity distribution program, pursuant to which Entergy may offer and sell from time to time shares of its common stock. The sales agreement provides that, in addition to the issuance and sale of shares of Entergy common stock, Entergy may enter into forward sale agreements for the sale of its common stock. The aggregate number of shares of common stock sold under this sales agreement and under any forward sale agreement may not exceed an aggregate gross sales price of $2 billion. As of March 31, 2023, shares at an aggregate gross sales price of approximately $1,077.8 million have been sold under the at the market equity distribution program.

In March 2022, Entergy entered into a forward sale agreement for 1,538,010 shares of common stock. No amounts were recorded on Entergy’s balance sheet with respect to the equity offering until settlements of the equity forward sale agreement occurred in November 2022. The forward sale agreement required Entergy to, at its election prior to September 29, 2023, either (i) physically settle the transactions by issuing the total of 1,538,010 shares of its common stock to the forward counterparty in exchange for net proceeds at the then-applicable forward sale price specified by the agreement (initially approximately $108.14 per share) or (ii) net settle the transaction in whole or in part through the delivery or receipt of cash or shares. The forward sale price was subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other fixed amounts specified in the agreement. In connection with the forward sale agreement, the forward seller, or its affiliates, borrowed from third parties and sold 1,538,010 shares of Entergy Corporation’s common stock. The gross sales price of these shares totaled approximately $168 million. In connection with the sale of these shares, Entergy paid the forward sellers fees of approximately $1.7 million, which have not been deducted from the gross sales price. Entergy did not receive any proceeds from such sales of borrowed shares.

Until settlement of the forward sale agreements, earnings per share dilution resulting from the agreement, if any, was determined under the treasury stock method. Share dilution occurs when the average market price of Entergy’s common stock is higher than the average forward sales price. For the three months ended March 31, 2022, 1,775,251 shares under the forward sale agreements were not included in the calculation of diluted earnings per share because their effect would have been antidilutive.

In November 2022, Entergy physically settled its obligations under the forward sale agreements by delivering 7,688,419 shares of common stock in exchange for cash proceeds of $853.3 million. See Note 7 to the financial statements in the Form 10-K for discussion of the common stock issued and forward sale agreements settled under the market equity distribution program. There were no shares of common stock issued under the at the market equity distribution program for the three months ended March 31, 2023, and there were no forward sale agreements in place as of March 31, 2023.

Treasury Stock

During the three months ended March 31, 2023, Entergy Corporation issued 269,546 shares of its previously repurchased common stock to satisfy stock option exercises, vesting of shares of restricted stock, and

other stock-based awards.  Entergy Corporation did not repurchase any of its common stock during the three months ended March 31, 2023.

Retained Earnings

On April 10, 2023, Entergy Corporation’s Board of Directors declared a common stock dividend of $1.07 per share, payable on June 1, 2023 to holders of record as of May 4, 2023.

Comprehensive Income

Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy and Entergy Louisiana. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2023:

	Pension and Other Postretirement Liabilities
	(In Thousands)
Beginning balance, January 1, 2023	($191,754)
Amounts reclassified from accumulated other comprehensive income (loss)	2,027
Net other comprehensive income for the period	2,027
Ending balance, March 31, 2023	($189,727)

The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2022 by component:

	Cash flow hedges net unrealized gain (loss)	Pension and other postretirement liabilities	Net unrealized investment gain (loss)	Total Accumulated Other Comprehensive Income (Loss)
	(In Thousands)
Beginning balance, January 1, 2022	($1,035)	($338,647)	$7,154	($332,528)
Other comprehensive income (loss) before reclassifications	(14)	—	(15,875)	(15,889)
Amounts reclassified from accumulated other comprehensive income (loss)	38	8,328	3,473	11,839
Net other comprehensive income (loss) for the period	24	8,328	(12,402)	(4,050)
Ending balance, March 31, 2022	($1,011)	($330,319)	($5,248)	($336,578)

The following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the three months ended March 31, 2023 and 2022:

	Pension and Other Postretirement Liabilities
	2023	2022
	(In Thousands)
Beginning balance, January 1,	$55,370	$8,278
Amounts reclassified from accumulated other comprehensive income (loss)	(786)	(613)
Net other comprehensive income (loss) for the period	(786)	(613)
Ending balance, March 31,	$54,584	$7,665

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy for the three months ended March 31, 2023 and 2022 were as follows:

	Amounts reclassified from AOCI		Income Statement Location
	2023	2022
	(In Thousands)
Cash flow hedges net unrealized loss
Interest rate swaps	$—	($48)	Miscellaneous - net
Total realized loss on cash flow hedges	—	(48)
Income taxes	—	10	Income taxes
Total realized loss on cash flow hedges (net of tax)	$—	($38)
Pension and other postretirement liabilities
Amortization of prior-service credit	$3,397	$3,837	(a)
Amortization of gain (loss)	1,661	(13,925)	(a)
Settlement loss	(7,816)	(782)	(a)
Total amortization	(2,758)	(10,870)
Income taxes	731	2,542	Income taxes
Total amortization (net of tax)	($2,027)	($8,328)
Net unrealized investment loss
Realized loss	$—	($5,495)	Interest and investment income
Income taxes	—	2,022	Income taxes
Total realized investment loss (net of tax)	$—	($3,473)
Total reclassifications for the period (net of tax)	($2,027)	($11,839)

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

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy Louisiana for the three months ended March 31, 2023 and 2022 were as follows:

	Amounts reclassified from AOCI		Income Statement Location
	2023	2022
	(In Thousands)
Pension and other postretirement liabilities
Amortization of prior-service credit	$951	$1,158	(a)
Amortization of gain (loss)	1,565	(319)	(a)
Settlement loss	(1,440)	—	(a)
Total amortization	1,076	839
Income taxes	(290)	(226)	Income taxes
Total amortization (net of tax)	786	613
Total reclassifications for the period (net of tax)	$786	$613

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

Noncontrolling Interests

The dollar value of noncontrolling interests for Entergy Louisiana as of March 31, 2023 and December 31, 2022 is presented below:

	2023	2022
	(In Thousands)
Entergy Louisiana Noncontrolling Interests
Restoration Law Trust I (a)	$31,813	$31,735
Restoration Law Trust II (b)	14,583	—
Total Noncontrolling Interests	$46,396	$31,735

(a)See Note 17 to the financial statements in the Form 10-K for discussion of Restoration Law Trust I.

(b)Restoration Law Trust II (the storm trust II) was established as part of the Act 293 securitization of Entergy Louisiana’s Hurricane Ida storm restoration costs. The storm trust II holds preferred membership interests issued by Entergy Finance Company, and Entergy Finance Company is required to make annual distributions (dividends) on the preferred membership interests. These annual dividends paid on the Entergy Finance Company preferred membership interests will be distributed 1% to the LURC and 99% to Entergy Louisiana. Entergy Louisiana, as the primary beneficiary, consolidates the storm trust II and the LURC’s 1% beneficial interest in noncontrolling interests in the consolidated financial statements for Entergy Louisiana and Entergy. See Note 2 to the financial statements herein for a discussion of the Entergy Louisiana March 2023 storm securitization.

Entergy Louisiana [Member]

Equity

EQUITY (Entergy Corporation and Entergy Louisiana)

Common Stock

Earnings per Share

The following table presents Entergy’s basic and diluted earnings per share calculations included on the consolidated income statements:

	For the Three Months Ended March 31,
	2023			2022
	(In Millions, Except Per Share Data)
	Income	Shares	$/share	Income	Shares	$/share
Basic earnings per share
Net income attributable to Entergy Corporation	$310.9	211.4	$1.47	$276.4	202.9	$1.36
Average dilutive effect of:
Stock options		0.3	—		0.5	—
Other equity plans		0.4	—		0.4	—
Equity forwards		—	—		0.1	—
Diluted earnings per share	$310.9	212.1	$1.47	$276.4	203.9	$1.36

The number of stock options not included in the calculation of diluted common shares outstanding due to their antidilutive effect was approximately 1.2 million for the three months ended March 31, 2023 and approximately 0.9 million for the three months ended March 31, 2022.

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

Dividends declared per common share were $1.07 for the three months ended March 31, 2023 and $1.01 for the three months ended March 31, 2022.

Equity Distribution Program

In January 2021, Entergy entered into an equity distribution sales agreement with several counterparties establishing an at the market equity distribution program, pursuant to which Entergy may offer and sell from time to time shares of its common stock. The sales agreement provides that, in addition to the issuance and sale of shares of Entergy common stock, Entergy may enter into forward sale agreements for the sale of its common stock. The aggregate number of shares of common stock sold under this sales agreement and under any forward sale agreement may not exceed an aggregate gross sales price of $2 billion. As of March 31, 2023, shares at an aggregate gross sales price of approximately $1,077.8 million have been sold under the at the market equity distribution program.

In March 2022, Entergy entered into a forward sale agreement for 1,538,010 shares of common stock. No amounts were recorded on Entergy’s balance sheet with respect to the equity offering until settlements of the equity forward sale agreement occurred in November 2022. The forward sale agreement required Entergy to, at its election prior to September 29, 2023, either (i) physically settle the transactions by issuing the total of 1,538,010 shares of its common stock to the forward counterparty in exchange for net proceeds at the then-applicable forward sale price specified by the agreement (initially approximately $108.14 per share) or (ii) net settle the transaction in whole or in part through the delivery or receipt of cash or shares. The forward sale price was subject to adjustment on a daily basis based on a floating interest rate factor and will decrease by other fixed amounts specified in the agreement. In connection with the forward sale agreement, the forward seller, or its affiliates, borrowed from third parties and sold 1,538,010 shares of Entergy Corporation’s common stock. The gross sales price of these shares totaled approximately $168 million. In connection with the sale of these shares, Entergy paid the forward sellers fees of approximately $1.7 million, which have not been deducted from the gross sales price. Entergy did not receive any proceeds from such sales of borrowed shares.

Until settlement of the forward sale agreements, earnings per share dilution resulting from the agreement, if any, was determined under the treasury stock method. Share dilution occurs when the average market price of Entergy’s common stock is higher than the average forward sales price. For the three months ended March 31, 2022, 1,775,251 shares under the forward sale agreements were not included in the calculation of diluted earnings per share because their effect would have been antidilutive.

In November 2022, Entergy physically settled its obligations under the forward sale agreements by delivering 7,688,419 shares of common stock in exchange for cash proceeds of $853.3 million. See Note 7 to the financial statements in the Form 10-K for discussion of the common stock issued and forward sale agreements settled under the market equity distribution program. There were no shares of common stock issued under the at the market equity distribution program for the three months ended March 31, 2023, and there were no forward sale agreements in place as of March 31, 2023.

Treasury Stock

During the three months ended March 31, 2023, Entergy Corporation issued 269,546 shares of its previously repurchased common stock to satisfy stock option exercises, vesting of shares of restricted stock, and

other stock-based awards.  Entergy Corporation did not repurchase any of its common stock during the three months ended March 31, 2023.

Retained Earnings

On April 10, 2023, Entergy Corporation’s Board of Directors declared a common stock dividend of $1.07 per share, payable on June 1, 2023 to holders of record as of May 4, 2023.

Comprehensive Income

Accumulated other comprehensive income (loss) is included in the equity section of the balance sheets of Entergy and Entergy Louisiana. The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2023:

	Pension and Other Postretirement Liabilities
	(In Thousands)
Beginning balance, January 1, 2023	($191,754)
Amounts reclassified from accumulated other comprehensive income (loss)	2,027
Net other comprehensive income for the period	2,027
Ending balance, March 31, 2023	($189,727)

The following table presents changes in accumulated other comprehensive income (loss) for Entergy for the three months ended March 31, 2022 by component:

	Cash flow hedges net unrealized gain (loss)	Pension and other postretirement liabilities	Net unrealized investment gain (loss)	Total Accumulated Other Comprehensive Income (Loss)
	(In Thousands)
Beginning balance, January 1, 2022	($1,035)	($338,647)	$7,154	($332,528)
Other comprehensive income (loss) before reclassifications	(14)	—	(15,875)	(15,889)
Amounts reclassified from accumulated other comprehensive income (loss)	38	8,328	3,473	11,839
Net other comprehensive income (loss) for the period	24	8,328	(12,402)	(4,050)
Ending balance, March 31, 2022	($1,011)	($330,319)	($5,248)	($336,578)

The following table presents changes in accumulated other comprehensive income (loss) for Entergy Louisiana for the three months ended March 31, 2023 and 2022:

	Pension and Other Postretirement Liabilities
	2023	2022
	(In Thousands)
Beginning balance, January 1,	$55,370	$8,278
Amounts reclassified from accumulated other comprehensive income (loss)	(786)	(613)
Net other comprehensive income (loss) for the period	(786)	(613)
Ending balance, March 31,	$54,584	$7,665

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy for the three months ended March 31, 2023 and 2022 were as follows:

	Amounts reclassified from AOCI		Income Statement Location
	2023	2022
	(In Thousands)
Cash flow hedges net unrealized loss
Interest rate swaps	$—	($48)	Miscellaneous - net
Total realized loss on cash flow hedges	—	(48)
Income taxes	—	10	Income taxes
Total realized loss on cash flow hedges (net of tax)	$—	($38)
Pension and other postretirement liabilities
Amortization of prior-service credit	$3,397	$3,837	(a)
Amortization of gain (loss)	1,661	(13,925)	(a)
Settlement loss	(7,816)	(782)	(a)
Total amortization	(2,758)	(10,870)
Income taxes	731	2,542	Income taxes
Total amortization (net of tax)	($2,027)	($8,328)
Net unrealized investment loss
Realized loss	$—	($5,495)	Interest and investment income
Income taxes	—	2,022	Income taxes
Total realized investment loss (net of tax)	$—	($3,473)
Total reclassifications for the period (net of tax)	($2,027)	($11,839)

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

Total reclassifications out of accumulated other comprehensive income (loss) (AOCI) into income for Entergy Louisiana for the three months ended March 31, 2023 and 2022 were as follows:

	Amounts reclassified from AOCI		Income Statement Location
	2023	2022
	(In Thousands)
Pension and other postretirement liabilities
Amortization of prior-service credit	$951	$1,158	(a)
Amortization of gain (loss)	1,565	(319)	(a)
Settlement loss	(1,440)	—	(a)
Total amortization	1,076	839
Income taxes	(290)	(226)	Income taxes
Total amortization (net of tax)	786	613
Total reclassifications for the period (net of tax)	$786	$613

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

Noncontrolling Interests

The dollar value of noncontrolling interests for Entergy Louisiana as of March 31, 2023 and December 31, 2022 is presented below:

	2023	2022
	(In Thousands)
Entergy Louisiana Noncontrolling Interests
Restoration Law Trust I (a)	$31,813	$31,735
Restoration Law Trust II (b)	14,583	—
Total Noncontrolling Interests	$46,396	$31,735

(a)See Note 17 to the financial statements in the Form 10-K for discussion of Restoration Law Trust I.

(b)Restoration Law Trust II (the storm trust II) was established as part of the Act 293 securitization of Entergy Louisiana’s Hurricane Ida storm restoration costs. The storm trust II holds preferred membership interests issued by Entergy Finance Company, and Entergy Finance Company is required to make annual distributions (dividends) on the preferred membership interests. These annual dividends paid on the Entergy Finance Company preferred membership interests will be distributed 1% to the LURC and 99% to Entergy Louisiana. Entergy Louisiana, as the primary beneficiary, consolidates the storm trust II and the LURC’s 1% beneficial interest in noncontrolling interests in the consolidated financial statements for Entergy Louisiana and Entergy. See Note 2 to the financial statements herein for a discussion of the Entergy Louisiana March 2023 storm securitization.