Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, for Entergy Corporation and its Registrant Subsidiaries (Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy Resources). Entergy operates primarily through a single reportable segment, Utility, which generates, transmits, distributes, and sells electric power in portions of Arkansas, Mississippi, Texas, and Louisiana. The natural gas distribution businesses in Louisiana and New Orleans were sold on July 1, 2025, and are no longer included in operations.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | 2026 (YTD) | 2025 (YTD) | Change |
|---|---|---|---|
| Operating Revenues | $6.71 billion | $6.18 billion | +8.7% |
| Net Income Attributable to Entergy | $867.5 million | $828.7 million | +4.7% |
| Diluted Earnings Per Share | $1.87 | $1.87 | 0% |
| Operating Cash Flow | $2.72 billion | $1.80 billion | +51.4% |
| Investing Cash Flow | ($5.09 billion) | ($3.74 billion) | -36.1% |
| Financing Cash Flow | $4.30 billion | $2.26 billion | +90.3% |
| Debt to Capital Ratio | 65.2% | 64.3% | +0.9 pts |
| Cash and Cash Equivalents | $3.85 billion | $1.18 billion | +226% |
Material Changes vs. Prior Period
- Revenue Growth: Operating revenues increased by $536 million year-over-year. Drivers included higher retail electric prices (due to rate plan adjustments and riders), increased return on construction work in progress, and higher industrial usage (primarily data centers). This was partially offset by the absence of natural gas revenues following the 2025 sale of gas distribution businesses.
- Winter Storm Fern Impact: In January 2026, Winter Storm Fern caused severe infrastructure damage. Entergy incurred approximately $450 million in restoration costs ($375 million capital, $75 million non-capital). Natural gas purchases in January 2026 were $483 million compared to $207 million in January 2025 due to cold weather demand.
- Interest Expense: Interest expense increased significantly due to new debt issuances in early 2026 (including $1 billion by Entergy Arkansas, $1.5 billion by Entergy Louisiana, and $650 million by Entergy Mississippi) and higher carrying costs on customer advances.
- Capital Expenditures: Investing cash outflows increased by $1.35 billion, driven by higher non-nuclear generation construction (e.g., Jefferson Power Station, Richland Parish units) and storm restoration costs.
Guidance, Outlook, and Risks
- Capital Plan Update: Entergy updated its 2026-2030 capital plan, projecting total investments of approximately $66.5 billion. The 2026 plan is $13.2 billion, with significant increases in generation spending to meet demand from large-scale data centers.
- Data Center Demand: Entergy Louisiana entered into a service agreement with Meta Platforms (Evest LLC) for a second data center, requiring an application for seven new combined-cycle units (5,278 MW) at a cost of ~$12.9 billion. Entergy Mississippi also expanded agreements with Amazon Web Services.
- Regulatory Risks:
- FERC MSS-4R Proceeding: A June 2026 FERC order found a tariff violation regarding Net Operating Loss Carryforward (NOLC) ADIT. The order requires recalculations of bills from 2016-2023. The final financial impact (refunds vs. surcharges) remains unclear pending rehearing.
- Rate Cases: Entergy Arkansas is facing scrutiny on the prudence of costs for the Jefferson Power Station. Entergy Louisiana is seeking approval for the Cottonwood Power Station acquisition and new generation resources.
- Nuclear Oversight: Grand Gulf was placed in NRC Column 2 (regulatory response) in Q1 2026 due to a low safety significance finding regarding an emergency diesel generator. River Bend received a preliminary finding in July 2026 that may result in Column 2 placement.
Investor Verification Checklist
- Storm Cost Recovery: Verify the regulatory status and timeline for recovering the $450 million in Winter Storm Fern costs across Louisiana and Mississippi jurisdictions.
- FERC MSS-4R Outcome: Monitor the rehearing process for the FERC order regarding NOLC ADIT to determine if Entergy will owe material surcharges or receive refunds.
- Data Center Project Approvals: Track the LPSC approval process for Entergy Louisiana's $12.9 billion generation application and the associated service agreement with Meta.
- Capital Execution: Assess Entergy's ability to execute the updated $66.5 billion capital plan within budget, particularly given supply chain and labor constraints mentioned in risk factors.
- Debt Issuance Costs: Review the impact of recent high-interest debt issuances on future interest expense and cash flow coverage.