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4-Traders Homepage  >  Equities  >  Nyse  >  Entergy Corporation    ETR

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ENTERGY : DE/ (form 10-K)

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02/24/2017 | 07:25pm CET
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  Table of Contents

  Report of Independent Registered Public Accounting Firm                       320

Consolidated Income Statements For the Years Ended Part II. Item 8. 321 December 31, 2016, 2015, and 2014

Consolidated Statements of Cash Flows For the Years Ended Part II. Item 8. 323 December 31, 2016, 2015, and 2014

Consolidated Balance Sheets, December 31, 2016 and 2015 Part II. Item 8. 324

Consolidated Statements of Changes in Common Equity for Part II. Item 8. 326 the Years Ended December 31, 2016, 2015, and 2014

  Selected Financial Data - Five-Year Comparison             Part II. Item 6.   327
Entergy Louisiana, LLC and Subsidiaries
  Management's Financial Discussion and Analysis             Part II. Item 

7. 328

  Report of Independent Registered Public Accounting Firm                   

351

Consolidated Income Statements For the Years Ended Part II. Item 8. 353 December 31, 2016, 2015, and 2014

Consolidated Statements of Comprehensive Income For the Part II. Item 8. 354 Years Ended December 31, 2016, 2015, and 2014

Consolidated Statements of Cash Flows For the Years Ended Part II. Item 8. 355 December 31, 2016, 2015, and 2014

Consolidated Balance Sheets, December 31, 2016 and 2015 Part II. Item 8. 356

Consolidated Statements of Changes in Equity for the Years Part II. Item 8. 358 Ended December 31, 2016, 2015, and 2014

  Selected Financial Data - Five-Year Comparison             Part II. Item 6.   359
Entergy Mississippi, Inc.
  Management's Financial Discussion and Analysis             Part II. Item 

7. 360

  Report of Independent Registered Public Accounting Firm                   

375

Income Statements For the Years Ended December 31, 2016, Part II. Item 8. 376 2015, and 2014

Statements of Cash Flows For the Years Ended December 31, Part II. Item 8. 377 2016, 2015, and 2014

  Balance Sheets, December 31, 2016 and 2015                 Part II. Item 

8. 378

Statements of Changes in Common Equity for the Years Ended Part II. Item 8. 380 December 31, 2016, 2015, and 2014

  Selected Financial Data - Five-Year Comparison             Part II. Item 6.   381
Entergy New Orleans, Inc. and Subsidiaries
  Management's Financial Discussion and Analysis             Part II. Item 

7. 382

  Report of Independent Registered Public Accounting Firm                   

396

Consolidated Income Statements For the Years Ended Part II. Item 8. 397 December 31, 2016, 2015, and 2014

Consolidated Statements of Cash Flows For the Years Ended Part II. Item 8. 399 December 31, 2016, 2015, and 2014

Consolidated Balance Sheets, December 31, 2016 and 2015 Part II. Item 8. 400

Consolidated Statements of Changes in Common Equity for Part II. Item 8. 402 the Years Ended December 31, 2016, 2015, and 2014

  Selected Financial Data - Five-Year Comparison             Part II. Item 6.   403
Entergy Texas, Inc. and Subsidiaries
  Management's Financial Discussion and Analysis             Part II. Item 

7. 404

  Report of Independent Registered Public Accounting Firm                   

418

Consolidated Income Statements For the Years Ended Part II. Item 8. 419 December 31, 2016, 2015, and 2014

Consolidated Statements of Cash Flows For the Years Ended Part II. Item 8. 421 December 31, 2016, 2015, and 2014

Consolidated Balance Sheets, December 31, 2016 and 2015 Part II. Item 8. 422

Consolidated Statements of Changes in Common Equity for Part II. Item 8. 424 the Years Ended December 31, 2016, 2015, and 2014

  Selected Financial Data - Five-Year Comparison             Part II. Item 6.   425



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Table of Contents

System Energy Resources, Inc.

  Management's Financial Discussion and Analysis               Part II.     

426

                                                               Item 7.
  Report of Independent Registered Public Accounting Firm                   

435

Income Statements For the Years Ended December 31, 2016, Part II. 436 2015, and 2014

                                                 Item 8.

Statements of Cash Flows For the Years Ended December 31, Part II. 437 2016, 2015, and 2014

                                           Item 8.
  Balance Sheets, December 31, 2016 and 2015                   Part II.     

438

                                                               Item 8.

Statements of Changes in Common Equity for the Years Ended Part II. 440 December 31, 2016, 2015, and 2014

                              Item 8.
  Selected Financial Data - Five-Year Comparison               Part II.     441
                                                               Item 6.
  Properties                                                 Part I. Item   442
                                                                  2.
  Legal Proceedings                                          Part I. Item   442
                                                                  3.
  Mine Safety Disclosures                                    Part I. Item   442
                                                                  4.
  Executive Officers of Entergy Corporation                  Part I. and    

442

                                                              Part III.
                                                               Item 10.
  Market for Registrants' Common Equity and Related            Part II.     444
Stockholder Matters                                            Item 5.
  Selected Financial Data                                      Part II.     446
                                                               Item 6.
  Management's Discussion and Analysis of Financial            Part II.     

446

Condition and Results of Operations                            Item 7.

Quantitative and Qualitative Disclosures About Market Part II. 446 Risk

                                                           Item 7A.
  Financial Statements and Supplementary Data                  Part II.     

446

                                                               Item 8.
  Changes in and Disagreements with Accountants on             Part II.     

446

Accounting and Financial Disclosure                            Item 9.
  Controls and Procedures                                      Part II.     

446

                                                               Item 9A.

Attestation Report of Registered Public Accounting Firm Part II. 448

                                                               Item 9A.
  Directors and Executive Officers of the Registrants         Part III.     449
                                                               Item 10.
  Executive Compensation                                      Part III.     455
                                                               Item 11.

Security Ownership of Certain Beneficial Owners and Part III. 502 Management

                                                     Item 12.

Certain Relationships and Related Transactions and Part III. 506 Director Independence

                                          Item 13.
  Principal Accountant Fees and Services                      Part III.     

507

                                                               Item 14.
  Exhibits and Financial Statement Schedules                   Part IV.     510
                                                               Item 15.
  Form 10-K Summary                                            Part IV.     510
                                                               Item 16.
  Signatures                                                                511
  Consents of Independent Registered Public Accounting                      

518

Firm

  Report of Independent Registered Public Accounting Firm                   

519

  Index to Financial Statement Schedules                                    S-1
  Exhibit Index                                                             E-1



This combined Form 10-K is separately filed by Entergy Corporation and its six
"Registrant Subsidiaries:" Entergy Arkansas, Inc., Entergy Louisiana, LLC,
Entergy Mississippi, Inc., Entergy New Orleans, Inc., Entergy Texas, Inc., and
System Energy Resources, Inc. Information contained herein relating to any
individual company is filed by such company on its own behalf. Each company
makes representations only as to itself and makes no other representations
whatsoever as to any other company.

The report should be read in its entirety as it pertains to each respective
reporting company. No one section of the report deals with all aspects of the
subject matter. Separate Item 6, 7, and 8 sections are provided for each
reporting company, except for the Notes to the financial statements. The Notes
to the financial statements for all of the reporting companies are combined. All
Items other than 6, 7, and 8 are combined for the reporting companies.


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Table of Contents

                          FORWARD-LOOKING INFORMATION

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

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

• resolution of pending and future rate cases and negotiations, including

various performance-based rate discussions, Entergy's utility supply

plan, and recovery of fuel and purchased power costs;

• long-term risks and uncertainties associated with the termination of the

System Agreement in 2016, including the potential absence of federal

authority to resolve certain issues among the Utility operating companies

and their retail regulators;

• regulatory and operating challenges and uncertainties and economic risks

associated with the Utility operating companies' participation in MISO,

including the effect of current or projected MISO market rules and market

and system conditions in the MISO markets, the allocation of MISO system

transmission upgrade costs, and the effect of planning decisions that

MISO makes with respect to future transmission investments by the Utility

operating companies;

• changes in utility regulation, including the beginning or end of retail

and wholesale competition, the ability to recover net utility assets and

other potential stranded costs, and the application of more stringent

        transmission reliability requirements or market power criteria by the
        FERC or the U.S. Department of Justice;

• changes in the regulation or regulatory oversight of Entergy's nuclear

generating facilities and nuclear materials and fuel, including with

respect to the planned potential or actual shutdown of nuclear generating

facilities owned or operated by Entergy Wholesale Commodities, and the

effects of new or existing safety or environmental concerns regarding

nuclear power plants and nuclear fuel;

• resolution of pending or future applications, and related regulatory

        proceedings and litigation, for license renewals or modifications or
        other authorizations required of nuclear generating facilities and the
        effect of public and political opposition on these applications,
        regulatory proceedings, and litigation;

• the performance of and deliverability of power from Entergy's generation

        resources, including the capacity factors at its nuclear generating
        facilities;

• the operation and maintenance of Entergy's nuclear generating facilities

        require the commitment of substantial human and capital resources that
        can result in increased costs and capital expenditures;

Entergy's ability to develop and execute on a point of view regarding

        future prices of electricity, natural gas, and other energy-related
        commodities;

• prices for power generated by Entergy's merchant generating facilities

and the ability to hedge, meet credit support requirements for hedges,

sell power forward or otherwise reduce the market price risk associated

        with those facilities, including the Entergy Wholesale Commodities
        nuclear plants;

• the prices and availability of fuel and power Entergy must purchase for

        its Utility customers, and Entergy's ability to meet credit support
        requirements for fuel and power supply contracts;

• volatility and changes in markets for electricity, natural gas, uranium,

        emissions allowances, and other energy-related commodities, and the
        effect of those changes on Entergy and its customers;



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Table of Contents

                    FORWARD-LOOKING INFORMATION (Concluded)

•       changes in law resulting from federal or state energy legislation or
        legislation subjecting energy derivatives used in hedging and risk
        management transactions to governmental regulation;

• changes in environmental laws and regulations or associated litigation,

including requirements for reduced emissions of sulfur dioxide, nitrogen

oxide, greenhouse gases, mercury, particulate matter, heat, and other

regulated air and water emissions, and changes in costs of compliance

with environmental laws and regulations;

• the effects of changes in federal, state or local laws and regulations,

        and other governmental actions or policies, including changes in
        monetary, fiscal, tax, environmental, or energy policies;

• uncertainty regarding the establishment of interim or permanent sites for

spent nuclear fuel and nuclear waste storage and disposal and the level

        of spent fuel and nuclear waste disposal fees charged by the U.S.
        government or other providers related to such sites;

• variations in weather and the occurrence of hurricanes and other storms

and disasters, including uncertainties associated with efforts to

remediate the effects of hurricanes, ice storms, or other weather events

        and the recovery of costs associated with restoration, including
        accessing funded storm reserves, federal and local cost recovery
        mechanisms, securitization, and insurance;

• effects of climate change, including the potential for increases in sea

levels or coastal land and wetland loss;

• changes in the quality and availability of water supplies and the related

        regulation of water use and diversion;


•       Entergy's ability to manage its capital projects and operation and
        maintenance costs;

Entergy's ability to purchase and sell assets at attractive prices and on

other attractive terms;

• the economic climate, and particularly economic conditions in Entergy's

Utility service area and the Northeast United States and events and

circumstances that could influence economic conditions in those areas,

including power prices, and the risk that anticipated load growth may not

materialize;

• the effects of Entergy's strategies to reduce tax payments;

• changes in the financial markets and regulatory requirements for the

issuance of securities, particularly as they affect access to capital and

        Entergy's ability to refinance existing securities, execute share
        repurchase programs, and fund investments and acquisitions;

• actions of rating agencies, including changes in the ratings of debt and

        preferred stock, changes in general corporate ratings, and changes in the
        rating agencies' ratings criteria;

• changes in inflation and interest rates;

• the effect of litigation and government investigations or proceedings;


•       changes in technology, including with respect to new, developing, or
        alternative sources of generation;

• the effects, including increased security costs, of threatened or actual

terrorism, cyber-attacks or data security breaches, natural or man-made

        electromagnetic pulses that affect transmission or generation
        infrastructure, accidents, and war or a catastrophic event such as a
        nuclear accident or a natural gas pipeline explosion;

Entergy's ability to attract and retain talented management and directors;

• changes in accounting standards and corporate governance;

• declines in the market prices of marketable securities and resulting

funding requirements and the effects on benefits costs for Entergy's

defined benefit pension and other postretirement benefit plans;

• future wage and employee benefit costs, including changes in discount

rates and returns on benefit plan assets;

• changes in decommissioning trust fund values or earnings or in the timing

of, requirements for, or cost to decommission Entergy's nuclear plant

sites and the implementation of decommissioning of such sites following

shutdown;

• the decision to cease merchant power generation at all Entergy Wholesale

        Commodities nuclear power plants by as early as 2021, including the
        implementation of the planned shutdown of Pilgrim, Palisades, Indian
        Point 2, and Indian Point 3 and the planned shutdown or sale of
        FitzPatrick;

• the effectiveness of Entergy's risk management policies and procedures

        and the ability and willingness of its counterparties to satisfy their
        financial and performance commitments;

• factors that could lead to impairment of long-lived assets; and

• the ability to successfully complete strategic transactions Entergy may

undertake, including mergers, acquisitions, or divestitures, regulatory

or other limitations imposed as a result of any such strategic

transaction, and the success of the business following any such strategic

        transaction.



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Table of Contents

                                  DEFINITIONS

Certain abbreviations or acronyms used in the text and notes are defined below:
Abbreviation or                                 Term
Acronym

AFUDC                Allowance for Funds Used During Construction
ALJ                  Administrative Law Judge
ANO 1 and 2          Units 1 and 2 of Arkansas Nuclear One (nuclear), owned by
                     Entergy Arkansas
APSC                 Arkansas Public Service Commission
ASLB                 Atomic Safety and Licensing Board, the board within the NRC
                     that conducts hearings and performs other regulatory
                     functions that the NRC authorizes
ASU                  Accounting Standards Update issued by the FASB
Board                Board of Directors of Entergy Corporation
Cajun                Cajun Electric Power Cooperative, Inc.
capacity factor      Actual plant output divided by maximum potential plant
                     output for the period
City Council         Council of the City of New Orleans, Louisiana
D. C. Circuit        U.S. Court of Appeals for the District of Columbia Circuit
DOE                  United States Department of Energy
Entergy              Entergy Corporation and its direct and indirect
                     subsidiaries
Entergy Corporation  Entergy Corporation, a Delaware corporation
Entergy Gulf States, Predecessor company for financial reporting purposes to
Inc.                 Entergy Gulf States Louisiana that included the assets and
                     business operations of both Entergy Gulf States Louisiana
                     and Entergy Texas
Entergy Gulf States  Entergy Gulf States Louisiana, L.L.C., a Louisiana limited
Louisiana            liability company formally created as part of the
                     jurisdictional separation of Entergy Gulf States, Inc. and
                     the successor company to Entergy Gulf States, Inc. for
                     financial reporting purposes. The term is also used to
                     refer to the Louisiana jurisdictional business of Entergy
                     Gulf States, Inc., as the context requires. Effective
                     October 1, 2015, the business of Entergy Gulf States
                     Louisiana was combined with Entergy Louisiana.
Entergy Louisiana    Entergy Louisiana, LLC, a Texas limited liability company
                     formally created as part of the combination of Entergy Gulf
                     States Louisiana and the company formerly known as Entergy
                     Louisiana, LLC (Old Entergy Louisiana) into a single public
                     utility company and the successor to Old Entergy Louisiana
                     for financial reporting purposes.
Entergy Texas        Entergy Texas, Inc., a Texas corporation formally created
                     as part of the jurisdictional separation of Entergy Gulf
                     States, Inc. The term is also used to refer to the Texas
                     jurisdictional business of Entergy Gulf States, Inc., as
                     the context requires.
Entergy Wholesale    Entergy's non-utility business segment primarily comprised
Commodities          of the ownership, operation, and decommissioning of nuclear
                     power plants, the ownership of interests in non-nuclear
                     power plants, and the sale of the electric power produced
                     by its operating power plants to wholesale customers
EPA                  United States Environmental Protection Agency
ERCOT                Electric Reliability Council of Texas
FASB                 Financial Accounting Standards Board
FERC                 Federal Energy Regulatory Commission
FitzPatrick          James A. FitzPatrick Nuclear Power Plant (nuclear), owned
                     by an Entergy subsidiary in the Entergy Wholesale
                     Commodities business segment
Grand Gulf           Unit No. 1 of Grand Gulf Nuclear Station (nuclear), 90%
                     owned or leased by System Energy



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  Table of Contents

                            DEFINITIONS (Continued)

Abbreviation or                                 Term
Acronym

GWh                  Gigawatt-hour(s), which equals one million kilowatt-hours
Independence         Independence Steam Electric Station (coal), owned 16% by
                     Entergy Arkansas, 25% by Entergy Mississippi, and 7% by
                     Entergy Power, LLC
Indian Point 2       Unit 2 of Indian Point Energy Center (nuclear), owned by an
                     Entergy subsidiary in the Entergy Wholesale Commodities
                     business segment
Indian Point 3       Unit 3 of Indian Point Energy Center (nuclear), owned by an
                     Entergy subsidiary in the Entergy Wholesale Commodities
                     business segment
IRS                  Internal Revenue Service
ISO                  Independent System Operator
kV                   Kilovolt
kW                   Kilowatt, which equals one thousand watts
kWh                  Kilowatt-hour(s)
LDEQ                 Louisiana Department of Environmental Quality
LPSC                 Louisiana Public Service Commission
Mcf                  1,000 cubic feet of gas
MISO                 Midcontinent Independent System Operator, Inc., a regional
                     transmission organization
MMBtu                One million British Thermal Units
MPSC                 Mississippi Public Service Commission
MW                   Megawatt(s), which equals one thousand kilowatts
MWh                  Megawatt-hour(s)
Nelson Unit 6        Unit No. 6 (coal) of the Nelson Steam Electric Generating
                     Station, 70% of which is co-owned by Entergy Louisiana
                     (57.5%) and Entergy Texas (42.5%) and 10.9% of which is
                     owned by an Entergy subsidiary in the Entergy Wholesale
                     Commodities business segment
Net debt to net      Gross debt less cash and cash equivalents divided by total
capital ratio        capitalization less cash and cash equivalents
Net MW in operation  Installed capacity owned and operated
NRC                  Nuclear Regulatory Commission
NYPA                 New York Power Authority
Palisades            Palisades Nuclear Plant (nuclear), owned by an Entergy
                     subsidiary in the Entergy Wholesale Commodities business
                     segment
Parent & Other       The portions of Entergy not included in the Utility or
                     Entergy Wholesale Commodities segments, primarily
                     consisting of the activities of the parent company, Entergy
                     Corporation
Pilgrim              Pilgrim Nuclear Power Station (nuclear), owned by an
                     Entergy subsidiary in the Entergy Wholesale Commodities
                     business segment
PPA                  Purchased power agreement or power purchase agreement
PRP                  Potentially responsible party (a person or entity that may
                     be responsible for remediation of environmental
                     contamination)
PUCT                 Public Utility Commission of Texas
Registrant           Entergy Arkansas, Inc., Entergy Louisiana, LLC, Entergy
Subsidiaries         Mississippi, Inc., Entergy New Orleans, Inc., Entergy
                     Texas, Inc., and System Energy Resources, Inc.



                                      vii

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  Table of Contents

                            DEFINITIONS (Concluded)

Abbreviation or                                 Term
Acronym

River Bend           River Bend Station (nuclear), owned by Entergy Louisiana
RTO                  Regional transmission organization
SEC                  Securities and Exchange Commission
System Agreement     Agreement, effective January 1, 1983, as modified, among
                     the Utility operating companies relating to the sharing of
                     generating capacity and other power resources. The
                     agreement terminated effective August 2016.
System Energy        System Energy Resources, Inc.
TWh                  Terawatt-hour(s), which equals one billion kilowatt-hours
Unit Power Sales     Agreement, dated as of June 10, 1982, as amended and
Agreement            approved by FERC, among Entergy Arkansas, Entergy
                     Louisiana, Entergy Mississippi, Entergy New Orleans, and
                     System Energy, relating to the sale of capacity and energy
                     from System Energy's share of Grand Gulf
Utility              Entergy's business segment that generates, transmits,
                     distributes, and sells electric power, with a small amount
                     of natural gas distribution
Utility operating    Entergy Arkansas, Entergy Louisiana, Entergy Mississippi,
companies            Entergy New Orleans, and Entergy Texas
Vermont Yankee       Vermont Yankee Nuclear Power Station (nuclear), owned by an
                     Entergy subsidiary in the Entergy Wholesale Commodities
                     business segment, which ceased power production in December
                     2014
Waterford 3          Unit No. 3 (nuclear) of the Waterford Steam Electric
                     Station, 100% owned or leased by Entergy Louisiana
weather-adjusted     Electric usage excluding the effects of deviations from
usage                normal weather
White Bluff          White Bluff Steam Electric Generating Station, 57% owned by
                     Entergy Arkansas





                                      viii

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  Table of Contents

                      ENTERGY CORPORATION AND SUBSIDIARIES

                 MANAGEMENT'S FINANCIAL DISCUSSION AND ANALYSIS

Entergy operates primarily through two business segments: Utility and Entergy Wholesale Commodities.

• The Utility business segment includes the generation, transmission,

distribution, and sale of electric power in portions of Arkansas,

Mississippi, Texas, and Louisiana, including the City of New Orleans; and

operation of a small natural gas distribution business.

The Entergy Wholesale Commodities business segment includes the ownership,

operation, and decommissioning of nuclear power plants located in the

northern United States and the sale of the electric power produced by its

operating plants to wholesale customers. Entergy Wholesale Commodities

also provides services to other nuclear power plant owners and owns

interests in non-nuclear power plants that sell the electric power

produced by those plants to wholesale customers. See "Entergy Wholesale

Commodities Exit from the Merchant Power Business" below for discussion of

       the operation and planned shutdown or sale of each of the Entergy
       Wholesale Commodities nuclear power plants.



Following are the percentages of Entergy's consolidated revenues and net income
generated by its operating segments and the percentage of total assets held by
them.
                                    % of Revenue             % of Net Income (Loss)         % of Total Assets
           Segment               2016      2015   2014       2016       2015     2014      2016    2015    2014
Utility                         83          82     78         204        711       88       89      86      82
Entergy Wholesale Commodities   17          18     22        (265 )     (680 )     31       15      18      22
Parent & Other                   -           -      -         (39 )     (131 )    (19 )     (4 )    (4 )    (4 )


See Note 13 to the financial statements for further financial information regarding Entergy's business segments.


Net income (loss) for 2016 includes $2,836 million ($1,829 million net-of-tax)
of impairment and related charges primarily to write down the carrying values of
the Entergy Wholesale Commodities' Palisades, Indian Point 2, and Indian Point 3
plants and related assets to their fair values. Net income (loss) for 2015
includes $2,036 million ($1,317 million net-of-tax) of impairment and related
charges primarily to write down the carrying values of the Entergy Wholesale
Commodities' FitzPatrick, Pilgrim, and Palisades plants and related assets to
their fair values. See Note 14 to the financial statements for further
discussion of the impairment and related charges.




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  Table of Contents
Entergy Corporation and Subsidiaries
Management's Financial Discussion and Analysis


Results of Operations

2016 Compared to 2015

Following are income statement variances for Utility, Entergy Wholesale Commodities, Parent & Other, and Entergy comparing 2016 to 2015 showing how much the line item increased or (decreased) in comparison to the prior period.

                                                         Entergy
                                                        Wholesale        Parent &
                                       Utility         Commodities       Other (a)        Entergy
                                                             (In Thousands)

2015 Consolidated Net Income (Loss) $1,114,516 ($1,065,657 ) ($205,593 ) ($156,734 )


Net revenue (operating revenue less
fuel expense, purchased power, and
other regulatory charges/credits)        350,528          (123,791 )           (33 )       226,704
Other operation and maintenance          (83,265 )          15,269           9,726         (58,270 )
Asset write-offs, impairments, and
related charges                          (68,672 )         799,403               -         730,731
Taxes other than income taxes            (10,229 )         (16,259 )          (432 )       (26,920 )
Depreciation and amortization             49,600           (39,180 )          (509 )         9,911
Gain on sale of asset                          -          (154,037 )             -        (154,037 )
Other income                              15,153             8,666           4,281          28,100
Interest expense                          14,414            (3,930 )        12,417          22,901
Other expenses                            19,589           (15,074 )             -           4,515
Income taxes                             407,627          (581,924 )       

(35 ) (174,332 ) 2016 Consolidated Net Income (Loss) $1,151,133 ($1,493,124 ) ($222,512 ) ($564,503 )

(a) Parent & Other includes eliminations, which are primarily intersegment

       activity.



Refer to "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON OF ENTERGY CORPORATION
AND SUBSIDIARIES" which accompanies Entergy Corporation's financial statements
in this report for further information with respect to operating statistics.

Results of operations for 2016 include $2,836 million ($1,829 million
net-of-tax) of impairment and related charges primarily to write down the
carrying values of the Entergy Wholesale Commodities' Palisades, Indian Point 2,
and Indian Point 3 plants and related assets to their fair values. See Note 14
to the financial statements for further discussion of the impairment and related
charges. Results of operations for 2016 also include a reduction of income tax
expense, net of unrecognized tax benefits, of $238 million as a result of a tax
election to treat a subsidiary that owns one of the Entergy Wholesale
Commodities nuclear power plants as a corporation for federal income tax
purposes; income tax benefits as a result of the settlement of the 2010-2011 IRS
audit, including a $75 million tax benefit recognized by Entergy Louisiana
related to the treatment of the Vidalia purchased power agreement and a $54
million net benefit recognized by Entergy Louisiana related to the treatment of
proceeds received in 2010 for the financing of Hurricane Gustav and Hurricane
Ike storm costs pursuant to Louisiana Act 55; and a reduction in expenses of
$100 million ($64 million net-of-tax) due to the effects of recording in 2016
the final court decisions in several lawsuits against the DOE related to spent
nuclear fuel storage costs. See Note 3 to the financial statements for
additional discussion of the income tax items. See Note 8 to the financial
statements for discussion of the spent nuclear fuel litigation.

Results of operations for 2015 include $2,036 million ($1,317 million net-of-tax) of impairment and related charges primarily to write down the carrying values of the Entergy Wholesale Commodities' FitzPatrick, Pilgrim, and

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  Table of Contents
                                            Entergy Corporation and Subsidiaries
                                  Management's Financial Discussion and Analysis

Palisades plants and related assets to their fair values. See Note 14 to the
financial statements for further discussion of the impairment and related
charges. As a result of the Entergy Louisiana and Entergy Gulf States Louisiana
business combination, results of operations for 2015 also include two items that
occurred in October 2015: 1) a deferred tax asset and resulting net increase in
tax basis of approximately $334 million and 2) a regulatory liability of $107
million ($66 million net-of-tax) as a result of customer credits to be realized
by electric customers of Entergy Louisiana, consistent with the terms of the
stipulated settlement in the business combination proceeding. See Note 2 to the
financial statements for further discussion of the business combination and
customer credits. Results of operations for 2015 also include the sale in
December 2015 of the 583 MW Rhode Island State Energy Center for a realized gain
of $154 million ($100 million net-of-tax) on the sale and the $77 million ($47
million net-of-tax) write-off and regulatory charges to recognize that a portion
of the assets associated with the Waterford 3 replacement steam generator
project is no longer probable of recovery. See Note 14 to the financial
statements for further discussion of the Rhode Island State Energy Center sale.
See Note 2 to the financial statements for further discussion of the Waterford 3
write-off.

Net Revenue

Utility

Following is an analysis of the change in net revenue comparing 2016 to 2015.
                                                    Amount
                                                 (In Millions)

2015 net revenue                                       $5,829
Retail electric price                                     289
Louisiana business combination customer credits           107
Volume/weather                                             14
Louisiana Act 55 financing savings obligation             (17 )
Other                                                     (43 )
2016 net revenue                                       $6,179


The retail electric price variance is primarily due to:

• an increase in base rates at Entergy Arkansas, as approved by the APSC.

The new rates were effective February 24, 2016 and began billing with the

       first billing cycle of April 2016. The increase includes an interim base
       rate adjustment surcharge, effective with the first billing cycle of April
       2016, to recover the incremental revenue requirement for the period
       February 24, 2016 through March 31, 2016. A significant portion of the
       increase is related to the purchase of Power Block 2 of the Union Power
       Station;

• an increase in the purchased power and capacity acquisition cost recovery

rider for Entergy New Orleans, as approved by the City Council, effective

       with the first billing cycle of March 2016, primarily related to the
       purchase of Power Block 1 of the Union Power Station;


•      an increase in formula rate plan revenues for Entergy Louisiana,
       implemented with the first billing cycle of March 2016, to collect the
       estimated first-year revenue requirement related to the purchase of Power
       Blocks 3 and 4 of the Union Power Station; and


•      an increase in revenues at Entergy Mississippi, as approved by the MPSC,
       effective with the first billing cycle of July 2016, and an increase in
       revenues collected through the storm damage rider.


See Note 2 to the financial statements for further discussion of the rate proceedings. See Note 14 to the financial statements for discussion of the Union Power Station purchase.

The Louisiana business combination customer credits variance is due to a regulatory liability of $107 million recorded by Entergy in October 2015 as a result of the Entergy Gulf States Louisiana and Entergy Louisiana business

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Management's Financial Discussion and Analysis


combination. Consistent with the terms of the stipulated settlement in the
business combination proceeding, electric customers of Entergy Louisiana will
realize customer credits associated with the business combination; accordingly,
in October 2015, Entergy recorded a regulatory liability of $107 million ($66
million net-of-tax). These costs are being amortized over a nine-year period
beginning December 2015. See Note 2 to the financial statements for further
discussion of the business combination and customer credits.

The volume/weather variance is primarily due to the effect of more favorable
weather during the unbilled period and an increase in industrial usage,
partially offset by the effect of less favorable weather on residential sales.
The increase in industrial usage is primarily due to expansion projects,
primarily in the chemicals industry, and increased demand from new customers,
primarily in the industrial gases industry.

The Louisiana Act 55 financing savings obligation variance results from a
regulatory charge for tax savings to be shared with customers per an agreement
approved by the LPSC. The tax savings results from the 2010-2011 IRS audit
settlement on the treatment of the Louisiana Act 55 financing of storm costs for
Hurricane Gustav and Hurricane Ike. See Note 3 to the financial statements for
additional discussion of the settlement and benefit sharing.

Included in Other is a provision of $23 million recorded in 2016 related to the
settlement of the Waterford 3 replacement steam generator prudence review
proceeding, offset by a provision of $32 million recorded in 2015 related to the
uncertainty at that time associated with the resolution of the Waterford 3
replacement steam generator prudence review proceeding.  See Note 2 to the
financial statements for a discussion of the Waterford 3 replacement steam
generator prudence review proceeding.

Entergy Wholesale Commodities


Following is an analysis of the change in net revenue comparing 2016 to 2015.
                                        Amount
                                     (In Millions)

2015 net revenue                           $1,666
Nuclear realized price changes               (149 )
Rhode Island State Energy Center              (44 )
Nuclear volume                                (36 )
FitzPatrick reimbursement agreement            41
Nuclear fuel expenses                          68
Other                                          (4 )
2016 net revenue                           $1,542


As shown in the table above, net revenue for Entergy Wholesale Commodities decreased by approximately $124 million in 2016 primarily due to:

• lower realized wholesale energy prices and lower capacity prices, although

the average revenue per MWh shown in the table below for the nuclear fleet

is slightly higher because it includes revenues from the FitzPatrick

reimbursement agreement with Exelon, the amortization of the Palisades

below-market PPA, and Vermont Yankee capacity revenue. The effect of the

amortization of the Palisades below-market PPA and Vermont Yankee capacity

       revenue on the net revenue variance from 2015 to 2016 is minimal;


•      the sale of the Rhode Island State Energy Center in December 2015. See
       Note 14 to the financial statements for further discussion of the Rhode
       Island State Energy Center sale; and

• lower volume in the Entergy Wholesale Commodities nuclear fleet resulting

from more refueling outage days in 2016 as compared to 2015 and larger

exercise of resupply options in 2016 as compared to 2015. See "Nuclear




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Matters - Indian Point 2 Outage" below for discussion of the extended Indian Point 2 outage in the second quarter 2016.

The decrease was partially offset by:

•      an increase resulting from the reimbursement agreement with Exelon
       pursuant to which Exelon is reimbursing Entergy for specified
       out-of-pocket costs associated with preparing for the refueling and
       operation of FitzPatrick that otherwise would have been avoided had
       Entergy shut down FitzPatrick in January 2017. Revenues received from
       Exelon under the reimbursement agreement are offset in nuclear fuel

expenses and other operation and maintenance expenses and have no material

effect on net income. See "Entergy Wholesale Commodities Exit from the

Merchant Power Business - Planned Sale of FitzPatrick" below for further

discussion of the reimbursement agreement; and

• a decrease in nuclear fuel expenses primarily related to the impairments

of the FitzPatrick, Pilgrim, and Palisades plants and related assets. See

Note 14 to the financial statements for discussion of the impairments.




Following are key performance measures for Entergy Wholesale Commodities for
2016 and 2015.
                                             2016     2015
Owned capacity (MW) (a)                     4,800    4,880
GWh billed                                  35,881   39,745
Average revenue per MWh                     $51.55   $51.88

Entergy Wholesale Commodities Nuclear Fleet
Capacity factor                              87%      91%
GWh billed                                  33,551   35,859
Average revenue per MWh                     $51.90   $51.49
Refueling Outage Days:
FitzPatrick                                   -        -
Indian Point 2                               102       -
Indian Point 3                                -        23
Palisades                                     -        32
Pilgrim                                       -        34


(a)    The reduction in owned capacity is due to Entergy's sale of its 50%
       membership interest in Top Deer Wind Ventures, LLC in November 2016. See
       Note 14 to the financial statements for discussion of the sale.



Other Income Statement Items

Utility

Other operation and maintenance expenses decreased from $2,443 million for 2015 to $2,360 million for 2016 primarily due to:

• a decrease of $78 million in compensation and benefits costs primarily due

to a decrease in net periodic pension and other postretirement benefits

costs as a result of an increase in the discount rate used to value the

benefit liabilities and a refinement in the approach used to estimate the

       service cost and interest cost components of pension and other
       postretirement costs. See "Critical Accounting Estimates" below and Note
       11 to the financial statements for further discussion of pension and other
       postretirement benefit costs;

• the effects of recording final court decisions in several lawsuits against

the DOE related to spent nuclear fuel storage costs. The damages awarded

include the reimbursement of approximately $19 million of spent nuclear




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fuel storage costs previously recorded as other operation and maintenance expense. See Note 8 to the financial statements for discussion of the spent nuclear fuel litigation; • the deferral in 2016 of $8 million of previously-incurred costs related to

ANO post-Fukushima compliance and $10 million of previously-incurred costs

related to ANO flood barrier compliance, as approved by the APSC in

February 2016 as part of the Entergy Arkansas 2015 rate case settlement.

These costs are being amortized over a ten-year period beginning March

2016. See Note 2 to the financial statements for further discussion of the

       rate case settlement; and


•      a decrease of $13 million in energy efficiency costs, including the
       effects of true-ups to energy efficiency filings for fixed costs to be
       collected from customers and incentives recognized as a result of
       participation in energy efficiency programs.


The decrease was partially offset by an increase of $61 million in nuclear generation expenses primarily due to higher nuclear labor costs, including contract labor, and an overall higher scope of work done during plant outages in 2016 as compared to prior year.

The asset write-offs, impairments, and related charges variance is due to the following activity:

• the $45 million ($28 million net-of-tax) write-off in 2015 to recognize

that a portion of the assets associated with the Waterford 3 replacement

       steam generator project was no longer probable of recovery; and


•      the $23.5 million ($15.3 million net-of-tax) write-off in 2015 of the
       regulatory asset associated with the Spindletop gas storage facility as a

result of the approval of the System Agreement termination settlement

       agreement.



See Note 2 to the financial statements for further discussion of the asset write-offs.


Depreciation and amortization expenses increased primarily due to additions to
plant in service, including the Union Power Station purchased in March 2016,
partially offset by the effects of recording the final court decisions in
several lawsuits against the DOE related to spent nuclear fuel storage costs.
The damages awarded include the reimbursement of approximately $11 million in
2016 of spent nuclear fuel storage costs previously recorded as depreciation.
See Note 8 to the financial statements for discussion of the spent nuclear fuel
litigation.

Other expenses increased primarily due to an increase in nuclear refueling
outage expenses as a result of amortization of higher costs associated with
refueling outages and increases in decommissioning expenses in 2016 primarily
due to revised decommissioning cost studies in 2015 for Grand Gulf and Waterford
3. See Note 9 to the financial statements for further discussion of the revised
decommissioning cost studies.

Entergy Wholesale Commodities

Other operation and maintenance expenses increased from $899 million for 2015 to $915 million for 2016 primarily due to:

• an increase of $60 million in severance and retention costs related to the

planned shutdown or sale of the Pilgrim and FitzPatrick plants. See

"Entergy Wholesale Commodities Exit From the Merchant Power Business"

       below and Note 14 to the financial statements for discussion of the
       decisions to cease operations of the plants;

$41 million associated with preparing to refuel FitzPatrick in January

       2017. Exelon reimbursed Entergy for these costs in accordance with the
       reimbursement agreement discussed in "Entergy Wholesale Commodities Exit

From the Merchant Power Business - Planned Sale of FitzPatrick" below; and

• an increase of $26 million in costs related to Pilgrim's response to a

planned NRC enhanced inspection as a result of the NRC placing Pilgrim in

       its "multiple/repetitive degraded cornerstone column" (Column 4) of its
       Reactor Oversight Process Action Matrix in September 2015. See Note 8 to
       the financial statements for further discussion of the NRC's decision and
       Pilgrim's response.



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The increase was partially offset by:

• the effects of recording the final court decisions in several lawsuits

against the DOE related to spent nuclear fuel storage costs. The damages

awarded include the reimbursement of approximately $60 million in 2016

compared to the reimbursement of approximately $2 million in 2015 of spent

       nuclear fuel storage costs previously recorded as other operation and
       maintenance expenses. See Note 8 to the financial statements for
       discussion of the spent nuclear fuel litigation;

• a decrease of $32 million as a result of the sale of the Rhode Island

State Energy Center in December 2015. See Note 14 to the financial

statements for further discussion of the Rhode Island State Energy Center

sale; and

• a decrease of $21 million in compensation and benefits costs primarily due

to a decrease in net periodic pension and other postretirement benefits

costs as a result of an increase in the discount rate used to value the

benefit liabilities and a refinement in the approach used to estimate the

       service cost and interest cost components of pension and other
       postretirement costs. See "Critical Accounting Estimates" below and Note
       11 to the financial statements for further discussion of pension and other
       postretirement benefit costs.



The asset write-offs, impairments, and related charges variance is due to $2,836
million ($1,829 million net-of-tax) in 2016 of impairment and related charges
primarily to write down the carrying values of the Entergy Wholesale
Commodities' Palisades, Indian Point 2, and Indian Point 3 plants and related
assets to their fair values, partially offset by $2,036 million ($1,317 million
net-of-tax) in 2015 of impairment and related charges primarily to write down
the carrying values of the Entergy Wholesale Commodities' FitzPatrick, Pilgrim,
and Palisades plants and related assets to their fair values. See Note 14 to the
financial statements for further discussion of these charges.

Depreciation and amortization expenses decreased primarily due to:

• decreases in depreciable asset balances as a result of the impairments of

       the FitzPatrick, Pilgrim, and Palisades plants. See Note 14 to the
       financial statements for further discussion of the impairments;

• the effects of recording the final court decisions in several lawsuits

against the DOE related to spent nuclear fuel storage costs. The damages

awarded include the reimbursement of approximately $15 million in 2016

compared to the reimbursement of approximately $4 million in 2015 of spent

nuclear fuel storage costs previously recorded as depreciation. See Note 8

to the financial statements for discussion of the spent nuclear fuel

litigation; and

• a decrease in depreciable asset balances as a result of the sale of the

Rhode Island State Energy Center in December 2015. See Note 14 to the

financial statements for further discussion of the Rhode Island State

       Energy Center sale.



The gain on sale of asset resulted from the sale in December 2015 of the 583 MW
Rhode Island State Energy Center in Johnston, Rhode Island, a business
wholly-owned by Entergy in the Entergy Wholesale Commodities segment. Entergy
sold Rhode Island State Energy Center for approximately $490 million and
realized a pre-tax gain of $154 million on the sale. See Note 14 to the
financial statements for further discussion of the Rhode Island State Energy
Center sale.

Other expenses decreased primarily due to the reduction in deferred refueling
outage amortization costs related to the impairments of the FitzPatrick,
Pilgrim, and Palisades plants and related assets, partially offset by increases
in decommissioning expenses primarily as a result of a trust transfer agreement
Entergy entered into with NYPA in August 2016 to transfer the decommissioning
trusts and decommissioning liabilities for the Indian Point 3 and FitzPatrick
plants to Entergy and a revision to the estimated decommissioning cost liability
for the Entergy Wholesale Commodities' Pilgrim plant as a result of a revised
decommissioning cost study in 2015. See Note 14 to the financial statements for
further discussion of the impairments and related charges and Note 9 to the
financial statements for further discussion of nuclear decommissioning costs.


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Management's Financial Discussion and Analysis


Income Taxes

See Note 3 to the financial statements for a reconciliation of the federal statutory rate of 35% to the effective income tax rates, and for additional discussion regarding income taxes.


The effective income tax rate for 2016 was 59.1%.  The difference in the
effective income tax rate versus the statutory rate of 35% for 2016 was
primarily due to a tax election to treat a subsidiary that owns one of the
Entergy Wholesale Commodities nuclear power plants as a corporation for federal
income tax purposes and the reversal of a portion of the provision for uncertain
tax positions as a result of the settlement of the 2010-2011 IRS audit,
partially offset by state income taxes and certain book and tax differences
related to utility plant items. See Note 3 to the financial statements for
additional discussion of the tax election, the tax settlement, and a
reconciliation of the federal statutory rate of 35% to the effective income tax
rate.

The effective income tax rate for 2015 was 80.4%.  The difference in the
effective income tax rate versus the statutory rate of 35% for 2015 was
primarily due to the tax effects of the Louisiana business combination. See Note
3 to the financial statements for further discussion of the tax effects of the
Louisiana business combination and a reconciliation of the federal statutory
rate of 35% to the effective income tax rate.

2015 Compared to 2014

Following are income statement variances for Utility, Entergy Wholesale Commodities, Parent & Other, and Entergy comparing 2015 to 2014 showing how much the line item increased or (decreased) in comparison to the prior period.

                                                         Entergy
                                                        Wholesale
                                       Utility         Commodities      Parent & Other       Entergy
                                                              (In Thousands)

2014 Consolidated Net Income (Loss) $846,496 $294,521 ($180,760 ) $960,257


Net revenue (operating revenue less
fuel expense, purchased power, and
other regulatory charges/credits)         94,195          (558,060 )           (1,885 )      (465,750 )
Other operation and maintenance          166,812          (123,645 )            1,278          44,445
Asset write-offs, impairments, and
related charges                           (3,553 )       1,928,707                  -       1,925,154
Taxes other than income taxes             35,010           (20,196 )                2          14,816
Depreciation and amortization             57,076           (36,892 )           (1,546 )        18,638
Gain on sale of asset                          -           154,037                  -         154,037
Other income                              (3,993 )          (4,899 )          (18,607 )       (27,499 )
Interest expense                          11,403            10,142             (5,583 )        15,962
Other expenses                            10,821           (19,533 )                -          (8,712 )
Income taxes                            (455,387 )        (787,327 )       

10,190 (1,232,524 ) 2015 Consolidated Net Income (Loss) $1,114,516 ($1,065,657 ) ($205,593 ) ($156,734 )




Refer to "SELECTED FINANCIAL DATA - FIVE-YEAR COMPARISON OF ENTERGY CORPORATION
AND SUBSIDIARIES" which accompanies Entergy Corporation's financial statements
in this report for further information with respect to operating statistics.

Results of operations for 2015 include $2,036 million ($1,317 million
net-of-tax) of impairment and related charges to write down the carrying values
of certain Entergy Wholesale Commodities' plants and related assets to their
fair values. See Note 14 to the financial statements for further discussion of
the impairment and related charges. As

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a result of the Entergy Louisiana and Entergy Gulf States Louisiana business
combination, results of operations for 2015 also include two items that occurred
in October 2015: 1) a deferred tax asset and resulting net increase in tax basis
of approximately $334 million and 2) a regulatory liability of $107 million ($66
million net-of-tax) as a result of customer credits to be realized by electric
customers of Entergy Louisiana, consistent with the terms of the stipulated
settlement in the business combination proceeding. See Note 2 to the financial
statements for further discussion of the business combination and customer
credits. Results of operations for 2015 also include the sale in December 2015
of the 583 MW Rhode Island State Energy Center for a realized gain of $154
million ($100 million net-of-tax) on the sale and the $77 million ($47 million
net-of-tax) write-off and regulatory charges to recognize that a portion of the
assets associated with the Waterford 3 replacement steam generator project is no
longer probable of recovery. See Note 14 to the financial statements for further
discussion of the Rhode Island State Energy Center sale. See Note 2 to the
financial statements for further discussion of the Waterford 3 write-off.

Results of operations for 2014 include $154 million ($100 million net-of-tax) of
charges related to Vermont Yankee primarily resulting from the effects of an
updated decommissioning cost study completed in the third quarter 2014 along
with reassessment of the assumptions regarding the timing of decommissioning
cash flows and severance and employee retention costs. See Note 14 to the
financial statements for further discussion of the charges. Results of
operations for 2014 also include the $56.2 million ($36.7 million net-of-tax)
write-off in 2014 of Entergy Mississippi's regulatory asset associated with new
nuclear generation development costs as a result of a joint stipulation entered
into with the Mississippi Public Utilities Staff, subsequently approved by the
MPSC, in which Entergy Mississippi agreed not to pursue recovery of the costs
deferred by an MPSC order in the new nuclear generation docket. See Note 2 to
the financial statements for further discussion of the new nuclear generation
development costs and the joint stipulation.

Net Revenue

Utility


Following is an analysis of the change in net revenue comparing 2015 to 2014.
                                                      Amount
                                                   (In Millions)

2014 net revenue                                         $5,735
Retail electric price                                       187
Volume/weather                                               95
Waterford 3 replacement steam generator provision           (32 )
MISO deferral                                               (35 )
Louisiana business combination customer credits            (107 )
Other                                                       (14 )
2015 net revenue                                         $5,829


The retail electric price variance is primarily due to:

• formula rate plan increases at Entergy Louisiana, as approved by the LPSC,

effective December 2014 and January 2015;

• an increase in energy efficiency rider revenue primarily due to increases

in the energy efficiency rider at Entergy Arkansas, as approved by the

APSC, effective July 2015 and July 2014, and new energy efficiency riders

at Entergy Louisiana and Entergy Mississippi that began in the fourth

       quarter 2014; and


•      an annual net rate increase at Entergy Mississippi of $16 million,
       effective February 2015, as a result of the MPSC order in the June 2014
       rate case.


See Note 2 to the financial statements for a discussion of rate and regulatory proceedings.

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The volume/weather variance is primarily due to an increase of 1,402 GWh, or 1%,
in billed electricity usage, including an increase in industrial usage and the
effect of more favorable weather. The increase in industrial sales was primarily
due to expansion in the chemicals industry and the addition of new customers,
partially offset by decreased demand primarily due to extended maintenance
outages for existing chemicals customers.

The Waterford 3 replacement steam generator provision is due to a regulatory
charge of approximately $32 million recorded in 2015 related to the uncertainty
associated with the resolution of the Waterford 3 replacement steam generator
project. See Note 2 to the financial statements for a discussion of the
Waterford 3 replacement steam generator prudence review proceeding.

The MISO deferral variance is primarily due to the deferral in 2014 of non-fuel MISO-related charges, as approved by the LPSC and the MPSC. The deferral of non-fuel MISO-related charges is partially offset in other operation and maintenance expenses. See Note 2 to the financial statements for further discussion of the recovery of non-fuel MISO-related charges.


The Louisiana business combination customer credits variance is due to a
regulatory liability of $107 million recorded by Entergy in October 2015 as a
result of the Entergy Gulf States Louisiana and Entergy Louisiana business
combination. Consistent with the terms of the stipulated settlement in the
business combination proceeding, electric customers of Entergy Louisiana will
realize customer credits associated with the business combination; accordingly,
in October 2015, Entergy recorded a regulatory liability of $107 million ($66
million net-of-tax). See Note 2 to the financial statements for further
discussion of the business combination and customer credits.

Entergy Wholesale Commodities


Following is an analysis of the change in net revenue comparing 2015 to 2014.
                                                    Amount
                                                 (In Millions)

2014 net revenue                                       $2,224
Nuclear realized price changes                           (310 )
Vermont Yankee shutdown in December 2014                 (305 )
Nuclear volume, excluding Vermont Yankee effect            20
Other                                                      37
2015 net revenue                                       $1,666


As shown in the table above, net revenue for Entergy Wholesale Commodities decreased by approximately $558 million in 2016 primarily due to:

• lower realized wholesale energy prices, primarily due to significantly

higher Northeast market power prices in 2014, and lower capacity prices in

2015; and

• a decrease in net revenue as a result of Vermont Yankee ceasing power

production in December 2014.

The decrease was partially offset by higher volume in the Entergy Wholesale Commodities nuclear fleet, excluding Vermont Yankee, resulting from fewer refueling outage days in 2015 as compared to 2014, partially offset by more unplanned outage days in 2015 as compared to 2014.

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Following are key performance measures for Entergy Wholesale Commodities for
2015 and 2014.
                                             2015     2014
Owned capacity (MW) (a)                     4,880    6,068
GWh billed                                  39,745   44,424
Average revenue per MWh                     $51.88   $60.84

Entergy Wholesale Commodities Nuclear Fleet
Capacity factor                              91%      91%
GWh billed                                  35,859   40,253
Average revenue per MWh                     $51.49   $60.35
Refueling Outage Days:
FitzPatrick                                   -        44
Indian Point 2                                -        24
Indian Point 3                                23       -
Palisades                                     32       56
Pilgrim                                       34       -

(a) The reduction in owned capacity is due to the retirement of the 605 MW

Vermont Yankee plant in December 2014 and the sale of the 583 MW Rhode

Island State Energy Center in December 2015.



Other Income Statement Items

Utility

Other operation and maintenance expenses increased from $2,276 million for 2014 to $2,443 million for 2015 primarily due to:

• an increase of $59 million in nuclear generation expenses primarily due to

an increase in regulatory compliance costs, higher labor costs, and an

overall higher scope of work done in 2015. The increase in regulatory

       compliance costs is primarily related to additional NRC inspection
       activities in 2015 as a result of the NRC's March 2015 decision to move
       ANO into the "multiple/repetitive degraded cornerstone column" of the

NRC's reactor oversight process action matrix. See "ANO Damage, Outage,

       and NRC Reviews" below for a discussion of the ANO stator incident and
       subsequent NRC reviews;

• an increase of $28 million in compensation and benefits costs primarily

       due to an increase in net periodic pension and other postretirement
       benefit costs as a result of lower discount rates and changes in
       retirement and mortality assumptions, partially offset by a decrease in

the accrual for incentive-based compensation. See "Critical Accounting

       Estimates" below and Note 11 to the financial statements for further
       discussion of pension and other postretirement benefit costs;


•      an increase of $27 million in energy efficiency costs, including the
       effects of true-ups to energy efficiency filings for fixed costs to be
       collected from customers;


•      an increase of $26 million in distribution expenses primarily due to

higher vegetation maintenance and higher labor costs in 2015 as compared

to 2014; and

• an increase of $24 million in transmission expenses primarily due to an

increase in the amount of transmission costs allocated by MISO. See Note 2

to the financial statements for further information on the recovery of

       these costs.



The increase was partially offset by a decrease of $23 million in storm damage provisions primarily at Entergy Mississippi. See Note 2 to the financial statements for a discussion of storm cost recovery.

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The asset write-offs, impairments, and related charges variance is due to the following activity:

• the $45 million ($28 million net-of-tax) write-off in 2015 to recognize

that a portion of the assets associated with the Waterford 3 replacement

steam generator project was no longer probable of recovery and the $16

million ($11 million net-of-tax) write-off in 2014 due to the uncertainty

at the time associated with the resolution of the Waterford 3 replacement

       steam generator project prudence review;


•      the $23.5 million ($15.3 million net-of-tax) write-off in 2015 of the
       regulatory asset associated with the Spindletop gas storage facility as a

result of the approval of the System Agreement termination settlement

agreement; and

• the $56 million ($37 million net-of-tax) write-off in 2014 of Entergy

Mississippi's regulatory asset associated with new nuclear generation

       development costs.



See Note 2 to the financial statements for further discussion of the asset write-offs.

Taxes other than income taxes increased primarily due to increases in ad valorem taxes, payroll taxes, and franchise taxes.


Depreciation and amortization expenses increased primarily due to additions to
plant in service, including the Ninemile Unit 6 project, which was placed in
service in December 2014, and higher depreciation rates at Entergy Mississippi
effective February 2015, as approved by the MPSC.

Interest expense increased primarily due to net debt issuances in the fourth
quarter 2014 by certain Utility operating companies including the issuance by
Entergy Louisiana in November 2014 of $250 million of 4.95% Series first
mortgage bonds due January 2045 and the issuance by Entergy Arkansas in December
2014 of $250 million of 4.95% Series first mortgage bonds due December 2044.

Other expenses increased primarily due to increases in decommissioning expenses
in 2015 as a result of revised decommissioning cost studies in 2014 for Grand
Gulf, ANO 1, ANO 2, and Waterford 3. See Note 9 to the financial statements for
further discussion of the revised decommissioning cost studies.

Entergy Wholesale Commodities


Other operation and maintenance expenses decreased from $1,023 million for 2014
to $899 million for 2015 primarily due to the shutdown of Vermont Yankee, which
ceased power production in December 2014. The decrease was partially offset by
an increase of $12 million in compensation and benefits costs primarily due to
an increase in net periodic pension and other postretirement benefit costs as a
result of lower discount rates and changes in retirement and mortality
assumptions, partially offset by a decrease in the accrual for incentive-based
compensation. See "Critical Accounting Estimates" below and Note 11 to the
financial statements for further discussion of pension and other postretirement
benefit costs.

The asset write-offs, impairments, and related charges variance is primarily due
to $2,036 million ($1,317 million net-of-tax) in 2015 of impairment and related
charges to write down the carrying values of certain Entergy Wholesale
Commodities' plants and related assets to their fair values, partially offset by
$107 million ($69 million net-of-tax) in 2014 of impairment charges related to
Vermont Yankee primarily resulting from the effects of an updated
decommissioning cost study completed in the third quarter 2014. See Note 14 to
the financial statements for further discussion of these charges.

Taxes other than income taxes decreased primarily due to the shutdown of Vermont Yankee, which ceased power production in December 2014.

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Depreciation and amortization expenses decreased primarily due to decreases in
depreciable asset balances as a result of the shutdown of Vermont Yankee, which
ceased power production in December 2014. See Note 14 to the financial
statements for further discussion of impairment of long-lived assets.

The gain on sale of asset resulted from the sale in December 2015 of the 583 MW
Rhode Island State Energy Center in Johnston, Rhode Island, a business
wholly-owned by Entergy in the Entergy Wholesale Commodities segment. Entergy
sold Rhode Island State Energy Center for approximately $490 million and
realized a pre-tax gain of $154 million on the sale. See Note 14 to the
financial statements for further discussion of the Rhode Island State Energy
Center sale.

Other income decreased primarily due to $37 million ($24 million net-of-tax) in
2015 of impairment and related charges resulting from the write-down of the
carrying values of the generating assets of Entergy's equity method investee Top
Deer Wind Ventures, LLC to their fair values, partially offset by higher
realized gains on decommissioning trust fund investments in 2015 as compared to
2014, including portfolio reallocations for the Vermont Yankee nuclear
decommissioning trust funds.

Other expenses decreased primarily due to a decrease in nuclear refueling outage
costs that are being amortized over the estimated period to the next outage as a
result of the impairments and related charges in 2015 to write down the carrying
values of the FitzPatrick and Pilgrim plants and related assets and the shutdown
of Vermont Yankee, which ceased power production in December 2014. See Note 14
to the financial statements for further discussion of the impairment and related
charges.

Income Taxes

See Note 3 to the financial statements for a reconciliation of the federal statutory rate of 35% to the effective income tax rates, and for additional discussion regarding income taxes.


The effective income tax rate for 2015 was 80.4%.  The difference in the
effective income tax rate versus the statutory rate of 35% for 2015 was
primarily due to the tax effects of the Louisiana business combination. See Note
3 to the financial statements for further discussion of the tax effects of the
Louisiana business combination and a reconciliation of the federal statutory
rate of 35% to the effective income tax rate.

The effective income tax rate for 2014 was 38%. The difference in the effective
income tax rate versus the statutory rate of 35% for 2014 was primarily due to
state income taxes, certain book and tax differences related to utility plant
items, and the provision for uncertain tax positions, partially offset by a
deferred state income tax reduction related to a New York tax law change and
book and tax differences related to the allowance for equity funds used during
construction.

ANO Damage, Outage, and NRC Reviews


In March 2013, during a scheduled refueling outage at ANO 1, a contractor-owned
and operated heavy-lifting apparatus collapsed while moving the generator stator
out of the turbine building.  The collapse resulted in the death of an
ironworker and injuries to several other contract workers, caused ANO 2 to shut
down, and damaged the ANO turbine building.  The total cost of assessment,
restoration of off-site power, site restoration, debris removal, and replacement
of damaged property and equipment was approximately $95 million.  Entergy
Arkansas is pursuing its options for recovering damages that resulted from the
stator drop, including its insurance coverage and legal action. During 2014,
Entergy Arkansas collected $50 million from Nuclear Electric Insurance Limited
(NEIL), a mutual insurance company that provides property damage coverage to the
members' nuclear generating plants. Litigation remains pending.

In addition, Entergy Arkansas incurred replacement power costs for ANO 2 power
during its outage and incurred incremental replacement power costs for ANO 1
power because the outage extended beyond the originally-planned

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duration of the refueling outage.  In February 2014 the APSC approved Entergy
Arkansas's request to exclude from the calculation of its revised energy cost
rate $65.9 million of deferred fuel and purchased energy costs incurred in 2013
as a result of the ANO stator incident. The APSC authorized Entergy Arkansas to
retain the $65.9 million in its deferred fuel balance with recovery to be
reviewed in a later period after more information regarding various claims
associated with the ANO stator incident is available.

Shortly after the stator incident, the NRC deployed an augmented inspection team
to review the plant's response.  In July 2013 a second team of NRC inspectors
visited ANO to evaluate certain items that were identified as requiring
follow-up inspection to determine whether performance deficiencies existed. In
March 2014 the NRC issued an inspection report on the follow-up inspection that
discussed two preliminary findings, one that was preliminarily determined to be
"red with high safety significance" for Unit 1 and one that was preliminarily
determined to be "yellow with substantial safety significance" for Unit 2, with
the NRC indicating further that these preliminary findings may warrant
additional regulatory oversight. This report also noted that one additional item
related to flood barrier effectiveness was still under review.

In March 2015, after several NRC inspections and regulatory conferences, the NRC
issued a letter notifying Entergy of its decision to move ANO into the
"multiple/repetitive degraded cornerstone column," or Column 4, of the NRC's
Reactor Oversight Process Action Matrix. Placement into Column 4 requires
significant additional NRC inspection activities at the ANO site, including a
review of the site's root cause evaluation associated with flood barrier
effectiveness and stator issues, an assessment of the effectiveness of the
site's corrective action program, an additional design basis inspection, a
safety culture assessment, and possibly other inspection activities consistent
with the NRC's Inspection Procedure. Entergy Arkansas incurred incremental costs
of approximately $53 million in 2015 to prepare for the NRC inspection that
began in early 2016. Excluding remediation and response costs that may result
from the additional NRC inspection activities, Entergy Arkansas also incurred
approximately $44 million in 2016 in support of NRC inspection activities and to
implement Entergy Arkansas's performance improvement initiatives developed in
2015. A lesser amount of incremental expense is expected to be ongoing annually
after 2016, until ANO transitions out of Column 4.

The NRC completed the supplemental inspection required for ANO's Column 4
designation in February 2016, and published its inspection report in June 2016.
In its inspection report, the NRC concluded that the ANO site is being operated
safely and that Entergy understands the depth and breadth of performance
concerns associated with ANO's performance decline. Also in June 2016, the NRC
issued a confirmatory action letter to confirm the actions Entergy Arkansas has
taken and will continue to take to improve performance at ANO. The NRC will
verify the completion of those actions through quarterly follow-up inspections,
the results of which will determine when ANO should transition out of Column 4.

Entergy Wholesale Commodities Exit from the Merchant Power Business


Entergy management has undertaken a strategy to manage and reduce the risk of
the Entergy Wholesale Commodities business, which includes taking actions to
reduce the size of the merchant fleet. Management evaluated the challenges for
each of the plants based on a variety of factors such as their market for both
energy and capacity, their size, their contracted positions, and the amount of
investment required to continue to operate and maintain the safety and integrity
of the plants, including the estimated asset retirement costs. Management
continues to look for ways to mitigate the operational and decommissioning risks
associated with the merchant power business. Assumptions regarding the operating
life of the plants and the decommissioning timeline and process continue to be
evaluated.  Changes to current assumptions could result in revisions to the
asset retirement obligations and affect compliance with certain NRC minimum
financial assurance requirements for meeting obligations to decommission the
plants. Increases in the asset retirement obligations could result in an
increase in operating expense in the period of a revision.  Assumptions
regarding the possibility that a plant may have an operating life shorter than
previously assumed will likely result in the need for additional contributions
to decommissioning trust funds, or the posting of parent guarantees, letters of
credit, or other surety mechanisms.


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Entergy Wholesale Commodities includes the ownership of the following nuclear
reactors:

                   Location      Market     Capacity          Planned Transaction
Vermont Yankee    Vernon, VT     ISO-NE    605 MW       Planned sale of shutdown plant
                                                        in 2018
FitzPatrick       Oswego, NY     NYISO     838 MW       Planned sale in 2017
Palisades         Covert, MI      MISO     811 MW       Planned shutdown in 2018
Pilgrim          Plymouth, MA    ISO-NE    688 MW       Planned shutdown in 2019
Indian Point 2   Buchanan, NY    NYISO     1,028 MW     Planned shutdown in 2020
Indian Point 3   Buchanan, NY    NYISO     1,041 MW     Planned shutdown in 2021



Entergy Wholesale Commodities also includes the ownership of two non-operating
nuclear facilities, Big Rock Point in Michigan and Indian Point 1 in New York
that were acquired when Entergy purchased the Palisades and Indian Point 2
nuclear plants, respectively. These facilities are in various stages of the
decommissioning process. In addition, Entergy Wholesale Commodities provides
operations and management services, including decommissioning services, to
nuclear power plants owned by other utilities in the United States. A relatively
minor portion of the Entergy Wholesale Commodities business is the ownership of
interests in non-nuclear power plants that sell the electric power produced by
those plants to wholesale customers.

Shutdown and Planned Sale of Vermont Yankee


On December 29, 2014, the Vermont Yankee plant ceased power production and
entered its decommissioning phase. In November 2016, Entergy entered into an
agreement to sell 100% of the membership interests in Entergy Nuclear Vermont
Yankee, LLC to a subsidiary of NorthStar. Entergy Nuclear Vermont Yankee is the
owner of the Vermont Yankee plant and is in the Entergy Wholesale Commodities
segment. The sale of Entergy Nuclear Vermont Yankee to NorthStar will include
the transfer of the nuclear decommissioning trust fund and the asset retirement
obligation for the spent fuel management and decommissioning of the plant.

Entergy Nuclear Vermont Yankee has an outstanding credit facility with borrowing
capacity of $100 million to pay for dry fuel storage costs. This credit facility
is guaranteed by Entergy Corporation. At or before closing, a subsidiary of
Entergy will assume the obligations under the existing credit facility or enter
into a new credit facility, and Entergy will guarantee the credit facility. At
the closing of the sale transaction, NorthStar will pay $1,000 for the
membership interests in Entergy Nuclear Vermont Yankee, and NorthStar will cause
Entergy Nuclear Vermont Yankee to issue a promissory note to the Entergy entity
selling the membership interests in Entergy Nuclear Vermont Yankee. The amount
of the promissory note issued will be equal to the amount drawn under the credit
facility or the amount drawn under the new credit facility, plus borrowing fees
and costs incurred by Entergy in connection with such facility. The principal
amount drawn under the outstanding credit facility was $45 million as of
December 31, 2016, and the net book value of Entergy Nuclear Vermont Yankee,
including unrealized gains on the decommissioning trust fund, as of December 31,
2016, was approximately $88 million.

Entergy plans to transfer all spent nuclear fuel to dry cask storage by the end
of 2018, subject to obtaining necessary regulatory approvals, in advance of the
planned transaction close. Under the sale agreement and related agreements to be
entered into at the closing, NorthStar will commit to initiate decommissioning
and site restoration by 2021 and complete those activities by 2030. The original
completion date, as outlined in Entergy's Post Shutdown Decommissioning
Activities Report filed with the NRC, was 2075. Entergy Nuclear Vermont Yankee,
under NorthStar ownership, will be required to repay the promissory note issued
to Entergy with certain of the proceeds from the recovery of damages under its
claims against the DOE related to spent nuclear fuel disposal, with any balance
remaining due at partial site restoration, subject to extension not to exceed
two years from partial site restoration.

The transaction is subject to certain closing conditions, including approval by the NRC; approval by the State of Vermont Public Service Board, including approval of site restoration standards that will be proposed as part of the

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transaction; the transfer of all spent nuclear fuel to dry fuel storage on the
independent spent fuel storage installation; and that the market value of the
fund assets held in the decommissioning trust fund for the Vermont Yankee
Nuclear Power Station, less the hypothetical income tax on the aggregate
unrealized net gain of such fund assets at closing, is equal to or exceeds
$451.95 million, subject to adjustments. The transaction is expected to close by
the end of 2018, subject to certain conditions, including the condition that
Entergy contribute to the decommissioning trust fund if the value is less than
provided for in the agreement with NorthStar.

Sale of Rhode Island State Energy Center


In December 2015, Entergy sold the Rhode Island State Energy Center, a 583 MW
natural gas-fired combined-cycle generating plant owned by Entergy in the
Entergy Wholesale Commodities segment. Entergy sold Rhode Island State Energy
Center for approximately $490 million and realized a pre-tax gain of $154
million on the sale.

Sale of Top Deer Investment


In November 2016, Entergy sold its 50% membership interest in Top Deer Wind
Ventures, LLC, a wind-powered electric generation joint venture owned by Entergy
in the Entergy Wholesale Commodities segment and accounted for as an equity
method investment. Entergy sold its 50% membership interest in Top Deer for
approximately $0.5 million and realized a pre-tax loss of $0.2 million on the
sale.

Planned Sale of FitzPatrick

In October 2015, Entergy determined that it would close the FitzPatrick plant.
The original expectation was to shut down the FitzPatrick plant at the end of
its fuel cycle in January 2017. See Note 14 to the financial statements for
discussion of the impairment charges associated with the decision to cease
operations earlier than expected.

In August 2016, Entergy entered into a trust transfer agreement with NYPA to
transfer the decommissioning trust funds and decommissioning liabilities for the
Indian Point 3 and FitzPatrick plants to Entergy. When Entergy purchased Indian
Point 3 and FitzPatrick in 2000 from NYPA, NYPA retained the decommissioning
trust funds and the decommissioning liabilities.  NYPA and Entergy subsidiaries
executed decommissioning agreements, which specified their decommissioning
obligations. NYPA had the right to require the Entergy subsidiaries to assume
each of the decommissioning liabilities provided that it assigned the
corresponding decommissioning trust, up to a specified level, to the Entergy
subsidiaries. Under the original agreements, if the decommissioning liabilities
were retained by NYPA, the Entergy subsidiaries would perform the
decommissioning of the plants at a price equal to the lesser of a pre-specified
level or the amount in the decommissioning trust funds.  At the time of the
acquisition of the plants Entergy recorded a contract asset that represented an
estimate of the present value of the difference between the stipulated contract
amount for decommissioning the plants less the decommissioning costs estimated
in independent decommissioning cost studies.  The asset was increased by monthly
accretion based on the applicable discount rate necessary to ultimately provide
for the estimated future value of the decommissioning contract. The monthly
accretion was recorded as interest income. As a result of the agreement with
NYPA, in the third quarter 2016, Entergy removed the contract asset from its
balance sheet, and recorded receivables for the beneficial interests in the
decommissioning trust funds and asset retirement obligations for the
decommissioning liabilities. The asset retirement obligations are accreted
monthly through a charge to decommissioning expense. The transaction was
contingent upon receiving approval from the NRC, which was received in January
2017.  The decommissioning trust funds for the Indian Point 3 and FitzPatrick
plants were transferred to Entergy by NYPA in January 2017. See Note 9 to the
financial statements for further discussion of Indian Point 3 and FitzPatrick's
decommissioning liabilities and see Note 16 to the financial statements for
further discussion of the receivables for the beneficial interests in Indian
Point 3 and FitzPatrick's decommissioning trust funds.

In August 2016, Entergy entered into an agreement to sell the FitzPatrick plant
to Exelon. The transaction is expected to close in the first half of 2017. The
purchase price is $100 million and the assumption by Exelon of certain
liabilities related to the FitzPatrick plant, with an additional $10 million
non-refundable signing fee, which was paid

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upon the signing of the agreement. The transaction is contingent upon, among
other things, the expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, the receipt of
necessary regulatory approvals from the FERC, the NRC, and the Public Service
Commission of the State of New York (NYPSC), and the receipt of a private letter
ruling from the IRS. NRC approval has not yet been received, but all other
necessary regulatory approvals have been received. Because certain specified
conditions were satisfied in November 2016, including the continued
effectiveness of the Clean Energy Standards/Zero Emissions Credit program
(CES/ZEC), the establishment of certain long-term agreements on acceptable terms
with the Energy Research and Development Authority of the State of New York in
connection with the CES/ZEC program, and NYPSC approval of the transaction on
acceptable terms, Entergy refueled the FitzPatrick plant in January and February
2017. Entergy expects to operate the FitzPatrick plant until the asset purchase
agreement closing date. Entergy entered into a reimbursement agreement with
Exelon pursuant to which Exelon will reimburse Entergy for specified
out-of-pocket costs associated with the refueling and operation of FitzPatrick
that otherwise would have been avoided had Entergy shut down FitzPatrick in
January 2017. Pursuant to the reimbursement agreement, as of December 31, 2016
Exelon reimbursed Entergy $56 million for nuclear fuel expenses and $41 million
for other operation and maintenance expenses associated with preparing to refuel
FitzPatrick in 2017. In addition, Entergy entered into a transfer agreement
whereby Exelon will be entitled to all revenues from FitzPatrick's electricity
and capacity sales for the period that commenced upon completion of the
refueling outage through the asset purchase agreement closing date. If the asset
purchase agreement is terminated, a termination fee of up to $30 million will be
payable to Entergy under certain circumstances. If it is consummated, the
transaction could result in a gain or loss because of fluctuations in the
decommissioning trust fund earnings and asset retirement obligation accretion.
Upon the closing of the sale, the FitzPatrick decommissioning trust along with
the decommissioning obligation for that plant will be transfered to Exelon.

As a result of the agreement and the status of the necessary regulatory
approvals, the assets and liabilities associated with the sale of FitzPatrick to
Exelon are classified as held for sale on Entergy Corporation and Subsidiaries'
Consolidated Balance Sheet. As of December 31, 2016, the $785 million receivable
for the beneficial interest in the decommissioning trust fund within other
deferred debits and the $714 million asset retirement obligation within other
non-current liabilities are classified as held for sale. The transaction also
includes property, plant, and equipment with a net book value of zero.

Planned Shutdown of Palisades


Most of the Palisades output is sold under a power purchase agreement (PPA) with
Consumers Energy, entered into when the plant was acquired in 2007, that is
currently scheduled to expire in 2022. The PPA prices currently exceed market
prices and escalate each year, up to $61.50/MWh in 2022.

In December 2016, Entergy reached an agreement with Consumers Energy to
terminate the PPA for the Palisades plant on May 31, 2018. Pursuant to the PPA
termination agreement, Consumers Energy will pay Entergy $172 million for the
early termination of the PPA. The PPA termination agreement is subject to
regulatory approvals. Separately, and assuming regulatory approvals are obtained
for the PPA termination agreement, Entergy intends to shut down the Palisades
nuclear power plant permanently on October 1, 2018, after refueling in the
spring of 2017 and operating through the end of that fuel cycle. Entergy expects
to enter into a new PPA with Consumers Energy under which the plant would
continue to operate through October 1, 2018. See Note 14 to the financial
statements for discussion of the impairment charges associated with the PPA
termination agreement and the decision to cease operations earlier than
expected.

Planned Shutdown of Pilgrim


In October 2015, Entergy determined that it would close the Pilgrim plant. The
decision came after management's extensive analysis of the economics and
operating life of the plant following the NRC's decision in September 2015 to
place the plant in its "multiple/repetitive degraded cornerstone column" (Column
4) of its Reactor Oversight Process Action Matrix. The Pilgrim plant is expected
to cease operations on May 31, 2019, after refueling in the spring of 2017 and
operating through the end of that fuel cycle. See Note 14 to the financial
statements for

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discussion of the impairment charges associated with the decision to cease operations earlier than expected and see Note 8 for further discussion on the placement of Pilgrim in Column 4.

Planned Shutdown of Indian Point 2 and Indian Point 3


Indian Point 2 and Indian Point 3 have been involved, and have faced opposition,
in extensive licensing proceedings. In January 2017, Entergy announced that it
reached a settlement with New York State to shut down Indian Point 2 by April
30, 2020 and Indian Point 3 by April 30, 2021. See further discussion of the
licensing proceedings and the settlement reached with New York State in "Entergy
Wholesale Commodities Authorizations to Operate Its Nuclear Power Plants" below.

As discussed above, in August 2016, Entergy entered into a trust transfer agreement with NYPA to transfer the decommissioning trust fund and decommissioning liability for the Indian Point 3 plant to Entergy. The decommissioning trust fund for the Indian Point 3 plant was transferred to Entergy by NYPA in January 2017.


See Note 14 to the financial statements for further discussion of the impairment
charges associated with management's evaluation of alternatives to the continued
operation of the Indian Point plants.

Costs Associated with Entergy Wholesale Commodities Strategic Transactions


Entergy incurred approximately $95 million in costs in 2016 associated with
these strategic decisions and transactions to exit the merchant power business,
primarily employee retention and severance expenses and other benefits-related
costs, and contracted economic development contributions. Entergy expects to
incur employee retention and severance expenses of approximately $100 million in
2017, and approximately $235 million from 2018 through the end of 2021
associated with these strategic transactions. See Note 13 to the financial
statements for further discussion of these costs.

Entergy Wholesale Commodities Authorizations to Operate Its Nuclear Power Plants


The NRC operating license for Palisades expires in 2031, for Pilgrim expires in
2032, and for FitzPatrick expires in 2034. See Note 14 to the financial
statements for additional discussion regarding the planned sales of the Vermont
Yankee and FitzPatrick plants and the planned shutdowns and associated
impairment and related charges for the Palisades and Pilgrim plants.

Indian Point NRC/ASLB Proceedings


In January 2017, Entergy reached a settlement with New York State, several State
agencies, and Riverkeeper, Inc. under which Indian Point 2 and Indian Point 3
will cease commercial operation by April 30, 2020 and April 30, 2021,
respectively, subject to certain conditions, including New York State's
withdrawal of opposition to Indian Point's license renewals and issuance of
contested permits and similar authorizations. See "Overview of Settlement" below
for further discussion on the settlement with New York State.

In April 2007, Entergy submitted to the NRC a joint application to renew the
operating licenses for Indian Point 2 and Indian Point 3 for an additional 20
years. The original expiration dates of the NRC operating licenses for Indian
Point 2 and Indian Point 3 were in September 2013 and December 2015,
respectively. Authorization to operate Indian Point 2 and Indian Point 3 rests
on Entergy's having timely filed a license renewal application that remains
pending before the NRC. Each of Indian Point 2 and Indian Point 3 has now
entered its "period of extended operation" after expiration of the plant's
initial license term under "timely renewal," which is a federal statutory rule
of general applicability providing for extension of a license for which a
renewal application has been timely filed with the licensing agency. The license
renewal application for Indian Point 2 and Indian Point 3 qualifies for timely
renewal protection because it met NRC regulatory standards for timely filing.


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The scope of NRC license renewal applications is focused primarily on whether
the licensee has in place aging management programs (detailed diagnostic
analyses performed when and as prescribed) to ensure that passive systems,
structures, and components (such as pipes and concrete and metal structures) can
continue to perform their intended safety functions. Other aspects of nuclear
plant operations (maintenance of active components like pumps and control
systems, security, and emergency preparedness) are regulated by the NRC on an
ongoing basis and, as such, are outside the scope of license renewal
proceedings. The NRC also determines whether there are any environmental impacts
that would affect license renewal.

Every application for renewal of a reactor operating license undergoes
comprehensive NRC staff review to ensure the adequacy of the application and the
aging management programs detailed in it. NRC staff's conclusions following such
review are set forth in a Final Safety Evaluation Report (FSER). Issuance of a
renewed operating license is a "major federal action" under the National
Environmental Policy Act, so NRC staff also are required to prepare an
Environmental Impact Statement (EIS) regarding the proposed licensing action.
The NRC has elected to address certain EIS issues on a generic basis via the
rulemaking process. As a result, the EIS for a particular license renewal
proceeding has two components: the Generic Environmental Impact Statement and a
Final Supplemental Environmental Impact Statement (FSEIS) addressing
site-specific EIS issues. Both the FSER and the FSEIS are subject to updating by
NRC staff in an individual license renewal proceeding.

Where, as in the case of Indian Point, one or more intervenors proposes for
admission contentions alleging errors and omissions in the applicant's license
renewal application or the NRC staff's review of related safety and
environmental issues, the NRC appoints an ASLB to determine whether the
contentions satisfy threshold standards and, if so, to adjudicate such
"admitted" contentions. Safety-related contentions address issues that will be
or have been described in the FSER and environmental-related contentions address
issues that will be or have been described in the FSEIS. Contentions may be
proposed at any time before license issuance based on new and material
information, subject to timeliness and admissibility standards. Final ASLB
orders on admissibility or resolving contentions, whether after hearing or on
summary disposition, are appealable to the NRC.

Various governmental and private intervenors sought and obtained party status to
express opposition to renewal of the Indian Point 2 and Indian Point 3 licenses.
The ASLB has admitted 16 consolidated contentions based on 21 contentions
originally proposed by the State of New York or other parties. Thirteen "Track
1" contentions have been resolved in favor of Entergy, whether by the ASLB or by
the NRC on appeal from an ASLB decision. Hearings on the three remaining
contentions, which are designated "Track 2," were conducted by the ASLB in
November 2015. The ASLB scheduled the filing of post-hearing submissions through
late-March 2016, but extended that schedule several times to allow the
submission of supplemental testimony addressing the results of the 2016 reactor
vessel internal inspection at Unit 2. That inspection led to the replacement of
a substantial number of baffle former bolts, as described further in "Nuclear
Matters" below. In January 2017 the ASLB issued an order suspending the schedule
for completion of Track 2 filings following notification of the settlement with
New York State.

Independent of the ASLB process, the NRC staff has performed its technical and
environmental reviews of the Indian Point 2 and Indian Point 3 license renewal
application. The NRC staff issued an FSER in August 2009, a supplement to the
FSER in August 2011, an FSEIS in December 2010, a supplement to the FSEIS in
June 2013, and a further supplement to the FSER in November 2014. In November
2014 the NRC staff advised of its proposed schedule for issuance of a further
FSEIS supplement to address new information received by NRC staff since
preparation and publication of the previous FSEIS supplement in June 2013. The
NRC staff issued a draft of the new FSEIS supplement in December 2015. The
target date for issuance of a final FSEIS supplement has not been announced. In
addition, NRC staff has not formally announced whether it plans to issue a
further FSEIS supplement addressing sensitivity analyses of severe accident
mitigation alternatives that the NRC directed staff to perform as part of an
order resolving appeal of one Track 1 contention in favor of NRC staff and
Entergy.

Entergy will continue to work with the NRC staff as it completes its technical and environmental reviews of the Indian Point 2 and Indian Point 3 license renewal applications.

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Management's Financial Discussion and Analysis

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