AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 4/6 · 18/10/2026
Moat—
Insufficient evidence for every rubric criterion; no category score is inferred.
structural advantage · — · Utility infrastructure, recovery approvals and a protected customer contract suggest advantages, but do not establish a durable company-wide barrier to competition. The moat verdict remains uncertain.
durability · — · Protected service rights, contract duration and sustained economic returns are insufficiently disclosed to establish moat durability.
customer dependency · — · Evest faces termination-related financial obligations, but wider customer captivity is unestablished and alternative procurement has already displaced some sales.
erosion resilience · — · Recovery mechanisms and collateral offer protection, but the evidence cannot establish resilience of an underlying company-wide moat against procurement alternatives, disallowances and operating burdens.
Pricing power38
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 1/4 · Observed customer bill credits demonstrate downward pricing adjustments, while the 2026 base rate proposal remained suspended. Recovery mechanisms support collections, but the supplied outcomes establish weak discretionary pricing rather than demonstrated premium pricing. Suspension is not treated as a final denial.
retention · 2/4 · Minimum bills, termination obligations and actual customer advances indicate commitment and switching friction indirectly. Protection is contract-specific, and alternative procurement has already reduced some sales or growth opportunities. No retention rate is inferred.
margin resilience · 2/4 · Fuel-cost recovery mechanisms and approved project recovery buffer costs, but actual regulatory asset write-offs show incomplete protection. Storm restoration spending creates additional capital demands. These mixed economic protections are assessed without inferring a moat from margins.
contractual freedom · 1/4 · Regulatory rate setting and suspension of proposed tariffs materially constrain discretion. The Evest contract secures cost contributions and minimum bills, but also imposes construction and service obligations with potential termination penalties. System Energy's cost-based FERC framework is subsidiary-specific.
Predictability48
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 10.98
- Positive FCF years (%)
- 20.00
- FCF margin volatility (pp)
- 13.68
Financial strength3
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 12.69
- currentRatioGrade
- 0.00
- Net debt / operating income (x)
- 9.06
- Interest coverage (x)
- 2.40
- Current ratio (x)
- 0.74
Capital allocation—
Missing required inputs: sbcRevenue. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 6.66
- 3-year average dilution (%)
- 2.64
- cashConversionGrade
- 0.00
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Customer advances, collateral and approved recovery demonstrate financing and risk-sharing discipline. Against this, construction spending and minimum equipment commitments increased, equity forwards were settled for cash, and diluted share counts rose. Historical write-offs further qualify the record; realized returns on the expansion remain unproven.
incentive alignment · 3/4 · Adopted incentives include earnings, credit, safety and customer measures; actual equity grants and verified director ownership compliance support alignment. No dividends are paid on unearned performance awards. Heavy adjusted-EPS weighting and exclusions for storms and certain regulatory outcomes limit the strength of that alignment; executive ownership compliance is not established.
execution · 2/4 · Commercial operation of Driver Solar, approved recovery and reported earnings progress demonstrate execution. Actual safety performance fell below minimum on two sub-metrics, while pole replacement met target and vegetation backlog performance exceeded target. The record is mixed; major expansion projects have not yet demonstrated completed returns.
governance · 3/4 · An independent board apart from the CEO, an independent lead director, regular sessions without management and at least 99% reported attendance provide strong demonstrated governance processes. The combined chair and CEO role qualifies the assessment, and these processes do not establish exceptional oversight outcomes.
Evidence
Entergy’s reportable segment that generates, transmits, distributes, and sells electric power, and which included a small amount of natural gas distribution in portions of Louisiana through June 30, 2025
Definitions / Utility reportable segment · Filed 19/02/2026
The Registrant Subsidiaries each have rate mechanisms in place to recover fuel, purchased power, and associated costs incurred under these purchase obligations.
Capital obligations / fuel and purchased power recovery mechanisms · Filed 19/02/2026
In March 2026 the APSC approved the Arkansas Cypress Solar facility and Entergy Arkansas’s recovery of the costs of the facility through the Generating Arkansas Jobs Act rider.
Arkansas Cypress Solar / approved project cost recovery · Filed 31/07/2026
In addition, changes to regulatory policies, such as those that allow customers to directly access the market to procure wholesale energy or those that incentivize development and utilization of new, developing, or alternative sources of generation, could, and in some instances, have already reduced sales, and other non-traditional procurements, such as virtual purchase power agreements or “behind the meter” generation solutions, could, and in some instances have already limited growth opportunities or reduced sales at the Utility operating companies.
Risk factors / realized sales displacement from alternative procurement · Filed 19/02/2026
Additionally, in its January 2026 order, the APSC found that Entergy Arkansas should conduct all-source competitive solicitations for future generation additions, with limited exceptions where Entergy Arkansas believes that a specific solicitation should be restricted to a certain resource and provides a detailed explanation to the APSC supporting this belief, which the APSC later determined in its March 2026 order is a narrow exception.
Jefferson Power Station / required competitive generation solicitations · Filed 31/07/2026
In third quarter 2023, Entergy Arkansas recorded write-offs of its regulatory asset for deferred fuel of $68.9 million and the undepreciated balance of $9.5 million in capital costs related to the ANO stator incident.
Management discussion / ANO stator incident asset write-offs · Filed 23/02/2024
•an increase of $210.4 million in capital expenditures related to storm restoration primarily due to Winter Storm Fern restoration efforts in 2026.
Entergy Louisiana cash flows / actual storm restoration capital spending · Filed 31/07/2026
The protections include terms requiring the customer to pay Entergy Louisiana’s incremental costs to serve the customer, including through contributions in aid of construction, other advanced payments and minimum monthly bills.
Major customer agreements / incremental cost payments and minimum monthly bills · Filed 31/07/2026
The agreements also include specified financial obligations in the event that Evest terminates the contracts early, restructures the project, or in the event of default.
Evest agreements / termination, restructuring and default obligations · Filed 31/07/2026
These specified financial obligations would be based on Entergy Louisiana’s unrecovered incremental costs to serve Evest at the time of such an event.
Evest agreements / unrecovered incremental cost basis · Filed 31/07/2026
Evest’s obligations under the electric service agreement and related contracts are secured by various forms of collateral, including a guaranty from Meta Platforms, Inc.
Evest agreements / collateral and guaranty · Filed 31/07/2026
Finally, the electric service agreement also includes provisions relating to Entergy Louisiana’s performance obligations, including the timely construction of the facilities supporting service to Evest, audit rights for the construction costs supported by Evest, and service standards during the term of the electric service agreement.
Evest agreements / construction, audit and service obligations · Filed 31/07/2026
Such penalties would vary based on the nature and severity of the failure, including the potential termination of the electric service agreement.
Evest agreements / penalties and potential termination · Filed 31/07/2026
•reductions in the demand for electricity to power large-scale data centers and other large customers and the potential for stranded assets;
Forward-looking risks / data center demand and stranded assets · Filed 31/07/2026
Net cash flow provided by operating activities increased $924 million for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 primarily due to an increase of $700 million in receipts of advance payments related to customer agreements, including $599 million in customer advances and $101 million in tax gross-up on customer advances for construction, higher collections from Utility customers, and the timing of recovery of fuel and purchased power costs.
Consolidated cash flows / customer advances, collections and recovery timing · Filed 31/07/2026
Entergy Arkansas refunded $92.3 million of the total through one-time bill credits under the Grand Gulf credit rider during the August 2024 billing cycle.
Entergy Arkansas regulatory matters / actual customer bill credits · Filed 19/02/2026
In March 2026 the APSC issued an order suspending the proposed rates and tariffs filed by Entergy Arkansas.
Entergy Arkansas 2026 base rate case / suspension of proposed rates · Filed 31/07/2026
Because the FERC sets the rates the Company is allowed to charge customers based on allowable costs, including a reasonable return on equity, the Company applies accounting standards that require the financial statements to reflect the effects of rate regulation, including the recording of regulatory assets and liabilities.
System Energy critical audit matter / FERC cost-based rate setting · Filed 19/02/2026
In February 2026, Entergy Corporation physically settled a portion of its obligations under certain of its then-outstanding forward sale agreements under its at the market equity distribution program for cash proceeds of $346 million.
Sources of capital / physically settled equity forward agreements · Filed 31/07/2026
•an increase of $804 million in non-nuclear generation construction expenditures primarily due to higher spending by Entergy Arkansas on the Jefferson Power Station project, the Cypress Solar project, and the Ironwood Power Station project, by Entergy Louisiana on the Richland Parish Power Station Units 1-4 project, the Pointe Coupee Units 1-3 project, the Waterford 6 Power Station project, the Waterford 5 Power Station project, and the Westlake Power Station project, and by Entergy Mississippi on the Traceview Advanced Power Station project; partially offset by lower spending by Entergy Texas on the Legend Power Station project as a result of the sale of assets related to the in-process project in December 2025 and lower spending on the Orange County Advanced Power Station project in 2026.
Consolidated investing cash flows / actual generation construction spending · Filed 31/07/2026
The agreement was amended in second quarter 2026, updating the minimum order commitment of PIE to 27 sets, with no change to the original commitment of a minimum order of two CTs.
Major vendor exclusivity agreement / increased minimum equipment commitment · Filed 31/07/2026
1,758 1,056 2,357 Less adjustments: Utility 4Q24 E-LA adjustment to a regulatory liability primarily related to securitization resulting from Louisiana state income tax rate change — 9 — 2Q24 E-LA agreement in principle to resolve its FRP extension filing and other retail matters — (151) — 1Q24 E-AR write-off of a regulatory asset related to the opportunity sales proceeding — (132) — 1Q24 E-NO increase in customer sharing of income tax benefits as a result of the 2016–2018 IRS audit resolution — (79) — 4Q23 customer sharing of tax benefits as a result of the 2016–2018 IRS audit resolution — — (98) 3Q23 E-AR write-off of assets related to the ANO stator incident — — (78) 1Q23 impacts from E-LA storm cost approvals and securitizations, including customer sharing (excluding income tax items below) — — (87) Income tax effect on Utility adjustments above — 92 73 4Q24 income tax expense resulting from Louisiana state income tax rate change — (29) — 4Q23 E-LA reversal of regulatory liability associated with Hurricane Isaac securitization, initially recorded in 2017 as a result of the TCJA — — 106 4Q23 2016–2018 IRS audit resolution — — 568 1Q23 E-LA income tax benefit resulting from securitization — — 129 Total Utility — (289) 611 Parent & Other 2024 pension lift out — (320) — 4Q24 DOE spent nuclear fuel litigation settlements — 25 40 Income tax effect on Parent & Other adjustments above — 62 (9) 4Q23 2016–2018 IRS audit resolution — — 275 Total Parent & Other — (233) 307 Total adjustments — (522) 919 ETR adjusted earnings 1,758 1,577 1,438 Diluted average number of common shares outstanding (in millions) (a) 450 432 425 Calculations may differ due to rounding (a) Diluted number of common shares outstanding and per-share information reflects the post-Stock Split share count.
Appendix A / earnings reconciliation, regulatory charges and diluted share counts · Filed 27/03/2026
2025 Annual Incentive Program Performance Measures and Methodology The measures that the Talent and Compensation Committee approved to determine the EAM for 2025 were: ETR Adjusted EPS; Adjusted FFO/Debt Ratio; Safety; Customer NPS; and Talent, Culture, and Commerce, with ETR Adjusted EPS being the most heavily weighted at 60% and the remaining measures each weighted at 10%.
Executive compensation / adopted 2025 incentive measures and weights · Filed 19/02/2026
The following table includes financial information for stock options for the three and six months ended June 30, 2026 and 2025: Three Months Ended Six Months Ended 2026 2025 2026 2025 (In Millions) Compensation expense included in Entergy’s consolidated net income $1.0 $1.0 $2.0 $2.1 Tax benefit recognized in Entergy’s consolidated net income $0.2 $0.2 $0.4 $0.5 Compensation cost capitalized as part of fixed assets and materials and supplies $0.5 $0.5 $1.0 $1.0 Other Equity Awards In January 2026 the Board approved and Entergy granted long-term incentive awards in the form of 461,708 restricted stock awards, 20,954 restricted stock units, and 195,692 performance units under the 2019 Omnibus Incentive Plan.
Stock-based compensation / January 2026 awards actually granted · Filed 31/07/2026
A review of non-employee director stock ownership was conducted at the December 2025 Corporate Governance Committee meeting, and the committee determined that all of our non-employee directors who had been members of the Board for at least five years satisfied the ownership requirement.
Director ownership / verified compliance with ownership requirement · Filed 27/03/2026
ETR Adjusted EPS, one of the performance measures used in our 2025 annual incentive program, is the earnings measure by which we provide external guidance, adjusted to eliminate the effect of: (i) major storms, including the impact on total debt of pending securitizations; (ii) resolutions during the year of certain unresolved regulatory litigation matters; (iii) unrealized gains or losses on equity securities; (iv) effects of income tax law changes; and (v) any adjustments to contributions to pension investments or trusts related to post-retirement benefits that are elective and deviate from original plan assumptions (collectively, the Pre-Determined Exclusions).
Appendix A / incentive earnings measure exclusions · Filed 27/03/2026
The committees assessed management’s performance at below minimum (0%) on each of the SIF and TRIR sub-metrics, 100% of target on the priority replacement pole sub-metric, and 200% of target on the vegetation trimming backlog sub-metric, resulting in an overall payout factor of 50% for the Safety measure.
2025 incentive results / safety shortfalls and maintenance achievements · Filed 27/03/2026
The Driver Solar facility commenced commercial operation in December 2024; •Entergy Louisiana began construction on the 49 MW Sterlington solar project in December 2024, located in Sterlington, Louisiana.
Utility generation additions / Driver Solar commercial operation · Filed 19/02/2026
Effective Board Structure and Composition Strong Independent Board Leadership All directors, other than our CEO, are independent.
Corporate governance / board independence · Filed 27/03/2026
Independent Lead Director The independent directors appoint an independent Lead Director who serves for a three-year term with robust, clearly defined duties and responsibilities.
Corporate governance / independent lead director · Filed 27/03/2026
Executive Sessions of Independent Directors Independent directors meet in executive session without management present at each regular Board meeting.
Corporate governance / independent director executive sessions · Filed 27/03/2026
Each of the incumbent directors attended at least 99% of the total meetings of our Board and the committees on which he or she served during 2025.
Board meetings / actual director attendance · Filed 27/03/2026
Executive Committee The Board also has an Executive Committee, which is chaired by Andrew Marsh, our Chair and CEO.
Corporate governance / combined chair and CEO role · Filed 27/03/2026
We do not pay dividends on unearned PUP awards.
Compensation practices / no dividends on unearned performance awards · Filed 27/03/2026
