Entergy Corporation

Social and demographic · Public perception and reputation

The reputation of Entergy or its Registrant Subsidiaries may be materially adversely affected by negative publicity or the inability to meet its stated goals or commitments, among other potential causes. Entergy's and its Registrant Subsidiaries' reputations could be harmed by a variety of factors, including: failure of a generating asset or supporting infrastructure; failure to restore power after a hurricane or other severe weather event or catastrophe in a manner perceived as timely by regulators or customers.

Natural and catastrophic events · Climate change and environmental impact

The physical effects of climate change could materially affect the financial condition, results of operations, and liquidity of Entergy and its subsidiaries. Potential physical risks from climate change include an increase in sea level, wind and storm surge damages, more frequent or intense hurricanes and wildfires, wetland and barrier island erosion, flooding and changes in weather conditions (such as increases in precipitation, drought, or changes in average temperatures).

Economic and market conditions · Inflation and deflation pressures

Significant increases in commodity prices, the prices of other materials and supplies, and operation and maintenance expenses may adversely affect Entergy's results of operations, financial condition, and liquidity. Entergy and its subsidiaries have observed and expect continued inflationary pressures related to commodity prices, other materials and supplies, and operation and maintenance expenses, including in the areas of labor, health care, and pension costs.

Natural and catastrophic events · Terrorism and security threats

Terrorist attacks and sabotage, physical attacks, cyber attacks, system failures, data breaches or other disruptions of Entergy's and its subsidiaries' or their suppliers' infrastructure or technology systems, including disruptions affecting other third parties ultimately connected to Entergy and its subsidiaries or their suppliers through the transmission grid, may adversely affect Entergy's business and results of operations.

Social and demographic · Public perception and reputation

The reputation of Entergy or its Registrant Subsidiaries may be materially adversely affected by negative publicity or the inability to meet its stated goals or commitments, among other potential causes.

Natural and catastrophic events · Climate change and environmental impact

The physical effects of climate change could materially affect the financial condition, results of operations, and liquidity of Entergy and its subsidiaries.

Natural and catastrophic events · Terrorism and security threats

Terrorist attacks and sabotage, physical attacks, cyber attacks, system failures, data breaches or other disruptions of Entergy's and its subsidiaries' or their suppliers' infrastructure or technology systems, including disruptions affecting other third parties ultimately connected to Entergy and its subsidiaries or their suppliers through the transmission grid, may adversely affect Entergy's business and results of operations.

Market and investment · Investment portfolio performance

Market performance and other changes may decrease the value of benefit plan assets, which then could require additional funding and result in increased benefit plan costs. The performance of the capital markets affects the values of the assets held in trust under Entergy's pension and postretirement benefits plans.

Capital structure and performance · Dividend policy and capital allocation

As a holding company, Entergy Corporation depends on cash distributions from its subsidiaries to meet its debt service and other financial obligations and to pay dividends on its common stock, and has provided, and may continue to provide, capital contributions or debt financing to its subsidiaries, which would reduce the funds available to meet its other financial obligations.

Capital structure and performance · Credit rating and cost of capital

A downgrade in Entergy's or its Registrant Subsidiaries' credit ratings could negatively affect Entergy's and its Registrant Subsidiaries' ability to access capital or the cost of such capital and/or could require Entergy or its subsidiaries to post collateral, accelerate certain payments, or repay certain indebtedness.

Capital structure and performance · Credit rating and cost of capital

A downgrade in Entergy's or its Registrant Subsidiaries' credit ratings could negatively affect Entergy's and its Registrant Subsidiaries' ability to access capital or the cost of such capital and/or could require Entergy or its subsidiaries to post collateral, accelerate certain payments, or repay certain indebtedness.

Capital structure and performance · Dividend policy and capital allocation

As a holding company, Entergy Corporation depends on cash distributions from its subsidiaries to meet its debt service and other financial obligations and to pay dividends on its common stock, and has provided, and may continue to provide, capital contributions or debt financing to its subsidiaries, which would reduce the funds available to meet its other financial obligations.

Legal and litigation · Litigation and legal proceedings

The litigation environment in the states in which the Registrant Subsidiaries operate poses a significant risk to those businesses. Entergy and its subsidiaries and related entities are involved in the ordinary course of business in a number of lawsuits involving employment, commercial, asbestos, hazardous material and customer matters, and injuries and damages issues, among other matters. The states in which Entergy and the Registrant Subsidiaries operate have proven to be unusually litigious environments.

Industry regulation · Energy grid operating standards

The Utility operating companies, System Energy, and Entergy's non-utility operations may incur substantial costs related to reliability standards. Entergy's business is subject to extensive and mandatory reliability standards. Such standards, which are established by the NERC, the SERC, and other regional enforcement entities, are approved by the FERC and frequently are reviewed, amended, and supplemented.

Tax and financial reporting · Tax compliance and changes in tax law

Recent U.S. tax legislation may materially adversely affect Entergy's financial condition, results of operations, and cash flows. The Tax Cuts and Jobs Act of 2017 significantly changed the U.S. Internal Revenue Code, including taxation of U.S. corporations, by, among other things, reducing the federal corporate income tax rate, limiting interest deductions, and altering the expensing of capital expenditures. The Inflation Reduction Act of 2022 further significantly changed the U.S. Internal Revenue Code by, among other things, enacting a new corporate alternative minimum tax and expanding federal tax credits for clean energy production.

Industry regulation · Energy grid operating standards

The Utility operating companies, System Energy, and Entergy's non-utility operations may incur substantial costs related to reliability standards.

Core operations · Operational disruption and business continuity

Entergy and the Utility operating companies could be adversely affected by various events beyond their control, including, without limitation, public health crises, natural disasters, wildfires, geopolitical tensions and other political instability, or other catastrophic events. Any of the foregoing, whether occurring locally, nationally, or globally, and the resulting effects thereof could lead to disruption of the general economy, impacts on the customers of the Utility operating companies, and disruption of the operations of Entergy's subsidiaries.

Human capital and workforce · Talent acquisition and retention

Failure to attract, retain and manage an appropriately qualified workforce could negatively affect Entergy or its subsidiaries' results of operations. Entergy relies on a large and changing workforce, including employees, contractors, and temporary staffing. Certain factors, such as an aging workforce, mismatching of skill sets for current and future needs, failing to appropriately anticipate future workforce needs, workforce impacts from public health concerns, challenges competing with other employers offering fully remote or more flexible work options, rising salary and other labor costs, unavailability of contract resources, and labor disputes and work disruptions may lead to operating challenges and increased costs.

Supply chain and procurement · Raw material availability and cost volatility

Significant increases in commodity prices, other materials and supplies, and operation and maintenance expenses may adversely affect Entergy's results of operations, financial condition, and liquidity.

Human capital and workforce · Talent acquisition and retention

Failure to attract, retain and manage an appropriately qualified workforce could negatively affect Entergy or its subsidiaries' results of operations.