Entergy Arkansas Reports Material Impairment

TL;DR

Entergy Arkansas took a big impairment hit, expect financial write-downs.

AI Summary

Entergy Arkansas, LLC, a subsidiary of Entergy Corp, filed an 8-K on March 12, 2024, to report a material impairment. The filing indicates that the company recognized a significant impairment charge related to its assets, though the specific dollar amount and the exact nature of the assets are not detailed in this summary section of the filing.

Why It Matters

This filing signals a potential write-down of assets for Entergy Arkansas, which could impact its financial statements and investor outlook.

Risk Assessment

Risk Level: medium — Material impairments can indicate underlying issues with asset value or future cash flow expectations, warranting closer scrutiny.

Key Players & Entities

• Entergy Arkansas, LLC (company) — Filer of the 8-K
• Entergy Corp (company) — Parent company

FAQ

Key Financial Figures

• $0.01 — red Entergy Corporation Common Stock, $0.01 Par Value ETR New York Stock Exchange
• $135 million — ission's ("APSC") denial of recovery of $135 million of payments to other Utility operating
• $14 m — plaint also involved a challenge to the $14 million, plus interest, of related refund
• $132 million — cember 31, 2023, Entergy Arkansas had a $132 million regulatory asset reflecting the expecte
• $99 million — d in first quarter 2024 a $132 million ($99 million net-of-tax) charge to earnings. This ch

Filing Documents

• etr-20240312.htm (8-K) — 37KB
• 0000065984-24-000018.txt ( ) — 219KB
• etr-20240312.xsd (EX-101.SCH) — 3KB
• etr-20240312_def.xml (EX-101.DEF) — 17KB
• etr-20240312_lab.xml (EX-101.LAB) — 30KB
• etr-20240312_pre.xml (EX-101.PRE) — 18KB
• etr-20240312_htm.xml (XML) — 6KB

06 Material Impairments

Item 2.06 Material Impairments. As more fully-described in "Entergy Arkansas Opportunity Sales Proceeding" in Note 2 in the Entergy Corporation ("Entergy") and Entergy Arkansas, LLC ("Entergy Arkansas") Annual Report on Form 10-K for the year ended December 31, 2023, in September 2020, Entergy Arkansas filed a complaint in the U.S. District Court for the Eastern District of Arkansas challenging the Arkansas Public Service Commission's ("APSC") denial of recovery of $135 million of payments to other Utility operating companies in December 2018 relating to off-system sales of electricity from 2002-2009, as ordered by the Federal Energy Regulatory Commission. The complaint also involved a challenge to the $14 million, plus interest, of related refunds ordered by the APSC and paid by Entergy Arkansas in August 2020. On March 7, 2024, the U.S. District Court for the Eastern District of Arkansas issued a judgment in favor of the APSC and against Entergy Arkansas. Entergy Arkansas plans to appeal the decision. As of December 31, 2023, Entergy Arkansas had a $132 million regulatory asset reflecting the expected recovery of a portion of the costs at issue in the opportunity sales proceeding. As a result of the adverse decision by the U.S. District Court for the Eastern District of Arkansas, on March 12, 2024, Entergy Arkansas concluded that it can no longer support the recognition of this regulatory asset and will record in first quarter 2024 a $132 million ($99 million net-of-tax) charge to earnings. This charge will not result in future cash expenditures.

01. Regulation FD Disclosure

Item 7.01. Regulation FD Disclosure. The charge described in Item 2.06 above will be considered an adjustment and excluded from Entergy's adjusted earnings (non-GAAP) and does not impact Entergy's adjusted earnings per share outlook. In addition, Entergy's credit and operating cash flow outlooks are unaffected by the U.S. District Court for the Eastern District of Arkansas decision. Cautionary Note Regarding Forward-Looking Statements In this current report on Form 8-K, and from time to time, Entergy and Entergy Arkansas make certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, among other things, statements regarding Entergy's current financial and operational outlooks; expected impacts to credit metrics and ratings; and other statements of Entergy's or Entergy Arkansas' plans, beliefs, or expectations included in this report. Readers are cautioned not to place undue reliance on these forward-looking statements, which apply only as of the date of this report. Except to the extent required by the federal securities laws, neither Entergy nor Entergy Arkansas undertakes any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Forward-looking statements are subject to a number of risks, uncertainties, and other factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements, including (a) those factors discussed elsewhere in this Current Report on Form 8-K and in Entergy's and Entergy Arkansas' most recent Annual Reports on Form 10-K, any of their subsequently filed Quarterly Reports on Form 10-Q, and any of their other subsequently filed reports and filings made under the Securities Exchange Act of 1934; (b) uncertainties associated with (1) Entergy's, including Entergy Arkansas', rate proceedings, formula rate

01. Financial Statements and Exhibits

Item 9.01. Financial Statements and Exhibits (d) Exhibits. Exhibit No. Description 104 Cover Page Interactive Data File – the cover page XBRL tags are embedded within the Inline XBRL document. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Entergy Corporation Entergy Arkansas, LLC By: /s/ Marcus V. Brown Marcus V. Brown Executive Vice President and General Counsel Dated: March 12, 2024