Entergy(ETR) - 2023 Q1 - Quarterly Report

Forward-looking Information This section defines forward-looking statements and outlines key risks that could cause actual results to differ materially Overview of Forward-looking Statements This section defines forward-looking statements and clarifies that registrants undertake no obligation to update them - Statements about future expectations, beliefs, plans, objectives, goals, projections, strategies, and events are considered 'forward-looking statements'[16] - Registrants do not provide assurance that forward-looking statements will prove correct and undertake no obligation to publicly update or revise them, except as required by federal securities laws[16] Factors That Could Cause Actual Results to Differ Materially This section outlines numerous risks and uncertainties that could cause actual results to differ materially from forward-looking statements - Key risk factors include resolution of rate cases and related litigation, regulatory and operating challenges with MISO, changes in utility regulation, and changes in nuclear facility oversight[17][18] - Economic and environmental risks such as volatility in energy markets, changes in environmental laws, weather variations (hurricanes, storms), effects of climate change, and supply chain disruptions are significant[17][20] - Financial and operational risks include changes in financial markets, actions of rating agencies, litigation, technological changes (e.g., distributed energy), cybersecurity threats, and the ability to attract and retain skilled workforce[17][22] Definitions This section provides a glossary of abbreviations and acronyms used throughout the report Abbreviations and Acronyms This section provides a glossary of abbreviations and acronyms used throughout the report, defining key terms related to regulatory bodies, company entities, and operational metrics - Key regulatory bodies defined include APSC (Arkansas Public Service Commission), FERC (Federal Energy Regulatory Commission), LPSC (Louisiana Public Service Commission), MPSC (Mississippi Public Service Commission), and PUCT (Public Utility Commission of Texas)[24][26] - Entergy's business segments are defined, with 'Utility' being the primary reportable segment and 'Parent & Other' encompassing the parent company and non-utility operations, following the exit from the merchant nuclear power business[24][26] - Operational metrics and facilities such as GWh (Gigawatt-hour), MISO (Midcontinent Independent System Operator, Inc.), ANO (Arkansas Nuclear One), and Grand Gulf (Grand Gulf Nuclear Station) are also defined[24][26] Part I. Financial Information This part provides detailed financial discussion and analysis for Entergy Corporation and its subsidiaries, including operations, liquidity, and regulatory updates Entergy Corporation and Subsidiaries This section provides a comprehensive financial discussion and analysis for Entergy Corporation and its subsidiaries, focusing on the Utility segment Management's Financial Discussion and Analysis This section details Entergy's financial performance for Q1 2023 compared to Q1 2022, highlighting changes in net income, operating revenues, and various expenses Net Income Attributable to Entergy Corporation (Q1 2023 vs. Q1 2022) | Category | 2022 Net Income (Loss) (In Thousands) | Variance (In Thousands) | 2023 Net Income (Loss) (In Thousands) | | :------------------------------------------------ | :--------------------- | :------- | :--------------------- | | Utility | $340,462 | $56,840 | $397,302 | | Parent & Other | ($64,062) | ($22,305) | ($86,367) | | Entergy Total | $276,400 | $34,535 | $310,935 | - Q1 2023 net income increased by $34.5 million, primarily driven by a $129 million reduction in income tax expense due to the Hurricane Ida securitization, partially offset by a $103 million regulatory charge[33][34] Operating Revenues (Q1 2023 vs. Q1 2022) | Item | Amount (In Millions) | | :------------------------------------------------ | :------------------- | | 2022 operating revenues | $2,728 | | Fuel, rider, and other revenues (no significant net income effect) | 161 | | Retail electric price | 86 | | Storm restoration carrying costs | 31 | | Return of unprotected excess accumulated deferred income taxes | 17 | | Volume/weather | (75) | | 2023 operating revenues | $2,948 | - Utility operating revenues increased by $219.8 million, primarily due to fuel/rider revenues ($161 million), retail electric price increases ($86 million), and storm restoration carrying costs ($31 million), partially offset by unfavorable volume/weather ($75 million)[33][35] Total Electric Energy Sales for Utility (Q1 2023 vs. Q1 2022) | Customer Segment | 2023 (GWh) | 2022 (GWh) | % Change | | :----------------- | :--------- | :--------- | :------- | | Residential | 7,276 | 8,454 | (14)% | | Commercial | 6,248 | 6,271 | —% | | Industrial | 12,740 | 12,496 | 2% | | Governmental | 577 | 584 | (1)% | | Total retail | 26,841 | 27,805 | (3)% | | Sales for resale | 4,502 | 3,641 | 24% | | Total | 31,343 | 31,446 | —% | - Total electric energy sales for Utility remained flat year-over-year, with a 14% decrease in residential sales due to less favorable weather, offset by a 24% increase in sales for resale[41] Debt to Capital Ratios (March 31, 2023 vs. December 31, 2022) | Ratio | March 31, 2023 | December 31, 2022 | | :------------------------------------------------ | :------------- | :---------------- | | Debt to capital | 67.4 % | 66.9 % | | Debt to capital, excluding securitization bonds (non-GAAP) | 67.2 % | 66.6 % | | Net debt to net capital, excluding securitization bonds (non-GAAP) | 65.5 % | 66.5 % | - Entergy's debt to capital ratio increased to 67.4% as of March 31, 2023, from 66.9% at December 31, 2022, primarily due to net debt issuance in 2023[56][57] Cash Flows (Q1 2023 vs. Q1 2022) | Category | 2023 (In Millions) | 2022 (In Millions) | | :-------------------------------- | :----------------- | :----------------- | | Cash and cash equivalents at beginning of period | $224 | $443 | | Net cash provided by (used in): | | | | Operating activities | 960 | 538 | | Investing activities | (1,283) | (1,551) | | Financing activities | 2,070 | 1,272 | | Net increase in cash and cash equivalents | 1,747 | 259 | | Cash and cash equivalents at end of period | $1,971 | $702 | - Net cash from operating activities increased by $422 million, driven by higher customer collections and decreased storm spending[85][87] - Net cash from financing activities increased by $798 million, primarily due to $1.458 billion from the Entergy Louisiana storm securitization[85][87] Consolidated Income Statements This section presents the consolidated income statements for Entergy Corporation and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing operating revenues, operating expenses, and net income Consolidated Income Statement Highlights (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Thousands) | 2022 (In Thousands) | | :------------------------------------------------ | :------------------ | :------------------ | | Operating Revenues | $2,981,059 | $2,877,925 | | Operating Income | $462,109 | $566,060 | | Income Before Income Taxes | $233,324 | $346,090 | | Income Taxes | ($78,975) | $66,497 | | Consolidated Net Income | $312,299 | $279,593 | | Net Income Attributable to Entergy Corporation | $310,935 | $276,400 | | Basic Earnings per Average Common Share | $1.47 | $1.36 | | Diluted Earnings per Average Common Share | $1.47 | $1.36 | - Consolidated net income attributable to Entergy Corporation increased to $310.9 million in Q1 2023 from $276.4 million in Q1 2022, with basic and diluted EPS rising to $1.47 from $1.36[96] - Operating revenues increased by $103.1 million, while operating income decreased by $103.9 million[96] - Income taxes shifted from an expense of $66.5 million in Q1 2022 to a benefit of $79.0 million in Q1 2023[96] Consolidated Statements of Comprehensive Income This section presents the consolidated statements of comprehensive income for Entergy Corporation and Subsidiaries for the three months ended March 31, 2023 and 2022, showing net income and other comprehensive income (loss) components Consolidated Comprehensive Income (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Thousands) | 2022 (In Thousands) | | :------------------------------------------------ | :------------------ | :------------------ | | Net Income | $312,299 | $279,593 | | Other comprehensive income (loss) | $2,027 | ($4,050) | | Comprehensive Income | $314,326 | $275,543 | | Comprehensive Income Attributable to Entergy Corporation | $312,962 | $272,350 | - Comprehensive income attributable to Entergy Corporation increased to $313.0 million in Q1 2023 from $272.4 million in Q1 2022, primarily due to higher net income and a positive shift in other comprehensive income[97] Consolidated Statements of Cash Flows This section provides the consolidated statements of cash flows for Entergy Corporation and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing cash flows from operating, investing, and financing activities Consolidated Cash Flow Highlights (Q1 2023 vs. Q1 2022) | Category | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net cash flow provided by operating activities | $959,543 | $537,966 | | Net cash flow used in investing activities | ($1,283,591) | ($1,551,219) | | Net cash flow provided by financing activities | $2,070,396 | $1,272,285 | | Net increase in cash and cash equivalents | $1,746,348 | $259,032 | | Cash and cash equivalents at end of period | $1,970,512 | $701,591 | - Net cash from operating activities significantly increased by $421.6 million, while net cash used in investing activities decreased by $267.6 million[99][101] - Net cash from financing activities increased by $798.1 million, leading to a substantial increase in cash and cash equivalents at period end[99][101] Consolidated Balance Sheets This section presents the consolidated balance sheets for Entergy Corporation and Subsidiaries as of March 31, 2023, and December 31, 2022, detailing assets, liabilities, and equity Consolidated Balance Sheet Highlights (March 31, 2023 vs. December 31, 2022) | Category | March 31, 2023 (In Thousands) | December 31, 2022 (In Thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Assets | $59,203,276 | $58,595,191 | | Total Liabilities | $45,816,938 | $45,310,889 | | Total Equity | $13,166,928 | $13,064,892 | - Total assets increased by $608.1 million, primarily driven by a significant increase in cash and cash equivalents to $1.97 billion from $224.2 million[103][105] - Total liabilities also increased by $506.0 million, with long-term debt rising to $24.46 billion from $23.62 billion[103][105] - Total common shareholders' equity increased by $91.2 million to $13.06 billion, reflecting net income and other comprehensive income[105] Consolidated Statements of Changes in Equity This section presents the consolidated statements of changes in equity for Entergy Corporation and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing changes in common stock, paid-in capital, retained earnings, accumulated other comprehensive loss, and noncontrolling interests Consolidated Changes in Equity (Q1 2023 vs. Q1 2022) | Category | March 31, 2023 (In Thousands) | March 31, 2022 (In Thousands) | | :-------------------------------- | :------------------------------ | :------------------------------ | | Balance at December 31 | $13,064,892 | $11,705,394 | | Consolidated net income | $312,299 | $279,593 | | Other comprehensive income (loss) | $2,027 | ($4,050) | | Common stock dividends declared | ($226,194) | ($205,058) | | Beneficial interest in storm trust | $14,577 | — | | Balance at March 31 | $13,166,928 | $11,776,826 | - Total equity increased to $13.17 billion as of March 31, 2023, from $13.06 billion at December 31, 2022, primarily due to consolidated net income and a beneficial interest in the storm trust, partially offset by common stock dividends[107] Note 1. Commitments and Contingencies This note discusses Entergy's involvement in various legal, regulatory, and tax proceedings, highlighting the resolution of the ANO damages case and the winding up of the Nelson Industrial Steam Company partnership - Entergy Arkansas accepted a $41 million offer of judgment from the DOE in March 2023 to resolve claims in the fourth round ANO damages case related to spent nuclear fuel storage costs[115] - The damages awarded included reimbursements for previously capitalized costs ($18 million), other operation and maintenance expenses ($10 million), nuclear fuel expense ($8 million), materials and supplies ($3 million), and taxes other than income taxes ($2 million)[115] - Entergy Louisiana is working to wind up the Nelson Industrial Steam Company (NISCO) partnership, which suspended operations in April 2023, and expects the generating units to transfer to Entergy Louisiana, with no material financial effect anticipated[121] Note 2. Rate and Regulatory Matters This note provides updates on various rate and regulatory proceedings affecting Entergy and its subsidiaries, including fuel and purchased power cost recovery, retail rate proceedings, and the closing of the Hurricane Ida securitization financing for Entergy Louisiana - Entergy Arkansas's energy cost rate increased to $0.01883 per kWh effective April 2023, primarily due to a large under-recovered balance from higher natural gas prices in 2022 and a $32 million deferral from 2021 winter storms[123] - The Hurricane Ida securitization financing for Entergy Louisiana closed in March 2023, resulting in the issuance of approximately $1.491 billion in bonds and a $180 million regulatory asset for future recovery[157] - The securitization led to a net reduction of income tax expense of approximately $133 million for Entergy Louisiana and $129 million for Entergy, but also a $103 million regulatory charge to share benefits with customers[163] - System Energy paid $103.5 million in refunds in January 2023 related to the Grand Gulf sale-leaseback renewal costs and depreciation litigation, distributed to Entergy Arkansas ($41.7 million), Entergy Louisiana ($27.8 million), and Entergy New Orleans ($34 million)[140] - Entergy Louisiana filed an application in April 2023 to use $1.6 billion in low-interest debt to reduce its COVID-19 regulatory asset of $47.8 million[127] Note 3. Equity This note details Entergy's equity structure, including common stock, earnings per share, equity distribution programs, treasury stock, comprehensive income, and noncontrolling interests Earnings per Share (Q1 2023 vs. Q1 2022) | Metric | 2023 | 2022 | | :-------------------------------- | :--- | :--- | | Basic earnings per share | $1.47 | $1.36 | | Diluted earnings per share | $1.47 | $1.36 | - Entergy physically settled its forward sale agreements in November 2022, delivering 7,688,419 shares of common stock for $853.3 million[171] - No forward sale agreements were in place as of March 31, 2023[171] - Entergy Louisiana consolidates Restoration Law Trust II (storm trust II) as a variable interest entity, with the LURC's 1% beneficial interest shown as noncontrolling interest ($14.6 million as of March 31, 2023)[179] - Common stock dividends declared were $1.07 per share for Q1 2023, up from $1.01 per share for Q1 2022[167] Note 4. Revolving Credit Facilities, Lines of Credit, Short-term Borrowings, and Long-term Debt This note provides details on Entergy's and its subsidiaries' credit facilities, short-term borrowings, and long-term debt, including borrowing capacities, outstanding amounts, and recent debt issuances Entergy Corporation Credit Facility Status (March 31, 2023) | Category | Amount (In Millions) | | :---------------- | :------------------- | | Capacity | $3,500 | | Borrowings | $150 | | Letters of Credit | $3 | | Capacity Available | $3,347 | - Entergy Corporation has a $3.5 billion credit facility expiring in June 2027, with $150 million drawn and $3.347 billion available as of March 31, 2023[180] - The weighted average interest rate on the drawn portion was 6.12%[180] - Entergy Corporation had $865.6 million of commercial paper outstanding as of March 31, 2023, with a weighted-average interest rate of 4.93%[182] - Entergy Arkansas issued $425 million of 5.15% Series mortgage bonds in January 2023[194] - System Energy issued $325 million of 6.00% Series mortgage bonds in March 2023[195] Long-Term Debt Fair Value (March 31, 2023 vs. December 31, 2022) | Company | March 31, 2023 Book Value (In Thousands) | March 31, 2023 Fair Value (In Thousands) | December 31, 2022 Book Value (In Thousands) | December 31, 2022 Fair Value (In Thousands) | | :-------------------- | :--------------------------------------- | :-------------------------------------- | :--------------------------------------- | :--------------------------------------- | | Entergy | $26,723,309 | $24,057,455 | $25,932,549 | $22,573,837 | | Entergy Arkansas | $4,620,604 | $4,126,440 | $4,166,500 | $3,538,930 | | Entergy Louisiana | $10,690,832 | $9,718,246 | $10,698,922 | $9,444,665 | | Entergy Mississippi | $2,431,365 | $2,156,919 | $2,331,096 | $1,987,154 | | Entergy New Orleans | $766,242 | $711,545 | $775,632 | $707,872 | | Entergy Texas | $2,896,522 | $2,566,690 | $2,895,913 | $2,485,705 | | System Energy | $1,020,211 | $979,621 | $777,905 | $702,473 | Note 5. Stock-based Compensation This note describes Entergy's stock-based compensation plans, including stock options and other equity awards, and provides financial information on compensation expense and tax benefits - Entergy granted options on 281,874 shares of common stock in Q1 2023 with a fair value of $20.07 per option[200] - As of March 31, 2023, 2,985,788 options were outstanding with an aggregate intrinsic value of $42.8 million[200] Stock Option Compensation Expense (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Millions) | 2022 (In Millions) | | :------------------------------------------------ | :----------------- | :----------------- | | Compensation expense included in consolidated net income | $1.1 | $1.1 | | Tax benefit recognized in consolidated net income | $0.3 | $0.3 | | Compensation cost capitalized | $0.5 | $0.4 | - In January 2023, Entergy granted 345,983 restricted stock awards and 143,212 long-term incentive awards[202][204] - Restricted stock awards were valued at $108.47 per share, and long-term incentive awards were valued at $130.65 per share (80%) and $108.47 per share (20%)[202][204] Other Equity Awards Compensation Expense (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Millions) | 2022 (In Millions) | | :------------------------------------------------ | :----------------- | :----------------- | | Compensation expense included in consolidated net income | $7.7 | $11.4 | | Tax benefit recognized in consolidated net income | $2.0 | $2.9 | | Compensation cost capitalized | $3.2 | $4.4 | Note 6. Retirement and Other Postretirement Benefits This note outlines the components of Entergy's qualified and non-qualified net pension costs and other postretirement benefit costs (income) for Q1 2023 and 2022 Entergy's Qualified Net Pension Costs (Q1 2023 vs. Q1 2022) | Component | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Service cost | $25,678 | $37,660 | | Interest cost | $75,701 | $51,119 | | Expected return on assets | ($98,133) | ($103,607) | | Amortization of net loss | $22,347 | $60,579 | | Settlement charges | $138,427 | — | | Net pension costs | $164,020 | $45,751 | - Entergy's net pension costs significantly increased to $164.0 million in Q1 2023 from $45.8 million in Q1 2022, primarily due to $138.4 million in settlement charges[206] Entergy's Net Other Postretirement Benefit Cost (Income) (Q1 2023 vs. Q1 2022) | Component | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Service cost | $3,664 | $6,184 | | Interest cost on APBO | $10,568 | $6,827 | | Expected return on assets | ($9,183) | ($10,855) | | Amortization of prior service credit | ($5,640) | ($6,388) | | Amortization of net (gain)/loss | ($2,862) | $1,083 | | Net other postretirement benefit income | ($3,453) | ($3,149) | - Entergy expects to contribute $267 million to its qualified pension plans in 2023, with $33 million already contributed as of March 31, 2023[216] Note 7. Business Segment Information This note details Entergy's business segments, primarily the Utility segment, and clarifies that Entergy Wholesale Commodities is no longer a reportable segment as of January 1, 2023 - Entergy operates primarily through a single reportable segment, Utility, which encompasses electric power generation, transmission, distribution, and sales in Arkansas, Louisiana, Mississippi, and Texas, plus a small natural gas distribution business in Louisiana[217] - Effective January 1, 2023, Entergy Wholesale Commodities is no longer a reportable segment, as Entergy completed its strategy to exit the merchant nuclear power business in 2022, with remaining activities now included under Parent & Other[218][32] Entergy's Segment Financial Information (Q1 2023 vs. Q1 2022) | Metric | Utility (2023, In Thousands) | Parent & Other (2023, In Thousands) | Consolidated (2023, In Thousands) | Utility (2022, In Thousands) | Parent & Other (22, In Thousands) | Consolidated (2022, In Thousands) | | :-------------------------- | :------------- | :-------------------- | :------------------ | :------------- | :-------------------- | :------------------ | | Operating revenues | $2,947,992 | $33,070 | $2,981,059 | $2,728,156 | $149,777 | $2,877,925 | | Income taxes | ($66,126) | ($12,849) | ($78,975) | $75,359 | ($8,862) | $66,497 | | Consolidated net income (loss) | $398,167 | ($30,394) | $312,299 | $343,156 | ($31,617) | $279,593 | | Total assets (period end) | $63,443,534 | $860,341 | $59,203,276 | $61,399,243 | $884,442 | $58,595,191 | Note 8. Risk Management and Fair Values This note discusses Entergy's market risk exposures, primarily commodity price risk, and its use of derivative instruments to mitigate these risks, along with fair value measurements of financial instruments - Entergy uses derivative instruments, including natural gas swaps and options, and financial transmission rights, to manage commodity price risk for its Utility segment, with most benefits/costs recovered through fuel cost recovery mechanisms[223][227][228] Fair Values of Derivative Instruments Not Designated as Hedging Instruments (March 31, 2023) | Instrument | Balance Sheet Location | Gross Fair Value (In Millions) | Offsetting Position (In Millions) | Net Fair Value (In Millions) | | :-------------------------- | :--------------------- | :----------------------------- | :------------------------------ | :--------------------------- | | Natural gas swaps and options (Assets) | Prepayments and other | $2 | $— | $2 | | Financial transmission rights (Assets) | Prepayments and other | $8 | ($1) | $7 | | Natural gas swaps and options (Liabilities) | Other current liabilities | $22 | $— | $22 | - Financial transmission rights are classified as Level 3 assets and liabilities in the fair value hierarchy, valued using unobservable inputs like estimates of congestion costs[244] Total Fair Value of Assets and Liabilities (March 31, 2023) | Category | Level 1 (In Millions) | Level 2 (In Millions) | Level 3 (In Millions) | Total (In Millions) | | :-------------------------- | :-------------------- | :-------------------- | :-------------------- | :------------------ | | Assets | $2,931 | $1,136 | $7 | $6,690 | | Liabilities | $22 | $— | $— | $22 | Note 9. Decommissioning Trust Funds This note provides information on Entergy's nuclear decommissioning trust funds, including their investment portfolios, fair value measurements, and regulatory accounting treatment - Entergy's subsidiaries maintain nuclear decommissioning trusts to fund costs for ANO 1, ANO 2, River Bend, Waterford 3, and Grand Gulf, investing in equity and fixed-rate debt securities[264] - Unrealized gains/losses on investment securities in the trusts are recorded as offsetting regulatory liabilities/assets due to regulatory treatment, except for the former Palisades plant[265] Available-for-Sale Debt Securities (March 31, 2023 vs. December 31, 2022) | Metric | 2023 (In Millions) | 2022 (In Millions) | | :---------------- | :----------------- | :----------------- | | Fair Value | $1,707 | $1,655 | | Total Unrealized Gains | $8 | $4 | | Total Unrealized Losses | $160 | $201 | - As of March 31, 2023, available-for-sale debt securities had an average coupon rate of approximately 3.07% and an average maturity of approximately 10.81 years[268] Note 10. Income Taxes This note provides updates on income tax matters, including the impact of the Tax Cuts and Jobs Act, the Act 293 securitization, and a recent Arkansas corporate income tax rate change - The Act 293 securitization for Entergy Louisiana resulted in a net reduction of income tax expense of approximately $133 million for Entergy Louisiana and $129 million for Entergy, due to a permanent tax accounting difference[293] - In Q1 2023, Entergy Louisiana recorded a $103 million ($76 million net-of-tax) regulatory charge to share the benefits of the securitization with customers[294] - Arkansas Act 532 reduced the corporate income tax rate from 5.3% to 5.1% in April 2023, with no significant expected effect on Entergy Arkansas's financial position[295] - There was no return of unprotected excess accumulated deferred income taxes for Entergy or its Registrant Subsidiaries for the three months ended March 31, 2023[290] Note 11. Property, Plant, and Equipment This note provides details on construction expenditures included in accounts payable for Entergy and its Registrant Subsidiaries as of March 31, 2023, and December 31, 2022 Construction Expenditures in Accounts Payable (March 31, 2023 vs. December 31, 2022) | Company | March 31, 2023 (In Millions) | December 31, 2022 (In Millions) | | :-------------------- | :--------------------------- | :---------------------------- | | Entergy | $426 | $459 | | Entergy Arkansas | $64.4 | $93.2 | | Entergy Louisiana | $117.3 | $154.3 | | Entergy Mississippi | $57.6 | $59.5 | | Entergy New Orleans | $5.7 | $11.2 | | Entergy Texas | $104.8 | $68.9 | | System Energy | $36.6 | $29 | - Total construction expenditures included in accounts payable for Entergy decreased from $459 million at December 31, 2022, to $426 million at March 31, 2023[296] Note 12. Variable Interest Entities This note discusses Entergy's variable interest entities (VIEs), including nuclear fuel companies, Restoration Law Trust I and II, AR Searcy Partnership, LLC, and MS Sunflower Partnership, LLC - Restoration Law Trust I and II are consolidated by Entergy Louisiana as VIEs, with Entergy Louisiana as the primary beneficiary[299][300] - Storm Trust II was established for the Act 293 securitization of Hurricane Ida costs[299][300] - As of March 31, 2023, Storm Trust I held $3.1 billion and Storm Trust II held $1.5 billion in Entergy Finance Company preferred membership interests[299][300] - AR Searcy Partnership, LLC (Entergy Arkansas) and MS Sunflower Partnership, LLC (Entergy Mississippi) are tax equity partnerships consolidated as VIEs, primarily consisting of property, plant, and equipment[302][303] Note 13. Revenue This note provides a detailed breakdown of Entergy's operating revenues by customer segment and type for Q1 2023 and 2022, including a reconciliation of changes in the allowance for doubtful accounts Entergy's Total Operating Revenues (Q1 2023 vs. Q1 2022) | Category | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------- | :------------------ | :------------------ | | Utility Electric revenues | $2,883,411 | $2,655,776 | | Natural gas revenues | $64,581 | $72,361 | | Other revenues | $33,067 | $149,788 | | Total operating revenues | $2,981,059 | $2,877,925 | - Total operating revenues increased by $103.1 million, with Utility electric revenues rising by $227.6 million, while natural gas revenues decreased by $7.8 million and other revenues decreased by $116.7 million[305] Allowance for Doubtful Accounts (March 31, 2023 vs. December 31, 2022) | Category | March 31, 2023 (In Millions) | December 31, 2022 (In Millions) | | :-------------------------- | :--------------------------- | :------------------------------ | | Balance | $23.3 | $30.9 | | Provisions | $6.1 | — | | Write-offs | ($34.4) | — | | Recoveries | $20.7 | — | - The allowance for doubtful accounts decreased from $30.9 million at December 31, 2022, to $23.3 million at March 31, 2023, reflecting write-offs of $34.4 million and recoveries of $20.7 million[309] Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the 'Market and Credit Risk Sensitive Instruments' section within Management's Financial Discussion and Analysis for disclosures regarding market and credit risk Item 4. Controls and Procedures This section confirms the effectiveness of the Registrants' disclosure controls and procedures as of March 31, 2023, and states that no material changes in internal control over financial reporting occurred during the quarter - Each Registrant's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2023, ensuring timely and accurate reporting[314] - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, internal control over financial reporting during the quarter ended March 31, 2023[315] Entergy Arkansas, LLC and Subsidiaries This section provides a detailed financial discussion and analysis for Entergy Arkansas, LLC and its subsidiaries, covering results of operations, liquidity and capital resources, and regulatory updates Management's Financial Discussion and Analysis This section analyzes Entergy Arkansas's financial performance for Q1 2023 compared to Q1 2022, detailing changes in net income, operating revenues, and expenses - Entergy Arkansas's net income decreased by $6.2 million in Q1 2023, primarily due to lower volume/weather and higher interest expense, partially offset by higher retail electric prices and other income[318] Entergy Arkansas Operating Revenues (Q1 2023 vs. Q1 2022) | Item | Amount (In Millions) | | :------------------------------------------------ | :------------------- | | 2022 operating revenues | $559.0 | | Fuel, rider, and other revenues (no significant net income effect) | 26.0 | | Retail electric price | 19.4 | | Volume/weather | (21.7) | | 2023 operating revenues | $582.7 | - Operating revenues increased by $23.7 million, driven by fuel/rider revenues ($26.0 million) and retail electric price increases ($19.4 million), partially offset by unfavorable volume/weather ($21.7 million)[319] Entergy Arkansas Total Electric Energy Sales (Q1 2023 vs. Q1 2022) | Customer Segment | 2023 (GWh) | 2022 (GWh) | % Change | | :----------------- | :--------- | :--------- | :------- | | Residential | 1,802 | 2,092 | (14)% | | Commercial | 1,239 | 1,307 | (5)% | | Industrial | 2,050 | 1,972 | 4% | | Governmental | 46 | 55 | (16)% | | Total retail | 5,137 | 5,426 | (5)% | | Sales for resale | 2,132 | 1,877 | 14% | | Total | 7,269 | 7,303 | —% | - Net cash flow provided by operating activities increased by $26.6 million, partly due to a $41.7 million refund from System Energy related to sale-leaseback litigation[331] Entergy Arkansas Debt to Capital Ratio (March 31, 2023 vs. December 31, 2022) | Ratio | March 31, 2023 | December 31, 2022 | | :-------------------------- | :------------- | :---------------- | | Debt to capital | 55.1 % | 52.5 % | | Net debt to net capital (non-GAAP) | 54.2 % | 52.5 % | - The debt to capital ratio increased to 55.1% from 52.5%, primarily due to the issuance of $425 million of 5.15% Series mortgage bonds in January 2023[325][338] Consolidated Income Statements This section presents the consolidated income statements for Entergy Arkansas, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing electric operating revenues, operating expenses, and net income Entergy Arkansas Income Statement Highlights (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Operating Revenues | $582,749 | $558,956 | | Operating Income | $103,031 | $115,534 | | Income Before Income Taxes | $69,831 | $84,684 | | Income Taxes | $10,434 | $19,117 | | Net Income | $59,397 | $65,567 | | Earnings Applicable to Member's Equity | $61,026 | $66,954 | - Net income decreased to $59.4 million in Q1 2023 from $65.6 million in Q1 2022, despite an increase in operating revenues, due to higher operating expenses and interest expense[364] Consolidated Statements of Cash Flows This section provides the consolidated statements of cash flows for Entergy Arkansas, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing cash flows from operating, investing, and financing activities Entergy Arkansas Cash Flow Highlights (Q1 2023 vs. Q1 2022) | Category | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net cash flow provided by operating activities | $274,037 | $247,426 | | Net cash flow used in investing activities | ($306,032) | ($214,477) | | Net cash flow provided by financing activities | $186,302 | $64,167 | | Net increase in cash and cash equivalents | $154,307 | $97,116 | | Cash and cash equivalents at end of period | $159,585 | $110,031 | - Net cash from operating activities increased by $26.6 million, while net cash used in investing activities increased by $91.6 million, primarily due to higher construction expenditures and nuclear fuel purchases[367] - Net cash from financing activities increased by $122.1 million, largely due to the issuance of $425 million in long-term debt[367] Consolidated Balance Sheets This section presents the consolidated balance sheets for Entergy Arkansas, LLC and Subsidiaries as of March 31, 2023, and December 31, 2022, detailing assets, liabilities, and equity Entergy Arkansas Balance Sheet Highlights (March 31, 2023 vs. December 31, 2022) | Category | March 31, 2023 (In Thousands) | December 31, 2022 (In Thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Assets | $13,280,430 | $13,006,576 | | Total Liabilities | $9,519,322 | $9,224,761 | | Total Equity | $3,761,108 | $3,781,815 | - Total assets increased by $273.9 million, primarily due to an increase in cash and cash equivalents to $159.6 million from $5.3 million[369][371] - Long-term debt increased to $4.33 billion from $3.88 billion[369][371] Consolidated Statements of Changes in Equity This section presents the consolidated statements of changes in equity for Entergy Arkansas, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing changes in noncontrolling interest and member's equity Entergy Arkansas Changes in Equity (Q1 2023 vs. Q1 2022) | Category | March 31, 2023 (In Thousands) | March 31, 2022 (In Thousands) | | :-------------------------- | :------------------------------ | :------------------------------ | | Balance at December 31 | $3,781,815 | $3,575,855 | | Net income (loss) | $59,397 | $65,567 | | Common equity distributions | ($80,000) | — | | Balance at March 31 | $3,761,108 | $3,641,422 | - Total equity decreased to $3.76 billion as of March 31, 2023, from $3.78 billion at December 31, 2022, primarily due to $80 million in common equity distributions, partially offset by net income[374] Entergy Louisiana, LLC and Subsidiaries This section provides a detailed financial discussion and analysis for Entergy Louisiana, LLC and its subsidiaries, covering results of operations, liquidity and capital resources, and regulatory updates Management's Financial Discussion and Analysis This section analyzes Entergy Louisiana's financial performance for Q1 2023 compared to Q1 2022, focusing on the significant impact of the March 2023 storm cost securitization - Entergy Louisiana's net income increased by $93.2 million in Q1 2023, primarily due to a $133.4 million reduction in income tax expense from the March 2023 storm cost securitization, partially offset by a $103.4 million regulatory charge[377] Entergy Louisiana Operating Revenues (Q1 2023 vs. Q1 2022) | Item | Amount (In Millions) | | :------------------------------------------------ | :------------------- | | 2022 operating revenues | $1,266.0 | | Fuel, rider, and other revenues (no significant net income effect) | 29.3 | | Retail electric price | 40.9 | | Storm restoration carrying costs | 30.6 | | Volume/weather | (21.6) | | 2023 operating revenues | $1,345.2 | - Operating revenues increased by $79.2 million, driven by retail electric price increases ($40.9 million) and storm restoration carrying costs ($30.6 million), partially offset by unfavorable volume/weather ($21.6 million)[378] Entergy Louisiana Total Electric Energy Sales (Q1 2023 vs. Q1 2022) | Customer Segment | 2023 (GWh) | 2022 (GWh) | % Change | | :----------------- | :--------- | :--------- | :------- | | Residential | 2,685 | 3,069 | (13)% | | Commercial | 2,447 | 2,421 | 1% | | Industrial | 7,832 | 7,606 | 3% | | Governmental | 194 | 191 | 2% | | Total retail | 13,158 | 13,287 | (1)% | | Sales for resale | 1,901 | 2,194 | (13)% | | Total | 15,059 | 15,481 | (3)% | - Net cash flow provided by operating activities increased by $356.6 million, partly due to a $27.8 million refund from System Energy related to sale-leaseback litigation[395] Entergy Louisiana Debt to Capital Ratio (March 31, 2023 vs. December 31, 2022) | Ratio | March 31, 2023 | December 31, 2022 | | :-------------------------- | :------------- | :---------------- | | Debt to capital | 49.2 % | 53.0 % | | Net debt to net capital (non-GAAP) | 46.6 % | 52.9 % | - The debt to capital ratio decreased to 49.2% from 53.0%, primarily due to a $1.5 billion capital contribution received indirectly from Entergy Corporation in March 2023[399] - Entergy Louisiana filed an application in February 2023 seeking certification of the Iberville/Coastal Prairie (175 MW) and Sterlington (49 MW) solar facilities to expand its Geaux Green Option[418] - Entergy Louisiana filed an application in March 2023 for an alternative RFP process to acquire up to 3 GW of solar resources on a faster timeline[419] Consolidated Income Statements This section presents the consolidated income statements for Entergy Louisiana, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing operating revenues, operating expenses, and net income Entergy Louisiana Income Statement Highlights (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Operating Revenues | $1,345,208 | $1,265,972 | | Operating Income | $180,728 | $234,264 | | Income Before Income Taxes | $133,195 | $181,649 | | Income Taxes | ($110,829) | $30,789 | | Net Income | $244,024 | $150,860 | | Earnings Applicable to Member's Equity | $243,470 | $150,860 | - Net income increased to $244.0 million in Q1 2023 from $150.9 million in Q1 2022, largely due to a significant income tax benefit of $110.8 million in 2023 compared to an expense of $30.8 million in 2022[429] Consolidated Statements of Comprehensive Income This section presents the consolidated statements of comprehensive income for Entergy Louisiana, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, showing net income and other comprehensive loss components Entergy Louisiana Comprehensive Income (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Thousands) | 2022 (In Thousands) | | :------------------------------------------------ | :------------------ | :------------------ | | Net Income | $244,024 | $150,860 | | Other comprehensive loss | ($786) | ($613) | | Comprehensive Income | $243,238 | $150,247 | | Comprehensive Income Applicable to Member's Equity | $242,684 | $150,247 | - Comprehensive income applicable to member's equity increased to $242.7 million in Q1 2023 from $150.2 million in Q1 2022, reflecting the higher net income[430] Consolidated Statements of Cash Flows This section provides the consolidated statements of cash flows for Entergy Louisiana, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing cash flows from operating, investing, and financing activities Entergy Louisiana Cash Flow Highlights (Q1 2023 vs. Q1 2022) | Category | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net cash flow provided by operating activities | $539,761 | $183,126 | | Net cash flow used in investing activities | ($2,038,403) | ($1,032,121) | | Net cash flow provided by financing activities | $2,521,881 | $987,069 | | Net increase in cash and cash equivalents | $1,023,239 | $138,074 | | Cash and cash equivalents at end of period | $1,079,852 | $156,647 | - Net cash from operating activities increased by $356.6 million[432] - Net cash used in investing activities increased by $1.01 billion, primarily due to the $1.46 billion purchase of preferred membership interests related to securitization[432] - Net cash from financing activities increased by $1.53 billion, driven by $1.46 billion from securitization proceeds and a $1.46 billion capital contribution from the parent[432] Consolidated Balance Sheets This section presents the consolidated balance sheets for Entergy Louisiana, LLC and Subsidiaries as of March 31, 2023, and December 31, 2022, detailing assets, liabilities, and equity Entergy Louisiana Balance Sheet Highlights (March 31, 2023 vs. December 31, 2022) | Category | March 31, 2023 (In Thousands) | December 31, 2022 (In Thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Assets | $29,448,873 | $28,144,555 | | Total Liabilities | $18,399,682 | $18,651,107 | | Total Equity | $11,048,191 | $9,493,448 | - Total assets increased by $1.3 billion, with cash and cash equivalents rising to $1.08 billion from $56.6 million[435] - Investment in affiliate preferred membership interests increased to $4.57 billion from $3.16 billion[435] - Total equity increased by $1.55 billion, primarily due to a $1.46 billion capital contribution from the parent[437] Consolidated Statements of Changes in Equity This section presents the consolidated statements of changes in equity for Entergy Louisiana, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing changes in noncontrolling interests, member's equity, and accumulated other comprehensive income Entergy Louisiana Changes in Equity (Q1 2023 vs. Q1 2022) | Category | March 31, 2023 (In Thousands) | March 31, 2022 (In Thousands) | | :-------------------------- | :------------------------------ | :------------------------------ | | Balance at December 31 | $9,493,448 | $8,180,572 | | Net income | $244,024 | $150,860 | | Contributions from parent | $1,457,676 | — | | Common equity distributions | ($160,250) | ($125,000) | | Beneficial interest in storm trust | $14,577 | — | | Balance at March 31 | $11,048,191 | $8,205,806 | - Total equity increased to $11.05 billion as of March 31, 2023, from $9.49 billion at December 31, 2022, driven by net income and a significant capital contribution from the parent[440] Entergy Mississippi, LLC and Subsidiaries This section provides a detailed financial discussion and analysis for Entergy Mississippi, LLC and its subsidiaries, covering results of operations, liquidity and capital resources, and regulatory updates Management's Financial Discussion and Analysis This section analyzes Entergy Mississippi's financial performance for Q1 2023 compared to Q1 2022, detailing changes in net income, operating revenues, and expenses - Entergy Mississippi's net income decreased by $9.4 million in Q1 2023, primarily due to lower volume/weather, higher other operation and maintenance expenses, and increased depreciation and interest expense, partially offset by higher retail electric prices[443] Entergy Mississippi Operating Revenues (Q1 2023 vs. Q1 2022) | Item | Amount (In Millions) | | :------------------------------------------------ | :------------------- | | 2022 operating revenues | $349.0 | | Fuel, rider, and other revenues (no significant net income effect) | 65.5 | | Retail electric price | 12.1 | | Volume/weather | (14.2) | | 2023 operating revenues | $412.4 | - Operating revenues increased by $63.4 million, driven by fuel/rider revenues ($65.5 million) and retail electric price increases ($12.1 million), partially offset by unfavorable volume/weather ($14.2 million)[444] Entergy Mississippi Total Electric Energy Sales (Q1 2023 vs. Q1 2022) | Customer Segment | 2023 (GWh) | 2022 (GWh) | % Change | | :----------------- | :--------- | :--------- | :------- | | Residential | 1,089 | 1,295 | (16)% | | Commercial | 1,015 | 1,021 | (1)% | | Industrial | 567 | 561 | 1% | | Governmental | 92 | 96 | (4)% | | Total retail | 2,763 | 2,973 | (7)% | | Sales for resale | 1,564 | 535 | 192% | | Total | 4,327 | 3,508 | 23% | - Net cash flow provided by operating activities increased by $41.2 million, shifting from a use of $4.3 million in Q1 2022 to a provision of $36.9 million in Q1 2023, primarily due to higher customer collections[456] Entergy Mississippi Debt to Capital Ratio (March 31, 2023 vs. December 31, 2022) | Ratio | March 31, 2023 | December 31, 2022 | | :-------------------------- | :------------- | :---------------- | | Debt to capital | 54.4 % | 53.4 % | | Net debt to net capital (non-GAAP) | 54.0 % | 53.2 % | - The debt to capital ratio increased to 54.4% from 53.4%, primarily due to $100 million in borrowings on Entergy Mississippi's credit facility in 2023[450][462] - Entergy Mississippi implemented a $27.9 million interim rate increase in April 2023, following its 2023 formula rate plan filing which showed earned return on rate base below the bandwidth[469] Consolidated Income Statements This section presents the consolidated income statements for Entergy Mississippi, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing electric operating revenues, operating expenses, and net income Entergy Mississippi Income Statement Highlights (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Operating Revenues | $412,428 | $349,029 | | Operating Income | $50,591 | $58,008 | | Income Before Income Taxes | $27,695 | $38,028 | | Income Taxes | $6,755 | $7,673 | | Net Income | $20,940 | $30,355 | | Earnings Applicable to Member's Equity | $23,081 | $30,355 | - Net income decreased to $20.9 million in Q1 2023 from $30.4 million in Q1 2022, despite an increase in operating revenues, due to higher fuel and purchased power expenses and increased other operation and maintenance costs[476] Consolidated Statements of Cash Flows This section provides the consolidated statements of cash flows for Entergy Mississippi, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing cash flows from operating, investing, and financing activities Entergy Mississippi Cash Flow Highlights (Q1 2023 vs. Q1 2022) | Category | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net cash flow provided by (used in) operating activities | $36,861 | ($4,340) | | Net cash flow used in investing activities | ($111,842) | ($61,154) | | Net cash flow provided by financing activities | $94,154 | $17,895 | | Net increase (decrease) in cash and cash equivalents | $19,173 | ($47,599) | | Cash and cash equivalents at end of period | $36,152 | $28 | - Net cash from operating activities improved by $41.2 million[481] - Net cash used in investing activities increased by $50.7 million, primarily due to higher construction expenditures[481] - Net cash from financing activities increased by $76.3 million, mainly due to $100 million in borrowings on Entergy Mississippi's credit facility[481] Consolidated Balance Sheets This section presents the consolidated balance sheets for Entergy Mississippi, LLC and Subsidiaries as of March 31, 2023, and December 31, 2022, detailing assets, liabilities, and equity Entergy Mississippi Balance Sheet Highlights (March 31, 2023 vs. December 31, 2022) | Category | March 31, 2023 (In Thousands) | December 31, 2022 (In Thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Assets | $6,049,464 | $6,078,764 | | Total Liabilities | $4,000,487 | $4,038,227 | | Total Equity | $2,048,977 | $2,040,537 | - Total assets decreased by $29.3 million[483][486] - Long-term debt increased to $2.03 billion from $1.93 billion[483][486] - Total equity increased by $8.4 million[483][486] Consolidated Statements of Changes in Equity This section presents the consolidated statements of changes in equity for Entergy Mississippi, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing changes in noncontrolling interest and member's equity Entergy Mississippi Changes in Equity (Q1 2023 vs. Q1 2022) | Category | March 31, 2023 (In Thousands) | March 31, 2022 (In Thousands) | | :-------------------------- | :------------------------------ | :------------------------------ | | Balance at December 31 | $2,040,537 | $1,839,568 | | Net income (loss) | $20,940 | $30,355 | | Common equity distributions | ($12,500) | — | | Balance at March 31 | $2,048,977 | $1,869,923 | - Total equity increased to $2.05 billion as of March 31, 2023, from $2.04 billion at December 31, 2022, due to net income, partially offset by $12.5 million in common equity distributions[489] Entergy New Orleans, LLC and Subsidiaries This section provides a detailed financial discussion and analysis for Entergy New Orleans, LLC and its subsidiaries, covering results of operations, liquidity and capital resources, and regulatory updates Management's Financial Discussion and Analysis This section analyzes Entergy New Orleans's financial performance for Q1 2023 compared to Q1 2022, detailing changes in net income, operating revenues, and expenses - Entergy New Orleans's net income decreased by $5 million in Q1 2023, primarily due to lower volume/weather, higher taxes other than income taxes, and a higher effective income tax rate, partially offset by higher retail electric prices and other income[492] Entergy New Orleans Operating Revenues (Q1 2023 vs. Q1 2022) | Item | Amount (In Millions) | | :------------------------------------------------ | :------------------- | | 2022 operating revenues | $198.3 | | Fuel, rider, and other revenues (no significant net income effect) | 11.3 | | Retail electric price | 4.0 | | Volume/weather | (4.8) | | 2023 operating revenues | $208.8 | - Operating revenues increased by $10.5 million, driven by fuel/rider revenues ($11.3 million) and retail electric price increases ($4.0 million), partially offset by unfavorable volume/weather ($4.8 million)[493] Entergy New Orleans Total Electric Energy Sales (Q1 2023 vs. Q1 2022) | Customer Segment | 2023 (GWh) | 2022 (GWh) | % Change | | :----------------- | :--------- | :--------- | :------- | | Residential | 453 | 538 | (16)% | | Commercial | 487 | 465 | 5% | | Industrial | 99 | 94 | 5% | | Governmental | 182 | 178 | 2% | | Total retail | 1,221 | 1,275 | (4)% | | Sales for resale | 1,043 | 716 | 46% | | Total | 2,264 | 1,991 | 14% | - Net cash flow provided by operating activities increased by $29.8 million, partly due to a $34 million refund from System Energy related to sale-leaseback litigation[504] Entergy New Orleans Debt to Capital Ratio (March 31, 2023 vs. December 31, 2022) | Ratio | March 31, 2023 | December 31, 2022 | | :------------------------------------------------ | :------------- | :---------------- | | Debt to capital | 52.2 % | 52.6 % | | Debt to capital, excluding securitization bonds (non-GAAP) | 51.7 % | 52.0 % | | Net debt to net capital, excluding securitization bonds (non-GAAP) | 45.1 % | 51.9 % | - The debt to capital ratio decreased to 52.2% from 52.6%[510] - Net debt to net capital, excluding securitization bonds, decreased significantly to 45.1% from 51.9%, primarily due to an increase in cash[510] - Entergy New Orleans filed an application in April 2023 seeking approval for the first phase (five years, $559 million) of a ten-year infrastructure hardening plan totaling approximately $1 billion[516] - Entergy New Orleans seeks approval of a $25.6 million rate increase based on its 2022 formula rate plan filing, with rates expected to be effective in September 2023[518] Consolidated Income Statements This section presents the consolidated income statements for Entergy New Orleans, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing electric and natural gas operating revenues, operating expenses, and net income Entergy New Orleans Income Statement Highlights (Q1 2023 vs. Q1 2022) | Metric | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Operating Revenues | $208,820 | $198,272 | | Operating Income | $22,051 | $26,764 | | Income Before Income Taxes | $14,925 | $18,391 | | Income Taxes | $4,783 | $3,265 | | Net Income | $10,142 | $15,126 | - Net income decreased to $10.1 million in Q1 2023 from $15.1 million in Q1 2022, despite an increase in operating revenues, due to higher operating expenses and income taxes[527] Consolidated Statements of Cash Flows This section provides the consolidated statements of cash flows for Entergy New Orleans, LLC and Subsidiaries for the three months ended March 31, 2023 and 2022, detailing cash flows from operating, investing, and financing activities Entergy New Orleans Cash Flow Highlights (Q1 2023 vs. Q1 2022) | Category | 2023 (In Thousands) | 2022 (In Thousands) | | :-------------------------------- | :------------------ | :------------------ | | Net cash flow provided by operating activities | $71,578 | $41,811 | | Net cash flow provided by (used in) investing activities | $85,156 | ($53,401) | | Net cash flow provided by (used in) financing activities | $14,688 | ($107) | | Net increase (decrease) in cash and cash equivalents | $171,422 | ($11,697) | | Cash and cash equivalents at end of period | $175,886 | $31,165 | - Net cash from operating activities increased by $29.8 million[532] - Investing activities shifted from using $53.4 million to providing $85.2 million, largely due to money pool activity[532] - Financing activities shifted from using $0.1 million to providing $14.7 million, primarily due to a $15 million advance for substation construction[532] Consolidated Balance Sheets This section presents the consolidated balance sheets for Entergy New Orleans, LLC and Subsidiaries as of March 31, 2023, and December 31, 2022, detailing assets, liabilities, and equity Entergy New Orleans Balance Sheet Highlights (March 31, 2023 vs. December 31, 2022) | Category | March 31, 2023 (In Thousands) | December 31, 2022 (In Thousands) | | :-------------------------------- | :------------------------------ | :------------------------------- | | Total Assets | $2,237,327 | $2,212,401 | | Total Liabilities | $1,524,369 | $1,509,585 | | Total Equity | $712,958 | $702,816 | - Total assets increased by $24.9 million, with cash and cash equiv