Entergy(ETR) - 2023 Q2 - Quarterly Report

Table of Contents Forward-looking Information This section outlines Entergy Corporation's forward-looking statements, emphasizing susceptibility to regulatory, market, and environmental risks - Forward-looking statements are subject to risks and uncertainties, including regulatory and rate case outcomes, MISO market conditions, changes in utility and nuclear regulation, cost recovery, and environmental concerns[17][18] - Key risk factors include resolution of pending and future rate cases, regulatory and operating challenges with MISO, changes in utility regulation, and changes in regulation of nuclear facilities[18] - Other significant risks involve increases in costs and capital expenditures due to changing regulatory requirements and economic conditions, effects of supply chain disruptions, and impacts of climate change and extreme weather events[18][20] Definitions This section provides a glossary of abbreviations, acronyms, and specific terms used throughout the report for clarity - The section defines key terms and abbreviations such as ANO (Arkansas Nuclear One), APSC (Arkansas Public Service Commission), FERC (Federal Energy Regulatory Commission), MISO (Midcontinent Independent System Operator, Inc.), NRC (Nuclear Regulatory Commission), and various Entergy subsidiaries[24][26][27] - It also clarifies terms related to power generation (e.g., capacity factor, GWh, kW, MMBtu, MW, MWh), financial reporting (e.g., ASU, FASB, GAAP, HLBV), and regulatory bodies (e.g., LPSC, MPSC, PUCT, SEC)[24][26] Part I. Financial Information Entergy Corporation and Subsidiaries This section provides a comprehensive financial discussion for Entergy Corporation, focusing on its Utility segment and reclassification of Entergy Wholesale Commodities Management's Financial Discussion and Analysis This section details Entergy Corporation's financial performance, liquidity, capital structure, and regulatory environment, including net income and capital expenditure changes - Entergy operates primarily through its Utility segment, which includes generation, transmission, distribution, and sale of electric power in Arkansas, Mississippi, Texas, and Louisiana, and a small natural gas distribution business[31] - Effective January 1, 2023, Entergy Wholesale Commodities is no longer a reportable segment, with remaining activities included under Parent & Other[32] Results of Operations This section analyzes Entergy Corporation's financial performance for Q2 and H1 2023, detailing changes in net income, revenues, and expenses, including storm cost impacts Net Income Attributable to Entergy Corporation (Second Quarter YoY) | Segment | 2022 Net Income (Thousands) | 2023 Net Income (Thousands) | Change (Thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :----------------- | | Utility | $152,739 | $514,227 | $361,488 | | Parent & Other | $6,964 | ($122,983) | ($129,947) | | Total Entergy | $159,703 | $391,244 | $231,541 | Net Income Attributable to Entergy Corporation (Six Months YoY) | Segment | 2022 Net Income (Thousands) | 2023 Net Income (Thousands) | Change (Thousands) | | :-------------------------------- | :-------------------------- | :-------------------------- | :----------------- | | Utility | $493,201 | $911,529 | $418,328 | | Parent & Other | ($57,098) | ($209,350) | ($152,252) | | Total Entergy | $436,103 | $702,179 | $266,076 | - Second quarter 2022 results included a $551 million regulatory charge at Utility due to System Energy's settlement agreement and a $283 million reduction in income tax expense from storm cost securitization, partially offset by a $166 million gain from the Palisades plant sale[35] - Six months ended June 30, 2023, results include a $129 million reduction in income tax expense from Hurricane Ida securitization, which also led to a $103 million regulatory charge at Utility[56] Utility Operating Revenues (Second Quarter YoY) | Item | Amount (Millions) | | :---------------------------------------------------------------- | :---------------- | | 2022 operating revenues | $3,306 | | Fuel, rider, and other revenues that do not significantly affect net income | (510) | | Storm restoration carrying costs | (59) | | Volume/weather | (47) | | Return of unprotected excess accumulated deferred income taxes to customers | 16 | | Retail electric price | 113 | | 2023 operating revenues | $2,819 | Utility Operating Revenues (Six Months YoY) | Item | Amount (Millions) | | :---------------------------------------------------------------- | :---------------- | | 2022 operating revenues | $6,034 | | Fuel, rider, and other revenues that do not significantly affect net income | (347) | | Volume/weather | (122) | | Storm restoration carrying costs | (29) | | Return of unprotected excess accumulated deferred income taxes to customers | 33 | | Retail electric price | 198 | | 2023 operating revenues | $5,767 | Total Electric Energy Sales for Utility (GWh) (Second Quarter YoY) | Segment | 2023 | 2022 | % Change | | :------------ | :------ | :------ | :------- | | Residential | 9,027 | 9,493 | (5) | | Commercial | 6,969 | 7,203 | (3) | | Industrial | 13,301 | 13,480 | (1) | | Governmental | 608 | 641 | (5) | | Total retail | 29,905 | 30,817 | (3) | | Sales for resale | 3,171 | 3,920 | (19) | | Total | 33,076 | 34,737 | (5) | Total Electric Energy Sales for Utility (GWh) (Six Months YoY) | Segment | 2023 | 2022 | % Change | | :------------ | :------ | :------ | :------- | | Residential | 16,303 | 17,946 | (9) | | Commercial | 13,217 | 13,474 | (2) | | Industrial | 26,041 | 25,976 | — | | Governmental | 1,185 | 1,226 | (3) | | Total retail | 56,746 | 58,622 | (3) | | Sales for resale | 7,674 | 7,562 | 1 | | Total | 64,420 | 66,184 | (3) | - Utility's other operation and maintenance expenses decreased by $81.6 million in Q2 2023 and $90.3 million in H1 2023, primarily due to lower compensation and benefits costs, reduced MISO transmission costs, and decreased non-nuclear and nuclear generation expenses[43][44][65] - Depreciation and amortization expenses increased due to additions to plant in service and higher depreciation rates at Entergy Texas[44][67] - Other income increased due to higher intercompany dividend income from storm cost securitizations and increased allowance for equity funds used during construction[46][69] - Interest expense increased due to new mortgage bond issuances by Entergy Arkansas, Entergy Louisiana, and Entergy Texas[47][71] - Parent & Other operating revenues and O&M expenses decreased due to the absence of Palisades revenues and expenses after its May 2022 shutdown[48][71] - Entergy's effective income tax rate was 25.6% for Q2 2023 and 7.3% for H1 2023, significantly impacted by state income taxes and storm cost securitizations[53][54][76][77][78] - Entergy intends to adopt a new safe harbor method for natural gas transmission and distribution property expenses, not expecting a significant financial impact, while monitoring the Inflation Reduction Act of 2022's clean energy tax incentives for future effects[79][80] Liquidity and Capital Resources This section updates Entergy Corporation's capital structure, credit facilities, and cash flow activities, including impacts from storm cost securitizations and capital projects Debt to Capital Ratios | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------------------------- | :------------ | :---------------- | | Debt to capital | 66.8 % | 66.9 % | | Effect of excluding securitization bonds | (0.2 %) | (0.3 %) | | Debt to capital, excluding securitization bonds (non-GAAP) | 66.6 % | 66.6 % | | Effect of subtracting cash | (1.0 %) | (0.1 %) | | Net debt to net capital, excluding securitization bonds (non-GAAP) | 65.6 % | 66.5 % | - As of June 30, 2023, 19.3% of outstanding debt is at the parent company, and 80.2% is at the Utility segment[84] Entergy Corporation Credit Facility (June 30, 2023) | Capacity (Millions) | Borrowings (Millions) | Letters of Credit (Millions) | Capacity Available (Millions) | | :------------------ | :-------------------- | :--------------------------- | :---------------------------- | | $3,500 | $150 | $3 | $3,347 | - Entergy Corporation maintains a $3.5 billion credit facility expiring in June 2028 and a commercial paper program with a $2 billion limit, with $1,108 million outstanding as of June 30, 2023[85][87] - Entergy Louisiana's storm restoration costs of $2.57 billion from multiple hurricanes and winter storms were deemed prudently incurred and eligible for recovery, with $1.491 billion financed through securitization in March 2023[90][91][92] - The securitization bonds are obligations of the Louisiana Local Government Environmental Facilities and Community Development Authority (LCDA) and are non-recourse to Entergy and Entergy Louisiana[94] - Entergy Mississippi made a substantial completion payment of $30.4 million in April 2023 for the Sunflower Solar facility acquisition, while Entergy Arkansas's Walnut Bend Solar and West Memphis Solar projects are expected to achieve commercial operation in 2024[99][101][102] - Entergy Louisiana is seeking LPSC approval for new solar facilities (Iberville/Coastal Prairie and Sterlington) and an alternative RFP process to acquire up to 3 GW of solar resources faster[103][104] - Entergy Louisiana and Entergy New Orleans are pursuing multi-year system resilience and storm hardening plans, with significant investments planned and regulatory approvals underway[105][108] - Entergy's Board declared a quarterly dividend of $1.07 per share in July 2023, consistent with the prior quarter[109] Cash Flow Activity (Six Months Ended June 30) | Activity | 2023 (Millions) | 2022 (Millions) | | :------------------------ | :-------------- | :-------------- | | Operating activities | $1,826 | $816 | | Investing activities | ($2,445) | ($3,224) | | Financing activities | $1,589 | $2,545 | | Net increase in cash | $970 | $137 | | Cash at end of period | $1,194 | $580 | - Net cash from operating activities increased by $1,010 million, driven by lower fuel costs, higher customer collections, and decreased storm spending[111] - Net cash used in investing activities decreased by $779 million, primarily due to lower distribution and transmission construction expenditures for storm restoration, and reduced payments to storm reserve escrow accounts[111] - Net cash from financing activities decreased by $956 million, mainly due to lower proceeds from securitization in 2023 compared to 2022, partially offset by long-term debt activity and increased commercial paper issuances[113][114] Rate, Cost-recovery, and Other Regulation This section refers to Note 2 of the financial statements for detailed updates on state, local, and federal regulatory proceedings - Updates on state and local rate regulation and federal regulatory proceedings are provided in Note 2 to the financial statements[116][117] Market and Credit Risk Sensitive Instruments This section discusses Entergy's market and credit risk exposure, highlighting derivative use for hedging and credit support requirements - Entergy's Utility segment has limited exposure to market risk due to cost-based rate regulation, using derivatives to hedge commodity price risk (power, fuel, gas)[119] - As of June 30, 2023, Entergy had $11 million in liquidity exposure under guarantees for non-utility operations and $6 million in posted cash collateral[119] Nuclear Matters This section updates on nuclear matters, specifically the NRC Reactor Oversight Process, noting plant performance classifications - All nuclear generating plants owned and operated by Entergy's Utility business are in NRC's Reactor Oversight Process Column 1, except River Bend, which is in Column 2[122] - Waterford 3 was returned to Column 1 in May 2023 after correcting a radiation monitor calibration error and a supplemental inspection[123] - River Bend was placed in Column 2 in July 2023 due to a failure to inspect wiring associated with the high pressure core spray system and will remain there pending a supplemental inspection[124] Critical Accounting Estimates This section refers to the Form 10-K for a discussion of critical accounting estimates, including nuclear decommissioning and taxation - Critical accounting estimates include nuclear decommissioning costs, utility regulatory accounting, impairment of long-lived assets, taxation and uncertain tax positions, qualified pension and other postretirement benefits, and other contingencies[125] New Accounting Pronouncements This section refers to Note 1 of the financial statements in the Form 10-K for new accounting pronouncements - New accounting pronouncements are discussed in Note 1 to the financial statements in the Form 10-K[126] Consolidated Income Statements The consolidated income statements show Entergy Corporation's financial performance for Q2 and H1 2023, with significant year-over-year net income increases Consolidated Income Statement Highlights (Three Months Ended June 30) | Metric | 2023 (Thousands) | 2022 (Thousands) | | :---------------------------------------- | :--------------- | :--------------- | | Total Operating Revenues | $2,846,026 | $3,395,196 | | Total Operating Expenses | $2,090,099 | $3,314,064 | | Operating Income | $755,927 | $81,132 | | Income (Loss) Before Income Taxes | $526,810 | ($195,632) | | Consolidated Net Income | $392,014 | $164,011 | | Net Income Attributable to Entergy Corporation | $391,244 | $159,703 | | Basic Earnings per Share | $1.85 | $0.79 | | Diluted Earnings per Share | $1.84 | $0.78 | Consolidated Income Statement Highlights (Six Months Ended June 30) | Metric | 2023 (Thousands) | 2022 (Thousands) | | :---------------------------------------- | :--------------- | :--------------- | | Total Operating Revenues | $5,827,085 | $6,273,122 | | Total Operating Expenses | $4,609,049 | $5,625,930 | | Operating Income | $1,218,036 | $647,192 | | Income (Loss) Before Income Taxes | $760,133 | $150,459 | | Consolidated Net Income | $704,312 | $443,604 | | Net Income Attributable to Entergy Corporation | $702,179 | $436,103 | | Basic Earnings per Share | $3.32 | $2.15 | | Diluted Earnings per Share | $3.31 | $2.13 | Consolidated Statements of Comprehensive Income The consolidated statements of comprehensive income present Entergy Corporation's net income and other comprehensive income components for Q2 and H1 2023 Consolidated Comprehensive Income (Three Months Ended June 30) | Metric | 2023 (Thousands) | 2022 (Thousands) | | :---------------------------------------- | :--------------- | :--------------- | | Net Income | $392,014 | $164,011 | | Other comprehensive income (loss) | ($3,292) | $12,540 | | Comprehensive Income | $388,722 | $176,551 | | Comprehensive Income Attributable to Entergy Corporation | $387,952 | $172,243 | Consolidated Comprehensive Income (Six Months Ended June 30) | Metric | 2023 (Thousands) | 2022 (Thousands) | | :---------------------------------------- | :--------------- | :--------------- | | Net Income | $704,312 | $443,604 | | Other comprehensive income (loss) | ($1,265) | $8,490 | | Comprehensive Income | $703,047 | $452,094 | | Comprehensive Income Attributable to Entergy Corporation | $700,914 | $444,593 | Consolidated Statements of Cash Flows The consolidated statements of cash flows summarize Entergy Corporation's cash activities for H1 2023, showing increased operating cash and decreased financing cash Consolidated Cash Flow Summary (Six Months Ended June 30) | Activity | 2023 (Thousands) | 2022 (Thousands) | | :---------------------------------------- | :--------------- | :--------------- | | Net cash flow provided by operating activities | $1,825,972 | $815,963 | | Net cash flow used in investing activities | ($2,445,431) | ($3,223,982) | | Net cash flow provided by financing activities | $1,589,637 | $2,545,349 | | Net increase in cash | $970,178 | $137,330 | | Cash at end of period | $1,194,342 | $579,889 | - Operating activities saw a substantial increase in cash provided, largely due to lower fuel costs, higher customer collections, and reduced storm spending[111][134] - Investing activities used less cash, primarily due to decreased construction expenditures for storm restoration and lower net payments to storm reserve escrow accounts[111][134] - Financing activities provided less cash, mainly due to lower proceeds from securitization in 2023 compared to 2022, partially offset by long-term debt activity[113][114][136] Consolidated Balance Sheets The consolidated balance sheets present Entergy Corporation's financial position as of June 30, 2023, showing increased total assets driven by cash and trust funds Consolidated Balance Sheet Highlights (June 30, 2023 vs. December 31, 2022) | Asset/Liability/Equity | June 30, 2023 (Thousands) | December 31, 2022 (Thousands) | | :--------------------------------- | :------------------------ | :---------------------------- | | Total Current Assets | $4,692,614 | $4,095,026 | | Total Other Property and Investments | $5,487,323 | $4,992,483 | | Property, Plant, and Equipment - Net | $42,858,733 | $42,477,124 | | Total Deferred Debits and Other Assets | $6,678,566 | $7,030,558 | | Total Assets | $59,717,236 | $58,595,191 | | Total Current Liabilities | $5,881,282 | $6,369,447 | | Total Non-Current Liabilities | $40,248,999 | $38,941,442 | | Total Equity | $13,367,545 | $13,064,892 | | Total Liabilities and Equity | $59,717,236 | $58,595,191 | - Cash and cash equivalents significantly increased from $224.2 million at December 31, 2022, to $1,194.3 million at June 30, 2023[138] - Decommissioning trust funds increased from $4,121.9 million to $4,560.0 million[138] - Regulatory assets decreased from $6,036.4 million to $5,645.2 million, while other regulatory liabilities increased from $2,324.6 million to $2,768.8 million[138][140] Consolidated Statements of Changes in Equity The consolidated statements of changes in equity detail movements in Entergy Corporation's equity for H1 2023, driven by net income and storm trusts Consolidated Changes in Equity (Six Months Ended June 30, 2023) | Item | Subsidiaries' Preferred Stock and Noncontrolling Interests (Thousands) | Common Stock (Thousands) | Treasury Stock (Thousands) | Paid-in Capital (Thousands) | Retained Earnings (Thousands) | Accumulated Other Comprehensive Loss (Thousands) | Total (Thousands) | | :-------------------------------------- | :------------------------------------------------------------------- | :----------------------- | :------------------------- | :-------------------------- | :---------------------------- | :----------------------------------------------- | :---------------- | | Balance at December 31, 2022 | $97,907 | $2,797 | ($4,978,994) | $7,632,895 | $10,502,041 | ($191,754) | $13,064,892 | | Consolidated net income | $1,364 | — | — | — | $310,935 | — | $312,299 | | Other comprehensive income | — | — | — | — | — | $2,027 | $2,027 | | Common stock issuances related to stock plans | — | — | $19,599 | ($15,118) | — | — | $4,481 | | Common stock dividends declared | — | — | — | — | ($226,194) | — | ($226,194) | | Beneficial interest in storm trust | $14,577 | — | — | — | — | — | $14,577 | | Distributions to noncontrolling interests | ($574) | — | — | — | — | — | ($574) | | Preferred dividend requirements of subsidiaries | ($4,580) | — | — | — | — | — | ($4,580) | | Balance at March 31, 2023 | $108,694 | $2,797 | ($4,959,395) | $7,617,777 | $10,586,782 | ($189,727) | $13,166,928 | | Consolidated net income | $770 | — | — | — | $391,244 | — | $392,014 | | Other comprehensive loss | — | — | — | — | — | ($3,292) | ($3,292) | | Common stock issuances related to stock plans | — | — | $600 | $16,528 | — | — | $17,128 | | Common stock dividends declared | — | — | — | — | ($226,248) | — | ($226,248) | | Capital contribution from noncontrolling interest | $25,708 | — | — | — | — | — | $25,708 | | Distributions to noncontrolling interests | ($113) | — | — | — | — | — | ($113) | | Preferred dividend requirements of subsidiaries | ($4,580) | — | — | — | — | — | ($4,580) | | Balance at June 30, 2023 | $130,479 | $2,797 | ($4,958,795) | $7,634,305 | $10,751,778 | ($193,019) | $13,367,545 | Consolidated Changes in Equity (Six Months Ended June 30, 2022) | Item | Subsidiaries' Preferred Stock and Noncontrolling Interests (Thousands) | Common Stock (Thousands) | Treasury Stock (Thousands) | Paid-in Capital (Thousands) | Retained Earnings (Thousands) | Accumulated Other Comprehensive Loss (Thousands) | Total (Thousands) | | :-------------------------------------- | :------------------------------------------------------------------- | :----------------------- | :------------------------- | :-------------------------- | :---------------------------- | :----------------------------------------------- | :---------------- | | Balance at December 31, 2021 | $68,110 | $2,720 | ($5,039,699) | $6,766,239 | $10,240,552 | ($332,528) | $11,705,394 | | Consolidated net income | $3,193 | — | — | — | $276,400 | — | $279,593 | | Other comprehensive loss | — | — | — | — | — | ($4,050) | ($4,050) | | Common stock issuances related to stock plans | — | — | $36,612 | ($31,085) | — | — | $5,527 | | Common stock dividends declared | — | — | — | — | ($205,058) | — | ($205,058) | | Preferred dividend requirements of subsidiaries | ($4,580) | — | — | — | — | — | ($4,580) | | Balance at March 31, 2022 | $66,723 | $2,720 | ($5,003,087) | $6,735,154 | $10,311,894 | ($336,578) | $11,776,826 | | Consolidated net income | $4,308 | — | — | — | $159,703 | — | $164,011 | | Other comprehensive income | — | — | — | — | — | $12,540 | $12,540 | | Common stock issuances related to stock plans | — | — | $18,927 | $15,214 | — | — | $34,141 | | Common stock dividends declared | — | — | — | — | ($205,408) | — | ($205,408) | | Beneficial interest in storm trust | $31,636 | — | — | — | — | — | $31,636 | | Capital contribution from noncontrolling interest | $9,595 | — | — | — | — | — | $9,595 | | Distributions to noncontrolling interests | ($190) | — | — | — | — | — | ($190) | | Preferred dividend requirements of subsidiaries | ($4,580) | — | — | — | — | — | ($4,580) | | Balance at June 30, 2022 | $107,492 | $2,720 | ($4,984,160) | $6,750,368 | $10,266,189 | ($324,038) | $11,818,571 | Notes to Financial Statements This section provides detailed notes to Entergy Corporation's financial statements, covering commitments, regulatory matters, equity, debt, and other key financial areas Note 1. Commitments and Contingencies This note details Entergy's legal, regulatory, and tax proceedings, including updates on spent nuclear fuel litigation and partnership wind-up - 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[154] - Entergy and Holtec International accepted a $59 million offer of judgment from the DOE in July 2023 to resolve claims in the Indian Point Unit 2 and Unit 3 combined damages case, with Holtec transferring $40 million to Entergy[155] - Entergy Louisiana is working to wind up the Nelson Industrial Steam Company (NISCO) partnership, which will result in ownership of two petroleum coke generating units transferring to Entergy Louisiana, and is evaluating the transaction's impact[161] Note 2. Rate and Regulatory Matters This note updates on regulatory assets and liabilities, fuel cost recovery, and retail rate proceedings, including Hurricane Ida securitization and System Energy litigation - System Energy filed a compliance report with FERC in February 2023 regarding unprotected excess accumulated deferred income taxes related to decommissioning tax deductions, following a FERC order[164] - Entergy Arkansas's energy cost recovery rider increased to $0.01883 per kWh in April 2023 due to a large under-recovered balance from higher natural gas prices in 2022 and a $32 million deferral from 2021 winter storms[165] - Entergy Mississippi's 2023 formula rate plan filing was approved in June 2023, resulting in a $26.5 million total revenue increase for 2023, with rates effective July 2023[166][176] - Entergy Texas filed an unopposed settlement in July 2023 for its fuel and purchased power cost reconciliation, proposing no disallowance of fuel costs and retention of $9.3 million in off-system sales margins[168][713] - Entergy Arkansas's 2023 formula rate plan filing proposes a $130.3 million total revenue change for 2024 projected year and 2022 historical year netting adjustment, limited to an $88.6 million increase by a 4% annual revenue constraint[170] - Entergy Louisiana's 2022 formula rate plan evaluation report shows an earned return on common equity of 8.33%, requiring an approximately $70.7 million increase to base rider revenue, capped at $4.9 million[172] - Entergy Louisiana received LPSC approval in June 2023 to use $1.6 billion in low-interest debt to reduce its COVID-19 regulatory asset, conduct vegetation management, and apply to the minor storm reserve account[174] - Entergy New Orleans seeks a $25.6 million rate increase based on its 2022 formula rate plan filing, with rates expected to be effective September 2023[177] - Entergy Texas's 2022 base rate case unopposed settlement, awaiting PUCT approval, includes a $54 million base rate increase effective December 2022, covering updated depreciation rates and recovery of regulatory assets[179] - System Energy's litigation proceedings at FERC include challenges to its authorized return on equity and capital structure, with an estimated refund of $39 million and an annual rate reduction of $28 million if the ALJ's initial decision is upheld[186] - System Energy paid $103.5 million in refunds in January 2023 related to sale-leaseback renewal costs and depreciation litigation, distributed to Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans[190] - A May 2023 ALJ initial decision found System Energy should have excluded certain accumulated deferred income taxes from rate base, recommending refunds of approximately $115 million plus $142 million interest for Entergy Arkansas, Entergy Louisiana, and Entergy New Orleans[199] - The Hurricane Ida securitization financing closed in March 2023, issuing $1.491 billion in bonds and resulting in a net reduction of income tax expense of approximately $133 million for Entergy Louisiana[211][215] Note 3. Equity This note details Entergy Corporation's common stock, earnings per share, dividends, equity distribution program, and noncontrolling interests related to storm trusts Earnings per Average Common Share (Three Months Ended June 30) | Metric | 2023 Income (Millions) | 2023 Shares (Millions) | 2023 $/share | 2022 Income (Millions) | 2022 Shares (Millions) | 2022 $/share | | :------------------ | :--------------------- | :--------------------- | :----------- | :--------------------- | :--------------------- | :----------- | | Basic EPS | $391.2 | 211.4 | $1.85 | $159.7 | 203.4 | $0.79 | | Diluted EPS | $391.2 | 212.2 | $1.84 | $159.7 | 204.7 | $0.78 | Earnings per Average Common Share (Six Months Ended June 30) | Metric | 2023 Income (Millions) | 2023 Shares (Millions) | 2023 $/share | 2022 Income (Millions) | 2022 Shares (Millions) | 2022 $/share | | :------------------ | :--------------------- | :--------------------- | :----------- | :--------------------- | :--------------------- | :----------- | | Basic EPS | $702.2 | 211.4 | $3.32 | $436.1 | 203.2 | $2.15 | | Diluted EPS | $702.2 | 212.2 | $3.31 | $436.1 | 204.3 | $2.13 | - Dividends declared per common share were $1.07 for Q2 2023 and $2.14 for H1 2023[220] - As of June 30, 2023, approximately $1,126 million in shares have been sold under the $2 billion at-the-market equity distribution program[221] - In June 2023, Entergy entered into forward sale agreements for 468,302 shares of common stock, with settlements expected prior to May 31, 2024, or June 28, 2024[226] Entergy Louisiana Noncontrolling Interests (Thousands) | Trust | 2023 | 2022 | | :------------------------ | :-------- | :-------- | | Restoration Law Trust I | $32,359 | $31,735 | | Restoration Law Trust II | $14,856 | — | | Total Noncontrolling Interests | $47,215 | $31,735 | - Restoration Law Trust II, established as part of the March 2023 Act 293 securitization, is consolidated by Entergy Louisiana as a variable interest entity, with LURC's 1% beneficial interest shown as noncontrolling interest[241] Note 4. Revolving Credit Facilities, Lines of Credit, Short-term Borrowings, and Long-term Debt This note outlines Entergy's credit facilities, commercial paper, and long-term debt, detailing borrowing capacities, outstanding amounts, and recent issuances Entergy Corporation Credit Facility (June 30, 2023) | Capacity (Millions) | Borrowings (Millions) | Letters of Credit (Millions) | Capacity Available (Millions) | | :------------------ | :-------------------- | :--------------------------- | :---------------------------- | | $3,500 | $150 | $3 | $3,347 | - Entergy Corporation has a $3.5 billion credit facility expiring in June 2028 and a commercial paper program with $1,108.4 million outstanding as of June 30, 2023[240][241] Registrant Subsidiaries' Credit Facilities (June 30, 2023) | Company | Expiration Date | Amount of Facility (Millions) | Interest Rate (a) | Amount Outstanding (Millions) | Letters of Credit Issued (Millions) | | :---------------- | :-------------- | :---------------------------- | :---------------- | :---------------------------- | :---------------------------------- | | Entergy Arkansas | April 2024 | $25 | 7.02% | $— | $— | | Entergy Arkansas | June 2028 | $150 | 6.33% | $75.0 | $— | | Entergy Louisiana | June 2028 | $350 | 6.45% | $— | $— | | Entergy Mississippi | July 2023 (e) | $45 | 6.70% | $— | $— | | Entergy Mississippi | July 2023 (e) | $40 | 6.70% | $— | $— | | Entergy Mississippi | July 2023 (e) | $10 | 6.70% | $— | $— | | Entergy Mississippi | July 2025 | $150 | 6.33% | $— | $— | | Entergy New Orleans | June 2024 | $25 | 6.83% | $— | $— | | Entergy Texas | June 2028 | $150 | 6.45% | $— | $1.1 | Registrant Subsidiaries' FERC-Authorized Short-Term Borrowing Limits (June 30, 2023) | Company | Authorized (Millions) | Borrowings (Millions) | | :---------------------- | :-------------------- | :-------------------- | | Entergy Arkansas | $250 | $152 | | Entergy Louisiana | $450 | $— | | Entergy Mississippi | $200 | $105 | | Entergy New Orleans | $150 | $— | | Entergy Texas | $200 | $— | | System Energy | $200 | $— | - Entergy Arkansas issued $425 million of 5.15% Series mortgage bonds in January 2023 and repaid $250 million of 3.05% Series mortgage bonds[254] - Entergy Mississippi issued $300 million of 5.0% Series mortgage bonds in May 2023 and repaid $250 million of 3.10% Series mortgage bonds and $50 million of an unsecured term loan[255] - System Energy issued $325 million of 6.00% Series mortgage bonds in March 2023 and repaid a $50 million term loan and $250 million of 4.10% Series mortgage bonds[258] Fair Value of Long-Term Debt (June 30, 2023) | Company | Book Value (Thousands) | Fair Value (Thousands) | | :---------------- | :--------------------- | :--------------------- | | Entergy | $26,170,727 | $23,052,902 | | Entergy Arkansas | $4,438,803 | $3,872,249 | | Entergy Louisiana | $10,687,807 | $9,531,338 | | Entergy Mississippi | $2,328,900 | $2,009,172 | | Entergy New Orleans | $784,810 | $710,894 | | Entergy Texas | $2,888,075 | $2,505,893 | | System Energy | $752,969 | $693,756 | Note 5. Stock-based Compensation This note details Entergy Corporation's stock-based compensation plans, including stock options and other equity awards, and related expenses and tax benefits - Entergy granted options on 281,874 shares of common stock in Q1 2023, with 2,969,605 shares outstanding and an aggregate intrinsic value of $24.1 million as of June 30, 2023[261] Stock Option Compensation Expense (Millions) | Period | Compensation Expense | Tax Benefit | | :---------------------- | :------------------- | :---------- | | Three Months Ended June 30, 2023 | $1.0 | $0.3 | | Three Months Ended June 30, 2022 | $1.2 | $0.3 | | Six Months Ended June 30, 2023 | $2.1 | $0.6 | | Six Months Ended June 30, 2022 | $2.3 | $0.6 | - In January 2023, Entergy granted 345,983 restricted stock awards and 143,212 long-term incentive awards under the 2019 Omnibus Incentive Plan[263] Other Equity Awards Compensation Expense (Millions) | Period | Compensation Expense | Tax Benefit | | :---------------------- | :------------------- | :---------- | | Three Months Ended June 30, 2023 | $10.1 | $2.6 | | Three Months Ended June 30, 2022 | $10.6 | $2.7 | | Six Months Ended June 30, 2023 | $17.8 | $4.6 | | Six Months Ended June 30, 2022 | $22.0 | $5.6 | Note 6. Retirement and Other Postretirement Benefits This note details Entergy's pension and other postretirement benefit costs, including service, interest, and settlement charges, and reclassifications from comprehensive income Entergy's Qualified Net Pension Costs (Thousands) | Component | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :------------------------------ | :-------- | :-------- | :-------- | :-------- | | Service cost | $25,366 | $36,977 | $51,044 | $74,637 | | Interest cost | $74,033 | $52,676 | $149,734 | $103,795 | | Expected return on assets | ($95,752) | ($103,085) | ($193,885) | ($206,692) | | Amortization of net loss | $21,307 | $56,413 | $43,654 | $116,992 | | Settlement charges | $7,246 | $22,653 | $145,674 | $22,653 | | Net pension costs | $32,200 | $65,634 | $196,221 | $111,385 | Entergy's Net Other Postretirement Benefits Income (Thousands) | Component | Q2 2023 | Q2 2022 | H1 2023 | H1 2022 | | :------------------------------ | :--------- | :--------- | :--------- | :--------- | | Service cost | $3,664 | $6,184 | $7,328 | $12,368 | | Interest cost | $10,568 | $6,827 | $21,136 | $13,654 | | Expected return on assets | ($9,183) | ($10,855) | ($18,366) | ($21,710) | | Amortization of prior service credit | ($5,640) | ($6,388) | ($11,280) | ($12,776) | | Amortization of net (gain) loss | ($2,862) | $1,083 | ($5,724) | $2,166 | | Net other postretirement benefits income | ($3,453) | ($3,149) | ($6,906) | ($6,298) | - Year-to-date lump sum benefit payments from qualified pension plans exceeded service and interest costs, resulting in settlement costs, with Entergy Arkansas, Entergy Louisiana, Entergy Mississippi, and Entergy New Orleans receiving regulatory approval to defer the expense portion[279][280] - Entergy expects to contribute $267 million to its qualified pension plans in 2023, with $91.5 million contributed as of June 30, 2023[282] Note 7. Business Segment Information This note details Entergy Corporation's business segment information, confirming Utility as the single reportable segment and restating prior period financials - Entergy has a single reportable segment, Utility, which includes electric power generation, transmission, distribution, and sales, and a small natural gas distribution business[283] - Effective January 1, 2023, Entergy Wholesale Commodities is no longer a reportable segment, with its remaining business activity included under Parent & Other[284] Entergy's Segment Financial Information (Second Quarter) | Segment | 2023 Operating Revenues (Thousands) | 2023 Consolidated Net Income (Loss) (Thousands) | 2022 Operating Revenues (Thousands) | 2022 Consolidated Net Income (Loss) (Thousands) | | :----------- | :---------------------------------- | :---------------------------------------------- | :---------------------------------- | :---------------------------------------------- | | Utility | $2,818,747 | $514,498 | $3,306,269 | $156,548 | | Parent & Other | $27,287 | ($40,559) | $88,933 | $50,714 | | Eliminations | ($8) | ($81,925) | ($6) | ($43,251) | | Consolidated | $2,846,026 | $392,014 | $3,395,196 | $164,011 | Entergy's Segment Financial Information (Six Months Ended June 30) | Segment | 2023 Operating Revenues (Thousands) | 2023 Consolidated Net Income (Loss) (Thousands) | 2022 Operating Revenues (Thousands) | 2022 Consolidated Net Income (Loss) (Thousands) | | :----------- | :---------------------------------- | :---------------------------------------------- | :---------------------------------- | :---------------------------------------------- | | Utility | $5,766,738 | $912,664 | $6,034,425 | $499,704 | | Parent & Other | $60,358 | ($70,953) | $238,711 | $19,097 | | Eliminations | ($11) | ($137,399) | ($14) | ($75,197) | | Consolidated | $5,827,085 | $704,312 | $6,273,122 | $443,604 | Note 8. Risk Management and Fair Values This note discusses Entergy's market and credit risk exposures, highlighting derivative use for hedging and fair value measurements across different hierarchy levels - Entergy uses derivatives, including natural gas swaps and options, and financial transmission rights, to mitigate commodity price risk, particularly for power and fuel prices[288][291][292][293] - The total volume of natural gas swaps and options outstanding as of June 30, 2023, is 21,084,400 MMBtu for Entergy[292] - The total volume of financial transmission rights outstanding as of June 30, 2023, is 140,203 GWh for Entergy[293] Fair Values of Entergy's Derivative Instruments (Millions) | Instrument | June 30, 2023 Gross Fair Value | June 30, 2023 Net Fair Value | Dec 31, 2022 Gross Fair Value | Dec 31, 2022 Net Fair Value | | :------------------------------ | :----------------------------- | :--------------------------- | :---------------------------- | :-------------------------- | | Assets: Natural gas swaps and options | $2 | $2 | $16 | $16 | | Assets: Financial transmission rights | $44 | $40 | $21 | $19 | | Liabilities: Natural gas swaps and options | $12 | $12 | $25 | $25 | - Financial transmission rights are classified as Level 3 assets and liabilities, with valuations based on unobservable inputs like estimated congestion costs[310] Entergy's Assets Accounted for at Fair Value (Millions) | Asset | June 30, 2023 Level 1 | June 30, 2023 Level 2 | June 30, 2023 Level 3 | June 30, 2023 Total | | :---------------------------------- | :-------------------- | :-------------------- | :-------------------- | :------------------ | | Temporary cash investments | $1,127 | $— | $— | $1,127 | | Decommissioning trust funds (Equity) | $19 | — | — | $19 | | Decommissioning trust funds (Debt) | $586 | $1,121 | — | $1,707 | | Common trusts | | | | $2,834 | | Securitization recovery trust account | $5 | $— | $— | $5 | | Storm reserve escrow accounts | $411 | $— | $— | $411 | | Gas hedge contracts | $2 | $— | $— | $2 | | Financial transmission rights | $— | $— | $40 | $40 | | Total Assets | $2,150 | $1,121 | $40 | $6,145 | Note 9. Decommissioning Trust Funds This note details Entergy's nuclear decommissioning trust funds, including investment portfolios, fair value measurements, and unrealized gains/losses - Entergy subsidiaries maintain nuclear decommissioning trusts for ANO 1, ANO 2, River Bend, Waterford 3, and Grand Gulf, investing in equity and fixed-rate debt securities[330] - Unrealized gains/(losses) recognized on equity securities still held as of June 30, 2023, were $211 million for the three months and $372 million for the six months[334] Available-for-Sale Debt Securities (Millions) | Metric | June 30, 2023 Fair Value | June 30, 2023 Unrealized Gains | June 30, 2023 Unrealized Losses | Dec 31, 2022 Fair Value | Dec 31, 2022 Unrealized Gains | Dec 31, 2022 Unrealized Losses | | :-------------- | :----------------------- | :----------------------------- | :------------------------------ | :---------------------- | :----------------------------- | :------------------------------ | | Debt Securities | $1,707 | $5 | $172 | $1,655 | $4 | $201 | - Proceeds from dispositions of available-for-sale debt securities amounted to $136 million for Q2 2023 and $260 million for H1 2023[339][340] Note 10. Income Taxes This note updates on income tax matters, including the impact of Act 293 securitization and a recent change in Arkansas corporate income tax rate - No unprotected excess accumulated deferred income taxes were returned to customers for Entergy or Registrant Subsidiaries for Q2 2023 or H1 2023[365] - The Act 293 securitization in Q1 2023 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[367] - Arkansas Act 532 reduced the corporate income tax rate from 5.3% to 5.1% in April 2023, leading Entergy Arkansas to accrue an $8 million regulatory liability for income taxes[369] Note 11. Property, Plant, and Equipment This note provides information on construction expenditures included in accounts payable for Entergy and its Registrant Subsidiaries Construction Expenditures in Accounts Payable (Thousands) | Company | June 30, 2023 | December 31, 2022 | | :------------------ | :------------ | :---------------- | | Entergy | $499,000 | $459,000 | | Entergy Arkansas | $113,200 | $93,200 | | Entergy Louisiana | $136,100 | $154,300 | | Entergy Mississippi | $66,800 | $59,500 | | Entergy New Orleans | $8,500 | $11,200 | | Entergy Texas | $104,600 | $68,900 | | System Energy | $17,700 | $29,000 | Note 12. Variable Interest Entities This note discusses Entergy's variable interest entities, including nuclear fuel companies, storm trusts, and tax equity partnerships - Restoration Law Trust I and II are VIEs consolidated by Entergy Louisiana, with the LURC's 1% beneficial interest presented as noncontrolling interest[373][374] - AR Searcy Partnership, LLC (Entergy Arkansas) and MS Sunflower Partnership, LLC (Entergy Mississippi) are tax equity partnerships qualifying as VIEs, consolidated by their respective Entergy subsidiaries[376][378] Note 13. Revenue This note provides a detailed breakdown of Entergy's total operating revenues by customer class and type, and a reconciliation of doubtful accounts Entergy's Total Operating Revenues (Three Months Ended June 30, Thousands) | Revenue Type | 2023 | 2022 | | :------------------------ | :---------- | :---------- | | Electric | $2,785,244 | $3,258,255 | | Natural gas | $33,503 | $48,008 | | Other | $27,279 | $88,933 | | Total Operating Revenues | $2,846,026 | $3,395,196 | Entergy's Total Operating Revenues (Six Months Ended June 30, Thousands) | Revenue Type | 2023 | 2022 | | :------------------------ | :---------- | :---------- | | Electric | $5,668,654 | $5,914,031 | | Natural gas | $98,084 | $120,369 | | Other | $60,347 | $238,722 | | Total Operating Revenues | $5,827,085 | $6,273,122 | Allowance for Doubtful Accounts Reconciliation (Six Months Ended June 30, Millions) | Item | 2023 | 2022 | | :------------------------ | :---- | :---- | | Balance at Dec 31 | $30.9 | $68.6 | | Provisions | $15.5 | $11.0 | | Write-offs | ($51.5) | ($75.5) | | Recoveries | $26.9 | $21.5 | | Balance at June 30 | $21.8 | $25.6 | Item 3. Quantitative and Qualitative Disclosures About Market Risk This section refers to the 'Market and Credit Risk Sensitive Instruments' section for disclosures on market risk - Disclosures about market risk are provided in the 'Market and Credit Risk Sensitive Instruments' section of Management's Financial Discussion and Analysis[389] Item 4. Controls and Procedures This section confirms the effectiveness of Entergy Corporation's disclosure controls and procedures and reports no material changes in internal control - As of June 30, 2023, Entergy Corporation and its Registrant Subsidiaries' disclosure controls and procedures were deemed effective[390] - No material changes in internal control over financial reporting occurred during the quarter ended June 30, 2023[392] Entergy Arkansas, LLC and Subsidiaries This section provides a financial discussion for Entergy Arkansas, covering operations, liquidity, capital resources, and regulatory updates, including solar projects Results of Operations Entergy Arkansas's net income saw mixed changes in Q2 and H1 2023, with operating revenues impacted by fuel, weather, and retail price changes - Net income for Entergy Arkansas increased by $3.8 million in Q2 2023 YoY, primarily due to higher retail electric price and lower O&M expenses, partially offset by lower volume/weather and higher interest/depreciation[394] - Net income for Entergy Arkansas decreased by $2.3 million for H1 2023 YoY, primarily due to lower volume/weather and higher interest/depreciation, partially offset by higher retail electric price and lower O&M expenses[395] Entergy Arkansas Operating Revenues (Second Quarter YoY) | Item | Amount (Millions) | | :---------------------------------------------------------------- | :---------------- | | 2022 operating revenues | $696.9 | | Fuel, rider, and other revenues that do not significantly affect net income | (90.6) | | Volume/weather | (8.6) | | Retail electric price | 18.6 | | 2023 operating revenues | $616.3 | Entergy Arkansas Operating Revenues (Six Months YoY) | Item | Amount (Millions) | | :---------------------------------------------------------------- | :---------------- | | 2022 operating revenues | $1,255.9 | | Fuel, rider, and other revenues that do not significantly affect net income | (64.8) | | Volume/weather | (30.0) | | Retail electric price | 38.0 | | 2023 operating revenues | $1,199.1 | Entergy Arkansas Electric Energy Sales (GWh) (Second Quarter YoY) | Segment | 2023 | 2022 | % Change | | :---------------------- | :---- | :---- | :------- | | Residential | 1,767 | 1,820 | (3) | | Commercial | 1,374 | 1,383 | (1) | | Industrial | 2,226 | 2,135 | 4 | | Governmental | 49 | 56 | (13) | | Total retail | 5,416 | 5,394 | — | | Sales for resale: Associated companies | 512 | 450 | 14 | | Sales for resale: Non-associated companies | 811 | 2,010 | (60) | | Total | 6,739 | 7,854 | (14) | Entergy Arkansas Electric Energy Sales (GWh) (Six Months YoY) | Segment | 2023 | 2022 | % Change | | :---------------------- | :----- | :----- | :------- | | Residential | 3,569 | 3,912 | (9) | | Commercial | 2,613 | 2,690 | (3) | | Industrial | 4,276 | 4,106 | 4 | | Governmental | 95 | 111 | (14) | | Total retail | 10,553 | 10,819 | (2) | | Sales for resale: Associated companies | 1,075 | 936 | 15 | | Sales for resale: Non-associated companies | 2,379 | 3,401 | (30) | | Total | 14,007 | 15,156 | (8) | - Other operation and maintenance expenses decreased due to lower compensation and benefits, reduced non-nuclear generation expenses, and decreased MISO transmission costs[406][408] - Depreciation and amortization expenses increased due to additions to plant in service[407][409] - Interest expense increased due to the issuance of $425 million of 5.15% Series mortgage bonds in January 2023[407][409] - The effective income tax rate was 22.9% for Q2 2023 and 19.4% for H1 2023, influenced by state income taxes and book/tax differences[410][411] Liquidity and Capital Resources This section details Entergy Arkansas's cash flow activities, capital structure, and sources of capital, including credit facilities and solar project developments Entergy Arkansas Cash Flow Summary (Six Months Ended June 30) | Activity | 2023 (Thousands) | 2022 (Thousands) | | :---------------------------------------- | :--------------- | :--------------- | | Net cash provided by operating activities | $407,699 | $386,522 | | Net cash used in investing activities | ($563,854) | ($376,810) | | Net cash provided by financing activities | $155,090 | $35,642 | | Net increase (decrease) in cash | ($1,065) | $45,354 | | Cash at end of period | $4,213 | $58,269 | - Net cash from operating activities increased by $21.2 million, driven by higher customer collections, lower fuel costs, and a $41.7 million refund from System Energy[415] - Net cash used in investing activities increased by $187 million, primarily due to higher distribution and transmission construction expenditures and increased nuclear fuel activity[416] - Net cash from financing activities increased by $119.4 million, mainly due to the issuance of $425 million of mortgage bonds and net borrowings on the nuclear fuel company VIE's credit facility[417] Entergy Arkansas Debt to Capital Ratios | Metric | June 30, 2023 | December 31, 2022 | | :------------------------------------ | :------------ | :---------------- | | Debt to capital | 53.8 % | 52.5 % | | Net debt to net capital (non-GAAP) | 53.8 % | 52.5 % | - Entergy Arkansas has credit facilities totaling $175 million and an uncommitted letter of credit facility with $11.6 million outstanding for MISO obligations[424] - The Walnut Bend Solar and West Memphis Solar projects are expected to achieve commercial operation in 2024, with regulatory approvals and settlement agreements in place[426][427] - Entergy Arkansas's 2023 formula rate plan filing proposes an $88.6 million rate increase for 2024, subject to a 4% annual revenue constraint[429] - The energy cost recovery rider increased to $0.01883 per kWh in April 2023 due to under-recovered balances from higher natural gas prices[430] - New Arkansas law revises net metering billing to reduce cost shifts, imposes a 5 MW limit for future facilities, and allows utilities to recover net metering credits like fuel[436] - The APSC approved Entergy Arkansas's Power Through offering in May 2023, with some modifications[438] Consolidated Income Statements The consolidated income statements for Entergy Arkansas, LLC show a net income of $66.9 million for the three months ended June 30, 2023, and $126.3 million for the six months ended June 30, 2023. Operating revenues decreased year-over-year for both periods Entergy Arkansas Consolidated Income Statement Highlights (Three Months Ended June 30) | Metric | 2023 (Thousands) | 2022 (Thousands) | | :------------------------------------ | :--------------- | :--------------- | | Electric Operating Revenues | $616,347 | $696,939 | | Total Operating Expenses | $490,478 | $582,063 | | Operating Income | $125,869 | $114,876 | | Income Before Income Taxes | $86,888 | $80,850 | | Net Income | $66,948 | $63,110 | | Earnings Applicable to Member's Equity | $67,954 | $63,639 | Entergy Arkansas Consolidated Income Statement Highlights (Six Months Ended June 30) | Metric | 2023 (Thousands) | 2022 (Thousands) | | :------------------------------------ | :--------------- | :--------------- | | Electric Operating Revenues | $1,199,096 | $1,255,895 | | Total Operating Expenses | $970,196 | $1,025,485 | | Operating Income | $228,900 | $230,410 | | Income Before Income Taxes | $156,718 | $165,534 | | Net Income | $126,344 | $128,677 | | Earnings Applicable to Member's Equity | $128,979 | $130,593 | Consolidated Statements of Cash Flows The consolidated statements of cash flows for Entergy Arkansas, LLC show an increase in net cash provided by operating activities for the six months ended June 30, 2023, while net cash used in investing activities also increased. Net cash provided by financing activities saw a significant rise Entergy Arkansas Cash Flow Summary (Six Months Ended June 30) | Activity | 2023 (Thousands) | 2022 (Thousands) | | :---------------------------------------- | :--------------- | :--------------- | | Net cash provided by operating activities | $407,699 | $386,522 | | Net cash used in investing activities | ($563,854) | ($376,810) | | Net cash provided by financing activities | $155,090 | $35,642 | | Net increase (decrease) in cash | ($1,065) | $45,354 | | Cash and cash equivalents at end of period | $4,213 | $58,269 | - Operating activities increased cash flow by $21.2 million, driven by higher customer collections, lower fuel costs, and a $41.7 million refund from System Energy[415][450] - Investing activities used $187 million more cash, primarily due to increased construction expenditures for storm restoration and transmission system reliability[416][450] - Financing activities provided $119.4 million more cash, mainly from the issuance of $425 million of mortgage bonds and net borrowings on the nuclear fuel company VIE's credit facility[417][450] Consolidated Balance Sheets The consolidated balance sheets for Entergy Arkansas, LLC show a slight decrease in total current assets but an overall increase in total assets as of June 30, 2023, compared to December 31, 2022. Utility plant net and decommissioning trust funds increased Entergy Arkansas Consolidated Balance Sheet Highlights (Thousands) | Asset/Liability/Equity | June 30, 2023 | December 31, 2022 | | :--------------------------------- | :------------ | :---------------- | | Total Current Assets | $888,774 | $964,673 | | Total Other Property and Investments | $1,328,933 | $1,202,274 | | Utility Plant - Net | $9,250,084 | $8,941,958 | | Total Deferred Debits and Other Assets | $1,954,908 | $1,897,671 | | Total Assets | $13,422,699 | $13,006,576 | | Total Current Liabilities | $1,231,847 | $1,142,236 | | Total Non-Current Liabilities | $8,371,909 | $8,082,525 | | Total Equity | $3,818,943 | $3,781,815 | | Total Liabilities and Equity | $13,422,699 | $13,006,576 | - Decommissioning trust funds increased from $1,199.9 million to $1,326.6 million[452] - Long-term debt increased from $3,876.5 million to $4,023.8 million[454] Consolidated Statements of Changes in Equity The consolidated statements of changes in equity for Entergy Arkansas, LLC show an increase in total equity for H1 2023, driven by net income Entergy Arkansas Changes in Equity (Six Months Ended June 30) | Item | 2023 Noncontrolling Interest (Thousands) | 2023 Member's Equity (Thousands) | 2023 Total (Thousands) | 2022 Noncontrolling Interest (Thousands) | 2022 Member's Equity (Thousands) | 2022 Total (Thousands) | | :---------------------------------- | :--------------------------------------- | :------------------------------- | :--------------------- | :--------------------------------------- | :------------------------------- | :--------------------- | | Balance at December 31 | $27,825 | $3,753,990 | $3,781,815 | $33,110 | $3,542,745 | $3,575,855 | | Net income (loss) | ($2,635) | $128,979 | $126,344 | ($1,916) | $130,593 | $128,677 | | Common equity distributions | — | ($89,000) | ($89,000) | — | ($36,000) | ($36,000) | | Distributions to noncontrolling interest | ($217) | — | ($217) | ($190) | — | ($190) | | Balance at June 30 | $24,973 | $3,793,970 | $3,818,943 | $31,004 | $3,637,338 | $3,668,342 | Entergy Louisiana, LLC and Subsidiaries This section provides a financial discussion for Entergy Louisiana, covering operations, liquidity, capital resources, and regulatory updates, including storm cost securitizations Results of Operations Entergy Louisiana's net income saw mixed changes in Q2 and H1 2023, significantly impacted by storm cost securitizations and revenue fluctuations - Net income for Entergy Louisiana decreased by $53.4 million in Q2 2023 YoY, primarily due to the net effects of the May 2022 storm cost securitization, including a $290 million reduction in income tax expense offset by a $224.4 million regulatory charge[461] - Net income for Entergy Louisiana increased by $39.8 million for H1 2023 YoY, primarily due to the net effects of the March 2023 storm cost securitization (including a $133.4 million tax reduction offset by a $103.4 million regulatory charge), higher retail electric price, and lower O&M expenses[462] Entergy Louisiana Operating Revenues (Second Quarter YoY) | Item | Amount (Millions) | | :---------------------------------------------------------------- | :---------------- | | 2022 operating revenues | $1,515.8 | | Fuel, rider, and other revenues that do not significantly affect net income | (320.9) | | Storm restoration carrying costs | (37.5) | | Volume/weather | (7.9) | | Return of unprotected excess accumulated deferred income taxes to customers | 9.2 | | Retail electric price | 46.9 | | 2023 operating revenues | $1,205.6 | Entergy Louisiana Operating Revenues (Six Months YoY) | Item | Amount (Millions) | | :---------------------------------------------------------------- | :---------------- | | 2022 operating revenues | $2,781.8 | | Fuel, rider, and other revenues that do not significantly affect net income | (300.9) | | Volume/weather | (29.5) | | Storm restoration carrying costs | (6.9) | | Return of unprotected excess accumulated deferred income taxes to customers | 18.4 | | Retail electric price | 87.9 | | 2023 operating revenues | $2,550.8 | Entergy Louisiana Electric Energy Sales (GWh) (Second Quarter YoY) | Segment | 2023 | 2022 | % Change | | :---------------------- | :----- | :----- | :------- | | Residential | 3,694 | 3,824 | (3) | | Commercial | 2,801 | 2,879 | (3) | | Industrial | 8,014 | 8,148 | (2) | | Governmental | 206 | 208 | (1) | | Total retail | 14,715 | 15,059 | (2) | | Sales for resale: Associated companies | 678 | 1,315 | (48) | | Sales for resale: Non-associated companies | 464 | 467 | (1) | | Total | 15,857 | 16,841 | (6) | Entergy Louisiana Electric Energy Sales (GWh) (Six Months YoY) | Segment | 2023 | 2022 | % Change | | :---------------------- | :----- | :----- | :--