Entergy Texas, Inc.  and Subsidiaries Management’s Financial Discussion and Analysis All debt and common and preferred stock issuances by Entergy Texas require prior regulatory approval.
Debt issuances are also subject to issuance tests set forth in its bond indenture and other agreements.
Entergy Texas has sufficient capacity under these tests to meet its foreseeable capital needs.
## Table 0 ##
See Note 4 to the financial statements for a description of the money pool.
Entergy Texas has a credit facility in the amount of $150 million scheduled to expire in August 2022.
The credit facility allows Entergy Texas to issue letters of credit against $30 million of the borrowing capacity of the facility.
As of December 31, 2017, there were no cash borrowings and $25.6 million of letters of credit outstanding under the credit facility.
In addition, Entergy Texas is a party to an uncommitted letter of credit facility as a means to post collateral to support its obligations to MISO.
As of December 31, 2017, a $22.8 million letter of credit was outstanding under Entergy Texas’s letter of credit facility.
See Note 4 to the financial statements for additional discussion of the credit facilities.
Entergy Texas obtained authorizations from the FERC through October 2019 for short-term borrowings, not to exceed an aggregate amount of $200 million at any time outstanding, and long-term borrowings and security issuances.
See Note 4 to the financial statements for further discussion of Entergy Texas’s short-term borrowing limits.
Entergy Texas, Inc.  and Subsidiaries Management’s Financial Discussion and Analysis 406 State and Local Rate Regulation and Fuel-Cost Recovery The rates that Entergy Texas charges for its services significantly influence its financial position, results of operations, and liquidity.
Entergy Texas is regulated and the rates charged to its customers are determined in regulatory proceedings.
The PUCT, a governmental agency, is primarily responsible for approval of the rates charged to customers.
Filings with the PUCT 2011 Rate Case In November 2011, Entergy Texas filed a rate case requesting a $112 million base rate increase reflecting a 10.6% return on common equity based on an adjusted June 2011 test year. ?
?The rate case also proposed a purchased power recovery rider. ?
?On January 12, 2012, the PUCT voted not to address the purchased power recovery rider in the rate case, but the PUCT voted to set a baseline in the rate case proceeding that would be applicable if a purchased power capacity rider is approved in a separate proceeding. ?
?In April 2012 the PUCT Staff filed direct testimony recommending a base rate increase of $66 million and a 9.6% return on common equity. ?
?The PUCT Staff, however, subsequently filed a statement of position in the proceeding indicating that it was still evaluating the position it would ultimately take in the case regarding Entergy Texas’s recovery of purchased power capacity costs and Entergy Texas’s proposal to defer its MISO transition expenses. ?
?In April 2012, Entergy Texas filed rebuttal testimony indicating a revised request for a $105 million base rate increase. ?
?A hearing was held in late-April through early-May 2012.
In September 2012 the PUCT issued an order approving a $28 million rate increase, effective July 2012. ?
?The order included a finding that “a return on common equity (ROE) of 9.80 percent will allow [Entergy Texas] a reasonable opportunity to earn a reasonable return on invested capital.
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?The order also provided for increases in depreciation rates and the annual storm reserve accrual. ?
?The order also reduced Entergy Texas’s proposed purchased power capacity costs, stating that they are not known and measurable; reduced Entergy Texas’s regulatory assets associated with Hurricane Rita; excluded from rate recovery capitalized financially-based incentive compensation; included $1.6 million of MISO transition expense in base rates; and reduced Entergy’s Texas’s fuel reconciliation recovery by $4
As a result of time lags between the funding of investments, the finalization of legal documents and the completion of the SVO filing process, the fixed maturity portfolio generally includes securities that have not yet been rated by the SVO as of each balance sheet date.
Pending receipt of SVO ratings, the categorization of these securities by NAIC designation is based on the expected ratings indicated by internal analysis.
Investments of our international insurance companies are not subject to NAIC guidelines.
Investments of our Japanese insurance operations are regulated locally by the Financial Services Agency, an agency of the Japanese government.
The Financial Services Agency has its own investment quality criteria and risk control standards.
Our Japanese insurance companies comply with the Financial Services Agency’s credit quality review and risk monitoring guidelines.
The credit quality ratings of the investments of our Japanese insurance companies are based on ratings assigned by nationally recognized credit rating agencies, including Moody’s, Standard & Poor’s, or rating equivalents based on ratings assigned by Japanese credit ratings agencies.
The amortized cost of our public and private fixed maturities attributable to the Financial Services Businesses considered other than high or highest quality based on NAIC or equivalent rating totaled $9.5 billion, or 7%, of the total fixed maturities as of December 31, 2009 and $9.0 billion, or 7%, of the total fixed maturities as of December 31, 2008.
Fixed maturities considered other than high or highest quality based on NAIC or equivalent rating represented 29% and 19% of the gross unrealized losses attributable to the Financial Services Businesses as of December 31, 2009 and December 31, 2008, respectively.
The increase in fixed maturity securities considered other than high or highest quality based on NAIC or equivalent rating is primarily due to credit migration on existing securities, rather than new originations or purchases.
As of December 31, 2009, the amortized cost of our public and private below investment grade fixed maturities attributable to the Financial Services Business, based on the lowest of external rating agency ratings, totaled $10.5 billion, or 8%, of the total fixed maturities, and may include securities considered high or highest quality by the NAIC based on the new rules for residential mortgage-backed securities described above.
The amortized cost of our public and private fixed maturities attributable to the Closed Block Business considered other than high or highest quality based on NAIC or equivalent rating totaled $6.7 billion, or 16%, of the total fixed maturities as of December 31, 2009 and $6.6 billion, or 15%, of the total fixed maturities as of December 31, 2008.
Fixed maturities considered other than high or highest quality based on NAIC or equivalent rating represented 41% of the gross unrealized losses attributable to the Closed Block Business as of December 31, 2009, compared to 29% of gross unrealized losses as of December 31, 2008.
As of December 31, 2009, the amortized cost of our public and private below investment grade fixed maturities attributable to the Closed Block Business, based on the lowest of external rating agency ratings, totaled $7.3 billion, or 17%, of the total fixed maturities, and may include securities considered high or highest quality by the NAIC based on the new rules for residential mortgage-backed securities described above.
Public Fixed Maturities—Credit Quality The following table sets forth our public fixed maturity portfolios by NAIC designation attributable to the Financial Services Businesses as of the dates indicated.
Public Fixed Maturity Securities—Financial Services Businesses
## Table 1 ##
(1) Reflects equivalent ratings for investments of the international insurance operations.
(2) Includes, as of December 31, 2009 and December 31, 2008, respectively, 19 securities with amortized cost of $177 million (fair value, $175 million) and 13 securities with amortized cost of $3 million (fair value, $2 million) that have been categorized based on expected NAIC designations pending receipt of SVO ratings.
(3) Includes $195 million of gross unrealized gains and $129 million gross unrealized losses as of December 31, 2009, compared to $132 million of gross unrealized gains and $132 million of gross unrealized losses as of December 31, 2008 on securities classified as held to maturity.
(4) On an amortized cost basis, as of December 31, 2009 includes $231 million in emerging markets securities and $153 million in securitized bank loans.
PART II ITEM 8 Financial Statements and Supplementary Data In November 2016, the FASB issued ASU No.2016-18, Statement of Cash Flows (Topic 230): Restricted Cash.
ASU 2016-18 requires entities to show the changes in the total of cash, cash equivalents, restricted cash and restricted cash equivalents in the statement of cash flows.
We adopted ASU 2016-18 beginning with the quarter ended December 31, 2016 on a retrospective basis.
As a result Net Cash Provided by Operating Activities from Continuing Operations increased by $5 million in 2015.
End-of-period cash, cash equivalents and restricted cash increased by $21 million and $16 million as of December 26, 2015 and December 27, 2014, respectively.
We classify restricted cash within our Consolidated Balance Sheets consistent with the nature of the restriction (e. g.  cash restricted for future interest payments within the next 12 months is classified in Prepaid expenses and other current assets).
In August 2014, the FASB issued ASU No.2014-15, Presentation of Financial Statements-Going Concern (Subtopic 205-40).
ASU 2014-15 requires management to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the entity’s ability to continue as a going concern for a period of one year following the date its financial statements are issued.
If such conditions or events exist, an entity should disclose that there is substantial doubt about the entity’s ability to continue as a going concern for a period of one year following the date its financial statements are issued.
Disclosure should include the principal conditions or events that raise substantial doubt, management’s evaluation of the significance of those conditions or events in relation to the entity’s ability to meet its obligations, and management’s plans that are intended to mitigate those conditions or events.
We adopted ASU 2014-15 effective December 31, 2016.
The adoption had no impact on our Consolidated Financial Statements.
## Table 2 ##
(a) These unexercised employee stock options and stock appreciation rights were not included in the computation of diluted EPS because to do so would have been antidilutive for the periods presented.
NOTE 4 Discontinued Operations As discussed in Note 1, on October 31, 2016, the Company completed the Separation of our China business.
In connection with the Separation, the Company and Yum China entered into a Separation and Distribution Agreement as well as various other agreements that provide a framework for the relationships between the parties, including among others a Tax Matters Agreement, an Employee Matters Agreement, a Transition Services Agreement and a Master License Agreement.
These agreements provided for the allocation between the Company and Yum China of assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) attributable to periods prior to, at and after the Separation and govern certain relationships between the Company and Yum China after the Separation.
For all the periods prior to the Separation, the financial results of Yum China are presented as Income from discontinued operations, net of tax in the Consolidated Statements of Income, Assets and Liabilities of discontinued operations in the Consolidated Balance Sheets and Cash flows from discontinued operations in our Consolidated Statements of Cash Flows.
Prior to the Separation, an intercompany franchise agreement existed between an entity of Yum China and a Company entity requiring Yum China to remit to the Company royalties on sales earned by KFC and Pizza Hut Company-owned stores in China.
The royalties related to the franchise agreement were eliminated as intercompany transactions and were not separately reflected in our previously issued financial statements.
Additionally, third-party franchisees of Yum China paid to a Company entity royalties as a percentage of their sales.
We have restated the results of our KFC

<table><tr><td>2017</td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>(In Thousands)</td></tr><tr><td>$44,903</td><td>$681</td><td>-$22,068</td><td>$306</td></tr></table>
<table><tr><td> -1 (2)</td><td colspan="4"> December 31, 2009</td><td colspan="4"> December 31, 2008</td></tr><tr><td> NAIC Designation</td><td> Amortized Cost</td><td> Gross Unrealized Gains-3</td><td> Gross Unrealized Losses-3</td><td> Fair Value</td><td> Amortized Cost</td><td> Gross Unrealized Gains-3</td><td> Gross Unrealized Losses-3</td><td> Fair Value</td></tr><tr><td></td><td></td><td></td><td></td><td colspan="2"> (in millions)</td><td></td><td></td><td></td></tr><tr><td>1</td><td>$94,368</td><td>$3,767</td><td>$1,845</td><td>$96,290</td><td>$85,474</td><td>$4,228</td><td>$4,425</td><td>$85,277</td></tr><tr><td>2</td><td>14,682</td><td>699</td><td>790</td><td>14,591</td><td>15,573</td><td>163</td><td>2,893</td><td>12,843</td></tr><tr><td>Subtotal High or Highest Quality Securities</td><td>109,050</td><td>4,466</td><td>2,635</td><td>110,881</td><td>101,047</td><td>4,391</td><td>7,318</td><td>98,120</td></tr><tr><td>3</td><td>2,743</td><td>44</td><td>314</td><td>2,473</td><td>3,009</td><td>16</td><td>800</td><td>2,225</td></tr><tr><td>4</td><td>1,657</td><td>22</td><td>345</td><td>1,334</td><td>1,639</td><td>2</td><td>565</td><td>1,076</td></tr><tr><td>5</td><td>685</td><td>19</td><td>202</td><td>502</td><td>379</td><td>14</td><td>123</td><td>270</td></tr><tr><td>6</td><td>197</td><td>25</td><td>69</td><td>153</td><td>36</td><td>4</td><td>4</td><td>36</td></tr><tr><td>Subtotal Other Securities-4</td><td>5,282</td><td>110</td><td>930</td><td>4,462</td><td>5,063</td><td>36</td><td>1,492</td><td>3,607</td></tr><tr><td>Total Public Fixed Maturities</td><td>$114,332</td><td>$4,576</td><td>$3,565</td><td>$115,343</td><td>$106,110</td><td>$4,427</td><td>$8,810</td><td>$101,727</td></tr></table>
<table><tr><td></td><td>2016</td><td>2015</td><td>2014</td></tr><tr><td>Income from continuing operations</td><td>$994</td><td>$936</td><td>$1,006</td></tr><tr><td>Income from discontinued operations</td><td>625</td><td>357</td><td>45</td></tr><tr><td>Net Income</td><td>$1,619</td><td>$1,293</td><td>$1,051</td></tr><tr><td>Weighted-average common shares outstanding (for basic calculation)</td><td>394</td><td>436</td><td>444</td></tr><tr><td>Effect of dilutive share-based employee compensation</td><td>6</td><td>7</td><td>9</td></tr><tr><td>Weighted-average common and dilutive potential common shares outstanding (for diluted calculation)</td><td>400</td><td>443</td><td>453</td></tr><tr><td>Basic EPS from continuing operations</td><td>$2.52</td><td>$2.15</td><td>$2.27</td></tr><tr><td>Basic EPS from discontinued operations</td><td>1.59</td><td>0.82</td><td>0.10</td></tr><tr><td>Basic EPS</td><td>$4.11</td><td>$2.97</td><td>$2.37</td></tr><tr><td>Diluted EPS from continuing operations</td><td>$2.48</td><td>$2.11</td><td>$2.22</td></tr><tr><td>Diluted EPS from discontinued operations</td><td>1.56</td><td>0.81</td><td>$0.10</td></tr><tr><td>Diluted EPS</td><td>$4.04</td><td>$2.92</td><td>$2.32</td></tr><tr><td>Unexercised employee stock options and stock appreciation rights (in millions) excluded from the diluted EPS computation<sup>(a)</sup></td><td>5.0</td><td>4.5</td><td>5.5</td></tr></table>

Question: what portion of the credit allowance was outstanding on december 31 , 2017 ? ( % ( % ) )