Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 309

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 1A
Chunk 309
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 on February 23, 2024, for discussion of operating, investing, and financing cash flow activities for 2023 compared to 2022.

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Table of ContentsEntergy Texas, Inc. and SubsidiariesManagement’s Financial Discussion and Analysis

Capital Structure

Entergy Texas’s debt to capital ratio is shown in the following table.

 December 31,2024December 31,2023Debt to capital51.6 %50.9 %Effect of excluding securitization bonds(1.7 %)(2.1 %)Debt to capital, excluding securitization bonds (non-GAAP) (a)49.9 %48.8 %Effect of subtracting cash(1.5 %)(0.2 %)Net debt to net capital, excluding securitization bonds (non-GAAP) (a)48.4 %48.6 %

(a)Calculation excludes the securitization bonds, which are non-recourse to Entergy Texas.

Net debt consists of debt less cash and cash equivalents.  Debt consists of finance lease obligations and long-term debt, including the currently maturing portion.  Capital consists of debt and equity.  Net capital consists of capital less cash and cash equivalents.  The debt to capital ratio excluding securitization bonds and net debt to net capital ratio excluding securitization bonds are non-GAAP measures.  Entergy Texas uses the debt to capital ratios excluding securitization bonds in analyzing its financial condition and believes they provide useful information to its investors and creditors in evaluating Entergy Texas’s financial condition because the securitization bonds are non-recourse to Entergy Texas, as more fully described in Note 5 to the financial statements.  Entergy Texas also uses the net debt to net capital ratio excluding securitization bonds in analyzing its financial condition and believes it provides useful information to its investors and creditors in evaluating Entergy Texas’s financial condition because net debt indicates Entergy Texas’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Entergy Texas seeks to optimize its capital structure in accordance with its regulatory requirements and to control its cost of capital while also maintaining equity capitalization at a level consistent with investment-grade debt ratings.  To the extent that operating cash flows are in excess of planned investments, cash may be used to reduce outstanding debt or may be paid as a dividend, to the extent funds are legally available to