Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 943

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 943
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, for discussion of operating, investing, and financing cash flow activities for 2023 compared to 2022.

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Table of ContentsEntergy New Orleans, LLC and SubsidiariesManagement’s Financial Discussion and Analysis

Capital Structure

Entergy New Orleans’s debt to capital ratio is shown in the following table.  The increase in the debt to capital ratio for Entergy New Orleans is primarily due to common equity distributions of $125 million in 2024 and the net issuance of long-term debt in 2024.

December 31,2024December 31,2023Debt to capital51.5 %45.8 %Effect of excluding securitization bonds — %(0.2 %)Debt to capital, excluding securitization bonds (non-GAAP) (a)51.5 %45.6 %Effect of subtracting cash(1.1 %)— %Net debt to net capital, excluding securitization bonds (non-GAAP) (a)50.4 %45.6 %

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

Net debt consists of debt less cash and cash equivalents.  Debt consists of short-term borrowings, finance lease obligations, long-term debt, including the currently maturing portion, and the long-term payable due to an associated company.  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 New Orleans 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 New Orleans’s financial condition because the securitization bonds are non-recourse to Entergy New Orleans, as more fully described in Note 5 to the financial statements.  Entergy New Orleans 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 New Orleans’s financial condition because net debt indicates Entergy New Orleans’s outstanding debt position that could not be readily satisfied by cash and cash equivalents on hand.

Entergy New Orleans seeks to optimize its capital structure in accordance with its regulatory requirements and to control its cost of capital while also maintaining equity