Company: EAI
Filing Date: 2025-02-18
Form Type: 10-K
Source: 0000065984-25-000012
Chunk: 806

Company: ENTERGY ARKANSAS, LLC
Filing Date: 2025-02-18
Form: 10-K
Item: Item 7
Chunk 806
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 of satisfactory credit ratings.  Entergy and its subsidiaries may fail to execute within currently expected time frames or within currently expected costs, due to a number of factors, including failure to obtain, or any delay in obtaining, regulatory approval, shortages of qualified labor, supply chain constraints, other cost pressures, or inadequate project management and execution.  Entergy and its subsidiaries may not be able to adequately protect contractually against the risks inherent in relying on such rapid growth within a small number of large customers concentrated in a single industry.  These customers may represent a high percentage of total sales, revenues, and cash flow with respect to the applicable Utility operating company and thereby create business and credit concentration risks which Entergy and its subsidiaries may not be able to fully mitigate.

Additionally, Entergy and its subsidiaries have pursued and may continue to pursue strategic transactions including merger, acquisition, divestiture, joint venture, restructuring, or other strategic transactions.  For example, each of Entergy Louisiana and Entergy New Orleans have entered into purchase and sale agreements to sell their respective regulated natural gas local distribution company businesses to a third-party.  Also, a significant portion of Entergy’s utility business plan over the next several years includes the construction and/or purchase of several natural gas plants and solar facilities.  These or other transactions and plans are or may become subject to regulatory approval and other material conditions or contingencies, including increased costs or delays resulting from supply chain disruptions, import tariffs, and other issues.  The failure to complete these transactions or plans or any future strategic transaction successfully or on a timely basis could have an adverse effect on Entergy’s or its subsidiaries’ financial condition or results of operations and the market’s perception of Entergy’s ability to execute its strategy.  Further, these transactions, and any completed or future strategic transactions, involve substantial risks, including the following:

•acquired businesses or assets may not produce revenues, earnings, or cash flow at anticipated levels;

•acquired businesses or assets could have environmental, permitting, or other problems for which contractual protections prove inadequate;

•Entergy and/or its subsidiaries may assume liabilities that were not disclosed to them, that exceed their estimates, or for which their rights to indemnification from the seller are limited;

•Entergy may experience issues integrating businesses into its internal controls over financial reporting;

•the acquisition or disposition of a business could divert management’s attention from other business concerns;

•Entergy and/or its subsidiaries may be unable to obtain the necessary regulatory or governmental approvals to close a transaction, such approvals may