Entergy 2002 Annual Report Download - page 64

NOTE 4. LINES OF CREDIT AND RELATED
SHORT-TERM BORROWINGS
Entergy Corporation has in place a 364-day bank credit
facility with a borrowing capacity of $1.450 billion, of which
$535 million was outstanding as of December 31, 2002. The
weighted-average interest rate on Entergy’s outstanding bor-
rowings under this facility as of December 31, 2002 and 2001
was 2.5% and 3.2%, respectively. The commitment fee for this
facility is currently 0.20% of the line amount. Commitment
fees and interest rates on loans under the credit facility can
fluctuate depending on the senior debt ratings of the domestic
utility companies.
Although the Entergy Corporation credit facility expires in
May 2003, Entergy has the discretionary option to extend the
period to repay the amount then outstanding for an additional
364-day term. Because of this option, which Entergy intends to
exercise if it does not renew the credit line or obtain an alter-
native source of financing, the debt outstanding under the
credit line is reflected in long-term debt on the balance sheet.
The credit line is reflected as notes payable at December 31,
2001. Entergy Corporation’s facility requires it to maintain a
consolidated debt ratio of 65% or less of its total capitalization.
If Entergy’s debt ratio exceeds this limit, or if Entergy or the
domestic utility companies default on other credit facilities or
are in bankruptcy or insolvency proceedings, an acceleration
of the facility’s maturity may occur.
The short-term borrowings of Entergy’s subsidiaries are
limited to amounts authorized by the SEC. The current limits
authorized are effective through November 30, 2004. In
addition to borrowing from commercial banks, Entergy’s
subsidiaries are authorized to borrow from the Entergy System
Money Pool (money pool). The money pool is an inter-company
borrowing arrangement designed to reduce Entergy’s
subsidiaries’ dependence on external short-term borrowings.
Borrowings from the money pool and external borrowings com-
bined may not exceed the SEC authorized limits. As of
December 31, 2002, Entergy’s subsidiaries’ authorized limit was
$1.6 billion and the outstanding borrowing from the money
pool was $61.5 million. There were no borrowings outstanding
from external sources.
Entergy Arkansas, Entergy Louisiana, and Entergy Mississippi
each have 364-day credit facilities available as follows (in millions):
Expiration Amount of Amount Drawn as
Company Date Facility of Dec. 31, 2002
Entergy Arkansas May 2003 $63 –
Entergy Louisiana May 2003 $15 –
Entergy Mississippi May 2003 $25 –
The facilities have variable interest rates and the average
commitment fee is 0.13%.
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NOTE 5. PREFERRED AND COMMON STOCK
PREFERRED STOCK
The number of shares authorized and outstanding and dollar value of preferred stock for Entergy Corporation subsidiaries as of
December 31, 2002 and 2001, are presented below (dollars in thousands). Only the Entergy Gulf States series “with sinking fund”
contains mandatory redemption requirements. All other series are redeemable at Entergy’s option.
Shares Authorized Total
and Outstanding Dollar Value
2002 2001 2002 2001
Entergy Corporation
U.S. Utility Preferred Stock:
Without sinking fund:
Entergy Arkansas, 4.32% – 7.88% Series 1,613,500 1,613,500 $116,350 $116,350
Entergy Gulf States, 4.20% – 7.56% Series 473,268 473,268 47,327 47,327
Entergy Louisiana, 4.16% – 8.00% Series 2,115,000 2,115,000 100,500 100,500
Entergy Mississippi, 4.36% – 8.36% Series 503,807 503,807 50,381 50,381
Entergy New Orleans, 4.36% – 5.56% Series 197,798 197,798 19,780 19,780
Total without sinking fund 4,903,373 4,903,373 $334,337 $334,337
With sinking fund:
Entergy Gulf States, Adjustable Rate 7.0%(a) 243,269 261,848 $ 24,327 $ 26,185
Total with sinking fund 243,269 261,848 $ 24,327 $ 26,185
Fair Value of Preferred Stock with sinking fund(b) $20,792 $ 26,160
All outstanding preferred stock is cumulative. Entergy Gulf States has annual sinking fund requirements of $3.45 million through 2007 for its preferred stock outstanding.
Totals may not foot due to rounding.
(a) Represents weighted-average annualized rates for 2002.
(b) Fair values were determined using bid prices reported by dealer markets and by nationally recognized investment banking firms. There is additional disclosure of fair
value of financial instruments in Note 15 to the consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued