Entergy 2006 Annual Report Download - page 91

ENTERGY CORPORATION AND SUBSIDIARIES 2
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The annual long-term debt maturities (excluding lease obligations)
for debt outstanding as of December 31, 2006, for the next five years
are as follows (in thousands):
2007 $ 158,241
2008 $1,071,413
2009 $ 517,659
2010 $1,488,537
2011 $ 893,747
In November 2000, Entergy’s Non-Utility Nuclear business
purchased the FitzPatrick and Indian Point 3 power plants in a seller-
financed transaction. Entergy issued notes to NYPA with seven
annual installments of approximately $108 million commencing one
year from the date of the closing, and eight annual installments of $20
million commencing eight years from the date of the closing. These
notes do not have a stated interest rate, but have an implicit interest
rate of 4.8%. In accordance with the purchase agreement with NYPA,
the purchase of Indian Point 2 in 2001 resulted in Entergy’s Non-
Utility Nuclear business becoming liable to NYPA for an additional
$10 million per year for 10 years, beginning in September 2003. This
liability was recorded upon the purchase of Indian Point 2 in
September 2001, and is included in the note payable to NYPA
balance above. In July 2003, a payment of $102 million was made
prior to maturity on the note payable to NYPA. Under a provision in
a letter of credit supporting these notes, if certain of the Utility
operating companies or System Energy were to default on other
indebtedness, Entergy could be required to post collateral to support
the letter of credit.
Covenants in the Entergy Corporation notes require 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 certain of the
Utility operating companies default on other indebtedness or are in
bankruptcy or insolvency proceedings, an acceleration of the notes’
maturity dates may occur.
The long-term securities issuances of Entergy Mississippi and
System Energy are limited to amounts authorized by the SEC under
PUHCA 1935. After the repeal of PUHCA 1935 on February 8,
2006, the FERC, under the Federal Power Act, has jurisdiction over
the securities issuances of these companies. Under a savings provision
in the PUHCA 1935 repeal legislation, these companies can rely on
the authority of their existing SEC orders until each obtains new
orders from the FERC. The SEC PUHCA 1935 financing order of
Entergy Mississippi limits securities issuances unless certain capitaliza-
tion and investment grade ratings conditions are met. Entergy Gulf
States and Entergy Louisiana have received FERC long-term financ-
ing orders that do not have such conditions. The long-term securities
issuances of Entergy Arkansas are limited to amounts authorized by
the APSC.
CAPITAL FUNDS AGREEMENT
Pursuant to an agreement with certain creditors, Entergy Corporation
has agreed to supply System Energy with sufficient capital to:
■maintain System Energy’s equity capital at a minimum of 35% of
its total capitalization (excluding short-term debt);
■permit the continued commercial operation of Grand Gulf;
■pay in full all System Energy indebtedness for borrowed money
when due; and
■enable System Energy to make payments on specific System
Energy debt, under supplements to the agreement assigning
System Energy’s rights in the agreement as security for the
specific debt.
NOTESto CONSOLIDATED FINANCIAL STATEMENTS continued
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