Entergy 2009 Annual Report Download - page 107

Entergy Corporation and Subsidiaries
Notes to Financial Statements
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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 Corporation 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.
Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy Texas, and System Energy
have received FERC long-term financing orders authorizing long-term securities issuances. Entergy Arkansas has
received an APSC long-term financing order authorizing long-term securities issuances. The long-term securities
issuances of Entergy New Orleans are limited to amounts authorized by the City Council, and the current
authorization extends through August 2010.
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.
Entergy Texas Securitization Bonds - Hurricane Rita
In April 2007, the PUCT issued a financing order authorizing the issuance of securitization bonds to recover
$353 million of Entergy Texas' Hurricane Rita reconstruction costs and up to $6 million of transaction costs, offset
by $32 million of related deferred income tax benefits. In June 2007, Entergy Gulf States Reconstruction Funding I,
LLC, a company wholly-owned and consolidated by Entergy Texas, issued $329.5 million of senior secured
transition bonds (securitization bonds), as follows:
Amount
(In Thousands)
Senior Secured Transition Bonds, Series A:
Tranche A-1 (5.51%) due October 2013 $93,500
Tranche A-2 (5.79%) due October 2018 121,600
Tranche A-3 (5.93%) due June 2022 114,400
Total senior secured transition bonds $329,500
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