Entergy 2010 Annual Report Download - page 88

transition property, and the creditors of Entergy Gulf States
Reconstruction Funding do not have recourse to the assets
or revenues of Entergy Texas. Entergy Texas has no payment
obligations to Entergy Gulf States Reconstruction Funding except
to remit transition charge collections.
Entergy Texas Securitization Bonds - Hurricane Ike
and Hurricane Gustav
In September 2009 the PUCT authorized the issuance of
securitization bonds to recover $566.4 million of Entergy
Texas’s Hurricane Ike and Hurricane Gustav restoration costs,
plus carrying costs and transaction costs, offset by insurance
proceeds. In November 2009, Entergy Texas Restoration funding,
LLC (Entergy Texas Restoration Funding), a company wholly-
owned and consolidated by Entergy Texas, issued $545.9 million
of senior secured transition bonds (securitization bonds), as
follows (in thousands):
Senior Secured Transition Bonds:
Tranche A-1 (2.12%) due February 2016 $ 182,500
Tranche A-2 (3.65%) due August 2019 144,800
Tranche A-3 (4.38%) due November 2023 218,600
Total senior secured transition bonds $545,900
Although the principal amount of each tranche is not due until the
dates given above, Entergy Texas Restoration Funding expects to
make principal payments on the bonds over the next five years
in the amount of $37.8 million for 2011, $38.6 million for 2012,
$39.4 million for 2013, $40.2 million for 2014, and $41.2 million
for 2015. All of the expected principal payments for 2011-2014
are for Tranche A-1 and $13.8 million of the scheduled principal
payments for 2015 are for Tranche A-1 and $27.4 million are for
Tranche A-2.
With the proceeds, Entergy Texas Restoration Funding
purchased from Entergy Texas the transition property, which
is the right to recover from customers through a transition
charge amounts sufficient to service the securitization bonds.
The transition property is reflected as a regulatory asset on the
consolidated Entergy Texas balance sheet. The creditors of Entergy
Texas do not have recourse to the assets or revenues of Entergy
Texas Restoration Funding, including the transition property,
and the creditors of Entergy Texas Restoration Funding do not
have recourse to the assets or revenues of Entergy Texas. Entergy
Texas has no payment obligations to Entergy Texas Restoration
Funding except to remit transition charge collections.
Note 6. Preferred Equity
The number of shares and units authorized and outstanding and dollar value of preferred stock, preferred membership interests, and
minority interest for Entergy Corporation subsidiaries as of December 31, 2010 and 2009 are presented below. All series of the Utility
preferred stock are redeemable at the option of the related company (dollars in thousands):
2010 2009 2010 2009 2010 2009
Entergy Corporation
Utility:
Preferred Stock or Preferred Membership Interests without sinking fund:
Entergy Arkansas, 4.32% - 6.45% Series 3,413,500 3,413,500 3,413,500 3,413,500 $ 116,350 $ 116,350
Entergy Gulf States Louisiana, Series A 8.25% 100,000 100,000 100,000 100,000 10,000 10,000
Entergy Louisiana, 6.95% Series(a) 1,000,000 1,000,000 840,000 840,000 84,000 84,000
Entergy Mississippi, 4.36% - 6.25% Series 1,403,807 1,403,807 1,403,807 1,403,807 50,381 50,381
Entergy New Orleans, 4.36% - 5.56% Series 197,798 197,798 197,798 197,798 19,780 19,780
Total Utility Preferred Stock or Preferred Membership Interests
without sinking fund 6,115,105 6,115,105 5,955,105 5,955,105 280,511 280,511
Entergy Wholesale Commodities
Preferred Stock without sinking fund:
Entergy Asset Management, 8.95% rate(b) 1,000,000 1,000,000 305,240 305,240 29,375 29,375
Other – – – – 852 1,457
Total Subsidiaries’ Preferred Stock
without sinking fund 7,115,105 7,115,105 6,260,345 6,260,345 $310,738 $311,343
(a) In 2007, Entergy Louisiana Holdings, an Entergy subsidiary, purchased 160,000 of these shares from the holders.
(b) Upon the sale of Class B preferred shares in December 2009, Entergy Asset Management had issued and outstanding Class A and Class B preferred shares.
The preferred stockholders’ agreement provides that during the 180 day period prior to each December 31 either Entergy Asset Management or the majority
Class A or Class B preferred shareholders, each acting separately as a class, may request that the preferred dividend rate for the respective class be reset.
If Entergy Asset Management and the respective preferred shareholders are unable to agree on a dividend reset rate, the preferred shareholder can request
that its shares be sold to a third party (“Sale Election”). If Entergy Asset Management is unable to enter into an agreement in principle to sell the preferred
shares within 75 days, the Class A preferred shareholders have the right to take control of the Entergy Asset Management board of directors for the purpose of
liquidating the assets of Entergy Asset Management in order to repay the Class A preferred shares and any accrued dividends. Upon the sale of Class A shares
resulting from a Sale Election or a liquidation transaction by the Class A preferred shareholders, Class B shareholders have the option to exchange their shares
for shares of Class A preferred stock.
All outstanding preferred stock and membership interests are cumulative.
Shares/Units
Shares/Units Authorized Outstanding
Notes to Consolidated Financial Statements continued
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