Entergy 2012 Annual Report Download - page 83

Entergy Corporation and Subsidiaries 2012
The annual long-term debt maturities (excluding lease obli-
gations and long-term DOE obligations) for debt outstanding
as of December 31, 2012, for the next five years are as follows
(in thousands):
2013 $ 659,720
2014 $ 385,373
2015 $ 860,566
2016 $ 295,441
2017 $1,561,801
In November 2000, Entergy’s non-utility nuclear business pur-
chased 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 mil-
lion 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 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.
Entergy Gulf States Louisiana, Entergy Louisiana, Entergy
Mississippi, Entergy Texas, and System Energy have obtained long-
term financing authorizations from the FERC that extend through
July 2013. Entergy Arkansas has obtained long-term financing
authorization from the APSC that extends through December 2015.
Entergy New Orleans has obtained long-term financing authorization
from the City Council that extends through July 2014.
Capital Funds Agreement
Pursuant to an agreement with certain creditors, Entergy Corpora-
tion has agreed to supply System Energy with sufficient capital to:
n maintain System Energy’s equity capital at a minimum of 35% of
its total capitalization (excluding short-term debt);
n permit the continued commercial operation of Grand Gulf;
n pay in full all System Energy indebtedness for borrowed money
when due; and
n 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 Arkansas Debt Issuances
In January 2013, Entergy Arkansas arranged for the issuance by
(i) Independence County, Arkansas of $45 million of 2.375% Pol-
lution Control Revenue Refunding Bonds (Entergy Arkansas, Inc.
Project) Series 2013 due January 2021, and (ii) Jefferson County,
Arkansas of $54.7 million of 1.55% Pollution Control Revenue
Refunding Bonds (Entergy Arkansas, Inc. Project) Series 2013 due
October 2017, each of which series is secured by a separate series of
non-interest bearing first mortgage bonds of Entergy Arkansas. The
proceeds of these issuances were applied to the refunding of outstand-
ing series of pollution control revenue bonds previously issued by the
respective issuers.
Entergy Arkansas Securitization Bonds
In June 2010, the APSC issued a financing order authorizing the issu-
ance of bonds to recover Entergy Arkansas’s January 2009 ice storm
damage restoration costs, including carrying costs of $11.5 million
and $4.6 million of up-front financing costs. In August 2010, Entergy
Arkansas Restoration Funding, LLC, a company wholly-owned and
consolidated by Entergy Arkansas, issued $124.1 million of storm cost
recovery bonds. The bonds have a coupon of 2.30% and an expected
maturity date of August 2021. Although the principal amount is not
due until the date given above, Entergy Arkansas Restoration Funding
expects to make principal payments on the bonds over the next five
years in the amount of $12.6 million for 2013, $12.8 million for 2014,
$13.2 million for 2015, $13.4 million for 2016, and $13.8 million for
2017. With the proceeds, Entergy Arkansas Restoration Funding pur-
chased from Entergy Arkansas the storm recovery property, which is
the right to recover from customers through a storm recovery charge
amounts sufficient to service the securitization bonds. The storm
recovery property is reflected as a regulatory asset on the consolidated
Entergy Arkansas balance sheet. The creditors of Entergy Arkansas do
not have recourse to the assets or revenues of Entergy Arkansas Resto-
ration Funding, including the storm recovery property, and the credi-
tors of Entergy Arkansas Restoration Funding do not have recourse to
the assets or revenues of Entergy Arkansas. Entergy Arkansas has no
payment obligations to Entergy Arkansas Restoration Funding except
to remit storm recovery charge collections.
Entergy Louisiana Securitization Bonds – Little Gypsy
In August 2011, the LPSC issued a financing order authorizing the
issuance of bonds to recover Entergy Louisiana’s investment recovery
costs associated with the cancelled Little Gypsy repowering project.
In September 2011, Entergy Louisiana Investment Recovery Fund-
ing I, L.L.C., a company wholly-owned and consolidated by Entergy
Louisiana, issued $207.2 million of senior secured investment recov-
ery bonds. The bonds have an interest rate of 2.04% and an expected
maturity date of June 2021. Although the principal amount is not
due until the date given above, Entergy Louisiana Investment Recov-
ery Funding expects to make principal payments on the bonds over
the next five years in the amounts of $16.6 million for 2013, $21.9
million for 2014, $20.5 million for 2015, $21.6 million for 2016,
and $21.7 million for 2017. With the proceeds, Entergy Louisiana
Investment Recovery Funding purchased from Entergy Louisiana
the investment recovery property, which is the right to recover from
customers through an investment recovery charge amounts suffi-
cient to service the bonds. In accordance with the financing order,
Entergy Louisiana will apply the proceeds it received from the sale
of the investment recovery property as a reimbursement for previ-
ously-incurred investment recovery costs. The investment recovery
property is reflected as a regulatory asset on the consolidated Entergy
Louisiana balance sheet. The creditors of Entergy Louisiana do not
have recourse to the assets or revenues of Entergy Louisiana Invest-
ment Recovery Funding, including the investment recovery property,
and the creditors of Entergy Louisiana Investment Recovery Funding
do not have recourse to the assets or revenues of Entergy Louisiana.
Entergy Louisiana has no payment obligations to Entergy Louisiana
Investment Recovery Funding except to remit investment recovery
charge collections.
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’s 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 Fund-
ing I, LLC, a company that is now wholly-owned and consolidated
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS continued
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