Leases

12 Months Ended

Dec. 31, 2011

Leases [Abstract]

LEASES

NOTE 10. LEASES (Entergy Corporation, Entergy Arkansas, Entergy Gulf States Louisiana, Entergy Louisiana, Entergy Mississippi, Entergy New Orleans, Entergy Texas, and System Energy)

General

As of December 31, 2011, Entergy had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) with minimum lease payments as follows:

Year	Operating Leases		Capital Leases
	(In Thousands)
2012	$	84,860	$	6,494
2013		78,552		6,494
2014		78,559		4,694
2015		62,043		4,615
2016		37,963		4,457
Years thereafter		166,445		38,025
Minimum lease payments		508,422		64,779
Less: Amount representing interest		—		23,621
Present value of net minimum lease payments	$	508,422	$	41,158

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $75.3 million in 2011, $80.8 million in 2010, and $71.6 million in 2009.

As of December 31, 2011, the Registrant Subsidiaries had capital leases and non-cancelable operating leases for equipment, buildings, vehicles, and fuel storage facilities (excluding nuclear fuel leases and the sale and leaseback transactions) with minimum lease payments as follows:

Capital Leases

Year	Entergy Arkansas		Entergy Mississippi
	(In Thousands)
2012	$	237	$	3,370
2013		237		3,370
2014		237		1,570
2015		158		1,570
2016		—		1,570
Years thereafter		—		1,701
Minimum lease payments		869		13,151
Less: Amount representing interest		530		2,430
Present value of net minimum lease payments	$	339	$	10,721

Operating Leases

Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2012	$	22,843	$	11,437	$	9,068	$	6,192	$	1,698	$	5,646
2013		21,318		10,904		7,876		5,568		1,464		5,435
2014		20,296		17,596		6,522		4,466		1,320		4,028
2015		21,692		8,341		5,540		3,324		1,077		1,999
2016		7,545		7,901		2,171		1,878		728		1,066
Years thereafter		5,013		65,565		1,801		6,156		604		1,274
Minimum lease payments	$	98,707	$	121,744	$	32,978	$	27,584	$	6,891	$	19,448

Rental Expenses

Year	Entergy Arkansas		Entergy Gulf  States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2011	$	13.4	$	12.2	$	12.2	$	5.2	$	1.7	$	8.4	$	1.6
2010	$	13.0	$	12.5	$	11.7	$	5.5	$	1.7	$	7.4	$	1.4
2009	$	12.0	$	11.6	$	10.7	$	5.3	$	1.6	$	9.9	$	1.3

In addition to the above rental expense, railcar operating lease payments and oil tank facilities lease payments are recorded in fuel expense in accordance with regulatory treatment. Railcar operating lease payments were $8.3 million in 2011, $8.4 million in 2010, and $7.2 million in 2009 for Entergy Arkansas and $2.0 million in 2011, $2.3 million in 2010, and $3.1 million in 2009 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2011, $3.4 million in 2010, and $3.4 million in 2009.

Sale and Leaseback Transactions

Waterford 3 Lease Obligations

In 1989, in three separate but substantially identical transactions, Entergy Louisiana sold and leased back undivided interests in Waterford 3 for the aggregate sum of $353.6 million. The interests represent approximately 9.3% of Waterford 3. The leases expire in 2017. Under certain circumstances, Entergy Louisiana may repurchase the leased interests prior to the end of the term of the leases. At the end of the lease terms, Entergy Louisiana has the option to repurchase the leased interests in Waterford 3 at fair market value or to renew the leases for either fair market value or, under certain conditions, a fixed rate.

Entergy Louisiana issued $208.2 million of non-interest bearing first mortgage bonds as collateral for the equity portion of certain amounts payable under the leases.

Upon the occurrence of certain events, Entergy Louisiana may be obligated to assume the outstanding bonds used to finance the purchase of the interests in the unit and to pay an amount sufficient to withdraw from the lease transaction. Such events include lease events of default, events of loss, deemed loss events, or certain adverse “Financial Events.” “Financial Events” include, among other things, failure by Entergy Louisiana, following the expiration of any applicable grace or cure period, to maintain (i) total equity capital (including preferred membership interests) at least equal to 30% of adjusted capitalization, or (ii) a fixed charge coverage ratio of at least 1.50 computed on a rolling 12 month basis. As of December 31, 2011, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2011, Entergy Louisiana had future minimum lease payments (reflecting an overall implicit rate of 7.45%) in connection with the Waterford 3 sale and leaseback transactions, which are recorded as long-term debt, as follows:

	Amount
	(In Thousands)
2012	$	39,067
2013		26,301
2014		31,036
2015		28,827
2016		16,938
Years thereafter		106,335
Total		248,504
Less: Amount representing interest		60,249
Present value of net minimum lease payments	$	188,255

Grand Gulf Lease Obligations

In 1988, in two separate but substantially identical transactions, System Energy sold and leased back undivided ownership interests in Grand Gulf for the aggregate sum of $500 million. The interests represent approximately 11.5% of Grand Gulf. The leases expire in 2015. Under certain circumstances, System Entergy may repurchase the leased interests prior to the end of the term of the leases. At the end of the lease terms, System Energy has the option to repurchase the leased interests in Grand Gulf at fair market value or to renew the leases for either fair market value or, under certain conditions, a fixed rate.

System Energy is required to report the sale-leaseback as a financing transaction in its financial statements. For financial reporting purposes, System Energy expenses the interest portion of the lease obligation and the plant depreciation. However, operating revenues include the recovery of the lease payments because the transactions are accounted for as a sale and leaseback for ratemaking purposes. Consistent with a recommendation contained in a FERC audit report, System Energy initially recorded as a net regulatory asset the difference between the recovery of the lease payments and the amounts expensed for interest and depreciation and continues to record this difference as a regulatory asset or liability on an ongoing basis, resulting in a zero net balance for the regulatory asset at the end of the lease term. The amount was a net regulatory asset (liability) of ($2.0) million and $60.6 million as of December 31, 2011 and 2010, respectively.

As of December 31, 2011, System Energy had future minimum lease payments (reflecting an implicit rate of 5.13%), which are recorded as long-term debt as follows:

	Amount
	(In Thousands)
2012	$	49,959
2013		50,546
2014		51,637
2015		52,253
2016		—
Years thereafter		—
Total		204,395
Less: Amount representing interest		25,611
Present value of net minimum lease payments	$	178,784