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, 2013, 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)
2014		$106,175		$4,694
2015	89,999		4,615
2016	64,758		4,457
2017	46,731		4,457
2018	36,778		3,672
Years thereafter	111,484		30,551
Minimum lease payments	455,925		52,446
Less: Amount representing interest			18,135
Present value of net minimum lease payments				$34,311

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $63.7 million in 2013, $69.9 million in 2012, and $75.3 million in 2011.

As of December 31, 2013, 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)
2014		$237		$1,570
2015	158		1,570
2016	—		1,570
2017	—		1,570
2018	—		785
Years thereafter	—		—
Minimum lease payments	395		7,065
Less: Amount representing interest	216		1,081
Present value of net minimum lease payments		$179		$5,984

Operating Leases



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2014		$32,124		$19,735		$11,398		$7,155		$2,121		$6,442
2015	33,069		10,294		9,825		6,162		2,083		5,620
2016	17,999		9,551		6,574		4,379		1,720		4,487
2017	11,019		8,547		4,580		2,992		1,300		3,318
2018	6,669		7,753		3,078		2,300		883		2,681
Years thereafter	3,908		34,981		3,706		4,306		1,988		2,356
Minimum lease payments		$104,788		$90,861		$39,161		$27,294		$10,095		$24,904

Rental Expenses



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2013		$12.0		$10.9		$10.1		$4.6		$1.3		$4.1		$2.5
2012		$12.6		$11.9		$11.2		$5.5		$1.5		$6.4		$1.5
2011		$13.4		$12.2		$12.2		$5.2		$1.7		$8.4		$1.6

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 $8.6 million in 2013, $8.5 million in 2012, and $8.3 million in 2011 for Entergy Arkansas and $2.2 million in 2013, $1.7 million in 2012, and $2.0 million in 2011 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2013, $3.4 million in 2012, and $3.4 million in 2011.

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 leases expire in July 2017. 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. In the event that Entergy Louisiana does not renew or purchase the interests, Entergy Louisiana would surrender such interests and their associated entitlement of Waterford 3’s capacity and energy.

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, 2013, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2013, 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)

2014		$31,036
2015	28,827
2016	16,938
2017	106,335
2018	—
Years thereafter	—
Total	183,136
Less: Amount representing interest	34,420
Present value of net minimum lease payments		$148,716

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 initial term of the leases expire in July 2015. In December 2013, System Energy exercised its options to renew the leases for fair market value with a renewal term for one lease expiring in July 2018 and the renewal term of the other lease expiring in July 2036. At the end of the lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.

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 liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, 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)

2014		$51,637
2015	52,253
2016	13,750
2017	13,750
2018	13,750
Years thereafter	247,500
Total	392,640
Less: Amount representing interest	295,226
Present value of net minimum lease payments		$97,414

Leases

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, 2013, 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)
2014		$106,175		$4,694
2015	89,999		4,615
2016	64,758		4,457
2017	46,731		4,457
2018	36,778		3,672
Years thereafter	111,484		30,551
Minimum lease payments	455,925		52,446
Less: Amount representing interest			18,135
Present value of net minimum lease payments				$34,311

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $63.7 million in 2013, $69.9 million in 2012, and $75.3 million in 2011.

As of December 31, 2013, 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)
2014		$237		$1,570
2015	158		1,570
2016	—		1,570
2017	—		1,570
2018	—		785
Years thereafter	—		—
Minimum lease payments	395		7,065
Less: Amount representing interest	216		1,081
Present value of net minimum lease payments		$179		$5,984

Operating Leases



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2014		$32,124		$19,735		$11,398		$7,155		$2,121		$6,442
2015	33,069		10,294		9,825		6,162		2,083		5,620
2016	17,999		9,551		6,574		4,379		1,720		4,487
2017	11,019		8,547		4,580		2,992		1,300		3,318
2018	6,669		7,753		3,078		2,300		883		2,681
Years thereafter	3,908		34,981		3,706		4,306		1,988		2,356
Minimum lease payments		$104,788		$90,861		$39,161		$27,294		$10,095		$24,904

Rental Expenses



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2013		$12.0		$10.9		$10.1		$4.6		$1.3		$4.1		$2.5
2012		$12.6		$11.9		$11.2		$5.5		$1.5		$6.4		$1.5
2011		$13.4		$12.2		$12.2		$5.2		$1.7		$8.4		$1.6

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 $8.6 million in 2013, $8.5 million in 2012, and $8.3 million in 2011 for Entergy Arkansas and $2.2 million in 2013, $1.7 million in 2012, and $2.0 million in 2011 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2013, $3.4 million in 2012, and $3.4 million in 2011.

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 leases expire in July 2017. 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. In the event that Entergy Louisiana does not renew or purchase the interests, Entergy Louisiana would surrender such interests and their associated entitlement of Waterford 3’s capacity and energy.

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, 2013, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2013, 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)

2014		$31,036
2015	28,827
2016	16,938
2017	106,335
2018	—
Years thereafter	—
Total	183,136
Less: Amount representing interest	34,420
Present value of net minimum lease payments		$148,716

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 initial term of the leases expire in July 2015. In December 2013, System Energy exercised its options to renew the leases for fair market value with a renewal term for one lease expiring in July 2018 and the renewal term of the other lease expiring in July 2036. At the end of the lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.

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 liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, 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)

2014		$51,637
2015	52,253
2016	13,750
2017	13,750
2018	13,750
Years thereafter	247,500
Total	392,640
Less: Amount representing interest	295,226
Present value of net minimum lease payments		$97,414

Leases

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, 2013, 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)
2014		$106,175		$4,694
2015	89,999		4,615
2016	64,758		4,457
2017	46,731		4,457
2018	36,778		3,672
Years thereafter	111,484		30,551
Minimum lease payments	455,925		52,446
Less: Amount representing interest			18,135
Present value of net minimum lease payments				$34,311

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $63.7 million in 2013, $69.9 million in 2012, and $75.3 million in 2011.

As of December 31, 2013, 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)
2014		$237		$1,570
2015	158		1,570
2016	—		1,570
2017	—		1,570
2018	—		785
Years thereafter	—		—
Minimum lease payments	395		7,065
Less: Amount representing interest	216		1,081
Present value of net minimum lease payments		$179		$5,984

Operating Leases



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2014		$32,124		$19,735		$11,398		$7,155		$2,121		$6,442
2015	33,069		10,294		9,825		6,162		2,083		5,620
2016	17,999		9,551		6,574		4,379		1,720		4,487
2017	11,019		8,547		4,580		2,992		1,300		3,318
2018	6,669		7,753		3,078		2,300		883		2,681
Years thereafter	3,908		34,981		3,706		4,306		1,988		2,356
Minimum lease payments		$104,788		$90,861		$39,161		$27,294		$10,095		$24,904

Rental Expenses



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2013		$12.0		$10.9		$10.1		$4.6		$1.3		$4.1		$2.5
2012		$12.6		$11.9		$11.2		$5.5		$1.5		$6.4		$1.5
2011		$13.4		$12.2		$12.2		$5.2		$1.7		$8.4		$1.6

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 $8.6 million in 2013, $8.5 million in 2012, and $8.3 million in 2011 for Entergy Arkansas and $2.2 million in 2013, $1.7 million in 2012, and $2.0 million in 2011 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2013, $3.4 million in 2012, and $3.4 million in 2011.

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 leases expire in July 2017. 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. In the event that Entergy Louisiana does not renew or purchase the interests, Entergy Louisiana would surrender such interests and their associated entitlement of Waterford 3’s capacity and energy.

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, 2013, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2013, 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)

2014		$31,036
2015	28,827
2016	16,938
2017	106,335
2018	—
Years thereafter	—
Total	183,136
Less: Amount representing interest	34,420
Present value of net minimum lease payments		$148,716

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 initial term of the leases expire in July 2015. In December 2013, System Energy exercised its options to renew the leases for fair market value with a renewal term for one lease expiring in July 2018 and the renewal term of the other lease expiring in July 2036. At the end of the lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.

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 liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, 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)

2014		$51,637
2015	52,253
2016	13,750
2017	13,750
2018	13,750
Years thereafter	247,500
Total	392,640
Less: Amount representing interest	295,226
Present value of net minimum lease payments		$97,414

Leases

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, 2013, 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)
2014		$106,175		$4,694
2015	89,999		4,615
2016	64,758		4,457
2017	46,731		4,457
2018	36,778		3,672
Years thereafter	111,484		30,551
Minimum lease payments	455,925		52,446
Less: Amount representing interest			18,135
Present value of net minimum lease payments				$34,311

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $63.7 million in 2013, $69.9 million in 2012, and $75.3 million in 2011.

As of December 31, 2013, 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)
2014		$237		$1,570
2015	158		1,570
2016	—		1,570
2017	—		1,570
2018	—		785
Years thereafter	—		—
Minimum lease payments	395		7,065
Less: Amount representing interest	216		1,081
Present value of net minimum lease payments		$179		$5,984

Operating Leases



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2014		$32,124		$19,735		$11,398		$7,155		$2,121		$6,442
2015	33,069		10,294		9,825		6,162		2,083		5,620
2016	17,999		9,551		6,574		4,379		1,720		4,487
2017	11,019		8,547		4,580		2,992		1,300		3,318
2018	6,669		7,753		3,078		2,300		883		2,681
Years thereafter	3,908		34,981		3,706		4,306		1,988		2,356
Minimum lease payments		$104,788		$90,861		$39,161		$27,294		$10,095		$24,904

Rental Expenses



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2013		$12.0		$10.9		$10.1		$4.6		$1.3		$4.1		$2.5
2012		$12.6		$11.9		$11.2		$5.5		$1.5		$6.4		$1.5
2011		$13.4		$12.2		$12.2		$5.2		$1.7		$8.4		$1.6

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 $8.6 million in 2013, $8.5 million in 2012, and $8.3 million in 2011 for Entergy Arkansas and $2.2 million in 2013, $1.7 million in 2012, and $2.0 million in 2011 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2013, $3.4 million in 2012, and $3.4 million in 2011.

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 leases expire in July 2017. 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. In the event that Entergy Louisiana does not renew or purchase the interests, Entergy Louisiana would surrender such interests and their associated entitlement of Waterford 3’s capacity and energy.

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, 2013, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2013, 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)

2014		$31,036
2015	28,827
2016	16,938
2017	106,335
2018	—
Years thereafter	—
Total	183,136
Less: Amount representing interest	34,420
Present value of net minimum lease payments		$148,716

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 initial term of the leases expire in July 2015. In December 2013, System Energy exercised its options to renew the leases for fair market value with a renewal term for one lease expiring in July 2018 and the renewal term of the other lease expiring in July 2036. At the end of the lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.

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 liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, 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)

2014		$51,637
2015	52,253
2016	13,750
2017	13,750
2018	13,750
Years thereafter	247,500
Total	392,640
Less: Amount representing interest	295,226
Present value of net minimum lease payments		$97,414

Leases

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, 2013, 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)
2014		$106,175		$4,694
2015	89,999		4,615
2016	64,758		4,457
2017	46,731		4,457
2018	36,778		3,672
Years thereafter	111,484		30,551
Minimum lease payments	455,925		52,446
Less: Amount representing interest			18,135
Present value of net minimum lease payments				$34,311

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $63.7 million in 2013, $69.9 million in 2012, and $75.3 million in 2011.

As of December 31, 2013, 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)
2014		$237		$1,570
2015	158		1,570
2016	—		1,570
2017	—		1,570
2018	—		785
Years thereafter	—		—
Minimum lease payments	395		7,065
Less: Amount representing interest	216		1,081
Present value of net minimum lease payments		$179		$5,984

Operating Leases



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2014		$32,124		$19,735		$11,398		$7,155		$2,121		$6,442
2015	33,069		10,294		9,825		6,162		2,083		5,620
2016	17,999		9,551		6,574		4,379		1,720		4,487
2017	11,019		8,547		4,580		2,992		1,300		3,318
2018	6,669		7,753		3,078		2,300		883		2,681
Years thereafter	3,908		34,981		3,706		4,306		1,988		2,356
Minimum lease payments		$104,788		$90,861		$39,161		$27,294		$10,095		$24,904

Rental Expenses



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2013		$12.0		$10.9		$10.1		$4.6		$1.3		$4.1		$2.5
2012		$12.6		$11.9		$11.2		$5.5		$1.5		$6.4		$1.5
2011		$13.4		$12.2		$12.2		$5.2		$1.7		$8.4		$1.6

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 $8.6 million in 2013, $8.5 million in 2012, and $8.3 million in 2011 for Entergy Arkansas and $2.2 million in 2013, $1.7 million in 2012, and $2.0 million in 2011 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2013, $3.4 million in 2012, and $3.4 million in 2011.

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 leases expire in July 2017. 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. In the event that Entergy Louisiana does not renew or purchase the interests, Entergy Louisiana would surrender such interests and their associated entitlement of Waterford 3’s capacity and energy.

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, 2013, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2013, 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)

2014		$31,036
2015	28,827
2016	16,938
2017	106,335
2018	—
Years thereafter	—
Total	183,136
Less: Amount representing interest	34,420
Present value of net minimum lease payments		$148,716

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 initial term of the leases expire in July 2015. In December 2013, System Energy exercised its options to renew the leases for fair market value with a renewal term for one lease expiring in July 2018 and the renewal term of the other lease expiring in July 2036. At the end of the lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.

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 liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, 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)

2014		$51,637
2015	52,253
2016	13,750
2017	13,750
2018	13,750
Years thereafter	247,500
Total	392,640
Less: Amount representing interest	295,226
Present value of net minimum lease payments		$97,414

Leases

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, 2013, 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)
2014		$106,175		$4,694
2015	89,999		4,615
2016	64,758		4,457
2017	46,731		4,457
2018	36,778		3,672
Years thereafter	111,484		30,551
Minimum lease payments	455,925		52,446
Less: Amount representing interest			18,135
Present value of net minimum lease payments				$34,311

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $63.7 million in 2013, $69.9 million in 2012, and $75.3 million in 2011.

As of December 31, 2013, 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)
2014		$237		$1,570
2015	158		1,570
2016	—		1,570
2017	—		1,570
2018	—		785
Years thereafter	—		—
Minimum lease payments	395		7,065
Less: Amount representing interest	216		1,081
Present value of net minimum lease payments		$179		$5,984

Operating Leases



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2014		$32,124		$19,735		$11,398		$7,155		$2,121		$6,442
2015	33,069		10,294		9,825		6,162		2,083		5,620
2016	17,999		9,551		6,574		4,379		1,720		4,487
2017	11,019		8,547		4,580		2,992		1,300		3,318
2018	6,669		7,753		3,078		2,300		883		2,681
Years thereafter	3,908		34,981		3,706		4,306		1,988		2,356
Minimum lease payments		$104,788		$90,861		$39,161		$27,294		$10,095		$24,904

Rental Expenses



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2013		$12.0		$10.9		$10.1		$4.6		$1.3		$4.1		$2.5
2012		$12.6		$11.9		$11.2		$5.5		$1.5		$6.4		$1.5
2011		$13.4		$12.2		$12.2		$5.2		$1.7		$8.4		$1.6

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 $8.6 million in 2013, $8.5 million in 2012, and $8.3 million in 2011 for Entergy Arkansas and $2.2 million in 2013, $1.7 million in 2012, and $2.0 million in 2011 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2013, $3.4 million in 2012, and $3.4 million in 2011.

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 leases expire in July 2017. 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. In the event that Entergy Louisiana does not renew or purchase the interests, Entergy Louisiana would surrender such interests and their associated entitlement of Waterford 3’s capacity and energy.

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, 2013, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2013, 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)

2014		$31,036
2015	28,827
2016	16,938
2017	106,335
2018	—
Years thereafter	—
Total	183,136
Less: Amount representing interest	34,420
Present value of net minimum lease payments		$148,716

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 initial term of the leases expire in July 2015. In December 2013, System Energy exercised its options to renew the leases for fair market value with a renewal term for one lease expiring in July 2018 and the renewal term of the other lease expiring in July 2036. At the end of the lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.

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 liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, 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)

2014		$51,637
2015	52,253
2016	13,750
2017	13,750
2018	13,750
Years thereafter	247,500
Total	392,640
Less: Amount representing interest	295,226
Present value of net minimum lease payments		$97,414

Leases

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, 2013, 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)
2014		$106,175		$4,694
2015	89,999		4,615
2016	64,758		4,457
2017	46,731		4,457
2018	36,778		3,672
Years thereafter	111,484		30,551
Minimum lease payments	455,925		52,446
Less: Amount representing interest			18,135
Present value of net minimum lease payments				$34,311

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $63.7 million in 2013, $69.9 million in 2012, and $75.3 million in 2011.

As of December 31, 2013, 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)
2014		$237		$1,570
2015	158		1,570
2016	—		1,570
2017	—		1,570
2018	—		785
Years thereafter	—		—
Minimum lease payments	395		7,065
Less: Amount representing interest	216		1,081
Present value of net minimum lease payments		$179		$5,984

Operating Leases



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2014		$32,124		$19,735		$11,398		$7,155		$2,121		$6,442
2015	33,069		10,294		9,825		6,162		2,083		5,620
2016	17,999		9,551		6,574		4,379		1,720		4,487
2017	11,019		8,547		4,580		2,992		1,300		3,318
2018	6,669		7,753		3,078		2,300		883		2,681
Years thereafter	3,908		34,981		3,706		4,306		1,988		2,356
Minimum lease payments		$104,788		$90,861		$39,161		$27,294		$10,095		$24,904

Rental Expenses



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2013		$12.0		$10.9		$10.1		$4.6		$1.3		$4.1		$2.5
2012		$12.6		$11.9		$11.2		$5.5		$1.5		$6.4		$1.5
2011		$13.4		$12.2		$12.2		$5.2		$1.7		$8.4		$1.6

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 $8.6 million in 2013, $8.5 million in 2012, and $8.3 million in 2011 for Entergy Arkansas and $2.2 million in 2013, $1.7 million in 2012, and $2.0 million in 2011 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2013, $3.4 million in 2012, and $3.4 million in 2011.

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 leases expire in July 2017. 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. In the event that Entergy Louisiana does not renew or purchase the interests, Entergy Louisiana would surrender such interests and their associated entitlement of Waterford 3’s capacity and energy.

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, 2013, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2013, 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)

2014		$31,036
2015	28,827
2016	16,938
2017	106,335
2018	—
Years thereafter	—
Total	183,136
Less: Amount representing interest	34,420
Present value of net minimum lease payments		$148,716

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 initial term of the leases expire in July 2015. In December 2013, System Energy exercised its options to renew the leases for fair market value with a renewal term for one lease expiring in July 2018 and the renewal term of the other lease expiring in July 2036. At the end of the lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.

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 liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, 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)

2014		$51,637
2015	52,253
2016	13,750
2017	13,750
2018	13,750
Years thereafter	247,500
Total	392,640
Less: Amount representing interest	295,226
Present value of net minimum lease payments		$97,414

Leases

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, 2013, 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)
2014		$106,175		$4,694
2015	89,999		4,615
2016	64,758		4,457
2017	46,731		4,457
2018	36,778		3,672
Years thereafter	111,484		30,551
Minimum lease payments	455,925		52,446
Less: Amount representing interest			18,135
Present value of net minimum lease payments				$34,311

Total rental expenses for all leases (excluding nuclear fuel leases and the Grand Gulf and Waterford 3 sale and leaseback transactions) amounted to $63.7 million in 2013, $69.9 million in 2012, and $75.3 million in 2011.

As of December 31, 2013, 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)
2014		$237		$1,570
2015	158		1,570
2016	—		1,570
2017	—		1,570
2018	—		785
Years thereafter	—		—
Minimum lease payments	395		7,065
Less: Amount representing interest	216		1,081
Present value of net minimum lease payments		$179		$5,984

Operating Leases



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas
	(In Thousands)
2014		$32,124		$19,735		$11,398		$7,155		$2,121		$6,442
2015	33,069		10,294		9,825		6,162		2,083		5,620
2016	17,999		9,551		6,574		4,379		1,720		4,487
2017	11,019		8,547		4,580		2,992		1,300		3,318
2018	6,669		7,753		3,078		2,300		883		2,681
Years thereafter	3,908		34,981		3,706		4,306		1,988		2,356
Minimum lease payments		$104,788		$90,861		$39,161		$27,294		$10,095		$24,904

Rental Expenses



Year	Entergy Arkansas		Entergy Gulf States Louisiana		Entergy Louisiana		Entergy Mississippi		Entergy New Orleans		Entergy Texas		System Energy
	(In Millions)
2013		$12.0		$10.9		$10.1		$4.6		$1.3		$4.1		$2.5
2012		$12.6		$11.9		$11.2		$5.5		$1.5		$6.4		$1.5
2011		$13.4		$12.2		$12.2		$5.2		$1.7		$8.4		$1.6

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 $8.6 million in 2013, $8.5 million in 2012, and $8.3 million in 2011 for Entergy Arkansas and $2.2 million in 2013, $1.7 million in 2012, and $2.0 million in 2011 for Entergy Gulf States Louisiana. Oil tank facilities lease payments for Entergy Mississippi were $3.4 million in 2013, $3.4 million in 2012, and $3.4 million in 2011.

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 leases expire in July 2017. 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. In the event that Entergy Louisiana does not renew or purchase the interests, Entergy Louisiana would surrender such interests and their associated entitlement of Waterford 3’s capacity and energy.

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, 2013, Entergy Louisiana was in compliance with these provisions.

As of December 31, 2013, 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)

2014		$31,036
2015	28,827
2016	16,938
2017	106,335
2018	—
Years thereafter	—
Total	183,136
Less: Amount representing interest	34,420
Present value of net minimum lease payments		$148,716

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 initial term of the leases expire in July 2015. In December 2013, System Energy exercised its options to renew the leases for fair market value with a renewal term for one lease expiring in July 2018 and the renewal term of the other lease expiring in July 2036. At the end of the lease renewal terms, System Energy has the option to repurchase the leased interests in Grand Gulf or renew the leases at fair market value. In the event that System Energy does not renew or purchase the interests, System Energy would surrender such interests and their associated entitlement of Grand Gulf’s capacity and energy.

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 liability of $61.6 million and $27.8 million as of December 31, 2013 and 2012, respectively.

As of December 31, 2013, 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)

2014		$51,637
2015	52,253
2016	13,750
2017	13,750
2018	13,750
Years thereafter	247,500
Total	392,640
Less: Amount representing interest	295,226
Present value of net minimum lease payments		$97,414